Glossary
Paid-up capital
Amount paid by shareholders or recorded as paid on issued shares.
Parent company or entity
Controlling company or entity.
Pari passu
On an equal footing, or proportionately. A term frequently used with respect to share issues to indicate that the new shares being issued will rank equally in all respects with previously issued shares either immediately or at some specified time in the near future.
Participating dividend
Dividend paid to preference shareholders in addition to the normal preference dividends payable.
Participating preference shares
Share with a claim to profits ahead of ordinary shares. These shares may also have access to any additional dividends to be paid after ordinary shareholders have received theirs.
Partly paid shares
Shares which have been issued with only part of their value paid, for example shares may be issued with a par value of $1.00, of which only 50 cents has been paid, with a further 50 cents still owing. Also known as Contributing Shares.
Passively managed
A 'buy and hold' investment management approach where a fund manager holds a portfolio of assets aimed at generating a return before fees similar to the index it is tracking, such as the ASX All Ordinaries Index or the ASX200 Index. (Also known as an index fund.)
pay as you go (PAYG) withholding
ATO term - The value of income tax withholding payable by employers on employee salary and wages. Other withholding not from salary and wages (including non-resident interest, dividend or royalty withholding, no-ABN and no-TFN) are excluded.
Payday loan
A cash advance against your next pay. These short-term loans charge a high interest rate and must be paid back by a certain date.
Payment dishonour
ATO term - A payment which has not been credited to the account due to insufficient funds.
Payment reversal
ATO term - The payment has been removed the account as if no payment had been made.
Payment variation advice (PVA)
ATO term - A statement used by super funds in two different situations: providing information when returning a payment/remittance from the ATO that cannot be accepted and credited to a member's account, advising that a recovery notice issued to the fund, requiring a payment of a previous remittance, cannot be satisfied and why
Pension
An income stream that makes regular income payments. Examples include the government age pension or an account-based pension from your super fund.
Percentage franked
Dividend paid by a company out of profits on which the company has already paid tax. The shareholder is entitled to an imputation credit, or reduction in the amount of income tax that must be paid, up to the amount of tax already paid by the company. The % figure represents the % of tax already paid by the company. Sometimes the percentage franked is also referred to in company announcements as a franked amount or imputed credit.
Personal insolvency agreement
Similar to a debt agreement but more structured and formal and costs more. Your property comes under the control of a trustee who must investigate your financial affairs. Your name, some personal details and details of the controlling trustee and creditors meeting must be advertised in a local or national newspaper.
Personal loan
A low-value loan for personal use such as to buy a car or take a holiday.
petroleum resource rent tax (PRRT)
ATO term - A profits-based tax that only taxes profits above a specified rate of return from the sale of petroleum resources. PRRT is not a royalty or a traditional income tax. It is rather a tax on 'rents' in the sense of excess returns that only taxes assessable receipts when they exceed deductible expenditure on a project-by-project basis. PRRT will only arise when a project has recovered all eligible outlays associated with the project (after deducting eligible exploration expenditure transferred from other projects), including the achievement of a threshold rate of return on the outlays.
Phishing
Emails or text messages that attempt to trick you into giving out your personal information such as usernames, passwords or banking details.
Physical market
Underlying market on which the derivative is based. For example, shares, equity indices, interest rate, physical commodities and currencies.
pillars of compliance
ATO term - The four pillars of compliance are correctly registering in the system, lodging tax information on time, reporting complete and accurate information and paying tax obligations on time.
Placement
Allotment of shares, debentures, etc. made directly from the company to investors.
Plain vanilla option
A simple, standard type of option, with an expiration date, a strike price, and no additional features.
PoA
A document that appoints someone to act on your behalf in a legal or business matter. A Power of Attorney (PoA) may be general or specific and may be unlimited or limited to a specific act. It is different to an enduring power of attorney
Poll (of creditors)
A voting procedure where the chair of the meeting must consider both the number of creditors voting the same way and the value of their debts in deciding if a resolution is approved or not
Ponzi scheme
A type of fraud that uses money from new investors to make interest payments to earlier investors. The schemes typically offer high rates of return and fall apart when no new investors can be found.
Pooling
The practice of treating the affairs of a group of companies as if it were a single external administration
Portfolio
The collection of assets held by an investor. Can include shares, fixed interest, derivatives, property, collectables, managed investments and cash.
Power of Attorney
A document that appoints someone to act on your behalf in a legal or business matter. A Power of Attorney (PoA) may be general or specific and may be unlimited or limited to a specific act. It is different to an enduring power of attorney
Preference shares
Shares that rank before ordinary shares in the event of liquidation.
Premium
In relation to an insurance contract, it is the price charged by an insurance company for providing the insurance cover.
Premium (option)
Amount payable by the taker of the option to the writer of the option on buying the option.
Premium margin
Current market value of an exchange traded option based on the previous day's closing market price and represents the current cost of liquidating the position.
Prescribed provisions
Provisions that the Corporations Act 2001 (Corporations Act) takes to be included in a deed of company arrangement, unless the deed specifically excludes them
Preservation age
The age at which you can withdraw your super. You must also meet a condition of release.
Preserved benefit
A super benefit that remains in a super fund until the member reaches preservation age and, in most instances, retires from the workforce.
Price earnings ratio (P/E ratio)
A financial ratio that can be used to work out whether the price of a share is over or undervalued compared to its competitors. To work out a P/E ratio, the current price of the share is divided by the earnings per share (EPS).
Price range for day or week
Highest and lowest price at which an instrument has traded over the course of a day or week.
Price sensitive announcements
Information that is expected to have a material effect on the price or value of the entity's securities.
Price-Earnings Ratio (PE)
The number of times the price covers the earnings per security over a twelve month period. Investors commonly use this ratio to measure the attractiveness of particular shares and to compare shares in one company with those in another. P/E ratio = Price per Share
Earnings per share
Primary card holder
The individual in whose name a credit card account is created. You are solely liable for all transactions on the account, including any secondary cards.
Principal
The original sum of money invested, or the amount borrowed or still owing on a loan.
Priority
The order set down by the Corporations Act for the payment of unsecured creditors of an insolvent company by an external administrator
Priority creditor
An unsecured creditor entitled to be paid ahead of other creditors (e.g. employees)
Private equity fund
Investment fund not available to the general public that often makes concentrated investments directly into companies.
Pro rata issue
Iissue offered to all holders of securities in a class on a pro rata basis.
Probate
A document issued by a court certifying the validity of a will and authorising the executor to administer the estate in accordance with the provisions of the will.
Product disclosure statement (PDS)
A document that financial service providers must provide to you when they recommend or offer a financial product. It must include information about the product's key features, fees, commissions, benefits, risks and the complaints handling procedure.
Promissory note
An unconditional written promise to pay a specified sum of money on demand or at a specified date.
Proof of debt
A prescribed form creditors complete setting out details of their claim against the company, including how the debt arose and the amount claimed
Property development
The business of buying land or property and developing or improving the asset for the purpose of selling at a profit.
Property trusts
Trusts that enable investors to purchase an interest in a diversified portfolio of real estate assets. Investors in property trusts gain exposure to the value of the real estate the trust owns, and receive rental income through distributions the trust pays to investors.
Prospectus
A document issued by a company that wants to raise money from the public by offering equity (shares) or debt (bonds) securities in the company or a trust. It must contain all the information needed to make an informed decision about investing in the company.
Provisional liquidator
A registered liquidator appointed by the court to preserve a company's assets until the court decides a winding-up application
Proxy
Written authorisation given by one person to another so that the second person can act in place of the first person, e.g. attending and voting at shareholders' meetings. The person authorised to act is also known as the proxy.
Proxy form
A form that creditors or shareholders must complete to appoint a proxy for a creditors' or shareholders' meeting
Public examination
An external administrator, ASIC or a person authorised by ASIC can apply to court to question an externally administered company's directors or any other person who may be able to give information about the affairs of the company
Public trustee
Government agency or business that provides professional and independent services such as making wills, acting as an executor in deceased estates, managing trusts and Powers of Attorney.
Pump and dump scam
When scammers artificially inflate the share price of a stock by posting positive news items (not necessarily true) to increase trading. Once the price increases, the scammers sell the shares at the inflated price.
Put option
An option contract that gives you the right to sell (but does not lock you into selling) the underlying asset at a specified price, at or before a certain time in the future. You would use a put option when you expect the price of an asset to decrease.
Put option / warrant
Option / warrant contract giving the holder the right, but not the obligation, to sell the underlying asset at the exercise price.
Pyramid scheme
Illegal form of multi-level marketing where you receive benefits for recruiting others to join the scheme. Most of the income is earned by recruiting others, rather than selling the good or service.
