Securities Finance glossary

The practice whereby a lender holds securities at a borrower’s request in anticipation of that borrower taking delivery.

A form of guarantee or insurance, frequently offered by agents. Terms vary significantly and the value of the indemnity does also.

A share index is a number that indicates the state of a stock market. It is based on the combined share prices of a set of companies.

Initial margin is collateral collected by a counterparty and posted on a two-way basis (each party posts and receives at the same time) to minimise current and potential risk exposure.

The first sale of stock by a private company to the public.

An institutional investor is a company or organisation that invests money on behalf of other people. Mutual funds, pensions, and insurance companies are examples. Institutional investors often buy and sell substantial blocks of stocks, bonds, or other securities.

The date that is entered into the securities settlement system as the settlement date, and on which the parties to a securities transaction agree that settlement is to take place.

An IDB is a specialist financial intermediary that facilitates transactions between broker-dealers, dealer banks and other financial institutions rather than private individuals.

An IRS is a financial derivative that companies use to exchange interest rate payments with each other. Swaps are useful when one company wants to receive a payment with a variable interest rate, while the other wants to limit future risk by receiving a fixed-rate payment instead.

An institution that facilitates a financial transaction between two parties.