Classification of Financial Instruments (CFI) - ISO 10962

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 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).

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
• Form