Nil Paid Rights that are transferred to paid rights when the Investor makes their payment for the nil paid rights. This allows the registry to identify Investors who have paid for their rights and those who have not, so that the short fall can be easily determined when the issue closes. The nil paid rights are usually tradeable on CHESS (if the issue is renounceable).
The portion of a company’s shares already issued which are actually paid up. In other words, the subscribed capital less any amounts yet to be called (and also less any calls in arrears).
Nominal or face value that applies to fixed interest securities and which was formerly attributed also to each share. In Australia, the par value concept was abolished by amendments to the Corporations Law introduced on 1 July 1998.
Prices in excess of a par value are said to be at a premium. Prices below a par value are said to be at a discount.
An existing security. For example, during a bonus issue, Investors who have holdings of the existing security (i.e.. the parent security) will be allocated bonus shares (depending upon the terms of the bonus issue).
Ranking equally. For example, in a new issue of shares which carry equal rights with existing shares they are said to rank pari passu.
A Participant in the Clearing House is an entity which;
A grouping of associated Participants within CHESS that enables related Participants to direct settlement to a designated holding belonging to a central Participant.
Participant Identifier is a five digit code assigned to Participants by the ASX that appears in all messages exchanged between the registry and CHESS and also appears on many application and transfer forms.
Broker Participants and NBPs are only permitted to initiate subregister movements (transfers and conversions) when the CHESS subregister is open. Conversely, Participant Securities Movements are not permitted if the CHESS subregister is either closed or suspended.
A dividend paid to preference shareholders in addition to the normal preference dividends payable.
For example, Preference shares in XYZ Ltd receive a fixed 10c dividend. One year, the board announces a 12c dividend on all shares. The 2c premium over the preference dividend is known as the Participating Dividend.
A type of preferred stock that gives the holder the right to receive dividends equal to the normally specified rate that preferred dividends receive as well as an additional dividend based on some predetermined condition.
The additional dividend paid to preferred shareholders is commonly structured to be paid only if the amount of dividends that common shareholders receive exceeds a specified per-share amount.
These are shares, which have been issued with only a portion of the nominal value paid on application. The outstanding money is payable in one or more calls, at times set out at the time of issue, in the terms of the issue, specified by the Issuer. Similar to Contributing Shares.
Banking details (direct credit or third party) supplied to the registry by the Investor instructing payment of dividends.
After (Dividend) Payments have been carried out, there are some support functions which follow.
These functions include dealing with payment rejections where the bank has rejected a direct credit payment; replacing cheques which have gone astray in the mail and reconciling the amounts paid to Investors with the amounts drawn from the Issuer’s bank account.
A person is defined as being an individual, company, joint application, trust, deceased estate, minor, partnership, club, or superannuation fund.
Where a company makes an allotment of shares, debentures etc directly to new investors or large insitutions rather than existing investors.
Concise statement of course of action at the corporate level.
Pooled Development Funds (PDFs) were established through the Pooled Development Act (1992) to encourage investment in small and medium sized Australian companies. Although most of the investments PDF make are unlisted companies, some PDFs also hold shares in unlisted companies.
These companies are normally in the formative stage of development, so most PDFs are considered high risk investments and as such enjoy special tax concessions, including capital gains tax exemption for gains made on PDFs, and concessional tax treatments on dividends.
Dividends received from a PDF will generally be exempt from tax however the investor has the option to include their PDF dividends as assessable income. The choice will depend on their own individual tax circumstances.
PDFs are limited as to what type of investments they can make. These limitations include:
Allocating groups of shares for different groups of Investors (for example, institutions, general public) in a Corporate Action.
The collection of investment holdings of a particular Investor usually with reference to its composition ie. the mix of different classes of securities, such as bonds, property, shares and cash, or if in a single asset class, the mix of different sectors and stocks.
A legal document granting authority to another individual or company (the recipient) to act on behalf of the person granting the authority (donor).
Preference shares are limited to a fixed dividend but have priority over the ordinary shares in regard to a company’s assets in the event of liquidation. They rank above ordinary shares, but below creditors and debenture holders, for claims on assets and dividends.
They can take various forms, for example, with or without cumulative dividend entitlements, redeemable or irredeemable, convertible or non-convertible.
It is commonly used to measure how attractive a share is to Investors, and to compare shares in one company with another. It shows the number of times the share price covers the company’s earnings per share (EPS). The lower the ratio relative to the average of the sharemarket, the lower the (market’s) profits growth expectations. It should be noted that dividing a historical earnings figure into a current market price could be misleading.
Calculated by: Market price of shares / Earnings per Share = P/E Ratio
The principal activities of a company as reported in the annual report.
The main register of an Issuer usually held in the state of incorporation and which records the transactions on all the various branch registers.
A priority issue is an offer made to holders of an existing security (termed the "parent security") of a non-transferable priority entitlement to take up new securities in a float or an issue of new securities.
Holders of the parent security are given priority for a limited number of the new securities. The priority entitlement is not pro rata to existing holdings, but may be loosely determined by the registered holdings of the parent security as at the specified record date.
Holders of priority entitlement may:
Priority entitlements cannot be sold or transferred to another party. Applications can also be lodged on a non-priority basis and/or additional units over and above the priority entitlement applied for. If the issue is oversubscribed, the Issuer selectively reduces or rejects applications and refunds application moneys.
As priority entitlements are not transferable, CHESS does not maintain priority entitlement holdings. After determining priority entitlements based on holders of the parent security on the notional record date, the Issuer forwards priority application forms to all eligible holders.
Priority applications are lodged directly with the Registry. The new securities are issued on the subregister selected by the applicant (ie. CHESS, Issuer Sponsored or Certificated subregisters, depending on which subregisters are supported by the Issuer). ASX trading in the security does not commence until after allotment and dispatch unless a pre-quotation market has been established.
A proprietary limited company, which cannot offer shares to the general public. Shareholdings are restricted to a small number of Investors and restrictions are placed upon transfers of shares. It is a non public company.
Proportional(ly).
Offered on a pro rata basis within a specific class to all holders of those securities.
Authority granted by a court to a person (the executor) to wind up an estate of a deceased person.
Set of steps outlining the tasks involved in performing a function or activity in a process.
A subscription document that provides CHESS users with guidelines to assist their internal operations under CHESS.
Series of activities that take place over time and have an identifiable purpose or result. Usually involves more than one department or team.
In common usage it is net profit after tax and minority interest. More specifically, it is revenue less any costs. There are usually a number of different measures of profit such as operating profit, earnings before tax, and pre-tax profit.
A type of collective investment (investors pool their money together and a professional manager operates the scheme) which invests in residential or commercial properties.
A property investment vehicle that in the ordinary course of business invests in commercial office buildings, retail shopping centres, industrial buildings and other investment property for the purpose of earning a rental income and long-term capital growth for investors.
Also known as private companies. They are usually owned by a small number of Investors and there are restrictions on the ability to transfer shares.
A legal document issued when a company proposes to raise funds from the public. It invites applications or offers to subscribe for securities of an Issuer or trust. The content of a prospectus is subject to the regulations of the Stock Exchange and the provisions of the Corporations Law.
A prospectus provides the background, financial status and management status of the company or fund. It must be made available to all interested Investors in advance of their investment, when an offer is made to the public.
A written authorisation given to a person (the donee) to act on behalf of an Investor (the donor), especially in regard to attending and voting at an Investors meeting. The proxy form may be personalised and bar-coded for subsequent processing of votes and attendance registration purposes.
Proxies generally are accepted up to 48 hours prior to the meeting.
Fund management agreements often delegate the authority to the fund manager to exercise proxy votes on behalf of the client.
Public companies are usually owned by a large number of Investors. They can issue shares and debentures by way of public issue and there are usually no limitations on the transfer of shares.
A contract which gives the Investor the right (without the obligation) to sell a fixed number of shares (usually 1000) at a fixed price on or before the expiry date.
A warrant which gives its holder the right to sell an underlying instrument (e.g. a share), and which would therefore normally be used by an investor who thought the price of the underlying asset was due to fall.
Often referred to as bid asked, or quote. The bid is the highest price anyone has indicated that he or she will pay for a security at a given time, and the asked is the lowest price anyone will accept at the same time. Also known as the bid offer.
One number or amount considered in relation or proportion to another. In oscar, the ratio is shown as Ratio Held: Ratio Given.
For example, if for every 2 shares held the Investor is entitled to purchase one additional share, the ratio would be 2:1.
A person appointed, either by a court or by a creditor to take charge of the affairs of a company (which has run into financial difficulty) until its debts are paid. The company is thus in receivership.
The condition of a company that has had a receiver appointed to administer it. The receiver’s responsibility where he/she is appointed by a creditor, is to realise the belongings of the person or company and try to pay off the debts of the Securityholder.
Unlike liquidation, receivership does not necessarily lead to cessation of the company’s business. The receiver may allow for the company to continue trading.
A trustee company under the ASTC Settlement Rules and any other trustee approved by ASX for the purpose of the listing rules. Note: Under the ASTC Settlement Rules a trustee company means a trustee company within the meaning of State or Territory Trustee Companies legislation or a Public Trustee of a State or Territory.
A payment list (mostly for dividend payments) is checked to see which cheques have or have not been presented to the Issuer’s bank for payment. This also involves the replacement of lost of stale cheques and the preparation of unclaimed money returns.
Reconciliation is also performed at the time of an issue of shares to ensure that application money for the number of shares allotted has been received and banked, and that the computer has recorded the correct total of shares allotted.
A change to the existing capital structure of a company. An Issuer may adjust its capital by reconstructing its shares into units of greater or lesser par value. This includes share splits, consolidations, capital reductions (partial repayments), schemes of arrangement and name changes.
The date on which the Issuer closes its register for the determination of eligible Investors for the current dividend or interest payment or any other Corporate Action. Shares purchased after the record date do not participate in the dividend or interest payment. It is also known as a books close date.
Paying off or cancelling a debt. For example, government bonds are redeemable at face value upon maturity ie. the government pays you, the lender, your money and redeems its debt.
A record, which holds the details of shares, issued to Investors for a specific Issuer. There is usually only one Australian register for each Issuer and this is based on the state of incorporation for example, NSW, VIC, QLD. Some Issuers also have overseas registers when they are listed in foreign countries such as NZ and UK.
Only a legal entity is permitted to be registered as a holder of securities. A legal entity is an individual person, a joint holding of up to three holders, a body incorporated under the Australian Corporations Law or overseas equivalent, or a body incorporated under an Australian or overseas Act of Parliament.
The organisation that maintains a company’s share register. For example, Link Market Services Limited.
The place where the maintenance of the register takes place. Most frequently this is the office of a professional share registrar.
A transaction initiated by a Registry to cause a movement on a subregister holding. The transaction is processed within time constraints published in the Clearing House business rules. The transaction does not involve a transfer of funds though CHESS.
Issue of certificate to replace one declared lost or damaged where a change of name is recorded or where a balance is left after a sale.
Company related through common ownership.
The Participant, a member of a Participant group, that may optionally direct settlement to a common settlement holding within an associated central Participant. The Participant is also a member of a group which allows single-entry transfers and reporting extensions within the group.
Change from one register location to another, for example ACT to NSW. This is sometimes called a shunt (especially for overseas companies.
An offer issued by a corporation to shareholders to purchase more shares of the corporation's stock (usually at a discount). Renounceable rights have a value and can be traded.
Renunciation occurs when an existing Investor sells entitlement to shares in a new issue to another person. Renunciation is the act of renouncing entitlements from a share issue to a purchaser willing to pay for the transfer of rights.
A transfer marked to cover a lost or stolen transfer. This only applies to companies that are not on CHESS.
An amount of tax-paid profits, or other surpluses separately designated in Investors' funds as being set aside for a particular or general purpose, or arising from a particular source. The profit or surplus set aside may be prohibited by statute from being distributed as a dividend, or the directors may intend that the amount is not available for distribution at least in the near future.
The term also applies to the excess of a provision over that reasonably necessary for the purpose and to surpluses arising on the upwards revaluation of non-current assets. Sometimes all accumulated profits and surpluses are generally described as reserves.
That part of the capital of a business that has not yet been called up. It is thus a reserve, which can be drawn on in case of need.
The reset date which relates to Rolling Instalments is the date upon which the Final Payment for the Loan Amount is reset for the next period.
An indicator that is used for Investors of securities subject to Foreign Ownership Restrictions to indicate whether the Investor is to be treated as Foreign, Domestic or both for the purposes of calculating the foreign ownership level in the register.
The domicile of a holder of securities subject to CHESS foreign ownership restrictions for the purposes of calculating the level of aggregate foreign ownership. An essential element in the processing of foreign to foreign allocations.
The balance of cash remaining after the total amount available for reinvestment (current payment plus residual carried forward) has been divided by DRP strike price with the result rounded down to a whole number.
The residual balance is carried forward until the next payment, added to the payment entitlement and the total amount used in the calculation of the allotment.
An official document representing an action on the part of the board of directors of a corporation.
The entity that operates a managed investment under the constitution.
Securities which have a trading restriction on them.
Defined in the Listing Rules as:
a. Securities issued by an entity in consideration of, or in connection with, its (or a related party's) acquisition of any of the following:
b. Securities issued by an entity in consideration of, or in connection with, a service provided to the entity (or to a related party) in relation to either of the following:
c. Securities issued for cash (or equivalent) if the person received the cash (or equivalent) for the assets or services mentioned in (a) or (b).
d. Securities issued to a holder of restricted securities in substitution for them as part of a reorganisation of capital.
e. Securities issued under a bonus issue in relation to restricted securities.
f. Securities issued on the conversion of restricted securities.
g. Securities that partly paid restricted securities become when the holder pays any of the outstanding amounts.
h. Securities that, in ASX's opinion, should be treated as restricted securities. For example, ASX is likely to treat as restricted securities, those securities held by a current director or promoter (or their associates) in an entity that has been removed from the official list that were on issue at the time the entity was removed. ASX is also likely to restrict such securities sold by a current director, promoter or their associates.
An individual who purchases small amounts of securities for him/herself, as opposed to an institutional investor. Also called individual investor or small investor.
The return on investment (ROI) or just return is a calculation used to determine whether a proposed investment is wise, and how well it will repay the investor. It is calculated as the ratio of the amount gained (taken as positive), or lost (taken as negative), relative to the basis.
What a company makes in monetary terms from its business for goods and services supplied by it during a financial year. It is also referred to as "revenue from operations", "turnover", "operating revenue" or loosely known as "sales".
The entitlement given to existing Investors to subscribe for new shares in the Issuer at a specific price and by a specific date. Rights are issued pro rata to Investors and may be renounceable (able to be traded) or non-renounceable (non-tradeable).
An offer of additional shares to existing Investors at a pre-determined ratio to registered holders as at the record date. Normally Investors do not pay brokerage or stamp duty. The decision to take up the entitlement is optional.
During repayment of funds for securities that have a finite life (such as debentures and convertible notes) Issuers may offer holders the option to roll over the maturing security. The security (debenture or loan) is replaced by a further security (debenture or loan) by negotiation with the party to whom the money is owed.
A statement sent by the Issuer outlining an investors transactions.