What is the function of ISIN in financial transactions?

The International Securities Identification Number (ISIN) is crucial in the financial sector as it serves to identify specific issues of securities. Each ISIN is a unique code that is assigned to a particular security, which may include stocks, bonds, or other financial instruments. This system of identification helps to facilitate the clearing and settlement of transactions related to that security by providing a standard means of reference across various markets and jurisdictions.

By using ISINs, participants in financial transactions can ensure they are dealing with the correct security, reducing the risk of errors due to confusion or ambiguity in identifying financial instruments. The ISIN, typically consisting of 12 alphanumeric characters, enhances efficiency and accuracy in trading, settlement, and reporting processes within the financial markets.