| |
# |
|
10 K
|
|
See annual report
|
|
10 Q
|
|
See quarterly report
|
| |
A |
|
AAA
|
|
American Arbitration Association
|
|
ACES
|
|
See Advanced Computerized Execution System
|
|
ACT
SM
|
|
See Automated Confirmation Transaction Service
SM
|
|
ADR
|
|
See American Depositary Receipt
|
|
Advanced Computerized Execution System (ACES)
|
|
Customized facility offered by NASDAQ that permits broker-dealers to automate their internal execution and record-keeping functions.
|
|
advertising review
|
|
A regulatory service provided by FINRA to ensure that advertising and sales literature used by members conforms to FINRA and Securities and Exchange Commission standards of fairness and accuracy.
|
|
affirmative obligations
|
|
Requirements imposed on Nasdaq Market Makers by FINRA. These include quoting firm prices, making two-sided markets on a continuous basis, participating in the Small Order Execution System, and reporting price and volume data for each transaction in a Nasdaq security within 90 seconds of execution. (See Market Maker
, Small Order Execution System
, two-sided market
)
|
|
aftermarket
|
|
Trading activity in a security immediately following its initial offering to the public.
|
|
agency order
|
|
An order that a broker-dealer executes for the account of a customer with another professional or retail investor and for which a commission is typically charged. (See principal orders)
|
|
American Depositary Receipt (ADR)
|
|
A U.S. security that is a repackaged foreign security. A U.S. bank creates an ADR based on evidence of ownership of a specified number of shares in the foreign security, while the underlying shares are held in a depositary in the issuing company's home country. U.S. investors may buy shares in the foreign company in the form of an ADR. The certificate, transfer, and settlement practices for ADRs are identical to those for U.S. securities.
|
|
AMEX
|
|
American Stock Exchange.
|
|
Amivest Liquidity Ratio
|
|
The Amivest Liquidity Ratio is one type of liquidity measurement which represents the dollar value of trading associated with a one percent change in share price. Amivest is the "creator" of this liquidity measurement. (See liquidity ratio
)
|
|
analysts
|
|
See securities analyst
|
|
annual report (10 K)
|
|
Public companies are required to file an annual report with the Securities and Exchange Commission detailing the preceding year's financial results and plans for the upcoming year. Its regulatory version is called "Form 10 K." The report contains financial information concerning a company's assets, liabilities, earnings, profits, and other year-end statistics. The annual report is also the most widely-read shareholder communication. (See management's discussion and analysis
)
|
|
answer
|
|
A respondent's written reply to a claim. (See arbitration
, claim
)
|
|
APTC
|
|
See Association of Publicly Traded Companies
|
|
arbitral immunity
|
|
Arbitrators are protected from suits arising out of their quasi-judicial conduct in arbitration proceedings. (See arbitrator
)
|
|
arbitrage
|
|
Arbitrage involves the simultaneous purchase of a security in one market and the sale of it or a derivative product in another market to profit from price differentials between the two markets. (See derivative
)
|
|
arbitration
|
|
A method where conflict between two or more parties is resolved by impartial persons - arbitrators - who are knowledgeable in the areas in controversy. (See mediation
)
|
|
arbitration counsel or arbitration administrator
|
|
The person at the sponsoring organization who handles administrative matters in arbitration proceedings. (See arbitration
)
|
|
arbitrator
|
|
A private, disinterested person chosen to decide disputes between parties. (See arbitration
)
|
|
Arbitrators Code of Ethics
|
|
A guide for the conduct and ethical responsibilities of arbitrators in commercial disputes.
|
|
ask price (offer price)
|
|
The price at which a Market Maker is willing to sell a security. (See Market Maker
, best ask
)
|
|
associated person
|
|
A person engaged in the investment banking or securities business who is directly or indirectly controlled by a FINRA member, whether or not this person is registered or exempt from registration with FINRA. Every sole proprietor, partner, officer, director, or branch manager of any FINRA firm.
|
|
Association of Publicly Traded Companies APTC, formerly NAOTC)
|
|
This organization, which is not connected with FINRA, provides publicly-traded companies with a forum for addressing regulatory and legislative issues that affect them.
|
|
auction market
|
|
Stock exchanges, like the New York Stock Exchange and the American Stock Exchange, are auction markets where buyers and sellers meet through a specialist. (See dealer market
, Market Maker
, specialist
)
|
|
Automted Confirmation Transaction ServiceSM
(ACTSM)
|
|
NASDAQ service that allows parties to a telephone negotiation to speed the steps involved in completing a transaction.
|
|
award
|
|
The written determination of the arbitrator
|
| |
B |
|
bear and bull markets
|
|
A bear market is one in which prices are low or declining; a bull market is one in which prices are high or rising.
|
|
bear market
|
|
See bear and bull markets
.
|
|
beneficial owner
|
|
A person who benefits from ownership of a security or mutual fund. Shares or title may be held by a bank or broker for safety and convenience, or in "street name" to expedite transactions, but the real owner is the beneficial owner. (See street name
.)
|
|
best ask
|
|
The lowest quoted offer of all competing Market Makers to sell a particular stock at any given time. (See Market Maker
.)
|
|
best bid
|
|
The highest quoted bid of all competing Market Makers to buy a particular stock at any given time. (See Market Maker
, bid price
.)
|
|
best-efforts underwriting
|
|
An investment bank, acting as an agent, agrees to do its best to sell an issue to the public, but does not make an outright purchase of the securities. (See underwriter
.)
|
|
best-execution requirement
|
|
The obligation of Market Makers, broker-dealers, and others to execute customer orders at the best price available at the time the trade is entered. (See Market Maker
.)
|
|
beta
|
|
A statistical measure of a stock's volatility compared with the overall market. A beta of less than 1 indicates lower risk than the market; a beta of more than 1 indicates higher risk than the market. (See volatility
.)
|
|
bid price (buy price)
|
|
The quoted bid at which a Market Maker is willing to buy a stock. (See Market Maker
, best bid
.)
|
|
bid/ask spread
|
|
The difference between the price at which a Market Maker is willing to buy a security (bid), and the price at which the firm is willing to sell it (ask). The spread narrows or widens according to the supply and demand for the security being traded. (See inside quote
, spread
.)
|
|
block trade
|
|
A purchase or sale of a large quantity of stock, generally 10,000 shares or more.
|
|
blue-sky laws
|
|
State laws that require issuers of securities to register their offerings with the state before they can be sold to its residents. Most blue-sky laws include provisions relating to fraudulent activities and the licensing of people selling securities. Nasdaq National Market securities, subject to higher qualifications standards, are exempted from registration requirements under most states' blue-sky laws as are those listed on exchanges.
|
|
Board of Governors
|
|
The controlling body of the Financial Industry Regulatory Authority, Inc.
|
|
bond
|
|
A long-term promissory note in which the issuer agrees to pay the owner the amount of the face value on a future date and to pay interest at a specified rate at regular intervals.
|
|
book manager or syndicate manager
|
|
See syndicate manager
.
|
|
branch office
|
|
Any location identified by any means to the public or customers as a location at which a FINRA member conducts investment banking or securities business.
|
|
breakpoint
|
|
The investment level in a mutual fund at which an investor becomes eligible for a discount on the front-end sales charge or load. Typically, there are several breakpoints, and if you invest more and reach each of these thresholds, the greater the reduction in the sales load.
|
|
broker
|
|
An individual or firm who acts as an intermediary between a buyer and seller, usually charging a commission. (See dealer
.)
|
|
broker-dealer
|
|
FINRA firms that act as securities dealers or brokers, or perform both functions. (See broker
, dealer
.)
|
|
bull market
|
|
See bear and bull markets.
|
|
buy price
|
|
See bid price.
|
|
buy-side trader
|
|
An individual, such as a pension or mutual fund portfolio manager, who effects trades for an institutional investor. (See sell-side trader
.)
|
|
by-laws
|
|
See NASD By-Laws.
|
| |
C |
|
CAES
|
|
See Computer Assisted Execution System
|
|
call
|
|
Bonds: The right to redeem outstanding bonds before their scheduled maturity. Options: The right to buy a specific number of shares at a specified price by a fixed date. (See put
)
|
|
capital commitment
|
|
The financial investment Market Makers carry in inventories of stocks in which they make markets. (See Market Maker
)
|
|
Central Registration Depository (CRD)
|
|
A computerized system in which FINRA maintains the employment, qualification, and disciplinary histories of more then 600,000 securities industry professionals who deal with the public.
|
|
Chinese Wall
|
|
A term used to describe procedures enforced within a securities firm that separate the firm's departments to restrict access to non-public, material information. The procedures help FINRA members avoid the illegal use "inside" information.
|
|
churning
|
|
See excessive trading
|
|
circuit breaker
|
|
A procedure that temporarily halts trading on all U.S. stock markets for one hour when the Dow Jones Industrial Average falls 250 points or more within a trading day. The pause is designed to allow time for the markets to absorb the news that precipitated the decline. Should the average fall another 150 points within the same day, trading would again be halted, this time for two hours.
|
|
claim
|
|
A demand for money or other relief. (See arbitration
)
|
|
clearance
|
|
The conclusion of an exchange of securities. (See settlement
)
|
|
co-manager
|
|
See co-underwriter
|
|
co-underwriter
|
|
Almost all public offerings are co-managed by a "co-underwriter." (See underwriter
)
|
|
comfort letter
|
|
An accounting firm's statement provided to a company preparing to go public. The letter indicates the accountants' comfort that unaudited financial data in the company's prospectus consistently follow generally accepted accounting principles, and no material changes have occurred since the report was prepared. (See Generally Accepted Accounting Principles, prospectus
)
|
|
commission
|
|
Fees paid to a broker for executing a trade based on the number of shares traded or the dollar amount of the trade.
|
|
Committee on Uniform Security Identification Procedures (CUSIP) number
|
|
A unique nine-character alpha/numeric code appearing on the face of each stock certificate that is assigned to a security by Standard & Poor's Corporation. The number is used to expedite clearance and settlement. (See clearance
, settlement
, Standard & Poor's
)
|
|
common stock
|
|
A class of securities representing ownership and control in a corporation and that may pay dividends as well as appreciate in value. (See preferred stock
)
|
|
compliance departments
|
|
Departments set up in all organized stock markets to oversee market activity and make sure that trading complies with Securities and Exchange Commission and other Exchange regulation.
|
|
Composite Quotation Service
|
|
See Consolidated Quotation System
|
|
Computer Assisted Execution System (CAES)
|
|
Nasdaq service that automates order routing and execution for securities listed on domestic exchanges in the Intermarket Trading System (ITS). When linked to ITS, Market Makers can execute trades in exchange-listed securities through CAES with specialists on an exchange floor. (See Intermarket Trading System
, Market Maker
, specialist
)
|
|
computer-to-computer interface (CTCI)
|
|
High speed communication interface between large member firms' mainframes and the Nasdaq system for more efficient transfer of information.
|
|
confirmation
|
|
Formal memorandum from a broker to a client giving details of securities transaction. When a broker acts as a dealer, the confirmation must disclose that fact to a customer.
|
|
Consolidated Quotation System (CQS)
|
|
An electronic service that provides quotations on issues listed on the New York and American stock exchanges, regional stock exchanges, and issues traded by FINRA member firms in the third market. Nasdaq processes this data and provides it to its subscribers as the Composite Quotation Service. The initials may be used either for the exchange system or Nasdaq service. (See third market
)
|
|
Consolidated Tape Association (CTA)
|
|
Operating authority for exchange-listed securities information.
|
|
convertible bond
|
|
A bond that can be exchanged at the option of the holder into preferred or common stock at a preset ratio. (See common stock
, preferred stock)
|
|
counterclaim
|
|
A claim against the claimant in an arbitration. (See claim
)
|
|
cooling-off period
|
|
The period after a company's prospectus has been filed with the Securities and Exchange Commission and before offering is made to the public.
|
|
corporate financing review
|
|
A regulatory service of FINRA that ensures the underwriting terms and conditions of public companies are fair and in the interests of the issuing company and its investors.
|
|
corporate governance standards
|
|
The non-quantitative qualification standards for companies whose securities are traded on Nasdaq.
|
|
cost of capital
|
|
The rate that a company must pay for its capital or the minimum return that is required to maintain the market value of a company's common stock. Cost of capital reflects the market's perception of the risk associated with a company's common stock.
|
|
CQS
|
|
See Consolidated Quotation System
|
|
CRD
|
|
See Central Registration Depository
|
|
credit and debit balance
|
|
A credit balance represents monies owed to a customer by a broker-dealer, generally resulting from the customer's sale of securities. Debit balances are monies owed to a broker-dealer by a customer, generally resulting from the customer's purchase of securities.
|
|
credit balance
|
|
See credit and debit balance
|
|
crossed quotations
|
|
See locked or crossed quotations
|
|
CTA
|
|
See Consolidated Tape Association
|
|
CTCI
|
|
See Computer-to-Computer Interface
|
|
CUSIP number
|
|
See Committee on Uniform Security Identification Procedures number
|
|
customer agreement
|
|
See new account information form
|
|
customer protection rule
|
|
An SEC rule that requires broker-dealers to establish separate reserve accounts into which customer credit balances are maintained. The rule prohibits a firm from using customer balances to finance its own trading. The rule also requires firms to gain possession of customers' fully paid and excess margin securities promptly, and to segregate them properly. (See prompt receipt and delivery of securities)
|
| |
D |
|
DBCC
|
|
See District Business Conduct Committee
|
|
dealer
|
|
Any person or company in the business of buying and selling securities for his or her own account, through a broker or otherwise. (See broker
)
|
|
dealer market
|
|
Nasdaq is a competing dealer market, different from an auction market in that many dealers, called Market Makers, use their own capital, research, retail, and/or systems resources to represent a stock. Many Market Makers can represent the same stock; thus, they compete with each other to buy and sell that stock. Auction markets have only one person, a specialist, who in a centralized location or "floor," matches incoming orders to buy and sell each stock. Specialists are not allowed to provide research or retail sales support, and are limited to only one firm's available capital. The average Nasdaq stock has eleven Market Making firms that risk and invest their capital.
|
|
dealer spread
|
|
See house spread
|
|
debenture
|
|
An unsecured bond backed solely by the general credit of a company.
|
|
debit balance
|
|
See credit and debit balance
|
|
deleted
|
|
A security is no longer included in The Nasdaq Stock Market.
|
|
depositary bank
|
|
When a company decides to issue American Depositary Receipts, it appoints an authorized depositary, normally part of a large U.S. banking institution or trust company. (See American Depositary Receipts
)
|
|
depth of market
|
|
The number of shares of a security that can be bought or sold at the bid and ask prices near the market without causing a dramatic change in price. (See liquidity ratio)
|
|
derivative
|
|
A generic term often applied to a wide variety of financial instruments that derive their cash flows, and therefore their value, by reference to an underlying asset, reference rate, or index.
|
|
Digital Interface Service Character Interface Presentation Server (DIS/CHIPS)
|
|
An alternative to Nasdaq Workstation II service for Nasdaq Level 3 users, DIS/CHIPS connects the Nasdaq network directly to a firm's computer system, allowing the firms to customize functionality for its traders.
|
|
direct participation programs (DPP)
|
|
Partnership agreements that provide a flow-through of tax consequences to the participants.
|
|
DIS/CHIPS
|
|
See Digital Interface Service/Character Interface Presentation Server
|
|
discretionary account
|
|
An account empowering a broker or adviser to buy and sell without the client's prior knowledge and consent.
|
|
distribution capability
|
|
An investment banker or underwriter's ability to sell shares.
|
|
dividend
|
|
Distributions to stockholders of cash or stock declared by the company's board of directors.
|
|
dividend notification
|
|
A requirement that companies notify the Uniform Practice Department of The Nasdaq Stock Market at least 10 days in advance of the record date of a stock dividend so that Nasdaq can set the ex-dividend date. (See ex-dividend date
)
|
|
downtick
|
|
A transaction executed at a price lower than the preceding transaction in that security, or a new quote registered at a lower price than the preceding quote in that security. (See uptick
)
|
|
DPP
|
|
See direct participation programs
|
|
due diligence
|
|
A thorough investigation of a company that is preparing to go public, undertaken by the company's underwriter and accounting firm.
|
| |
E |
|
ECN
|
|
See electronic communication network
(ECN)
|
|
EDGAR
|
|
Electronic Data Gathering, Analysis, and Retrieval (EDGAR)--An electronic system developed by the Securities and Exchange Commission. EDGAR permits companies to file electronically with the SEC all documents required for securities offerings and ongoing disclosure obligations. EDGAR became fully operational mid-1995. (See Securities and Exchange Commission
)
|
|
electronic communication network (ECN)
|
|
Any electronic system that widely disseminates to third parties orders entered by an exchange Market Maker or OTC Market Maker, and permits such orders to be executed against in whole or in part. (See Market Maker
)
|
|
eligibility rules
|
|
The Code of Arbitration states that no claim shall be eligible for submission to arbitration where six years have elapsed from the occurrence or event giving rise to the controversy.
|
|
ENC
|
|
Excess Net Capital
|
|
equity
|
|
The ownership interest of stockholders in a company. Also, the excess of the market value of securities over debit balances in a margin account. (See credit and debit balance
, margin
)
|
|
excessive trading
|
|
A broker excessively trades an account for the purpose of increasing his or her commissions, rather than to further the customer's investment goals.
|
|
ex-dividend date
|
|
The date on or after which a security begins trading without the dividend (cash or stock) included in the contract price. (See dividend
, dividend notification
)
|
|
excess spread policy
|
|
A requirement that prohibits Market Makers from entering quotations on The Nasdaq Stock Market that exceed prescribed limits for maximum allowable spreads. (See Market Maker
, spread
, two-sided market
)
|
|
ex parte communication
|
|
Communication by one party only with the arbitrator. (See arbitration
)
|
|
executive sessions
|
|
A private conference between the arbitrators during the course of the hearing to determine matters that have arisen such as evidentiary objections or motions.
|
| |
F |
|
failure to execute
|
|
The failure of a broker to execute an order of his or her customer.
|
|
FAQS
|
|
See Firm Access and Query System
|
|
Federal Reserve System
|
|
A federal government institution created by Congress to administer the nation's credit and monetary policies. Among other things, the Board of Governors of the Federal Reserve System sets the initial amount of credit that broker/dealers (as well as other lenders) may extend to customers to purchase securities.
|
|
filing
|
|
Delivery to the Director of Arbitration of the statement of claim or other pleadings, to be kept on file as a matter of record and reference.
|
|
Financial Industry Regulatory Authority (FINRA)
|
|
The Financial Industry Regulatory Authority, known as FINRA, is the largest non-governmental regulator for all securities firms doing business with the United States public—more than 5,000 firms employing more than 660,000 registered representatives. FINRA was created in 2007 through the consolidation of NASD and NYSE Member Regulation.
|
|
financial printer
|
|
An experienced financial printer that is familiar with Securities and Exchange Commission regulations governing the graphic presentation of a prospectus. (See prospectus
, red herring prospectus
)
|
|
FINRA
|
|
FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business with the United States public—more than 5,000 firms employing more than 660,000 registered representatives.
|
|
Firm Access and Query System (FAQS)
|
|
FINRA system that allows participating members computer access to their registration and examination data maintained in the Central Registration Depository. Members may use FAQS to schedule qualification examinations, and review their CRD accounting, balance and activity. (See Central Registration Depository
)
|
|
firm-commitment underwriting
|
|
See underwriter
|
|
firm quotation
|
|
A requirement that a Market Maker execute an order from another broker/dealer at its displayed Nasdaq price for the normal unit of trading, or for its displayed size, whichever is greater. (See Market Maker
)
|
|
FOCUS
|
|
Financial and Operational Combined Uniform Single Report
(The FOCUS Report is also called Form X-17A-5)
|
|
foreign
|
|
A non-U.S. company with securities trading on The Nasdaq Stock Market.
|
|
Form 10 K
|
|
See annual report
|
|
Form 20-F
|
|
A Securities and Exchange Commission 1934 Act registration statement and annual report form typically used by foreign issuers.
|
|
Form 6-K
|
|
The Securities and Exchange Commission form for non-U.S. issuers to make periodic reports.
|
|
Form F-1
|
|
The Securities and Exchange Commission 1933 Act form registering the securities of a non-U.S. company to be issued as part of a public offering.
|
|
Form U-4
|
|
A uniform application for security industry registration or transfer.
|
|
Form U-5
|
|
A uniform termination notice for security industry registration.
|
|
forum fee
|
|
Fee charged by FINRA (or other forum) for the use of its facilities.
|
|
fourth market
|
|
The direct trading of large blocks of securities between institutional investors through a computer network. (See INSTINET
, third market
)
|
| |
G |
|
GAAP
|
|
See Generally Accepted Accounting Principles
|
|
Generally Accepted Accounting Principles (GAAP)
|
|
Rules, conventions, standards, and procedures that are widely accepted among financial accountants. Since 1973, GAAP doctrine has been established by the Financial Accounting Standards Board (FASB), an independent, self-regulating organization.
|
|
going-concern value
|
|
The value of a company as an operating business to another company or individual. (See goodwill
)
|
|
goodwill
|
|
The going-concern value of a company in excess of its asset value; goodwill is considered an intangible asset. Generally, it is the value of the business' good name, its customer relations, high employee morale, and other factors that might translate into earning power. Nasdaq's calculation of net tangible asset value excludes goodwill. (See going-concern value
)
|
|
Government securities broker
|
|
Any person or company regularly engaged in the business of effecting transactions in government securities for the account of others. The definition does not include corporations that issue securities exempted by the Secretary of the Treasury, corporations that are empowered by law to issue exempt securities, banks or other insured financial institutions.
|
|
green shoe
|
|
A provision in an underwriting agreement that if there is an exceptional public demand, an issuer will authorize additional shares for distribution by the syndicate. (See issuer
, syndicate
, underwriter
)
|
| |
H |
|
held
|
|
A situation where a security is temporarily not available for trading. Market Makers are not allowed to display quotes of held securities.
|
|
house
|
|
A person or company doing business as a broker or dealer in securities, investment banking, or related services.
|
|
house spread
|
|
Among Market Maker firms, the house spread is the difference between the highest price bid for a security, and the highest price asked the difference between best bid and best ask. (See best ask
, best bid
, inside market
, inside quote
)
|
|
hypothecation
|
|
Pledging of securities or other assets as collateral to secure a loan, such as a debit balance in a margin account. (See debit balance
, margin
)
|
| |
I |
|
ICI
|
|
See Investment Company Institute
|
|
ICSD
|
|
See International Councils of Securities Dealers
|
|
individual investor
|
|
A person who buys or sells securities for his or her own account. The individual investor is also called a retail investor or retail shareholder.
|
|
INSTINET
|
|
See The Institutional Networks Corporation
|
|
IOSCO
|
|
See International Organization of Securities Commissions
|
|
initial public offering (IPO)
|
|
A company's first sale of stock to the public. Companies making an IPO are seeking outside equity capital and a public market for their stock. (See syndicate
, underwriter
)
|
|
Industry Support Information Services (ISIS)
|
|
The ISIS system supports all NASD regulatory activities set forth in its charter and the Securities Exchange Act of 1934. The system includes information applications for securities industry personnel and issuer companies, including databases on registered personnel, issues, members, and market data users.
|
|
inside market
|
|
The highest bid and the lowest ask (offer) prices among all Market Makers competing in a Nasdaq security; the best bid and ask prices for a security. (See best bid
, best ask
)
|
|
inside quote
|
|
See inside spread
|
|
inside spread (inside quote)
|
|
The difference between the best bid and best ask among all securities is the highest bid and lowest offer being quoted among all of the Market Makers competing in a security. Since the spread is the aggregate of individual Market Maker spreads, it is narrower than an individual dealer spread or quote. (See Market Maker
, Market Maker spread
)
|
|
institutional investor
|
|
A bank, mutual fund, pension fund, or other corporate entity that trades securities in large volumes. (See also buy-side trader
, fourth market
, qualified institutional investor
)
|
|
Institutional Networks Corporation (INSTINET)
|
|
A computerized service that allows subscribers to display tentative bid and ask quotes. INSTINET registered as a stock exchange with the Securities and Exchange Commission; it supports the "fourth market." (See fourth market
, SelectNet
)
|
|
Intermarket Surveillance Group (ISG)
|
|
A group that coordinates surveillance and investigations among NASD and other U.S. and foreign exchanges trading in securities, options, and futures and foreign securities. (See market surveillance
)
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|
Intermarket Trading System (ITS)
|
|
A computer system that interconnects competing exchange markets for the purpose of choosing the best market. ITS is operated by Securities Industry Automation Corporation (SAC). (See Computer Assisted Execution System
)
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International Councils of Securities Dealers (ICSD)
|
|
An international organization of self-regulatory and securities-industry organizations. ICSD seeks to foster mutual understanding among members, and to promote stable and efficient securities markets.
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|
International Organization of Securities Commissions (IOSCO)
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IOSCO attempts to harmonize international securities regulation, and supports the development of securities markets around the world.
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international linkages
|
|
Intermarket connections of world securities markets.
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Investment Company Institute (ICI)
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|
The U.S. trade association for the mutual fund industry. Investment companies create and maintain mutual funds and investment trusts.
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|
investment banking, securities business
|
|
The business carried on by a broker or dealer; a business that deals in government or municipal securities; a business that underwrites or distributes securities issues; a business that buys or sells securities for itself or on the account of others. The definition does not include banks or bank departments. (See underwriter
)
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|
investor
|
|
A person who buys or sells securities for his or her own account or the account of others. (See individual investor
, institutional investor
)
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IPO
|
|
See initial public offering
|
|
ISG
|
|
See Intermarket Surveillance Group
|
|
ISIS
|
|
See Industry Support Information Services
|
|
issuer
|
|
A corporation that has distributed to the public securities registered with the Securities and Exchange Commission.
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|
ITS
|
|
See Intermarket Trading System
|
|
ITS/CAES
|
|
See Intermarket Trading System
/Computer Assisted Execution System
|
| |
L |
|
last-sale service
|
|
A service that allow real-time access to last-sale information reported by Market Makers. (See last-sale reporting
)
|
|
last-sale reporting
|
|
The electronic notification by a Market Maker to The Nasdaq Stock Market of the price and the number of shares involved in a transaction in a Nasdaq security. The notification must be made within 90 seconds of the execution of an order.
|
|
letter of intent
|
|
A letter that formalizes the relationship between an underwriter and a company preparing to go public. The letter of intent outlines the underwriter fees, ranges for stock prices, and other terms of the underwriter's agreement. (See underwriter
)
|
|
limit order
|
|
An order to buy or sell a security at a customer-specified price; a customer order to buy or sell a specified number of shares of a security at a specific price. (See stop-loss order
)
|
|
limit-order file
|
|
A file maintained as a feature of Nasdaq's Small Order Execution System that stores customers' unexecuted limit orders. (See limit order
)
|
|
liquidity
|
|
The liquidity of a stock is the ease with which the market can absorb volume buying or selling, without dramatic fluctuation in price.
|
|
liquidity ratio
|
|
A measure of the trading volume of a security associated with a 1 percent change in its price. The higher the ratio, the more shares that can be traded with little change in price. (See Amivest Liquidity Ratio
)
|
|
listing and maintenance agreement
|
|
A written contract between a securities market and an issuing company. In it, the issuing company agrees to meet and maintain the market's qualitative and quantitative listing standards.
|
|
locked or crossed quotations
|
|
A temporary and unusual condition where the ask (offer) price of one Market Maker for a security is the same or lower than the bid (buy) price of another Market Maker. Locked or crossed quotations may occur in fast-moving markets. (See ask price
, bid price
, Market Maker
)
|
|
locked-in trade
|
|
A securities transaction in which all of the terms and conditions of the trade are accepted by the buyer and seller. Once a transaction is locked in, last-sale reporting to Nasdaq and reporting to the clearing corporation are processed electronically. (See last-sale reporting
)
|
| |
M |
|
Maloney Act
|
|
Also called the Maloney Amendment, provides for the regulation of over-the-counter securities markets through national associations registered with the Securities and Exchange Commission. The Act was passed in 1938 to add Section 15A to the Securities Exchange Act of 1934.
|
|
management's discussion and analysis (MD&A)
|
|
An interpretive section of a prospectus and annual report, also called the Financial Review.
|
|
managing underwriter
|
|
See syndicate manager
|
|
margin
|
|
An account in which a customer purchases securities on credit extended by a broker-dealer. Rules of the Federal Reserve Board and FINRA govern margin accounts. (See Regulation T
)
|
|
markdown and markup
|
|
A markdown is a charge subtracted from the selling price of a security that a customer is selling to a dealer-broker for the broker's-dealer own account. The broker-dealer adds a markup to the price when it sells a security to a customer from its own account. The markdown or markup are the equivalent of a commission on the sale.
|
|
market capitalization
|
|
The price of a stock multiplied by the total number of shares outstanding. Also, the market's total valuation of a public company.
|
|
market depth
|
|
See depth of market
|
|
Market Information Data Access System (MIDAS)
|
|
Computer system that supports FINRA market regulation and examination programs by providing historical data on Nasdaq over-the-counter quotation and trading volume.
|
|
Market Maker
|
|
A firm that maintains a firm bid and offer price in a given security by standing ready to buy or sell at publicly-quoted prices. The Nasdaq Stock Market is a decentralized network of competitive Market Makers. Market Makers process orders for their own customers, and for other broker-dealers; all Nasdaq securities are traded through Market Maker firms. Market Makers also will buy securities from issuers for resale to customers or other broker-dealers.
|
|
Market Maker spread
|
|
The difference between the price at which a Market Maker is willing to buy a security and the price at which the firm is willing to sell it. (See inside market
)
|
|
market order
|
|
An order to buy or sell a stated amount of a security at the best possible price at the time the order is received in the marketplace.
|
|
market surveillance
|
|
A highly automated, centralized process of investigating and preventing abusive, manipulative, or illegal trading practices in The Nasdaq Stock Market. The Market Surveillance Department is called Market Regulation.
|
|
market value
|
|
The market value of a security is the last-sale price multiplied by total shares outstanding. It is calculated throughout the trading day, and is related to the total value of the index. (See last-sale reporting
)
|
|
material news
|
|
News released by a public company that might reasonably be expected to affect the value of a company's securities or influence investors' decisions. Material news includes information regarding corporate events of an unusual and non-recurring nature, news of tender offers, unusually good or bad earnings reports, and a stock split or stock dividend. (See trading halt
)
|
|
MBARSSM
|
|
See Municipal Bond Acceptance and Reconciliation Service
|
|
MD&A
|
|
See management's discussion and analysis
|
|
mediation
|
|
An informal, voluntary process used in securities industry disputes in which a mediator helps negotiate a mutually-acceptable resolution between disputing parties. Unlike arbitration or litigation, mediation does not impose a solution. If the parties cannot negotiate an acceptable settlement, they may still arbitrate or litigate their dispute. (See arbitration
)
|
|
MIDAS
|
|
See Market Information Data Access System
|
|
misrepresentation
|
|
A false representation of a matter of fact that should have been disclosed, which deceives another so that he/she acts upon it to his/her injury.
|
|
most active
|
|
Most active Nasdaq National Market stocks.
|
|
motion
|
|
An application made to the arbitrator(s) for the purpose of obtaining a rule or order directing some act to be done in favor of the applicant.
|
|
MSRB
|
|
Municipal Securities Rulemaking Board
|
|
multiple
|
|
See price/earnings ratio
|
|
Municipal Bond Acceptance and Reconciliation Service (MBARSSM)
|
|
Service designed to eliminate submission of trade-data paperwork to the clearing corporation and to assist in the comparison and clearing of municipal bond, over-the-counter corporate bond, and unit investment trust trades.
|
|
Municipal bonds
|
|
Bonds issued by states, cities, counties, and towns to fund public capital projects like roads, schools, sanitation facilities, bridges, as well as operating budgets. These bonds are exempt from federal taxation and from state and local taxes for the investors who reside in the state where the bond is issued.
|
|
Municipal securities
|
|
See Municipal bonds
|
|
Municipal securities broker
|
|
A broker engaged in the business of effecting transactions in municipal securities for the account of others. Banks are not included in this definition.
|
|
Municipal securities dealer
|
|
Any person, except a bank or department or division of a bank, engaged in the business of buying and selling municipal securities for his own account. Banks are not included in this definition.
|
|
mutual fund
|
|
A pool of money invested by an investment company in a number of securities like stocks, bonds, or government securities. Each mutual fund is different in its make-up and philosophy. Because most mutual funds invest in a large number of securities, they offer investors the benefit of diversification, which can help reduce market risk.
|
| |
N |
|
NAC
|
|
See National Adjudicatory Council
|
|
NASAA
|
|
See North American Securities Administrators Association, Inc
.
|
|
NASD
|
|
NASD, originally known as the National Association of Securities Dealers, was established in 1939 under the Securities and Exchange Act of 1934. Until 2007, when it consolidated with NYSE Member Regulation to create FINRA
, the Securities Industry Regulatory Authority, NASD was the largest self-regulatory organization for the U.S. securities industry, and the world’s leading private-sector provider of financial regulatory services.
|
|
NASD Rules
|
|
The numbered rules set forth in the NASD Manual beginning with the Rule 0100 Series.
|
|
NASD By-Laws (Marketplace Rules)
|
|
The basic rules and regulations that govern NASD. Attached to the By-Laws are Schedules:
Schedule A - NASD assessments and fees
Schedule B - NASD district boundaries.
Schedule C - Registration and examination qualification requirements.
Schedule D - Participation in the Nasdaq market by issuers and members.
Schedule E - Requirements for distributing a public offering.
Schedule G - Procedures for reporting over-the-counter transactions.
Schedule H - Procedures for reporting and trading non-Nasdaq over-the-counter securities.
Schedule I - Rules governing all aspects of The PORTALSM Market.
|
|
Nasdaq CompositeSM
Index
|
|
A statistical measure that indicates changes in The Nasdaq Stock Market. The Nasdaq Composite Index measures all Nasdaq domestic and foreign common stocks. It is market-value weighted: each company's security affects the index in proportion to its market value. Securities in the Nasdaq Composite Index generally are assigned to subindexes based on their Standard Industrial Classification (SIC) codes. (See |
