Bank Glossary - N

Naked warrants

Subscription warrants which are issued without simultaneous flotation of an option bond. Unlike the traditional subscription warrant, naked warrants are not associated with financing projects for companies. They are primarily issued by banks and securities trading houses. Frequently, provision is made for a cash settlement instead of acceptance/supply of the basic value. Naked warrants are issued in the form of call option warrants as well as put option warrants. Covered warrants are a sub-category of naked warrants.

Negative clause

Also referred to as negative pledge. Obligation on the part of a debtor with respect to the creditor, in the case of long-term credits and bond issues, to refrain from encumbering specific assets - principally property ownership - in future, or to refrain from encumbering them to a higher level, or to refrain from granting any securities to other creditors without allowing the existing creditor to participate in such arrangements.

Net interest return

see return, interest return, current

Neuer Markt

Established on March 10, 1997, the Neuer Markt represents a new trading segment on the Frankfurt stock exchange, providing growth-oriented and innovative companies with new means of raising capital. Among its chief features is the high degree of transparency companies offer investors in this market. The Neuer Markt is moreover characterized by active marketing measures on the part of Deutsche Börse, its liquidity and Europe-wide network. Issuers on the Neuer Markt are SMEs (small and medium-sized enterprises), innovative high-growth companies operating in trendsetting or traditional industries which launch innovative products, processes or services. These firms generally have a strong international orientation and are keen to pursue an active 'Investor relations policy'.

NIBTB

Abbreviation for Non-interest-bearing Treasury bonds

New York Stock Exchange (NYSE)

Founded in 1792, it is the world's most significant stock exchange. Shares in more than 1,700 of the largest US joint-stock companies are traded on the NYSE.

Night-and-day vault

Vault which is used for the depositing of cash, cheques, bills of exchange and other documents, even outside business hours. Such vaults are subject to the [German] 'Conditions for the Use of Night-and-Day Vaults'.

Nominal capital

see Joint-stock company

Nominal interest

Contractually-guaranteed interest rate, based upon the face value of a debenture bond; see also return.

Non-assessment certificate

Certificate, issued by the nearest tax office to one's place of residence, to the effect that, for unlimited income tax payers, an assessment for income tax is unlikely to come into consideration. In this way, shareholders are refunded the allowable corporation tax. The certificate is issued subject to revocation. The maximum term is three years and matures at the end of a given calendar year (§ 36 of the [German] Income Tax Act).

Non-interest-bearing Treasury bonds (NIBTB)

Discount papers, issued by the Federal Government, with terms of up to two years. NIBTB's are mainly directed towards institutional investors, although, in principle, anyone is entitled to purchase them. They are issued as once-only issues in the tendering procedure and have a minimum fragmentation of DM 500,000.00. NIBTB's are not introduced into stock exchange trading.

Non-negotiable instrument

Security which bears the name of a specific person. The claim documented in the non-negotiable instrument can only be validated by this person or by his legal successor. This paper is transferred in accordance with the law of obligations (§§ 398 et seq of the German Civil Code) and transfer is possible by means of mutual consent and assignment of the documented right. Ownership of the certificate is only assigned to the respective holder of the right.

No-par-value share

A "nennwertlose Aktie" has no par value and does not represent a specific amount of share capital. In Germany a special type of no par value share, the so-called "Stückaktie", has been introduced by law. Here, the company has a fixed nominal share capital. This share capital is divided into shares which each represent an equal partial amount of share capital, i.e. different proportionate share capital amounts comparable with the different par values existing today are not permissible. As the total number of shares is fixed in the Articles of Association, it can be calculated what fraction of capital is represented by one share (e.g. one 40-millionth). This arithmetic sum must correspond at least to the present minimum par value of DM 5. From January 1, 1999, the minimum par value will be 1 euro; see also share.

Nostro transaction

Dealing in securities by a bank on its own account.

Numbered account

Bank account which is only managed under the account number; the name and address of the account holder are known to the bank, but are kept secret. This form of account administration is not permitted in Germany, but in contrast is widespread in Switzerland.

NYSE

Abbreviation for New York Stock Exchange