Kay Review and Net credit/debit position: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Update.)
 
imported>Doug Williamson
(Added missing 'a')
 
Line 1: Line 1:
A government sponsored review into UK equity markets set up in 2011 and led by Professor John Kay.
''Netting systems''.  


The review was established to ask how well equity markets are achieving the following core purposes:
A participant’s net credit or net debit position in a netting system is the sum of the value of all the transfers the participant has received up to a particular point in time, minus the value of all the transfers the participant has sent. 


1. Enhancing the performance of UK companies by facilitating investment and enabling effective governance and decision making in support of long-term profitability and growth; and
If the difference is positive, the participant is in a net credit position. 


2. Enabling investors to benefit from this corporate activity in the form of returns from equity investment.  
If the difference is negative, then the participant is in a net debit position.  


The review was designed assess to what extent equity market participants are excessively focused on short-term outcomes to the detriment of the core purposes (1. and 2. noted above) and if so, what actions should be taken to address this problem.


It therefore examines the incentives, motivations and timescales of the following participants in the equity markets – end investors, pension funds, advisers, fund managers, the market and company boards – and also the relationships between them.
The net credit or net debit position at settlement time is defined as the net settlement position.


 
These net positions may be calculated on a bilateral or multilateral basis.
The Kay Report, published in 2012 was welcomed, by the UK Government in its response of the same year.
 
Implementation of the recommendations is being monitored.




== See also ==
== See also ==
* [[Corporate governance]]
* [[Credit]]
* [[Equity]]
* [[Debit]]
 
* [[Netting]]
 
====Other links====
[https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/367070/bis-14-1157-implementation-of-the-kay-review-progress-report.pdf Building a culture of long-term equity investment - Implementation of the Kay Review:Progress Report, Oct 2014]
 
[[Category:Corporate_finance]]

Revision as of 08:24, 11 April 2015

Netting systems.

A participant’s net credit or net debit position in a netting system is the sum of the value of all the transfers the participant has received up to a particular point in time, minus the value of all the transfers the participant has sent.

If the difference is positive, the participant is in a net credit position.

If the difference is negative, then the participant is in a net debit position.


The net credit or net debit position at settlement time is defined as the net settlement position.

These net positions may be calculated on a bilateral or multilateral basis.


See also

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=Kay_Review&oldid=34044’