Page 35 - PRIAA Glossary

COMMODITY FUTURES TRADING COMMISSION (CFTC)
An independent agency of the central government set up to regulate the US commodity futures and options markets, recently given responsibility for driving and monitoring US derivatives reform under the Dodd-Frank Act.
COMMON REPORTING (COREP)
A standardised framework for reporting financial and capital information (capital adequacy, group solvency, securitisations, large exposures) by financial institutions in the European Union.
COMMON STOCK
Represents units of ownership of a public corporation. Owners of stocks (or shares of stock) are entitled to vote on the selection of directors and other important matters as well as to receive dividends when they are declared. In the event that a corporation is liquidated, the claims of bond holders, secured/unsecured creditors and preferred stock holders take precedence over the common stock holders.
COMPLIANT CULTURE
Culture across the organisation of knowing and understanding what it is expected in terms of compliance responsibility at an individual level.
COMPOUND OPTION
An option which has another option as its underlying security. Primarily used in currency and fixed income markets, a compound option allows the buyer to hedge an uncertain risk whilst incurring a low premium cost.
COMPOUNDING
The process by which the value of an investment increases by adding the accumulated interest back on the principal amount. In effect, the investment is earning interest on interest as well as principal.
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