Radar Alter (U.S)
Close watch by a company’s top
executive on trading their company’s stock. The objective is to detect any
unusual amount of buying which might indicate that some one is attempting to
acquire a chunk of the stock in anticipation of a takeover attempt.
Random Walk Theory
Claims that a stock’s past price
action is no guide to future prices because prices move randomly, not in a
pattern. Random walk theoreticians would sneer at the idea that because a stock
has been moving up during the last few weeks it is likely to continue moving
up.
Real Time Gross Settlement (RTGS)
Concept designed to achieve sound
risk management in the settlement of interbank payments. Transactions are
settled across accounts held at the Central Bank on a continuous gross basis
where settlement is immediate, final and irrevocable.
Record Date
A date on which the records of a
company are closed for the purpose of determining the stockholders to whom
dividends, proxies rights etc., are to be sent.
Red Herring
A preliminary prospectus filed
with the Securities and Exchange Commission in the United States in order to
test the market’s reaction to a proposed new issue of securities. In Indian
scenario, Red Herring is a draft prospectus which is used in book built issues.
It contains all disclosures except the price and is used for testing the market
reaction to the proposed issue.
Redemption Price
The price at which a bond is
redeemed.
Registered Bonds
A bond which is registered in the
books of the company in the name of the owner.
Registrar to an issue
The person appointed by a body
corporate or any person or group of persons to carry on the activities of
collecting applications from investors in respect of an issue; keeping a proper
record of applications and monies received from investors or paid to the seller
of the securities and assisting body corporate or person or group of persons
in- determining the basis of allotment of securities in consultation with the
stock exchange; finalising of the list of persons entitled to allotment of
securities; processing and despatching allotment letters, refund orders or
certificates and other related documents in respect of the issue.
Regulation T/Regulation U (U.S)
Two Federal Board regulations
controlling respectively, the amount of credit a broker or a bank can extend to
a client to buy securities. During recent years, under Regulation T (applying
to Brokers), the Federal Reserve Board has set margin requirements on most
stock at 50 per cent, meaning that the broker can lend a client no more than 50
per cent of the stocks he wishes to purchase. Regulation U applies in similar
manner to banks.
Regulatory arbitrage
A financial contract or a series
of transactions undertaken, entirely or in part, because the transaction(s)
enable(s) one or more of the counterparties to accomplish a financial or
operating objective which is unavailable to them directly because of regulatory
obstacles.
Rematerialisation
The process of converting
electronic holdings into physical securities through a Depository Participant.
Repurchase Agreement (repo)
A financing arrangement used primarily
in the government securities market whereby a dealer or other holder of
government securities sells the securities to a lender and agrees to repurchase
them at an agreed future date at an agreed price which will provide the lender
an extremely low risk return. Repos are popular because they can virtually
eliminate credit problems. The repo market is enlarged and enhanced by its use
in federal board open market operations in the United States. Repos operate
slightly differently in other markets.
Repurchase price
The price or net asset value at
which an open-ended scheme purchases or redeems its units from the unit
holders. It may include exit load, if applicable.
Reverse book building
Reverse book building is similar
to the process of book building, which is aimed at securing the optimum price
for a company’s share. In reverse book building the investors’ aim is to sell
the shares to exit the company.
Reverse repo
The
purchase of securities with an agreement to resell them at a higher price at a
specific future date. This is essentially just a loan of the security at a
specific rate. Also called reverse repurchase agreement.
Rigged Market
Manipulation of share price to
attract buyers and sellers to the riggers advantage.
Rights Issue/ Rights Shares
The issue of new securities to
existing shareholders in a fixed ratio to those already held.
Rolling settlement
The practice on many stock markets
of settling a transaction a fixed number of days after the trade is agreed.
Ruling Price
The current market price of a
security.
Run
