SIAA Securities & Managed Investments key terms

The segment where securities are sold for the first time by an issuer, such as through an initial public offering or a new bond issue, with proceeds going to the issuer rather than to other investors.

The trading venue where investors buy and sell securities already issued, providing liquidity and price discovery while the issuer receives no new capital from those transactions.

The first sale of a company's shares to the public, converting it from private to listed ownership and typically raising capital while creating a market for the stock.

A formal disclosure document describing an offer of securities, including the issuer's business, financial position, risks and the terms of the offering, intended to let investors make informed decisions.

A firm that continuously quotes both buy and sell prices for a security in order to provide liquidity, earning the spread while carrying inventory risk.

An intermediary that executes buy and sell orders on behalf of clients, typically charging commission and owing duties of best execution and order handling.

The obligation of an intermediary to take reasonable steps to obtain the best possible outcome for client orders, considering price, cost, speed, likelihood of execution and settlement.

The ease and speed with which an asset can be bought or sold in size without materially moving its price, reflecting trading volume, bid-ask spread and available counterparties.

The difference between the highest price a buyer will pay and the lowest price a seller will accept, a key measure of trading cost and market liquidity.

A unit of ownership in a company that typically carries voting rights and a residual claim on profits and assets after all other obligations are paid.

A class of share that usually pays a fixed dividend ahead of ordinary shareholders and ranks higher on winding up, often with limited or no voting rights.

A distribution of company profits to shareholders, commonly paid in cash but sometimes as additional shares, declared at the discretion of the board.

Annual dividend per share divided by the share price, expressed as a percentage, showing the income return a shareholder receives relative to the current market price.

A share's market price divided by its earnings per share, indicating how much investors pay for each unit of profit and often used to compare relative valuation.

The total market value of a company's outstanding shares, calculated as share price multiplied by shares on issue, commonly used to classify companies by size.

An offer of new shares to existing shareholders, usually at a discount to market price and in proportion to their holdings, allowing them to avoid dilution.

The reduction in an existing shareholder's proportional ownership and per-share metrics that occurs when new shares are issued to other parties.

The periodic interest payment a bond issuer promises to pay bondholders, usually expressed as an annual percentage of the bond's face value.

The principal amount stated on a bond that the issuer repays at maturity and against which coupon payments are calculated.

The total annualised return on a bond if held to maturity, accounting for its current price, coupon payments and the gain or loss at redemption.

A measure of a bond's price sensitivity to interest rate changes, expressed in years, combining the timing and size of its cash flows.

The risk that a bond issuer or borrower fails to make scheduled interest or principal payments, or that its perceived ability to do so deteriorates.

An independent agency's opinion about an issuer's or debt instrument's creditworthiness, usually expressed on a letter scale from high to low quality.

A credit rating category indicating relatively low default risk, generally from BBB minus or Baa3 upward, distinguishing such bonds from speculative or high-yield debt.

A short-term, highly liquid debt security with a maturity typically of one year or less, such as treasury notes, commercial paper or bank bills.

A pooled investment vehicle that gathers money from many investors and invests it according to a stated strategy under professional management.

The value of one unit in a managed fund, usually calculated from the fund's net asset value divided by the number of units on issue.

The total value of a fund's assets minus its liabilities, often expressed per unit or per share to show what investors' holdings are worth.

A regulated document given to retail investors before they invest in a financial product, summarising features, fees, risks and the investor's rights.

An ongoing charge deducted from a fund's assets to pay for investment management and administration, usually calculated as a percentage of assets.

A financial contract whose value depends on an underlying asset, rate or index, used to hedge risk or to take a leveraged position without owning the underlying.

A contract giving the buyer the right, but not the obligation, to buy or sell an underlying asset at a set price before or on a specified date.

A standardised agreement to buy or sell an asset at a predetermined price on a future date, typically traded on an exchange and settled through margin payments.

The process of dividing a portfolio among asset classes such as shares, bonds and cash, generally the largest driver of long-term return and risk.

Spreading investments across assets, sectors or regions so that poor performance in one holding has less impact on the overall portfolio.

A statistical measure from minus one to plus one describing how closely two investments move together, used to judge the risk-reduction benefit of combining them.

The degree to which an investment's returns fluctuate over time, commonly measured by standard deviation and used as a basic indicator of investment risk.

The risk that changes in market interest rates reduce the value of a fixed income investment, with longer-duration bonds generally more exposed.

An investor's willingness and financial capacity to accept fluctuations in portfolio value in pursuit of higher expected returns, central to suitability assessment.

The requirement that a recommendation or product matches a client's objectives, financial situation, needs and risk tolerance, based on reasonable inquiry.

The process of collecting and verifying information about a client's identity, circumstances, goals and risk profile before providing advice or services.

Laws, rules and procedures requiring financial firms to identify customers, monitor transactions and report suspicious activity to prevent proceeds of crime being disguised.

Standards governing how firms and individuals behave in markets, including fair dealing, managing conflicts of interest and avoiding misleading communication with clients.

Trading or tipping others to trade in securities while in possession of material non-public information, a form of market abuse prohibited by law.