Numbering Agencies Discuss ISINs Global Network At ANNA Meeting

The securities numbering agencies of 23 countries met to discuss international standards last month at the Association of National Numbering Agencies' (ANNA) inaugural meeting in London. The association is promoting the adoption of international securities identification numbers (ISINs) in line with the Group of Thirty's recommendations for cross-border trading.

The ISIN is aimed at addressing the disparate securities-numbering systems used by national agencies worldwide. When securities are traded across borders, these disparate systems make identification of securities difficult.

The adoption of ISINs in the U.S. is unlikely. The ISIN identification code uses 12 characters, compared with the nine characters used by CUSIP, which issues identification numbers for North American securities. The codes are used by sell- and buy-side firms to identify securities for processing in settlement and portfolio management systems. A switch to the ISIN numbering system would require substantial system rewrites for vendors and users of pricing services.

While the ANNA delegates didn't make any firm decisions on securities identification, the meeting did revive the long-dormant issue of a network linking the world's securities numbering databases. But sources say the network--dubbed GIAM (for Global ISIN Access Mechanism)--won't be ready by the end of this year, by which time the Group of Thirty had urged the adoption of ISINs.

Delegates elected Fred Dellemijn of the Amsterdam Stock Exchange chairman of ANNA. James Taylor, vice president of the CUSIP Service Bureau, which is operated by McGraw-Hill Inc.'s Standard & Poor's Corp. subsidiary, was also named to the board.

According to Dellemijn, delegates discussed a draft version of a set of guidelines for allocating ISINs. Delegates discussed ISINs for derivative instruments and securities from so-called emerging markets.

Each ISIN will consist of a two-character prefix, a nine-character code, and a check digit. In the U.S., CUSIP recently began issuing securities identifiers carrying an alphanumeric character prefix to specify country of origin for certain foreign issues trading in North America. These identifiers--issued according to the CUSIP International Numbering System (CINS)--will replace CUSIP numbers originally issued to these securities.

While CUSIP had warned vendors and users of the adoption of alpha characters, some users were caught out by the change. According to an official at one vendor of end-of-day pricing services, several large institutional users of its data hadn't made the systems changes necessary to handle the alpha prefix, which will be added to a total of 600 foreign securities.

CUSIP's Taylor says users of CUSIP's numbering system should have been aware of the changes. He says the agency provides constant updates to stock exchanges, data vendors and sellers of securities processing and portfolio management systems. He says CUSIP has used alpha characters in the fifth and sixth positions of the nine-digit CUSIP code for some time.

The vendors themselves were better prepared. Interactive Data Corp. last week began offering the new CUSIP numbers as an option. The company will continue to support existing all-digit CUSIP numbers. Meanwhile, Merrill Lynch & Co.'s Securities Pricing Service is carrying the alpha prefix, according to Ronald Ciesla, director of the service.

Dellemijn says that the ANNA delegates discussed the associations plans for GIAM, but that no firm decisions were made. The ANNA-affiliated numbering agencies first proposed the system in 1990, when they held meetings on an informal basis (Inside Market Data, Aug. 6, 1990).

At that time, the association decided it would create a network for linking participating agencies' respective numbering databases as the first step toward creating a central database allowing cross-referencing between domestic and ISIN numbers.

Dellemijn says no timeframe for building the network was determined at the ANNA meeting. But sources close to the project say that the system won't be available until next year.

Taylor declines to comment on timeframes for the GIAM rollout. He says, however, that ANNA is in discussions with a number of network services providers including IBM and GE Information Services Inc.