| ADP(Automatic Data
Processing Inc.)
|
ADP Investor
Communications (formerly IICC) is the Canadian division and ADP Investor
Communication Services is the American division that provide services such as
beneficial shareholder mailings and proxy tabulation to US based brokerage
firms, banks and other investment firms and funds, via direct electronic data
collection of the shareholder information.
|
| Authorized
Capital
|
The maximum
number of shares that a corporation may issue under its Articles of
Incorporation, By-Laws or Memorandum of Association.
|
| Beneficial
Owner
|
The beneficial
owner of shares (or other assets) is the real owner. For example: An investor
may own shares that are registered in the name of a depository, brokerage firm,
trustee, custodian or bank to facilitate transfer or to preserve
anonymity, and the investor would be the beneficial owner of the shares.
|
| Bearer
Security
|
A security
(shares or debt instrument) whose ownership is evidenced by possession and is
transferable by delivery. The owner's name is not recorded on the books of the
issuing company or on the security itself.
|
| Bid
and Asked Quotations
|
Bid represents
the highest price that a prospective buyer is willing to pay; ask price
is the lowest price that the seller will accept. The two together are
referred to as a quotation or quote.
|
| Board
Lot
|
100 units of a security trading at $1.00 or more per unit, 500 units of a
security trading at $0.10 or more per unit and less than $1.00 per unit and
1000 units of a security trading at less than $0.10 per unit
|
| Broker/Brokerage
Firm
|
A securities
firm or an individual associated with one. When acting as a broker, as in
buying or selling listed stocks, the broker does not own the securities
himself, but acts for the buyer or seller as an agent and charges a commission
for these services.
|
| Canadian
Securities Administrators (CSA)
|
A cooperation of
the provincial securities regulators in Canada. This group was
established to harmonize regulatory standards and coordinate activities to
create in Canada a national system of securities regulation administered by
provincial securities commissions. This has been described in recent
years as the "virtual national securities commission".
|
| Capital
Pool Company
|
Is defined in
the TSX Venture Exchange Corporate Finance Manual as a corporation that has
been incorporated or organized pursuant to the laws of a jurisdiction in
Canada, that has obtained a receipt for a preliminary CPC Prospectus from one
or more of the Commissions in compliance with the TSX Venture Exchange Policy
and in regard to which the Final Exchange Bulletin has not yet been issued.
|
| Cease
Trade Order
|
An order issued
by the Securities Commission restraining the trade of the securities of a
company.
|
| Certificate
|
The printed or
engraved document evidencing ownership of securities.
|
| Co-Transfer
Agent
|
A co-transfer
agent effects transfers of securities and reports these transfers to the main
transfer agent but does not maintain a company’s records or documents.
|
| Commission
|
The fee charged
by a stock broker for buying or selling securities as an agent on behalf of a
client.
|
| Consolidation
(Reverse Split)
|
The exchange of
a greater number of a company's shares for a lesser number, (e.g. three for
one). Results in a higher share price and less shares outstanding.
|
| Continuous
Disclosure
|
A reporting
issuer must issue a press release as soon as a material change occurs in its
affairs and, in any event, within ten days.
|
| CUSIP
|
(Committee on
Uniform Security Identification Procedures) is the registered trademark of the
American Bankers Association and is a standard system of securities
identification (i.e. CUSIP numbering system) and securities description (i.e.
CUSIP descriptive system) that is used in processing and recording securities
transactions in North America.
|
| Day:
Business Day
|
Refers to those
days when most corporate and government offices are open for business,
generally excluding weekends and holidays.
|
| Day:
Calendar Day
|
Refers to any
day of the year.
|
| Day:
Clear Day
|
Under take-over
legislation, if a stated period of days ends on a Sunday or a holiday, the
period is extended to the next day that is not a Sunday or holiday. Clear
Day is also defined as the day after the mailing of notice of an event, and the
day prior to the event.
|
| Deemed
Disposition
|
Under certain
circumstances, taxation rules state that transfer of property has occurred,
even without a purchase or sale, e.g. there is a deemed disposition on death or
emigration from Canada.
|
| Delivery
|
Good Delivery is
when a security that has been sold is in proper form to transfer title by
delivery to the buyer. Regular Delivery is when, unless otherwise
stipulated, sellers of stock must deliver it on or before the third business
day after the sale (see day). Failed delivery is a transaction in which
there is a clear understanding that delivery of the securities involved
will be delayed beyond the normal settlement period.
|
| Depository
|
Acts as a
clearinghouse for the settlement of securities trading activity and holds
securities on behalf of intermediaries such as brokerage firms, banks, trust
companies and other investment firms. CDS Inc. is the only depository for the
Canadian securities industry and DTC (The Depository Trust Company) is the only
depository for the U.S. securities industry.
|
| Direct
and Indirect Holdings
|
The holding(s)
of an individual or company in other companies. For example:
Company A owns 500,000 of Company B's 1,000,000 outstanding shares.
Company A therefore has a 50% direct interest in Company B. Company B in
turn owns 300,000 of Company C's outstanding 500,000 shares. Company B
therefore has a 60% direct interest in Company C. Company A (by virtue of
its 50% direct interest in Company B) has a 30% indirect interest in Company C.
|
| Director
|
Person elected
by voting common shareholders at a company's annual meeting to direct company
activities.
|
| Disclaimer
Clause
|
The Securities
Commission requires that all prospectuses carry on their front page the
disclaimer that the Commission itself has in no way approved the merits of the
securities being offered for sale.
|
| Dissident
Proxy (Circular)
|
A group of
shareholders that wish to remove the incumbent management are referred to as
"dissident" shareholders. Under Securities Laws they can prepare, file with the
regulatory authorities and mail to an issuer's shareholders, a Dissident
Information Circular and proxy nominating persons to replace the current
directors. Also known as a proxy fight.
|
| Escrow
|
An agreement
under which a security or document is delivered by a grantor, obligor or
promisor to a third party, usually a trust company, to be held by the latter
until the happening of a contingency or performance of a condition and then
delivered by the trust company to the grantee, obligee or promisee. The term is
also, however, used to cover a wide variety of arrangements and deposits, most
frequently being the deposit of treasury shares of a new company pending
development of its property or a product, or issued on the acquisition of a
product or property by a listed company. Such shares may only be released or
transferred with the permission of the applicable regulatory authority such as
the stock exchange and/or the provincial securities commission(s) or under the
time release terms of the agreement.
|
| Financial
Intermediary
|
An institution such as a bank, life insurance company, credit union, or mutual
fund that receives cash from suppliers of capital and invests it.
|
| Flow-Through
Shares
|
Tax deductions
and credits, normally available only to a corporation, may flow through to
owners of the corporation's flow-through shares. Canadian exploration and
mining companies are able to issue such shares at a premium because investors
are considered to be funding exploration and development costs and are
therefore entitled to deduct these expenses from all other income.
|
| General
Power of Attorney
|
A legal document signed by a living person, a company or corporation assigning
to the named party or parties, limited or unlimited powers, all as specified in
such general power of attorney. The person signing the general power of
attorney is generally referred to as the grantor and the person named to act is
referred to as the substitute. The grantor normally appoints a substitute to
act on his behalf as a matter of convenience, generally because he is
unavailable, by reason of travel, incapacitation, other than incompetence.
|
| Generic
Certificate
|
A Generic Certificate is a traditional share certificate that is “computer
customized” on special security paper by the Transfer Agent. Generic
Certificates provided by Pacific Corporate Trust are approved for use on all
exchanges in North America, including the TSX which has approved the use of
generic certificates provided that they conform with STAC's policy &
procedure regarding Generic Certificates. They are more secure and cost
the issuer less than the traditional customized engraved certificate.
|
| Guarantee
|
See
Signature Guarantee.
|
| Information
Circular
|
Document sent to
shareholders with a proxy, providing details of matters to come before a
shareholder's meeting.
|
| Insider
|
All directors
and senior officers of a corporation and those who may also be presumed to have
access to inside information concerning the company; also anyone owning more
than 10% of the voting shares in a corporation, under current Canadian
regulations.
|
| Insider
Report
|
A report of all
transactions in the shares of a company by those considered to be insiders of
the company and submitted each month to securities commissions.
|
| Intermediary
|
Is defined in
National Instrument 54-101: for a security, a person or company that, in
connections with its business, holds the security on behalf of another person
or company, and that is NOT (a) a person or company that holds the security
only as a custodian, and is not the registered security holder of the security
nor holding the security as a participant in a depository, (b) a depository, or
(c) a beneficial owner of the security.
|
| Intrinsic
Value
|
That portion of
a warrant, right, or call option's price that represents the amount by which
the market price of a security exceeds the price at which these securities may
be exercised.
|
| Investment
Advisor
|
A salesperson
employed by a securities firm who must be registered by the Securities
Commission of the province in which they work.
|
| Investment
Counsellor
|
A professional
engaged to give investment advice on securities for a fee.
|
| Investment
Dealer
|
A securities
firm or an individual associated with one. When underwriting new
securities or in most bond trading, the dealer acts as a principal, owning the
securities bought or sold.
|
| ISIN
(International Securities Identification Number)
|
A code that
uniquely identifies a specific securities issue. The organization that
allocates ISINs in any particular country is the National Numbering Agency
(NNA), which is CDS Inc. in Canada. All issuers are urged to use this numbering
scheme which is now the accepted standard by virtually all countries.
|
| Issue
|
Any of a
company's securities; the act of distributing such securities.
|
|
Issued and Outstanding
|
Refers to the
number of shares a company has issued from its treasury and that are
outstanding on the shareholder register of the company.
|
| Limited
Liability
|
The word limited
at the end of a Canadian company's name implies that liability of the company's
shareholders is limited to the money they paid to buy the shares and can only
be claimed from funds left in the company. By contrast, ownership by a
sole proprietor or partnership carries unlimited personal legal responsibility
for debts incurred by the business.
|
| Main
Agent
|
The main agent
is the main transfer point and maintains the client company’s records and
documents.
|
| Manipulation
|
The illegal
practice of buying or selling a security for the purpose of creating
false or misleading appearance of active trading or for the purpose of raising
or depressing the price to induce purchases or sales by others.
|
| Margin
|
The amount paid
by a client when he uses credit to buy a security, the balance being loaned by
the dealer against acceptable collateral.
|
| Market
Price
|
The most recent
price at which a security transaction took place.
|
| Material
Change
|
A change in the
affairs of a company that is expected to have a significant effect on the
market value of its securities. This is defined by the Securities Act of a
province.
|
| Medallion
Guarantee
|
See
Signature Guarantee.
|
| National
Instrument 54 101
|
The Canadian
Securities Administrators have adopted this National Instrument as the
replacement for National Policy 41.
|
| NCI
(Non-certificated Issue) |
We currently
have an agreement with CDS to hold their position NCI. Rather than sending
certificates back and forth between our offices, if shares are to be added to
their position we receive them, cancel them and add the shares to their
position. If a client of one of their participants wants a certificate, they
send a withdrawal request and we issue a certificate and reduce the balance of
their position. As part of the process we exchange files with CDS daily so they
can reconcile their records with the balance we maintain on the register. The
file they send to us contains the balances of the intermediaries that hold
positions in your company's shares. This allows us to give you the Participant
Balance Reports
|
| Non-Objecting
Beneficial Owner (NOBO)
|
Refers to those
beneficial owners that do not object to having their shareholder information
(name and mailing address) released to the public. Lists of U.S. NOBOs for any
given Issue are available from ADP in the United States. These list have
recently become available for Canadian NOBO's under National Instrument 54-101.
|
| No Par
Value (n.p.v.)
|
Indicates a
common stock has no stated face value.
|
| OBO
(Objecting Beneficial Owner)
|
Refers to those
beneficial owners that object to having their shareholder information (name and
mailing address) released to the public.
|
| Odd
Lot
|
A number of
shares which is less than a board lot.
|
| Offer
|
The lowest price
at which a person is willing to sell; as opposed to bid which is the highest
price at which one is willing to buy.
|
| Over-The-Counter
(OTC)
|
A market for
securities made up of securities dealers who may or may not be members of a
recognized stock exchange. Over-the-Counter is mainly a market conducted
over the telephone. Also called the unlisted, interdealer or street
market.
|
| Ownership
Statement
|
A statement
issued by a Transfer Agent reflecting the current registered security holdings
of a person or entity in a particular security issue maintained by that
Transfer Agent. It would also reflect any changes to the registered
shareholder's position, similar to a bank statement, and would replace the use
of a physical certificate to denote registered ownership of securities.
Australia is currently using Ownership Statements instead of certificates and
Canada is most likely to use them upon the expected dematerialization of the
securities industry.
|
| Pooled
Shares
|
see
Escrow.
|
| Private
Placement
|
The underwriting
of a security and its sale to a few buyers, usually by way of a subscription
agreement and an Offering Memorandum or Prospectus is not issued.
|
| Prospectus
|
A legal document
which describes securities being offered for sale to the public. Must be
prepared in conformity with requirements of applicable securities laws.
|
| Proximate
Intermediary
|
As defined in NI
54-101, means for a security, (a) a participant in a depository holding the
security, or (b) an intermediary that is the registered holder of the security.
|
| Proxy
|
Authorization
given by a shareholder to someone else, who need not be a shareholder, to
represent him or her and vote his or her shares at a shareholders' meeting.
|
| Push-Out
|
During a stock
split, the process of the transfer agent forwarding new shares directly to the
registered holders of old share certificates, without the holders having to
surrender these old certificates. Both old and new shares henceforth
have equal value.
|
| Qualifying
Transaction
|
In Policy 2.4 of
the TSX Venture Exchange Corporate Finance Manual (August 2002), means a
transaction where a CPC acquires Significant Assets, other than cash, by way of
purchase, amalgamation, merger, or arrangement with another Company or by other
means.
|
| Quotation
or Quote
|
The highest bid
to buy and the lowest offer to sell a security at a given time.
|
| Record
Date
|
The date set by
the corporate board of directors for the transfer agent to close the books to
further changes in registration of stock. All shareholders as of the
close of business on this date are entitled to the upcoming dividend or other
entitlement that is to be distributed to registered shareholders. In relation
to shareholder meetings, this is the date that determines who is eligible to
receive material and if applicable, to vote at the meeting.
|
| Registered
Security
|
A security
recorded on the books of a company in the name of the owner. It can be
transferred only when the certificate is properly endorsed by the registered
owner. Registered debt securities may be registered as to principal only
or fully registered. In the latter case, interest is paid by cheque
rather than by coupons attached to the certificate.
|
| Registrar
|
Usually a trust
company appointed by a company to prevent the over-issuance of securities as
defined by the company's authorized capital. The registrar receives both
the old cancelled certificate and the new certificate from the transfer agent
and records and signs the new certificate. The registrar is, in effect,
an auditor checking on the accuracy of the work of the transfer agent, although
in most cases the registrar and transfer agent are the same trust company.
|
| Reporting
Issuer
|
Usually, a
corporation that has issued or has outstanding securities that are held by the
public and is subject to continuous disclosure requirements of the securities
administrators as defined by provincial Securities Regulations.
|
| Restricted
Shares
|
Shares that
participate in a company's earning and assets (in liquidation), as common
shares do, but generally have restrictions on voting rights or else no voting
rights.
|
| Reverse
Split
|
See
Consolidation.
|
| Right
|
A temporary
privilege granted to existing common shareholders to purchase additional shares
of a company from the company itself at a stated price.
|
| Rights
Certificate
|
This is a
document which gives the shareholders the right to buy additional shares at a
pre-determined price; this price is generally below the current market value.
Rights are issued to registered shareholders on a given record date, usually on
the basis of one right for each share held. A specific number of rights at a
stated subscription price entitles the shareholder to purchase a new share. The
life of a rights certificate is usually for a period of four to six weeks,
after which they become null and void. Rights certificates generally carry an
assignment panel which enables the shareholder to sell or assign part or all of
his rights.
|
| SEC
|
The Securities
and Exchange Commission, a federal body established by the United States
Congress, to protect investors in the US. In Canada, there is no national
regulatory authority; instead, securities legislation is provincially
administered.
|
| Securities
|
The general term
applied for documents issued to investors by companies, governments and
quasi-government bodies which evidences ownership of capital, formal loans or
financial obligations. This general descriptive term covers stock certificates,
bonds, debentures, notes, warrants and similar documents, all of which are
normally saleable and transferable from one person to another.
|
| Securities
Acts
|
Provincial Acts
administered by the Securities Commission in each province, which set down the
rules under which securities may be issued and traded.
|
| Securities
Administrator
|
A general term
referring to the provincial regulatory authority (e.g. Securities Commission or
Provincial Registrar) responsible for administering a provincial Securities
Act.
|
| Securities
Transfer Association (STA)
|
Is an industry
organization that represents transfer agents in the United States. Many
Canadian transfer agents are also members as there rules and regulations that
are being proposed, discussed and passed in the United States have both direct
and indirect consequences to Canadian transfer agents that represent Issuers
that do business or are located in the United States.
|
| Securities
Transfer Association of Canada (STAC)
|
Is the industry
organization that represents the regional and national transfer agents. The
representatives of STAC sit on many committees that deal with changing
legislation, regulation, policy and procedures that are being proposed and or
implemented in the Canadian market place.
|
|
Shareholder of Record
|
The holder of a
registered security as of the close of business on a specified day.
|
| Signature
Guarantee
|
In general terms
a signature guarantee is the process whereby the guarantor warrants to the
transfer agent that: a) the signature of the shareholder is genuine, b) the
signer was an appropriate person to endorse the certificate, and c) the signer
has the legal capacity to sign. The Medallion Signature Guarantee is the term
used to describe the programs that are in place in the United States and in
Canada. Companies can apply for, pay an insurance premium and if approved,
receive a special stamp to enable them to provide signature guarantees within
the limits of the insurance they have paid for. The limits are set to the
market value of any one certificate the medallion stamp appears on. In Canada,
in addition to the Medallion programs, banks may also provide signature
guarantees.
|
| Special
Warrant
|
Is a fully paid
for security that is exchangeable into another security and no further
consideration is required to be paid at the time of the exchange.
|
| Split
|
Division of the
outstanding shares of a corporation into a larger number of shares. A 3 for 1
split by a company with one million shares outstanding would result in three
million shares outstanding. Each holder of 100 shares before the 3-for-1 split
would have 300 shares, his proportionate equity in the company would remain the
same.
|
| Stock
Power of Attorney
|
An assignment
(to transfer a security certificate) separate from the security certificate.
|
| Stockbroker
|
One who acts as
an agent in buying and selling of securities and charges a commission for his
services. Usually a member of a stock exchange.
|
| Straight
Through Processing (STP)
|
The automated
processing of a securities transaction from a securities seller through a
central securities depository to the securities purchaser to eliminate
repetitive data entry, reduce risk of error and speed processing (CCMA Web
site).
|
| Street
Certificate
|
A stock
certificate that is registered in the name of an investment dealer, depository,
stockbroker, or individual and that is properly endorsed by the registered
holder, but beneficially owned by someone else.
|
| Street
Name
|
Securities
registered in the name of a dealer or individual, instead of the real or
beneficial owner.
|
| System
for Electronic Document Analysis and Retrieval (SEDAR)
|
An initiative of
the Canadian Securities Administrators (CSA) and CDS Inc., the SEDAR system was
created to allow filing of certain documents such as prospectuses and
continuous disclosure documents in an electronic format with the relevant
Canadian Securities Regulatory jurisdiction(s). It was developed to increase
the efficiency of the filing process for both the filing issuers and the
Securities Commissions as well as to allow the electronic payment of CSA filing
fees and to improve public access to securities filings. For more information
see our SEDAR page.
|
System
for Electronic Disclosure by Insiders (SEDI)
|
An initiative of
the Canadian Securities Administrators (CSA) and CDS Inc., SEDI is the on-line
computer system providing for the transmission, receipt, review and
dissemination of insider reports and related information filed electronically.
|
| Take-Over
Bid
|
An offer made to
security holders of a company to purchase voting securities of the company
which, with the offeror's already owned securities, will in total exceed 20% of
the outstanding voting securities of the company. For federally
incorporated companies, the equivalent requirement is more than 10% of the
outstanding voting shares of the target company.
|
| Timely
Disclosure
|
An obligation
imposed by securities administrators on companies, their officers and directors
to release promptly to the news media any favourable or unfavourable corporate
information which is of a material nature. Broad dissemination of this
news allows non-insiders to trade the company's securities with the same
knowledge about the company as insiders themselves.
|
| Trader
|
Employee of a
securities firm who executes buy and sell orders for the firm and its clients
either on a stock exchange or the OTC market. Also a client who buys
and sells frequently with the objective of short-term profit.
|
| Trade
Date + 1 (T + 1)
|
A proposal by
the Canadian and U.S. securities industries, currently in the planning stages,
to shorten the time it takes to clear and settle a securities trade (to
exchange securities for money) from the current three days after the date of
trade (T + 3) to one day after the date of trade.
|
| Transaction
Date
|
The date on
which the purchase or sale of a security takes place.
|
| Transfer
Agent
|
Generally a
trust company appointed by a corporation to transfer ownership of its shares.
In the majority of instances, the trust company in its capacity as Transfer
Agent maintains the shareholders register and provides other related services.
|
| Treasury
Shares
|
Authorized but
unissued shares of a company or previously issued shares that have been
re-acquired by the corporation.
|
| Underwriting
|
The purchase for
resale of a security issue by one or more investment dealers or
underwriters. The formal agreements pertaining to such a transaction are
called underwriting agreements.
|
| Unit
|
Two or more
corporate securities (such as preferred shares and warrant) offered for sale to
the public at a single, combined price.
|
| Unlisted
|
A security not
listed on a stock exchange but traded on the over-the-counter market.
|
| Voting
Instruction Form
|
A form that is sent out by ADP to beneficial shareholders in place of the
proxy produced by an Issuer for voting on the resolutions at their shareholder
meeting. It contains all of the resolutions as shown on the Issuer's proxy, but
it is in a form that can be scanned through a machine that tallies the votes.
The Voting Instruction Form provides the option to vote on the form, or via
telephone or the internet.
|
| Warrants
|
A warrant is
usually a bearer certificate giving the holder the right over a specified
period of time to purchase shares of a company at specifically stated prices.
Warrants are normally attached to certain new bond or share issues, in order to
make them more attractive to prospective purchasers.
|
|
Sources:
TSX Venture Exchange Corporate Finance Manual,
The Trust Companies Institute Corporate Trust Services Manual
&
How to Invest in Canadian Securities (The
Canadian Securities Institute)
|