Page 93 - PRIAA Glossary

INTRAGROUP TRANSACTION
Counterparties (CPs) that are classified by EMIR to be
part of same group satisfying the conditions a) both CPs
are established in the EU or, if one is established in a third country, the commission has declared the third country equivalent b) both CPs are subject to appropriate centralised risk evaluation, measurement and control procedures c) both CPs are included in same accounting consolidation on a full basis d) if one CP is financial, it must be subject to appropriate prudential requirement. Any transaction between such entities is considered to be an intragroup transaction.
INTRINSIC VALUE
The true value of an asset based on all the tangible and intangible factors that affect the price of the asset. It may or may not be equal to the current market value of the asset. Also, the difference between the market value of the underlying asset of an option and the strike price given that the option is in-the-money. The intrinsic value is zero if the option is out-of-money.
INVERSE FLOATER
An interest rate derivative whose floating leg coupon rises when a specified underlying floating index falls and vice versa.
INVESTMENT ADVISOR
A firm or an individual who provides advice, investment options and recommendations to an investor. The advisor may be compensated via a fee or a percentage of earnings commission. Large advisors (with assets under management > $25MM) register with the SEC, while smaller firms fall under state regulations. Investment advisors inherently work for the best interests of their clients.
INVESTMENT HOLDING COMPANY
A company that does not produce goods or services itself, but instead owns the outstanding stock of other companies called subsidiaries. Investment holding companies allow for the benefits of diversification while keeping subsidiaries legally separate, thus reducing risk for investors.
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