Levy and Overnight indexed swap: Difference between pages

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1. ''Verb.''
(OIS). A fixed rate interest rate swap against a floating rate index such as SONIA, EURONIA or EONIA.


To charge or impose a fee or a tax.
The two parties to the OIS agree to exchange the difference between the interest accrued at an agreed fixed interest rate for a fixed period (for example 3 months) on an agreed notional amount, and the interest accrued on the same amount, by compounding the reference index daily over the term of the swap.  


Settlement is made net at an agreed date after maturity (in the sterling market settlement is on the maturity date) so the principal never changes hands.


2. ''Tax.''
== See also ==
* [[EONIA]]
* [[EURONIA]]
* [[SONIA]]


A particular tax or similar charge.
For example, the UK's Climate Change Levy, and the levy payable to fund the Financial Services Compensation Scheme.
==See also==
*[[Climate Change Levy]]
*[[Financial Services Compensation Scheme]]
*[[Tax]]
* [[UK Bank Levy]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Cash_management]]
[[Category:Financial_products_and_markets]]
[[Category:Liquidity_management]]
[[Category:Trade_finance]]

Revision as of 14:20, 23 October 2012

(OIS). A fixed rate interest rate swap against a floating rate index such as SONIA, EURONIA or EONIA.

The two parties to the OIS agree to exchange the difference between the interest accrued at an agreed fixed interest rate for a fixed period (for example 3 months) on an agreed notional amount, and the interest accrued on the same amount, by compounding the reference index daily over the term of the swap.

Settlement is made net at an agreed date after maturity (in the sterling market settlement is on the maturity date) so the principal never changes hands.

See also