Jurisdiction

defined by the American Bankers Association as "the legal right, power or authority to hear and determine a cause; as in the jurisdiction of a court." The term frequently comes up in finance and investment discussions in connection with the jurisdictions of the various regulatory authorities bearing on the field. For example, the Federal Reserve Board, not the Securities and Exchange Commission (as might be supposed), has jurisdiction in a case involving a brokerage margin account (see also Regulation T).

The term also is important with respect to eurocurrency loan agreements, where it is possible for a loan to be funded in one country but made in another by a group of international banks each from different countries, to a borrower in still another country. The determination of jurisdiction, not to mention the willingness of courts in different countries to accept that jurisdiction, is a matter of obvious urgency in such cases.