Tab Content goes Capital Gains Tax (CGT)
A tax on profit made from the disposal of assets over and above their CGT exemption in any one year (applicable to UK residents).
Money from a company’s reserves is converted into issued capital, which is then distributed to shareholders in place of a cash dividend. Also known as a bonus or scrip issue.
A cash payment usually paid out twice a year as an interim and final payment. In the US dividends are generally paid 4 times a year on a quarterly basis.
CDIs (Crest Depository Interests)
These are UK securities representing an underlying interest in an overseas security. For ease, they are settled in the UK & Irish depository CREST.
A paper share certificate, evidencing legal title to a shareholding. It is more and more common to hold shares electronically through a broker’s nominee service.
Change on the day
The difference between the previous days closing price and the current price.
Stands for Clearing House Automated Payment Service – allows you to make a same day withdrawal from your account.
The set of techniques used in technical analysis in which charts are used to plot price movements, volume, settlement prices, open interest, and other indicators, in order to anticipate future price movements. Users of these techniques, called chartists, believe that past trends in these indicators can be used to extrapolate future trends.
The price of a bond without any adjustment for accrued interest.
This is where the settlement date of a sale matches the settlement date of the purchase. This just leaves the loss to be paid for or the profit realised, without the need to pay for the purchase.
The mid price at the time of the close on the previous trading day.
Collective Investment Schemes
These offer investors the ability to spread their risk by investing into just one product along with lots of other investors; the capital generated is then pooled together and invested into a wide variety of equities, bonds, gilts, property etc. One benefit is greater buying power, because all investors’ money is pooled together, which helps lower any potential costs. Examples of these types of investments are Investment Trusts, Unit Trusts and ETFs.
This is the fee charged by stockbrokers for buying and selling shares for customers. When buying shares, commission is added to the total cost, and when selling shares it’s deducted from the amount raised.
A physical substance, such as food, grains and metals.
This is the total amount of the transaction i.e. the amount required to purchase the shares and pay the commission and stamp duty.
Consolidated Tax Certificate (CTC)
A Consolidated Tax Certificate (CTC) details all dividend payments received between the period of April 6th to April 5th of the following year.
Where a company reduces the number of shares it has in circulation by consolidating its share capital.
A contract note details the full title of stock, price, stamp duty (if applicable), consideration, commission, time of deal etc, and is sent no later than the next working day after a transaction is made.
Contracts for Difference
A CFD is a Contract For Difference. The contract is an agreement between broker and a trader to exchange the difference between the share price at the opening and the share price at the closing of a particular trade, so resulting in either a profit or loss. With a CFD, you receive many of the benefits of share ownership (such as dividends and price performance) but you don’t actually own the share. A CFD is a derivative product.
These are bonds that can be converted, at the choice of the bondholder, into the shares of the issuer.
Convertible Preference Shares
These are Preference Shares, which allow the holder to convert them into Ordinary Shares at some date in the future.
A corporate action is an event initiated by a company that affects the shares issued by the company. This includes a wide range of corporate actions, including takeovers, rights issues, demergers, scrip dividends and conversions.
The participant with whom a trade is being transacted.
The annual interest rate paid on a bond. The coupon rate is expressed as a percentage of the nominal (par) value.
Warrants give the owner the “right but not the obligation” to buy or sell an underlying at a fixed price on a future date. The fixed price is known as the “exercise” price, and the future date is known as the “expiry” date. Covered warrants are issued by financial institutions and are “covered” because the institution buys the underlying investments in the market.
CREST is an electronic settlement and registration system, which organises delivery of cash and shares to the right parties, as well as transferring legal ownership of the shares.
Crest transfer form
This is an official form to be used for transferring certificated holdings to a CREST member such as a broker to be held by that CREST member in an electronic format.
Means ‘with dividend’. If you buy a share that is cum dividend, it you have entitlement to the next dividend payment. The dividend will already have been declared (but not paid) and so its value will be reflected in the share price.
Cumulative Preference Shares
A type of share that gives its owner the right to receive a set amount of money as a dividend. If this money cannot be paid in time, it must be paid later, and before any money is paid to owners of ordinary shares.
An organisation which holds client’s assets in safe custody, ensures that they are not released without authorisation, and ensures that timely and accurate collection of dividends, and other actions concerning your stock, are undertaken.here