The interest that has accumulated on a bond or loan since the last interest payment up to, but not including, the settlement date.
A form of securities lending where an agent (e.g., a bank or financial institution) lends securities on behalf of the owner (beneficial owner).
The simultaneous purchase and sale of an asset in different markets to profit from price discrepancies.
The true owner of a security, who receives the benefits of ownership even though the title may be held in another name.
An entity that borrows securities with the obligation to return equivalent securities at the end of the loan period.
A process by which a buyer of securities enforces delivery from a seller who has failed to deliver the securities by purchasing the securities in the market and charging the defaulting seller for any costs incurred.
Assets pledged by a borrower to secure a loan or other credit and subject to seizure in the event of default.
Any event initiated by a public company that affects the securities issued by the company, such as dividends, stock splits, or mergers.
A financial institution that holds customers' securities for safekeeping to prevent them from being lost or stolen.
Failure to fulfill the legal obligations or conditions of a loan, such as not making the required interest or principal payments.
A distribution of a portion of a company's earnings to its shareholders, usually in the form of cash or additional shares.
A financial instrument used when a security's dividend has been declared but not yet paid. It indicates the right to receive the dividend once it is paid.
The process of raising capital through the sale of shares in an enterprise.
A type of investment fund and exchange-traded product, meaning they are traded on stock exchanges, much like stocks.
The date on which a stock trades without the right to receive the next dividend payment.
A situation where one party in a trading contract does not deliver on their obligation to the other party.
The total number of shares of a stock that are publicly owned and available for trading.
A program allowing investors to lend out their fully paid securities in exchange for a fee.
High-quality securities that can be used as collateral in repurchase agreements and other transactions.
A standard legal agreement used for the lending and borrowing of securities across different jurisdictions.
The percentage difference between an asset's market value and the amount that can be used as collateral for a loan.
An investment made to reduce the risk of adverse price movements in an asset, typically involving derivative contracts like options and futures.
The practice of pledging securities as collateral to secure a loan without transferring ownership of the securities.
The International Securities Lending Association (ISLA) is a leading non-profit industry association, representing the common interests of securities lending and financing market participants across Europe, Middle East and Africa.
A guarantee provided by a lender to compensate the borrower for any losses incurred in a securities lending transaction.
A financial derivative contract in which two parties exchange interest rate cash flows, based on a specified principal amount from different interest rate indices.
An entity that lends securities to a borrower, usually in exchange for collateral and a fee.
The use of borrowed capital (debt) to increase the potential return of an investment.
The ease with which an asset can be converted into cash without affecting its market price.
A demand by a broker that an investor deposit further cash or securities to cover possible losses.
The process of valuing an asset at its current market price rather than its book value or purchase price.
Collateral provided in the form of securities or other non-cash assets, as opposed to cash.
The practice of short selling without first borrowing the security or ensuring that it can be borrowed, which is illegal in many markets.
A type of mutual fund that does not have restrictions on the amount of shares the fund can issue.
Trading done directly between two parties without the supervision of an exchange.
An authority to act on behalf of a shareholder for the purpose of voting at a company’s meeting.
A financial contract that gives the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a specified time period.
The action taken by a lender to request the return of securities on loan before the agreed return date.
A form of short-term borrowing for dealers in government securities, where the dealer sells the government securities to investors, usually on an overnight basis, and buys them back the following day.
A form of short-term borrowing for dealers in government securities, where the dealer sells the government securities to investors, usually on an overnight basis, and buys them back the following day.
The act of borrowing or lending securities, typically to cover short sales or for other trading strategies.
The sale of a security that the seller has borrowed, with the intention of buying it back later at a lower price.
Securities that are in high demand and low supply in the securities lending market, often leading to a premium being paid to borrow them.
A loan for a specific period of time, after which it must be repaid.
The date on which a trade is executed.
A loan that is not backed by any collateral.
A financial specialist who assesses and assumes another party's risk for a fee, such as in the issuance of securities.
A statistical measure of the dispersion of returns for a given security or market index.
A tax deducted at source, especially one levied on interest or dividends paid to a non-resident.
The capital of a business used in its day-to-day trading operations, calculated as current assets minus current liabilities.
The income return on an investment, such as the interest or dividends received, expressed as a percentage of the investment’s cost or current market value.
A graph that shows the relationship between interest rates and different maturities of debt securities issued by the same borrower.
A bond that does not pay periodic interest payments and is sold at a deep discount from its face value. The return is the difference between the purchase price and the face value at maturity. This glossary covers essential terms in securities finance, providing a foundational understanding of the key concepts and practices in this field.