Acronyms Flashcards
Committee on Union Security Identification Procedures (CUSIP)
The Committee on Uniform Security Identification Procedures (CUSIP) number identifies most securities, including U.S. government and municipal bonds. CUSIP numbers are unique nine-character alphanumeric identifiers assigned to each series of securities.
Electronic Data Gathering Analysis and Retrieval (EDGAR) database
The SEC’s Electronic Data Gathering, Analysis and Retrieval database provides free public access to corporate information such as registration statements, prospectuses, and quarterly and annual reports.
Employee Retirement Income Security Act (ERISA)
The Employee Retirement Income Security Act of 1974, which is administered by the U.S. Department of Labor. ERISA does not require employers to offer a pension plan. But it does require employers who do offer them to meet certain minimum standards.
Exchange-Traded Fund (ETF)
A type of exchange-traded investment product that must register with the SEC as either an open-end investment company (generally known as “funds”) or a unit investment trust. ETFs offer investors a way to pool their money in a fund that makes investments in stocks, bonds, or other assets and, in return, to receive an interest in that investment pool. ETF shares are traded on a national stock exchange.
Financial Accounting Standards Board (FASB)
The Financial Accounting Standards Board (FASB) is the accounting standard setter for purposes of the Federal Securities Laws. See GAAP.
Generally Accepted Accounting Principles (GAAP)
GAAP (Generally Accepted Accounting Principles) are accounting standards, conventions and rules. It is what companies use to measure their financial results. These results include net income as well as how companies record assets and liabilities. In the US, the SEC has the authority to establish GAAP. However, the SEC has historically allowed the private sector to establish the guidance. See The Financial Accounting Standards Board.
Initial Public Offering (IPO)
An initial public offering occurs when a company first sells its shares to the public.
London Interbank Offered Rate (LIBOR)
The interest rates banks charge each other for short-term loans. LIBOR is frequently used as the base for resetting rates on floating-rate securities.
Mortgage-backed Securities (MBS)
Mortgage-backed securities, or MBS, are bonds or notes backed by a pool of mortgages on residential or commercial properties. As the mortgage borrowers pay the principal and interest on their loans, the investors in MBS receive payments of interest and principal.
Net Asset Value (NAV)
The value of a fund’s assets minus its liabilities. SEC rules require funds to calculate their NAV at least once daily. To calculate the NAV per share, simply subtract the fund’s liabilities from its assets and divide the result by the number of shares outstanding.
Real Estate Investment Trust (REIT)
A company that owns and typically operates income producing real estate or real estate-related assets, such as office buildings, shopping malls, apartments, hotels, resorts, self-storage facilities, warehouses, and mortgages or loans.
Standard & Poor’s Depositary Receipts (SPDR) Trust
An ETF designed to replicate the performance of the Standard & Poor’s 500 Index. Because of its acronym, the SPDR instrument is referred to as a “spider.”
Statement of Additional Information (SAI)
Conveys information about an open or closed-end fund that some investors find useful. Funds are not required to provide investors with the SAI, but they must provide it for free upon request. Also known as “Part B” of the fund’s registration statement.
Unit Investment Trust (UIT)
A type of investment company that typically makes a one-time “public offering” of only a specific, fixed number of units. A UIT will terminate and dissolve on a date established when the UIT is created, which may be more than 50 years in the future.
