CUSIP – Definition & Meaning

A CUSIP (Committee on Uniform Securities Identification Procedures) is a 9-character alphanumeric identifier used primarily in the U.S. and Canada to uniquely identify financial instruments-such as stocks and bonds-across market data, trading, clearing, and settlement.

Key Takeaways

In one sentence: CUSIP is a 9-character security identifier widely used in North American markets.
Why it matters: It enables accurate trade processing, settlement, corporate actions, and regulatory reporting.
Context/usage: Appears on confirmations, brokerage statements, market data feeds, and clearing files.
Relation to ISIN: U.S. ISINs embed the CUSIP as their “NSIN” portion (e.g., US + CUSIP + check digit).

What Is CUSIP?

CUSIP numbers standardize the way U.S./Canadian securities are referenced across systems. The series covers equities, corporate and municipal bonds, U.S. government securities, certain funds, and structured products. The identifier is assigned and maintained under the CUSIP system to ensure every instrument can be referenced unambiguously across venues and data vendors.

CUSIP Structure (9 characters)

Issuer (positions 1–6): Alphanumeric code identifying the issuer.
Issue (positions 7–8): Identifies the specific issue or class (e.g., share class, bond series).
Check Digit (position 9): Calculated using a modulus-10 algorithm to detect input/transmission errors.

How CUSIP Works

When an instrument is issued, it receives a CUSIP. Trading, custody, and back-office systems store the CUSIP as a primary key for the instrument in North America. Cross-listed instruments can map multiple tickers and MIC venue codes to the same CUSIP.

Check Digit Calculation (high level)

Convert letters to numbers (A=10 … Z=35).
Apply weights 1,2,1,2,… to the first 8 characters; if a product ≥10, sum its digits (e.g., 18→1+8=9).
Sum all weighted digits.
Check Digit = (10 − (Sum mod 10)) mod 10.

Example (format only)

Example CUSIP: 037833100

037833 = issuer code (placeholder)
10 = issue code (placeholder)
0 = check digit from the modulus-10 process

Benefits and Considerations

Benefits

Operational clarity: Reduces settlement breaks by standardizing the instrument key.
Interoperability: Maps cleanly to vendor data, regulators, and post-trade utilities.
Coverage breadth: Equities, munis, corporates, governments, funds, and more.

Considerations

Regional scope: Predominantly North America; outside the region, ISIN is the global standard.
Multiple lines: One CUSIP may map to multiple tickers/venues; use MIC and currency fields for the trading line.
Lifecycle changes: Corporate actions (mergers, splits, reorgs) can retire/replace CUSIPs-maintain current reference data.

Example of CUSIP in Practice

A U.S. company issues common stock and later a preferred share class. Each line receives its own CUSIP for precise settlement and corporate-action processing. Data warehouses aggregate positions by CUSIP to avoid double-counting across exchanges or alternative trading systems.

Related Terms

ISIN (International Securities Identification Number) – global identifier; U.S. ISIN embeds the CUSIP.
SEDOL – U.K. identifier used by the London Stock Exchange; maps to ISIN and often cross-references CUSIP.
MIC (Market Identifier Code) – identifies the trading venue, complementing CUSIP/ISIN.
LEI (Legal Entity Identifier) – identifies the issuer/legal entity, not the instrument.

CUSIP