Face Amount Certificate – One of the three (3) types of investment companies defined in the Investment Company Act of 1940. The debt holder makes payments periodically to the issuer, and the issuer agrees to pay to the holder the face value at maturity.
Family Limited Partnership – A partnership used for estate tax planning and designed to centralize family business or investment accounts. The family’s assets are pulled into one (1) single family-owned business partnership that family members own shares of. Shares in the FLP can be transferred between generations, at lower taxation rates than those applied directly to the partnership’s holdings.
Corporation FDIC – The corporation that insures customer bank accounts up to one (1) hundred thousand dollars against bank failure.
Federal Covered Security – Most of the stocks trading in the United States are federally covered. A federally covered security is one issued by a company listed on a major stock exchange and those issued by a registered company. Federal covered securities must be registered with the Securities and Exchange Commission (SEC) and cannot be required to register with the state.
Federal Funds – This is the shortest term money market instrument. An overnight, unsecured loan between bank members of the Federal Reserve System designed to enable banks temporarily short of their reserve requirement to borrow reserves from banks having excess reserves.
Federal Funds Rate – The interest rate charged on borrowing between Federal Reserve System member banks for overnight loans on reserves and is the lowest interest rate in the economy. This rate changes daily in response to borrowing needs.
Federal Reserve Board (FRB) – Also known as “The Fed”. The governing board of the Federal Reserve System which sets the policies that affect the money supply and monitors the economic health of the country.
Fee Only Adviser – An advisor whose only compensation comes from the charges paid by the customer and does not receive payments from third parties for customer referrals or trade executions.
Fiduciary – A person legally appointed to hold assets in trust for another person. The fiduciary manages the assets for the benefit of the other person, usually a beneficiary and must always act in the best interest of the other person.
Fiduciary Account – A company, trust, or person who holds or invests funds for someone else and acts in the best interest of the account owner. Trust accounts are an example of a fiduciary account.
Firm Commitment Underwriting – A type of underwriting commitment in which the underwriter agrees to buy all of the issuer’s new securities and then resell them to the public. The issuer is granted its funds and the underwriter assumes full financial liability if the issue is not sold to the public.
First Market – Trading of exchange listed securities on the exchange floor.
Fixed Annuity – An annuity that pays the annuitant a fixed amount for life, or for a fixed time period. This is considered an insurance product and not a security because the insurance company bears all the investment risk.
Floor Broker – Also called a “pit broker” and a commission house broker. This is an employee of a member firm who executes trades on the exchange floor on behalf of the firm’s clients.
Form ADV – A form filed with the Securities and Exchange Commission (SEC) that contains information about a Registered Investment Advisor (RIA) such as the investment advisors name, location, fiscal year of business, type of business, names of the officers, number of employees, total assets under management, states in which the advisor is registered etc.
Form 10-K – A comprehensive summary of a company’s performance that includes information such as company history, organizational structure, equity, holdings, earnings per share, subsidiaries, etc. and must be submitted annually to the Securities and Exchange Commission (SEC).
Form 10-Q – Required by the Securities and Exchange Commission (SEC) for all United States (US) public companies on a quarterly basis. This form must contain financial information for the quarter and must note any relative changes or events such as a stock split or acquisition in the quarter.
Fourth Market – The direct trading of large blocks of securities between institutional investors through a computer network called INSTINET rather than on an exchange.
Free Credit Balance – In a cash account, the amount of money that remains after all purchases and can be withdrawn by the customer without restrictions. In a margin account, the free credit balance is the total remaining money after margin requirements, short sale proceeds, and special miscellaneous accounts are taken into consideration.
Future Value – The original principal amount of an investment plus any interest during a specified time period. The future value is dependent upon the amount of time the investment is held and the interest rate earned over the investment’s life.
Futures – Contracts to buy of sell commodities at a pre-determined future date. These are not considered securities and are not regulated by the Securities and Exchange Commission (SEC).