Dictionary - Government
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Tax Anticipation Bill

A tax anticipation bill is a Treasury bill that matures in fewer than 273 days and is repaid with tax receipts. For example, let's assume that the U.S. Read more


In the strictest terms, abeyance means temporary inactivity.In the finance world, the term generally refers to unknown ownership. Read more

Accord and Satisfaction

Accord and satisfaction is a legal term that denotes accepting compensation in lieu of some contractual obligation from another party. An accord is an agreement with conditions. Read more

American Rule

The American Rule, in law, is a rule by which each party pays its legal fees resulting from litigation.  This contrasts with the English Rule, which is the global norm, where the losing party pays the legal fees of the winning party. For example, assume the plaintiff (the party suing that claims to have been wronged by the defendant's actions) files a lawsuit against a defendant and hires an attorney on a contingent fee basis (whereby the attorney doesn't charge fees but gets a percentage of the settlement if the suit is victorious). Read more


Antitrust refers to federal laws disallowing companies from monopolizing markets, engaging in price discrimination or price fixing, or otherwise restraining free trade. Antitrust laws apply universally to companies seeking profits, whether they're public or privately held. Read more


Arbitration is a process in which impartial parties (arbitrators) help disagreeing parties resolve a dispute.Contracts, particularly financial ones, with disputes often go to arbitration. Read more


A bailee is a person who has been entrusted with custody of a piece of property.A bailee does not have ownership of the property. Read more

Bailee's Customers Insurance

Bailee's customers insurance covers any damage or destruction that a bailee might do to a bailor's property. Bailment is a transfer of custody of property rather than a transfer of ownership of property. Read more


Bailment is a transfer of custody of a piece of property rather than a transfer of ownership of a piece of property. For example, let's say John Doe owns a big piece of farmland on the eastern shore of Maryland. Read more

Bait and Switch

Bait and switch is a sales tactic that tricks consumers into buying something other than an advertised item. John Doe sees an ad in the paper for $1 orange juice at a local retailer. Read more

Bait Record

A bait record is a fake file on a computer that is used to see whether anyone is improperly accessing data. Let's assume Company XYZ's magazine covers keep leaking to the competition before they are published, causing competitors to scoop them on several stories. Read more

Bank Holiday

A bank holiday is a day on which a bank or banking system is closed. In the United States, banks and financial markets generally cannot be closed for more than four calendar days in a row, which puts some limits on the timing and quantity of bank holidays. Read more

Ben Bernanke

Ben S.Bernanke was the chairman of the United States Federal Reserve (the Fed) from 2006 to 2014. Read more

Blue Sky Laws

Blue sky laws require the registration of brokers, brokerage firms and investment professionals in order to provide transparency of financial offerings and protect investors from investment fraud.Each state has its own blue sky law. Read more

Call Report

A call report is a quarterly report that banks and all regulated financial institutions must file with the Federal Financial Institutions Examination Council (FFIEC). The formal name of the call report is the Consolidated Reports of Condition and Income. Read more

Capital Improvement

In general, a capital improvement is a one-time expenditure for physical assets such as buildings, land, construction, landscaping or major equipment. Let's say Town XYZ wants to refurbish ABC Elementary School. Read more

Carding Forum

Designed to facilitate the sharing of stolen credit card information, a carding forum is an illegal website where fraudsters also share info, tips and techniques about obtaining credit card information as well as how to use the illicit information effectively.A card holder's complete profile, called “fullz” in slang, provides the criminal with all the information they would need to impersonate the legitimate cardholder online or in person. Read more

Consolidated Reports of Condition

Consolidated Reports of Condition are reports that are filed quarterly by banks and all regulated financial institutions with the Federal Financial Institutions Examination Council (FFIEC). Consolidated Reports of Condition are commonly referred to as a call report. Read more

Consumer Financial Protection Bureau (CFPB)

Created by President Obama’s Administration in 2010, the Consumer Financial Protection Bureau (CFPB) serves as a federal watchdog over the consumer financial industry.Responsible for regulating financial services companies in the credit card and mortgage industry as well as other financial services products, the CFPB guides policy and enforcement in order to protect consumers from fraud and abuse. Read more

Credit CARD Act

The Credit Card Accountability, Responsibility, and Disclosure Act is better known as the Credit CARD Act.The law's main purpose is to prevent certain business practices in the credit card industry that were considered unfair or even deceptive to consumers.  The act was signed into law in May 2009 and took effect in phases. Read more

Daisy Chain

In finance, a daisy chain is an investment scam whereby a group of fraudulent investors inflate the price of a security and then sell it at a profit. In a daisy chain scenario, an investor or group of investors holding a long position in a low-price, small-cap stock unfoundedly publicize the stock as a promising opportunity. Read more

Date Certain

A date certain is a legal term identifying a date on which an action or process must occur or complete. For example, let's say that John Doe rents a house from Jane Smith. Read more


Demonetization is the act of removing a currency from use as legal tender. Demonetization occurs when a governing body cancels the legal tender status of a currency unit in circulation. Read more

Disclosure Statement

A disclosure statement is an official document that outlines the terms, conditions, risks and rules of a financial transaction, such as a loan or an investment. In the case of a loan, the disclosure statement describes the terms of the loan, such as the interest rate, the amount borrowed, the repayment schedule, fees, disbursement conditions, collateral requirements, insurance requirements, prepayment rights (or penalties), and any other expectations of the lender and any additional obligations of the borrower. Read more


An embargo is a government-instituted prevention of exports to a certain country.In the media world, an embargo is the release of information with the condition that it cannot be published or disseminated before a certain date. Read more

Employee Benefits Security Administration (EBSA)

The Employee Benefits Security Administration (EBSA) is the branch of the United States Department of Labor responsible for overseeing the administration and planning of employee pension funds by company investment managers. The United States Department of Labor ensures that the American workforce is treated fairly and is compensated in accordance with the law. Read more

Equal Credit Opportunity Act (ECOA)

The Equal Credit Opportunity Act (ECOA) is legislation designed to ensure that all qualified people have access to credit.It prevents lenders from rejecting credit applicants based on race, gender, marital status, age, religion, or national origin and requires lenders to consider public assistance in the same light as other forms of income. Read more

Fair and Accurate Credit Transactions Act (FACTA)

The Fair and Accurate Credit Transactions Act (FACTA) allows consumers to get a free credit report from the three major credit reporting agencies every 12 months in order to help prevent identity theft.[InvestingAnswers Feature: The Hidden Costs of "Free" Credit Reports] FACTA does many things to protect consumers from fraud and identity theft. Read more

Federal Financial Institutions Examination Council (FFIEC)

The Federal Financial Institutions Examination Council (FFIEC) is an interagency body of the U.S.government that provides standardized methods for examining financial institutions in accordance with numerous regulating bodies. Read more

Federal Insurance Contributions Act (FICA)

The Federal Insurance Contributions Act (FICA) is a US payroll tax used to fund the Social Security and Medicare programs.These programs are designed to support those without wage income: retirees, dependents of non-working adults, and those with disabilities. Read more

Federal Reserve System (FRS)

The Federal Reserve System (FRS) is the U.S.'s central bank.The Federal Reserve manages the economy's money supply, regulates the banking industry, acts as a clearinghouse for checks and other payments conducted through the banking system, operates the U.S. Read more

Financial Industry Regulatory Authority (FINRA)

The Financial Industry Regulatory Authority (FINRA) is an independent non-profit corporation that regulates the actions of securities firms in the United States.  In order to deal in securities in the United States, firms are required to become members of FINRA, unless they are regulated by another self-regulatory organization (SRO). This self-regulatory body helps to protect investors and preserve market integrity by establishing, overseeing, and enforcing rules that govern brokers and dealers. Read more

Fiscal Policy

Fiscal policy refers to a government's spending and taxation policies intended to maintain economic stability, which is indicated by levels of unemployment, interest rates, prices and economic growth. A government is capable of directly affecting economic activity in response to fluctuations in macroeconomic growth. Read more

Gas Guzzler Tax

The purpose of the gas guzzler tax is to discourage the manufacture of inefficient cars.The sticker on a new car should disclose the amount of gas guzzler tax that a manufacturer has paid on a car. Read more

Glass Steagall Act

The Glass Steagall Act was passed by Congress in 1933.It prohibited commercial banks from conducting brokerage or investment banking activities. Read more

Global Investment Performance Standards (GIPS)

Global Investment Performance Standards (GIPS) are ethical standards for asset-management companies.They were established by the Association for Investment Management Research. Read more

Gold Reserve Act of 1934

The Gold Reserve Act of 1934 nationalized gold and fixed the price of gold in terms of U.S.dollars. Read more

Government Accounting Office (GAO)

Founded in 1921, the Government Accounting Office (GAO) is an independent, nonpartisan agency that studies how the federal government spends taxpayer money. The head of the GAO is the Comptroller General of the United States. Read more

Government Sponsored Enterprise (GSE)

In the US, government sponsored enterprises, or GSEs, are quasi-governmental, privately-held entities established to improve, and at times make possible, the flow of credit to specific sectors of the economy or to otherwise provide essential services to the public.  GSEs are established by Congress. Government sponsored enterprises have been established in key areas of the economy.  For example in the housing sector, Congress created the Federal Home Loan Bank in 1932, to act as a wholesale bank providing support for housing mortgages issued by private banks.  Today, the network of 12 Federal Home Loan Banks provides loans to local banks at preferred interbank lending rates to enhance commercial and mortgage bank liquidity.  In education, Congress established the Student Loan Marketing Association, known as Sallie Mae, to guarantee student loans issued by local financial institutions.   The Federal National Mortgage Association, known as Fannie Mae, and the Federal Home Loan Mortgage Corporation, known as Freddie Mac, provide guarantees and low cost credit that allow housing loans. Read more

Grandfather Clause

A grandfather clause is a clause that is included as part of a new law that exempts specific parties from the law due to practices that were in place prior to the law's implementation. For example, consider a law that is passed stating that all buildings with three or more stories must be equipped with two elevators.  There may be buildings that were built before the passing of that law that are structurally unable to accommodate this law. Read more


In the business world, a grant usually refers to a stock option grant.However, the term can also refer to federal funding for research, business ventures or partnerships. Read more


In the legal world, a grantee is a person who receives something. In real estate, a grantee is a person who receives property after a sale or other transfer of title. Read more


In the legal world, a grantor is a person or entity creating a trust. A trustee is a person or entity that has a fiduciary duty to another person or entity, called the beneficiary. Read more


In general, a guarantee is a promise to take responsibility for another company's financial obligation if that company cannot meet its obligation.The entity assuming this responsibility is called the guarantor. Read more

Health Insurance Portability and Accountability Act (HIPAA)

The Health Insurance Portability and Accountability Act (HIPAA) is a federal law that promises continued health insurance coverage and ensures health information privacy for those covered by health insurance plans. HIPAA was passed in 1996 as an amendment to two previous laws: the Public Health Service Act (PHSA) and the Employee Retirement Income Security Act (ERISA). Read more

Hedge Clause

A hedge clause is a disclaimer found in financial documents that protects a financial reports' authors from liability for errors within the report. A hedge clause simply absolves the authors of wrongdoing in connection with the presented information. Read more

Holder of Record

A holder of record is the registered owner of a stock, bond or other security. Let's say John Doe buys 100 shares of Company XYZ. Read more

Identity Theft

Identity theft is the crime of using another person's personal information, credit history or other identifying characteristics in order to make purchases or borrow money without that person's permission. Let's say John Doe is at work and happens to see some paperwork on a co-worker's desk. Read more


The term impairment refers to assets that are no longer of the same value as in a prior period.An impairment charge is used and the asset is revalued downward and a "charge" is made to net assets. Read more


A jitney is an illegal scheme in which two brokers trade a stock back and forth in order to increase the trading volume and earn commissions.In some circles, a jitney is also scheme in which a broker performs trades for another broker who does not have access to a certain exchange. Read more

Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA)

The Jobs and Growth Tax Relief Reconciliation Act of 2003 was a bill passed by the U.S.Congress in 2003 as an economic stimulus measure. Read more

Joint and Several Liability

Joint and several liability means an obligation to make a payment either together or individually. For example, let's say John and Jane Doe buy a car. Read more

Katie Couric Clause

A Katie Couric clause was a proposed provision of SEC executive compensation disclosure rules that would have required public companies to disclose compensation paid to several non-executive employees whose total compensation exceeded that of the most highly paid executive officers. The Katie Couric clause is named after former "Today Show" co-host Katie Couric, who, like many media personalities, receive high compensation but are not company officers. Read more

Lagged Reserves

Lagged reserves are currency reserves banks are required to hold with the Federal Reserve.Lagged reserves must be equal to the sum of all demand deposits from two weeks in arrears.  The United States Federal Reserve regulates the U.S. Read more

Marital Property

Marital property is property owned by a married couple. Let's say John Doe and Jane Smith get married. Read more

Market Capitalization Rule

The market capitalization rule is a regulation that places a floor on the total value of a company's stock for 30 consecutive days. The market capitalization rule was established by the New York Stock Exchange (NYSE) in 2004. Read more

Market Discipline

Market discipline refers to the obligation by banks and financial institutions to manage their stakeholders' risk in the course of their day-to-day operations. Banks and other financial institutions assume some level of risk with each loan they disburse. Read more

Market Out Clause

A market out clause is a provision that allows an underwriter to withdraw from a stock underwriting contract. When an investment bank serves as an underwriter for an initial public offering (IPO), it has a contract with the issuing company to market and sell new shares of stock to investors in the primary market. Read more

Market Performance Committee

The Market Performance Committee is responsible for maintaining effective and organized trading operations on the New York Stock Exchange (NYSE). The Market Performance Committee consists of several members of the NYSE who closely observe the performance of trading specialists for individual stocks. Read more

Market Surveillance

Market Surveillance is a unit of the NASDAQ stock exchange whose function is to ensure that all trading is conducted in a compliant manner. The Market Surveillance unit of the NASDAQ stock exchange is responsible for monitoring trading activity. Read more

Material Insider Information

Material insider information is material, nonpublic information about a security or its issuer.Information is material if it might reasonably influence the users of the issuer’s financial statements. Read more

Mineral Rights

Mineral rights are a landowner's rights regarding natural resources located on his or her land. When an individual buys or owns a piece of land, there is the possibility that the land may contain valuable minerals and or natural resources like precious metals (for example, gold and silver), iron ore or oil. Read more

Minimum-Interest Rules

Minimum-interest rules are federal regulations requiring that all loans bear interest. Many companies and individuals make loans. Read more

Mortgage Forbearance Agreement

A mortgage forbearance agreement is a contractual arrangement between a mortgage lender and a borrower to help the borrower catch up on payments when he/she is behind schedule. A borrower makes monthly payments of principal and interest over the term of the mortgage (usually 30 years). Read more

Mortgage Putback

A mortgage putback is a mandatory buyback of a mortgage by its original lender. Once a lender completes a mortgage, the lender often sells it to another investor in the secondary mortgage market. Read more

Mortgage-Backed Securities (MBS)

Mortgage-backed securities (MBS) are securities that represent an interest in a pool of mortgage loans. To understand how MBS work, it's important to understand how they're created. Read more

Named Fiduciary

A named fiduciary is a person or entity responsible for managing a qualified retirement plan in accordance with the Employee Retirement Income Security Act (ERISA). For example, let's say Company XYZ gets a 401(k) plan. Read more

NASD Rule 2790

NASD Rule 2790 is a rule prohibiting FINRA members from buying IPO shares for personal gain.The rule is now just called Rule 2790, because NASD became FINRA in 2007. Read more

National Association of Securities Dealers (NASD)

The National Association of Securities Dealers (NASD) was a regulatory organization that oversaw the securities industry.The Financial Industry Regulatory Authority (FINRA) superseded NASD in 2007. Read more

National Bank Surveillance System

The National Bank Surveillance System is a computer system that collects financial information about banks. The U.S. Read more

National Credit Union Administration (NCUA)

The National Credit Union Administration (NCUA) is an agency of the United States government that charters and oversees federal credit unions.It was created by Congress in 1970. Read more


Nationalization occurs when a country's government seizes the assets of corporations or resources without paying for those assets. Let's say Country XYZ elects John Doe. Read more

Negative Amortization Limit

A negative amortization limit is a clause in a loan that restricts the amount of negative amortization that can occur during the contract. Negative amortization occurs when the principal balance on a loan (usually a mortgage) increases because the borrower's payments don't cover the total amount of interest that has accrued. Read more

Negative Float

Negative float is the amount of time between when a person writes a check and when that check clears the account. In banking, the formula for negative float is: Negative Float = Account's Ledger Balance - Account's Available Balance For example, let's assume John has $1,000 available in his checking account today. Read more

Negative Verification

Negative verification is a bank method for verifying bank records. For example, let's assume Bank XYZ is performing an internal audit of the computer system that generates customers' monthly bank statements. Read more


Negotiable refers to an item that can be sold or transferred to another party as a form of unconditional payment.Negotiable also means that the terms of an agreement can be adjusted. Read more

Negotiable Instrument

A negotiable instrument is a signed document that gives the bearer of the document permission to obtain a certain amount of money.  Checks are the most common negotiable instrument. Read more

Nellie Mae

Nellie Mae is a subsidiary of Sallie Mae (SLM), the largest originator, funder and servicer of student loans in the United States.Specifically, it is responsible for originating Federal Stafford Loans, PLUS loans, consolidation loans and private loans for students and parents. Read more

Non-Accredited Investor

A non-accredited investor is an individual or organization that does not meet the description of a "sophisticated" investor as defined by the Securities and Exchange Commission. According to the Securities Act of 1933, a person or entity must meet any of the following criteria to be deemed an accredited investor: An accredited investor can be a bank, insurance company, registered investment company, business development company or small-business investment company. Read more


The descriptors "exempt" and "non-exempt" are used to describe different categories of employees as defined by the Fair Labor Standards Act (FSLA) according to US Federal employment law.Typically, a non-exempt employee is an hourly wage earner who is entitled to overtime pay at a rate of 1.5 times the usual hourly rate. Read more


To notarize means to have a notary affix his or her seal and signature to a document signifying that he or she witnessed the signing of the document. For example, when John and Jane Doe buy a house, they must sign the closing paperwork that makes them responsible for a large mortgage, title insurance and other responsibilities. Read more


An obligation is a legal requirement to fulfill a responsibility.In the finance world, this often involves making specific payments by specific dates and/or ensuring that a company meets certain performance requirements. Read more

Occupancy Fraud

Occupancy fraud occurs when a mortgage borrower lies to a bank about his or her intention to occupy the home that he or she is purchasing with the mortgage. For example, let's say John lives in Denver. Read more

Offer in Compromise (OIC)

An offer in compromise is an arrangement between a taxpayer and a taxing authority, whereby the taxing authority agrees to let a taxpayer settle a tax debt for less than the full amount. For example, let's say John owes the IRS $40,000 in back taxes. Read more

Offering Memorandum

An offering memorandum is a legal document that discloses the terms, conditions, risks, and other information about a private placement.It is not the same thing as a prospectus (those are for issuances of publicly-traded securities). Read more

Office Of Federal Housing Enterprise Oversight (OFHEO)

The Office of Federal Housing Enterprise Oversight (OFHEO) is a defunct regulatory body that ensured the financial safety of Freddie Mac and Fannie Mae. Started in 1922 after the passage of the Federal Housing Enterprises Financial Safety and Soundness Act, the OFHEO became part of the Federal Housing Finance Agency (FHFA) in 2008 when President Barack Obama signed the Housing and Economic Recovery Act of 2008. Read more

Office of Foreign Assets Control (OFAC)

The Office of Foreign Assets Control is the entity within the U.S.Treasury Department that creates and enforces trade sanctions. Read more

Office of the Comptroller of the Currency (OCC)

The Office of the Comptroller of the Currency (OCC) is a division of the U.S.Treasury. Read more

Office of Thrift Supervision (OTS)

The Office of Thrift Supervision (OTS) was a regulatory agency that provided oversight to thrift institutions.On July 21, 2011, the OTS became part of the Office of the Comptroller of the Currency (OCC). Read more

Patent Troll

A patent troll is a person or company whose main business purpose is to sue other people or companies for patent infringement. For example, John Doe buys a patent for the design and manufacture of a flat, rotating disc used to hold objects on a countertop or other flat surface. Read more


A plutocracy is a system of government where the wealthiest people in a country rule or possess the power, and thus govern directly or indirectly.Plutocracy is often linked to the term “dynastic wealth.”  A plutocracy may not be the result of a planned system of government. Read more

Political Risk

Political risk is the potential for financial, market, or personnel losses that occur due to political decisions or disruptions.Political risk is also known as "geopolitical risk." Who Is Affected by Political Risk?  Political risks are faced equally by investors in international businesses and investment fund portfolios. Read more

Pork Barrel Spending

Pork barrel spending is a type of appropriated expenditure that is added into a non-related Congressional bill.  Pork barrel spending may also be referred to as earmarking.The Oxford English dictionary differentiates pork barrel spending from normal appropriation spending as government funded projects "designed to please... Read more

Preemptive Rights

Preemptive rights are a clause in an option, security or merger agreement that gives the investor the right to maintain his or her percentage ownership of a company by buying a proportionate number of shares of any future issue of the security. Preemptive rights are sometimes called "subscription rights," "anti-dilution provisions," or "subscription privileges." Preemptive rights are particularly relevant for convertible preferred stock. Read more

Price Cap Regulation

A price cap regulation places a ceiling on the amount companies in a given industry (typically utilities and telecommunications providers) can charge for services. Price cap regulation typically has four tenets: 1. Read more

Private Placement

A private placement is an offering of securities that is not registered with the U.S.Securities and Exchange Commission (SEC) Companies issuing stock in the U.S. Read more

Proxy Statement

A proxy statement is the common name for the Securities and Exchange Commission (SEC) Form 14-A.It is the document containing the voting ballot and material information related to the propositions to be determined. Read more

Qualified Eligible Participant (QEP)

A qualified eligible participant (QEP) is a person who is allowed to trade in investment funds as defined in Rule 4.7 of the Commodity Exchange Act. In order to be a QEP, a person must own at least $2,000,000 of securities and other investments, have an open account with a futures commission merchant for at least six months, have at least $200,000 of initial margin and option premiums for commodity interest transactions and have a portfolio of those investments. Read more

Qualified Exchange Accommodation Arrangements

Qualified exchange accommodation arrangements are a strategy to simplify and assist with real estate exchanges made under Section 1031. For example, let's assume that John wants to sell his commercial property for $600,000. Read more

Qualified Institutional Buyer (QIB)

A qualified institutional buyer (QIB or QUIB) is a company that manages at least $100 million of securities on a discretionary basis or is a registered broker-dealer investing at least $10 million in non-affiliate securities. A QIB can be an insurance company, a bank, a 401(k) plan, an employee benefit plan, a trust fund, a business development company (BDC), a charity, or even an entity owned by qualified investors. Read more

Qualified Institutional Placement (QIP)

A qualified institutional placement (QIP) occurs when the Securities and Exchange Board of India (SEBI) allows an Indian company to issue securities in India without providing preliminary filings regarding the issue. QIPs are similar to private placements in the United States. Read more

Quiet Filing

A quiet filing is an IPO filing that intentionally excludes certain information. When a company is getting ready to go public, it files an SEC Form S-1, which is also called a prospectus. Read more


When most people think of racketeering, thoughts of 1930s mobsters come to mind.Gangs of this time period are often associated with organized crime and operating “rackets” to illicitly earn and move money throughout criminal networks.  Today, racketeering takes place through complex operations that may cross over from physical to digital, while law enforcement actively pursues these illegal enterprises. Read more

Real Estate Settlement Procedures Act (RESPA)

The Real Estate Settlement Procedures Act, abbreviated as RESPA, is a federal ordinance that was established by the U.S.Department of Housing and Urban Development (HUD). Read more

Red Herring

A red herring is a registration statement filed with the Securities and Exchange Commission (SEC) by a company that intends to make a public equity offering.The red herring is a rough draft of the company's prospectus and includes a description of the company's business, financial condition, strategy, management, litigation and risk factors. Read more

Regulation DD

Regulation DD is a directive created by the Federal Reserve.It was enacted to fulfill the Truth in Savings Act (TISA) that was passed in 1991, which requires lenders to provide accurate information about fees and interest to account holders when they begin banking with that institution. Read more

Regulatory Data

Regulatory data is information that must be provided by a company to a regulatory agency.  Protecting consumers is the main rationale offered by governments looking to regulate economic activity, and they try to do so in two primary ways.The first is by preventing market failures. Read more


Rescission is the cancelling of a contract so that it is no longer legally binding.A court can release parties from any obligations under the contract and revert them to their positions before the contract was executed. Read more

Routing Number

A routing number is a exclusive identification number assigned to banking institutions by the American Bankers Association (ABA). For those banks and banking institutions that qualify as account holders with the Federal Reserve, the ABA assigns a routing number for identification. Read more

Sarbanes-Oxley Act (SOX)

The Sarbanes-Oxley Act, officially named the Public Company Accounting Reform and Investor Protection Act of 2002, became law on July 30, 2002.The law was informally named after its sponsors, Senator Paul Sarbanes (D-MD) and Representative Michael G. Read more

Schedule 13-D

A beneficial ownership report, known as SEC Schedule 13-D, is a public notice of anyone who has acquired 5% or more of a voting class of a company's equity securities. For example, let's say you really like Company XYZ stock. Read more

SEC Form 11-K

An SEC Form 11-K is an annual report that is filed with the Securities and Exchange Commission (SEC) for employee stock purchase plans and similar savings plans that constitute securities registered under the Securities Act of 1933. A Form 11-K requires the following: Audited financial statements for the past two fiscal years Audited statement of income and changes in plan equity for each of the latest three fiscal years of the plan Companies aren't the only organizations that must file annual reports with the SEC. Read more


SEC Form BD is an application with the Securities and Exchange Commission (SEC) to register as a broker-dealer. A Form BD makes public the information about any broker-dealer that wishes to trade securities. Read more

Securities Act of 1933

The Securities Act of 1933 was the first law passed that imposed regulations on the securities industry following the stock market crash of 1929. The stock market crash of 1929 resulted from more than a decade of unsavory and imprudent business and investment practices. Read more

Securities and Exchange Commission (SEC)

The Securities and Exchange Commission, also known as the SEC, is a regulatory body that was established as a result of the Securities Act of 1934.Founded after the stock market crash of 1929, the SEC is the federal agency responsible for the oversight and enforcement of laws pertaining to the securities industry. Read more

Series 63

The Series 63 (formally known as the Uniform Securities Agent State Law Exam) primarily covers a specific state's laws and ethical standards.Some states require brokers to obtain this license before soliciting clients and taking orders. Read more

Series 7

Series 7 is a license that is required before an individual can sell securities.Those who pass the exam for a Series 7 license are eligible to become a registered representative of broker-dealers in the United States. Read more

Shelf Registration

A shelf registration is the filing and registration with the Securities and Exchange Commission (SEC) for a security offering that is released to the public market incrementally over a period of time (shelf offering). Under Rule 415, the SEC allows an issuer to register new securities, and then shelve the public offering for up to two years.   A shelf registration requires that the company file quarterly and annual reports with the SEC. Read more

Sovereign Debt

Sovereign debt refers to the amount of money a country owes to the holders of its government bond.In the United States, sovereign debt is issued by the Department of Treasury and the bonds are referred to as Treasuries -- Treasury notes, Treasury bonds, Treasury bills, etc., depending on the length of their issuance. Read more

Taft-Hartley Act

The Taft-Hartley Act, officially known as the Labor-Management Relations Act, is a federal labor law that regulates the actions of labor unions. Ratified in 1947, the Taft-Hartley Act sought to reform labor union law, largely to oversee management and collective bargaining practices were concerned. Read more


News stories over the past few years have focused on tariffs and rumors of “escalated trade wars” between the United States and another country.But what is a tariff? Read more

Tax Anticipation Note (TAN)

A tax anticipation note (TAN) is a short-term note that a state or local government issues and expects to repay with imminent tax receipts. Let's assume Town XYZ wants to purchase a new building to replace the old City Hall. Read more

Tax Arbitrage

Tax arbitrage refers to a strategy or practice where individuals or corporations profit from the ways different kinds of capital gains, income, and financial transactions are treated for tax purposes.  Read more

Tax Base

A tax base is the total amount of assets or revenue that a government can tax. Taxes can be based on any kind of asset or revenue stream. Read more

Tax Court

Tax court is a court of law in which administrative law judges manage disputes between taxpayers and the IRS. The tax court handles a wide variety of tax matters but does not have a jury system. Read more

Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)

The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) became law on September 3, 1982.The TEFRA made it more difficult for individuals and corporations to reduce their tax liability. Read more

Tax Exempt

Generally, tax exempt means free from federal income taxation. Tax exemptions can apply to a portion of an individual's income or to the nature of an organization. Read more

Tax Reform Act of 1986

The Tax Reform Act of 1986, signed by President Ronald Reagan, was one of the most significant changes to the American federal income tax system. The Tax Reform Act of 1986 had several noteworthy components, not the least of which was the reduction in the number of tax brackets (from a little over a dozen down to four) and the reduction in the top tax rate (from 50% to 28%). Read more

Tax Reform Act of 1993

Also called the Revenue Reconciliation Act of 1993, the Tax Reform Act of 1993 was a major revision to the United States tax system. The Tax Reform Act of 1993 had several components that received a lot of attention. Read more

Tax Roll

A tax roll is a list of taxable property in a city, county, state or other taxing authority. For example, let's assume that the city of Investon has 1,500 residents. Read more

Taxation Without Representation

"Taxation without representation" is a phrase commonly thought to have been first made famous by Boston lawyer James Otis in 1765.It refers to the idea of imposing taxes on people who have no recourse against or control over the taxing authority. Read more


Treasuries refer to all the tradable and negotiable debt obligations issued by a country's government.Broadly speaking, when an investor is referring to "Treasuries," he or she is referring to U.S. Read more

U.S. Agency for International Development (USAID)

The U.S.Agency for International Development (USAID) is a federal agency that works to encourage foreign markets for American goods. Read more

U.S. Bureau of Engraving and Printing (BEP)

The U.S.Bureau of Engraving and Printing creates and produces U.S. Read more

U.S. House Financial Services Committee

The U.S.House Financial Services Committee is a group of 60 Congressional representatives that make decisions regarding the economy, the banking system, housing, insurance, securities rules and financial markets. Read more

Uncle Sam

Uncle Sam is a fictional character who represents the United States government.His predecessor was a character named Brother Jonathan. Read more

Uniform Gifts to Minors Act (UGMA)

The Uniform Gifts to Minors Act (UGMA) is a set of rules under which adults can give money to a minor via a custodial account in the minor's name.In some states, the UGMA has been superseded by the Uniform Transfers to Minors Act (UTMA). Read more


A waiver is a party's voluntary renunciation of rights in a contractual arrangement. When two parties enter into a contract, they often agree to forfeit some of their respective rights or claims. Read more

Waiver of Exemption

A waiver of exemption is a clause in a contract that allows a creditor to seize property that state laws may exempt from seizure. Let's assume 65-year-old John Doe borrows $250,000 to buy a house. Read more

War Babies

War babies are securities issued by companies in the defense industry. Let's assume Company XYZ builds jets for the Navy, and Company ABC builds guns for the Army. Read more


A warranty is a guarantee, usually written, that a product or service works as expected. For example, when you buy a new car from a car dealer, the warranty states that the car works. Read more

Water Rights

Water rights are the legal permissions to use water in a specific way. For example, let's assume that John buys a house on the famous Yellowstone River in Livingston, Montana. Read more

Wells Notice

A Wells Notice is a letter from a regulator such as the Securities and Exchange Commission that warns a financial institution or financial professional that the SEC is beginning an investigation into the institution's or professional's activities. Specifically, a Wells Notice informs a person or institution that a regulator intends to recommend that the Justice Department or other authority begin enforcement proceedings against the person or institution. Read more

X-Mark Signature

An X-mark signature is a mark made by a person who is not able to sign his or her name. Let's say John Doe suffers a traumatic brain injury and can no longer read or write. Read more


Zoning is a method of determining how people can use land and buildings within a certain area. Zoning typically delineates areas within a town acceptable for residential construction, commercial construction, industrial construction and agricultural space. Read more