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Securitisation
Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans, or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt obligations (CDOs). Investors are repaid from the principal and interest cash flows collected from the underlying debt and redistributed through the capital structure of the new financing. Securities backed by mortgage receivables are called mortgage-backed securities (MBS), while those backed by other types of receivables are asset-backed securities (ABS). The granularity of pools of securitized assets can mitigate the credit risk of individual borrowers. Unlike general corporate debt, the credit quality of securitized debt is non- stationary due to changes in volatility that are time- an ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Orphan Structure
Orphan structure or Orphan SPV or orphaning are terms used in structured finance closely associated with creating SPVs (" Special Purpose Vehicles") for securitisation transactions where the notional equity of the SPV is deliberately handed over to an unconnected 3rd party who themselves have no control over the SPV; thus the SPV becomes an "orphan" whose equity is controlled by no one. Description In an orphaned SPV, the equity is held by a 3rd party with no legal relationship to the two main parties engaging in the securitisation (the asset user(s), and the lender(s) financing the assets). While this 3rd party legally "owns" the equity of the SPV, the way in which their ownership is structured gives them no control over the SPV. The driver for orphaning is to enable the securitisation transaction to be held off-balance sheet. If the asset users, or the asset lenders, owned (or legally controlled) the SPV equity, then the SPV would be consolidated into their group accounts. ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Credit Rating Agency
A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's ability to pay back debt by making timely principal and interest payments and the likelihood of default. An agency may rate the creditworthiness of issuers of debt obligations, of debt instruments, and in some cases, of the servicers of the underlying debt, but not of individual consumers. Other forms of a rating agency include environmental, social and corporate governance (ESG) rating agencies and the Chinese Social Credit System. The debt instruments rated by CRAs include government bonds, corporate bonds, CDs, municipal bonds, preferred stock, and collateralized securities, such as mortgage-backed securities and collateralized debt obligations. The issuers of the obligations or securities may be companies, special purpose entities, state or local governments, non-profit organizations, or sovereign nations. A credit rating facilitates the trading of ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Security (finance)
A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any form of financial instrument, even though the underlying legal and regulatory regime may not have such a broad definition. In some jurisdictions the term specifically excludes financial instruments other than equity and fixed income instruments. In some jurisdictions it includes some instruments that are close to equities and fixed income, e.g., equity warrants. Securities may be represented by a certificate or, more typically, they may be "non-certificated", that is in electronic ( dematerialized) or " book entry only" form. Certificates may be ''bearer'', meaning they entitle the holder to rights under the security merely by holding the security, or ''registered'', meaning they entitle the holder to rights only if they appear on a securi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Share Capital
A corporation's share capital, commonly referred to as capital stock in the United States, is the portion of a corporation's equity that has been derived by the issue of shares in the corporation to a shareholder, usually for cash. ''Share capital'' may also denote the number and types of shares that compose a corporation's share structure. Definition In accounting, the share capital of a corporation is the nominal value of issued shares (that is, the sum of their par values, sometimes indicated on share certificates). If the allocation price of shares is greater than the par value, as in a rights issue, the shares are said to be sold at a premium (variously called share premium, additional paid-in capital or paid-in capital in excess of par). This equation shows the constituents that make up a company's real share capital: : \sum\text \times \text This is differentiated from share capital in the accounting sense, as it presents nominal share capital and does not take t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Regulation AB
Regulation AB consolidates and codifies existing interpretative, primarily client-specific, positions that clarify Securities Act of 1933 registration requirements for asset-backed securities offerings in the United States. Regulation AB: * updates and clarifies the registration requirements for ABS offerings under the Securities Act; * provides disclosure guidance and requirements for filings involving ABS under the Securities Act and Exchange Act; * establishes a consistent servicing standard, used as the basis for measuring; * requires an accountant An accountant is a practitioner of accounting or accountancy. Accountants who have demonstrated competency through their professional associations' certification exams are certified to use titles such as Chartered Accountant, Chartered Certif ...'s report for each servicer assertion. References United States securities law {{US-law-stub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Institutional Investor
An institutional investor is an entity that pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked companies, insurers, pension funds, sovereign wealth funds, charities, hedge funds, real estate investment trusts, investment advisors, endowments, and mutual funds. Operating companies which invest excess capital in these types of assets may also be included in the term. Activist institutional investors may also influence corporate governance by exercising voting rights in their investments. In 2019, the world's top 500 asset managers collectively managed $104.4 trillion in Assets under Management (AuM). Institutional investors appear to be more sophisticated than retail investors, but it remains unclear if professional active investment managers can reliably enhance risk-adjusted returns by an amount that exceeds fees and expenses ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Tradable Securities
Liquid tradable securities (or LTS) is a generic phrase for a wide range of financial instruments. It often differentiates financial instruments that are easily tradable (or tradeable) as opposed to those that require the permission of the company or a signed document that registers the transfer of securities between two market participants. Another way to look at it is the difference between how a person buys a fund (collective investment scheme) and how they buy a bond or share. Liquid tradable securities come in many forms and with a wide variety of acronyms. These include stocks and bonds as well as exchange-traded funds, exchange traded commodities, exchange-traded notes (including certificates), REITs, as well as most OTC securities. Note that these do not include Swaps or repurchase agreement (repos), which are contractual arrangements and as such are not tradable. This is a wider definition than the definition of transferable securities under MiFID. LTS advantage over c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Investment Bank
Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broader viewpoint, an investment can be defined as "to tailor the pattern of expenditure and receipt of resources to optimise the desirable patterns of these flows". When expenditures and receipts are defined in terms of money, then the net monetary receipt in a time period is termed cash flow, while money received in a series of several time periods is termed cash flow stream. In finance, the purpose of investing is to generate a return on the invested asset. The return may consist of a capital gain (profit) or loss, realised if the investment is sold, unrealised capital appreciation (or depreciation) if yet unsold. It may also consist of periodic income such as dividends, interest, or rental income. The return may also include currency gains ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Arm's Length
The arm's length principle (ALP) is the condition or the fact that the parties of a transaction are independent and on an equal footing. Such a transaction is known as an "arm's-length transaction". It is used specifically in contract law to arrange an agreement that will stand up to legal scrutiny, even though the parties may have shared interests (e.g., employer-employee) or are too closely related to be seen as completely independent (e.g., the parties have familial ties). An arm's length relationship is distinguished from a fiduciary relationship, where the parties are not on an equal footing, but rather, power and information asymmetries exist. It is also one of the key elements in international taxation as it allows an adequate allocation of profit taxation rights among countries that conclude double tax conventions, through transfer pricing, among each other. Transfer pricing and the arm's length principle were one of the focal points of the base erosion and profit sh ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Accounting
Accounting, also known as accountancy, is the process of recording and processing information about economic entity, economic entities, such as businesses and corporations. Accounting measures the results of an organization's economic activities and conveys this information to a variety of stakeholders, including investors, creditors, management, and Regulatory agency, regulators. Practitioners of accounting are known as accountants. The terms "accounting" and "financial reporting" are often used interchangeably. Accounting can be divided into several fields including financial accounting, management accounting, tax accounting and cost accounting. Financial accounting focuses on the reporting of an organization's financial information, including the preparation of financial statements, to the external users of the information, such as investors, regulators and suppliers. Management accounting focuses on the measurement, analysis and reporting of information for internal use by ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Master Trust
A master trust in the UK is a multi-employer occupational pension scheme. Structure Traditionally, a trust based pension scheme is established by an employer for its employees. Representatives of that employer will then usually form the majority of the trustee board which is responsible for governing the trust. By contrast, a master trust is typically set up by a provider, often an insurance company. There is one legal trust and one trustee board, but a number of non-associated employers can participate in the scheme. Each participating employer will have one or more sections within the master arrangement. The trustee takes on governance responsibility for each section on things such as investment funds and service providers and will ensure compliance with regulatory duties. The decisions over benefit and contribution levels will normally remain with each participating employer. Running costs It is normal for the sponsoring employer to cover the running costs of its trust bas ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bankruptcy
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. Bankrupt is not the only legal status that an insolvent person may have, meaning the term ''bankruptcy'' is not a synonym for insolvency. Etymology The word ''bankruptcy'' is derived from Italian language, Italian , literally meaning . The term is often described as having originated in Renaissance Italy, where there allegedly existed the tradition of smashing a banker's bench if he defaulted on payment. However, the existence of such a ritual is doubted. History In Ancient Greece, bankruptcy did not exist. If a man owed and he could not pay, he and his wife, children or servants were forced into "debt slavery" until the creditor recouped losses through their Manual labour, physical labour. Many city-states in ancient Greece lim ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
