Financial and Economic Dictionary

Public Goods

Products that are not provided in a purely free market are those that have two special characteristics: non-rivalry which means that consumption by one individual does not reduce the amount available to others, and non-excludability which means that once the good (or service) is provided, individuals cannot be prevented from consuming it even if they do not pay for it.

Equity Securities

Any financial instrument issued by a legal entity, representing a legal ownership or financial right of a person in that entity or its project. This includes shares, equity stakes, and any document representing participation in the capital or entitlement to profits or part thereof, and some of these instruments, such as contribution bonds, may be tradable.

Control

In the Merger & Acquisition regulations, in the ability to influence the actions or decisions of another person, whether directly or indirectly (excluding indirect ownership of shares through swap arrangements or through an investment fund whose unit owner have no discretion in its investment decisions), individually or collectively with a person or persons acting in concert, through holding (directly or indirectly) 30% or more of the voting rights in a company. moreover, “controller” shall be construed accordingly.

Appointed Person

An Appointed Person, weather he was administrator, personal representative, executor of a will, receiver or liquidator who has been appointed legally to administer, manage, liquidate or wind up the affairs of a Taxable Person including a deceased natural Person. The appointed person shall notify the Zakat, Tax and Customs Authority (ZATCA) in writing of the appointment within twenty days of the date of the appointment.

(Value Added Tax)VA Certificate of Registration

An official document issued by the Zakat, Tax and Customs Authority (ZATCA) that confirms the establishment's registration in the Value Added Tax system and authorizes it to engage in activities subject to tax. It includes: the name of the taxpayer, his account number (VAT Tax Identification Number which must be shown in tax invoices), and the effective date of registration. Each VAT certificate contains a special number.

Financing Transaction

The transaction under which a special purposes entity raises finance by the issue of debt instruments, including the acquisition, transfer or other use of assets required to generate amounts due under the terms of those debt instruments, and the issue of the debt instruments itself.

Real Estate Transaction Tax

An indirect tax imposed on all transactions under which a legal effect resulted in the form of transferring the right of ownership of the real estate or possession of it for the purpose of owning it, or the possession of its benefit from one person to another; transactions may be based on an agreement between the two parties such as selling or based on the independent freewill of the owner such as a devisor’s will.

Open-Ended Investment Fund

An investment fund with changing capital, the units of which would increase with the issuance of new units, and decrease with redemption by unitholders of some or all of their units. Unitholders are entitled to redeem the value of their units at their net asset value on dealing days set in the Fund’s Terms And Conditions in accordance with the Investment Funds Regulations.

Offer

In the Mergers and Acquisitions Regulations, “offer” means any public offer subject to the Mergers and Acquisitions Regulations and made to all holders of voting shares in the offeree company, excluding offers made by the same company as the offeree, for either of the following purposes: to purchase voting shares in the offeree company, or to effect a merger with the offeree company. Any reference in the Mergers and Acquisitions Regulations to the term “offer” or “potential offer” means any of the following: a merger or potential merger; an offer and a partial offer for the purpose of control; a potential offer or a potential partial offer for the purpose of control; or a partial offer or a potential partial offer not for the purpose of control.

Independent Board Member

In the Capital Market Institutions Regulations, a non-executive member of the board of directors is a member who enjoys full independence in position and decisions, and to whom none of the circumstances negating independence stipulated in paragraph (c) of Article 53 of the Capital Market Institutions Regulations applies.

Oversight Controls

The procedures implemented by the entity and its employees as an internal control tool to reduce and mitigate risks that may affect the achievement of objectives, which includes procedures and controls that are implemented on all administrative levels, operations, inputs and outputs of all kinds.

Offeror

In the Rules on the Offer of Securities and Continuing Obligations, a person who makes an offer or invites another person to make an offer that, if accepted, would result in the issuance or sale of securities by that person or by another party with whom arrangements have been made for the issuance or sale of the securities; and in the Merger and Acquisition Regulations, a person who makes or intends to make a takeover offer subject to the Merger and Acquisition Regulations.

Finance Lease Contract

A finance lease contract established between the lessor and the lessee under which the lessor is obligated to transfer the leased asset, either owned by the lessor or obtained from the supplier, to the lessee's possession for use, provided that ownership of the asset is transferred to the lessee, or the lessee has the option to purchase the asset after a specified period, and to settle the obligations agreed upon between the contracting parties.

Rating Category

A rating symbol, such as a letter or numerical symbol which might be accompanied by appending identifying characters, used in a credit rating to provide a relative measure of risk to distinguish the different risk characteristics of the types of rated entities, securities or other assets.

Current Account Surplus

A surplus that occurs when a country's revenues from exports (goods, services, and transfers) and income received from abroad exceed its expenditures on imports of goods, services, and other financial payments (such as interest on debt or remittance payments to foreign countries).

Offer Period

The period from announcing a confirmed intention to provide an offer until the offer becomes unconditional as to acceptance, or until the extraordinary general assembly issues a decision to the offeror, as the case may be, and the offeree company in case of acquisition by an offer to exchange securities against the total shares of the offeree company.

Place of Effective Management

The place where the most important commercial and administrative decisions necessary for the conduct of a person's business are made, or the place where decisions are made by senior management, such as the board of directors, or the place where the general direction of the business is determined.

Income-Generating Expenses

Regular and necessary expenses, whether paid or due, incurred during the tax year to earn a taxable income. These expenses are eligible for deduction when calculating the tax base except for any capital expenditures and other expenses that are not subject to deduction under the income tax law and its implementing regulation.

Place of Actual Consumption

The place where the customer actually consumes the goods, either within the framework of the supply of electricity, gas, oil, water, and other public services through the pipeline distribution system. The Zakat, Tax, and Customs Authority considers the actual place of consumption to be the registered location, or the delivery point where the goods are delivered.

Ownership and Control of Capital and Voting rights

One of the requirements for forming a tax group is that each legal person must be directly or indirectly controlled by the same person, or by a group of persons, either: by owning (50%) or more of the capital of each legal person who is a member of the tax group to be formed, or by owning (50%) or more of the ownership rights or voting rights of each legal person who is a member of the tax group to be formed.

Ultimate Parent Entity of Multinational Enterprise (MNE) Group

An entity that is a member of a multinational enterprise group and that: directly or indirectly owns sufficient shares in one or more entities belonging to that group to be required to prepare consolidated financial statements in accordance with the generally accepted accounting principles in its country of tax residence, or would be required to prepare them if its shares were publicly traded in the financial market of its country of tax residence.

Fund Sub-Manager

A third party contracted by a fund manager, under a contract, in accordance with the Investment Funds Regulations and the Real Estate Investment Funds Regulations, and takes on the fund manager’s behalf all or part of the investment decisions for an investment fund managed by the fund manager.

Independent Financial Advisor

In the Merger & Acquisition Regulations, a financial advisor who is authorized by the Capital Market Authority (CMA) and is independent of its appointor (whether it is the offeror, offeree company or any other person obligated to appoint an independent financial advisor in accordance with the Merger & Acquisition Regulations).

International Transport

The provision of a transportation service by means of a vehicle, aircraft or vessel together with a driver or pilot and with a crew where necessary for the purpose of that service, provided that the transportation service involves transport of Goods or passengers either to a place outside the Kingdom, or from a place outside the Kingdom into the Kingdom.

Credit Score

A numerical representation of an individual's creditworthiness, typically ranging from 300 to 850 in the United States. It is based on an analysis of a person's credit history, including their payment history, credit utilization, and other factors.

Contactless Payment

Transactions made using RFID or NFC technology without physical contact with a payment terminal.

Advance Payment

A payment made by the government body to the contractor or supplier before commencing business, against a guarantee provided by the contractor of supplier.

Intellectual Capital

The knowledge, skills, and expertise that contribute to the value of an organization.

Operation Profit

A measure of a company's profitability calculated by subtracting operating expenses from gross profit, reflecting the earnings generated from core business activities.

Public Debt

The total financial obligations incurred by the government through borrowing from domestic or foreign entities to finance budget deficits or to fund development and investment projects, which are to be repaid in the future according to specific terms and conditions.

Insights

Valuable understandings or perceptions gained from data analysis, research, or observation, providing guidance or information for decision-making.

Project Sponsor

The entity or person who approves the use of the financial and human resources in the project implementation process.

Customs Duties

Taxes or duties imposed on imported or exported goods.

Affiliate Program

An organized system that enables affiliates to drive traffic to your properties through tracked links, and earn a cut when that traffic converts.

Training Program

A comprehensive set of educational activities and resources designed to impart specific skills, knowledge, or competencies to participants.

Net Zero Emissions

The balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere. Achieving net-zero emissions means minimizing emissions and offsetting them through various means, like carbon credits.

Customer-Centric Employee Training

Providing employees with the necessary skills and knowledge to deliver exceptional experiences to beneficiaries.

Customer-Centric Knowledge Management

Organizing and sharing knowledge resources to empower employees to serve customers effectively.

Customer-Centric Process Optimization

Streamlining internal operations to enhance the customer experience and meet their expectations.

Overstimulated Economy

An economic condition where excessive demand leads to high inflation and instability.

Circular Economy

An economic model that minimizes waste by reusing, repairing, and recycling resources.

Economic Activities

Operations that involve the production, exchange, or distribution of goods and services within the economy. This includes all activities undertaken by economic institutions or individuals to achieve value-added or economic output.

Developed Economies

Countries that have high levels of economic growth, advanced infrastructure, strong industrial and service sectors, as well as high per capita income and living standards.

Overall Economic Productivity

A measure of how efficiently an economy utilizes its resources to produce goods and services.

Green Economy

An economic system focused on sustainability and reducing environmental impact.

Environmental, Social, and Governance (ESG) Considerations

ESG considerations refer to the evaluation of a company's impact on the environment, society, and corporate governance practices, often used for responsible investing and risk assessment.

Blue Economy

The sustainable use of ocean resources for economic growth, improved livelihoods, and jobs, while preserving the health of ocean ecosystems.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit decreasing as the size of the operation grows.

Emerging Economies

Countries experiencing rapid economic growth, transitioning from developing to developed economies, with improvements in infrastructure, industry, and increased foreign investments.

Cash Concentration

It is the transfer of funds from diverse accounts into a central account to improve the efficiency of cash management and liquidity.

Circular Carbon Economy

A sustainable economic model that focuses on reducing, reusing, recycling, and recovering carbon to minimize environmental impact.

Platform Economy

An economic model that relies on digital platforms (apps or websites) to connect individuals or businesses with each other to exchange goods or services. In this model, the platform does not own the products or services itself, but facilitates the exchange between users.

Economic Productivity

The efficiency of resource use in producing goods and services, measured as output per unit of input.

الإنفاق الرأسمالي الثابت

Cartel

A group of businesses or countries that coordinate to control prices and limit competition.

Customs Warehousing Procedure

A Customs procedure under which imported goods are stored under Customs control in a designated place (a Customs warehouse) without payment of import duties and taxes.

Judicial Jurisdiction

Legal authority of a court to hear and decide cases within a defined geographical area, including the organizational and legal boundaries that govern its operation and rules.

Job Performance

An employee's effectiveness and productivity in carrying out their work tasks and responsibilities.

Affiliated Management

It is represented by three-digit numbers of the entity code, which identifies the name of the main department in the entity.

Portfolio Management

The professional management of investment portfolios to achieve specific financial goals.