Definitions
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
A
Abbreviations:
Acceptable and standard abbreviations used in security registrations recommended by the New York Clearing House Association.
Affidavit of Domicile:
A notarized affidavit executed by the legal representative of an estate reciting the residence of the decedent at the time of death.
Affidavit of Loss:
An affidavit stipulating the circumstances, under which a certificate(s) is deemed to have been lost, stolen, or destroyed.
Agenda:
The matter(s) or item(s) that is to be voted on at the Annual or Special meeting.
Alteration Guarantee:
Certification by an authorized person used in an altered assignment.
American Depository Receipts (ADR's):
Certificates of deposit issued by an American trust company against the actual foreign shares deposited with the European correspondent of the bank.
Annual Meeting:
A meeting held to elect the Board of Directors and to vote on other items as necessary by the corporation's shareholders (see also Special Meeting).
Assigned in Blank:
Assignment does not contain the name of the transferee.
Assignee:
The person(s) to whom the shares are assigned by the registered owner or assignor.
Assignment:
The written instructions that inform the transfer agent how to transfer the shares.
Assignment Form:
(see Stock Power)
Assignor:
The person(s) who is transferring the shares to be assigned to the new registered owner(s) or assignee.
Attorney-in-Fact:
An agent acting for the shareholder under a power of attorney (see also Power of Attorney).
B
Ballot:
A form used to cast a shareholder's vote(s) on items voted on at a corporation's Annual or Special meeting.
Bearer Securities:
Usually bonds. The instrument does not indicate any registration of ownership.
Beneficial Holder:
(see Street Name)
Board of Directors:
Elected persons with responsibility to shareholders to oversee management and the corporation itself.
Bond:
An instrument of debt issued by a corporation, government or municipality.
Book-closing Item:
(see: Record Date)
Bring-down:
In the transfer of securities in a private name, the change of shares coming back in the name of the brokerage firm is called the bring-down.
Broker:
An agent who can buy and sell and also hold securities for a shareholder.
C
Cancellation of Certificates:
Before issuance of a new certificate, the old certificate presented to the transfer agent is cancelled. The cancelled certificates are eventually destroyed after a number of years and microfilmed for future reference.
Capital Stock: generally the same as common stock. Usually used when the corporation does not have preferred stock.
Certificate:
(see Stock Certificate)
Classes of Stock:
Common:
Represents the principal ownership of the corporation, the first class to be issued and the last to be retired.Classified Common Stock:
Division of the common stock usually into two classes, such as a class A and a class B, to differentiate controlling or voting power.Preferred:
Securities with a definite rate of return usually described in a percentage (e.g. 7 ¾ % preferred).Cumulative Preferred:
Dividends if not paid to stockholders are accumulated and paid at a future date.Non-Cumulative Preferred:
The stockholder is paid dividends if they are earned, without any cumulative provision.Participating Preferred:
The stockholder will receive a specified dividend; he may also be entitled to additional earnings generally available to common stockholders.Classified Preferred Stock:
This distinction usually relates to different dividend rates or voting privileges (e.g. 4.25 PFD, Class A PFD, Class B PFD, etc.).Convertible Preferred:
This class carries a provision giving a privilege to the stockholder to convert his stock into common shares.
Clearing House:
Central depot affiliated with a security exchange where securities are delivered and received by transfer agents.
Convertible Bond:
A bond with privilege to convert it into common shares if the bondholder so desires.
Co-registrar:
As in the case of transfer agent, a corporation may employ co-registrars in different cities.
Co-transfer Agent:
Corporations may employ co-agents in various cities to assist in issuing certificates and effecting transfers.
Creation of Stock Certificates:
The creation of the stock is authorized by the charter of the corporation and generally empowered by the board of directors.
Cusip Number:
The nine (9) digit number assigned to a security that designates the company and the class of stock.
Custodian of Minor:
Under Uniform Gifts to Minors Act, a supervisor of the custodial property acting for the interest of the minor.
D
Date of Assignment:
The date when the certificate is endorsed.
Decedent:
A shareholder who is now deceased.
Declaration:
The formal announcement of a dividend or other item to the interested parties.
Director:
(see Board of Directors)
Dividend Disbursing Agent:
A professional transfer agent or a commercial bank, which disburses dividends to the stockholders.
Dividend Reinvestment:
Cash dividends are automatically used to buy additional shares of stock.
Dividend Reinvestment Agent:
A professional transfer agent or a commercial bank, which acts as agent for the plan and handles transfers, purchases and/or liquidation of shares through the plan.
Duplicate Security:
A security issued as a replacement of a lost or stolen certificate.
E
Endorsement:
The signature of the shareholder or an appropriate person on the reverse side of the certificate or on a stock power.
Endorsement by X Mark:
An alternative endorsement by a person who is unable sign.
Engraved Security:
Securities engraved with steel plates using varied colors. A requirement by the New York Stock Exchange and the American Stock Exchange for listed securities.
Erasure Guarantee:
Any irregularity in the assignment should be guaranteed by the broker or financial institution before the transfer is effected.
Execution Date Guarantee:
A certification as to the correct date of execution in cases where the date previously affixed is altered.
Exemption Statues:
Statues governing the fiduciary transfer exonerating the transfer agent in requesting documents otherwise necessary under the common law.
F
Facsimile Signature:
A machine signature acceptable only for members of the New York and American Stock Exchange. Also used on the face of multiple stock certificates for corporate
officers.
Financial Institution:
A Bank, Savings & Loan, or other institution, which can perform bank type services.
H
Holder of Record:
The person whose name appears in the records of the corporation.
I
In-and-Out Transfers:
A rapid transfer of security. The transfer of the stock is accomplished in one day.
Indemnity Bond:
An obligation, usually underwritten by an insurance company, agreeing to save the issuer and it transfer agent against any liability by reason of its issuance of a replacement certificate.
Inheritance Tax Waivers:
A document procured from the tax bureau of a state consenting to the transfer of the certificate registered in the name of a decedent.
Interim Certificate:
A temporary certificate issued by the transfer agent.
Investment Stock:
Securities issued under an investment letter. Restriction, in the form of a legend, usually appears on the certificate restricting the security against sale or transfer.
Irrevocable Proxy:
A proxy, which when voted cannot be changed or recast by the shareholder (see also Revocable Proxy).
Issuer:
Issuer of stock, the corporation itself.
J
Joint Tenants with Right of Survivorship:
Joint ownership. Upon the death of one party the survivor takes title of all the shares.
L
Legal Transfer:
Transfer of securities registered in the name of decedents, fiduciaries, trusts, bankruptcy, corporations, partnerships, clubs, institutions, etc. Transfer of items, which are generally, not recognized as good-delivery items.
Legend:
Language found on the back of the stock certificate used in the restriction of shares and designating when and how the shares may be transferred.
Letters of Administration:
A certificate issued by the court evidencing the appointment of the administrator of an estate.
Letter of Erasure:
Letter signed by an authorized person indemnifying the transfer agent and the corporation against liability in effecting a transfer on an erased or altered
assignment.
Letter of Indemnity:
Letter signed by an authorized person indemnifying the transfer agent and the corporation against liability in correcting the registration on a stock certificate.
Letter of Transmittal:
A form used in transmitting securities to the transfer agent. Generally used for any buy-backs, exchanges and tenders.
Letters of Trusteeship:
A certificate issued by the court evidencing the appointment of the trustee of an estate.
Letters Testamentary:
A certificate issued by the court evidencing the appointment of the executor of an estate.
Listed Security:
A security listed on an exchange.
Locations of the Transfer Agent:
A corporation may employ a trust company to act as its transfer agent located in any city. Certain corporations may handle their own transfers and dividend disbursing.
M
Medallion Signature Guarantee:
A program that guarantees the endorsement of the current owner(s) or the person(s) who is listed in the registration of the shares of stock. (The three (3) Medallion Guarantee Programs are the Stock Transfer Association Medallion Program (STAMP), the New York Stock Exchange Program (NYSP), and the Stock Exchange Medallion Program (SEMP).
Meeting Date:
The date a meeting is to be held for voting on the items listed on the agenda.
Minor:
In the security industry usage, a minor is a person under 21 years of age.
(NOTE: Some states may allow a lesser age of 18 or 19 to be considered an adult.)
Minutes of the Meeting:
A written listing in chronological order of the results, discussion, voting, etc. of a prior meeting and any other activities that occurred.
O
Odd-Lot:
Number of shares less than 100 shares in stocks and below $1,000 value in bonds.
Omnibus Waiver:
A waiver affixed to a certificate when the transfer is a non-taxable transaction.
One-and-the-Same Guarantee:
A certificate used in the event that the signature of the shareholder differs slightly form the name appearing on the face of the certificate
Options:
(see Stock Options)
Out-of-Town Bank Guarantee:
Assignment guaranteed by an out-of-town bank or trust company not having a local correspondent.
P
Par Value:
The face value of the stock - no relation to its market value.
Payable Date:
The date the shareholder may receive and cash dividend checks or receive stock certificates from a stock split.
Payment Order:
An order for the payment of dividends to another person, signed by the registered holder of the security.
Power of Attorney:
A legal document conferring authority to a named agent to act in behalf of the maker (see also Attorney-in-Fact).
Power of Substitution:
The designation of another or substitute attorney to transfer.
Proxy:
Voting instructions in lieu of a ballot vote used at the Annual or Special meeting (see also Revocable and Irrevocable Proxy).
Q
Qualitative One and the Same Guarantee:
Certification to the effect that the person signing is the same person whose name appears on the certificate.
R
Receipt:
Issued by the transfer agent against the security presented to it; either over-the-window or through the Clearing Corporation.
Record Date:
The date when the books of the corporation are closed and shareholders recorded in the books as of the close to that day receive dividends, proxies, rights or other benefits elected by the board of directors.
Replacement Certificate:
A certificate issued in lieu of a still outstanding certificate deemed lost, stolen, or destroyed.
Registered Owner:
The shareholder whose name appears in the registration of the security and in the corporation books.
Registrar:
An Agency employed by the corporation to guard against over-issuance of corporate stock. Cancellation and issuance of any certificates by the transfer agent are verified by the registrar.
Rejection of Transfer:
An incomplete transfer rejected by the transfer agent.
Resolution:
The formal declaration of information that is to be a part of a corporation's minutes.
Restricted Transfer:
The transfer of the security is restricted by reason of a prior notification to the transfer agent; lost or stolen securities, control or investment stock, etc.
Restriction:
Language that specifies when and how a transfer of shares may be made.
Reverse Stock Split:
An exchange of original shares for a different amount of shares; usually a lesser amount is given back.
Revocable Proxy:
A proxy which when voted, can be changed or recast by the shareholder (see also Irrevocable Proxy).
Round-lot:
Full lots-100 shares in stock and $1,000 value in bonds.
S
Signature Guarantee:
(see Medallion Signature Guarantee)
Situs Certification:
A certification by an authorized person reciting the residence of the decedant, or the physical location of the certificate at the time of death.
Special Meeting:
Same as an Annual meeting, but it is convened for a special item or purpose that requires it to be voted on immediately.
Small Estate Statutes:
Transfer of securities by fiduciaries without probate proceedings.
Stock Certificate:
An instrument indicating the ownership of the shareholder in a corporation.
Stock Power or Fly Power:
A single form to cover an assignment separate from a certificate or multiple certificates.
Stock Options:
The named person(s) have the option of purchasing additional shares at a specified price.
Stock Split:
The action of issuing shares to a shareholder based on their holdings as of a certain record date.
Stock Transfer Tax:
Transfer tax imposed by certain states.
Stop Transfer:
A stop order placed on the certificate.
Street Name:
Securities held in the name of the brokerage firm; or securities held in the name other than the owner (see also Beneficial Holder).
Surety Bond:
A bond from a surety company through which the replacement of a lost or stolen security is made possible.
T
Transfer Agent:
A professional transfer agent or a commercial bank, which handles transfer of shares and maintains records of securities and their holders.
Transfer on Death (TOD):
A registration which upon the death of the first name listed in the registration, the shares are owned by the next name listed in the registration after the TOD designation.
Tenants by Entirety:
A registration for a joint ownership acceptable only in certain states; generally based on the marital status of the husband and wife.
Tenants in Common:
A registration for effectively a partnership account, each tenant having a divisible interest.
Transfer Agent:
A professional agency employed by the corporation to handle the transfer of the certificate, conversation of securities, mailing notices to stockholders, payments of dividends, effecting stock subscriptions and maintaining the books of the corporation.
Transfer Fanfold:
A transfer instruction form generally used by brokerage office personnel.
Transferee:
The assignee.
Transferor:
The assignor.
True-copy Certification:
A certification affixed to a copy of a document to the effect that the document is a true copy of the original and is still in full force and effect.
U
Uniform Gifts to Minors Act:
A registration for statutes adopted by states. The convenient arrangement of making a gift of securities to a minor.
Uniform Transfers to Minors Act:
A registration for statutes adopted by states. The convenient arrangement of making a transfer of securities to a minor.
Usufruct:
On who is the beneficial holder in a usufructuary registration.
(Note: This is only usable in Louisiana.)
Usufructuary:
A registration for one who holds property for use by a usufruct.
(Note: This is only usable in Louisiana.)
V
Validation Certification:
A certification used in cases where the stockholder signature is placed on the wrong line.
Voting Trust Certificate:
Certificate issued in accordance with the terms of the voting trust agreement of the corporation.
W
Warrant:
A certificate entitling the holder to purchase additional shares at a specified price.
Witness:
A person who witnesses the endorsement of the stockholder.