| M0 |
The narrow
measure of money supply in the United Kingdom, also known as high powered
money. Defined as notes and coins in circulation plus banks’ operational
deposits with the Bank
of England. |
| M2 |
The measure of
money supply which takes into account all money which can be used to settle
transactions. It is defined as notes and coins in circulation plus non-interest
bearing bank deposits plus other retail deposits with banks and
building
societies. |
| M4 |
The widest
measure of money, defined as M2 plus wholesale deposits with banks and
building
societies, including
certificates of
deposit. |
| MATIF |
Marchi ` Terme
Internationale de France - the Paris
futures
market. |
| MEFF |
Spanish
derivatives
exchange; a recognised
overseas investment exchange. |
| MIRAS |
See
Mortgage Interest Relief
At Source. |
| MIT |
See
Market-if-Touched. |
| MMC |
See
Monopolies and Mergers
Commission. |
| MONEP |
The Paris
options
market. |
| MPL |
See
Maximum Publication
Level. |
| MPS |
See
Market Place
Service. |
| MQP |
See
Mandatory Quote
Period. |
| MQS |
See
Minimum Quote
Size. |
| Maintenance
Margin |
An alternative
method of margining often used in the United States.
When a position is
opened, initial margin is called in the usual way and is credited to a
maintenance margin account. However,
variation margin
debits and credits are not payable/paid daily but are debited and credited
directly against the maintenance margin account. When the balance in the
account falls below a predetermined level (normally around two thirds of the
initial margin payment), the customer must fund the account back up to the
initial margin level. Such a system is also sometimes operated by
brokers in the
UK for their customers. |
| Managing |
The activity of
determining the way in which money should be invested; an authorisable activity
under the Financial
Services Act. |
| Mandatory
Offer |
Under the
Blue Book, when
an investor either obtains control or consolidates control in a company which
is covered by the Blue Book, he must make a
mandatory
offer to buy out all the other shareholders. See also
Control and
Consolidation of
Control. |
| Mandatory
Quote Period |
The period
during the day when a market maker must make
firm (i.e.
guaranteed), two-way (i.e. buy and sell) prices in stocks in which they are
registered. It varies from market to market. For domestic
SEAQ, it runs
from 9.00 a.m. to 4.30 p.m. |
Margin
back to top |
A payment made
by buyers and sellers of exchange traded
futures
contracts and
writers of
exchange traded options to demonstrate their ability to cover their potential
losses on their position. The payment is made to the relevant clearing
house.See also
Initial
Margin, Variation
Margin, Maintenance Margin and
Intraday
Margin. |
| Market
Counterparty |
A professional
investment
business whose status requires only a low degree of protection under
the SFA rules. The
status may be determined using either the transactions based test or the
one-off test. |
| Market
Maker |
A member of the
Stock Exchange who has registered as such. There may be
gilt edged
market makers (GEMMS) who are obliged to quote firm two-way prices (i.e.
guaranteed prices at which they will buy and sell) for all gilts. Alternatively
they may be equity
or fixed interest market makers who are only obliged to make firm two-way
prices in stocks in which they are registered. |
| Market
Order |
An order which
is to be immediately executed at the best available price. |
| Market Place
Service (MPS) |
A dealing
service offered by OMLX which allows less active members to
place orders by contacting market officials on the telephone, as opposed to
using the computerised trading system,
Click. |
| Market-if-Touched
(MIT) |
An order which
becomes a market
order if a specified price is achieved. A buy MIT order is placed below
the current market price; a sell MIT is placed above the current market price.
Once the market hits the specified price, the order is then traded at the
prevailing market price. An MIT order is generally used to open a position as
opposed to closing one. It is in their relationship to the underlying price
that MIT orders differ from
stop
orders. |
| Marketing
Operation |
An issue of
shares to raise cash. For example,
Offer for
Subscription, Offer for Sale,
Intermediaries
Offer, Placing or
Rights Issue.
Note that an Introduction is not a marketing operation
as it does not involve the issue of shares. |
| Marking to
Market |
The process of
valuing open
positions each evening at closing prices in order to determine that day’s
unrealised profit or loss. This process is carried out each evening by
LCH in order
to determine variation
margin payments to be made the next business day. |
Married
Couple’s Allowance
back to top |
This is
calculated as 15% W #1,900 i.e. #285 in the fiscal year 1998/99. A married
couple is permitted to reduce their income tax liability by #285 in the year.
Note that the allowance is for the couple, not for each individual. It may all
be claimed by the man, all by the woman or shared equally between them. If no
election is made, it is automatically claimed by the man. If both parties
elect, it may all be claimed by the woman. If only one party makes an election,
it will be shared equally. |
| Match |
A matched trade
is one in which the details recorded by buyer and seller are equal and
opposite. Contrast with an
Out Trade
where there is a disagreement of some sort on the details of the
trade. |
| Matched
bargain |
See
Order Driven
System. |
| Matched
transaction |
Where two
CREST
members, the counterparties to a trade, have both entered identical or
corresponding information. See
Unmatched
Transaction. |
| Matching |
See
Crossing and
Accruals. |
| Matching
rules |
See
Share Identification
Rules. |
| Material
Interest |
A situation in
which concerns over a firm’s own position may cause conflict with the best
interest of a customer. This conflict may be managed in a variety of ways
including an independence policy. Regardless, the
interests of the customer must be placed above those of the firm.Alternatively, a beneficial holding of 3% or more of the
shares of a public company. When an investor obtains such a holding, he is
obliged to tell the company within two business days. He is also obliged to
disclose within two business days when the holding moves to the next full
percentage point, i.e. 4%, 5%, 6% etc. |
| Maturity |
The final date
on which the capital value of a
bond is
redeemed. |
| Maximum
Publication Level |
Defined as 6 W
the normal market
size (NMS). Where a trade of this size is completed, it must be
reported into SEAQ under the usual deadlines. However,
whereas most trades are then displayed on the screen to give information to
investors, display of trades in excess of the maximum publication level are
usually delayed for 60 minutes. This gives the
market maker
who has carried out the trade the opportunity to cover his position in the
stock. See also Block
Trades and Less
Liquid or
Illiquid SEAQ Securities. |
| Memorandum
of Association |
A
constitutional document of a company, detailing its name, its registered
office, the fact that it has
limited
liability, its trading objects and other relevant facts. See also
Articles of
Association, the other main constitutional document of a
company. |
| Mid-Price |
A page of SETS
or SEAQ which
gives the current mid-price of stocks. Where the colour of the price is blue,
this indicates that the most recent price movement has been upwards. Where the
colour of the price is red, this indicates that the most recent movement was
downwards. |
| Minimum
Quote Size |
The smallest
quantity at which a normal market maker is allowed to quote at for a
SEAQ security. It
is defined as 1 W the normal market size (NMS) of the stock. For
example, if a stock has a NMS of 25,000, a
market maker
registered in the stock must be prepared to deal in at least 25,000
shares. |
Minority
Interests
back to top |
Minority
interests arise when a company has a
subsidiary
company in which it does not own all of the shares. The shareholders apart from
the holding company are referred to as the minority interests. For example,
where a holding company owns 80% of the shares in a subsidiary company, the
remaining 20% of shareholders are the minority interests. |
| Misleading
Statements & Practices |
Section 47 of the
Financial Services
Act 1986 makes it a criminal offence to try and mislead the market or
investors. |
| Model
Code |
Part of the
Yellow Book. A
series of rules regulating when directors and relevant employees of listed and
AIM companies
are permitted to deal in the shares and related
derivatives of
the company of which they are employees. The purpose of the rules is to ensure
that the public perceive that such directors and employees do not abuse their
position in the company. The rules generally state that directors and relevant
employees may not deal in the shares before a price sensitive announcement or
in the ‘close
period’, which usually constitutes the two months prior to the
release of interim and final results. |
| Modified
Duration |
A measure
closely linked to duration. Can be used to predict a change
in price for a bond given a change in interest rates.
Defined as duration divided by (1 + the
gross redemption
yield of the bond). |
| Money
Laundering |
The process by
which the sources of illegally obtained money is disguised. The process is
comprised of three phases; placing, layering and integration. The
Criminal Justice Act 1993 identifies three offences which carry individual
liability; assisting, tipping off and failure to report a
suspicion. |
Money
Markets
back to top |
The wholesale
market for short term (usually less than one year maturity) money. Money can be
put on deposit in the money markets for various
maturities up to
one year. Alternatively, short term
instruments
such as Treasury
bills, Commercial bills and
Certificates of
deposit may be invested in. |
| Monopolies
and Mergers Commission |
The statutory
body in the United Kingdom which is responsible for investigating mergers and
takeovers in the UK to ensure that they are not against the public interest,
which is usually defined in terms of the impact of the merger on competition in
the relevant sector. The MMC will investigate a merger at the instigation of
the President of the Board of Trade and will make a recommendation to the
President of the Board of Trade as to whether the merger should be cleared or
blocked. See also Office of Fair Trading. |
| Mortgage
Interest Relief At Source |
A tax subsidy
for individuals with mortgages. 10% of the interest on the first #30,000 of a
mortgage is eligible for tax relief. For example, if a mortgage of #30,000
incurred #3,500 of interest in the year, the individual paying the mortgage
would be able to claim tax relief of #350 (3,500 W 10%) for the year. This tax
relief is taken by means of paying a lower amount to the mortgage lender. In
the above example, the individual would actually pay only #3,150 (3,500 - 350)
to the mortgage lender over the year. Hence the phrase, relief at
source. |
| Mutual
Funds |
See
Collective Investment
Schemes. |
| Mutual
Guarantee |
A type of
guarantee operated by clearing houses where losses caused by a
clearing
members default are covered initially from the defaulting clearing
member’s assets (if any),and then from the
guarantee
fund contributed to by the clearing members. Only once this guarantee
fund has been exhausted does the clearing house use its own resources to meet
losses. Contrast with an independent guarantee, where no such fund exists. See
Independent
Guarantee. |
