SEDOL

From Free net encyclopedia

SEDOL stands for Stock Exchange Daily Official List, a list of security identifiers used in England and Ireland for clearing purposes. The numbers are assigned by the London Stock Exchange, on request by the security issuer. SEDOLs serve as the NSIN for all securities issued in the United Kingdom and are therefore part of the security's ISIN as well.

Although SEDOL was to have been superceeded by ISIN, problems with the ISIN system have since forced a reversal of this decision. In particular, a single ISIN is used to identify the shares of a company no matter what exchange it is being traded on, making it impossible to specify a trade on a particular exchange or currency. For instance, Chrysler trades on twenty-two different exchanges worldwide, and is priced in five different currencies. An expanded ISIN standard is currently being formulated to address this problem.

Description

SEDOLs consist of two parts, a six-place alphanumeric code and a trailing check digit. The security codes are assigned in a similar fashion as the US CUSIP system, based on an alphabetical listing of the company name; companies with names closer to the front of a phone book will receive smaller SEDOL numbers.

The check digit for SEDOL uses a weighted sum of the first six digits. Letters are converted to numbers by adding their ordinal position in the alphabet to 9, such that A = 10 and Z = 35. The resulting string of numbers is then multiplied by the weighting factor as follows:

First   1
Second  3
Third   1
Fourth  7
Fifth   3
Sixth   9

The character values are multiplied by the weights. The checksum is 10 - this sum modulo 10.

SEDOLs are converted to ISINs by padding the front with two zeros, then adding the country code on the front and the ISIN check digit on the end.

Example

BAE Systems: 0263494

The low-numbered security identifier is the result of BAE appearing low in an alphabetical ranking.

The checksum can be calculated by multiplying the digits by their weightings:

(0×1, 2×3, 6×1, 3×7, 4×3, 9×9) = (0, 6, 6, 21, 12, 81)

Then summing up the results:

0 + 6 + 6 + 21 + 12 + 81 = 126

The check digit is then calculated by:

10 - (126 modulo 10) = 10 - 6 = 4

Note: Since modulo 10 always produces a number between 0 and 9, there is chance that the check digit computed using the above formula will turn out to be 10. In such cases consider check digit as 0.