An effect point represents the position of an effect on a layer: It can be the focus of a Lens Flare effect, the center point of a Reflection effect, or the starting point for Path Text. Some effects require more than one effect point, such as the start and end of a Stroke effect or the four corners of the Corner Pin effect.
You can set the effect point with the Effect Controls window's Effect Point button, or by manipulating it in the Composition or Layer window. Because effects are applied to a layer, the coordinates of an effect point refer to the layer, not the composition.