Markets Flashcards
Unit trusts & mutual funds difference to ETFs
Unit trusts and mutual funds priced on underlying NAV from end of each day.
ETFs traded live on exchanges so price not based on NAV alone
Generally, ETFs lower fees as more passive
What are unit trusts
Open ended collective investments funds. Classed as trust not company
What is SETS vs SETSqx and SEAQ
LSEs online trading system.
Order driven system
SETSqx and SEAQ for less liquid stocks - they are quite driven
Example of a quote driven market
Bonds market, SEAQ
Needs market maker
Example of order driven market
LSE Equities - matches buyer and seller orders
What is order driven market
All trades go through a central order book which matches buyer and seller orders. Example - LSE equities
What is quote driven market
Needs market makers who set buy and sell prices of securities
Traders vs brokers?
Traders employ brokers to make trades for them. The brokers cover fees which are settled post trade
Standard conditions to list on a market
- publish approved listing particulars or prospectus
- have published accounts for 3 years
- at least £30 million for shares or £200,000 for debt
- 10% of shares held publicly on date of admission
- demonstrate sufficient working capital
- need a sponsor
Requirements to list on AIM
- no minimum company size, trading record or number of shares held publicly
- need a nominated advisor
Requirements to list on ASQE
- have an ASQE corporate advisor
- at least 24 months audited accounts
- 10% of shares already held publicly
- demonstrate appropriate corporate governance along with minimum one independent non-executive director.
Settlement times
Equities - t+2
Gilts - t+1
What does the Financial Reporting Council (FRC) make institutional investors engage in
The UK Stewardship Code
How are gilt premiums paid
Gross coupons semi annually
