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A sharesDomestic shares of Mainland companies denominated and traded in RMB. In general, only the Mainland residents can trade the A shares. In addition, Hong Kong and overseas investors is allowed to trade eligible A shares listed on the Shanghai Stock Exchange through Shanghai-Hong Kong Stock Connect. |
AMS/3The third generation of the Automatic Order Matching and Execution System, the trading system of the cash market in Hong Kong. |
Annual general meetingAGM in abbreviation, a shareholder meeting that is required by law to be held in each financial year. |
Annualised Percentage Rate (APR)In Hong Kong, banks are required to state their APR, which is calculated according to the Code of Banking Practice. The APR gives you the total cost of a banking product per year by factoring in all the standard costs associated with the product, such as interest rate and other fees and charges. |
AnnuityAn annuity is a contract between you and a financial institution in which you make a lump sum payment or series of payments in return for regular disbursements. Through an annuity, you can continue to receive a steady stream of income during retirement. |
ArbitrageAn investment strategy to earn profit by capitalising on the price differences of an investment vehicle in two markets. |
AskThe price at which an investment product is to be sold. |
At-auction limit ordersAn order type that investor expects to be executed at a particular price or better during the pre-opening and closing auction sessions of the Stock Exchange of Hong Kong. |
At-auction orderAn order type that requires no input of price during the pre-opening and closing auction sessions of the Stock Exchange of Hong Kong. |
At-the-moneyWhen the underlying asset price is equal to the exercise price of a call or put warrant/option. |
ATMAn automated teller machine (ATM) allows you to access your bank accounts and make financial transactions. |
Average return warrantAn exotic warrant whose final payout is determined by comparing the average of all the periodic reference prices (which may be higher or lower than the exercise price) with the exercise price. |
B sharesDomestic shares of Mainland companies denominated in RMB but traded in foreign currency like HK$ or US$ by foreign persons and Mainland residents holding legal foreign currency deposits. |
Balanced fundA type of fund which invests in stocks and bonds. |
Bank statementA record, usually sent to the account holder once per month, summarising all transactions in the account during the time from the previous statement to the current statement. |
Banking OrdinanceThe Banking Ordinance provides the legal framework for banking supervision in Hong Kong. The principal function of the Hong Kong Monetary Authority is to "promote the general stability and effective working of the banking system". |
BankruptcyCourt proceedings at which an individual or a company is declared unable to pay its creditors. Once you’re declared bankrupt, the Official Receiver becomes the provisional trustee and has the power to arrange how your property – in Hong Kong and elsewhere – will be distributed to creditors. The debtor can also choose individual voluntary arrangement which is a formal procedure under the Bankruptcy Ordinance to provide an alternative to bankruptcy. A debtor makes a repayment proposal to the court and the creditors. If it is approved, it will legally bind all creditors. |
BenchmarkA standard against which the performance of a security, a fund or fund manager is measured and compared. It is usually an index of securities of the same or similar class. |
BeneficiaryThe person nominated to receive the policy benefit in the event of a claim under the policy. |
BidThe price at which an investment product is to be bought. |
BitcoinA virtual commodity and an electronic payment medium invented by an unidentified programmer, or group of programmers. Bitcoin is generally used for online transactions but is not considered legal tender in Hong Kong. |
BlockchainBlockchain is generally referred to as a database or digital ledger on which transactions are recorded. The term blockchain is derived from the two words "block" and "chain". An individual "block" refers to all of the transactions which have taken place within a fixed period of time. Each block is "chained" to the next block mathematically and sequentially to form a blockchain. Given the latest block, it is possible to access previous blocks linked together in the chain. A blockchain database, thus, retains the complete history of all assets and instructions executed since the very first one - making its data verifiable and independently auditable . Blockchain is the technology behind the transactions of cryptocurrencies, most notably bitcoin. |
Blue chipsStocks of large, well-established companies and are generally of higher market capitalisation and constituents of a market index. |
Board lotThe minimum no. or multiples of such no. of shares that a stock can be bought or sold in a stock exchange. |
Boiler roomA financial fraud where cold callers adopt high pressure sale techniques to lure investors to buy worthless instruments. |
BondA debt instrument that is issued for fund raising purpose by borrowing. |
Bonus sharesShares distributed by a listed company to its shareholders as dividend in proportion to their existing shareholdings. |
Book-close dateA specific period when a share registrar stops processing the transfer of shares of a listed company. |
BudgetAn estimate of income and expenses over a specified period of time. |
Call optionsGive holders the right to buy a given amount of the underlying asset at a predetermined exercise price within a certain period. |
Call warrantsGive holders the right to buy a given amount of the underlying asset at a predetermined exercise price within a certain period. |
CallableA feature of an investment tool that allows the issuer to repay the principal to a holder before the tool expires. |
Capital reorganisation/ restructuringA change in the share capital of a listed company due to share reduction, share consolidation or share split. |
Capped call warrantAn exotic warrant whose profit potential is "limited", i.e. the profit is capped even when the underlying asset price moves beyond a pre-defined cap level. |
CBBCCallable bull bear contracts, a special form of derivatives that tracks the underlying asset on an almost one-to-one basis |
CCASSCentral Clearing And Settlement System, the clearing and settlement system of the cash market in Hong Kong. |
CircularisationAn exercise in which an auditor asks the clients of a brokerage to confirm the balance of their stock accounts at the brokerage. |
Class B fundsFunds that do not require upfront subscription fee. |
Commitment approachAn approach to calculate the leverage level of the UCITS funds via financial derivative instruments (FDIs). The level of leverage using the commitment approach is expressed as a ratio between the market value of the equivalent position in the underlying assets of the FDIs (excluding FDI positions for hedging purposes) and its net asset value. This approach allows netting of certain FDI positions (subject to specified conditions). |
CompoundingIt refers to generating earnings from previous earnings. |
Conversion ratioThis refers to the number of units of the underlying asset exchanged when exercising a unit of a warrant. For derivative warrants on stocks, the conversation ratio is normally one (i.e. one warrant for one share) or 0.1 (i.e. 10 warrants for one share). |
Cooling-off periodThe Insurance Authority has issued the Guideline on Cooling-off Period for compliance by insurers allowing policyholders of new life insurance policies a stipulated time period to change their mind about the life insurance policy that they have purchased or applied for. The cooling-off period is 21 days after the delivery of a life insurance policy or issue of a notice to the policyholder or the policyholder’s representative, whichever is the earlier. |
Corporate actionCorporate actions are events initiated by a listed company that could affect the stock or bond issued by the company. Examples of corporate action include stock splits, dividend announcements and company name change. |
CouponThe interest that a bond issuer pays to its bondholders. |
Coupon rateThe rate at which a bond issuer pays interest on the bond's principal to its bond holders each year. |
CreditA contractual agreement in which a borrower receives something of value now and agrees to repay the lender at some date in the future, generally with interest. The term also refers to the borrowing capacity of an individual or company. |
Credit cardA card which allows cardholders to buy on credit and to obtain cash advances. Cardholders receive regular statements and may pay the balance in full, or in part usually subject to a certain minimum. Interest is payable on outstanding balances. |
Credit card balanceThe amount of money, including capital, interest and charges, owed to the credit card company. |
Credit limitThe amount of credit that a financial institution extends to a borrower. Credit limit also refers to the maximum amount a credit card company will allow someone to borrow on a single card. |
Credit rating agencyA licensed corporation or registered institution that is licensed or registered to carry on the business of providing credit rating services. It assesses the creditworthiness of an obligor as an entity or with respect to specific securities or money market instruments. |
Credit reportA report that contains information about an individual's background and credit/borrowing history, used by lenders to assess creditworthiness. |
Credit riskThe risk that a bond issuer fails to repay the interest and/or principal to its bondholders. |
Credit-linked noteA structured product whose returns are linked to the occurrence of credit events in a single or a group of companies. |
Credit scoreA numerical snapshot of your credit report at a particular point in time, used by lenders to assess creditworthiness. |
CrowdfundingAn umbrella term describing the use of monetary contributions, obtained from a large number of individuals or organisations, to fund a project, a business, a company, a loan or a donation, and other needs through an online platform. |
CSRCChina Securities Regulatory Commission, the securities regulator in Mainland |
Current yieldA bond's rate of return derived by dividing its annual coupon by current price. |
CustodianA firm that safekeeps the assets of a mutual fund. |
Dark poolDark pool refers to the crossing of trades off the order book. Brokers sometimes use a dark pool to move a large block of shares for institutional investors without revealing their actions to the open market. Such trades usually involve a mid-point reference price. |
Day tradingBuying and selling a stock on the same day to profit from price movements. |
DebtAn obligation to repay a sum of money. More specifically, it is funds passed from a creditor to a debtor in exchange for interest and a commitment to repay the principal in full on a specified date. |
Debt collection agencyAn agency that recovers money owed to clients from delinquent accounts. |
Debt consolidationThe act of combining several loans or liabilities into one loan. Debt consolidation involves taking out a new loan to pay off a number of other debts. |
Debt crowdfundingSee peer-to-peer lending. |
Debt servicing ratioThe monthly repayment obligations of the borrower as a percentage of monthly income. |
DependentA child or relative who relies on another individual for financial support. In some circumstances, taxpayers may claim deductions or exemptions for dependents. |
DepositAn amount of money that is placed in a bank account; or the money that is paid for the purchase or rental of something, and that you can get back the money if you return the item or leave it in good condition . |
Deposit Protection SchemeA deposit protection scheme protects depositors by paying them compensation in the event of a bank’s failure. In Hong Kong, in case a member bank of DPS (a Scheme member) fails, the DPS will pay compensation up to HKD500,000 to each depositor of the failed Scheme member. |
Derivative warrantsWarrants issued by financial institutions which can be linked to a single stock, a basket of stocks, an index, a currency, a commodity or a futures contract. |
DerivativesFinancial instruments whose value and returns depend on the performance of their underlying asset, such as a stock, an index, a commodity, etc. |
Direct business transactionsA trade in which a brokerage acts for both the buyer and seller and does not input the order but "crosses" the trade and reports on the Stock Exchange's trading system within 15 minutes. |
DiversificationSpreading different types of investments in a portfolio across a range of asset classes or across several countries with different characteristics of risks and returns. Diversification helps to reduce the risk of fluctuations in any single asset class or single country by broadening exposure to different investments. |
Dividend accumulator warrantAn exotic warrant which pays dividends distributed by its underlying stock during its life. |
Donation crowdfundingFund-raising activity through an online platform for a charitable cause and not for the purpose of providing returns to the contributors. |
Dual filingAn arrangement where listing applicants and listed companies need to submit their disclosure and documents to both the SFC and the Stock Exchange of Hong Kong. |
Duty of DisclosureThe practical implications of the principle of utmost good faith, which requires the parties to a proposed insurance contract to reveal to the other all material information, whether requested or not. |
Effective gearingMeasures the expected rate of change in a warrant's theoretical price with respect to 1% change in the underlying asset price. |
Employee Choice ArrangementAllows employees to transfer the accrued benefits (ie the accumulated contributions and investment returns) arising from their mandatory contributions (not their employer’s portion) in their MPF contribution accounts during the period they are working for their current employer. Such benefits can be transferred to a trustee and a scheme of their own choice on a lump sum basis once every calendar year. |
Equity crowdfundingThe mechanism where investors usually invest in a project or a business which is often a start-up, through an online platform, typically in return for an interest in shares issued by a company. |
Excess rights sharesRights shares that are not taken up by other shareholders in a rights issue |
Exchange ParticipantA brokerage which holds the trading right of the Stock Exchange of Hong Kong or Hong Kong Futures Exchange. |
Exchange traded fundsA fund normally tracking a market index and traded on a stock exchange. |
ExclusionRisks or causes of claims specifically removed from the cover of the policy. These are relatively rare with life insurance, but may more commonly be found with rider benefit, eg, suicide with accidental death benefits. |
Ex-dividend dateTwo trading days before the first date of the book close date of a dividend declared by a listed company |
Executive officersIndividuals who oversees the daily operation of registered institutions. |
Exercise priceAlso called strike price, the predefined price at which a warrant or option holder trades the underlying asset. |
Extraordinary general meetingEGM in abbreviation, a shareholder meeting called by a directors or shareholders holding a certain amount of voting rights in aggregate to discuss a particular resolution. |
Fair valueThe price of a warrant calculated based on a pricing model, e.g. Black Scholes, which takes into account the price and expected volatility of the underlying asset, time to expiry, exercise price, dividends expected to be paid by the underlying share and the prevailing interest rate. |
Final payoutThe final payout of a locked-in return warrant is determined by averaging the locked-in profits (including zero profits) on all the fixing dates. |
Financial planningFinancial planning is the process of setting, planning, achieving and reviewing your life goals through the proper management of your finances. It involves managing your present and future finances. |
FintechThe integration of finance and technology in the delivery of financial services. It is used to describe a variety of innovative business models and emerging technologies that have the potential to transform the financial services industry. Fintech commonly covers areas such as mobile payment, big data analytics, cybersecurity, equity crowdfunding, peer-to-peer lending, artificial intelligence, machine learning, data-driven trading, online investment and wealth management, robo-advisor, cryptocurrency and other blockchain/decentralised ledger technology applications etc. |
Fixed interest rateAn interest rate that remains fixed either for the entire term of the loan or for part of the term. |
Floating interest rateAn interest rate that is allowed to move up and down with the rest of the market or along with an index. |
ForeclosureA situation in which a homeowner is unable to make principal and/or interest payments on his or her mortgage, so that the lender can seize and sell the property as stipulated in the terms of the mortgage contract. |
Forward pricingFunds are priced based on the immediately subsequent net asset value. |
Free floatThe shares publicly owned and available for trading |
Fund of Hedge FundsA fund that invests in a number of hedge funds. |
Fundamental analysisAn analysis method that looks into the financials and operations of a company. |
Futures contractA futures contract represents a commitment to buy or sell a predefined amount of its underlying asset at a predetermined price on a specified future date. |
GearingUsing a low-priced instrument to gain exposure to the price movement of another instrument of a higher value. |
Gearing ratiosGearing ratios measure the sensitivity of a warrant price to any change in the underlying asset price. Simple gearing measures how many times the underlying asset costs more than the warrant you buy. Effective gearing measures the expected rate of change in the theoretical warrant price with respect to a 1% change in the underlying asset price. |
General mandateA resolution to be voted in an annual general meeting that grants the right to a company listed on the SEHK to increase its share capital by up to 20%. |
General meetingsShareholder meetings convened by a listed company annually or for a special purpose. |
Growth Enterprise Market (GEM)A market under the Stock Exchange of Hong Kong targeting growth companies for listing. |
GuaranteeAn undertaking given by a person called the guarantor promising to pay the debts of another person if that other person fails to do so. |
Guaranteed fundsA type of funds that offers fund holders a guaranteed rate of return barring certain pre-determined conditions. |
H sharesShares of Mainland-incorporated enterprises which are listed in Hong Kong and denominated in Hong Kong dollar. |
HedgingA defensive strategy to reduce the risk of unfavourable price movements of a financial instrument by taking an opposite position in another related instrument, usually a derivative like a futures or an options contract. |
Hedge fundsFunds that adopt a variety of alternative investment strategies. |
HIBORHong Kong Interbank Offer Rate |
HKSCCHong Kong Securities and Clearing Company Limited, the clearing house of the cash market in Hong Kong. |
Hong Kong Monetary AuthorityThe front-line regulator of banks in Hong Kong |
Identity theftIdentity theft is when someone steals your personal information, such as your name, ID card number, credit card or bank account number to obtain benefits in your name. |
Illustration documentThe document that indicates the projected amounts of money that an investor can get back at different time periods before the end of the term of an investment-linked assurance scheme (ILAS). |
Implied volatilityThe volatility of the underlying asset price "implied" by the market price of a warrant, calculated by working backwards through a certain option pricing model from the warrant price. |
IndemnityThe compensation paid by an insurer to a policyholder. |
IndexA statistical measure for monitoring changes in the economy, financial markets, market sectors or asset classes for assessing portfolio performance. |
Index-tracking fundA fund whose investment return is linked to the performance of a particular index. |
INEDIndependent non-executive directors |
Insider dealingTransactions in stocks or derivatives conducted based on insider information in order to make profits or avoid losses. |
InsolvencyA company becomes insolvent when it is unable to pay its debts when they fall due or when its liabilities exceed the value of its assets. |
Insurable interestInsurable interest exists when you have a legally recognised relationship in a subject matter to be insured (like a person or asset), including your body parts, such as your limbs and teeth, and even your voice. Without an insurable interest, insurance protection would be speculative in nature, and not be enforceable under the law. |
In-the-moneyWhen the underlying asset price is above the exercise price of a call warrant/option or below the exercise price of a put warrant/option. |
Interest rateThe charge or the return on an asset or debt expressed as a percentage of the price or size of the asset or debt. It is usually expressed on an annual basis, known as the annual percentage rate (APR). |
Intrinsic valueFor a call warrant, its intrinsic value is the higher of 0 or (underlying asset price - exercise price). For a put warrant, it is the higher of 0 or (exercise price - underlying asset price). |
Investment-linked assurance schemeA life insurance policy that combines with fund investments. |
Investor Compensation CompanyThe company responsible for receiving, assessing and determining claims against Investor Compensation Fund. |
Investor Compensation FundThe fund established for compensating investors for their losses in their investment in products traded on Hong Kong Exchanges and Clearing due to broker default. |
Investor Participant accountAn account opened in an investor's own name at CCASS to keep his own shares. |
Invoice and trade receivables trading (online)The mechanism where businesses sell their invoices or receivables to a pool of investors through an online platform. |
Joint accountA bank account that is shared between two or more individuals. Usually, joint accounts are shared between close relatives or business partners. |
KeyloggingKeylogging is a type of software or hardware device used to build a log of everything typed into a keyboard. It can be used by criminals to record every keystroke you make on your computer, including usernames, passwords, e-mails and the websites you access. It also serves legitimate purposes to troubleshoot networks, analyse employee productivity, or to assist law enforcement. |
LeverageUsing a low-priced instrument to gain exposure to the price movement of another instrument of a higher value. |
LiabilityAll financial claims, debts or potential losses against or incurred by an individual or an organisation. |
Licensed corporationsCompanies that hold SFC licences for conducting regulated activities in Hong Kong. |
Life expectancyThe average length of time a person is expected to live, if in the future they experience the current age-specific mortality rates in the population. |
Limit orderAn order type to buy/sell a security at a specified or a better price. |
Liquidity riskThe risk arising from the difficulty of selling an asset in a timely manner or without incurring a loss. This may be due to lack of interest in the market for a particular asset, forcing the owner to sell it for less than its value. |
Liquidity providerThe designated brokerage responsible for providing liquidity for a derivative warrant by either responding to quote requests or inputting quotes continuously. |
Listing documentThere are two types of listing documents for derivative warrants. The base listing document sets out the background and financial strength of the issuer or the guarantor (if there is one). The supplemental listing document carries specific information about a derivative warrant's features and terms. |
Loan to value ratioThe ratio of money borrowed to fair market value of collateral, usually in reference to real property. |
Locked-in return warrantAn exotic warrant that locks in the profits on periodic fixing dates when the warrant is in-the-money. Zero profits are locked in when the warrant is at-the-money or out-of-the-money. |
MainboardA market under the Stock Exchange of Hong Kong that targets established companies for listing. |
Mandatory Provident Fund (MPF)The Mandatory Provident Fund (MPF) is a mandatory, privately managed, fully funded contribution scheme established under the Mandatory Provident Fund Schemes Ordinance (Cap. 485) ("MPFSO") to offer basic retirement protection to the working population. |
Margin callA demand to a margin account holder to deposit cash or securities when the account holder's equity in a margin account falls below the maintenance requirement set by a brokerage. |
Market orderAn order type to buy/sell a security at the current market price. |
Market riskThe risk associated with the entire market or a specific market. Also known as systematic risk, it stems from the economic, geographical, political, social or other factors of that market. |
MaturityCommonly used in the context of fixed income investments such as bonds and deposits. It refers to the date on which a financial contract (such as a bond or deposit) expires and the bond issuer has the obligation to repay bondholders the principal or the bank is obliged to repay depositors the deposit plus interest (if any). |
Maturity knock-in warrantAn exotic warrant that has a "knock-in price" in addition to the exercise price. It will gain a profit only if it is in-the-money with respect to the "knock-in price", but the amount of the profit is determined by reference to the exercise price instead of the "knock-in" price. |
Minimum balanceThe minimum amount a bank or other financial institution requires a customer to maintain in his or her account. Accounts holding deposits of less than the minimum balance may be subject to fees. |
MortgageA legal agreement in which a person borrows money to buy property (such as a house) and pays back the money over a period of years. |
Mutual fundA collective investment scheme that is established as a limited liability company. |
NAVNet asset value, which is equal to the total assets value minus liabilities of a fund and then divided by the number of units of a fund. |
NEDNon-executive directors |
Net worthNet worth is broadly calculated as your assets minus your liabilities. Asset is what you own, including, savings, property, investments; and liability is what you owe, such as mortgage loan, tax bills and outstanding debts. |
No Claim DiscountA system of rewarding the insured for one or more claim-free years in motor insurance (possibly occurring with other classes), by allowing a discount on the renewal premium for the coming year. Usually on an increasing scale, the highest scale applying to private cars. |
Non-registered shareholderA shareholder whose shares are usually held through a brokerage or bank and the shares are normally registered in the name of nominee. |
Occupational Retirement Schemes Ordinance (ORSO) SchemeORSO schemes are retirement schemes set up voluntarily by employers to provide retirement benefits for their employees. |
OptionAn option is a contract that gives the buyer the right, but not the obligation, to buy or sell a predetermined quantity of the specified underlying asset at a particular price in the future. |
OTC marketOver-the-counter market |
Out-of-the-moneyWhen the underlying asset price is below the exercise price of a call warrant/option or above the exercise price of a put warrant/option. |
Offering documents
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OverdraftA short-term borrowing facility offered by banks. Overdrafts are usually repayable on demand and are more expensive than longer-term borrowing. |
P/E ratioShare price divided by the earning per shares of a stock. |
Par valueThe value shown on the face of a stock, bond, note which is set by the issuer |
Passive investment riskPassive investing refers to a portfolio management strategy, for the long term, to match the performance of an index and is commonly used in the context of exchange-traded funds (ETF). Passive investment risks refer to the risks associated with the index tracking strategy of ETF. It basically means that the ETF manager will not take defensive positions in declining markets, so investors may lose a significant part of their respective investments if the underlying Index falls. |
Peer-to-peer lending (P2P lending)A type of micro-financing activity that is conducted through an online platform, which matches people who have money to invest with people who are looking for a loan. |
Penny stocksStocks of lower price |
Periodic cash settlement amountThis is the profit locked-in by comparing the periodic reference price with the exercise price of a locked-in return warrant on each fixing date. |
Periodic reference priceIt refers to the average of the closing prices of the underlying (usually a stock) on the five trading days immediately before the fixing date. |
PhishingPhishing is a form of online fraud involving e-mails claiming to be from your bank or other reputable company. Criminals attempt this ruse to set up beneficiaries on your accounts then transfer your money to their account. There are a variety of ways phishing scams can be deployed via mobile. The most common method is for a fraudulent company to contact random people via email claiming to represent their financial institution. |
PlaceesPersons to whom new shares are issued in a placing. |
PlacingA fund raising method where shares of a listed company are issued to selected persons. |
Pooling riskA broker firm may re-pledge margin clients' stocks to its banker for loan facilities. If a broker firm is in financial difficulties, the bank may sell the re-pledged stocks to pay off the loans. In such a case, a margin client may not be able to get back all his shares. This is known as pooling risk. |
PremiumThe amount of money a policyholder pays to the insurer in order to get coverage against certain risks. |
Premium
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PrincipalThe par or face value of a bond. |
PrincipalThe total amount borrowed or invested. |
Principle brochureThe document that explains the objectives of the fund options available under investment-linked assurance scheme (ILAS), return calculations, etc. |
PrivatisationA listed company withdraws its listing on a stock exchange. |
Prospectus
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Put optionsGive holders the right to sell a given amount of the underlying asset at a predetermined exercise price within a certain period. |
Put warrantsGive holders the right to sell a given amount of the underlying asset at a predetermined exercise price within a certain period. |
Real estate crowdfundingInvestors invest in real estate through an online platform, typically in return for an interest in shares issued by a company or profit-sharing or interest in a collective investment scheme. |
Real estate investment trustsCalled REIT in abbreviation, a fund that invests in a portfolio of income-generating real estates. |
Red chipsShares of companies incorporated outside Mainland but their business, assets, markets and ownership have a strong Mainland orientation. |
Registered institutionsBanks registered with the SFC for conducting regulated activities in Hong Kong |
Registered shareholderA shareholder of a company whose shares are registered in his own name |
RegistrarA private company that updates the share register of a listed company. |
Regulated activitiesThe term refers to 10 types of business activities regulated by the SFC, including dealing in securities, dealing in futures contracts, asset management, advising on corporate finance among others. |
Reinvestment riskThe risk that a bond holder will get lesser return when he re-invests the proceeds from a callable bond being called by the issuer |
Relevant individualsBank staff who can perform regulated activities defined under Securities and Futures Ordinance |
Responsible officersIndividuals who oversees the daily operation of an SFC-licensed corporation |
Retirement schemeAn arrangement by which an employer and (usually) an employee pay into a fund that is invested to provide the employee with a pension on retirement. |
Reward/pre-sale crowdfundingFinancial backers pre-pay via an online platform for physical goods or services to be produced or offered by the person(s) seeking funding. |
Right issuesA rights issue allows existing shareholders to subscribe for new shares in proportion of their existing shareholding by exercising the rights allotted to them. |
Rights of set-offIf you default on a loan, the bank is entitled to take (set-off) the amount due from your bank account to cover the loan. A card issuer may claim the right to set off the debit balance in the credit card account of any of the principal or subsidiary cardholders against the credit card balance in other accounts of the principal cardholder. |
Robo-advisorGenerally refers to an automated digital investment advisory programme which makes use of algorithms, data-driven strategy and technology to provide automated investment/portfolio management advice, strategies and services for users in place of a human financial advisor. |
Roll yieldThe return arising from rolling a short-term futures contract into a longer-term futures contract. The roll yield can be positive or negative, depending on whether the rolling transactions would result in a gain or loss. |
Second/ third liner stocksStocks of relatively smaller listed companies and are generally of lower market capitalisation. |
Settlement instructionAn instruction to CCASS where an investor can transfer his stockholding from one broker's account at CCASS to another broker's account at CCASS without involving physical scrip. |
Share consolidationA number of existing shares is combined to become a new share. |
Share splitsAlso called share subdivision in which an existing share is divided into a number of new shares. |
Sharpe ratioA risk-adjusted return indicator defined as the annual return of an investment tool divided by its annualised standard deviation. |
Short sellingA trading strategy by which an investor attempts to gain profits by first selling a security that he borrows from a brokerage/third party and then buying it back at a lower price. |
Sortino ratioSortino ratio |
Special general meetingSGM in abbreviation, a shareholder meeting called by a directors or shareholders holding a certain amount of voting rights in aggregate to discuss a particular resolution. |
Spot priceThe current market price of a security or commodity. |
SponsorA company that conducts due diligence and facilitates a company to list on the Stock Exchange of Hong Kong. |
SpreadThe difference between bid and offer quotes. |
Stock Segregated AccountA sub-account under a broker's account at CCASS to keep the stocks of a designated client only |
Stop orderAn order type to buy a price above or sell at a price below a specified price |
Straddle warrantAn exotic warrant which combines a call warrant and a put warrant with the same underlying asset, exercise price and expiry date. It is suitable for those investors who anticipate a significant upward or downward movement in the underlying asset price. |
Strike priceAlso called exercise price, the predefined price at which a warrant or an option holder trades the underlying asset. |
Subscription warrantsWarrants issued by a listed company, giving holders the rights to buy the underlying shares of the company. |
Sum of notionals approachAn approach to calculate the leverage level of the UCITS funds via financial derivative instruments (FDIs). The level of leverage using the sum of notionals approach is expressed as a ratio between the aggregate of the notional values of all FDIs entered into by the fund (including FDIs that are used for investment purposes and/or for hedging purposes) and its net asset value. This approach does not allow the netting of FDI positions. |
SuretyA person who takes responsibility for another’s performance of an undertaking, for example their appearing in court or paying a debt |
Surrender valueSurrender value equals cash value minus surrender charge, a charge that is applicable when a policy is surrendered for its cash value or when a policy, under some plans, is adjusted to provide a lower level of death benefit. |
SuspensionTrading in the shares of a listed company is stopped. |
Structured productsSynthetic products whose returns are linked with their underlying assets. |
TakeoverTake control over a corporation by another corporation, through acquisition or merger. |
Technical analysisAn analysis method that uses chartings on price, volume to predict future price movement of an investment tool. |
The number of that warrant outstanding in the marketTotal number of units issued minus amount held by issuer and its group companies. |
Time valueThe amount the price of a warrant exceeds its intrinsic value. For a call warrant, its intrinsic value is the higher of 0 or (underlying asset price - exercise price). For a put warrant, it is the higher of 0 or (exercise price - underlying asset price). |
Top-up placingA fund raising method where existing major shareholders first place their shares to independent persons and then subscribe for the new shares issued by a listed company |
Tracking errorMeasure how the performance of an exchange-traded fund (ETF) or index fund deviates from that of the index or benchmark on which it is based. |
TrusteeA company safekeeps the assets of a unit trust. |
UCITS IIIEU Commission regulations which govern funds domiciled in the EU member states. They allow investments in financial derivative instruments (FDIs). |
Unauthorised fundA fund that has not been authorised by the SFC. |
Unit trustA collective investment scheme operates under a trust system. |
Unlisted retail structured productsUnlisted retail structured products include equity-linked deposits, equity-linked notes, equity-linked investments, credit-linked notes, fund-linked notes, commodity-linked notes and index-linked notes. |
Value-at-Risk - VaRA statistical technique used to measure and quantify the level of financial risk within a firm or investment portfolio over a specific time frame. Value-at-Risk is measured in three variables: the amount of potential loss, the probability of that amount of loss, and the time frame. |
VolatilityAn indicator of the extent of the price fluctuation of a financial instrument, usually expressed by the annualised standard deviation of the daily price change. A high volatility indicates that the instrument's price moves up and down by a large extent over a period of time. |
Voting by pollA voting method where the number of votes a shareholder has is equal to the number of shares he holds. |
Voting on a show of handsA voting method where each shareholder attending a general meeting has one vote only. |
WarrantsAn instrument that gives investors the right, but not the obligation, to buy or sell the underlying asset, usually a stock, at a pre-set price on or before a specified date. |
Window barrier warrantAn exotic warrant that will cease trading and pay the holders a fixed rebate if it is "knocked" out during a predefined "window period" by reference to a pre-set "barrier price" (i.e. For a window barrier call warrant, the closing price of the underlying asset is equal to or lower than the barrier price on any trading day during the window period. For a window barrier put warrant, the closing price of the underlying asset is equal to or higher than the barrier price on any trading day during the window period.). |
WithdrawalTaking out funds from an account, plan, pension or trust. |
Yield to callA callable bond's rate of return derived by dividing the total coupon and principal to be received before the bond is called by its current price. |
Yield to maturityA bond's rate of return derived by dividing the total coupon and principal an investor receives for holding the bond until its maturity by the bond's current price. |
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