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Gramm-Leach-Bliley Act
Categories: Credit and Debt, Banking,
GLB Act or GLBA. Legislation that, on one hand, allows great freedom to financial institutions in offering a full range of services and, on the other hand, imposes strict controls on how institutions share or disclose personal financial information. Signed into law in 1999 by President Clinton, GLBA repeals the key provisions of the Glass-Steagall Act of 1933 and the bank holding company Act of 1956 that barred banks from securities trading and insurance business. In its corporate aspect, the act introduces two new organization types - the financial holding company and the financial subsidiary. Under these provisions, banks, insurance companies, securities trading companies, and other types of financial institutions can together exist as one consolidated corporate entity. In its consumer aspect, the GLBA authorizes the states and eight federal agencies to monitor all collectors and holders of personal financial information, and to enforce the financial privacy rule, safeguards rule, and 'pretexting' (obtaining personal information under false pretext) rule. These rules apply also to any entity that offers any type of financial product or service, including brokers, debt collectors, credit counselors, financial advisors, small lenders, and tax-return preparers. The GLBA gives consumers some control over how their financial information is used and disclosed (beyond the purpose for it was collected) via the opt-out provision that lets them choose the option of not divulging this information.
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Definition / Meaning of
Stop Order
Categories: Investing and Trading, Brokerages,
You can issue a stop order, which instructs your broker to buy or sell a security once it trades at a certain price, called the stop price. Stop orders are entered below the current price if you are selling and above the current price if you are buying. Once the stop price is reached, your order becomes a market order and is executed.For example, if you owned a stock currently trading at $35 a share that you feared might drop in price, you could issue a stop order to sell if the price dropped to $30 a share to protect yourself against a larger loss. The risk is that if the price drops very quickly, and other orders have been placed before yours, the stock could actually end up selling for less than $30. You can give a stop order as a day order or as a good 'til canceled (GTC) order. You might use a buy stop order if you have sold stock short anticipating a downward movement of market price of the security. If, instead, the price rises to the stop price, the order will be executed, limiting your loss. However, there is a risk with this type of order if the market price of the stock rises very rapidly. Other orders entered ahead of yours will be executed first, and you might buy at a price considerably higher than the stop limit, increasing your loss.
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