| RIE |
See
Recognised Investment
Exchange. |
| RNS |
See
Regulatory News
Service. |
| RPI |
See
Retail Price
Index. |
| RUR |
See
Register Update
Request. |
| Recognised
Clearing House (RCH) |
An organisation
which provides clearing services for a market(s).
Recognition is granted by the Financial Services Authority to those
clearing houses meeting its requirements under the terms of the
Financial Services
Act. Currently The
London Clearing
House and CREST are RCHs. Only RCHs are able to
operate as clearing houses in the UK. |
| Recognised
Investment Exchange (RIE) |
An
organisation, based in the UK, providing a market place in
investments
and recognised by the Financial Services Authority. Whilst the
exchanges must be licensed or "recognised", they are exempt from
authorisation. |
| Recognised
Overseas Investment Exchange (ROIE) |
A non-UK
exchange, yet able to act as an exchange within the UK often with a screen
trading system. Recognition is granted by Her Majesty’s
Treasury. |
| Recognised
Professional Body (RPB) |
An organisation
recognised by the Financial Services Authority. Empowered to
authorise firms
to conduct investment
business; e.g. The Law Society. |
| Reduced Size
Market Maker |
Stock Exchange
member firms who do not have the capital base to run a large book are able to
register as reduced size market makers. This enables them to deal
in the stocks in which they are registered in smaller quantities than those at
which a normal market maker must deal. They have an obligation to deal in
quantities up to the Lesser SEAQ Size. There are very few
reduced size market makers in existence. |
| Register
Update Request |
This is a
CREST
instruction sent to a company
registrar
requesting that the register is amended to reflect a trade
conducted. The registrar must register or reject within two hours of receiving
this request. The registrar must be able to distinguish between CREST holdings
(dematerialised)
and non-CREST holdings (paper certificates). |
| Registered
Person |
An individual
on any of the SFA
registers. |
| Registered
Securities |
Shares or
bonds whose
ownership is recorded in a central register, as opposed to
bearer
securities, i.e. UK shares. |
Registers
back to top |
The
SFA maintains a
number of registers denoting the role/status of individuals. There are
registers of directors, partners, managers, representatives and
traders. |
| Registrar |
This is the
department or organisation appointed by a company responsible for the upkeep of
a legal record (the register) of the company’s shareholders. |
| Regulatory
News Service |
Part of the
Stock Exchange system for ensuring announcements by listed companies is
disseminated fairly through the market. See also
Company Announcements
Office. |
| Relit |
A domestic
settlement agency
for French government debt. |
| Renounceable
Document |
A document for
which legal title can be transferred to another person. |
| Repo |
See
Repurchase
Agreement. |
| Repurchase
Agreement |
Meaning sale
and repurchase agreement. An agreement to sell a
bond (often a
government bond) at one price with a simultaneous agreement to repurchase the
bond at a later date at a price agreed today. Effectively, a repo trade enables
the holder of a bond to borrow money while using the bond as financial
collateral with the lender. |
| Reserves |
Part of
shareholders’
funds on a company’s
balance sheet.
All parts of shareholders’ funds apart from
share capital
are reserves, such as the
share premium
account, the profit and loss account and the
revaluation
reserve. |
| Residence |
A tax concept.
An individual is considered to be resident in the UK in a
fiscal year if
he remains in the UK for 183 days or more in the fiscal year in question or if
in the past four fiscal years he has stayed in the country for an average of 92
days or more per year. Anyone who is resident in the UK is liable to pay income
tax on their worldwide income, subject to certain exceptions. In addition, they
are liable to pay capital gains tax on any capital gains which they make
worldwide. Individuals who are not UK residents are usually only liable to pay
income tax on their income from UK sources. |
| Residual
Settlement |
This is
settlement outside CREST whereby if the counterparties are
CREST
members, CREST permits the use of the
CCSS and CREST
payment instructions. |
Restitution
Order
back to top |
An instruction
to make good any losses and to place the investor in a similar financial
position prior to any wrongdoing. Restitution Orders are amongst the direct
powers held by the Financial Services Authority. |
| Retail Price
Index |
The measure of
the rate of inflation in the United Kingdom, the retail price index calculates
the cost of buying a standard basket of goods and expresses this as a
percentage of the base year index. For example, when the base year is 100 and
the current retail price index is 150, this indicates that prices have risen by
50% since the base year. Note, however, the constituents of the basket change
over time to reflect consumer preferences. For example, LPs have been replaced
by compact discs and pilchards by pasta sauce. The usual retail price index
(the headline figure) takes into account mortgage interest payments, on the
basis that this is a typical cost for a household. There are however two
alternative RPI measurements. RPI(X) excludes the impact of mortgage interest
payments while RPI(Y) excludes the impact of mortgage payments and indirect
taxes, such as VAT. |
| Retail
Sales |
The indicator
of the level of retail demand in the United Kingdom. The higher the level of
retail sales, the higher the level of demand for goods and the greater the
likelihood that prices will rise as a result. |
| Return on
Capital Employed |
An accounting
ratio designed to assess the underlying profitability of a company. It is
defined as profits before interest and tax divided by
capital
employed, expressed as a percentage. Broadly speaking, the higher the
return on capital employed, the more successful the company. |
| Revaluation
Reserve |
Part of
shareholders’
funds. Arises when an asset is revalued in a company’s
balance sheet.
The profit on revaluation is considered to be part of shareholders’ funds
but is shown in a separate reserve to highlight the fact that the profit is not
realised, since the asset has only been revalued, not actually
sold. |
Reversal
back to top |
An example of
an arbitrage
trade, where the future is sold and a
synthetic future
is purchased by buying a call option and selling a
put option with
the same maturity and strike price on the same
underlying asset. Entered into when the relationship described as put/call
parity has broken down, and the futures is relatively expensive to the
synthetic. The opposite of a
conversion. |
| Reverse Cash
and Carry Arbitrage |
An
arbitrage trade
entered into where a futures contract is purchased and the
underlying
asset is sold in the cash market. Such a trade will be effected where
the trader believes that the futures is trading relatively cheaply to its fair
value. |
| Review Panel
(The) |
See
Financial Reporting
Review Panel. |
| Rights
Issue |
An issue of
shares for cash by a company to its existing shareholders on a basis pro rata
to their existing shareholdings. The issue will normally be at a substantial
discount to the current share price (usually between 20% and 40% discount). The
rights issue is a means of implementing
Pre-Emption
Rights. On a rights issue, existing shareholders will receive a
Provisional Allotment
Letter, which tells them how many shares they have the right to
subscribe for and the subscription price for the rights. They may exercise
their rights and subscribe for the shares. Alternatively, they may sell the
provisional allotment letter to another person who can subscribe for the
shares. This is known as selling the rights nil paid. A third alternative is to
take no action by the deadline for subscription. In this case, the company will
sell the shares in the market, retain the subscription price and remit any
excess proceeds from the sale to the shareholder who failed to take up his
rights. |
Ring
back to top |
The term used
to describe the area on the trading floor of the
LME in which
open outcry
trading takes place. In other markets, the designated trading area is normally
known as a Pit. |
| Ring
Member |
A category of
LME membership
where the members are entitled to place traders in the
ring and thus
trade metal contracts by open outcry. Only ring members have this
capacity. Other categories of LME members must therefore use the services of a
ring member in order to effect trades in the ring. |
| Risk
Warnings |
Written
warnings of the risks associated with investments in either
warrants or
derivatives.
These documents are usually required to be signed by private customers prior to
dealing or receiving advice. The exceptions to the requirement to sign relate
to indirect
customers (where the agent must sign), private customers resident
outside the UK, for the sale of warrants already held and for the purchase of
warrants when attached to another
security. |
| Rolling
Settlement |
This is normal
settlement for CREST eligible
securities. The
settlement date is based on a set number of business days (normally five
business days) after the trade date; i.e. a trade dealt for T + 5 on a Monday
would have an intended settlement date of the following Monday. |
| Rostrum
Clerk |
This is the
term used to describe the junior officials acting for the exchange in the
LIFFE commodity
markets. Rostrum clerks are responsible for reporting and disseminating trading
prices as they happen. |
| Rules
Governing the Substantial Acquisitions of Shares (The) |
A set of rules
governing the circumstances in which a holding of 15% to less than 30% in a
listed or
AIM company may
be obtained. The main purpose of the rules, which are policed by the
Takeover Panel,
is to prevent dawn raids in a listed or AIM company from taking an
investor’s holding to 15% or more. |
