Professional Documents
Culture Documents
5 DECEMBER 09
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5 DECEMBER 09
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5 DECEMBER 09
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What is the penalty if any asset management company of a mutual fund registered under SEBI Act fails to comply the regulations of SEBI?
As per sec. 15E : penalty of one lakh rupees for each day during which such failure continues or one crore rupees
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What is the maximum cap on invstment by a single investor in a mutual fund scheme ?
no single investor can hold more than 25 per cent of the corpus of any scheme/plan.
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up to 10 per cent of their net assets as on January 31 of each year subjects to limits of minimum US $ 5 million and maximum of US $ 50 million.
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Yes
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Should FII report the issue of their off shore derivative instruments to SEBI?
Yes, FIIs, have to report issuance/ renewal/cancellation/redemption of off-shore derivatives instruments against underlying Indian securities
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The primary market provides the channel for sale of new securities, while the secondary market deals in securities previously issued
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1% of total world turnover The market capitalization of all listed companies taken together on all markets is 1.5% of the world (about US$ 100 trillion)
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The promotors hold about 50% non-promoters hold about 50%, the public has 16.% and the institutional holdings by (FIIs, MFs, FIs) have 24% & FIIs have about 9%.
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How much money has Indian companies raised from ADR / GDR issues ?
Since they were permitted access in 1992, Indian companies have raised about Rs. 2 lakh million through American Depository Receipts (ADRs)/Global Depository Receipts (GDRs).
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They have invested about US $ 200 bn. In India. About 1000 FIIs are registered with SEBI
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What is GETF?
GETF = gold exchange traded fund from January 12, 2006 mutual funds are permitted to issue GETFs in India subject to certain investment restrictions
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Should a share broker send both ECN & physical contract note to the client ?
No, Only one of them is required. If ECNs (electronic contract note) have not been delivered or have been rejected by the e-mail ID of the client, the broker is obligated to send the physical contract note(s) within the stipulated time under the extant SEBI guidelines.
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What is the minimum public shareholding requirement as per SEBI (DIP) Guidelines, 2000
25%
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What is the the market capitalisation & market turnover in Indian stock markets in comparison to national income ?
Market capitalization as percent for GDP in India is 65% (in developed countries, it is more than 100% ) The turnover ratio, which is a measure of liquidity, however is approximately 108% it is 115% for developed countries.
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What is T bill ?
Treasury bill It is issued for 3 months / 6 months it is issued at discount price in comparison to its face value the discount rate is based on bidding process generally banks / FI buy T bills as these instruments are very safe and fullfill SLR requirements also 5 DECEMBER 09 www.afterschool.tk 38
Maximum interest rate possible is here CAP minimum rate of interest possible is FLOOR
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It is also called uniform price auction. Here bids are accepted at the same prices as decided in the cut off. Example : cut off price is 100, so bids are accepted at 100
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It is used for Government dated securities and treasury bills. Bids are accepted at different prices/yields quoted in the individual bids.
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Bill-financing = seller drawing a bill of exchange and the buyer accepting it, thereafter the seller discounting it with, say, a bank, later the bank gets it further rediscouted from other banks / RBI
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What is MMMF? = Money Market Mutual Funds a mutual fund that invests in money market first introduced in 1971 by Bruce Bent and Henry Brown of the Wall street. RBI appointed a task force on MMMFs was set up under the chairmanship of D Basu in September, 1991 and itnroduced MMMF in 1992 and SEBI issued guidelines on these in 1994 .
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Formation of which institution enhanced call money market and stabilised it?
The formation and operations of Discount and Finance House of India (DFHI) led to enhanced activities in this market segment.
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periodical large borrowings to meet CRR requirements of banks. certain banks operate excessive credit beyond their permissible limits so they need money from call moneymarket call rates increase steeply when institutional lenders and corporates withdraw huge amounts for tax payments etc.
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My bank wants to buy 91 Days Treasury Bill Maturing on Dec. 26, 2009. The rate quoted by seller is Rs. 99.5 per Rs. 100 face values. Today is 5/12/9, What YTM?
YTM = yield to maturity formula = ((100 price paid) * 365*100)/(price paid * days to maturity) = ((100-99.5)*365*100) / (99.5*21) YTM =8.73%
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What is CD ?
CD = certificate of deposit It is a negotiable money market instrument and issued in dematerialised form or as a Usance Promissory Note, for funds deposited at a bank or other eligible financial institution for a specified time period.
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Rs.1 lakh
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not less than 15 days and not more than one year
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What is ICD ?
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What is CP ?
CP = commercial paper It is an unsecured money market instrument issued in the form of a promissory note. It is a privately placed instrument. It was introduced in India in 1990 with a view to enabling highly rated corporate borrowers to diversify their sources of short-term borrowings and to provide an additional instrument to investors
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The Central Government may privately place government securities with Reserve Bank of India. This is usually done when the Ways and Means Advance (WMA)
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What is WMA?
As per the latest law, the government has to give justification for any money that it wants to raise from RBI. This justification based borrowing is called WMA WMA = WAYS AND MEANS ADVANCES
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What is demutualisation ?
Convert stock exchange to FOR PROFIT organisation The board should consist of 75% public interest/ shareholder directors and 25% broker directors, 51% shareholding of the stock exchange should be divested to public& 49% with the trading member brokers.
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Technology Development Fund (TDF) in the year 1987-88 (promoted by Govt. Of India)
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Who is incubator?
hardcore technocrat who works with an entrepreneur to develop a business idea, and prepares a Company for subsequent rounds of growth & funding
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Yes, provided, such investment from any investor is more than five lakh rupees.
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Yes, after the expiry of three years from the date of the issuance of units by the venture capital fund.
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No
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Can VCF invest in sick company ? Yes, in fact 80 percent of funds raised by a
venture capital fund should be invested in: 1. sick company OR 2. shares of an unlisted company 3. invested in companie which are investing in sick company / un listed company
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It should give details of the terms subject to which monies are proposed to be raised from investors. VCF has to prepare it before raising money from the market
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No, only after the scheme is approved by the Trustee and it has obtain rating from a credit rating agency and has been appraised by an appraising agency.
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Is it necessary to have an escrow account before a company buys back its shares?
Yes, an escrow account is an account opened by a company with a scheduled commercial bank by way of a security for discharging its obligation and shall consist either of cash or bank guarantee in favour of a merchant banker or deposit of acceptable securities
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What is depository ?
It is an organisation, where securities of a shareholder are held in the electronic form example : NSDL,CDSL
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Depository can legally transfer beneficial ownership, but a custodian cannot, otherwise they are very similar
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Can the collective investment scheme be closed before the due date ?
In some cases yes, the law says that the scheme should be wound up on the expiry of duration specified in the scheme or on the accomplishment of the purpose of the scheme.
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External Commercial Borrowings (ECB) include commercial bank loans, buyers credit, suppliers credit, securitised instruments such as floating rate notes and fixed rate bonds.
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If you want to go for GDR / FCCB issue, whose permission should you get ?
1. Approval of a Board of Directors, 2. shareholders, 3. In principle and Final approval of Ministry of Finance, 4. Approval of Reserve Bank of India, 5. In-principle consent of Stock Exchange for listing of underlying shares 6. In-principle consent of Financial institutions.
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It can be accessed under two routes, (i) Automatic Route (ii) Approval Route.
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power, telecommunication, railways, road including bridges, sea port and airport, industrial parks and urban infrastructure including water supply, sanitation and sewage projects
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NGOs engaged in micro finance activities can raise ECB up to USD 5 million during a financial year.
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The lender
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ECB for investment in real sector, industrial sector, especially infrastructure sector, are under Automatic Route, i.e. it does not require RBI/ Government approval.
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Roadshows represent meetings of issuers, analysts and potential investors. Details about the company are presented in the roadshows and such details including history, culture, milestones etc.
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listing agent in getting its Euro-issue instruments listed on the Overseas Stock Exchanges.
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It is authorised by the issuing company to issue Depository Receipts against issue of ordinary shares or Foreign Currency Convertible Bonds of issuing company.
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http://www.esnips.com/web/onlinespeeches
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