There are thousands of companies listed on the Indian stock exchanges and there are scores of major exchanges around the world. If we consider only the major exchanges, shares of lakhs of companies would be listed on them. In a globalised world, individuals often trade and invest across borders. Many companies are also listed on multiple international exchanges. When there are millions of shares and bonds in the world, it becomes important to have an identification system in place to avoid confusion.
The first level of identification is the stock symbol, but two companies can have the same symbol on different exchanges. The problem of having a unique identification is solved by assigning a CUSIP number.
What Is the CUSIP Number?
The CUSIP number is a unique set of numbers assigned to all stocks and bonds in the United States and Canada. It is also assigned to municipal bonds and less traditional options like preferred stocks, syndicated loans and certificates of deposit. The CUSIP number creates a distinction between all publicly traded securities in the two North American countries.
Besides providing a unique identity, the CUSIP number also serves another purpose. The CUSIP number has been designed to work seamlessly with computerised record-keeping systems. CUSIP stands for Committee on Uniform Securities Identification Procedures and it is owned by the American Bankers Association along with Standards & Poor’s. Investors can use the CUSIP number to track and trace any security, while the exchanges use it for clearance and settlement.
Understanding CUSIP Number
The CUSIP number is of nine characters, which generally consists entirely of numbers but can also be alphanumeric. CUSIP number functions just like the serial number of the products in a supermarket. It is the serial number for securities. To understand the CUSIP meaning, let us break the formation of the CUSIP number.
The first six characters of the CUSIP number identify the issuer of the security and is known as CUSIP-6. The seventh and eighth digits are a marker of the type of the security and the ninth character is the check digit, which gets generated automatically. The nine digits of the CUSIP number are essential for the efficient clearance and settlement of all trades. The CUSIP number of all securities is recorded to ensure fool-proof tracking of trades.
Examples of CUSIP Numbers
CUSIP numbers, assigned by the American Bankers Association’s CUSIP Service Bureau, provide unique identifiers for a variety of securities. Below are examples of CUSIP numbers across different asset types:
- Apple Inc. Common Stock: 037833100
- Microsoft Corporation Bonds: 594918AL9
- Vanguard Total Stock Market Index Fund: 922908363
- United States Treasury Note: 912828M60
- Alphabet Inc.: 02079K107
- Alaska Air Group: 011659109
- Walmart Inc.: 931142103
- Coca-Cola Company Preferred Stock: 191216100
- Convertible Bonds: 88160RAA7
- Amazon.com, Inc. Warrants: 023135200
- Exxon Mobil Corporate Bonds: 30231GAC9
- Berkshire Hathaway Class B Stock: 084670207
- JPMorgan Chase Depositary Shares: 46625H202
These CUSIP numbers ensure standardisation for tracking, trading, and reporting securities. They are subject to changes over time and should be verified for accuracy using official sources.
Finding the CUSIP Number
- Visit the EMMA website: Begin by visiting the EMMA website at https://emma.msrb.org/ . This is the official platform provided by the Municipal Securities Rulemaking Board (MSRB) for accessing municipal securities information.
- Search for the security: On the homepage, use the search box to input details of the municipal security you’re looking for. This could include the issuer’s name, the security’s name, a description, or even a partial CUSIP number.
- Review search results: Browse through the results to locate the specific municipal security you’re interested in. Ensure you select the correct option from the list provided for accurate information.
- Access security details: Click on the selected security to open its details page. This page will display comprehensive information about the security, including its CUSIP number.
- Locate and verify the CUSIP: On the details page, find the unique CUSIP number assigned to the security. It is crucial to double-check the CUSIP for accuracy. Cross-reference it with other official sources or documents to ensure its correctness.
ISIN vs CUSIP
Both ISIN and CUSIP are codes used for the identification of securities. The structure and the applicability of the code differentiate the two. While the CUSIP number is used only in the US and Canada, ISIN is used to identify securities and facilitate their buying and selling across the world. The CUSIP numbering system is owned by the American Bankers Association and managed by Standard & Poor’s, while the ISIN system is operated by the International Organisation for Standardisation.
The CUSIP number is a nine-digit code, while the ISIN consists of 12 characters. The first two letters of ISIN are the country code, which is followed by nine alphanumeric characters, known as the national security identifier. The 11 characters are followed by a check digit. For example, the country code of India is ‘IN’. The country code is issued by the ISO, while the national security identifier is provided by the National Numbering Agency of each country.
Conclusion
The CUSIP number is essential for the seamless trade of financial securities. Without a unique identification code for each security, the financial markets may not be able to function efficiently. While the CUSIP is used in North America, the ISIN is used in India. Having the ISIN is necessary for a host of financial activities.
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FAQs
How can I find my CUSIP number?
To find your CUSIP number, visit the MSRB’s EMMA website (emma.msrb.org). Use the search box to enter details such as the issuer’s name, security’s description, or a partial CUSIP. Once you locate the correct security in the search results, click on it to access its details page, where the CUSIP number is displayed. Cross-check the number with official sources to ensure accuracy.
What is the difference between ISIN and CUSIP?
CUSIP is a nine-character alphanumeric code used specifically in the United States and Canada for identifying securities like stocks and bonds. ISIN, on the other hand, is a globally recognised 12-character code. It begins with a two-letter country code (e.g., “IN” for India), followed by a nine-character national security identifier and a final check digit.
Who issues CUSIP numbers?
CUSIP numbers are assigned by the CUSIP Service Bureau, operated by the American Bankers Association and managed by Standard & Poor’s.
Can you convert ISIN to CUSIP?
Yes, ISIN can be converted to CUSIP by extracting the nine-character National Securities Identifier (NSI) found within the ISIN. However, conversion requires specialised tools or services, and care must be taken to ensure accuracy since the ISIN includes additional details like a country code and check digit.
