Chapter 2 Flashcards
What is capital?
wealth, both real (land, building, etc) and representational (bonds, stokcs, money)
Direct vs indirect investing?
Direct: savings for a home, invest in highway, pay start up costs for business
indirect: stocks, bonds, investing in RESP, depositing savings, generally done with them help of an investment advisor
What are the three characteristcs of capital
Mobility, sensitivity to environment and scarcity
What is a structured product
Financial engineered product with the characteristics of debt, equity and an invesmtne funds (Principal-protected notes, index linked GIC)
What is money market?
Short-term, fixed-income securities with a term of 1 year or less trade.
What is auction market?
Securities are bought and sold by investors. investment dealers, who are generally acting as agents for their client execute buy/sell orders. These orders are channeled into a single market where they compete against each other and create a bid-ask spread
What is the TSX
They list equities and some debt instruments that are convertible into listed equity, income trusts and exchange-traded funds
What is TSX Venture
Lists equities and a few debenture issues (unsecured bonds)
What is TSX Alpha Exchange
Offers trading in securities listed on TSX and TSx venture
What is montrea exchange/ bourse de montreal
Trades all financial and equity futures and options listed for trading in canada
What is ICE NGC Canada
They provide electronic trading, central counterparty clearing and data services in NA natural gas and electricity markets
What is the canadian securities exchange
They list equities of emerging companies
What is NEO
Listing services and facilitates trading in securities listed in NEo exchange, TSX and TSX venture Exchange
What is dealer market?
It is an OTC market, dealers negotiate and market makers post bid-ask quotes via electronic platforms, they generally act as principals. Almost all bonds and debntures are sold through dealer markets
What are the properties of unlisted equity market
more speculative, no attempt to regulate, less liquid
Explain otc derivates market
24 hrs, dominated by large internation financial intuitions, products tend to be complex
Describe Reporting standards for unlisted equity market
In most of canada, you do not need to report trades, however in Ontario, the Ontario Securiteis Act requires that they be reported through the web-based system of Canadian Unlisted Board Inc.
Describe Alternative Trading systems
Also called ATS, they provide automatic matching and execution of equity and fixed income trades.
For Equities it was once performed exclusively by stock exchanges but the Canadian Securiteis Administrators allow ATS to complete with recognized exchanges and other ATS. They cannot carry out all functions that traditional exchanges (such as tsx) can. They cannot list securities and can only trade them
For Fixed-Income Electronic Trading System
- With exception of a few debentures listed on TSX and TSX venture exchange, all bond and money market securities are sold through dealer markets. includes CanDeal, CBID, CBID Institutional, MarketAxess and CanPx
Describe CanDeal
Member of IIOC, joint venture by Canada’s 6 largest banks, offers institutional investors access to government securities and money market Instruments. recognized as both debt ATS and investment dealer. (operated by TMX Group LTD)
Describe CBID and CBID INstitutional
ATS that operated two distinc fixed=income marketplaces: retail and institutional. retail fixed-income marketplace is accessible by registered dealers on behalf of clients and institutional is accessible by registered dealers, institutional investors, governments and pensionfunds
Describe marketAxess
Provides market data and trading platform for wide range of coporate bonds and other fixed-income securities with access to multi-dealer compentive pricing. Member of IIROC and operates in Canada and Quebec
Describe CanPX
Joint venture between several Canadian invesmtne dealers and inter-dealer brokers. Combines digital feeds from participating dealers to provide real-time bid and offer quotations, in price and yield terms with volume info. Covers Government of Canada bonds and T-bills.
