Copy of `The London Trade Group - Stock trading info`

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The London Trade Group - Stock trading info Category: Economy and Finance > London trading and exchange Date & country: 28/01/2011, UK Words: 312

ecofin
Council of Finance and Economic Ministers of the European Union

ecu
European Unit of Account. A so-called "basket currency" made up of the EU currencies. The forerunner of the euro used by the European Commission for accounting purposes and also for financial transactions such as bond issues and loans.

eea
European Economic Area

emi
European Monetary Institute, the forerunner of the European Central Bank.

ems
European Monetary System. A forerunner of EMU, it was aimed at improving monetary stability.

emu
Economic and Monetary Union. A process by which the majority of countries of the European Union link their economies and unify the currencies.

endorsement
Wording and signatures applied usually to the reverse of certain documents, in order to transfer the rights that they confer. Such documents include Bills of Exchange, Bills of Lading and insurance documents.

eonia
Euro Overnight Index Average. An overnight funding rate for euro.

erm
Exchange Rate Mechanism - a system of adjustable exchange rates used by Eurozone member countries whereby their currencies operated within defined exchange rate bands.

erm ii
Exchange Rate Mechanism 2. Similar to ERM, it is a system to assist the countries which are not members of the euro to work towards membership through adhering to common economic convergence criteria.

escrow account
Funds held in a designated account for a specific purpose, which can be disbursed once certain conditions have been met.

eur
Currency code for the euro

eur 1 a
document used in relation to trade with European Union countries to prove the origin or goods.

eurex
The German Stock Exchange group formerly known as the Deutsche Terminbörse.

euribor
A rate used for Euro interest rate fixings based upon dealings in the markets of Euro zone.

euro
The currency of the countries of the European Union following Economic and Monetary Union. (see EMU)

euro libor
A rate used for Euro interest rate fixings based upon dealings in the London market. Also referred to as "BBA euro Libor".

eurocurrency
Funds deposited in centres outside the normal territory for its currency. Thus "eurodollars" are deposited with banks outside the USA etc. Such funds re-lent by banks are termed "eurocurrency loans".

european union
Currently a group fifteen European countries including: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, The Netherlands, Portugal, Republic of Ireland, Spain, Sweden and the United Kingdom.

ex quay
A delivery term under which the seller accepts up to delivery in to a named port including import duties and unloading costs. Refer to INCOTERMS for standard definition.

ex ship
A delivery term under which the seller prices his goods to include all costs including cost, insurance and freight, import duties and any other expenses up to the place where the buyers takes delivery, such as his works or warehouse. Refer to INCOTERMS for standard definition.

ex works, ex warehouse or ex store
A delivery term under which the buyer collects goods from the sellers works, warehouse or storage facility. Refer to INCOTERMS for standard definition.

expiry date
See Validity Date.

export credit agency
A state owned or supported export finance organisation which guarantees overseas debtors payment obligations in respect of export credit loans. It may also subsidize the interest payable on such loans.

face value
A term used in Forfaiting to mean the total value of future cash flows due under a payment instrument such as a Bill of Exchange or Promissory Note. Usually means the total of principal and interest.

factoring
Advancing funds against future short term trade receivables, usually With Recourse. Can differ from simple Invoice Discounting because of additional services, such as sales ledger management which the factor company may provide.

force majeure
A legal term meaning beyond the control of the parties [to a commercial contract].

forward cover
To buy or sell a foreign currency in advance of its receipt or payment. Usually used to control foreign currency risk.

forwarding agent
A firm which organises and arranges for the carriage of goods.

fra
Forward Rate Agreement.

frn
Floating Rate Note.

front end fee
A fee paid to bankers for setting up a transaction, usually payable before or shortly after funds are drawn.

ftse
Financial Times Stock Exchange, the name of several London Stock Market equity indices such as the FTSE 100, FTSE 250 etc.

full set
A term often used in the context of documents to be presented under a Letter of Credit. A Full Set of Clean On Board Bills of Lading, means all of the originals Issued.

gatt
General Agreement on Tariffs and Trade. The forerunner of the World Trade Organisation (WTO).

gdp
Gross domestic product.

gnp
Gross National Product.

golden handshake
A final payment or benefit paid to an employee on leaving his/her employment.

golden parachute
A sum payable, usually to a senior executive if he/she is forced to leave his/her company, in the event, for example, of a takeover by another firm.

good value
The correction of a payment between banks. By altering the date of payment or by paying interest, the payment is effectively received by the payee on the date on which it should have been received.

grace days
Days which are added to a transaction to allow for administration delays in the banking system. Commonly used in Forfaiting.

grace period
A period of time following an advance under a loan or other financing during which no principal is repaid.

grant aid
Gifts of aid by wealthier countries to developing ones not expected to be repaid.

green clause letter of credit
A mechanism by which funds may be advanced to an exporter under a Letter of Credit in advance of goods being shipped.

gsp
Generalized System of Preferences. Preferential trade arrangements under which goods from emerging markets receive more favourable import tariff treatment.

hermes
German insurance group which includes the German export credit insurer.

ibrd
International Bank for Reconstruction and Development commonly referred to as the World Bank.

icb
International Competitive Bidding: Method used to select bidders to World Bank and other aid-funded projects.

icc
International Chamber of Commerce

ico
Instituto de Credito Oficial. Part of the Spanish state export credit system responsible, among other things, for paying interest rate subsidies.

ida
The International Development Association. The long-term lending arm of the World Bank.

ifc
International Finance Corporation. The commercial lending arm of the World Bank Group.

ilc
Irrevocable Letter of Credit

imf
International Monetary Fund. IMRO Investment Management Regulatory Organisation, (in the UK). Now part of FSA.

incoterms
A publication of the International Chamber of Commerce which is a standard reference on shipping terms. See bibliography.

ins / in countries
The 11 EU countries which were included in the EMU area in the first round of membership in May 1998. They are Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain.

inspection agency
A commercial company which inspects cargoes to ensure their condition, often in terms of quantity and quality. It will issue a Certificate of Inspection to confirm the results of its findings.

insurance certificate
Often called for under Letters of Credit, evidences that goods have been properly insured up to time of delivery.

interest subsidy / interest make up
A subsidy paid to banks or exporters in relation to ECA-supported export credit transactions. It enables an overseas buyer or borrower to receive fixed rate financing.

invoice discounting
An advance made against future trade receivables evidenced by invoices. Usually carried out by Factoring companies on a With Recourse basis.

ipma
International Primary Markets Association.

irr
Internal Rate of Return. The discount rate which would be need to be applied to a series of future cashflows in order for the Net Present Value to be equal to the capital investment.

irrevocable
Cannot be revoked, withdrawn or cancelled except by mutual agreement of the parties. Particularly applies to Letters of Credit.

isa
Individual Savings Account. ISAs, were introduced by the UK government on 6th April 1999 to support and extend the principle of long term savings. As such they superseded PEPs and TESSAs.

isda
The International Swap Dealers Association. This organisation has produced standard documentation to underpin derivative transactions.

isin
International Securities Identification Number used to identify securities.

islamic financing
Financial arrangements which conform to Islamic, Sharia Law which forbids the payment or receipt of interest.

isma
International Securities Markets Association.

iso
International Standards Organisation.

issuing bank
See Opening Bank.

kfw
Kreditanstalt fur Wiederaufbau. A bank which is part of the German export credit system.

lcb
Local Competitive Bidding. A procedure used in bidding for World Bank funded projects.

lch
London Clearing House.

legacy currencies
The currencies of the member states participating in EMU. The legacy currencies will eventually disappear and be replaced by the euro.

legalisation
The certification or stamping of documents by the embassy or consulate of an importing country.

leverage
To borrow, amount of borrowing (used as both a verb and a noun). Influence (used as both a verb and a noun).

lex monetae
The principle that the law of the country in whose currency a debt is expressed decides what constitutes the currency in question.

lib
Limited International Bidding. A procedure used in bidding for World Bank funded projects.

liba
London Investment Banking Association.

libor
London Inter-bank Offered Rate. The rate of interest at which first class banks are able to fund themselves in the London Inter-bank Eurocurrency market.

lien
Claim of a creditor over property.

limited recourse
Where, in the context of an export financing operation, the financier is able to look to another party to cover part of the risk of non-payment.

line of credit
A loan to a buyer to enable him to pay for a variety of imported goods on extended credit terms.

lme
London Metal Exchange.

london club
Used in the context of debt rescheduling arrangements to refer to commercial bank lenders to a debtor nation.

lse
London School of Economics.

lse
London Stock Exchange.

maastricht treaty
The Treaty on European Union which amended the Treaty of Rome. The Maastricht Treaty established key criteria which member countries needed to achieve in order to be eligible for EMU.

management fee or commission
Payable to a bank for arranging a loan facility or structuring a transaction. It is usually payable before or shortly after funds are drawn. M&A Mergers & acquisitions.

match funding
Where a bank arranges its own funding arrangements to match exactly the future repayment(s) under a loan or other lending transaction.

matif
Marché à Terme International de France.

maturity date
The date on which loan or a discounted cashflow falls due for payment.

mediocredito centrale
Istituto Centrale per il Credito a Medio Termine. An Italian medium term lending institution which, among other things, is the part of the Italian state export credit system responsible for paying interest rate subsidies. In particular it is well-known for paying such subsidies in the context of forfaiting transactions arising from Italian exports.

mercosur
A South American free trade area comprising Argentina, Brazil, Chile, Paraguay and Uruguay.

miga
The Multilateral Investment Guarantee Agency a division of the World Bank which provides guarantees to support foreign investment in developing countries.

mixed credit
A credit package, typically assembled in support of exports from a wealthy country to a less developed one, which may incorporate elements of Export Credits, Soft Loans, Grant Aid etc.

msci
Morgan Stanley Capital International.

mtn
Medium Term Note.

multilaterals
International agencies such as the World Bank set up to assist less developed countries.

nafta
North American Free Trade Agreement. A free trade agreement dating from 1994 involving Canada, Mexico and the United States of America.