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Basics of depository and depository participant

Posted by Shantanu Das on June 7, 2011 at 9:17 AM

In this article we discussed about Depository, who regulates depository in India, functions of a depository , benefits of depository system, difference between a depository & custodian, models of depository, depository participant and its characteristics, difference between dematerialisation & rematerialisation, rights of depository participant and finally added with objective questions for refresher.

Depositories:- Depository is an organization where the securities of the shareholders are held in electronic form at the request of the shareholder through the medium of a Depository Participant. In the following article we are going to learn more about depository and depository participant.

Definition of Depository: Depository means a company formed and registered under the companies act, 1956 and it has been granted a certificate of registration under section 12(1A) of SEBI Act, 1992.

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Credit Rating Agency : CRISIL

Posted by Shantanu Das on June 3, 2011 at 3:33 AM

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In previous article we discussed about credit rating , different kinds of rating, users of credit rating and rating process for different concern. Lets discuss more about credit rating and the different agencies and their ratings. Below is the brief discussion about CRISIL ( the rating agency). CRISIL : Credit rating information services of India Ltd. According to CRISIL, “ Credit Rating is an unbiased and independent opinion as to issuer’s capacity to meet its financial obligations. Its doesn't constitute a recommendation to buy/sell or hold a particular security”.

CRISIL , the first credit rating agency was started on January 1, 1988. It was started jointly by ICICI bank and UTI bank with an equity capital of Rs. 4 crores. The main objective of CRISIL is to rate debt obligation of Indian Companies. CRISIL commences rating as per the request of the companies.

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Credit Rating

Posted by Shantanu Das on May 30, 2011 at 12:15 AM

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CREDIT RATINGMeaning of Credit Rating : Credit rating is the ranking provided on the basis of financial analysis of an individual or of a business concern from there financial history by the credit agencies. This rating shows the ability to meet debt obligations of the business entity. Investors can use this information to decide whether to invest or not.

Credit rating is the instrument which help an investor to differentiate between different debt instruments. It is easy to understand as it is expressed in alphabetical or numerical form.Credit rating not only applies for debt obligation but also for other purposes. There are various kinds of credit rating :

1. Financial Instruments Rating

(a) Bond Rating

(b) Equity Rating

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Collective Investment Schemes ? As per Indian Companies and SEBI Act

Posted by naths on May 1, 2011 at 12:18 AM

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Collective Investment Schemes: According to sub section 2 of section 11AA of SEBI Act, Collective Investment Scheme means “Any scheme or arrangement made or offered by any company under which the contributions, or payments made by the investors, are pooled and utilized with a view to receive profits, income, produce or property, and is managed on behalf of the investors is a CIS. Investors do not have day to day control over the management and operation of such scheme or arrangement”.

In the following article, we are going to learn more about “Collective Investment Schemes” and “Collective Investment Management Companies”.

Features of Collective Investment Scheme:

1. In collective investment scheme, the contribution made by the investors are pooled and used in different schemes

2. The purpose of contribution by the investors is earn some profit, income, property i.e. movable or immovable from such scheme

3. Funds are managed by CIS instead of investor

4. Investors have no control on the management of funds

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CAPITAL MARKET INSTRUMENT

Posted by naths on April 13, 2011 at 1:54 PM

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Following are the terminology of capital market:

1. Pure Instrument: Equity shares, Preference shares and debenture or bonds which are issued with the basic charterstics without mixing the instruments are called Pure Instrument.

2. Hybrid Instrument : Those instrument which are created by combining the features of equity with bond, preference or equity shares is called as Hybrid Instrument. This is created in order to fulfill the needs of investors. For example: Convertible Preference Shares, Partial convertible debentures etc.

3. Derivative: are those instrument whose value is determined from the reference of other financial instruments. For example: future and option

4. Equity Shares: are those shares which refer to a part of ownership as a shareholder . These type of shareholder undertakes the maximum entrepreneurial risk associate with the business.

5. Preference shares: Sec. 85(1) of the Companies Act defines preferenceshares as those shares which carry preferential rights as the payment of dividend at a fixed rate and as to repayment of capital in case of winding up of the company. Thus, both the preferential rights include (a) preference in payment of dividend and (b) preference in repayment of capital in case of winding up of the company, must attach to preference shares.

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Blog

Basics of depository and depository participant

Credit Rating Agency : CRISIL

Credit Rating

Collective Investment Schemes ? As per Indian Companies and SEBI Act

CAPITAL MARKET INSTRUMENT

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