SEAQ
The London Stock Exchange Automated Quotations system is a London Stock Exchange trading service. SEAQ is a continuously updated electronic notice board containing price quotations of UK securities. Market makers use the system to display the prices at which they are prepared to buy or sell shares.
Secondary market
Marketplace for trading in securities.
Securities
General name for stocks and shares of all types.
Self managed
An investment company whose assets are managed by its own team of managers or by the directors of the company, rather than by hiring the services of an external management company.
SETS
The London Stock Exchange Electronic Trading Service (SETS) is the London Stock Exchange trading service for UK blue chip securities. It is an automatic electronic order driven trading service that can execute hundreds of trades a second.
Share
The authorised share capital of a company is divided into a number of equal parts. Each part is called a share. See ordinary shares or securities.
Share buy-backs
A way for investment companies to return cash to their shareholders is through offering to buy back a proportion of the shares currently issued. Trusts need to seek the permission of their shareholders to do this, and will typically put a motion to their AGMs allowing them to buy back a proportion of their total shares (up to 15 per cent).
This process has the effect not only of returning cash to shareholders but also reducing any discount to Net Asset Value, by reducing the total number of shares in issue. It also reduces the total share capital of the company giving the remaining shareholder a larger percentage ownership.
Share price
The share price is the value of the share at a given moment. It is determined by the balance between demand and supply on stock markets' price of a share. There are different share prices quoted in the market. Bid/Sell is the price offered in the market to buy shares from an investor, also referred to as the selling price. Offer/Buy is the price offered in the market at which shares are offered to investors also referred to as the buying price. The mid-market price is calculated as the mid point between the bid and offer prices and is used to calculate the price related data.
Some investment companies securities trade on SETs. SETs trading service operates for the securities comprising the FTSE 100 index and the most liquid FTSE 250 securities. Securities which trade on SETs only have one official closing price; this price is used to calculate the price related data in the AIC Stats. See dealing spread.
Share price capital return performance
For AIC statistics purposes, the theoretical capital return to the investor, including the original £100 invested at the beginning of the period specified, on a mid-market to mid-market basis, reflecting the change in share price over the period. A simple measure of price at the end of the period compared with price at the beginning of the period. Transaction costs are not taken into account. See share price.
Share price total return performance
For AIC statistics purposes, the theoretical total return to the investor, including the original £100 invested at the beginning of the period specified, on a mid-market to mid-market basis, assuming that all dividends received were reinvested in the shares of the company at the time the shares were quoted ex-dividend. Transaction costs are not taken into account. See share price and total return performance.
Split capital investment companies
Split capital investment companies (splits) are companies with a portfolio of investments just like conventional trusts, but which issue two or more different types of share class. These share classes have specific rights and entitlements to participate in the income and/or capital returns of the portfolio. At least one component share of a split is likely to have a limited life with a fixed wind-up date.
Stamp duty
A tax payable on the purchase of shares, property and businesses. All shares purchases incur 0.5% stamp duty. All other assets are charged at different rates, dependant on their value.
Stock exchange indices
Stock exchange indices are calculations made on an index number basis to indicate the movements in the general level of prices of securities listed on stock exchanges. There are many different indices which are designed to meet different investor needs. Some are based on a selection of shares listed others on the whole market.
Stock swap
Two transactions involving the sale of securities by the seller the consideration for which is satisfied by purchase from the buyer of other securities
Structural gearing
Split capital investment companies may be financially geared but they will also be geared as a result of their capital structure. Splits provide gearing to their share classes through their capital structure called structural gearing. This type of gearing is due to the predetermined entitlement and order of priority of the shares within the structure. The returns to each class of share are governed by the effect of the entitlements of the other share classes. The number of share classes and the proportionate entitlement of each determine the level of gearing involved. For more information see the Guide to investment companies.
Subscription shares
In the context of investment companies, a form of traded option which gives the holder the right, but not the obligation to subscribe for shares in the company at some time in the future at a fixed price. Subscription shares have the same characteristics as warrants but are qualifying investments for the stocks and shares component of an ISA.
