What is an ISIN in a Demat Account?

An ISIN number is a unique 12-character identifier code assigned to your securities when you trade or invest in a securities market. The International Organisation for Standardisation (ISO) introduced the concept of ISIN in Demat account to number and specify securities.

When you are purchasing a share or enquiring about certain stocks of a company, you can see a unique ISIN assigned to each of such securities. Apart from stocks, you can spot an ISIN for other securities, like mutual funds, bonds, etc.

Read this blog and discover the purpose of an ISIN, its detailed structure, how to find it, and more.

What is the Meaning of the ISIN Number in Securities?

The International Securities Identification Numbering (ISIN) system introduced a 12-digit code to each security traded in both domestic and global securities markets. This code ensures efficient, smooth and secure transactions and trade settlement for investors like you.

In India, the Securities and Exchange Board of India (SEBI) appoints NSDL to assign an ISIN to securities. Also, the RBI regulates the ISIN allotment for government securities, and ISO 6166 decides the structure of this code.

Breakdown of the 12-Character ISIN in Demat Account

To better understand the concept of ISIN in Demat account, a proper breakdown of this 12-character code is important. Suppose IN E132465YX 7 is an ISIN, and here is its breakdown:

• Country Code

  An ISIN code comprises three important segments, and the first two characters represent the country code of the company in which it is headquartered. In this case, the country is India.

• Unique Identifier

  The next segment consists of 9 alphanumeric characters (E132465YX), which is the unique identifier of a security. For India-based companies, the NSDL assigns an ISIN for their listed securities.

• Check Digit

  At the end of an ISIN, there is a single character, which acts as a check digit, and in this case, 7 is a check digit. It reduces error occurrences and fraud.

Importance of ISIN to Identify Securities

After learning the ISIN full form, let us explore the important role of this code in identifying securities. Take a look at how this identifier helps with investments:

• Helps with Identification and Tracking

  ISIN is a globally recognised standard, and in India, the NSDL assigns a unique ISIN to the listed securities of domestic companies. Thus, it helps in tracking the security’s performance, making informed investment decisions and maintaining transparency.

• Helps With Settlements

  ISIN in Demat account is a vital component for trade settlements. Being a universally recognised standard, ISIN reduces many risks with trade settlements in a rapidly globalising market.

• Additional Security

  The check digit at the end of each ISIN increases the overall investment security by reducing fraud and errors.

How to Find the ISIN of Stocks?

As you know, what is ISIN number, it is important to learn how to search for it. You do it online by visiting specific websites. Visit the official websites of the NSE, BSE or NSDL, search for the company, and the websites will show you the ISIN of listed securities.

How Does an ISIN in a Demat Account Help Reduce Errors in Trade?

When you are investing in the securities market, maintaining accuracy is crucial. An ISIN eliminates ambiguity or errors, ensuring the purchase of the exact security that you want. For NRI investors, it helps them to accurately locate Indian companies and invest in their securities.

Conclusion

ISIN in Demat account is a unique identifier that helps to accurately locate securities and invest in them. It helps fund managers identify the securities and prevent fraud, errors, etc. For NRIs, it becomes easy to locate Indian securities and invest or trade accurately.

FAQ’s

1. Are ISINs mandatory for all financial instruments?

Yes, all financial securities, like stocks, mutual funds, bonds, etc., need an ISIN for proper identification in the market.

2. Who issues ISIN in India?

The NSDL assigns the ISIN to securities in India, and as per the ISO 6166 decided structure.

3. What types of securities have ISINs?

An ISIN is issued for securities, such as stocks, bonds, mutual funds, commercial papers, warrants, etc.

4. Is an ISIN the same as a CUSIP or a ticker symbol?

CUSIP is a 9-character-long code used in the USA and Canada. A ticker symbol is used to locate stocks at the exchange level. The ISIN is a globally recognised 12-character code for securities.