Towards a Financial Transactions Tax? - European Union Committee Contents


APPENDIX 4: GLOSSARY[222]


ABI    Association of British Insurers.

ACT    The Association of Corporate Treasurers.

AFME  Association for Financial Markets in Europe.

AIMA    The Alternative Investment Management Association.

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.[223]

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 Association.

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.[224]

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.
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'.[225]

TFEU    Treaty on the Functioning of the European Union.

TUC    Trades Union Congress.

VAT    Value Added Tax.


222   With thanks to http://lexicon.ft.com/ for definitions, except where otherwise stated. Back

223   http://www.investorwords.com/1977/first_mover_advantage.html Back

224   http://www.londonstockexchange.com/traders-and-brokers/rules-regulations/change-and-updates/stock-exchange-notices/2008/n2108pdf.pdf Back

225   http://www.icap.com/markets/foreign-exchange/spot-fx.aspx Back


 
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