ISIN

ISIN is the international securities identification number: an alphanumeric string of fixed length that is assigned to a specific issue and stays with it until redemption or cancellation. It is neither the name of the security nor its exchange symbol, but a record-keeping key by which the issue is recognised by depositories, clearing and settlement systems, registrars and brokers' back-office systems, including those outside the country of issue.

How the code is built

The code begins with the letters denoting the country in which the issue is registered, followed by the national part, which is assigned by that country's numbering agency, and the string ends with a check character calculated from the preceding characters. The check character is not decoration: it is there so that a typo in an instruction does not pass as someone else's, yet existing, code. The assignment of the code itself has nothing to do with the exchange: issues that have never been traded have one too, while listing and admission to trading are handled through separate procedures and at a later stage. For Russian issues the national part is assigned by the National Settlement Depository, and it is this code that becomes the reference point across the whole record-keeping chain — from the entry at the depository to the line in the securities account statement.

Where the code works instead of the name

A ticker is convenient for a person; the code is convenient for a system. When a security is moved between brokers, the depository transfer is processed by code, not by name: matching names will not save the instruction, and a mismatch in the code will stop it. The instrument card on the trading venue shows the familiar symbol, but behind it stands a specific issue with its own code:

What the code does not tell you

The code answers the question "which security is this", but says nothing about its terms. Neither the maturity, nor the rate, nor the settlement currency can be read from it — a security with one country's code may well settle in another currency. Hence a common mix-up: a matching country at the start of the code is taken as an indication of where and in what currency settlement will take place.

The second trap is securities that are linked economically but are not identical for record-keeping purposes. A depositary receipt and the share underlying it are separate securities with separate codes, so after the conversion of receipts the holder ends up with a different identifier on the account, although the stake in the company has not changed. The substitution and splitting of issues behave the same way: a change of the issuer's name does not affect the code, while the appearance of a new issue always means a new code.