01.
Financial instruments of the capital
market are classified into the following two categories namely; government or
gilt edged securities and corporate securities
02.
The financial instruments of corporate
sector are: shares, debentures, public deposits and loans from institutions
03.
Financial intermediaries are those
institutions which collect savings from those who save and make it available to
the investors for their use.
04.
The financial intermediaries or
institutions are mainly classified into two categories namely; institutional or
organized; non institutional or unorganized
05.
Institutional or organized are mainly
divided into two parts namely; 1) banking institutions and non banking financia
intermediaries.
06.
The financial regulatory authorities
in India are: Reserve Bank of India, Securities and Exchange Board of India and
Insurance Regulatory and Development authority
07.
SEBI – securities and exchange board
of India
08.
IRDA – Insurance Regulatory and
Development Authority
09.
IRDA was established in 1990
10.
IRDA has its headquarters at
Hyderabad
11.
The financial institutions perform a
number of functions: promoting savings, mobilizing savings and allocate it
among different users and facilitating
capital formation, production and economic development
12.
The financial markets in the country
can be divided into money markets and capital markets
13.
Money market refers to that market
wherein short term monetary assets are bought and sold
14.
Financial institutions can be either
in the organized sector or unorganized sector
15.
RBI, Commercial Banks, Cooperative
Banks are in organized sector
16.
Indigenuous banks, money lenders,
chit funds etc are in the unorganized sector.
17.
Financial instruments include bills,
treasury bills, promissory notes, hundies, certificate of deposits etc.
18.
The important terms which relate to
money market are: money market, call market, notice money, term money, held
till maturity, yield to maturity coupon rate, treasury operations and gild
edged security
19.
Under call money market, funds are
transacted on overnight basis and under notice money market funds are
transacted for the period between 2 days and 14 days.
20.
The participants in call/notice money
market currently include banks, primary dealers, development finance institutions,
insurance companies and select mutual funds.
21.
Treasury bills are money market
instruments to finance the short term requirements of the Government of India.
22.
There are different types of treasury
bills based on the maturity period and utility of the issuances like, ad-hoc,
treasury bills, 3 months, 6months and 12 months
23.
Treasury bills etc in India at
present are issued for the following periods namely; 91 days, 182 days and 364
days
24.
Call money is an amount borrowed or
lent on demand for very short period
25.
When the period of call money is more
than one day; however, lesser than 14 days, it is called at notice money
26.
Certificate of deposit is a
negotiable promissory note, secure and short term of up to a year in nature.
27.
Commercial paper is freely negotiable
by endorsement and delivery.
28.
An intercorporate deposit or ICD is
an unsecured loan extended by the
corporate to another.
29.
Ready forward contracts are
transactions in which two parties agree to sell and repurchase the same
security.
30.
Bills of exchange are negotiable
instruments drawn by the seller or drawer of the goods on the buyer or drawee
of the goods for the value of the goods delivered.
31.
Pass through certificate is an
instrument with cash flows derived from the cash flow of another underlying instrument
or loan.
32.
Past through certificates have two to
three year maturity because the issuance stamp duty rate making shorter
duration PTCs unviable.
33.
A bill market is the market which
deals in short term bills.
34.
The bills may be of two types i)
bills of exchange or commercial bills and ii) finance bills or treasury bills.
35.
Bill market scheme was introduced by
Reserve Bank of India in 1952.
36.
New Bill market scheme was introduced
by RBI in 1970.
37.
The gilt edged market refers to the
market for government and semi government securities, backed by RBI.
38.
The industrial securities market
refers to the market which deals in equities and debentures of the corporate.
39.
Industrial securities market is
divided into primary market and secondary market.
40.
Securiteis and Exchange Board of
India was established 1988
41.
In India, there are 23 stock exchanges
42.
Securities and Exchange Board of India got its
legal status in 1992.
43.
CRISIL – Credit Rating Information Services of
India – was established in 1988
44.
ICRA – Investment Information and Credit Rating
Agency of India Limited – was established on 1991
45.
CARE – Credit Analysis and Research Limited – was
established in 1991
46.
IEPF – Investors Education and Protection Fund was
set up by SEBI in 2001
47.
NSE has introduced the derivatives trading in the
equities in November, 2001
48.
IRDA – Insurance Regulatory and Development
Authority was set up in 2000
49.
CCIL – Clearing Corporation of India Limited
50.
OTCEI – Over the counter exchange of India – was
incorporated in 1990 under the companies act 1956
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