Glossary
Managed discretionary account (MDA)
A personal investment account where you own investment assets, such as company shares or units in a managed fund. You give someone else (the MDA provider) the authority to buy and sell investments on your behalf. Financial advisers often use MDAs to manage portfolios for their clients.
Managed fund
An investment fund where your money and that of other investors is pooled and used to buy assets such as cash, shares, bonds and property trusts.
Managed investments
Professionally managed portfolio of assets.
Management Expense Ratio (MER)
Fee paid to the manager of an investment fund. The MER is normally expressed as an annual percentage or "basis point" charge (where one basis point equals one hundredth of a percent) on the fund's net asset value.
Managing controller
A managing controller is a receiver and manager, or any other controller who has functions or powers of management of the company
Mandatory settlement
Process whereby cash options or futures contracts still open at expiry are closed out by mandatory cash settlement.
Margin
Amount calculated by the clearing house as necessary to cover the risk of financial loss on options contracts, futures contract and CFDs.
Margin call
Occurs when the value of an asset falls below the agreed loan to valuation ratio. The lender will ask the borrower to deposit enough money to bring the loan back to the agreed lending ratio.
Margin interval
Probable maximum one day move in the underlying asset as calculated by the clearing house. Expressed as a percentage, and used in the calculation of margins for options and futures.
Margin loan
A loan that is taken out to invest in shares or managed funds.
Marginal tax rate
The highest rate of tax a taxpayer will pay on their income.
Market announcements office
The office designated by ASX to process company announcements for release to the market.
Market capitalisation
Total number of shares on issue multiplied by their market price. This can be applied to work out the market value of one company or of the value of all companies listed on the exchange.
Market index
A statistical measure of change in the value of a market, asset class or industry sector. The value of an index increases or decreases with changes in the value of the underlying security or sector it's measuring. For example, the ASX All Ordinaries Index measures the change in the overall value of 500 largest companies by market capitalisation listed on the Australian Securities Exchange.
Market order
Order to a broker to buy or sell at the current market price at the time the order is given.
Market participants
Organisations that meet ASX's requirements are recognised as Market Participants. Includes Trading Participants and Clearing Participants.
Market price
Prevailing price of shares traded on ASX. May be the last price at which the shares traded, or the most recent price offered or bid for the shares.
Market risk
Risk of a general decline in the market.
Market sector
A group of companies that produce or buy and sell such similar goods that they are in competition with each other. Examples include the mining, retail and technology sectors.
Market-linked investment
A pooled investment scheme where the value of the investment depends on the movements of a particular market.
Master trust
Allows individual investors to pool their funds so that they can invest in a wide choice of investments, usually at wholesale prices. Typically used by financial planners for reporting convenience. Also known as an investment platform or wrap account.
Maturity
The date on which a debt or investment and all outstanding interest payments must be paid in full.
median adjustment
ATO term - The midway point of all label adjustments made. The median differs from the mean, which is the arithmetic average (adding all adjustments and dividing by the number of labels adjusted). The reason we use median rather than mean is because it is a more accurate representation of adjustments, as it reflects the sample size being used. For example, a small number of large value adjustments will overstate the true value of adjustments in the sample.
Member (of a company)
A shareholder
Members' voluntary liquidation
A liquidation for solvent companies, initiated by the company's shareholders
Memorandum of association
Part of a company's constitution, the formal document subscribed by those wishing to form a company and giving details of the company, e.g. its name, objects and particulars of capital.
Merger
When two or more companies combine either by takeover or creation of a new entity.
Mining tenement
A license, permit or lease providing rights to explore for and/or extract minerals under the surface of an area of land.
MINIs
Highly leveraged share-tracking warrants providing exposure movement in the price of an underlying asset on a one to one basis for a fraction of its price. They can be considered as a CFD - style product with an embedded stop loss feature.
Money transfer request
When one individual or entity asks another to send them money.
Mortgage
A charge over property given by the owner (borrower/mortgagor) to a lender (mortgagee) to secure repayment of a loan or to ensure satisfaction of a debt.
Mortgage broker
A person who matches borrowers to lenders and arranges mortgage contracts between the two parties.
Mortgage fund
A type of investment fund where investors' money is on lent (as mortgage loans) to a range of borrowers who use the money to buy or develop properties. It might also be used for other investments (for example, investing in other mortgage funds). In return the fund manager promises to pay investors a regular income.
Mortgage scheme
A scheme that invests in mortgage loans or in companies that lend money for mortgages.
Mortgage-backed security
An investment in a collection of loans for which the lender holds a mortgage over the property the loan was used to purchase. The loans are written by a financial institution, then sold to an intermediary, who packages (or securitises) the loans into different groups, based on their level of risk. The packaged group of loans is then offered to investors.
Mortgagee
Someone who lends money in a mortgage arrangement.
Mortgagee sale
When a mortgagee sells a property to recoup their costs because a mortgagor defaults on their repayments.
Mortgagor
Someone who borrows money in a mortgage arrangement.
Mutual fund
American term to describe a managed investment.
