NASD Regulation

(USA) A self-regulatory organization that has substantial responsibility for the regulation of broker/dealers, as well as the operation of the Nasdaq markets. Originally part of the NASD but now in the process of being separated.

Nasdaq Bulletin Board

See ‘Nasdaq Stock Market’ and ‘OTC Bulletin Board.’

Nasdaq Europe (archaic)

Nasdaq Europe (formerly EASDAQ) was a pan-European stock market based in Brussels. Modeled on Nasdaq in the US, Nasdaq Europe was screen-based (it did not have a trading floor) and quote driven. Nasdaq Europe allowed for dual listings, providing companies with access to a broader base of international investors than in their domestic markets. Nasdaq acquired a majority interest in EASDAQ in 2001, in connection with which the exchange was rebranded as Nasdaq Europe. Nasdaq Europe was closed down in November 2003.

Nasdaq National Market (formerly NASDAQ NMS)

The larger and higher quality of the two markets administered by The Nasdaq Stock Market, Inc. The Nasdaq National Market is now the second largest stock market in the world in terms of volume of shares traded.

Nasdaq Small Cap Market

A stock market for smaller companies that cannot satisfy the listing requirements of the Nasdaq National Market.

Nasdaq Stock Market

The Nasdaq Stock Market (based in New York) has two tiers in the USA, the Nasdaq National Market and the Nasdaq Small Cap Market. Each tier has its own set of financial requirements that a company must meet to list its securities. Nasdaq also operates the OTC Bulletin Board, which is scheduled to be replaced by the Bulletin Board Exchange, or BBX, in 2003.The Nasdaq markets are not physical stock exchanges in the traditional sense and do not have an exchange floor, but instead use electronic trading and support systems. In 1998, Nasdaq and the American Stock Exchange combined into one corporate organization: The Nasdaq-Amex Market Group. Outside the USA, Nasdaq operates the Nasdaq Canada, Nasdaq Europe and Nasdaq Japan Exchanges.

Nasdaq-100

An index based on the shares of 100 of the largest companies traded on the Nasdaq National Market. See ‘Index’’ and ‘Nasdaq National Market.’

Nasdaq-Amex Market Group

The result of the combination of Nasdaq and the American Stock Exchange in 1998.

National Association of Securities Dealers (NASD)

(USA) The national organization of the USA securities industry. Through a subsidiary, The Nasdaq Stock Market Inc., it operates stock exchanges.

Net Debt

Net debt is calculated as short and long-term interest-bearing debt minus cash (and equivalents). The concept of Net Debt is the same under cash and accrual-based financial reporting. High levels of Net Debt impose a call on future revenue flows to service that debt. One shortcoming of the Net Debt concept is that it does not provide information on whether debt has been incurred to finance fixed asset accumulation or current expenditure. Calculation: Net Debt equals debt due within one year excluding bank overdrafts plus debt due after one year minus cash in hand and at bank minus overnight deposits plus bank overdrafts plus other current investments.

Net Proceeds

The amount received by an issuer from the offering of securities, after deduction of expenses and underwriting discounts and commissions associated with the offering.

New Issue

Securities being offered to the public for the first time. See ‘Initial Public Offering.’

New York Stock Exchange (NYSE)

The New York Stock Exchange, located in New York City, is the world’s largest stock market by market capitalization.

NewCo

A generic term for a new company incorporated for the purpose of acquiring the target business, unit or company.

No-action Letter

(USA) A procedure where private parties can write to the SEC staff and request an interpretation of how particular aspects of the securities laws apply to their factual situation. The SEC’s response takes the form of a letter indicating that the SEC staff will or will not recommend that the SEC take any enforcement action if the parties proceed as described. This process is not typically formalized in other markets, but it is common for regulatory authorities to be asked for ‘clarification.’

NOMAD

The advisor to an issuer on AIM with delegated responsibility for compliance with the AIM rules. See ‘Nominated Advisor.’

Nominated Advisor

See ‘NOMAD.’

Nominated Broker

The broker to an issuer on AIM, often also filling the role of the Nominated Advisor.

Nominee Name

See ‘Street Name.’

Non-accountable Expense Allowance

See ‘Expense Allowance.’

Non-compete Clause

A clause in an agreement whereby a party agrees not to work for competitor companies or form a new competitive company within a certain time period after termination of employment. Permissible scope of such clause is very dependent on local law.

Non-disclosure Agreement (NDA)

An agreement between parties to protect the privacy of their ideas when disclosing those ideas to each other.

Non-discretionary Client

A client who is involved in the decisions taken by the investment manager, who handles the clients’ assets.

Non-executive Director (NED)

A member of the Board of Directors of a company who has no management or executive function within the underlying company.

Non-qualified Stock Options

(USA) Stock options that do not qualify for special tax treatment. Accordingly, there are no limitations on the exercise price, person to whom granted, etc. In the USA, the option holder has no tax at the time of grant, but will have ordinary taxable income at the time of exercise equal to the difference between the exercise price on the date of option exercise and fair market value on that date. The company generally may take a deduction at the same point in an equal amount if the option were issued as compensation. The taxation regime in other countries is often different from this, but non-qualified options are increasingly being used as part of executive remuneration packages. Compare with ‘Incentive Stock Options or ISOs.’

Novation

The substitution of a new contract for an old one, or the substitution of one party in a contract with another party. Also, the replacement of an existing debt or obligation with a new one.