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ILC Glossary of Financial Terms


From Takeover Bid to Trustee

Takeover Bid:

An offer made to security holders of a company to purchase their voting securities which, together with the offering individual's already owned securities, will total over 20% of the outstanding voting securities of the company. For federally incorporated companies, the equivalent requirement is more than 10% of the outstanding voting shares of the target company.

Tax Bracket:

Although income tax is paid by most wage or income earners, the rate of income tax paid increases as income exceeds certain amounts, called brackets.

Tax Credit:

Tax credits reduce taxes payable to the same extent for all taxpayers, regardless of their income level and marginal tax rate. Deductions from taxable income, however, are more valuable as your income and tax rate increases.

Tax Shelter:

This is an investment that offers tax savings in some form, such as immediate deductions, credits or income deferral.


Common term for a government treasury bill, which is a short-term government debt issue.

Technical Analysis:

A method of market and security analysis that studies investor attitudes and psychology as revealed in charts of stock price movements and trading volumes. This analysis may be used to assess possible future price action.

Term Deposit Receipt:

A deposit instrument most commonly available from chartered banks requiring a minimum investment at a predetermined rate of interest for a stated term. The interest rate varies according to the amount invested and the term to maturity, but is competitive with comparable alternative investments. A reduced interest rate usually applies if funds are withdrawn prior to maturity.

Thin Market:

A market in which there are comparatively few bids to buy or offers to sell, or both. The phrase may apply to a single security or to the entire stock market. In a thin market, price fluctuations between transactions are usually larger than when the market is liquid. A thin market in a particular stock may reflect lack of interest in that issue, or a limited supply of the stock.

Time Limit Order:

A client order that specifies the time during which it can be executed.

Time Value or Extrinsic Value:

The amount that the current market price of a right, warrant or option exceeds its intrinsic value. Intrinsic value is the amount by which the market price of a security exceeds the price at which the warrant, right or option may be exercised. The intrinsic value of a put is calculated as the amount by which the market price of the underlying security is below the exercise price.

Timely Disclosure:

The obligation for companies to promptly release to the news media any favorable or unfavorable corporate information which is of a material nature. This obligation is imposed by the securities administrators on companies. Broad dissemination of this news allows all investors to trade the company's securities with the same knowledge about the company as insiders.


1. Employee of an investment dealer who executes buy and sell orders for the dealer and its clients either on a stock exchange or the over-the-counter market. 2. The term is also used to describe a client who buys and sells frequently with the objective of short-term profit.

Trading Halt:

Suspension of trading in a security while material news from the issuer is being spread. A trading halt gives all investors equal opportunity to hear the news and make any appropriate trade decisions.

Trading Units:

Different par values make up trading units for the over-the-counter market. For example, one trading unit of Government of Canada treasury bills is $250,000 par value, while one trading unit of provincial bonds and guarantees is $25,000 par value.

Transaction Date:

The date on which the purchase or sale of a security takes place.

Transfer Agent:

A trust company appointed by a company to keep a record of the names, addresses and number of shares held by its shareholders. Frequently the transfer agent also distributes dividend cheques.

Treasury Bills:

Short-term government debt, usually issued in trading units of $250,000 and sold chiefly to large institutional investors. Treasury bills do not pay interest but are sold at a discount and mature at par (100). The difference between the purchase price and par at maturity represents the purchaser's income in lieu of interest. In Canada such gain is taxed as interest income in the purchaser's hands.

Treasury Shares:

Authorized but unissued stock of a company, or previously issued shares that have been re-acquired by the corporation.


1. Usually a trust company appointed by the company to protect the security behind the company's bonds and to make certain that all covenants of the trust deed relating to the bonds are honored. 2. A person who holds property and securities in trust for another person.