CUSIP6, CUSIP8
Posted: 11 February 2015 02:54 AM   [ Ignore ]
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Hello guys,

I have a question about CUSIP6 when merging TFN with CRSP.


I merged CUSIP8 from TFN to CUSIP8 or NCUSIP8 from CRSP individually. Then I double checked the unmatched CUSIP8 in TFN, and extracted the first 6 digits of CUSIP8 and NCUSIP in TFN and CRSP. When merging TFN with CRSP based on CUSIP6 or NCUSIP6, I found extra data which could be matched. My question is that the first 6 digits are the same and the company names are the same as well, but the last two digits in corresponding CUSIP8 are actually different. May I still be able to use the data from CRSP to represent the firm in TFN?

For example,
only “00205P20” is in TFN
only “00205P10” is in CRSP

Any help would be great. Many thanks in advance!

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Posted: 11 February 2015 08:42 AM   [ Ignore ]   [ # 1 ]
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hi,

The 6 first characters of a cusip identify the issuer, the next two the instrument. See https://www.cusip.com/cusip/about-cgs-identifiers.htm

If you are matching firms, using the first 6 only would be sufficient. Do you have any instances where the firms seem to be different even though the first 6 match?

Hope this helps,

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Posted: 11 February 2015 07:45 PM   [ Ignore ]   [ # 2 ]
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Thanks for the quick reply. Yes, I do find some companies with the same CUSIP6 but different company names. For instance,

59041920 MERRIMAN HOLDINGS INC   RATEXCHANGE CORP             59041910
75845J20 RENEGY HOLDINGS INC       CATALYTICA ENERGY SYSTEMS INC 75845J10


One thing I have to clarify is that every CUSIP in TFN database is linked to a trade by a person in a firm (e.g. buying or selling stock, or exercising options, etc.). If the cusip6 and name are matched in CRSP, but not CUSIP8. May I still be able to use the return data in CRSP to calculate the abnormal returns to explain something about the profitability of this person’s trade?


Also, I find one deficiency of the TFN database. The recorded CUSIPs are not the actual CUSIPs on the transaction date, although they said it is affiliated with the time of transaction.

First of all, quote from the USER MANUAL in WRDS:
““CUSIP Issuer – The first 6 digits of the company’s CUSIP number for which the insider is affiliated at the time of
the transaction. The CUSIP number is a unique identifier for issuers and issues of securities and financial
instruments. Issuer CUSIP refers to the company. Full refreshes contain the CUSIP of the security at the time of
the refresh. Ongoing updates contain the CUSIP at the time of the filing. Inactive securities will be populated
with the last available CUSIP information for that security.””

““CUSIP Issue – The 7th and 8th digits of the CUSIP number for which the insider is affiliated at the time of the
transaction. The CUSIP number is a unique identifier for issuers and issues of securities and financial
instruments. Issue CUSIP refers to the security type (e.g. common stock or preferred stock). Full refreshes
contain the CUSIP of the security at the time of the refresh. Ongoing updates contain the CUSIP at the time of
the filing. Inactive securities will be populated with the last available CUSIP information for that security. “”

One example:
A person called, MASTERS CLARK H, traded on CUSIP=86681020 on 4 Aug 2003. However, when I check the DSENAMES file in CRSP, this 86681020 CUSIP actually started to be used from 12 Nov 2007. So the same question happens, may I still recognize that the same PERMNO but different CUSIPs are the same firm and be able to use the CRSP return data to do event analysis?

Cheers,
L

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Posted: 11 February 2015 08:38 PM   [ Ignore ]   [ # 3 ]
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hi,

It is odd—my institution has access to the cusip master files (all issuers, all issues), and issues 59041910 and 75845J10 are not included (59041920 MERRIMAN HOLDINGS and 75845J20 RENEGY HOLDINGS are).

Also, it shows 86681020 became active in 2007 (like you said).

I can’t tell you what is acceptable or unacceptable, but I would think that the different instruments of the same company would correlate highly. So, if an insider bought class B shares, these are likely to correlate with class A shares (of same issuer). Probably to a lesser extent for debt vs equity securities (if insider purchased bonds).

It probably makes sense to contact the helpdesk of TFN for further clarification. (Feel free to post any findings in this thread as this is relevant for others as well).

best regards,

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Posted: 12 February 2015 12:21 AM   [ Ignore ]   [ # 4 ]
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Thanks Joost. I phoned them just now, but they requested the name of the product where WRDS pulled the data. So I contacted the WRDS again. I will update the results in here once I get the feedback.

Cheers,
L

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Posted: 12 February 2015 03:42 PM   [ Ignore ]   [ # 5 ]
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Thanks for following up!

cheers,

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