APPENDIX 4: GLOSSARY|
ABI Association of British Insurers.
ACT The Association of Corporate Treasurers.
AFME Association for Financial Markets in Europe.
AIMA The Alternative Investment Management
APCIMS The Association of Private Client Investment
Managers and Stockbrokers.
BBA British Bankers' Association.
Bond Essentially, a tradable IOU. Governments,
companies and other organisations issue bonds to
raise money; in doing so, they have an obligation
to repay the bondholder according to specific terms.
BPF British Property Federation.
CBI Confederation of British Industry.
CDO Collateralised Debt Obligations.
CDS Credit Default Swaps.
CFD Contracts for Difference. This is essentially
a contract between an investor and an investment
bank or a spread-betting firm. At the end of the contract,
the parties exchange the difference between the opening
and closing prices of a specified financial instrument, including
shares or commodities.
Derivative A financial instrument whose value
is based on the performance of underlying assets
such as stocks, bonds currency exchange rates, real estate.
The main categories of derivatives are futures, options and swaps.
ECB European Central Bank.
ECOFIN The Economic and Financial Affairs Council.
It is composed of the finance ministers of all
EU Member States.
Equity What a shareholder owns in a corporation,
entitling him/her to part of that entity's profits
(in the form of dividends) and a measure of control
(through shareholder voting rights). The markets where equity
(stocks/shares are also called equities) is traded are called
the equity markets (the same as stock markets).
EU European Union.
FAT Financial Activities Tax.
First mover The edge that a company gains by
entering a particular market advantage before any competitors.
FTT Financial Transaction Tax.
FX Foreign Exchange market.
GDP Gross Domestic Product.
HFT High-Frequency Trading. The use of computers
to implement various highly active trading strategies
to trade at exchanges where automated electronic
systems arrange trades.
IEA Institute of Economic Affairs.
IMA Investment Management Association.
ISDA International Swaps and Derivatives
Joint and When a number of parties make a joint
commitment under a contract several and agree to be liable
as a group as well as individually (jointly and liability severally)
for that obligation to be fulfilled.
Liquidity How easy it is to perform a transaction
in a particular security or instrument.
MAR Market Abuse Regulation.
Market An entity that, ordinarily as part of
their business, deals as principal maker in equities,
options or derivatives (whether OTC or exchange- traded)
a) to fulfil orders received from clients, in response to a client's
request to trade or to hedge positions arising out of those dealings;
and/or b) in a way that ordinarily has the effect of providing
liquidity on a regular basis to the market on both bid
and offer sides of the market in comparable size.
MBS Mortgage Backed Securities.
MEP Member of the European Parliament.
MiFID Markets in Financial Instruments Directive.
NAPF National Association of Pension Funds.
OTC Over-the-counter derivatives.
SDRT Stamp Duty Reserve Tax.
Spot The purchase of one currency against
the sale of another at an currency agreed price for delivery
on a value date which is usually the trade transaction date
plus two working days, the traditional 'spot value'.
TFEU Treaty on the Functioning of the European
TUC Trades Union Congress.
VAT Value Added Tax.
222 With thanks to http://lexicon.ft.com/ for definitions,
except where otherwise stated. Back