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Abbreviations / Acronyms

Definitions – S


For a fee banks will safekeep (i.e. hold in their vault, clip coupons on and present for payment at maturity) bonds and money market instruments.


Safety of Principal:

Safety of principal is an objective that emphasizes the security of the invested principal.



The transfer of ownership of an asset for a consideration, however small. If the two parties of the sale are not the dealing at arm's length, Revenue Canada may assess capital gains tax against the seller based on assessed fair market value of the asset sold.


Savings Deposit A/C:

Interest-bearing deposit at a savings institution that has no specific maturity. Savings accounts features Daily or Monthly interest, some may have chequing privileges .

Save Harmless: Also called an "indemnity clause," is when one party to a transaction tries to protect itself from a past or future liability and harmless if a suit is brought.

Schedule I Banks:

A designation in the Bank Act that refers to Canadian-owned banks that are wildly held, i.e. ones in which no one owner holds more than 10% of the shares.


Schedule II Banks:

A designation in the Bank Act that refers to Foreign-owned banks and closely head Canadian banks i.e. ones in which an owner hold more than 10% of the outstanding stock.


Scholarship Trust:

Another name for a pooled RESP.


Seasoned Issue:

An issue that has been well distributed and trades well in the secondary market.


Second Mortgage:

A mortgage loan granted when there is already one other mortgage registered against the property. In case of default, the first mortgage is paid before the second mortgage from the proceeds of the sale of the property.


Secondary Market:

The market in which previously issued securities are traded.


Sector Fund:

This is a stock mutual fund that invests in only one industry. E.g.:- Gold, Resources, Financial Services etc.



The general term for publicly traded stock, bonds, and other financial instruments.


Security (Real Estate):

Property offered as backing for a loan. In the case of mortgages, the property being purchased with the loan usually forms the security for the loan.


Securities Act:

Provincial legislation regulating the underwriting, distribution and sale of securities.


Securities & Exchange Commission (SEC):

Agency created by the U.S. Congress to protect investors in securities transactions by administering various securities acts.


Securities/Investment Dealer:

One who acts as a the agents for an other party to buy and sell securities and other investments; also an underwriter.

Seed Capital/Financing:

Equity and Loan capital provided for a new venture or existing business. The first people/firm contributing capital for a start-up business, normally other than the proprietors.


Selling Group:

Investment dealers who assist a banking group in marketing a new issue of securities in order to obtain wide distribution. These dealers do not assume financial responsibility for the underwriting of the issue as the banking group does.


Self-Regulatory Organization (SRO):

Under provincial securities laws, a securities commission may recognize an SRO if it is satisfied that doing so would be in the public interest. This allows the SRO to regulate the standards of practice and business conduct of its members and their representatives in accordance with its by-laws, rules, regulations and policies with the objective of protecting investors and the public interest.


Senior Debt:

A term used to describe debt instruments that are providing financing with primary security marked against either specific or all assets of the borrower. Have fixed terms of repayment either have fixed or floating interest rates of return.


Segmented Plan:

A financial plan designed to help clients achieve determined objectives in a single area of their financial situation, or to solve a specific problem (also referred to as a single-purpose plan).



The process of ensuring that key players are not exposed to the same risk simultaneously.


Self Administered Plan ( see also RRSP/RRIF):

A plan in which planholders have the right to choose their own investments and administrator.



Accepting financial responsibility for the results of insurable hazards rather than transferring that responsibility to an insurer by taking out an insurance contract and paying premiums to provide such protection.


Semi-Annual Coupon:

One-half of the total annual coupon amount is paid every six months on a bond with a semi-annual coupon.



Refers to interest that is calculated twice per year.


Seniors Benefit:

OAS age and pension credits are to be replaced with the Seniors Benefit Program in the year 2001. If the change take affect then payments will be tax free and indexed to inflation. With certain income limits restrictions, conditions and exceptions.


Servicing (Mortgage):

All the steps and operations a lender performs to keep a loan in good standing, such as collection of payments, payment of taxes, insurance, property inspections and the like.


Settlement Date:

The date on which a trade is cleared by delivery of securities against funds. The settlement data may be the trade date or a later date.


Settlement Points:

Regional collection points in the clearing and settlement system operated by the CPA. Settlement points forward each bank's regional balance to the bank of Canada in Ottawa at the end of each day to allow the central bank to adjust the bank's balances with the central bank.



The person establishing and transferring assets to a trust, also known as the grantor.



A legal document representing partial ownership of a corporation.



The owner of a share or shares; hence a part-owner of a corporation.


Shareholders' Equity:

See net worth.



Seeking to obtain the best bid or offer available by calling a number of dealers and/or brokers.


Short Sale

When you sell a stock you do not own at today's price, because you believe the price will go down and you will be able to buy it back later at a profit.


Short-Term Debt:

A money market security, or another form of loan with no more than two or three years before repayment is expected.


Short-Term Deposit:

A deposit of money into a bank, trust company, credit union or savings association for a period of time ranging normally from one day (normally called over night money) through 30 to 365 days.


Simple Interest:

Interest which is computed only on the principle balance.


Simplified Prospectus:

An abbreviated and simplified prospectus distributed by mutual funds to purchasers and potential purchasers of units or shares.


Sinking Fund:

Indentures on corporate issues often require that the issuer make annual payments to a sinking fund, the proceeds of which are used to retire randomly selected bonds in the issue.


Small Cap:

A small cap stock is one issued by a company with less than $500 million in market capitalization.


Securities/Investment Dealer:

One who acts as a the agents for an other party to buy and sell securities and other investments; also an underwriter.


Social Insurance:

Government-administered insurance designed to ensure social adequacy, where the recipients of the benefits generally contribute to a portion or all of the costs of a program.



Being able to meet maturing obligations.


Special Opportunity Grants:

The federal government grants are available to certain recipients of Canada student loans. Eligible categories are female doctoral students, students who have permanent disabilities, and high-need part-time students.


Speculative Risk:

Risk that has the potential for loss, the potential for gain or the potential for no change.



The difference between two rates of interest, yield or currencies.


Spot Market:

Market for immediate as opposed to future delivery. In the spot market for foreign exchange, settlement is two business days ahead.

Spot Rate:

The price prevailing in the spot market.


Spouse's Allowance:

A monthly pension payable to a spouse, widower who is aged 60 to 64 of an OAS pensioner.


Spousal RRSP

An RRSP where one spouse makes the contributions and claims the tax deductions, but where title to the plan proceeds is in the name of the other spouse.


Spousal Trust:

A trust in which the spouse is the only person to receive income or capital from the trust during the spouse's lifetime, often with restrictions on removal of capital from the trust.



1) Difference between bid and asked prices on a security.

2) Difference between yields on or prices of two securities of differing sorts or differing maturities.

3) In underwriting, difference between price realized by the issuer and price paid by the investor.


Staggered Maturities:

This is a key strategy for people who buy GICs or strip bonds for RRSPs Instead of trying to guess interest rates, evenly divide your money over a range of terms so part comes due each year. That way you're averaging ups and downs.


Stock Exchange:

A market for trading of equities, a public market for the buying and selling of public stocks. The four major exchanges are the Toronto, Montreal, Alberta and Vancouver Stock Exchanges.


Stock Index Options:

In major markets, the option on an index is a driving force in the momentum of the cash market. The most widely followed in North America is the option the S&P 500 index and moves in the market for this option typically are a leading indicator for the direction of prices in the cash market for stocks in that index.


Stock Linked GICs:

A type of debt security sold to individuals by banks and trust companies. The principal investment is guaranteed by CDIC. Any return is NOT. The return on the investment is subject to how well the stock market performs and if linked to an index (E.g., TSE-500) how it performs.


Stock Picking:

Investors analyze individual stocks and select the most promising ones in this active, investments strategy.


Stock Options:

Rights to purchase a corporation's stock at a specified price.


Stock-Option Plan:

This type of plan allows an employee to buy a set number of shares of a company's stock at a future date at a set price.


Stop-Loss Order:

This is when you tell your broker to sell the stock if it drops to a certain price.



The capital portion of a bond from which the coupons have been stripped stripped(removed)(removed). The holder of a strip bond is entitled to its par value at maturity., But not the annual interest payments.

Subordinated Debt: Where one lender has agreed in writing to rank behind another, typically a bank will insist that any shareholder loans be subordinated to any loan the bank has made.

Subordinated Debentures:

Corporations will meet their obligations to holders of more senior securities before paying their debts to holders of subordinated debentures. The latter's rights are subordinated to those of other creditors.


Succession Duties:

A direct tax levied by some provinces (Quebec, Ontario, Manitoba and Saskatchewan) on value transferred at death on those who receive the property.


Succession Duty Releases:

Permission granted by a provincial succession duty department to transfer or dispose of assets before a full accounting has been made to the department for purposes of determining duty payable.


Succession Planning:

For a business is planning for the next generation of owner/managers to succeed the current owner/manager.



The first party in a bond. The surety agrees to answer to the second party, the obligee, for the default, failure to perform or dishonesty of the third party, the principal.


Survey (Mortgage):

A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to know points, its dimensions, and the location and dimensions of any buildings.



The ability of a shareholder to transfer investments from one mutual fund to another within a "family" of funds managed by the same company. This exchange or swap may or may not be accompanied by a transaction fee which is based on the asset value of the transfer.


Sweat Equity:

Equity created by a purchaser performing work in your own business or in real estate on a property being purchased.



A combination of persons or corporations to achieve a common business purpose.


Syndicated Loan:

Loans to a company back by a group of banks in order to share the risk in a large transaction among several financial institutions. There is usually a lead bank and several participating bank of other type of financial institutions .


Systematic Risk:

Any uncertainty that affects the whole market such as political, social and economic decisions.


Systematic Withdrawal Plan:

Plans offered by financial institutions allowing the investor to receive payments from their investment at regular intervals.

This Glossary of financial terms was created by Fiscal Agents Financial Information Services, Research Department. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, mechanical, electronic, photocopying, recording, or otherwise, without the prior written permission of Fiscal Agents. Copyright Fiscal Agents © 2000. All Worldwide Rights Reserved. See Notes and Credits or see permissions page.

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