Banco de España - General Glossary

General Glossary

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Past-due registers: Private agencies where the existence of delinquent customers is registered. Normally, the inclusion of a customer in one of these registers prevents them from accessing additional financing from banks. Pursuant to the regulations in force, those responsible for these files have the obligation of notifying the affected customer of their inclusion in the register within a period of thirty days as of their inclusion therein. The affected party has the right to access and, where applicable, rectify their data in the file. The registration of personal data due to non-fulfilment of monetary obligations can only be carried out in the case of existence of prior debt, mature and payable, which has not been paid, and provided that payment has previously been required from the interested party. Adverse data relative to past-due debts can only be reregistered for a period of six years. (See Data Protection Agency: Organic Law 15/1999 and Instruction 1/1995 of 1 March of the Agency).
Pension fund: Capital created for the purpose of fulfilling a pension scheme. They lack legal personality and must be administrated by a managing entity with the participation of a custodian.
Pension scheme: Pension schemes define the rights of people in whose favour they are constituted to perceive income or capital for retirement, permanent incapacity or death, as well as the obligation to contribute to them. The necessary resources for financing, hedging and effectiveness of the pension schemes are included in pension funds.
Personal/tenants in common/ or joint tenancy account: Classification of an account according to its account holders. An account is personal when it has been opened in the name of single account holder. It is a joint tenancy account when there are two or more account holders, and all transactions must be conducted by agreement of all account holders, and requires their signature. A tenants in common account is that in which there are several account holders and only one signature is required to withdraw funds.
Personal banking: This term makes reference to institutions specialised in managing the investments of their clients, usually only from high economic levels.
Personal loan: A loan granted to a private individual on the basis of the confidence he/she inspires as a borrower. The holder is liable for reimbursement of the loan with all his/her assets, both present and future.
Pledge: The delivery or commitment of an asset as collateral to secure the performance of an obligation.
Preference shares: Also called preferred shares. A debt instrument issued by a company that does not grant voting rights to the investor. They offer fixed retribution (conditioned by obtaining profits) and their period is unlimited, although the issuer reserves the right to redeem them after five years, subject to authorisation by the supervisor (in the case of financial institutions, the Banco de España). Although they are generally aimed at institutional investors, when they are commercialised among private clients the same must properly evaluate their real profitability, taking into account the difficulties they may find to liquidate them (for the return of the nominal value) and the right of pre-emption (order of preference of payment in case of bankruptcy), which is only surpassed by that of ordinary shares. In the past they were issued by instrumental subsidiaries based abroad, primarily in offshore centres, to take advantage of tax privileges, but since 2003 their issuance from Spanish territory has been regulated.
Price brochure: A document that every financial institution is obliged to place at their customers' disposal, which includes a detailed breakdown of the maximum bank charges for its transactions and services. Credit institution price brochures may be consulted on the Banco de España website.
Protest: A notarial deed which states that the bearer of a bill of exchange unsuccessfully tried to cash their bill.
Public offering: A public placement (by private and/or institutional investors) of part or the total capital of a company. It may be due to the privatisation of a state-owned company, the floating of a private company or the partial sale of capital by a shareholder. The issuer must register a detailed information brochure at the National Securities Market Commission (CNMV) for investors to be aware of all the characteristics and possible risks of the operation.
Put option: A contract that extends the right to the holder to sell an asset at the price stipulated, from the date of signing to its maturity (American option) or at that same time (European option).