Definitions
Authority
Securities and Commodities Authority, incorporated by virtue of Law No. (4) of 2000 concerning the Emirates Securities & Commodities Authority and Market.
Law
Federal Law No. (4) Of 2000 concerning the Emirates Securities & Commodities Authority and Market, as amended.
Regulations
Brokers Regulations issued under the SCA`s Board Decision No. (1) Of 2000, as amended.
Market
Any stock exchange market licensed by the Authority, and through which the sale and purchase transactions of securities are executed.
Securities
The shares, bonds, and debentures issued by joint stocks companies as well as the bonds and debentures issued by the Federal Government, Local Governments, Public Authorities and Corporations in the UAE, and any other local or foreign financial instruments approved by the Authority.
Investor
A natural and/or legal person executing trading and dealing with the financial markets of the State through the broker.
Trading Account
The Investor’s trading account held with the Company and through which Securities are traded.
Trading
The sale and purchase transactions performed on Securities in the Market.
Cash Trading Account
Account launched for trading purposes, where the Investor pays full sum to the Company before any purchase order is completed for any certain security.
Margin Trading
Broker company finances a percentage of the price of the margin funded securities, secured by the guaranteed available in the margin trading account, or any other securities, in the cases listed exclusively by the Margin Trading System.
Initial Margin
A sum deposited by the Investor at the Broker for the margin trading account, whether in cash sum or securities, according to the percentage approved of the market value of the margin traded securities, before the purchase order is executed.
Maintenance Margin
Minimum limit approved by SCA for the Investor contribution in the market value of the securities through the margin trading account, any time after the purchase date.
Bonds
Bonds are generally a debt instrument used by companies to finance their projects, as they provide a stable return to investors for an acceptable risk.
Short term trading account
This service is considered one of the latest services provided by the market, as this new service is based on regulatory rules that allow the brokerage firm to provide financing solutions to its clients (up to four times the value of the deposited amount or shares according to the legislation and regulations of the Abu Dhabi Securities Exchange and Dubai Financial Market) on condition His commitment to sell the financed securities or cover them for cash.
Investment funds
Investment funds are defined as investment vessels that collect capital from investors and manage them according to a specific investment strategy and objectives.
Permissions
The permission is a short-term debt instrument used by companies to finance their projects, as it can be requested at any time.
Commission
Trading service fees charged by each of the broker, market, authority, and the clearing to deal with the purchase or sale of a security, and it is equal to 0.275% of the total value of the transaction, in the Dubai Financial Market and in the Abu Dhabi Securities Excahnge. The commission is 0.150%.
Primary Market
A market that issues new securities on an exchange. Companies, governments and other groups obtain financing through debt or equity based securities. Primary markets are facilitated by underwriting groups, which consist of investment banks that will set a beginning price range for a given security and then oversee its sale directly to investors.
Secondary Market
A market where investors purchase securities or assets from other investors, rather than from issuing companies themselves.
Nominal Value
The stated value of an issued security. Nominal value in economics also refers to a value expressed in monetary terms for a specific year or years, without adjusting for inflation. When used in reference to securities, nominal value is also known face value or par value.
Market Value
The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization of a publicly-traded company,and is obtained by multiplying the number of its outstanding shares by the current share price.
Shareholders’ Equity
A firm's total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity represents the amount by which a company is financed through common and preferred shares.
Net Profit
Calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes and other expenses.
Cash Dividend
Money paid to stockholders, normally out of the corporation’s current earnings or accumulated profits. All dividends must be declared by the board of directors.
Price Index
A stock index in which each stock influences the index in proportion to its price per share. The value of the index is generated by adding the prices of each of the stocks in the index and dividing them by the total number of stocks. Stocks with a higher price will be given more weight and, therefore, will have a greater influence over the performance of the index.
Purchase Order
An order issued by the investor to the broker asked him to buy a certain amount of shares of a listed companies in the market.
Sales Order
An order issued by the investor to the broker asking him to sell a specified amount of shares of a listed companies in the market.
Initial Public Offering (IPO)
The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.
Shareholder Register
A list of active owners of a company’s shares, updated on an ongoing basis. The shareholder register requires that every current shareholder be recorded. The register includes each person’s name, address, and number of shares held, but can further detail the holder’s occupation and price paid. The shareholder register is fundamental to the examination of the ownership of a company.
Shareholder
Any person, company or other institution that owns at least one share of a company’s stock.
Broker
The company is licensed by the Securities and Commodities Authority and by the market to deal in companies listed on the market on behalf of it’s clients.
Shares
A unit of ownership interest in a corporation or financial asset.
Earnings Per Share (EPS)
The portion of a company’s profit allocated to each outstanding share of common stock. Earnings per share serve as an indicator of a company’s profitability. Earnings per share (AED) = net profit / number of shares issued Return on paid-up capital (%) = net profit * 100% / paid-up capital. Return on equity (%)=net profit * 100% / equity.Return on Assets (%).
