Found:  42 Items

Capital Appreciation

An increase in the market price of an asset.

Capital Gains

The appreciation in value of an asset, that is, when the selling price is greater than the original price at which the security was bought. The tax rate on capital gain depends on how long the security was held.

Capital Gains Tax

Capital gains tax is the tax to which the individual is liable on realised capital gains accruing in a year of assessment, during any part of which the individual is resident in the UK. If your assets are invested in a collective investment vehicle, they are managed free of capital gains . You may be subject to capital gains if you decide to sell your shares. The annual exemption, as at the tax year 2000/2001, currently stands at £7,200. The total of your capital gains from sales of all liable investments will be free of capital gains tax if the total gains fall within each year's annual allowance. Any gains in excess of the annual exemption will be subject to capital gains tax. The calculation has previously taken into account the change in the Retail Prices Index from the time of purchase to the time of sale, or from 31st March 1982 in the case of shares bought before that date. However, this indexation allowance was frozen at 5th April 1998, and has been replaced by a taper relief. Therefore, from 6th April 1998, chargeable gains are reduced according to how long the investment has been held. The value of any tax relief will depend on your individual circumstances. The levels and bases of, and reliefs from, taxation may be changed by future legislation. If you are in any doubt about your tax position, you should see your financial Advisor. risks in the same way as back-to-back loans.

Capital Growth

see Capital Gains

Capital Markets

Market in long term debt instruments (more than one year).

Capitalisation Issue

This is the issue by a company of new shares which, because they become fully paid up immediately on issue out of the company's existing reserves, do not require any payment from the shareholders as in a rights issue. This is a method which has the effect of making the company's shares more marketable because of the increased number available and their lower market price. The practice in a capitalisation issue is to make a bonus issue to existing shareholders which is in proportion to each investor's current shareholdings. Therefore, although the number of shares held by each shareholder increases, his or her proportion of the company's capital after the scrip issue is unchanged and the value of the total holding remains much the same.

Cash Management System

Method of managing cash that allows it to be invested and income-producing until the day it is actually needed. Cash management oriented mutual funds are those which invest in short-term, highly liquid money market instruments.

Central Bank

Most countries have a central bank. Each differs a little from the others in the range of its activities, in the powers and techniques it can use, and in its relationship with its government, but all serve as bank to their country's government and to its banking system. It is through the interplay of these two roles in controlling the cost and availability of money and credit that central banks play a key part in the monetary management of an economy. In addition, many central banks are responsible for the overall stability of their country's financial system. The UK's central bank is the Bank of England. In Germany, it is the Bundesbank and in the US, the Federal Reserve System (the Fed).

Central Provident Fund

Compulsory pension fund in Singapore to which all employees are required to contribute.

Charitable Fund

A fund designed for charities recognised by the Inland Revenue to invest in. The fund may be invested in a broad spread of shares in which case it can pay out its income distributions without deduction of tax or in Government securities and other fixed interest stocks and deposits.


Occurs when sales agents urge a client to engage in a rapid and sustained buying and selling of investments. It is a lucrative practice because agents earn commission on each transaction. It is also often illegal.

City ; The

Financial district of London, traditionally concentrated in the City of London, or Square Mile; the UK equivalent of Wall Street; used as a synonym for UK financial markets.


Process of calculating what market participants owe each other, usually on a net basis, for the exchange of securities and money. Process of transferring securities on the date a transaction is to settle.

Clearing House Automated Payment System

Computerised payment system for clearing cheques in the UK.


An institution where mutual claims are settled between accounts of member depository institutions. Clearinghouses among banks have traditionally been organized for check-clearing purposes, but more recently have cleared other types of settlements, including electronic fund transfers.

Client Relationship Management

Those aspects of a business strategy which relate to techniques and methods for managing customer relationships in an organised way (i.e. methodologies, software and internet capabilities).

Closed End Fund

Fixed capital structure. Variations in demand for the shares of the fund are reflected in movements in their market prices and not by an expansion or contraction in their supply.

Collective Investment Vehicle

These include Unit Trusts, Investment Trusts and OEICs (Open Ended Investment Companies). They provide a method of investing in a variety of companies and often have a sectoral or geographical theme.


A fee charged by an agent making transactions of buying or selling securities for another individual. This fee is generally a percentage based on either the number of stocks bought or sold or the value of the stocks bought or sold.


The process of tracking, monitoring and setting up trading restrictions and rules.

Compliance Department

The department within a brokerage firm that oversees the trading and market-making activities of the firm.


The number of different shareholdings in a portfolio. The fewer held, the more concentrated the holding is said to be.

Confirmation (also Trade Confirmation)

Written notification, from a broker to a client, that summarizes the details of a securities transaction. Some details include the security's name, number of shares, price and whether the broker acted as principal or agent.

Conversion Shares

Cconversion Shares (or C Shares) are a method of raising new funds without penalising existing shareholders. The new money raised is maintained as a discrete pool which is kept separate from the existing fund for a specified period and all the expenses of the issue and all the costs of investment are borne by those subscribing for the new shares. The Conversion shares are only converted into ordinary shares when nearly all the new money is invested; at this point, the holders of the 'C' shares are offered new ordinary shares at the combined net asset value of the enlarged trust.

Convertible Loan Stocks

Fixed interest loans which may be converted into ordinary shares in the trust at a future date. The terms of conversion are fixed at the date of the issue of the loan. The intention is to give the investor a yield higher than that on the company's ordinary shares at the date the convertible is issued, together with the opportunity to benefit from the company's capital growth. Corporation tax The tax chargeable on the profits of a UK company. Investment trusts can often quite properly reduce or eliminate the amount of their liability depending on the structure of the individual company and the investment policy of its directors. This widens the appeal of investment trusts to pension funds, charities and similar bodies not liable to corporation tax an their capital gains. Approved investment trust companies are exempt from corporation tax on their capital gains.

Convertible Securities

Corporate securities (usually preferred stock or bonds) that are exchangeable into a fixed number of shares of common stock at a stipulated price. Convertibles may also be exchanged into other forms of the security, but it is unusual. Convertible securities are usually bought by investors who want higher income than what can be received from common stock combined with a greater potential for appreciation than what can be received from regular bonds. A corporation will issue convertibles to enhance the marketability of their securities.

Corporate Action

Any event initiated by a corporation that impacts its shareholders. Some Corporate Actions may affect only one security issued by the issuer; others may affect many or all of the securities issued. Corporate Actions can pertain to either equity or debt securities, although there are some differences in the action types that apply to each. Some corporate actions are mandatory, others are voluntary. A mandatory action is one in which the holder of the security has no choice regarding the change in status of his or her shares. Most mandatory actions happen automatically, with no action required on the part of the holder. A stock split is an example of a mandatory action. A voluntary action is one in which the holder has a choice to make about how the action will affect the status of his or her shares. Usually, there is some action required on the part of the holder in order to participate in the action.

Corporate Actions System

System that streamlines and controls corporate event activity. In other words, it autometes the routing of corporate actions messages within an organisation, ensuring that they are responded to efficiently and in time.

Corporate Finance

Advising, arranging finance, and underwriting finance for major corporations.

Corporate Treasury

Treasury operations run within large corporations.


Party to a trade

Credit Rating

Assessment of an individual's or corporation's credit history and ability to pay its obligations. There are several firms that investigate, analyze, and maintain records on the credit status of individuals and businesses--for example, Equifax for individuals, and Dun & Bradstreet for commercial firms. Standard & Poor's and Moody's assign ratings to bonds. In rating the bonds, credit worthiness is an important factor.

Credit Risk

The possibility that a bond issuer will default, i.e. fail to repay principal and interest in a timely manner. Also called default risk.


The new settlement system for the securities industry in the UK introduced in July 1996.

CRM Analytics

All programming that analyses data about a company’s customers and presents it so that better and quicker business decisions can be made.


When referring to loan stock or shares, cumulative means that, if the payment due for one period is missed, those securities must be given priority when the next payment is made, and arrears of the missed amounts must be paid before any dividend can be paid on the ordinary shares. Cumulative preference shares and cumulative unsecured loan stock (CULS) are often mentioned.

Cumulative Return

The percentage movement in the value of the shares or units in a fund over a period of time. It is calculated as the change in the value of your investment divided by the initial investment amount, expressed as a percentage. For example, if you have invested $10,000 on 1 January 2000 and the investment is worth $13,000 on 30 June 2003, the cumulative return on your investment over this 2.5 year period is ($13,000-$10,000) / $10,000 = 30%. CUMULATIVE RETURN is also sometimes referred to as Total Return.

Currency Exposure

The net effect in terms of exposure to a currency after taking into account the equity investment, bonds and net cash held in that currency, deducting any prior capital and loans in that currency and adjusting for the effect of any forward exchange or hedging commitments involving that currency.

Currency Swap

An arrangement between two parties by which both parties exchange currencies based on current rates of exchange and agree to exchange them at the same rates at a specified future date. Swaps are used to overcome or to minimise currency risk.


An organization, usually a bank, which holds and administers securities and financial instruments on behalf of others.


Legal responsibilities for the assets of another person.

Customer Relationship Management

see Client Relationship Management