Securities and related assets (TALC 42)

A1A.315.

Securities and related assets (TALC 42) is further classified into:

• debt securities (TALC 421);
• financial derivatives (TALC 422);
• employee stock options (TALC 423);
• equity including contributed capital (TALC 424); and
• investment fund shares or units (TALC 425).

A1A.316.

Debt securities (TALC 421) consists of negotiable financial instruments serving as evidence of a debt.

Includes: Bills such as treasury bills, negotiable certificates of deposit, bankers’ acceptances, promissory notes, and commercial paper; bonds and debentures; bonds that are convertible into shares; zero-coupon bonds; deep-discount bonds; loans that have become negotiable from one holder to another and where there is evidence of secondary market trading; non-participating preferred stocks or shares; asset-backed securities; collateralised debt obligations; stripped securities; and index-linked securities.

A1A.317.

Financial derivatives (TALC 422) consists of financial instruments that are linked to another specific financial instrument or indicator or commodity, through which specific financial risks, such as interest rate risk, foreign exchange risk, equity and commodity price risks and credit risks, can be traded in their own right in financial markets.

Includes: Options, warrants including detachable warrants, forward-type contracts such as futures, forward rate agreements and forward foreign exchange contracts; swap contracts such as currency swaps, interest rate swaps and cross-currency interest rate swaps; credit derivatives such as total return swaps and credit default swaps; and stock options granted to employees that can be traded on financial markets without restriction; repurchase agreements; securities repurchase agreements which involve the sale of securities for cash, at a specified price, with a commitment to repurchase the same or similar securities at a fixed price either on a specified future data or with an open maturity; securities lending which involves security holders transferring securities to another party, subject to the stipulation that the same or similar securities be returned on a specified date or on demand; gold swaps which involve an exchange of gold for foreign exchange deposits with an agreement that the transaction be reversed at an agreed future date at an agreed gold price; and off-market swaps which involve swap contracts that have a non-zero value at inception as a result of having reference rates priced differently from current market values.

Excludes: Instruments with embedded derivatives (these are classified according to the primary characteristics of the instrument); central bank swap arrangements (classified to advances other than concessional loans (TALC 433)); repayable margin payments made in cash (classified to currency and deposits TALC 511); repayable margin payments made in assets other than cash (not recorded as a transaction or change in stock position because no change in economic ownership has occurred).

A1A.318.

Employee stock options (TALC 423) consists of options to buy the equity of a company, offered to employees of the company as a form of remuneration.

Includes: Stock options provided to suppliers of goods and services.

Excludes: Stock options granted to employees that can be traded on financial markets without restriction (classified to financial derivatives (TALC 422)).

A1A.319.

Equity including contributed capital (TALC 424) consists of all instruments and records that acknowledge claims on the residual value of a corporation or quasi-corporation, after the claims of all creditors have been met.

Includes: Listed and unlisted shares; stocks; participations; depository receipts which are securities that represent ownership of securities listed in other economies.

A1A.320.

Investment fund shares or units (TALC 425) consists of collective investment undertakings through which investors pool funds for investment in financial or non-financial assets. These funds issue shares (if a corporate structure is used) or units (if a trust structure is used). Investment fund shares or units refer to the shares issued by mutual funds and unit trusts, rather than the shares they may hold.

Includes: Money market funds; non-money market funds.