The lexicon

Find the most simple to the most complex banking term in our financial lexicon.

These definitions have been provided for information purposes only. Societe Generale Securities Services cannot be held liable for them under any circumstances.

Tradable security issued by a company with share capital, representing a share in its capital. In return for purchasing shares, investors have the right to earnings and a right to vote at General Meetings.

Share registered in the books of the company, which thus knows the exact identity of the holder of the share.

Person that owns shares in a company.

Meeting of a company’s shareholders. There are two types of General Meeting (GM):

  • The Ordinary General Meeting (OGM): the shareholders’ meeting held at least once a year by companies, in the six months following the close of the financial year, and which is chiefly intended to present the performance of the company’s activities to shareholders. The OGM has several functions, including: approval of the financial statements, the distribution of dividends, changes to or reappointment of the board of directors, presentation of the annual report, etc.
  • The Extraordinary General Meeting (EGM): shareholders’ meeting held to take important decisions (amendments to articles of association, capital increases, bond market issues).

Meeting combining an Ordinary General Meeting and Extraordinary General Meeting held at the same time.

Employee share ownership plan that enables listed or unlisted joint-stock companies to allocate, under certain conditions and within certain limits, free shares to their employees and corporate officers.

Moment that marks the end of the vesting period, the duration of which cannot be less than one year. From that moment, shares are definitively vested to their beneficiary. However, the cumulative duration of vesting and retention periods must be equal to at least two years.

Company external growth procedure, but which is also used to strengthen its financial structure when the company is financially weakened.
The decision to increase the company’s share capital is taken at the Extraordinary General Meeting, and this is the only company body able to make this decision. This decision is taken following a report from the company’s board of directors or executive board, which sets out all the reasons for the capital increase.

The purpose of the Autorité des Marchés Financiers is to strengthen the effectiveness and visibility of market regulation. The AMF has four main missions: to regulate, authorise, monitor and sanction.
Its jurisdiction covers financial transactions and information, collective investment schemes, markets and professionals, on which it may conduct controls or launch investigations.

For each transaction (purchase, sale) that holders conduct on their securities, they receive a few days later a transaction notice that summarises all the characteristics of the order that has been executed. In the event of a complaint, they usually have 30 days to exercise their rights.

Banking and/or financial intermediary responsible for centralising documentation relating to a corporate action or a financial transaction.
The centraliser is responsible for ensuring the administrative, accounting and financial completion of a transaction, and also for paying the various fees to intermediaries.

Identification number for securities listed on the Stock Exchange, adopted by Euronext for the sake of European harmonisation. It replaced the “Sicovam”, then “Euroclear” codes.

Financial establishment approved by the market authorities that is responsible for finalising securities transactions and contracts recorded on a stock market.
The clearing agent ensures that the exchanges of these various assets actually give rise to simultaneous settlements.

Management body of a société anonyme (public limited company).
Its members, the directors, and the chairman of the board of directors divide strategic tasks (business development, audit, remuneration, nomination of executive management, etc.) between them in specialist committees.

A security is listed when it is admitted to a financial market. The price of the security is its market price, established by matching the best sale and purchase offers.
For a company, the advantage of listing is the access it gives to the capital markets and the opportunity to communicate information about the company.

A sum of money, payable to the holder of a bond, corresponding to the interest paid by the issuer.

The price, sometimes expressed as a percentage, of a financial instrument, a security, a commodity, a currency, merchandise, etc. resulting from the balancing of supply against demand; Price from which the opening price of the new session is established. This is the last listed price or the last indicative price appearing on the listing:

  • For subscription options, it is the average of the last 20 listed prices preceding the date of the board of directors’ meeting allocating the stock options.
  • For call options, it is the highest between the average purchase price of the shares held by the company and the average of the last 20 listed prices preceding the date of the board of directors’ meeting allocating the stock options.
  • For exercising stock options, it is the first stock market price on the day the options can be exercised.

Remuneration of an intermediary (service provider, broker) received when transactions are conducted on behalf of his/her clients. Concerning stock markets, the term brokerage usually encompasses all fees, actual brokerage as well as the commissions received by the bank or credit institution through which the trade order was rooted.

Date on which stock options or free shares are allocated to beneficiaries.
In particular, this date enables the tax regime applicable to free shares or those resulting from the exercise of stock options to be determined.

Date on which the beneficiary may exercise his/her stock options. 
It may correspond to the end of the lock-up period, but the settlement plan may set out other ways for exercising stock options (“gradual exercise”).

Date, decided by the issuing company, from which stock options may no longer be exercised by the beneficiary. The options are thus invalid and lost by the holders.

A dividend corresponds to the portion of the company’s earnings redistributed to shareholders as decided by the company’s annual general meeting, which passes resolutions on the very principle that dividends should be paid and their unit amount.

Amount of fees paid to your intermediary in return for holding your securities in their account books.

Essential attribute of a share enabling its holder to vote on resolutions proposed at general meetings. Pure registered shares (according to the terms and conditions set by the company) may grant double voting rights.

Operation conducted by a holder who has been assigned stock options with a view to obtaining, in return for payment of the strike price, the corresponding shares.

Tax return to be sent by the paying institutions to holders and used to declare all income from investments and securities transactions. Under French tax regulations, it must be issued and sent.

A “fiscal non-resident” is anyone with a tax residence established outside France. Fiscal non-residents are governed by a specific tax regime, depending on the products they hold.

Corporate actions identify events that causes a change in a security: dividend payments, capital increases, takeover bids, etc.

Instruction sent to a financial intermediary, who, depending on the information received and the situation of the client’s account, submits it for execution on the stock market. A trade order must carry certain pieces of information necessary for it to be properly executed (the transaction direction, the security’s name or ISIN, the quantity of securities, etc.).

Plan to purchase or subscribe to securities enabling a company to offer options to all or some of its employees and/or corporate officers, giving them the possibility to purchase its shares at a set price over a defined period. 

Specific securities account created in 1986. It was designed to encourage mass share ownership. 
Equity Savings Plans enable a European equities portfolio to be managed free from tax on dividends and capital gains, provided the holder does not retire in the five years following the opening of the plan. Payments are limited to €120,000 per person (€240,000 for a married couple).

Price at which beneficiaries of stock options can exercise their options to acquire shares. 

A “tax resident” is considered anyone who has their tax residence in France (either their family home or the place they conduct a professional activity or the centre of their economic interests).

Contractual document drawn up by the issuer and between the company and the beneficiary, defining the procedures of the options plan or the free shares plan, such as the strike price, the exercise period, retention period, etc.

Method of tax collection consisting of having the tax collected by a third-party payer, usually the employer or bank, when income on which tax is due is paid to the tax payer.

Any company that issues shares, bonds or other investment securities on the capital market.

Right granted to employees to purchase a certain quantity of shares in their company at a set price for a defined period.
When they exercise their options, they acquire the share at a set price. In certain cases, they can sell them on immediately and collect the capital gain.
The option does not constitute an obligation to purchase. If the real share price is lower than the strike price, it will not be in the employees’ interest to exercise their option. If the price is higher, then they have an interest in exercising their option. They will thus acquire the share at a lower price than its real price.

Form of holding securities in which the name of the beneficiary is not recorded, chosen by the holder.
Bearer securities are however numbered by the issuing company. This numbering enables the security in question to be identified. It is the opposite of a registered security, which is addressed to a person in particular, and not simply the holder of the security.
In order that the issuing company is aware of the securities they own, investors may ask their shares to be registered.

The securities are directly registered and managed by the issuing company. This company conducts operations such as the payment of a dividend, the use of subscription rights or the allocation of new shares.
Form of holding securities chosen by the holder.

Securities are registered directly by the issuing company, but are managed by an intermediary.
Form of holding securities chosen by the holder.

Any natural or legal person holding registered shares.