Define Valoren Number:

"The term "Valoren number" refers to a unique identification number assigned to securities traded on the Swiss stock exchange, SIX Swiss Exchange."

Explain Valoren Number:

Valoren Number: 

The term "Valoren number" refers to a unique identification number assigned to securities traded on the Swiss stock exchange, SIX Swiss Exchange. It is used to uniquely identify and track specific financial instruments, such as stocks, bonds, and exchange-traded funds (ETFs), in the Swiss market.

The Valoren number serves as a standardized code that helps facilitate efficient trading and settlement processes. It enables market participants, including investors, brokers, and exchanges, to accurately identify and differentiate between various securities listed on the Swiss stock exchange.

Each security listed on the SIX Swiss Exchange is assigned a unique Valoren number. This number is typically a combination of digits and can vary in length depending on the specific security. For example, stocks may have a Valoren number consisting of six digits, while bonds may have longer Valoren numbers.

The Valoren number is an integral part of the trading and settlement infrastructure in Switzerland. It is used by market participants to place orders, execute trades, and track the ownership and movement of securities. Investors can use the Valoren number to search for specific securities and obtain relevant information, such as price quotes, trading volumes, and historical data.

Additionally, the Valoren number is essential for settlement processes. When a trade is executed, the Valoren number helps ensure that the correct security is delivered to the buyer and that ownership is properly transferred. It also assists in reconciling trade data and facilitating accurate record-keeping.

Market data providers, financial institutions, and other participants in the Swiss financial industry rely on the Valoren number to maintain accurate and up-to-date databases of securities traded on the SIX Swiss Exchange. The Valoren number is often included in financial statements, investment reports, and other documents related to Swiss securities.

It's important to note that the Valoren number is specific to securities listed on the SIX Swiss Exchange and is not used in other international markets. Other stock exchanges and financial markets may have their own unique identification codes or symbols for securities trading on their platforms.

In conclusion, the Valoren number is a unique identification code assigned to securities traded on the SIX Swiss Exchange. It serves as a standardized identifier that facilitates trading, settlement, and record-keeping processes for Swiss securities. By using the Valoren number, market participants can accurately identify and differentiate between various securities listed on the Swiss stock exchange, ensuring efficient and transparent trading in the Swiss market.

Process and the basis on which Valoren numbers are allocated to stocks:

The allocation of Valoren numbers to stocks on the SIX Swiss Exchange follows a specific process based on certain criteria. The Swiss Valoren numbering system is managed by the Association of National Numbering Agencies (ANNA) and is regulated by the Swiss Financial Market Infrastructure Act (FMIA). Here are the key factors and basis on which Valoren numbers are allocated to stocks:

1. Listing and Approval: Before a stock can be assigned a Valoren number, it must first be listed and approved for trading on the SIX Swiss Exchange. Companies seeking to list their stocks must comply with the exchange's listing requirements, which include criteria such as financial performance, corporate governance standards, and compliance with regulatory guidelines.
   
   
2. Unique Identification: Each stock listed on the SIX Swiss Exchange is assigned a unique identification number to ensure proper tracking and differentiation. The Valoren number serves as this unique identifier and is specific to the individual stock. It helps market participants identify and trade the stock accurately.
   
   
3. ANNA-Regulated System: The allocation and management of Valoren numbers are governed by ANNA, which is responsible for coordinating and overseeing global standardization in numbering systems for financial instruments. ANNA ensures consistency and harmonization across different exchanges and markets, including the SIX Swiss Exchange.
   
   
4. Length and Structure: Valoren numbers are structured in a specific format. Generally, they consist of a combination of digits, with each digit serving a specific purpose. The length and format of the Valoren number may vary depending on the type of security. For example, stocks may have a six-digit Valoren number, while bonds may have longer numbers.
   
   
5. Unique to Each Security: Valoren numbers are unique to each security listed on the SIX Swiss Exchange. This means that no two stocks will have the same Valoren number. This uniqueness enables accurate identification and differentiation of securities in the trading and settlement processes.
   
   
6. Managed by Financial Intermediaries: Financial intermediaries, such as banks and brokerages, play a role in the allocation and management of Valoren numbers. These intermediaries are responsible for obtaining and assigning Valoren numbers to the stocks they handle on behalf of their clients. They ensure compliance with the ANNA-regulated system and maintain accurate records of the Valoren numbers for each stock.

Overall, the allocation of Valoren numbers to stocks on the SIX Swiss Exchange is a regulated process managed by ANNA. It ensures the unique identification and accurate tracking of securities in the Swiss market. The Valoren number serves as a standardized code that helps market participants trade, settle, and differentiate between stocks listed on the SIX Swiss Exchange, promoting efficient and transparent trading in the Swiss market.