ISIN Number: What It Is, How and Why It Is Used

What Is an International Securities Identification Number (ISIN)?

An International Securities Identification Number (ISIN) is a 12-digit alphanumeric code that uniquely identifies a specific security. The organization that allocates ISINs in any particular country is the country's respective National Numbering Agency (NNA).

Key Takeaways

  • An ISIN is a 12-digit alphanumeric code that uniquely identifies a specific security.
  • The numbers are allocated by a country's respective national numbering agency (NNA).
  • An ISIN is not the same as the ticker symbol, which identifies the stock at the exchange level. The ISIN is a unique number assigned to a security that is universally recognizable.
  • ISINs are used for numerous reasons including clearing and settlement. The numbers ensure a consistent format so that holdings of institutional investors can be tracked consistently across markets worldwide.

Understanding International Securities Identification Number (ISIN)

An ISIN is often confused with a ticker symbol, which identifies the stock at the exchange level. For example, according to ISIN Organization, IBM common stock is traded on close to 25 trading exchanges and platforms, and its stock has a different ticker symbol depending on where it is traded. However, IBM stock has only one ISIN for each security. The ISIN code is the only common securities identification number that is universally recognized. ISINs are used for numerous reasons, including clearing and settlement.

All internationally traded securities issuers are urged to use the ISIN numbering scheme, which is now the accepted standard by virtually all countries. Both the United States and Canada use a similar scheme, known as a CUSIP number. 

ISIN codes have a total of 12 characters that consist of both letters and numbers. These include the country in which the issuing company is headquartered (first two digits), along with a number specific to the security (middle nine digits), and a final character, which acts as a check.

An example of an ISIN number for a US company’s stock certificate could look like this: US-000402625-0 (dashes incorporated for simplicity). On the other hand, a theoretical Namibian company could have an ISIN, which appears as NA-000K0VF05-4. The middle nine digits of the ISIN are computer-generated in a complex formula. These are critical in helping protect against counterfeiting and forgery.

An ISIN should not be confused with a ticker symbol, which identifies stock at the exchange level. A company's security could have more than one ticker symbol depending on the trading platform, but the security will have only one ISIN.

History of International Securities Identification Numbers (ISINs)

Universal acceptance of ISIN allows global straight-through processing (GSTP), which is the electronic handling of trade clearing and settlement. ISINs are used to track holdings of institutional investors in a format that is consistent across markets worldwide.

ISINs were first used in 1981 but were not widely accepted until 1989 when the G30 countries recommended their adoption. A year later they were endorsed by the International Organization for Standardization (ISO). In 1994, the Global ISIN Access Mechanism was created to electronically exchange ISIN information across regions through a digital information exchange process called GIAM-2.

The relevant National Numbering Agency (NNA) in each country issues ISINs. In the United States, this is the CUSIP Service Bureau. Established in 1964, the CUSIP Service Bureau was created to improve country-wide standards for the financial services industry.

In the United States, ISINs are extended versions of 9-character CUSIP numbers and are formed by adding a two-digit country code at the beginning of the CUSIP number and appending a check digit at its end.

The International Organization for Standardization (ISO) 6166 currently defines an ISIN’s structure. Currently, an ISIN can be assigned to most forms of securities including (but not limited to) equity shares; units and/or depositary receipts; debt instruments including bonds; commercial paper; stripped coupons and principal amounts; T-bills; rights and warrants; derivatives; commodities; and currencies.

Article Sources
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  1. The ISIN Organization. "ISIN." Accessed Sept. 28, 2020.

  2. ISIN. "About CUSIP." Accessed Sept. 28, 2020.

  3. CUSIP Global Services. "Inside the CGS Identification System," Page 2. Accessed Sept. 28, 2020.

  4. ISIN. "History of ISIN Number Codes." Accessed Sept. 28, 2020.

  5. CUSIP Global Services. "What Are the Trusted Originator of Quality Identifiers and Descriptive Data." Accessed Sept. 28, 2020.

  6. ISIN. "ISO 6166." Accessed Sept. 28, 2020.

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