Escali Blog

What is the CIC code?

Sep 15, 2020 1:05:06 PM / by Gerdt Vedeler

Introduction

Complementary Identification Code (CIC) is a code for the categorisation of assets, used primarily by insurance companies for Solvency II reporting and by pension schemes for reporting to the European Insurance and Occupational Pensions Authority (EIOPA).

The code contains 4 characters, with following structure:

First two characters – Country of listing

For financial instruments, the first two characters of the CIC are the country code for the country where instrument is listed. This is a 2-character code based on the ISO-3166 standard (https://www.iban.com/country-codes).

If the asset or instrument is not listed on an exchange, the following codes should be used:

XL – Not listed on an exchange

XT – Not exchange tradable

If financial instruments are listed on exchanges in multiple countries, the code XV should be used.

Third character – Asset category

The third character consists of a digit from 0 to 9 for “ordinary” assets, and from A to F for derivatives.

Below is an overview of the codes for ordinary asset categories:

1 = Government bonds

2 – Corporate bonds

3 – Equity

4 – Collective Investment Undertakings

5 – Structured notes

6 – Collateralised securities

7 – Cash and deposits

8 – Mortgage and loans

9 – Property

0 – Other investments

And here is an overview of codes for derivatives:

A – Futures

B – Call options

C – Put options

D – Swaps

E – Forwards

F – Credit-derivatives

Fourth character – Sub-category of the asset

The fourth character of the CIC code is used to define sub-categories of the asset or instrument. This is a digit from 1 to 9. The digit’s meaning varies depending the category of asset or instrument being considered. Below is an example of the sub-categorisation, in this case for collective investment undertakings (i.e. where the third character of the CIC equals 4):

1 – Equity funds

2 – Debt funds

3 – Money market funds

4 – Asset allocation funds

5 – Real Estate funds

6 – Alternative funds

7 – Private Equity funds

8 – Infrastructure funds

9 – Other funds

Based on the above structure, one can see that a CIC code of IE42 represents a debt fund listed on an exchange in Ireland.

Further information

Further information regarding CIC codes is included in the Commision Implemen,ting Regulation (EU) 2015/2450, from page 1361 – 1378. Here you will find all the categories and sub-categories mentioned above, together with a more detailed description of each category and sub-category.

Where do you find the CIC code for a financial instrument?

As far as we know, there is no centralised public source of financial instruments CIC codes.

The easiest way to obtain this information is to subscribe for data delivery from market vendors such as Bloomberg, Refinitive, Factset or equals. You should select a subscription which includes CIC codes.

Here is a link to some of the vendors Solvency II and EIOPA reporting packages:

Bloomberg                      

Refinitiv                           

Factset

 

It is a good idea to make sure that your asset manager can deliver CIC codes when they report the fund content of their funds.

Alternatively, it is relatively easy to register the CIC codes yourself, and once added it remains unchanged throughout the lifetime of the instrument.

Why is the CIC code so important?

The CIC code is important because it is used throughout solvency II for insurance companies and EIOPA reporting for pension funds.

The CIC code is crucial for the calculation of a company’s solvency capital requirements (SCR). The regulations for stress-testing and solvency capital requirements is built up on the same asset categorisation as in the CIC framework, and CIC codes are frequently referred to in the regulations. National and central supervisory authorities can use the CIC to look at SCR on an overall level, by analysing the market values of each asset class and looking at average stress factors. This approach can also be used to assure the quality of the individual business’ own SCR calculation.

For investments made indirectly through collective investment undertakings you should use the CIC to categorise the assets for fund look-through, when calculating the SCR and when reporting fund look-through data.

In addition, the CIC is used to validate the content of different reports. CIC codes are used extensively in the validation rules, e.g. to check that investments with 4 as the 3rd character in the CIC code in the asset list are also included in the fund look-through report.

The code is also very important to reconcile the asset list and the balance sheet report. Here you need a 100% match between the values of each asset category in the balance and the corresponding assets in the asset list (based on CIC code).

We highly recommend customers ensure the correct CIC codes are registered to all investments in their portfolio system. This paves the way for efficient and consistent reporting to the supervisory authorities.

Gerdt Vedeler

Written by Gerdt Vedeler

CEO at Escali Financials Systems