Reference
Financial & Compliance Glossary
92+ key terms in KYC/AML, M&A, corporate finance, trade finance, and market intelligence. Clear, professional definitions for practitioners.
92 terms
Adverse Media— Adverse Media Screening
The process of searching news and public sources for negative information about a client or counterp...
KYC / AML▾
AIFMD— Alternative Investment Fund Managers Directive
EU Directive 2011/61/EU governing managers of Alternative Investment Funds (AIFs) — hedge funds, PE ...
Legal / Company▾
Alternative Data
Non-traditional data sources used by investors and analysts to gain investment insights beyond conve...
Market Intelligence▾
Altman Z-Score
A quantitative model developed by Edward Altman (1968) to predict corporate bankruptcy using five fi...
Finance▾
AML— Anti-Money Laundering
A framework of laws, regulations, and procedures designed to prevent criminals from disguising illeg...
KYC / AML▾
AMLD6— 6th Anti-Money Laundering Directive — EU
The 6th AML Directive (2018/1673/EU) strengthened EU criminal law on money laundering. Key changes: ...
KYC / AML▾
Annual Accounts (UK)— Annual Accounts — United Kingdom
Financial statements that all UK companies must prepare and file with Companies House each year — ba...
Legal / Company▾
Apostille— Apostille Certificate — Hague Convention Authentication
Authentication issued to public documents for use in countries party to the 1961 Hague Convention. R...
Legal / Company▾
Äriregister— Äriregister — Estonian Business Registry
Estonia's official commercial register, maintained by the Centre of Registers and Information System...
Legal / Company▾
Articles of Association— Articles of Association (AoA)
The constitutional document of a company, defining its internal governance rules: objects (permitted...
Legal / Company▾
Beneficial Owner
The natural person who ultimately benefits from an asset or corporate structure, even if legal owner...
KYC / AML▾
Bill of Lading— Bill of Lading (B/L)
A legal document issued by the carrier to the shipper, serving three functions: receipt of goods, ev...
Trade Finance▾
CAGR— Compound Annual Growth Rate
The rate at which an investment or metric grows from its beginning value to its ending value over a ...
Finance▾
Cap Table— Capitalization Table
A spreadsheet or database showing the ownership structure of a company: who holds shares (founders, ...
M&A / Due Diligence▾
CDD— Customer Due Diligence
The standard level of identity verification required when onboarding a new client. CDD includes: ver...
KYC / AML▾
CDD Rule— FinCEN Customer Due Diligence Rule
FinCEN's CDD Rule (31 CFR § 1010.230, effective May 2018) requires banks, brokers, and mutual funds ...
KYC / AML▾
CDS— Credit Default Swap
A financial derivative that functions as insurance against a credit event (default, restructuring, f...
Market Intelligence▾
Certificate of Incorporation (UK)— Certificate of Incorporation — United Kingdom
The foundational document issued by Companies House confirming a UK company has been legally incorpo...
Legal / Company▾
CFT— Counter-Financing of Terrorism
The set of measures designed to identify, prevent, and disrupt the flow of funds to terrorist organi...
KYC / AML▾
CIF— Cost, Insurance and Freight
An Incoterm where the seller arranges and pays for freight and minimum insurance to the named destin...
Trade Finance▾
Companies Act 2006— Companies Act 2006 — UK Company Law
The primary legislation governing company law in the UK — 1,300 sections and 16 schedules. Defines c...
Legal / Company▾
Company Register— Company Register / Business Registry
The official public authority database maintaining records of legally incorporated entities in a jur...
Legal / Company▾
Corporate Transparency Act— Corporate Transparency Act — US FinCEN BOI Reporting
US law effective January 1, 2024 requiring most LLCs and corporations to report beneficial ownership...
KYC / AML▾
Corruption Perception Index— Corruption Perception Index (CPI)
An annual index published by Transparency International ranking 180 countries by perceived levels of...
Market Intelligence▾
Country Risk
The risk that a country's political, economic, legal, or social conditions will adversely affect cro...
Market Intelligence▾
Credit Rating
An assessment of the creditworthiness of a borrower (country, company, or specific debt instrument) ...
Market Intelligence▾
Current Ratio
Current Assets divided by Current Liabilities, measuring a company's ability to meet its short-term ...
Finance▾
Data Room— Virtual Data Room (VDR)
A secure online repository used to share and review confidential documents during M&A due diligence,...
M&A / Due Diligence▾
DDP— Delivered Duty Paid
The seller's maximum obligation Incoterm: the seller is responsible for all costs and risks includin...
Trade Finance▾
Debt-to-Equity Ratio— Debt-to-Equity Ratio (D/E)
Total financial debt divided by total shareholders' equity. Measures the proportion of company finan...
Finance▾
Documentary Collection— Documentary Collection (D/C)
A trade finance mechanism where the seller's bank forwards documents to the buyer's bank, which rele...
Trade Finance▾
Dormant Company (UK)— Dormant Company — United Kingdom
A UK company that has had no significant accounting transactions during its accounting period (Compa...
Legal / Company▾
Due Diligence— Due Diligence (DD)
A comprehensive investigation and verification of a company, asset, or individual before entering in...
M&A / Due Diligence▾
e-Residency— e-Residency — Estonia Digital Identity
Estonia's government-issued digital identity for non-residents (since 2014), allowing 100,000+ peopl...
Legal / Company▾
Earn-out
A contingent payment mechanism in M&A where part of the purchase price is paid after closing, based ...
M&A / Due Diligence▾
EBIT— Earnings Before Interest and Taxes
Operating profit: revenue minus operating expenses (including D&A, unlike EBITDA). EBIT represents w...
Finance▾
EBITDA— Earnings Before Interest, Taxes, Depreciation and Amortization
A widely used measure of a company's operating profitability that strips out the effects of financin...
Finance▾
EDD— Enhanced Due Diligence
Additional verification measures applied to higher-risk clients, relationships, or transactions. EDD...
KYC / AML▾
ESG Score— Environmental, Social and Governance Score
A quantitative assessment of a company's performance on environmental (carbon emissions, water use),...
Market Intelligence▾
EV— Enterprise Value
The total value of a company inclusive of all capital providers — equity holders and debt holders. E...
Finance▾
EV/EBITDA— Enterprise Value to EBITDA Multiple
The most widely used valuation multiple in corporate finance and M&A, expressing the price of a busi...
Finance▾
FATF— Financial Action Task Force
The international body that sets global standards for anti-money laundering and counter-terrorist fi...
KYC / AML▾
FCA— Free Carrier
The ICC's recommended Incoterm for containerized cargo. Risk transfers when the seller delivers good...
Trade Finance▾
FOB— Free On Board
An Incoterm where the seller's responsibility ends when goods are loaded on board the vessel at the ...
Trade Finance▾
Free Cash Flow— Free Cash Flow (FCF)
The cash generated by a business after accounting for capital expenditures required to maintain or g...
Finance▾
FX Hedging— Foreign Exchange Hedging
Techniques used by companies to reduce or eliminate the risk of adverse currency movements on intern...
Trade Finance▾
Good Standing— Certificate of Good Standing
An official document issued by a company registry confirming that a company is properly incorporated...
Legal / Company▾
ICE— Identifiant Commun de l'Entreprise
A 15-digit national company identifier used in Morocco, introduced to standardize business identific...
Legal / Company▾
Incoterms— International Commercial Terms
A set of pre-defined international trade terms published by the International Chamber of Commerce (I...
Trade Finance▾
IRR— Internal Rate of Return
The discount rate at which the NPV of an investment equals zero — i.e., the annualized return genera...
Finance▾
KTK— Kasu Saava Isiku Register — Estonian UBO Register
Estonia's official beneficial ownership register, maintained by RIK in compliance with EU 4th/5th AM...
KYC / AML▾
KYB— Know Your Business
The process of verifying the identity, structure, and legitimacy of corporate entities. KYB requires...
KYC / AML▾
KYC— Know Your Customer
The process of verifying the identity of individual clients before and during a business relationshi...
KYC / AML▾
LBO— Leveraged Buyout
An acquisition financed primarily with debt, using the target company's assets and cash flows as col...
M&A / Due Diligence▾
LEI— Legal Entity Identifier
A 20-character ISO 17442 standard identifier assigned to legal entities participating in financial t...
Legal / Company▾
Letter of Credit— Documentary Letter of Credit (LC)
A bank commitment to pay the seller (beneficiary) a specified amount upon presentation of conforming...
Trade Finance▾
Leverage Ratio— Financial Leverage Ratio
A measure of the extent to which a company uses borrowed money (debt) to finance its assets. Common ...
Finance▾
LOI— Letter of Intent
A preliminary document outlining the key terms of a proposed transaction before a binding agreement ...
M&A / Due Diligence▾
MAC— Material Adverse Change
A clause in an SPA or LOI that allows the buyer to walk away from a deal if a significant negative c...
M&A / Due Diligence▾
MBI— Management Buy-In
An acquisition in which an external management team purchases a company and takes over its operation...
M&A / Due Diligence▾
MBO— Management Buyout
A type of LBO in which the existing management team acquires the company, often backed by a private ...
M&A / Due Diligence▾
NDA— Non-Disclosure Agreement
A legal contract between parties in which one or both agree to keep confidential information secret....
M&A / Due Diligence▾
Net Debt
Total financial borrowings minus cash and cash equivalents. Net Debt = Gross Debt – Cash. Used to as...
Finance▾
Nominee Director
A person who appears on official company records as a director but acts under the instruction of the...
Legal / Company▾
NPV— Net Present Value
The present value of future cash flows, discounted at the appropriate rate (WACC for firm-level anal...
Finance▾
OFAC— Office of Foreign Assets Control
A division of the US Treasury Department that administers and enforces economic and trade sanctions ...
KYC / AML▾
OÜ— Osaühing — Estonian Private Limited Company
Estonia's standard private limited company — equivalent to UK Ltd or US LLC. Can be incorporated 100...
Legal / Company▾
P/E Ratio— Price-to-Earnings Ratio
Share price divided by earnings per share (EPS), indicating how much investors pay per dollar of pro...
Finance▾
PEP— Politically Exposed Person
An individual who holds or has held a prominent public function, creating elevated exposure to corru...
KYC / AML▾
PIPE— Private Investment in Public Equity
A private placement of securities in a publicly traded company, typically at a discount to the marke...
M&A / Due Diligence▾
Political Risk
The risk that political decisions, events, or conditions in a country will adversely affect the prof...
Market Intelligence▾
Quick Ratio— Quick Ratio (Acid-Test Ratio)
A more conservative measure of short-term liquidity than the Current Ratio, excluding inventory and ...
Finance▾
RC— Registre de Commerce
The trade registry in French-speaking countries (France, Morocco, Belgium, Luxembourg, etc.) where c...
Legal / Company▾
Registered Agent
A designated third party authorized to receive official legal and government correspondence on behal...
Legal / Company▾
ROE— Return on Equity
Net income divided by shareholders' equity, expressing how efficiently a company generates profit fr...
Finance▾
ROIC— Return on Invested Capital
A measure of how efficiently a company allocates its capital to generate profit. ROIC = NOPAT (Net O...
Finance▾
Sanctions Screening
The process of checking individuals, companies, and transactions against government and internationa...
KYC / AML▾
SAR— Suspicious Activity Report
A mandatory report filed by regulated entities when they suspect that funds are the proceeds of crim...
KYC / AML▾
SDD— Simplified Due Diligence
A reduced level of customer verification permitted for clients assessed as presenting a lower money ...
KYC / AML▾
SIF— Specialized Investment Fund — Luxembourg
A Luxembourg-regulated alternative investment fund (Law of 13 February 2007) restricted to well-info...
Legal / Company▾
SIREN— Système d'Identification du Répertoire des ENtreprises
The 9-digit company identifier in France, assigned by INSEE at incorporation. Unique and permanent —...
Legal / Company▾
SIRET— Système d'Identification du Répertoire des Établissements
The 14-digit establishment identifier used in France, comprising the SIREN number (9 digits identify...
Legal / Company▾
Sovereign Default
The failure of a national government to meet its debt obligations — either missing a payment, renego...
Market Intelligence▾
SPA— Share Purchase Agreement
The binding legal contract governing the sale and purchase of shares in a company. The SPA contains:...
M&A / Due Diligence▾
SPAC— Special Purpose Acquisition Company
A shell company created solely to raise capital via an IPO for the purpose of acquiring an existing ...
M&A / Due Diligence▾
SWIFT/BIC Code— SWIFT Code / Bank Identifier Code (BIC)
An 8 or 11-character alphanumeric code (ISO 9362) uniquely identifying a bank in international wire ...
Trade Finance▾
Trade Credit
Short-term financing extended by suppliers to buyers, allowing the purchase of goods on deferred pay...
Trade Finance▾
UBO— Ultimate Beneficial Owner
The natural person(s) who ultimately own or control a company, trust, or other legal entity. Regulat...
KYC / AML▾
UCITS— Undertakings for Collective Investment in Transferable Securities
EU regulatory framework (Directive 2009/65/EC) for retail investment funds — the single passport tha...
Legal / Company▾
WACC— Weighted Average Cost of Capital
The blended cost of all capital sources — debt and equity — weighted by their proportions in the cap...
Finance▾
Working Capital— Net Working Capital (NWC)
Current assets minus current liabilities, representing the short-term liquidity of a business. In M&...
Finance▾
Zombie Company
A company that generates just enough cash flow to service its debt interest but cannot repay princip...
Market Intelligence▾
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