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Glossary

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account statement   A record of transactions in an account at a financial institution or investment firm, usually provided each month.
accredited investor  A government, financial institution, large company, or individual with a required level of income or assets, permitted to invest in certain types of high-risk securities.     
administrative tribunal  Specialized government agency established to implement legislative policy.
advisors/advisers  Advisors specialize in giving advice to clients about investing in securities and are registered with the securities regulators. 
affinity fraud   A type of scam that usually occurs in a group setting (ethnic groups, clubs, associations, religious groups, etc.). Fraudsters will gain trust by joining groups with common interests; it is often easier to trust someone who is like you or has similar interests to you. Once trust is gained, it is easier to perpetrate a scam.
annual information form    An AIF is a legally required disclosure document to provide material information about a company and its business at a particular point in time based on its historical and possible future development.
annual report  A comprehensive report issued to shareholders that provides information about a company’s activities and financial condition.

annuity    

A financial instrument that provides a series of payments at regular intervals for a specified period of time. 
ask price     The lowest price a seller is willing to accept for a security.
asset-backed commercial paper     Short-term debt typically issued by banks and financial institutions. This is a kind of commercial paper that is backed by pool of assets, such as credit card receivables, car loans, or mortgages.
asset mix      The allocation of assets within a fund or your portfolio that is invested in the three major asset classes:  cash and equivalents, fixed income, and equity.
assets  Something that has a financial value and that could be converted into cash now or in the future.
back-end load  A sales charge or commission investors pay when an investment is sold.  
balanced portfolio  An investment portfolio that holds an appropriate mix of different types of investments, such as bonds and shares.
balance sheet or statement of financial position  A financial statement that shows a company's financial condition at a specific point in time. It summarizes a company's assets, liabilities, and shareholders' equity.
BC Securities Commission  The independent provincial government agency that regulates trading in securities (like stocks and bonds) and protects investors in BC.
benchmark  A market or sector index against which you can measure the performance of an investment (such as a mutual fund). 
beneficial owner     The individual who has the benefits of owning a security even though the title may be registered in another name.  
Better Business Bureau (BBB)  An organization dedicated to fostering fair and honest relationships between businesses and customers, instilling consumer confidence and contributing to an ethical business environment.
bid price         The highest price a buyer is willing to pay for a security.
boiler room      A scheme or fraud where salespeople use high pressure techniques, often by telephone, to push investment opportunities to generally unsophisticated investors.  
bond  An investment in which a government or company promises to repay money borrowed from investors at a specified time and to pay interest at a specified rate. A bond is secured against the borrower's assets.
bond ladder  A strategy for fixed income products that attempts to minimize risk by dividing up investment dollars evenly among bonds that mature at different times.
budget  An estimate of the income and expenses of a person, a family, or an organization, over a certain period of time. 
callable  

A term that applies to bonds and preferred shares where the company may require you to sell back the bonds or shares by a certain date for a specified price. Also known as redeemable.

call option  A type of option that gives the holder the right to buy an asset at a specified price within a specified time.
Canada Deposit Insurance Corporation (CDIC)  A federal government organization that provides insurance to protect money deposited in Canadian banks and certain other financial institutions. See more at CDIC.
Canada Pension Plan (CPP)  A Canadian government system in which you pay a percentage of your earnings to a fund that provides income when you retire. See more at CPP.
Canada Revenue Agency (CRA)  The federal government agency that collects taxes and administers Canada's tax laws. See more at CRA.
Canada Savings Bond (CSB)  Financial product offered by the Bank of Canada with a guaranteed minimum amount of interest.
Canadian Securities Administrators (CSA)  A council of the securities regulators of Canada's 13 provinces and territories. See more at CSA 
capital gain  The increase in an investment's value. It is the difference between the amount you initially paid for an investment and the amount you sold it for.
cash account  A trading account where you pay cash for all transactions.
cash equivalent  An investment that can be quickly converted to cash with little risk, such as a treasury bill.
category  Used when referring to stocks or mutual funds, categories help investors make meaningful comparisons between investments. 
cease trade order (CTO)  An order issued by a provincial or territorial securities commission or similar regulatory body against a company, management of a company, or any individual for a breach or an alleged breach of the Securities Act. Most CTOs are issued as a result of a filing deficiency, such as the failure to file a proper quarterly or annual financial statement, but may also be issued as a result of an enforcement action that involves a proven or admitted breach of the Securities Act.
certificate of deposit  A debt instrument that pays a fixed rate of interest at a certain point in time. Funds must be kept on deposit for a fixed period of time. 
clearing house  An organization that settles trades and regulates the delivery of securities transactions.
closed end investment fund  A fund that issues a finite number of units or shares, which may trade on a stock exchange.
CNSX  Canadian National Stock Exchange, a stock exchange for trading the equity securities of emerging companies. Formerly known as CNQ, Canadian Trading and Quotation System Inc. See more at CNSX
commercial paper  A form of loan you make to a corporation. You buy the investment at a discount and you get the full value back on the maturity date. The time period is less than one year.
commission  A fee you pay to a broker or agent for the service of arranging the purchase or sale of a security or real estate investment. Commissions vary between brokers.
commodity 

A basic good that is used in commerce that is interchangeable with another similar product. Commodity prices are subject to supply and demand. Examples include grain and oil.  

commodity pool  A fund that invests in derivatives or commodities that conventional mutual funds are not permitted to invest in.
common share  A share in the ownership of a company, giving the holder a vote in the election of directors and some other major corporate decisions and with the right to share in available assets if the company is wound up.
compound interest   Interest that's paid on the original amount deposited, and also on any interest that's been earned in previous periods (e.g., in year 1, the bank pays you $5 interest on your $100 deposit; in year 2, it pays you interest on $105). See also Rule of 72. 
contingency fund  A fund that exists to provide certain protections if a dealerglossary icon becomes insolvent either because of business failure or fraud that leads to insolvency. Examples include the Canadian Investor Protection Fund (CIPF) for investment dealers and the MFDA's Investor Protection Corporation (IPC) for mutual fund dealers.
continuous disclosure  The legally required public disclosure by issuers of their financial statements and new releases.
control person  Significant shareholders, acting alone or with others, that are in a position to influence the actions of a company. 
counterparty  A party to a contract, generally the entity or person(s) with whom you negotiate an agreement (the other party to a transaction).
coupon rate  The interest rate stated on a bond, note, or other fixed income security when it is first sold.
credit union  A financial institution that is owned by its members (depositors and borrowers).
Credit Union Deposit Insurance Corporation (CUDIC)  A government organization that provides insurance to protect money deposited in British Columbia credit unions. See more at CUDIC.
cumulative  Collection or successive additions; accumulation of unpaid dividends to be repaid if a company makes money. 

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dealers  People, or investment firms, registered to buy or sell securities on behalf of clients and give advice to clients about the purchase or sale of securities. .
debenture   Similar to a bond: a company promises to repay money borrowed from investors at a specified time and to pay interest at a specified rate. A debenture is secured only against the general credit of the borrower.
debt 

An amount borrowed from lenders. The borrower pays interest for the use of the money and is obliged to repay by a specific date. Examples include bonds, commercial paper, and debentures. 

decision  A direction, decision, order or ruling or requirement made under a power or right given by the Securities Act or the regulations.
deferred sales charge (DSC)  A sales charge or commission you pay when an investment is sold. 
 defined benefit pension plan  A pension plan whereby an employer pays a predetermined and ongoing amount when an employee retires. The amount is based on earnings and the number of years worked.
defined contribution pension plan  A pension plan with an individual account for each participant. The amount of the benefit is based on how much you make each year and how much your company contributes. The retirement income depends on the plan’s investment income and the amount contributed to the plan.
deposit insurance  An insurance plan designed to protect the money you deposit if a bank, credit union, or trust company fails. See also CDIC and CUDIC.
derivative  A financial contract that gives you the right to buy and sell at specified prices. Examples include call and put options.
disciplinary action  Action taken by a securities regulator to discipline an individual, company or registrant. This can include a fine or a ban from the securities market.
discount broker  A stockbroker that charges lower fees compared to full service brokers. No investment advice is given.
discount brokerage firm  Brokerage firms that provide no investment advice, and charge a lower fee to buy and sell securities.
discretionary trade  When you give someone else authority to make investment decisions and trade securities for you without checking with you prior to each trade.
diversification  A way to reduce portfolio risk and volatility by investing in various types of investments. It is unlikely the value of these securities will move up or down at the same time.
diversify  Reducing risk by investing in a number of assets. 
dividend  A portion of a company's profit that a company decides to pay to shareholders.
dividend yield  A financial ratio that shows how much a company pays out in dividends relative to the current share price.
dollar cost averaging  A timing strategy that requires investing money at regular intervals regardless of market conditions. Designed to reduce price volatility.
early warning report  A report that must be filed when a person or group of people acquire 10% of a company's securities.
earnings per share (EPS)  The portion of a company's profits divided by the number of shares outstanding. 
educational assistance payment (EAP)  Payments from a group scholarship plan that a child receives when attending a post secondary institution. 
equity   See our shareholders' equity definition
equity investments  Ownership shares in a company. Also known as shares and stocks.
escrow  Securities deposited with a neutral third party and held in trust that are delivered when certain conditions are fulfilled.
exchange-traded fund (ETF)  A fund that holds the same mix of investments as a stock or bond market index and trades on a stock exchange.
exemption  The  Securities Act and Rules provide a number of exemptions from the registration and prospectus requirements. If you purchase securities using these exemptions, the securities are subject to resale restrictions.
exempt market  A market where private companies sell their securities under various exemptions from the prospectus and registration requirements. See also exemption, private company, and offering memorandum.
expected return  The overall profit you expect to receive from an investment in the future which may be very different from the actual returns that you eventually receive.
face value  The value printed on the face of currency or other financial instruments, like bonds or debentures. The amount that a lender will receive when a bond or debenture is repaid, exclusive of interest. See also maturity date.
financial advisor  A person who offers advice about buying or selling investments.
financial institution  A bank, trust company, credit union, or other institution that offers financial services such as savings and chequing accounts, loans, and credit cards. 
financial plan  A written plan that helps you identify your goals and figure out how to manage your money to achieve your goals.
financial planners  People who determine how individuals can meet their financial goals through proper management of their financial resources. They offer financial services such as budgeting, cash and debt management, retirement, and tax planning. Except in Québec, financial planners are not subject to provincial registration or regulation.
financial statements  A formal record of a company’s financial activities for a period of time, usually including a statement of financial position or balance sheet, statement of comprehensive income or income statement, cash flows or a cash flow statement, and notes.
FINRA  The Financial Industry Regulatory Authority is the largest independent regulator for all US securities firms. See more at FINRA.
fixed income investments   Investments that pay you predetermined interest or dividend income such as government and corporate bonds and debentures.
flow-through partnership  Provides tax-assisted investment in a portfolio of flow-through shares of resource companies (generally oil and gas or mineral exploration) with earnings and capital appreciation for the benefit of the limited partnership.
flow-through share  A special type of common share issued by oil and gas or mineral exploration companies that allows certain tax deductions.  
foreign exchange (forex)   Investing in different currencies to make money on the changes in exchange rates. Also known as FX trading.
forward  A contract where the seller agrees to deliver to the buyer an agreed amount of an asset at a specified price on a specified future date. Forwards are traded in the over-the-counter market.
front-end load  A sales charge or commission investors pay when an investment is initially purchased. 

full service investment firm 

A firm that provides a full range of investment products and services for a variety of fee types, including investment advice.
Fund Facts  A document that highlights key information for an investor in a mutual fund, in language the investor can easily understand, including a description of the fund, as well as the performance, risks, and costs of buying and owning the fund.
future  A derivative product whereby the seller agrees to deliver to the buyer an agreed amount of an asset at a specified price on a future date. Futures are traded on an exchange.
guaranteed investment certificate (GIC)  Deposit certificate issued by a financial institution.
guaranteed minimum withdrawal benefit (GMWB)  Guaranteed fixed income that certain segregated funds will pay out of your investment.

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hedge  An investment made to reduce the risk of adverse price movements of another asset.
hedge fund  An investment pool that uses advanced investment strategies that are not generally permitted for traditional mutual funds. Examples include various types of derivatives.
high yield investment program (HYIP)  An investment that promises high rates of return but is a scam. It is a type of Ponzi scheme where returns are paid with money invested by new investors.
income statement or statement of comprehensive income  A financial statement that measures a company's financial performance by summarizing revenues and expenses for a specific period of time.
income trust  A trust that is designed to distribute cash to investors. Examples: real estate investment trusts (REITS), oil and gas income trusts, also known as royalty trusts.
incorporated  A firm or company that has formed a legal corporation by completing the required procedures. See more at British Columbia Coporate Registry.
index  A statistical composite of securities that measures financial and economic performance. It is used as a performance benchmark.
individual variable insurance contract (IVIC)  A contract with a life insurance company that gives the contract holder certain specified benefits based on the value of one or more segregated funds.
information circular  A document sent to shareholders that outlines important issues that will be discussed at a shareholder’s meeting.
initial public offering (IPO)  A company’s first sale of stock to the public.
insider  A director or officer of a company, a shareholder who owns a significant number of shares, a director or officer of a person that is itself an insider, a subsidiary, and certain other specified individuals or companies. 

insider disclosure 

The legally required public disclosure by insiders of their securities holdings and transactions. 
Integrated Market Enforcement Team (IMET)  A team of investigators focused on capital markets fraud, including members from the Royal Canadian Mounted Police, federal Ministry of Justice, local police forces and securities regulators. See more at IMET.
interest  A fee paid for borrowing money expressed as a percentage rate over a period of time.
interim financial report      For financial years beginning on or after January 1, 2011, financial statements issued for an accounting period of less than one year. Formerly called interim financial statements.
 International financial reporting standards (IFRS)    Global accounting standards that provide transparent and comparable information in financial statements. IFRS will apply to most Canadian publicly accountable enterprises for financial years beginning on or after Janaury 1, 2011.
 inverse ETF (leveraged ETF)  An exchange traded fund that uses derivatives to profit from a decline in the value of an underlying benchmark.
investment  A way to put your money to work in the expectation that it will provide income, increase in value, or both.
investment fund  An investment where money is pooled and invested in a diversified mix of assets. Funds are professionally managed and fees are charged.
Investment Industry Regulatory Organization of Canada (IIROC)  The national self-regulatory organization that oversees all investment dealers and trading activity on debt and equity marketplaces in Canada. IIROC formed after a merger between the Investment Dealers Association and Market Regulation Services Inc. See more at IIROC.
investor alert  The BCSC issues Investor Alerts to raise public awareness about suspicious activities.
investor watch  The BCSC issues investor Watches to provide information on specific products or investment opportunities that investors should be cautious about.
issuer  A company or other entity that has issued, or is proposing to issue, securities.
issuer bid  An issuer offers to buy back some of their own securities. Often done when the company believes the market is undervaluing its shares.
junk bond  A high-risk, speculative bond with a low credit rating and high risk of default.
know your client  The duty of investment dealers and advisors to understand the general investment needs and objectives of their client. 

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labour sponsored investment fund  A fund that provides venture capital to new and small businesses and offers tax incentives to investors.
legal advice  Advice from a lawyer on your individual circumstances.
letter of credit  A written commitment issued by a financial institution that acts as an irrevocable guarantee of payment.
leverage  An investment technique where you use a small amount of your own money to make an investment of much larger value. It involves borrowing money and can result in magnified gains or losses.
leveraged ETF  An exchange-traded fund that uses derivatives and debt to amplify returns of an underlying benchmark.
limited partnership  An interest in a partnership consisting of a general partner who manages the partnership, and limited partners who provide the investment capital.
linked note  A hybrid investment product that combines the features of fixed income investments and derivatives. The return is linked to the performance of an underlying benchmark, such as one or more stocks, a stock market index, a commodity, a currency, an investment fund, or other portfolio.
liquidity   Ability to sell an investment quickly and at a fair price. 
locked-in retirement  account (LIRA)   An account for locked-in pension funds. It is like an RRSP, but funds are not normally available to holders until retirement.
long  Signifies ownership of securities. Also an investment strategy where you purchase the security because you think its price will increase.
management's discussion and analysis (MD&A)   The section of a quarterly or annual financial report in which the issuer's management comments on its financial results.
management expense ratio (MER)  The management expense ratio (MER) is the total of the management fee and operating expenses expressed as a percentage of the fund's value. Funds show their MER as a percentage of the fund's assets.
management fee  A service fee you pay the manager of your investments to manage the risk inherent in your portfolio.
margin account  A trading account that allows you to borrow money to buy securities.
market maker  A company or individual who buys and sells securities to ensure market liquidity. 
market price  The price that buyers and sellers agree to trade the security on the open market. The prevailing price that the security is sold.
material change  A change in a company's business that significantly affects the market value of its securities.
maturity date  The date on which a bond, debenture, GIC, or term deposit is due to be repaid.
money market fund  Mutual fund that invests in short-term fixed income securities.
mortgage backed security 

A debt security where the payments to investors are backed by a pool of mortgages, either on residential or commercial properties.  

mortgage investment company (MIC)  An investment and lending company that purchases mortgages for investment purposes.
mutual fund  A pool of money that is invested in securities for a large number of investors by a professional money manager and entitles you to redeem your units at the end of each trading day.  
mutual fund dealer  A company that buys and sells the shares or units of mutual funds for investors.
Mutual Fund Dealers Association of Canada (MFDA)  The national self-regulatory organization for the distribution side of the Canadian mutual fund industry. The MFDA regulates the operations, standards of practice, and business conduct of its members and their representatives. See more at MFDA.
mutual fund unit  Part ownership in a mutual fund.
National Association of Securities Dealers Automated Quotations (NASDAQ)  The largest electronic screen-based equity securities market in the United States, founded in 1971. See more at NASDAQ.
National CTO Database  Real-time dissemination system of cease trade order information operated and maintained by the CSA. The national CTO database includes outstanding CTOs against issuers, management, and individuals from the securities regulatory authorities in most provinces.  See more at National CTO Database.
National Registration Database (NRD)  The CSA's national web-based system that permits individuals who are dealers or advisors to file registration forms electronically.
net asset value (NAV)  The value of all the assets of a mutual fund, less the fund's liabilities.
new client account form  You are required to complete this form when you open a securities trading account. This form includes basic personal information and your investment preferences.
non-disclosure agreement  A contract that protects information that is considered to be proprietary or confidential. Also known as a confidentiality agreement.
North American Securities Administrators Association (NASAA)  An association that consists of Canadian provincial, American state, and Mexican federal securities regulators. NASAA promotes cooperation in the development and enforcement of securities laws and assists members in investor protection.  See more at NASAA.
notice of hearing  If BCSC staff decide to pursue a case against someone or a firm, we issue a notice of hearing. It contains key information about the hearing, such as the allegations and proposed penalties. Notices are published on the BCSC public website.
offering document  A document that offers securities for sale, including an offering memorandum or a prospectus.
offering memorandum   A legal disclosure document that has the same purpose as a prospectus, but is much shorter and less detailed. It must contain specific information about the investment that help potential buyers make an investment decision on exempt-market securities. 
offshore investment banking  Investment banking that is handled outside of Canada.
offshore investment schemes  Schemes that involve sending money outside of Canada.
Ombudsman for Banking Services and Investments (OBSI)  An independent Canadian body that investigates complaints from individuals and small businesses about products and services provided by banks, investment dealers, and mutual fund dealers. See more at OBSI.
open-ended mutual fund  A type of mutual fund that does not limit the number of shares or units that can be issued by the fund.
option  The right to buy or sell an asset at a specific price for a specific period of time.
order  A decision issued by a securities regulatory authority under the securities regulation of the relevant province or territory.
Over-the-Counter Bulletin Board (OTCBB)  A quotation service that displays quotes, last-sale prices, and volume information for equity securities trading over-the-counter in the United States. See more at OTCBB.
over-the-counter market  A market for securities that do not trade through a regulated exchange or market. 

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pension  A regular payment made to a retired or disabled employee, usually from a fund that the employer and employee have contributed to in prior years. 
performance fee 

An incentive fee paid to the manager of an investment fund that is based on the portfolio's performance.

pink sheets  An electronic system published by Pink Sheets LLC, to display bid and ask quotation prices of securities. The company changed its name to OTC Pink in 2008, and has oporated as OTC Markets Group since 2010. See more at OTC Markets.
Ponzi / pyramids   This is an investment fraud where there is no actual investment. Money from new investors is used to pay existing investors to make it appear that money is being made.
portfolio  The collection of stocks, bonds, or other investments you own. 
portfolio manager 

A person with greater educational qualifications than a dealer who is authorized to make discretionary trades for institutional investors and high net worth individuals.  Also, a firm or individual who manages a mutual fund or collection of securities.

preferred share  A share that pays a fixed dividend and receives priority over common shares. Owners have limited or no voting rights. 
price-earnings (PE) ratio     The current market price of a stock divided by the earnings per share.
principal  The money originally invested or lent to earn interest or other income. 
prime bank schemes  A fraud where scam artists lead investors to believe that they can make high returns by participating in a secret trading regime, typically with the world's major banks.
principal protected note (PPN)  An investment that promises to return you the original amount you invested (usually after 6 to 10 years). Any potential return above the principal is variable and is usually linked to a market index, a fund, or another underlying investment. 
private company  A private company is one that sells its securities under one or more exemptions and is not a reporting company.
private placement  A company issues securities privately rather than offering them to the public. There is no formal prospectus and the shares are subject to resale restrictions and may not be able to be sold for a period of time. 
promissory notes  This is a promise to pay back money borrowed under specific terms (payable on a specific date along with a specific interest payment).
prospectus  A formal document required by law when a company wants to sell shares to the public. 
proxy  A written authorization that allows a person to act for another as agent or substitute.
public company  A public company in British Columbia is most commonly one that is a reporting issuer and has issued securities under a prospectus in British Columbia or been listed on a stock exchange. 
pump and dump 

A scheme where fraudsters use false statements to temporarily increase the share price so they can sell shares they bought cheaply.

put option  A type of option that gives the holder the right to sell an asset at a specified price within a specified time. 
rate of return  The gain or loss on an investment expressed as a percentage of the total amount invested.
Real Estate Investment Trust (REIT)  A publicly traded trust that invests in real estate through properties or mortgages. 
real return   The return from an investment adjusted for inflation. For example, if your investment earned 6% interest last year, but the cost of everything went up 4%, you are only ahead (your 'real return' is only) 2%. 
recovery room  A scam where there is an offer to buy shares for a front-end commission. Victims are people who initially bought shares from a boiler room. See also boiler room
redeem     To cash in, buy back, or repurchase a security.
redeemable 

A term that applies to bonds and preferred shares where the company may require you to sell back the bonds or shares, by a certain date for a specified price. Also known as callable.

red flags  A warning sign that causes you to stop and seriously consider an investment as being dangerous. 
registered  Advisors and investment companies licensed by a securities regulator to buy and sell investments, or provide investment advice. Also, accounts and retirement plans protected by income tax and other laws.
RegisteredEducation Savings Plan (RESP)  An education savings plan, established for the purpose of providing tax-sheltered financial assistance to fund post-secondary education. Income on savings within an RESP grows tax-sheltered. See more at Canada Revenue Agency RESP.   
Registered Education Savings Plan Dealers Association of Canada (RESPDAC)  RESPDAC is a trade association that represents members and establishes rules and procedures for self-regulation. See more at RESPDAC
Registered Retirement Income Fund (RRIF)  A tax deferral investment available to RRSP holders who deregister their plans. The plan holder invests withdrawn RRSP funds in the RRIF and each year must withdraw and pay income tax on a set portion of the fund. 
Registered Retirement Savings Plan (RRSP)   A special type of savings plan registered with the government that allows you to reduce the income tax you pay on money you save for retirement. Any income you earn in the RRSP is usually exempt from tax for the time the funds remain in the plan.
registrant  A firm or individual that is registered under the Securities Act to trade or advise in securities. 
reporting insider  The most senior officers of a company, its subsidiaries and significant shareholders, the directors, an insider that has access to information that would allow them to influence the company’s activities, and certain other specified insiders.  
reporting issuer  A reporting issuer in British Columbia is most commonly one that has issued securities under a prospectus in British Columbia or has at any time been listed on the TSX Venture. These issuers, often called public companies, are subject to the continuous disclosure requirements of securities laws. 
restricted voting share  A share that has restricted or no voting rights.
retractable 

A term that applies to bonds and preferred shares where, under certain circumstances, you can require the company to repay the principal, or buy back the bond or share, before the security's due date.

return  The profit you make on an investment through interest, dividends or increased value of the investment. See also expected return.
return of capital  A return from all, or a portion of, an investment, that is not considered income. It is not a gain because it is simply paying back money you originally invested. 
return on capital  This is a rate of return measure. It shows how effectively a company utilizes funds invested in its operations. It is calculated by dividing after-tax operating income by the book value of capital invested in the company.
return on investment (ROI)  A profitability measure. It is the gain or loss on an investment expressed as a percentage of the total amount invested.
 rights  The option to buy additional securities from the company at a certain price within a certain period of time. 
 rights plan  A defensive tactic often adopted by a company’s board in response to or in anticipation of an unsolicited or hostile take-over bid.
risk  Amount of uncertainty about the expected return from an investment, including the possibility that the investment may lose money or become worthless.  
risk acknowledgement form  A risk acknowledgement form must accompany an offering memorandum. This form states that you are aware of the risks posed by the investment. You must sign it if you decide to invest. 
risk tolerance  How willing or comfortable you are to risk losing your money on an investment. 
Rule of 72  Divide 72 by the annual interest rate you are receiving to determine approximately how many years it will take to double your investment. See also compound interest.
RS  Market Regulation Services, Inc., now known as IIROC.

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savings  Money you have not spent or have put aside. 
savings account  An account with a bank, trust company, or credit union that pays interest on the money you deposit and allows you to withdraw your money at any time. 
savings bond  A loan to a government that is secured by the general credit and taxation powers of the government. 
scam  A fraudulent or unethical activity; a fraud or trick, an unethical scheme. 
scholarship plan dealer  A type of firm that is registered to sell scholarship or education savings plans. 
securities  An ownership interest in investment products including bonds, notes, stocks, future contracts, and options. 
Securities ActRSBC 1996, c.418  The Securities Act in BC regulates buying and selling stocks, bonds, and other securities.
securities regulation  The regulation of the conduct of securities market participants including: issuers that raise capital through security offerings, and their directors and officers; securities firms, their directors and officers, and their employees registered to advise and trade in securities. Securities regulation is the responsibility of the BC Securities Commission in British Columbia. 
securities regulators  Organizations that apply the rules and laws of securities legislation to the marketplace. Contravention of the legislation may result in fines and/or a ban from participating in the public marketplace. 
Securities Rules, BC Reg. 194/97  Specific requirements under the Act, approved by government and issued by the BC Securities Commission. 
SEDAR: System for Electronic Document Analysis and Retrieval  The CSA's national electronic filing system for disclosure by public companies and mutual funds. 
SEDI: System for Electronic Disclosure by Insiders  The CSA 's national web-based system that facilitates the filing and public dissemination of insider reports.
segregated fund  An insurance product that combines investment products with insurance coverage. 
self-regulatory organization (SRO) An organization that establishes and enforces minimum standards and rules of conduct for members. The Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada are examples of self-regulatory organizations.  
settlement agreement  A settlement agreement is a signed document between staff of the BCSC and a person who agrees that the allegations against them are true. 
share  A partial ownership interest in a company. Also known as stocks and equities. 
shareholder  Someone who owns shares in a company. 
shareholder communication form  A form shareholders complete to indicate their instructions about the communication they wish to receive from companies on investments they own, and how they wish to receive the communication. 
shareholders' equity or equity  On a balance sheet, shareholders' equity is the company’s total assets minus total liabilities, also known as stockholders' or owners' equity.
short selling  The sale of borrowed securities with the intention of repurchasing them later at a lower price and earning the difference. 
short-term trading fee  A fee charged to investors when mutual fund shares are sold prior to the expiration of a hold period.
simple interest  Interest that is paid only on the amount of the initial deposit and not on any interest the deposit earns over time, unlike compound interest. For example, in year 1, the bank pays you $5 interest on your $100 deposit; in year 2, it again pays you interest, but only on the original $100 deposit. 
sinking fund  Funds are set aside in a separate account and used to pay off or redeem debt securities.
spot market  A commodities or securities market where goods are traded for cash and delivered immediately. 
start-up company  A new business venture that seeks private financing.
statement of allegation  A statement of allegation is made by BCSC staff when they have found conduct that contravenes the Securities Act or is otherwise contrary to the public interest. Staff state their allegations in a notice of hearing. Staff must then prove the allegations in a public hearing before a panel of commissioners. 
statement of cash flows or cash flow statement  A financial statement that shows a company’s cash receipts and payments during a specified period. 
statement of comprehensive income      See our income statement definition.
statement of financial position  See our balance sheet definition.
 statute of limitations  Law that places a time limit in which an action can be taken. 
stock  A share in the ownership of a company. Also known as shares and equities.
stock exchange  A public place where shares and some other types of investments can be bought and sold. 
stockholder  Someone who owns shares in a company.
stock spam  Unsolicited email that promotes a company's stock.
strip bond  An interest payment coupon and the principal portion of a bond, are separated from each other and are sold as individual investments.
suitability  Every registered securities advisor in Canada is required by law to recommend only investments that are appropriate for an investor’s goals and financial situation. 
suitable investment  An investment that is appropriate to your risk tolerance and investment goals when considered in the context of your life circumstances and entire portfolio. 
swap  A derivative product whereby two parties agree to exchange an asset, cash flow, or some other liability for another. 
takeover bid  An offer that a shareholder or prospective shareholder makes to acquire at least 20% of the shares of a company.
term deposit  A type of deposit with a financial institution that is repaid to you at a specified time (for example, 90 days or one year) and at a specified interest rate. 
term to maturity  Specifies the date or term period before a bond matures and is redeemable.
thinly traded  A term that describes an inactive or infrequently traded security. 
timing the market  Buying or selling securities by attempting to predict future market directions.
trade  A trade is the sale of a security for valuable consideration. It does not include the purchase of a security, or a transfer, pledge or mortgage. or other encumbrance of a security for the purpose of giving collateral for debt. 
trailer fees  A commission or fee paid monthly or quarterly to salespeople for advice and other services.
transfer agent  A trust company, bank, or financial institution that a company appoints to maintain records of investors and account balances and transactions. 
treasury bill (T-bill)  A security where you lend money to the government for a short period of time. There is no interest, but rather you buy the T-bill at less than the price the government will pay you at the end of the loan term.
trust company  A financial institution, similar to a bank, that can take deposits and make loans. Trust companies often provide other specialized services that banks cannot, like administering estates and pension plans. 
trust units  Units of a trust, such as a royalty trust, income trust, or real estate investment trust. 
TMX Group  A public company that operates several markets including the Toronto Stock Exchange, TSX Venture Exchange, and the Montreal Exchange. See more at TMX Group.
TSX  Toronto Stock Exchange is the national senior equity exchange and a subsidiary of TMX Group
TSX Venture Exchange  The national junior equity exchange, a subsidiary of TMX Group
voting instruction form  A form that non-registered owners receive in place of a proxy form.

WXYZ 

 
 
warning  Cautionary advice that an infraction occurred without fine or penalty, and corrective action is required. 
warrant  The right to buy additional securities from the company at a certain price within a certain period of time. Usually included with a new issue of securities as an inducement for investors to buy the securities. 
West African letter scam 

Individuals who claim to be high-ranking government officials from a developing nation ask you to help them gain access to large sums of money that they will share with you. See more at the Royal Canadian Mounted Police's Nigerian/West African Fraud.   

yield  The promised rate of return on an investment expressed as a percentage.
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