MiFIR: How ISINs Work: 4

Who can issue ISINs?  You might think that any stock or derivatives or commodities exchange can issue ISINs for the instruments traded on their platforms - but they can't.  ISO has nominated one Registration Authority to be responsible for maintaining the basic details of all ISINs issued globally: the Association of National Numbering Agency (ANNA).  ANNA doesn't generally issue the ISINs itself, but is required by ISO to maintain a central register of all of the ISINs that its members - the "National Numbering Agencies" - have issued. 

Some people say that the system for issuing ISINs is similar to the Global Legal Entity Identifier (LEI) System, and that it is a "federation" of issuers.  In fact, the two approaches are very different.  The Global LEI System promotes competition between issuers of LEIs, both internationally and within each country, in the interest of the legal entities that must pay to obtain an LEI.  ANNA's membership rules state that there can only be one official issuer of ISINs per country (note: this is not a requirement of ISO or of the ISO 6166 standard).  This means that any party that has to comply with MiFIR - any exchange, MTF, OTF, Systematic Internaliser, investment firm, etc - can today only obtain a new ISIN from one source: the organisation defined by ANNA as the local "National Numbering Agency".

As mentioned in an earlier blog, ISINs are not necessarily made available free of charge.  They may have to be paid for, and in some cases there may also be licences and licence fees that govern the use of ISINs, their re-distribution and their cost to market participants.  This is another area that is different from the Global LEI System: licence fees cannot be charged for using or re-distributing LEIs.

ESMA's recommendations for MiFIR technical standards reinforce this "one ISIN supplier per country" approach.

(Chris Pickles is an independent consultant and a member of the Open Symbology Team at Bloomberg)