No doubt that India is in the phase of bull run. The brokers calling you for more investment for securities, Mutual funds, debt, Insurance etc. I know people hate to visit the regulatory websites like SEBI, RBI, IRDA and make most of their decision based on the brokers advise.
Quick question before proceeding further how many ever read the prospectus before signing the document for investments.? I guess very few of them.
Sharing some bold points issued by SEBI for securities & Mutual funds at least this is minimum information the person should have before investing 🙂
For Securities : Continue reading “Bull run and the Brokers chase”
Commodity derivatives markets started in India in 1990s, The National Agriculture Policy, announced by the government in 2000, advocated the development of futures markets so that consumers and producers of commodities could use these contracts to procure commodities at a more rational price than at the Minimum Support Price (MSP) set by the government, which came with a large cost to the exchequer. This set in place a drive of reforms in these markets, following the reform model that had lead to the development of the Indian equity markets previously.
In 2003 commodity futures contracts started trading on electronic exchanges with a nation-wide reach. Counterparty credit risk, that was a serious problem in the older exchanges, was eliminated using netting by novation at clearing houses similar to their more visible equity derivatives cousins. Total traded Continue reading “Commodity Futures need revolution in India”
This morning was comparing mutual funds for the personal investment and than thought of sharing some basic myths and facts on them.
Wealth creation over the years has changed its avenues and area of interest for the investors in India. The prototype investment where the post offices and typically the scheduled banks through savings and fixed deposits have changed and with the awareness of finance, Mutual fund has become an excellent route to create wealth for the public at large.
“Mutual fund is a pool of money is invested in accordance with the common objective stated before the investment to the investors.”
Here is the concept of mutual fund which is a suitable for the common man as it offers an opportunity to invest and diversified, professionally managed basket of securities comparatively at low-cost. Continue reading “The facts and Myths about Mutual fund”
Across the world we have seen the unification of trading in all kinds of products — spot or derivatives, equities or currencies or fixed income or commodities etc., OTC or exchange. It makes too much sense to reap economies of scale and economies of scope, both in the private sector and in the work of regulation and supervision. The arrangement in India, where the Forward Contracts Regulation Act (1952) envisages the Forward Markets Commission that is a part of the Department of Consumer Affairs, is a silly one.
Everything we have learned about how to run the equity market is valuable for commodity futures:
- The regulatory governance process at SEBI including authority to issue regulations, enforcement process, appeals at SAT, etc.
- Governance problems of Infrastructure Institutions with three-way separation between shareholders, managers and trading members.
- Netting by novation at the clearing corporation.
- Not having `badla’ trading. Continue reading “The Commodity Futures is under Ministry of Finance”
The Securities and Exchange Board of India (SEBI) announced not long back.
Presently, mutual funds are not allowed to appoint a custodian belonging to the same group, if the sponsor of the mutual fund or its associates hold 50 per cent or more of the voting rights of the share capital of such a custodian or where 50 per cent or more of the directors of the custodian represent the interests of the sponsor or its associates.
The Board has decided that the custodian in which the sponsor of a mutual fund or its associates are holding 50 percent or more of the voting rights of the share capital of the custodian, would be allowed to act as custodian subject to fulfilling the following conditions i.e. (a) the sponsor should have net worth of atleast Rs.20,000 crore at all points of time, … Continue reading “Worth of Net worth”