CUSIP
From Wikipedia, the free encyclopedia
The acronym CUSIP typically refers to both the Committee on Uniform Security Identification Procedures and the 9-digit alphanumeric security identifiers that they distribute for all North American securities for the purposes of facilitating clearing and settlement of trades. The CUSIP distribution system is owned by the American Bankers Association and is operated by Standard & Poor's. The CUSIP Services Bureau acts as the National Numbering Association (NNA) for North America, and the CUSIP serves as the National Securities Identification Number for products issued from both the United States and Canada.
In the 1980s there was an attempt to expand the CUSIP system for international securities as well. The resulting CINS (CUSIP International Numbering System) has seen little use as it was introduced at about the same time as the truly international ISIN system. CINS identifiers do appear in the ISIDPlus directory, however.
[edit] Description
The first six characters are known as the "base" (or "CUSIP-6"), and uniquely identify the issuer. Issuer codes are assigned alphabetically from a series that includes deliberate built-in "gaps" for future expansion. The last two characters of the issuer code can be letters, in order to provide more room for expansion. The numbers from 990000 up are reserved, as are xxx990 and up within each group of 1000 (ie, 100990 to 1009ZZ).
The 7th and 8th digit identify the exact issue, the format is dependent on the type of security. In general, numbers are used for equity and letters are used for fixed income. For commercial paper the first issue character is generated by taking the letter code of the maturity month, the second issue character is the day of the maturity date, with letters used for numbers over 9. The first security issued by any particular issuer is numbered "10". Newer issues are numbered by adding ten to the last used number up to 80, at which point the next issue is "88" and then goes down by tens. The issue number "01" is used to label all options on equities from that issuer.
Fixed income issues are labeled using a similar fashion, but due to there being so many of them they use letters instead of digits. The first issue is labeled "AA", the next "A2", then "2A" and onto "A3". To avoid confusion, the letters I and O and digits 1 and 0 are not used.
The 9th digit is an automatically generated check digit using the "Modulus 10 Double Add Double" technique. To calculate the check digit every second digit is multiplied by two. Letters are converted to numbers by adding their ordinal position in the alphabet to 9, such that A = 10 and M = 22. The resulting string of digits (numbers greater than 10 becoming two separate digits) are added up. The ten's-modulus of the last number is the check digit. Some clearing bodies ignore or truncate the last digit.
CINS adds a single country code letter to be the beginning of an otherwise similar CUSIP. These are not standard country codes, for instance South Africa is "R". A table of the country codes appears on the CUSIP web site.
[edit] Examples
Apple Computer: 037833100
The low-numbered issuer number, 037833, is a side effect of the company name starting with the letter "A". Their stock is the first issue they released, and is thus numbered "10".
The check digit is calculated by first collecting the even and odd digits, converting any letters to numbers if need be (not in this case):
(0, 7, 3, 1), (3, 8, 3, 0)
The second set is then multiplied by two:
(6, 16, 6, 0)
The individual digits are then added together:
(0 + 7 + 3 + 1) + (6 + (1 + 6) + 6 + 0) = 30
The check digit is the ten's modulus of 0 is 0, so the check digit is 0.
Wal-Mart: 931142103
Similar to the Apple example, but with a name appearing near the end of the dictionary. The check digit is (9 + 1 + 4 + 1) + (6 + 2 + 4 + 0) = 27, the ten's modulus of 7 is 3.
