A corporate action in which a company buys most, if not all, of the target company's ownership stakes to assume control of the target firm. Acquisitions are often made as part of a company's growth strategy when it is more beneficial to take over an existing firm's operations and niche compared to expanding on its own. Acquisitions are often paid in cash, the acquiring company's stock or a combination of both.

Adverse claim

The written notice that's filed with a transfer agent by someone other than the registered holder that indicates an interest in a claim against a particular security. Once the transfer agent accepts the notice, they will not transfer the security without notifying the person filing the adverse claim. An adverse claim expires after one year unless renewed. Certain provincial corporate statutes do not provide for adverse claims. Claims against securities issued by corporations incorporated under these statutes are dealt with as stop transfers.

Affidavit of loss/Agreement of indemnity

This document allows use of a standardized surety bond when replacing lost, stolen, or destroyed security certificates.


The written notice that's filed with a transfer agent by someone other than the registered holder indicating an interest in, or a claim against, a particular security. Once the transfer agent accepts the notice, they will not transfer the security without notifying the person filing the adverse claim. An adverse claim expires after one year unless renewed. Certain provincial corporate statutes do not provide for adverse claims. Claims against securities issued by corporations incorporated under these statutes are dealt with as stop transfers.

Beneficial owner

See Non-Registered Investor.

Bid Price

In securities markets and price reports, this is the highest current or recorded price a buyer is willing to pay for a security.

Board lot

The standardized number of shares that are set by a stock exchange as a trading unit for listed shares. The number of shares in a board lot is usually based on the price per share. Setting board lots facilitates trading because trades are executed in standard units and multiples thereof. For example, on the Toronto Stock Exchange, or TSX Venture Exchange the board lots are as follows:

Security selling price board lot size:

  • $0.005 to $0.095 - 1,000 shares
  • $0.10 to $0.995 - 500 shares
  • More than $1.00 - 100 shares
Book value

The book value of a corporation is the value of the assets to which the investors would theoretically be entitled if the corporation was liquidated. It consists of the total assets less the corporation’s liabilities and the value of intangible assets such as goodwill. The book value of a share is the book value of the corporation divided by the number of outstanding shares.

Canadian Depository for Securities (CDS)

CDS is the Canadian national depository, the clearing and settlement hub that supports Canada’s equity, debt, and money markets by providing a facility for its participants to hold assets and settle trades. It tracks assets and transactions on a book-based system. CDS is owned by major Canadian chartered banks and members of the Investment Industry Regulatory Organization of Canada (IIROC) and TSX Inc.

Canadian Securities Administrators (CSA)

The CSA is a forum for the 13 securities regulators of Canada's provinces and territories to coordinate and harmonize regulation of the Canadian capital markets.

Capital gain (or loss)

The profit (or loss) resulting from the sale of an asset in respect of which there may be tax implications.

Cash dividend

The per share cash payment that's made by a corporation to its registered investors.

Declaration of transmission

The declaration of transmission is a document unique to transferring securities. It is an affidavit sworn before a notary public or commissioner for oaths by the deceased’s legal representatives. It provides formal evidence of the following information with respect to the securities:

  • The death of the securityholder
  • The existence of legal representatives
  • The ownership of the securities
  • The deceased’s place of residence

For more information, see the Securities Canadian Stock Transfer section of our website.

Deemed Disposition

Under certain circumstances, tax rules state that a transfer of property has occurred without a purchase or sale. For example, a person may be deemed to have disposed of their assets when they die.

Under demutualization, eligible policyholders receive shares or other benefits in exchange for their ownership rights as policyholders.

Depository Trust Company (DTC)

The Depository Trust Company (DTC), established in 1973, was created to reduce costs and provide clearing and settlement efficiencies in the U.S. securities markets by immobilizing securities and making "book-entry" changes to ownership of the securities.

DTC provides custody and safekeeping services; deposit and withdrawal services; direct registration services; and dividend, reorganization, and proxy services for its broker-dealer participants.

DTC is a member of the U.S. Federal Reserve System, a limited-purpose trust company under New York State banking law, and a registered clearing agency with the Securities and Exchange Commission.

Direct Registration System (DRS)

The Direct Registration System is a facility administered by the Depository Trust Company (DTC) that provides electronic registration of eligible securities in an investor’s name directly on the books of the issuer as maintained by the transfer agent, and it allows shares to be transferred between the transfer agent and the depository participant broker-dealer electronically. Through DRS, an investor can have his/her securities registered in his/her name without having a certificate issued and can move these securities to his/her DTC participant broker-dealer without risk and delay associated with the use of paper certificates.

Employee share plan (ESP)

A benefit plan that's under which employees can participate in the ownership of their employer by purchasing shares, usually through payroll deductions.

Equity (see also investor equity)

The ownership interest of common and preferred investors that's in a corporation and the difference between the assets and liabilities of a corporation.


An agreement under which property, a security or a document is delivered by a grantor, obligor or promisor to a third person, usually a trust company, to be held by the latter until the happening of a contingency or performance of a condition and then by him delivered to the grantee, obligee or promisee. The term is also, however, used to cover a wide variety of arrangements and deposits, most frequently the deposit of treasury shares of new mining and oil companies pending development of the property. In such cases shares may only be released or transferred with the permission of the applicable authority such as the stock exchange and/or the provincial securities commission.


When shares trade “ex-dividend,” a buyer will not receive an upcoming dividend after the ex-dividend date set by the market on which the shares trade. The ex-dividend date is two or three days before the record date for the dividend. The number of days is tied to the number of days allowed by the market in question for settling trades and the type of security being traded. (See Cum-Dividend).

Financial intermediary

An institution such as a trust company, bank, life insurance company, investment dealer, or stockbroker that handles financial transactions for others, including receiving cash for investing on their behalf.

Fractional shares

The shareholding that's amounting to less than one whole share (e.g., 0.0125 shares).

General power of attorney

See Power of Attorney.

Grey market (see also OTC and unlisted securities)

The term used when describing the "if, as, and when issued" market for newly authorized but, as yet, unissued and unlisted securities (see also if, as, and when trading).

Once securities are approved for distribution to the public, but before they are actually distributed, they trade on an “if, as, and when issued” basis over the counter until they are actually issued. This phrase in the contract for any trades protects the dealer against delay in receiving the certificates.


An agreement whereby one person agrees to protect another from a loss or damage in certain circumstances by agreeing to assume the liability for the loss or damage.

Initial public offering (IPO)

A private corporation who offers its securities to the public for the first time.


Under the securities laws of most jurisdictions, insiders usually include all directors and senior officers of a corporation and anyone owning more than 10% of the voting shares. Insiders are so named because they may be presumed to have access to inside or material nonpublic information about the corporation. Insiders are required to report trading in the shares of the corporation to the securities commissions, which in turn make the information public.

Installment Receipts

A certificate issued in which a predetermined amount of funds becomes due and payable at specified times until fully paid for.

Joint registration

The type of registration which is used when securities are held in the names of two or more persons.

Justice of the Peace

A lower-level magistrate who's in a certain court system who has authority to act upon minor offenses, commit cases to a higher court for trial, perform marriages, and take affidavits. CST requires sworn affidavits in connection with the completion of lost certificate documents and declarations of transmission for estate transfers. Usually affidavits are sworn by commissioners for oaths or notaries public, but they can also be sworn by justices of the peace.

You can contact justices of the peace through courthouses or government websites.

Letter of Transmittal (LOT)

Letter sent to an investor announcing spin-off, merger, or exchange and how they can participate. Investors complete and return a form, which includes a W-9 and Affidavit of Loss, along with the securities in order to receive cash-in-lieu payments or exchanged securities.

Letters probate

Letters probate is the name used in some jurisdictions for the court document confirming the appointment of a person’s executors. Letters probate is called a certificate of appointment as estate trustee in other jurisdictions. For more information, see the Securities Transfers section of our website.


Debts of a corporation, that are usually divided into current liabilities (those due within one year) and long-term liabilities (those due in one year or beyond).

Limited liability

The investors’ liability in the event of the bankruptcy of a limited liability corporation cannot exceed the money they have invested in the corporation's shares.

Market value

A security’s last reported sales price, that's typically available in newspapers or on online financial sites.

Medallion guarantee (see also Signature guarantee)

A type of signature guarantee issued under signature guarantee programs in place in Canada and the United States where the guarantee is backed by insurance. Financial services corporations can apply for the necessary insurance, pay the premium, and, if approved, receive a special stamp to enable them to provide signature guarantees within the limits of their insurance policy.


See Non-certificated Issue.


A certificate that's representing a security transferable by delivery, which, in the case of a registered certificate, means that it has a completed securities transfer form attached with the signature guaranteed.

No par value (npv)

A term that's used to describe the shares that have no stated face value.


A corporation or person who holds the securities belonging to others to facilitate transfers and trading.

Odd lot

A number of shares that are not equal to, or, an even multiple of a board lot (see Board Lot).


The price at which an individual is willing to sell.

Offer to Purchase

An offer to buy to owners of a certain security. It is often made by another company and usually for more than market price. Also referred to as a “take-over-bid” or “tender offer”.

Ontario Securities Commission (OSC)

The regulatory body that's responsible for administering the Securities Act in Ontario (see Securities Act).

Par value

A stated face value that's expressed in a currency that is printed on a security.

Payable date

A date on which a payment is due to be made to the person who's entitled (e.g., the date on which a dividend is paid to investors).

Power of attorney (PA)

A power of attorney is a legal document signed by a living person, or corporation, giving to a named party or parties certain powers to act on his/her behalf. The powers can be unlimited (general power of attorney), or limited (limited power of attorney) as specified in the document. A person normally appoints an attorney to act on his/her behalf as a matter of convenience, generally because his/her is unavailable by reason of travel or incapacitation other than incompetency.

Preauthorized Debit (PAD)

Someone who authorizes and directs another individual or corporation to automatically withdraw a specified amount of money from his/her bank account at predetermined intervals.

Record date

This date is set by issuers to determine which investors will receive entitlements, such as dividends, or the right to vote at an investor meeting. A holder must be registered on the books of the corporation on the record date to receive the entitlement.


The procedure by which a corporation redeems (pays off) its outstanding securities by paying the holder the appropriate redemption price.

Registered investor

The owner or holder of a corporation's stock whose name is recorded in the investor register that is kept by the corporation or its transfer agent.

Registered retirement savings plan (RRSP)

A savings plan that's registered with Canada Revenue Agency in which contributions to the plan are tax deductible (with specific limits) and earnings within the plan are exempt from tax until withdrawn from the plan prior to, or at, maturity of the plan, provided the plan holds qualified investments.


A general term that's applied to investments issued by corporations, governments, and others, such as shares, debt instruments, rights, warrants, etc. Securities can also refer to the document that evidences ownership of the investment. This general descriptive term covers stock certificates, bonds, debentures, notes, warrants, and similar documents, all of which can be sold and transferred from one party to another.

Securities Act

A provincial act (each province has its own) that's administered by the Securities Commission in each province that sets down the regulations under which securities may be issued to the public.

Securities and Exchange Commission (SEC)

A regulatory body that's established by the United States Congress to protect investors in the U.S. The SEC administers the U.S. Securities Act of 1933 and other legislation.

Securities transfer form

A standard form that's used to transfer securities from one person to another (also known as an irrevocable stock power of attorney). The securities transfer form must be signed by all the registered holders of the securities, and their signatures must be guaranteed. For more information, see the Securities Transfer section of our website.

Takeover bid

An offer to acquire outstanding voting securities or equity securities of a class made to one or more persons, any of whom is in the local jurisdiction or whose last address as shown on the books of the offeree issuer is in the local jurisdiction, where the securities subject to the offer to acquire, together with the offeror's securities, constitute in the aggregate 20% or more of the outstanding securities of that class of securities at the date of the offer to acquire but does not include an offer to acquire if the offer to acquire is a step in an amalgamation, merger, reorganization or arrangement that requires approval in a vote of securityholders


The change in the ownership of shares by virtue of either the physical delivery of shares from the seller to the buyer or the appropriate entries being made in the share register or a book-based system.

Transfer agent

The transfer agent is the corporation appointed to keep records of all registered securityholders and to transfer ownership of securities. To determine the transfer agent for securities, first check the securities certificate, which will usually show the transfer agent’s name. Failing that, you can check the issuing corporation’s annual report or website.


The person to whom the transferor assigns (sells) the security to.


The transaction pursuant to a formal agreement whereby one or more investment dealers agree to purchase securities that are issued by a corporation for resale to the public.


The term used to describe a share that's not listed on a stock exchange but traded on the over-the-counter market.

Voting Rights

The rights that are attached to most securities to vote on certain issues at securityholder meetings. The voting rights attached to common shares give those investors the greatest control over the corporation by virtue of being able to elect the directors of the corporation.

Warrants (also share purchase warrants)

The certificate that provides the holder the right over a specified period of time to purchase shares of a corporation at specifically stated prices. Warrants are often attached to new debt or share issues in order to make them more attractive to prospective purchasers.

Warrants are similar to rights except that the latter have a shorter term and are not issued in conjunction with other securities.


The rate of return (e.g., dividends or interest) on an investment that's usually expressed as a percentage.