Committee on Uniform Security Identification Procedures (CUSIP)
What is a CUSIP Number?
CUSIPs (Committee on Uniform Security Identification Procedures) are nine-character identifiers designed to differentiate between different issuers and their financial instruments in the United States and Canada. CUSIPs are an important tool for recognizing and tracking securities for purposes of security clearance, financial analysis, and reporting. They enable investors, organizations, and regulators to identify and assess financial instruments more effectively. CUSIPs provide a unique identifier for each security, simplifying the process of researching and analyzing the investments of a portfolio. Furthermore, CUSIPs are used to monitor and control trading of securities, ensuring that only authorized trades occur.Structure of the CUSIP
| CUSIP Identifier | Issuer | Issue | Check |
|---|---|---|---|
| 087654321 | 087654 | 32 | 1 |
| First 6 digits | Next 2 digits | Last Digit |
A two-letter country code is used to identify the country of incorporation of a company or security, as delineated by the International Organization for Standardization (ISO). This code, drawn from ISO 6166, is typically assigned according to the location of a company’s head office. However, a different code designation, ‘XS’ is used for international securities cleared through pan-European clearing systems such as Euroclear and Clearstream. For depository receipts, the ISIN code is unique in that the country code is assigned to the receipt issuer, not the underlying security.
A National Securities Identifying Number (NSIN) is a nine-digit numeric identifier that is assigned by each country’s or region’s governing body in order to uniquely identify securities. If a national number contains less than nine digits, it is padded with leading zeros to bring the total up to nine, as the NSIN must be nine digits in length. The number itself has no intrinsic meaning, it is simply a serial number used to identify and distinguish individual securities.
A check-digit is a single digit used to validate a sequence of numbers or characters. It is typically the last character in the sequence and is used to verify that the sequence is genuine and not counterfeit. The check-digit is calculated using a sum modulo 10 algorithm, which takes the preceding 11 characters/digits into account. This algorithm helps to protect against fraud by validating the authenticity of the sequence.
Register for a CUSIP
A CUSIP number (Committee on Uniform Securities Identification Procedures) is a unique nine-character alphanumeric code used to identify and track securities. It is used primarily in the United States and Canada to facilitate clearing and settlement of trades. CUSIPs are assigned to both private and public companies, hedge funds, mutual funds, private equity, corporations, LLCs, and much more. They are also assigned to offshore entities in over 30 jurisdictions, such as those in the Cayman Islands and the British Virgin Islands.
Companies conducting an initial public offering (IPO) are often required to register for a CUSIP number. CUSIPs are used to identify and track a wide variety of securities, including stocks and preferred shares, warrants, rights offerings, and much more. They are also used to identify and track debt securities, such as bonds, notes, loans, and medium-term notes (MTNs) syndicated and otherwise.
CUSIP numbers are essential to the efficient functioning of the financial markets, as they provide a means of quickly and accurately identifying and tracking individual securities. They are also widely used for regulatory compliance, such as for anti-money laundering (AML) and know-your-customer (KYC) checks, as well as for investor relations purposes.