“Basis Swap”

a type of transaction which, in the context of an interest rate swap, involves the exchange of two floating rate financial instruments which may have different interest rates, tenor, and may be denominated in the same or different currencies.

“Currency Forward”

a contract under which the contract holders are obligated to buy or sell a specified currency at a specified price, for a specified quantity and on a specified future date.

“Currency Option”

a contract that grants the holder the right, but not the obligation, to buy or sell currency at a specified exchange rate during a specified period of time.

“Currency Swap”

an agreement between two parties to exchange a given amount [or series of payments] of one currency for another and, after a specified period of time, to give back the original amount swapped along with interest payment.

“Forward or Forward Contract”

an agreement between two parties to exchange an asset or cash flows at a specified future date at a price agreed on the trade date.

“Forward Rate Agreement”

an agreement between two parties to exchange a series of fixed interest payments for a series of floating interest payments in respect of a specified interest period.

“G7 Currency or G7 Currencies”

the lawful currency or currencies of the United States, Japan, United Kingdom, Euro, Australia, New Zealand and Canada or any one of these currencies.

“G7 Forward”

forward traded in the currencies of the group of seven nations, namely, the United States, Japan, United Kingdom, Euro, Australia, New Zealand and Canada.

“HIBOR or Hong Kong Interbank Offered Rate”

a daily floating rate based on the interest rate at 11 am local time at which banks offer to lend unsecured funds in the Hong Kong money market denominated in Hong Kong dollars.

“Interest Rate Swap”

an agreement between two parties where one stream of future interest payments is exchanged for another based on a specified principal amount. Interest rate swaps often involve exchanging a fixed payment for a floating payment that is linked to an interest rate (for us, most often the LIBOR, HIBOR and SHIBOR)

“LIBOR or London Interbank Offered Rate”

a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in London wholesales money market (commonly known as the interbank market).

“Money Market”

the network of corporations, financial institutions, investors and government which deal with the flow of short term capital, and is usually applied to the buying and selling of debt instruments maturing in one year or less. In the present context, money market commonly refers to the short term lending and borrowing market between banks.

“Non-Deliverable Forward”

a cash-settled, short-term forward contract on a thinly traded or non-convertible foreign currency, where the profit or loss on the date the trade is confirmed is calculated by taking the difference between the agreed upon exchange rate and the spot rate at the time the trade is confirmed, for an agreed upon notional amount of funds.

“Option”

an agreement that gives the buyer thereof the right, but not the obligation, to buy or sell a specified amount of any underlying asset at an agreed upon price on, or until the expiration of the agreement.

“SHIBOR”

Shanghai Interbank Offered Rate, a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the Shanghai wholesale money market.

“SIBOR”

Singapore Interbank Offered Rate, a daily reference rate based on interest rates at which banks offer to lend unsecured funds to other banks, in Singapore wholesale money market.

“Spot”

an exchange of two currencies in the foreign exchange and money markets at a price agreed at the time of the transaction for settlement two days later.

“Swap”

an agreement between two parties to exchange cash flows or other assets or liabilities at specified payment dates during the life of the agreement.

“Taiex Index”

Taiwan Stock Exchange Capitalization Weighted Stock Index, an index covering all of the listed stocks excluding preferred stocks, full-delivery stocks and newly listed stocks, which are listed for less than one calendar month.

“Treasury Bills”

short term debt instruments issued by sovereign borrowers with a term of less than one year in maturity and which may not be issued at a discount or with interest coupons.