International Securities Identification Number (ISIN) - Explained
What is an ISIN Number?
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Table of ContentsWhat is an International Securities Identification Number (ISIN)?How is an ISIN Used?Academic Research on International Securities Identification Numbering (ISIN)
What is an International Securities Identification Number (ISIN)?
The ISIN (International Securities Identification Number) is a numerical value which is used as a unique identifier of a security. It is an alphanumeric code containing 12 characters. There is a particular organization in every country that is responsible for assigning ISINs, commonly said to be an NNA (National Numbering Agency).
How is an ISIN Used?
ISO 6166 (International Organization for Standardization) defines the ISINs. The securities that are traded internationally must have this number. There are several states which follow a different numbering system, e.g., the United States, Canada, etc. use the number, called CUSIP (Committee on Uniform Security Identification Procedures). A CUSIP Service Bureau runs a banking system and issues this number. It was established in 1964. The main objective to form this organization was to make the securities tracking better. It also ensures to keep up the securities securities regulatory standards. Hence, aims to improve the industry of financial services. The standard ISIN codes contain twelve characters, including the digits and alphabets. Every character of ISIN represents a specific attribute. The 1st 2 numbers show the companys headquarters that issue the security. The next 9 numbers exhibit particular security. The last character is a security check. The United States stock may have ISIN US-00050275-0. Majority of agencies that issue a random number in the middle of ISIN using the randomization system. This is a measure to avoid counterfeit copies.
Academic Research on International Securities Identification Numbering (ISIN)
- International Securities Identification Numbering (ISIN), Bodson, L. (2008). Encyclopedia of Business in Today's World. This paper explains about the use of ISIN, which is an International Securities Identification Number).
- The impact and importance of mandatory adoption of International Financial Reporting Standards in Europe, Aubert, F., & Grudnitski, G. (2011). Journal of International Financial Management & Accounting, 22(1), 1-26. In this research, the writers have made a 2 stage analysis on the effect and significance of IFRS (International Financial Reporting Standards), which is compulsory for the EU (European Union) industries. They have shared the report of results generated from this analysis. In the 1st stage, they have analysed 13 countries and 12 firms. They identified major differences in ROA (the Return on Assets) for the industries counted under International Financing Reporting Standards (IFRS) as well as local GAAP (Generally Accepted Accounting Principles) referred to as LG shortly. Fairly large positive differences were found in France, Italy, Belgium, Netherlands, Switzerland, Finland, the UK and Sweden. Just Norwegian and German industries showed a fairly large negative difference in Return on Assets (ROA) counted using LG and IFRS. The analysis was repeated firm-by-firm to identify the difference in Return on Assets. In the 2nd stage, the industries of Spain and Portugal were analyzed with respect to the effect of compulsory IFRS. If we define the effect regarding the quality of financial and market reporting, we see statistically important terms between market returns and accounting information for industries having 3530 records collected from samples of all countries, including Finland, Greece, Belgium, Italy, Norway, Germany, Netherlands, UK, France and Sweden. The research uncovered the support for the patness of accounting data of industries in the collected sample of all countries, including Finland, Germany, Norway, Belgium, Switzerland, Netherlands, Italy, France and Sweden. Lastly, as proof in favour of the proposition, we find discretionary accruals for industries collected from the sample of all countries with 3480 records and from Greece, UK, Sweden and Netherlands. However, if we compare the differential accounting data obtained under LG and IFRS, we find a few differences. Particularly, for any sample, no statistical record was provided against the relevant accounting data created under LG and IFRS. When the researchers moved the analysis to the patness of earnings, they found a positive differential effect in earnings based on IFRS and LG for the sample collected from all countries. Lastly, the discretionary accruals quality was found to be fairly higher under LG and IFRS for industries in Sweden, Finland and Greece.
- The Regulatory and Institutional Conditions for an International Securities Market, Van Zandt, D. E. (1991). Va. J. Int'l L., 32, 47. This paper provides extensive research on what are the institutional and regulatory conditions for ISM (International Securities Market).
- Analysis of how underlying topics in financial news affect stock prices using latent dirichlet allocation, Feuerriegel, S., Ratku, A., & Neumann, D. (2016, January). In 2016 49th Hawaii International Conference on System Sciences (HICSS) (pp. 1072-1081). IEEE. It is the responsibility of the organisations which are a part of the stock exchange that they expose all information before the public that can have a fairly large effect on the stock prices. This transparency standardisation has been devised to make sure that all the market contributors can access the same data. The relevant press releases are new and the most credible sources related to the industrys operations. It is interesting to know that despite the researchers have inquired the release time, research has put a bit effort in checking the relevant new topics. So, the authors make an analysis of the impact of topics got in corporate PRs (Press Releases) on the returns of the German stock market. The topic of ad-hoc promulgation has been determined with the help of LDA (Latent Dirichlet Allocation). There are forty topics being extracted successfully. As supposed, the impact of these domain groups is quite different from each other. There are some domains that have no impact on exceptional stock returns. Other topics show a greater effect, e.g. drug testing.
- Consistency checking of financial derivatives transactions, Dui, D., Emmerich, W., Nentwich, C., & Thal, B. (2002, October). In Net. ObjectDays: International Conference on Object-Oriented and Internet-Based Technologies, Concepts, and Applications for a Networked World (pp. 166-183). Springer, Berlin, Heidelberg. XML has become a de-facto standard and most of the institutions are using it to present data of their goods and services and exchange it. The objective is to process transactions fast, economically, and involving less human interaction. Because of the nature of a commercial firm, there are high chances of inconsistency in the whole life of a financial instance. Their resolution reveals timing and cost overheads.
- Mining individual securities databases for analytical purposes: the example of the BIS international debt securities statistics, Ptre, D. (2008). IFC Bulletin, (29). This paper highlights the analytical mining of databases containing data related to individual securities. For that, it provides an example of statistical records of global debt securities maintained by the Bureau of Industry and Security (BIS).
- Improving Decision Analytics with Deep Learning: The Case of Financial Disclosures, Fehrer, R., & Feuerriegel, S. (2015). arXiv preprint arXiv:1508.01993. This research is about how to make the decision analytics better with the help of deep learning
- Preliminary report on standards in global financial markets, Houstoun, K., Milne, A., & Parboteeah, P. (2015). Available at SSRN 2531210. This article addresses several market failures. They can cease regulations and suggest actions on how to control these blockers and therefore make sure to greatly realise the efficacy and standardisation advantages of risk minimisation in international financial markets. First, it checks the economic advantages of regulations. The market failures, including deficiency of coordination and fixed interests, can be a barrier in this regard. Then, it views standard organisations and industries, e.g. engineering, internet, international supply chain established to overcome the market barriers, as compared to underdeveloped organisations of standard progress in fiscal services. It keeps assessing the progress of transaction and information reference regulations in financial commercial places, theres much yet to do particularly on information reference regulations, where nowadays limited development depends fairly on regulatory commission. Lastly, it suggests 3 activities to make standardisation better in international financial markets: (1) Advancement of discussion and communication across the company. (2) to let the senior managers engaged in the project of developing cross the company support for regulations and standard organisations.; and (3) renewed strive of professionals and researchers, on pointing to the certain opportunities to use regulations. This is to make business efficiency and commercial transparency better.
- Financial Information Regulation and Emir Principles., Clements, S., & Lemma, V. (2015). In this research paper, the provisions of European Union Regulation # 648 (EMIR 2012) have been analyzed in order to specific efforts of negotiating on a private basis. The research is based on the types of financial derivatives and data available to the counterparties of the contract only. The writers emphasise on the principles that plan to enhance the protection and transparency of the financial markets incorporated with the development of the communication process, making data central to the warehouses accessible to any fiscal operator. Nowadays, this type of centralisation helps a lot in the new establishment of financial transactions. The application of European Markets Infrastructure Regulation provisions (of proper reporting and clearing procedures) have an impact on the industrys structures. It ensures more safety of the right to data. In short, the paper brings forth the main factors of financial data markets that European Union Regulator does not take as a fact. So, we have a dissatisfied outlook that the European Union does not perceive and regulate all the functions relevant to supply and demand of data about the characteristics of financial instruments and market orientations.
- Counterparty Risk Management and the Global Legal Entity Identifier (LEI), Milne, A., & Parboteeah, P. (2014). This paper addresses the international LEI (Legal Entity Identifier), which has been introduced recently. It is a standard for worldwide, unique and clear recognition of contributors to the financial market. G20 leadership has endorsed it. FSB (Financial Stability Board) and commercial regulators of all main jurisdictions support it. The researchers have used different sources of data in order to analyse (1) business effect of LEO and attached reports and explicit requirements on Over-the-Counter contracts of business markets; (2) LEI application and attached related information (such as possession) to manage and control OTC party and the financial risks thereby. It shows that these regulators have intended costs (suggesting withdrawal of industries from OTC contract markets; incurring unnecessarily huge transitional expenditures of compliance), and LEI will get fairly large benefits a large part of the project still needs to work on if it is beneficial for managing and measuring the party and procedural risk.
- Securities data for enhanced analysis of external debt-challenges due to non-ISIN securities, Hokkanen, J. This study focuses on the information of securities to make a detailed analysis of the challenges encountered on external debt because of securities without ISIN.