A CUSIP number is a unique nine-digit identification number assigned to financial securities primarily in the United States and Canada. This system helps streamline the trading and settlement processes, offering a concrete method to distinguish various traded securities. Here’s a deep dive into what CUSIP numbers are, how they work, and their importance in the financial world.
Key Takeaways
- CUSIP numbers are unique identifiers assigned to stocks and registered bonds in the U.S. and Canada.
- Comprising nine alphanumeric characters, they provide a standardized method for distinguishing securities.
- Introduced in 1964, CUSIPs are now mainly utilized in computerized trading record-keeping systems.
- Foreign securities utilize similar identification numbers like CINS or ISIN when traded internationally.
Unlocking the Mysteries of CUSIP Numbers
Pronounced Q-sip, CUSIP stands for the Committee on Uniform Security Identification Procedures. CUSIP numbers work like serial numbers, uniquely identifying a company’s equity, debt, and other issuances. Each number comprises:
- The first six alphanumeric characters (CUSIP-6) identifying the issuer.
- The seventh and eighth digits indicating the type of security.
- The ninth digit functions as a check digit auto-generated to secure the code.
Here’s a breakdown of various securities categorized by their CUSIP numbers:
| Equity | Debt | Other |
|---|---|---|
| Common Stock | Corporate Bonds | Hedge Funds |
| Preferred Stock | Municipal Bonds | Derivatives |
| Exchange-Traded Funds (ETFs) | Commercial Paper | Variable Annuities |
| Mutual Funds | Collateralized Debt Obligations (CDOs) | Insurance-Related Vehicles |
| Real Estate Investment Trusts (REITs) | Certificates of Deposit (CDs) | Capital Securities |
| American Depository Receipts (ADRs) | Asset-Backed Securities | Equity-Linked Notes |
| Indexes | Syndicated Loans | Credit Derivatives |
How to Locate a CUSIP Number
CUSIP numbers are publicly accessible and can be found through various platforms like the Municipal Securities Rulemaking Board’s (MSRB) Electronic Municipal Market Access (EMMA) system, or typically listed on official security statements like purchase confirmations and periodic financial reports.
It’s Not Just About CUSIPs: ISINs and CINS Explained
ISIN
The International Securities Identification Number (ISIN) system extends beyond the U.S. and Canadian markets. ISINs often augment CUSIP numbers with a two-character prefix and an additional check character, providing broader international security identification.
CINS
The CUSIP International Numbering System (CINS) assigns a similar nine-digit identifier outside North America. Like ISINs, CINS numbers help create streamlined international security processing and identification.
Practical Examples of CUSIP Numbers
Explore CUSIP numbers for well-known companies:
| CUSIP Numbers for Select Stocks | |
|---|---|
| Apple | 037833100 |
| Alphabet | 02079K107 |
| Alaska Air Group | 011659109 |
| Walmart | 931142103 |
Why Are CUSIP Numbers Important?
CUSIP numbers play a crucial role by providing standardized security identification, facilitating clearances, and settlements of market trades.
What Does a CUSIP Number Tell You?
A CUSIP number reveals the security type and the issuing entity, offering valuable details for the precise identification and categorization amid trading activities.
What Can You Do With a CUSIP Number?
While CUSIP numbers are mostly used by brokerage and clearing firms, average investors can use them to track the exact details and statuses of their holdings.
How to Look Up a CUSIP Number?
Fetching a CUSIP number is easy through a brokerage’s website, brokerage statements, physical stock, bond certificates, or via platforms like the MSRB’s EMMA system.
Final Thoughts
In summary, a CUSIP number is more than just an identifier; it’s a monumental tool developed in the 1960s to foster efficient trading and settlement. Managed by the CUSIP Service Bureau under the auspices of the American Bankers Association, CUSIP numbers are vital in financial databases and instrumental within any modern trading system.
Related Terms: ISIN, CINS, security identification, financial instruments.
References
- CUSIP Global Services. “History”.
- CUSIP Global Services. “CUSIP”.
- CUSIP Global Services. “CUSIP: A Common Language for Efficient Markets”, Page 12.
- CUSIP Global Services. “About CGS”.
- FactSet. “FactSet Completes Acquisition of CUSIP Global Services”.
- CUSIP Global Services. “CUSIP: A Common Language for Efficient Markets”, Page 16.
- CUSIP Global Services. “CINS”.
- OpenFIGI. “CUSIP Lookup”.
