S Flashcards
Sacrifi ce Ratio
Describes the extent to which Gross
Domestic Product must be reduced with
increased unemployment to achieve a 1%
decrease in the inflation rate.
Sale and Repurchase Agreements
SRAs
An open-market operation by the Bank of
Canada to offset undesired downward
pressure on overnight financing costs.
SEC
The Securities and Exchange Commission,
a federal body established by the United
States Congress, to protect investors in the
U.S. In Canada there is no national
regulatory authority; instead, securities
legislation is provincially administered.
Secondary Issue
Refers to the redistribution or resale of
previously issued securities to the public by
a dealer or investment dealer syndicate.
Usually a large block of shares is involved
(e.g., from the settlement of an estate) and
these are offered to the public at a fixed
price, set in relationship to the stock’s
market price.
Secondary Market
The market where securities are traded
through an exchange or over-the-counter
subsequent to a primary offering. The
proceeds from trades in a secondary market
go to the selling dealers and investors,
rather than to the companies that originally
issued the shares in the primary market.
Securities
Paper certificates or electronic records that
evidence ownership of equity (stocks) or
debt obligations (bonds).
Securities Acts
Provincial Acts administered by the
securities commission in each province,
which set down the rules under which
securities may be issued and traded
Securities Administrato
A general term referring to the provincial
regulatory authority (e.g., Securities
Commission or Provincial Registrar)
responsible for administering a provincial
Securities Act
Securities Eligible for Reduced
Margin
Securities which demonstrate sufficiently
high liquidity and low price volatility based
on meeting specific price risk and liquidity
risk measures.
Securitization
Refers in a narrow sense to the process of
converting loans of various sorts into
marketable securities by packaging the loans
into pools. In a broader sense, refers to the
development of markets for a variety of
debt instruments that permit the ultimate
borrower to bypass the banks and other
deposit-taking institutions and to borrow
directly from lenders
Segregated Funds
Insurance companies sell these funds as an
alternative to conventional mutual funds.
Like mutual funds, segregated funds offer a
range of investment objectives and
categories of securities e.g. equity funds,
bond funds, balanced funds etc. These
funds have the unique feature of
guaranteeing that, regardless of how poorly
the fund performs, at least a minimum
percentage (usually 75% or more) of the
investor’s payments into the fund will be
returned when the fund matures.
Self-Directed RRSP
A type of RRSP whereby the holder invests
funds or contributes certain acceptable
assets such as securities directly into a
registered plan which is usually
administered for a fee by a Canadian
fi nancial services company
Self-Regulatory Organization
SRO
An organization recognized by the
Securities Administrators as having powers
to establish and enforce industry regulations
to protect investors and to maintain fair,
equitable, and ethical practices in the
industry and ensure conformity with
securities legislation. Canadian SROs
include the Investment Industry
Regulatory Organization of Canada and,
the Mutual Fund Dealers Association
Selling Group
Investment dealers or others who assist a
banking group in marketing a new issue of
securities without assuming fi nancial
liability if the issue is not entirely sold. The
use of a selling group widens the
distribution of a new issue
Sentiment Indicators
Measure investor expectations or the mood
of the market. These indicators measure
how bullish or bearish investors are.
Separately Managed Account
A managed product structure whereby individual accounts are created for each investor. In either case, an investment manager is guided by an investment mandate.
Serial Bond or Debenture
See Instalment Debenture.
Settlement Date
The date on which a securities buyer must
pay for a purchase or a seller must deliver
the securities sold. For most securities,
settlement must be made on or before the
third business day following the transaction
date
Share of Profi t of Associates
A company’s share of an unconsolidated
subsidiary’s revenue. The equity accounting
method is used when a company owns 20%
to 50% of a subsidiary
Short-Form Prospectus
Distribution System
This system allows reporting issuers to issue
a short-form prospectus that contains only
information not previously disclosed to
regulators. The short form prospectus
contains by reference the material fi led by
the corporation in the Annual Information
Form.
Short Position
Created when an investor sells a security
that he or she does not own. See also short
sale.
Short Sale
The sale of a security which the seller does
not own. This is a speculative practice done
in the belief that the price of a stock is
going to fall and the seller will then be able
to cover the sale by buying it back later at a
lower price, thereby making a profit on the
transactions. It is illegal for a seller not to
declare a short sale at the time of placing
the order. See also Margin.
Short-Term Bond
A bond with greater than one year but less
than five years to maturity.
Short-Term Debt
Company borrowings repayable within one year that appear in the current liabilities section of the statement of fi nancial position. The most common short-term debt items are: bank advances or loans, notes payable and the portion of funded debt due within one year
Single-Manager Account
A type of fee-based account that is directed
by a single portfolio manager who focuses
considerable time and attention on the
selection of securities, the sectors to invest
in and the optimal asset allocation.
Simplifi ed Prospectus
A condensed prospectus distributed by
mutual fund companies to purchasers and
potential purchasers of fund units or shares.
Sinking Fund
A fund set up to retire most or all of a debt
or preferred share issue over a period of
time. See also Purchase Fund.
Small Cap
Reference to smaller growth companies.
Small cap refers to the size of the
capitalization or investments made in the
company. A small cap company has been
defined as a company with an outstanding
stock value of under $500 million. Small
cap companies are considered more volatile
than large cap companies.
Soft Landing
Describes a business cycle phase when
economic growth slows sharply but does
not turn negative, while infl ation falls or
remains low
Soft Retractable Preferred Shares
A type of retractable preferred share where
the redemption value may be paid in cash
or in common shares, generally at the
election of the issuer.
