20.07.2020

Market Infrastructure Dictionary (Jargon)

This Market Infrastructure (Jargon) Dictionary is a section of a financial regulatory dictionary. The language of the financial regulatory field is complex and an entry barrier to understanding its regulation. This work is informative and lacking in scientific character. It is only an approach that facilitates access to a complex subject. This same work and this particular section are available in Spanish.

Por Sanz González , María

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Concept	Definition
INTEROPERABILITY ARRANGEMENT	An arrangement between two or more CCPs that involves a cross-system execution of transactions
CAPITAL	Subscribed capital within the meaning of Article 22 of Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions (27) in so far it has been paid up, plus the related share premium accounts, it fully absorbs losses in going concern situations, and, in the event of bankruptcy or liquidation, it ranks after all other claims
CLASS OF DERIVATIVES	A subset of derivatives sharing common and essential characteristics including at least the relationship with the underlying asset, the type of underlying asset, and currency of notional amount. Derivatives belonging to the same class may have different maturities
CLIENT	An undertaking with a contractual relationship with a clearing member of a CCP which enables that undertaking to clear its transactions with that CCP
CLEARING	The process of establishing positions, including the calculation of net obligations, and ensuring that financial instruments, cash, or both, are available to secure the exposures arising from those positions
CCP	A legal person that interposes itself between the counterparties to the contracts traded on one or more financial markets, becoming the buyer to every seller and the seller to every buyer
CLEARING MEMBER	An undertaking which participates in a CCP and which is responsible for discharging the financial obligations arising from that participation
INDEPENDET MEMBER OF THE BOARD	A member of the board who has no business, family or other relationship that raises a conflict of interests regarding the CCP concerned or its controlling shareholders, its management or its clearing members, and who has had no such relationship during the five years preceding his membership of the board
TRADING VENUE	A system operated by an investment firm or a market operator within the meaning of Article 4(1)(1) and 4(1)(13) of Directive 2004/39/EC other than a systematic internaliser within the meaning of Article 4(1)(7) thereof, which brings together buying or selling interests in financial instruments in the system, in a way that results in a contract in accordance with Title II or III of that Directive
TRADE REPOSITARY	A legal person that centrally collects and maintains the records of derivatives
RESERVES	Reserves as set out in Article 9 of Fourth Council Directive 78/660/EEC of 25 July 1978 based on Article 54(3)(g) of the Treaty on the annual accounts of certain types of companies and profits and losses brought forward as a result of the application of the final profit or loss
COUNTERPARTY CREDIT RISK	The risk that the counterparty to a transaction defaults before the final settlement of the transaction’s cash flows
PENSION SCHEME ARRANGEMENT	(a)institutions for occupational retirement provision within the meaning of Article 6(a) of Directive 2003/41/EC, including any authorised entity responsible for managing such an institution and acting on its behalf as referred to in Article 2(1) of that Directive as well as any legal entity set up for the purpose of investment of such institutions, acting solely and exclusively in their interest; (b)occupational retirement provision businesses of institutions referred to in Article 3 of Directive 2003/41/EC; (c)occupational retirement provision businesses of life insurance undertakings covered by Directive 2002/83/EC, provided that all assets and liabilities corresponding to the business are ring-fenced, managed and organised separately from the other activities of the insurance undertaking, without any possibility of transfer; (d)any other authorised and supervised entities, or arrangements, operating on a national basis, provided that: (i)they are recognised under national law; and (ii)their primary purpose is to provide retirement benefits;