What is the purpose of the Classification of Financial Instruments (CFI) under ISO 10962?

The Classification of Financial Instruments (CFI) under ISO 10962 serves the vital purpose of standardizing the classification format for financial instruments. This standardization helps maintain consistency in how financial products are categorized across different markets and jurisdictions. By providing a common framework, the CFI facilitates more efficient communication, comparison, and analysis of financial instruments among industry participants, such as investors, regulators, and firms involved in financial transactions. A universal classification system reduces ambiguity and enhances transparency in financial markets, allowing stakeholders to better assess risk and make informed decisions.

The other options do not align with the primary intention of the CFI. Classifying banking institutions globally does not fall under the scope of a classification system focused on financial instruments. Identifying currency exchange rates is a separate function that relates to market valuation rather than classification. Ranking financial instruments by market share focuses on market performance metrics instead of providing a standardized format for categorization.