When securities that have been lent out pay a cash dividend, the borrower of the securities is in general contractually required to pass the distribution back to the lender of the securities. This payment “pass-through” is known as a manufactured dividend.
A request by one party in a transaction for the initial margin to be reinstated or to restore the original cash/securities ratio to parity.
Market capitalisation describes the value of a company or corporation, where their shares are traded and listed on the stock exchange. This value is estimated by multiplying the market price of its shares by the number of shares the company currently has in issue.
Markets in Financial Instruments Directive is a regulation that increases the transparency across the European Union’s financial markets and standardises the regulatory disclosures required for particular markets. This was updated in 2017 with MiFID II.
Markets in Financial Instruments Regulation, is a European law which demands its member states to comply with its regulations. As a result of the last financial crisis, the need for a European Union-wide regulation called for the emergence of MiFIR. This regulation was formed with the intent to not only protect the markets, but also the investors.
Market risk is an investment risk that can potentially impact the entirety of an asset class as asset prices rise and/or fall.
The value of loan securities or collateral as determined using the last (or latest available) sale price on the principal exchange where the instrument was traded or, of not so traded, using the most recent bid offered prices.
Refers to the interest rate arbitrage book that a repo trader may run. By matching or mismatching maturities, rates, currencies, or margins, the repo trader takes market risk in search of returns.
A memorandum of understanding is an agreement between two or more parties outlined in a formal document. It is not legally binding but signals the willingness of the parties to move forward with a contract.
Mergers and acquisitions is a general term used to describe the consolidation of companies or assets through various types of financial transactions, including mergers, acquisitions, consolidations, tender offers, purchase of assets, and management acquisitions.
A money market fund is an open-ended mutual fund that invests in short-term debt securities such as US Treasury bills and commercial paper. Money market funds are managed with the goal of maintaining a highly stable asset value through liquid investments, while paying income to investors in the form of dividends.
A multi manager fund is one which invests in other managers’ funds rather than directly into individual stocks and shares. (See ‘Fund of Funds’).