Liquid assets
Assets that can be converted into cash quickly and with little or no loss of value. The most liquid assets, such as cash and short-dated government debt, are sometimes distinguished as high quality liquid assets (see High quality liquid assets).
Liquidity coverage ratio
A measure of a bank’s 30-day stress liquidity, required under Basel III regulations. The ratio requirements are designed to ensure that banks hold sufficient high-quality liquid assets (see HQLA) to survive a 30-day stress period.
Liquidity risk
Arises when an individual investor, business, or financial institution cannot (readily) convert an asset into cash without offering a discount, thereby potentially realizing a loss because a lack of buyers or an inefficient market.
Liquidity risk management
The processes an institution uses to identify, measure and control the risk that it cannot meet its payment obligations as they fall due, or can only do so at high cost. It sits alongside, and is distinct from, credit risk management, and is a core discipline within corporate and bank treasury (see Liquidity risk).
Loss-given default
The amount of money that is projected to be lost upon default of a borrower after accounting for any recovery, commonly represented as a percentage of total exposure at the time of default.
Low Volatility Net Asset Value (LVNAV)
A new type of money fund since the implementation of the EU MMF Regulation ((EU) 2017/1131). These funds can price at €1/£1/$1 a share, so long as the market NAV does not deviate more than 20bps from the dealing NAV of 1.00.
Management Company (ManCo)
The regulated entity responsible for the day-to-day operation and oversight of a fund, including compliance with its investment policy and applicable regulation. In fund structures such as an AIF (see AIF), the ManCo is distinct from both the fund itself and the assets it manages.
Manager
TreasurySpring Management (Jersey) Limited
Master subscription agreement
The document which needs to be signed by a client to be able to onboard to the TreasurySpring Platform.
Maturity mismatch
Arises in the context of balance sheets when a company’s short-term liabilities exceed its short-term assets. One of the risks investors into money market funds face is maturity mismatch.
Maturity transformation
The common practice by financial institutions of borrowing money for a shorter period than they lend money out.
Medium term note
A type of debt security with a typical maturity of 5 to 10 years.
Money market fund
A type of open-ended mutual fund that invests in high quality, short-dated debt securities – largely from the financial world. MMFs can have different formats but are all consistent with the characteristics of capital preservation and liquidity.
Money market instrument
A short-term debt instrument, typically maturing in under a year, used by governments, banks and corporates to borrow or invest cash. Commercial paper, certificates of deposit and Treasury bills (see Commercial paper (CP), Certificate of Deposit, Treasury bill) are all examples of money market instruments.
Moody's Investors Service
One of the three main credit rating agencies, provides credit ratings, commentary and research for global capital markets.
Multi-Academy trust
A charitable company that operates two or more academy schools in England under a single governance and financial structure. MATs typically hold and invest surplus cash centrally on behalf of their constituent schools, subject to the same public-sector guidance on security and liquidity as other public bodies.
Net asset value
Denotes the value per share of a mutual fund, calculated as ((Assets – Liabilities) / Number of shares). In a money market fund (depending on the accounting method used) this is typically €1/£1/$1.
Net stable funding ratio
A liquidity ratio requirement for financial institutions introduced by Basel III regulations which is defined as the amount of available stable funding relative to the amount of required stable funding. This ratio should be equal to at least 100% on an ongoing basis. It is one of the Basel Committee’s key reforms to promote a more resilient banking sector.
Note
A type of debt issued by companies in note format, designed to ensure constant cash flows coming in from the debt issuance allowing companies to meet their financing needs. Similar to bonds, however typically with an earlier maturity date. Depending on the jurisdiction, the maturity it refers to can vary.
Notice account
An interest bearing bank account allowing for withdrawals after notice is given. The notice period is typically between 30-90 days but can sometimes be longer.
Obligor
Person or entity who is contractually obliged to make principal repayments and interest payments on outstanding debt, often used interchangeably with “Issuer” or “Borrower”.
Operational risk
The risk of loss resulting from failed or inadequate internal processes, people or systems, or from external events, as distinct from credit or market risk. It covers areas such as settlement errors, fraud, cyber-attacks and business continuity failures.
Option extension date
The date on which the holder of an eFTF Class may select to extend the Redemption Date to the Extended Redemption Date.
Overcollateralization
Refers to the presence of a haircut in a repo transaction, i.e the purchase price paid for the collateral is lower than their market value. All of our secured FTFs are overcollateralized.
Overnight index swap
Describes an interest rate swap, whereby the overnight rate (e.g. the Fed Funds rate) is being exchanged for a fixed interest rate.
People's Bank of China
The central bank responsible for managing monetary policy in mainland China.
Politically exposed person
Someone who has been entrusted with a prominent public function, thus representing a higher risk for potential involvement in illicit activities like bribery and corruption.
Portal
Online portal through which an onboarded client can purchase FTF shares and future clients are able to complete all documentation to be onboarded.
Probability of default
The forecast percentage chance over a certain time horizon that a borrower will not be able to meet its debt obligations.
Prudential regulation authority
The United Kingdom regulatory body responsible for prudential regulation and the supervision of financial institutions including banks and insurance companies.
Recovery rate
The extent to which principal and accrued interest can be recovered upon default, expressed as a percentage of face value using the default market value (DMV) at default.
Redeem
A maturity action where funds will be repaid to the client.
Repo/Repurchase transactions
In a repo transaction, Party A sells an asset (typically a liquid financial instrument such as government bonds) to Party B at one price and commits to repurchase the same or another part of the same asset from Party B at a different price at a future date. In the event of the seller defaulting during the life of the repo, the buyer as the new owner (in this case, Party B) can sell the asset to a third party to offset the loss. The asset therefore acts as collateral and mitigates the credit risk that the buyer has on the seller. Should a shortfall remain, the claimant is in no worse position for said shortfall than other senior unsecured claims, such as deposits.
Repurchase overnight index average
Indicates the rate at which interest is paid on secured pounds sterling overnight wholesale funds, whereby the collateral, which is constituted of domestic government bonds, is not subject to any exceptional, special, nor specific demand in the cash market.
Reverse repo/Reverse repurchase agreement
Repo (see ‘Repo/repurchase transaction’) flipped on its head – in a reverse repo transaction, Party B purchases securities from Party A in order to to sell them back at a higher price at a specific future date.
Revolving credit facility
A pre-agreed credit line that a borrower can draw down, repay and redraw repeatedly up to an agreed limit, over an agreed period. Unlike a term loan, an RCF is not paid out as a single lump sum; it functions similarly to a line of credit (see Line of credit) but is typically used for larger, syndicated corporate facilities.
Secured overnight financing rate
A secured interbank interest rate benchmark published daily by the New York Fed, measuring the cost of borrowing cash on an overnight basis, collateralized by domestic government bonds.
Securities and Exchange Commission (SEC)
US government oversight agency responsible for regulating the securities markets and protecting investors.
Senior debt
Debt that a company has to repay first upon default, for example a loan that is intended to rank ahead of other unsecured and unsubordinated debt upon the insolvency of a borrower.
Settlement risk
The risk that one party to a transaction delivers cash or securities but does not receive the corresponding payment or asset in return, typically because the other party defaults or a system fails between trade execution and final settlement. It is closely related to, but distinct from, counterparty risk (see Counterparty risk).
Single euro payments area
A pan-European network that facilitates payments between cross-border banks in the Eurozone.
Society for Worldwide Interbank Financial Telecommunication (SWIFT)
A worldwide network used to send and receive information about financial transactions, including payments.
Sovereign bond
A bond issued by a national government, typically in its own currency, used to fund government spending over periods of more than a year. Sovereign bonds sit within the wider Sovereigns, Supranationals and Agencies category (see Sovereigns, Supranationals and Agencies (SSA)).
Sovereigns, Supranationals and Agencies (SSA)
These entities typically issue debt to support sovereign and multilateral budgets, export financing, international development programs and local government projects, and typically carry very strong credit ratings.
Special Purpose Vehicle (SPV)
A legal entity created for a single, defined purpose, most often to hold or ring-fence specific assets and liabilities away from a parent company's balance sheet. SPVs are a standard structuring tool across fund and corporate finance, including the type of segregated cell structure used to hold each Fixed-Term Fund (see Fixed-Term Funds).
S&P Global Ratings
S&P Global Ratings, one of the three main credit rating agencies, is a leading provider of credit ratings, commentary and research for global capital markets.
Sterling Overnight Index Average (SOIA)
The effective overnight interest rate for unsecured interbank transactions in pounds sterling, administered by the Bank of England.
Structured debt
Debt that the lender has specifically tailored to the needs of the borrower, typically offered to large financial institutions or companies with unique or complicated financing needs who are unsatisfied with conventional financial products.
Subordinated debt
Debt which is unsecured and/or ranks below senior debt (see Senior debt) in terms of repayment if a company falls into insolvency.
Subscription account
TreasurySpring’s account at the Subscription Bank
Subscription bank
The Royal Bank of Scotland International – the deposit institution to/from which subscription funds are paid
Subscription instruction form
A paper or online form used to instruct TS to make a subscription. Funds must also be received in advance for an instruction to be actioned.
Sweep account
A bank account that automatically transfers ("sweeps") balances above or below a set threshold into another account, typically to consolidate cash overnight or move idle cash into an interest-bearing account. Sweep arrangements are one mechanism treasury teams use to manage otherwise idle or surplus cash.
Term deposit
A fixed-term investment that requires the placement of funds into an account at a financial institution, and economically equivalent to an unsecured loan. Unlike with notice accounts, the maturity is fixed in nature.
Trans-European automated real-time gross settlement express transfer system
The real-time gross settlement system for the Eurozone. Also available to non-Eurozone countries.
Treasury bill
A short-term debt obligation, typically issued by governments and often sold at a discount from the par amount.
TreasurySpring's online portal
TreasurySpring’s online portal (see Portal)
TreasurySpring (TS)
TreasurySpring
Tri-party agent
Acting as a neutral party, the tri-party agent facilitates the flows of securities and cash between two counterparties. The tri-party agent is also responsible for intra-day valuation and margining of collateral, ensuring that there are sufficient securities in the borrower’s account at all times during the transaction. The most notable tri-party agents are Bank of New York Mellon, Clearstream, Euroclear and JP Morgan.
Underlying investment
Eligible investment by the cell, defined in the Factsheet.
Undertakings for collective investment in transferable securities
A type of regulated investment fund for the investment of assets raised from retail investors.
United Nations principles for responsible investment
A voluntary and aspirational set of six investment principles, often referenced as “the Principles”, to which companies can support as a signatory and which aim to incorporate ESG issues into investment practice.
United Nations sustainable development goals
Set up in 2015 by the United Nations General Assembly and intended to be achieved by 2030, the UN SDGs are a collection of 17 interlinked global goals designed to be a “blueprint to achieve a better and more sustainable future for all”.
Valuation Point
Cut off time for net asset value calculation.
Variable-rate demand note/variable-rate certificate of deposit
A financial instrument with a fixed term and an interest rate that fluctuates over time, based on a range of market figures (such as the CPI and the prime rate).
VIX
The ticker symbol for the Chicago Board Options Exchange’s CBOE Volatility Index, colloquially often referred to as a ‘fear index’, which is a widely used measure of the stock market’s expectation of volatility based on S&P 500 index options.
Weighted Average Life (WAL)
The average length of time until the principal of a debt instrument or portfolio is repaid, weighted by the size of each repayment. WAL is commonly quoted alongside Weighted Average Maturity (see Weighted Average Maturity (WAM)) as a measure of a portfolio's overall repayment profile.
Weighted Average Maturity (WAM)
The average time remaining until the securities in a portfolio mature, weighted by the size of each holding. WAM remains a standard measure of interest-rate and liquidity risk in money market fund and Fixed-Term Fund portfolios. It is often quoted alongside Weighted Average Life (see Weighted Average Life (WAL)).
Liquid assets
Assets that can be converted into cash quickly and with little or no loss of value. The most liquid assets, such as cash and short-dated government debt, are sometimes distinguished as high quality liquid assets (see High quality liquid assets).
Liquidity coverage ratio
A measure of a bank’s 30-day stress liquidity, required under Basel III regulations. The ratio requirements are designed to ensure that banks hold sufficient high-quality liquid assets (see HQLA) to survive a 30-day stress period.
Liquidity risk
Arises when an individual investor, business, or financial institution cannot (readily) convert an asset into cash without offering a discount, thereby potentially realizing a loss because a lack of buyers or an inefficient market.
Liquidity risk management
The processes an institution uses to identify, measure and control the risk that it cannot meet its payment obligations as they fall due, or can only do so at high cost. It sits alongside, and is distinct from, credit risk management, and is a core discipline within corporate and bank treasury (see Liquidity risk).
Loss-given default
The amount of money that is projected to be lost upon default of a borrower after accounting for any recovery, commonly represented as a percentage of total exposure at the time of default.
Low Volatility Net Asset Value (LVNAV)
A new type of money fund since the implementation of the EU MMF Regulation ((EU) 2017/1131). These funds can price at €1/£1/$1 a share, so long as the market NAV does not deviate more than 20bps from the dealing NAV of 1.00.
Management Company (ManCo)
The regulated entity responsible for the day-to-day operation and oversight of a fund, including compliance with its investment policy and applicable regulation. In fund structures such as an AIF (see AIF), the ManCo is distinct from both the fund itself and the assets it manages.
Manager
TreasurySpring Management (Jersey) Limited
Master subscription agreement
The document which needs to be signed by a client to be able to onboard to the TreasurySpring Platform.
Maturity mismatch
Arises in the context of balance sheets when a company’s short-term liabilities exceed its short-term assets. One of the risks investors into money market funds face is maturity mismatch.
Maturity transformation
The common practice by financial institutions of borrowing money for a shorter period than they lend money out.
Medium term note
A type of debt security with a typical maturity of 5 to 10 years.
Money market fund
A type of open-ended mutual fund that invests in high quality, short-dated debt securities – largely from the financial world. MMFs can have different formats but are all consistent with the characteristics of capital preservation and liquidity.
Money market instrument
A short-term debt instrument, typically maturing in under a year, used by governments, banks and corporates to borrow or invest cash. Commercial paper, certificates of deposit and Treasury bills (see Commercial paper (CP), Certificate of Deposit, Treasury bill) are all examples of money market instruments.
Moody's Investors Service
One of the three main credit rating agencies, provides credit ratings, commentary and research for global capital markets.
Multi-Academy trust
A charitable company that operates two or more academy schools in England under a single governance and financial structure. MATs typically hold and invest surplus cash centrally on behalf of their constituent schools, subject to the same public-sector guidance on security and liquidity as other public bodies.
Net asset value
Denotes the value per share of a mutual fund, calculated as ((Assets – Liabilities) / Number of shares). In a money market fund (depending on the accounting method used) this is typically €1/£1/$1.
Net stable funding ratio
A liquidity ratio requirement for financial institutions introduced by Basel III regulations which is defined as the amount of available stable funding relative to the amount of required stable funding. This ratio should be equal to at least 100% on an ongoing basis. It is one of the Basel Committee’s key reforms to promote a more resilient banking sector.
Note
A type of debt issued by companies in note format, designed to ensure constant cash flows coming in from the debt issuance allowing companies to meet their financing needs. Similar to bonds, however typically with an earlier maturity date. Depending on the jurisdiction, the maturity it refers to can vary.
Notice account
An interest bearing bank account allowing for withdrawals after notice is given. The notice period is typically between 30-90 days but can sometimes be longer.
Obligor
Person or entity who is contractually obliged to make principal repayments and interest payments on outstanding debt, often used interchangeably with “Issuer” or “Borrower”.
Operational risk
The risk of loss resulting from failed or inadequate internal processes, people or systems, or from external events, as distinct from credit or market risk. It covers areas such as settlement errors, fraud, cyber-attacks and business continuity failures.
Option extension date
The date on which the holder of an eFTF Class may select to extend the Redemption Date to the Extended Redemption Date.
Overcollateralization
Refers to the presence of a haircut in a repo transaction, i.e the purchase price paid for the collateral is lower than their market value. All of our secured FTFs are overcollateralized.
Overnight index swap
Describes an interest rate swap, whereby the overnight rate (e.g. the Fed Funds rate) is being exchanged for a fixed interest rate.
People's Bank of China
The central bank responsible for managing monetary policy in mainland China.
Politically exposed person
Someone who has been entrusted with a prominent public function, thus representing a higher risk for potential involvement in illicit activities like bribery and corruption.
Portal
Online portal through which an onboarded client can purchase FTF shares and future clients are able to complete all documentation to be onboarded.
Probability of default
The forecast percentage chance over a certain time horizon that a borrower will not be able to meet its debt obligations.
Prudential regulation authority
The United Kingdom regulatory body responsible for prudential regulation and the supervision of financial institutions including banks and insurance companies.
Recovery rate
The extent to which principal and accrued interest can be recovered upon default, expressed as a percentage of face value using the default market value (DMV) at default.
Redeem
A maturity action where funds will be repaid to the client.
Repo/Repurchase transactions
In a repo transaction, Party A sells an asset (typically a liquid financial instrument such as government bonds) to Party B at one price and commits to repurchase the same or another part of the same asset from Party B at a different price at a future date. In the event of the seller defaulting during the life of the repo, the buyer as the new owner (in this case, Party B) can sell the asset to a third party to offset the loss. The asset therefore acts as collateral and mitigates the credit risk that the buyer has on the seller. Should a shortfall remain, the claimant is in no worse position for said shortfall than other senior unsecured claims, such as deposits.
Repurchase overnight index average
Indicates the rate at which interest is paid on secured pounds sterling overnight wholesale funds, whereby the collateral, which is constituted of domestic government bonds, is not subject to any exceptional, special, nor specific demand in the cash market.
Reverse repo/Reverse repurchase agreement
Repo (see ‘Repo/repurchase transaction’) flipped on its head – in a reverse repo transaction, Party B purchases securities from Party A in order to to sell them back at a higher price at a specific future date.
Revolving credit facility
A pre-agreed credit line that a borrower can draw down, repay and redraw repeatedly up to an agreed limit, over an agreed period. Unlike a term loan, an RCF is not paid out as a single lump sum; it functions similarly to a line of credit (see Line of credit) but is typically used for larger, syndicated corporate facilities.
Secured overnight financing rate
A secured interbank interest rate benchmark published daily by the New York Fed, measuring the cost of borrowing cash on an overnight basis, collateralized by domestic government bonds.
Securities and Exchange Commission (SEC)
US government oversight agency responsible for regulating the securities markets and protecting investors.
Senior debt
Debt that a company has to repay first upon default, for example a loan that is intended to rank ahead of other unsecured and unsubordinated debt upon the insolvency of a borrower.
Settlement risk
The risk that one party to a transaction delivers cash or securities but does not receive the corresponding payment or asset in return, typically because the other party defaults or a system fails between trade execution and final settlement. It is closely related to, but distinct from, counterparty risk (see Counterparty risk).
Single euro payments area
A pan-European network that facilitates payments between cross-border banks in the Eurozone.
Society for Worldwide Interbank Financial Telecommunication (SWIFT)
A worldwide network used to send and receive information about financial transactions, including payments.
Sovereign bond
A bond issued by a national government, typically in its own currency, used to fund government spending over periods of more than a year. Sovereign bonds sit within the wider Sovereigns, Supranationals and Agencies category (see Sovereigns, Supranationals and Agencies (SSA)).
Sovereigns, Supranationals and Agencies (SSA)
These entities typically issue debt to support sovereign and multilateral budgets, export financing, international development programs and local government projects, and typically carry very strong credit ratings.
Special Purpose Vehicle (SPV)
A legal entity created for a single, defined purpose, most often to hold or ring-fence specific assets and liabilities away from a parent company's balance sheet. SPVs are a standard structuring tool across fund and corporate finance, including the type of segregated cell structure used to hold each Fixed-Term Fund (see Fixed-Term Funds).
S&P Global Ratings
S&P Global Ratings, one of the three main credit rating agencies, is a leading provider of credit ratings, commentary and research for global capital markets.
Sterling Overnight Index Average (SOIA)
The effective overnight interest rate for unsecured interbank transactions in pounds sterling, administered by the Bank of England.
Structured debt
Debt that the lender has specifically tailored to the needs of the borrower, typically offered to large financial institutions or companies with unique or complicated financing needs who are unsatisfied with conventional financial products.
Subordinated debt
Debt which is unsecured and/or ranks below senior debt (see Senior debt) in terms of repayment if a company falls into insolvency.
Subscription account
TreasurySpring’s account at the Subscription Bank
Subscription bank
The Royal Bank of Scotland International – the deposit institution to/from which subscription funds are paid
Subscription instruction form
A paper or online form used to instruct TS to make a subscription. Funds must also be received in advance for an instruction to be actioned.
Sweep account
A bank account that automatically transfers ("sweeps") balances above or below a set threshold into another account, typically to consolidate cash overnight or move idle cash into an interest-bearing account. Sweep arrangements are one mechanism treasury teams use to manage otherwise idle or surplus cash.
Term deposit
A fixed-term investment that requires the placement of funds into an account at a financial institution, and economically equivalent to an unsecured loan. Unlike with notice accounts, the maturity is fixed in nature.
Trans-European automated real-time gross settlement express transfer system
The real-time gross settlement system for the Eurozone. Also available to non-Eurozone countries.
Treasury bill
A short-term debt obligation, typically issued by governments and often sold at a discount from the par amount.
TreasurySpring's online portal
TreasurySpring’s online portal (see Portal)
TreasurySpring (TS)
TreasurySpring
Tri-party agent
Acting as a neutral party, the tri-party agent facilitates the flows of securities and cash between two counterparties. The tri-party agent is also responsible for intra-day valuation and margining of collateral, ensuring that there are sufficient securities in the borrower’s account at all times during the transaction. The most notable tri-party agents are Bank of New York Mellon, Clearstream, Euroclear and JP Morgan.
Underlying investment
Eligible investment by the cell, defined in the Factsheet.
Undertakings for collective investment in transferable securities
A type of regulated investment fund for the investment of assets raised from retail investors.
United Nations principles for responsible investment
A voluntary and aspirational set of six investment principles, often referenced as “the Principles”, to which companies can support as a signatory and which aim to incorporate ESG issues into investment practice.
United Nations sustainable development goals
Set up in 2015 by the United Nations General Assembly and intended to be achieved by 2030, the UN SDGs are a collection of 17 interlinked global goals designed to be a “blueprint to achieve a better and more sustainable future for all”.
Valuation Point
Cut off time for net asset value calculation.
Variable-rate demand note/variable-rate certificate of deposit
A financial instrument with a fixed term and an interest rate that fluctuates over time, based on a range of market figures (such as the CPI and the prime rate).
VIX
The ticker symbol for the Chicago Board Options Exchange’s CBOE Volatility Index, colloquially often referred to as a ‘fear index’, which is a widely used measure of the stock market’s expectation of volatility based on S&P 500 index options.
Weighted Average Life (WAL)
The average length of time until the principal of a debt instrument or portfolio is repaid, weighted by the size of each repayment. WAL is commonly quoted alongside Weighted Average Maturity (see Weighted Average Maturity (WAM)) as a measure of a portfolio's overall repayment profile.
Weighted Average Maturity (WAM)
The average time remaining until the securities in a portfolio mature, weighted by the size of each holding. WAM remains a standard measure of interest-rate and liquidity risk in money market fund and Fixed-Term Fund portfolios. It is often quoted alongside Weighted Average Life (see Weighted Average Life (WAL)).
