Numbering Agencies Suggest International Database Network

The Association of National Numbering Agencies (ANNA) has proposed a network that would link international numbering agencies' databases of security identification numbers. Dubbed the Global ISIN Access Mechanism (GIAM), the proposed network would allow numbering agencies to cross-reference domestic security codes with International Securities Identification Numbers (ISINs).

The ISIN was created by the International Standards Organization (ISO), a worldwide federation of national standards committees, specifically for cross-border trading. As international trading grows, the Group of Thirty (G30), an international organization made up of major financial organizations, has recommended that all countries adopt the 12-digit ISIN codes for cross-border trading by 1992.

National agencies create codes and assign them to securities as they are introduced. The U.S. code is known as the CUSIP number, while the U.K. code is known as the SEDOL number. The problems arise when firms trade foreign issues. For example, U.S. firms can't always assign a U.K. security its SEDOL number because it may clash with an existing CUSIP number.

Many market participants consider ISINs an efficient way of accommodating cross-border identification of securities. But changing existing security numbers to ISIN numbers would be a major undertaking for many countries. In some instances it would entail complete overhaul of computer systems, say some observers.

ANNA and other market participants see the creation of a database to allow cross-referencing between national codes and ISIN codes as a possible solution. The GIAM proposal, made at a recent ANNA meeting, would accommodate that cross- referencing capability. The association plans to issue a request for proposal for the network by the end of the year.

In adopting the GIAM plan, ANNA rejected two other proposals: one from Telekurs AG and McGraw-Hill Inc.'s Standard & Poor's Corp. subsidiary; a second from members proposing development and management of a central ISIN database by the Society for Worldwide Interbank Financial Telecommunications (SWIFT).

Telekurs, a Swiss data vendor that also has responsibility for securities numbering in that country, already has compiled an ISIN database of about 200,000 international securities in a joint development with S&P (MTR, Oct.16, 1989). However, rival market data vendors have expressed concern about an ISIN database falling into the hands of companies like Telekurs, which are both data vendors and numbering agencies.

An S&P spokeswoman denies the database is competitive with what ANNA is trying to develop. But ANNA's rejection of the proposal reflected vendor concerns. ANNA spurned the SWIFT proposal partly because of its $1 million price tag, sources say.

Peter Wittman, chairman of an ISIN user group and a member of the ISO committee that formulated the ISIN standard, says the GIAM network is the first step in the creation of a central database system available to users. He is optimistic that all countries involved in the international securities marketplace will abide by the G30 recommendation and adopt the ISIN standard.