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Powering Efficient Capital Markets
CUSIP Global Services: From A to Z
April 10th, 2014
CONFIDENTIAL AND PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services.
Agenda
• About CUSIP Global Services (CGS)
• Leadership
• The World of Standards
• Processes
• Technology
• Licensing
• Products and Services
2
CONFIDENTIAL AND PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services.
About CGS
History
Mission
Asset Class Coverage
3
CONFIDENTIAL AND PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services.
History of CUSIP Global Services
1989- CINS
created for Intl
offerings
1975-Federal Reserve uses
CUSIP to speed up transfer
US Treasuries
1989- CUSIPs for
Insurance PPNs
1968-CGS is formed
ABA selects
S&P to run it
1964-ABA spawns
CUSIP
1960’s
4
1998-CUSIPs for
TBAs
1993- 1-hour
Xpress service
1972-All Clearing Corps
use CUSIP. Mandatory
for brokerage firms
1970’s
1983- MSRB mandate
Muni’s need CUSIP
CUSIP assigned to CDs
1980’s
1990- CUSIPs for
Commercial Paper
1990’s
CONFIDENTIAL AND PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services.
History of CUSIP Global Services
2014 – CUSIPs for
private placements
(CrowdFunding)
2008 – CGS opens
Asia office
2009 - CGS partners
With eVestment on Hedge Funds
2007 – CUSIP NOW
2009 - CGS partners
With Avox on Entity IDs
2003 – CUSIPs are
assigned to Indices
2006 – 144A Linkage
Service
2004 – CGS partners
with LSTA - Loans
2003 - CGS partners
with Markit – CLIPS/RED
2003
5
2009 - CGS partners
With FOW on listed options
2006 – Muni Alert Service
2004
2006-2008
2009-now
CONFIDENTIAL AND PROPRIETARY.
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About CUSIP Global Services
Mission – Powering Efficient Capital Markets
• CUSIP helps foster market liquidity
 Over 14 million securities and their issuers worldwide
 A unique, common language across institutions, exchanges and nations
 A streamlined workflow from the front to back office
• Users rely on the accuracy of CGS information to run their businesses in an
efficient and cost-effective manner
• The numbering system for:
 US & Canada
 Cayman Islands, Bermuda, & Puerto Rico
 35 markets total in North, South, Central America and Caribbean
6
CONFIDENTIAL AND PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services.
About CGS: Asset Class Coverage
Equity
Debt
Other
• Common/Ordinary Shares
• Corporate Debt
• Credit Derivatives (RED Codes)
• Exchange Traded Funds
• Municipal Debt
• Hedge Funds and Funds of Funds
• Global/American Depositary
Receipts (GDR/ADR)
• U.S. Treasury and Government
Agencies
• Restricted Rule 144A and Regulation
S Securities
• Indices
• Limited Partnerships
• Federal Government Economic
Stimulus Programs
• Listed options – US and Canada
• Sovereign Debt
• Structured Products (Equity- and
Index-Linked Securities; Equity &
Debt Hybrids)
• Mutual Funds
• Supranational Agencies
• Preferred Shares
• Bankers Acceptances
• Real Estate Investment Trusts
(REIT)
• Commercial Paper
• Rights
• Certificates of Deposit
• Unit Investment Trusts
• Asset-Backed Securities
• Warrants
• Mortgage-Backed Securities
• Variable Annuities and Other
Insurance-Related Products
• Medium-Term Notes
• Collateralized Debt Obligations
• Syndicated Bank Loans
7
CONFIDENTIAL AND PROPRIETARY.
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Leadership
Board Structure
Thought Leadership
Legal Entity Identifiers
8
CONFIDENTIAL AND PROPRIETARY.
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Leadership: CUSIP Board of Trustees
• Board includes a wide cross-section of firms and industry
representation
 Feedback and guidance directs new initiatives and areas for
growth
 Ensures that CGS is responding to industry needs
• Rotating chairperson
• Permanent ABA, SIFMA, and DTCC representation
• Meets formally three times per year
• Highlights CGS independence within S&P Capital IQ
9
CONFIDENTIAL AND PROPRIETARY.
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Leadership: Thought Leadership
• Monthly CUSIP Issuance Trends Report
 Solid predictor of future capital markets activity
 Video on www.cusip.com and print version
 Wide publication, including Barron’s and Wall Street Journal
• Solutions Center
 Online version of CUSIP A-Z
 Product video clips
• News and Events
 White papers and articles on standards development
 Upcoming events calendar: CGS Summit, Operations Forum, and
Educational opportunities
10
CONFIDENTIAL AND PROPRIETARY.
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Leadership: Standards Body View of Legal Entity ID’s
• Attempts to create a lingua franca for legal entities
 Allows regulators to better monitor systemic risk
 Model includes Regulatory Oversight Committee, a Central Operating Unit, and federated
Local Operating Units
 A building block for viewing capital structure and corporate hierarchy
• Collaboration between Industry and Regulators
 Spearheaded by Financial Stability Board (FSB)
 SIFMA and global sister organizations formed under the banner of GFMA
• Current State of Affairs
 FSB has endorsed a 20-character code with first four positions denoting the LOU of origin
 DTCC and SWIFT issuing Global Markets Entity ID’s (pre-LOU prefix 5493)
 CGS collaborating with DTCC: Issuers can secure a GMEI during CUSIP application
11
CONFIDENTIAL AND PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services.
Structure of LEI
• A unique 20-character alphanumeric code assigned to all entities
involved in financial transactions through ISO 17442. The LEI will be
neutral, with no imbedded intelligence: 5493QN3K1A1C2R3JL544
– Legal Name: Echo Street Capital Partners, LP
– Address: 2711 Centreville Road, Suite 400, Wilmington DE 19808
– Country: USA
– Entity Status: Active
– Legal Form: Limited Partnership
– Date of Assignment
– Last Update
– Date and Reason for Expiry
12
CONFIDENTIAL AND PROPRIETARY.
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Leadership: Our LEI Contribution
CABRE Directory
• Registry of financial entities with over 550,000 CABREs to date; semi-annual
quality reviews
• Continuous inbound flow of new entities from Issuance Operations
• Directory is free to CUSIP customers and can be used now
• CABRE will map to LEI
CABRE AVID LEI/CICI
DE0D179P08 4525288 7LTWFZYICNSX8D621K86
DK10611003 7625372 1MX2U20WYJ5121KEZV44
NL07802596 3210953
US064966H7 2411441 549300ABYZD2SFD5JB29
US07134481 3201632 FJSUNZKFNQ5YPJ5OT455
13
CUSIP_ISSUER_NUM
D179P0
K4277T
780259
64966H
713448
LEGAL_ENTITY_NAME
Deutsche Bank AG
The Government of the Kingdom of Denmark
Royal Dutch Shell PLC
City of New York
Pepsico, Inc.
LEGAL_FORM
ROLE_TYPE
AKTIENGESELLSCHAFT ISSUER
OTHER
COUNTER PARTY
ISSUER
OTHER
ISSUER
CORPORATION
ISSUER
CONFIDENTIAL AND PROPRIETARY.
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The World of Standards
ANNA/ASB
ISIN
CFI
14
CONFIDENTIAL AND PROPRIETARY.
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The World of Standards: ANNA and ASB
Association of National Numbering Agencies (ANNA)
• CGS one of 22 founding members in 1992 and an original Board member
• Currently 84 full members and 31 partners representing some 122 countries
• Registration Authority for the ISIN standard/ISO 6166 (among others)
• Establish and update ISIN allocation guidelines
• Global expansion to new NNAs/countries
ANNA Service Bureau
• Central hub and largest ISIN repository with over 8.3 million active ISINs
• Receive and consolidate ISIN data from NNAs
• Disseminate ISIN codes to the market
• CGS co-manages with SIX Financial Information (Swiss NNA)
15
CONFIDENTIAL AND PROPRIETARY.
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The World of Standards: ISIN
ISO 6166 - International Securities Identification Number
A global, uniform unique code that identifies instruments to facilitate
cross-border trading
Example: Amazon.com Inc – Common Stock
ISO
Country Code
Local
Identifier
Check
ISIN Identifier
2 Characters
US
9 Characters
023135106
1 Character
7
12 Characters
US0231351067
 ISO rules govern designation of the ISO Country Code, e.g.
 for Equity Issues: country where the entity is incorporated/organized
 for Debt Issues: country where the Central Securities Depository is located
 The local Identifier is assigned by the individual National Numbering Agency (NNA)
16
CONFIDENTIAL AND PROPRIETARY.
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The World of Standards: CFI
ISO 10962 – Classification of Financial Instruments code
Equity/Shares
CFI Code
Debt/ Bonds
ESVUFR
CFI Code
DBFUGR
Asset / Product Type
Asset / Product Type
Category
E = Equity
Category
D = Debt
Group
S = Shares
Group
B = Bonds
Attributes
Attributes
1st Attribute – Voting right
V = Voting
1st Attribute – Type of Interest
F = Fixed Rate
2nd Attribute – Ownership
U = Unrestricted
2nd Attribute – Guarantee
U = Unsecured
3rd Attribute – Payment Status
F = Fully Paid
3rd Attribute – Redemption
G = Callable
4th Attribute – Form
R = Registered
4th Attribute – Form
R = Registered
17
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Processes
Assigning CUSIP/CINS/ISIN
Sample Codes
General Procedures
Suspicious Deals
18
CONFIDENTIAL AND PROPRIETARY.
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Processes: Assigning CUSIP (US and Canada)
Equity
•
Public (unrestricted) equity offering by U.S. or Canadian issuer
•
Private (restricted) equity offering in U.S. by any issuer
 Rule 144A, Regulation D
•
American/Global Depositary Receipts (ADR/GDR)
Debt
•
Public or private debt offering in U.S. by any issuer
 SEC-registered, Rule 144A, Regulation D
19
CONFIDENTIAL AND PROPRIETARY.
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Processes: Assigning CINS (International)
Equity
• Equity offered solely outside U.S. and Canada
 U.S. company Regulation S stock offering on U.K. AIM exchange or in
Germany
•
Public offerings in U.S. by non-U.S./Canadian issuer (except
GDR/ADR)
 Cayman Islands, Bermuda and other non-U.S./Canadian issuers
Debt
•
Debt offered solely outside U.S. and Canada
 Regulation S (any issuer)
 Eurobonds
20
CONFIDENTIAL AND PROPRIETARY.
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Processes: Sample CUSIP
Structure of a CUSIP
CGS provides a 9-character standard CUSIP identifier for issuers and their
financial instruments offered in the U.S. and Canada
Example: Amazon.com Inc – Common Stock
21
Issuer
Issue
Check
CUSIP Identifier
023135
10
6
023135106
First 6 Characters
• Identifies the unique
name of the:
– Company
– Municipality
– Government
agency
• A hierarchical alpha
numeric convention
linked to alphabetic
issuer name
Next 2 Characters
• Identifies the type of
instrument:
– Equity
– Debt
• Uniquely identifies
the issue within the
issuer
• A hierarchical alpha
numeric convention
Next 1 Character
• A mathematical
formula checks
accuracy of the
previous 8
characters
• Delivers a 1
character
check result
Resulting 9
Characters
• A unique identifier
CONFIDENTIAL AND PROPRIETARY.
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Processes: Sample CINS
Structure of a CINS
CGS provides a 9-character standard CINS identifier for
non-U.S./Canadian financial instruments
Example: Abingdon Capital PLC – Shares
22
Country Code
Issuer
Issue
Check
CINS Identifier
G
0052B
10
5
G0052B105
First
Character
• Identifies country
or region where
issuer is
incorporated
• CGS’s rulesbased engine
governs
designation
• In this case,
G=United
Kingdom
Next 5 Characters
• Combined with
Country Code,
uniquely
identifies
the issuer
• In this case,
Abingdon
Next 2 Characters
• Identifies the
type of
instrument
• Uniquely
identifies the
issue within the
issuer
Next 1
Character
• A mathematical
formula checks
accuracy of the
previous 8
characters, and
delivers 1
character result
Resulting 9
Characters
• A unique
identifier
CONFIDENTIAL AND PROPRIETARY.
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Processes: ISIN from CUSIP or CINS
Structure of an ISIN Assigned by CGS
ISIN Based on CUSIPs
Example: Amazon.com Inc – Common Stock
ISO
Country Code
Local Identifier
(CUSIP)
US
023135106
Check
7
ISIN Identifier
US0231351067
Example: Air Canada Inc – Class A Shares
ISO
Country Code
Local Identifier
(CUSIP)
CA
008911703
Check
4
ISIN Identifier
CA0089117034
ISIN Based on CINS
Example: Cable and Wireless Jamaica Limited – Shares
23
ISO
Country Code
Local Identifier
(CINS)
JM
P19231102
Check
6
ISIN Identifier
JMP192311026
CONFIDENTIAL AND PROPRIETARY.
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Processes: General Procedures
Securities Offerings
• New Public or Private Offering (prospectus, offering document)
• Corporate Action
 Name change
 Company merger, acquisition or reorganization
 Chapter 11 bankruptcy reorganization
 Reverse stock split
• CUSIP assigned pre-sale/pre-trade
 Preliminary information
 Data Quality Group focused on final validation of descriptive data and customer
support/queries
• Internet Requests at www.cusip.com
 CUSIPRequest
• Express assignments within one hour
24
CONFIDENTIAL AND PROPRIETARY.
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Processes: General Procedures
• CUSIP identifiers are not reused except for discount commercial paper,
government agency discount notes and TBA mortgage pools
• A security is assigned a CUSIP or CINS; and one ISIN
• Fungibility:
 One CUSIP and one ISIN if shares trade on multiple stock exchanges or
denominated in different currencies
 Separate CUSIPs and ISINs if debt issued in different tranches or classes by
currency, for example U.S. dollar tranche and Euro tranche
 Separate CUSIPs and ISINs for each transfer/ownership type: SEC-registered
(unrestricted), Rule 144A, Accredited Investors and Regulation S
25
CONFIDENTIAL AND PROPRIETARY.
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CUSIP Workflow: Request and Assignment
Issuers and Obligors
Lead Underwriter
CGS
Pre-trade self-registration
• Preliminary Prospectus
• Preliminary Official
Statement
• Proxy Statement
• Draft Merger Agreement or
Certificate of Amendment
Electronic
documents
Counsel
Prioritize and process
Electronic Confirmation
• XPRESS Requests (1 hour or less)
• Standardized Issuer/Issue Descriptions
• Up to 60 Data Elements
• Final CUSIP/CINS ISIN Assignment
Real-Time Web
26
CGS/ASB Data Services
Global Data Vendors
Data Distribution
CONFIDENTIAL AND PROPRIETARY.
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Processes: Spotting Suspicious Deals
• A CGS Identifier is NOT meant to be a mark of authenticity or seal of
approval for any given security
 Offering must meet eligibility for a CUSIP
 Must have legal source document
• We do, however, prevent suspicious offerings from reaching the
market with a CUSIP
• Red flags include:
 Fake territories/jurisdictions
 Backed by precious metals
 Absurd offering amounts
 No reputable placement agent
 No depository eligibility
27
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Technology
SCORE
REACH & FIRST
Web Services/API
28
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Technology: SCORE Assignment System
29
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Technology: SCORE Assignment System
30
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Technology: Speedy Issuance for Large Requesters
• Since early 2008, retail CD brokers can request CUSIP numbers electronically
through the CUSIP REACH interface
• Since late 2010, CUSIP FIRST lets requesters “fast-track” new bulk CUSIP identifier
issuance
CUSTOMER
6. Customer
Retrieves and
Deletes
Response File
1. XML
Request
3. Email
Notification
Request
Received
5. Email
Notification
Response
Available
S&P FTP
Server
Customer
Request Folder
2. Request
Pickup
Customer
Response Folder
4. Response
Posting
CUSIP REACH
31
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Technology: Customized Data via API
• Flexible content in XML-based files; real-time access
• Simple Object Access Protocol (SOAP) Request and Response
messages
• Uses Web Services Definition Language (WSDL) to determine
format of input and response
32
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Licensing
Basic Overview
Value of CGS Data
33
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Licensing: Basic Overview
• Ensures quality and consistency of CGS data throughout the industry
• Allows for direct re-investment by CGS on behalf of market participants
• Protects the ABA’s Intellectual Property
• Allows firm to source data either directly from CGS or indirectly through an
authorized market data vendor
 Direct subscribers receive the data straight from the source
 Indirect subscribers can leverage existing datasets and workflow
 One license covers any number of vendor feeds and allows a firm to take
product up to the value of a license
• Transparent and non-discriminatory
 Process begins with Use of Service Statement as completed by client
 Sample fees available on www.cusip.com
34
CONFIDENTIAL AND PROPRIETARY.
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Licensing: Value of CGS Data
• It’s not “just about the numbers”
 Up to 60 data elements required for unique identification
 Standardized Issuer and Issue descriptions
 CGS is the primary source for pre-trade security information
 All major Market Data Vendors consume CUSIP feeds on behalf
of their customers
 Brings speed, efficiency, and reliability to market participants
• CUSIP identifiers are interoperable between vendors
 Proprietary vendor codes lock a firm into one platform
 CUSIP is a common language regardless of environment
35
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Products and Services
Delivery Options
Value Proposition
Content & Solutions
36
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Products and Services: How We Deliver the Data
CGS Data Feeds
CGS Web Services
One of the largest securities
databases available
Fast & accurate source
information
• Intra-day, Daily, Weekly
• Near Real Time
• Master & Delta Files
• Online web portals
• Flat & XML formats
• API Web Services
• CGS iPad Application
FASTEST and MOST RELIABLE WAY TO GET
CUSIP NUMBERS and UNDERLYING
REFERENCE DATA FOR SECURITY SET UP
37
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Value of taking data directly from CGS
Data Provenance
Validation & Accuracy
• Source database
• Ensure accuracy of CUSIP,
CINS and ISIN identifiers
• Legal documentation
• 40 years of historical
reference data and
corporate actions
38
• Protect against dummy
numbers
• Data expertise
• Cross check underlying
data elements with legal
documentation
Speed
Asset Class Coverage
• Real time access to IPOs,
new issuance, and
corporate actions
• Dozens of asset classes
covered across public and
private markets
• Multiple delivery options
via feed or web services
• Work with industry experts
on expansion to new
classes i.e. LSTA, NAIC,
Markit
CONFIDENTIAL AND PROPRIETARY.
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Products and Services: CGS’s Flagship Solutions
A Range of Content to Suit Your Needs
 CUSIP Master File
CGS Data Feeds
 CINS Master File
 CGS ISIN Master File
CGS CUSIP Access
CGS CUSIP
New Issue Alert
CGS Portfolio
Service
CGS TBA
(To Be Announced)
39
+ Subsets
(i.e., Equity only, Corp Debt only, etc.)
 Near real time web access to the CUSIP database
 Search by issuer name or CUSIP
 New issue alert service
 Transmission files pushed to clients every 15 minutes
 Validate CUSIPs and CINS in your Security Master File or
portfolio
 Returns valuable reference data for each inbound security
 Temporary CUSIPs for federal agency mortgage pools
CONFIDENTIAL AND PROPRIETARY.
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Products and Services: Segment Solutions
Capturing Client Needs for Additional Coverage Organically
or through Partnerships
Red Codes
 Credit derivative entity identifiers for Markit‘s RED
service
 Private corporate bank loans
CGS Syndicated
Loans
 Working with LSTA
 CUSIPs assigned at the deal and facility level
CGS Options
CGS Hedge Fund
Service
40
 U.S. and Canadian listed equity, index, and ETF options
 Hedge funds and fund of hedge funds identified globally
 Increase transparency in a traditionally opaque market
CONFIDENTIAL AND PROPRIETARY.
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Products and Services: Solutions and Linkages
Services to Help You Work More Efficiently
CGS Security
Identifier Linkages
 CUSIP to ISIN Linkages
 CINS to ISIN Linkages
Global referencing for
cross border trading
needs
 Link related issuer names in the CUSIP database
CGS Associated
Issuers
 Issuers with multiple base numbers
 Issuers related through historical corporate actions
 Link related securities from the same private placement
offering memorandum
144A Service
 CUSIPs are assigned for each type of qualified
institutional buyer including:
 144A, Accredited Investor, Registered issues and Reg S
Entity ID (LEI,
CABRE) to Security
CUSIP, ISIN)
Linkage File
41
 Developed new process linking CABRE to global ISINs
 Created as part of LEI initiative
 Over 10 million entity to security identifier links
CONFIDENTIAL AND PROPRIETARY.
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Contact Information
•
Jim Taylor, Managing Director, Head of CUSIP Global Services, 212-438-4007
– [email protected]
•
Scott Preiss, Vice President and COO, 212-438-6560
– [email protected]
•
Matthew Bastian, Director of CGS Product, Market & Business Development, 212-438-4072
– [email protected]
•
Gerard Faulkner, Director, CUSIP Operations, 212-438-6542
– [email protected]
•
Vinny DeCarluccio, Senior Manager, CGS Data Governance, 212-438-6540
– [email protected]
•
Peter McNally, Manager, CUSIP Operations, 212-438-6580
– [email protected]
•
Thomas Baldinger, Senior Manager, Product Development and Support, 212-438-1360
– [email protected]
•
Robert Corrado, Product Manager, 212-438-2945
– [email protected]
•
Darren Purcell, Director, CUSIP Global Services EMEA, +44 20 7176 7445
– [email protected]
•
Eng Ban Ho, Director, CUSIP Global Services Asia Pacific, +65 6530 6457
–
42
[email protected]
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43
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