SEC 13F Security List has incorrect CUSIP numbers?

Question

I'm building database of 13F sec.gov forms with 13F security lists (http://www.sec.gov/divisions/investment/13flists.htm). Along with integrity checks.

I implemented CUSIP digit check algorithm to check if I'm getting correct CUSIP numbers and don't mess anything while parsing PDFs.

I found that half of CUSIP numbers on 13F Security Lists are incorrect - checksum digit is different than computed by algorithm checksum (algorithm described here: http://en.wikipedia.org/wiki/CUSIP#Check_digit_pseudocode).

For example, take 3rd page of http://www.sec.gov/divisions/investment/13f/13flist2014q3.pdf where you can find line:

D18190 90 8 DEUTSCHE BANK AG CALL

We read CUSIP from line as D18190908. Now, check this against available on-line CUSIP validator (i.e.: http://www.topyields.nl/validate-cusip.php) and you'll get that this CUSIP is INVALID!

From algorithm I'm getting checksum digit equals to 6 so CUSIP should got as D18190906. Check this modified CUSIP against on-line validator and you'll see replacing 8 with 6 makes CUSIP valid.

I've done some more research to check if it's not some one time error and found that 50% of CUSIPS in 10 most recent 13F Security Lists are invalid the same way as described in example.

Have you faced this issue? Whats wrong with 13F Security Lists?

Answer 1

I've run into this issue as well. I can't find any official documentation, but the issue arises because the SEC makes up CUSIPs for all of the options on the list.

It does this by taking the first 6 digits of the underlying equity (which makes sense, as this represents the issuer, which should be the same for the stock and the option), and then for the 7th and 8th digit, it uses 90 for calls and 95 for puts. It then uses the 9th digit from the underlying stock as the 9th digit for the option, which is why the checksum doesn't work.