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CAES
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See Computer Assisted Execution System
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call
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Bonds: The right to redeem outstanding bonds before their scheduled maturity. Options: The right to buy a specific number of shares at a specified price by a fixed date. (See put
)
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capital commitment
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The financial investment Market Makers carry in inventories of stocks in which they make markets. (See Market Maker
)
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Central Registration Depository (CRD)
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A computerized system in which FINRA maintains the employment, qualification, and disciplinary histories of more then 600,000 securities industry professionals who deal with the public.
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Chinese Wall
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A term used to describe procedures enforced within a securities firm that separate the firm's departments to restrict access to non-public, material information. The procedures help FINRA members avoid the illegal use "inside" information.
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churning
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See excessive trading
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circuit breaker
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A procedure that temporarily halts trading on all U.S. stock markets for one hour when the Dow Jones Industrial Average falls 250 points or more within a trading day. The pause is designed to allow time for the markets to absorb the news that precipitated the decline. Should the average fall another 150 points within the same day, trading would again be halted, this time for two hours.
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claim
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A demand for money or other relief. (See arbitration
)
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clearance
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The conclusion of an exchange of securities. (See settlement
)
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co-manager
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See co-underwriter
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co-underwriter
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Almost all public offerings are co-managed by a "co-underwriter." (See underwriter
)
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comfort letter
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An accounting firm's statement provided to a company preparing to go public. The letter indicates the accountants' comfort that unaudited financial data in the company's prospectus consistently follow generally accepted accounting principles, and no material changes have occurred since the report was prepared. (See Generally Accepted Accounting Principles, prospectus
)
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commission
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Fees paid to a broker for executing a trade based on the number of shares traded or the dollar amount of the trade.
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Committee on Uniform Security Identification Procedures (CUSIP) number
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A unique nine-character alpha/numeric code appearing on the face of each stock certificate that is assigned to a security by Standard & Poor's Corporation. The number is used to expedite clearance and settlement. (See clearance
, settlement
, Standard & Poor's
)
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common stock
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A class of securities representing ownership and control in a corporation and that may pay dividends as well as appreciate in value. (See preferred stock
)
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compliance departments
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Departments set up in all organized stock markets to oversee market activity and make sure that trading complies with Securities and Exchange Commission and other Exchange regulation.
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Composite Quotation Service
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See Consolidated Quotation System
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Computer Assisted Execution System (CAES)
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Nasdaq service that automates order routing and execution for securities listed on domestic exchanges in the Intermarket Trading System (ITS). When linked to ITS, Market Makers can execute trades in exchange-listed securities through CAES with specialists on an exchange floor. (See Intermarket Trading System
, Market Maker
, specialist
)
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computer-to-computer interface (CTCI)
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High speed communication interface between large member firms' mainframes and the Nasdaq system for more efficient transfer of information.
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confirmation
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Formal memorandum from a broker to a client giving details of securities transaction. When a broker acts as a dealer, the confirmation must disclose that fact to a customer.
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Consolidated Quotation System (CQS)
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An electronic service that provides quotations on issues listed on the New York and American stock exchanges, regional stock exchanges, and issues traded by FINRA member firms in the third market. Nasdaq processes this data and provides it to its subscribers as the Composite Quotation Service. The initials may be used either for the exchange system or Nasdaq service. (See third market
)
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Consolidated Tape Association (CTA)
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Operating authority for exchange-listed securities information.
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convertible bond
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A bond that can be exchanged at the option of the holder into preferred or common stock at a preset ratio. (See common stock
, preferred stock)
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counterclaim
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A claim against the claimant in an arbitration. (See claim
)
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cooling-off period
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The period after a company's prospectus has been filed with the Securities and Exchange Commission and before offering is made to the public.
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corporate financing review
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A regulatory service of FINRA that ensures the underwriting terms and conditions of public companies are fair and in the interests of the issuing company and its investors.
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corporate governance standards
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The non-quantitative qualification standards for companies whose securities are traded on Nasdaq.
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cost of capital
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The rate that a company must pay for its capital or the minimum return that is required to maintain the market value of a company's common stock. Cost of capital reflects the market's perception of the risk associated with a company's common stock.
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CQS
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See Consolidated Quotation System
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CRD
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See Central Registration Depository
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credit and debit balance
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A credit balance represents monies owed to a customer by a broker-dealer, generally resulting from the customer's sale of securities. Debit balances are monies owed to a broker-dealer by a customer, generally resulting from the customer's purchase of securities.
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credit balance
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See credit and debit balance
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crossed quotations
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See locked or crossed quotations
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CTA
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See Consolidated Tape Association
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CTCI
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See Computer-to-Computer Interface
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CUSIP number
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See Committee on Uniform Security Identification Procedures number
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customer agreement
|
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See new account information form
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customer protection rule
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An SEC rule that requires broker-dealers to establish separate reserve accounts into which customer credit balances are maintained. The rule prohibits a firm from using customer balances to finance its own trading. The rule also requires firms to gain possession of customers' fully paid and excess margin securities promptly, and to segregate them properly. (See prompt receipt and delivery of securities)
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