Maturity: The date on which the principal amount on a debt instrument becomes due and payable.

Medium-term Bond: A bond or debenture maturing in more than three but less than ten years.

Minimum Continuing Capital and Surplus Requirements (MCCSR): Minimum standards set for federally regulated life insurance companies and societies to maintain adequate capital, and for companies operating in Canada (on a branch basis) to maintain an adequate margin of assets over liabilities in Canada.

Money Market: That part of the capital market in which short-term financial obligations are bought and sold. These include treasury bills and other federal government securities maturing in three years or less, commercial paper, bankers' acceptances, trust company-guaranteed investment certificates, and other instruments with a year or less left to maturity. Longer-term securities, when their term shortens to the limits mentioned, are also traded in the money market.

Mortgage-Backed Securities: Similar to bonds, the current $5,000 units with five-year terms are backed by a share in a pool of home mortgages insured under the National Housing Act. Units pay interest and a part of principal each month and, if homeowners pre-pay their mortgages, may pay out additional amounts of principal before normal maturity. They trade in the bond market at prices reflecting current interest rates.

National Energy Board (NEB): The main functions of the NEB are to regulate the services of utilities, and establish fair and reasonable rates. It approves utility activities with respect to location, construction and operations.

Negative Pledge Provision: A protective provision written into the trust indenture of a company's debenture issue providing that no subsequent mortgage bond issue may be secured by all or part of the company's assets, unless at the same time the company's debentures are similarly secured.

Net Asset Value (NAV): Often used with reference to the units of mutual funds; the total market value of all securities owned by the fund (less any liabilities) divided by the number of units of the fund outstanding. The net asset value is the amount paid by purchasers of the units and received by sellers.

NHA: National Housing Act

NHA-MBS: National Housing Act Mortgage-Backed Securities

No-Load Fund: A mutual fund that charges no fee for either buying or for selling its units.

Nova Scotia Utility and Review Board (The): Provincial Body whose responsibilities include regulating the operations of Nova Scotia Power.

OECD: Organization for Economic Cooperation and Development

Office of the Superintendent of Financial Institutions (OSFI): An agency responsible for regulating and supervising all federally chartered, licensed or registered banks, insurance, trust, loan and investment companies, cooperative credit associations and fraternal benefit societies. It also monitors federally-regulated pension plans and provides actuarial advice to the Government of Canada.

Ontario Energy Board: Provincial body whose responsibilities include regulating the operations of Ontario's gas distribution utilities.

Open-End Investment Company: An investment company that sells mutual fund units to the public. New units are created to meet investor demand, unlike a closed-end investment company, which issues a fixed number of shares which are then traded on an exchange.

Over-The-Counter (OTC): A market for securities made up of securities dealers who may or may not be members of a recognized stock exchange. Over-the-counter is mainly a market conducted over the telephone. Also called the unlisted, inter-dealer or street market.

Par Value: The stated face value of a bond or stock (as assigned by the company's charter) expressed as a dollar amount per share. Par value of a common stock usually has little relationship to the current market value and so "no par value" stock is now more common. Par value of a preferred stock is significant, as it indicates the dollar amount of assets each preferred share would be entitled to should the company be liquidated.

Policy Reserves: Money required to pay future claims.

Preferred Stock: A class of share capital that entitles owners to a fixed dividend ahead of the company's common shares, with a stated dollar value per share, in the event of liquidation. Usually do not have voting rights unless a stated number of dividends have been omitted.

Premium: The amount by which a preferred stock or debt security may sell above its par value. In the case of a new issue of bonds or stocks, the amount the market price rises over the original selling price. Also refers to that part of the redemption price of a bond or preferred share in excess of face value, par value or market price. In the case of options, the price paid by the buyer of an option contract to the seller.

Present Value: The value now of a sum to be received at some future date, discounted at some appropriate compound interest (or discount) rate.

Price Caps: Proceedings to commence in 1996 to determine the mechanics of a price-cap regime in the telecommunications industry. The hearings will establish how to manage residual contribution requirements in a price-cap environment (where limits are set on prices).

Price-Earnings Ratio (PE): A share's market price divided by annual earnings per share. This ratio is used as a tool in determining the relative value of a particular stock. The shares of companies with steady above-average growth rates tend to have higher than average price-earning ratios.

Prime Rate: The interest rate chartered banks charge to their most creditworthy borrowers.

Principal: The person for whom a broker executes an order, or a dealer buying or selling for his own account. The term may also refer to a person's capital or to the face amount of a bond.

Pro Forma: A term applied to a document drawn up after giving effect to certain assumptions or contractual commitments not yet completed. For example, an issuer of new securities is required to include in the prospectus a statement of its capitalization on a pro forma basis after giving effect to the new financing.

Prospectus: A legal document that describes securities being offered for sale to the public. Must be prepared in conformity with requirements of applicable securities commissions.

Prudent Man Rule: An investment standard. In some provinces, the law requires that a fiduciary, such as a trustee, may invest funds only in a list of securities designated by the province or the federal government. In other provinces, the trustee may invest in a security if it is one an ordinary prudent man would buy if he were investing for the benefit of other people for whom he felt morally bound to provide. Most provinces apply the two standards.

Public Utilities Income Tax Transfer Act (PUITTA): Established to protect consumers from significant rate increases caused by the change in a utility's status (from government to private). PUITTA was eliminated in February 1995.

Purchase Fund: A fund set up by a company to retire, through purchases in the market, a specified amount of its outstanding preferred shares or debt if purchases can be made at or below a stipulated price.

Purchasing Power: A measure of the amount of goods and services a dollar can buy, as compared to prior periods. Inflation decreases purchasing power, whereas deflation increases it.

Puts and Calls: Options giving the holder the right, but not the obligation, to sell or buy a fixed amount of a certain stock at a specified price within a specified time. A put gives the holder the right to sell the stock; a call the right to buy a stock. Puts are generally purchased by those who think a stock may go down; calls by those who expect a price increase. Puts and calls are also available on bonds, currencies, precious metals, futures contracts and stock indices.

QDIC: Quebec Deposit Insurance Corporation