Understanding the Process of Obtaining an ISIN for Companies

In today's global financial landscape, the International Securities Identification Number (ISIN) plays a vital role in facilitating securities trading and enhancing transparency. For companies seeking to issue or trade securities, obtaining an ISIN is a crucial step. Let's delve into the process of acquiring an ISIN for companies.

What is an ISIN?

An ISIN is a unique identifier used for securities, including stocks, bonds, options, and futures. It consists of a 12-character alphanumeric code, providing a standardized method for identifying securities worldwide. Each ISIN is unique to a specific security, enabling efficient tracking and trading across borders.

ISIN (International Securities Identification Number) is a unique 12-digit alphanumeric identification number allotted for a security Equity fully paid up, equity-partly paid up, equity with differential voting/dividend.

Importance of an ISIN for Companies

For companies looking to issue securities, having an ISIN is essential for several reasons such as Global Recognition, Market Transparency and Regulatory Compliances.

To secure a new ISIN, a company must engage a SEBI registered Registrar to an issue and Share Transfer Agent (RTA).

Process to Obtain ISIN for Companies:

1. Board Resolution Authorization: The company initiates the process by passing a Board Resolution authorizing a Director or another designated signatory to avail the ISIN and execute necessary agreements, forms, and documents.
2. Net Worth Certificate: A Net Worth Certificate, signed by a Practicing Chartered Accountant or Practicing Company Secretary (PCS), is essential. This certificate should be digitally signed by both the PCA and an authorized signatory of the company.
3. ISIN Activation Form: The company completes and signs the ISIN activation form for CDSL/NSDL, comprising Part A for Issuer Details and Part B for Security Details.
4. Tripartite Agreement: Execution of the Tripartite Agreement is required between the Issuer, RTA, and NSDL/CDSL. Each party involved signs three copies of the agreement, including the Depository Participant, RTA, and Issuer.
5. Audited Financial Reports: Submission of a signed copy of the company's latest audited auditor report and Balance sheet is mandatory.
6. GST Certificate: A signed copy of the company's latest GST Certificate must be provided.
7. Memorandum and Articles of Association (MOA/AOA) and Certificate of Incorporation or Conversion: Submission of signed and certified true copies of the Memorandum of Association, Articles of Association, and all Certificates of Incorporation of the Company is necessary.
8. Post Balance Sheet Transactions: If any shares have been issued after the Audited balance sheet date or if there is any change in Authorized Share Capital, submission of a copy of PAS 3 & SH7 and payment challans thereof is required.

All these documents must be processed through the mediation of the RTA.

Conclusion

Acquiring an ISIN is a pivotal step for companies venturing into securities issuance. It not only amplifies market visibility but also serves as a regulatory compliance prerequisite, attracting potential investors. Understanding and meticulously adhering to the outlined process, in collaboration with NNAs and regulatory bodies, ensures a seamless ISIN application journey for companies, fostering successful securities issuance and trading on a global scale.