Capital Markets Glossary, C - D

 

 

European Banking Authority / EBA

Independent EU Authority tasked with ensuring effective and consistent prudential regulation and supervision across the European banking sector.

 

ESMA / 

Abc.

 

Foreign Exchange / FX

The conversion of one currency to another. A number of large FinTech’s such as Revolut and Transferwise focus on this segment. Large corporates and banks have used algorithmic trading in FX for over 20 years.

 

Initial Coin Offering / ICO

An event where funds are raised, say to develop a FinTech business, by offering new cryptocurrencies in return for a cash investment.

 

Know Your Client / KYC

A set of checks which must be made by financial services providers to identify their clients. Typically used during onboarding, it helps check for anti-money laundering (AML) and combat financing of terrorism (CFT). The digitalisation of KYC is leading to a boom in RegTech solutions.

 

Markets in Financial Instruments Directive / MIFID

An EU policy aimed at governing the provision of investment services in financial instruments by banks and investment firms and operation of trading venues.

 

Mini-Bond

Peer-to-Peer / P2P

Transactions occurring between persons via a marketplace, typically short-term personal lending. Provides liquidity to borrowers who might otherwise be excluded from market, and potentially high returns for investors.

 

Rating Agency

Abc.

Retail Bond

Seed Capital

The founder’s initial capital used to start a business, usually relatively small and sourced from family and friends.

 

Series A

A company’s first round of venture capital financing, usually occurring between proof of concept and growth stages.

 

Series B

A company’s second round of venture capital financing.

 

Unicorn

A start-up or scale-up with a valuation in excess of USD 1bn, typically based on growth assumptions rather than actual profitability. Opposite of a Cockroach.

Underwriter

 

Yield Curve

Abc.

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