An identifier is a code or symbol assigned to an economic entity to identify it uniquely, so that the entity does not get mistaken for another in a given context. By way of example, in many countries, for fiscal purposes, along with given names, a person is assigned a VAT identification number (“Codice fiscale” in Italy) that is unique to that person, so that there can be no mistakes and confusion with another person with the same name.
Similarly, in a financial context, financial instruments are assigned unique codes, called identifiers. An identifier can refer to a specific company or to the instruments that are linked to a specific company.
Identifiers were introduced at different times in various parts of the world. Many countries initially developed national identifiers, that are not used outside of their own territory. With the expansion of financial markets, though, the need emerged to create systems of identifiers that could be recognized by the international financial community.
Nowadays there is not one-for-all system of identifiers used across all countries of the world, but we can rely on a few formats that have been developed by specific agencies and are internationally recognized, and that can be used to search financial databases. Along with those, individual financial information providers (such as Bloomberg, LSEG, S&P, etc.) have implemented proprietary codes to be used exclusively within their platforms.
It is important to be aware of the variety of identifiers as you begin your search with financial databases. It is also important to know that not all types of identifiers are constant over time. In this guide we are going to learn about the most popular companies and securities identifiers and how to use them effectively.
About this guide: this guide assumes you already have basic knowledge of financial databases, including how to access them and what their basic functions are. If you need a quick refresher, you can check the databases libguides.
This guide focuses on company and equity identifiers (not bond or other instrument identifiers). Furthermore, it does not cover the codes related to industry classification systems (NAICS, NACE, SIC, ATECO, etc.).
In the context of financial databases, an identifier can identify a company and/or specific securities within that company (different classes of stocks, stocks of a specific company but traded on different markets, bonds, etc.). Here is an example:
The public company Alphabet Inc. (Google's parent company) issues both Class A (ticker: GOOGL) and Class C shares (ticker: GOOG). What is the Alphabet's ticker, then? The answer is: there is no single universal identifier. First of all, they are 2 separate instruments, so they cannot have the same code. Secondly, different systems assign them different codes:
|
Alphabet’s Class A shares |
Alphabet’s Class C shares |
|
ticker symbol: GOOGL |
ticker symbol: GOOG |
|
RIC code: GOOGL.O |
RIC code: GOOG.O |
|
ISIN code: US02079K3059 |
ISIN code: US02079K1079 |
Marking the difference between Class A and Class C shares is not the only situation when it is important to specify what instruments you are working with. Other circumstances when you will want to use accurate identifiers, instead of the company's name, before starting pulling out data from a database could be, for example:
Stanley Black & Decker Inc.: based in the USA, operates in industrial machinery
Stanley Lifestyles LTD: based in India, operates in home furnishing
GE Capital Fleet Services: operates in motor vehicle lease services
GE Capital Real Estate: operates in real estate management services
The most important use of identifiers, though, is when extracting data about multiple companies simultaneously: if you have a list of identifiers, you can easily upload it to the financial database. The same thing cannot be done if you have a list of company names, as most financial databases do not allow you to upload a list of names (except Orbis, but it will require you to spend time excluding companies with similar names).
Always bear in mind that some types of identifiers may vary over time; some identifiers may even be 'recycled', that is, re-assigned to a different instrument. Depending on your research, you may need to use identifiers that do not change through time.
