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Calculation Agent

The company who is responsible for determining the maturity proceeds of a Structured Product that are due to investors. They are assigned by the Issuer of a Structured Product.  

Cap
A cap is a limit on the possible return a Structured Product can pay. This means that, if the final performance of the Underlying is above the cap, the return due on the structured product will not reflect this full performance. Instead, only performance up to the cap is used to determine the return.

Capital
The amount of money an investor uses to purchase a Structured Product. Please also see ‘Initial Investment’.  

Cash ISA
Cash Individual Savings Account. An ISA is restricted to UK tax resident individuals only.
 
Client Money
Relates to the provisions of the FCA’s Client Assets Sourcebook relating to client money.

Closing Level
The closing level of an Underlying on a given Business Day representing the most up-to-date valuation until trading commences on the next Business Day.

Collateral
A portfolio of securities that are used to secure a payment to an investor. For example, if a Structured Product is collateralised and the issuer of that Structured Product went into administration, the investors would have access to the securities that were used to collateralise that Structured Product to help minimise any losses that they would otherwise incur.

Counterparty
The institution (usually a bank) that is responsible for issuing the securities that make up a Structured Product. Investors are exposed to the risk that the Counterparty defaults and is therefore unable to repay their investment and any returns that might be due under the terms of the Structured Product. Please also see ‘Issuer’.

Counterparty Risk
The risk that the Counterparty will default and will be unable to pay any amount due to an investor. For Structured Deposits, the Counterparty is the Deposit Taker, for Structured Investments, the Counterparty is the Issuer or Counterparty of the Securities.

Coupon
A dividend, interest payment or any similar payment.

Credit Event
When a company becomes insolvent, defaults on its payment obligations or is the subject of governmental intervention or a restructuring of its debt obligations in a manner that is detrimental to creditors.

Credit Ratings
A scale of letters ranging from AAA to D assigned to companies by independent ratings agencies, intended to reflect the creditworthiness of that company. They are reviewed regularly and can go up or down in response to changes in the financial position of the institution being rated.

Credit Ratings Agency
A company, such as Fitch Ratings, Moody’s or Standard & Poor’s, which assigns Credit Ratings to companies. A credit ratings agency does not rate individual consumers.   

Custodian
Is a financial institution that holds investors’ securities for safekeeping to minimise the risk of theft or loss. The custodian for structured products is generally a different company to the Plan Manager or Product Provider.

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