Assets - Items of commercial value which may be tangible or intangible, but must always represent value to the owner.

ATM - An ATM is an Automatic Teller Machine from which you can withdraw cash, ask for a balance on your account, or transfer money from one account to another. It is convenient but you have to know how to use it safely.


Balance Sheet - All businesses generally produce balance sheets. Companies; however, are required by law to produce balance sheets of their operations. A balance sheet is a "snapshot" of a company's situation at a point in time. The balance sheet shows what assets (money, goods and accounts) it owns and what it owes to other people or organisations (loans creditors). It also shows where the money used to buy the assets and to pay its creditors, has come from. The balance sheet allows others (e.g. the owners, possible buyers, etc.) to assess the performance and value of the business.

Balloon Payment - A fixed value amount or lump sum payment made at a point in time on a financial lease agreement. Normally this payment is made as the last payment on the contract, but it can be a "repeat" payment as well, e.g. R5000 paid each December.

Beneficiary - The beneficiary is the person who receives the benefits of the estate or trust.

BIC Code - Abbreviation for Bank Identifier Code. This is the SWIFT identifier code of organisations with a SWIFT address.

Bond - Any interest-bearing government or corporate security that requires that the issuer will pay the holder of the bond a specified sum of money, usually at fixed intervals, and will repay the principal amount of the loan at maturity.

Broker - Broker is a trading party, who trades in the security market either for itself or for its clients. Thus, the broker is responsible for initiating settlement instructions into STRATE.

Budget - To budget is to plan how to spend your money. You budget by making sure that your expenses are not more than your income.


Capital Balance - The capital balance on an Instalment credit agreement is the value of the original cost price still to be paid at a point in time on an agreement. The total financed value of the goods is the capital balance at the beginning of the agreement. A portion of each payment made is deducted from the original financed amount over the period of the agreement so as to reduce it to zero at the end of the agreement period.

Capital Gains Tax - A tax on profits realised from buying a security at one price and selling it (or holding it to redemption and then redeeming it) at another.

Capital Sum - The initial sum of money invested / deposited before interest.

Cash Flow - Cash flow refers to the sums of money received, and amounts paid out, over a period of time. For example, monthly cash flow is the net of the value of moneys (cash) received and paid out for the month.

Certificate - A paper document, also known as physical script, attesting to the holder's ownership of an issuer's stock or debt obligation. It is required for settlement and often also for collection of income. A certificate may be bearer or registered. Depending on the country, a certificate may indicate the name of the issuer, specific type of the share / debt, serial number, interest rate (if debt), quantity (number of shares or par value of debt), name and address of shareholder, paying agent, and tax-related information such as country of domicile of beneficial owner. Coupons, if any, are normally attached to the certificate but may also be issued separately.

Certified Cheque - A cheque which is guaranteed for payment by a bank.

Charges / Banking Charges - A fee that the bank charges the customer for services rendered, e.g. cheque payment, debit orders, stop orders. Some bank charges include: Government Duty Service fee, VAT, Debit Interest, Cash Deposit fee.

Clearing - The process, in conjunction with settlement, of determining accountability for the exchange of money and securities between counter parties to a transaction. Clearing creates binding statements of obligation for securities and / or funds due.

Counterpart - The other party to a trade. Usually one party to a trade refers to its trading partner as a "counterpart".

Counterparties - One party to a trade. A trade can take place between two or more counterparties. Usually one party to a trade refers to its trading partners as counterparties.

Coupon - A small document attached to a bearer bond or share certificate which, when detached and presented to the issuer of a security or his / her agent(s), entitles the holder to exercise the right embodied in the coupon (interest, dividend payment or subscription right).

Credit Lines - Guarantee of an amount of credit which a bank or other group is prepared to advance to its clients or investor.

Credit Risk - The risk that a counter party to a transaction will fail to perform according to the terms and conditions of the contract, thus causing the holder of the claim to suffer a loss.


Deposit - A deposit is a varied amount paid by the borrower, to reduce the finance or loan amount required. Non-tax based individuals are required to provide minimum deposits on certain asset purchases, e.g. 10% for motor vehicles.

Deposit (security) - A deposit of securities for safe custody.


Electronic Banking - A means of banking other than making use of a physical branch. This incorporates utilising the Internet via your PC and modem, an Automatic Teller Machine (ATM) or alternatively some form of call centre or telephone banking facility.

Electronic Funds Transfer [EFT] - The transfer or movement of funds by electronic means.


Fixed Interest Rate - The interest rate on the agreement is fixed for the full period of the agreement. The interest rate does not change as market rates change.

Fluctuating Payments - Fluctuating payments are caused by the use of a variable (fluctuating) interest rate. As the interest rate changes the payments are recalculated using the new interest rate.

Foreign Investment Restrictions - Regulations designed to control foreign investment activity in a particular country. Restrictions are used to maintain and protect a country's financial system. Restrictions include: Foreign exchange controls - to maintain and protect the value of its currency; Foreign investment regulations - to control foreign investments' entry and exit from the country; Foreign investment restrictions - used to protect strategic industries such as defence and telecommunications; and Declaration of holdings - to control foreign ownership of domestic companies.


GDP - Gross Domestic Product. The total market value of all final goods and services produced in a country in a given year, equal to total and government spending, plus the value of exports, minus the value of imports

Gilts - A debt issued through the Treasury, public entities and municipalities, with the principal and interest guaranteed by the government. Also, referred to as gilt-edged security or gilt-edged stock.

Guarantee Fund - A fund maintained by an exchange to recompense investors when a member firm fails to meet its obligations.


Lease - A lease agreement is an agreement between a seller (lessor) and a customer (lessee) where the customer is given use of the goods. For example, a motor vehicle in a business, where there is an agreed rental for the use of the goods over a fixed period of time. The customer must keep the goods for the full period and must pay the seller all the rentals which are due over that period. The customer normally has the right to terminate the agreement early, by buying the goods from the seller. At the end of the agreed period the customer must either buy the goods or extend the lease period. A business or tax operated individual (derives income from the use of the goods) entering into a lease agreement may claim the lease payments as a business expense.

Legal (Lawful) - All the rules of conduct that have been approved by the government and which are in force over a certain territory and which must be obeyed by all persons on that territory. Violation of these rules could lead to government action such as imprisonment, a fine or both, or private action such as legal judgement against the offender obtained by the person injured by the action prohibited by law.

Liabilities - Any legal obligation, either due now or at some time in the future. It could be a debt or a promise to do something. To say a person is liable for a debt or wrongful act is to indicate that they are the person responsible for paying the debt or compensating the wrongful act.

Life Cover - In the event of death or permanent disability of the insured person, this cover provides for the full amount of the debt outstanding (or a fixed amount) to be paid to the beneficiary (usually the bank or debtors estate). This enables the bank or the executor of the debtor's estate to settle any amounts owing and to take ownership in the goods.

Loan - A loan agreement is an agreement between a lender (bank) and a customer (debtor) where the lender lends an agreed amount of money for an agreed period. The customer is required to repay the money over the period and also to pay interest on the amount of the loan outstanding. Interest is normally charged monthly at an agreed rate. A business entering into a loan agreement may claim interest paid as a business expense.


Minimum Balance - A certain amount of money that must be maintained in an account at all times

Money Transfers - The sending (or movement) of funds or securities or of a right relating to funds or securities from one participant to another by (a) conveyance of physical instruments / money, (b) accounting entries on the books of a financial intermediary, or (c) accounting entries processed through a funds and / or securities transfer system.


Notice Deposit Account (32 Day Extension) - This is a special account into which you can deposit funds for a specific period such as 32, 60 or 88 days. Withdrawals can only be made on expiry of the specific notice. The interest rate over the period is guaranteed (i.e. it remains the same even if there is an increase or decrease in rates). The term for this type of deposit is chosen upfront.


Offshore Trade - Cross border trade. This is an off-market trade between entities in South Africa and another country or between two entities outside South Africa.

Offshore Banking Unit - A Foreign Bank usually handling foreign exchange and domestic money market transactions in a centre where the capital market is free and enjoys advantages in terms of tax and / or reserve requirements.

Offshore Funds - Funds based outside the tax system of the country in which intended investors reside.

Omnibus Account - An account held in the name of an entity or person which may be used for placing and clearing the trades of one or more undisclosed customer of the account holder.

Onshore Trade - Off-market trade between two entities in Namibia but not through JET.

Order - An offer to sell, or a bid to buy, an agreed quantity of securities at a fixed or determinable price.

Overdraft - An overdraft is a form of a loan. The overdraft loan is made for a short period, normally one month, and interest is charged on the amount loaned. The loan can be renewed each month by the lender. This form of lending can continue indefinitely provided that the lender is happy that the customer will be able to pay back the loan and the interest when asked to do so, normally by virtue of tangible security.


PIN - [Personal Identification Number] Your secret code to access your account using the bank card.

Prime Rate - Most banks have a range of interest rates which they will use when lending money to their customers. Prime rate is the minimum lending rate which a bank will charge to its most valued customers, either by virtue of undoubted track record or security offered.

Principle Account - The account of a JSE member firm, in its own records, which is used to hold its own securities.

Proxy - Written authority to act or speak for an absent shareholder at shareholder meetings. Depending on the regulations of the market, the party acting on behalf of the shareholder may be a nominee, custodian, lawyer, JSE member firm or local representative.

Proxy Voting - Acting or speaking for an absent shareholder on issues surrounding the management of the company at shareholders' meetings. Depending on the regulations of the market, the party acting on behalf of the shareholder may be a nominee, custodian, lawyer, JSE member firm or local representative.

Purchase Price - The total negotiated price including VAT and extras.


Real Time - A term which refers to computer output in an immediate time frame. In other words, up-to-date information is available without delay.

Redemption - Partial or full return of the debt or shares to the issuer in exchange for a cash value.

Registered Owner - The party registered as the owner in the Register of Members. This may be the true owner, a fund, unit trust or nominee.

Registration - The recording of a legal title to securities in the books of the issuing company by its Transfer Secretary. Securities held in the CSD are registered in the Register of Members in the name of the CSD Nominee. Transfers within the CSD arising from transaction settlements or otherwise require no entry in the Register of Members, since the title change is recorded electronically in the CSD participant's records.

Rental - A rental agreement is similar in many respects to a lease agreement. A rental agreement does not have a fixed period. Instead it has a period of notice to end the agreement which must be given by the customer to the seller. When the agreement has ended, the goods are returned to the seller. The customer has no automatic choice of ownership. A business entering into a rental agreement can claim the rentals paid as a business expense.

Repayment Terms - These refer to the amount of borrowed repayments, interest rates and dates that payments (Instalments) are due.

Repossessions - These are goods which are subject to a credit agreement and have been "repossessed" from the customer by the lender due to non-payment of the agreed payments or other non-compliance with the credit agreement. Procedures for repossession of goods are regulated by the Credit Agreements Act and by the common law.

Repurchase Agreement - Two simultaneous transactions: the purchase of securities (the collateral) by an investor from a bank or dealer, and the commitment by the bank or dealer to repurchase the securities at the same price at an agreed future date and rate.

Resale Value - The resale value is the amount for which the customer can sell goods owned by him to a dealer of used goods or to another person. The resale value is normally lower than the market price if the buyer is a dealer, as he /she will restore the goods and sell them at a profit.

Residual Value - The term is only applied to a rental agreement. The residual value is normally related to the resale value. The residual amount is deducted from the cost when calculating the rentals to be paid. The seller would then recover the residual value at the end of the rental agreement by selling or re-renting of the goods. (See also Guaranteed Minimum Future Value)

Restructuring - Generally, any event where the equity, debt or capital structure of a company is changed.

Retail Investor - Individual investors who generally deal in smaller amounts than the professional or institutional investors.


S.W.I.F.T. - Society for Worldwide Interbank Financial Telecommunication

Safe Custody - The safe keeping of the deposited securities by a custodian.

Same-day Funds - The term used to describe a cash payment of which the receiver has constructive use on the day of receipt, for example funds that can be used immediately to fund a payment to a third party.

Saswitch - Should a Bank Windhoek ATM not be available, you can use any Saswitch ATM at an additional service fee. Saswitch is an internationally recognized organisation.

Savings Account - Money that is left in a bank account that earns interest, but withdrawals and deposits can be made at any time, unlike investments, where notice has to be given to withdraw.

Securities - Any instrument which is traded on a stock exchange.

Settlement - The completion of a transaction, whereby securities and corresponding funds are delivered and received into the appropriate accounts of clients.

Settlement Date - Date on which securities and payments are exchanged and credited to proper accounts. If securities are debited from the seller's account on one or more days prior to being credited to the buyer's account, or if securities and cash move at different times, the date on which securities are received by the buyer, which in most cases is also the value date of the payment, is commonly perceived as the settlement date. In general, the term refers to the contracted settlement date. The actual settlement date, as opposed to the contracted settlement date, may be delayed in the settlement process.

Stamp Duty - A tax paid by the transferee on registration of shares in his/her name. No stamp duty is payable if MST has been paid.

Stock Exchange - Organised electronic trading floor where the buying and selling of stock and share transactions takes place.

Stock Exchange Index - A measurement of the movement of stock exchange securities. Indices can be average or combined of dissimilar component series.

Stock Lending - Collateralised loan of securities for a limited period of time. This involves the transfer of securities to the borrower with an agreement for the borrower to replace them in due course with identical securities. Normally the borrower will deposit collateral with the lender to cover the value of the borrowed stock, and will pay the lender a fee. The lender retains the benefits and risks of price movements on the stock.

Stockbroker - A member of the South African Institute of Stockbrokers.

Suspensive Sale - A Suspensive Sale is similar in all respects to an Instalment Sale, except that it is not subject to the control of the Credit Agreements Act or the Usury Act. Typically the ownership in the goods will only pass to the buyer once the "suspensive condition" of full repayment, for example, has been made. A business entering into a Suspensive Sale Agreement may claim the interest paid as a business expense.

Swift Code - A swift code is a method of payment used overseas. This code is mostly used by our card members who have no access to an American Express Office overseas and therefore can make payment from overseas at any bank into the American Express card by using the swift code. Please be advised should you require the swift code this can be obtained by phoning our teleconsultants on (011) 710 4747 and also remember that the American Express Card number must always be present.

Third Party Payment - Account payment to other merchants via your account.

Transfers - Funds that are transferred between your own accounts or accounts nominated by yourself, e.g. from your cheque account to your savings account.

Transmission Account - This is similar to a cheque / current account which allows for debit orders, stop orders and account payments, but does not have a cheque book facility.

Trustee - The person who holds property rights for the benefit of another through legal mechanism of the trust. A trustee usually has full management and administration rights over the property but these rights must always be exercised to the full advantage of the beneficiary. All profits from the property go to the beneficiary, although the trustee is entitled to reimbursement for administrative costs. There is no legal impediment for trustee to also be a beneficiary of the same property.


Variable Interest Rate - A variable interest rate is an interest rate which has been linked to either another market rate or an event. For example, an interest rate of Prime Interest Rate plus 3% means that the interest rate used will the bank's current prime interest rate plus 3%. Banks publish their prime rates regularly. Prime rates are affected by market forces and can change. The interest rate on the agreement will thus vary from time to time depending on what happens to the prime rate. The linked amount, e.g. 3% will however never change.


Will - A will is a written instrument containing directions for how the property of the person making the will (the "testator") shall pass on his or her death. The will must usually be executed in accordance with the laws of the country where the testator resides. These laws generally require that the will be signed by the testator and by at least two witnesses who have no interest in the property passing under it. The testator must state in the presence of the witnesses that the instrument is his or her will. He or she must also be "competent" (not insane, senile or mentally disabled) and not acting under duress or under the controlling influence of any person. A signed instrument purporting to be someone's will is not officially recognised until the court having jurisdiction over the instrument declares it to be a valid will after examining it and the circumstances surrounding its execution.

Withdrawals - This means to take out money from an account at a bank, provided there are sufficient funds in the account.


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