Isin what is it-international securities identification number
WHAT IS ISIN
NAME: ASIF KHAN
ROLL NO: 07
ISIN-what is it-International
India’s capital markets regulator, Securities and Exchange Board of India, SEBI, has made
dematerialized settlement mandatory for all transactions in securities. This was done in a phased
manner, thus bringing most of the securities in India into dematerialized form. Now, the settlement of
trades on stock exchanges is almost 100 per cent in demat form.
The dematerialization was brought in to prevent physical certificates from sneaking into
circulation, avoiding bad deliveries and associated problems that existed before the pre-demat era.
Companies have to mandatorily go for dematerialized form of securities before making a public or
rights issue or an offer for sale. It has also been made compulsory for public listed companies making
IPO of any security for Rs. 10 crore or more only in dematerialized form.
Movement of securities has become almost instantaneous in the dematerialized environment.
Two depositories, namely, National Securities Depositories Limited (NSDL) and Central Depository
Services (India) Limited (CDSL) provide electronic transfer of securities and more than 99 per cent of
turnover is settled in dematerialized form. All actively traded scrips are held, traded and settled in
demat form. As per the schedule of the clearing agency, the securities will be transferred in-and-out of
members’ demat account by these two depositories, seamlessly and simultaneously, through
depository participants’ (DPs) pool accounts. A DP is an inter-face between a demat accountholder
and a depository.
Each instrument or security is identified separately in NSDL/CDSL system through a unique code
called ISIN (International Securities Identification Number). The description of each instrument is
communicated to all the Depository Participants and Issuers through circulars.
ISIN is an alphanumeric code (12-digit):
•Used by share custodians to track holdings of institutional investors in a format which is consistent
across markets worldwide
•Designed by United Nations International Organization for Standardization (under ISO: 3166)
•ISIN is issued by National Numbering Agency (NNA)
•SEBI acts as NNA in India
•Physical and Demat shares will have different ISINs
•Fully paid-up and partly paid up shares will have different ISINs
•SEBI being the National Numbering Agency for India has permitted NSDL(National Securities
Depository Limited) to allot ISIN for demat shares.
NSDL ensures the following during allotment of ISINs:
•The ISINs allotted by NSDL does not at any point of time breach the uniqueness of ISIN of physical
form for the same security
•ISIN for a security is allotted only when the security is admitted to NSDL or on receipt of request for
ISIN from CDSL
•The numbering system is simple
•The numbering system of ISIN is in compliance with the structure of ISIN adopted by SEBI
•In case, any corporate action results in a change in ISIN, then the securities bearing the new ISIN is
treated as newly listed security for group categorization
Numbering System of ISIN
The numbering structure for securities in NSDL is of 12-digit alpha-numeric string.
1. The first two characters represent country code i.e. IN (as per ISO 3166).
2. The third character represents the Issuer Type as detailed in Table 1below. The list may be
expanded as per the needs. Maximum issuer types can be 35 (A to Z & 0 to 8. The partly paid-up
shares are identified by 9).
3. The next four characters (fourth to seventh character) represent company identity. The first 3
characters are numeric. The fourth character is alpha character. The numbering begins with ‘001A’
and continues till ‘999A’ and proceeds to ‘001B’.
4. The next two characters (the eight and ninth characters) represent security type for a
given issuer. Both the characters are numeric. The security types are planned which may be
expanded as per the need as detailed in Table 2.
5. The next two characters (the tenth and eleventh characters) are serially issued for each security of
the issuer entering the system.
6. Last digit is double-add-double check digit.
Table 1: Issuer Type (the Third Character)
Company, Statutory Corporation, Banking Company
Mutual Funds including UTI
NB: ISINs for Government Securities (G-Secs) are allotted by Reserve Bank of India
Table 2: Security Type (the eighth & ninth characters)
Postal Savings Scheme
Deep Discount Bonds
Floating Rate Bonds
Step Discount Bonds
Regular Return Bonds
Certificates of Deposit
RBI Relief Bonds (incl National Savings Certificates VII issue)
The stamp duty on transfer of demat securities has been waived. There are two depositories in
India, namely, NSDL and CDSL. They have been set up to provide instantaneous electronic transfer
In order to promote dematerialisation of securities, India’s leading financial institutions, along with
National Stock Exchange, had in August 1996 established the National Securities Depository Ltd.
(NSDL), the first depository in the country, with the objective of enhancing the efficiency in settlement
systems as also to reduce the menace of fake/forged and stolen securities. This has ushered in an
era of dematerialized trading and settlement.
CDSL was set up in February, 1999 to provide depository services. All leading stock exchanges like
the National Stock Exchange, Calcutta Stock Exchange, Delhi Stock Exchange, The Stock
Exchange, Ahmadabad, etc have established connectivity with CDSL