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Acquisition
Ancillary services undertaking
Asset management company
 
Bond
Book of shares
Branch
Broker
 
Central counterparty
Central Depository & Clearing Company
Clearing
Clearing member
Client
Close links
Co-lead manager
Collective investment undertaking
Competent authority
Control
Corporate bonds
Corporate finance
Credit institution
 
Dealing on own account
Distribution channels
Dividend
Durable medium
 
E
Execution of orders on behalf of clients
 
F
Financial holding company
Financial institution
Financial instruments
 
H
HANFA
Home Member State in the case of a regulated market
Home Member State in the case of investment firms
Host Member State in the case of a regulated market
Host Member State means the Member State
 
Index
Investment advice
Investment counseling
Investment firm
Investment services and activities
Issuing agent
 
L
Local firm
 
Market maker
Market operator
Market value
Member State
Mergers and acquisitions
Mixed-activity holding company
Mixed financial holding company
Money-market instruments
Multilateral trading facility
Municipal bonds
 
Nominal value
Normal trading hours
 
Order
Outsorcing
 
Parent financial holding company in the European Union
Parent financial holding company in the Republic of Croatia
Parent investment firm in the European Union
Parent investment firm in the Republic of Croatia
Parent undertaking
Participation
Participative preferred shares
Person with whom a relevant person has a family relationship
Personal recommendation
Portfolio
Portfolio management
Preferred shares
 
Qualifying holding
Quotation
 
Raising of capital
Recognized third-country investment firms
Regulated market
Regular shares
Relevant person
 
Settlement
Share
State bonds
Stock exchange
Systematic internaliser
Subsidiary
 
Tender
Tied agent
Transaction
Transferable securities
 
U
Undertakings managed on unified basis
 
     
   
     
 

Acquisition - Takeover (purchase) of control or majority packet of shares or business stake of a trading company

Ancillary services undertaking - means a undertaking the principal activity of which consists in owning or managing property, managing data-processing system or performing any other similar activity which is ancillary to the principal activity of one or more credit institutions or investment firms.

Asset management company - means a management company defined by the act regulating the conditions for establishment and operation of investment funds and investment fund management companies.

 
   
   
     
 

Bond - debt securities allowing the owner the repayment of deposited amounts carrying the agreed interest. The main issuers of bonds are: the state, the cities and the units of local authority or self-governance bodies and companies. The principal can be repaid in annuities or in one term upon maturity and in the meantime the incurred interest is repaid either annually or semi-annually.

Book of shares - a document holding the list of all shareholders of a company with the basic identification data. The book of shares keeps the evidence of all the changes of property and by enrolling into it one realizes the basic precondition for shareholding rights.

Branch - means a branch as defined by the act regulating establishment and operation of companies. For the purposes of Capital Markets Act (see: http://www.hanfa.hr/index .php?ID=0&LANG=HR&AKCIJA=5#2), all the places of business set up in the same Member State by an investment firm with headquarters in another Member State shall be regarded as a single branch;

Broker - a person educated and licensed to trade in securities and by mandate to purchase and sell securities on the securities stock exchanges.

 
   
   
     
 

Central counterparty is a person which for the purpose of clearing of transactions in financial instruments entered into on a regulated market, an MTF or outside a regulated market and an MTF, assumes responsibility for fulfillment of obligations of parties to counterparties in such transactions in such manner that it enters into every transaction and acts as a new seller in relation to a buyer or as a new buyer in relation to a seller.

Central Depository & Clearing Company Inc.(SKDD - Croatian for short) - is the central register of dematerialized securities, namely the place in which in the form of electronic records are kept the data on issuers, securities and the owners of these securities for the whole territory of The Republic of Croatia. Additionally the Agency offers the services of clearing and settlement for transactions with securities.

Clearing - after a transaction on the stock exchange, SKDD provides clearing, or the preparation for a settlement. Clearing includes sorting out a transaction into an appropriate proceeding of settlement, computing the dues of both, the seller and the buyer, allocation to the investor's account and other reporting.

Clearing member - means a member of the stock exchange or the clearing house which has a direct contractual relationship with the central counterparty.

Client - means any natural or legal person to whom an investment firm provides investment and/or ancillary services.

Close links - means a situation in which two or more natural or legal persons are linked in any of the following ways:

  • participation relationship,
  • control relationship, or
  • the fact that both or all are permanently linked to one and the same third person by a control Relationship.

Co-lead manager - the word is of Anglo-Saxon origin. It indicates a legal person, mostly a financial institution which simultaneously with the main sponsor of the securities issuer (Lead manager, Underwriter) acts with the purpose to effectively place new emissions of securities.

Collective investment undertaking - means:

  • an undertaking for collective investment which has been authorized by the HANFA in accordance with the act regulating establishment and operation of funds and management companies;
  • an undertaking for collective investment which has obtained authorization in a Member State and which, pursuant to the legislation of the home Member State, satisfies the requirements of the Council Directive 85/611/EEZ of 20 December 1995 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) and amendments thereto;
  • other foreign undertaking for collective investment including undertakings other than those referred to in indent 2 of this point, as well as undertakings for collective investment which have been granted authorization to carry on business in a third country.

Competent authority means:

  • the competent authority designated by a state which has, under the laws of that state, competence for supervision of investment firms, unless it is stipulated by a provision of this Act that such provision relates to an authority that has competence for another type of supervision;
  • the competent authority of a Member State which has, under the laws of that state, competence for supervision of investment firms and which has been designated by that Member State as a contact point in accordance with Article 56, paragraph 1, of Directive 2004/39/EC, unless it is stipulated by a provision of this Act that such provision relates to an authority that has competence for another type of supervision. The contact point in accordance with Article 56, paragraph 1, of Directive 2004/39/EC shall be the HANFA.

Control - means the relationship between a parent undertaking and a subsidiary as defined in the legislation governing accounting of enterprises and application of financial reporting standards, or a similar relationship between any natural or legal person and an undertaking.

Corporate bonds - debt securities usually issued by large and successful companies with the aim of raising the needed funds when the money on the capital market is cheaper and more easily available than through regular bank loans. They have a higher interest rate than state or municipal bonds but also a higher risk of return on investment.

Corporate finance - we follow and satisfy financial needs of our clients, renown domestic companies. This activity consists of placement of surplus or finding lacking funds directly or through the market, or finding a suitable bank – partner which offers the best conditions in a certain moment.

Credit institution - means a credit institution as defined by the act that regulates establishment and operation of credit institutions.

 
   
   
     
 

Dealing on own account -means trading against proprietary capital resulting in the conclusion of transactions in one or more financial instruments.

Distribution channels - shall mean a channel through which information is, or is likely to become, publicly available. ‘Likely to become publicly available information’ shall mean information to which large number of persons have access.

Dividend - the amount of money paid to the shareholders by the company pursuant to successful business performance and a realized profit. Most of successful companies pay out through dividends a minor part of their profit and retain a bigger part and through such "reinvestment" increase the value of their shares, fulfilling in this way the expectations of shareholders to make money on the investment basis.

Durable medium - means paper or any instrument which enables a client to store information in digital format in such a way that access, processing and integrity of the information is ensured for at least the period of time stipulated by law or provisions enacted by virtue of this Act.

 
   
  E  
     
 

Execution of orders on behalf of clients - means acting to conclude agreements to buy or sell one or more financial instruments on behalf of clients.

 
   
  F  
     
 

Financial holding company - means a financial institution the subsidiary undertakings of which are either exclusively or mainly investment firms or other financial institutions, at least one of which is an investment firm, and which is not a mixed financial holding company.

Financial institution - means any undertaking other than a credit institution, the principal activity of which is to acquire holdings or to carry on one or more of the basic financial services as defined by the act governing establishment and operation of credit institutions.

Financial instruments - are:
a. transferable securities;
b. money-market instruments;
c. units in collective investment undertakings;
d. derivatives which include:

  • options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, or other derivative instruments, financial indices or financial measures which may be settled physically or in cash
  • options, futures, swaps, forward rate agreements and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event);
  • options, futures, swaps and any other derivative contract relating to commodities that can be physically settled provided that they are traded on a regulated market and/or a multilateral trading facility;
  • options, futures, swaps, forwards and any other derivative contracts relating to commodities, that can be physically settled not otherwise mentioned in point 2, sub-point (d), indent 3, not being for commercial purposes, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are cleared and settled through recognized clearing houses or are subject to regular margin calls;
  • derivative instruments for the transfer of credit risk;
  • financial contracts for differences;
  • options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables, freight rates, emission allowances or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event), as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this point, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market or a multilateral trading facility, are cleared and settled through recognized clearing houses or are subject to regular margin calls.

 
   
  H  
     
 

HANFA - means the Croatian Financial Services Supervisory Agency, whose competences and scope of operation are stipulated by the Act on the Croatian Financial Services Supervisory Agency (see :http://www.hanfa.hr/index.php?ID=0&LANG=HR&AKCIJA=5#“).

Home Member State in the case of a regulated market - means the Member State in which the regulated market is registered or, if under the law of that Member State it has no registered office, the Member State in which the head office of the regulated market is situated.

Home Member State in the case of investment firms - means: - if the investment firm is a natural person, the Member State in which its head office is situated; - if the investment firm is a legal person, the Member State in which its registered office is situated; - if the investment firm has, under its national law, no registered office, the Member State in which its head office is situated.

Host Member State in the case of a regulated market - means the Member State, other than the home Member State, in which a regulated market provides appropriate arrangements so as to facilitate access to trading on its system by remote members or participants established in that same Member State.

Host Member State means the Member State - other than the home Member State, in which an investment firm has a branch or performs investment services and/or activities directly.

 
   
  I  
     
 

Index - a numerical indicator of price floating on a certain stock exchange. It is computed by a combination of indicators which follow the most liquid shares of the best and biggest companies listed on the stock exchange. There are indexes which follow the entire market and those which follow certain segments: the bond index, the index of technological companies, industrial companies etc.

Investment advice - means the provision of personal recommendations to a client, either upon his/her/its request or at the initiative of the investment firm, in respect of one or more transactions relating to financial instruments.

Investment counseling - using knowledge and experience gathered through the years, we offer to our clients investment counseling services for the investments in securities. Based on the analyses of the capital market, domestic and international, and business performance of the companies listed on the stock exchange, as well as the analyses of global and local macroeconomic environment, we give the needed advice how to optimize investment portfolio with the aim, on one side, to diversify and minimize risk, and to reach maximum profit, on the other side.

Investment firm - means any legal 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.

Investment services and activities means any of the services and activities listed in Article 5 of Capital Market Act (see: http://www.hanfa.hr/index.php?ID=0&LANG=HR&AKCIJA=5#“).

Issuing agent - a company authorized to deal in securities which for the issuer of securities organizes, prepares and leads the registration and payment of securities and their listing on an appropriate stock exchange quotation.

 
   
  L  
     
 

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.

 
   
   
     
 

Market maker - means a person who holds himself out on the financial markets on a continuous basis as being willing to deal on own account by buying and selling financial instruments against his proprietary capital at prices defined by him.

Market operator - means a person or persons who manage(s) and/or operate(s) the business of a regulated market. The market operator may be the regulated market itself.

Market value - the value of securities obtained on the market as the consequence of the demand and supply relation. Big oscillations of market values for securities which are not in a direct connection with their nominal value, bookkeeping or some other (estimated, "real") values are characteristic.

Member State - means a member of the European Union and a signatory to the European Economic Area Agreement.

Mergers and acquisitions - activities which refer to purchase of strategic (major) share in companies, as well as the business and ownership “combining” of the companies owned by the same investor or interconnected by the ownership and mutual interests. During the privatization process Investco successfully realized a large number of such projects, working both for domestic and foreign investors.

Mixed-activity holding company - means a parent undertaking other than a financial holding company or an investment firm or a mixed financial holding company, the subsidiaries of which include at least one investment firm and not include a credit institution.

Mixed financial holding company - means a parent undertaking other than a credit institution, insurance undertaking or investment firm, the subsidiaries of which include at least one credit institution, insurance undertaking or investment firm.

Money-market instruments - means all classes of instruments which are normally dealt in on the money market, such as treasury bills, commercial papers and certificates of deposit and excluding instruments of payment.

Multilateral trading facility - (hereinafter: MTF) means a multilateral system, operated by an investment firm or a market operator, which brings together multiple third-party buying and selling interests in financial instruments. Bringing together of buying and selling interests is carried out in accordance with pre-determined non-discretionary rules in a way that results in a contract in accordance with the provisions of Capital Markets Act (see: http://www.hanfa.hr/index.php?ID=0&LANG=HR&AKCIJA=5#“).

Municipal bonds - the bonds issued by a city or regional authorities and self-governance bodies aimed to finance investment projects of regional importance. The repayment of liabilities quoted in such bonds is most often secured through earnings from a project whose financing was the purpose of issuing the bonds. A potential collateral may be also the municipal taxes or the assets owned by this region or the city.

 
   
   
     
 

Nominal value - a book-keeping value of a share at the moment of its issuing. According to a nominal value the stake of a certain shareholder is computed and also the number of voting rights that a shareholder has is indicated. The price of a share and its market value is usually significantly discrepant from its nominal value.

Normal trading hours - means those hours which the trading venue or investment firm establishes in advance and makes public as its trading hours.

 
   
   
     
 

Order - a written statement of a client (investor) (under certain circumstances it is possible to give oral orders or in an electronic form) to an agent (certified company i.e. brokerage house) to perform certain securities transactions in their name and for the account of a client.

Outsourcing - means an arrangement of any form between an investment firm, stock exchange, central clearing and depositary agency and a service provider by which that service provider performs actions, services or activities which would otherwise be undertaken by the investment firm, stock exchange or central clearing depositary company.

 
   
   
     
 

Parent financial holding company in the European Union - (hereinafter: EU parent financial holding company) means a parent financial holding company with a registered office in a Member State which is not itself a subsidiary of a credit institution or of an investment firm authorized in any Member State, or of another financial holding company set up in any Member State.

Parent financial holding company in the Republic of Croatia - (hereinafter: RoC parent financial holding company) means a financial holding company with a registered office in the Republic of Croatia which is not itself a subsidiary of another investment firm authorized by the Agency, or of a credit institution authorized by the Croatian National Bank, or of another financial holding company set up in the Republic of Croatia.

Parent investment firm in the European Union - (hereinafter: EU parent investment firm) means a parent investment firm with a registered office in a Member State which is not itself a subsidiary of another investment firm or of a credit institution authorized in any Member State, or of a financial holding company set up in any Member State.

Parent investment firm in the Republic of Croatia - (hereinafter: RoC parent investment firm) means an investment firm with a registered office in the Republic of Croatia which has a credit institution, investment firm, another financial institution as a subsidiary or which holds a participation in one or more such entities, and which is not itself a subsidiary of another investment firm authorized by the Agency, or of a credit institution authorized by the Croatian National Bank, or of a financial holding company set up in the Republic of Croatia.

Parent undertaking - means:

  • a parent undertaking as defined in the legislation governing accounting of enterprises and application of financial reporting standards,
  • for the purposes of Part 2, Title 1, Chapters 9 and 11, of Capital Markets Act (see: http://www.hanfa.hr/ index.php?ID=0&LANG=HR&AKCIJA=5#2) a parent undertaking as defined in the legislation governing accounting of enterprises and application of financial reporting standards and any undertaking which, in the opinion of the HANFA, exercises a dominant influence over another undertaking.

Participation - as defined in the legislation governing accounting of enterprises and application of financial reporting standards means participation of a person in another legal person if:

  • it has direct or indirect investments on the basis of which it owns 20% or more of the capital or voting rights of that legal person; or
  • it has a holding in that legal person amounting to less than 20% of its capital or voting rights, which has been acquired with the intention to enable, on the basis of permanent link with that legal person, influence over its management.

Participative preferred shares – give the owners the right that besides guaranteed dividends they have the rights belonging to the owners of regular shares.

Person with whom a relevant person has a family relationship - means:

  • the spouse of the relevant person or any partner of that person considered by national law as equivalent to a spouse,
  • a dependent child or stepchild of the relevant person,
  • any other relative of the relevant person who has shared the same household as that person for at least one year on the date of the personal transaction concerned.

Personal recommendation - is a recommendation that is made to a person in his capacity as an investor or potential investor, or in his capacity as an agent for an investor or potential investor. That recommendation must be presented as suitable for that person, or must be based on a consideration of the circumstances of that person, and must constitute a recommendation to take one of the following sets of steps:

  • to buy, sell, subscribe for, exchange, redeem, hold or underwrite a particular financial instrument;
  • to exercise or not to exercise any right conferred by a particular financial instrument to buy, sell, subscribe for, exchange, or redeem a financial instrument. A recommendation is not a personal recommendation if it is issued exclusively through distribution channels or to the public.

Portfolio - a group of securities which enables its owner - the investor diversification (dispersion) of a risk and optimum of profit potential.

Portfolio management - means managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more financial instruments.

Preferred shares - the shares that give their owner some additional rights, e.g. the right to a dividend of in advance determined amounts, the right of priority in dividend payments, or other rights in accordance with the law and the statute of the company. Preferred shares do not usually give the voting right on the main assembly of the company.

 
   
   
     
 

Qualifying holding - means: - any direct or indirect holding in an investment firm which represents 10% or more of the capital or of the voting rights, or which makes it possible to exercise a significant influence over the management of the investment firm, stock exchange or central clearing depositary company in which that holding subsists. - for the purposes of Chapter 9 of Part Two of Capital Markets Act (see: http://www.hanfa.hr/index .php?ID=0&LANG=HR&AKCIJA=5#2), a qualifying holding means any direct or indirect holding in an undertaking which represents 10% or more of the capital or of the voting rights or which makes it possible to exercise a significant influence over the management of that undertaking.

Quotation - a particularly organized part of the stock exchange that lists the securities according to determined conditions which enable transparency to the investors. We distinguish the first quotation with the biggest request for listings and maximum transparency, the quotation of public shareholding companies with somehow smaller requests and the free market with minimal requests. The quotation conditions are prescribed by each stock exchange independently.

 
   
   
     
 

Raising of capital - companies collect capital needed for their business activities by issuing of the securities on the primary market. Investco has been and remained an active participant of the primary market for bonds where the capital is raised through the placement of debt securities. We are also active in development of primary share market where the companies try to attract investment capital by selling new share issues.

Recognized third - country investment firms - means firms meeting the following conditions: - firms which, if they were established within EU, would be covered by the definition of investment Firm, - firms which are authorized in a third country, and - firms which are subject to and comply with prudential rules considered by the HANFA as at least as stringent as those laid down in Capital Markets Act (see: http://www.hanfa.hr/index .php?ID=0&LANG=HR&AKCIJA=5#2).

Regular shares - most frequently issued shares which entitle the owner to:

  • voting right on the main assembly
  • right to the payment of a dividend(part of the company's profit)
  • right to the payment of the rest of liquidation amount or bankruptcy amount of the company

Regulated market - means a multilateral system operated and/or managed by a market operator, and which satisfies the following requirements: a. brings together or facilitates the bringing together of multiple third-party buying and selling interests in financial instruments, in the system and in accordance with pre-determined nondiscretionary rules, and in a way that results in a contract in respect of the financial instruments admitted to trading under its rules and/or systems, b. is authorized as a regulated market, and c. functions regularly in accordance with the provisions of Part 2 of Capital Markets Act (see: http://www.hanfa.hr/index.php?ID=0&LANG=HR&AKCIJA=5#“).

Relevant person - in relation to an investment firm, means:

  • a person in managerial position in the investment firm, person with equity holdings or tied agent of the investment firm,
  • a person in managerial position or person with equity holdings in any tied agent of the investment Firm,
  • an employee of the investment firm or of a tied agent of the investment firm, as well as any other natural person whose services are placed at the disposal and under the control of the investment firm or a tied agent of the investment firm and who is involved in the provision by the investment firm of investment services and activities,
  • a natural person who is directly involved in the provision of services to the investment firm or to its tied agent under an outsourcing arrangement for the purpose of the provision by the investment firm of investment services and activities.

 
   
   
     
 

Settlement - after a transaction on the stock exchange and completing of clearing, SKDD carries out the settlement – the transfer of securities ownership and their payment through the money transfer to the seller's account.

Share - a security which entitles its owner to a voting right at the annual assembly of the company and the right to a profit through the payment of a dividend. For a trading company which issues shares it is an instrument of raising the principal capital or the needed funds.

State bonds - debt securities issued by the state or the ministries in order to raise needed funds for functioning of the state and its institutions. They are in general considered the safest securities. Hence, the biggest part of operations on the stock exchanges worldwide, and with us too, consists of trading with state bonds.

Stock exchange - the location where demand and supply meet. The securities stock exchange is the location where securities are traded. It can be a location where brokers are physically present and where they jointly close deals. It can also be a virtual space where the trading is done through electronic systems, namely computer networks (this is the situation in Croatia).

Systematic internaliser - means an investment firm which, on an organized, frequent and systematic basis, deals on own account by executing client orders outside a regulated market or a multilateral trading facility.

Subsidiary - means: - a subsidiary undertaking as defined in the legislation governing accounting of enterprises and application of financial reporting standards, - for the purposes of Part 2, Title 1, Chapters 9 and 11, of Capital Markets Act (see: http://www.hanfa.hr/index .php?ID=0&LANG=HR&AKCIJA=5#2) a subsidiary undertaking within the meaning of the legislation governing accounting of enterprises and application of financial reporting standards and any undertaking over which, in the opinion of the HANFA, a parent undertaking exercises a dominant influence.

 
   
  T  
     
 

Tender - invitation for bids to sell a control or proprietary stake of a trading company through a collection of offers. Most often tenders are announced by states or their authorized agencies in the course of privatization deals.

Tied agent - means a natural or legal person who, under the full and unconditional responsibility of only one investment firm on whose behalf he/she/it acts, carries on the activities laid down in this Act as the activities of tied agents.

Transaction - purchase and sale of securities on the stock exchange as the consequence of "matching" a purchase and a sale order.

Transferable securities - means those classes of securities which are negotiable on the capital market, with the exception of instruments of payment, such as:
a. shares and other securities equivalent to shares which represent a share in the capital or membership rights in a company, and depositary receipts in respect of shares;
b. bonds or other forms of securitized debt, including depositary receipts in respect of such securities;
c. any other securities giving the right to acquire or sell any such transferable securities or giving rise to a cash settlement determined by reference to transferable securities, currencies, interest rates or yields, commodities or other indices or measures;

For the purposes of point c. of this Article, instruments of payment are not deemed to be transferable securities.

 
   
  U  
     
 

Undertakings managed on unified basis - as defined in the legislation governing accounting of enterprises and application of financial reporting standards means undertakings which are not connected as described in Article 3 paragraph 1 number 23 and 24 of Capital Markets Act (see: http://www.hanfa.hr/index .php?ID=0&LANG=HR&AKCIJA=5#2), but are affiliated in any of the following ways:

  • undertakings operate on equal terms and are managed on unified basis pursuant to a contract or provisions of a statute;
  • majority of the members of the management board or supervisory board of those undertakings are the same persons.