CUSIP: Committee on Uniform Securities Identification Procedures

The Committee on Uniform Securities Identification Procedures (CUSIP) system provides a standardized method for identifying securities in the United States. The CUSIP Service Bureau, operated by Standard & Poor’s on behalf of the American Bankers Association, administers the system. Each CUSIP number uniquely identifies a specific security and consists of nine alphanumeric characters.

Basic Elements

A CUSIP number is formatted as follows:

• First 6 Characters: Identifies the issuer.
• Next 2 Characters: Identifies the issue.
• Last Character: A check digit used for verifying the authenticity of the entire number.

Example

For instance, a CUSIP number like 12345678X can be broken down as follows:

• 123456: Issuer identifier.
• 78: Issue identifier.
• X: Check digit.

Types of Securities Covered

CUSIP numbers are assigned to a variety of financial instruments, including:

• Stocks: Common and preferred shares.
• Bonds: Corporate and municipal bonds.
• Government Securities: Treasury bonds and notes.
• Derivatives: Options and futures contracts.

Access and Usage

CUSIP numbers facilitate the processes of trading, clearing, and settling securities by providing a unique identifier that all parties can reference. They are essential for brokers, financial institutions, and regulatory agencies.

Origin

The CUSIP system was created in 1964 to resolve the difficulties associated with managing the increasing volume and complexity of securities. The American Bankers Association collaborated with Standard & Poor’s to develop this systematic approach.

Evolution

Over the years, the system has been updated to incorporate advancements in financial instruments and technology. With globalization, the focus has expanded to include international securities via the CUSIP International Numbering System (CINS).

ISIN

International Securities Identification Number (ISIN):

• Structured with 12 characters.
• Contains both CUSIP and country code elements.
• Used globally and not limited to U.S. based securities.

SEDOL

Stock Exchange Daily Official List Number (SEDOL):

• Originates in the United Kingdom.
• Comprising seven characters.
• Primarily used within the UK.

FAQs

1. How can one obtain a CUSIP number for a new security?

• Issuers can request a CUSIP number through a financial services provider or directly via the CUSIP Global Services (CGS) website.

2. Are CUSIP numbers the same as ticker symbols?

• No, ticker symbols are short codes typically used for trading, while CUSIP numbers provide a unique identifier for securities themselves.

3. Is a CUSIP number required for all securities transactions?

• While not mandated, CUSIP numbers are highly recommended as they facilitate smoother, more accurate transactions.

4. Can a single security have multiple CUSIP numbers?

• Generally, each security has one CUSIP number, but different tranches or series could have distinct CUSIPs.

5. How can an investor find the CUSIP number of a security?

• CUSIP numbers can be found on financial statements, brokerage websites, and through financial news services.