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Definitions NZX Flashcards

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1
Q

Accrual

A

an adjustment to settlement terms of a trade or contract arising from a benefit, call or instalment payment, entitlement or right which arises while a trade or contract remains unsettled.

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2
Q

Acting as principal

A

A Market Participant acting in a transaction where they are the beneficial owner of part or all of a security at any point in the transaction

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3
Q

Adjust Session

A

A phase after NZX Close that lasts for 30 mins where dealers can:
- Adjust the prices and volumes of orders providing it does not improve a dealers position in the market
- May withdraw but not enter orders
- No orders will be matched

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4
Q

AFSL

A

Australian Financial services Licence

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5
Q

Agent

A

An individual authorised by a managing principal or a responsible executive of a market participant to act on their behalf from time to time

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6
Q

Alternative Regulator

A

A regulatory body other than NZX that is established under NZ law or another jurisdiction whose function is or includes prudential supervision

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7
Q

American Depository Receipt

A

A receipt for the Securities of an entity whose securities are listed or Quoted on a market provided by the NZX which are held in the vault of a United States bank

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8
Q

AML Legislation

A

The Financial Transactions Reporting Act 1996 and the Anti-Money Laundering and Countering Financing of Terrorism Act 2009

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9
Q

Anonymous Call Auction Session

A

A phase of the market which is a Pre-Opening Session with the exception that only the best Bids and Offers or non Bids and Offers will be displayed and will be on an anonymous basis

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10
Q

Approved Organisation

A

An organization approved by NZX to be a market participant

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11
Q

Arbitrage

A

The sale or purchase of a Financial Instrument in one market and the taking of an equal and opposite position in a similar instrument in another market to provide a profit

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12
Q

AUD

A

The lawful currency of Australia

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13
Q

Authorisation Code or FIN

A

an alpha numeric identifier issued by NZX, an issuer or a Securities Registry, to a Security holder that provides authority to access the shareholders account in the securities registry

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14
Q

Bank Only Participant

A

A bank that is designated and approved as a Trading Participant in the NZDX only and that may Trade in that market either on its own account or on behalf of its clients

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15
Q

Base Currency

A

NZD

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16
Q

Beneficial Owner

A

The underlying beneficial owner of a Security

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17
Q

Best Execution

A

Using the best endeavours to obtain for a client the best available price for the size and kind of transaction concerned relative to the instructions received from that client

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18
Q

Best Mid-Point

A

(Best available bid + Best available Offer)/2 and not limited to the standard price steps

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19
Q

Bid

A

The price or yield of a security to be purchased

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20
Q

Broking Business

A

Trading in securities or Giving investment advice or any other business performed by a market participant which relates to Securities and impacts the financial position of the participant

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21
Q

Buying clearing participant

A

The clearing participant providing clearing and settlement services to the Buyer under a Trade

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22
Q

C&S Rules

A

CHO’s Clearing and Settlement rules

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23
Q

C&S Agreement

A

A clearing and settlement agreement that a Trading Participant must enter into and maintain with each of its clearing participants

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24
Q

Call Option

A

An option where the buyer has the right but not the obligation to acquire a commodity or futures contract

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25
Capital Adequacy
The requirement for a market participant requiring capital to have sufficient funds
26
Churning
The practice of excessive trading in financial securities on or for the account of a client in order to enable a participant to earn maximised commission
27
CDO
New Zealand Depository Limited
28
CHO
New Zealand Clearing LImited
29
Clearing and Settlement Obligations
An obligation imposed on a Clearing Participant under C&S Rules
30
Clearing and Settlement Terms
The rights and obligations of the Buyer or Seller under a trade as Principal
31
Client Advising Firm
An NZX Trading and advising Firm or an NZX Advising firm or a Bank only participant or any approved organisation designated as a client advising participant
32
Client Funds
The funds given by a client to a market participant accepting client assets to be held by that market participant accepting client assets in its client funds account
33
Close
The market phase as determined by NZX during which time trades are created from matching orders in accordance with Rules 11.6 12.6 14.6 or 22.7.6
34
Closing market price
the last traded price at the end of a Trading Day
35
Commodity
Any property, right or asset and includes financial product, a Security, Emissions Unit, electricity and Money in any currency but excludes any property or right in a Derivatives Contract
36
Common Shareholder Number
A unique alphanumerical identifier that uniquely identities that security holder on all Securities registries and to NZX
37
Company
A company registered or re-registered under the Companies Act 1993
38
Conventional sale
Any sale of securities that is not a short sale
39
Counterparty
In respect to a transaction to which a market participant requiring capital is a party, another party to that transaction
40
Crossing
A transaction where a trading participant acts as; Buyer and seller for that transaction in an agency capacity, Buyer or seller on one side of that transaction in an agency capacity and as a trading participant as principal on the other side
41
Current Market Price
The last traded price of a security at any given time
42
Custody Account
A client account for which the client is the beneficial owner of the securities and the market participants nominee company is the legal owner of the securities in the account or the securities are held in a depository account in the name of the market participants nominee company and the market participants nominee company is accountable to the client in respect to those securities
43
Dealer
A person who has been accredited and approved by NZX as a Dealer to use the trading and reporting functionality available in the trading system, including entering, withdrawing or amending Orders Bids and or Trades on behalf of a trading participant
44
Direct Client Order Processing or DCOP
The process by which an Order is submitted by a DMA Authorised Person directly into the Trading system via the order entry system of a Trading Participant without being re-keyed by a Dealer of that Trading Participant
45
Discretionary Account
An account for which a Client Advising Participant buys and or sells securities without prior reference to the client
46
Enquiry Session
The market phase during which time no Bids or Offers can be entered, amended or withdrawn in the trading system
47
Execution Only Order
An order executed by a client advising participant upon the specific instructions of a client or other authorised person where no advice has been provided as to the merits of the transaction
48
Forward Rate Agreement
An agreement where two parties agree that a) one party will make payments to the other party of an amount of interest for a specific period in respect to an agreed principal amount. b) no commitment is made to lend or borrow the principal amount. c) the exposure is limited to the difference between the agreed and actual market interest rates at settlement
49
Good Broking Practice
Conduct that is in the wider interests of the markets operated or provided by NZX
50
Institutional Client
A person whose principle business is the investment of money or who in the course of and for the purpose of their business, habitually invests money, and in relation to purchases of its own securities includes an issuer
51
In the Money
In relation to call options or rights, that the current market price of the underlying instrument is greater than the exercise price and in relation to put options, that the current market price of the underlying instrument is less than the xercise price
52
Investment Grade
A security with a credit rating that is BBB- or higher by Standard and Poor's or Baa3 or higher by Moody's or BBB(low) or higher by DBRS
53
Market Maker
A person who has been designated by NZX as a Market Maker and maintains firm Bids and Offers by standing ready to buy and sell at quoted price/yields on a continuous basis during the periods that the relevant markets provided by NZX are open
54
Negotiated Deal
An off market trade between two trading participants acting as principal or acting as an agent
55
Normal Trading Session
A phase of the market as determined by NZX during which Bids and Offers may be entered and if opposing prices/yields match or overlap, a trade will automatically be executed
56
Offer
The price or yield of securities to be sold
57
Off Market Trade
Any transaction between trading participants in securities quoted on a securities market operated or provided by NZX effected outside the Trading System and includes a crossing
58
One Off Sale
A one off request received by a Client Advising Participant from a person to sell all of that persons holdings in securities quoted on a market operated by NZX or another recognised securities exchange that does not result in an ongoing relationship being created between that client advising participant and that person
59
Opening Market Price
The price/yield of that first Trade for each Security to be determined at the Opening Order Match Period at the beginning of each trading day
60
Opening Order Match
A phase of the market as determined by NZX immediately following a Pre-Opening Session, where Trades are created from matching Orders using a pre set algorithm when prices/yields overlap
61
Order
An instruction to purchase or sell securities or and instruction to amend or cancel a previous order
62
Pre-Close Session
The market phase following the close of the Normal Trading Session and prior to the commencement of the Close during which Dealers and DMA Authorised Persons may deal in securities
63
Pre-Opening Session
A phase of the market as determined by NZX during which Bids and Offers may be entered, amended or removed, but during which Trades will not be created when Price/Yields meet or overlap
64
Prescribed Person
Either; an Employee of a market participant, their immediate family, a family company, trust, company, body corporate or other entity controlled by them
65
Principal
An individual who is, a partner director or shareholder of an NZX firm, or of 20% of the issued capital of an NZX firm.
66
Principal Account
The account of a trading participant established for the purpose of acting as principal trading
67
Quoted
Securities of an issuer that are approved for trading on a market operated or provided by the recognised securities exchange
68
Spread
The difference between a Bid and Offer price for a security
69
Swap
A transaction where two parties agree to exchange streams of payments over time on a pre-determined basis
70
Trade
Any transaction where an order to buy securities is matched with an order to sell securities in the trading system
71
Trade with price improvement
An Off Market transaction where the transaction is executed at a price which is higher than the best available bid and lower than the best available offer by more than one or more price steps or at the best mid point
72
Trading Participant
Either an NZX Trading and Advising firm, a Principal only book dealer or a bank only participant

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