Laserfiche WebLink
SECURITIES & EXCHANGE <br />COMMISSION: <br /> Agency created by Congress to protect <br /> investors in securities transactions by <br /> administering securities legislation. <br />SEC RULE 15C3-1: <br /> See Uniform Net Capital Rule. <br />STRUCTURED NOTES: <br /> Notes issued Federal Agencies <br /> (Government Sponsored Enterprises like <br /> FHLB, FNMA, SLMA, etc.) and <br /> Corporations which have imbedded options <br /> (e.g., cai1 features, step-up coupons, <br /> floating rate coupons, derivative-based <br /> returns). Their market performance and <br /> value are impacted by the fluctuation of <br /> interest rates, the volatility of the imbedded <br /> options and shifts in the shape of the yield <br /> curve. <br />TREASURY BILLS: <br /> A non-interest bearing discount security <br /> issued by the U.S. Treasury to finance the <br /> national debt. Bills are issued to mature in <br /> three months, six months, or one year. <br />TREASURY BONDS: <br /> Long-term coupon-bearing U.S. Treasury <br /> securities issued as direct obligations of the <br />U.S. Govenunent and having initial <br />maturities of more than 10 years. <br />TREASURY NOTES: <br />Medium-term coupon-bearing U.S. <br />Treasury securities issued as direct <br /> obligations of the U.S. Government and <br /> having initial maturities from two to 10 <br /> years. <br /> <br />UNIFORM NET CAPITAL RULE: <br /> Securities and Exchange Commission <br /> requirement that member firms as well as <br /> nonmember broker-dealers in securities <br /> maintain a maximum ratio of indebtedness <br /> to liquid capital of 15 to 1; also called net <br /> capital rule and net capital ratio. <br /> Indebtedness covers all money owed to a <br /> firm, including margin loans and <br /> commitments to purchase securities, one <br /> reason new public issues are spread among <br /> members of underwriting syndicates. <br /> Liquid capital includes cash and assets <br /> easily converted into cash. <br />YIELD: <br /> Return on an investment. (a) CURRENT <br /> YIELD is obtained by dividing the annual <br /> income by the current market price for the <br /> security. (b) YIELD TO MATURITY is <br /> the compound rate of return an investor <br /> will receive if: (1) the security is held to <br /> maturity and (2) all cash flows are <br /> reinvested at the same rate. <br /> <br />City of San Marcos Investment Policy Page t 2 <br /> <br /> <br />