USA
A finance term for a discount or loss. An investor is said to take a haircut on a poor investment that has been sold at a loss. The term is also used when discussing the percentage at which eligible collateral pledged under a trading relationship, often under an ISDA Master Agreement, will be valued by the parties for purposes of calculating whether or not sufficient collateral has been posted. The haircut on US treasury bills, for example, is typically about 2%. This means that they are valued at 98% of face value for purposes of determining aggregate collateral values.
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.