<p>A <strong>Stock Exchange Daily Official List (SEDOL)</strong> is a unique identifier assigned to each security traded on a stock exchange. It's a crucial tool for investors and traders to ensure they are buying or selling the correct security.</p>

<h2>How It Works</h2>
<p>SEDOLs are alphanumeric codes, consisting of seven characters. The first six characters are numeric, and the seventh is a check digit used for error detection. SEDOLs are generated by the London Stock Exchange (LSE) and are used globally. Here's how it works:</p>
<ul>
  <li>Each security, such as a share or bond, is assigned a unique SEDOL.</li>
  <li>When a security is traded, its SEDOL is used to identify it.</li>
  <li>SEDOLs remain the same even if the security's name or other details change.</li>
</ul>

<h2>Why It Matters</h2>
<p>SEDOLs matter because they prevent errors in trading. For instance, imagine a trader wants to buy shares in 'Company A'. Without a SEDOL, the trader might accidentally buy shares in 'Company B' with a similar name. Using the SEDOL ensures the trader gets the correct security. This is particularly important in today's fast-paced, high-volume trading environments.</p>