From Riski

Jump to: navigation, search

CUSIP stands for Committee on Uniform Securities Identification Procedures. A CUSIP number identifies most securities, including: stocks of all registered U.S. and Canadian companies, and U.S. government and municipal bonds. The CUSIP system—owned by the American Bankers Association and operated by Standard & Poor’s—facilitates the clearing and settlement process of securities.

The number consists of nine characters (including letters and numbers) that uniquely identify a company or issuer and the type of security. A similar system is used to identify foreign securities (CUSIP International Numbering System).

For more information about how the CUSIP process works, you can contact CUSIP at (212) 438-6500 or visit its website.

Securities markets "barcode

Like the ubiquitous striped symbols on grocery store items, the CUSIP ID is a unique code assigned to every security traded in the stock and bond markets that allows the computer systems of different firms and exchanges to track investments like inventory through the supply chain. As more and more types of products enter financial markets and increasingly faster computer systems execute and clear trades, the demand for these unique identifiers continues to grow.

The 9-digit CUSIP ID, named for the Committee on Uniform Security Identification Procedures and administered by CUSIP Global Services, recently celebrated its 40th anniversary with the launch of new IDs to track TARP- and TALF-related securities, hedge funds and equity options. To date, 9.1 million CUSIP IDs have been issued, with the number of unique IDs issued increasing 160% over the past 15 years as more and more different types of financial instruments come to market. Before any stock is taken public, before any new government rescue package can be deployed, before any equity option is packaged, a team of 30 data analysts at CUSIP Global Services must distill hundreds of pages of issuer offering documents down to 9 digits that will become its face to the world.

In the aggregate, CUSIP IDs, like bar codes, offer useful insights and perspectives on the performance of "inventory" in the marketplace. In the case of securities, new CUSIP issuance, particularly with respect to new instrument creation, provides a bird's-eye perspective on the overall health of U.S. economic activity.

This has been a particularly important metric to track over the last year as U.S. government stimulus programs have injected thousands of new securities into the marketplace. Between November 2008 and October 2009, a total of 4,735 CUSIP IDs were issued for new stimulus-related securities coming out of the TARP, TALF, FDIC-backed and Build America Bond programs.

In fact, when the TARP and FDIC-backed stimulus programs reached their peak issuance levels in December 2008, they accounted for 2.5% of all new corporate security issuance in the U.S. Likewise, when Build America Bonds reached their peak issuance levels in August 2009, they accounted for 4.7% of all municipal security issuance. Within the broad category of government stimulus-related securities, Build America Bonds have been the single largest category of new issuance, with 4,207 new CUSIP IDs issued since November 2008...

...So far in 2009, CUSIP IDs for more than 36,000 corporate deals were assigned, compared with 66,948 in 2008 and 60,781 in 2007. The trend line is certainly down, but the big banks have been far from dormant when it comes to new capital creation. Among the top corporate underwriters receiving the most CUSIP IDs this year were Merrill Lynch and Credit Suisse..."


Personal tools