Managing & Integrating Data

ISINs – Powering T+1 STP transformation

Laura Stanley

Director of Symbology, LSEG

International Securities Identification Numbers (ISINs) are critical for a wide range of use cases, including the new requirement for the transformation of clearing and settlement to trade date plus one day (T+1) via straight-through processing in the US.

The London Stock Exchange is the National Numbering Agency (NNA) for UK ISIN codes which includes Great Britain, Jersey, Guernsey and Isle of Man. UK ISIN codes are issued free of charge. Organisations that require large numbers of ISINs can also receive a bulk download of ISIN codes pre-assigned in advance, making their processes more efficient.

  1. ISINs are identifiers that uniquely identify a financial instrument that aid in the automation of clearing and settlement.
  2. ISINs are issued for free by London Stock Exchange for Great Britain, Jersey, Guernsey and the Isle of Man.
  3. An ISIN pre-allocation service is available from London Stock Exchange for organisations that need large quantities of these codes for regulatory reporting and other workflows.

Symbology plays a critical role in data transformation projects – for example, ISIN identifiers are essential for the new US Securities and Exchange Commission (SEC) requirement for T+1 straight through processing (STP) for financial instrument clearing and settlement by May 2024. Firms around the globe need to prepare for this change. Other jurisdictions – such as Europe and the UK – are now more likely to introduce T+1 eventually to reduce operational risk and speed processing, and the UK government is actively studying the move to T+1. So, what role does an ISIN play?

What is an ISIN?

ISINs are an alphanumeric code composed of 12 characters, which are assigned to specific financial instruments, such as equities, fixed income, derivatives, and more. It functions much in the same way as the bar code does on items for sale in the supermarket – it provides a code that is used to process transactions associated with the instrument, such as clearing and settlement.

The ISIN was originally developed in 1981 – and then recommended for adoption by the G30 in 1989 – to enable straight through processing (STP) of securities, which is the electronic handling of trade clearing and settlement. Today, ISINs are also used to track holdings of institutional investors because the code is in a format that is consistent across markets worldwide. It is also required for regulatory reporting in jurisdictions such as the EU.

Who issues ISINs?

SINs are created and distributed by designated National Numbering Agencies (NNAs). For example, the London Stock Exchange Group (LSEG) is the sole issuer for ISINs for Great Britain, Jersey, Guernsey and the Isle of Man.

Across the globe, currently there are 116 NNAs, and these can be different types of organisations, including central securities depositories, exchanges, central banks, vendors and regulators. Today, the NNAs cover more than 220 jurisdictions. New organisations regularly join. For example, in December 2022, the Barbados Central Securities Depository Inc joined the Association of National Numbering Agencies (ANNA) – the body that oversees the ISIN programme – as a full member. Banque Centrale du Congo and International Financial Services Centres (IFSC), India, were confirmed as partners. London Stock Exchange is a founding member of ANNA.

What does an ISIN look like?

An ISIN is a code is composed of 12 characters which has three parts:

  • Characters 1-2 – This is the two-letter code of the country where the issuer of the securities has its legal domicile. For debt securities, the NNA is the Country of Incorporation of the CSD.
  • Characters 3-11 – These reflect the local numbering code of the security concerned. If the national number has fewer than nine characters, zeros are inserted in front of the number.
  • The final character is a check digit, which is a form of redundancy check used for error detection on identification numbers.

For example, AstraZeneca Plc – GB0009895292. As of mid-2023, more than 96.7 million ISINs had been created, and of those 16.1 were active.

Refinitiv reference data: We originate, consolidate and distribute reference data to meet your trading and compliance needs.

How is the ISIN process governed?

The overall ISIN framework is overseen by ANNA. The International Organisation for Standardisation (ISO) develops and maintains the standards which govern the creation and use of ISINs. The revised ISO 6166 – the ISIN standard – was implemented by ANNA in February 2023.

The revised ISO 6166 extended the number of data fields in the ISO record from 43 to 49. Emission allowances, carbon credits and baskets are now confirmed as instruments which can have ISIN numbers. The revised standard also includes assignment rules for tokenised financial and referential instruments as well as for OTC derivatives.

Why are ISINs important for T+1 STP?

ISINs are essential for the delivery of T+1 STP because the identifiers enable the automation of the clearing and settlement process – meeting this shortened timeframe is impossible without extensive automation. Financial firms in the US must now move to a T+1 settlement cycle by May 2024. According to a recent survey by the DTCC, more than 40% of US respondents have not yet begun planning for T+1, and 61% of US buy-side firms unprepared for the transition. More than 50% of European and Asia-Pacific market participants have not defined their plans to manage critical areas such as foreign exchange and securities lending. Other jurisdictions – Canada and India – have also announced their intentions to move to T+1. This makes it more likely for Europe and the UK to move to T+! over the medium term. An interim public report on the UK government taskforce’s initial findings on moving to T+1 is due to be published by December 2023.

Also, ISINs are an important component of firms’ overall symbology strategy – a key part of the data management strategy – for meeting T+1. Symbology enables firms to connect data points to each other. So, for example, ISINs can be linked, via financial instruments, to other identifiers, such as SEDOLsPermIDs, RICs, LEIs and more to power automation.

How we can help

UK ISINs are issued free of charge and can only be requested directly from the London Stock Exchange here.

London Stock Exchange offers a bulk ISIN Pre-Allocation Service for organisations who issue their own instruments and require an ISIN code within their instrument creation workflow or for regulatory compliance. The pre-allocation service enables firms to quickly and easily obtain the ISIN codes they need – for example, for exchange-traded derivatives. Organisations can then assign an ISIN and upload that to LSEG, who then distributes the ISIN code to the ANNA database of ISIN codes. Also, organisations are allocated 10,000 or 100,000 ISINs. When the number of ISINs the organisations have left to use hits a threshold, more ISINs are automatically sent via SFTP. For organisations that require large quantities of ISINS for regulatory reporting or other use cases, pre-allocation reduces operational risk and enhances the efficiency of internal processes.

Please email the ISIN Services Team at isinrequests@lseg.com for more information.

ANNA Service Bureau (ASB).

Symbology services: We support a number of identifiers to enable you to deliver on your firm’s use cases, such as connecting data across the trade life cycle.

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