What is the National Securities Markets Improvement Act (NSMIA)? The National Securities Markets Improvement Act (NSMIA) was introduced in 1996 to more efficiently allocate capital in financial markets. NSMIA amended the previously passed Investment Company Act of 1940 to promote the more efficient management of mutual funds, protect investors, and provide more effective regulation. What…
What is a Negative Pledge? A negative pledge is a contract provision prohibiting the debtor in a contract from creating security interests over specified property assets. The contractual provision aims to protect unsecured creditors by ensuring that debtors can only use unencumbered assets as collateral. Over time, the negative pledge’s become a boilerplate…
What is Net of Tax? Net of tax is the amount obtained after the applicable tax is deducted from the gross income that resulted from investments or transactions. Net of tax is a term most commonly used for showing the results of businesses in terms of income, profits, or losses. If the tax effect is considered…
What is a Venture-Capital-Backed IPO? A venture-capital-backed IPO is the initial offering of shares of a company that’s been mainly supported by venture capital investors. Such a type of initial public offering (IPO) is part of a judicious plan by investors to recover all or a part of a loss of their investments from the…
What is a Night Depository? A night depository is an overnight drop box service provided by banks that allows account holders to make money deposits after regular banking hours. A night depository service is always available for making deposits 24 hours a day, 7 days a week. The deposits can be made up…
What is Net Premium? Net premium is the amount received or written on insurance policies when premiums are incurred or paid, and return premiums are deducted from gross premiums. Net premium can be referred to as the present value of policy benefits less the present value of premiums payable in the future. Hence,…
What is Cliff Vesting? Cliff Vesting is a process where employees are entitled to the full benefits from their firm’s qualified retirement plans and pension policies on a given date, as opposed to retirement plans where the employee’s ownership of the funds vests gradually. In most cases, there is usually a four-year vesting schedule plan…
What is Cohort Analysis? Cohort Analysis is a form of behavioral analytics that takes data from a given subset, such as a SaaS business, game, or e-commerce platform, and groups it into related groups rather than looking at the data as one unit. The groupings are referred to as cohorts. They share similar characteristics such…
What is Proof of Funds (POF)? Proof of Funds (POF) is a letter or documentation that certifies that an individual, institution, or corporation has sufficient funds (money) to complete a transaction. A POF is typically issued by a commercial bank or custody agent to provide confidence or assurance to another party – typically a seller…
