Jargon Buster | Glossary of Investment Terms
The document issued by a product provider to the policyholder after signing a contract. During a specified period of time, the policyholder is entitled to cancel certain financial products. The period of time in which the product can be cancelled differs dependant upon which market the client and provider operate in. May not apply to many international jurisdictions. Can also be referred to as Cooling Off Notice/Period or Rights to Cancel.
Chargeable Transfer/Chargeable Lifetime Transfer
An immediate charge applied to a Discretionary/Flexible Trust and any other chargeable transfer made by the same person within the previous 7 years that exceeds the available nil rate band. The current rate (as at 2012) is 20% of the value of the transfer.
This is a transaction on a policy which leads to a Chargeable gain.
Chargeable event certificate
Certificate issued by RL360° to HMRC when a chargeable event occurs on a policy/bond owned by a UK resident.
The amount of profit a policyholder makes after they have surrendered a policy/bond (or if UK resident, if the policyholder exceeds their 5% tax deferred annual allowance).
Closed ended fund
A collective investment which has a fixed number of shares traded on a stock exchange. In the UK the most common example of this is an Investment Trust.
A document confirming details of a sale or purchase on the stock exchange or with a fund manager confirming all the relevant details of the deal.
Any event, agreed by the board of directors of a company that brings a major change(s) to a company and affects its stakeholders. This can include but is not limited to takeovers/mergers, bonus issues, rights issues, consolidations etc.
The creation price of a unit in a Unit Trust is the price before the initial charge has been applied. It represents the value of the trust at current market levels, with all expenses included, divided by the number of units in issue. The creation price is used to calculate the offer price (purchase price).
Critical illness insurance
Insurance that pays a lump sum if the policyholder is diagnosed with a specified condition covered by their policy terms and conditions.
A specialised company that is responsible for holding financial assets for safe keeping and record keeping on behalf of corporate or individual investors.
Customer Due Diligence
A procedure that financial institutions like RL360° must carry out which involves the gathering of relevant personal and financial information and documents regarding a policyholder in order to comply with legislation and regulations.