Definitions on Euroclear

[Sapphire Capital]

I often run into brokers who follow a broker language tradition they picked up of the years. I can only say that almost all of it closes more doors than opens, so here are some definitions from the Euroclear System:

A
Account holder
A Client who is the holder of a Cash Account or a Securities Account.
Account nature (NDC)
Account type used in ESES. The account nature is expressed by a three-digit account type qualifier.
Account operator
In the context of ESES, a Client that has been authorised by one or more Parties to send instructions in the name of, and on behalf of, each of such other Parties in relation the the latter's Securities Account(s) and the Cash Account linked thereto.
Account type
Data that fully identifies a securities account. This data defines the type of securities held in the client's account.
Accounting letter
Document completed by issuers in the French market. This document is used to notify Euroclear France of the details of a new balance that is to be created for an equity, goverment bond or corporate bond in the settlement system. The equivalent in the United Kingdom and Ireland is the Securities Application Form (SAF).
Active
Trading in the security has commenced or the security has been re-activated after a suspension in trading.
Actual holding
The settled number of securities held in a given account at a specific moment in time.
ADR
American Depositary Receipt
Advance Notice of Income and Redemption (ANIR)
In a Euroclear Bank context, the Advance Notice of Income and Redemption (ANIR) is a report that notifies clients, in advance, of declared dividends, or any other financial operations rendered official by the issuer.
AEDBF
Association Européenne pour le droit Bancaire et Financier
AFC
Agence Française de Codification
AFEI
French Association of Investment Firms
AFG
French asset management association
AFT
Agence France Trésor
Agence France Trésor (AFT)
French agency in charge of handling public debt and treasury management. It was created as part of the government reform to modernise its public debt and treasury management.
Agence Française de Codification (AFC)
The French numbering agency is in charge of allocating codes for shares, warrants and debt instruments, on its own account and on behalf of Monaco’s national numbering agency.
Agent
The party that acts on behalf, or upon request, of another party.
AGM
Annual General Meeting
Agreement party
The party involved in a - usually commercial (buying, selling, acquiring, providing products or services) - relationship, which materialises in an agreement with a counterparty. Both counterparties are also referred to as agreement parties.
Allotment rights
Privileges allotted to existing security holders, entitling them to receive new securities free of charge. See Bonus rights.
American Depositary Receipt (ADR)
A negotiable certificate issued by a US bank representing a specific number of shares of a foreign stock traded on a US stock exchange. These certificates can be traded freely like any other security, either by exchange or in the over-the-counter market and can be used to raise capital.
AMF
Autorité des Marchés Financiers
Amortised value
Quantity expressed as an amount representing the current amortised face amount, e.g. a periodic reduction of a bond's principal amount.
Ancillary system
In particular, when reference is made in the TARGET context to ancillary systems (AS); these include retail payment systems, large-value payment systems, foreign exchange settlement systems, money market systems, clearing houses and securities settlement systems (SSSs). AS systems do usually settle through TARGET their net positions either at the end of the day or at several times during the day.
Ancillary System Interface (ASI)
Standardised interface of the Single Shared Platform of TARGET2, which controls and distributes the information pertaining to Ancillary Systems and, in particular, securities settlement systems activity.
ANIR
Advance Notice of Income and Redemption
Annual General Meeting (AGM)
An annual mandatory shareholder meeting that allows stakeholders to stay informed of, and involved in, company decisions and workings. This annual meeting is an event whereby shareholders are able to gather and ask the board of directors questions pertaining to corporate health and strategy. Proper notice must be given to shareholders with regards to meeting times and agenda.
ANSA
French association of joint stock companies
ASI
Ancillary System Interface
Assured Payment Agreement
An Assured Payment Agreement is an agreement between Euroclear UK & Ireland and all the Settlement Banks participating in the Assured Payment Mechanism, defining the obligations between Settlement Banks in relation to the Assured Payment Mechanism.
Assured Payment Mechanism
The Assured Payment Mechanism is the payment mechanism currently used in Euroclear UK & Ireland to settle transactions in USD whereby the Settlement Banks settle on a net basis at the end of the day the inter-Settlement Bank payment obligations resulting from USD transactions settled during the day by Clients to whom the eligible Settlement Banks provide a USD settlement service.
Attachment
The combination of different security types to create a unit. Units are usually comprised of warrants and bonds or warrants and equity. Securities may be combined at the request of the security holder or based on market convention.
AutoFlow
The automated ISO-based STP interface that allows clients to exchange structured data with Euroclear via the CCI. AutoFlow may also be referred to in the Euroclear Contractual Documentation as 'CCI STP channel'.
Automated Securities Lending and Borrowing
A facility in Euroclear Bank whereby securities are loaned to facilitate the fulfillment of settlement obligations.
Autorité des Marchés Financiers (AMF)
The French Authority for the Financial Markets - The French market regulator.
AutoSelect
AutoSelect is an electronic processing module owned and used by Euroclear Bank designed to facilitate the selection of securities for collateral management purposes.

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B

Back-to-back transactions
A chain of securities transactions among three or more parties involving the purchase and sale of a single security, for settlement on a single date. The most simple back-to-back trade is a pair of transactions in which one party agrees to purchase securities from a second party and then agrees to sell them to a third party.
Backload fees
Sales charge paid by the investor when redeeming an investment such as an investment fund.
Balance
A division of a Securities Account, of a type maintained by a Euroclear Group (I) CSD on the Single Platform; the functionality available to, and/or rights of, the Securities Account Holder in respect of securities held within that balance being dependent on the type of balance.
Bank Identifier Code (BIC)
A unique data that identifies precisely the financial institutions involved in international financial transactions. A BIC consists of eight or eleven characters. The first three or four characters are bank code, country code, location code and branch code. BICs are allocated and managed by SWIFT.
Bank of England (BoE)
National central bank of the United Kingdom.
Bankruptcy
Legal status of a company unable to pay creditors. Bankruptcy usually involves a formal court ruling. Securities issued by this company risk losing all of their value.
Banque de France (BdF)
National central bank of France.
Basket
Package or group of assets.
BCE
Banque Centrale Européenne - European Central Bank
BdF
Banque de France
Bearer (form)
The owner is not registered in the books of the issuer or of the registrar.
Bearer depository receipt
Receipt - in bearer form - for securities issued in a foreign market to promote trading outside the home country of the underlying securities.
Bearer/Registered (form)
Securities issued in both bearer and registered form but with the same identification number.
Beneficial ownership
The entitlement to receive some or all of the benefits of ownership of a security (e.g. income, voting rights, power to transfer). Beneficial ownership is usually distinguished from 'legal ownership' of a security. See also 'legal ownership'.
BIC
Bank Identifier Code
Bilateral financing instruction
The bilateral financing instruction is a type of two-leg securities transaction instruction in which a seller acquires cash by selling securities (used as collateral) and simultaneously agrees to repurchase the same or similar securities at a future time.
BNR
Bordereau numérique de retrait (withdrawal receipt)
Bond
Any interest-bearing or discounted security that normally obliges the issuer to pay the bondholder a contracted sum of money and to repay the principal amount of the debt.
Bonds with warrants attached
A bond that is issued together with one or more warrant(s) attached as part of the offer, the warrant(s) granting the holder the right to purchase a designated security, often the common stock of the issuer of the debt, at a specified price.
Bonus issue (Scrip Issue / Capitalisation Issue)
Security holders are awarded additional assets free of payment from the issuer in proportion to their holding. A bonus issue is typically represented by shares, rights or warrants. Nominal value does not change. Holders may be offered choice of form.
Bonus rights
See Allotment rights.
Book-entry deposit
Where the CSD is Euroclear Nederland, a book-entry deposit ('girodepot') within the meaning of the Wet Giraal Effectenverkeer.
Bottom-up method
Corporate action processing method through which the Euroclear group (I)CSD Client typically generates relevant securities and/or cash transfers from its account to the system paying agent account, in accordance with the issuer’s notification. After this transfer, the system paying agent distributes the relevant proceeds (also in accordance with the issuer’s notification).
Bridge
The 'Bridge' is the name used for the processes established between Euroclear Bank and Clearstream Banking Luxembourg that permit cross-systems settlement of a trade between a customer of one ICSD and a customer of the other ICSD.
Broker to custodian trade affirmation system (SBI)
A stock exchange (Euronext) trade affirmation platform, managed by Euroclear France, used between brokers and their clients (custodians). Confirmed trades automatically generate DVP securities transaction instructions that are discharged on the same value date (T+3) except monthly settlement service.
Bundesbank (Buba)
National central bank of Germany.
Bunds
German government bonds.
Business continuity
Arrangements that aim to ensure that post-trade service providers meet agreed service levels even if one or more components of their systems fail or if they are affected by an unusual external event.
Business Day
A day on which the relevant Euroclear group (I)CSD or (I)CSDs are open for business.
Business Role
One of a certain number of defined roles a Party may perform in the (I)CSD Systems: the role(s) of a Party determines the Business Services to which the Party may have access.
Business Service
A service provided by a Euroclear group (I)CSD comprising a set of system functions within the (I)CSD Systems and related services to which a Party is provided access.

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C

C21
Clearing 21 ®
Caisse Interprofessionelle-Interprofessionele Kas (CIK)
See Euroclear Belgium.
Call options
Contracts between a buyer and a seller giving the buyer (holder) the right, but not the obligation, to buy the assets specified at a fixed price or formula, on or before a specified date. The seller of the call option assumes the obligation of delivering the assets specified should the buyer exercise his option.
Call payment
A payment made by an investor as part of a choice to purchase new shares. For example the payment made to purchase new shares in a rights issue.
Cap
Cap limit or credit line in CREST.
Capital gains distribution (cash)
Distribution of profits resulting from the sale of securities. Shareholders of mutual funds, unit trusts, or SICAVs are recipients of capital gain distributions, which are often re-invested in additional shares of the fund.
Capital reduction (decrease in value)
Reduction of the share capital and face value of a single share. The number of the circulating shares remains unchanged. This may include a capital pay out to shareholder.
Cash Account
"In the ESES context, a cash account opened by a Settlement Bank with a central bank in accordance with the Cash Account Documentation, which is operated by the Euroclear CSDs on behalf of the relevant Central Bank in connection with the use of the CSD System or a system operated by another Euroclear CSD; Cash Accounts may also be referred to in the Euroclear Contractual Documentation as 'cash positions in Central Bank Money (CeBM)'."
Cash Account Documentation
In the ESES context, the contractual arrangements between any central bank and each Settlement Bank that is the holder of a Cash Account opened in the books of that central bank, specifically governing the opening and the holding of Cash Accounts with such central bank.
Cash Correspondent
A financial institution that executes cash transfers on behalf of its clients.
Cash dividend (DVCA)
Distribution of cash to shareholders, in proportion to their equity holding. Ordinary dividends are recurring and regular.
Cash position in Central Bank Money
Balance in a central bank money account on a settlement platform operating the integrated settlement model. Also referred to as Liquidity position.
Cash/central settlement account (TBF) (CCR)
Accounts used and maintained by financial institutions on the books of the Banque de France for the functioning of the Transfert Banque de France (TBF) system.
Cbol
Central Bank of Ireland
CCI
Common Communication Interface
CCP
Central counterparty
CD Rules
The 'Règles de fonctionnement du dépositaire central Euroclear France', as approved by the AMF.
CDI
CREST Depository Interest
CDMS
Custody and Deposit Management System
CeBM
Central bank money
CECEI
Credit institutions and investment companies committe
Central bank money (CeBM)
Settlement is described as being in central-bank money if payment moves directly and irrevocably between accounts on the books of the central bank.
Central Bank of Ireland (Cbol)
National central bank of Ireland.
Central bank rules
In respect of each central bank, the rules and regulations of the central bank, which govern among others the opening and holding of cash accounts with the central bank.
Central counterparty (CCP)
An entity that is the buyer to every seller and the seller to every buyer of a specified set of contracts/obligation (e.g. those executed on a particular exchange).
Central European Time (CET)
The legal standard time of many Central European countries applied during the winter, where the standard time equals the Coordinated Universal Time + 1 hour.
Central Securities Depositary (CSD)
An entity which operates a system enabling clients to hold, manage and transfer securities by book entry.
Centre for securities administration (CF)
The centre for securities administration is the Dutch institution that administrates the balances of accounts by type (issued or non-issued) and by participating custodian. This entity is owned by Euroclear Nederland.
Certificate
Evidence of ownership of a company showing the number of shares and relevant details on the security.
CET
Central European Time
CF
Centre for securities administration
CF-certificate
A Dutch bearer bond or bearer share with a certificate and attached coupon sheet. The CF-coupon sheet does not have individual coupons. Only custodians that are participant in the CF-system can keep the certificates in custody.
CF-office (CF)
See The centre for securities administration
CFI
Classification of Financial Instruments
Change
Generic change, e.g. change in the terms of an issue or identification of a security, change of a board lot, change from global to definitive form.
Charges/Fees
Amount of money paid for the provision of financial services that cannot be categorised by another qualifier.
CIK
Caisse Interprofessionnelle - Interprofessionele Kas
Circles
Optimisation function in CREST which attempts to resolve settlement dependencies.
Classic payment method
With this method, a coupon security is distributed at account level on the Single Platform, generally (but not always) on the payment date of the cash distribution. The distribution is based on each holder's position on the record date. Thereafter, coupons can be transferred between clients, primarily for market claim purposes, and can be presented to the paying agent in exchange for cash.
Classical certificate / K-certificate
A certificate that consists of a principal amount, representing the nominal amount or quantity of shares and a coupon sheet with individual coupons.
Classification of Financial Instruments (CFI)
An International Standard defining and describing codes for an internationally valid system to classify financial instruments. In principle, the CFI code reflects characteristics that are defined when a financial instrument is issued and that remain unchanged during its entire lifetime. However, a few events that may lead to a new CFI code for the same instrument are anticipated, such as the changing of voting rights or ownership restrictions by a stockholders' meeting.
Clear calendar day
‘Clear’ indicates the point in the calendar day which constitutes the end of a full day as defined in the official/legal documentation related to the corporate action.
Clearing 21 ® (C21)
LCH.Clearnet clearing platform used for the clearing of Euronext trades.
Clearing member
A member of a clearing house that is permitted by the clearing house to clear trades with that clearing house.
Clearstream
The German central securities depository, Clearstream Banking Frankfurt (CBF), and an international central securities depository based in Luxembourg, Clearstream Banking Luxembourg (CBL).
Client
Any person who has entered into an arrangement with a Euroclear group (I)CSD in order to receive Business Services through one or more Parties in one or more Business Roles.
Client deposit
Where the CSD is Euroclear Belgium, the cash amount which the Client is required to transfer to the CSD as a guarantee for the amounts owed by the Client to the CSD under or pursuant to the Terms and Conditions.
Client Settlement Option
The Client Settlement Option gives Clients using the Full Service the possibility to optimise their settlement efficiency by removing the Intended Settlement Date from the reservation key for the positioning.
Closeness
Optimisation function that attempts to resolve settlement dependencies in a real-time gross settlement system.
CMO
Central Moneymarkets Office
CNS
Continuous Net Settlement
CoBM
Commercial Bank Money
Collateral
Collateral refers to assets or instruments that provide security in respect of financial obligations.
Collateral substitution
Operation in which securities collateral is replaced by substitute securities collateral.
Collateral transaction
In the ESES context, any transaction entered into between a Settlement Bank and a Central Bank where the Settlement Bank sells securities to the Central Bank against a purchase price and both parties irrevocably agree that the Settlement Bank will repurchase the same number of securities from the Central Bank against the same purchase price.
Collateral withdrawal
Operation in which collateral will be withdrawn as a result of an excess of collateral.
Collective deposit
Where the CSD is Euroclear Nederland, a collective deposit (verzameldepot) within the meaning of the Wge held by the Client.
Comité de Place
The Market Advisory Committee in place for the French market.
Commercial Bank Money (CoBM)
Settlement is described as being commercial money if the payment moves between the accounts of banks (in contrast to central bank money).
Commercial Paper (CP)
Loan in the form of short term paper issued by companies. Usually redeemable at par value and pays no interest. See Euro Commercial Paper.
Committee on Uniform Securities Identification Procedures (CUSIP)
CUSIP is a standard system of securities identification and securities description that is used in electronical processing and recording of securities transactions in North America.
Common Communication Interface (CCI)
It is the communication interface with the external world that will provide users with a single access to all Euroclear group services. It will enable clients to send instructions and receive reports in industry standard formats, using a variety of networks.
Common Depositaries
Banks that hold securities for Euroclear Bank and Clearstream Banking Luxembourg.
Company meeting
Is a meeting (potentially virtual) of the different stakeholders of an organisation to which its stakeholders are encouraged to participate in order to vote on various types of company decisions and policies.
Complex reorganisations
For the Euroclear group, complex reorganisations are corporate actions for which elections may be made, i.e. mandatory reorganisation with options or voluntary reorganisations.
Conditional quantity
Minimum quantity of securities to be accepted (used in the framework of conditional privilege on election). In case of proration, if this minimum quantity is not reached then the instruction is void.
Consent solicitation
A solicitation by one party to the stakeholders of a particular security for the consent of a material change.
consideration
See 'settlement amount'.
Continuous Net Settlement (CNS / RNC)
An automated book-entry accounting system. CNS centralises the settlement of matched transactions and maintains an efficient flow of security and money balances.
Contractual regime
The set of rights and obligations of a securities account holding client in its contractual relationship with a Euroclear (I)CSD.
Conversion
Exchange of securities for another type of securities.
Convertible bond
A bond that can be converted into other securities.
Convertible shares
Shares (common/ordinary) that, at the option of the holder, can be converted into other securities, at a designated rate. The conversion privilege may be perpetual or limited to a specific period.
Corporate action
An event which may occur during the lifespan of a security. Certain ones take place on fixed dates (coupon payments, refunds), whereas others occur on an ad hoc basis (stock-splits, rights issue, tender offers, etc).
Corporate action notification
A message to provide an account owner with the details of a corporate action.
Corporate action option
A corporate action may include a series of choices from which a client may make elections of his holdings on the action to be taken by the paying agent. These choices are called corporate action options.
Corporate action processing system (in Euroclear France)
Part of the settlement system that treats all types of corporate actions, both balances and transaction movements.
Corporate action reference
Reference assigned by the account servicer to unambiguously identify a corporate action.
corrective movements
See 'Euroclear movements'.
Cost plus
Tariff set at a level that covers running costs plus a reasonable margin.
Coupon certificate
Replacement of the original coupons or rights showing evidence of ownership of the entitlements involved and other relevant items. Only applicable in the Belgian market and issued by Euroclear Belgium.
Coupon stripping
Coupon stripping is the process whereby interest coupons for future payment dates are separated from the security principal amount that entitles the holder to the principal repayment.
Covered warrants
Warrants issued by a third party that is not the issuer of the underlying securities to which the warrant refers. The warrant issuer holds as many securities as would be required if all the warrants are exercised.
CP
Commercial Paper
Credit institutions and investment companies committee (CECEI)
French committee in charge of making decisions and/or granting individual authorisations or exemptions foreseen by the legal and statutory measures applicable to credit institutions and investment firms, with the exception of those covered by the banking commission.
Credit party
The party that receives cash or securities. In the payment chain, it may be an agent or the creditor. Furthermore, for each pair of consecutive parties in the payment chain, one party always plays the role of the debit party and the other the role of the credit party.
Creditor
The party that receives assets from the debtor/originating party (e.g. cash, securities). In the context of the payment model, the creditor is also the credit account owner.
CREST
CREST is Euroclear UK & Ireland's real-time settlement system for UK and Irish shares and other corporate securities.
CREST Depository Interest (CDI)
These are securities that are created in CREST and that are specifically related to an underlying international security held within another CSD and credited to the account of Euroclear UK & Ireland. CDIs are issued under UK law but the underlying security is held under the law in the jurisdiction under which it is held.
Cross-border Harmonisation Working Groups
Where harmonisation proposals in specific domains are discussed with market experts. The following working groups are part of it: Communication Working Group, Contractual Harmonisation Working Group, Custody Working Group, Foreign Securities in the Single Platform Working Group, Issuers Working Group, Legal Working Group, Market Discipline Working Group, Payments Working Group, Securities Settlement Working Group, Tax Working Group.
Cross-border Market Advisor Committee (XMAC)
XMAC's remit is to engage in a two-way consultation process on all key cross-market issues relating to the services offered by the various domestic CSDs in the Euroclear group. The committee comprises the chairmen of the five domestic MACs and senior representatives of three Euroclear clients with sizeable cross-border activity in Europe.
Cross-quality payment
Payment between a Euroclear group customer using central bank money and another Euroclear group customer using commercial bank money.
CSD
Central Securities Depositary
CSD of reference
Associated to each security, a CSD of reference corresponds to the CSD at which settlement operations take place and which therefore holds the securities balances.
Currency option
Holder’s option to receive income and/or redemption payments in one of several currencies, as determined by the terms and conditions of the issue.
CUSIP
Committee on Uniform Securities Identification Procedures
Custodian
The party that safekeeps and administers assets on behalf of the owner.
Custody and Deposit Management System (CDMS)
A Euroclear Belgium's safekeeping system.
Custody fees
Amount charged by a financial intermediary for administering a securities account.
Cut-off time
The deadline defined by a system to accept securities transaction instructions for a specific defined settlement cycle.

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D

DACSI
Dutch Advisory Committee Securities Infrastructure
Data provider
A source of financial information. It provides financial news and data (e.g. facts, statistics and analysis), for professional and individual investors through various communication channels (e.g. the internet, magazine).
De Nederlandsche Bank (DNB)
The central bank of The Netherlands.
Debit party
The party that gives cash or securities. In the payment chain, it may be an agent or the debtor. Furthermore, for each pair of consecutive parties in the payment chain, one party always plays the role of the debit party and the other the role of the credit party.
Debt instruments
Financial instruments evidencing money owed by the issuer to the holder on terms as specified.
Debt securitisation fund (FCC)
French investment funds that acquire debt held by credit institutions, insurance companies or the ‘Caisse des dépôts et consignations’.
Debtor
The party that owes assets to the creditor, e.g. as a result of receipt of goods or services, gifts, or charity payments. The debtor may also be the debit account owner.
Default
Failure to complete a funds or securities transfer according to its terms for reasons that are not technical or temporary, usually as a result of bankruptcy. Default is usually distinguished from a failed transaction.
Delisted
Security no longer complies with the listing requirements of a stock exchange and is removed from official board quotation.
Delivery by mutual consent settlement service (SLAB)
In Euroclear France, system of reception, gathering and matching of securities transaction instructions for over-the-counter transactions.
Deposit receipt
Explanatory and detailed receipt of a deposit in an account. See Statement.
Depositary Trust & Clearing Corporation (DTCC)
Central securities depository for the US market.
Detachment
Separation of components that comprise a security – usually units comprised of warrants and bonds or warrants and equity. Units may be broken up at the request of the security holder or based on market convention.
Detailed Service Description (DSD)
A description of a specific service offered as incorporated by reference in the Operating Manual.
Direct Account Holder
In the ESES context, this is a Party that holds one or more Securities Accounts and that is able to transfer securities in the CSD System, using either free of payment instructions or delivery versus payment instructions.
Direct Holding Model
The operating model of the Euroclear group under which in general: a Client in the Domestic Service holds Group CSD Securities directly in the Euroclear group CSD which is the Primary CSD in relation to that security (without the intermediation of any other Euroclear group CSD).
Direct participant in TARGET2
A credit institution that is responsible to the settlement bank for the settlement of payments on the TARGET2 platform.
Direct payment method
With this method, the System Paying Agent (SPA) distributes cash proceeds directly to the holders on the payment date based on the holders' position in the underlying security at close of business on the record date.
Discharge
Release from a legal obligation imposed by contract or law.
Disclosure /Ownership disclosure
Requirement for holders or beneficial owners to disclose their name, location and holdings of any issue to the issuer.
Discount
Price expressed as the number of percentage points below par, e.g. a discount price of 2.0% equals a price of 98 when par is 100.
Disperse (cash or securities)
Term no longer used. Refer to 'cash proceeds' or 'security proceeds'.
Distribution
Corporate action that occurs when the issuer of a security delivers a particular benefit or ‘proceeds’ (e.g. cash, securities, rights) to a holder of the security and where the underlying holding, which gave rise to the distribution, is unchanged by the corporate action in full. The most obvious example is a cash dividend where a shareholder receives cash or coupons but its original shareholding is unaffected. These corporate actions can be mandatory, or mandatory with options, but cannot be voluntary. See Stock distribution, Distribution with options.
Distribution with options
Corporate action that occurs when the issuer of a security (or its chosen agent) grants an entitlement to holders of the security. Holders can use this entitlement to elect the final benefit that they wish to receive. The corporate action does not affect the holding which gives rise to the distribution.
Dividend clawback
An arrangement by which the sponsors of a project agree to use dividends they previously received from the project to cover any subsequent cash deficiencies.
Dividend date
Date from which the economic rights start (i.e. receiving dividends) attached to the stock.
Dividend election by mandate
An election for an alternative to the default dividend distribution type which applies to the next, and all subsequent, dividends (also known as an ‘evergreen election’).
Dividend option (DVOP)
Distribution of a dividend to shareholders with a choice of benefit to receive. Shareholders may choose to receive shares, cash or both. See optional dividends.
Dividend Reinvestment (DRIP)
Dividend payment where cash dividend is rolled over into additional shares in the issuing company. See also Dividend Reinvestment Plan/Dividend with reinvestment option.
Dividend Reinvestment Plan / Dividend with reinvestment option
A DRIP generates the distribution of a right which allows holders to exchange cash that they decide to reinvest for example shares that the company (or its agent) must acquire on the market.
DNB
De Nederlandsche Bank
Domestic inter-CSD transactions
When the security is eligible in several Euroclear group CSDs and one party is instructing on a depot with the primary issuer CSD and the other is instructing on a depot with the other eligble CSD.
Domestic package
Term no longer used. Refer to 'Domestic service'
Domestic security
Term no longer used. Refer to 'group CSD security'
Domestic Service
Set of services provided by Euroclear group CSDs.
Drawing
Redemption in part before the scheduled final maturity date of a security.
DRIP
Dividend Reinvestment
DSD
Detailed Service Description
DTCC
Depositary Trust & Clearing Corporation
Dutch Advisory Committee Securities Infrastructure (DACSI)
Local harmonisation working groups, established upon the initiative of domestic market bodies as forums to coordinate the views and harmonisation discussions in Dutch market.
Dutch Auction
An action by a party wishing to acquire a security. Holders of the security are invited to make an offer to sell, within a specific price range. The acquiring party will buy from the holder with lowest offer.
DVCA
Cash dividend
DVOP
Dividend option
DVP model 1
One of the three DVP schemes defined by the G10. In model 1, transfer instructions for both securities and funds are settled on a trade by trade basis, with final transfer of the securities from the seller to the buyer (delivery) occurring at the same time as final transfer of the funds from the buyer to the seller (payment).
DVP transaction
Any delivery versus payment securities transaction settled in the CSD System, the cash leg of which is settled using a Cash Account.

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E

EABFL
European Association for Banking and Financial Law
EBF
European Banking Federation
ECB
European Central Bank
ECD
Euro Certificate of Deposit
ECP
Euro Commercial Paper
ECSA
The European Credit Sector Associations is comprised of the Banking Federation of the European Union (EBF), the European Association of Co-operative Banks (EACB) and the European Savings Banks Group (ESBG).
ECSDA
European Central Securities Depositories Association
EDR
European Depository Receipt
Effective date
Date at which a process is to be completed or becomes effective.
EGM
Extraordinary general meeting
Election form
A bespoke form allowing an investor to make an election for an alternative to the default dividend distribution type.
Election period
The period of time during which an investor must indicate to the issuer whether or not he will exercise his option linked to his financial instrument.
Election Transfer Deadline
The date by which information and securities (and cash if necessary) must be transfered to the issuer (or its agent) to validate elections.
Election withdrawal
The client's wish to reverse a previously made election.
Electronic Matching and Securities Settlement System (EMSS)
The Euroclear Belgium settlement system.
EMSS
Electronic Matching and Securities Settlement System
EMTN
Euro Medium Term Note
EMXCo
A technology company established in 1999 to automate the European funds industry. On 1 January 2007, EMXCo became part of the Euroclear group, as a fully owned subsidiary of Euroclear SA/NV. The EMX Message System is the de-facto standard for funds order routing in the United Kingdom and provides order routing services throughout Europe.
End-of-month settlement (SRD)
End-of-month settlement is the opposite from rolling settlement whereby the settlement date of a party's securities transaction instruction is deferred until the end of the month. Hence, it is possible to buy stocks without immediately settling and benefit from an anticipated rise of the stock or to short sell the stock not yet purchased. French name: Service de Règlement Différé.
Entitlement
Right or claim, accruing to a holder of securities, to receive or subscibe for cash, securities or other assets or benefits to be distributed or issued by the issuer.
Entrance fees
Sales charge paid immediately by the investor when subscribing to an investment such as an investment fund.
EONIA
Euro Overnight Index Average
EPIM
European Pre-Issuance Messaging
Equity
Security representing ownership of a stake in a corporation, i.e. share traded on a stock exchange (quoted or listed share), unquoted or unlisted share and other forms of equity. Equities usually produce income in the form of dividends.
eRGV
The screen channel available for interacting with the RGV system in Euroclear France.
ESCB
European System of Central Banks
Escrow balance
See 'restricted balance'
ESES
Euroclear Settlement of Euronext-zone Securities
ETCMS
Euroclear Trade Capture and Matching System
ETF
Exchange Traded Fund
EURIBOR
Euro Interbank Offered Rate
Euro Certificate of Deposit (ECD)
The certificate is evidence of a deposit made with a bank, which will be redeemed on the maturity date with interest. The difference between a certificate of deposit and a normal deposit with a bank is that a certificate of deposit is an instrument which can be sold on in the money markets to other investors.
Euro Commercial Paper (ECP)
Loan in the form of short term paper issued by companies. Usually redeemable at par value and pays no interest. Hence it is issued and traded at a discount.
Euro Interbank Offered Rate (EURIBOR)
The rate of interest at which panel banks borrow funds from other panel banks, in marketable size, in the EU interbank market. Because banks involved with EURIBOR are the largest participants in the EU money market, this rate has become the benchmark for short-term interest rates.
Euro Medium Term Note (EMTN)
Debt note that usually matures (is paid back) in 5 to 10 years.
Euro Overnight Index Average (EONIA)
Effective overnight reference rate for the euro zone.
Eurobond
Originally, a bond issued by a debtor outside its own country that may be denominated in a currency foreign to the debtor or to the purchaser, or both.
Euroclear Bank
Brussels-based public limited liability company (société anonyme / naamloze vennootschap), which is an International Central Securities Depository (ICSD) and the operator of the securities settlement system 'Euroclear System'. It is the premier provider of settlement services for international bond, money-market, equity and fund instruments. Euroclear Bank offers clients in more than 80 countries a single access point to post-trade services for equities, bonds, as well as international securities.
Euroclear Belgium
Formerly CIK, is the Central Securities Depository (CSD) of Belgium, offering a wide range of back-office services to the financial community and a portfolio of added-value services to issuers. Euroclear Belgium settles Euronext Brussels stock exchange transactions (with LCH.Clearnet S.A. as the central counterparty) and over-the-counter transactions, and provides securities safekeeping, printing on demand of securities (PRIOS), the Domestic Investment Fund Service (DIFS) and Registrar Services.
Euroclear France
The Central Securities Depository (CSD) of France and the operator of the Relit+ and RGV state-of-the-art, high-performance settlement systems. First launched in 1941 as CCDVT (Caisse Centrale de Dépots et de Virements de Titres), Sicovam SA took over its operations in 1949. Sicovam was renamed Euroclear France after a merger with Euroclear Bank in January 2001. With a track record stretching back over 50 years, Euroclear France offers unique, highest standard issuer, custody and settlement services, supporting the French financial markets with expertise and dedication.
Euroclear group
Group that comprises Euroclear Bank SA/NV, Euroclear France SA, Euroclear Nederland BV, EMXCo, Euroclear UK & Ireland and Euroclear Belgium.
Euroclear group (I)CSD
Any (I)CSD belonging to the Euroclear group (i.e. Euroclear Bank, Euroclear Belgium, Euroclear France, Euroclear Nederland or Euroclear UK & Ireland).
Euroclear group CSD
Any CSD belonging to the Euroclear group other than Euroclear Bank (i.e. Euroclear Belgium, Euroclear France, Euroclear Nederland or Eurooclear UK & Ireland).
Euroclear market
Market in which the local CSD is a part of the Euroclear group.
Euroclear Nederland
The Central Securities Depository (CSD) of The Netherlands that provides real-time settlement, custody and securities administration services for capital market paper and money market paper. Euroclear Nederland settles transactions traded on the Euronext Amsterdam stock exchange as well as over-the-counter transactions. LCH.Clearnet Amsterdam is the designated clearing system for Euronext Amsterdam trades, and Euroclear Nederland is the primary settlement system for Euronext Amsterdam.
Euroclear Nederland Issuing Agent
Where the CSD is Euroclear Nederland, the Party designated by the issuer of a security in order to represent the issuer vis-à-vis the CSD in relation to issues and withdrawals ('uitlevering') of such security.
Euroclear Nederland Paying Agent
Where the CSD is Euroclear Nederland, the Client designated by the issuer of a security and approved by the CSD in order to represent the issuer vis-à-vis the CSD in relation to corporate action payments on such security
Euroclear Nederland Transfer Agent
Where the CSD is Euroclear Nederland, the Party designated by the issuer of a security in order to represent the issuer vis-à-vis the CSD in relation to corporate actions on such security other than issues and withdrawals (uitlevering)
Euroclear NIEC
Nederlands Interprofessioneel Effectencentrum NIEC B.V. (Euroclear NIEC) is a sister company of Euroclear Nederland. As a separate legal entity, Euroclear NIEC offers safekeeping and settlement services for securities that are not eligible to the securities giro transfer system as defined by the Securities Giro Transfer Act (Wet Giraal Effectenverkeer).
Euroclear SA/NV
The parent company of the group (I)CSDs. Euroclear SA/NV owns the group's shared securities processing platforms and delivers a range of services to the group's depositories, including development of its technology platform. Euroclear SA/NV, a company (société anonyme/naamloze vennootschap) organised under the laws of Belgium.
Euroclear Settlement of Euronext-zone Securities (ESES)
Euroclear Settlement of Euronext-zone Securities (ESES) is an important intermediary step towards the Single Platform. ESES will provide the Euronext-zone market CSDs (Euroclear Belgium, Euroclear France and Euroclear Nederland) with an integrated settlement solution and harmonised custody service for stock exchange and over-the-counter activities.
Euroclear system
Current settlement system of Euroclear Bank.
Euroclear Trade Capture and Matching System (ETCMS)
An automated matching and routing service for over-the-counter transactions with a Central Counterparty (CCP), which offers netting at both user and security eligibility level. In practice, the following occurs: • instructions are entered by clients for matching purposes. If the instruction is deemed to be valid, it will be given a Euroclear reference ID and will enter the matching process; • once matched, instructions are sent to the CCP for netting; • the CCP then undertakes a local validation process, whereupon the instruction is either registered when the trade is novated or rejected when the instruction does not meet all of the validation criteria.
Euroclear UK & Ireland
The Central Securities Depository (CSD) of the United Kingdom and Ireland. Operates the multi-currency, real-time settlement system CREST, settling UK, Irish and international securities and money market instruments. Formerly: CRESTCo.
Euronext N.V.
European stock exchange with subsidiaries in Belgium, France, The Netherlands, Portugal and the United Kingdom. Euronext was established on 22 September 2000 in a merger of the exchanges of Amsterdam, Brussels and Paris, in order to take advantage of the harmonisation of the EU financial markets. In 2002, the group merged with the Portuguese exchange Bolsa de Valores de Lisboa e Porto (BVLP) and London International Financial Futures and Options Exchange (LIFFE).
Euronext-zone securities
Securities that are listed on any stock exchange(s) that is/are part of Euronext and are primarily deposited in the Belgian, Dutch or French CSD. Note: The Euronext-zone also includes Portugal, which is not part of the ESES-zone. Better: ESES-zone (depending on context).
European Association for Banking and Financial Law (EABFL / AEDBF)
European association of professionals (bank and corporate attorneys, lawyers, judges, university scholars and government representatives from the European community), legal specialists in term of banking, financial and stock exchange activities, all representing member states of the European Union and Switzerland.
European Banking Federation (EBF)
An association representating the European banking sector. It represents the interests of over 4,500 European banks, large and small, from 27 national banking associations, with assets of more than EUR 20,000 billion and over 2.3 million employees. FBE acts as a forum where members' initiatives are proposed and debated and as well as a dialogue partner for the European institutions in laying out the relevant legislation in the banking sphere.
European Central Bank (ECB / BCE)
The European Central Bank (ECB) is the central bank of the Euro zone, in charge of monetary policy for the 25 countries that use the euro currency. It is the legal personality under Community law. It ensures that the tasks conferred upon the Eurosystem and the ESCB are implemented either by its own activities or those of the national central banks pursuant to the Statute of the European System of Central Banks and of the European Central Bank.
European Central Bank (ECB)
The central bank for Europe's single currency, the euro. The ECB’s main task is to maintain the euro's purchasing power and thus price stability in the euro area.
European Central Securities Depositories Association (ECSDA)
Formed in 1997 to provide a forum for national and international CSDs to exchange views and carry out projects of mutual interest in the field of securities clearing and settlement. Today, ECSDA's objective is to offer solutions and provide advice at an international level on technical, economical, financial and legal and regulatory matters to reduce risk and increase efficiency in custody, pre-settlement and settlement arrangements for securities and related payments across Europe for the benefit of issuers, investors and market participants.
European Depository Receipt (EDR)
Also called Global Depository Receipt (GDR). A negotiable certificate issued by a trust company or security depository evidencing the deposit of publicly traded securities and facilitating the trading of such securities on exchanges.
European Pre-Issuance Messaging (EPIM)
EPIM automates the pre-issuance information processing and ISIN and Common Code allocation for new issues of European commercial paper (ECP) and related money-market instruments. EPIM is a central messaging hub, linking the parties involved in the issuance of European commercial paper, including banks, dealers, Issuing and Paying Agents (IPAs), securities depositories and numbering agencies enabling them to request ISINs and Common Codes for the issuance of European commercial paper (ECP) and related money-market instruments from International Central Securities Depositories (ICSDs) or Central Securities Depositories (CSDs) using standardised message formats. The ICSDs and CSDs then communicate the ISIN and/or Common Code to both the dealer and Issuing and Paying Agent using the EPIM platform.
European System of Central Banks (ESCB)
Comprises the ECB and national central banks of all EU members states, whether or not they have adopted the euro.
Eurosystem
The Eurosystem comprises the ECB and the NCBs of those countries that have adopted the euro. The Eurosystem and the ESCB co-exist as long as there are EU Member States outside of the euro area.
Ex date
The date from which trading (including stock exchange and over-the-counter trading) occurs on the underlying security without the benefit / the entitlement.
Exchange member
A member of an exchange with certain trading privileges. An exchange member is not necessarily a member of the exchange's clearing house.
Exchange offer / Capital reorganisation (EXOF)
Offer to shareholders to exchange their holdings for other securities and/or cash. Exchange offers are usually voluntary and involve the exchange of an outstanding security for a different security or securities and/or cash.
Exchange option
Option for the shareholders to exchange their securities for other securities and/or cash. Exchange options are mentioned in the terms and conditions of a security and are valid during the whole lifetime of a security unless otherwise stated by the issuer.
Exchange Traded Fund (ETF)
Type of investment company whose investment objective is to achieve the same return as a particular market index. An ETF is similar to an index fund in that it will primarily invest in the securities of companies that are included in a selected market index. An ETF will invest in either all of the securities or a representative sample of the securities included in the index.
Exercise security
See 'underlying security'
EXOF
Exchange offer / Capital reorganisation
eXtensible Markup Language (XML)
Simple and very flexible text format derived from Standard Generalized Markup Language (SGML) (ISO 8879). The eXtensible Markup Language (XML) is a W3C-recommended general purpose markup language for creating special-purpose markup languages. Its primary purpose is to facilitate the sharing of data across different systems, particularly systems connected via the internet.
external transactions
On foreign/non-group CSD securities when the counterparty is settling the transaction outside the Single Platform (i.e. the counterparty is a member of a non-group (I)CSD. In view of the Euroclear Bank services on multi-deposited securities, external settlement may also be possible on group securities when the counterparty is a member of a non-group CSD.)
Extraordinary general meeting (EGM)
Meeting other than the annual general meeting between a company's shareholders, executives and any other members. An EGM is usually called on short notice and deals with an urgent matter.

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F

Face Amount
Quantity expressed as an amount representing the face amount, i.e. the principal, of a debt instrument.
FBF
French Banking Federation
FCC
Debt securitisation fund
FCP
Fonds Commun de Placement
Final agent
A financial institution of the creditor that receives the payment transaction on behalf of an account owner or other nominated party, and posts the transaction to the account.
Final maturity
Repayment in full of a debt security, investment trust or a preferred stock issue, at stated maturity.
Final party
The party that is the ultimate beneficiary of the cash transfer. The final party is mentioned when different from the creditor, whose account will be credited by the final agent. See Beneficiary of money (Securities Industry), Ultimate beneficiary (Payment Industry).
Final settlement
The discharge of an obligation by a transfer of funds and a transfer of securities that have become irrevocable and unconditional.
Financial instruments
See 'Securities'
First agent
A financial institution of the debtor that receives the payment transaction from either the account owner or authorised party, and processes the instruction.
fixed income security
An investment that provides a return in the form of fixed periodic payments and eventual return of principle at maturity. Unlike a variable-income security where payments change based on some underlying measure, such as short-term interest rates, fixed income securities payments are known in advance.
Fixed term instruction
Transaction with a fixed maturity date.
FMS
Forward Market Settlement System
Fonds Commun de Placement (FCP)
Mutual fund issued under French law.
Foreign CSD
Term no longer used. See 'Non-group CSD'
Foreign security
Term no longer used. See 'Non-group CSD security'
Form of Agreement
See 'Standard Form Agreement'
Forward Market Settlement System (FMS)
Euroclear Belgium's clearing and settlement system.
Forwarding agent
A financial institution that prepares the payment instruction and forwards it to the first agent in the payment chain, as is the case in a relay scenario for payment transactions.
French asset management association (AFG)
Asset management association, representing investment funds and individual portfolios. It includes all of the financial management actors, either collective or under mandate.
French Association of Investment Firms (AFEI)
Comprises nearly 130 investment service providers, mainly investment firms, but also credit institutions authorised to provide investment services.
French association of joint stock companies (ANSA)
The main French association of corporate issuing companies.
French Banking Federation (FBF)
The professional body representing over 500 commercial, cooperative and mutual banks operating in France and includes both French and foreign-based organisations. Its missions : research, analysis and proposals on any issues concerning the profession, at national and international levels; Member information service; Public relations to enhance public perception of banks and the part they play in the economy.
Full call / early redemption
An issuer's right to redeem bonds or preferred stock before maturity (if any).
Full Service
Set of services provided by Euroclear Bank.
Full-Domestic transactions
When one party to a transaction/trade is using the Full Service and the other is using the Domestic Service (i.e one party is using a Domestic operational securities account and the other is using a Full securities account)
Fund accountant
The party that keeps accounting records of the available assets and liabilities of the fund. It calculates dealing prices, the Net Asset Value (NAV) of the fund, and may provide fund performance and tax data.
Fund management company
The party that sets up the fund, decides on the investment strategy, appoints the agents, and is responsible for the promotion and the marketing of the fund. It makes all of the important decisions related to the fund.
Future
Contract that obliges the buyer to receive and the seller to deliver the assets specified at an agreed price in the future.

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G

Gilt-edged security
A fixed-interest bond or security issued by the British Government. However, from a corporate perspective, when applied to bonds, the term gilt-edged is the equivalent of describing a stock as a blue chip. Both terms mean that the issuing corporation has a long, strong record for meeting its financial obligations to its investors, including making interest and dividend payments on time and redeeming bonds on schedule.
Gilts
Government securities issued by the United Kingdom.
Graphical User Interface (GUI)
The screen interface used for interacting with the CREST system.
Gridlock situation
Situation that can arise in a system in which the failure of some transactions to be executed (because the necessary liquidity or securities balances are unavailable) prevents a substantial number of other transactions from other clients from being executed.
Gross amount
Amount of money before any deductions and allowances have been made.
Group CSD Security
In the context of the Domestic Service, it is a security for which a Euroclear group CSD is a Primary CSD.
GUI
Graphical User Interface

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H

Headroom (limit left for use)
It is the difference between the cash indicator and the limit between the settlement bank and its client.

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I

IBAN
International Bank Account Number
IBEI
International Business Entity Identifier
Iberclear
The Spanish central securities depository.
ICMA
International Capital Market Association
ICMSA
International Capital Market Services Association
ICPG
Indicateur de Compensation, de Prêtabilité et de Garantie
ICSD
International central securities depository
Identifiable bearer security (TPI)
Based on the French legal framework, it is a service in Euroclear France that allows an issuer of bearer securities to request and obtain a list of, all or part of, securities' holders registered on the custodians’ books (from the French Titre au Porteur Identifiable) . Certain holders declared by the custodians may have the status of registered intermediary.
Indemnity Amount
(Unique to France) The amount due to a buyer of securities dealt prior to ex date which may be subject to a different rate of taxation.
Indicateur de Compensation, de Prêtabilité et de Garantie (ICPG)
Collateral indicator; at Euroclear France, it is one of the elements of the securities account structure by which the client indicates to the Securities Settlement System (SSS) how it may use the securities. Note: 0 - ordinary - Usable securities as instructed by clients; 1 - Lendable LCH.Clearnet - Usable securities by the SSS for automatic lending to LCH.Clearnet; 3 - Collateralisable BdF - Usable securities by the SSS for repos with the Banque de France.
Indicative price
Estimated price, e.g. for valuation purposes.
Indice
Amount based on the performance of an index.
Indirect Party
In the ESES context, a Client which does not hold a Securities Account but is authorised by a Direct Account Holder to send SBI instructions and/or SLAB instructions to the CSD on the Securities Account of the Direct Account Holder and, if applicable, on the Cash Account linked thereto, in the name and on behalf of the Direct Account Holder.

[Sapphire Capital]

Infrastructure
The party that provides, through common membership, services to create a fair and open process for the execution of transactions between trading parties, and the creation of settlement obligations.
Initiating party
The party initiating the payment to the forwarding or first agent. In the payment context, this can either be the debtor (in a credit transfer), the creditor (in a direct debit), or a party that initiates the payment on behalf of the debtor or creditor. In the context of treasury, the party that instructs the trading party to execute a treasury deal on its behalf.
Instrument category
The second qualifier in the CFI - ISO 10962 classification of a security.
Instrument family
The first qualifier in the CFI - ISO 10962 classification of a security. Synonym: security family.
Instrument type
Synonym = Security type The classification of financial instruments into various groups according to their individual characteristics. The securities classification will be completed both on: 1) the Classification of Financial Instruments (CFI - ISO 10962); 2) a proprietary classification.
Integrated settlement model
SSSs settle transactions directly in their own system without the constant involvement of the payment system. An interface is used at the request of clients when they want to transfer cash into the SSS or back to the payment system. An example of integrated settlement models is the relationship between Euroclear France and TBF.
Intended settlement date
This is the date defined by the client on which the transaction is due to settle.
Interest dated date (bond)
The date from which interest start to accrue.
Interest payment
Regular interest payment, only in cash, distributed to holders of an interest-bearing asset. According to the terms of the issue, a holder may be able to elect the currency in which the interest is paid.
Interest with options
See 'Optional interest'.
Interested agent
The party that receives information from other parties about transactions that are being processed, and performs functions such as regulatory oversight and accounting.
Interfaced settlement model
Transactions are settled using an interface between the payment system and the SSS. As two systems are involved, they constantly communicate with each other. The security leg is settled in the SSS while the cash leg is settled in the RTGS. Examples of interfaced settlement models are the relationships between Monte Titoli and New BIREL in Italy, and between Interbolsa and SPGT in Portugal.
Interim security
A short term security distributed to facilitate the election process of a corporate action. e.g. a right issue or optional dividend.
Intermediary (financial)
The party that provides services to investors relating to financial products. These services may include some, or all of, provision of information and advice on products, placement of investment orders, transmission of payment, custody of assets, and the administration of rights and benefits. In the specific framework of the investment funds industry, an intermediary may present information about funds to potential investors, and solicit orders for the fund. It may facilitate the transmission of the orders and information from/to the investors and/or other intermediaries. The intermediary receives commission from the fund and/or fees from the investor.
Intermediate securities distribution
The distribution of intermediate securities or privilege that gives the holder the right to take part in a future corporate action.
Internal transaction category
In the Single Platform context, this transaction category includes: Intra-entity settlement transactions when both parties to the transactions are members of the same (I)CSD; This covers: intra-Domestic transactions when both parties are using the Domestic Service and transactions settle then on the books of the primary issuer CSD or the CSD of reference of the security, intra-Full transactions when both parties are using the Full Service and transactions settle then on the books of Euroclear Bank. Full-Domestic transactions when one party is using the Full Service and the other is using the Domestic Service (i.e one party is using a Domestic operational securities account and the other is using a Full securities account); Domestic inter-CSD transactions when the security is eligible in several group CSDs and one party is instructing on a depot with the primary issuer CSD and the other is instructing on a depot with the other eligble CSD.
Internal transactions
When both parties are settling the transactions on the Single Platform.
International Bank Account Number (IBAN)
International standard (ISO 13616). An expanded version of the Basic Bank Account Number (BBAN), intended for use internationally that uniquely identifies an individual account at a specific financial institution, in a particular country.
International Business Entity Identifier (IBEI)
International Business Entity Identifier to uniquely identify business entities playing a role in the life cycle and events related to a financial instrument.
International Capital Market Association (ICMA)
Self-regulatory organisation and trade association representing the investment banks and securities firms issuing and trading in the international capital market worldwide. ICMA's member firms are located in 48 countries across the globe, including the world's main financial centres, and currently number over 400 in total. ICMA performs a crucial role in the market by providing and enforcing a self-regulatory code of industry-driven rules and recommendations which regulate issuance, trading and settlement in international fixed income and related instruments. ICMA liaises closely with regulatory and governmental authorities, both at the national and supranational level, to ensure that financial regulation promotes the efficiency and cost effectiveness of the capital market.
International Capital Market Services Association (ICMSA)
A trade association for all organisations providing capital market services. Current members include banks, law firms, ICSDs, registrars and stock exchanges. The ICMSA focuses on the evolving capital markets and provides a formal platform for all service organisations to ensure the market remains operationally efficient.
International Central Securities Depository (ICSD)
An entity in which securities are held and managed, and which enables transactions to be processed by book entry. An ICSD also settles trades in international securities and in various domestic securities, usually through direct or indirect (through local agents) links to local CSDs. Within Euroclear group, the ICSD offers its services in the Full Service.
International organisation of securities commissions (IOSCO)
International association of securities regulators that was created in 1983. It provides a forum where securities regulators can exchange information, and co-ordinate supervisory and regulatory efforts.
International Securities Identification Number (ISIN)
A 12-digit security identification code comprised of a 2-digit ISO 6166 country code, a 9-digit national number (e.g. CUSIP) and a 1-digit 'check number'. Its registration and maintenance authority is the ANNA.
International securities services association (ISSA)
Promotes progress and transparency in the securities services industry, opens up communication channels between securities services providers, increases the professional knowledge of securities industry participants as well as the investment community, and works together with other financial sector industry organisations.
International Standards Organisation (ISO)
Worldwide federation of national standards bodies from more than 146 countries, one from each country. ISO is a non-governmental organisation established in 1947. Its mission is to promote the development of standardisation and related activities in the world with a view to facilitating the international exchange of goods and services, and to developing cooperation in the spheres of intellectual, scientific, technological and economic activity.
Internet Protocol (IP)
Telecommunication's protocol used on networks that support internet and allows data to be sent in blocks referred to as packets. It addresses the various packets, transports them independently of one another and recomposes the initial message on arrival. Thus, this protocol uses a technique known as packet switching. On the internet, data transmissions are associated with a Transmission Control Protocol called TCP (Transmission Control Protocol) which is referred to as the TCP/IP protocol.
Intra-Domestic transactions
When both parties are using the Domestic Service and transactions settle on the books of the primary issuer Euroclear group CSD or the Euroclear group CSD of reference of the security.
Intra-entity settlement transactions
When both parties to the transactions are members of the same Euroclear group (I)CSD; This covers: - intra-Domestic transactions when both parties are using the Domestic Service and transactions settle then on the books of the primary issuer Euroclear group CSD or the Euroclear group CSD of reference of the security, - intra-Full transactions when both parties are using the Full Service and transactions settle then on the books of Euroclear Bank.
Intra-Full transactions
When both parties are using the Full Service and transactions settle on the books of Euroclear Bank.
Intraday repo (PLI)
A transaction with the central bank designed to increase the liquidity of settlement banks in the Transfert Banque de France (TBF) system. i.e. repo with Banque de France requested by a settlement bank on the Euroclear platform to generate additional liquidity that will be automatically swept back to the TBF system.
Investment decision maker
An individual investor that makes its own investment decisions, a financial analyst that advises the investor, or a portfolio manager that has received the investor's cash to be invested. It decides upon an investment strategy for the investor's assets.
Investment manager
The party that implements the investment strategy and selects portfolio investments, in accordance with the objectives and strategy set forth in the fund's prospectus. It places orders to effect or liquidate selected investments, in accordance with the net flow of capital into or out of the fund. See Asset Manager (Securities Industry ), Fund manager (Securities Industry).
Investor
The party whose assets are being invested, and that benefits from the performance of the investment. It can either be an individual or organisation.
Invoicee
The party identified in a commercial invoice as the liable party.
Invoicer
The party issuing an invoice, whose name and address appear in a commercial invoice as the issuer, in the context of a business agreement.
IOSCO
International organisation of securities commissions
IP
Internet Protocol
IPA
Issuing and Paying Agent
Irish Co-ordination Committee for Harmonisation
Local harmonisation working group, established upon the initiative of domestic market bodies as forums to coordinate the views and harmonisation discussions in Irish market.
ISIN
International Securities Identification Number
ISO
International Standards Organisation
ISO 15022
International standard which sets the principles necessary to provide the different communities of users with the tools to design message types to support their specific information flows. These tools consist of a set of syntax and message design rules, a dictionary of data fields and a catalogue for present and future messages built by the industry with the above mentioned fields and rules.
ISO 20022 Financial Services
It is a UNIversal Financial Industry message scheme (UNIFI) - newly published standard which provides the usage of a common platform for the development of messages.
ISSA
International securities services association
Issuance Account
In the ESES context, any account opened in the name of an issuer in the books of the CSD on the debit of which all securities of a same issue which are admitted by the CSD are recorded; in the case of dematerialised securities, all securities of the relevant issue will be recorded on the debit of the Issuance Account; Issuance Accounts are not considered as Securities Accounts for the purposes of the Terms and Conditions.
Issue price
Initial issue price of a financial instrument.
Issuer agent
Any Client appointed by an issuer of a security to represent the issuer vis-à-vis the CSD; issuer agents may also be referred to in the Euroclear Contractual Documentation as main agents.
Issuing and Paying Agent (IPA)
An institution that acts on behalf of the issuer of securities in distributing the securities and in realising the proceeds thereof for the benefit of the issuer. Also, on behalf of an issuer, an IPA makes payments to holders of securities. See 'Paying agent'.

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L

LCH
London Clearing House
LCH.Clearnet
LCH Clearnet S.A., a public limited liability company (société anonyme) organised under the laws of France, which is the central counterparty for transactions on Euronext markets.
Legacy platform
One of the current input, matching, settlement and/or reporting systems of the group (I)CSDs.
Legal owner
In relation to a particular security, the person entitled to enforce, against the issuer, rights conferred on a holder by its constitutional documents. In the case of a security in registered form, the registered holder.
Legal Securities Account
See 'Operational Securities Account (OSA)'.
LIBOR
London InterBank Offered Rate
Liquidation (interim payment) / Liquidating dividend / Liquidation proceedings
Distribution of cash, assets, or both. Debt may be paid in order of priority based on preferred claims to assets specified by the security. Security holders may be able to choose the form of liquidation distribution.
Liquidity movements
Posted cash entries that have impacted the cash position in central bank money.
Liquidity position
See 'Cash position in central bank money'.
Liquidity provision
See 'Puchasing power'.
Liquidity sweep
Any automated transfer of cash from a Cash Account to the corresponding RTGS Cash Account
Liquidity transfer
Refers to individual liquidity transfers, initiated by a settlement bank, from the central bank system/TARGET2 to the Euroclear platform and vice versa. Optional liquidity transfers can be done in real time during the day and within a given time frame. See 'Sweep'.
Loan Recall
In relation to an outstanding collateral management transaction or a bilateral financing transaction, changing the closing date to an earlier date.
Local Securities Record
A record of holders of securities held in a Euroclear group CSD, kept in the territory of that CSD.
London Clearing House (LCH)
See 'LCH.Clearnet'.
London InterBank Offered Rate (LIBOR)
An interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. The LIBOR is fixed on a daily basis by the British Bankers' Association. The LIBOR is derived from a filtered average of the world's most creditworthy banks' interbank deposit rates for larger loans with maturities between overnight and one full year.
London Stock Exchange (LSE)
Stock exchange market located in London.
LSA
Legal Safekeeping Account
LSE.
London Stock Exchange

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M

MACs
Market Advisory Committees
mandatory cash distribution
A mandatory cash distribution is a corporate action that generally does not require any action from the individual holders of the security. The issuer of the security (or its agent) delivers a cash benefit to entitled holders based on their holdings in the underlying security at the close of business on the record date. The corporate action does not affect the holding that gives rise to the cash distribution.
Mandatory corporate action
A corporate action that occurs without any action required on the part of individual holders of the security. This may involve, for example, an issue of securities, a reorganisation (i.e. mandatory exchange) or certain payments.
Mandatory corporate action with options
A corporate action that occurs without any action required on the part of the holders of the security, but in relation to which the holders have some choice as to the type of benefit that they may receive.
Mandatory distributions with options
Corporate actions where the issuer (or its agent) offers the investor a choice in the benefit to be received.
Mandatory reorganisation (without options)
Reorganisation corporate action that usually occurs without any action required on the part of individual holders of the security. In such case, transactions in the impacted security often cannot continue to occur in their original state and a ‘transformation’ process (which generally involves a cancel and replace) takes place.
Mandatory reorganisation with options
These are mandatory reorganisations for which the holder has a choice in the proceeds. The corporate action specifies the default proceeds clients receive if they choose not to take part the election process.
Mandatory security distribution
Corporate action that occurs without any action being required on the part of the holders of the security. The issuer of a security (or its agent) delivers security proceeds to the holders of the security. This corporate action does not change (decrease or increase) the underlying holding that gives rise to the distribution. Depending on the type of distribution, either the final security proceeds or interim securities are distributed.
Market Advisory Committees (MACs)
Euroclear has set up MACs in each country for which it acts as Central Securities Depository (CSD) or central settlement system. The purpose of the MACs is to act as a primary source of consultation between the Euroclear group and the user communities on significant matters relating to their respective domestic markets. This consultation process is conducted with Euroclear management. The members of the MACs are chosen by the market and approved by the Board of Euroclear SA/NV.
Market claims
These types of transfers are used to ensure that the benefit of a distribution reaches the contractually entitled party.
Market deadline
The ultimate deadline for receipt by the issuer or its system paying agent of valid election instructions.
Market Identifier Code (MIC)
A unique data element that identifies precisely the financial markets within a country.
Market maker
Makes a market in one or more specific instruments. May frequently adjust or revise the published quote depending on market conditions but may be prohibited from withdrawing it. Will often function within an organised market, e.g. a stock exchange, in which case its quotes and trades are made within the context of the market's rules and membership criteria. To make a market in an instrument, a party must extend a continuous offer to buy or sell financial instruments with any qualified counterparty at a price quote published by the party, without respect to the identity of the qualified counterparty.
Market price
Last reported/known price of a financial instrument in a market.
Matching
The process for comparing the trade or settlement details provided by counterparties to ensure that they agree with respect to the terms of the transaction.
Medium-term notes (MTN)
Negotiable debt instruments offered under a programme agreement through one or more dealers upon request of the issuer. The programme defines the terms and conditions of the notes.
Member
See 'Client'.
Merged securities
Securities resulting from the merger of two companies.
Merger
Mandatory or voluntary exchange of outstanding securities as the result of two or more companies combining assets. Cash payments may accompany share exchange.
MIC
Market Identifier Code
MMI
Money Market Instrument
Money Market Instrument (MMI)
Financial instrument designated at issuance as such with a short-term life, usually twelve months or less, e.g. treasury bills or commercial paper.
MTN
Medium-term notes
Multi-deposited securities
Securities which are eligible in more then one Euroclear Group CSD.


Naked warrants
Warrants issued by a third party that is not the issuer of the underlying securities to which the warrant refers. The warrant issuer does not hold as many securities as would be required if all the warrants were exercised.
Name change
The issuing company changes its name. Event shows the change from old name to new name and may involve surrendering physical shares with the old name to the registrar.
Nationale Bank van België/Banque Nationale de Belgique (NBB/BNB)
The central bank of Belgium.
NBB
Nationale Bank van België
NBB/BNB
Nationale Bank van België/Banque Nationale de Belgique
NCB Technical Account
In the ESES context, the reconciliation account which is the tool for recording (i) all debits and credits made to all Cash Accounts in the course of a given Business Day in execution of Liquidity Transfers and (ii), for the purposes of returning balances to the Central Bank at the end of the day, all debits and credits made to Cross-NCB Positions.
NDC
Nature de compte - See Account nature.
Netting
An agreed offsetting of positions or obligations between counterparties. The netting reduces a large number of individual positions or obligations to a smaller number of obligations or positions. Netting may take several forms.
Nextinfo
An affiliate company of Fininfo jointly formed with Euronext to cover financial data distribution in Belgium and The Netherlands.
Nominee
A person or entity named by another to act on his behalf. A nominee is commonly used in a securities transaction to obtain registration and legal ownership of a security. See 'Trustee'.
Non-Group CSD
A CSD that is not a member of the Euroclear group.
Non-Group CSD security
In the context of the Domestic Service, it is a security eligible in a Euroclear group CSD but for which the Primary CSD is not a Euroclear group CSD.
Novation
Satisfaction and discharge of existing contractual obligations by means of their replacement by new obligations (whose effect, for example, is to replace gross with net payment obligations). The parties to the new obligations may be the same as those to the existing obligations or, in the context of some clearing house arrangements, there may additionally be substitution of parties.

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O

OAT
Obligation Assimilable du Trésor
Obligation Assimilable du Trésor (OAT)
Obligations assimilables du Trésor (OAT), have become the method of choice for placing the French government’s long-term debt. These fungible securities are issued with maturities of seven to 50 years, generally by auction according to an annual calendar published in advance.
Obligation Lineaire Obligatie (OLO)
Belgian government bond.
OEIC
Open-end investment company
OLO
Obligation Lineaire Obligatie
Omnibus account
A single Securities Account within which the Securities Account Holder co-mingles the assets of two or more underlying clients, rather than in separate accounts with designation.
OPCVM
Organisme de Placement Collectif en Valeurs Mobilières
Open offer
A mechanism by which issuers raise funds through a pro-rated offer of new shares to existing shareholders. Each qualifying shareholder is entitled to subscribe for new shares, but entitlement is not readily transferable and, if the entitlement lapses, holders do not receive any compensation.
Open term transaction
Transaction with no fixed maturity date.
Open transactions management
The process of managing open term transactions that are affected by corporate actions giving rise to market claims, transformations and buyer protection processing.
Open-end investment company (OEIC / SICAV)
An Undertaking for Collective Investment in Transferable Securities (UCITS). It has as a principal objective to manage a portfolio of securities for the account of its shareholders. Each one of its shareholders holds an interest in a fraction of the fund, proportionally with the total number of shares issued by the open-end investment company. OEICs continually sell new shares to the public and redeem outstanding shares on demand, resulting in an increase or decrease of outstanding capital.
Operational day
In respect of each Euroclear Business Day, the hours during which the Euroclear System is active.
Operational Securities Account (OSA)
In either the Domestic Service or the Full Service, a facility enabling a Party to manage a number of Securities Accounts on a consolidated basis. In the Domestic Service, a Party will be able through an OSA to manage a number of Securities Accounts held with different CSDs but carrying the same identifier. The Operational Securities Account is not itself an account for legal purposes.
Optional dividend
Distribution of a dividend to holders with a choice for the payment resource. Shareholders must choose either stock (i.e. the company’s shares), cash or both. This may also be called dividend with option.
Optional interest
Distribution of interest to holders with a choice for the payment resource. Holders must choose stock (i.e. the company’s shares), cash or both. This may also be called interest with option.
Options
Contract that grants the holder the privilege to either buy or sell the assets specified at a predetermined price or formula at or within a time in the future.
Organisme de Placement Collectif en Valeurs Mobilières (OPCVM)
French instrument of collective savings products including open-end investment companies (SICAV) and mutual funds (FCP).
Originating party
The party that owes cash to the creditor, e.g. for the receipt of goods and services. This party orders the payment, and may or may not be the debtor.
OSA
Operational Securities Account
OTC
Over-The-Counter
Over-The-Counter (OTC)
Market outside an organised exchange in which transactions are conducted through a telephone or computer network connecting the different market participants.

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P

Pari passu
Occurs when securities with different characteristics (e.g. shares with different entitlements to dividend or voting rights) become identical in all respects (e.g. pari-passu or assimilation). May be scheduled in advance (e.g. shares resulting from a bonus may become fungible after a pre-set period of time) or may result from outside events (e.g. merger, reorganisation, issue of supplementary tranches, etc.).
Partial call / Drawing
Securities are redeemed in part before their scheduled final maturity date. The outstanding amount of securities will be reduced proportionally. The call is either based on a specific percentage of holding or specific security identification numbers.
Partial defeasance (repayment per bond)
Event that occurs when the issuer sets money aside to redeem a portion of an issue and the indenture states that the securities could be called earlier than the stated maturity. Also: Exchanging one type of collateral for another type (e.g. loans where the original immovable tangible was the collateral, but it is replaced by a more conventional collateral (government bond) because the original collateral was risky, unhandy and expensive in use)
Participant
See 'Client'.
Participant Direct de Système Exogène (PDSE)
A direct participant to the ancillary system connected to the national RTGS.
Party
A Party is a representation of a Client. A Client can have multiple Parties representing it. A Party can only represent one Client.
Payment date
The date on which the distribution is due to take place (cash and/or securities).
Payment settlement agent
An agent that executes the cash transfer upon the request of either an agreement party, or a clearing agent.
PDSE
Participant Direct de Système Exogène
Percentage
Price expressed as a percentage of par.
Physical securities management tool (CDMS)
Custody and Depository Management System (CDMS) is the Euroclear Belgium and Euroclear Nederland safekeeping system that is used for vault administration and inventory management. CDMS will be used for ESES-markets physical securities and will be interfaced with the Single Settlement and the Single Platform Engine (SSE).
Pivot account
Account opened in the name of the system paying agent and used as intermediary account between the system paying agent's account and the accounts of the entitled holders during the processing of the corporate action.
Place of deposit
A location where the securities for a market are immobilised or dematerilised, generally classified as a central depository.
Place of listing
The place of listing identifies the market place where the issuer has requested the referenced financial instrument to be listed.
PLC
PLC – automatic repo
PLC – automatic repo (PLC)
Automatically generated intra-day repo transaction in RGV with the Banque de France, generates liquidity within RGV for settlement purposes
PLI
Intraday repo
POA
Power of Attorney
Poll
Voting method where every holder present has a number of votes which corresponds to the number of securities it holds.
Post-trade administrator
The party ensuring that all the details of the trade have been collected and reported, as required to all parties involved in the trade transaction including counterparties, the investor, and settlement parties.
Posting / allocation
Calculation method allocating expenses to the cost of the various products in order to calculate the complete cost.
Power of Attorney (POA)
Written document that authorises a particular person to perform certain acts on behalf of the one signing the document. See Proxy.
Pre-matching
See 'Pre-matching process'.
Preference convertible shares
See 'Preferred convertible shares'.
Preference shares
See 'Preferred shares'.
Preferred convertible shares
Preferred shares (common/ordinary or preferred) that, at the option of the holder, are convertible into other securities, usually common shares, at a designated rate. The conversion privilege may be perpetual or limited to a specified period.
Preferred shares
Payment of dividends to holders normally takes preference over the payment of dividends to other classes of shares. In the event of liquidation, preferred shares normally rank above ordinary shares but behind creditors of the company.
Premium
Price expressed as the number of percentage points above par, e.g. a premium (price) of 2.0% equals a price of 102 when par is 100.
Primary CSD
In relation to holdings of a particular security, the CSD in which the holdings are admitted where no other CSD intermediates between the first CSD and the issuer.
Primary dealer
See 'Treasury securities primary dealer'.
Proprietary identifier
One of two types of financial institution identification recognised by ISO standards. A unique and unambiguous identifier, as assigned financial institution using a standard identifier, e.g. participant code.
Proxy
Written Power of Attorney given by shareholders of a corporation, authorising a specific vote on their behalf at corporate meetings.
Puchasing power
A settlement bank's cash position in central bank money and its collateral value of securities that may be used for autocollateralisation with the central bank (when allowed by the relevant central bank). Also referred to as liquidity provision.
Purchase rights
Anti-takeover device that gives a prospective acquiree’s shareholders the right to buy shares of the firm or shares of anyone who acquires the firm at a deep discount to their fair market value.
Put options
Contracts between a buyer and a seller giving the buyer (holder) the right, but not the obligation, to sell the assets specified at a fixed price or formula, on or before a specified date. The seller of the put option assumes the obligation of buying the assets specified should the buyer exercise his option.
Put redemption
Early redemption of a bond at the election of the bond holder subject to the terms and conditions of the issue.

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Q

Quasi-issuance balance
In the ESES context, it is a balance type eligible only for a Euroclear entity if it supports a functionality that is specific to a market. The quasi-issuance balance is used in France and Belgium to record funds transactions in the account of the funds manager or its agents.

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R

RBTR
Real-time gross settlement system
RDUG
Reference Data Users Group
Real-time gross settlement system (RTGS / RBTR)
Settlement system in which occurs the continuous (real-time) settlement of funds or securities transfers individually on a transaction-by-transaction basis (without netting).
Record date
It is the date on which positions are struck at the end of the day to identify which parties will receive the entitlement.
Redenomination
Corporate action by which the unit (currency and/or nominal) of a debt is restated.
Redistributor agent
The institution that receives and redistributes certain business information, e.g. quote or order details, or facilitating trading. It may add or modify the information if necessary. Examples include: Alternative Trading Systems (ATS)- mechanisms whereby the direct trading of stocks can occur without the presence of brokers or other intermediaries, or Electronic Communications Networks (ECN) electronic stock markets anonymously matching buy and sell orders.
Reference Data Users Group (RDUG)
Coalition of industry participants and vendors located in London focused on analysing and developing recommendations for reference data standards including security identifiers and entity identifiers.
Registered depository receipt
Receipt - in registered form - for securities issued in a foreign market to promote trading outside the home country of the underlying securities, e.g. ADR.
registered securities
Registered securities (or securities in registered form) are securities, title to which is determined by reference to entries in a register/record of holders kept by the issuer (or its agent) or the operator of a settlement system in accordance with the laws under which the securities are constituted.
Registered Share Exchange
Exchange from bearer shares into registered shares.
Registrar
The party that is responsible for keeping track of the owners of securities. In the context of funds, the party appointed by the fund management company that keeps the investor registry of the fund, and administers investor accounts and related records. These records represent the liability accounts of the fund management company. It prepares and distributes account statements (holdings and transactions) to the investor and/or its intermediary, on a periodical or upon request basis. It may provide tax information to the investor and/or to its intermediary, can be the corporate secretary for the proxy voting, reports to the regulator on shareholder identity, and can appoint the sub-registrar.
Registrar account
Account at the registrar where financial instruments are registered.
Registrars account folio number
The investor's account reference number given by the registrar.
Registration date
The date at which the positions, which have been registered for meeting participation, are struck at the end of the day to identify the entitled parties and their voting entitlement.
Regulator
A government agency, or a self-regulated body, that sets the rules for the regulation of the market, as well as the relationship between the different parties in the market.
Regulatory fees
Amount of money charged by a regulatory authority, e.g. securities and exchange fees.
RELIT +
Règlement Livraison de Titres Plus: revocable channel of RGV2. In this channel, the irrevocability of discharges is applied either during or at the end of the accounting day. See 'Irrevocability', 'Securities Settlement System (SSS)'.
Relit Grande Vitesse 2 (RGV2)
French securities settlement system managed by Euroclear France. The RGV2 system is composed of two securities settlement channels. One is known as being revocable (Relit +). The other is known as being irrevocable (RGV).
Relit à Grande Vitesse (RGV)
Irrevocable channel of RGV2. In this channel, all discharges become irrevocable as soon as they are carried out. See 'Irrevocability', 'Securities Settlement System (SSS)'.
Reorganisation
Corporate action that occurs when the issuer replaces, or offers to replace, all, or some, of an underlying security with one or more different resource(s).
Reorganisation claims
See 'Transformation'.
Repurchase agreement / Repo / Buybacks / RPs
Contract to sell and subsequently repurchase securities at a specified date and price. Economically, it represents a cash loan against securities collateral. Full ownership of the securities is transferred, with a firm commitment that the seller will repurchase the securities at an agreed price and date.
Repurchase offer issuer bid
Offer by issuing company to existing shareholders to repurchase the company's own shares or other securities convertible into shares. A repurchase offer may include the distribution of renounceable or non renounceable rights. The objective of this offer is to reduce the number of outstanding shares.
response deadline
The date and time by which clients must send instructions to Euroclear Bank.
Restricted balance
This balance type is used to block securities in the Party account in relation to elections relating to certain corporate actions. The holding is under the direct control of the system paying agent, who is the only one who can transfer securities out of this balance type. Formerly known as: 'Escrow balance', 'Sequestred balance'.
Reverse stock split / Change in nominal value / consolidation
Corporate action that consists of a change in nominal value, a consolidation. With this corporate action, the number of outstanding shares of stock is decreased without any change in the shareholder’s equity or the aggregate market value at the time of the reverse split. Stock price and nominal value are increased accordingly.
RGV
Relit à Grande Vitesse
RGV2
Relit Grande Vitesse 2
Rights
Financial instruments providing the holder the privilege to subscribe to or to receive specific assets on terms specified. See 'Entitlements'.
Rights issue / Subscription rights / Rights offer
Privilege granted to existing shareholders of a company to subscribe to shares of a new issue against payment. Rights are often tradable in the secondary market.
RNC
Continuous Net Settlement
Rolling settlement
A practice in which settlement takes place a standard number of business days after the date of the trade.
Rollover
In relation to an outstanding collateral management transaction or a bilateral financing transaction, changing the closing date to a later date.
Royal Decree n°62 of 10 November 1967
As amended, the principal asset protection law governing the holding of securities in Belgium (with Euroclear Belgium, or Euroclear Bank).
RTGS
Real-time gross settlement system
RTGS Cash Account
In the ESES context, any main cash current account with any central bank participating in TARGET2

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Safe custody account
A securities account, in most cases, held and managed by the central bank on which credit institutions can place securities deemed suitable to back central bank operations. The securities held on these accounts are finally deposited with the CSD under the name of the national central bank, so that the transfer into a safe custody account results in a transfer between the bank's and the national central bank's account with the CSD. The securities deposited with the national central bank are generally pledged to the National Central Bank as collateral for overnight and intraday Lombard loans.
Safekeeping account
Account in which assets are held, also used for reporting, corporate actions, etc.
SBI
Broker to custodian trade affirmation system
SBI intermediary
In the ESES context, any Client, acting as Party or Indirect Party, entitled to receive transaction notices in the SBI platform as an intermediary.
SBI market member
In the ESES context, any Client, acting as Party or Indirect Party, entitled to send transaction notices in the SBI platform as a market member.
Scheme of arrangement
Restructuring of share capital involving the issuance of new securities and/or cash.
ScreenFlow
Name of the intuitive screen-based application that will offer real-time access to Euroclear group services.
Scrip dividend
Dividend paid in the form of scrip (temporary certificate) which represents the company's promise to pay a cash dividend. Occurs when earnings are sufficient but issuer wishes to conserve cash holdings.
Scrip payment
Dividend or interest paid on the form of a temporary certificate (which is a scrip) which represents the company’s promise to pay a cash dividend. This occurs when earnings are sufficient, but the issuer wishes to conserve cash holdings. Holders are not offered any choice.
SE
Stock exchange
Secondary CSD
In relation to holdings of a particular security, the CSD in which the holdings are admitted where another CSD intermediates between the first CSD and the issuer.
Securities
Securities and other financial instruments of any description.
Securities Account
An account opened by a Client through a Party with a Euroclear group (I)CSD to which are credited securities held by the Client with that (I)CSD.
Securities Account holder
A Client who is the holder of a Securities Account.
Securities Applicant
A Securities Applicant is a Client which has applied for the admission of a security by the CSD. The Securities Applicant may but does not have to be the issuer of the relevant security.
Securities Applicant Form
In the ESES context, the form to be signed by the Securities Applicant for a specific security upon the admission of such security by the CSD including the annexes to such form or any other documents that may be required by the CSD as part of the securities admission process
Securities Clearance Account
Securities Clearance Account means a securities clearance account opened in connection with the Euroclear System by Euroclear Bank on its books in the name of a client or in the name of another Clearance System.
Securities distribution
Corporate action that occurs without any action required on the part of individual holders of the security. In such case, the issuer of a security (or its chosen agent) delivers a security benefit to holders of the security. The corporate action does not affect (reduce) the holding which gives rise to the distribution.
Securities loan / Securities lending / Securities borrowing
Securities finance mechanism that involves transferring full ownership of securities, with or without a guarantee, with a contractual agreement that the seller will repurchase the securities in return for the guarantee, if there is a guarantee, at an agreed price and date. The lending of securities in exchange for a fee. Securities lending is mostly facilitated by CSDs, but not offered directly. (I)CSDs and banks, such as custodians that directly offer securities lending, possess a banking license and are regulated by existing banking law.
Securities Market Practice group (SMPG)
Sponsored by SWIFT, the objective of this industry group is to create globally harmonised market practices which, together with the ISO 15022 standard, will enhance Straight Through Processing (STP) at an industry level. The formation of the SMPG resulted in the establishment of National Market Practice Groups (NMPG) in more than 35 geographic markets comprised of broker/dealers, investment managers, custodian banks, central securities depositories and regulators.
Securities only account holder
In the ESES context, any Party that holds one or more Securities Accounts and is able to transfer securities using free of payment instructions only.
Securities Settlement System (SSS)
A system which permits the holding and transfer of securities, either free of payment (FOP) or against payment (Delivery Versus Payment-[DVP]).
Security
Term used for financial instruments within Euroclear.
Security balance
It is the level at which positioning will occur. In other words, the security balance records several attributes (i.e. security identifier, balance type, registration forms and sub-balance pool identifier) in order to identify the assets held.
Security proceeds
Security which is to be received by the holders as a result of the corporate action. Formerly known as: disperse security, benefit.
SEDOL
Stock Exchange Daily Official List
SEF
Systeem Effecten
Select Collateral iteration
The 'Select Collateral' iteration principle makes sure that one single 'Select Collateral' module run executes several times the allocation of collateral to several transactions.
Sequestred balance
See 'Restricted balance'.
Settlement
Delivering securities and/or making payments in the performance of obligations between the counterparties to a transaction.
Settlement account
An account held by a direct participant of a national RTGS system, which is thus registered with its central bank for the purpose of processing payments.
Settlement agent
The party that provides settlement, custody, and accounting services for its own, or someone else's, assets.
Settlement Bank
A Client which is permitted under the Standard Form Agreement it has entered into with a Euroclear group CSD to make and/or receive payments by means of the (I)CSD Systems as a bank for the account of itself and/or one or more other Clients in connection with the Domestic Service.
Settlement bank agent
An agent is a direct participant in TARGET2 appointed by a settlement bank within the Securities Settlement System (SSS) that does not have a direct account in TARGET2 (in the context of the French market, one also uses the term PR for Participant de Règlement, in order to indicate the Settlement bank agent). An entity that (i) holds an RTGS cash account with a central bank participating in TARGET2; and (ii) has agreed to act as settlement bank agent for one or more settlement banks in accordance with Section 5.2.9 of the Terms and Conditions which contains the termans that are common to all Euroclear CSDs.
Settlement Bank Client
A Client who has appointed a Settlement Bank to provide cash services in connection with the Domestic Service.
Settlement connect
An interface through which securities transaction instructions are entered from the Clearing 21® platform.
Settlement date
Date at which the financial instruments are to be delivered or received.
Settlement Finality Directive
Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payments and securities settlement systems.
Settlement liquidity indicator
The liquidity position of a client in the system that uses the services of a settlement bank (i.e. the liquidity position of a settlement bank’s client, as above). It reflects the liquidity resulting from the settlement bank client’s activity in the Securities Settlement System (SSS).
Settlement liquidity limit
The amount of liquidity or credit which a settlement bank has notified to the CSD as being available to a settlement bank client during each Business Day.
Settlement sub-System
The system operated by the CSD to process the settlement of instructions, manage the Securities Accounts balances and the Purchasing Powers and provide reporting to the Clients.
Shares, i.e. common/ordinary
Holders typically being entitled to vote and receive dividends. In the event of liquidation, holders of shares usually rank behind the entity's creditors and holders of preferred shares.
Show of hands
Voting method whereby votes are cast by raising your hand at the general meeting. Every holder present at the meeting has one vote, irrespective of the number of securities they hold.
SICAV
Open-end investment company
Simple reorganisations
For the Euroclear group, simple reorganisations are mandatory reorganisations without options for which the holder of the underlying security does not have a choice in the proceeds (securities, cash or a combination of securities and cash).
Single Matching Engine (SME)
Input and matching system which would be introduced to enable customers of different group (I)CSD to facilitate the matching and settlement of cross-system transactions in book-entry form.
Single Platform
The long-term solution, an IT platform shared by all Euroclear group (I)CSDs hosting the (I)CSD Systems.
Single Settlement Engine (SSE)
The first building block of the Single Platform, concentrating on the core settlement (i.e. positioning and booking of cash and securities transfers).
Single Shared Platform (SSP)
The new platform of European Central Bank, also known as TARGET2, which will be shared by a number of participating national central banks.
SLAB
Delivery by mutual consent settlement service
SME
Single Matching Engine
SMPG
Securities Market Practice group
SPA
System paying agent
Spin-off / Demerger / Unbunding
The distribution of subsidiary rights to shareholders of the parent company, with no surrender of shares. A spin-off represents a form of divestiture resulting in an independent company.
SRD
Service de Règlement Différé
SSE
Single Settlement Engine
SSP
Single Shared Platform
SSS
Securities Settlement System
Standard Form Agreement
An agreement between a Client and a Euroclear group (I)CSD incorporating the relevant standard terms and conditions of that Euroclear group (I)CSD.
Standing instruction
Subscription through which the client requests the automatic processing of its preferred options for future corporate actions, where no other specific instruction has been received. Standing instructions can be created at different levels which determine in which circumstances it will be activated.
Statement /Receipt
A detailed summary of an account. See 'Deposit receipt', 'Withdrawal receipt'.
Stock dividend
A dividend paid to shareholders in the form of shares in the issuing company or in another company. This may involve a surrender of the existing shares and the use of a new ISIN. The nominal value of the shares is adjusted accordingly.
Stock exchange (SE)
A corporation or mutual organisation that provides the facilities for stock brokers to trade company stock and other financial instruments in the secondary market. Stock exchanges also provide facilities for the issue and redemption of securities, as well as other financial instruments and capital corporate actions including the payment of income and dividends.
Stock Exchange Daily Official List (SEDOL)
An identification number assigned to all foreign stock by the London Stock Exchange. Foreign stock that has a CUSIP number and does not trade in the United States can be identified by its SEDOL code.
Stock split / Change in nominal value / Subdivision
Increase in a corporation's number of outstanding equities without any change in the shareholder's equity or the aggregate market value at the time of the split. Equity price and nominal value are reduced accordingly.
STP
Straight Through Processing
Strip
In the United Kingdom, it is a security issued in respect of future interest payments on UK Gilt-Edged securities. See 'Gilts', 'Gilt-Edged Security'. Outside of the United Kingdom, it is an interest payment that has been split off the capital sum of a (government) bond.
Subscription rights
Privileges allotted to existing security holders, entitling them to subscribe to new securities at a price normally lower than the prevailing market price.
Suite de marché (Redelivery)
French term which literally translates to ‘after the market’, i.e. client-side transaction resulting from a direct order between an investor and a market broker.
Sweep
Automated transfer of liquidity positions from the Securities Settlement System (SSS) to RTGS Accounts at specific moments during the day. There are two types of sweeps: intra-day optional sweeps and an end of day mandatory sweep.
Systeem Effecten (SEF)
The settlement system of Euroclear Nederland.
System Paying Agent (SPA)
The party within the CSD that is responsible for distributing resources relating to a specific distribution to other CSD parties.
System transaction administrator
In a central system, the entity or neutral body, in charge of providing services to the system's members. It is in charge of performing specified tasks on behalf and under the responsibility of the system's direct members. It can be a matching engine, a settlement engine, or a financial institution. It also maintains accounts or netting positions for the direct members of the system, registers transactions, performs checks and validations, and manages the settlement cycle or other value added processes, as specified in the functional specifications of the system.

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T

TARGET2
Trans-European Automated Real- Time Gross settlement Express Transfer 2
Tax credit
Additional amount on dividends paid by a company resident in France to alleviate double taxation.
Tax voucher
A statement showing the amount or value of a distribution and either (i) the tax credit to which the recipient is entitled in respect of that distribution; or (ii) the amount of tax deducted from the distribution.
TBF
Transfert Banque de France
TCN
Titres de créances négociables
Tender /acquisition / Take over / Purchase offer / Buyback
An offer made to shareholders, normally by a third party, requesting them to sell (tender) or exchange their equities.
Third party
The party that is a customer of either a direct or indirect system member. It is not known by the system transaction administrator, and does not have any liability nor rights, vis-à-vis the system.
Titre au Porteur Identifiable (TPI)
Identifiable bearer security, a service in Euroclear France that allows an issuer of bearer securities to request a list of beneficial owners registered in the custodians’ books.
Titres de créances négociables (TCN)
Generic term used to refer to French negotiable, corporate and government, short and medium term debt securities, i.e. Certificats de Dépôt (CD), Billets de Trésorerie (BT), Bons à Moyen Terme Négociables (BMTN), Bons du Trésor.
Top-down method
Corporate action processing method whereby the issuer’s agent or the CSD automatically distributes proceeds to clients, without any action required on the part of such holders. In many, but not all, markets where this method is used, the proceeds are automatically distributed only when relevant securities and/or cash are transferred from the holders’ accounts to the system paying agent account.
TPI
Titre au porteur identifiable
Trade date
The date on which a market trade is executed.
Trade instructor
The party that decides upon one or more specific trades to follow the investment decision maker's strategy. This may be an individual within an investment firm, that selects a market in which to execute the investment decision maker's orders, and adds instructions for hedging and leveraging.
Trader
The party that interacts with counterparties in the context of a market (i.e. an exchange, network, or over-the-counter network), to execute trades.
Trading party
The party that plays an active role in planning and executing the transactions that create or liquidate investments of the investors’ assets, or that move the investor's assets from one investment to another. A trading party is a trade instructor, an investment decision-maker, a post trade administrator, or a trader. In the context of treasury, it is the party that negotiates and executes the treasury transaction.
Traditional warrants
Warrants issued by the issuer of the underlying instrument.
Trans-European Automated Real- Time Gross settlement Express Transfer 2 (TARGET2)
The trans-European automated real-time gross settlement express transfer system organised by the Eurosystem and replacing TARGET.
Transaction
In a Euroclear context, it is the result of the matching and execution of either a purchase or sale order with compatible opposite orders.
Transaction lifecycle
The overall lifecycle of a transaction from its creation until its end-of-life.
Transaction notice
A statement that summarises all of the characteristics of the order (buy, sale) that was carried out.
Transfer agent
The party appointed by the emissioner. It updates records of investor accounts to reflect the daily investor purchases, redemptions, switches, transfers, and re-registrations. It ensures the timely settlement of transactions, and may provide tax information to the investor and/or to its intermediaries. It may calculate, collect, and rebate commissions. It prepares and distributes confirmations reflecting transactions, resulting in unit or cash account movements to the investor or the investor's intermediary. It responds to inquiries concerning account status, and processes the income distribution.
Transfert Banque de France (TBF)
France’s real-time gross settlement system, which is part of TARGET. This system is managed by Banque de France. See 'RTGS'.
Transformation
Transformation is the process by which transactions that are open at, or after, the record date/election transfer date are cancelled and/or replaced by new transactions in accordance with the terms of the reorganisation.
Treasury securities primary dealer
Financial institution having obtained, by the State, a particular role relative to the issuance, the placement, and the secondary market of Treasury securities, and having on a permanent basis, the obligation to ensure the liquidity of the secondary market.
Trigger point / Stop loss/ Release order
Order that becomes valid starting only from a predetermined threshold. This order is especially used in the event of an unexpected drop or rise of the market.
Trust
See 'Trustee'.
Trustee
In a fiduciary relationship, called a Trust, it is a person who holds title to property for the benefit of another person. See 'Nominee'.
Two-leg settlement instruction
Settlement instruction which can be used to settle bilateral repo, securities lending & borrowing, buy-sell back and sell-buy back transactions.

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UK gilt-edged securities
UK government bonds.
Underlying security
The security that is affected by a corporate action or a meeting.
UNIFI Standard
See 'ISO 20022 Financial Services'.
Unit
Securities representing a portion of assets pooled by investors: run by a management company whose share capital remains separate from such assets, e.g. a number of shares.

[Sapphire Capital]

Valuation haircut
A risk control measure applied to securities used in reverse transactions, implying that the central bank calculates the market value of the underlying securities, reduced by a certain percentage (haircut). The Eurosystem applies valuation haircuts that also reflects certain characteristics of the securities, notably their residual maturity.
Vault
The protected warehouse in which physical documents are stored.
Verlaagde Voorheffing/Précompte Réduit (VVPR)
Reduced withholding tax. Specific Belgian system. See 'Strip'.
Voluntary corporate action
Corporate action in which holders of a security need to take action if the corporate action is to affect their holdings. The issuing company usually informs all holders of the corporate action that is about to take place. Sometimes, this notice is provided in the original offering documentation for the security. If the holder takes no action, its holding is unaffected by the corporate action.
Voluntary reorganisation (with options)
Corporate actions for which the holder of a security may choose whether or not to participate. If the holder decides not to participate, there is no change to its holdings in the underlying security.
Voting service provider (VSP)
A service provider mandated by the Client to act on its behalf. (i.e. receipt and sending of meeting notifications, collection of voting instructions, instructing the system agent).
VSP
Voting service provider
VVPR
Verlaagde Voorheffing/Précompte Réduit

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Warrant exercise / Warrant conversion
Option to buy (call warrant) or to sell (put warrant) a specific amount of equities, cash, commodity, etc., at a predetermined price over a specific period of time.
Warrants
Financial instruments that permit the holder to purchase a specified amount of a financial instrument, commodity, currency or other during a specified period at a specified price.
Warrants on index
Amount based on the performance of an index.
Wet Giraal Effectenverkeer (Wge)
Law relative to the book-entry delivery of securities. The principal law under which Euroclear Nederland operates.
Wge
Wet Giraal Effectenverkeer.
Withdrawal receipt (BNR)
Explanatory and detailed receipt of a withdrawal from an account. See Statement.
Withholding tax
A tax on income imposed at source on payments such as dividends and interest.

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X

XMAC
Cross-border Market Advisor Committee
XML
eXtensible Markup Language