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A-Team Insight Blogs

CGS and FOW Tradedata Launch Cusip Service for US Equity Options

Two months after the formal announcement of its partnership with UK-based futures and options specialist FOW Tradedata, Standard & Poor’s Cusip Global Services (CGS) business has launched its new Cusip Options Service for US listed equity options. The vendor began this year demonstrating an aggressive stance towards extending its reach into other areas of the entity and securities identification space and this launch is just one example of its ambitions put in practice.

CGS, which is managed by S&P on behalf of the American Bankers Association, indicated in May that it was planning to launch the new service by the end of June and has duly met its deadline. “Today’s announcement underscores CGS’ commitment to global investors to expand our coverage of asset classes to equity options. With the inclusion of option Cusips, investors now have a consistent nine character Cusip and 12 character ISIN to track options in their security masters,” says Jim Taylor, managing director of CGS.

The service contains over one million option Cusips with accompanying ISINs and related data elements such as strike price, contract name, exchange code and underlying symbol. Market participants can receive the Cusip Options Service directly from CGS or via a properly licensed vendor. FOW Tradedata’s Xymbology product, which maps option contracts to market data and proprietary vendor codes, will also contain option Cusips and ISINs.

The Cusip Options Service provides nine character Cusip numbers and 12 character ISINs for each contract strike price. FOW Tradedata is the source of the contract data covering all the major options exchanges in the US. The Cusip Options Service contains unique identifiers that will not conflict with other Cusips, says CGS. The letter C (call) and P (put) in the third position of the Cusip will be reserved for option Cusips.

“We believe this new coverage will greatly help with standardisation in the global options market and complement the Options Clearing Corporation’s (OCC) planned 21 character Options Symbology Initiative (OSI) code,” says Taylor.

The OCC was selected earlier this year to operate the new symbology allocation system, which is being introduced as an alternative standard to the Options Price Reporting Authority (Opra) code by 2010. Last year, the Financial Information Forum (FIF) estimated that the cost of its introduction would total around US$250 million.

The industry has a lot of work still to do to meet the requirements of the new system by next year. Currently, most firms are only able to store nine or 12 digit identification codes and in order to comply with OSI, they will have to create proprietary identifiers for listed contracts for purposes including client reporting and processing.

This release by CGS and FOW Tradedata should go some way to supporting their efforts around the OSI and, according to the results of the FIF survey, it is likely to get some traction in the market. According to the survey, which was published in October last year, 39% of respondents said at the time they would use codes created by CGS to help them meet their requirements. This was by far the most popular choice, as only 7% said they would use Interactive Data’s solution, 2% would use Symbol Management Clearing, 7% indicated they would use their current internal identifiers, 7% were uncertain and 24% declined to comment.

It should be more evident by the end of the year whether these figures will prove accurate.

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