Glossary of Terms


Additional Public Offer:
When a listed company seeks to raise additional capital by offering more of its shares to the public.
Annual Report:

Early record of a publicly held company’s financial condition. It includes a description of the firm’s operations, as well as balance sheet, income statement, and cash flow statement information.

Anti-Money Laundering:

Refers to the laws, regulations and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income.

Articles of Incorporation:

Legal document establishing a corporation and its structure and purpose.


Balance Sheet:

A balance sheet is a financial statement that reports a company’s assets, liabilities and shareholders’ equity at a specific point in time, and provides a basis for computing rates of return and evaluating its capital structure. It is a financial statement that provides a snapshot of what a company owns and owes, as well as the amount invested by shareholders.


The price a potential buyer is willing to pay for a security.

Bull Market:

Any market in which prices are in an upward trend.

Broker (also called Stockbroker):

An individual who is paid a commission for executing customer orders. Also, person who acts as an intermediary between a buyer and seller, usually charging a commission. A “broker” who specializes in stocks, bonds, commodities, or options acts as an agent and must be registered with the exchange where the securities are traded.


Bonds are debt and are issued for a period of more than one year. When an investor buys bonds, he or she is lending money. The seller of the bond agrees to repay the principal amount of the loan at a specified time.


Capital Appreciation (also called Capital Growth):
The increase in an asset’s market price.
Closing Price:

A weighted average price which is calculated as the total value traded divided by the total volume traded.

Capital Distribution:

A payment made, liability incurred or other consideration given by a Company to any Person that is not a Company, (a) for the purchase, acquisition, redemption, repurchase, payment or retirement of any capital stock or other equity interest of such Company, or (b) as a dividend, return of capital or other distribution (other than any stock dividend, stock split or other equity distribution payable only in capital stock or other equity of such Company) in respect of such Company’s capital stock or other equity interest.


Debt Instrument:

An asset requiring fixed dollar payments, such as a government or corporate bond.

Deferred Share:

A share(s) issued at no par value that shall be held by an investor for a period of usually not less than five (5) years. They form part of the capital of the issuing organization. Deferred shares are similar to preference shares which generate interest income for the shareholder.


Dividing investment funds among a variety of securities with different risk, reward, and correlation statistics so as to minimize unsystematic risk.

A portion of a company’s profit paid to common and preferred shareholders.


Exchange Traded Fund:

A basket of stocks similar to an index mutual fund.

Ex-dividend Date:

The first day of trading when the buyer of a stock is no longer entitled to the most recently announced dividend payment (i.e., the trade will settle the day after the record date, too late for the buyer to appear on the shareholder record and receive the dividend.)

Exempt Distribution:

With regulatory approval, companies can issue securities to raise money without the time and expense of filing a prospectus. This is called an exempt distribution. These exempt distributions are granted exclusively by the Financial Services Commission (FSC).

Ex-rights Date:

The date on which a share of common stock with rights on it begins trading ex-rights.


Ownership interest in a firm. Equity is also shorthand for stock market investments.


Fixed Rate:

A traditional approach to determining the finance charge payable on an extension of credit. A predetermined and certain rate of interest is applied to the principal.


Global Bond:

Bonds designed to qualify for immediate trading in any domestic capital market and in the Euromarket.


Initial Public Offer:

An initial public offering (IPO) is a company’s first sale of its shares to the public.

Issued Share Capital:

Total amount of shares that have been issued by a company; also described as outstanding shares.


An International Securities Identification Number (ISIN) uniquely identifies a security. The ISIN code is a 12-character alphanumeric code that serves for uniform identification of a security through normalization of the assigned National Number, where one exists, at trading and settlement.


Junior Market:

A market for trading in shares of smaller or younger companies. Being listed on a Junior market is often a stepping-stone to a larger market, especially for a high-growth business. In Jamaica, the Junior Market in Jamaica admits companies with capital of $500 million and below.


Know Your Client (KYC):
The know your customer or know your client (KYC) guidelines in financial services require that professionals make an effort to verify the identity, suitability, and risks involved with maintaining a business relationship. The procedures fit within the broader scope of a bank’s Anti-Money Laundering (AML) policy. KYC processes are also employed by companies of all sizes for the purpose of ensuring their proposed customers, agents, consultants, or distributors are anti-bribery compliant, and are actually who they claim to be. Banks, insurers, export creditors, and other financial institutions are increasingly demanding that customers provide detailed due diligence information. An ethical foundation of licensed securities brokers is that an adviser who recommends the purchase or sale of any security to a customer, must believe that the recommendation is suitable for the customer, given the customer’s financial situation.



In context of securities, liquidity of a security refers to a high level of trading activity, allowing buying and selling with minimum price disturbance. A liquid market is, a market characterized by the ability to buy and sell with relative ease. In context of a corporation, liquidity refers to the ability of the company to meet its short-term financial obligations.


Market Capitalization:

The total dollar value of all outstanding shares, computed as shares times current market price. Capitalization is a measure of corporate size.

Market Price:

The last reported price at which a security was traded on an exchange.

Market Value:

The price at which a security is trading and could presumably be purchased or sold.


In financial terms, a financial mentor is essentially someone who can help you plan smart strategies for how to spend, save, and invest your money. Money can get complicated and having a trusted financial mentor can bring clarity and context to your financial decisions and make things like investing and saving a little easier to manage.

Mutual Fund:

Mutual funds are pools of money that are managed by an investment company. They offer investors a variety of goals, depending on the fund and its investment charter.



Instruction to a broker/dealer to buy, sell, deliver, or receive securities or commodities that commits the issuer of the “order” to the terms specified.

Ordinary Share (Stock):

Also known as common shares, is defined as shares of a company that give shareholders the right to vote in the company’s meeting and also an income in the form of dividends from the corporation’s profits.


Occurs when the number of shares that investors want to buy is higher than the number of shares available.


P/E Ratio:

The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS). To determine the P/E value, one simply must divide the current stock price by the earnings per share (EPS).

Par Value:

Also called the maturity value or face value; the amount that an issuer agrees to pay at the maturity date.


A portfolio is a collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including closed-end funds and exchange traded funds (ETFs).

Primary Market:

The primary market is where securities are created. It’s in this market that firms sell (float) new stocks and bonds to the public for the first time. An initial public offering, or IPO, is an example of a primary market.

Private Placement:

A sale of stocks, bonds, or securities directly to a private investor, rather than as part of a public offering.

Preference Share:

Preferred shares of a corporation that have first claim to preferred dividends.


A formal document that provides details about an investment offering to the public. A prospectus is filed for offerings of stocks, bonds, and mutual funds.


Record Date:

Date by which a shareholder must officially own shares in order to be entitled to a dividend.


An agent of a bank, trust company, or other corporation who is responsible for certifying and registering issues of securities.

Repurchase Agreement:

An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date.


Secondary Market:
In the secondary market, investors trade among themselves. That is, existing investors trade previously issued securities without the issuing companies’ involvement.

A document that proves ownership of an investment asset, whether  stocks, bonds, or other securities.

Person or entity that owns shares or equity in a corporation.
The selling of a stock that the seller does not own. More specifically, a short sale is the sale of a security that is not owned by the seller, but that is promised to be delivered. In practical terms, facilities exist in markets where shares can be loaned to settle a position, and paid back, usually with a margin, to the lender or owner of those securities.
Stock Split:

Occurs when a firm issues new shares of stock and in turn lowers the current market price of its stock to a level that is proportionate to pre-split prices.


Trade Settlement:

A transaction method wherein the securities in trade are transferred into the buyer’s account and the monetary value of the security is deposited into the seller’s account post a trade execution.


A trustee is a person or firm that holds and administers property or assets for the benefit of a third party. A trustee may be appointed for a wide variety of purposes, such as in the case of bankruptcy, for a charity, for a trust fund, or for certain types of retirement plans or pensions.


A situation in which the demand for an initial public offering (IPO) or another offering of securities is less than the number of shares issued.
To guarantee, as to guarantee the issuer of securities a specified price by entering into a purchase and sale agreement. To bring securities to market.
Unit Trust:
Unincorporated mutual funds that pass profits directly to investors rather than reinvesting in the fund. The terms ‘mutual fund’ and ‘unit trusts’ are used interchangeably.


Variable Rate:

Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution.



The percentage return paid on a stock in the form of dividends, or the effective rate of interest paid on a bond or note.