Acceptance for settlement: The status of the processing of a payment in which all risk management tests have been carried out and can be settled in accordance with the rules and procedures of the system.
Acceptor: Is any commercial or service store, business, that allows the payment of goods or services in your name or your company through an electronic money instrument.
Access: It is an option that an institution has to use the services of a particular payment system to make the payments on its own account or for the clients.
Access to products: These are payment tools that allow customers to access their deposit accounts and transfer deposits in them. As an example we can talk about home banking services, and electronic transfers at the point of sale.
Accountability: It is the record of electronic money transactions.
ACH: These are the acronyms of the Automated Compensation Chamber.
Acquirer: It is the company or companies that maintain the deposit accounts for the clients that accept the cards and that the client transmits the data related to the transaction.
Acquiring technical operator: test the technical facilities for each company.
Advisory netting: similar to position netting.
Agency relationship: it is a contractual relationship in which a party, the agent, acts on behalf of the director. The agent can execute actions by the director, but is not responsible for the performance of the latter.
Agent: It is a person, as a fund manager, who has a loan of assets and agreements with the lender on behalf of a client-owner.
APS: These are the initials of the secured payment system).
Arbitrage: is to take advantage of a price difference between two or more markets.
Assured payment system: It is an agreement in a system of exchange by value under which the finalization of the timely execution of a payment instruction is backed by an irrevocable and unconditional commitment of a third party (usually a bank, a syndicate of banks or a clearing house).
Asymmetric cryptography: (Cryptography of public key) A set of cryptographic methods in which there are two types of code, private and public code, are used to encrypt and decrypt data, the private code is for the owner while the public is prepared to the communicating entities.
ATM: stands for automated workshop machine.
Auditability: Defines that all the events of a system must be able to be registered for its subsequent control. One of the aspects of the ability to audit is to have sufficient knowledge of the system and its structure, functions, controls, among others, through appropriate documentation. Another important aspect is to make visible all the modifications related to the system and its data. The data record must be able to answer the questions "who", "what" and "when".
Audit trail: Is a history of events that occurred in a system
Authentication: These are the resources used to verify the origin of a message or the identity of a participant connected to a system and to confirm that a message has not been changed or replaced in the process.
Automated clearing house: It is an electronic network for financial transactions in which the payment orders are exchanged between financial institutions. See also compensation / clearance.
Automated teller machine: It is a computer connected to a bank that allows the client to perform certain banking operations (withdraw cash from their accounts and / or access other services, such as balance inquiries, funds transfers or acceptance of deposits) using a magnetic card or notebook that has a personal password assigned to it. ATMs can work online with real-time access to an authorizations database or offline.
Availability: Is the accessibility that users have to services and information.
Back office: It is the part of a company that is responsible for post-trade activities. Depending on how the company is structured, the back office can be a single department or several (such as documentation, risk management, accounting or liquidations). Some organizations have combined a part of these responsibilities. They are usually found in the back office, particularly those related to management risk, in what is called a middle office function. See also front office.
Back-to-back trades: These are a couple of transactions that require an entity to receive and re-deliver the same funds on the same day. The transactions involved can be direct purchases and sales or guaranteed transactions (repurchase agreements or securities loans). For example, a securities trader can buy and sell the same securities for the same settlement date in the course of creating markets for customers or can buy securities for inventory and pay through a repurchase agreement.
Back-to-back transactions: These are a couple of transactions that require an entity to receive and re-deliver the same funds on the same day. The transactions involved can be direct purchases and sales or guaranteed transactions (repurchase agreements or securities loans). For example, a securities trader can buy and sell the same securities for the same settlement date in the course of creating markets for customers or can buy securities for inventory and pay through a repurchase agreement.
Balance-based system: It is an electronic money system in which the funds are stored in a device such as an accounting book, with transactions carried out as debits or credit to a balance.
Bank draft: In Europe, the term generally refers to a bill of exchange issued by a bank. The payer purchases the money order and sends it to the beneficiary, who presents it to his bank for payment. That bank presents it to the payer's bank for reimbursement. In the United States, the term generally refers to a bill of exchange or check drawn by a bank in itself or of funds deposited in another bank. In the case of a cashier, the bank is both the drawer and the drawer. In the case of a cashier's check, a bank is the cashier and a second bank is the cashier. Bills of exchange may be issued by a bank for its own use. or they can be bought by a customer and sent to a customer to fulfill an obligation.
Bank reserves: They are deposits held by banks in the central bank.
Basis risk: It means risk of changes in the base, that is, the difference between the price of a futures contract and the price of the guarantee asset.
Batch: The delivery or processing of several payment orders and / or transfer instructions as a set in discrete terms.
Beneficial ownership / interest: The right to receive benefits from the ownership of a security or other financial instrument (for example, income, voting rights, transfer power). Effective ownership is often differentiated from the "legal property" of a security or financial instrument.
Bilateral credit limit: Similar to credit limit.
Bilateral exposure: It is the presentation of a part to another party.
Bilateral net settlement system: It is a payment system in which the net settlement positions of each participant are settled among all the bilateral combinations of participants.
Bilateral netting: It is an agreement between two entities to compensate their bilateral obligations. The obligations covered by the agreement are due to financial contracts, transfers or both.
Bill of Exchange: It is a written order from one party (the drawer) to another (the drawee) to settle a specific sum a request or a specific date to the drawer or a third party specified by the drawer. It is very useful to finance trade and, when discounted with a financial institution, to obtain credit.
Biometric: It is a method of identifying identity by measuring a unique physical characteristic of the holder, for example, by comparing fingerprints, speech recognition or the retina scanner.
Bit: It is the basic element of data: a binary digit, 0 or 1.
Book-entry system: It is an accounting system that makes possible the transfer of credits (for example, the electronic transfer of securities) in the physical movement of paper documents or certificates.
Bridge: Is the name used for the link between Euroclear and Clearstream that permits cross-system settlement of a trade between a participant in one ICSD (international central securities depository) and a participant in the other ICSD.
Broker: A broker is a company that communicates the volumes of purchase and sale to the main potentials and that otherwise arranges the transactions as an agent in exchange for a commission, without acting as counterpart in the operations.
Broker-dealer: A person or entity that sometimes acts as a broker and sometimes as a principal intermediary in securities transactions. A broker is a company that communicates the volumes of purchase and sale to the main potentials and that otherwise arranges transactions as an agent in exchange for a commission, without acting as a counterpart in the transactions.
Brute force attack: It is a cryptanalysis process in which all the possible cryptographic keys are tested.
Bulk funds transfer system: see retail funds transfer system.
Business continuity: These are agreements of a payment system that are intended to ensure that it meets the agreed service levels, even if one or more system components do not work or are affected by an abnormal external event. Include both precautions and provisions to deal with contingencies.
Buy-in: It is a purchase of assets in the open market by the lender, when the borrower cannot deliver the securities to the lender in accordance with the terms of the transaction (for example, on the settlement date). In this case, the borrower is responsible for all expenses.
Byte: It is a series of eight bits.
Call money: It is a loan contract that is renewed every day automatically, unless the lender or the borrower wishes that the funds be returned in a short period of time.
Capital risk: Similar to principal risk.
Caps: These are the quantitative limits to the transfers of funds of the different agents of the system; the limits can be set by each agent or imposed by the managing body of the system; Limits can be set for the two positions, the net debtor or the net creditor position of the participants in the system.
Card: Similar to cash card, check guarantee card, chip card, credit card, debit card, delayed debit card, prepaid card, retailer card, travel and entertainment card.
Card-based products: These are electronic payment products that provide the customer with a portable and specialized computer device, usually an IC card that contains a microprocessor chip.
Case law: Are those precedents established in previously decided court cases that may influence future interpretations of the law or the resolution of future court cases.
Cash card: It is a card that is only used in ATMs or ATMs
Cash clearing: It is a method to settle futures contracts in which the positions are adjusted periodically to the market value and the resulting obligations are satisfied by cash payments, which is known as margin of variation.
Cash correspondents: These are banks (or similar institutions) used by the SSS to pay or receive payments.
Cash deposit risk: It is the credit risk associated with the possession of cash balances in a mediator in order to perform the settlement of operations with securities.
Cash dispenser: It is an electromechanical device that allows consumers, through plastic cards for mechanical reading, to withdraw bank notes (coins) and, in some cases, coins.
Cash-driven securities lending transactions: These are transactions motivated by the desire to invest an amount in cash through a temporary acquisition (or loan) of securities.
Cashier's check: Similar bank draft.
Cash memorandum accounts: These are records maintained by the SSS of the funds owed to the agents or received by them with respect to their securities settlements; the records are for informational purposes only and do not represent claims or legal obligations between the SSS and its agents.
Cash settlement agent: The organization whose assets are used to settle the final payment obligations that arise from the transfers of funds within the CSD. The accounts with the cash liquidator are maintained by settlement banks that act in their own name and can also provide payment services to participants who do not have accounts with the liquidator.
Central bank bills: short-term assets issued by the central bank that could be tradable or negotiable.
Central bank credit (liquidity) facility: It is a permanent credit facility that can be used by holders of designated accounts (for example, banks) in the central bank. In some cases, the facility may be used automatically at the initiative of the account holder, while in other cases the central bank may maintain a degree of discretion. Loans usually take the form of advances or overdrafts in the current account of the account holder, which can be guaranteed by a pledge of securities (also known as Lombard loans in some European countries), or by the traditional rediscount of effects.
Central counterparty: It is an organization that is the buyer of each seller and the seller of each buyer of a specific group of contracts, for example, those executed in one or several bags in particular.
Central processing unit: It is the area of a computer system (and an IC card) that performs the calculations.
Central securities depository: It is a system (or an institution) of securities holding that allows operations with securities to be processed through book entries. Physical values can be immobilized by the depository or the values can be dematerialized (that is, they exist only as electronic records). In addition to its custody, the central depository of securities may incorporate functions of comparison, compensation and liquidation.
Certificate: It is a physical document that shows a claim of ownership, indebtedness or other financial obligations pending from the issuer.
Certification authority: Is an organization responsible for establishing and assigning public key certificates.
CFD: Similar to contract for difference.
Chaining: It is a procedure used in some transfer systems (mainly for values) for treatment instructions. It consists of manipulating the order in which transfer instructions are processed to increase the number or value of transfers that can be settled with funds and / or balances of funds and / or available securities (or lines of credit or loan) of available values).
Challenge-response: It is a means of identification in which a device responds a challenge from another device, thus demonstrating its authenticity.
Charge card: Similar to "travel and entertainment card".
Check: It is a written order from one party (the drawer) to another (the drawee) to settle a specific sum a request or a specific date to the drawer or a third party specified by the drawer.
Check guarantee card: It is a card granted within the framework of a check guarantee system. This function can be combined with others of the same card, for example, those of a cash or debit card.
Check guarantee system: It is a guarantee of checks, generally up to a certain amount, that has been validated by the merchant on the basis of a card issued to the issuer of the check or through a central database accessible to merchants. Validated checks are guaranteed by the issuer of the guarantee card, the giro bank or the system operator.
Chip card: It is also known as an IC card (integrated circuit). A card containing one or more computer chips or integrated circuits for identification, data storage or special purpose processing used to validate personal identification numbers (PIN), authorize purchases, check account balances and store personal records. In some cases, the memory of the card is updated each time it is used.
Choice of law: It is a contract by which the parties choose the law that will govern their contract or relationship. The choice of law can also refer to the question of which law should govern in case of conflict of laws.
Ciphertext: The encoded form of the data.
Clearance: The term "compensation" has two meanings in the securities markets. It can mean the procedure for calculating mutual obligations of agents in the market, usually on a net basis, for the exchange of assets and money. It can also mean the process of transferring securities on the payment date and, in this sense, the term "compensation system" is sometimes used to refer to securities settlement systems.
Clearing and settling institution: It is an organization that transmits information and funds through a chain of payment systems. You can operate as an agent or as a director.
Clearing / clearance: It is the process of transmission, conciliation and, in some cases, confirmation of payment orders or instructions of transfer of funds before cancellation, which may include compensation of instructions and establishment of positions final for the settlement. Sometimes the term is used (inaccurately) to include the settlement.
Clearing house: It is a central location through which financial institutions agree to exchange payment instructions or other financial obligations. Institutions pay for items exchanged at a given time according to the rules and procedures of the clearing house. In some cases, the clearing house can assume important counterpart, financial or risk management responsibilities for the compensation system.
Clearing house funds: This is the term most used in certain markets in the United States to refer to funds that are typically provisional on the day of receipt and ending on the following day. The term is used to refer to monetary assets firmly the next day that are exchanged by agents in certain clearing house agreements in the cancellation of obligations arising from the compensation process.
Clearing link: It is an agreement in which the same contract is negotiated in the exchanges affiliated to two clearing houses, but all the positions are transferred daily to a single clearing house where they are transported until their expiration.
Clearing member: It is a member of an information exchange center. All negotiations must be settled through a liquidating member. A direct compensation member can only liquidate his own debts. A general liquidator is able to settle its own obligations, as well as those of its clients.
Clearing system: It is a set of procedures in which financial institutions present and exchange data and/or documents in relation to transfers of funds or securities to other financial institutions in a single place (clearing house).
Client: It is a part that is not part of the clearing house and that must pay through a liquidating member.
Closed network: A telecommunications line used for a specific purpose, such as a payment system, and whose access is limited.
Closeout: It is the process of counteracting existing contracts. The closing can be used by the clearing house to prevent additional losses of positions carried out by an agent that has breached.
Closeout netting: It is a special form of compensation that occurs after some predefined events, such as non-compliance. Settlement compensation is intended to reduce exposure to open contracts if one of the parties meets certain conditions specified in the contract (for example, becomes subject to insolvency proceedings) before the settlement date (also called compensation of defaults, compensation of open contracts or compensation of substitution contracts).
Closing (or back) leg: It is the second part of a pair of operations with the same assets, that is, a securities lending operation, one for a close value date and the other for a later value date.
Collateral: It is an asset or a value of third parties accepted by the beneficiary to guarantee an obligation of the guarantor against the beneficiary.
Collateral management service: It is a centralized service that can have several functions related to the guarantees for a client company, among which include the valuation of the guarantees, the confirmation of the valuations with the counterpart entities, the improvement of the use of the guarantees and the transfer of them.
Collateral pool: They are assets owned by members of a payment system that are collectively available to the system as collateral to enable them to obtain funds under the conditions specified in their rules.
Combination of an outright sale with put and call option: It is a derivative financial agreement that has a similar economic relationship effect of a securities lending operation. In this agreement, an agent at the same time (1) sells shares directly to an investor in cash, the market value receiver, (2) purchases OTC to the cash call options of the investor in cash that give the dealer the right to buy the shares on a specified date at the original price, and (3) is sold to the investor in cash at the OTC cash at-the-money put options that they give to the investor in cash has the right to sell the shares at the price original. This has as a result that the agent has a long synthetic position of the shares, retaining any positive or negative return on the shares, while the cash investor is hedged against a loss in the value of the shares, but must also pay any profit to the distributor.
Committed facilities: These are facilities under which the provider is committed by contract to advance money in certain situations.
Comparison: Similar to matching.
Confidentiality: It is the right to be protected against unauthorized disclosure.
Confirmation: The process by which a market participant notifies its customers of the details of an operation and, in general, gives them time to affirm or question the operation.
Confirmation process: It is the procedure of verification of the details of the operation with a part of the contract. This is usually done by faxing or mailing a document that identifies the details of the operation and any legal documentation that regulates the operation and that verifies the accuracy of the information provided by the counterpart.
Conflict of laws: This is a situation in which two or more sets of laws that are appropriately applied to a particular transaction require different results.
Contact cards: These are cards that require physical contact through an electronic connection platform between the card and the card reader or terminal device.
Contactless cards: Cards that do not require physical contact through an electronic connection platform between the card and the card reader or terminal device.
Contract for difference: It is a financial agreement in which the difference between the agreed fixed price of a security and its current market price is paid periodically to the counterparty in money. Since there is no capital transfer, a CFD covers hedging or speculative needs.
Contract law: This is a body of laws that deals with establishing and enforcing agreements.
Contractual income collection: A contract by a custodian to deposit interest payments, dividends or tax refunds into the cash account of a customer on the date the payments are scheduled, regardless of whether the custodian has actually received the pay.
Contractual settlement date accounting: It is a contract by a custodian to deposit and collect the cash and the securities accounts of a client, as applicable, on the date on which the client's contract with its counterparty provides for the settlement (the date of settlement of the established contract), regardless of whether the settlement actually occurred.
Correspondent banking: It is an agreement by virtue of which a bank owns deposits owned by other banks and provides payment and other services to the defendant banks.
Counterparty: Means the opposite of a financial transaction, such as a securities purchase or exchange agreement.
Counterparty credit limits: These are the limits established by a negotiating organization to restrict most of its credit exposures to different counterparties.
CPU: The acronym for central processing unit.
Credit caps: Similar to caps.
Credit card: It is a card that indicates that the owner has obtained a line of credit. It allows the holder to make purchases up to a pre-established maximum limit; the credit granted can be paid in full at the end of a certain period or it can be paid in part, considering the balance as an extended credit. Interest is charged on the amount of any extended credit and sometimes the owner is charged an annual fee.
Credit card company: It is a company that has registered a particular credit card brand, and that can also provide a series of marketing, processing or other services to its members using the services of the card.
Credit institution: Company whose activity consists in receiving deposits or other repayable funds from the public and in granting credits on its own account.
Credit limit: Limit of exposure to the line of credit in which a participant is in the payment system in front of another participant (bilateral credit limit) or in front of all other participants (multilateral credit limit) as a consequence of receiving of payments that have not yet been settled.
Credit risk/exposure: It is the risk that counterparty does not settle an obligation for its total value, either at the time of its expiration or at any later time.
Credit transfer: It is a sequence of payment orders taken with the purpose of making funds available to the beneficiary. Both the payment instructions and the funds described therein pass from the payer's bank to the beneficiary's bank, possibly through several other banks as intermediaries or from more than one credit transfer system.
Credit transfer system: It is a type of fund transfer system through which the payment orders pass from the originator of the transfer message or payer, to the recipient of the message or beneficiary.
Cross-border netting scheme: It is an agreement to compensate positions or obligations between the parties in more than one country or jurisdiction.
Cross-border settlement: An operation that takes place in a country other than the country where one or both commercial counterparts are located.
Cross-border trade: a negotiation between agents located in different countries.
Cross-currency settlement risk: Similar to main risk.
Cross-margining agreement: It is an agreement between the central counterparts to consider the positions and guarantees of support in their respective organizations as a portfolio for the participants that are members of both organizations. In the case of a default on the part of a participant whose account is of crossed margins, the central counterparty may use the positions and guarantees in the cross account in the other central counterparty to cover losses.
Cross-system settlement: The payment of an operation that is carried out through a link between two separate systems of transfer of funds.
Cryptanalysis: Area of cryptography dedicated to the study and development of methods that, without the prior knowledge of the cryptographic code, can be deduced flat text from cryptographic text.
Cryptographic algorithm: Also called encryption. It is a mathematical function used in combination with a key that is applied to the data to guarantee its confidentiality, integrity and / or authentication.
Cryptography: The application of theoretical mathematics to develop methods and algorithms that can be applied to data to ensure objectives such as confidentiality, data integrity and / or authentication.
CSD: Similar to central securities depository.
CSDA: Similar to contractual settlement date accounting.
Current exposure: It is the loss that would occur today in a contract or set of contracts if one of the parties did not fulfill its obligations. Also known as replacement cost, the current exposure is what it would cost to substitute a particular contract if the other party defaulted now.
Custodian: It is an organization, often a bank, that guards and administers assets for its clients and that can provide other services, such as compensation and settlement, cash management, currency exchange and securities lending.
Custody: It is the protection and administration of securities and financial instruments on behalf of third parties.
Custody-only link: It is a connection between two Securities Settlement Systems (SSS) that allows transactions with securities held in the SSS1 to be settled using the SSS2 when both the buyer and the seller are participants in the SSS2. Custody only links do not allow the transfer of funds between SSS1 and SSS2 and cannot be used to settle transactions between a participant in the SSS1 and a participant in the SSS2.
Custody risk: Is the risk of loss of securities held in custody caused by the insolvency, negligence or fraudulent action of the custodian or a sub custodian.
Customer: Is a buyer, seller or holder of securities and financial instruments that do not participate directly in a system. The possessions of a participant in a system usually include securities and financial instruments of which the participant's clients are the actual beneficiaries.
Customer-to-customer transfer: Similar to transferability.
Daily processing: It is a complete cycle of processing tasks that must be completed in a typical business day, the procedures from the beginning of the day to the end of the day, including the generation of backup copies of the data.
Daily settlement: This is the completion of the transaction on the day of the value of all accepted payments for the transaction.
Data encryption standard: It is a symmetric cryptographic algorithm (ANSI standard) commonly used in the financial sector. Triple DES consists of operating three times in a data set (encrypt-decrypt-decrypt-encrypt) using a double-length DES key
Daylight credit: This is a credit extended for a period of time less than one business day; In a credit transfer system with final settlement at the end of the day, the receiving institution tacitly extends the credit in daylight if it accepts and acts in accordance with a payment order, even though it will not receive the final funds until the end of the day. the business day
Day of value: It is the day in which a payment must be paid to the participant receiver in the payment system.
DBV: Acronyms referring to delivery by value.
Dealer: Is an organization that conducts operations as a counterpart on both sides of the market of one or more products.
Debit balance: Similar to net credit (or debit) position.
Debit caps: Similar to caps.
Debit card: It is a card that allows the cardholder to make his purchases directly from his account in a deposit entity.
Debit transfer system: This is a fund transfer system in which the debit orders issued by the payer pass from the payee to the payer and give rise to a charge (debit) in the payer's account.
Debt book-entry system: It is a computerized system for the issuance and registration of debt securities in the form of book entries.
Default: It is the failure to complete a transfer of funds in accordance with its terms for reasons that are not technical or temporary. Non-compliance is often distinguished as a "failed operation".
Defaulter pays: It is a system of distribution of losses in which each participant is obliged to guarantee the exhibitions that he creates for other participants.
Deferred net settlement system: It is a system that effects the cancellation of obligations or transfers between the parties on a net basis at some later time.
Delayed debit card: It is a card issued by banks, which indicates that the cardholder can charge in their account up to a maximum authorized limit. It allows you to make purchases, but does not offer extended credit; the total amount of the debt incurred has to be settled at the end of a specific period. In general, the holder is subject to an annual fee.
Deletion: It is a mechanism by which transfers to or from a participant that has not complied with are excluded from the liquidation process.
Delivery: Final transfer of an asset or financial tool.
Delivery by value: It is a mechanism in settlement systems to help a participant borrow money or lend money to another participant against guarantees maintained in the system.
Delivery versus delivery: It is a link between two systems of transfer of securities that ensures that a delivery occurs if and only if, another delivery occurs and vice versa.
Delivery versus payment: It is a link between a securities transfer system and a fund transfer system that ensures that delivery occurs if, and only if, payment occurs.
Delivery-versus-payment system: It is a securities exchange settlement system that guarantees that the final transfer of a good occurs if and only if the final transfer of another or other assets occurs.
Dematerialization: It is the destruction of the physical certificates or property documents that represent the ownership of the assets, so that the assets only exist as accounting records.
Depository: It is an agent whose main function is to record the property, either physically or electronically, and keep a record of ownership of those goods.
Depository institution: It is the definition of "bank" in the United States,
Depository receipt: An instrument issued in a country that grants the right to a security held in custody in another country.
Derivative: It is a financial contract whose value depends on the value of underlying reference assets, types or indices.
Derived key: A cryptographic key that is obtained by using an arithmetic function in combination with a master code and a unique identification value, such as a serial number of the card.
DES: Similar to data encryption standard.
Digital signature: It is a data string created by a cryptographic method that is attached to a message to guarantee its integrity and protect the recipient against rejection by the sender.
Direct debit: A debit previously authorized in the bank account of the beneficiary initiated by him.
Direct holding system: A securities retention system in which the effective beneficiary of the securities (i) is reflected as the legal owner in the registry or official records of the issuer (and, if certification of the securities is required, it is issued in the name of the owner) or ii) is in possession of securities issued to the bearer.
Direct market participant: It is a stockbroker or partner of a stock exchange that directly executes an order.
Direct participant: It is an agent in an interbank system of transfer of funds (IFTS) that is in charge, before the liquidating agent, of the liquidation of its own payments, those of its clients and those of the indirect participants on behalf of which liquidation is taking place.
Direct participant / member: In the context of the EC, this term has a specific meaning: it refers to the participants in a transfer system who are responsible for the liquidation institution for the settlement of their own payments, those of their customers and those of the indirect participants in whose name they are installed.
Discharge: Exemption from a legal obligation established by contract or by law.
Disclosure see public disclosure: Similar to public disclosure.
Distributing institution: It is a company that distributes or sells electronic money to the customer.
Domestic settlement: This is a settlement that takes place in the country in which both counterparts of the operation are located.
Domestic trade: It is a negotiation between counterparts located in the same country.
Draft: It is an order written from one party to another to pay a party identified in the order or bearer a certain amount, either on request or on a specific date.
DVD: Similar to delivery versus delivery:
DVP schemes as defined by the g10: It is based on three models: in model 1, the transfer instructions for both the securities and the funds are settled individually, and the final transfer of the values from the seller to the buyer occurs at the same time as the final transfer of funds from the buyer to the seller. In model 2, the instructions for transferring securities are settled gross, with the final transfer of securities from the seller to the buyer (delivery) throughout the entire processing cycle, but the funds transfer instructions are settled in net figures, and the final transfer of funds from the buyer to the seller (payment) occurs at the end of the processing cycle. In model 3, the transfer instructions for both securities and funds are settled in net terms, and the final transfers of both securities and funds occur at the end of the processing cycle.
Early termination option: A contract available that gives either party the option to terminate a contract before its expiration date, sometimes through the payment of a commission.
EDI: Similar to electronic data interchange:
EEPROM: It is a programmable, electronically erasable read-only memory: the area of an IC chip used to store data.
EFTPOS: Similar to point of sale.
Electronic data interchange: It is the electronic exchange between companies, in a standard format, of data related to a series of categories of messages, such as orders, invoices, customs documents, notices of remittances and payments. EDI messages are sent through public data transmission networks or channels of the banking system.
Electronic money: It is a value stored electronically in a device such as a chip card or a hard disk of a personal computer.
Electronic purse: It is a rechargeable multipurpose prepaid card that can be used for small retail or other payments instead of using coins.
Electronic wallet: It is a computerized device used in some electronic money systems that can contain an IC card or in which IC cards can be inserted and that can perform more functions than an IC card.
Embedding: The process by which the chip module is mounted on the plastic support when IC cards are manufactured.
Encryption: The use of cryptographic algorithms to encode clear text data in encrypted text in order to avoid unauthorized observation.
End-of-day gross settlement systems: are funds transfer systems in which the payment orders are received one by one by the settlement agent during the business day, but in which the final settlement takes place at the end of the day individually or in aggregate gross terms
Endogenous default: It is the default of a liquidating member that results in losses in the positions of the chamber or the client that the liquidating member carries out in that clearing house, instead of losses from another source.
End user: It is an organization that takes positions in derivatives for investment or hedging purposes. An end user often deals only on one side of the market. End-users include banks, insurance companies, pension funds, other financial institutions, non-financial corporations, governments, supranational entities and individuals with high net worth.
EPROM: It is an electronically programmable read-only memory: the area of an IC chip used to store data. Data in EPROM can only be written once and cannot be deleted by selection.
Equity swap: It is a swap operation consisting of a performance exchange of a recognized stock index or a specific basket of individual shares for a fixed or variable interest rate.
Event of default: It is an event stipulated in an agreement as constituting a breach. In general, the lack of payment or delivery on the due date, breach of contract and insolvency are cases of default.
Exchange-for-value settlement system: It is a system that involves the exchange of assets, such as money, currencies, securities or other financial instruments, in order to comply with settlement obligations. The links between the exchange of assets and the payment system or systems can be manual or electronic.
Exchange member: It is a member of a stock exchange with certain commercial privileges.
Exchange-traded derivative: It is a derivative instrument that is quoted and traded in an organized market. Derivatives exchanges usually offer participants standardized contracts and centralized compensation means.
Exit criteria: These are criteria for an existing member of a payment system to stop participating.
Face-to-face payment: These are the payments made through the exchange of instruments between the payer and the beneficiary in the same physical site.
Fail: It is the failure to perform the settlement of a securities operation on the settlement date of the contract, usually due to technical or temporary difficulties. Also called failed transaction.
Failed transaction: It happens when the operation of securities is not settled on the settlement date of the contract.
Final (finality): irremediable and unconditional.
Finality risk: It is the risk that a temporary transfer of funds or securities will be canceled.
Final settlement: It is an irrevocable and unconditional agreement.
Final transfer: It is an irreversible and indisputable transfer that has the effect of fulfilling the obligation to effect the transfer.
Financial risk: which assumes a series of risks derived from financial operations, both liquidity and credit.
Firewall: It is a system that is based on hardware and / or software and that is used as an interface between the Internet and a computer system to monitor and classify incoming and outgoing communications.
Freckless: It comes from the German "fleckenlos", which means without blemish; it is said that a device or system has no stain when it can provide evidence that it has not been tampered with.
Forced settlement: Settlement of securities or funds that is ordered or executed by the actions of a third party.
Foreign exchange settlement risk: It is the risk that one of the parties to a currency exchange transaction pays the currency that it sold but does not receive the currency that it bought.
Forward contract: It is a contract that obligates one party to buy and the other to sell a guarantee asset at a specific price and date in the future.
Forward rate agreement: It is a contract where its beginning, determines the interest rates in which it must be paid or received for a specific obligation during a certain period of time.
Free-of-payment delivery: It is the delivery of assets without the corresponding payment of funds.
Front office: It is a counterpart entity and other areas that are responsible for developing and managing relationships with counterparts.
FTS: Similar to funds transfer system.
Funds transfer system: It is a formal agreement, based on contractual or private statutory law, with multiple members, common rules and standardized agreements, for the transmission and settlement of pecuniary obligations that arise between members.
Fungibility: It is a concept that characterizes the method of conservation of securities by a CSD or other financial intermediary in which each of the issues of physical or dematerialized securities is held in separate fungible pools.
Futures contract: It is a standardized term contract that is traded on a stock exchange.
Futures-style margining: It is a method of financing derivative contracts in which positions are adjusted to the market and current exposures are extinguished by cash payments known as margin of variation.
Collateral General: Are the securities that meet the general requirements of a cash borrower to guarantee their cash loans.
Giro system: Similar to credit transfer system.
Global custodian: It is a custodian that provides its clients custody services of securities traded and liquidated not only in the country in which the guardian is located, but also in other countries around the world.
Gridlock: It is a situation that can arise in a system of transfer of funds or values in which the non-compliance of some transfer instructions prevents the execution of a substantial number of other instructions of other participants
Gross margining: It is the system of margins in which the liquidator must deposit in the clearing house a sufficient initial margin to cover the gross positions of its clients.
Gross settlement system: It is a transfer system in which instructions for liquidation of funds or transfer of securities are made individually, instruction by instruction.
Haircut: It is the distinction between the market value of a security and its security value. The cuts are applied by a lender of funds in order to protect the lender, in case it is necessary to liquidate the guarantee, of the losses due to the decrease in the market value of the guarantee.
Hedge fund: It is a private investment fund, sometimes indebted and often involved in active commercial strategies.
Herstratt risk: Similar to main risk.
Home banking: banking services that can be accessed by a retail customer of a financial company using a telecommunications link (telephones, computers, among others) with the computer center of the company.
Hot list: It is a card-based system, a list of card numbers or ranges of suspicious card numbers, found in the merchant's terminal or other device.
Hybrid system: It is the payment system that combines the characteristics of RTGS and compensation systems.
IC card: Similar to chip card
IC (integrated circuit card): It is a plastic card in which one or more integrated circuits is embedded. It is also called a chip card.
ICSD: international central securities depository.
LFTS: interbank funds transfer system.
Immobilization: It is the placement of guarantees and financial instruments in a central depository of securities to facilitate the transfers of book entries.
Imprinter: It is a device that is responsible for reproducing the name and account number of the cardholder on a paper receipt.
Imprinter voucher: It is a purchase receipt that must be signed by the customer in which the customer's name and card numbers are printed in card transactions.
Indemnification: It is an agreement to compensate for damages or losses. Custodians sometimes offer it to loan clients in a variety of ways.
Indirect holding system: It is a system of securities retention in which two things can happen: a representative is reflected as the legal owner of the securities in the official record of the issuer and the beneficial owner is reflected as the owner of the securities in the books of the representative or, the bearer securities are deposited in an intermediary and the intermediary maintains an account that reflects the rights and interests of the beneficial owner in the official record of the issuer security.
Indirect market participant: It is a member of the market that uses an intermediary to execute operations on its behalf. In general, institutional and transnational clients are indirect participants in the market.
Indirect participant / member: They are the participants in a transfer system that are only responsible to their direct participants for the settlement of the payments introduced in the system.
Initial margin: It is the cash or guarantee that has been deposited in the clearing house to ensure compliance with the obligations contracted with it.
Inpayment: It is a payment instruction, sent together with the bill of delivery of goods and / or services, prepared by the beneficiary; the payer can pay through their designated bank account or through a cash payment at a designated agent.
Integrity: It is the protection against accidental or fraudulent alterations or to indicate if alterations have occurred or not.
Interbank funds transfer system: It is a mechanism for transferring funds in which the majority (or all) of the direct operators are financial entities, in particular banks and other credit institutions.
Interchange fee: It is a transaction fee payable in the context of a network of payment cards by one participating financial institution to another.
Interlinking: It is the interconnection within the TARGET system, which provides the common procedures and infrastructure that allow the payment orders to pass from a national RTGS to another RTGS.
Internal settlement: It is a transaction that is made through transfers of assets and funds in the books of a single intermediary.
International central securities depository: It is a central repository of securities that compensates and liquidates international securities or border operations of national securities.
Internet: It is an open communication system on a world scale that consists of interconnected computer networks and that allows access to information at a distance.
Interoperability: This is a situation in which the payment instruments belonging to a certain system can be used in other countries and in systems installed by other organizations.
Intraday credit: similar to daylight credit.
Intraday liquidity: These are assets that can be accessed during the business day, generally to allow financial institutions to make payments immediately.
Irrevocable and unconditional transfer: It is a transfer that cannot be canceled by the payer and is unconditional.
Irrevocable transfer: It is an operation that cannot be canceled by the payer.
ISO: International Organization for Standardization: It is an international organization whose members are national standardization bodies and which approves, develops and publishes international standards.
Issuer: Is the entity that receives the payment in exchange for the value distributed in the system and that is obliged to pay or reimburse the transactions or balances that are presented in a prepaid electronic money system of stored value or similar.
Issuing agent: Is an organization that intervenes on behalf of the issuer of securities in the distribution of the same and in the realization of the product thereof for the benefit of the issuer.
Issuing institution: Is the institution that receives funds in exchange for the value distributed in the system and that, in principle, is obliged to cancel or reimburse the client's transactions and the unused funds presented to him.
Key: It is a unique combination of digits used with a cryptographic algorithm.
Key length: The number of bits that make up an encryption key.
Key management: Is the design of the life cycle of the keys and the relationships between the keys that are used in a computer system for cryptographic purposes.
Large-value funds transfer system: It is a transfer system through which transfers of high-value and high-priority funds are made between the participants in the system on their own account or on behalf of their clients, with no minimum value for payments. , since the average is usually relatively large.
Large-value payments: These are payments of large amounts, which are exchanged between banks or between participants in the financial markets and which require urgent and timely liquidation.
L / C: Similar to letter of credit.
Legal ownership: Is the legal recognition as owner of a security or financial instrument.
Legal risk: Is the risk of loss due to the unforeseen application of a law or because a contract cannot be executed.
Legal title: This is a recognizable or enforceable owner of the law or one that is complete and perfect in regard to the apparent right of ownership, and possession, which may not carry any real interest.
Letter of credit: A promise from a bank to a third party to make the payment on