Glossary

Find explanations and definitions of a large number of financial terms and expressions

A

  • ACT  Share (Action)

  • ADR  American Depositary Receipt.

  • ADS  American Depositary Share.

  • American depositary receipt  Receipts evidencing the shares of a foreign company on deposit or under the control of a US banking institution.
    See: ADS

  • American depositary share  Share of a non-US company which is represented by an ADS.
    See: ADR

  • ATR  Securisation share (Action de titrisation)

  • Average floating interest rates  Mean of floating rates in a specific currency over two weeks.
    See: stock exchange indicator

  • Average yield rate  Mean of yield rates to maturity of a group of bonds classified by listing currency and term

B

  • Basket of securities  Group of securities

  • BdL Market: code EU  Il s'agit d'un marché réglementé au sens de la Directive 2004/39/CE et figurant sur la liste des marchés réglementés de la Commission Européenne 

  • BDR  Bearer Depostiary Receipt

  • Bonds  A bond is a tradable debenture certificate which represents a fraction of a loan issued by a company, a public body or a government. As his income is contract-based, the bondholder does not support the business risk of the issuing entity. However, he has no corporate right and he is not entitled to receive a dividend and to take part in the issuing entity's management. Remuneration takes the form of an interest (coupon) paid at predetermined maturities.

    - Fixed-rate bond (straight bond): a bond which bears a fixed interest.
    - Floating-rate note: a bond which bears a variable interest set for given periods of time. 
    - RMB bond: a bond which is traded in Renminbi(RMB)on the LuxSE
    - Zero-coupon bond: no coupon stripping – the bond bears no interest.

    See: debenture

  • Bond with warrant attached  This particular type of bonds has a security, ie a warrant, attached to the bond. The security entitles to subscribe to a specified security by paying the defined subscription price. The holder may strip the warrant from the bond and to trade it on its own.
    See: bond, ex-warrant bond, warrant

C

  • Call option  Buying option. The right but not the obligation to buy stock or shares at an agreed price up to a date in the future.
    See: Warrant, Put

  • Capital underlying  Underlying to which the capital is linked.

  • Capitalization (type of income)
    See: type of share/unit of UCI

  • CDR  Continental Depositary Receipt

  • Certificate
    See: depositary receipt, securities, real estate certificate

  • CI  Real estate certificate (Certificat Immobilier)

  • CNF  Convertible Floating rate note (Emprunt convertible à taux flottant )

  • CNS Straight convertible bond (Emprunt convertible à taux fixe)

  • CNZ  Zero-coupon convertible bond (Emprunt convertible à coupon zéro)

  • Common Code  9-digit identifier of a security , used for listing purposes. The code is common to Euroclear and Clearstream.
    See: securites, ISIN code

  • Corporate event  An event which affects the life of an issue or the issuer (e.g. stock split, increase in capital…)
    See: stock event, securities

  • CPZ  Zero-coupon (Coupon zéro)

  • CWF  Floating rate warrant (Emprunt avec warrant à taux flottant)

  • CWS Fixed rate warrant (Emprunt avec warrant à taux fixe)

  • CWZ Zero-coupon warrant (Emprunt avec warrant à coupon zéro)

D

  • Debenture 
    See: bond

  • Demande de l'agent introducteur  Request from listing agent.

  • Demande de l'émetteur  Request from issuer.

  • Depositary receipt  Marketed internationally to sophisticated investors, they are negociable certificates that give evidence of ownership of a company's shares. They are a good medium for international investors because they may be more liquid and are more easily traded than the shares they represent. There are several types of depositary receipts:

    - Bearer depositary receipt (BDR)
    - Continental depositary receipt (CDR)
    - European depositary receipt (EDR)
    - Fiduciary depositary receipt (FDR)
    - Global depositary receipt (GDR)
    - International depositary receipt (IDR)

    See: share, equity, GDR, ADR

  •  Depositary share  Shares represented by a depositary receipt.
    Types of depositary shares :
    - American depositary share (ADS)
    - Global depositary share (GDS)
    - European depositary share (EDS)

    See: ADS

  • Distribution (type of income)
    See: type of share/unit of UCI

  • Dividend  Part of the company's profits after tax distributed to shareholders.
    See: equity, type of share/unit of UCI

  • DRT  Droit de souscription (Subscription rights)

  • DS Depositary Share

E

  • EDR  European Depositary Receipt

  • EDS  European Depositary Share

  • Equity index
    See: index

  • Eurobond  A loan issued in a currency other than that of the country or the market in which it is used. Interest is paid without the deduction of tax.

  • Euro MTF: code LU  This market is MTF (Multilateral Trading Facility) as defined in Directive 2004/39/EC and regulated by the provisions of the Rules & Regulations of the LuxSE.
    See: Markets 

  • Ex-warrant bond  Remaining bond after the warrant has been stripped from a bond with a warrant attached.
    See: bond with warrant attached, warrant 

F

  • FCP  Mutual fund (Fonds commun de placement)

  • FDR  Fiduciary Depositary Receipt

  • Financial instrument
    See: securites

  • Fixing  Formation of prices for a specific group of securities, by comparing and matching the order books at a given time.
    See: MFX

  • Floating Rate Notes (FRN)  A bond which bears a variable interest set for given periods of time.

  • Fonds Commun de Placement (FCP)
    See: mutual fund, UCI

  • FRN  Floating Rate Note

G

  • Global Depositary Receipt (GDR)  A financial instrument usually denominated in US Dollars, representing underlying shares of a foreign company.
    The underlying shares are issued to a depositary bank in whose name they are registered and deposited with custodian bank in the foreign company’s country.
    The depositary bank then issues receipts representing the underlying shares. These receipts are then traded on international exchanges as any other registered security.
    See: Depositary receipt, ADR

  • Global Depositary Share (GDS)

H

I

  • IDR  International Depositary Receipt

  • Index  Index based on the prices of a given group of equities.
    The indices of the Luxembourg Stock Exchange are based on the prices of Luxembourg shares. The weight of a share in an index is a function of the product (prices in Euro of the share x number of related shares), compared to the one of the other index constituents.
    See: equity index, price, shares

  • Indicative price  A price indication without a trade having been made.
    See: price, no-trade price

  • Institutional investors  These investors are legal persons and entities which heavily invest their resources in the share capital of companies, on their own behalf or on behalf of third parties.

  • Investment fund
    See:UCI

  • ISIN code  International Securities Identification Number.
    See: securities, common code

J

K

L

  • Listed company  A company whose shares have been admitted to the Luxembourg Stock Exchange offial list. It has had to comply with the Exchange's listing regulations.

  • Listing  The listed securities can be traded on the MFX market segment. They can be temporarily suspended.
    See: MFX, withdrawl

M

  • Markets
    BdL Market: code EU

    This is a regulated market as defined in Directive 2004/39/EC and specified in the European Commission list of regulated markets. 

    Euro MTF: code LU
    This market is regulated by the provisions of the Rules and Regulations of the Luxembourg Stock Exchange.
    See: type of markets

  • Marker
    See: price marker 

  • Matching price  Traded price at which the volumes traded between a buyer and a seller match fully.
    See:price, traded price

  • MTN  Medium Term Note

  • MTNF  Floating rate MTN

  • MTNS  Fixed rate MTN

  • MTNZ  Zero-coupon MTN

  • Multi Fixing System (MFX)  Market based on a sequence of fixings held at defined times over a trading session. Each individual fixing applies to a group of securities.
    See: Fixing

  • Mutual fund  / Fond Commun de placement (FCP)  OPC usually managed according to risk spreading principles. The fund is not a legal entity and is managed under a fiduciary agreement. The investor has no ownership right on the fund's assets but has a right to participate in the assets and to benefit of capital gains from fund appreciation.

N

O

  • Official price  Any traded price is an offical price. The last no-trade price is deemed to be an offical price unless there has been a trade on that day.
    See: price, traded pric , no-trade price

  • Official price list  Daily and monthly price list containing offical prices and corporate actions/stock events of all securities listed at the Luxembourg Stock Exchange.

  • Olux  Luxembourg linear government bonds
    See: Average yield rate

  • OPC  Action ou part d'OPC (Share or unit of UCI)

  • Option  The buyer of an option acquires the right but not the obligation to purchase (call option) or sell (put option) a specified quantity of securities for a given period of time and at a predetermined price. To acquire this right he pays a premium to the seller of the option (option price).
    See: Warrant, Call, Put

  • Order / Order book  List of buy and sell orders (volumes and limits) recorded on the UTP System.

  • Other instruments  Securities which are not shares, bonds, type of share/unit of UCI, warrants, bonuses or rights.

P

  • Preferred shares  Preferred stocks combine characteristics of common stocks and bonds. Preferred shares do not normally vote. In general, a preferred has a fixed dividend (as a bond pays interest), a redemption price (as a bond), and perhaps a redemption date (like a bond). One difference from bonds is that in liquidation (e.g. following bankruptcy), bond holder claims have priority over preferred shares, which in turn have priority over common shares (in that sense, the preferred shares are "preferred"). These shares are also preferred with respect to payment of dividends.

  • Price  Price expressed either in amounts or percent at which a security is traded (traded price) or at which a security might trade (no -trade price).

  • Price maker  A marker which identifies orders which generate a price.
    Trade price:
    t traded price
    d reported trade

    no-trade price:
    i indicative price

    See: price, order book

  • Primary market  The function of a stock exchange in bringing securities to the market for the first time. Mraised by selling securities to the investor is used to enhance the development of the company.

  • Programme  Series of bonds and warrants governed by similar terms and conditions of issue. The bonds and warrants are the tranches of the programme.
    See: bond, warrant

  • Prospectus   Document giving the details that a company is required to make public when it issues a bond or a share. It contains the terms and conditions applied to the issue concerned.

  • PUB: Publications  Prospectus published inLuxembourg without the listing of securities on one of the Stock Exchange markets.

  • Put  Selling option. The right but not the obligation to sell stock at an agreed price and/or within a stated future time.
    See : Warrant, Call

Q

R

  • Rachat total  Full redemption.

  • Real estate certificate  Real estate certificates are bearer securities which entitle to receive part of lease income of a building, or when the building concerned is disposed of, part of the sale proceeds. Legally speaking, the certificate holders have no right of ownership in respect of the building but are creditors of the issuing company.
    See: certificate

  • Redemption price  Price at which the securities are redeemed at maturity.

  • Reduced ask price  A traded price at which sellers' oreders are partly filled.
    See: price, traded price

  • Remboursement anticipé total Full early redemption

  • Reported trade  Trade reported to the stock exchange and which does not originate from the order books.

S

  • Secundary market  Marketplace for trading in securities that are not new issues.

  • Securites  General name for stocks and shares of all types. In common usage stocks are fixed interest securities and shares the rest, though strictly speaking, the distinction is that stocks are denominated in money terms.

  • Shares  Certificate representing ownership in a company. The shareholder is granted a number of rights in relation to the company's life (voting rights, right to access information) and the company's assets (right to receive part of the profit, subscription right).
    See: Securities

  • SICAF / SICF (Fixed-capital investment company)  The fund operates as a separate entity in the form of a "société anonyme". Units are issued in the form of shares. (Société d'investissement à capital fixe)
    See: UCI

  • SICAR / SICR  Investment company in risk capital (Société d'investissement à capital risque)

  • SICAV / SICV (Variable-capital investment company)  Open-end fund incorporated as a "société anonyme" and issues shares. (Société d'investissement à capital variable)
    See: UCI

  • Stock event 
    See: Corporate event 

  • Stock exchange  A public organized market where securities are traded.

  • Stock exchange indicator  Stocks
    See: Securities

  • STR  Fixed rate bond

  • Sub-fund of UCI  Sub-entity of an undertaking for collective investment. The sub-funds of UCIs are, in turn, split into types of shares/units.
    See : UCI, type of share/unit of UCI.

T

  • Trade  / Traded price  Price at which a trade is done. This can be a matching price, a reduced bid price or a reduced ask price.
    See: price, price marker

  • Traded volume
    See: Trading value, turnover, volume

  • Trading mode 

    MFX: MultiFixing Market on the BdL Market (code EU)
    MFL: MultiFixing Market on Euro MTF (code LU).

  • Trading value 
    See: Traded volume, turnover

  • Turnover
    See: Traded price

  • Types of markets
    MFX: MultiFixing Market on the BdL Market (code EU)
    MFL: MultiFixing Market on Euro MTF (code LU)

  • Type of share/unit of UCI  Security which is a share or a unit of UCI, depending on whether the entity is a SICAV, SICAF or FCP.
    The income may be a dividend (distribution) or capitalization-based (reinvested proceeds).
    See : security, UCI, sub-fund, NAV

  • Type of income  Capitalization or income.
    See: type of share/unit of UCI

U

  • UCI(TS)   An Undertakings for Collective Investment (in Transferable Secruties) manages a portfolio of securities on behalf of unitholders.
    UCIs may be set up as FCPs, SICAVs, SICAFs, ...
    UCIs may have seperate types of shares/units or sub-funds which, in turn, can have seperate types of shares/units.
    See: securities, FCP, SICAV, SICAF

V

  • Volume  Traded volume, ie the number of traded securities or, if trading is in percent, the nomial amount traded.
    See: traded price, trading value

W

  • WACT  Stock warrant (Warrant à souscription d'actions)

  • Warrant  A warrant is a tradable right which entitles the holder to aquire or sell a defined number of shares at a predetermined price until a day indicated in the terms and conditions of the contract.
    See : security, Option, Obligation cum warrant, programme

  • Withdrawal  The securities withdrawn from listing are no longer traded in the market of the Stock Exchange. Announcements of securities to be withdrawn are made with 3 days’ prior notice (8 days’ prior notice in respect of fully redeemed securities).

  • WOBL  Bond warrant ( Warrant à souscription d'obligations)

  • WOPT  Zero-coupon bond (Warrant à option autre)

X

Y

  • Yield  The return earned on an investment taking into account the annual income and its present capital value. There are a number of different types of yield, and some cases different methods of calculating each type.

  • Zero Coupon Note / ZCN  A zero-coupon note generates no periodic interest payments and is isuued at a discount from face value. All return is realized at maturity.