Clearing, Settlement and Custody

Glossary

30/360 Also 360/360 or 30(E)/360. A day/year count convention

assuming 30 days in each calendar month and a ‘year’ of 360 days;

adjusted in America for certain periods ending on 31st-day of the

month (and then sometimes known as 30(A)/360).

AAA The highest credit rating for a company or asset – the risk of

default is negligible.

Accrued interest Interest due on a bond or other fixed income

security that must be paid by the buyer of a security to its seller.

Usual compensation: coupon rate of interest times elapsed days from

prior interest payment date (i.e. coupon date) up to but not including

settlement date.

Actual settlement date Date the transaction effectively settles in

the clearing house (exchange of securities eventually against cash). ...