Page 37 - PRIAA Glossary

CONSTANT MATURITY SWAP (CMS)
A type of interest rate derivative whereby the floating rate index on one (or both) legs is a swap rate from the swap curve. On the index reset dates, the swap rate is typically sourced from the ISDAFIX service. A CMS where both legs reference different swap rates on the same yield curve is known as a yield curve swap.
CONSUMER FINANCIAL PROTECTION BUREAU
A body which regulates services and financial products for the public in accordance with federal laws. The bureau was created by the Dodd-Frank Act.
CONSUMER PROTECTION
Laws that protect the interest of consumers by disclosing detailed information about products, preventing unfair trade practices and misrepresentation.
CONTANGO
A condition in which prices for delivery of a commodity are higher in the succeeding delivery months than in the immediate delivery month. It is also used in the futures market to describe an upward sloping forward curve. The opposite of “backwardation”.
CONTINUOUS LINKED SETTLEMENT (CLS)
A service offered by CLS Bank International that reduces settlement risk through a simultaneous, global, multi- currency settlement system.
CONTRACT FOR DIFFERENCE (CFD)
It is an agreement between two parties such that at the end of the contract, the parties exchange the difference between the opening and closing prices of a specified financial instrument. It allows one to trade on the price movements without actually owning the underlying instrument specified in the contract.
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