Glossary - D

This section provides an explanation for some of the jargon used to describe structured retail products. If you would like us to add additional words then please let us know by clicking here.

Database

The products on the website are stored in individual databases. Users subscribe to access one or more databases. For most databases, the database name signifies the country or region where the products are being distributed. However the “Offshore, Private Banking & Institutional” database contains retail products which are offered in the offshore markets as well as non-retail products targeted at private banking and institutional markets.

DAX30

This is an index of shares of the largest 30 companies by market capitalisation in Germany. This index is a total return index meaning that its calculation includes the dividends paid as well as the value of each of the shares.

Debenture

A kind of bond.

Deferred Purchase Agreement

A deferred purchase agreement is an agreement entered into by the provider and investor whereby the investor will gain notional exposure to the performance of the underlying asset. Upon maturity, investors may either accept physical delivery of the delivery assets on the settlement date or receive the sale proceeds in the form of cash equal to the final value of the investment. The delivery asset may take the form of shares or units in a fund.

Deposit

This is a bank or building society deposit or savings account.

Depósito Estructurado

Structured term deposit account (Spain).

Dépôt

Deposit account.

Derivatives

Derivatives are financial products that derive their value from the price of some other underlying asset or index.

Typical derivative products are futures and options contracts.

Derivatives are either traded on an exchange, in a similar way to shares, or entered into bilaterally between two companies i.e. over-the-counter.

Derivatives Counterparty

The derivatives counterparty or counterparties through whom the product was hedged.

Digital

A digital type structured product is one that pays out a fixed amount if the underlying is above (or below) a specified level on a given date, usually the maturity date of the product.

A typical example is a product that pays a minimum return at maturity of 100% of the amount invested plus a bonus of 50% if the final level of the FTSE100 is above its initial level at maturity. In this case the bonus is paid as long as the index has risen, by any amount, at maturity so that the 50% bonus is paid if the index rise by 1% or 100% over period.

Dispersion

A return based on the spread between the performance of different shares within a basket. For example, the return may be based on the share in the basket with the smallest absolute performance in comparison to its initial level or the absolute value of all share performances compared to the overall basket performance.

Distribution Channel

The distribution channels through which the product is being offered. The available distribution channels are shown below:



Direct

Sales are made directly to the end investor via the internet, the telephone or post.



Financial Advisers

Sales are made via independent advisers that are not employed by the Provider or Provider Group, sometimes paying a commission on the amount invested.



Salesforce

Sales are made via a tied salesforce owned by the Provider or Provider Group, often based in bank branches.

Dividend

A return based on the actual dividend yield on the underlying index or shares

DJ Eurostoxx50

The Dow Jones Eurostoxx 50 index is an index of shares of the largest 50 companies weighted by market capitalisation in the countries of the Euro zone.

Dlhopis

Medium term note in Slovakia

DLS

Derivative Linked Security

Doplnkový dôchodkový fond

Pension fund in Slovakia

Dow Jones Industrial Average

The Dow Jones Industrial Average (DJIA) is a stock index consisting of 30 of the largest and most widely held public companies in the United States.

Downside cliquet

This is a type of cliquet product where there is no minimum fall in any sub-period used in calculating the return.

Downside gearing

In many high income products and some other forms of structured product, the capital invested is at risk if the underlying fails to rise over the term of the product.

Downside gearing refers to the gearing applied to any fall in the underlying index in calculating the amount of capital that is returned if the underlying fails to rise.

For example, a product with 100% downside gearing would apply a 1% reduction in capital for every 1% fall in the underlying index. So if the index fell by 20% then only 80% of the investors capital would be returned.

A product with 200% downside gearing however would apply a 2% reduction in capital for every 1% fall in the underlying index. In this case a fall of 20% in the index would result in only 60% of the investor’s capital being returned.

Dual Currency

A return at maturity which is either in the original currency or an alternate currency at a rate of exchange fixed upfront and at the choice of the product provider.

Dublin structure

Many structured products offered in the UK make use of Close-ended Investment Companies. These companies are often corporate entities that are registered in foreign centres such as Dublin, Jersey or Guernsey, since these centres often provide a more flexible environment and lower tax charges.

One of the most popular locations has been the Dublin registered company or Dublin structure. This type of company, first used in 1995, has been used by a large number of UK product providers to create structured products since the shares of these companies qualify for both PEP and now ISA investment.