# Understanding SEDOL Codes: A Guide to UK Stock Identification

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## What Is the Stock Exchange Daily Official List (SEDOL)?

The stock exchange daily official list (SEDOL) is a seven-character identification code assigned to securities that trade on the [London Stock Exchange](https://www.investopedia.com/terms/l/lse.asp) and various smaller exchanges in the United Kingdom. SEDOL codes are essential identification tools for securities on UK exchanges. These codes are used for [unit trusts](https://www.investopedia.com/terms/u/unittrust.asp), investment trusts, insurance-linked securities, and domestic and foreign stocks.

The first six characters of the code are alphanumeric, and the seventh character is a trailing check digit. Letters from B to Z are allowed (but no vowels), as are numbers from 0 to 9. The seventh digit is a weighted sum of the first six characters.

### Key Takeaways

*   SEDOL is a seven-character alphanumeric code used to identify securities traded on UK exchanges.
*   Originally numeric, SEDOL codes since 2004 have included both letters and numbers.
*   The London Stock Exchange assigns SEDOL codes and manages the SEDOL Masterfile.
*   SEDOL codes are primarily used in the UK and Ireland but are recognized internationally.
*   They are comparable to CUSIP numbers, which are used for securities in the U.S. and Canada.

## How SEDOL Codes Are Formulated and Used

New SEDOL codes may be issued due to changes like new [corporate headquarters](https://www.investopedia.com/terms/c/corporate-headquarters.asp), mergers, new [ISIN](https://www.investopedia.com/terms/i/isin.asp)s, takeovers, company name changes, or share [reclassifications](https://www.investopedia.com/terms/r/reclassification.asp).

All SEDOL codes have seven characters, split into two parts: the first six characters are an alphanumeric code, and the seventh character is a trailing check digit. Within the alphanumeric part, letters from B to Z are allowed, while numbers from 0 to 9 are allowed as numerals.

Before January 2004, SEDOL codes were only numeric. Since January 26, 2004, they include both numbers and letters, starting with B000009. For each character position, numbers always go before letters, and vowels are never used. Therefore, SEDOL codes issued after January 2004 begin with a letter.

The check digit for the SEDOL code is selected to make the weighted sum of all seven characters a multiple of 10. This digit is calculated using the weighted sum of the first six characters. Letters are assigned numbers for this process: Each letter equals nine plus the number that correlates to its position in the alphabet. For example, C would equal 12 (9 + 3).

> **Fast Fact**
>
> SEDOL codes are seven digits long.

## Why SEDOL Codes Matter in Global Markets

The London Stock Exchange views SEDOL as a significant market-level identifier that's globally recognized, reduces trade failure costs across borders, and boosts trade efficiency. SEDOL codes help the United Kingdom's exchanges provide a higher caliber of service by reducing such failures and streamlining the trading process.

SEDOL codes are vital because they use unique country-level numbers for easy identification and have a quick issuance process. They are assigned to each country for both listed and unlisted securities, covering all asset classes.

Today's global market relies on SEDOL codes for secure and clear asset tracking. London and the UK use these codes for their uniqueness and efficiency in ensuring investors buy the right stocks.

## Real-World Example: SEDOL Code for HSBC

Banking giant HSBC was listed on the London Stock Exchange (LSE) in 1991 and has a SEDOL code of 0540528. To check whether the reported SEDOL number is correct, traders must multiply digits with their assigned weight and add them. If the resulting number is a multiple of ten, then the code is correct.

For HSBC, the calculation is:

0+5X3+4X1+0+5X3+2X9+1X8 = 60, which is a multiple of 10.

## Comparing SEDOL and CUSIP: Key Differences

SEDOL codes are comparable to [CUSIP numbers](https://www.investopedia.com/terms/c/cusipnumber.asp), which are codes issued by the Committee on Uniform Securities Identification Procedures for stocks traded in the United States.

CUSIP is a nine-character alphanumeric code used predominantly in the United States and Canada. The American Bankers Association developed it to identify securities like stocks and bonds uniquely. The first six characters of a CUSIP identify the issuer, the next two identify the issue, and the last character is a check digit.

While both SEDOL and CUSIP codes are used to identify securities, they are not interchangeable due to their regional focus and structural differences. Some securities may have a SEDOL and a CUSIP code, particularly if traded in the UK and North American markets.

## What Does SEDOL Stand for?

SEDOL stands for Stock Exchange Daily Official List. It is a unique alphanumeric code used to identify securities. The SEDOL system was introduced to provide a standardized method for identifying and tracking securities, simplifying trade processing, and ensuring accurate settlement in financial markets.

## Who Assigns SEDOL Codes?

SEDOL codes are assigned by the London Stock Exchange (LSE). The LSE is responsible for maintaining and updating the SEDOL Masterfile, which contains the list of all SEDOL codes assigned to securities. 

## How Many Characters Are in a SEDOL Code?

A SEDOL code consists of seven alphanumeric characters. The first six characters are used to uniquely identify the security, while the seventh character is a check digit that helps verify the accuracy of the code.

## In Which Region Is SEDOL Primarily Used?

SEDOL codes are primarily used in the United Kingdom and Ireland, but they also play a significant role in international markets.

## How Does SEDOL Differ From CUSIP?

SEDOL differs from CUSIP in both regional focus and code structure. While SEDOL is primarily used in the UK and international markets, CUSIP is predominantly used in the United States and Canada. SEDOL codes consist of seven alphanumeric characters, whereas CUSIP codes are nine characters long. Both systems essentially serve the same purpose.

## The Bottom Line

SEDOL is a seven-character alphanumeric code assigned by the London Stock Exchange to uniquely identify securities, primarily in the UK and international markets. It is composed of six alphanumeric characters and a check digit, which is a weighted sum of the first six characters. SEDOL is similar to CUSIP, which is used in the U.S. and Canada.

This code facilitates accurate trade processing, settlement, and reporting across different regions, making it essential for global financial transactions.

> **Article Sources**
>
> 1.  London Stock Exchange. "[HSBC Holdings PLC](https://www.londonstockexchange.com/stock/HSBA/hsbc-holdings-plc/company-page?lang=en)."