Anna on track for Isin review deadline

The International Securities Identification Number can be thought of as a barcode for securities, and it’s fundamental to capital markets, facilitating trade across borders since it was introduced in the early 1980s. The Isin is governed by an ISO standard—6166, to be precise—which was recently updated, triggering an implementation process by the body that is tasked with coordinating the assignment of the codes to securities.

This body, the Association of National Numbering Agencies (Anna), says it’s on track to have the revised standard implemented in its systems by the deadline of February 2, 2023. Anna managing director Emma Kalliomaki says the registration authority and its 120 associated members, known as national numbering agencies (NNAs), had to update their systems and workflows to accommodate the revised standard.

These NNAs assign Isins to securities issued in their domains. Every day, they send new Isins and other data to Anna’s data hub, the Anna Service Bureau (ASB), which normalizes and enriches the data for distribution to subscribers such as financial firms and data vendors.  

“With the firm deadline being February 2, we have had confirmation from the majority of the NNAs that everyone is on track to meet that deadline. And we even have some NNAs that have already transitioned to the new record structure,” Kalliomaki says.

All ISO standards, whether for food safety requirements, electrical plugs or shipping containers, undergo a review process every five years. If a standard is no longer serving its intended purpose, it is updated. ISO 6166 was updated after a review process by the ISO, Anna, and industry working groups to reflect how the use of the code has evolved due to new regulatory mandates. The Isin was selected for use in transaction reporting under Mifid II, for example. Another factor is that an identifier that can be used alongside the Isin, the Legal Entity Identifier (LEI), is gaining traction in regulatory mandates worldwide, and the standard of the Isin needed to include that data. 

Anna announced the updated standard in February this year, and set the deadline for implementation by NNAs and its own service bureau for a year later. The updated standard mainly involved a wider dataset, expanding the 43 data fields associated with the Isin to 49. Also, NNAs must now report LEIs to the ASB, as well as two codes also administered by Anna, the Classification of Financial Instruments (CFI) and the Financial Instrument Short Name (FISN)

These standards all work independently to classify and describe instruments or entities, but when brought together, can help financial risk managers, for example, gain a wider understanding of their exposures to instruments and entities, Kalliomaki says. The CFI and FISN were already referenced in the previous version of the Isin standard, but with the update, that is now a clearly formalized relationship.

“It’s important for that formalization to exist. It emphasizes the complementary nature of the standards: You have the LEI at the entity level, the Isin at the issuance level, the CFI to classify and the FISN to describe. That’s identification, description, and classification, sitting in there in one suite of ISO standards,” Kalliomaki says.

The revised Isin also contains new, explicit language confirming that it covers both financial and referential instruments, as well as assignment rules for over-the-counter (OTC) derivatives.

Anna's responsibility was to plan the implementation and adoption of the revised standard, Kalliomaki says—but that isn’t necessarily a simple exercise due to the federated model under which the body's 120 members operate.

“We can’t just say, ‘Next week, you need to implement this revised standard.’ The implementation takes planning and time to ensure that everyone is aligned to make the changes that are necessary for the implementation,” she says.

The NNAs themselves had to make internal changes to their workflows for sourcing Isin information. By February 2, they must have introduced the six new data fields and be reporting those to the ASB. Kalliomaki says “a small number” of NNAs have not transitioned to the new schema, but adds that “we are confident that we’ll be able to work with everyone to ensure that we’re ready for February 2.”

Anna itself has updated its own tech stack, partially to accommodate the new standard. In 2021, it began migrating its platform to the cloud, in the process adding the new data elements and validations associated with the Isin update, as well as a new subscription service that allows users to extract customized data on their portfolios.

As well as the revised Isin exercise, Anna has also been engaged in a separate project with the Global LEI Foundation to map LEI to the Isin.

“The entity where the LEI comes from and the Isin are related to issuances. The relationship between the two is really important, which is why Anna has a voluntary agreement in place for inclusion of the LEI within the Isin in the ASB database,” Kalliomaki says.

NNAs can agree to contribute Isin-to-LEI mappings, making them available in an open file that users can look up online. As part of this agreement, the NNA must also ensure that validation and maintenance is done to a certain level.

Because of these firm commitments required on the part of the NNA, the agreement is voluntary. Kalliomaki says about 25 NNAs have agreed to it, meaning that 61 jurisdictions are covered (some NNAs cover more than one jurisdiction). Almost 8 million Isins are mapped to about 89,000 unique LEIs, Kalliomaki says.