In general, terms in this Standard have the meanings defined in other Regulations and Standards issued by the Central Bank. In addition, for this Standard, the following terms have the meanings defined in this section.

1. a)A commodity is defined as a physical product that is or can be traded on a secondary market, e.g. agricultural products, minerals (including oil) and precious metals.
2. b)Convertible bonds are debt issues or preference shares that are convertible, at a stated price, into common shares of the issuer.
3. c)Deep-discount bonds are defined as bonds with a coupon of less than 3%.
4. d)A financial asset is any asset that is cash, the right to receive cash or another financial asset; or the contractual right to exchange financial assets on potentially favorable terms, or an equity instrument.
5. e)A financial instrument is any contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments include either primary financial instruments (or cash instruments) and derivative financial instruments.
6. f)A financial liability is the contractual obligation to deliver cash or another financial asset or to exchange financial liabilities under conditions that are potentially unfavorable.
7. g)General market risk is market risk related to broad movements in overall market prices or rates that reflect common movements among many related market instruments.
8. h)Marked-to-model refers to the use of quantitative models to determine the value of positions or exposures, typically in the absence of reliable market prices.
9. i)Market risk is defined as the risk of losses in on-balance-sheet and off-balance-sheet positions arising from movements in market prices.
10. j)A special purpose entity is an entity, typically created to be bankruptcy-remote from the sponsoring entity, with operations limited to the acquisition and financing of specific assets as a method of isolating risk.
11. k)Specific risk is market risk related to factors affecting a specific issuer, rate, currency, or commodity rather than to broad market movements.
12. l)A two-way market is deemed to exist where there are independent bona fide offers to buy and sell so that a price reasonably related to the last sales price or current bona fide competitive bid and offer quotations can be determined within one day and settled at such price within a relatively short time conforming to trade custom.