| Glossary |
Top rating for bonds (primarily US corporate and municipal) awarded by ratings agencies Standard and Poor’s and Moody’s.
Asset Backed Security. A financial instrument collateralisd by one or more types of assets including property, mortgages, receivables etc.
Associate of the Chartered Association of Certified Accountants in UK.
The difference between IAS and IFRS There has been some misunderstanding over the status of International Accounting Standards (IAS) since the International Accounting Standards Board (IASB) announced the introduction of International Financial Reporting Standards (IFRS) in 2001.
The first body to set International Accounting Standards (IAS) was the International Accounting Standards Committee (IASC), which was set up in 1973. During its 28-year life, the IASC introduced 41IAS, some of which have been replaced or withdrawn. The IASB was created in 2001 as part of a restructuring of the IASC, designed to make the international standard-setting process more effective.
New standards released by the IASB are known as IFRS.
There are two main differences between IAS and IFRS:
The amount a company owes to its suppliers for goods and services purchased on credit.
一个公司因赊购商品和服务而欠供应商的账款金额。
The balance owed to a company for purchases. These normally take the form of sales invoices which have been issued, but are not yet paid.
其他方由于采购拖欠一个公司的账款余额。它的形式通常是已经开出、但还没有支付的销售发票。
Used to describe the process by which the principal amount on which a transaction is based increases by a pre-arranged factor over the life of the deal.
Automated Clearing House:
Associate of the Chartered Insurance Institute.
Automated Direct Debit Amendment and Cancellation Service: BACS UK-based automated system used by banks to advise the originator of amendments/cancellations of a direct debit instruction (DDI), either electronically or in paper form.
Amsterdam Stock Exchange. Now part of Euronext – with Brussels, Lisbon and Paris Stock Exchanges.
Association of Futures Brokers and Dealers.
Abbreviation of Aktiengesellschaft, used for German, Austrian and Swiss companies and comparable to the ‘plc’ abbreviation of 'public limited company’ used for UK companies.
Association of International Bond Dealers, a self-regulatory body based in Zurich, representing the primary and secondary Eurobond markets. Now known as ISMA.
Association of Insurance and Risk Managers. UK association; equivalent of RIMS in the US.
A German, Austrian, or Swiss Public Limited Company. (See also 'AG').
Agricultural Mortgage Corporation Ltd. Established in 1928 to provide medium- to long-term secured finance on agricultural land in the UK.
May be exercised any time prior to expiry, in contrast to European style option which can only be exercised on a pre-determined exercise date.
Annual Percentage Rate. The annual equivalent rate of return on a loan or investment, where the rate of interest specified is chargeable or payable more frequently than annually.
The simultaneous purchase sale of related products, with the intention of profiting from discrepancy in the relationship between the prices.
Abbreviation for arbitrageurs, or dealers specialising in arbitrage.
Adjustable Rate Mortgage. A mortgage which permits the lender to adjust the mortgage's interest rate, either up or down, periodically on the basis of a change in a specified index.
Adjustable-Rate Preferred Stock. US preferred stock whose dividend changes, usually quarterly, according to changes in the Treasury Bill rate or a similar benchmark rate issued with a collar.
Accounting rate of return or the net value expected from an investment, calculated as a percentage of the book value of the assets invested.
Austrian RTGS system linked to TARGET.
Automated Return of Unapplied Credits. A mechanism in the UK by which paying banks return unapplied credits to the originator.
Automated Return of Unpaid Direct Debits in the UK.
Accounting Standards Board. A UK body, set up in 1989, with the aim of improving standards of financial reporting by UK companies, some of which are enforceable in law.
Athens Stock Exchange.
Association of South East Asian Nations. Formed in 1967 to promote economic, social and cultural co-operation and development among the states of the South East Asian region. Headquartered in Jakarta, its members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
These come in a variety of different forms. However, the pay-off in all Asian options is determined by variations in the price of the underlying asset over the course of the contract. This contrasts with a European option, which can only be exercised on the option’s expiry date, and an American option, which can be exercised on any date up to the expiry date.
The buyer of an Asian option (also known as an average price option) will receive a cash settlement on expiry. Typically, the pay-off will be calculated by multiplying the principal amount by the difference between the average price of the underlying instrument and the option’s strike price over the course of the contract. This can be modified, perhaps by basing the pay-off on the differences between the two prices on a number of dates over the course of the contract, rather than the average over all dates.
The average price of an underlying instrument will always be less volatile than the price of the instrument itself. Because it is based on the less volatile average price, an Asian option is usually cheaper than its European or American style equivalent.
Automated screen trading. Electronic dealing using visual display units.
Australian Stock Exchange Ltd. Clearing and settlement house for Australia's equities, warrants and equity options markets. It operates two clearing houses, one for cash market securities and another for equity derivatives. ASX is a listed company with its ordinary shares publicly traded in Australia.
Automated Teller Machine. Also known as ‘cash dispenser’.
Aid and Trade Provision. A component of the British aid programme, which seeks to combine aid for developing countries with business opportunities for British companies.
Austrian Traded Index.
Automated Direct Debit Instruction, allowing users to send Direct Debit Instructions (DDIs) electronically to payers’ banks and building societies in the UK.
A guarantee by a third party, usually the purchaser’s bank, to assume payment of a debt in the event of a default. An aval can be added to a debt obligation such as a draft, bond or promissory note.
保付签字一种由第三方（通常是买方的银行）提供的担保，即担保方承诺在出现违约的情况下承担偿债责任。保付签字可以加签到汇票、债券或本票等债务票据上。
Formerly Bankers’ Automated Clearing Services Ltd. UK ACH responsible for bulk electronic clearing and the management and provision of related payment services to the UK banking industry.
Former commodity and freight-chartering exchange in the City of London. Most of its trade, including the Baltic International Freight Futures Exchange (BIFFEX) has been taken over by London FOX.
Bond Anticipatory Note, issued by US states and municipalities to provide interim finance for projects to be funded by bond issues.
The art of establishing and building good relationships with your banking providers to ensure that your company receives the best possible service at the most competitive price. Bank relationship management is an increasingly important part of the treasurer's role and treasurers should take care to monitor and review these relationships on a regular basis. This is particularly crucial for treasurers of Chinese companies, due to the rapid evolution of the Chinese banking sector.
与你的银行建立和建设良好关系的艺术，确保你的公司可以以最具有竞争力的价格获得最好的服务。银行关系管理是资金管理者的一项越来越重要的职责，资金管理者应该注意定期监督和总结与银行的关系。这项工作对于中国公司的资金管理者来说，显得尤其重要，因为中国银行业的发展非常迅速。
A promissory note, negotiated by companies to finance trade in physical goods. Payment is guaranteed for the note by a bank.
French term for a merchant bank or an issuing house as well as an investment bank.
One of the most common forms of exotic option is the barrier option.
Barrier options are similar to plain vanilla options. However, there also include trigger prices, or barriers, which, if reached before maturity, cause an option either to come into existence or cease to exist.
If an option comes into existence at the trigger price, this is known as a ‘knock-in’ option. If an option ceases to existence when the trigger price is reached, this is known as a ‘knock-out’ option.
A barrier option can have one or two trigger prices. A single barrier option will have a trigger on one side of the strike price. A double barrier option will have triggers on both sides of the strike price.
Barrier options are cheaper than plain vanilla options. However, just as with plain vanilla options, the price of barrier options increases with the likelihood of them being exercised. This means if the underlying price is volatile, a knock-in option will be more expensive (as there is more chance the trigger price will be reached) and a knock-out option will be cheaper for the same reason. See also 'Exotic options', 'Asian options'.
Business and Accounting Software Developers Association. A UK trade association and standards body for software vendors primarily in the accounting area.
Basel II is a revised version of the 1988 Capital Accord, written by the Basel Committee on Banking Supervision (BCBS). Its formal title is the International Convergence of Capital Measurement and Capital Standards: A Revised Framework. Basel II aims to produce greater consistency in the way banks and their regulators approach cross-border risk management. One of its main goals is to align regulatory capital with risk management, which was deemed one of the failings of the original Accord.
Basel II is based upon three ‘pillars’:
In China the CBRC will implement Basel II in stages, beginning in 2010.
新巴塞尔Ь议是1988年资本Ð-议的修订版，由巴塞尔银行监管委员会（BCBS）制定。它的正式名称是《统一资本计量和资本标准的国际Ð-议：修订框架》。新巴塞尔Ð-议旨在提高银行及其监管机构在跨境风险管理方式上的一致性。它的主要目标之一是将监管资本与风险管理相结合，这是Ô¬始Ь议的一个公认弱点。
新巴塞尔Ь议的基础是三个“支柱”：
中国银监会将从2010年起，在中国分阶段落实新巴塞尔Ь议。
This multinational committee provides a forum for members to discuss banking supervisory issues. Originally formed in 1974, its core objective is to ensure the stability of the international banking system. Under this remit, it has developed into a standard-setting body for the international banking community. The committee currently has 13 members – Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, the United Kingdom and the United States. Member countries are represented by their central bank or, where there is no central bank, the authority with formal responsibility for banking supervision in that country. The committee has well established links with other banking supervisory authorities throughout the world; its recommendations are generally adopted as best practice by the banking authorities in all the major global economies. China has announced its intention to adopt the committee’s Basel II regulatory framework on banking capital by 2008.
这个多国委员会为成员提供了一个论坛，讨论银行监管的问题。它成立于1974年，核心目的是确保国际银行系统的稳定性。在这一宗旨下，它发展成了一个为国际银行业设立标准的机构。该委员会目前有13个成员国——比利时、加拿大、法国、德国、意大利、日本、卢森堡、荷兰、西班牙、瑞典、瑞士、英国和美国。各成员国由它们的中央银行代表，那些没有中央银行的国家则由该国正式承担银行监管责任的机构代表。该委员会还与全世界其他国家的银行监管机构建立了联系；全球所有主要经济体的银行监管机构普遍采纳这些建议作为最佳实践。中国宣布，打算在2008年前采用该委员会的新巴塞尔协议作为监管银行资本的政策框架。
One hundredth of one percent per annum. (0.01% p.a.)
The change in value of a security that will result from one basis point change in yield.
An interest rate swap in which the interest obligations are both floating point rates. They may be denominated in either the same or different currencies.
The processing of a number of individual payments in one batch containing all the individual payment instructions. For instance, if a company wanted to make payments to its suppliers on a set day each month it could submit a batch payment file to its bank for processing. The bank will make local currency payments in much the same way by submitting a bulk payment file to the local clearing system. The local clearing system then sorts out the instructions and sends them to each beneficiary bank in batch files containing all the individual payment instructions. The total amounts of the payment files are aggregated and the banks settle with each other at an agreed time. This is normally done on a net basis.
在一个批次中包含所有单独的支付指令，处理多笔单独的支付业务。例如，如果一家公司想在每月一个固定的日期向供应商进行支付，它就可以向银行提交一个批量支付文件，来处理这些支付。银行将用大致相同的方法，向本地的清算系统提交一个批量支付文件，完成本地的货币支付。然后，本地的清算系统把各种支付指令归类，用包含全部单独支付指令的批量文件把这些指令发送到每一家收款银行。所有支付文件的总金额被加总在一起，各家银行在商定的时间互相清算。通常是在净额基础上进行清算。
Address of the Toronto Stock Exchange, alternative term for the TSE itself.
British Bankers Association. Principal representative body for banks active in the UK with over 300 members.
Basel Committee on Banking Supervision. See also 'Basel Committee'.
A tool, developed by the Boston Consulting Group to assess a company's position relative to others in terms of product range using market share and expected market growth.
Banking Code Standards Board. Established in 1999 this UK board aims to ensure personal customers are treated fairly by banks and building societies.
Bolsa de Derivados do Porto. Portuguese derivatives exchange.
The reverse of a ‘bull spread’ is a ‘bear spread’ strategy. If a company believes that the value of an underlying instrument (perhaps a currency) will only depreciate by a small amount, it can reduce the cost of the protection against appreciation by adopting a bear spread strategy.
A bear spread strategy is a combination of either two call options or two put options on the same value and maturity of underlying instrument, but at different strike prices.
(See also ‘Bull spread strategies').
The Belgian Futures and Options Exchange, based in Brussels and set up in 1991 to trade in Belgian government bond futures and stock index options.
An option where early exercise is restricted to certain dates during its life. Neither an American option, or a European option, but somewhere between the two – hence the name.
Business Expansion Scheme. Introduced in the UK in 1984 as an incentive (via tax relief) to private investors to invest long-term equity capital in companies (particularly new and smaller ones).
Business Impact Analysis. An evaluation of a company's readiness for a disaster and the impact an interruption would have on a company.
Baltic International Freight Futures Market; now mostly superseded by London FOX.
Colloquial name for the New York Stock Exchange, on which the stocks of the largest US corporations are traded.
The four major accounting firms worldwide. Known as the ‘Big Five’ until the collapse of Arthur Andersen in the wake of the Enron scandal of 2000, Sometimes jokingly referred to as the ‘Final Four’.
A debt instrument with an original life of less than one year. Usually issued at a discount to face value (e.g. US Treasury Bill) and redeems at par.
Signed, written order by which one party instructs another to pay a specified sum to a third party.
In the UK the rate on the Discount Market at which Bills of Exchange are discounted (i.e. purchased for less than they are worth at maturity). See also Discount Rate.
Italian RTGS system linked to TARGET.
Bank for International Settlements. Central banks owned institution which fosters monetary and financial co-operation between central banks.
Block order exposure system, a system for buying or selling large blocks of securities on TOPIC (Teletext Output Price Information Computer).
Stock of a large, national company with a good trading and dividend record.
Bolsa de Mercadorias & Futures, the Brazilian futures and options exchange; the largest in Latin America and fifth biggest worldwide.
Brazil’s National Bank for Social and Economic Development.
Bundesverband Öffentlicher Banken Deutschlands, representative body for Germany’s public sector banks.
Abbreviation for Bundesobligationen. These 5 year bonds issued by the German government are the underlying commodity for the futures and options contracts traded on LIFFE and DTB.
Finnish RTGS system linked to TARGET.
Spanish stock market, based in Madrid.
An investment evidenced by a certificate which will pay a defined amount to the holder. Bonds usually repay the principal amount at a defined date in the future and are transferable between individuals.
A method of interest calculation using a day count fraction equal to actual days divided by actual days in a year. Also called 'Day Count Basis'.
Board of Trade Clearing Corporation. The clearing house for the futures and options contracted on the CBOT.
A market with no overall direction. Markets are generally bracketed as trends are not necessarily evident. The statistics depend, of course, on the particular analysts and the definitions they employ.
A currency agreement, made in 1944, which set fixed exchange rates, provided for central bank intervention in currency markets and set the price of gold at US$35 per ounce.
The fee charged by brokers to their clients.
Global electronic brokerage for bonds, formed in June 1999 as a partnership between Citigroup, Credit Suisse First Boston, Deutsche Bank, Goldman Sachs, Lehman Brothers, Merrill Lynch and Morgan Stanley Dean Witter.
Building Society Association.
A common name for the Bundesbank, the German central bank.
In most cases, a company will act to protect its position by purchasing an option. However, if the company believes that the value of the underlying instrument (perhaps a currency) will only appreciate by a small amount, it can reduce the cost of the protection against depreciation by adopting a bull spread strategy.
A bull spread strategy is a combination of either two call options or two purchase options on the same value and maturity of underlying instrument but at different strike prices. In a call spread purchase, the company will purchase a call option, with a strike price of ‘A’. It will simultaneously sell a call option with a strike price of ‘B’. If the price of the underlying instrument is below ‘A’ on exercise day, the company will not exercise its call option, limiting its loss on the purchase call to the cost of the premium. This loss will be reduced by premium received from the unexercised call sale. If the price is above ‘A’, the company will exercise its right to purchase the quantity at the strike price, allowing it to make a profit by selling the purchased quantity at the market price. If the price rises above ‘B’, the company will continue to exercise its purchase option, but will have to use some of the purchased quantity to compensate its counterparty to the call sale, which will have the effect of limiting the company’s profit.
A similar effect can be achieved by combining two puts. (see also 'Call options', 'Call purchases', 'Put options' and 'Put purchases').
BEPS is a bilateral netting payments system in China. Based on the CNAPS infrastructure, it is used for the processing of low-value electronic payments (under RMB 20,000). Payments made via the BEPS system are arranged into batches, sorted by receiving bank. All payments destined for the same receiving bank are bundled together into a single batch which is subsequently submitted to the clearing system. These batches of payment instructions are delivered to the receiving bank, with final settlement occurring at the end of each clearing session, meaning that payments cleared through BEPS have same-day value. There are currently three BEPS clearing sessions per day. BEPS is currently being piloted in Beijing, Tianjin and Xiamen and will be rolled out nationwide on successful completion of the trial.
BEPS系统是中国的一个双边净额支付系统。它基于中国国家现代化支付系统(CNAPS)的基础设施，用来处理小额（低于20,000元人民币）的电子支付。通过BEPS系统完成的支付是批量进行的，按照收款银行进行分类。所有去往同一家收款银行的支付被打包成一个批次，然后提交给清算系统。这些支付批次指令被发往收款银行，最后的交割在每个清算期结束时进行，也就是说通过BEPS系统清算的支付可以当天到帐。现在每天有三个BEPS清算期。现在，BEPS正在北京、天津和厦门进行试点，试验成功完成后，将在全国范围内推行。
A package of Eurodollar strips composed of two, three, five, seven or ten year’s accumulation of quarterly contracts. Bundles are used to create Treasury/Eurodollar (TED) spreads and in the hedging of some IRS transactions. See Strip and Pack.
Abbreviation of Besloten Vennootscap, appearing after the name of a Dutch company and equivalent to the British designation of plc.
Cost and Freight. The seller must pay costs and freight necessary to bring goods to designated port. The buyer must pay all duties, taxes and other charges upon entry. Risks of loss or of damage to the goods pass from seller to buyer upon arrival at port of entry (see also CIF).
This term is used to denote the sterling US dollar exchange rate. Originates from the time when a cable was sent each day from London to New York advising the rate of exchange between the two countries' currencies.
Abbreviation for Cotation Assistée en Continu, the Paris Bourse’s electronic trading system.
The Paris Bourse’s general indicator, based on the shares of 250 leading companies.
Cash Against Documents (or Sight Drafts). Payment made when a commission house, or other intermediary, transfers title documents to the buyer when they receive cash.
A contract giving the buyer the right, but not the obligation, to buy at the strike price.
If a company purchases a call option, it buys the right, but not the obligation, to buy a quantity of the underlying instrument at the strike price. If the price of the underlying instrument rises above the strike price, the company will exercise the option and purchase the agreed quantity at the strike price. At the minimum, the company could then sell the purchased quantity at the market price making a profit. This profit will equal the market price less the strike price per instrument with a deduction for the premium. If the underlying price does not rise above the strike price, the company will lose the price of the premium.
If a bank writes a call option, it sells its counterparty the right to buy a quantity of the underlying instrument at the strike price. If the price of the underlying instrument rises above the strike price, the holder of the option will exercise it and purchase the agreed quantity at the strike price. The higher the market price above the strike price, the greater the loss felt by the bank. This loss will be mitigated by the premium the bank received when writing the option.
California Public Employees Retirement Fund, the largest public pension fund in the US.
Global electronic trading system for fixed income markets launched by US broker Cantor Fitzgerald in 1999.
A Cap provides the ability to limit exposure due to the upward movement of interest rates/foreign exchange prices whilst keeping the benefit of a possible downward movement. (See Collar and Floor).
This term describes the method that ensures that banks or financial institutions have sufficient capital to meet any obligations they may commit themselves to. An institution will usually be regulated to maintain minimum levels of capital if it is to be allowed to continue operating.
Government restrictions on cross-border flows of capital. Capital controls can apply to the rate of exchange of a currency, the amount of foreign capital a country's residents are entitled to hold or the size of the holding a foreign company/investor is permitted in a domestic company.
The intention of capital controls is for a country's foreign exchange markets to reflect accurately its level of international financial activity – developing and emerging economies often struggle to achieve this on the open market as they are susceptible to speculative foreign investment (so-called 'hot money') destabilising their exchange rates. The imposition of capital controls is a commonly used method of ensuring exchange rate stability. In the wake of the Asian financial crisis of 1997-1998, many countries in South East Asia introduced capital controls as a means of protecting their economies while they recovered from the crisis.
政府对跨境资本流通的限制。资本管制可以体现在货币的外汇汇率、一国国民有权持有的外资额度或允许外国公司/投资者在本国公司中所持有股份的规模。
资本管制旨在使国家的外汇市场准确反映其国际金融活动情况---发展中经济体及新兴经济体通常努力在公开市场上进行资本管制，因为它们容易受到投机外资（即所谓的“热钱”）的影响，使汇率受到动摇。实行资本管制是确保汇率稳定的常用方法。1997-1998年亚洲金融危机之后，很多东南亚国家在从危机恢复的过程中，引入资本管制来保护经济。
A method of calculating the stock market index. The price of each share component is multiplied by the number of outstanding shares, the sum of these result gives the index.
This is the name of an option giving the holder the right to buy or sell a cap.
Compound annual return; the total return available from an investment or deposit, in which the interest is used to augment the investment. CAR is usually quoted on a gross basis.
A banking structure which allows the balances on a number of separate accounts to be treated collectively for interest purposes. This concentration of balances optimises the amount of interest companies both pay and receive, as the bank will consider the pooled balance when calculating interest. Use of a cash pool can also help a company improve its liquidity management, as total cash balances are managed centrally rather than locally.
Cash pooling may be conducted on a physical basis, whereby funds are physically transferred from participant accounts into a master or header account at the end of each day, week or month. Alternatively, it may be conducted on a notional basis, in which case no physical movement of funds takes place. Instead, the bank offsets the debit and credit balances of participating accounts in order to calculate the pool's net interest position. Notional pooling is not permitted in China, but physical pooling may take place using an entrust loan structure.
一种出于对利率的考虑而允许公司多个分散帐户的余额被集中处理的银行结构。集中帐户余额优化了公司利息的支出及收益，因为银行在计算利息时会考虑集中后的余额。使用现金池还可以帮助公司改善其流动性管理，因为总现金余额是中央管理而非本地管理。
现金池可以采用实际余额转移的方式操作，每逢日末、周末或月末，资金会从参与帐户实际转移到主帐户。另外，现金池也可以是名义的，在这种情况下，资金不会发生实际转移。而银行将参与账户的借方余额和贷方余额进行抵消，以计算现金池的净利息头寸。中国不允许名义现金池方式，但利用委托贷款结构可以实施实际余额现金池。
Brazilian Clearing and Depository Corporation. Clearing house for the Brazilian securities markets (equities and debt instruments).
Chicago Board Options Exchange.
Chicago Board of Trade; the world's largest financial futures exchange until 1999, when it was displaced by Eurex.
The China Banking Regulatory Commission (CBRC) is responsible for supervising and regulating Chinese banking institutions. It has a number of responsibilities which include:
中国银行业监督管理委员会（CBRC）负责监督和管理中国的银行机构。它的职责包括：
Correspondent Central Banking Model. Formed by the European Central Bank in 1998 to facilitate cross-border use of collateral. For more detail see www.ecb.int
The Cheque and Credit Clearing Company, responsible for the bulk clearing of chequers and paper credits throughout the UK.
The China Commodities Futures Exchange of Hainan.
Association formed in 2001 dedicated to the improving global clearing of financial markets. Members are Australian Stock Exchange(ASX), The Brazilian Clearing Corporation(CBLC), Sao Paolo, The Canadian Depository for Securities Limited(CDS), Toronto, Clearnet, Paris, The Depository Trust and Clearing Corporation, New York, Eurex Clearing AG, Frankfurt, Hong Kong Exchanges and Clearing Limited(HKEx), S.D.Indeval, Mexico, London Clearing House(LCH), The Options Clearing Corporation(OCC), Chicago, Singapore Exchange Limited(SGX)/The Central Depository(Pte)Limited, Tokyo Stock Exchange(TSE), Chicago Mercantile Exchange Inc(CME), which joined in July 2001.
This a negotiable bearer document issued by a bank, or possibly a building society for funding, trading and liquidity. (Essentially a transferable bank deposit). Each certificate will state the amount of money that has been deposited with the issuer, the rate of interest to be paid on it and the date of maturity.
Collateralised Debt Obligations. Structured fixed income securities with cash flows linked to the performance of debt instruments.
Canadian Depository for Securities Ltd. Canada's national securities clearing and depository service, established in 1970.
Comité des Etablissements de Crédit et des Enterprises d’Investissement, the French banking regulator.
Central de Livraison de Valeurs Mobilières; Luxembourg-based computerised clearing system for Eurobonds, which merged with the Frankfurt-based clearer, Deutsche Börse Clearing, in 1999. Now Known as Clearstream. Main competitor to Euroclear.
A wholly owned subsidiary of SGX which provides clearing and settlement for securities traded on SGX-ST.
Clearing House Automated Payments System. UK, Bank of England operated TARGET Real Time Gross Settlement (RTGS) electronic payments and receipts system. Introduced in 1996 to replace the old system whereby payments were processed by a single net transfer at the end of the day, payments are now processed individually and continuously throughout the day. With the advent, in 1999, of the euro the UK RTGS system was developed to accommodate euro accounts so that members could make domestic and cross-border euro payments. Since August 2001 known as NewCHAPS using the SWIFT network.
Clearing House Inter-Bank Payments System. US, bank owned and privately run, Real Time Gross Settlement System (RTGS) electronic payments and receipts system for banks in New York. At the end of each day, member banks are informed of their position, whether debit or credit. Those with a debit position settle by sending funds to CHIPS via FEDWIRE. CHIPS then sends funds out to those with a credit position. Along with FEDWIRE handles most large US dollar transfers. Transactions outside New York are undertaken through FEDWIRE.
Cost, Insurance, Freight. As with C&F but also includes insurance premiums.
Chartered Institute of Management Accountants in the UK.
The Chinese inter-bank electronic clearing system. CNAPS, constructed and owned by the PBOC, was rolled out across China in June 2005. CNAPS comprises two payments systems: a High-Value Payment System (HVPS) and a Bulk Electronic Payment System (BEPS) – see above.
HVPS is designed for the processing of one-off high-value payments (defined as those over RMB20,000 in value). Payments made via HVPS are processed on a real-time gross settlement (RTGS) basis – as the paying bank’s account is debited, the receiving bank’s account is simultaneously credited.
是中国的银行间电子清算系统。CNAPS由中国人民银行建立和所有，于2005年6月在中国全面推行。CNAPS由两个支付系统构成：大额支付系统 (High-Value Payment System, HVPS) 和上面介绍过的小额批量电子支付系统 (BEPS)。
HVPS用来处理一次性的大额支付（价值在20,000元人民币以上的支付）。通过HVPS完成的支付是在一个实时全额支付系统 (RTGS) 的基础上进行的——在借记支付行账户的同时，贷记收款行的账户。
This term is used to designate the price of a security excluding the accrued interest since the previous dividend payment.
The settlement of a transaction. A ‘cleared’ cheque is one that has been successfully debited to the payee’s account.
Traders use clearing agents to deal with the paperwork and the clearing house involved in making exchange traded contracts.
The affiliate or subsidiary of a futures or securities exchange in the US which handles settlement and clearing of trades.
UK term for a centralised and computerised system for settling indebtedness between members. See BACS and APACS.
The clearing house for Euronext.
Clearing and settlement service for bonds and equities formed, in 1999, by a merger between Cedel and Deutsche Borse Clearing. Major competitor to Euroclear.
Continuous Linked Settlement. A global system for instant settlement of foreign exchange deals.
Continuous Linked Settlement Bank, which acts as an intermediary in FX transactions in order to eliminate settlement risk. CLS settles both legs of an FX transaction simultaneously through the use of Settlement Members, which are banks holding accounts at CLS Bank. Members’ accounts are simultaneously debited the currency being sold and credited with the currency being received. As required currencies are paid in, CLS releases currencies that are owed to that Settlement Member, which in turn debits and credits their client’s account.
持续联系结算银行在外汇交易中充当中间人，以消除结算风险。持续联系结算通过使用结算会员（在持续联系结算银行开户的银行），同时对一笔外汇交易的双边业务进行结算，并同时将出售的货币记入会员银行账户的借方，将收到的货币记入其贷方。会员银行将所需货币支付后，持续联系结算银行就会将应付给该银行的货币付清，而该银行也将对客户账户进行借记和贷记。
Chicago Mercantile Exchange. Futures and Options Exchange in four basic areas:
Conseil des Marchés Financiers, the French financial markets regulator.
Constant Maturity Swap. A variation on the fixed for floating IRS. The rate on one side of the CMS is either fixed or reset periodically at or relative to LIBOR. The constant maturity side, which gives the swap its name, is reset each period relative to a regularly available fixed maturity market rate e.g. yields on two-year to five-year sovereign debt. Hence parties in a CMS have exposure to changes in a longer-term market rate.
Constant Maturity Treasury. One of any yield indexes which equals the yield on a specific maturity of a Treasury instrument. Derivative instruments such as CMS are often linked to CMT indexes.
A Collar provides the ability to limit exposure due to the downward movement of interest rates/foreign exchange prices whilst keeping the benefit of a possible upward movement. (See Cap and Floor).
A short-term method of borrowing, whereby creditworthy institutions issue unsecured short-term (up to one year) promissory notes which are bought by investors.
是一种短期的借贷方法，由信用良好的机构发行并由投资者购买的无担保短期期票（不超过1年）。
It is common to use the terms committed and uncommitted applied to sources of finance used both in the short-term and for longer periods.
Committed facilities are so called because a bank, or other party, has made a firm commitment to lend funds to a company. This commitment can be made in a variety of forms, but the typical commitment is in the form of a loan. The key feature of this arrangement is that both parties (or more if the loan is syndicated) are subject to agreement before the commitment term begins. This agreement will set terms and conditions within which the company must keep for the funds to stay committed for the full term.
From the company’s perspective, the real benefit of committed facilities is that they provide a guaranteed source of funding for the duration of the agreement. Although the terms and conditions can place some restriction on how these funds are to be used, the existence of the facilities provides the treasurer with a base funding position. This is useful, whether the funds are to be used to fund a particular project when the commitment means that funds will not be withdrawn part way through (as long as the terms and conditions continue to be met) or they are used as a reserve fund, to be used when needed.
Those companies that use the committed facilities as a reserve should expect to pay a commitment fee on those funds in the facility that remain undrawn. The level of this fee will be part of the initial agreement and is designed to compensate the bank for having to hold capital to meet its commitment. See also 'Uncommitted facilities'.
A physical good typically produced in agriculture or mining, which can be the object of commercial transactions. e.g. grain, coffee, rubber etc.
This term designates the risk of a loss due to adverse movements in commodity prices.
A compound option is an option on an option, such as a put on a call, a call on a put, or a call on a call. These options are used primarily in fixed income and currency markets when the need for the risk protection afforded by an option is not certain and the buyer of the option would like to pay a reduced premium.
A compound option is an ‘option on an option’. A common example is to give the holder the right to buy a six month option with pre-determined characteristics in one month’s time. The holder pays an initial premium for the ‘option of an option’ and then a second premium if they take out the option in full.
These are useful for companies which are bidding for tenders, who need to protect themselves against adverse price movements after a tender is submitted. If they win the tender, they will be committed to fulfilling the terms of the contract at the price they submitted. However, an adverse currency or commodity price since the submission of the tender could make the contract unprofitable for the company.
A compound option allows the company to protect themselves against adverse price movements without committing themselves to purchasing a plain vanilla option. If the company does not win the tender, it has only had to pay the initial premium, rather having to pay the premium on the full option. If the company does win the tender, it can take out the second option and gain full project protection.
An Interest Rate Swap with a notional principal amount which fluctuates periodically or in response to a change initiated by one of the counterparties.
A charge made to a stock purchaser who wishes to delay delivery of and payment for his shares. The charge is based on interest on the amount of the transaction from the scheduled settlement date until the ultimate settlement.
An agreement between two parties to exchange, at the close of the contract, the difference between the opening price of the contract, multiplied by the number of shares specified within the contract.
The share price at which the principal amount of a convertible bond may be used to acquire shares in or owned by the issuing company or shares in a related company.
A bond which gives the holder the privilege of exchange for other securities of the issuing company at a future date.
The management of a company’s financial structure (eg policy, strategy, budgeting, funding, acquisition, investment, taxation and financial modelling). More specifically, it is used to describe the establishment of credit lines and other borrowing facilities, such as commercial paper or bonds.
公司财务结构（例如政策、战略、预算、融资、收购、投资、税务以及财务模型）的管理。更具体地说，它描述了信用额度和商业票据或债券等借款工具的建立。
The system by which a corporation is directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation (eg the Board, managers, shareholders, auditors and other stakeholders). Corporate governance rules also determine the procedures for making decisions, setting objectives, and monitoring performance.
对公司进行指导和控制的系统。公司治理结构规定了公司中不同参与者（例如-事会、管理层、股东、审计人员以及其他的利益相关人）之间权利和责任的分配。公司治理规则还确定了制定决策、设立目标和监控绩效的程序。
The interest rate stated on a bond at its time of issue. Originally these were physical coupons attached to bond certificates which would be cut off and delivered to an agent for payment but these are now registered electronically.
债券发行时指定的利率。最初，它们是以实际票据的形式附在债券上，在兑付时剪下并交给代理商，但现在已采用电子形式。
See IRS.
If a bank writes a call option, it is exposed to an increasing loss should the price of the underlying instrument rise above the strike price. However, the bank could purchase a quantity of the underlying instrument at the market price (MP) when it writes the option. If the market price depreciates, the value of the bank’s holding falls and vice versa. If the market price falls below the purchase price, the bank’s loss will be mitigated by the receipt of the premium. If the price rises above the market price, the bank will see its holding of the underlying instrument appreciate in value. Once the strike price is reached, any increase in the underlying price will be cancelled out, capping the potential profit.
If a bank writes a put option, it is exposed to an increasing loss should it be forced to buy the underlying instrument when the holder exercises the option. The counterparty would exercise the option if the market price dropped below the strike price. In order to protect itself against such a loss, the writer may sell the agreed quantity of the underlying instrument short at the market price (MP) for delivery on the maturity date. If the market price of the underlying instrument is above the fixed price on maturity day, the bank will have to buy the instrument on the open market at a loss. The total of the loss will be reduced by the amount of the size of the premium received when the option was written. If the market price falls below the fixed price, the bank will make a profit by buying the instrument at the lower market price and then reselling it at the fixed price. If the market price falls below the strike price, the holder will exercise the option. This will limit the profit on the transaction.
Bilateral financial contracts which isolate aspects of credit risk from an underlying instrument and transfer it. (See Credit Risk).
The risk that a debtor or counterparty will be unable or unwilling to repay or may otherwise default on a financial obligation of some kind.
债务人或交易对手不能或不愿意偿还或履行某种财务义务的风险。
RTGS system for UK and Ireland corporate securities. Settlement system for London Stock Exchange.
Central Securities Depository. An institution which dematerialises or eliminates physical and settlement of securities transactions. Following this, transactions can be settled electronically.
Discounted cash flow. A method of calculating the rate of return of a project. The actual net cash flow back is discounted annually until the present worth of the discounted cash flow over the life of the project is equal to the cost of the project.
Direct Debit Instruction.
Danish RTGS system linked to TARGET.
In the case of an Interest Rate Swap, one with a forward start date. In the case of Options, any which are traded before their effective lives commence.
A financial instrument whose value in whole, or in part, is determined directly or indirectly by reference to the price of an underlying security or asset. This asset may be a commodity, a currency or a security.
A digital option pays the holder a fixed amount if the option is ‘in-the-money’ when it expires. The holder of the option receives either a fixed payment (if it is ‘in-the-money’) or nothing (if it is not). This is why digital options are sometimes called binary options. They can be seen as a ‘bet’ on the future value of the underlying instrument.
They can be structured in a number of different ways. One touch digital options trigger payment if the currency reaches the strike price. A double no touch digital option triggers payment if the currency stays between an upper and lower value through the life of the contract. They can be structured as European-style options, where exercise depends only on the price on expiry, or as American-style options, where the option can be exercised at any point up to expiry.
The price of a bond adjusted to take account of the accrued interest that is to be paid to the seller.
Facility provided by the Federal Reserve enabling member banks to borrow reserves against collateral.
The distribution of corporate earnings to shareholders.
Dow Jones Industrial Average; US stock market index.
Abbreviation for Dual Listed Company. A company whose share price is quoted on the stock market of two countries.
Abbreviation for Debt Management Office. Agency of the UK Treasury with two main functions.
The Deutsche Terminborse; Germany’s Frankfurt-based derivatives exchange.
Depository Trust Company. US company. The world's largest securities depository and clearing house for institutional post-trade processing and settlement.
The Depository Trust and Clearing Corporation. US company, established in 1999 this is the holding company which oversees two subsidiaries:
Delivery versus payment. This is where cash and securities are exchanged simultaneously between counterparties.
Euro-Access Frankfurt. German same day payments settlements system which merged with the RTGS system ELS to form RTGSplus.
The exercise of an option before it is set to expire.
European Association of Securities Dealers Automated Quotation. Brussels-based electronic stock market, established in 1996, and modelled on the Nasdaq.
European Banking Association. Formed in 1985 by eighteen commercial banks and the European Investment Bank to promote and develop the Ecu and to facilitate its use by developing and managing the Ecu Clearing System. Further developments to payments clearing systems were EURO1 and STEP1.
European Central Bank.
Electronic Communication Network. Market participants use an ECN to avoid having to use an intermediary when trading, whether on an exchange or OTC.
Extendible Commercial Notes. These were created in response to the reduced availability and increased cost of arranging backup lines for commercial paper. ECNs operate essentially in the same way as CP, but without the need for backup lines. On the note's maturity, the issuer will either pay off the note or exercise the right to extend the maturity date of the note, then paying a higher rate of interest.
Electronic Data Interchange.
Enterprise Earnings Protection Insurance. An insurance policy designed to protect publicly held companies against earnings disruption, volatility and adverse results.
Software which enables companies to manage and monitor their bank accounts electronically via a direct link telephone link to the bank. Companies using an electronic banking system can move cash between accounts, make payments and monitor account balances automatically and in real-time. This has been the preferred means of electronic communication between banks and their corporate customers for many years and is only slowly being replaced by internet web portals.
一种使公司通过直线电话与银行建立连接，从而可以对公司银行帐户进行电子管理和监控的软件。使用电子银行系统的公司可以周转不同帐户中的现金、自动实时结算并监控帐户余额。这是多年以来较受欢迎的一种银行和公司客户间的电子沟通方式，只是现在正慢慢被互联网门户取代。
Belgian RTGS system linked to TARGET.
German RTGS system linked to TARGET. Now replaced by RTGSplus.
What is energy price risk?
This is the risk that a change in energy prices will impose additional costs on a company’s operations. Unlike weather risk which affects volumes (e.g. of demand or consumption) energy risk derives from the changes in the price of oil, gas and electricity. There is, of course, a connection between the two. Energy prices are more volatile than the prices of other commodities. The price volatility is caused by shifts in the supply and demand for the commodity. Natural gas and wholesale electricity prices are particularly volatile as demand for these commodities increases quickly in response to weather changes. Furthermore, storage of gas or electricity is limited and it is difficult to move it quickly to where it is needed.
Managing energy price risk
Standard financial derivatives have been adapted to provide protection for companies against the impact of energy price fluctuations. The financial instruments to hedge energy risk can vary slightly depending on whether oil, gas or electricity is traded but there are four general categories: forwards, futures, options and swaps.
Forward Price Contracts.
A forward is a customised supply contract between a buyer and a seller of energy which delays delivery to a specified date in the future. The transaction includes the obligation for the buyer to purchase and for the supplier to supply a fixed amount of energy at a pre-determined price. Payment is due at or after delivery. While usually prices are fixed, forward contracts can also include floors, caps or inflation rate changes (escalators).
Futures Contracts.
Futures contracts are standardised fixed price contracts for the delivery or receipt of a certain quantity of energy at some time in the future. The difference between forwards and futures is that while forwards are traded over the counter, futures can only be traded at regulated exchanges. With that comes a higher degree of standardisation, but also a lower counterparty risk for futures contracts.
Options contract.
Both parties to an energy contract can purchase instruments to limit their exposure to adverse price movements. An option gives the buyer the right to buy (call option) or sell (put option) a commodity at a specified price (the “strike” price) over a specified period of time. It differs from a futures contract in that the option includes the right but lacks the obligation to actually make the transaction.
An option guarantees a maximum purchase price (call) or minimum sales price (put), whilst retaining the opportunity to benefit from a price movement in the other direction. This comes at a cost in the form of the premium payable.
The premium can be at least partially offset by agreeing a collar, which is the simultaneous purchase of a call and sale of a put, or vice versa, with identical quantities and expiry dates but at a different price. This will guarantee a price for the underlying commodity between the strike prices of the put and the call. The premium payable on one is then partially offset by the premium reserved for the other.
Swaps contract.
Another way to fix the price of energy is to enter into a swap agreement. In effect one party in a swap contract agrees to exchange a fixed price for a floating price. The fixed price of the swaps is usually set off against an official commodity index and the differences between the fixed price and the floating price (average price of the index) are settled in cash. A physical delivery of the commodity does not take place.
Coming into effect on 1 January 2008, the new EIT law removed the advantageous tax rates that FIEs were previously able to enjoy over domestic companies. The new tax rate will, after a steady migration over a period of five years, be fixed at 25% for both foreign and domestic companies. Incentives will, however, be available for companies in particular industries.
新的企业所得税法于2008年1月1日开始生效，它取消了先前外商投资企业相对于中国境内公司所享有的优惠税率。在五年的平稳过渡期之后，中外公司的所得税税率都将被固定在25%。不过，特定行业的公司仍将享有优惠政策。
Chinese regulations currently prohibit lending between non-financial organisations – including inter-company lending. Entrust loans – also known as entrusted or entrustment loans – provide an alternative as they allow companies to become, in effect, lenders by providing funding to a financial intermediary. The intermediary – a bank/financial institution known as the 'entrustee' – grants loans to the borrower according to the lender's specific conditions (eg loan purpose, amount, loan period and interest rate) as well as supervising and collecting the loan on the lender's behalf.
目前中国的法规禁止非金融机构之间包括公司间的借贷。委托贷款提供了另一选择，它允许公司通过向金融中介提供资金成为事实上的贷款人。中介机构一般是银行或其他金融机构，叫做受托人，会根据贷款人提出的具体条件（例如贷款目的、数额、贷款期限以及利率）向借款人发放贷款，同时代表贷款人收回贷款。
ERP systems are accounting-oriented information systems for identifying and planning the business-wide resources needed to handle all aspects of a business. ERP systems are designed to provide one single controlling, recording and accounting system for all the business processes of medium- and large-sized businesses.
ERP系统是一个以会计职能为导向的信息系统，可以在整个企业范围内识别和规划处理一个企业所有方面所需要的资源。设计ERP系统的目的是，为大中型企业的所有业务流程提供一个单一的控制、记录和会计系统。
European Options Exchange which merged with the Financiele Termijnmart Amsterdam to form the AEX.
Derivatives that involve stocks or shares.
An option involving a stock or share. It may alternatively involve a basket or index of these.
Financial risk of uncertainty in the future market value of a stock portfolio.
A swap with payments on one or both sides linked to the performance of equities.
Swedish RTGS system linked to TARGET.
European System of Central Banks. Composed of ECB and the central banks of the other member nations. Tasks:
For more information, please see www.ecb.int
European Securities Clearing Corporation. The clearing house for European Government debt securities.
European Options and Financial Futures Exchange. A jointly owned subsidiary of the SWX Swiss exchange and the Deutsche Borse AG. Electronic derivatives exchange created in 1998.
Eurex Clearing AG acts as the clearing house for Eurex.
The EBA's cross-border euro payment system developed by EBA for larger amounts operated by SWIFT.
A bond issued in a Eurocurrency.
Brussels-based settlement system for securities transactions covering both bonds and equities.
A currency deposited or banked outside the country of origin. For example Eurodollars are US dollar deposits or CDs accepted by commercial banks in centres such as London or Paris. Interest on such deposits is paid in dollars.
A market which emerged in the 1950s for financing international trade. Principal participants are commercial banks, large companies and central banks trading in Eurocurrencies, Eurobonds etc.
Cross-border European market for equities, bonds, derivatives and commodities formed by the merger of the exchanges in Amsterdam, Brussels and Paris.
May be exercised only on the expiry date, in contrast to an American Option.
Economic Value Added. This is calculated by taking after tax cash flow generated by a business and deducting the cost of the capital it has deployed to generate that cash flow.
The risk that a long or short foreign exchange position might, due to an adverse movement in the relevant exchange rate, generate a loss E.g: A trader purchases US dollars in the hope that the dollar will strengthen. The exchange rate risk is the possibility that the dollar might weaken.
Instruments and commodities are said to be exchange-traded when they are available for sale on a stock, derivatives or other exchange. There is a wide range of financial instruments and commodities that can be traded on an exchange. Most people are aware of instruments such as shares in companies traded on exchanges such as Euronext, the London Stock Exchange, the NYSE or Nasdaq. In addition, some companies have their debt securities listed for sale on these exchanges.
Other exchanges include derivatives exchanges such as Liffe and the Chicago Mercantile Exchange. Instruments for sale on these exchanges include both futures and options. Finally there are also commodity exchanges, which tend to focus on specific commodities, for example oil or grain.
As can be seen, a range of instruments and commodities are available for trade on an exchange. In all cases, the nature of an exchange-traded transaction means that the instrument or commodity is available for sale in a standard form. For instance, this means that shares in companies are available in a standard form. Other financial instruments that can be exchange-traded, such as futures or options, are quoted for standard terms (one week, one month etc.) and in standard currencies.
Because they are exchange-traded, the accompanying documentation is standardised reducing the associated costs and the price can be seen as it is openly quoted by traders or brokers on the exchange. However the downside is that the standard form being traded may not exactly match what is required.
The introduction of multi-bank FX portals has lead to speculation that FX may become an exchange traded product. If it does, the method of getting a FX price would change fundamentally. At present, each bank provides its own price for a currency transaction. For the common currency pairs, there is only a marginal difference between banks. For the less common pairs, different banks will quote a different price depending on their positions in the relevant currencies. This can lead to some significant differences in the quoted rates.
If FX became exchange-traded, dealing prices for all currencies would be quoted on an exchange (not a physical exchange, but on a series of connected rate screens). This would improve the liquidity for the less common currency pairs. There will also be changes in the FX settlement process as traders will act as prime brokers on behalf of their clients.
Taking up the right of an option to buy or sell granted under the terms of a listed options contract.
Most option contracts entered into by corporate treasurers are known as ‘plain vanilla’ options. These give the buyer of the option the right, but not the obligation, to exchange a quantity of one currency, interest rate or other instrument for an agreed quantity of another on or before (depending on the terms of the option agreement) a given date in the future.
Exotic options come in two main forms:
Exotic options are primarily available in the foreign exchange market, although they have been constructed in other asset classes. See also: Asian options, Barrier options and Vanilla options.
The point in time when a transaction reaches maturity. The point at which the holder ceases to have any rights under the agreed contract. In options terms the date after which the option is void. The option buyer must decide whether or not to exercise on or before this date. See American and European style options.
The price of an option less its intrinsic value. See Intrinsic Value.
The amount the issuer of, for example, a bond agrees to pay upon maturity.
In Futures terms the computation of the cost of a Futures contract based on the current market prices of the stocks in the index, current interest rates, how long until the contract expires etc. In Options terms the fair value of an Option is the price or premium at which both the buyer and the writer can expect to break even.
Colloquial name for the U.S. Federal National Mortgage Association (FNMA).
The U.S. Financial Accounting Standards Board. Quasi-regulatory organisation responsible for the setting of financial reporting standards.
Federal Deposit Insurance Corporation. An independent US Federal executive agency designed to promote public confidence in banks and to provide insurance cover for bank deposits up to US$100,000. Originally established (1933) to prevent a repetition of losses incurred in the Great Depression.
US Federal Reserve System.
Excess funds held by the Federal Reserve Banking System on behalf of depository institutions. These institutions lend to each other usually on an overnight basis. See Fed Funds Rate.
Federal Funds Rate. The rate at which US banks lend to each other overnight. It is a market rate but is controlled by the Fed through Open Market Operations. See Open Market Operations.
12 US banks, situated in Atlanta, Boston, Chicago, Cleveland, Dallas, Kansas City, Minneapolis, New York, Philadelphia, Richmond, San Francisco and St.Louis. These, together with the Board of Governors in Washington, make up the Federal Reserve System (FED).
US Central Bank created by Congress in 1914 and largely responsible for the monetary policy of the US.
US Federal Reserve Bank run RTGS payments and receipts transfer system for transactions outside New York. It connects the 12 US Federal Reserve Banks, the Treasury and other government agencies. Along with CHIPS, which deals with transactions in New York, handles most large dollar transfers.
Futures Industry Association. The representative association of organisations with an interest in the US Futures Markets.
When dealing in Financial Futures a Buy or Sell order, when completed, is said to be Filled.
Fitch Investor Services. One of the major US rating agencies. These agencies evaluate an individual's or a company's credit history and capability of repaying obligations. They assign credit ratings to assist investors to analyse credit risks. See Moody's and S&P's.
A loan on which the rate paid by the borrower is fixed for the duration of the loan.
Term denoting a trader as neither long nor short in his positions.
This denotes an interest rate that is periodically refixed according to a reference index rate e.g.LIBOR.
The process of launching a public company for the first time by inviting the public to subscribe in its shares. Also known as 'Going Public'.
Futures and Options Association. Commodity Exchange trading in Futures Contracts. London version known as FOX.
‘Free on board’. ‘Fob Southampton’, for example, would be a price quoted as including the cost of goods and all additional expenses up to the point when they have been loaded onto the cargo vessel at Southampton.
US 12-member body consisting of the seven members of the Federal Reserve Board and five of the 12 Federal Reserve Bank residents. The primary policy making body which determines the objectives for growth of money and credit in the US. Meets eight times per year to set the Fed Funds Rate.
An enterprise established in China backed by investments from both Chinese and foreign parties. The rights and obligations of all parties involved in the enterprise are defined in contracts signed at the outset of the venture. Normally these contracts specify that when a pre-determined co-operation period ends, all the assets of the new enterprise will be owned solely by the Chinese party. The foreign party will generally have recouped its initial investment during the co-operative period.
在中国建立的、由中外双方联合投资的企业。各方在企业中的权力和义务由各方在企业成立时签署的合同约定。通常，合同中会约定，当预先确定的合作期限终止时，新企业的所有资产将完全归中方所有。外方一般会在合作期间收回它的初始投资。
The potential impact of foreign exchange rate fluctuations on a company’s profitability.
外汇汇率波动对公司收益性的潜在影响。
An enterprise established in China which has some degree of backing from foreign investors. Depending on the nature of this foreign investment, an FIE is either classed as being a foreign co-operative joint venture (see above) or a wholly owned foreign enterprise (see below).
在中国建立、在某种程度上有外国投资者支持的企业。根据外国投资的不同性质，外商投资企业可以分为中外合作企业（见35页）和外商独资企业（参见下面）两种类型。
A foreign investment enterprise (FIE) is a type of company owned at least in part by foreign investors. In China FIEs are usually funded by a minimum of 25% foreign investment. WFOEs, JVs and FICLSs are all legal structures that can be used to establish FIEs.
外商投资企业（FIE）是至少部分由外国投资者拥有的公司。在中国，外商投资企业中的外方出资比例通常不得低于25%。外商独资企业（WFOEs）、合资企业（JVs）和外商投资股份有限公司（FICLSs）都是可以用于成立外商投资企业的法人结构。
A less common example of a foreign investment enterprise, FICLS are companies limited by shares. They must have at least five shareholders, with at least 25% of shares held by foreign investors.
FICLS属于股份有限公司，是一种不太常见的外商投资企业。它的股东人数至少是5人，外国投资者持股比例不得低于25%。
A contractual obligation between two parties to exchange a particular good or instrument at a set price on a future date.
Forward Rate Agreement. A contract determining an interest rate to be paid or received on a specific obligation beginning at a start date in the future.
Forward Rate Agreement British Bankers Association. Terms and conditions for trading in FRAs, as laid down by the BBA.
Fixed Rate Mortgage.
Floating Rate Note. A fixed principal financial instrument whose yield is periodically reset relative to a reference index rate to reflect changes in short-term interest rates.
In the context of a treasury department, the front office performs procedures such as cash investment and foreign exchange. Front office staff are those directly involved in dealing and agreeing financial transactions. Larger treasury organisations are divided into front and back office for control and process purposes with the back office checking what the front office has done. Some have a middle office as well. Smaller treasury organisations have to find other ways to establish appropriate check and control procedures.
在资金管理部门中，前台执行诸如现金投资和外汇交易等流程。前台员工直接参与金融交易的办理和确认。出于控制和流程的目的，规模较大的资金管理组织被划分为前台和后台，后台负责核对前台完成的工作。一些组织还设有中台。规模较小的资金管理组织只得寻找其它的方式来建立适当的核对和控制流程。
Financial Services Authority. An independent body whose board is appointed by the UK Treasury and which regulates the financial services industry in the UK.
Financial Stability Forum. An international forum for finance ministers, central banks and financial supervisors set up in 1999 by G7 to promote international financial stability through information exchange and international co-operation in financial supervision.
Fungible is a term used to describe a situation when one instrument is identical to, and therefore interchangeable with another. A fungible bond is a new issue which is attached to an existing issue in the sense that it has the same specifications, other than price. If a bond is fungible, it can be exchanged for an existing bond with the same characteristics.
A cash transaction where a buyer and a seller agree upon the price and quantity of a commodity or index on a date in the future. These contracts must be exercised.
Organised exchange where standardised contracts for the future delivery of various commodities and financial instruments are traded according to established rules and regulations.
A forward is an agreement whereby the purchaser agrees to buy a particular asset at a future date, but fixes the price at the time the agreement is made. In the context of FX, the purchaser would agree to buy a fixed amount of a foreign currency at some point in the future, but at a price based on the current exchange rate and the interest rate difference between the two currencies. This enables the purchaser to budget precisely as the uncertainty resulting from exchange rate fluctuations has been eliminated. However, by using making such an agreement, the purchaser loses the chance to profit if the exchange rate is more favourable on the delivery date than the agreed forward rate.
远期交易是指一种协议，根据该协议买方同意在未来某个日期买进某项特定的资产，但价格在协议签订时确定。在外汇远期交易中，买方会同意在未来某时买进一笔固定数额的外汇，但价格根据当前汇率和两种货币之间的利率差来确定。这种方式使买方能够进行精确的预算，因为汇率波动带来的不确定性已被消除。但是，签订这种协议后，如果交割日的汇率比议定的远期汇率更为有利，买方就会丧失获利机会。
The use of techniques or instruments to reduce a company’s existing exposure to foreign currency movements. The effectiveness of a ‘hedge’ is measured in terms of the residual gain or loss that results from a rate, price, or currency movement after taking any hedging into account.
利用技术或工具帮助企业减少汇率变动带来的风险。衡量套期保值效益的标准是，考虑套期之后，利率、价格或货币汇率变动导致的剩余收益或损失。
Foreign exchange risk is the danger that a change in exchange rates will affect a company’s profits and/or the value of its assets and liabilities. All companies which engage in foreign trade will be exposed to a certain amount of foreign exchange risk. Companies which only operate in one country can also be exposed to FX risk, albeit indirectly.
外汇风险是汇率的变化将影响公司的利润和/或资产及负债价值的危险。所有进行国外贸易的公司都会面临一定程度的外汇风险。但是，只在一个国家开展经营活动的公司也可能面临外汇风险，虽然是间接风险。
FX risk management is concerned with controlling a company’s exposure to FX risk.
外汇风险管理涉及控制公司面临的外汇风险。
Organisation of 11 Central Banks (US, Japan, Germany, UK, France, Italy, Canada, Netherlands, Belgium, Sweden and Switzerland) linked to BIS by concern for payments systems.
The Group of 30. Private organisation sponsored by central banks and major commercial and investment banks aiming to develop plans for faster, standardised clearance and settlement of domestic and international securities transactions.
Group of countries (US, Japan, Germany, UK, France, Italy and Canada) committed to working out economic and currency exchange rate issues.
Global Business Dialogue on Electronic Commerce. A body set up in 1999 made up of international business representatives from the internet industry to address conflicting rules and regulations concerning global electronic commerce.
German name for a Limited Company. See Aktiengesellschaft.
Bonds issued by the UK government. Named after the gilded edge on the bond certificate.
An electronic Futures and Options trading system started in 1992 by Reuters, CME and CBOT. Joined by MATIF and Deutsche Terminborse but weakened by the decision in 1994 of LIFFE not to join and the withdrawal of CBOT.
Gesellschaft mit beschränkter Haftung. German equivalent of the British 'PLC'.
See Flotation and IPO.
An arrangement whereby an old rule continues to be applicable in some circumstances even when a new rule is in place.
一种即使新规则已¾¬生效，Ô¬有规则在某些条件下仍继续适用的安排。
Greek letters are used to describe the level of sensitivity of the value of an option. Examples include: Delta, gamma, theta, rho and vega.
The settlement of the full amount due rather than taking any account of what is due back to the remitter from the same counterparty.
对应付的全额进行结算，而不考虑同一个交易对手应该返还给汇款人的金额。
‘Good till cancelled’. This is used to describe any order that is good until it is either filled or cancelled.
A bank account which acts as a central depository for the funds of several other bank accounts. For example, in a cash pooling arrangement, a company may have several operating subsidiaries, each with their own bank account. These operating accounts could all be arranged to feed into a central header account, which would contain all of the company’s money.
一个为其他几个银行账户的资金担任中央存管处的银行账户。例如，在一个现金池协议中，一家公司可能有几家运营子公司，每一家都有自己的银行账户。可以安排这些运营账户都向一个中央的主账户提供资金，而这个主账户将持有公司的全部资金。
A widely varied pool of assets managed intensely for which managers are paid a percentage of any profits. Despite the name such funds do little or no hedging.
A ratio of the number of Options contracts needed to hedge a position in the underlying instrument.
Greek RTGS system linked to TARGET.
An alternative term for settlement risk in FX transactions. The name derives from the collapse in 1974 of the German Herstatt Bank.
外汇交易结算风险的另一种称谓，得名于1974年德国赫斯塔特银行的破产。
Hong Kong Exchanges and Clearing Ltd. HKEx wholly owns The Stock Exchange of Hong Kong Limited, Hong Kong Futures Exchange Limited and Hong Kong Securities Clearing Company Limited.
Hong Kong Futures Exchange.
Hong Kong Monetary Authority. Established in 1993 by merging the offices of the Exchange Fund with the Office of The Commissioner of Banknotes. The Government authority in Hong Kong responsible for maintaining monetary and banking stability.
Hong Kong Stock Exchange.
A company that controls one or more other companies which are then described as subsidiaries of the holding company.
控制一家或多家其它公司的公司，这些被控制的公司被称为控股公司的子公司。
The difference between IAS and IFRS
There has been some misunderstanding over the status of International Accounting Standards (IAS) since the International Accounting Standards Board (IASB) announced the introduction of International Financial Reporting Standards (IFRS) in 2001.
The first body to set International Accounting Standards (IAS) was the International Accounting Standards Committee (IASC), which was set up in 1973. During its 28-year life, the IASC introduced 41IAS, some of which have been replaced or withdrawn. The IASB was created in 2001 as part of a restructuring of the IASC, designed to make the international standard-setting process more effective.
New standards released by the IASB are known as IFRS.
There are two main differences between IAS and IFRS:
Inter-Bank Data Exchange, a secure data exchange network utilised in the cheque clearing process.
Institute of Chartered Accountants of England and Wales.
Institute of Chartered Accountants of Scotland.
International Commodities Clearing House. See LCH.
International Central Securities Depositories. See Euroclear and Clearstream.
Industrial Development Agency of Ireland. Government agency responsible for securing new investment from overseas in the manufacturing and international services sector.
International Financial Services Centre. Dublin, Ireland, base for International Mutual Funds, Banking, Life Assurance Treasury and Insurance businesses for non residents. EU approved tax regime of no withholding taxes on interest payments made to non residents and ten per cent corporation tax for trading operations.
Inheritance tax. Tax payable on inherited wealth.
An asset not readily convertible into cash quickly and at a low cost.
International Monetary Fund. International organisation established in 1944 as part of the Bretton Woods Agreement with the authority to lend funds to member countries conditioned on their pursuit of sound economic policies. Funded by members' contributions of gold and currency.
International Monetary Market. The financial futures market sector of the CME.
Referring to an Option which has Intrinsic Value.
Exposure to loss as a result of a change in interest rates.
The term denoting a favourable difference between the strike price of an option and the current price of the commodity, asset or instrument on which it is based. This is said to be the amount by which it is ‘in the money’.
A public limited company which uses the funds provided by its shareholders to invest in other companies.
International Petroleum Exchange. London-based exchange, formed in 1980, trading in Energy Futures and Options.
Initial Public Offering; when a company achieves a stock market listing for the first time. US equivalent of a UK Flotation. See also Going Public.
‘Interest Rate Guarantee’. This is the term used to denote an option on a forward-rate agreement.
Irish RTGS system linked to TARGET.
Interest Rate Swap. An agreement to exchange a fixed rate interest stream for a floating rate interest stream in the same currency based on an agreed notional principal amount. Sometimes referred to as a Vanilla or Coupon Swap.
The International Swaps and Derivatives Association. Principal derivatives industry trade organisation. ISDA develops and publishes master agreements for IRSs and other derivative contracts. ISDA agreements serve as industry standard documentation for a variety of financial instruments.
International Securities Market Association. Formerly known as AIBD. Regulatory body monitoring the increasing range of financial products and setting rules governing good market practice.
Internet service provider.
The establishment of a business enterprise by two or more parties, who agree to share the enterprise’s profits and losses. In China a JV can take the form of an Equity Joint Venture (which is taxable separately and profits are shared according to capital contributions) or a Co-operative Joint Venture (profits shared according to contractual agreement).
由两方或多方建立的企业，各方同意在企业中共享利润、共担损失。在中国，合资企业可以采取股权合资企业（独立缴税，利润根据出资额进行分配）或合作企业（利润根据合同协议的规定进行分配）的形式。
Johannesburg Stock Exchange.
A Key Performance Indicator (KPI) is a quantifiable measurement of an organisation’s objectives. By determining a set of KPIs, a company can monitor and measure its progress towards achieving particular goals and targets. For instance, a school may set the percentage of its students who progress to further education as a KPI. The reasoning behind identifying and measuring KPIs is for organisations to be able to measure how well it is achieving its goals.
关键绩效指标(KPI)是衡量组织目标的定量指标。通过确定一系列关键绩效指标，公司可以监控和衡量自己实现特定目的和目标的进展。例如，一所学校可能把升学率作为一个关键绩效指标。界定和衡量关键绩效是为了保证组织能够衡量自己实现目标的程度。
The Kuala Lumpur Commodity Exchange.
German state central banks.
Leveraged buyout, in which a small company with limited assets borrows heavily on these and the assets of the target company to finance the takeover of a larger company.
London Clearing House. Established in 1888 and known until 1991 as the International Commodities Clearing House (ICCH). Central clearing system for most exchange traded Futures and Options contracts in the UK.
Letters of credit are used in trade transactions to protect both purchasers and suppliers from counterparty risk. A letter of credit is issued by a bank, which guarantees the credit of its customer for a particular amount as long as the conditions of the letter of credit have been met.
The purchasing company cannot claim the goods until payment has been authorised, while the supplier cannot be guaranteed payment until certain documentary conditions have been fulfilled. Letters of credit therefore provide both parties with a high level of security. However, they are also associated with extensive paperwork and documentation is often rejected in the first instance, resulting in potentially expensive delays.
在贸易中使用信用证的目的是帮助买卖双方防范交易对手违约风险。信用证由银行签发，在信用证条款得到满足的前提下，银行为其客户提供一定数额的信用担保。
买方公司只有在授权付款之后才能提货，而供应商只有在满足特定的单据条件后，才能得到付款担保。因此，信用证为双方都提供了高度的安全保障。不过，信用证的使用还伴随着大量的书面工作，而且一开始单据常常会遭到拒付，由此而造成的延迟可能会导致高昂成本。
London Investment Banking Association.
London Inter-bank Bid Rate. The rate at which banks in London are prepared to accept short-term money deposits.
London Inter-Bank Offered Rate. The primary fixed income index reference rates used in the Euromarkets. Most international floating rates are quoted as LIBOR.
The London International Financial Futures and Options Exchange. Financial Futures market, opened in 1982, trading in Financial, Equity and Commodities Futures contracts.
London Inter-bank Mean Rate. The median average between LIBOR and LIBID.
Luxembourg's RTGS system and link to TARGET.
This term is used to denote a market in which large deals make little difference to price movement. This is usually a market in which there are high volumes of trade and participants.
These funds are a type of mutual fund used by investors as an alternative to bank deposits. Liquidity funds invest in a diversified portfolio of high-grade, short-term debt instruments. Investors in this type of fund deposit money for short periods and earn a short–term rate of interest in return. Liquidity funds come in many different forms and offer different credit and maturity profiles. If carefully chosen, they offer diversification of risk, are highly secure (the safest being 'AAA' rated) and may offer same-day availability of funds.
The use of liquidity funds by corporates in Asia is increasing. The large global fund managers generally offer highly rated liquidity funds denominated in EUR, GBP and USD, with the USD-denominated funds being the most popular. There are also a growing number of local currency opportunities available – the Australian, Hong Kong, Indian, Indonesian, Japanese and Singaporean markets now have local currency liquidity funds available.
这些基金是一种共同基金，是投资者除银行存款外的另一种投资选择。流动基金投资于由各种高评级短期债务工具所组成的多元化投资组合。这种类型基金的投资者只做短期存款，并获得短期利息回报。流动基金形式多样，提供不同信用度和期限。如果精心选择的话，流动基金可以分散风险、具有高度安全（最安全的为“AAA”评级）、并且可以提供当日可用资金。
亚洲公司正在愈来愈多地使用流动基金。大型全球基金经理人通常提供欧元、英镑、美元面额的高评级流动基金，而又以美元面额的基金最为流行。此外，流动基金也有越来越多的机会使用本国货币---澳大利亚、香港、印度、印度尼西亚、日本、及新加坡的市场现在就有本国货币的流动基金。
The set of strategies and measures that aim to ensure that short-term funding needs are met and short-term cash surpluses are invested.
一套旨在确保短期资金需求得以满足、短期现金赢余得以投资的策略与方法。
Liquidity Risk occurs when there is a change of perception of an instrument's value in the market, thus making sale difficult.
Loan Market Association. An organisation started in 1996 with the objective of developing a secondary market for loans within the Euromarkets.
London Metal Exchange. Established in 1877, the London-based non-ferrous metal exchange is used by metals industry participants for hedging against adverse fluctuations in prices of metals such as copper, aluminium, lead, zinc, nickel, tin and silver.
The Exchange changed its name to London Stock Exchange Limited on 9 December 1995 following separation of the Irish Stock Exchange. It has since become a plc (8 June 2000), following shareholders approval of the demutualisation proposals, and became a listed company on 20 July 2001. The London Stock Exchange plc is now a fully commercial public company, and provides the markets a means of raising capital for UK and international companies through equity, debt and depositary receipt issues. Further details can be found at: www.londonstockexchange.com
An investment position which will benefit from a rising market. For example, if a trader buys US dollars in the hope that the US currency will strengthen, he is said to be 'long' of dollars.
A lookback option is exercised at the end of the option contract. It gives the holder of the option the right to buy or sell the underlying instrument at its lowest or highest price within the contract period.
These are expensive as they give the holder the option to select the exercise price which will be most advantageous to them. The cost will be based on the underlying volatility of the price over time.
London Stock Exchange. Market, in London, started in the 17th century for dealings in securities. In 1986 it became the International Stock Exchange of the United Kingdom and Republic of Ireland. See ISE and London Stock Exchange.
Long-Term Capital Management; a US hedge fund revealed as the most active user globally of interest rate swaps which had to be rescued when it ran into financial difficulties, August/September 1998.
Low-value payment.
Treaty, signed in 1991 at Maastricht in the Netherlands amongst Western European countries to promote economic co-operation and to establish a single European currency.
A sum required to be paid by an investor in securities when the price suddenly drops. Failure to do this would result in liquidation of the securities in order to pay back the loan to the broker.
A dealer who undertakes to buy and sell securities as a principal and is therefore obliged to declare buying and selling prices for a particular security at a particular time. This ensures that securities can always be traded.
The risk that changes in the markets in which the company operates will affect its operating profit. This includes price changes and the inability to deliver.
公司所在的市场中的变化会影响经营利润的风险。包括价格的变化和无法交货的风险。
The value of an asset based on the price it would sell for under current market conditions.
根据某项资产在当前市场条件下的售价而确定的资产价值。
Marche A Terme International de France. French derivatives exchange, established in 1986, trading in Financial Futures and Options contracts. Since 1997 sole shareholder has been Paris Bourse SA. Operational management body is Euronext Paris SA.
The date on which the life of a financial instrument ends through cash or physical settlement.
Whereby one or more of the management employees acquire part or all of the ownership of a company.
Mercado Oficial Espanol de Opciones y Futuros Financieros. Spain's Financial Futures and Options market.
Market on Close Order. This is the order given to traders to execute trade at the prevailing price at the end of the day.
Ministry of Commerce of the People’s Republic of China, a government body which is responsible for the formulation of policies and guidelines relating to domestic and foreign trade, foreign investment, imports and exports.
中华人民共和国商务部，一个负责制定有关境内外贸易、外商投资及进出口的政策和指导方针的政府机构。
A day count fraction equal to actual days divided by 360, except in the UK and several commonwealth countries where the denominator is 365(or actual days).
One of the major US rating agencies. These agencies evaluate an individual's or a company's credit history and capability of repaying obligations. They assign credit ratings to assist investors to analyse credit risks. See Fitch and S&P's.
Abbreviation of mobile payments, which are transactions initiated using a wireless mobile device such as a mobile phone or PDA.
使用手机或个掌上电脑（PDA）等无线移动设备启动的交易。
A large company with subsidiaries in many countries.
在多个国家拥有附属子公司的一家大型公司。
The National Association of Financial Market Institutional Investors (NAFMII) was created in August 2007 to implement its own Master Agreement, a China-specific version of the International Swaps and Derivatives Association (ISDA) Master Agreements. The Master Agreement is designed to be a standard basis for the documentation of financial derivatives transactions. NAFMII is a self-regulatory body that works under the direction of the People’s Bank of China (PBC) for Chinese inter-bank market participants. Its main objectives are:
• To perform self-regulatory administration within the inter-bank market. • To safeguard members’ rights. • To ensure fair competition in such a way that will develop China’s inter-bank market.2007年8月，中国银行间市场交易商Ь会（NAFMII）成立，并开始制定其主Ь议。该Ь议是国际掉期及衍生工具Ь会（ISDA）主Ð-议的中国版本，其目的是为金融衍生工具交易的文件提供一个标准的范本。NAFMII是一个自律性机构，在中国人民银行（PBC）的指导下为中国的银行间市场交易商提供服务。它的主要目标是：
• 在银行间市场进行自律管理； • 保护成员的权利； • 确保公平竞争，推进中国银行间市场的发展National Association of Securities Dealers Inc; US self-regulating organisation of the securities industry, responsible for operating the NASDAQ and over the counter securities markets.
US computer system for trading in over the counter securities, which has developed into the second-largest US stock market since its inception in 1971.
A form of wireless communication enabling mobile devices such as mobile phones and PDAs to communicate when in close proximity of one another.