Banking, investment and insurance: Jargon buster

• AIM - Alternative Investment Market - junior market to the London Stock Exchange.
• Back office - support functions not directly responsible for fee-earning, e.g. IT, Human Resources.
• Derivatives - the group term for financial contracts between buyers and sellers of commodities or securities.
• Emerging markets - financial markets of developing countries.
• FTSE - Financial Times Stock Exchange; lists an index of the most highly capitalised companies on the London Stock Exchange, the FTSE 100 index.
• Forex - Foreign Exchange - the largest money market in the world.
• Financial Services Authority (FSA) - the UK’s financial regulator.
• Front office - function that relates to revenue generating activities for a financial firm.
• Hedge funds - a private investment fund, charging a performance fee, usually only open to a limited range of qualified investors.
• Instrument - an item that may be traded, typically stocks, bonds, futures, options and currencies.
• LSE - London Stock Exchange.
• Risk management - management of the pure risks to which a company might be subject. It involves analysing all possible risks and determining how to handle this exposure through trading out, or transferring the risk through derivatives.
• Trader - person who buys and sells instruments in the financial markets.
• Underwriting - the guarantee to buy, or find buyers, for an entire issue of stocks and shares.

	Written by higher education careers professionals	Date:  Autumn 2007
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