A record of transactions in an account at a financial institution or investment firm, usually provided each month.
A government, financial institution, large company, or individual with a required level of income or assets, permitted to invest in certain types of high-risk securities.
Advisers specialize in giving advice to clients about investing in securities, but they do not buy or sell securities for their clients. Advisers are registered with securities regulators to give investment advice.
A type of scam that usually occurs in a group setting (ethnic groups, clubs, associations, religious groups, etc.). Scammers will gain trust by joining groups that they can share common interests; it is often easier to trust someone who is like you or has similar interests to you. Once trust is gained, it is easier to execute a scam.
Alberta Securities Commission (ASC)
The regulatory agency responsible for administering the province's securities laws.
A financial instrument that provides a series of payments at regular intervals for a specified period of time.
The lowest price a seller is willing to accept for a security.
Something that has a financial value and that could be converted into cash now or in the future.
The allocation of assets within a fund or your portfolio that is invested in the major asset classes: cash and equivalents, fixed income, equity, alternative assets.
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 pool of assets, such as credit card receivables, car loans, or mortgages.
back end load
A sales charge or commission investors pay when an investment is sold.
balance sheet or statement of financial position
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 market or sector index against which you can measure the performance of an investment (such as a mutual fund).
Better Business Bureau (BBB)
An organization dedicated to fostering fair and honest relationships between businesses and consumers, instilling consumer confidence and contributing to an ethical business environment. Visit the BBB website.
The highest price a buyer is willing to pay for a security.
An investment in which a government or company promises to repay money borrowed from investors at a specified time and to pay interest at a specified rate.
An estimate of the income and expenses of a person, a family or an organization, over a certain period of time.
A type of option that gives the holder the right to buy an 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 (CDIC)
A federal government organization that provides insurance to protect money deposited in Canadian banks and certain other financial institutions.
Canadian Investor Protection Fund (CIPF)
In the unlikely event that the CIPF Member you are dealing with becomes insolvent, CIPF will ensure the securities, cash and other property that are held in your account are returned to you in accordance with their coverage policy.
Canada Pension Plan (CPP)
A Canadian government system in which you pay a percentage of your earnings to a fund that provides income when you retire.
Canada Revenue Agency (CRA)
The federal government agency that collects taxes and administers Canada's tax laws.
Canada Savings Bond (CSB)
A bond issued by the Government of Canada that can be cashed at most Canadian financial institutions.
The increase in an investment's value. It is the difference between the amount you initially paid for an investment and the amount you sold it for.
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.
cease trade order (CTO)
An order issued by a provincial or territorial securities commission (or similar regulatory body) against a company for failing to meet disclosure requirements, such as filing a quarterly or annual financial statement, or as a result of an enforcement action that involves an investigation of wrongdoing. See Enforcement Terms.
certificate of deposit (CD)
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.
An organization that settles trades and regulates the delivery of securities transactions.
closed end investment fund
A fund that issues a finite number of units or shares, which may trade on a stock exchange.
Canadian National Stock Exchange, a stock exchange for trading the equity securities of emerging companies. Formerly known as CNQ, Canadian Trading and Quotation System Inc.
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 a broker or agent for the service of arranging the purchase or sale of a security or real estate investment. Commissions vary between brokers.
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 (see equities, shares, stocks).
Interest that's paid on the original amount deposited, and also on any interest that's been earned in previous periods (e.g.: in year 1, the bank pays you $5 interest on your $100 deposit; in year 2, it pays you interest on $105).
A fund that exists in to provide certain protections if a salesperson or mutual fund distributor becomes insolvent either because of business failure or fraud that leads to insolvency. Examples include the IIROC's Canadian Investor Protection Fund (CIPF) and the MFDA's Investor Protection Corporation (IPC).
The legally required public disclosure by issuers of their financial statements and new releases.
A party to a contract, generally the entity or person(s) with whom you negotiate an agreement (the other party to a transaction).
The interest rate stated on a bond, note, or other fixed income security when it is first sold.
A financial institution that owned by its depositors and borrowers.
Canadian Securities Administrators: a council of the securities regulators of Canada's 13 provinces and territories.
People who are registered to buy or sell securities on behalf of clients and give advice to clients about the purchase or sale of securities. Some dealers are registered with a self-regulatory organization like the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada.
Similar to a bond; a loan for a specific term where repayment is secured by the general credit of the borrower.
An amount borrowed from lenders. The borrower pays interest for the use of the money and is obliged to repay by a specific date. Examples include bonds, commercial paper, and debentures.
deferred sales charge (DSC)
A sales charge or commission you pay when an investment is sold.
defined benefit pension plan
A pension plan that defines a benefit for an employee upon that employee's retirement. The amount of the benefit depends on factors such as years of contribution to the plan or years of employment. A specific income is guaranteed and known for retirement with no risk but it is set based on earnings and years worked, with no other way to increase it.
defined contribution pension plan
A pension plan with an individual account for each participant with benefits based on the amount contributed to the account, plus or minus income, gains, expenses and losses allocated to the account. This plan often includes the ability for you to control the amount of contributions going in to your plan and even what your plan invests in. The retirement income is totally dependent on income generated on the investments in the plan 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 CDIC).
A financial contract that gives you the right to buy and sell at specified prices. Examples include call and put options.
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.
discount brokerage firm
Brokerage firms that charge a lower fee to buy and sell securities, compared to a full-service broker, but provide no investment advice.
When you give someone else (usually your portfolio manager) the authority to make investment decisions and to trade securities for you without checking with you on each trade.
A way to reduce portfolio risk and volatility by investing in various types of investments. It is unlikely the value of these securities will move up or down at the same time.
A portion of a company's profits paid to shareholders.
A financial ratio that shows how much a company pays out in dividends relative to the current share price.
dollar cost averaging
A timing strategy that requires investing money at regular intervals regardless of market conditions. Designed to reduce price volatility.
earning per share (EPS)
The portion of a company's profits divided by the number of shares outstanding.
egX Canada Inc.
egX Canada Inc., a subsidiary of Global Financial Group Inc. (GFG), is a fully regulated exchange developed for the listing and trading of real estate securities and related financial products.
Shares in a company.
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 and registration requirements.
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.
A person who offers advice about buying or selling investments.
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 you identify your goals and figure out how to manage your money to achieve them.
People who determine 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. Except in Québec, financial planners are not subject to provincial registration or regulation.
Financial planners cannot trade securities or recommend investments to their clients unless they are registered with the provincial securities regulator in their province. Some financial planners are registered to trade in mutual funds and segregated funds (an insurance product), allowing them to trade and advise clients on mutual funds or insurance products only.
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.
The Financial Industry Regulatory Authority is the largest independent regulator for all US securities firms.
fixed income investments
Investments that give you fixed interest or dividend income such as government and corporate bonds, debentures and preferred shares.
Provides tax-assisted investment in a portfolio of flow-through shares of resource companies (generally oil and gas or mineral exploration) with earnings and capital appreciation for the benefit of the limited partnership.
A special type of common share issued by oil and gas or mineral exploration companies that allows certain tax deductions.
foreign exchange (Forex)
Investing in different currencies to make money on the changes in exchange rates. Also known as FX trading.
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 sales charge or commission investors pay when an investment is initially purchased.
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.
guaranteed investment certificate (GIC)
An investment in which you deposit money with a financial institution for a fixed period of time and receive a specified rate of interest.
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. Examples include various types of derivatives.
high yield investment program (HYIP)
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.
income statement or statement of comprehensive income
A financial statement that measures a company's financial performance by summarizing revenues and expenses for a specific period of time.
A firm or company that has formed a legal corporation by completing the required procedures.
A statistical composite of securities that measures financial and economic performance. It is used as a performance benchmark.
initial public offering (IPO)
A company’s first sale of stock to the public.
The legally required public disclosure by insiders of their securities holdings and transactions.
international financial reporting standards (IFRS)
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 Janaury 1, 2011.
inverse ETF (leveraged ETF)
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.
investment account statement
A record of transactions and balances in an account at an investment form, usually issued monthly.
Investment Dealers Association of Canada (IDA)
Consolidated in 2008 with Market Regulation Services Inc. (RS) to form the Investment Industry Regulatory Organization of Canada (IIROC).
A company that buys and sells investments for its clients.
Investment Industry Regulatory Organization of Canada (IIROC)
IIROC is the national self-regulatory organization which oversees 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 sets high quality regulatory and investment industry standards, protects investors and strengthens market integrity while maintaining efficient and competitive capital markets.
Someone who makes an investment.
A company or other entity that has issued or is proposing to issue securities.
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 designed to protect both clients and advisers.
labour sponsored investment fund
A fund that provides venture capital to new and small businesses and offers tax incentives to investors.
Advice from a lawyer on your individual circumstances.
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.
An interest in a partnership consisting of a general partner who manages the partnership, and limited partners who provide the investment capital.
Ability to sell an investment quickly and at a fair price.
A service fee you pay the manager of your investments to manage the risk inherent in your portfolio.
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.
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 on securities you currently own or intend to purchase.
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.
Market Regulation Services Inc (RS)
Consolidated in 2008 with the Investment Dealers Association of Canada (IDA) to form the Investment Industry Regulatory Organization of Canada (IIROC).
The date on which a bond, debenture, GIC or term deposit is due to be repaid.
money market fund
Mutual fund that invests in short-term fixed income securities.
mortgage backed security
A debt security where the payments to investors are backed by a pool of mortgages, either on residential or commercial properties.
mortgage investment company (MIC)
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.
mutual fund dealer
A company that buys and sells the shares or units of mutual funds for investors.
Mutual Fund Dealers Association of Canada (MFDA)
The national self-regulatory organization (SRO) for the distribution side of the Canadian mutual fund industryself. The MFDA regulates the operations, standards of practice and business conduct of its Members and their representatives.
mutual fund unit
Part ownership in a mutual fund.
National Association of Securities Dealers Automated Quotations (NASDAQ)
The largest electronic screen-based equity securities market in the United States; originally founded in 1971.
National Registration Database (NRD)
The CSA's national web-based system that permits individuals who are dealers or advisers to file registration forms electronically. Investors can check if an individual or firm is registered to sell investments.
net asset value (NAV)
The value of all the assets of a mutual fund, less the fund's liabilities.
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.
Natural Gas Exchange. Was recently granted recognition to operate as an Exchange and Clearing Agency.
Also known as “West African letter scam”. Individuals who claim to be high-ranking government officials from a developing nation send an email explaining they need help from you to remove money from an account and deposit it in a mutually accessible bank account or simply provide a bank account number. Although they promise a sum of money for doing this, the individuals drain the bank accounts and are never heard from again.
North American Securities Administrators Association (NASAA)
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 to assist members in investor protection.
A document that offers securities for sale, including an offering memorandum or a prospectus.
A document that describes the business of an issuer prepared by the company itself. This is a legal document about the investment that must contain specific information, including a detailed explanation of the company’s business, its audited financial statements, the risks of the investment, and how the company plans to use the money it raises from investors. An offering memorandum helps potential buyers make an investment decision on exempt-market securities.
Ombudsman for Banking Services and Investments (OBSI)
An independent Canadian body that investigates complaints from individuals and small businesses about products and services provided by banks and investment and mutual fund dealers. Its objective is to provide impartial and prompt resolution of complaints. This service is free of charge; however, one must first try to resolve complaints directly with the bank or dealer before contacting OBSI.
open-end 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 (OTCBB)
A quotation service that displays quotes, last-sale prices and volume information for equity securities trading over-the-counter in the United States. It is where market makers in an issuer's shares publish the prices at which they are prepared to buy or sell those securities.
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.
Most “phishing” is accomplished by an email purported to be from a firm asking for the client to assist with a security issue by providing their name, account number, password and other information necessary to access the accounts. The “phishing” emails usually adopt or rely upon corporate logos and information derived from the inappropriately used firm’s website.
An electronic system published by Pink Sheets LLC, to display bid and ask quotation prices of securities. It is mainly used by stock brokers trading over-the-counter securities in the United States.
Ponzi / pyramids
These swindles promise high returns on group investments. Each participant is encouraged to bring in new investors. There is no actual investment; money from previous investors is used to pay new investors to make it appear as if money is being made. The only people who make money are the people who started them.
The bundle of stocks, bonds or other investments you hold.
Person who is authorized to make discretionary trades for you. Sometimes investors allow their porfolio manager to make discretionary trades on their behalf.
price-earnings (PE) ratio
The current market price of a stock divided by the earnings per share.
prime bank schemes
Scam artists will promise high returns on investments made through the world's most prestigious banks. They lead investors to believe that they can participate in a secret trading regime, typically with the world's major banks. Investors might be required to sign non-disclosure agreements that prevent them from disclosing the identity of the parties involved and the terms of the transactions.
The money originally invested or lent to earn interest or other income.
A private company is one that has 50 or fewer shareholders and which has not otherwise become a reporting company. Securities of a private company are not traded or owned by the public.
A company issues securities privately rather than offering them to the public. This does not include a formal prospectus and the shares do not trade publicly on a formal stock exchange.
An appeal requested under the Act, an application brought before the ASC in relation to Part 5 or Part 14 of the Act, or a request by staff for an order from the ASC under Part 16 of the Act.
These are often sold as an insurance product and are short term loans that promise high returns for borrowing money from you - at no risk. The companies offering the 'investments' are often non-existent.
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.
pump and dump
A scheme where fraudsters heavily promote the purchase of specific company stock, which creates high demand and drives or "pumps" up the prices. The individuals behind the promotion then sell or "dump" their shares at the increased price and stop promoting the stock, which leaves other investors with stock that is worth far less than they paid for it.
A type of option that gives the holder the right to sell an asset at a specified price within a specified time.
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%.
Advisors 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 Disability Savings Plan (RDSP)
A savings plan to help parents and others save for the long-term financial security of a person who is eligible for the disability tax credit.
Registered Education Savings Plan (RESP)
A special type of savings plan registered with the government that allows you to reduce the taxes you pay on money you save for post-secondary education expenses.
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. During retirement, an RRSP can be another source of income for you.
A firm or individual that is registered under the Securities Act to trade or advise in securities.
The profit you make on an investment through interest, dividends or increased value of the investment (see expected return).
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 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 on investment
A profitability measure. It is the gain or loss on an investment expressed as a percentage of the total amount invested.
The option to buy additional securities from the company at a certain price within a certain period of time.
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 and given to an investor. This form states you are aware of the risks posed by the investment and 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.
Money you have not spent.
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 fraudulent or unethical activity; a fraud or trick.
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 Alberta Securities Commission in Alberta.
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.
Organizations like the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada who make sure their member firms meet standards set by provincial laws for securities.
Stock, a certificate that represents part ownership of a company.
Someone who owns shares in a company.
shareholder communication form
A form shareholders complete to indicate their instructions on the communication they wish to receive from companies on investments they own and how they wish to receive the communication.
The sale of borrowed securities with the intention of repurchasing them later at a lower price and earning the difference.
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 (e.g.: in year 1, the bank pays you $5 interest on your $100 deposit; in year 2, it again pays you interest only on the original $100 deposit).
A commodities or securities market where goods are traded for cash and delivered immediately.
statement of cash flows or cash flow statement
A financial statement that shows a company’s cash receipts and payments during a specified period.
A share in the ownership of a company.
A place where shares and some other types of investments can be bought and sold.
Someone who owns shares in a company.
Unsolicited email that promotes a company's stock.
Every registered securities advisor in Canada is required by law to recommend only investments that are appropriate for an investor’s goals and financial situation.
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.
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.
A term that describes an inactive or infrequently traded security.
A public company that operates several markets including the Toronto Stock Exchange, TSX Venture Exchange, and the Montreal Exchange.
A trade is the disposition of a security for valuable consideration. It does not include the purchase of a security or a transfer, pledge or mortgage or other encumbrance of a security for the purpose of giving collateral for debt.
A commission or fee paid monthly or quarterly to salespeople for advice and other services.
A trust company, bank, or financial institution that a company appoints to maintain records of investors and account balances and transactions.
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.
Toronto Stock Exchange - TSX is a subsidiary of TSX Group.
A public company that owns the Toronto Stock Exchange and TSX Venture Exchange.
TSX Venture Exchange
The national junior Equity exchange, a subsidiary of TSX Group.
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
An email is sent by individuals who claim to be high-ranking government officials from a developing nation. They explain that due to complications, they are unable to remove millions of dollars from an account and need help. In return, they offer a sum of money. They ask people to show good faith by depositing money in a mutually accessible bank account or to provide a bank account number, in which they will deposit the money. The individuals then drain the bank accounts and are never heard from again. A common form is the Nigerian Scam.