Glossary
Daily settlement price
The official daily quotation for each option contract available for each delivery or cash settlement month as determined by the Exchange for the purpose of margining by the Clearing House.
Day orders
Orders which automatically expire at the close of the day's trading if not filled during the day on which they are received.
DCS
ASX Clear operates the Derivatives Clearing System (DCS) to clear and settle equity-related derivative products.
Death benefit
A payment made from a super fund to a beneficiary when you die. For example, from a super fund or insurance policy.
Debenture
Loan to a company at a fixed rate of interest and for a fixed term, usually one to five years. The debenture is secured by a trust deed over an asset, or assets, of a company.
Debenture
A document acknowledging that a company undertakes to repay a sum of money lent to the company by the holder of the document
Debenture
A medium-term investment issued by a company where investors lend them money in exchange for a regular and fixed interest amount for the term of the investment. The invested funds (principal) are repaid at the end of the term (maturity) and are usually secured by tangible property. They may be offered at call or for a set period.
Debenture trustee
The debenture trustee undertakes a range of functions on behalf of debenture holders, including acting as a liaison between the issuer company and the debenture holders
Debit card
A plastic card that gives you access to your bank accounts via ATM and EFTPOS.
Debt agreement
A legal agreement for the repayment of unpaid debts that is less formal and intrusive than bankruptcy. The agreement is between you and all of your unsecured creditors and allows you to pay back your debts over an extended period of time at an amount per week you can afford.
Debt consolidation
When several loans are combined into one, with the aim of reducing repayments. Also known as loan consolidation.
Debt funding/finance
Process of financing through issuing debentures or bonds; or increasing other liabilities to finance operations. Alternative to equity funding.
Debt investment
Comprises cash and fixed interest investments. You lend money to an organisation in return for interest payments. The company you lent to now owes you or is indebted to you.
Debt security
As defined in the Listing rules
Debt to equity ratio
Relationship between funds provided by borrowing and funds provided by shareholders. The debt to equity ratio shows to what extent a company is financed by debt (also called the gearing or leverage ratio). Debt to equity ratio = (total debt / shareholder equity) x 100
Debtor
A person who owes a debt
Declaration of indemnities
A declaration that must be provided to creditors by a voluntary administrator or a liquidator in a creditors' voluntary liquidation informing creditors about any indemnities given to the voluntary administrator or liquidator to cover fees or other debts incurred by them in acting as a voluntary administrator or a liquidator of the company. The declaration provides information to allow creditors to decide whether they wish to replace the voluntary administrator or liquidator over concerns about independence
Declaration of loss
A declaration by registered liquidators, pursuant to Section 104-145 of the Income Tax Assessment Act, that they have reasonable grounds to believe there is no likelihood that shareholders will receive any distribution for their shares.
Declaration of relevant relationships
A declaration that a voluntary administrator or a liquidator must provide in a creditors' voluntary liquidation informing creditors about certain relationships. The declaration provides information to allow creditors to decide whether they wish to replace the voluntary administrator or liquidator over concerns about independence
Deed administrator
The external administrator appointed to oversee a deed of company arrangement
Deed of company arrangement
A binding arrangement between a company and its creditors governing how the company's affairs will be dealt with. It may be agreed as a result of the company entering a voluntary administration. It aims to maximise the chances of the company, or as much as possible of its business, continuing, or to provide a better return for creditors than an immediate winding up of the company, or both
Default fee
An amount of money that you may be charged if you fail to make a repayment when it is due on a loan or credit card.
Defensive asset
Cash or fixed interest investments that are generally low risk and less volatile than growth investments.
Deferred delivery
Shares quoted "dd" are the result of a reconstruction of the company's share capital where shareholders have surrendered old scrip to the company but the company has yet to issue new scrip. Shareholders who wish to sell must do so on a "dd" basis so buyers know that they cannot yet expect delivery of scrip.
Deferred establishment fee
A fee charged by a lender when a loan is paid off before a set period has elapsed e.g. 3 years. Also known as an exit fee. It's to cover the costs the lender incurred in setting up the loan.
Deferred payment
A debt that can be paid off at some time in the future.
Deferred settlement
Settlement in which the obligation to settle on a trade date plus two (2) business days (T+2) basis is deferred until the time following the despatch date that ASX fixes.
Defined benefit fund
A super fund where your retirement benefits are calculated by a predetermined formula. Retirement benefits are usually calculated using your average salary over the last few years before you retire and the number of years you worked in the company or public service. In general, market fluctuations have limited effect on the value of your benefit, although in periods of prolonged economic downturn, your defined benefits could be affected. If the fund performance is poor, the trustee will generally ask an employer to help pay member benefits as required.
Delisted
When a company is removed from the Official List and its shares are no longer quoted.
Deliver not enforceable
Securities quoted as "del" are the result of a new issue for which CHESS statements have not yet been issued.
Deliverable types
The actual types or grades of the underlying asset which may be delivered in settlement of a futures contract for which the underlying is a commodity.
Deliverable warrant
Settlement of a warrant by transfer of the underlying asset rather than by payment of cash.
Delivery
The tender and receipt of the underlying physical asset, or warehouse receipts covering such commodity, in settlement of a futures contract.
Delivery month
Specified month during which actual delivery of the physical asset may be made under the terms of a futures contract.
Delta
Measure of the sensitivity of an option or warrant price to movement in the price of the underlying asset.
Dependant
A person who relies on you for financial support e.g. children under 18 or your non-working spouse.
Deposit bond
Can be used in place of a deposit when a buyer exchanges contracts on a property. It guarantees that the buyer will pay the full deposit by an agreed date.
Depreciation
A decrease in the value of an asset.
Deregistered company
A company that is struck off the register of companies by ASIC and ceases to exist as a legal entity.
Derivative
Instrument that derives its value from an underlying instrument (such as shares, share price indices, fixed interest securities, commodities, currencies etc). General usage includes futures, exchange-traded options, contracts for difference and warrants. Often involves leverage. Corporations Act characterisation may differ from general usage for example some warrants are not classified as derivatives under the Corporations Act.
Direct debit
A payment collection method that allows loan or service providers to draw money from your bank account on a regular basis.
Direct market access (DMA)
Where a Market Participant gives their clients the ability to submit orders to the Participant, which then routes the orders through its internal systems and controls and onto the trading platform.
Director
A natural person appointed as a director of a company who is then responsible for directing and managing the affairs of a company. This also includes a shadow director
Discount
When a derivative is trading at a price less than its fair value. With futures, sometimes used to refer to the price differences between futures of different delivery months, as in the phrase "July at the discount to May", indicating that the price of the July future is lower than that of May.
Discretionary account
An investment account for which an authorised adviser makes investment decisions on behalf of the client in accordance with the adviser's authority.
Dispute resolution
A way to resolve issues instead of going to court. All Australian Financial Services (AFS) licensees, banks and other credit providers must belong to a dispute resolution scheme.
Distribution
Payment to unit holders of a fund out of the profits of the fund. These are allocated on a per unit basis.
Distribution from employer
ATO term - The super guarantee entitlement received from your employer.
Diversification
Spreading investments over a variety of investment categories with different performance characteristics, in order to reduce risk.
Diversified portfolio
Portfolio that holds a variety of assets with different performance characteristics.
Dividend
Distribution by a company to shareholders. Usually expressed as a number of cents per share. Many ASX listed companies (see listed company) pay dividends twice each year, usually as a smaller 'interim' dividend and a larger 'final' dividend. Also used to describe a sum paid to creditors out of the assets of an insolvent company.
Dividend amount
Dividend shown as cents per share. For example a figure of 19 represents $0.19 and a figure of 7.5 represents $0.075.
Dividend cover
Ratio showing the number of times a company's dividend is covered by its net profit. Dividend Cover ratio = (net profit / dividend paid)
Dividend imputation
Tax credits passed on to a shareholder who receives a franked dividend. Imputation credits entitle investors to a rebate for tax already paid by an Australian company.
Dividend in arrears
Dividends on cumulative preference shares that have not been declared each period in accordance with the terms of their issue. See cumulative preference dividends.
Dividend income
See dividend.
Dividend or distribution plan
Plan which gives holders of securities the opportunity to accept securities in place of dividend, distribution or interest payments (either partly or wholly). Also called a 'Dividend Reinvestment Plan'.
Dividend Reinvestment Plan (DRP)
An alternative to cash dividends, allowing shareholders to receive new shares instead of cash.
Dividend type
Either interim or final. The last dividend in the company's financial year is classified as final and all others are classified as interim. Some dividends may also be classified as 'special' in accordance with the advice given by the company about the dividend. Ordinarily the term 'special' is used to indicate that the dividend is not one that is paid regularly each year but the term may be used differently by different companies.
Dividend yield
A financial ratio that measures how much a company pays out in dividends each year relative to its share price.
Division 293 tax
An extra 15% tax on the super contributions of high income earners. This tax is charged if your income plus your concessional super contributions are above $250,000. There are different tax rules for members of defined benefit super funds. More details are available on the Australian Tax Office website. Find out more about tax and super.
DPS adjusted
Total dividend, in cents per share, for the year, adjusted by a dilution factor to take account of issues and reconstructions.
