If you're looking for information on a stock or bond, you can try looking up the name of the security. Alternatively, you may try by looking up the CUSIP number, a unique identifier. CUSIP stands for the Committee on Uniform Securities Identification Procedures. Formed in 1962, this committee developed a system which it implemented in 1967 to identify securities—specifically U.S. and Canadian registered stocks, U.S. government and municipal bonds, exchange-traded funds, and mutual funds.
The Basics of CUSIP Numbers
Seeking to create a standardized method for identifying securities to facilitate the clearance and settlement of trading market transactions, the New York Clearing House Association engaged the American Bankers Association (ABA) to come up with a solution in 1964. The ABA formed the Committee on Uniform Security Identification Procedures, which created the CUSIP system. The CUSIP Service Bureau, now CUSIP Global Services (CGS), was created in 1968 and tasked with oversight and administration of the system. S&P Capital IQ currently manages CGS on behalf of the ABA.
The number of financial instruments categorized by the CUSIP system.
The CUSIP number consists of a combination of nine characters, including letters and numbers, which act as a sort of DNA for the security, uniquely identifying the company or issuer, and the type of security. The following explains what each character represents:
- The first six characters identify the issuer and are assigned alphabetically.
- The seventh and eighth characters—which can be alphabetical or numerical—identify the type of security.
- The ninth and last digit is used as a check digit.
By providing a consistent identifier that distinguishes securities, CUSIP numbers help facilitate and ease actions and activities such as trades and settlements.
Public vs. Private Investments
CUSIP numbers are used to identify securities registered to be sold publicly, usually on an exchange such as the New York Stock Exchange (NYSE). They were invented to make market transactions and clearing processes more efficient by creating a standardized nomenclature to identify unique financial instruments. Private investments, on the other hand, require neither public transactions nor clearing, so they remain outside the universe of assets that require such identification.
CUSIP Global Services creates anywhere between 1,000 to 2,000 new identifiers each day.
Take hedge funds, for instance. These funds are typically structured as limited liability companies (LLCs) or limited liability partnerships (LLPs), and are offered to a limited number of accredited or qualified investors. So you can't buy shares of a hedge fund on any public exchange. And unlike public investment vehicles, hedge funds require investors to sign disclosure documents, limited partner agreements, and subscription agreements that indemnify fund managers from liability in the event their performances fail to live up to expectations.
Any investor with a brokerage account can purchase stocks, bonds, closed-end funds or ETFs sold on public exchanges. Each company with shares trading on such exchanges is required to follow various regulations dealing with disclosing information, financial statements, business strategies, and the risks it faces in a competitive market. Hedge funds, on the other hand, are not required to disclose specific information regarding their strategies.
Locating CUSIP Numbers
There are several different ways you can look up CUSIP numbers. They are available to the general public and can be accessed through the Municipal Securities Rulemaking Board (MSRB)'s Electronic Municipal Market Access (EMMA) system. You can also find the number on a security's official statements. CUSIP numbers can also be obtained through securities dealers.
- CUSIP numbers are unique identifiers assigned to U.S. and Canadian registered stocks, U.S. government and municipal bonds, ETFs, and mutual funds.
- CUSIP numbers are made up of nine alphanumeric characters.
- These numbers help facilitate and ease the tracking of actions and activities including trades and settlements.
- Private investments such as hedge funds are not assigned CUSIP numbers.
Examples of CUSIP Numbers
The following are CUSIP numbers for some of the world's most recognized companies:
- Amazon: 023135106
- Apple: 037833100
- Facebook: 30303M102
- Johnson & Johnson: 478160104
- Microsoft: 594918104
- Walmart: 931142103
- Wells Fargo: 949746101