AIMA

The Alternative Investment Management Association

Alternative Investment Management Association

Glossary

AIMA's Glossary has been developed for all those with an interest in the alternative investment industry - from the beginner to the advanced practitioner.

You will find a considerable overlap of content with the traditional fund management industry - the instruments used, the service providers employed, etc.  However, the hedge fund industry is individual in the way in which it uses these resources.

For reasons of law and accuracy, this is not a wiki.  It is a work-in-progress, however, and we invite you to submit new items for inclusion below (including the proposed definition).

  • We express our sincere thanks to Stanley Marchon, Vincent Kuhn, Nicolas Watin-Augouard, Stephen Foster and Sunil Gopalan for the creation of this resource. 
  • Special thanks are also extended to Anne Taulbut and Jennifer Nye of Katten Muchin Rosenman Cornish for the extensive legal review.
   
off-exchange

See Over-the-counter.

offer

An indication of willingness to sell at a given price; opposite of Bid.

offer document

A term used for a document combining a prospectus and an investment statement.

offering memorandum

See Prospectus.

offset

Liquidating a purchase of futures contracts through the sale of an equal number of contracts of the same delivery month, or liquidating a short sale of futures through the purchase of an equal number of contracts of the same delivery month. See Closing out.

offshore fund

An investment vehicle that is domiciled outside the manager’s domicile, typically in a jurisdiction with no or very low taxes, such as Bermuda, British Virgin Islands, Cayman Islands, Dublin, or the Channel Islands, and has no limit on the number of investors it can take on. Although the fund's securities transactions occur on on-shore exchanges and are executed by an on-shore manager, or general partner, its administration and audits are conducted offshore, usually in a tax haven like the Cayman Islands.

Omega

Omega is the probability weighted ratio of gains to losses, relative to a pre-defined return threshold. It captures all of the higher moment information in the returns distribution and also incorporates sensitivity to return levels.

open outcry

A method of trading, common to most US futures or options exchanges, where trading occurs on a trading floor and traders may bid and offer simultaneously either for their own accounts or for the accounts of customers. Transactions may take place simultaneously at different places in the trading pit or ring. At almost every exchange outside the US, open outcry has been replaced by Electronic Trading Platforms. See Specialist system.

open-ended product/fund

A product that is permanently open for investment. New units (shares, bonds, units) are created or dissolved as required. Investors can subscribe for or redeem these units at the prevailing net asset value per unit in accordance with the details set out in the relevant product/fund prospectus.

opening

The period at the beginning of the trading session officially designated by the exchange during which all transactions are considered made "at the opening".

Suggest a new term or amendment

Registered users of our site are invited to submit suggestions for new terms and amendments to existing terms. If you are a registered user, please login here

Main Menu

  1. Home
  2. About
    1. Our Core Objectives
    2. Meet the team
    3. AIMA Council
    4. Global Network
    5. Sponsoring Members
    6. Global Partners
    7. FAQs
    8. Opportunities at AIMA
  3. Why Join?
    1. Benefits of Membership
    2. Membership Fees
  4. Members
    1. AIMA Governance
      1. Memorandum and Articles
      2. Latest Annual Reports
    2. AIMA Members' List
    3. Committees and Working Groups
    4. Use of AIMA's Name / Logo
    5. Weekly News
    6. Update Profile
  5. Investors
    1. AIMA Investor Services
    2. AIMA Members' List
    3. Investor Steering Committee
    4. Update Profile
  6. Regulation
    1. Asset Management Regulation
      1. EU Asset Management Regulation
        1. AIFMD
          1. AIFMD Archive
            1. AIMA Documents
            2. Official Papers
            3. Expert Opinions
            4. Directive Press
            5. Quotes
        2. UCITS
          1. ETFs and Structured UCITS
        3. Venture Capital
        4. MiFID / MiFIR
      2. US Hedge Fund Regulation
        1. Registration and Reporting
        2. Incentive-Based Compensation
      3. Asia Pacific Asset Management regulation
      4. Other Jurisdictions’ Asset Management Regulation
      5. Regulation of NBFCs / SIFIS
      6. Supervision
        1. UK regulatory reform
        2. European Supervisory Authorities
        3. US Self-Regulatory Organisations
      7. Remuneration
        1. UK
        2. US
        3. AIFMD
      8. Shadow Banking
      9. Volcker Rule
      10. Other
    2. Markets Regulation
      1. Bank/Capital Regulation
        1. Capital Requirements Directive
      2. Derivatives/Clearing
        1. EMIR
        2. MiFID / MiFIR
        3. MAD / MAR
        4. Dodd-Frank Act Title VII
        5. Hong Kong
        6. IOSCO
      3. High Frequency Trading
        1. ESMA Guidelines
        2. MiFID / MiFIR
        3. MAD / MAR
        4. Flash Crash
        5. IOSCO
      4. Insurance Regulation
        1. Solvency II
      5. Market Abuse
        1. MAD / MAR
      6. Position Limits
        1. MiFID / MiFIR
        2. CFTC
      7. Resolution of Financial Institutions
      8. Short Selling
        1. EU Short Selling Regulation
        2. Hong Kong Short Sellling Regulation
        3. US Short Selling Regulation
        4. Short Selling Bans
      9. Trading
        1. MiFID / MiFIR
        2. Dodd-Frank Act
    3. Tax Affairs
      1. EU Savings Directive
      2. FAIFs and FINROFs
      3. FATCA
      4. FIN 48 and IAS 12
      5. Financial Transaction Tax
      6. Investment Manager Exemption
      7. UK Offshore Funds Regime
      8. Other
    4. Search
    5. Resources
      1. Noticeboard
        1. Bribery Act
        2. EU Directive on Alternative Investment Fund Managers
        3. EU Directive on Markets in Financial Instruments (MiFID)
        4. FSA Remuneration Code
        5. Market Abuse Directive
        6. Securities Law Directive
        7. Short Selling
        8. UK Stewardship Code
        9. US Dodd-Frank Wall Street Reform and Consumer Protection Act
      2. Guidance Notes
      3. Quarterly Regulatory Update
  7. Education
    1. AIMA Journal
    2. Guides for institutional investment
    3. Industry-standard DDQs
    4. Sound Practices
    5. Industry Guides
    6. Hedge Fund Matrix
    7. CAIA Designation
    8. Services to Start-up Managers
    9. Useful Websites
    10. Glossary
    11. Roadmap to Hedge Funds
    12. AIMA's Investor Steering Committee Paper
  8. Events
    1. AIMA Events
    2. Industry Events
    3. FSA Asset Management Visits: Past Things and Future Expectations
    4. OTC Clearing in EMIR and Dodd-Frank update
    5. AIMA's Global Policy and Regulatory Forum 2012
  9. Media
    1. AIMA in the News
      1. Published articles
      2. Radio interviews
      3. Television interviews
    2. Press Releases & Statements
    3. Media Contacts
    4. Press Materials

Sub Menu

  1. Education
    1. AIMA Journal
    2. Bibliography
    3. CAIA Designation
    4. Research
    5. Roadmap to Hedge Funds
    6. AIMA's Investor Steering Committee Paper
    7. Glossary
  2. Regulatory, Tax, Policy & Government Affairs
    1. AIMA Position Papers
    2. AIMA Responses
      1. Australian Tax Office
      2. Authority for the Financial Markets
      3. Committee of European Banking Supervisors
      4. Committee of European Securities Regulators
      5. Commodity Futures Trading Commission
      6. Dubai Financial Services Authority
      7. European Commission
      8. European Securities and Markets Authority
      9. Swiss Financial Market Supervisory Authority
      10. Financial Services Authority (UK)
      11. Financial Services and the Treasury Bureau
      12. Guernsey Financial Services Commission
      13. HM Revenue & Customs
      14. HM Treasury
      15. Independent Commission on Banking
      16. IOSCO
      17. Monetary Authority of Singapore
      18. Securities and Exchange Board of India
      19. Securities and Exchange Commission (USA)
      20. Securities and Futures Commission
      21. Singapore Exchange
      22. The Takeover Panel
      23. US House of Representatives / Senate
      24. Federal Deposit Insurance Corporation
      25. Financial Stability Oversight Council
      26. Financial Stability Board
      27. US Treasury
      28. Internal Revenue Service
      29. US Federal Reserve
      30. Financial Industry Regulatory Authority (FINRA)
      31. Council of European Union
      32. Hong Kong Exchanges and Clearing
      33. House of Lords
    3. AIMA Summaries
      1. CESR
      2. European Commission
      3. Financial Services Authority (UK)
      4. HM Revenue & Customs
      5. HM Treasury
      6. IOSCO
      7. Securities and Exchanges Commission
      8. FSOC
      9. CFTC
    4. Guidance Notes
    5. Jurisdictional Resource
    6. AIMA Noticeboard
      1. EU Directive on Alternative Investment Fund Managers
      2. FSA Remuneration Code
      3. Short Selling
      4. US Dodd-Frank Wall Street Reform and Consumer Protection Act
      5. UK Stewardship Code
      6. Securities Law Directive
      7. EU Directive on Alternative Investment Fund Managers - Level II
      8. EU Directive on Markets in Financial Instruments (MiFID)
      9. International Financial Centres
      10. Bribery Act
      11. Market Abuse Directive
      12. MF Global
      13. FATCA
      14. FTT
      15. Other Tax Issues
    7. AIMA Regulatory Update
  3. Sound Practices
    1. Due Diligence Questionnaires
    2. Guides to Sound Practices
  4. Hedge Fund Matrix
  5. Start-Up Service Providers
  6. Useful Websites
 
Sponsoring members of AIMA
  • CME Group
  • FundLab
  • Deutsche Bank Global Prime Finance
  • Ernst & Young
  • Man Investments
  • Fauchier Partners
  • Simmons & Simmons