M
Major Trend
Underlying price trend prevailing in a market despite temporary declines
or rallies.
Managed Account
This is similar to a discretionary account where a client has given
specific written authorization to a partner, director or qualified portfolio
manager of an investment dealer to select securities and execute trades,
but on a continuing basis and for a fee. Managed accounts can be solicited
whereas discretionary accounts are opened as a matter of convenience to
clients who are ill or out of the country.
Manipulation
The illegal practice of buying or selling a security for the purpose
of creating a false or misleading appearance of active trading, or for
the purpose of raising or depressing the price to induce purchases or
sales by others.
Margin Account
A client account where he or she uses credit from the investment dealer
to buy a security. The client needs to deposit a "margin" amount with
the balance being advanced by the investment dealer against acceptable
collateral such as investments. The investment dealer can make a "margin
call" and demand that the client deposit more money or securities when
the value of the account falls below a certain level. If the client does
not meet the margin call, the dealer can sell the securities in the margin
account at a possible loss to cover the balance owed. The client is also
charged interest on the money borrowed from the investment dealer for
the purchase of the securities.
Market Maker
An authorized trader employed by an investment dealer who is required
by the applicable self-regulatory organizations to maintain reasonable
liquidity in securities markets by making firm bids or offers for one
or more designated securities.
An order placed to buy or sell a security immediately at the best current
price.
Market Out Clause
A clause in an underwriting agreement allowing the underwriter to cancel
the agreement without penalty for certain specified reasons, such as the
issue becoming unsaleable due to an unexpected change in securities markets,
or in the affairs of the company whose securities are being underwritten.
Market Price
The most recent price at which a security transaction took place.
Marketable
Easily bought or sold.
Material Change
A change in the affairs of a company that is expected to have a significant
effect on the market value of its securities share ownership of the company
that could affect control, or the acquisition or disposition of any securities
in another company. A material change must be reported to the applicable
self-regulatory organization.
Maturity
The date on which a loan or a bond or debenture comes due and is to
be paid off.
Medium-Term Bond or Debenture
A bond or debenture which matures in more than three years, but less
than 10.
Member Firm
An investment dealer which owns a seat on a particular stock exchange
or is a member of the Investment Dealers Association of Canada.
Merger
The act of one company permanently joining another to become one company.
This appears on consolidated financial statements where the parent company's
figures are combined with those of its subsidiaries. Even if the parent
company owns less than 100% of a subsidiary's stock, all of the subsidiary's
assets and liabilities are combined in the consolidated financial statements.
To compensate, the part not owned by the parent company is minority interest
and is shown as a liability on the balance sheet and deducted in the earnings
statement.
Monetary Policy
A policy followed by the federal government through the Bank of Canada
for controlling credit and the money supply in the economy. The policy
will vary according to the anti-inflationary or job-creating results the
government primarily desires to achieve.
Money Market
That part of the capital market in which short-term financial obligations
are bought and sold. These include federal government treasury bills,
short term Government of Canada bonds, commercial paper, bankers' acceptances
and guaranteed investment certificates. Longer term securities, when their
term shortens to three years, are also traded in the money market.
Mortgage
A contract specifying that certain property is pledged as security for
a loan. The money is to be repaid in installments which usually combine
principal and interest payments.
Mortgage Backed Securities
Similar to bonds, these securities are backed by a share in a pool of
home mortgages insured under the National Housing Act. The securities
pay interest and a part of the principal each month and, if home owners
prepay their mortgages, may pay out additional amounts of principal before
normal maturity. They trade in the bond market at prices reflecting current
interest rates.
Mutual Funds
These are open-end funds that are not listed for trading on a stock
exchange and are issued by companies which use their capital to invest
in other companies. Mutual funds sell their own new shares to investors
and buy back their old shares upon redemption. Capitalization is not fixed
and normally shares are issued as people want them.
