Equity cap

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Equity cap

An agreement in which one party, for an up-front premium, agrees to pay the other at specific time periods if a designated stock market benchmark tops a predetermined level.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Equity Cap

1. The maximum amount of equity in a company an investor or class of investors is allowed to hold. A government may place an equity cap on the amount of equity a foreign national or company may possess in domestic companies, or in certain industries thought to be important.

2. Informal for equity capital. Equity capital is money raised by owners of a company. A common example of equity capital is the funding raised by issuing stock.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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In 2017 Duterte issued MO 16 directing the National Economic and Development Authority Board to take steps to relax or eliminate foreign equity caps on eight investment areas.
The World Bank said productivity growth would be enhanced if the government could allow foreign enterprises to compete in currently restricted investment sectors by reducing the equity caps; reduce trade costs through improved port and logistics infrastructures, and further easing the way of doing business by streamlining procedures when starting a new enterprise and paying taxes.
In recent weeks, China has issued a shorter list of areas closed to foreign investment, and committed to easing or eliminating foreign equity caps in sectors that include banking, insurance, securities, the auto industry, as well as in shipbuilding and aerospace.
Banks, such as HSBC, want the equity caps that limit their participation to be more than doubled, according to document seen by Europolitics.
In addition, the ETF may invest up to 20% of its assets in instruments that provide exposure "to the component securities of the index," including futures contracts; options on securities, indexes and futures contracts; equity caps, collars and floors; swap agreements; forward contracts and reverse repurchase agreements."
New Delhi, Sept 15 ( ANI ): Welcoming further liberalization of FDI Policy through increase in equity caps in Civil Aviation, Power Trading Exchanges, Broadcasting and opening up of Multi Brand Retail for FDI, Mr Adi Godrej, President CII said that "today's announcements on FDI Caps has restarted the reform process", in a press statement.
Yet, equity caps limit the size of potential new inflows, while national security concerns might prompt more oversight of FDI approval processes.
Gutierrez, who succeeded Donald Evans in his cabinet post, is already familiar with the financial and political situation in the Middle East, having made a well-regarded trip in 2006, during which he argued forcefully that the world's main oil producer - Saudi Arabia - could attract more investment to strengthen and diversify its economy by relaxing equity caps on foreign business ownership.
Two noted authors, Michael and Anthony Perkins, created a market basket of Internet stocks, as of June 11, 1999, based upon 13 publicly traded Internet companies with equity caps of $100 million or greater.
Here in many cases the market is pretty closed with equity caps on foreign ownership, so it will take some time [to obtain results here].