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 equities and Fixed income instruments. In some jurisdictions it includes some instruments that are close to equities and fixed income, e.g., equity warrants.
The Uniform Commercial Code (UCC), first published in 1952, is one of a number of Uniform Acts that have been established as law with the goal of harmonizing the laws of sales and other commercial transactions across the United States through UCC adoption by all 50 states, the District of Columbia, and the Territories of the United States.
A repurchase agreement, also known as a repo, RP, or sale and repurchase agreement, is a form of short-term borrowing, mainly in government securities. The dealer sells the underlying security to investors and, by agreement between the two parties, buys them back shortly afterwards, usually the following day, at a slightly higher price.
The Depository Trust & Clearing Corporation (DTCC) is an American post-trade financial services company providing clearing and settlement services to the financial markets. It performs the exchange of securities on behalf of buyers and sellers and functions as a central securities depository by providing central custody of securities.
CREST is a UK-based central securities depository that holds UK equities and UK gilts, as well as Irish equities and other international securities.
Clearstream is a financial services company that specializes in the settlement of securities transactions and is owned by Deutsche Börse AG. It provides settlement and custody as well as other related services for securities across all asset classes. It is one of two European International central securities depositories.
Security market is a component of the wider financial market where securities can be bought and sold between subjects of the economy, on the basis of demand and supply. Security markets encompasses stock markets, bond markets and derivatives markets where prices can be determined and participants both professional and non professional can meet.
The phrase street name securities or "nominee name securities" is used in the United States to refer to securities of companies which are held electronically in the account of a stockbroker or bank or custodian, similar to a bank account. The entity whose name is recorded as the legal owner of the securities is known as the "nominee owner," and that entity has ownership rights in the security. The nominee owner holds those ownership rights on behalf of the true economic owner who is referred to as the beneficial owner.
The indirect holding system is a system of securities clearance, settlement and ownership system where ownership information is held electronically as a book entry. It consists of one or more tiers of intermediaries between issuer and investor. It is an evolution from the "direct holding system" in which owners of securities had a direct relationship with the issuer.
The Direct Registration System (DRS) or direct holding system is a traditional system of securities clearance, settlement and ownership in which owners of securities have a direct relationship with the issuer. As implemented in the past, investors would either be recorded on the issuer's register or they would be in physical possession of bearer securities certificates.
Settlement is the "final step in the transfer of ownership involving the physical exchange of securities or payment". After settlement, the obligations of all the parties have been discharged and the transaction is considered complete.
In India, a Depository Participant (DP) is described as an Agent of the depository. They are the intermediaries between the depository and the investors. The relationship between the DPs and the depository is governed by an agreement made between the two under the Depositories Act. In a strictly legal sense, a DP is an entity who is registered as such with SEBI under the sub section 1A of Section 12 of the SEBI Act. As per the provisions of this Act, a DP can offer depository-related services only after obtaining a certificate of registration from SEBI. As of 2012, there were 288 DPs of NSDL and 563 DPs of CDSL registered with SEBI.
In corporate law, a stock certificate is a legal document that certifies the legal interest of ownership of a specific number of shares or stock in a corporation.
Depository Trust Company (DTC), founded in 1973, is a New York corporation that performs the functions of a central securities depository as part of the US National Market System. DTC annually settles transactions worth hundreds of trillions of dollars, processes hundreds of millions of book-entry deliveries, and custodies millions of securities issues worth tens of trillions of dollars issued in the United States and over 100 other countries. Since 1999 it has been a subsidiary of the Depository Trust & Clearing Corporation, a securities holding company.
A stock transfer agent, transfer agent, share registry or transfer agency is an entity, usually a third party firm unrelated to security transactions, that manages the change in ownership of company stock or investment fund shares, maintains a register of ownership and acts as paying agent for the payment of dividends and other distributions to investors. The name derives from the impartial intermediary role a transfer agent plays in validating and registering the purchase of new ownership shares and, in the case of a transfer of ownership, cancelling the name and certificate of shareholders who sell shares and substituting the new owner's name on the official master shareholder register.
The Unidroit convention on substantive rules for intermediated securities, also known as the Geneva Securities Convention, was adopted on 9 October 2009. It has been signed by only one of the 40 negotiating States (Bangladesh), but not entered into force. The official commentary was published in 2012.
The Financial Services and Markets Authority (FSMA) is the financial regulatory agency in Belgium.
Liquid tradable securities is a generic phrase for a wide range of financial instruments. It often differentiates financial instruments that are easily tradable 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 and how they buy a bond or share.
Cede and Company, shorthand for "certificate depository", is a specialist United States financial institution that processes transfers of stock certificates on behalf of Depository Trust Company, the central securities depository used by the United States National Market System, which includes the New York Stock Exchange, and Nasdaq.
In finance and financial law, dematerialization refers to the substitution of paper-form securities by book-entry securities. This is a form of indirect holding system where an intermediary, such as a broker or central securities depository, or the issuer itself holds a record of the ownership of shares usually in electronic format. The dematerialization of securities such as stocks has been a major trend since the late 1960s, with the result that by 2010 the majority of global securities were held in dematerialized form.
