JSE CSC flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Central limit order book
- An electronic record of all buy and sell limit orders for a security, matched by price priority then time priority, with execution at the resting order's price.
- Opening auction
- A pre-trading call phase in which orders accumulate without matching; at the close of the call, the exchange computes a single price maximising executable volume.
- Tick size
- The minimum permitted price increment for a security on the exchange; orders entered in smaller increments are rejected by the trading system.
- T+2 settlement
- The convention under which a trade is settled, meaning cash and securities are exchanged, two business days after the execution date.
- Trading halt
- A temporary suspension of matching in a security, triggered by pending news, regulatory action, or a volatility circuit breaker, during which orders may not execute.
- Agency versus principal capacity
- An agency trade is executed for a client with commission charged separately; a principal trade is executed against the member's own inventory at a disclosed price.
- Best execution obligation
- The duty of a member-dealer to take reasonable steps to obtain the best available price and outcome for a client order given prevailing market conditions.
- Front-running
- Trading for the member's own account ahead of a known client order to profit from the price impact that order is expected to cause.
- Client asset segregation
- The requirement to hold client cash and securities separately from the member's proprietary assets, so client property is identifiable on insolvency.
- Order validity
- The period an order remains live in the book, such as day-only or good-till-cancelled, after which the system cancels any unfilled balance.
- Insider trading prohibition
- Trading or tipping on material non-public information about an issuer; both the insider and the tippee can be liable for breaches.
- Market manipulation
- Conduct that artificially distorts a security's price or volume, including wash trades, matched pre-arranged trades, and false rumour dissemination.
- Substantial shareholding disclosure
- The obligation to notify the regulator and issuer when holdings cross specified percentage thresholds, and the basis for mandatory offer triggers.
- Capital adequacy requirement
- The minimum regulatory capital a member-dealer must maintain, calculated against risk exposures and reported periodically to the regulator and exchange.
- Self-regulatory organisation
- An exchange such as the JSE that writes and enforces conduct rules for its members under oversight of the statutory securities regulator.
- Ex-dividend date
- The date from which a buyer of shares no longer receives the declared dividend; the share price typically adjusts downward by the dividend amount.
- Price-earnings ratio
- Market price per share divided by earnings per share; it expresses how many years of current earnings the market is paying for the stock.
- Rights issue
- An offer of new shares to existing holders, usually at a discount, with the theoretical ex-rights price reflecting the resulting dilution.
- Stock split
- A proportional increase in share count with a matching fall in price; market capitalisation and each holder's total value are unchanged.
- Bond price-yield relationship
- Bond prices move inversely to yields; price equals the present value of future coupons and principal discounted at the required yield.
- Market capitalisation
- Shares outstanding multiplied by market price; it measures the total equity value of a listed company and weights capitalisation-based indices.
- Delivery versus payment
- A settlement mechanism in which the transfer of securities occurs only if the corresponding cash payment occurs simultaneously, reducing principal risk.
- Margin call
- A demand for additional collateral when a position's equity falls below the maintenance requirement, to be met within the period specified by the broker.
- Duration
- A measure of a bond's price sensitivity to yield; it approximates the percentage price change for a one percent change in yield.
- Systematic versus unsystematic risk
- Systematic risk affects the whole market and cannot be diversified away; unsystematic risk is company-specific and is reduced by diversification.
- Liquidity risk
- The risk that a position cannot be exited quickly without a material price concession, indicated by wide spreads and thin order-book depth.
- Risk tolerance versus capacity
- Tolerance is the client's willingness to accept volatility; capacity is the financial ability to absorb losses without derailing goals.
- Suitability assessment
- The process of matching a recommendation to a client's objectives, time horizon, risk tolerance, and financial circumstances before advising.
- Conflict of interest disclosure
- The obligation to inform clients of commissions, mark-ups, and other interests that could bias a recommendation or transaction.
- Capitalisation-weighted index
- An index in which each constituent's weight is its market capitalisation divided by the total, so larger companies drive index movements.
- Total return index
- An index that assumes dividends are reinvested, so it rises faster than a price-only index of the same constituents over time.
- Fiduciary duty
- The professional obligation to place the client's interests ahead of the member's own when acting as agent or adviser, including fair dealing.