IFSCA Grade A key terms

The international framework setting minimum capital, leverage and liquidity standards for banks, requiring common equity, tier-1 and total capital to be held against risk-weighted assets.

A bank's exposures weighted by credit, market and operational risk so that safer assets consume less regulatory capital than riskier ones.

A Basel standard requiring banks to hold enough high-quality liquid assets to survive a 30-day stressed outflow scenario.

A Basel standard requiring stable funding to cover long-term assets over a one-year horizon, limiting reliance on short-term wholesale funding.

Mandated minimum lending by banks to specified sectors such as agriculture, MSMEs and weaker sections, with shortfalls typically met through specified instruments.

A loan or advance where principal or interest has remained overdue for more than 90 days, triggering provisioning and income-recognition rules.

The proportion of gross non-performing assets a lender has set aside as provisions, indicating the cushion available against expected credit losses.

A privately pooled investment vehicle that raises funds from sophisticated investors under a defined category regime, distinct from retail mutual funds.

An investment vehicle that allocates capital to several underlying funds rather than directly to securities, giving diversification across managers and strategies.

An investor meeting prescribed income, net-worth or sophistication thresholds, permitted access to higher-risk products with lighter regulatory protection.

The value of a fund's assets minus liabilities, divided by units outstanding, used to price subscriptions and redemptions.

A mechanism segregating illiquid or impaired assets from the main portfolio so that redeeming investors do not force a distressed sale.

A captive offshore unit of a multinational that delivers shared services such as technology, analytics, risk or operations to group entities across jurisdictions.

Rules governing the prices charged for transactions between related entities in different jurisdictions, requiring arm's-length terms and documentation.

A fixed place of business or dependent agent in a jurisdiction that creates a taxable presence for a foreign enterprise under tax treaties.

A category of institutional investor such as a mutual fund, insurer or foreign portfolio investor allowed wider market access and lighter disclosure.

A non-resident entity registered to invest in a jurisdiction's securities markets, subject to ownership limits and reporting obligations.

The first sale of equity shares by a company to the public, raising capital and creating a listed market for its securities.

A participant obligated to quote continuous two-way prices in specified securities, providing liquidity and narrowing bid-ask spreads.

The excess of an insurer's admitted assets over liabilities, expressed as a required ratio of liabilities, measuring ability to meet policyholder claims.

Insurance purchased by an insurer to transfer part of its risk to another insurer, protecting solvency against large or aggregated claims.

An insurance company owned by a non-insurance group to underwrite the risks of its parent and affiliates rather than buying cover in the open market.

The liability an insurer recognises for expected future policyholder claims and benefits, computed using assumptions on mortality, morbidity and interest.

Contracts whose value derives from a physical commodity, used for hedging price exposure or for speculation, settled physically or in cash.

A document evidencing ownership of goods stored in a warehouse, often accepted as collateral for financing and for delivery against futures.

Non-precious industrial metals such as copper, aluminium, zinc and nickel, traded on exchanges and central to hedging industrial demand.

Gold or silver in bars, coins or blocks, valued mainly by weight and purity rather than face value, widely used as a reserve asset.

Systems such as payment systems, central securities depositories and clearing houses whose failure could disrupt the wider financial system.

An entity that interposes itself between trade counterparties, becoming buyer to every seller and seller to every buyer to reduce counterparty risk.

A centralised registry that records details of derivative transactions, supporting regulatory transparency and systemic risk monitoring.

A lease where the lessor retains substantial risks and rewards of ownership and the asset is returned or re-let at the end of the term.

A lease transferring substantially all risks and rewards of ownership to the lessee, typically capitalised as an asset with a corresponding liability.

A transaction where an owner sells an asset and immediately leases it back, releasing capital while retaining use of the asset.

A controlled environment allowing firms to test innovative products with real customers under relaxed requirements and close supervisory oversight.

A defined interface letting one software system request data or services from another, underpinning open banking and third-party integrations.

Credit extended through digital channels using automated underwriting and data-driven assessment, often in partnership with regulated lenders.

A charter where the charterer takes the vessel or aircraft without crew and assumes responsibility for operation, crewing and maintenance.

A charter hiring a vessel or aircraft with crew for a defined period, with the owner bearing operating costs and the charterer paying hire.

A charter transferring possession and control of a vessel or aircraft to the charterer for a period, closely analogous to a bareboat arrangement.