Difference Between ISIN and CUSIP (With Table)

ISIN and CUSIP codes are two of the world’s most famous checkpoints for securities and are especially important for trade, selling, and purchase of shares. How do CUSIP and ISIN vary, given that both are codes for the use of a security to help clearing and trade settlement? Let’s compare and contrast both of them.

ISIN vs CUSIP

The difference between ISIN and CUSIP is ISIN is used worldwide to identify securities and facilitate their buying and selling, whereas the CUSIP is only used in the United States and Canada. The American Bankers Association owns the CUSIP numbering system, while the International Organization for Standardization operates the ISIN system.

ISIN stands for International Securities Identification Number, and it is a 12-character alphanumeric identifier that identifies securities globally. It has quickly become the world’s largest standard securities identification number code. Shares, bonds, warrants, and other securities are among the securities available. The ISIN is a significant system for identifying a certain securities issue.

The Committee on Uniform Securities Identification Procedures (CUSIP) is an organization that works to standardize the process of identifying securities. This group, which was established in 1964, produced a system for identifying securities, namely the U.S. and Canadian listed stocks, U.S. government and municipal bonds, exchange-traded funds, and mutual funds, which is applied in 1967. 

Comparison Table Between ISIN and CUSIP

Parameters of Comparison ISINCUSIP
Full formInternational Security Identification NumberCommittee on Uniform Securities Identification Procedures
Locations of Usage Used across the world.Used only in the US and Canada
Operated byInternational Organization for StandardizationAmerican Bankers Association
Code’s Digit12-Digit Code9- Digit Code
Country CodeIncludes a two-character country code.CUSIP doesn’t include any country code.

What is ISIN?

An ISIN (International Securities Identification Number) is a 12-digit alphanumeric identifier that defines particular security. The National Numbering Agency of each country is responsible for allocating ISINs (NNA). The ticker symbol, which represents the stock at the exchange level, is not the same as the ISIN. The ISIN is a globally identifiable number assigned to security.

ISINs are used for a variety of purposes, such as trading and settlement. The figures maintain a standard structure, allowing institutional investors’ holdings to be tracked similarly throughout markets around the world.

The ISIN numbering system was created in 1981 and is still in use today. But, it wasn’t extensively utilized until 1989, when the Group of 30 (G30) nations demanded that all of their participants use the numbering system to differentiate between different investment tools. One year later, the International Standards Organization (ISO) joined the team and started using ISO 6166 as a standard reference. The ISIN code data was transferred using discs until it was transmitted through the internet in the year 2000. When the European Union (EU) enforced the use of the ISIN code for substantial regulatory reporting obligations in 2004, the ISIN number became increasingly important.

The ISIN numbering scheme must be used by anyone who trades securities worldwide. In this way, the ISIN numbering system can be thought of as the de facto standard for trading securities.

What is CUSIP?

The Committee on Uniform Securities Identification Procedures (CUSIP), which administers the whole CUSIP system, is referred to as CUSIP. The CUSIP number is assigned identifying number granted to all stocks and registered bonds in the United States and Canada, and it is used to distinguish publicly traded securities. These identifiers are intended to make trades and settlements easier by giving a consistent identifier for the securities in a trade. To make monitoring of actions and activities easier, each trade and its related CUSIP number are logged.

The American Bankers Association, in collaboration with Standard & Poor’s, owns the CUSIP system. The technology was set up to make the settlement procedure and the acceptance of related securities easier. The CUSIP is nine characters long and can contain both letters and integers. All equities and registered bonds sold or exchanged in the United States and Canada are given this number.

A CUSIP number is identical to a serial number in that it identifies a specific item. The base, or CUSIP-6, is made up of the first six alphanumeric characters and is used to identify the issuer. The seventh and eighth digits specify the level of security, while the ninth digit is an electronically generated “check digit.” CUSIP numbers help streamline and simplify actions and decisions such as trades and settlements by giving a standard identification that identifies securities. Every day, CUSIP Global Services generates 1,000 to 2,000 new identities.

Main Differences Between ISIN and CUSIP

  1. The acronym “ISIN” means “International Securities Identification Number,” and “CUSIP” means “Committee on Uniform Security Identification Purposes.”
  2. The ISIN number is used to authenticate securities traded and settled internationally, whereas the CUSIP number is used to represent securities traded, cleared, and settled in North America, primarily in the United States.
  3. The ISIN number has twelve alphanumeric characters, whereas the CUSIP number has nine.
  4. ISIN contains a two-character country code given by the ISO, whereas CUSIP does not.
  5. The ISIN is a nine-character code that is known for national security identification, whereas the CUSIP is made up of six characters that verify the issuer and two characters that find the issue.

Conclusion

Both the ISIN and CUSIP numbers are authoritative codes that are considered necessary today. The numbers will assist you in determining the security. They function as a company’s individual social security number. An ISIN or CUSIP number is not a ticker signifier that is used to identify stocks in the market. For example, the company’s ticker symbol could be one of several. This is determined by the trading platform, but all securities will have the same ISIN number. ISIN codes are needed, but companies cannot generate their own ISIN code. When a business wants an ISIN number, it must first contact a numbering agency, such as the Association of National Numbering Agencies (ANNA). The CUSIP number is required for the smooth trading of financial securities. The financial markets may be unable to work properly unless each security has a distinct identification code. In North America, the CUSIP is used, whereas, in India, the ISIN is used. 

References

  1. https://books.google.com/books?hl=en&lr=&id=23LIzAAcp4oC&oi=fnd&pg=PA1&dq=ISIN+and+CUSIP&ots=OXLaCW24lT&sig=vZHsC0FCO5OU9wFplARO2n7m70E
  2. https://www.csx.ky/Attachments/8567/Battalion%20CLO%20XV%20Ltd.%20-%20Notice%20of%20Proposed%20Supplemental%20Indenture%20and%20Request%20for%20Consent%20(compiled)_1.PDF
x
2D vs 3D