A glossary is provided below that provides an explanation of many of the terms used in this book along with a number of others that may be needed for reference purposes.

Accumulation trusts Where the trustees have discretion but only for a certain period, after which a beneficiary will become entitled to either the income or capital at a certain date in the future.

Across principal closing The settlement of two transactions in the same security entered into by the same agent with a selling principal and a buying principal.

Active risk The risk that arises from holding securities in an actively managed portfolio in different proportions to their weighting in a benchmark index. Also known as tracking error.

Administrator A person appointed by the courts to administer the estate of a deceased person.

Agency cross A transaction by which a member firm acting as an agent matches the buy and sell orders of two or more non-members at the same price and on the same terms.

AIM security A security which the exchange has admitted to trading on AIM and is traded on SETSmm, SEAQ or SEATS Plus.

American form A form of transfer endorsed on a stock certificate, execution of which enables the holder to pass title to another.

Annual equivalent rate (AER) See Effective rate.

Annual general meeting (AGM) The annual meeting of directors and ordinary shareholders of a company. All companies are obliged to hold an AGM at which the shareholders receive the company's report and accounts and have ...

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