Committee on Uniform Securities Identification Procedures (CUSIP)
What Is a CUSIP?
A CUSIP is a unique identification number assigned to financial securities such as stocks, bonds, and mutual funds in the United States and Canada. The number helps identify specific securities and facilitates efficient trading and settlement in financial markets.
CUSIP stands for Committee on Uniform Securities Identification Procedures.
Why It Matters
Financial markets involve millions of securities. CUSIP numbers allow investors, brokers, and financial institutions to accurately identify securities and process transactions efficiently.
Without unique identifiers, trading systems could experience confusion or errors.
How CUSIP Works
Each CUSIP number contains nine characters.
These characters identify:
- the issuing company or organization
- the specific security issued
- a final check digit used for verification
CUSIP numbers are used by brokers, clearing firms, and financial institutions to process trades and track securities.
Example
A corporate bond issued by a company will have a specific CUSIP number that distinguishes it from other bonds or securities.
CUSIP vs Ticker Symbol
- A CUSIP identifies a specific security for settlement and recordkeeping.
- A ticker symbol is a short abbreviation used to identify securities on stock exchanges.
FAQs About CUSIP
Do individual investors use CUSIP numbers?
Most investors use ticker symbols, but CUSIPs are used behind the scenes in financial systems.
Who assigns CUSIP numbers?
CUSIP numbers are issued by the CUSIP Global Services organization.
Are CUSIP numbers used internationally?
They are primarily used in North America.
Related Terms
