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A-Team Insight Blogs

FOW Tradedata to Assist S&P’s CGS with US Liquidity Equity Options Cusip Development

Standard & Poor’s Cusip Global Services (CGS) business has certainly been busy over the last couple of months. Not only has it recently announced a partnership with business entity identification specialist Avox, it has now also agreed to work with UK-based futures and options specialist FOW Tradedata to develop a new Cusip identification system for listed equity options in the US.

The vendor, which is managed by S&P on behalf of the American Bankers Association, will launch the new service by the end of June, says Matthew Bastian, director of product development at S&P. Bastian indicates that the service, which has been dubbed Cusip Options Service, is being developed to expand the vendor’s asset coverage and to address a “longstanding industry need”.

“The feedback we have received from the industry is that a common nine to 12 character identifier is a tremendous step forward in standardisation, and is an essential complement to the Options Clearing Corporation’s (OCC) planned 21 character Options Symbology Initiative (OSI) code,” he explains.

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 service is therefore aimed at supporting the industry in moving to these standards and will encompass approximately one million option Cusips with accompanying ISINs and related data elements. Market participants who wish to receive the Cusip Options Service will be able to do so directly from CGS or via a properly licensed vendor, says Bastian. FOW Tradedata’s Xymbology product, which maps option contracts to market data and proprietary vendor codes, will also contain option Cusips and ISINs.

Once operational, the Cusip Options Service will generate a nine character Cusip and 12 character ISIN for each contract strike price. FOW Tradedata will be the source of the contract data and it will aim to cover all the major options exchanges in the US. The Cusip Options Service will contain unique identifiers that will not conflict with other Cusips. Moreover, the use of the letter C (call) and P (put) in the third position of the Cusip will be reserved for Options Cusips, indicate the vendors.

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