Frequently used terms with our website and literature.



Absolute return funds

A type of fund that typically targets a higher rate of return than cash investments and aims to provide positive returns regardless of market conditions. Returns are not guaranteed though. Absolute return funds can invest in a wide range of assets and use different investment strategies including derivatives.


The terminology we use to refer to the different ways in which you can invest through our platform. We offer 6 different types of Account. An Investment Dealing Account, an Individual Savings Account (ISA), a Self Invested Personal Pension (SIPP) Account and a version of each of these that you can use if you are investing on behalf of a child.

Accumulation shares

A type of share offered by a fund. 'Accumulation shares' refers to the fact that any income earned by the shares is kept in the fund to accumulate. The fund price then reflects the fact that this income is automatically reinvested.


When a business is taken over (acquired) by another company. One company takes over the other by buying its assets and/or shares.

Active management

A style of fund management. Active fund managers try to add value by aiming to outperform a chosen benchmark, which is often a market index (like the FTSE 100 index for example). They aim to achieve this by making decisions on which asset classes to invest in, and in what proportions, and then which individual investments to buy, sell or hold.

Additional State Pension

An extra amount of money you could get with your basic State Pension if you have reached State Pension Age before 6 April 2016. It's based on your National Insurance contributions. How much you get depends on your earnings and whether you've claimed certain benefits.

Additional Voluntary Contribution (AVC)

A scheme that lets you make extra contributions into an employer sponsored pension scheme.


A company that is in financial difficulties can go in to administration. A specialist practitioner takes control of the company’s affairs and tries to reorganise them, or to realise the company’s assets, for the benefit of anyone to whom the company owes money. Once a company goes into administration the shares tend to be suspended from trading. If you hold those shares in your Account with Alliance Trust Savings you may eventually get some money for them as the company is broken up but this is not guaranteed and may take some time.

Alternative Investment Market (AIM)

The London Stock Exchange's global market for smaller and growing companies.

Annual Allowance

Is the maximum amount you can pay in to a pension (excludes transfers) in a given year. You have to pay a tax charge on any payments above your Annual Allowance.

Annual General Meeting (AGM)

An annual meeting called by the directors of a company that allow shareholders to stay informed and involved with the company decisions and workings. Also includes the directors' report and accounts, declaration of dividends and election of directors.


An annuity converts your pension savings into a monthly or yearly guaranteed retirement income for you to live on (usually) for the rest of your life. We don’t offer annuities. But we can help arrange for you to buy one from another company.

Asset allocation

This refers to how invested money is distributed across different asset classes, industry sectors, and geographical regions. Asset allocation should reflect the investment objectives of a fund or portfolio and also the degree of risk that someone investing in it is prepared to take.

Asset class

Asset classes are distinct types of investment. The four main asset classes are shares, bonds, cash and property.

Associated Companies

These are companies where another investing company holds around 20% - 50% of the Ordinary Shares. A company’s Profit and Loss Account will include its share of the profits of an associated company whilst the Balance sheet will include its share of the net assets.


BACS (Bankers Automated Clearing Services)

A way of making electronic transfers of funds between financial institutions

Balance Sheet

Gives a summary of a company's financial position at a given point in time. For example it’s assets, liabilities and net worth.

Base rate

This is the interest rate set by the Bank of England's Monetary Policy Committee.


A technical measure of the volatility of a company’s shares compared to the overall market. A beta greater than 1 means the share tends to be more volatile than the market and of less than one that the share tends to be less volatile than the market.

Bid Price

The price at which an investment is bought.

Bid offer spread

The difference between the bid price and the offer price for an investment.

Blue Chip

Used to describe a listed company that is known for the quality and wide acceptance of its products, services and management and its ability to generate profits and pay dividends to shareholders.


Debt securities issued by governments and companies as a way of raising money. A bond usually has a fixed term and entitles its holder to a regular fixed interest payments and then, at the end of its life (‘maturity’) repayment of the amount paid for it when it was first issued (its ‘nominal value’).

Bonus Issue

When a company offers its existing shareholders additional shares at no extra cost. This increases the number of shares in circulation and reduces their individual prices, tending to make them easier to trade overall (more ‘liquid’).

Book Cost

The original cost of an investment, generally used to compare against the current market value.


Called up Share Capital

The ‘nominal’ value of the shares of a company that are issued and fully paid up.

Capital Gains tax (CGT)

A tax on any profit you make from selling investments. Profit made from the disposal of assets over and above the CGT exemption in any one year.

Capitalisation Issue

When money from a company's reserves is converted into shares and then distributed to shareholders in place of a cash dividend. Also known as a bonus or scrip issue.

Capital reorganisation

A restructuring of a company’s share capital, returning capital to shareholders. This can be done, for example, by converting bonds or Ordinary Shares into redeemable preference shares and might happen when a company is experiencing serious financial or operating problems. For example, the loss of a major customer or the danger of an imminent bankruptcy.

Cash Flow

Cash flow is a measure of company's financial health, looking at how much cash a company is receiving compared to how much it is paying out over a given period of time.

Cash Flow Statement

Gives a summary of a company's cash flow over a given period of time.

Cash Offer (or Share Offer)

These happen when there is a company takeover. Shareholders receive either cash in place of their shares in the company that is being taken over, shares in the new company or a mix of both.

Certificated Deal or Trade

Share certificates can be issued to shareholders directly by company registrars. A certificated deal or trade is when you buy or sell shares held in the form of certificates in your name.

CHAPS (Clearing House Automated Payment Service)

A UK bank-to-bank same-day payment service in Sterling. There is usually a charge for using it.

Child Trust Fund

A long-term tax-free savings Account for children born between 1 September 2002 and 2 January 2011. It is no longer possible to open a new Child Trust Fund.


Any item that can be bought and sold. Taken to refer to Exchange-traded items, including sugar, coffee, tin etc.

Company Pension Scheme

A pension scheme set up by an employer to provide employees with retirement benefits. Also known as occupational pension schemes.

Conditional dealing

Where shares are traded before the admission to trading date, as the name implies these trades are ‘conditional’ on the company being listed and can only settle once trading has become unconditional; i.e. everyone can buy and sell them.


Legal term for the financial value of a deal or trade.

Consolidated Tax Certificate (CTC)

A certificate that details all dividend and income payments received in a tax year. We issue these for Investment Dealing Accounts (in which investments are not sheltered from tax) to help you complete your tax return.


When a company reduces the number of shares it has in circulation by consolidating its share capital. This reduces the number of shares a shareholder has but usually results in each new share having a higher value than before.

Consumer Price Index (CPI)

A percentage measure of changes in the price level of consumer goods and services. It is based on the changing price of a ‘market basket’ of representative items that a household might buy.

Contract Note

A document giving all the details of an investment deal made on your behalf, usually sent no later than the next working day after your deal has been made.


When one class of shares in a company is converted to another. For example, as part of a Bonus Issue you might receive Subscription Shares that give you the right to convert to Ordinary Shares at some point in the future.


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Corporate Actions

A corporate action is an event initiated by a company that affects the shares issued by the company. Examples include takeovers, rights issues, demergers, scrip dividends and conversions. Corporate actions can have a considerable effect on shareholders and can change the number of shares you hold in the company. They often need approval from shareholders.

Corporate Bond

A bond issued by a company.

Corporation Tax

A tax paid by limited companies on their profits.


The other party to a deal.


A regular payment received by a bondholder over the lifetime of the bond. The coupon rate is shown as a percentage of the face value of the bond.

Credit ratings

Ratings that assess how likely it is that a company or government will be able to repay its loans (for example in the form of bonds it has issued) or to keep up the interest payments on those loans.


The people who a company owes something to – usually cash or a claim to services.


Crest is the UK and Ireland's electronic registration and settlement system for share trading. Crest matches trades against payments and tells the company's registrars what names to add to the share register and which ones to delete.

Crest Depository Interest (CDI)

A Crest Depository Interest (CDI) is a UK security that represents a share traded on an exchange outside the UK. For each share available as a CDI Crest has the underlying share held in its name. Trades in CDIs can be settled through Crest just like a regular share. The underlying shares are held on trust by Crest for the owners of the CDI, who have full economic rights over them.

Crest Transfer Form

This is the official form for transferring certificated share holdings to a Crest member to be held by that Crest member. You will complete a Crest Transfer Form if you want to transfer any certificate share holdings in your name to an online trading Account with Alliance Trust Savings.



Dealers buy and sell investments on behalf of others.


A type of long-term bond, issued by a company, which it agrees to repay at a set future date.


People who owe a company something, usually cash or a claim to services.

Defined Benefit Pension Scheme

A type of pension scheme in which what you get back depends on your salary (how much you earn) and how long you work for your employer. Sometimes also known as Final Salary pension schemes.

Defined Contribution Pension Scheme

A type of pension scheme in which what you get back depends on how much you pay in, how investments perform and how you plan to take income from your savings. Sometimes also known as money purchase pension schemes.


When an investment is removed from a stock exchange. This can happen, for example, if the company that issued the investment goes out of business or is taken over by or merged with another company.


An investment whose value depends on the performance of an underlying asset or security.

Dilution Levy

If you want to buy or sell a very large number of shares or units in a fund the fund manager might charge you a Dilution Levy (or make a Dilution Adjustment). This is to cover the fund’s costs in doing this for you, so they don’t have an adverse impact on its other investors.

Direct Debit

A payment system that lets you authorise someone else (like Alliance Trust Savings for example) to take funds from your bank Account on a one-off or (more often) regular basis.


The practice of investing in a range of different asset classes that perform differently in any particular set of market conditions, with the aim of spreading the overall risk of investing. The investment equivalent of not putting all your eggs in one basket.


A payment made to shareholders by companies out of their profits (after tax). These payments are at the discretion of the director(s) and are not guaranteed.

Dividend Cover

A technical measure of a company's ability to pay dividends to shareholders.

Dividend Yield

The percentage of a company's share price that it pays out as a dividend over the course of a year.

(Total Dividend / Share Price)*100

Dividend Yield is displayed as a percentage figure.


Earnings Per Share (EPS)

A measure of a company’s profitability for each share it has issued. It is worked out by dividing the company's annual earnings after tax by the number of shares it has issued.

Enhanced Protection

A form of protection that some individuals have which means their lifetime allowance for pension savings is higher than the current amount allowed (£1.055 million for the 2019/2020 tax year).


Another word for Shares in a company that give you an ownership interest in that company.


An 'Extraordinary General Meeting' of a company. See 'General Meetings' for more information.

Exchange Traded Fund (ETF)

A collective investment vehicle which tracks market indices. They can allow low cost exposure to the performance of an index and shares in ETFs are traded, like other shares, on a stock exchange.

Executive Pension Plan

A type of pension plan that a company may set up for key employees.


Euro - common currency of the European Union.


An organised market that gives companies access to raise capital by issuing shares and other securities and then facilitates dealing in those securities through trading platforms and services.

Exchange Market Size (EMS)

The maximum number of shares that market makers are obliged to quote for (in other words, to offer to buy or sell) a particular security. EMS is based on the percentage of the share's average daily turnover in the previous year.

Execution Only

A service that doesn’t involve the giving of advice. ATS’s service is execution only, meaning we only do what you ask us to do. We give no financial or investment advice.


Final Salary scheme

A type of pension scheme in which what you get back depends on your salary (how much you earn) and how long you work for your employer. Also known as Defined Benefit pension schemes.

Financial Year

A period of 12 months used by companies to calculate their budgets and their profits and losses. Not necessarily the same as a Tax Year.

Fixed Protection

Another form of protection that some individuals have which means their lifetime allowance for pension savings is higher than the current amount allowed (£1.055 million for the 2019/2020 tax year).

Flexi-access drawdown

A way to take an income from your pension savings. You can take some of your money (usually up to 25%) as a tax free cash lump sum. The rest is used to pay you a taxable income. Either over a period of time or all at once.

Foreign Exchange Market (FOREX or FX)

A market where traders conduct foreign exchange transactions.

Financial Conduct Authority (FCA)

The FCA regulate the financial services industry in the UK. Their aim is to protect consumers, ensure the financial industry remains stable and promote healthy competition between financial services providers. They have rule-making, investigative and enforcement powers that they use to protect consumers and regulate the financial services industry.

FTSE™ 100

An index of the share prices of the UK's 100 largest companies by capitalisation.

FTSE™ MID 250 Index (FTSE 250)

The index of the share prices of the 250 UK listed companies that follow the top 100 (comprising the FTSE 100).

Fund Closure

When a fund closes and either sells its investments or gives you an amount per share for your existing holdings in it.


The generic term used to describe collective investment vehicles in which money is pooled and invested in a portfolio of securities with a common investment purpose. Examples of different fund types include Unit Trusts, OEICs and ETFs.


Securities or goods bought or sold at a fixed price for future delivery. There may be no intention to take them up but instead to rely on price changes to sell them at a profit before delivery.



Pound Sterling


Pence Sterling


Companies are financed by a combination of money they borrow and money that has been invested by shareholders. A gearing ratio will tell how much a company has borrowed compared to how much shareholders have invested in the business.

General Meetings

A meeting of the shareholders of a company is usually held on an annual basis - commonly known as the AGM - at which company business is done. This might include approving the Directors' report and accounts, declaring dividends and electing Directors.

If something happens that means shareholders need to meet before the next scheduled AGM, then an extraordinary general meetings is held, commonly known as an EGM.

Gilts or Gilt-Edged Securities

A type of Bond issued on behalf of the Government.


The total amount before deductions are made (for example, tax).

Growth Metrics

Indicators of a company's growth potential

Guaranteed Minimum Pension (GMP)

This is the minimum pension that a company (or occupational) pension scheme has to provide for those employees who were contracted out of the State Earnings-Related Pension Scheme (SERPS) between 6 April 1978 and 5 April 1997. The amount is said to be 'broadly equivalent' to the amount the member would have received had they not been contracted-out.


Hedge funds

A type of fund (not generally made available to the public) that can take part in a wider range of investment and trading activities than other types of fund. For example they can use ‘short’ positions which mean they can benefit when an asset price falls or use ‘long’ positions which benefit when asset rise in value. They can also use derivatives or can borrow money which is then used to generate returns.


A hedge is when different but matching (or ‘offsetting’) sets of transactions are made to try and largely eliminate one or more types of risk. This often involves the use of Derivatives.


Her Majesty’s Revenue and Customs service.


In Specie

A Latin phrase (which means ‘in the actual form’) sometimes used to describe a situation where investments are transferred from one person to another (or one provider to another) without having to be converted to cash first.


A statistical measure of the changes in a portfolio of stocks representing all or part of an overall market. For instance, the FTSE 100 and the S&P500 are examples of indices.

Income Shares

A type of share offered by a fund which could provide you with a regular pay-out of income.

Index Tracker

A fund that follows the make-up of a market index, such as the FTSE 100 Index. While the value of the investment will go up and down in line with the index that it aims to match, the value of the fund won't exactly match the index it tracks. This could be, for example because of expenses associated with running a fund or if the fund has bought just a representative sample of stocks in the index.

Individual Savings Account (ISA)

A tax-advantaged savings plan. There are four types of ISA – a Cash ISA, a Stocks & Shares ISA, an Innovative ISA, and a Lifetime ISA. ATS offers a Stocks & Shares ISA. There is a limit to how much you can invest between each type of ISA in a tax year. Investments in an ISA grow free of Income Tax and Capital Gains Tax.


When prices of a selected group of items are going up, the rate of increase in process is the rate of inflation. The rate of inflation depends on the range of goods measured. Inflation results in a reduction in the purchasing power of money. Conversely, deflation results in an increase in the purchasing power of money.

Initial Public Offering (IPO)

The term used for a company joining the stock market. It is a way for companies to raise cash and increase and diversify their current shareholder base. To see what IPOs are available, visit our IPO page.

Intention to float

The company’s first announcement on its plans to join the stock market.


What a bank or other financial organisation charges you for borrowing money. Or what you earn as a return for holding a bond or putting your money on deposit with a bank, building society or other financial organisation.

Interim Dividend

A dividend that is declared and distributed before a company's annual earnings have been calculated. These dividends are usually distributed six-monthly or quarterly.

Interim Results

The results reported by a company for the first six months of its financial year. Generally, interim results are made public within three months of the end of the interim period.

Investment Trust

A company quoted on the London Stock market whose main activity is to invest in the shares of other companies on behalf of a client.


International Securities Identification Number. International 12 digit code for a listed security.


The inability of a person (or company) to settle debts.

Issue price

The price at which the shares will be sold, also known as the offer price, before general trading begins.


Junior ISA

A special type of ISA designed for investing on behalf of a child.


Key Information Document (KID) or Key Investor Information Document (KIID)

All funds have important documents which you should read before you invest in them. These used to be called Key Investor Information Documents (KIIDs) but they’re now in the process of being simplified, and in the coming year you’ll start to see Key Information Documents (KIDs) instead.

Both documents provide key information about the fund including the charges, risk rating and investment profile.


Lifetime Allowance

The total amount you can build up in pension savings in your lifetime before having to pay a tax charge. It applies across all your pensions from all sources. At the moment the Lifetime allowance, since April 2019, is £1,055,000 and it is likely to increase in line with inflation at the end of the current tax year.

Limit Order

An order to buy or sell an investment at a price you specify (the limit) or better. A limit order to buy would be executed at the limit or lower, while a limit order to sell would be executed at the limit or higher. You always place a buy limit order below the current investment price, and a sell limit order above the current investment price.


The ease with which a security can be traded on the market, usually defined by turnover.

Listed Company

A company whose securities have been admitted to the UKLA's Official List and admitted to trading on the London Stock Exchange.

Listed Securities

Securities issued by a Listed Company.


Main Market

The London Stock Exchange’s key quotation venue for mature companies.

Major shareholders

Shareholders in a company owning more than 3% of the Ordinary Shares.


The difference between the cost price of a product and the selling price.

Also used to describe the amount deposited with a broker to get credit to buy shares or derivatives.

Marginal rate(s)

The rate(s) at which you pay income tax.

Market Abuse

A conduct that adversely affects a financial market and falls below the standards expected by a regular user of that market. The FCA can discipline anyone who commits market abuse.

Market Capitalisation

The market value of a company, calculated by multiplying the current share price by the number of shares in issue.

Market Maker

A specialist firm which is obliged to offer to buy and sell securities in a particular market throughout what is known as the ‘mandatory quote period’. The role of a market maker is to keep a market liquid by making sure that anyone who wants to trade in a security can find someone to trade with.

Market Order

An order to deal in a specified number of shares without setting any limits on price, see 'Limit Order'.

Market Price

The price of a security. For shares, there are two prices quoted - Bid price and Offer price.

Maturing Share Scheme

A share scheme is usually offered by an employer to encourage employees to own shares in the business. There are different types of share schemes. A scheme is ‘maturing’ at the point where the employee is able to acquire shares and/or trade them freely for the first time.


In a merger, two or more companies come together to become one. The shareholders of the merging companies often become joint owners of the newly combined entity.


The price between the bid price and the offer price for an investment.

Money market instruments

These are short term, tradable, cash-type investments. They include, for example, Certificates of Deposit, Commercial Bills and Treasury Notes.

Money purchase pension scheme

A type of pension scheme in which what you get back depends on how much you pay in, how investments perform and how you plan to take income from your savings. Sometimes also known as defined contribution pension schemes.

Multi-manager investing

This is a way of increasing diversification by accessing several fund managers through one fund.

Mutual Fund

A collective investment scheme in the US that pools investors' money to be invested in stocks, bonds and other securities.


National Association of Securities Dealers Automated Quotation (NASDAQ)

The first electronic stock market based in the USA.

Net Assets

The total figure for all assets less any liabilities.

Net Asset Value

When talking about shares, this is a measure of the value of the shareholders interest in a company. When talking about funds it is the total amount of money that an investor would receive for each share held if the fund sold all of its assets, paid off all of its outstanding debts and distributed the proceeds to shareholders.

New Issue

Please refer to 'IPO '.


A nominee is a company that simply holds investments on behalf of others. It carries out no other business. When you hold your investments through a nominee it is the legal owner of the investment. But you are the beneficial owner, meaning the money associated with the investment belongs to you.


Open Ended Investment Company (OEIC)

A type of fund, structured as a company.


When a company sells shares to the general public it has to make the formal offer in the form of a prospectus.

Offer for Subscription

When a company allows clients to buy more Ordinary Shares at a discounted price.

Offer Price

The price at which the shares will be sold, also known as the issue price.

Offer price range

The range at the time of publication of prospectus within which the offer price is expected to be set.

Offer size

The number of shares to be sold under the offer.

Official List

Operated by the UKLA, all Main Market companies need to join it before trading can begin.

Open Offer

When shareholders are entitled to buy a set amount of shares at a price set by the company

Operating Profit/ Loss

A company's profit after deducting operating costs from gross profits.


The right (but not the obligation) to buy or sell securities at a fixed price within a specified period.


An offer to buy or sell a tradable investment with a variety of conditions applied. See 'Limit Order' and 'Market Order' for example.

Order Book

An automatic execution facility operated by an Exchange. Order books facilitate the trading of order book securities.

Order Book Security

A security that is admitted to trading on the order book.

Ordinary Shares

The most common form of share. If you hold ordinary share you may receive dividends in line with company's profitability and on the recommendation of its Directors.



A Property Authorised Investment Fund is a fund structure that allows eligible individuals to invest in property via 'collective investment' in a more tax-efficient manner.

Partial Execution

When only part of an Order is executed.

Passive Management

Unlike 'Active Management', passive investment managers don’t make decisions on markets and stock selection or form views on market movements. They just aim to match their benchmark, which is usually a market index.

Pending Order

An order that has been placed but not yet executed.

Pensions Freedoms

Short hand for the range of choices you have around accessing your pension savings in defined contribution pension schemes from the age of 55.

Personal Pension

A personal pension is a defined contribution pension plan for an individual. If you have a personal pension you can hold this alongside a company pension scheme if you like. A Self Invested Personal Pension is a type of personal pension.


A way to access and deal in a wide range of investments, holding them all together in one place through one or more types of Account and managing everything online using just one personal ID and one password.

Preference Shares

Shares that rank above Ordinary Shares if a company is wound up and often pay dividends at a fixed rate. Preference shares still represent partial ownership in a company but usually without the voting rights of ordinary shareholders.

Pre-Tax Profit

A company's operating profit before tax is deducted.

Primary market

The market for new shares issued and offered as part of an IPO. (An IPO may be made up of a mixture of new and existing shares).

Primary Protection

Another form of protection that some individuals have which means their lifetime allowance for pension savings is higher than the current amount allowed (£1.055 million for the 2019/2020 tax year).

Probate (Grant of)

Probate is the process of getting legal clearance to deal with the assets of someone who has died. It makes sure that any Inheritance Tax due is assessed and paid before the remaining assets are distributed as set out in the Will (if there is one) or the intestacy rules (if there isn’t a Will). The equivalent process in Scotland is Confirmation.

Profit and Loss Account

Gives a record of a firm's trading activities and whether it has made a profit or lost money over a particular period of time. It differs from the Balance Sheet which records the financial position of the business at a particular snapshot moment in time.

Profit Warning

When a listed company expects profits to fall below analysts' forecasts by more than 10%, the directors are required to issue a profits warning through the London Stock Exchange.


The definitive document outlining the offer in full.

Protected Rights

Pension savings that you may have built up in the past as a result of contracting out of the State Second Pension. It is no longer possible to contract out.

Protected Rights Pension

A particular type of pension that was designed to hold Protected Rights.


Often used as short hand for a business that provides a particular product or service. For example, Alliance Trust Savings is a Platform provider.

Public Offer

A way of issuing new shares to the public, including private and institutional investors.



An offer to buy or sell a quote driven security. Quotes are displayed by market makers that are registered in that security.


Real Estate Investment Company (REITS)

These operate in a similar way to Investment Trusts. A REIT is a listed company that owns and manages income producing property, either commercial or residential, and is designed to offer investors income and capital growth from rented property assets in a tax efficient way.

Record Date

A date set by a company on which you must own shares to be eligible to receive a dividend.


A type of 'Bonus Issue' where you are given shares that can be redeemed for cash.

Redemption Date

The date on which a security (usually a bond or other fixed interest security) is due to be repaid by the issuer at its full face value. The year is included in the title of the security. The actual redemption date is usually the date on which the last interest payment is due.

Registered Contact

The person who is authorised to give instructions concerning the management of a Junior ISA on behalf of the child in whose name it is held. The registered contact must be either the parent or guardian of the child, or the child themselves (as long as they are 16 or over).

Registered pension scheme

A pension scheme registered for tax relief under Chapter 2 of Part 4 of the Finance Act 2004.


An organisation responsible for maintaining a company's share register.

Regulatory News Service (RNS)

The means by which UK listed companies make announcements to the London Stock Exchange.


When the income from an investment (dividend or interest) is, instead of being paid out to the investor, used to buy them more shares or units in that investment.

Relevant Income

Any income which is subject to income tax for the tax year. Your income includes earned income (employed or self-employed), pension income, dividends, rental income and income from trusts. This list may not be exhaustive.

Retirement Annuity Contract

A type of pension scheme that was available before July 1988 to the self-employed or employees without company pension schemes.

Return of Cash (or Return of Capital)

When a company returns some of its profits to its shareholders.

Rights Issue

An invitation to existing shareholders to buy more shares in the company, usually at a discounted price. Only available to shareholders holding their shares on a certain date. It is possible to sell your rights to buy the new shares on the open market without converting them to Ordinary Shares.


S&P 500

Standard and Poors Composite Index - an index comprising shares of 500 US companies reflecting the general trend in the US stock market.

Scaled back

When all investors’ applications cannot be satisfied by the amount of stock available they may be scaled back by a proportionate amount.

Scheme of Arrangement

A court-approved agreement between a company and its shareholders or creditors. It may bring about a merger or takeover and may alter shareholder or creditor rights.

Scrip Dividend

An issue of shares available to shareholders that replaces a cash dividend payment. Shareholders have the option to forgo their cash dividend for the share alternative.

Secondary market

The market for shares already admitted to trading.


Groupings of companies having similar products or services that you might consider for investment. For example the technology sector or transport sector.

Securities / Stocks

Often used as a general term for all types of stocks and shares.

Self Invested Personal Pension (SIPP)

A type of personal pension that lets you choose from a wide range of investments.


ShareGift is a charty that specialises in accepting donations of shares. They take donations of all sizes, no matter how small and use them to generate funds to give to other charities. Find out more at


An individual or organisation that owns shares in a company.

Shareholder Benefit

Benefits provided by some companies to their shareholders – for example vouchers for a discount on the bill in any Greene King pub. If you invest through an Investment Dealing Account or ISA you may be able to participate in shareholder benefits. But not if you invest through a SIPP Account.

Share Offer (or Cash Offer)

These happen when there is a company takeover. Shareholders receive either cash in place of their shares in the company that is being taken over, shares in the new company or a mix of both.


A unit of ownership in company. There are different types of shares, including Ordinary and Preference shares.

Stamp duty

A tax on certain financial transactions including the purchase and/or transfer of shares. This is currently 0.5% of the amount paid. Gilts and corporate bonds are currently exempt form stamp duty.

State Pension

A regular payment from the government that you can claim if you reach State Pension Age on or after 6 April 2016.

State Pension Age

The age at which you can claim the State Pension. Your State Pension Age depends on your sex and your date of birth. You can check yours at

Stock Exchange

This is a place where stocks and shares are bought and sold.

Stock Exchange Daily Official List number (SEDOL)

A 7 digit alphanumeric number used by the London Stock Exchange to identify stocks.

Stock Exchange Automated Quotations system (SEAQ)

A quote service for UK securities.


When a company increases the number of shares it has in circulation by sub-dividing its share capital. This increases the number of shares a shareholder has but usually results in each new share having a lower value than before.

Supplementary Prospectus

A document only issued in the event of a significant change in the terms of the original Prospectus.



The acquisition of one company by another. If a company you own shares in is taken over you may be given new shares or cash in place of your existing shares.

Tax Year

From 6 April in one year to 5 April in the following year.

Tender Offer

When a company offers to buy back their shares from shareholders at a price higher than the price they are currently trading at.

Third Party

For Alliance Trust Savings this means a person other than the named Account holder for any Alliance Trust Savings Account who has access to and authority to deal on that Account.

Ticker Symbol

The three or four letter trading symbol assigned to a share (and some types of fund - investment trusts and ETF's). Investors often refer to shares by their ticker symbols because of the brevity and because they often remain the same even if a company's name changes.


A trust is a way of giving away something of value (the asset) for the benefit of others (the beneficiaries) but without giving them full access to and control over the asset. The asset can include property, shares and money.



Short hand for an Uncrystallised Funds Pension Lump Sum. This is a way of taking money out of your pension savings. You can take out one or more lump sums and for each lump sum 25% will usually be tax free, and the rest taxed at your marginal rate.


UK Listing Authority, the arm of the City regulator – the Financial Conduct Authority – which deals with the rules of companies quoted on the Main Market.

Unconditional dealing

When a company is officially listed on the stock exchange and normal exchange trading takes place.

Unit Trusts

A type of fund, structured as a Trust. Unit Trusts are open-ended funds where private investors pool their money to be invested in a portfolio of securities. Unit trusts issue units to investors in response to demand and the unit price is closely aligned to the fund’s Net Asset Value.

US Person

US Person means someone described in Regulation S of the United States Securities Act 1933. We understand it to include any natural person resident in the United States and/or a partnership or corporation organised or incorporated under the laws of the United States (where 'United States' means the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia). If you are not sure whether you might be a US Person you should seek professional advice.


US Dollar.


Venture Capital Trusts (VCTs)

A VCT is a type of private equity trust established by the government to encourage investment in high-risk, small, young companies. They have traditionally offered lucrative tax concessions to attract risk capital from higher rate tax payers.


A measure of the amount of movement in the price of an instrument.


The number of shares traded over a given period, usually one day.

Voting Rights

The entitlement of ordinary shareholders to vote in person or by proxy at annual meetings or annual general meetings (AGM).


W8 Ben Form

This is a form you need to fill in if you want to be given the appropriate tax relief on any income paid to you from US stocks and shares.

Winding up

The process of selling all the assets of a company, paying off its creditors, distributing any remaining assets those entitled to them and then dissolving the business.


Zero coupon bonds

Bonds that trade at a deep discount from their face value as they pay no interest to the bond holder during the lifetime of the bond.

Alliance Trust Savings Limited is registered in Scotland No. SC 98767, registered office, PO Box 164, 8 West Marketgait, Dundee DD1 9YP; is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, firm reference number 116115. Alliance Trust Savings Limited gives no financial or investment advice. ‘Alliance Trust Savings’, ‘ATS’ and 'AT Savings' are all brand names of Alliance Trust Savings Limited together with the ‘Alliance Trust Savings’ logo are owned by and used with the permission of Alliance Trust PLC, the previous owner of Alliance Trust Savings Limited.