What is a CUSIP Number?

The CUSIP number is a unique identification code assigned to most financial instruments, including stocks of all registered US and Canadian companies, commercial paper, and US government and municipal bondsMunicipal BondsA municipal bond is a debt security issued by a national, state, or local authority to finance capital expenditures on public projects related to the development and maintenance of infrastructures such as roads, railways, schools, hospitals, and airports.read more.

Some examples of CUSIP numbers are given below.

What is the Full Form of CUSIP?

The full form of CUSIP is Committee on Uniform Securities Identification Procedures.

The system was born out of a need to develop a standard method of identifying securities to improve operating efficiencies across the industry. The American Bankers Association (ABA) was tasked to find a suitable system for the same in 1964 by the New York Clearing HouseClearing HouseA clearinghouse is a mediator between two firms (which may or may not know each other) that are engaged in a financial transaction (wherein one party is a buyer & another party is the seller in the said transaction), taking the exact opposite positions for each firm and ensures that there is no risk of default in the transaction.read more Association. As a result, the Committee on Uniform Security Identification Procedures was created, and the CUSIP system was instituted. The CUSIP. The Service Bureau was formed to administer the system in 1968.

CUSIP Global Services (CGS), the overarching entity for all offerings, is managed on behalf of the ABA by S&P Global Market Intelligence. CGS has a Board of Trustees representing various leading financial institutions.

CGS is the numbering systems or agency for

  • The United States and Canada.The Cayman Islands, British Virgin Islands, and Bermuda.35 Other markets throughout the Caribbean and Central/South America.

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CUSIP System

This identification system provides descriptive information about various securities, making it easier to track securities across all processing and analysis phases. The system covers a wide range of global financial instrumentsFinancial InstrumentsFinancial instruments are certain contracts or documents that act as financial assets such as debentures and bonds, receivables, cash deposits, bank balances, swaps, cap, futures, shares, bills of exchange, forwards, FRA or forward rate agreement, etc. to one organization and as a liability to another organization and are solely taken into use for trading purposes.read more and currently covers over 14 million financial instruments.

CINS is used to codify and identify foreign securities, similar to the CUSIP system.

The criteria for assigning these to equity or debt instruments of issuers are as follows:

Format of the CUSIP Number

These numbers capture an issue’s significant differentiating characteristics based on a 9-character identifier with a common structure. Given is the format of both CUSIP and CINS numbers.

CUSIP Format

The CINS identification system uses a nine-character structure similar to the CUSIP but contains a letter in the first position to denote the issuer’s country/geographic region.

CINS Format

Abingdon Capital PLC – Shares

How to Find Your Securities CUSIP Number?

They are mentioned on the face of the security documents, as is shown in the specimen samples below.

#1 – Specimen Share Certificate

Source: SEC archives

#2 – Specimen Bond Certificate

Source: oldstocks.com

Therefore, in the case of securities owned, the CUSIP number can be obtained directly from the security documents, offer documents, from securities brokers, on the website of issuing companies, or by contacting the investor relations department of the issuing entity. In addition, entities usually mention the number of their common stock on their website.

  • Brokerage firms and websites that provide securities research also include the CUSIP number in the profile information of the concerned stock or bond. E.g., CBXmarket.In the case of common stock, a general Google search with the stock’s trading symbol is likely to yield results on the CUSIP number.This unique number of municipal bonds can be found in Electronic Municipal Market Access (EMMA), managed by the Municipal Securities Rulemaking Board.CGS’s ‘CUSIP Access’ is a fee-based web service that provides access to the entire universe of identifiers and a standardized securities description.These numbers can also be found using other web-based search tools offered by various investment houses and brokers such as Fidelity Investments.

Why does an Investor Need a CUSIP Number?

An investor is required to quote the CUSIP number in forms and documents on the purchase and trade of stocks or bonds.

Additionally, the following benefits also accrue to investors:

  • Since these numbers are unique and specific to each security, it allows for easy identification and tracking of stocks, bonds, funds, etc., to ensure accurate execution and documentation of trades, settlement, and clearance.Information specific to the trades, yield, performance of a stock, etc., can be obtained through research using the CUSIP number.It allows issuers to map individual securities to the investors, making it easier to track interest and dividendDividendDividends refer to the portion of business earnings paid to the shareholders as gratitude for investing in the company’s equity.read more, etc.

Conclusion

Under the CUSIP system, securities are provided a unique identification code that enables clear tracking of the issue and security-related details, facilitating ease of execution of trades, settlements, and payouts for both the investor and the issuer.

This article has been a guide to the CUSIP number and its meaning. Here we discuss the CUSIP number format and why an investor needs this number, along with examples. You may also have a look at the following articles –

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