CUSIP
From Wikipedia, the free encyclopedia
The acronym CUSIP typically refers to both the Committee on Uniform Security Identification Procedures and the 9-character 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.
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[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.
Issuer numbers 990 to 999 and 99A to 99Z in each group of 1,000 numbers are reserved for internal use. This permits a user to assign an issuer number to any issuer which might be relevant to his holdings but which does not qualify for coverage under the CUSIP numbering system. Other issuer numbers (990000 to 999999 and 99000A to 99999Z) are also reserved for the user so that they may be assigned to non-security assets or to number miscellaneous internal assets
The 7th and 8th digit identify the exact issue, the format being dependent on the type of security. In general, numbers are used for equities 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 are not used since they might be mistaken for the digits 1 and 0.
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-complement of the last number is the check digit. In other words, the sum of the digits, including the check-digit, is a multiple of 10. 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 Norway is "R". A table of the country codes appears on the CUSIP web site.
[edit] Examples
Apple Inc: 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 complement of the last digit of 30, which is 0, so the check digit is 0. The ten's complement of a digit is the result of subtracting that digit from 10, except that the ten's complement of 0 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 complement of 7 is 3.
US Treasury Note: 912827XN7
Here we have a combination of letters and numbers. The letters A to Z have the values 10 to 35, so X is 33 and N is 23. The check digit is (9 + 2 + 2 + (3 + 3)) + (2 + (1 + 6) + (1 + 4) + (4 + 6)) = 43, the ten's complement of 3 is 7.
