customer, issuer, guarantor, entity
Customer, issuer, guarantor and entity schemas share a lot of common type attributes so they are grouped together here. Also, due to the complexity of this property, the variety of reporting granularity and the larger issue of data quality at firms, the fields are not all mutually exclusive and should be thought of more as a tree rather than unique items:
├── individual │ ├── partnership │ └── natural_person ├── corporate │ └── sme ├── financial │ ├── credit_institution │ │ └── promotional_lender │ ├── investment_firm │ ├── sspe │ ├── ciu │ ├── ceis │ ├── pic │ ├── insurer │ ├── financial_holding │ └── other_financial ├── ccp ├── central_bank ├── mdb ├── credit_union ├── deposit_broker ├── pse │ ├── local_authority │ ├── regional_govt │ ├── central_govt │ └── other_pse ├── sovereign ├── intl_org └── other
Individual is a UK specific definition which is slightly broader than a natural person and defined in the FCA Handbook Glossary under individual:
(a) a natural person; or
(b) a partnership consisting of two or three persons not all of whom are bodies corporate; or
(c) an unincorporated body of persons which does not consist entirely of bodies corporate and is not a partnership.
Natural person refers to a human being, as you would expect. It is further defined in the Data Protection Directive:
Article 2(a): (a) ... an identifiable person is one who can be identified, directly or indirectly, in particular by reference to an identification number or to one or more factors specific to his physical, physiological, mental, economic, cultural or social identity
As defined in the FCA Handbook:
(in accordance with section 417(1) of the Act (Definitions)) any partnership, including a partnership constituted under the law of a country or territory outside the United Kingdom, but not including a limited liability partnership.
The definition of an SME is based on a set of criteria, while in theory it is possible for this to be a dynamic field based on other relevant data provided (employee count, turnover etc.), often times the data is unavailable or not current and hence firm may wish to identify SMEs directly. In this scenario, an SME type will be assumed to comply with the EU SME Recommendation, further explained in What is an SME? broadly as:
|Company category||Staff headcount||Turnover (or)||Balance sheet total|
|Medium-sized||< 250||≤ € 50 m||≤ € 43 m|
|Small||< 50||≤ € 10 m||≤ € 10 m|
|Micro||< 10||≤ € 2 m||≤ € 2 m|
Other means it is known to not be one of the other types. If type is unknown it should just be left blank.
"CCP" means a legal person that interposes itself between the counterparties to the contracts traded on one or more financial markets, becoming the buyer to every seller and the seller to every buyer
From the US FDIC Regulatory Capital Rules:
Central counterparty (CCP) means a counterparty (for example, a clearing house) that facilitates trades between counterparties in one or more financial markets by either guaranteeing trades or novating contracts.
Article 411 of the CRR:
financial customer means a customer that performs one or more of the activities listed in Annex I to Directive 2013/36/EU as its main business, or is one of the following: (a) a credit institution;
(b) an investment firm;
(c) an SSPE;
(d) a CIU;
(e) a non-open ended investment scheme;
(f) an insurance undertaking;
(g) a financial holding company or mixed-financial holding company.
'financial sector entity' means any of the following: (a) an institution;
(b) a financial institution;
(c) an ancillary services undertaking included in the consolidated financial situation of an institution;
(d) an insurance undertaking;
(e) a third-country insurance undertaking;
(f) a reinsurance undertaking;
(g) a third-country reinsurance undertaking;
(h) an insurance holding company;
(i) a mixed-activity holding company
(j) a mixed-activity insurance holding company as defined in point (g) of Article 212(1) of Directive 2009/138/EC;
(k) an undertaking excluded from the scope of Directive 2009/138/EC in accordance with Article 4 of that Directive;
(l) a third-country undertaking with a main business comparable to any of the entities referred to in points (a) to (k);
Multilateral Development Banks are defined in the CRR Article 117 as:
The Inter-American Investment Corporation, the Black Sea Trade and Development Bank, the Central American Bank for Economic Integration and the CAF-Development Bank of Latin America shall be considered multilateral development banks. ... (a) the International Bank for Reconstruction and Development;
(b) the International Finance Corporation;
(c) the Inter-American Development Bank;
(d) the Asian Development Bank;
(e) the African Development Bank;
(f) the Council of Europe Development Bank;
(g) the Nordic Investment Bank;
(h) the Caribbean Development Bank;
(i) the European Bank for Reconstruction and Development;
(j) the European Investment Bank;
(k) the European Investment Fund;
(l) the Multilateral Investment Guarantee Agency;
(m) the International Finance Facility for Immunisation;
(n) the Islamic Development Bank.
International Organisations are defined in CRR Article 118:
(a) the Union;
(b) the International Monetary Fund;
(c) the Bank for International Settlements;
(d) the European Financial Stability Facility;
(e) the European Stability Mechanism;
(f) an international financial institution established by two or more Member States, which has the purpose to mobilise funding and provide financial assistance to the benefit of its members that are experiencing or threatened by severe financing problems.
An organisation with government approval to conduct business (or other activities).
As defined in the FCA handbook, a sovereign is:
(a) the EU; or
(b) a Member State including a government department, an agency, or a special purpose vehicle of the Member State; or
(c) in the case of a federal Member State, a member of the federation; or
(d) a special purpose vehicle for several Member States; or
(e) an international financial institution established by two or more Member States which has the purpose of mobilising funding and provide financial assistance to the benefit of its members that are experiencing or threatened by severe financing problems; or
(f) the European Investment Bank.
A central bank is often a nationalised institution in charge of the production and distribution of money and credit in the system it resides over. It is usually responsible for monetary policy and the regulation of member banks.
A regional government is a government entity that only has control on a specific geographic area.
A central government is the government of a nation-state. While some countries may have regional governments that operate autonomously, the central goverment is the governing system that is concerned with issues that affect the entire nation.
A public sector entity is defined in the FCA handbook as any of the following:
(a) non-commercial administrative bodies responsible to central governments, regional governments or local authorities; or
(b) authorities that exercise the same responsibilities as regional and local authorities; or
(c) non commercial undertakings owned by central governments that have explicit guarantee arrangements; or
(d) self administered bodies governed by law that are under public supervision.
Credit institution is defined in Article 4 of CRR:
(1) 'credit institution' means an undertaking the business of which is to take deposits or other repayable funds from the public and to grant credits for its own account
A promotional lender is defined by the EU here Article 10.1(e):
(ii) any credit institution whose purpose is to advance the public policy objectives of the Union or of the central or regional government or local authority in a Member State predominantly through the provision of promotional loans on a non-competitive, not for profit basis, provided that at least 90 % of the loans that it grants are directly or indirectly guaranteed by the central or regional government or local authority and that any exposure to that regional government or local authority, as applicable, is treated as an exposure to the central government of the Member State in accordance with Article 115(2) of Regulation (EU) No 575/2013;
Investment firm is defined in the FCA Handbook as:
(1) any person whose regular occupation or business is the provision of one or more investment services to third parties and/or the performance of one or more investment activities on a professional basis. [Note: article 4(1)(1) of MiFID]
(2) (in REC) a MiFID investment firm, or a person who would be a MiFID investment firm if it had its head office in the EEA.
(3) (in IFPRU and BIPRU 12) has the meaning in article 4(1)(2) of the EU CRR.
(4) (in GENPRU (except GENPRU 3) and BIPRU (except BIPRU 12) any of the following: (a) a firm in (3); and (b) a BIPRU firm.
(5) (in SYSC 19A(IFPRU Remuneration Code)) a firm in (3).
(6) (in SYSC 19D (Dual-regulated firms Remuneration Code)) a firm in (3) that is a UK designated investment firm.
Local firm is defined by the EU here Article 4(1)(4):
'local firm' means a firm dealing for its own account on markets in financial futures or options or other derivatives and on cash markets for the sole purpose of hedging positions on derivatives markets, or dealing for the accounts of other members of those markets and being guaranteed by clearing members of the same markets, where responsibility for ensuring the performance of contracts entered into by such a firm is assumed by clearing members of the same markets
A securitisation special purpose entity is defined in the FCA Handbook as:
(1) (in accordance with Article 4(44) of the Banking Consolidation Directive (Definitions) and for the purposes of BIPRU) a corporation, trust or other entity, other than a credit institution, organised for carrying on a securitisation or securitisations (within the meaning of paragraph (2) of the definition of securitisation), the activities of which are limited to those appropriate to accomplishing that objective, the structure of which is intended to isolate the obligations of the SSPE from those of the originator, and the holders of the beneficial interests in which have the right to pledge or exchange those interests without restriction.
(2) (in MIPRU) a corporation, trust or other entity that has the following characteristics: (a) it is organised for carrying on a securitisation or securitisations (within the meaning of paragraph (2) of the definition of securitisation); (b) its activities are limited to those appropriate to accomplishing such securitisation or securitisations; and (c) its structure is intended to isolate its obligations from those of the originator.
A collective investment undertaking is defined by the EU here Article 4(1)(7):
'collective investment undertaking' or 'CIU' means a UCITS as defined in Article 1(2) of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (21), including, unless otherwise provided, third-country entities which carry out similar activities, which are subject to supervision pursuant to Union law or to the law of a third country which applies supervisory and regulatory requirements at least equivalent to those applied in the Union, an AIF as defined in Article 4(1)(a) of Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers (22), or a non-EU AIF as defined in Article 4(1)(aa) of that Directive;
The FCA Handbook defines an insurer as:
a firm with permission to effect or carry out contracts of insurance (other than a UK ISPV ). Where insurance consists of: (1) (in relation to a specified investment) the investment, specified in article 75 of the Regulated Activities Order (Contracts of insurance), which is rights under a contract of insurance in (2).
(2) (in relation to a contract) (in accordance with article 3(1) of the Regulated Activities Order (Interpretation)) any contract of insurance which is a long-term insurance contract or a general insurance contract, including:
(a) fidelity bonds, performance bonds, administration bonds, bail bonds, customs bonds or similar contracts of guarantee, where these are:
(i) effected or carried out by a person not carrying on a banking business;
(ii) not effected merely incidentally to some other business carried on by the person effecting them; and
(iii) effected in return for the payment of one or more premiums;
(c) capital redemption contracts or pension fund management contracts, where these are effected or carried out by a person who:
(i) does not carry on a banking business; and
(ii) otherwise carries on the regulated activity of effecting or carrying out contracts of insurance;
(d) contracts to pay annuities on human life;
(e) contracts of a kind referred to in article 2(2)(e) of the Consolidated Life Directive (Collective insurance etc); and
(f) contracts of a kind referred to in article 2(3) of the Consolidated Life Directive (Social insurance);
but not including a funeral plan contract (or a contract which would be a funeral plan contract but for the exclusion in article 60 of the Regulated Activities Order (Plans covered by insurance or trust arrangements)); in this definition, "annuities on human life" does not include superannuation allowances and annuities payable out of any fund applicable solely to the relief and maintenance of persons engaged, or who have been engaged, in any particular profession, trade or employment, or of the dependants of such persons.
A financial holding copmany is defined by the EU here Article 4(1)(20):
(20) 'financial holding company' means a financial institution, the subsidiaries of which are exclusively or mainly institutions or financial institutions, at least one of such subsidiaries being an institution, and which is not a mixed financial holding company;
Any other type to be classified as financial but not one of the other types witin financial.
A financial holding copmany is defined by the EU here Article 3:
'personal investment company' (‘PIC’) means an undertaking or a trust whose owner or beneficial owner, respectively, is a natural person or a group of closely related natural persons, which was set up with the sole purpose of managing the wealth of the owners and which does not carry out any other commercial, industrial or professional activity. The purpose of the PIC may include other ancillary activities such as segregating the owners' assets from corporate assets, facilitating the transmission of assets within a family or preventing a split of the assets after the death of a member of the family, provided these are connected to the main purpose of managing the owners' wealth;
A credit union is defined by the FCA as:
A credit union is a financial co-operative owned by its members. The services that credit unions can offer include: deposit-taking
lending These services are regulated activities.
A deposit broker can be an individual or a firm that facilitates the placement of deposits with insured depository institutions. Deposit brokers offer investors an assortment of fixed-term investment products, which earn low-risk returns.
From CRR definitions (80):
Trade finance means financing, including guarantees, connected to the exchange of goods and services through financial products of fixed short-term maturity, generally of less than one year, without automatic rollover;
From the EBA's report on the NSFR, section 6.2.1 outlines what trade credit insurance is:
A seller providing trade credit is exposed to the credit risk of the buyer. Trade credit insurance provides the seller with protection against the risk of non-payment by the buyer. The nonpayment may be due to the insolvency of the buyer or, in an international trade, due to political risks that prevent payment.
From the EBA's report on the NSFR, section 6.2.2, a letter of credit is:
When goods are traded, the seller and the buyer need to agree on the process of how to pay for the goods. While the buyer may be reluctant to prepay for the traded goods, the seller may also be unwilling to ship the goods before payment is made. In this situation, a bank can intermediate between the trading partners by providing an import letter of credit (L/C) to the buyer of the goods, which guarantees payment to the seller. A L/C is a contingent liability and payment is only made by the bank to the seller from funds in the buyer’s account when the documentation of shipping is presented.
From EU Supervisory Reporting part 2(9):
'Financial guarantees' are contracts that require the issuer to make specified payments to reimburse the holder of a loss it incurs, because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. Under IFRS or compatible National GAAP, these contracts meet the IAS 39.9 and IFRS 4.A definition of financial guarantee contracts. The following items of Annex I of the CRR shall be classified as 'financial guarantees': (a) Guarantees having the character of credit substitute. (b) Credit derivatives that meet the definition of financial guarantee. (c) Irrevocable standby letters of credit having the character of credit substitutes.
As defined in Supervisory Reporting part 2(5)(41)(l):
'Project finance loans' include loans that are recovered solely from the income of the projects financed by them.
As outlined in LCR Article 13(2)(g)(iv):
loans or leases for the financing of motor vehicles or trailers (see Article 3 of Directive 2007/46/EC). agricultural or forestry tractors (see Directive 2003/37/EC) tracked vehicles (see Directive 2007/46/EC) Such loans or leases may include ancillary insurance and service products or additional vehicle parts, and in the case of leases, the residual value of leased vehicles.
As outlined in LCR Article 13(2)(g)(v):
loans and credit facilities to individuals resident in a Member State for personal, family or household consumption purposes.
As outlined in LCR Article 13(2)(g)(iii):
commercial loans, leases and credit facilities to undertakings established in a Member State to finance capital expenditures or business operations other than the acquisition or development of commercial real estate
This includes commercial loans or mortgages that do not fall under commercial due to their real estate connection and do not classify as mortgage either due to the customer not being an individual or the occupation of the property not being residential.
A liquidity_facility means the securitisation position arising from a contractual agreement to provide funding to ensure timeliness of cash flows to investors, as outlined in Article 242(3) in CRR.
Margin is defined in LCR Article 3(12):
margin loans means collateralised loans extended to customers for the purpose of taking leveraged trading positions.
A mortgage is a residential loan to a individuals secured with a one-to-one correspondence to land or property.
As outlined in LCR Article 13(2)(g)(i)
loans secured with a first-ranking mortgage granted to individuals for the acquisition of their main residence
A credit_card is credit facility typically secured by a deposit account or equity in the borrower's property.
From Annex I of the CRR, credit facilities are:
agreements to lend, purchase securities, provide guarantees or acceptance facilities
Nostro loans are the firm's accounts at other financial institutions which are in effect loans to other firms. Nostros are used in the context of correspondent banking operations which are described by the ECB:
Correspondent banking: an arrangement under which one credit institution provides payment and other services to another credit institution. Payments through correspondents are often executed through reciprocal accounts (nostro and loro accounts) to which standing credit lines may be attached. Correspondent banking services are primarily provided across international boundaries but are also known as agency relationships in some domestic contexts. A loro (vostro) account is the term used by a correspondent to describe an account held on behalf of a foreign credit institution; the foreign credit institution would in turn regard this account as its nostro account.
Other refers to a type of security not covered by the above. If you find yourself using this often, please contribute.
├── equity │ ├── share │ │ └── pref_share │ └── share_agg ├── debt │ ├── bond │ ├── covered_bond │ ├── convertible_bond │ ├── frn │ ├── commercial_paper │ ├── cd │ ├── struct_note │ ├── spv_mortgages │ ├── spv_other │ ├── mtn │ │ └── emtn │ └── abs │ ├── abs_auto │ ├── abs_sme │ ├── abs_consumer │ ├── abs_other │ └── mbs │ ├── rmbs │ ├── rmbs_trans │ └── cmbs ├── cb_reserve ├── cb_facility ├── cash_ratio_deposit ├── cash └── other
A cash or cash-equivalent security such as a securitisation of cash deposits. Within Finrep Annex V part (2)(1)(1.1)(1):
"Cash on hand" includes holdings of national and foreign banknotes and coins in circulation that are commonly used to make payments.
This is a "catch all" term for equity instruments such as share, share_agg to be used when further granularity is not available or not needed.
Denotes if the security is a share (stock) or represents an aggregate for a portfolio or package of shares.
The FCA defines a preference share as:
A share conferring preference as to income or return of capital which does not form part of the equity share capital of a company
This is a "catch all" term for debt of any kind, bond, bond_amortising, index_linked_gilt, covered_bond, abs, residential_mbs, non_residential_mbs, frn, govt_gteed_frn, to be used when further granularity is not available or not needed.
A bond is a type of loan whereby an investor lends money to an entity for a defined period of time at a fixed or floating interest rate.
From the LCR Introduction (8):
Covered bonds are debt instruments issued by credit institutions and secured by a cover pool of assets which typically consist of mortgage loans or public sector debt to which investors have a preferential claim in the event of default. Their secured nature and certain additional safety features, such as the requirement on the issuer to replace non-performing assets in the cover pool and maintain the cover pool at a value exceeding the par value of the bonds (‘asset coverage requirement’), have contributed to make covered bonds relatively low-risk, yield-bearing instruments with a key funding role in mortgage markets of most Member States. In certain Member States outstanding covered bond issuance exceeds the pool of outstanding government bonds. Certain covered bonds of credit quality step 1, in particular, exhibited an excellent liquidity performance during the period from 1 January 2008 to 30 June 2012 analysed by the EBA in its report. Nevertheless the EBA recommended treating these covered bonds as level 2A assets to align with BCBS standards. However, in the light of the considerations made above about their credit quality, liquidity performance and role in the funding markets of the Union, it is appropriate for these credit quality step 1 covered bonds to be treated as level 1 assets. In order to avoid excessive concentration risks and unlike other level 1 assets, the holdings of credit quality step 1 covered bonds in the liquidity buffer should be subject to a 70 % cap of the overall buffer, a minimum 7 % haircut and to the diversification requirement.
Generally, a convertible_bond is a security which gives the investor the right to convert the security into shares at an agreed price on an agreed basis.
bonds, which may, at the option of the holder, be converted into the equity of the issuer, at which point they are classified as shares;
A Euro medium-term note is a medium-term (less than 5 years), flexible debt instrument that is traded and issued outside of the US and Canada. A medium-term note is the same but is traded in the US and Canada.
Commercial paper is an unsecured promissory note with a fixed maturity of, typically, not more than 270 days.
A certificate of deposit is also a promissory note, however can only be issued by a bank. It has a fixed maturity and specified fixed interest rate.
The FCA defines structured notes as:
a type of fixed-term investment where the amount you earn depends on the performance of a specific market (such as the FTSE 100) or specific assets (such as shares in individual companies)
A special purpose vehicle is a separate legal entity created to fulfil a certain purpose for the parent.
An asset-backed security is a security whose income payments and hence value are derived from and collateralised (or "backed") by a specified pool of underlying assets. The pool of assets is typically a group of small and illiquid assets which are unable to be sold individually. Pooling the assets into financial instruments allows them to be sold to general investors, a process called securitisation. This allows the risk of investing in the underlying assets to be diversified because each security will represent a fraction of the total value of the diverse pool of underlying assets. The pools of underlying assets can include common payments from credit cards, auto loans, and mortgage loans, to esoteric cash flows from aircraft leases, royalty payments and movie revenues.
A residential mortgage-backed security (a subclass of an ABS).
This type value is in order to indicate whether the security is subject to transitional provisions for securitisations backed by residential loans:
LCR Article 37:
By derogation from Article 13, securitisations issued before 1 October 2015, where the underlying exposures are residential loans as referred to in point (g)(i) of Article 13(2), shall qualify as Level 2B assets if they meet all the requirements set out in Article 13 other than the loan-to-value or loan-to-income requirements set out in that point (g)(i) of Article 13(2).
By derogation from Article 13, securitisations issued after 1 October 2015, where the underlying exposures are residential loans as referred to in point (g)(i) of Article 13(2) that do not meet the average loan-to-value or the loan-to-income requirements set out in that point, shall qualify as Level 2B assets until 1 October 2025, provided that the underlying exposures include residential loans that were not subject to a national law regulating loan-to-income limits at the time they were granted and such residential loans were granted at any time prior to 1 October 2015.
A commercial mortgage-backed security (a subclass of an abs).
A floating-rate note is defined in the Money Market Statistics Regulation in Annex II as:
A debt instrument for which the periodic interest payments are calculated on the basis of the value, i.e. through fixing of an underlying reference rate such as Euribor on predefined dates known as fixing dates, and which has a maturity of not more than one year. note: "one year" is defined as transactions with a maturity date of not more than 397 days after the trade date
A government guaranteed floating-rate note.
As defined in Finrep Annex V part (2)(1)(1.1)(2)
include balances receivable on demand at central banks.
The BofE defines this as:
non-interest bearing deposits lodged with the Bank of England by eligible institutions (ie. banks and building societies), who have reported average eligible liabilities (ELs) of over £600 million over a calculation period. The level of each institution's CRD is currently calculated twice-yearly (currently in May and November) at 0.18% of average ELs, over the previous six end-calendar months, in excess of £600mn. The value bands and ratios were specified by HM Treasury in the Cash Ratio Deposits (Value Bands and Ratios) Order (2013 No 1189).
Other refers to a type of security not covered by the above. If you find yourself using this often, please contribute.
The receivables or assets underlying the securitisation must be credit claims or receivables with defined terms relating to rental payments or principal and interest payment. Any referenced interest payments should be based on commonly encountered market interest rates and may include terms for caps and floors, but should not reference complex formulae or exotic derivatives. A non-exhaustive list of examples of underlying assets that may comply with the above principles, (subject to meeting all other criteria) could include:
- residential mortgages,
- certain commercial real estate mortgages,
- loans to SMEs,
- automobile loans/leases,
- consumer finance loans,
- credit card receivables, and
- leasing receivables.
├── current ├── call ├── internet_only ├── savings ├── time_deposit ├── bonds ├── retail_bonds ├── cd ├── isa ├── money_market ├── vostro ├── prepaid_card ├── debit_card ├── credit_card └── other
A call account is defined in the Money Market Statistics Regulation in Annex II as:
A debt instrument in which the issuer has a call option, i.e. an option to redeem the instrument early, with a final repayment date of not more than one year from the date of issuance.
A deposit account purely holding certificates of deposit (see cd Security type)
From the Interchange Fees for Card-based Payments Regulation Article 2(35):
prepaid card means a category of payment instrument on which electronic money, as defined in point 2 of Article 2 of Directive 2009/110/EC, is stored. NB. see credit_card
From the Interchange Fees for Card-based Payments Regulation Article 2(33) and (4):
debit card means a category of payment instrument that enables the payer to initiate a debit card transaction excluding those with prepaid cards; debit card transaction means a card-based payment transaction, including those with prepaid cards that is not a credit card transaction;
NB. see credit_card
A credit card is typically an off-balance sheet, contingent funding obligation whereby a customer has a certian credit limit and may borrow funds at any point, up to that limit, similar to a card-based credit facility.
The Interchange Fees for Card-based Payments Regulation states that:
There are two main types of credit cards available on the market. With deferred debit cards, the total amount of transactions is debited from the cardholder account at a pre-agreed specific date, usually once a month, without interest to be paid. With other credit cards, the cardholder can use a credit facility in order to reimburse part of the amounts due at a later date than specified, together with interest or other costs.
A credit card is then defined in Article 2 (34) and (5) as:
credit card means a category of payment instrument that enables the payer to initiate a credit card transaction; credit card transaction means a card-based payment transaction where the amount of the transaction is debited in full or in part at a pre agreed specific calendar month date to the payer, in line with a prearranged credit facility, with or without interest;
current (checking, demand)
Any transactional account.
Any account containing notes, bonds or other securities instruments.
As referenced in the LCR Regulation Article 28 (6) as any account:
containing notes, bonds and other securities issued which are sold exclusively in the retail market and held in a retail account. Limitations shall be placed such that those instruments cannot be bought and held by parties other than retail customers.
An internet-only account is one that is offered and only accessible via the internet. The FCA defines the internet in their handbook as:
a unique medium for communicating financial promotions as it provides easy access to a very wide audience. At the same time, it provides very little control over who is able to access the financial promotion.
The distinction here linked to financial promotions suggests that internet-only accounts are sold and managed through a higher risk channel and therefore should be regulated spearately to other accounts.
An ISA is an individual savings account which is a scheme of investment satisfying the conditions prescribed in the UK's ISA Regulations.
A money market account is an interest-bearing account that typically pays a higher interest rate than a savings account, and which provides the account holder with limited check-writing ability.
Money market accounts are accounts where the customer's money has been invested in the "money markets" either directly in money market instruments or money market funds which are described in the 2013 Proposal for the Regulation of Money Market Funds as providing a key component of corporate banking:
On the demand side, MMFs offer a short-term cash management tool that provides a high degree of liquidity, diversification, stability of value combined with a market-based yield. MMFs are mainly used by corporations seeking to invest their excess cash for a short time frame, for example until a major expenditure, such as the payroll, is due.
Money market deposits are mentioned in association with definitions of cash in that they represent claims for the repayment of money.
Nostro and vostro (loro) accounts are used in the context of correspondent banking operations which are described in [ECB guidelines on monetary policy instruments][ecb-guidelines] from 2003:
Correspondent banking: an arrangement under which one credit institution provides payment and other services to another credit institution. Payments through correspondents are often executed through reciprocal accounts (nostro and loro accounts) to which standing credit lines may be attached. Correspondent banking services are primarily provided across international boundaries but are also known as agency relationships in some domestic contexts. A loro account is the term used by a correspondent to describe an account held on behalf of a foreign credit institution; the foreign credit institution would in turn regard this account as its nostro account.
An account subject to the European Council Directive on taxation of savings. A savings account essentially does not allow the customer to use funds in the account as a "medium of exchange" such as writing checks or for making ATM withdrawals. Hence, funds are typically not callable immediately and/or incur a withdrawal penalty such as loss of interest. In the US, Regulation D uses the characteristics of the 'reservation of right' and 'convenient' withdrawals to describe savings accounts:
In order to classify an account as a 'savings deposit,' the institution must in its account agreement with the customer reserve the right at any time to require seven days’ advance written notice of an intended withdrawal. In practice, this right is never exercised, but the institution must nevertheless reserve that right in the account agreement. In addition, for an account to be classified as a 'savings deposit,' the depositor may make no more than six 'convenient' transfers or withdrawals per month from the account.
Time deposit accounts have the following characteristics:
- must have a maturity of at least seven days from the date of deposit
- may require at least seven days’ prior written notice of intent to withdraw funds
- must be subject to early withdrawal penalties if funds are withdrawn within six days of the date of deposit or within six days of the date of the immediately preceding partial withdrawal
- may be interest-bearing
- may be evidenced by a negotiable or nonnegotiable, transferable or nontransferable certificate, instrument, passbook, book entry, or other similar instrument
- include club accounts (such as Christmas club or vacation club accounts)
- no eligibility requirements
Deposit or depository account is defined in the Directive regarding the mandatory exchange of tax information section 8:
The term “Depository Account” includes any commercial, checking, savings, time, or thrift account, or an account that is evidenced by a certificate of deposit, thrift certificate, investment certificate, certificate of indebtedness, or other similar instrument maintained by a Financial Institution in the ordinary course of a banking or similar business. A Depository Account also includes an amount held by an insurance company pursuant to a guaranteed investment contract or similar agreement to pay or credit interest thereon.
Any other account type that cannot be classified as one of the other types.
The collateral type defines the form of the collateral, such as property or other assets used to secure an obligation.
The EC Collateral Directive states:
The assets can be provided: either by transfer of full ownership from a collateral provider to a collateral taker; or by the transfer of possession from a collateral provider to a collateral taker under a security right (e.g. pledge, charge or lien), where the full ownership of the assets remains with the collateral provider.