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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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. Leadership Board Structure Thought Leadership Legal Entity Identifiers 8 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. The World of Standards ANNA/ASB ISIN CFI 14 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. Processes Assigning CUSIP/CINS/ISIN Sample Codes General Procedures Suspicious Deals 18 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. Technology SCORE REACH & FIRST Web Services/API 28 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. Technology: SCORE Assignment System 29 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. Technology: SCORE Assignment System 30 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. Licensing Basic Overview Value of CGS Data 33 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. Products and Services Delivery Options Value Proposition Content & Solutions 36 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 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] CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services. 43 CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of CUSIP Global Services.