Terms & Definitions - S
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Sales charge: In the case of mutual funds, these are commissions charged to holder of fund units, usually based on the purchase or redemption price. Sales charges are also known as "loads."
Securities Act: Provincial legislation regulating the underwriting, distribution and sale of securities.
Segregated funds: Investment vehicles offered by life insurance companies, similar to mutual funds but with several interesting differences. In a way, they combine the growth aspects of a mutual fund with the guarantees of a GIC.
Shares: A document signifying part ownership in a company. The terms "share" and "stock" are often used interchangeably.
Shareholders' equity: The amount of a corporation's assets belonging to its shareholders (both common and preferred) after allowance for any prior claim.
Short selling: The sale of a security made by an investor who does not own the security. The short sale is made in expectation of a decline in the price of a security, which would allow the investor to then purchase the shares at a lower price in order to deliver the securities earlier sold short.
Short Term Disability (STD): An income replacement benefit, which is usually payable weekly, after an elimination period, to a disabled employee. It typically replaces a percentage of the employee’s earnings. Generally, a Short Term Disability plan refers to a self-insured employer sponsored plan. Whereas, a Weekly Indemnity plan refers to an insured plan.
Simplified prospectus: An abbreviated and simplified prospectus distributed by mutual funds to purchasers and potential purchasers of units or shares (see prospectus).
Specialty fund: A mutual fund that concentrates its investments on a specific industrial or economic sector or a defined geographical area.
Split: When a stock splits, the company's shares are divided into a larger number of common shares. For instance, a 3-for-1 split would give you two extra shares for every share you own.
Spread: The difference between the rates at which money is deposited in a financial institution and the higher rates at which the money is lent out. Also, the difference between the bid and ask price for a security.
Spousal RRSP: An RRSP to which contributions are made by the plan holder's spouse.
Spouse: This term applies to a legally married or a common-law spouse. A common-law spouse is a person of the opposite sex who is living with you in a common-law relationship, which means that he or she is your child's natural or adoptive parent (legal or in fact); or has been living with you in such a relationship, for at least 12 continuous months, or previously lived with you in such a relationship for at least 12 continuous months (including any period of separation of less than 90 days).
Staggered Maturities: See Laddered Annuities .
Stock options: Rights to purchase a corporation's stock at a specified price.
Stop-Loss: Under this arrangement the insurer accepts the financial risk for claims in excess of a pre-determined amount whereby stopping the policyholder’s losses. Stop-loss protection is available on either an individual or aggregate basis. When the stop-loss protection is on an individual basis it is more commonly referred to as Large Amount Pooling.
Strip bonds: The capital portion of a bond from which the coupons have been stripped. The holder of the strip bond is entitled to its par value at maturity, but not the annual interest payments.
Successor annuitant: A designation used to ensure that a RRIF passes to your spouse undisturbed. Instead of naming your spouse the beneficiary of your RRIF, you can designate them as the "successor annuitant" - either in the fund itself or in your will. In this way, the RRIF will remain exactly the same, except that the name of the payee will be changed to his or hers. If you name the spouse as beneficiary of the RRIF, the assets may be cashed in and the proceeds rolled over into your spouse's RRIF Tax forms must be filed, and investments must be made anew.
Systematic withdrawal plan: Plans offered by mutual fund companies that allow unit holders to receive payment from their investment at regular intervals.
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