Whether you are already a stocks trader or planning to get into stocks trading, you have probably heard of CUSIP numbers and their relations to stocks and securities. CUSIP numbers are essential since they identify stocks and securities for Canadian and US companies. They also identify securities for bonds, from municipal to government bonds. This article offers you the first step to understanding CUSIP numbers, how to get a CUSIP number, and the meaning of CUSIP numbers. Read on.
What is a CUSIP Number?
The CUSIP number is an industry code that uniquely identifies all securities and bonds. The first step to understanding CUSIP numbers is knowing what CUSIP stands for and the difference between CUSIP numbers and ISIN. CUSIP is an acronym for Committee on Uniform Securities Identification Procedures. The committee oversees the entire CUSIP system. Stocks and bonds registered in the US and Canada have CUSIP numbers as identification numbers.
At first glance, distinguishing between ISIN and CUSIP may be challenging. However, even though they all perform the same function, they slightly differ. The US and Canadian stocks rely on CUSIP to identify securities, while ISIN is applicable internationally. Other differences include that the CUSIP contains nine characters (numbers and letters), while ISIN has 12 alphanumeric characters.
CUSIP numbers are only related to bonds, stocks, and securities. But that is not all. A question that many people want to know is, does my birth certificate have a CUSIP number? Or better yet, can you monetize your birth certificate?
The simple answer is, no, your birth certificate doesn’t have a CUSIP number. Each birth certificate in the US has an 11-digit number that specifies the location and year of birth or registration, as well as a serial number unique to each birth. The information on your birth certificate can be used as a form of identification during financial transactions, but your birth certificate number has no other financial use.
What are CUSIP Numbers Used For?
The simple and straight answer is to identify securities. Most investors have already seen stocks being identified by three or four letters. However, identifying stocks by letters is not enough, nor does it explain the function of CUSIP as identifying securities.
Most stocks are identified by a three or four-letter code. It is expected that anyone who has traded stocks will recognize them by only the first three to four letters. However, companies trading publicly use more than 20,000 unique symbols. And what about bonds? There are more than one million issues related to bonds, and most of these are cities, state, and municipal bonds, among others.
That is where the relevance of CUSIP numbers comes in. The identification of securities makes it easy to keep track of all the issues related to securities and bonds.
How Do CUSIP Numbers Work?
CUSIP numbers work just like serial numbers. The groups of numbers have different functions in the identification process. Of the nine characters, the first six identify the issuer, and the following seventh and eighth numbers show securities types.
The ninth number is an automatically generated check digit. When grouped, these numbers identify securities and help make the activities and interactions in stock trading much more manageable. New identifiers are created each day, and every stock trading activity is catered for.
For example, Apple Inc.’s CUSIP number is 037833100
- 037833 – issuer. Identifies the unique name
- 10 – type of security
- 0 – automatically generated check digit
How to Get a CUSIP Number
The simplest way of getting the CUSIP number is by applying for it. Applying for the new CUSIP identifiers online is easy.
An issuer can apply for the identifiers online to promptly generate the CUSIPS to the requesters. You need to get the CUSIPs in the application form and the electronic documentation to make the requests. The requester will then get the confirmations, and they will have to verify the request before receiving the new CUSIP.
However, before you get the CUSIP, the CUSIP global services will determine whether the assets, the security, financial instruments, or the assets class are eligible and whether the requester has submitted all the appropriate documentation. CUSIP global services will issue the CUSIP number as soon as possible, provided you meet all their requirements.
The determination by the CUSIP global services is final. If CUSIP global services do not approve your request, then there is nothing more you can do to get the CUSIP.
Where to Find Your CUSIP Number
Finding the CUSIP number is simple since the CUSIP number is available for the public. You can access CUSIP numbers from the Municipal securities rulemaking Boards. Various securities dealers can also give information about the CUSIP numbers. Another simple way to locate a CUSIP number is through a Google search using search tools like QuantumOnline.com. The results from these searches here will go a step further and provide you with the searched company’s profile, too.
You can Google the CUSIP numbers for select stocks. For instance, Google the CUSIP number for Apple Inc. Another simple way of looking up a CUSIP number is through the brokers’ websites, where you only need to request a quote, and you will get the CUSIP number.