ISIN codes are used worldwide in a variety of ways for both private and public companies. While there are many securities identifiers that both small and large corporations issue to their clients, ISINs are considered the only true underlying identifier that crosses all other identifiers. Said another way, ISINs are the common denominator security identification code. For example, Facebook has several different types of securities outstanding, mostly in the equity field and each one may have numerous types of private securities codes. However, all the securities or classes of shares or tranches of notes or bonds have their own unique ISIN, which is considered the common denominator of securities identifiers.
ISIN codes are issued to stocks, bonds, futures, indexes and many other types of securities and products. It is 12 digit alpha numeric code that has gained worldwide acceptance over the past 25 years. Yearly, more countries – today over 120 – use ISINs as their primary code identifier. ISINs are used in cross border trading and its main function, aside from identifying the security (it acts as sort of a passport number but for a securities), is for clearing and settlement purposes. When a stock or bond trade is executed the trade must clear, and often times the ISIN code is the identifier that assists in the clearing. Additionally, the settlement aspect of the trade, too, uses the ISIN code. Thus, the clearing and settlement of transactions – which is of course of paramount importance for the financial world’s health – is often utilized via the ISIN code.
Equity ISIN Codes
ISINs are given to equity securities. For example, a private fund may need its share classes assigned ISINs, while a company seeking to list their shares publicly on a stock exchange would utilize obtaining an ISIN code for such purposes. Private companies looking to sell their common stock would do the same. Entities that use ISINs for the equities include, for example:
- Hedge funds seeking ISINs for their share classes
- Mutual funds and specialty funds
- Offshore and onshore funds (such as Cayman Islands funds and United Kingdom (UK) funds)
- Unit Trusts (such as from Hong Kong)
- Corporations and Limited Liability Companies, and much more
Debt ISIN Codes
Note issuance and bond offerings go hand in hand, and both private and public entities utilize ISINs for identification purposes or for clearing and settling the transaction. For examples, here are some of the debt instruments that many seek an ISIN number for:
- Promissory Notes
- Sovereign Government debt, and much more
Public vs Private Company and ISIN
Many public and private companies apply for ISINs codes. ISINs are not just given to public companies. On the contrary, we believe more private entities receive ISINs than public ones. Public entities normally submit a prospectus or a S-1 or Red Herring or similar disclosure document when applying for an ISIN, while private companies submit an offering memorandum or private placement memorandum.
If you need assistance with the ISIN application process or country codes, or need to know the fees, please contact us.