Fungible

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Entirely interchangeable. In the context of securities, being of the same issue, and having the same securities identification number. The same, but not, if you see, the same.

• Not fungible: Securities from different series, even if issued by the same issuer, are not fungible with each other.
• Fungible: Individual securities comprising part of a single series (and having a the same ISIN are fungible with each other.

Definition

Assets are fungible where their nature allows them to be replaced in whole or in part with other assets of a like nature. However, it applies only to the equivalence of each unit of a commodity with other units of the same commodity. Fungibility does not describe or relate to any exchange of one commodity for some other, different commodity.

Examples

For example shares in a company can be described as fungible as you can replace those shares with other equivalent shares in the same company. However, shares of an “equivalent” value in another company would not be considered a valid replacement.

Money can also be considered a fungible asset. If you borrow £10 from someone, you do not need to give the same £10 note back. You could give that person another £10 note, or two £5 notes, or any combination of coins that add up to £10 (as long as they are happy to accept that many coppers!)

“Equivalent” and “fungible”: la même chose

Note: in financial markets speak, “equivalent” means fungible. It doesn’t mean “somewhat like". Go see our “equivalent” article for more.

See also

• Equivalent
• True sale opinion