Term
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Definition |
agency settlement
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Where settlement functions are provided by an external third party (in this case ACS) acting as an “agent” for the broker. Please see our product sheet for more information. Agency Settlement
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Applications Service Provider (ASP)
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A provider of computerised tasks (``applications'') as a service.
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arbitrage
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Purchasing an asset in one market while selling an equivalent asset in another market at a higher price.
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ASLA
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Australian Securities Lending Association Limited
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ASX
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Australian Stock Exchange Limited. For more information, please visit www.asx.com.au
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back office
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The operational activities of a financial firm, as opposed to the ‘front office’.
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broker sponsored
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Where a client entrusts the sponsorship in CHESS of shares held (in one or more listed companies) to a broker.
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brokerage
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A fee charged by a broker for the execution of a transaction (potentially an amount per transaction or a percentage of the total value of the transaction)
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Cash Management Trust (CMT) or Account (CMA)
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A highly liquid, pooled investment vehicle, giving small investors the option of moving cash in and out on a frequent basis.
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CHESS
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“Clearing House Electronic Subregister System“ - the electronic settlement system that replaced physical transfer documents in the share settlement process.
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CHESS encryption devices
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Devices that encrypt messages sent by a CHESS Participant to the CHESS computer.
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CHESSLink™
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A Trademark of GBST Holdings Pty. Ltd. For more details on this, please visit GBST’s website at www.gbst.com
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Clear Thinking®
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A Registered Trademark of Australian Clearing Services Pty Ltd.
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clearing
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In Australian English: the mutual exchange of cash for shares, ensuring that a party receives either the shares purchased, or the funds for shares sold.
In American English this includes Execution, in Australian English it does not.
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Clearing Participant (of ASX)
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Clearing Participants are authorised to clear and settle trades. They are not authorised to advise, underwrite and execute transactions.
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contract notes
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Official form supplied by the broker, setting out particulars of the transaction.
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corporate actions
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An action taken by a company to give an entitlement to holders of the company’s securities. For example, rights issues, bonus issues, dividends or other payments, or offers under a buy- back scheme
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custodian
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A custodian is an organisation that holds assets on the behalf of others.
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dividend
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Distribution of after-tax profit to shareholders.
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Electronic Commerce™
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A Trademark of GBST Holdings Pty. Ltd. For more details on this, please visit GBST’s website at www.gbst.com
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EquEP™
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A trademark of Australian Clearing Services Pty Ltd.
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equities
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In this usage, a synonym for a share (as distinct from fixed interest) investment;
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equities settlement OR settlement
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The final stage of a securities transaction. It involves the payment for and transfer of the security.
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escrow
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Money or assets involved in a contract are placed with a third party. The idea is that a third party makes sure that both sides honour their parts of the contract.
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execution
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To fulfill an order to buy or sell.
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fixed interest (security)
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Interest income that remains constant, such as income derived from preference shares. A fixed income security is thus any security that has a fixed rate of return.
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front office
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A term that refers to the revenue earning activities of a company, as opposed to the “back office” functions.
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GBST Online™
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A trademark of GBST Holdings Pty. Ltd. For more details, please visit GBST’s website at www.gbst.com
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GBST™
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Global Banking & Securities Transactions (GBST) is a registered business name of GBST Holdings Pty Ltd. For more details on GBST, please visit their website at www.gbst.com
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international execution
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Completing a buy or sell order for a non-Australian security.
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issuer sponsored
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Where a client entrusts the sponsorship in CHESS of shares held in a listed company to that company.
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liquid capital requirements
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As defined by Section 1A of ASX Business Rules. For more information, please visit www.asx.com.au
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listed company
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A company whose shares are traded on the stock exchange and are able to be bought and sold by members of the general public.
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managed fund
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See unit trust
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market obligation
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The Stockbroker’s obligation to meet commitments made on SEATS (e.g., providing shares to the purchaser’s stockbroker).
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NASDAQ
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Abbrev. for National Association of Securities Dealers Automated Quotation System.
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NYSE
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Abbrev. for New York Stock Exchange
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OTC
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Abbrev. for “Over The Counter”, meaning a security which is not traded on a listed exchange. Normally it implies that the security has been “tailor-made” for a client by a financial institution, and can only be re-sold by negotiation.
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portfolio
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A portfolio contains all the different investments controlled by an investor. This includes a combination of assets, (eg. shares, property, bonds and cash investments).
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principal trading (proprietary trading)
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Trading by a Stockbroker for the broker’s own account, rather than trading as an agent for clients.
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SEATS
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Abbreviation for “Stock Exchange Automated Trading System”, the screen trading system adopted by the Australian Stock Exchange.
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securities
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Stocks and bonds on the financial markets.
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settlement
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Settlement is the final stage of a securities transaction. It involves the actual payment and transfer of the security.
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settlement agent
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Where Settlement functions are provided by an external third party (in this case ACS) acting as an “Agent” for the broker. Please see our product sheet for more information. Agency Settlement
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settlement date
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A transaction carried out today is not completed until the day that securities are paid for and received. Currently this is Transaction Date plus three business days (T+3).
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settlement obligation
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The legal obligation to pay for or receive securities created by executing a trade on SEATS.
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share(s)
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One of the parts of company, entitling each holder, as part owner of the company, to a proportion of the profits or of the net assets after satisfying creditors in the event of winding up.
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Shares™
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A trademark of GBST Holdings Pty. Ltd. For more details on this, please visit GBST’s website at www.gbst.com
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short selling
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Under ASX Business Rules, the sale of a security that is not yet owned in the expectation that its price will fall so that it can be bought back later at a profit.
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sponsorship
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Uncertificated holdings in CHESS have to be “sponsored” by a participating organisation since an individual shareholder cannot gain direct access to CHESS.
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Stockbroker
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A professional who buys and sells securities on behalf of customers in return for a commission (or brokerage). Stockbroker is a protected term under Australian law, meaning a Stockbroker Participating Organisation of ASX
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synthetic equity
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An instrument that derives it’s value from the price of another more basic instrument or product.
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trades (on ASX)
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A transaction on SEATS (as opposed to Contract Note)
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Trading Participant (of AXS)
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Trading Participants are authorised to advise, underwrite and execute transactions. They are not authorised to clear and settle trades.
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Treasury™
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A Trademark of GBST Holdings Pty. Ltd. For more details on this, please visit GBST’s website at www.gbst.com
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underwrite
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Where an organisation for a fee guarantees a minimum level of subscriptions to a share or debt issue. If public subscriptions fail to reach this minimum level, then the underwriter takes up the shortfall.
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unit trust
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A pooled or collective investment, established under a trust deed that continually offers new units and stands ready to redeem existing ones from the owners.
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UPS
|
Uninterruptable Power Supply
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UUT
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Unlisted Unit Trust
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wrap
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A service which consolidates the records relating to all of a client’s portfolio, generally including reporting to include transaction history, tax return data and portfolio valuations.
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