Vocabulary and explanations

Subscription Right – A subscription right is a security that entitles the holder to subscribe for new shares in a rights issue at a predetermined price. If you already own shares in a company, you will receive subscription rights when the company conducts a new share issue (also called a rights issue). Subscription rights may be traded on the market.

Unit Right – A unit right is a security that entitles the holder to subscribe for new units in a rights issue at a predetermined price. If you already own shares in a company, you will receive unit rights when the company conducts a rights issue of units. Unit rights may be traded on the market.

Financial Instrument – A financial instrument is a type of security intended for trading on a marketplace, such as shares, bonds, convertibles, warrants, etc.

Security – A security is a physical or digital financial asset with commercial value. The term is commonly used for instruments such as shares, funds, derivatives, and bonds.

Paid Subscribed Share (BTA) – A BTA is a temporary instrument allotted in connection with subscription in a rights issue before the share capital has been registered. BTAs are automatically converted into shares once the issue is completed. BTAs may be tradable.

Paid Subscribed Unit (BTU) – A BTU is a temporary instrument allotted in connection with subscription of units in a rights issue before the new share capital has been registered. BTUs are automatically converted once the issue is completed and may be tradable.

Warrant – A warrant is a security often granted when subscribing for units in a rights issue. Warrants entitle the holder to subscribe for new shares at a certain price during a specified period (the exercise period). Warrants may be traded.

Interim Share (IA) – Interim shares are temporary instruments allotted during warrant exercises before the share capital increase is registered. Interim shares are not traded and convert automatically once registration is completed.

Unit – A unit is a security consisting of a combination of instruments, typically shares and warrants or shares and convertibles. Warrants included in units are typically free of charge.

Settlement Date – The same as the payment date. On this date, the subscription funds must have been received by the issuing agent or bank.

Euroclear Sweden AB – Euroclear Sweden is the Swedish Central Securities Depository (CSD). All listed companies must be connected to Euroclear. Once connected, Euroclear manages the company’s share register, and shareholders can view their holdings directly in their bank accounts.

First Day of Trading – The first day a security can be bought or sold on the stock market.

Last Day of Trading – The last day a security can be bought or sold on the stock market.

Delivery of Securities – Means that securities are transferred from our account to the account held by your bank, which then transfers the securities to your custody account (such as ISK).

Share Issue – A process carried out to provide the company with capital, for example through a rights issue, directed issue, or public offering. New shares are issued and paid for by new or existing shareholders.

IPO – Initial Public Offering – When a company lists its shares for public trading on a stock exchange (e.g. Nasdaq or Spotlight Stock Market). This may occur through a new share issue or by existing shareholders selling their shares.

Directed Issue – A share issue offered only to a limited number of investors, not available for public subscription.

Bond – An interest-bearing instrument confirming that the holder has lent money to a company or the government, in exchange for interest payments.

Convertible Bond – A debt instrument issued by a company that, during a defined period, may be converted into shares at a predetermined conversion price. If not converted, the loan is normally repaid with interest.

Investment Savings Account (ISK) – An account used to hold shares and funds without capital gains tax on each sale. Instead, a standardised tax based on the government borrowing rate is paid annually.

Endowment Insurance Account (KF) – An account used to hold shares and funds with tax treatment similar to ISK. It allows designated beneficiaries and payout scheduling, e.g. during retirement.

Custody Account (Depot Account) – A securities account where you can hold shares and funds. Unlike ISK and KF, gains on sales are taxed individually.

VP Account / Service Account – A securities account held directly with Euroclear Sweden where securities can be registered. A VP account always begins with three zeros (000) and contains twelve digits.

Valuation (Pre-money) – The company’s valuation before a share issue is carried out, calculated as the total number of shares multiplied by the share price.

Valuation (Post-money) – The valuation after the share issue, including the newly raised capital.
Example: Pre-money valuation is 30 MSEK. The issue raises 10 MSEK, resulting in a post-money valuation of 40 MSEK.

Subscription Period – The timeframe during which it is possible to subscribe in a share issue. After the subscription period ends, no further subscriptions can be submitted.

Record Date – The date on which you must be registered as a shareholder to be entitled to benefits such as dividends or participation in a share issue. As settlement takes two banking days, shares must be purchased at least two banking days before the record date.

Marketplace – A venue where buyers and sellers trade securities. There are two types: regulated markets (e.g., Nasdaq Stockholm) and multilateral trading facilities (MTFs), such as Nasdaq First North Growth Market or Spotlight Stock Market.

Issuing Agent – An issuing agent manages the planning, administration and implementation of share issues. It performs administrative and technical tasks in Euroclear’s systems and may also manage project coordination. Issuing agents must be licensed by the Swedish Financial Supervisory Authority (Finansinspektionen) and have agreements with Euroclear.

Contract Note – A transaction receipt confirming the purchase or sale of securities. It includes information about the buyer, price per share, transaction date, total amount, and details about the company whose shares were purchased. A contract note is equivalent to an invoice.