Chapter 1 Flashcards
Which organisation acts as central counterparts and clearing house for SETS trades?
LCH.Clearnet
At what stage does a clearing house become the central counterparts to a trade?
When the trade is registered
What is the settlement period for shares traded on the LSE?
2 days
What is EMS?
Exchange Market Size
Coupon stripping means:
Separating coupons from redemption proceeds
• The UK government issues gilts that are strippable. This means the coupons and capital components may be traded separately)
What is the purpose of the London Stock Exchange’s central counterparts service?
To reduce default risk through margin
• The central counterparts service (CCP) provided by the London Stock Exchange reduces default risk by notating the contract and collecting margin. CREST protects against settlement risk through delivery versus payment (DVP)
What is the minimum percentage of the voting shareholders of a company required to call a general meeting?
5%
• Shareholders owning at least 5% of the voting share capital (or the directors themselves) can request a general meeting
How many days notice does a company have to give to its shareholders when calling an annual general meeting?
21 days
Which one of the following needs disclosing as part of the notifiable interest rules?
Percentage of holding
• The trigger level for notifiable interests is 3%
Which of the following are true of a company AGM?
- Legally it must be held annually
- A special resolution may be considered
- 21 days notice is required
• Shareholders can vote via proxy, they do not need to attend
At the AGM, what is not usually discussed?
Articles of association
• They’re set up when the company is created and outlines what the company’s line of business is
What is the minimum level of notifiable interest under the disclosure and transparency rules?
3%
Which of the following are not true of disclosure of interest under the disclosure and transparency rules?
Shares owned by spouses, children and grandchildren are aggregated for disclosure purposes
• Spouses, children, concert parties and companies with ownership of at least one third of the shares are included. NOT grandchildren
Under the disclosure and transparency rules, within how many days must a shareholder inform the company once obtaining a notifiable interest?
2 business days
What level of votes cast either at the meeting or by proxy is required to pass a special resolution at an AGM?
75%
