Glossary of Financial Terms

Tags:  concept market transactions

A back-to-back transaction consists of two legally separate but economically linked sale and purchase transactions which otherwise share the same trade details. It typically involves three counterparties, of which one is the buyer in one transaction and the seller in the other, thus acting as an intermediary between the two others.

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Tags:  market transactions transaction settlement

Free of payment is a settlement method for a securities transaction in which the delivery or reception of the securities is not linked to a corresponding transfer of funds.

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Tags:  market transactions transaction settlement

Standing settlement instructions are a market participant’s default instructions for the payment and delivery of securities. They often differ depending on the type and denomination currency of the securities.

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Tags:  activities and occupations post-negotiation

The term asset servicing describes a group of tasks and activities provided by a custodian to his clients around the assets he has under custody.

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Tags:  financial instruments interest rate derivatives

A convertible asset swap is an asset swap where the underlying asset is a convertible bond.

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Tags:  corporate actions post-negotiation

A market claim is a procedure that covers income events and non-income events if a security is traded while "cum" (with the entitlement), but settled when "ex" (without the entitlement), with the purpose of reallocating the proceeds of a distribution to the contractually entitled party.

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Tags:  financial instruments interest rate derivatives

Interest rate futures contract on a notional long-term Italian government bond (Buoni del Tesoro Poliennali or BTP) with a remaining term comprised between 8.5 and 11 years and a 6% coupon.

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Tags:  financial mathematics time value of money

In finance, a year fraction represents a portion of an interest period, expressed as a decimal figure. It is calculated by dividing the number of days of the portion through the number of days in the interest period.

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Tags:  financial instruments interest rate derivatives

Interest rate futures contract on a notional long-term German government bond (Bundesanleihe) with a remaining term comprised between 8.5 and 10.5 years.

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Tags:  market transactions transaction settlement

The term settlement describes the process of carrying out the delivery of a security and the transfer of the corresponding cash payment between two counterparties to a security transaction according to the terms which have been agreed.

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Tags:  financial instruments interest rate derivatives

Interest rate futures contract on a notional very long German government bond (Bundesanleihe) with a remaining term comprised between 24 and 35 years.

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Tags:  custody metric

Assets under custody is a measure of the total value of all financial assets which a custodian manage on behalf of its clients.

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Tags:  market transactions transaction settlement

An instruction for a securities transaction from a counterparty against your account for which your matching instruction is missing in the settlement system.

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Tags:  accounting concept

The cost constraint is a GAAP constraint which stipulates that the benefits of reporting financial information should justify and be greater than the costs imposed on supplying it.

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Tags:  interest rate markets valuation and pricing

In finance, tenor refers to the time-to-maturity of a loan or other financial contract.

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Tags:  financial instruments interest rate derivatives

Interest rate futures contract on a notional German government note (Bundesschatzbrief) with a remaining term comprised between 1.75 and 2.25 years.

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Tags:  foreign exchange derivatives foreign exchange instruments

A non-deliverable option is an option for which the underlying asset cannot be delivered. Settlement at maturity is made in cash instead.

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Tags:  bonds valuation and pricing

Multiplicator used to neutralize differences in the characteristics in terms of coupon rate and maturity of the deliverable bonds for a futures contract.

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Tags:  foreign exchange instruments foreign exchange market

Currency that is used as a unit of account, medium of exchange and store of value not only for transactions within the country, but also for international public and private transactions.

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Tags:  financial instruments market conventions

The business day convention determines how to proceed when a date which is relevant for the payment or calculation of interest falls on a non business day.

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