Glossary of terms

Authorized Person – any officer, employee or another person authorized by a Client who is entitled by the contract, power-of-attorney or otherwise in writing to act on behalf of the client including commitments under the brokerage agreement. 

Bloomberg – source of static data.

Broker – professional participant of the securities market which executes trades with issue securities and other financial instruments on the instruction of, at the expense and in the interest of a client.

Buffer order – an order to buy/sell a financial instrument at a future price.

Bear market (Downward trend market) –any market where prices have a downward trend.

Bull market (Upward trend market) – any market where prices have an upward trend.

Central Securities Depository (JSC “Central Securities Depository”) – a dedicated non-profit organization which main function is to perform depository operations.

Client account –array of records in the register system of the securities holders or nominal holding system which allows to unambiguously identify registered entity with a view to register trades and record rights for the securities and other financial instruments;

Convertible security – security of a joint-stock company which can be exchanged into its security of other type under the terms and in the procedure set by the prospectus.

Conversion – changing of one thing into another that is equivalent (for example conversion of common shares into GDR, ADR).

Circulation period – a period in which one can exercise trades with bonds and when interest fixed by the terms of the issue is accrued.

Coupon – interest fixed by term of the bond issue which is periodically paid out to the bond holders in the period while bonds are circulated.

Custody Account Trading Access – an access which authorizes to buy or sell financial instruments from the client custodian account on the trade floor of JSC “Kazakhstan Stock Exchange”. Such sale and purchase trades in securities are settled only upon custodian confirmation.

Custodian – professional participant of the securities market which records financial instruments and cash of clients and confirms rights for them, stores documentary financial instruments of clients undertaking obligations for their safety and performs other functions under the legal acts of the government.

Delisting –case when securities are temporarily or permanently excluded from the official list of the trade organizer (JSC “Kazakhstan Stock Exchange”).

Depository receipt – aderivative which certifies the ownership right for a specific number of securities which are the underlying asset of the given depository receipt.

Dealer – professional participant of the securities marketwhich trades in securities and other financial instruments in its interests and at its own expense on the non-organized and organized securities markets with the direct access right.

Delivery versus payment (DVP) – trade with securities is settled when securities are delivered versus payment.

Eurobonds – bonds issued in a currency which is the foreign currency for an issuer (usually) placed with the assistance of international syndicate of underwriters among foreign investors for whom the given currency is usually foreign.

Free of Payment (FOP) – trade with securities is settledwhen securities are delivered without payment.

IPO/Initial Public Offering – initial public offering consists in selling the shares of a company to the market for the first time, i.e. to a very large pool of investors.

Hedge fund – a fund that may use a variety of techniques to enhance returns such as buying and sorting stocks based on a valuation model.

Listing – the process of including securities in a particular category of the securities list of JSC Kazakhstan Stock Exchange”. By-laws of the stock-exchange set the special listing requirements applied to the securities and issuers to list the securities.

Limit order – an order to buy/sell a financial instrument at an agreed price.

Margin – this allows to buy securities by borrowing money from a broker within the scope of marginal trade. Margin is the difference between market price of a security and loan provided by the broker.

Market liquidity – а market is liquid when it has a high level of trading activity, where one can buy and sell with the minimum price deviation.

Market order – an order to buy/sell a financial instrument at a market price.

Marginal trade – sale and purchase trade in securitiesexercised by the broker under the client order which is settled by the broker using cash or securities provided by the broker to the client subject to its return and payment.

Nominal Holding Account – Account is a set of records contained in the nominal holding recordkeeping system which allow to definitely identify a registered entity to record transactions and rights in securities and other financial instruments.

NIN - National Identification Number, number and letter code given by the regulatory body to the securities in order to identify them and systemize the record-keeping.

Non-organized market – the universe where securities circulate and trades with securities are executed without meeting the requirements set by the by-laws of the trade organizer (JSC “Kazakhstan Stock Exchange”).

Primary securities market – placing of the declared securities by the issuer (underwriter or issuing consortium) except for the further placing of the securities bough-back before by the issuer on the secondary securities market.

Receive Versus Payment (RVP) – trade with securities is settled when securities are received versus payment.

Option – contract under which one party (option seller) undertakes to sell or buy and second party (option buyer) acquires the right to buy or sell the portion of property (of underlying asset)to the extent and at the price stipulated in the contract. If the trader organizer standardizes the terms of the contract it can be used as a derivative.

Registrar – professional participant of the securities market which forms, stores and maintains register system of the securities holder.

Repo – array of two simultaneously concluded trades which are different in settlement terms and opposite to each other with the homogeneous securities (target of REPO) whereby the parties are two same entities (REPO participants);

• REPO opening is sale-and-purchase of the homogeneous securities which contemplates the funds in the amount of the trade to be transferred from one counterparty of REPO trade to another and specific number of securities to be transferred from the second counterparty of REPO trade to the first;
• REPO closing is sale-and-purchase of the same homogeneous securities as in case of the REPO opening which contemplates the funds in the amount of the trade to be transferred from the second counterparty to the first and the return of the same number of securities as in case of the REPO opening by the first counterparty of REPO to the second.

Secondary market –legal relations between the entities of the securities market in the course of placed securities circulation.

Stamp duty – money charged by the government as a pledge upon documents, which shall be drafted while making the specific transactions (registration of company, equity capital increase, transfer of securities, execution of trust.) The value of the stamp duty is set by the state and is relatively stable.

Settlement date – the date on which payment is made to settle a trade.

Stock – a security issued by the joint stock company which certifies the rights to take part in managing of joint stock company, get dividends and piece of property of the joint-stock company upon its liquidation and other rights provided for by the law of the Republic of Kazakhstan.

Spread – the difference between the bid and ask prices of a security.

SWIFT message – a type of payment order with numerous categories of settlement instructions used as a message for different purposes (in a special format).

Stock-exchange (JSC “Kazakhstan Stock Exchange) – a legal entity established as a joint-stock company which organizes and provides technical facilities for trades and holds trades using the trade systems of the trade organizer.

T+0 – settlement cycle which implies same day Trade Date and Settlement Date.

T+3 – settlement cycle which implies three-day settlement date from Trade Date.