| A |
| Automated Clearing House (ACH) |
| An electronic clearing system in which payment orders are exchanged among financial institutions, primarily using magnetic media or via telecommunication networks, and handled by a data-processing centre. |
| B |
| Bank Identifier Code (BIC) |
| A universal means of identifying financial institutions in order to facilitate the automated processing of telecommunication messages in financial environments. |
| Batch Processing |
| The transmission or processing of a group of payment orders and/or securities transfer instructions in batches at discrete intervals of time. |
| C |
| Central Securities Depository (CSD) |
| An entity which holds and administers securities or other financial assets, holds issuance accounts and enables transactions to be processed by book entry. Assets may exist either physically (but immobilised within the CSD) or in a dematerialised form (i.e. only as electronic records). |
| Central Bank |
| An institution which - by way of a legal act - has been given responsibility for conducting the monetary policy for a specific area. |
| Clearing |
| The process of transmitting, reconciling and, in some cases, confirming payment orders or security transfer instructions prior to settlement, possibly including the netting of instructions and the establishment of final positions for settlement. Sometimes the term is used (imprecisely) to include settlement. |
| Custodian |
| An entity which undertakes the safekeeping and administration of securities and other financial assets on behalf of others. |
| Custody |
| The holding and administration of securities and other financial instruments on behalf of others. |
| D |
| Delivery |
| Final transfer of a security, another financial instrument or a commodity. |
| Delivery versus payment (DVP) system |
| A mechanism in an exchange-for-value settlement system which ensures that the final transfer of assets (securities or other financial instruments) occurs if, and only if, the final transfer of another asset (or other assets) occurs. |
| Derivative |
| A financial contract, the value of which depends on the value of one or more underlying reference assets, rates or indices. The basic classes of derivatives are futures contracts, options, swaps and forward rate agreements. |
| E |
| Equities |
| Securities representing ownership of a stake in a corporation, i.e. shares traded on a stock exchange (quoted or listed shares), unquoted or unlisted shares and other forms of equity. Equities usually produce income in the form of dividends. |
| Equity Instruments |
| Dividend-bearing securities (corporate shares, and securities evidencing an investment in an equity fund). |
| Equity Market |
| The market in which equities are issued and traded. |
| F |
| Failed Transaction |
| A securities transaction which does not settle on the contractual settlement date. |
| Free-of-payment Delivery |
| The delivery of securities with no corresponding payment of funds. |
| Futures contract |
| A contract to buy or sell securities or a commodity at a predetermined price on a specified future date. |
| G |
| Global Custodian |
| A custodian which provides its customers with custody services in respect of securities traded and settled not only in the country in which the custodian is located but also in numerous other countries throughout the world. |
| Gridlock |
| A situation which can arise in a funds or securities transfer system when the failure of some transfer instructions to be executed (because the necessary funds or securities balances are unavailable) prevents a substantial number of other instructions from other participants being executed. |
| H |
| I |
| Immobilisation |
| Placement of certificated securities and financial instruments in a central securities depository to facilitate book-entry transfers. |
| Incident |
| A situation which prevents a system from functioning normally or causes substantial delays. |
| International Bank Account Number (IBAN) |
| The IBAN concept was developed by ECBS and by the International Organization for Standardisation (ISO) and is an internationally agreed standard. It was created as an international bank identifier, used to uniquely identify the account of a customer at a financial institution, to assist error-free cross-border customer payments, and to improve the potential for straight-through processing (STP), with a minimum amount of change within domestic schemes. |
| International central securities depository (ICSD) |
| A securities settlement system which clears and settles international securities or cross-border transactions in domestic securities. At present, there are two ICSDs located in EU countries: Clearstream Luxembourg and Euroclear Bank. |
| International Securities Identification Number (ISIN) |
| An international identification code assigned to securities issued in financial markets. |
| Issuer |
| The entity which is obligated on a security or other financial instrument. |
| J |
| K |
| L |
| M |
| N |
| Net Credit Position |
| The sum of the value of all the transfers received up to a particular point in time in a netting system, less the value of all transfers sent, but only if the difference is positive. If the difference is negative, the participant is in a net debit position. The net credit or net debit position at settlement time is called the net settlement position. These net positions may be calculated on a bilateral or multilateral basis. |
| Net debit position |
| The sum of the value of all the transfers received up to a particular point in time in a netting system, less the value of all transfers sent, but only if the difference is negative. If the difference is positive, the participant is in a net credit position. The net credit or net debit position at settlement time is called the net settlement position. These net positions may be calculated on a bilateral or multilateral basis. |
| Net Settlement |
| The settlement of a number of obligations or transfers between or among counterparties on a net basis. |
| Net Settlement System |
| A funds transfer or securities settlement system whose settlement operations are completed on a bilateral or multilateral net basis. |
| Netting |
| An agreed offsetting of positions or obligations by trading partners or participants. The netting reduces a large number of individual positions or obligations to a smaller number of obligations or positions. Netting may take several forms which have varying degrees of legal enforceability in the event of the default of one of the parties. |
| Nominee |
| A person or entity named by another to act on his/her behalf. A nominee is commonly used in a securities transaction to obtain registration and legal ownership of a security. |
| Non-financial corporation |
| A corporation or quasi-corporation that is not engaged in financial intermediation but is active primarily in the production of market goods and non-financial services. |
| O |
| P |
| Q |
| R |
| Real-time Processing |
| The processing of instructions at the time they are received rather than at some later time. |
| S |
| SCORE |
| The Standardised Corporate Environment (SCORE) is based on a closed user group, administered by SWIFT, where corporates can interact with financial institutions. To be eligible for SCORE, corporates must be listed on a regulated stock exchange of a country which is member of the Financial Action Task Force. Subsidiaries can also join SCORE if they are majority owned by an eligible company (i.e., listed in one of the FATF countries), duly incorporated, in good financial standing and subject to regular audits in accordance with internationally recognised accounting standards by an independent audit firm. |
| T |
| TARGET2-Securities |
| TARGET2-Securities will be a platform for the cross-border and domestic settlement of securities against central bank money. The platform will service the Central Securities Depositories (CSDs). It will be run by the Eurosystem. The T2S project pursues cost reduction by increasing competition and price transparency. |
| U |
| V |
| W |
| X |
| Y |
| Z |
