CUSIP refers to the Committee on Uniform Securities Identification Procedures which oversees the entire CUSIP system. The CUSIP number is a unique identification number assigned to all stocks and registered bonds in the United States and Canada, and it is used to create a concrete distinction between securities that are traded on public markets.
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
These numbers are used to help facilitate trades and settlements by providing a constant identifier to help distinguish the securities within a trade. Each trade and the corresponding CUSIP number are recorded to facilitate the tracking of actions and activities.
The CUSIP system is owned by the American Bankers Association in conjunction with Standard & Poors. The system is in place to facilitate the settlement process and the clearance of associated securities. The CUSIP is composed of nine characters and can include letters and numbers. It is assigned to all stocks and registered bonds that are sold or traded within the United States and Canada.