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Simple English definitions for legal terms
SAR
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A quick definition of SAR:
Term: SAR
Definition: SAR stands for Stock-Appreciation Right or Suspicious-Activity Report. A Stock-Appreciation Right is a type of financial benefit that some employees receive from their company. A Suspicious-Activity Report is a document that financial institutions must file with the government if they suspect that a customer is involved in illegal activities, such as money laundering or terrorism financing.
A more thorough explanation:
Definition: SAR is an abbreviation that can stand for two different things:
- Stock-Appreciation Right: This is a type of financial incentive that some companies offer to their employees. It gives the employee the right to receive a payment based on the increase in the company's stock price over a certain period of time.
- Suspicious-Activity Report: This is a report that financial institutions are required to file with the government if they suspect that a customer's transactions are related to illegal activity, such as money laundering or terrorism financing.
Examples:
- Stock-Appreciation Right: John's company offered him a SAR as part of his compensation package. If the company's stock price goes up by 10% over the next year, John will receive a payment of $10,000.
- Suspicious-Activity Report: The bank filed a SAR after noticing that a customer had made several large cash deposits in a short period of time, which seemed unusual for their account history.
The examples illustrate the two different meanings of SAR. In the first example, SAR refers to a type of financial incentive that rewards employees for the company's success. In the second example, SAR refers to a report that helps prevent illegal activity in the financial system by alerting the government to suspicious transactions.