SECURITIES AND EXCHANGE COMMISSION ("SEC"): The federal agency created by the Securities Exchange Act of 1934 to administer that act and the Securities Act of 1933. The statutes administered by the SEC are designed to promote full public disclosure and protect the investing public against fraudulent and manipulative practices in the securities markets. Generally, most issues of securities offered in interstate commerce or through the mails must be registered with the SEC.
SECURITIES INVESTOR PROTECTION CORPORATION (SIPC): A nonprofit corporation that insures investors against the failure of brokerage houses, similar to the way that the Federal Deposit Insurance Corp. insures bank deposits. Coverage is limited to a maximum of $500,000 per account, but only up to $100,000 in cash. SIPC does not insure against market risk.
SEPARATE INVESTMENT ACCOUNT: Funds kept in a separate account, which are not permitted to be commingled with company funds or used to pay company expenses. The funds in a separate investment account are invested on the policyowner's behalf.
SETTLEMENT: The conclusion of a securities transaction; a broker/dealer buying securities pays for them; a selling broker delivers the securities to the buyer's broker. The settlement date is the date specified for delivery of securities between securities firms, usually three business days after the execution of an order.
SHORT SALE: The sale of shares of a security that the seller does not own. Such sales are made in anticipation of a decline in the price of the security to enable the seller to cover the sale with a purchase at a later date, at a lower price, and thus at a profit. Securities and Exchange Commission rules allow investors to sell short only when a stock price is moving upward. This prevents "pool operators" from driving down a stock price through heavy short-selling, then buying the shares for a large profit.
SIMPLIFIED ISSUE INSURANCE: Insurance that does not require a full underwriting process. An insurance company can, in some cases, determine your insurability and premium using less information than is normally required. For example, simplified issue insurance usually does not require a medical exam. The time it takes to underwrite a simplified issue policy is greatly reduced.
SOCIAL SECURITY: Benefits provided under the Social Security Act of 1935. Usually refers to retirement benefits. Other benefits include SS Disability Income, Food Stamp Program, Unemployment Insurance, Medicare, Medicaid and various grants-in-aid.
STANDARD & POOR'S 500: A market indicator composed of 400 industrial stocks, 20 transportation stocks, 40 financial stocks and 40 public utility stocks.
STANDARD RISK: Person who, according to a company's underwriting standards, is entitled to insurance protection without extra rating or special restrictions.
STOCK POWER: A standard form that duplicates the back of a stock certificate. It is used if the registered owner of a security does not have the certificate available for signature endorsement.
STREET NAME: Term given to securities held in the name of a broker on behalf of a customer. This arrangement allows shares to be transferred easily. If the stock were registered in the customer's name rather than the broker's name, physical certificates would need to be transferred.
SUBSTANDARD RISK: Person who is considered an above-average insurance risk because of physical condition, family or personal history of disease, hazardous occupation, residence in an unhealthy climate or dangerous habits. Also known as "Impaired Risk."
TECHNICAL ANALYSIS: A method of securities analysis that concentrates on the supply and demand of the stock market, a particular industry group, or an individual stock.
TENANTS IN COMMON: A form of ownership that directs that upon the death of one tenant, the descendant's fractional interest in the joint account is retained by the estate. This form of ownership may be used by any two or more individuals.
TERM OF POLICY: Period for which the policy is in force. With life insurance, this period is to the end of the specified term for term life insurance, to the maturity date for endowment policies and to the insured’s death or by age 100 (sometimes greater than 100), whichever comes first for permanent life insurance.
TIME DEPOSITS: Savings accounts or CDs, held in a financial institution (usually a bank), for a fixed term or with the understanding that the customer can withdraw only by giving advanced notice. Time deposits are different from demand deposits such as a checking account, which you can demand withdrawal from at any time. Common maturity dates are 3 months, 6 months, or 1 year.
TOTAL DISABILITY: Disability preventing the insured from performing any duty of their usual occupations or any occupation for remuneration; actual definition depends on the policy wording.
TRADE CONFIRMATION: A bill or details of a securities transaction that is sent to a customer on or before the first business day following the trade date.
TRADING PROFITS: Profits earned through the purchase and subsequent sale of securities within a relatively brief period of time (generally less than one year).
TRANSFER AGENT: An agent who maintains records of stock and bond owners to cancel and issue certificates, and resolve problems arising from lost, destroyed, or stolen certificates.
TRANSFER OF RISK: An insurance contract is designed to transfer risk. Individuals face the risk of monetary losses resulting from a death, disability or illness. An individual can ensure that they will not have to bear the complete monetary loss due to these factors by purchasing an insurance policy, which transfers the risk of loss to the insurance company. If a death, disability or illness occurs, the insurance company will pay proceeds that will compensate for the loss.
TREASURY BILLS: A marketable, short-term (90 days to one year) US government debt security issued through a competitive bidding process at a discount from par value.
TRUST: Arrangement in which property is held by a person or corporation (trustee) for the benefit of others (beneficiaries). The grantor (person transferring the property to the trustee) gives legal title to the trustee, subject to terms set forth in a trust agreement. Beneficiaries have equitable title to the trust property.
UNDERWRITING: Process of assigning people to different risk classes. Insurance companies use underwriting to determine whether, and on what basis, an insurance policy will be issued.
UNIFORM GIFTS TO MINORS ACT: The act that permits gifts of money and securities to be given to minors and allows adults to act as custodians for minors.
UNIFORM TRANSFER TO MINORS ACT: Enacted in all 50 states which either supplements or replaces the Uniform Gift to Minors Act. It also allows other types of assets such as real estate and collectibles.
UNIT INVESTMENT TRUST: An investment company that has its own fixed portfolio of securities in which it invests. It sells in this portfolio in terms of redeemable securities. Unit investment trusts are organized under a trust indenture, not a corporate charter.
UNIVERSAL LIFE INSURANCE: Two-part contract containing permanently renewable term insurance and a cash value account, which generally earns interest at a higher rate than a traditional policy. Universal life policies have adjustable premiums and an adjustable death benefit. Excess premiums, after the company deducts its fee and a monthly cost for the term coverage, are deposited in the cash value account where they earn a valuable rate of interest.
VARIABLE LIFE INSURANCE: A insurance policy that combines permanent insurance protection and an investment account. Accumulated cash values are held in a separate account where they may be invested in different portfolios of stocks, bonds, or commercial paper. The value of the policy depends on the fluctuating market value of invested funds..
WHOLE LIFE INSURANCE: Life insurance protection that extends from policy issue to the death of the insured, or to age 100 or older, whichever comes first. A whole life policy has fixed premium payments, a fixed death benefit and cash value accumulation.
YIELD TO CALL: The rate of return on an investment that accounts for the cash difference between a bond's purchase price and its proceeds calculated to the earliest date that the bonds can be called in by the issuing corporation.
YIELD TO MATURITY: The rate of return on an investment that accounts for the cash difference between a bond's purchase price and its maturity proceeds.
For more information about any of our products and services or for a full disclosure of fees, please call 1-800-724-7788, or visit the M&T Branch nearest you.
Investment and Insurance Products: • Are NOT Deposits • Are NOT FDIC-Insured • Are NOT Insured By Any Federal Government Agency • Have NO Bank Guarantee • May Go Down In Value
M&T Investment GroupSM is a service mark of M&T Bank Corporation and consists of M&T Securities, Inc., the investment-related areas of M&T Bank and investment advisory firms MTB Investment Advisors, Inc., and Zirkin-Cutler Investments, Inc.
Brokerage services and insurance products are offered by M&T Securities, Inc. (member FINRA/SIPC), not by M&T Bank. M&T Securities, Inc. is licensed as an insurance agent and acts as agent for insurers. Insurance policies are obligations of the insurers that issue the policies. Insurance products may not be available in all states.
