| safe harbor | The "Safe Harbor for Forward-Looking Information" allows company management to discuss in good faith a company's prospects and financial projections with analysts and investors without fearing litigation. (From the Private Securities Litigation Reform Act of 1995.) | |
| secondary market | Markets where securities are bought and sold subsequent to original issuance. | |
| secondary offering | A registered offering of a large block of a security that has been previously issued to the public. The blocks being offered may have been held by large investors or institutions, and proceeds of the sale go to those holders, not the issuing company. Also called secondary distribution. (See initial public offering, new issue, underwriter) | |
| Securities Act of 1933 | The "disclosure statute" requires companies to register stock offerings to the public, and disclose important facts through a prospectus, and additional information filed with the Securities and Exchange Commission. (See prospectus, Securities and Exchange Commission) | |
| Securities Acts Amendments of 1975 | considered the most significant securities legislation since the 1934 Act, this act ended fixed commission rates, initiated action toward development of a national market system, and granted the Securities and Exchange Commission final say in the adoption of rules by any of the self-regulatory organizations (SROs). (See Securities Exchange Act of 1934, self-regulatory organizations) | |
| Securities Exchange Act of 1934 | This law created the Securities and Exchange Commission to regulate the securities industry. The law outlawed manipulative and abusive practices in the issuance of securities; it required registration of stock exchanges, brokers and dealers, and registration of exchange-listed securities; it also required disclosure of certain financial information and insider activity. The law gave the SEC surveillance authority over exchanges and brokers, and the authority to regulate margin requirements. The law also authorized the SEC to enforce the Securities Act of 1933. In 1938, the law was amended to allow regulation of over-the-counter markets through self-regulated organizations. (See Maloney Act, Securities Act of 1933) | |
| Securities Investor Protection Act of 1970 (SIPA) | The statute that established the Securities Investor Protection Corporation (15 U.S.C. §78aaa et seq., as amended). | |
| Securities Industry Association (SIA) | The principal trade association and lobbying arm of the securities industry. | |
| Securities Industry Automation Corporation (SAC) | A facility owned by the New York and American stock exchanges that operates automated communication systems to support trading, surveillance and market data for these exchanges. | |
| Securities Investor Protection Corporation (SIPC) | A nonprofit corporation that insures investors against the failure of brokerage houses, similar to the way that the Federal Deposit Insurance Corp. insures bank deposits. Coverage is limited to a maximum of $500,000 per account, but only up to $100,000 in cash. SIPC does not insure against market risk. | |
| securities analyst | An individual who does investment research and makes recommendations to buy, sell, or hold. Most analysts specialize in a single industry or business sector. | |
| Securities and Exchange Commission (SEC) | The federal agency created by the Securities Exchange Act of 1934 to administer that act and the Securities Act of 1933. The statutes administered by the SEC are designed to promote full public disclosure and protect the investing public against fraudulent and manipulative practices in the securities markets. Generally, most issues of securities offered in interstate commerce or through the mails must be registered with the SEC. (See Maloney Act, Securities Acts Amendments of 1975, Securities Exchange Act of 1934) | |
| Securities and Exchange Commission Rules | See Rules | |
| securities exchange | A physical facility in which buyers and sellers of securities, or their agents, meet to effect transactions. | |
| SelectNetSM | An automated Nasdaq market service that enables securities firms to route orders, negotiate terms, and execute trades in Nasdaq securities, eliminating the need for verbal contact between trading desks. | |
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self-regulatory organization (SRO) |
An entity, such as FINRA, responsible for regulating its members through the adoption and enforcement of rules and regulations governing the business conduct of its members. | |
| sell-side trader | An employee of a retail broker, institutional broker and trader, or research department who engages in securities transactions. (See buy-side trader) | |
| settlement | The conclusion of a securities transaction; a broker-dealer buying securities pays for them; a selling broker delivers the securities to the buyer's broker. (See clearance, prompt receipt and delivery of securities) | |
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settlement date (T+3) |
The date specified for delivery of securities between securities firms, usually three business days after the execution of an order. (See prompt receipt and delivery of securities) | |
| shareholder of record | The name of an individual or entity that an issuer carries on its books as the registered holder (not necessarily the beneficial owner) of the issuer's securities. (See beneficial owner) | |
| short sale | The sale of shares of a security that the seller does not own. Such sales are made in anticipation of a decline in the price of the security to enable the seller to cover the sale with a purchase at a later date, at a lower price, and thus at a profit. Securities and Exchange Commission rules allow investors to sell short only when a stock price is moving upward. This prevents "pool operators" from driving down a stock price through heavy short-selling, then buying the shares for a large profit. | |
| Short Sale Rule | A Nasdaq rule that prohibits FINRA members from selling a Nasdaq National Market stock at or below the inside best bid when that price is lower than the previous inside best bid in that stock. (See best bid, inside spread, short sale) | |
| short interest | The total number of shares of a security that have been sold short by customers and securities firms that have not been repurchased to settle short positions in the market. (See short sale) | |
| SIA | See Securities Industry Association | |
| SAC | See Securities Industry Automation Corporation | |
| SIC codes | See Standard Industrial Classification codes | |
| SIPC | See Securities Investor Protection Corporation | |
| SIPA | ||
| SmallCap | See The Nasdaq SmallCap Market | |
| SMART | See Securities Market Automated Regulated Trading Architecture | |
| Small Order Execution SystemSM (SOESSM) | Automated execution system for processing small order agency executions of Nasdaq securities (up to 1,000 shares). | |
| SOESSM | See Small Order Execution System | |
| soft dollars | Payment for brokerage services, such as research, through commissions or directed underwriting rather than fees. | |
| specialist | A member of a stock exchange through which all trades in a given security pass. | |
| specific performance | The remedy of performance of a contract in the specific form in which it was made, according to the precise terms agreed upon. | |
| split | The division of outstanding shares of a corporation into a larger number of shares. For example: in a 3-for-1 split, each holder of 100 shares before would have 300 shares, although the proportionate equity in the company would remain the same. A reverse split occurs when the company reduces the total number of outstanding shares, but each share is worth more. | |
| sponsorship | Enhancing the demand for a stock through research and order flow. | |
| spread | The difference between the bid price at which a Market Maker will buy a security, and the ask price at which a Market maker will sell a security. (See inside spread) | |
| SRO | See self-regulatory organization | |
| Standard & Poor's Corporation | A company well known for its rating of stocks and bonds according to investment risk (the Standard & Poor's Rating) and for compiling the Standard & Poor's Index—commonly called the Standard & Poor's 500—that tracks 400 industrial stocks, 20 transportation stocks, 40 financial stocks, and 40 public utilities as a measurement indicative of broad changes in the market. | |
| Standard Industrial Classification (SIC) codes | A numbering system established by the U.S. Office of Management and Budget that identifies companies by industry. It is used to promote the comparability of economic statistics from various sectors of the U.S. economy. | |
| stock | An instrument that signifies an ownership position in a corporation. | |
| stock symbol | A unique four- or five-letter symbol assigned to a Nasdaq security that is used for identifying it on stock tickers, in newspapers, on on-line services, and in automated information retrieval systems. If a fifth letter appears, it identifies the issue as other than a single issue of common or capital stock. | |
| stop-loss order | A customer order to a broker that sets the sell price of a stock below the current market price, therefore protecting profits that have already been made or preventing further losses if the stock drops. (See limit order) | |
| street name | Term given to securities held in the name of a broker on behalf of a customer. This arrangement allows shares to be transferred easily. If the stock were registered in the customer's name rather than the broker's name, physical certificates would need to be transferred. (See beneficial owner) | |
| subindex | Categories of the Nasdaq Composite Index. There are currently 11 subindexes: Bank, Biotechnology, Computer, Industrial, Insurance, Nasdaq ADR (American Depositary Receipts), Nasdaq Regional Indexes, Nasdaq-100® (100 of the largest companies on the Nasdaq National Market), Other Finance, Telecommunications. (See Nasdaq Composite Index) | |
| suitability | A suitability violation occurs when and investment made by a broker is inconsistent with the investor's objectives, and the broker knows or should know the investment is inappropriate. | |
| surveillance | See market regulation | |
| syndicate | A group of investment banking firms formed to conduct an underwriting of a new security issue. (See underwriter) | |
| syndicate manager | Also called the managing underwriter or manager, the syndicate manager works with a company to prepare a new stock issue and register it with the Securities and Exchange Commission. The manager often also organizes the syndicate to spread the risk of a new issue. |
