GlossaryGuide

The SEC’s Office of Investor Education and Advocacy (OIEA)receives many types of complaints from individual investors, including complaints against brokers, brokerage firms, investment advisers, transfer agents, mutual funds, and other market participants. Investors can submit a complaint form to OIEA to report problems with investments, an investment account, or a financial professional, including problems involving: Order handling,… Continue reading COMPLAINTS

The Committee on Uniform Securities Identification Procedures (CUSIP) number identifies most securities, including U.S. government and municipal bonds. CUSIP numbers are unique nine-character alphanumeric identifiers assigned to each series of securities.

You will likely pay a commission when you buy or sell a stock through a financial professional.  The commission compensates the financial professional and his or her firm when it is acting as agent for you in your securities transaction.

“Closing price” generally refers to the last price at which a stock trades during a regular trading session. For many U.S. markets, regular trading sessions run from 9:30 a.m. to 4:00 p.m. Eastern Time. A number of markets offer after-hours trading and some financial publications and market data vendors use the last trade in these after-hours markets as… Continue reading CLOSING PRICE

A closed-end fund, legally known as a closed-end investment company, is one of three basic types of investment companies  The two other types of investment companies are open-end funds (usually mutual funds) and unit investments trusts (UITs). Exchange-traded funds (ETFs) are generally also structured as open-end funds, but can be structured as UITs as well. A closed-end fund invests the money… Continue reading CLOSED-END FUNDS

A class of fund shares without any front-end load, deferred sales charge, or other asset-based fee for sales or distribution.  A broker would be expected to charge its customers commissions for effecting transactions in Clean Shares.

Different types of shares issued by a single fund, often referred to as Class A shares, Class B shares, and so on. Each class of a fund holds identical investments and shares the same investment objectives and policies. But each class has different shareholder services with different fees and expenses, and therefore, each class will… Continue reading CLASSES

A broker typically earns a portion of the commissions or other fees on each purchase or sale of securities that the brokerage firm makes for an investor. When a broker engages in excessive buying and selling (i.e., trading) of securities in a customer’s account without considering the customer’s investment goals and primarily to generate commissions that benefit the… Continue reading CHURNING

A certificate of deposit (CD) is a savings account that holds a fixed amount of money for a fixed period of time, such as six months, one year, or five years.  In exchange, the issuing bank pays you interest.  When you cash in or redeem your CD, you receive the money you originally invested plus… Continue reading CERTIFICATE OF DEPOSIT

Don’t assume that a “federally insured one-year non-callable” CD matures in one year. It doesn’t. These words mean the bank cannot redeem the CD during the first year. A “one-year non-callable” CD may still have a maturity date that is years in the future.