JSE CSC key terms

The regional stock exchange that operates trading platforms for securities issued by companies and governments across participating Caribbean jurisdictions, providing listing, trading, clearing, and market-information services to member territories.

A firm licensed to execute buy and sell orders on behalf of clients and, where permitted, trade for its own account, earning commissions or spreads while carrying obligations for client suitability and record keeping.

An entity that holds securities in electronic book-entry form, transfers ownership by updating accounts rather than moving certificates, and supports settlement of trades between participants in the market.

The agreed period between trade execution and final transfer of cash and securities, typically expressed as T plus a number of business days, within which both legs of the transaction must be completed.

A settlement arrangement in which transfer of securities occurs only if the corresponding cash payment is made simultaneously, reducing the risk that one party delivers without receiving the counterpart value.

An institution that reconciles orders between trading parties, confirms obligations, and in some markets becomes the legal counterparty to each side, managing default risk through margins and guarantee funds.

The process by which a clearing house interposes itself between buyer and seller, replacing the original bilateral contract with two new contracts so that each party faces the clearing house instead of the other.

The written or electronic record capturing a client instruction, including security, side, quantity, price limits, account, time received, and executing representative, used for compliance and audit purposes.

An instruction to buy or sell a security immediately at the best price available in the market, with no price guarantee, so execution is certain but the final price may differ from the quoted level.

An instruction to trade only at a specified price or better, meaning a buy executes at the limit or lower and a sell at the limit or higher, with no assurance that execution will occur.

The difference between the highest price a buyer is willing to pay and the lowest price a seller will accept, representing a transaction cost and a gauge of market liquidity for the security.

A participant that continuously quotes buy and sell prices for assigned securities, providing liquidity and earning income from the spread while accepting inventory risk on positions held.

The ease with which a security can be bought or sold in volume without materially moving its price, influenced by trading activity, spread width, and the number of willing counterparties.

Minimum standards an issuer must satisfy to have securities admitted to trading, covering matters such as financial history, public float, shareholder numbers, governance, and ongoing disclosure obligations.

A formal disclosure document issued in connection with a public offering that describes the issuer, its business, financial position, risks, and the terms of the securities being sold to investors.

The obligation of a listed issuer to keep the market informed after listing through timely reports of financial results, material developments, and governance changes, supporting fair and informed trading.

Any fact a reasonable investor would consider important in deciding whether to buy, hold, or sell a security, including events that could reasonably affect its market price.

Trading securities while in possession of material non-public information obtained through a relationship of trust, or communicating such information to others who trade on it, which is prohibited by securities law.

Prohibited conduct that undermines market integrity, encompassing insider dealing, unlawful disclosure of inside information, and manipulation such as false orders or misleading transactions designed to distort prices.

Deliberate conduct intended to distort the price or supply of a security, for example wash trades, spoofing, or disseminating false information, thereby misleading other participants in the market.

A transaction, or pair of offsetting transactions, in which beneficial ownership does not genuinely change, executed to create an appearance of trading volume or to influence the quoted price.

The due-diligence process by which a financial firm verifies a client's identity, address, and business profile before opening an account, forming the basis for anti-money-laundering monitoring and reporting.

The framework of laws, procedures, and controls requiring financial institutions to detect, record, and report transactions that may involve proceeds of crime, including suspicious activity reporting and staff training.

A confidential filing made by a regulated institution to the financial intelligence unit when it knows, suspects, or has reasonable grounds to believe that funds relate to criminal conduct or terrorist financing.

The natural person who ultimately owns or controls a client or the funds involved in a transaction, identified through ownership thresholds or control tests rather than by the nominal account holder's name.

The evaluation a firm performs to confirm that a recommended investment fits a client's objectives, risk tolerance, financial circumstances, and knowledge, documented before or at the time of recommendation.

A client's willingness and financial capacity to accept fluctuations in investment value, a key input in asset allocation and in judging whether a particular product is appropriate for the account.

Spreading investment across different issuers, sectors, and asset classes so that poor performance in any single holding has a limited effect on the overall portfolio's value.

A pooled investment vehicle that raises money from many investors and invests according to a stated mandate, issuing redeemable units whose value is based on the fund's net asset value.

The value of a fund's assets minus its liabilities, divided by the number of units outstanding, typically calculated at least daily and used as the basis for subscriptions and redemptions.

A debt security under which the issuer promises to pay interest, usually at a fixed rate, and to repay principal on a stated maturity date, giving the holder a creditor claim on the issuer.

The annualized return an investor would earn by holding a bond to maturity, assuming all coupons are reinvested at that same rate and the issuer pays all amounts as scheduled.

An independent assessment of an issuer's or debt issue's ability to meet obligations, expressed on an alphanumeric scale, used by investors to gauge default risk and by regulators for capital purposes.

The exposure of a fixed-income investment to losses when market interest rates rise, since existing bonds with lower coupons fall in price to offer yields competitive with new issues.

The possibility that the other side of a transaction fails to honor its obligations, whether by not paying, not delivering securities, or defaulting before settlement is completed.

A short-term funding arrangement in which one party sells securities and agrees to buy them back at a set price and date, functioning economically as a collateralized loan.

The minimum cash or collateral an investor or clearing participant must deposit to support a position, set by regulation or the clearing house to cover potential losses on adverse price moves.

A demand from a broker or clearing house for additional funds or collateral when the value of pledged assets falls below the required level, which if unmet may trigger forced liquidation.

The use of borrowed funds or margin to increase the size of an investment position relative to the capital committed, magnifying both potential gains and potential losses.