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Introduction Introduction
Largest components of the Financial System . Debt larger than the other financial markets in the developed world Indian debt market estimated at appx. more than $100 billion.
competitive structure , low transaction cost, safe market infrastructure, high level market heterogeneity among market participants.
Introduction Introduction
STRUCTURE OF SECURITIES MARKET IN INDIA
Securities Market
Equity Market
Debt Market
Derivatives Market
Money Market
deals in short term debt instruments
Options Market
Futures Market
Regulators
RBI: Operates both as the monetary authority and the debt manager to the government. As a monetary authority, Participates in the market through open-market operations as well as through Liquidity Adjustment facility (LAF) to regulate the money supply. Regulates the bank rate and reverse repo rate As the debt manager issues the securities at the cheapest possible rate. Also supervises banks and development financial institutions. SEBI: Regulates the debt instruments listed on the stock exchanges. It issues guidelines for its issuance and also for their listing on stock exchanges. The secondary market trading is conducted as per the rules set by the SEBI.
Growth in WDM
Process of Issuing Government Securities- Primary Market Government issues securities through Auction (Dutch/ French) on price or yield basis:
On price basis, the coupon is predetermined, then the bidders should quote price per Rs. 100 of the face value of the security. On yield basis, then the coupon of the security is decided in an auction and the security carries the same coupon till maturity.
Process of Issuing Government Securities- Primary Market Government issues securities through
Tap sale:
No aggregate amount is indicated in the notification in respect of the securities sold on tap. Sale of such securities may be extended to more than one day and the sale may be closed at any time on any day.
Primary Market new debt issues through prospectus, rights or private placements, BODs
Primary Market new debt issues through prospectus, rights or private placements, BODs
Negotiated Dealing System (NDS) of RBI Electronic platform for negotiated trades in Government Securities and Money Market Instruments. Participants (Banks, FIs, MFs, PDs) have SGL a/c with RBI Negotiated directly between counter parties or negotiated through brokers Facilitates online reporting of transactions in the instruments available on the NDS.
Wholesale Debt Market of NSE Permits only high value transactions in debt securities. Primarily for banks, institutional and corporate participants and intermediaries. All types of SLR (Government securities, T-bills etc.) and non-SLR (CPs, CDs etc.) securities are available for trading in the WDM segment of the NSE.
Debt instruments traded on OTCEI, BSE AND WDM segment of NSE. Govt securities-Bills, bonds of PSUs, floating rate bonds, index bonds, commercial paper , etc available for trading.
Secondary Segment of Debt market Debt instruments traded on OTCEI, BSE AND WDM segment of NSE. NSE provides screen based trading through NEAT. BSE provide electronic trading platform for corporate & other non govt. debt securities through order matching system.
With warrants
DEEMED DATE OF ALLOTMENT ALLOTMENT PUT/CALL OPTION TENOR REDEMPTION SECURITY INTEREST PAYMENT DATE
LISTING TRUSTEE
Pricing shares arising out of Warrant, Conversion Pricing of shares arising out of warrants or on conversion
Priced not less than higher of following
Av of weekly high & low of closing price of related shares during 6 months or 2 weeks preceding the relevant date
Relevant date is 30 days prior to the date on which the sh holders meeting is held or 30 days prior to the date on which warrant holders become entitled to apply for said shares 25% of price fixed becomes payable for warrant on allotment
To be adjusted against price payable subsequently for acquiring shares by exercising the option Forefeited if option not exercised
Listing of Warrants Along with NCDs Issuer is a listed Company Issued as combined offering of NCDs NCDs & Warrants to be traded in min lot of Rs 1 lakh Application to be given to SEBI through designated stock ex of listed company
Scrip Code roup Market Lot Date of Allotment Warrant Issue price
Warrant Exercise Price Warrant Exercise Ratio Scrip ID on BOLT System Detail Name on the Bolt System ISIN No. Distinctive numbers Warrant Exercise Period
Banks investment in unlisted non SLR securities restricted to 10% of the total investments in non SLR securities.
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