Finance Careers Glossary A to L: Roles and Terms (plain-English definitions)

About this page

Finance is full of terms that sound simple until you have to use them. This page is a plain-English glossary for Finance Careers, covering entries such as Access person, Accrual accounting, Affirmation, AI washing, Appointed Actuary, each with a short definition and a pointer to the part of the volume where it is explained.

Keep it open while you read, or use it to settle an argument about what a term really means. Every entry is written to stand on its own, with no jargon left undefined, and the part number beside it tells you where to read more. Use it as a quick reference whenever a term trips you up.

A sample of the entries (118 terms on the full page)

Access person — An adviser’s employee who sees nonpublic client trades, holdings or recommendations, and so must report personal holdings and trades under the code of ethics (C.14).

ARR bridge — A reconciliation of opening to closing annual recurring revenue through new, expansion, contraction and churn movements (C.9).

Authorized participant — A clearing-agency member with an agreement with an ETF that lets it create and redeem ETF shares in large blocks in exchange for a basket of securities. (B.7)

Break — An unexplained difference between two records of the same number, such as the administrator’s NAV and the shadow NAV, investigated before release (C.12).

Cap table — The capitalization table: a record of who owns which shares, options and convertible instruments in a company. (D.2)

Central counterparty — A clearing house that becomes buyer to every seller and seller to every buyer, guaranteeing trades and collecting margin; also CCP. (0.1)

Chargeback — A card payment reversed at the cardholder’s request through the card network, which the merchant or its processor may have to absorb if the merchant cannot pay. (B.8)

Common Admission Test (CAT) — The national entrance test the Indian Institutes of Management use to shortlist domestic applicants for their MBA programs. (H.2)

Contingency funding plan — A bank’s plan for raising cash in a liquidity stress: triggers, funding sources in order of use, and decision rights (E.9).

Credit conversion factor (CCF) — The percentage that turns an off-balance-sheet item, such as an undrawn commitment, into an on-balance-sheet exposure before risk weighting (C.15).

Customer protection rule — SEC Rule 15c3-3: a broker-dealer must keep customers’ securities in its possession or control and hold a reserve for net customer cash in a special bank account (E.4).

Deficiency letter — The SEC examination outcome that lists potential violations and asks the firm for corrective action, typically with a written response within 30 days (C.14).

Divisional CFO — The finance head of a business unit or region, usually with a solid line to the group CFO and a dotted line to the division’s general manager (see Business unit CFO); a common last rung before the group CFO chair (A.4).

DV01 — The change in a position’s value for a one-basis-point move in interest rates; the starting point of a rates desk’s P&L explain (E.7).

Employee stock ownership plan — In the US, a tax-qualified retirement plan that must invest primarily in the employer’s stock; not the same as the Indian ESOP (C.10).

Exit price — The price that would be received to sell an asset in an orderly transaction between market participants; the basis of fair value (C.13).

Form 8-K — The SEC current report a US-listed company files for material events, including a principal officer’s departure or appointment, generally within four business days (A.3).

Fund administrator — A third party that keeps a fund’s books, calculates its NAV and handles investor records. (0.1, C.12)

Hallucination — Fluent output from a language model that is not supported by its source data (G.2).

ICITSS — ICAI’s Integrated Course on Information Technology and Soft Skills, taken before practical training; an advanced version follows it. (H.2)

Interest rate risk in the banking book (IRRBB) — The risk to a bank’s earnings and economic value from rate moves on loans, deposits and other non-trading positions (E.9).

Invoice Registration Portal (IRP) — The Indian GST portal to which businesses above a turnover threshold report B2B invoices, receiving an Invoice Reference Number in return (G.3, India Lens).

LDTI — Long-duration targeted improvements: the FASB’s ASU 2018-12, which changed US GAAP measurement of long-duration insurance contracts (C.11).