To find your definition simply click on the letter that your investment or financial term starts with.
An online or paper record of transactions in an account at a financial institution or investment firm, generally provided monthly.
A government, financial institution, large company or individual with a required level of income or assets, permitted to invest in certain types of securities sold without a prospectus.
Advisors/advisers specialize in giving advice to clients about investing in securities and are registered with the securities regulators.
A type of investment fraud that exploits the trust and friendship that exists in groups of people who have something in common, such as religious or ethnic communities, social clubs or professional groups. The fraudsters who promote affinity scams frequently are – or pretend to be – members of the group. They often enlist respected leaders (who may be unsuspecting victims) from within the group to spread the word about the scheme, by convincing them that a fraudulent investment is legitimate and worthwhile. The resulting sense of affinity and trust allows fraudsters to more effectively lure their victims into a fraudulent investment.
Refers to any crypto asset other than Bitcoin.
Annual Information Form (AIF)
An AIF is required to be filed annually by certain companies under Part 6 of National Instrument 51-102. It is intended to provide material information about a company and its business at a point in time in the context of its historical and possible future development. An AIF describes the company, its operations and prospects, risks and other external factors that impact the company specifically.
A comprehensive report issued to shareholders that provides information about a company’s activities and financial condition.
A financial instrument that provides a series of payments at regular intervals for a specified period of time.
How much your money, investments, or other assets go up in value as time passes.
The lowest price a seller is willing to accept for a security.
The allocation of assets within a fund or your portfolio that is invested in the three major asset classes: cash and equivalents, fixed income, and equity.
Asset-backed commercial paper
Short-term debt typically issued by banks and financial institutions. This is a kind of commercial paper that is backed by a pool of assets, such as credit card receivables, car loans, or mortgages.
Assets are everything you own that has any monetary value, plus any money you are owed.
A type of fee that investors pay when they sell mutual fund shares. The fee is a percentage of the value of the share being sold.
A financial statement that shows a company’s financial condition at a specific point in time. It summarizes a company’s assets, liabilities, and shareholders’ equity.
An investment portfolio that holds an appropriate mix of different types of investments, such as bonds and shares.
A period when the value of the securities market, or a sector of the securities market, is generally declining. It is a transition from high investor optimism to widespread investor fear and pessimism. A bear market should not be confused with a correction, which is a short-term trend that has a duration of less than two months.
A market or sector index against which you can measure the performance of an investment (such as a mutual fund).
A beneficiary is the person or organization who receives assets that are held in your name in a retirement plan, or are paid on your behalf by an insurance company after your death.
The individual who has the benefits of owning a security even though the title may be registered in another name.
Better Business Bureau
An organization dedicated to fostering fair and honest relationships between businesses and customers, instilling consumer confidence, and contributing to an ethical business environment.
The highest price a buyer is willing to pay for a security.
Binary Options Scam
Binary options are like bets on how an asset (currency, stock, etc.) will perform in a limited amount of time – they are “all or nothing” wagers, similar to gambling. Even when investors see virtual gains, they often cannot access these profits as they don’t exist. Typically luring victims through enticing online ads, emails or social media, binary options trading platforms promote higher than average returns for a small amount of work. Investors are required to create a trading account, supply their credit card and other personal information, and make an initial deposit before they start trading.
Is the most popular type of crypto asset. Bitcoin uses distributed ledger technology called blockchain to operate independently of a central bank and is commonly used a medium of exchange.
An online infrastructure that permits and records the transactions of crypto assets for all participants securely using cryptography, hence the term “crypto”. As a transaction of crypto assets takes place on the blockchain, a peer-to-peer network confirms and validates the transaction and adds it to growing list of records called blocks.
A browser in Blockchain that allows you to see all the transactions on a Blockchain network.
Funds that invest in companies that have operations related to Blockchain. Blockchain funds allow access of the technology behind crypto assets without directly buying, owning or trading crypto.
A scheme or fraud where salespeople use high pressure techniques, often by telephone, to push investment opportunities to generally unsophisticated investors.
Bonds are debt securities issued by corporations and government.
A strategy for fixed income products that attempts to minimize risk by dividing up investment dollars evenly among bonds that mature at different times.
A budget is a written record of income and expenses during a specific time frame, typically a year.
A period when the value of the securities market, or a sector of the securities market, is generally rising.
A type of option that gives the holder the right to buy a specified security asset at a specified price within a specified time
A term that applies to bonds and preferred shares where the company may require you to sell back the bonds or shares by a certain date for a specified price. Also known as redeemable.
Canada Deposit Insurance Corporation
A federal government organization that provides insurance to protect eligible money deposited in Canadian banks and certain other financial institutions up to a certain amount. See more at CDIC.
Canada Education Savings Grant
Employment and Social Development Canada (ESDC) provides an incentive for families to save for their child’s post-secondary education by paying a grant based on the amount contributed to an RESP for the child. The grant will be directly deposited into the child’s RESP.
Canada Revenue Agency
The federal government agency that collects taxes and administers Canada’s tax laws. See more at CRA.
Canada Savings Bond
Financial product offered by the Bank of Canada with a guaranteed minimum amount of interest.
Canadian Premium Bonds
A low-risk investment from the Bank of Canada. It offers a higher interest rate than a Canada Savings Bond. You can only redeem CPBs once a year on or within 30 days of the anniversary date each year.
Canadian Securities Administrators
A council of the securities regulators of Canada’s 13 provinces and territories. See more at CSA.
Canadian Securities Exchange
A stock exchange for trading the equity securities of emerging companies. Formerly known as Canadian National Stock Exchange and CNQ, Canadian Trading and Quotation System Inc. See more at CSE.
Money that is used to generate income or make an investment.
An increase in the money value of a capital asset such as an investment or other asset, which results in a profit if the asset is sold. For example, if a share is bought at $26 and sold at $30, there is a capital gain of $4.
A trading account where you pay cash for all transactions.
An investment that can be quickly converted to cash with little risk, such as a treasury bill.
The extent to which you depend on your investments to meet day-to-day expenses. Investors who rely on their investments to meet daily living expenses will be much less comfortable with the risk of losses.
Cease Trade Order
An order issued by a provincial or territorial securities commission or similar regulatory body against a company, management of a company, or any individual for a breach or an alleged breach of the Securities Act. Most CTOs are issued as a result of a filing deficiency, such as the failure to file a proper quarterly or annual financial statement, but may also be issued as a result of an enforcement action that involves a proven or admitted breach of the Securities Act.
Centralized Finance (CeFi)
Abbreviated as CeFi, it refers to centralized finance, which includes the traditional financial system as well as centralized crypto asset trading platforms.
Certificate of deposit
A debt instrument that pays a fixed rate of interest at a certain point in time. Funds must be kept on deposit for a fixed period of time
Canadian Investment Regulatory Organization (CIRO)
CIRO regulates mutual fund dealers, investment dealers, and acts as the regulation services provider for marketplaces that have retained it as such, including monitoring trading on those marketplaces for compliance with CIRO rules and securities legislation. CIRO, which had temporarily been known as the New Self-Regulatory Organization of Canada, consolidated the functions of the Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada.
An organization that settles trades and regulates the delivery of securities transactions.
Client Relationship Model 2
Securities law requirements that provide investors with information from their registered investment advisors on the costs and performance of their investments, as well as other information related to their accounts.
Closed end investment fund
A fund that issues a finite number of units or shares, which may trade on a stock exchange.
Are wallets that are not connected to the internet and offer fewer opportunities for potential hacking of a user’s address and private key. Similar to a USB drive, cold wallets allow users to view their portfolio without connecting to the internet and putting their private key at risk and connecting to the internet only at the time of trading.
A form of loan you make to a corporation. You buy the investment at a discount and you get the full value back on the maturity date. The time period is less than one year
A fee you pay to your investment dealer or advisor for their services, such as providing investment advice and conducting transactions.
A basic good that is used in commerce that is interchangeable with another similar product. Commodity prices are subject to supply and demand. Examples include grain and oil.
A fund that invests in derivatives or commodities that conventional mutual funds are not permitted to invest in.
A share in the ownership of a company, giving the holder a vote in the election of directors and some other major corporate decisions.
Money that you earn on interest from a previous period. For example, if you invest $100 at an annual interest rate of 5%, it will grow by $5 to $105 after one year. In the next year, at 5%, it will grow to $110.25. The extra 25 cents is interest earned on the previous interest. It might not seem like much, but the compounding increases each year and becomes quite significant over time.
A fund that exists to provide certain protections if a dealer becomes insolvent either because of business failure or fraud that leads to insolvency. Examples include the Canadian Investor Protection Fund (CIPF) for investment dealers and the MFDA’s Investor Protection Corporation (IPC) for mutual fund dealers.
The legally required public disclosure by issuers of their financial statements and new releases.
Contracts-For-Difference, commonly called CFDs, are contracts between buyers and sellers stipulating that sellers will pay an amount based on future value of an underlying thing when the contract is due. The underlying things typically include assets, such as securities or commodities, or benchmarks, such as currency exchange rates or securities indices. CFDs are financial derivatives considered to be securities and specified derivatives under AB securities legislation
Significant shareholders, acting alone or with others, that are in a position to influence the actions of a company.
A party to a contract, generally the entity or person(s) with whom you negotiate an agreement (with the other party to a transaction).
The interest rate stated on a bond, note, or other fixed income security when it is first sold.
Credit Union Deposit Insurance Corporation
A government organization that provides insurance to protect money deposited in AB credit unions. See more at CUDIC
A web-based process that gives businesses a way to collect small amounts of money from a large number of people.
A term that encompasses all digital assets that use cryptography, a peer-to-peer network and a digital ledger system to record transactions.
Crypto Asset Trading Platform
An online trading service that allows the trading of crypto assets.
Cryptocurrencies is a popular name for speaking to digital assets. As cryptocurrencies can be used for a variety of functions outside of just being a medium of exchange and are not considered legal tender in Canada and not regulated as a traditional currency the more appropriate name is crypto assets.
Provides a storage of digital assets in exchange for a fee. These assets could be stored online (hot storage) or offline (cold storage) and could support a multi-approval approach.
Crypto Exchange Traded Funds (ETFs)
A type of exchange traded fund that tracks crypto assets instead of stocks or bonds that are held by a regular ETF. This provides exposure to crypto assets without directly buying, owning or trading them.
Cumulative collection or successive additions
Accumulation of unpaid dividends to be repaid if a company makes money.
People, or investment firms, registered to buy or sell securities on behalf of clients and give advice to clients about the purchase or sale of securities.
Similar to a bond, a company promises to repay money borrowed from investors at a specified time and to pay interest at a specified rate. A debenture is secured only against the general credit of the borrower.
The money that you owe to a lender (for example a bank) when you borrow money.
Decentralized Finance (DeFi)
A term that encompasses peer-to-peer financial services on blockchains.
A direction, decision, order or ruling or requirement made under a power or right given by the Securities Act or the regulations.
Deferred sales charge
A type of back-end load that investors pay if they sell shares of a mutual fund within a specified period of time, usually the first 6 or 7 years.
Defined benefit pension plan
A pension plan whereby an employer pays a predetermined and ongoing amount when an employee retires. The amount is based on earnings and the number of years worked.
Defined contribution pension plan
A pension plan with an individual account for each participant. The amount of the benefit is based on how much you make each year and how much your company contributes. The retirement income depends on the plan’s investment income and the amount contributed to the plan.
An insurance plan designed to protect the money you deposit if a bank, credit union, or trust company fails. See also CDIC and CUDIC.
A financial contract that gives you the right to buy and sell at specified prices. Examples include call and put options.
Another name for crypto assets
A digital system where records of transactions are simultaneously maintained at multiple points through a network of peer-to-peer computers. Blockchain is a form of a distributed ledger.
Another name for crypto assets
Action taken by a securities regulator to discipline an individual, company, or registrant. This can include a fine or a ban from the securities market
A stockbroker that charges lower fees compared to full service brokers. No investment advice is given.
Discount Brokerage firm
Brokerage firms that provide no investment advice, and charge a lower fee to buy and sell securities.
When you give someone else authority to make investment decisions and trade securities for you without checking with you prior to each trade
The investment in a number of different securities. This reduces the risks inherent in investing. Diversification may be among types of securities, companies, industries or geographic locations.
Reducing risk by investing in a number of assets.
A payment made by a company to its shareholders from the company’s profits. For common shares, the dividend can vary with the financial success of the company. Dividends can generally be raised, lowered or discontinued at the discretion of the company’s board of directors.
Dividend Reinvestment Plan
The automatic reinvestment of shareholder dividends in more shares of the company’s stock.
A financial ratio that shows how much a company pays out in dividends relative to the current share price.
Dollar Cost Averaging
A strategy that requires investing money at regular intervals regardless of market conditions. Designed to reduce price volatility.
Dow Jones Industrial Average
A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. The Dow is a barometer of how shares of the largest US companies are performing.
Early warning report
A report that must be filed when a person or group of people acquire 10% of a company’s securities.
Earnings Per Share
The amount of profit earned by a company during a period per share of common stock. It is calculated by dividing net income by the total number of shares outstanding during the period.
Earnings before interest, taxes, depreciation and amortization. EBITDA is one way to analyze and compare profitability among companies.
Your emotional response to risk and to changes in the value of your investments. Some people are quite comfortable with the ups and downs of the market, while others lose sleep when their investments fluctuate in value.
Educational Assistance Payment
Payments from a group scholarship plan that a child receives when attending a post secondary institution.
The ownership interest of the shareholders (common and preferred) of a company. Shares of a company can be referred to as equities.
Ownership shares in a company. Also known as shares and stocks
Securities deposited with a neutral third party and held in trust that are delivered when certain conditions are fulfilled.
Exchange-Traded Fund (ETF)
A fund that holds the same mix of investments as a stock or bond market index and trades on a stock exchange.
A market where private companies sell their securities under various exemptions from the prospectus requirement to investors that meet specific criteria in National Instrument 45-106 Prospectus and Registration Exemptions.
The Securities Act and Rules provide a number of exemptions from the registration and prospectus requirements. If you purchase securities using these exemptions, the securities are subject to resale restrictions.
The overall profit you expect to receive from an investment in the future which may be very different from the actual returns that you eventually receive.
The value printed on the face of currency or other financial instruments, like bonds or debentures. The amount that a lender will receive when a bond or debenture is repaid, exclusive of interest. See also maturity date.
Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver.
A person who offers advice about buying or selling investments.
Financial Consumer Agency of Canada
Canadian agency that protects and educates consumers about financial services.
Financial Industry Regulatory Authority
The largest independent regulator for all US securities firms. See more at FINRA.
A bank, trust company, credit union, or other institution that offers financial services such as savings and chequing accounts, loans, and credit cards.
A written plan that helps investors identify their short and long-term financial goals and determine how to best manage their money to achieve them.
A person who determines how individuals can meet their goals through proper management of their financial resources. They offer financial services such as budgeting, cash and debt management, retirement and tax planning. Financial planners cannot trade securities or recommend investments to their clients unless they are registered with the provincial securities regulator in their province.
A formal record of a company’s financial activities for a period of time, usually including a statement of financial position or balance sheet, statement of comprehensive income or income statement, cash flows or a cash flow statement, and notes.
Fixed income investments
Investments that pay you predetermined interest or dividend income such as government and corporate bonds and debentures.
Fixed Income Securities
Investments that pay a pre-determined rate of interest or dividend income such as government and corporate bonds, debentures and preferred shares.
A special type of common share issued by oil and gas or mineral exploration companies that allows certain tax deductions.
Foreign Exchange (FOREX) Trading
Investing in different currencies to make money on the changes in exchange rates. Also known as FX trading.
Also referred to as FX or foreign exchange, Forex is essentially the trading of foreign currencies. Victims of Forex scams are often solicited through online or newspaper ads describing Forex trading as a quick and easy way to make large profits, when in reality it’s a complicated process requiring professional training and experience using very advanced software. The scams typically guarantee little or no risk and high returns and are often offered by unregistered dealers based outside of Canada.
A contract where the seller agrees to deliver to the buyer an agreed amount of an asset at a specified price on a specified future date. Forwards are traded in the over-the-counter market.
A type of fee that investors pay when a mutual fund is initially purchased. Front-end loads decrease the size of the investment because they are deducted from the initial investment amount.
Full service investment firm
A firm that provides a full range of investment products and services for a variety of fee types, including investment advice.
A document that fund managers are required to provide for each mutual fund that they create. Each Fund Facts is in plain language, no more than two pages double-sided and highlights key information for investors, including past performance, risks and the costs of investing in the mutual fund. Dealers must provide Fund Facts to their clients before the client invests in the fund.
A company that oversees securities. The fund manager oversees the operation of investment funds, including deciding which securities to purchase, and in what quantities, and when to buy and sell the securities. These decisions are based on the stated objective and strategy of the fund. An investment fund offers investors a wider selection of investment opportunities, management expertise and lower investment fees than investors could access on their own.
A derivative product whereby the seller agrees to deliver to the buyer an agreed amount of an asset at a specified price on a future date. Futures are traded on an exchange.
The first cryptocurrencies to represent voting on a blockchain by distributing the power of making major platform decisions from a centralized structure to an entire community
Guaranteed investment certificate
Deposit certificate issued by a financial institution.
Guaranteed minimum withdrawal benefit
Guaranteed fixed income that certain segregated funds will pay out of your investment.
An investment made to reduce the risk of adverse price movements of another asset.
An investment pool that uses advanced investment strategies that are not generally permitted for traditional mutual funds, such as the use of derivatives.
An investment strategy that uses one investment to offset the risk of another investment. While hedging in investing is generally considered an advanced strategy, a more relatable example of (non-investment) hedging is insurance. When you take out insurance to reduce the risk that an injury will reduce your income because of an inability to work, this is a hedge.
High Yield investment program
An investment that promises high rates of return but is a scam. It is a type of Ponzi scheme where returns are paid with money invested by new investors.
Also known as online wallets, hot wallets run on connected devices like computers, mobile phones, and tablets through the internet. Maintaining crypto assets in a hot wallet allows them to be conveniently traded, but increases the risk that the device can be hacked and the crypto-assets stolen.
A financial statement that measures a company’s financial performance by summarizing revenues and expenses for a specific period of time.
A trust that is designed to distribute cash to investors. Examples: real estate investment trusts (REITS), oil and gas income trusts, also known as royalty trusts.
A firm or company that has formed a legal corporation by completing the required procedures. See more at Alberta Corporate Registry.
A statistical composite of securities that measures financial and economic performance. It is used as a performance benchmark.
A mutual fund that matches its portfolio to that of a specific financial market index, with the objective of duplicating the general performance of the market in which it invests.
Individual variable insurance contract
A contract with a life insurance company that gives the contract holder certain specified benefits based on the value of one or more segregated funds.
A document sent to shareholders that outlines important issues that will be discussed at a shareholder’s meeting.
Initial Coin Offering (ICO)
A way businesses can raise money by distributing crypto assets to investors.
Initial public offering
A company’s first sale of stock to the public.
Initial Token Offerings
ITOs are commonly used by companies to raise money through the sale of cryptocurrencies they have created. They are also referred to as ICO
A general increase in the price of goods and services and a fall in the purchasing value of money.
A director or officer of a company, a shareholder who owns a significant number of shares, a director or officer of a person that is itself an insider, a subsidiary, and certain other specified individuals or companies.
The legally required public disclosure by insiders of their securities holdings and transactions.
Integrated Market Enforcement Teams
RCMP-led units of investigators focused on capital markets fraud. The initiative is a partnership with Justice Canada’s Federal Prosecution Service, provincial and municipal forces, and securities commissions and market regulators. See more at IMET.
Payments made by a borrower to a lender for the use of the lender’s money. A corporation pays interest on bonds to its bondholders.
When you are borrowing money, interest rate refers to the price lenders charge you when you use their money for a specified period of time. The rate charged is usually expressed as a percentage of the total amount borrowed. When you are depositing money, interest rate refers to the amount of money a deposit will earn over the length of time it is deposited. The rate earned is usually expressed as a percentage of the total amount deposited.
Interim financial report
For financial years beginning on or after January 1, 2011, financial statements issued for an accounting period of less than one year. Formerly called interim financial statements.
International financial reporting standards
Global accounting standards that provide transparent and comparable information in financial statements. IFRS will apply to most Canadian publicly accountable enterprises for financial years beginning on or after January 1, 2011.
An exchange-traded fund that uses derivatives to profit from a decline in the value of an underlying benchmark.
A way to put your money to work in the expectation that it will provide income, increase in value or both.
An investment entity where money is pooled and invested in various assets. Each investor owns unit or shares of the fund. Investment funds include mutual funds and exchange-traded funds.
Investment Industry Regulatory Organization of Canada
IIROC was the national self-regulatory organization that oversaw all investment dealers and trading activity on debt and equity marketplaces in Canada. Created in 2008 through the consolidation of the Investment Dealers Association of Canada and Market Regulation Services Inc., IIROC set high quality regulatory and investment industry standards, protected investors and strengthened market integrity while maintaining efficient and competitive capital markets. Effective January 1, 2023, IIROC was amalgamated with the Mutual Fund Dealers Association of Canada (MFDA) to form CIRO.
The ASC issues Investor Alerts to raise public awareness about suspicious activities.
The ASC issues investor Watches to provide information on specific products or investment opportunities that investors should be cautious about.
An issuer offers to buy back some of their own securities. Often done when the company believes the market is undervaluing its shares.
An individual, company or entity that has issued or is proposing to issue securities, often to raise capital from investors for a business venture or investment. A common example of an issuer is a company looking to sell its own securities (common shares, bonds, etc.).
A high-risk, speculative bond with a low credit rating and high risk of default.
Know your Client (KYC) Rule
This requirement ensures that advisers know detailed information about their clients’ risk tolerance, investment knowledge and financial position. This information is collected on forms and is designed to protect both clients and advisers.
A physical automated teller machine that allows you to use cash to purchase crypto assets.
Labour Sponsored investment fund
A fund that provides venture capital to new and small businesses, and offers tax incentives to investors.
The practice of purchasing undeveloped land for resale to a developer in the future.
Advice from a lawyer on your individual circumstances.
Letter of Credit
A written commitment issued by a financial institution that acts as an irrevocable guarantee of payment.
An investment technique where you use a small amount of your own money to make an investment of much larger value. It involves borrowing money and can result in magnified gains or losses.
ETF: An exchange-traded fund that uses derivatives and debt to amplify returns of an underlying benchmark.
An interest in a partnership consisting of a general partner who manages the partnership, and limited partners who provide the investment capital.
A hybrid investment product that combines the features of fixed income investments and derivatives. The return is linked to the performance of an underlying benchmark, such as one or more stocks, a stock market index, a commodity, a currency, an investment fund, or other portfolio.
An asset that can be sold rapidly, with minimal loss in value, anytime within market hours. If your asset is illiquid, you may have to hold on to it even as it loses value.
The ability to sell an investment quickly and at a fair price.
Locked-in retirement account
An account for locked-in pension funds. It is like an RRSP, but funds are not normally available to holders until retirement.
Signifies ownership of securities. Also an investment strategy where you purchase the security because you think its price will increase.
Management Expense Ratio (MER)
The management expense ratio (MER) is the total of the management fee and operating expenses expressed as a percentage of the fund’s value. Funds show their MER as a percentage of the fund’s assets.
A service fee you pay the manager of your investments to manage the risk inherent in your portfolio.
Management’s Discussion and Analysis (MD&A)
The section of a quarterly or annual financial report in which the issuer’s management comments on its financial results.
A trading account that allows you to borrow money to buy securities.
A company or individual who buys and sells securities to ensure market liquidity.
The price that buyers and sellers agree to trade the security on the open market. The prevailing price that the security is sold.
The value of a company that is traded on the stock market, calculated by multiplying the total number of shares by the present share price.
A change in a company’s business that significantly affects the market value of its securities.
The date on which a bond, debenture, GIC, or term deposit is due to be repaid.
The competitive process between peer-to-peer computers that verifies and adds new transactions to the blockchain for a cryptocurrency that uses the proof-of-work (PoW) method.
Money Market Fund
Mutual fund that invests in short-term fixed income debt securities, including commercial paper (representing a short-term loan to a corporation) and treasury bills (T-bills), all generally referred to as money-market instruments. Money market funds are usually issued at a fixed price. The return you receive will vary depending on the investments the fund holds.
An investment and lending company that purchases mortgages for investment purposes.
Mortgage investment company
An investment and lending company that purchases mortgages for investment purposes.
A pool of money that’s invested for a large number of investors by a professional money manager. A mutual fund is the most common type of investment fund.
Mutual Fund Dealer
A company that buys and sells the shares or units of mutual funds for investors.
Mutual Fund Dealers Association of Canada
he MFDA was the national self-regulatory organization (SRO) for the distribution side of the Canadian mutual fund industry. The MFDA regulated the operations, standards of practice and business conduct of its members and their representatives. Effective January 1, 2023, the MFDA was amalgamated with the Investment Industry Regulatory Organization of Canada (IIROC) to form CIRO.
Mutual Fund Unit
Part ownership in a mutual fund.
Includes 100 of the largest US domestic and international non-financial companies listed on The Nasdaq Stock Market based on market capitalization. The index includes companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade, and biotechnology.
National Association of Securities Dealers Automated Quotations
The largest electronic screen-based equity securities market in the United States, founded in 1971. See more at NASDAQ
National CTO Database
Real-time dissemination system of cease trade order information operated and maintained by the CSA. The national CTO database includes outstanding CTOs against issuers, management, and individuals from the securities regulatory authorities in most provinces. See more at National CTO Database.
National Registration Database (NRD)
A tool for investors to see if an adviser is registered. In Canada, anyone in the business of trading securities or advising clients on securities must be registered with the securities regulator in each province or territory where they do business, unless an exemption applies. Visit https://aretheyregistered.ca.
Net Asset Value
The value of all the assets of a mutual fund, less the fund’s liabilities.
A measure of a company’s profitability. To calculate net income for a business, start with a company’s total revenue. From this figure, subtract the businesses expenses and operating costs to calculate the business’s earnings before tax. Deduct tax from this amount to find the business’s net income.
The total amount of your assets, including the money in your accounts, your investments, and personal property such as home, car or business, minus any outstanding debts you have.
New client account form
You are required to complete this form when you open a securities trading account. This form includes basic personal information and your investment preferences.
A contract that protects information that is considered to be proprietary or confidential. Also known as a confidentiality agreement.
Non-fungible token (NFT)
A type of digital token that represents a unique digital or real-world object such as art, music or video. These are usually one of a kind or part of a limited series. People will generally buy NFTs in exchange for the ownership rights to that object.
North American Securities Administrators Association
An association that consists of Canadian provincial, American state, and Mexican federal securities regulators. NASAA promotes cooperation in the development and enforcement of securities laws and assists members in investor protection. See more at NASAA.
Notice of Hearing
If ASC staff decide to pursue a case against someone or a firm, we issue a notice of hearing. It contains key information about the hearing, such as the allegations and proposed penalties. Notices are published on the ASC public website.
A legal disclosure document that has the same purpose as a prospectus, but is much shorter and less detailed. It must contain specific information about the investment that help potential buyers make an investment decision on exempt-market securities.
A document that offers securities for sale, including an offering memorandum or a prospectus.
Offshore investment banking
Investment banking that is handled outside of Canada.
Offshore investment schemes
Schemes that involve sending money outside of Canada.
Ombudsman for Banking Services and Investments
An independent Canadian body that investigates complaints from individuals and small businesses about products and services provided by banks, investment dealers, and mutual fund dealers. See more at OBSI.
Open-ended mutual fund
A type of mutual fund that does not limit the number of shares or units that can be issued by the fund.
The right to buy or sell an asset at a specific price for a specific period of time.
A decision issued by a securities regulatory authority under the securities regulation of the relevant province or territory.
Over-the-Counter Bulletin Board
A quotation service that displays quotes, last-sale prices, and volume information for equity securities trading over-the-counter in the United States. See more at OTCBB.
A market for securities that do not trade through a regulated exchange or market.
A regular payment made to a retired or disabled employee, usually from a fund that the employer and employee have contributed to in prior years.
An incentive fee paid to the manager of an investment fund that is based on the portfolio’s performance.
An electronic system published by Pink Sheets LLC, to display bid and ask quotation prices of securities. The company changed its name to OTC Pink in 2008, and has operated as OTC Markets Group since 2010. See more at OTC Markets.
A type of scam in which investors are promised high rates of return with little to no risk, however there is no legitimate investment. To keep the scheme running, some investors may initially see returns, making it believable and sustainable. These returns are actually coming from other investor’s money. Eventually investments and new investors will cease, and with no money coming in, the scheme will collapse and investors are typically left with nothing.
All the securities which an investment company or an individual investor owns.
A person who is authorized to make discretionary trades for you. Sometimes investors allow their portfolio manager to make discretionary trades on their behalf.
An ownership security, senior to the common stock of a corporation, with preferred claim on assets in case of liquidation and a specified annual dividend.
The current market price of a stock divided by the earnings per share.
Prime Bank schemes
A fraud where scam artists lead investors to believe they can make high returns by participating in a secret trading regime, typically with the world’s major banks.
The money originally invested or lent to earn interest or other income.
Principal protected notes
An investment that promises to return you the original amount you invested (usually after 6 to 10 years). Any potential return above the principal is variable and is usually linked to a market index, a fund, or another underlying investment.
A private company is one that sells its securities under one or more exemptions and is not a reporting company.
A company issues securities privately rather than offering them to the public. There is no formal prospectus and the shares are subject to resale restrictions and may not be able to be sold for a period of time.
Every address on a block chain has a private key and a public key. The private key acts as the password to the account which allows you to trade crypto assets with others. The private key is not meant to be shared.
When a company issues securities privately rather than offering them to the public. The offering does not include a formal prospectus and the shares do not trade publicly on a stock exchange.
A promise to pay back money borrowed under specific terms (payable on a specific date along with a specific interest payment).
Proof of work (PoW)
A system to add validated transactions to a blockchain. This involves computers racing to solve math problems before a set of transactions can be added to the blockchain. Those that solve the equation are given a fraction of the fee for the transaction and a fractional piece of a new crypto asset added into circulation.
A system to add validated transactions to a blockchain. A person, often called a forger, is chosen to process a particular set of crypto asset transactions based on the amount of crypto assets they hold. This is becoming a popular system for crypto assets due to the reduction in e-waste to validate transactions.
A formal document required by law when a company wants to sell shares to the public.
A written authorization that allows a person to act for another as agent or substitute.
A public company in BC is most commonly one that is a reporting issuer and has issued securities under a prospectus in BC or has been listed on a stock exchange.
The public key is used to receive crypto assets from other people and identify your account on the blockchain. Very similar to an email address.
A potential investor receives an email or a call promoting or “pumping” an incredible deal on a low-priced stock. What investors may not know is that the promoter likely owns much of this stock. As more investors buy shares, the value of the stock skyrockets. Once the share price hits a peak, the scam promoter sells or “dumps” their own shares and the value of the stock plummets, leaving investors with worthless shares.
A type of option that gives the holder the right to sell an asset at a specified price within a specified time.
Scam based on a hierarchical or “pyramid” structure. Participants actively promote the scheme and try to make money solely by recruiting new participants into the program. Recruiters move up the “pyramid” as new investors buy in. When new participants slow or cease to exist, the scheme loses steam and collapses. To attract new investors, recruiters will guarantee high returns and disguise the scam as legitimate. However, the majority of those who invest in pyramid schemes lose their investment.
Rate of Return
The gain or loss on an investment expressed as a percentage of the total amount invested.
Real Estate Investment Trust (REIT)
A publicly traded trust that invests in real estate through properties or mortgages.
The return from an investment adjusted for inflation. For example, if your investment earned 6% interest last year, but the cost of everything went up 4%, you are only ahead (your “real return” is only) 2%.
Recovery Room Scams
A person who has been the target of a scam may be targeted again, because the person who defrauded the individual the first time may keep their information or sell it to another scam artist or criminal organization. After some time has passed, they are contacted again, either by the first scam artist or by someone else. They will offer to buy the shares purchased in the initial scam at an inflated price. In order to receive the money, investors are instructed to first pay a fee for this service/transaction. Once the fee is paid, the scam artist takes the money and runs – the victim has been scammed again.
A warning sign that causes you to stop and seriously consider an investment as being dangerous.
To cash in, buy back, or repurchase a security.
A term that applies to bonds and preferred shares where the company may require you to sell back the bonds or shares by a certain date for a specified price. Also known as callable.
A fee that some mutual funds charge when you sell or redeem units. You pay this fee to the fund (not the broker). It covers the costs of redeeming your units.
Advisers and investment companies licensed by a securities regulator to buy and sell investments, or provide investment advice. Also, accounts and retirement plans protected by income tax and other laws.
Registered Retirement Savings Plan (RRSP)
A type of savings plan registered with the government that allows you to reduce the income tax you pay on money you save for retirement. Any income you earn in the RRSP is usually exempt from tax for the time the funds remain in the plan. During retirement, an RRSP can be another source of income for you.
Registered Education Savings Plan Dealers Association of Canada (RESPDAC)
RESPDAC is a trade association that represents members and establishes rules and procedures for self-regulation. See more at RESPDAC.
Registered Retirement Income Fund (RRIF)
A tax deferral investment available to RRSP holders who deregister their plans. The plan holder invests withdrawn RRSP funds in the RRIF, and each year must withdraw and pay income tax on a set portion of the fund.
Registered Retirement Savings Plan (RRSP)
A special type of savings plan registered with the government that allows you to reduce the income tax you pay on money you save for retirement. Any income you earn in the RRSP is usually exempt from tax for the time the funds remain in the plan.
A firm or individual that is registered under the Securities Act to trade or advise in securities.
The most senior officers of a company, its subsidiaries and significant shareholders, the directors, an insider that has access to information that would allow them to influence the company’s activities, and certain other specified insiders.
A reporting issuer in AB is most commonly one that has issued securities under a prospectus in BC or has at any time been listed on the TSX Venture. These issuers, often called public companies, are subject to the continuous disclosure requirements of securities laws.
Restricted voting share
A share that has restricted or no voting rights
A term that applies to bonds and preferred shares where, under certain circumstances, you can require the company to repay the principal, or buy back the bond or share, before the security’s due date.
The profit you make on an investment through interest, dividends or increased value of the investment (see expected return).
Return on capital
This is a rate of return measure. It shows how effectively a company utilizes funds invested in its operations. It is calculated by dividing after-tax operating income by the book value of capital invested in the company.
Return of capital
A return from all, or a portion of, an investment that is not considered income. It is not a gain because it is simply paying back money you originally invested.
Return on investment
A profitability measure. It is the gain or loss on an investment expressed as a percentage of the total amount invested.
A robo-adviser is a digital platform that provides relatively low-cost automated investing services without the human interaction typical of working with a financial advisor.
The option to buy additional securities from the company at a certain price within a certain period of time.
A defensive tactic often adopted by a company’s board in response to or in anticipation of an unsolicited or hostile take-over bid.
Amount of uncertainty about the expected return from an investment, including the possibility that the investment may lose money or become worthless.
Risk acknowledgement form
A risk acknowledgement form must accompany an offering memorandum. This form states that you are aware of the risks posed by the investment. You must sign it if you decide to invest.
How willing or comfortable you are to risk losing your money on an investment.
Rule of 72
A way to quickly estimate how long it will take an investment to double in value at a given annual rate of return. To calculate, simply divide 72 by the interest rate of your investment. For example, an investment with an average interest of 6% would take 12 years to double in value.
72/6 = 12 years
*Please note that this provides only a rough estimate of how long it takes to double your investment and becomes less accurate with interest rates over 20%.
Standard and Poor’s (S&P’s) Corporation is an American stock market index based on the market capitalizations of 500 large companies having common stock listed on NASDAQ.
Money you have not spent or have put aside.
An account with a bank, trust company, or credit union that pays interest on the money you deposit and allows you to withdraw your money at any time.
A loan to a government that is secured by the general credit and taxation powers of the government.
A fraudulent or unethical activity; a fraud or trick, an unethical scheme.
Scholarship plan dealer
A type of firm that is registered to sell scholarship or education savings plans.
Transferable certificates of ownership of investment products including bonds, notes, stocks, future contracts and options.
The regulation of the conduct of securities market participants including issuers that raise capital through security offerings, and their directors and officers; and securities firms, their directors and officers, and their employees registered to advise and trade in securities. Securities regulation is the responsibility of the AB Securities Commission.
Organizations that apply the rules and laws of securities legislation to the marketplace. Contravention of the legislation may result in fines and/or a ban from participating in the public marketplace.
The digital form of traditional investments like stocks, bonds or other securitized assets. A digital, liquid contract for fractions of an asset that already has value. Generally speaking security tokens are subject to securities laws.
SEDAR (System for Electronic Document Analysis and Retrieval)
The CSA’s national electronic filing system for disclosure by public companies and mutual funds.
SEDI (System for Electronic Disclosure by Insiders)
The CSA’s national web-based system that facilitates the filing and public dissemination of insider reports.
An insurance product that combines investment products with insurance coverage.
An organization that establishes and enforces minimum standards and rules of conduct for members. The IIROC and the MFDA are examples of self-regulatory organizations.
A settlement agreement is a signed document between staff of the BCSC and a person who agrees that the allegations against them are true.
A partial ownership interest in a company. Also known as stocks and equities.
Someone who owns shares in a company.
The amount of a corporation’s assets belonging to its shareholders (both common and preferred) after allowance for any prior claims.
The sale of borrowed securities with the intention of repurchasing them later at a lower price and earning the difference.
Short-Term trading fee
A fee charged to investors when mutual fund shares are sold prior to the expiration of a hold period.
Interest that is paid only on the amount of the initial deposit and not on any interest the deposit earns over time, unlike compound interest. For example, in year 1, the bank pays you $5 of interest on your $100 deposit; in year 2, it again pays you interest, but only on the original $100 deposit.
Funds are set aside in a separate account and used to pay off or redeem debt securities.
Programs stored on a blockchain that run when predetermined conditions are met. Can be used for agreements between individuals, companies or platforms.
A commodities or securities market where goods are traded for cash and delivered immediately.
SRO - Self-Regulatory Organizations
A Self-regulatory organization (SRO) is an organization that represents its members and is organized for the purpose of regulating the operations, standards of practice, and business conduct of its members and their representatives with a view to promoting the protection of investors and the public interest through the establishment of rules that promote ethics and equality. The Securities Act (Alberta) gives the ASC authority to recognize SROs. The SROs currently recognized by the ASC are the Mutual Fund Dealers Association of Canada (MFDA) and Investment Industry Regulatory Organization of Canada (IIROC).
Any cryptocurrency idealistically designed to have a relatively stable price, usually by being tied to a commodity or currency, or by having its supply related to an algorithm.
A new business venture that seeks private financing.
Statement of allegation
A statement of allegation is made by ASC staff when they have found conduct that contravenes the Securities Act or is otherwise contrary to the public interest. Staff state their allegations in a notice of hearing. Staff must then prove the allegations in a public hearing before a panel of commissioners.
Statement of cash flows
A financial statement that shows a company’s cash receipts and payments during a specified period.
Statement of comprehensive income
See our income statement definition.
Statement of financial position
See our balance sheet definition.
Statute of limitations
Law that places a time limit in which an action can be taken.
A share in the ownership of a company. Also known as shares and equities.
A market where stocks and shares are traded publicly.
Unsolicited email that promotes a company’s stock.
Someone who owns shares in a company.
is a security representing the part ownership of a corporation by a shareholder.
An interest payment coupon and the principal portion of a bond are separated from each other and are sold as individual investments.
An investment that is appropriate to your risk tolerance and investment goals when considered in the context of your life circumstances and entire portfolio.
A derivative product whereby two parties agree to exchange an asset, cash flow, or some other liability for another.
An offer that a shareholder or prospective shareholder makes to acquire at least 20% of the shares of a company.
Tax-Free Savings Account (TFSA)
A registered savings plan that allows you to earn tax-free investment income and capital gains on money contributed up to a set annual limit.
A type of deposit with a financial institution that is repaid to you at a specified time (for example, 90 days or one year) and at a specified interest rate.
Term to Maturity
Specifies the date or term period before a bond matures and is redeemable.
A term that describes an inactive or infrequently traded security.
A period of time one expects to hold an investment before withdrawing funds.
Timing the Market
Buying or selling securities by attempting to predict future market directions.
A public company that operates several markets including the Toronto Stock Exchange, TSX Venture Exchange, and the Montreal Exchange. See more at TMX Group.
A trade is the sale of a security for valuable consideration. It does not include the purchase of a security; a transfer, pledge, or mortgage; or other encumbrance of a security for the purpose of giving collateral for debt.
Commissions paid by the fund company or other party to the investment dealer or advisor each year as long as the investor stays in the fund.
A trust company, bank, or financial institution that a company appoints to maintain records of investors and account balances and transactions.
A security where you lend money to the government for a short period of time. There is no interest, but rather you buy the T-bill at less than the price the government will pay you at the end of the loan term.
A financial institution, similar to a bank, that can take deposits and make loans. Trust companies often provide other specialized services that banks cannot, like administering estates and pension plans.
Units of a trust, such as a royalty trust, income trust, or real estate investment trust.
Toronto Stock Exchange is the national senior equity exchange and a subsidiary of TMX Group.
TSX Venture Exchange
The national junior equity exchange, a subsidiary of TMX Group.
A type of crypto asset that has a specific function such as allowing the owner of the token the right to participate in a particular online ecosystem or access assets within it.
The degree and speed of changes in an investment’s value over a given period of time. Investments that change in value gradually, or minimally, are said to have lower volatility than those that change rapidly or significantly and frequently during the same time period. Volatility is usually measured historically – how an investment has acted in the past – and that behaviour suggests how the investment may behave in the future, although no one can predict the future.
Voting Instruction Form
A form that non-registered owners receive in place of a proxy form.
Cautionary advice that an infraction occurred without fine or penalty, and corrective action is required.
The right to buy additional securities from the company at a certain price within a certain period of time. Usually included with a new issue of securities as an inducement for investors to buy the securities.
West African letter scam
Individuals who claim to be high-ranking government officials from a developing nation ask you to help them gain access to large sums of money that they will share with you. See more at the Royal Canadian Mounted Police’s Nigerian/West African Fraud.
A marketing document that is released by founders of a crypto project to provide potential investors with information. It can include things such as technical information about the crypto concept, statistics and roadmap for growth.
Annual rate of return received on investments, usually expressed as a percentage of the market price of the security.