What is a Valoren Number?
A valoren number is a unique identification number assigned to financial instruments in Switzerland. This numerical system is crucial for the precise categorization and tracking of various financial products, similar to the CUSIP (Committee on Uniform Securities Identification Procedures) numbers utilized in Canada and the United States. Typically, a valoren number consists of six to nine digits, serving as a specific reference point for investors, brokers, and financial institutions when dealing with trades involving Swiss financial instruments.
The Mechanics of Valoren Numbers
In practice, a valoren number is a numeric code devoid of any intrinsic meaning or embedded information about the financial instrument it identifies. When a new number is required, it is simply drawn from a sequential list. The numbering system ensures that each financial instrument can be uniquely identified without ambiguity, which is vital in the bustling and complex world of finance.
Since valoren numbers lack the structured information that is present in other identification systems like ISINs (International Securities Identification Number) or CUSIPs, their main application is in tracking and facilitating transactions of Swiss financial products across various financial platforms and institutions.
Issuance and Regulatory Authority
Valoren numbers are issued by SIX Financial Information, a subsidiary of the SIX Group, which operates from Zurich, Switzerland. SIX Group is a prominent multinational financial data vendor with offices in over 20 countries, supplying market data that it collects from primary trading venues in real-time. The database maintained by SIX encompasses structured and encoded securities administration data for more than 20 million financial instruments, making it a vital resource for market participants.
Historical Background
Originally known as Telekurs, SIX Financial Information underwent significant changes beginning in 1996 when it was restructured into a holding company. It expanded its product range significantly and made strategic acquisitions, including a portion of the Fininfo Group in 2007. A pivotal merger in 2008 combined Telekurs Group with Swiss financial services entities, resulting in the formation of SIX Group. This merger not only bolstered its market presence but also led to the renaming of Telekurs Financial to SIX Telekurs in 2012, phasing out the Telekurs name entirely.
Uses of Valoren Numbers
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Financial Instrument Identification: Valoren numbers are designed to grant swift recognition and identification of financial instruments within the Swiss financial ecosystem; they are the primary identifiers for brokerages, banks, and investment firms.
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Transaction Reporting: The numbers streamline transaction reporting obligations, allowing for easier tracking of trades and settlements.
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Position Keeping: In managing private and corporate client portfolios, valoren numbers enable accurate position keeping, ensuring that all trades are accurately recorded and monitored.
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Integration with Other Identifiers: Valoren numbers can be used alongside the Market Identifier Code (MIC) and currency codes to create a robust identification framework for traded instruments. This integration helps to maintain clarity and accuracy in the transaction process.
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Reuse and Expiry: In Switzerland and Liechtenstein, the valoren number is prevalent and serves as the primary identifier within the Swiss Value Chain. Notably, valoren numbers for derivatives may be recycled and reassigned after the derivative expires, ensuring efficient resource usage.
Conclusion
In summary, valoren numbers are an essential component of Switzerland's financial infrastructure. By serving as unique identifiers for millions of financial instruments, they facilitate seamless transactions, accurate reporting, and efficient portfolio management. Understanding their function and mechanisms is crucial for anyone involved in finance, particularly in the Swiss market, highlighting the importance of having a reliable, structured, and systematic approach to financial instrument identification.
As global markets continue to evolve, the role of identification codes such as valoren numbers will become increasingly critical in fostering transparency, efficiency, and security across different financial systems.