Table of Contents
- What Is the Stock Exchange Daily Official List (SEDOL)?
- Key Takeaways
- Understanding the Stock Exchange Daily Official List (SEDOL)
- Fast Fact
- The Significance of SEDOL Classification Codes
- Example of SEDOL Classification Codes
- SEDOL vs. CUSIP
- What Does SEDOL Stand for?
- Who Assigns SEDOL Codes?
- How Many Characters Are in a SEDOL Code?
- In Which Region Is SEDOL Primarily Used?
- How Does SEDOL Differ From CUSIP?
- The Bottom Line
What Is the Stock Exchange Daily Official List (SEDOL)?
Let me explain what SEDOL is directly to you: it's a seven-character identification code that gets assigned to securities trading on the London Stock Exchange and various smaller exchanges in the United Kingdom. These codes apply to unit trusts, investment trusts, insurance-linked securities, and both domestic and foreign stocks.
Key Takeaways
SEDOL codes are unique seven-character alphanumeric identifiers for securities on the London Stock Exchange and other smaller UK exchanges. They come with a unique checksum character at the end, where the seventh digit is a weighted sum of the first six characters. I see SEDOL codes as an important innovation because they decrease trade costs and boost the efficiency of trades and securities transactions.
Understanding the Stock Exchange Daily Official List (SEDOL)
New SEDOL codes get issued for reasons like changes in corporate headquarters, mergers, new ISIN issuances, takeovers, company name changes, or share reclassifications. All these codes have seven characters: the first six are alphanumeric, and the seventh is a trailing check digit. In the alphanumeric part, you can have letters from B to Z and numbers from 0 to 9.
Before January 2004, SEDOL codes were just numeric. Since January 26, 2004, they've been issued sequentially with numbers and letters, starting from B000009. For each position, numbers come before letters, and vowels are excluded. So, post-2004 codes start with a letter.
The check digit makes the weighted sum of all seven characters a multiple of 10, calculated from the first six. Letters get numbers like this: each equals nine plus its alphabet position—for example, C is 12 (9 + 3).
Fast Fact
SEDOL codes are seven digits long.
The Significance of SEDOL Classification Codes
The London Stock Exchange views SEDOL as a key market-level security identifier that's recognized worldwide—it cuts costs from cross-border trade failures and improves trade and transaction efficiency. These codes help UK exchanges deliver better service by minimizing failures and streamlining processes.
Several traits make SEDOL codes vital: they're unique with country-level assignments for easy identification, issued quickly with short processing times, and common across all countries for listed and unlisted securities covering every asset class.
In today's global marketplace, exchanges need secure ways to track traded assets, and the UK relies on SEDOL for its uniqueness, efficiency in asset tracking, and ensuring investors buy the right stocks.
Example of SEDOL Classification Codes
Take banking giant HSBC, listed on the London Stock Exchange in 1991 with SEDOL code 0540528. To verify it, multiply digits by their weights and add them up—if it's a multiple of ten, it's correct.
For HSBC: 0 + 5×3 + 4×1 + 0 + 5×3 + 2×9 + 1×8 = 60, which is a multiple of 10.
SEDOL vs. CUSIP
SEDOL codes are like CUSIP numbers, which the Committee on Uniform Securities Identification Procedures issues for US-traded stocks. CUSIP is a nine-character alphanumeric code used mainly in the US and Canada, developed by the American Bankers Association to identify securities like stocks and bonds. The first six characters identify the issuer, the next two the issue, and the last is a check digit.
They're not interchangeable due to regional focus and structural differences, but some securities might have both if traded in the UK and North America.
What Does SEDOL Stand for?
SEDOL stands for Stock Exchange Daily Official List—it's a unique alphanumeric code for identifying securities, introduced to standardize tracking, simplify trade processing, and ensure accurate settlement in financial markets.
Who Assigns SEDOL Codes?
The London Stock Exchange assigns SEDOL codes and maintains the SEDOL Masterfile with all assigned codes.
How Many Characters Are in a SEDOL Code?
A SEDOL code has seven alphanumeric characters: the first six identify the security uniquely, and the seventh is a check digit for accuracy verification.
In Which Region Is SEDOL Primarily Used?
SEDOL codes are mainly used in the United Kingdom and Ireland, but they're significant in international markets too.
How Does SEDOL Differ From CUSIP?
SEDOL differs from CUSIP in regional focus and structure: SEDOL is for the UK and international markets with seven characters, while CUSIP is for the US and Canada with nine characters, though both serve similar purposes.
The Bottom Line
SEDOL is a seven-character alphanumeric code from the London Stock Exchange that uniquely identifies securities, mainly in the UK and internationally—it supports accurate trade processing, settlement, and reporting, making it crucial for global financial transactions.
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