CFI (ISO 10962)
CFI: Classification of Financial Instruments
Important update: 1 July 2017 has been set as the global start date for issuance of updated Classification of Financial Instruments and Financial Instrument Short Name codes.
The CFI code has been developed to address a number of problems which have concerned the financial community on the past years. Among others the following problems have affected the financial community:
- Lack of consistent and uniform approach to grouping financial instruments
- Use of similar terminology for instruments having significantly different features in the different countries
- Inability to group securities in a consistent manner leading to reports of holdings being categorized differently.
The benefits of the new code are:
- Definition and description for an internationally valid system to classify financial instruments
- Provision of a set of codes to be used by all market participants in an EDP environment and permission of electronic communication between participants
- Improved understanding of the characteristics of financial instruments will lead to a better understanding by investors.
The structure of the CFI code:
The CFI reflects characteristics that are defined when a financial instrument is issued and remain unchanged during its entire lifetime.
The CFI consists of six alphabetical characters:
The first character indicates the highest level of classification (categories).
- Equities (E)
- Collective investment vehicles (C)
- Debt instruments (D)
- Entitlement (rights) (R)
- Listed options (O)
- Futures (F)
- Swaps (S)
- Non-listed and complex listed options (H)
- Spot (I)
- Forwards (J)
- Strategies (K)
- Financing (L)
- Referential instruments (T)
- Others (miscellaneous) (M)
The second character indicates specific groups within each category:
Groups e.g. for equities:
- Common/ordinary shares
- Preferred/preference shares
- Common/ordinary convertible shares
- Preferred/preference convertible shares
- Limited partnership units
- Depositary receipts on equities
- Structured instruments (participation)
- Others (miscellaneous)
The third to sixth character indicate the most important attributes to each group:
Attributes e.g. for equities:
- Voting right
- Ownership/transfer restrictions
- Payment status
Report on CFI developments
Requests from some countries (such as the US and Switzerland as well as from some industry organizations) have required ISO TC68/SC4/WG6 to reconvene and discuss these requests for a possible revision of ISO Standard 10962.
The new version of ISO 10962 that includes significant enhancements e.g. for OTC derivatives has been published in September 2015. ANNA is currently working with its members on the implementation plan. The date for global implementation of the new version is 1 July 2017.