Glossary
Early termination fee
A fee which may be applied if a loan is repaid earlier than the stated term.
Earnings
Income or profit of an entity. May be expressed as gross or net.
Earnings Per Share (EPS)
Measures of earnings attributed to each equivalent ordinary share over a twelve month period. Calculated by dividing the company's earnings by the number of shares on issue in accordance with AASB 1027 'Earnings per share'.
economic group
ATO term - Financially or administratively connected entities with a common source of control (majority or effective ownership of greater than 50%).
Effective interest rate
An annual interest rate that takes into account the effect of compound interest and fees. Also known as an effective yield or the annual percentage rate (APR).
EFTPOS (Electronic Funds Transfer at Point of Sale)
EFTPOS is an Australian network for processing credit cards, debit cards and charge card payments at the 'point of sale'. EFTPOS also allows users of the system to withdraw cash at the time of purchasing a product or service through the merchant's EFTPOS terminal. This function is known as 'debit card cashback' in many other countries.
Electronic holding statement
Evidence of securities ownership in the form of a holding statement. All security holdings on ASX are registered electronically.
Eligible employee creditor
A creditor (including the Australian Taxation Office for superannuation guarantee charge) who, in a winding up of a company, would normally be paid their employment related entitlements ahead of (known as "priority") other unsecured debts. These creditors have a special right to vote on a deed of company arrangement proposal that seeks to modify the priority payment order
Eligible rollover fund (ERF)
A holding account designed to receive the super benefits of lost members and those with low account balances that are no longer receiving contributions.
Eligible unsecured creditor
A creditor entitled to have a say in a pooling determination made by a liquidator. The term generally covers the external unsecured creditors of a group of companies, but excludes debts owing between companies in the pooled group. A pooling determination relates to a decision to treat the affairs of a group of companies as if it were a single external administration
Emerging market
Low to middle income economy typically undergoing significant economic and political reform as it transitions from a developing to a developed nation. They tend to have relatively underdeveloped economies, legal systems and regulatory frameworks, and a high government presence in their market.
Employee incentive scheme
For the purposes of ASX Listing Rules, a scheme for the issue or acquisition of equity securities in the entity to be held by, or for the benefit of, participating employees or non-executive directors of the entity or a related entity.
Employer share scheme
An employer scheme that gives employees shares, or the opportunity to purchase shares, in the company, sometimes at a discount to market rates. Shares may be offered as part of an employee's remuneration or bonus, or through a loan or salary sacrifice arrangement.
Enduring power of attorney
Like an ordinary Power of Attorney (PoA), an enduring power of attorney authorises your nominated representative to make property and financial decisions for you. Unlike an ordinary PoA, an enduring PoA continues to have effect if you become mentally incapacitated at a later date.
Enhanced regulatory sandbox
The Australian Government's enhanced regulatory sandbox (ERS) allows individuals and businesses to test innovative financial services and credit activities.
Entry fee
Fee set by the fund manager for buying units in a managed investment expressed as a percentage of the amount invested. The fee is deducted from the amount invested by the fund manager.
EPS
Earnings Per Share, a financial ratio calculated by dividing the company's earnings (profits) by the number of shares on issue. The higher the EPS, the more a share is potentially worth.
Equities
Often used as a synonym for shares. Represents part-ownership of a company, as distinct from debt securities such as bonds and debentures.
Equity
The value of an asset such as your house or property, less any money owing on it.
Equity capital or equity funding
Capital raised by a company by issuing shares. An alternative to debt funding.
Equity investment
An investment where you buy and hold shares in a company or property from which you expect to receive income and capital gains.
Equity release
A way of accessing the equity in your home to provide you with additional funds in retirement.
Equity securities
For the purposes of ASX Listing Rules: 1. shares in a body corporate or an unincorporated body other than redeemable preference shares which are Loan Securities in accordance with paragraph; (c)of the definition of Loan Securities 2. prescribed interests except those referred to in paragraph (d) of the definition of Loan Securities 3. renounceable and non-renounceable rights to subscribe for Securities other than Loan Securities
Equity warrants
Warrants for which the underlying asset is a security (for example, shares in companies).
ERF
A holding account designed to receive the super benefits of lost members and those with low account balances that are no longer receiving contributions.
error
ATO term - Mistakes made in submitting information to us, including when lodging a tax return. An error can be intentional or unintentional.
Escrow
Depositing an instrument of title to securities with a third party custodian in order to prevent the holder from transferring those securities during a period agreed.
Establishment fee
A one-off fee which may apply to set up a personal or other loan.
Estate
All of a person's assets, whether real property or personal property, and their liabilities or debts.
Ethical investment
An investment strategy that promotes positive environmental, social or ethical issues. Avoids investment in industries and companies that produce goods harmful to health, society or the environment e.g. chemicals, tobacco, armaments. Each fund will have its own interpretation of the values it wants to protect or promote. You will find details in the company's PDS
European exercise, European style
Where the holder of an option or warrant can exercise their right to buy or to sell only on the expiry date.
evasion
ATO term - The act of evading tax obligations. Tax evasion occurs when people break the law by not reporting all of their income, or dishonestly overstating deductions to reduce the amount of tax they need to pay. Examples of tax evasion include under-reporting income, not reporting cash wages, not lodging tax returns or not paying employee superannuation entitlements.
Ex rights
Securities entitling the seller to retain the right to participate in a New Issue then current.
Ex-bonus, ex-bonus date
Where the seller retains the bonus shares being issued. The ex bonus date occurs two business days prior to and including the Record Date. The share price may fall on the ex bonus date to reflect the dilution effect as the company's assets are spread over a greater number of shares on issue.
Ex-date
Date on which shares change from being quoted "cum" to "ex". It is usually the business day prior to the record date.
Ex-dividend
Shares which, when sold, entitle the seller to retain the current dividend. Shares are usually quoted ex-dividend one business day before company's Record Date.
Ex-dividend date
One business day before the company's Record Date. To be entitled to a dividend a shareholder must have purchased shares before the ex-dividend date.
Excess
In relation to an insurance contract, it is the amount of an insurance claim that consumers have to pay. The amount is specified in the insurance policy.
Exchange for physical
The exchange of a physical holding in the underlying to a futures or CFD position or the exchange of a futures or CFD position for a physical holding in the underlying. EFPs are not always transacted at market and therefore do not have to be traded within the current market bid and offer. They are omitted from the calculation of first, high, low and last prices.
Exchange rate
The price at which the currency of one country can be exchanged for the currency of another.
Exchange Traded Commodity (ETC)
ETFs that invest in and track the performance of a commodity such as silver or gold rather than an equity index and which allows for applications and redemptions in the primary market on a daily basis either in -specie or in cash.
Exchange Traded Fund (ETF)
Investment fund designed to track the performance of an asset such as a share price index and which allows for applications and redemptions in the primary market on a daily basis either in -specie or in cash.
Exchange Traded Options (ETO)
Option contracts where counterparties are novated with ASX Clear interposed between taker and writer and which are bought and sold on the options market operated by ASX.
Exchange-traded treasury bond (eTB)
A type of Australian Government Bond quoted and traded on the Australian Securities Exchange that is a medium-to long-term debt security with a fixed face value ($100) and a fixed annual interest rate.
Exchange-traded treasury indexed bond (eTIB)
A type of Australian Government Bond quoted and traded on the Australian Securities Exchange. It is a medium to long-term debt security with a fixed interest rate but a face value that is adjusted for movements in the Consumer Price Index (CPI).
excise
A tax on alcohol, tobacco, fuel and petroleum products produced or manufactured in Australia. Collectively, these products are referred to as excisable goods.
excise clearance data
ATO term - The excisable units (litres, numbers or kilograms) of excisable products cleared for home consumption and reported by excise clients on their excise return.
excise equivalent goods (EEGs)
ATO term - Imported alcohol, tobacco, fuel and petroleum products (including LPG, LNG and CNG) that are subject to duty are treated consistently with goods manufactured in Australia.
Excluded employee
An employee who has also been a director of the company, or a relative of a director, at any time in the 12 months before the appointment of an external administrator. Excluded employees are only entitled to limited priority for repayment of their outstanding entitlements
Exclusion
In relation to an insurance contract, it is something that is specifically not covered under the insurance policy. Depending on the type of policy these may include specific events, illnesses or pre-existing conditions.
Execution risk
When a lack of market liquidity causes a gap between the price at which you place a trading order, and the price you receive.
Executor
A person specified in a will, or appointed, to administer the will.
Exercise
Notification by the buyer (taker) of an option or warrant of their decision to buy or sell the underlying asset or in the case of cash settled contracts to receive a cash payment.
Exercise price
Price at which the taker (buyer) of an option or warrant may buy/sell the underlying asset. Also known as the strike price.
Exit fee
Fee set by a fund manager for selling units in a managed investment expressed as a percentage of the amount invested. The fee is deducted from the amount invested by the fund manager.
Exotic instruments
More complex instruments which may involve one or a number of unusual features.
Expiry, expiry date, expiration
Date on which all unexercised options, warrants in a particular series or futures in a particular expiry month expire.
External administration
Companies under external administration include companies in voluntary administration, provisional liquidation, liquidation or subject to deed of company arrangement. It does not include companies under receivership or controllership
External administrator
A defined term for a registered liquidator formally appointed to control the affairs of a company and its property. Includes a provisional liquidator, liquidator, voluntary administrator and an administrator of a deed of company arrangement. It does not include receivers or controllers
External Dispute Resolution (EDR) Scheme
Nearly all financial services, energy, water and telecommunications businesses belong to an external dispute resolution (EDR) scheme. The EDR scheme hears complaints for free and can be a simpler alternative to resolving disputes in court.
