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Definition of ISDA
International Swap Dealers Association. Formed in 1985 to promote uniform practices in the writing,
An arrangement whereby a security issue is canceled if the underwriter is unable
Swap in which the principal or national amount rises (falls) as interest rates
Creditors exchange the debt of one defaulting borrower for the debt of another
An interest rate Swap used to alter the cash flow characteristics of an institution's assets so as to
An International bank headquartered in Basel, Switzerland, which
A Swaption in which the buyer has the right to enter into a Swap as a fixed-rate payer. The
Futures contracts, such as stock index futures, that settle for cash, not involving
A fixed rate currency Swap against floating U.S. dollar LIBOR payments.
Value of outstanding common shares at par, plus accumulated retained
A strategy that involves writing a call option on securities that the investor
An agreement to Swap a series of specified payment obligations denominated in one currency
Refers to establishing and liquidating the same position or positions within one day's trading.
A set of transactions (also called a debt-equity Swap) in which a firm buys a country's dollar bank
Swap between two LIBO rates of interest, e.g. yen LIBOR for dollar LIBOR. Payments are
A U.S. corporation that receives a tax incentive for
A Swap in which the cash flows that are exchanged are based on the total return on some stock
Extending maturity through a Swap, e.g. selling a 2-year note and buying one with a slightly
Firm commitment underwriting
An undewriting in which an investment banking firm commits to buy the
Foreign exchange swap
An agreement to exchange stipulated amounts of one currency for another currency
Good delivery and settlement procedures
Refers to PSA uniform practices such as cutoff times on delivery
Government National Mortgage Association (Ginnie Mae)
A wholly owned U.S. government corporation
Delivery and settlement of securities within five business days.
trading by officers, directors, major stockholders, or others who hold private inside
Interest rate swap
A binding agreement between counterparties to exchange periodic interest payments on
Intermarket spread swaps
An exchange of one bond for another based on the manager's projection of a
International Bank for Reconstruction and Development - IBRD or World Bank
International Bank for Reconstruction and Development makes loans at nearly conventional terms to countries for projects of high
International Banking Facility (IBF)
International Banking Facility. A branch that an American bank
A collective term that refers to global bonds, Eurobonds, and foreign bonds.
International Depository Receipt (IDR)
A receipt issued by a bank as evidence of ownership of one or more
The attempt to reduce risk by investing in the more than one nation. By
International finance subsidiary
A subsidiary incorporated in the U.S., usually in Delaware, whose sole
International Fisher effect
States that the interest rate differential between two countries should be an
A mutual fund that can invest only outside the United States.
Related: See external market.
International Monetary Fund
An organization founded in 1944 to oversee exchange arrangements of
International Monetary Market (IMM)
A division of the CME established in 1972 for trading financial
Last trading day
The final day under an exchange's rules during which trading may take place in a particular
An interest rate Swap used to alter the cash flow characteristics of an institution's liabilities so
London International Financial Futures Exchange (LIFFE)
A London exchange where Eurodollar futures
London International Financial Futures Exchange (LIFFE)
London exchange where Eurodollar futures as well as futures-style options are traded.
National Futures Association (NFA)
The futures industry self regulatory organization established in 1982.
In the balance of payments, other capital is a residual category that groups all the capital
Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due
Other long term liabilities
Value of leases, future employee benefits, deferred taxes and other obligations
Amount of funds generated during the period from operations by sources other than
Trades based on signals from computer programs, usually entered directly from the trader's
Pure yield pickup swap
Moving to higher yield bonds.
A financial tool in which the buyer has the right, or option, to enter into a Swap as a floatingrate
See: differential Swap.
Rate anticipation swaps
An exchange of bonds in a portfolio for new bonds that will achieve the target
Regular way settlement
In the money and bond markets, the regular basis on which some security trades are
Savings and Loan association
National- or state-chartered institution that accepts savings deposits and
When payment is made for a trade.
The date on which payment is made to settle a trade. For stocks traded on US exchanges,
A figure determined by the closing range which is used to calculate gains and losses in
The rate suggested in Financial Accounting Standard Board (FASB) 87 for discounting the
SIMEX (Singapore International Monetary Exchange)
A leading futures and options exchange in Singapore.
The trade is settled one business day beyond what is normal.
An agreement in settlement of a lawsuit involving specific payments made over a
A Swap in which a money manager exchanges one bond for another bond that is similar in
An arrangement whereby two companies lend to each other on different terms, e.g. in different
Related: Swap sale.
The sale of an interest rate Swap by one counterparty to the other, effectively ending the Swap.
The difference between spot and forward rates expressed in points, e.g., $0.0001 per pound sterling.
An interest rate Swap designed to end a counterparty's role in another interest rate Swap,
Also called a Swap assignment, a transaction that ends one counterparty's role in an interest rate
Options on interest rate Swaps. The buyer of a Swaption has the right to enter into an interest rate
Swapping two similar bonds to receive a tax benefit.
Buying and selling securities.
Costs of buying and selling marketable securities and borrowing. trading costs include
trading of a stock, bond, option or futures contract can be halted by an exchange while news is
CDs purchased by accounts that are likely to resell them. The term is commonly used in the Euromarket.
The posts on the floor of a stock exchange where the specialists stand and securities are traded.
The difference between the high and low prices traded during a period of time;
Acting as the underwriter in a purchase and sale.
The portion of the gross underwriting spread that compensates the securities firms that
For an insurance company, the difference between the premiums earned and the costs
A group of investment banks that work together to sell new security offerings to
An exchange of cash flows between two counterparties. The
Foreign Corrupt Practices Act (FCPA)
a law passed by U.S. Congress in 1977 that makes it illegal for a U.S. company to engage in various “questionable” foreign payments and
The date when money first changes hands; i.e., when a buyer
A contract between two parties to exchange cash flows in the future
A Swap option; an option on an interest-rate Swap. The option gives
A cluster of accounts that are listed after fixed assets on the balance sheet,
international Fisher effect
Theory that real interest rates in all countries should be equal, with differences in nominal rates reflecting differences in expected inflation.
Arrangement by two counterparties to exchange one stream of cash flows for another.
International Monetary Fund (IMF)
Organization originally established to manage the postwar fixed exchange rate system.
See foreign exchange reserves.
Official Settlements Account
An account within the balance of payments accounts showing the change in a country's official foreign exchange reserves. It is used to measure a balance of payments deficit or surplus.
Uniform Interstate Family Support Act
A federal Act specifying which jurisdiction
Uniformed Services Employment and Reemployment Rights Act of 1994
A federal act that minimizes the impact on people serving in the Armed Forces
Accumulated Other Comprehensive Income
Cumulative gains or losses reported in shareholders'
Bill and Hold Practices
Products that have been sold with an explicit agreement that delivery
Creative Accounting Practices
Any and all steps used to play the financial numbers game, including
Other-than-Temporary Decline in Market Value
The standard used to describe a decline in market value that is not expected to recover. The use of the other-than-temporary description as
A debt or equity security bought and held for sale in the near term to generate income on short-term price changes.
Historically, damages paid out during settlement of personal physical injury cases were distributed in the form of a lump-sum cash payment to the plaintiff. This windfall was intended to provide for a lifetime of medical and income needs. The claimant or his/her family was then forced into the position of becoming the manager of a large sum of money.
A dictionary meaning for the word viatica is "the eucharist as given to a dying person or to one in danger of death". In the context of Viatical settlement it means the selling of one's own life insurance policy to another in exchange for an immediate percentage of the death benefit. The person or in many cases, group of persons buying the rights to the policy have high expectation of the imminent death of the previous owner. The sooner the death of the previous owner, the higher the profit. Consumer knowledge about this subject is poor and little is known about the entities that fund the companies that purchase policies. People should be very careful when considering the sale of their policy, and they should remember a sale of their life insurance means some group of strangers now owns a contract on their life. If a senior finds it difficult to pay for an insurance policy it might be a better choice to request that current beneficiaries take over the burden of paying the premium. The practice selling personal life insurance policies common in the United States and is spilling over into Canada. It would appear to have a definite conflict with Canada's historical view of 'insurable interest'.
A mutual fund that can invest in securities issued anywhere outside of Canada.
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