MONEY MARKET

DEFINITION:

XISS

MONEY MARKET IS THE MARKET FOR FINANCIAL ASSETS THAT ARE CLOSE SUBSTITUTES OF MONEY.

IT IS A MARKET FOR SHORT TERM FUNDS AND INSTRUMENTS HAVING A MATURITY PERIOD OF ONE OR LESS THAN ONE YEAR.

Characteristics of Money Market It is not a single market but a collection of markets for several

instruments It is a wholesale market of short term debt instruments Its principal feature is honour where the credit worthiness of the

participant is important. It’s a need based market wherein the demand and supply of money

shapes the market.

The money market is a mechanism that deals with

the lending and borrowing of short term funds

Functions of money market

Provides a balancing mechanism to even out demand and supply for short term funds

Provides a focal point for central bank intervention for influencing liquidity and general level of interest rates in the economy

Provides reasonable access to suppliers and users of short term funds to fulfill their borrowing and investment requirements.

Benefits of an efficient money market

Provides a stable source of funds to banks

Encourage development of non banking entities

Facilitates Government market borrowing

Makes effective monetary policy actions Helps in pricing different floating interest

products.

The Indian Money Market:

The average turnover of the money market in India is over 40,000 crore daily.

2% of the annual GDP of India gets traded in the money market in just 1 day

Even though the money market is many times larger than the capital market, it is not even a fraction of the daily trading in developed markets.

To ensure liquidity and short term interest rates are maintained at levels consistent with monetary policy

To ensure adequate flow of credit to the productive sectors of the economy

To bring about order in the forex market

Role of RBI in Money Market:

Money Market instruments

Treasury Bills (T-Bills) Call/Notice money market CPs CDs CBs Collateralized Borrowing and Lending

Operations (CBLOs)

Treasury Bills1

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A T-bill is a particular kind of Finance Bill or promissory note put out by the Govt. (A finance bill is a bill which does not arise from any genuine transaction in goods…)

T Bills are short term instruments issued by the RBI on behalf of the Govt. to tide over short term liquidity shortfalls.

Treasury Bills are money market instruments to finance the short term requirements of the Government of India. These were first issued in 1917

These are discounted securities and thus are issued at a discount to face value. The return to the investor is the difference between the maturity value and issue price.

It is issued by the Central Govt. Though it were earlier issued by the state Govts. too until 1950

XISS

Features They are negotiable instruments They are highly liquid There is no risk of default They have an assured yield, low transaction cost There are 92, 182 and 364 day t bills They are not issued in scrip form (are issued in the form of promissory

note in physical form or by credit to Subsidiary General Ledger (SGL) account or Gilt account in dematerialised form.)

They are repaid at par on maturity and sold through fortnightly or monthly auctions at varying discount rate depending upon the bids.

T Bills are available for a minimum amount of Rs. 25000 and in multiples there off.

All entities registered in India like banks, financial institutions, Primary Dealers, firms, companies, corporate bodies, partnership firms, institutions, mutual funds, Foreign Institutional Investors, State Governments, Provident Funds, trusts, research organisations, Nepal Rashtra bank and even individuals are eligible to bid and purchase Treasury bills.

Eligible for inclusion in SLR Repayment : The treasury bills are repaid at par on the expiry of their

tenor at the office of the Reserve Bank of India, Mumbai. Availability : All the treasury Bills are highly liquid instruments available

both in the primary and secondary market. Negligible capital depreciation

Features

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 Form The treasury bills are issued in the form of

promissory note in physical form or by credit to Subsidiary General Ledger (SGL) account or Gilt account in dematerialised form.

Minimum Amount Of Bids Bids for treasury bills are to be made for a

minimum amount of Rs 25000/- only and in multiples thereof.

 Eligibility: All entities registered in India like banks, financial

institutions, Primary Dealers, firms, companies, corporate bodies, partnership firms, institutions, mutual funds, Foreign Institutional Investors, State Governments, Provident Funds, trusts, research organisations, Nepal Rashtra bank and even individuals are eligible to bid and purchase Treasury bills.

   

Repayment The treasury bills are repaid at par on the

expiry of their tenor at the office of the Reserve Bank of India, Mumbai.

 Availability All the treasury Bills are highly liquid

instruments available both in the primary and secondary market.

 Day Count For treasury bills the day count is taken as 365

days for a year.

Calculation of Yield at MaturityThe yield of a Treasury Bill is calculated as per the

following formula:

(100-P)*365*100

Y = ---------------------

       P*D

Wherein 

Y = discounted yield ; P= Price; D= Days to maturity

    

Example A cooperative bank wishes to buy 91 Days Treasury Bill Maturing on Dec. 6, 2002 on Oct. 12, 2002. The rate quoted by seller is Rs. 99.1489 per Rs. 100 face values. The YTM can be calculated as following:

The days to maturity of Treasury bill are 55 (October – 20 days, November – 30 days and December – 5 days)

YTM = (100-99.1489) x 365 x 100 (99.1489*55)

Similarly if the YTM is quoted by the seller price can be calculated by inputting the price in above formula.

=5.70%

Types: On Tap Bills Ad hoc Bills Auctioned T Bills

On Tap Bills: are bills that could be bought from the RBI any time at an interest yield of 4.66%. They were discontinued from April 1, 1997 as they lost their relevance.

Types Of Treasury Bills There are different types of Treasury bills based on the maturity period and utility of the issuance like, ad-hoc Treasury bills, 3 months, 12months Treasury bills etc. In India, at present, the Treasury Bills are the 91-days and 364-days Treasury bills.

Ordinary

Ad-hoc

T-Bills

Ad-hocs

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Have been discontinued since 1997. Was first used in 1937

Ad hoc Bills: these were introduced afresh in1955, It was decided between the RBI and the Govt. of India that the Govt. could maintain with the RBI a cash balance of not less than 50 crores on Fridays and 4 crores on other days, free of obligation to pay interest thereon. And whenever the balance fell below a minimum the Govt. a/c would be replenished by creation of ad hoc bills in favour of RBI.

Adhoc 91d TBs were widely used for replenishment of Govt’s cash balance with the RBI, which is nothing but an Accounting Measure in RBI’s books, resulting in automatic monetisation of Govt’s budget deficit.

They were issued at an unduly low market rate … remained at 4.6% for many years and became vehicles for automatic monetisation of budget deficit.

Moreover, In 70 and 80s a large proportion of these bills were converted into: 1)long term dated and 2)undated securities. They put a constraint in RBI’s credit policy Somehow, this wasn’t desirable and therefore:

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The Govt. of India entered into an agreement with the RBI on Sep 9, 1994 to phase out the system of adhocs

The agreement provided: That at the end of the year 94-95 the net issues should not exceed

6000 crores That the net issues should not exceed 9000 cr for more than 10

continuous working days during 94-95 If it exceeds the RBI will reduce the excess by auctioning Tbills or

floating Gsecs Has to be totally discontinued from 97-98

Fresh agreement on March 26, 1997 which provided : System of adhocs will be discontinued from April 1, 1997 That the outstanding Adhocs & Taps will be converted into special

securities without any specific maturity date at an interest rate of 4.6% pa.

That a system of “ways and means advance” (WMA) by the RBI to the GOI will be introduced from April 1, 1997 to accommodate temporary mismatch in GOI’s receipts and payments.

When 75% of WMA limits is utilised the RBI will trigger fresh issues. That OD will not be permissible for periods exceeding 10 consecutive

working days

Auctioned TBills: They were first introduced in April 1992. The RBI receives bids from various participants and issues the bills subject to some cut-off limits. Thus the yields are market determined. These bills are neither rated nor can they be rediscounted with the RBI. At present RBI issues T Bills of 3 maturities: 91, 182 and 364 days. Types Of Treasury Bills There are different types of

Treasury bills based on the maturity period and utility of the issuance like, ad-hoc Treasury bills, 3 months, 12months

Treasury bills etc. In India, at present, the Treasury Bills are the 91-days and 364-days Treasury bills.

Importance of T-Bills:

It is central to the growth of money market. They play a vital role in the cash

management of the Govt. act as a benchmark and helps in pricing

different floating rate products in the market

It is the preferred central bank tool for market intervention to influence liquidity and short term interest rates.

Benefits Of Investment In Treasury Bills

No tax deducted at source Zero default risk being sovereign paper Highly liquid money market instrument Better returns especially in the short term Transparency Simplified settlement High degree of tradability and active

secondary market facilitates meeting unplanned fund requirements.

Primary Market

XISSTreasury Bill Notified amount (Rs

crore) Day of auction Day of payment

91 day 500 Every Wednesday Following Friday

364 day 1000 Wednesday to coincide with reporting Friday

Following Friday

In the primary market, treasury bills are issued by auction technique.

CALENDAR OF AUCTION AS ANNOUNCED BY RESERVE BANK OF INDIA FOR 2002-03

Salient Features Of The Auction Technique

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The auction of treasury bills is done only at Reserve Bank of India, Mumbai.

Bids are to be submitted on NDS by 2:30 PM on Wednesday. If Wednesday happens to be a holiday then bids are to submitted on Tuesday.

Bids are submitted in terms of price per Rs 100.  For example, a bid for 91-day Treasury bill auction could be for Rs 97.50. 

Auction committee of Reserve Bank of India decides the cut-off price and results are announced on the same day.

Bids above the cut-off price receive full allotment; bids at cut-off price may receive full or partial allotment and bids below the cut-off price are rejected.

Difference between Govt. Dated Securities and T Bills

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Both are credit instruments or Securities and are used to finance the Government’s deficit

T-bills are short-term securities that mature in one year or less from their issue date.

Government Bonds are long-term (1 year and above) debt instruments. They are generally issued for a period of five to thirty years.

Bonds are issued in the name of each holder, while Treasury Bills are bearer documents

TBill Rates:

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It is the rate of interest at which TBills are sold by the RBI. The effective return on the TBills is the discount at which

they are sold and is based on the difference between the price at which they are sold and their redemption value.

It used to be administered as well as the lowest till 1993 . It increased from 2.52% in 55-56 to 4.60% in 74 but as

per the recommendation of the Chakravarti and Vaghul Committee the system of fixed rate of discount of 4.6% was replaced by the system of flexible interest rate:

92-93: 10.68% 93-94: 7.08-11.10% 94-95: 7.21-11.90% 95-96: 11.40-12.70% 96-97: 6.92-12.97%

2

Call/Notice money is the money borrowed or lent on demand for a very short period. When money is borrowed or lent for a day, it is known as Call (Overnight) Money. Intervening holidays and/or Sunday are excluded for this purpose. Thus money, borrowed on a day and repaid on the next working day, (irrespective of the number of intervening holidays) is "Call Money". When money is borrowed or lent for more than a day and up to 14 days, it is "Notice Money". No collateral security is required to cover these transactions.

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Call/Notice Money

Facts & Characteristics of C/N MM It is a key segment of the Indian money market

and accounts for the major part of the total turnover of the money market.

It is a highly liquid market and highly risky as well It is required mostly by banks - because

Commercial banks need to maintain a minimum cash balance called CRR and for this they need inter bank borrowings. In fact this is what has led to the development of the call money market.

It is basically an over-the-counter (OTC) market without the intermediation of the brokers.

What is CRR?

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CRR is a technique for monetary control effected by RBI for achieving specific macro-economic objective/s like maintaining desired level of inflation, growth exchange rates etc.

CRR refers to the cash that banks have to maintain with the RBI as a certain % of their total demand and time liabilities (DTL). It is about 9% July-Aug 08

Prior to May2000, banks were required to maintain 85% of their fortnightly reserve requirements on a daily basis. But because of low branch networking it wasn’t possible to report the NDTL in time.

To bring in more flexibility in the system, a lagged reserve maintenance system was introduced in Nov 99 whereby, banks were allowed to maintain reserve requirements on the basis of the last Friday of the 2nd (instead of 1st) preceding fortnight.

From May 6, 2000 this requirement of 85% balance on the first 13 days was brought down to 65%. From Aug 11, 2000 it was brought down to 50% for the first 7 days of the reporting fortnight while maintaining 65% for the remaining 7 days including the reporting Friday.

The daily minimum CRR was reduced to enable the smooth adjustment of liquidity between surplus and deficit segments and better cash management to avoid sudden increase in overnight call rates.

Hence, once every fortnight on a reporting Friday banks have to satisfy

reserve requirements which often involves borrowing in the call/notice

money market.

Participants in the call money

LENDERS & BORROWERS

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Was predominantly an inter-bank market till 1971 when UTI & LIC were allowed to operate as lenders

Until 1978 brokers were also allowed 90s the participation was gradually widened to

include DFHI (Disc & fin hs of India ltd.), STCI, GIC, NABARD, IDBI, MMFs. Corporates, Pvt. Sector Mutual Funds etc as lenders in this market.

Who plays the role of both lenders and borrowers are scheduled and non-scheduled commercial banks, foreign banks, state, district and urban cooperative banks, DFHIs

1996-97 even Primary dealers have been allowed

LENDERS

From August 6, 2005 call money market is now a pure inter-bank money market

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Reporting of call/Notice Money Transaction: In order to improve transparency reporting of call or notice money market transactions on the NDS(Negotiated Dealing System) was made compulsory w.e.f May 3rd, 2003 -> Any transaction whether executed on the NDS or outside it or whether the counter member is a member of NDS or not is to be reported on the NDS.

Role of RBI in the Call Money Market: In 2 ways: By providing lines of finance (additional funding) to the DFHIs and other

call money dealers & By conducting REPO auctions (This increases liquidity in the market and

brings down call money rates) Reverse Repo absorbs excess liquidity

Link between call money market and other Financial Markets: CALL rates and Short term money market instruments

If it goes up banks resort to CDs; if it goes down banks funds CPs Investment in Govt. Securities

MIBOR

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The NSE (National Stock Exchange) developed and launched the: NSE Mumbai Inter-bank Bid Rate (MIBID) & NSE Mumbai Inter-bank Offer Rate (MIBOR) for overnight money markets on

June 15, 1998 Both are based on rates pooled by the NSE from a representative

panel of 31banks/institutions or PDs (Reuters MIBOR [Mumbai Inter-bank Overnight Average] is arrived at by obtaining a weighted average of call money transaction of 22 banks and other players.)

PROCESS: Currently, quotes & rates are pooled and processed daily by the

exchange at 9:40 (IST) for overnight rates & 11:30 (IST) for 14d/1m/24m rates

The rates pooled are then processed using the Bootstrap method to arrive at an efficient estimate of the reference rates.

This rate is used as a benchmark rate for majority of deals struck for floating rate debentures and term deposits. (the benchmark is the rate at which money is raised at the financial markets)

These rates are used in hedging strategies and as reference points in forwards and swaps also.

1. On a typical day, 20 dealers are polled at random from a panel of 30.

2. Each dealer is asked to report the best borrow/lend rates at Rs.10 crore. Some dealers, e.g. UTI, only report best lend rates.

3. The bootstrap is used to obtain inference for trimming zero to four extreme observations. This is used to choose a “best” k. The bootstrap additionally gives a sampling standard deviation.

4. Two rates are reported: MIBID and MIBOR, and each is accompanied by a standard deviation.Implicit in these is an additional time–series for the bid–ask spread at Rs.10 crore on the call money market. (http://www.mayin.org/˜ajayshah)

More on MIBOR (How is it done?)

Bootstrapping is the practice of estimating properties of an estimator (such as its variance) by measuring those properties when sampling from an approximating distribution.

Factors influencing call money market rate:

Liquidity conditions (d/s > dep mob, rsv rqmts/ taxation, govt borrw)

Reserve requirement stipulations (cut in crr increases call rates) Structural Factors ( govt legislations, cond of stock mkt) Investment policies of NB participants Liquidity changes and gaps in FOREX markets (call rates inc during

volatile forex conds.)t

Measures for curbing high volatility: Increasing the number of participants Through Repo options by RBI Freeing the inter-bank liabilities by easing reserve

requirements Investment policies of NB participants Size of the call money market

3

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A commercial paper is an unsecured short term promissory note issued at a discount by credit worthy corporates, primary dealers and all India financial institutions. (Was introduced in India in Jan 1990)

Characteristics: It is an unsecured short term promissory note. It is negotiable and transferable by endorsement and delivery with a

fixed maturity period CPs are normally issued in multiples of five Lakhs (therefore min is 5

lakhs) for 30/45/60/90/120/180/270/364 days. Generally issued at a discount by leading creditworthy and highly

rated corporates to meet their working capital requirements Companies can issue CPs either directly to the investors or through

banks/merchant banks (called dealers). Depending upon the company the CPs is also known as a finance

paper or an industrial paper. CPs have to be compulsorily rated by a recognized credit rating

agency, companies can issue CPs only if they have a short term rating of P2 by Crisil (or atleast P1/A1.) [http://india.smetoolkit.org]

Commercial Paper

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A company issues CPs to save on interest costs i.e. it issues CPs only when the situation is such that CP rates are lower than the rate at which it borrows money from its banking association.

Corporates are allowed to issue CPs up to 100% of their fund based working capital limits

The paper attracts stamp duty No prior approval of the RBI is required to issue a CP and underwriting

the issue is also not mandatory. A CP is issued as an unsecured promissory note or in a dematerialized

form at a discount which is freely determined by market forces. The paper is usually priced between the lending rate of SCBs and a representative money market rate. (as represented by CDs and TBs)

A CP can be issued to individuals, banks, companies and other registered Indian corporate & unincorporated bodies. NRIs can be issued a CP only on a non-transferable and non-repatriable basis. Banks are not allowed to underwrite or co-accept the issues of a CPs

Banks are the main lenders of this market, call markets affect CP rate; lower call rates mean cash surplus, banks scrutinize CPs as an alternate investment route. Higher call rates also discourage corporates form issuing CPs as it leads to higher cost of funds.

FIs are eligible to invest in CPs but within limits prescribed by SEBI

The process of issuing a CP

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A resolution is passed by the BOD approving the CP issue as per the RBI norms

The issue then has to be rated by a credit rating agency (is completed within 2-3 weeks

The company has to select an issuing and paying agent (IPA) which has to be a scheduled bank.

The IPA verifies all the documents and minimum credit rating stipulations

Then the company has to arrange for dealers such as merchant bankers, brokers and banks for placement which has to be completed within 2 weeks of opening.

Every CP issue has to be reported to the RBI through the IPA

SCBs are major investors in CPs as banks prefers investing in CPs because sanctioning loans block up the funds for a longer time period.

XISSAs per the annual report 2008 published by RBI, the total outstanding amount of commercial papers issued by Corporates increased from INR 17,863 Crores (March 2007) to INR 50,062 Crores (January 2008) – a 180% increase in a period spanning 10 months. Although, seasonal year-end redemptions led to a decline in the figures in March 2008 with outstanding amount at INR 32,592 Crores (a y-o-y increase of 82.45%). July 2008 saw the issuance of CPs reaching INR 51,569 Crores. The report also observes that the fortnightly average issuance of CPs during 2007-08 was INR 4,153 Crores as compared to INR 2,322 Crores during 2006-07.

XISS

The Weighted Average Discount Rate (WADR) on CPs declined from 11.33% on March 31, 2007 to 7.65% at end-October 2007 but hardened to 10.38% as on March 31, 2008 and further to 10.95% as on July 31, 2008. The most preferred tenor of CP issuance was for period 180 days and above.

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In terms of non-SLR Investments made by Scheduled Banks, observing figures for the year 2007 indicate that Commercial Papers constituted 9.4% (at INR 8,978 Crores) of the total non-SLR investments made, as compared to its preceding year at 5.4% (INR 4,821 Crores). Bonds/Debentures still remain the biggest avenue although their share has been a reasonable decline over the past four years. Shares and Mutual Funds are the other two destinations where the banks are routing their non-SLR investments.

Some Examples of CP issuers:In the recent past, prominent corporates

like: Power Finance Corporation Rural Electrification Corporation Tata Power, Tata Motors Simplex Infrastructure IDFC etc.

have been observed raising short-term funds through commercial papers (CPs) and debentures.

Commercial Bills4Trade bills are

called Commercial

Bills

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A commercial bill is a short term, negotiable and self liquidating instrument with low risk.

It is a negotiable instrument drawn by the seller on the buyer for the value of goods delivered to him (and are called Trade Bills.) These are, in turn, accepted and discounted by commercial banks and when such bills are accepted by the commercial banks they are called Commercial Bills.

The banks discounts this bill by keeping a certain margin and credits the proceeds.

The Commercial banks in turn, if they need money, gets these bills rediscounted by financial institutions like LIC, UTI, GIC, ICICI and IRBI.

The maturity period of the bills varies from 30ds – 60ds – 90ds.

Types of Commercial Bills

Demand Bill / Usance Bill Clean Bill / Documentary Bill Inland Bill/ Foreign Bill - Export

Bill/Import Bill Hundi Derivative usance promissory notes

Demand Bill / Usance Bill: A demand bill is payable on demand, i.e., immediately at sight or on presentation to the drawee. A usance bill is payable after a specified period of time.

Clean Bill / Documentary Bill: In a Clean Bill documents are enclosed and delivered against acceptance by the drawee after which it becomes clear. & in case of Documentary Bill documents are delivered against payment accepted by the drawee and documents of the file is held by the banker till the bill is paid.

Inland / Foreign Bills: Inland bills must be (a) drawn or made in India and must be payable in India (b) drawn upon any person resident in India. Foreign bills on the other hand are (a) drawn outside India and may be payable in and by a party outside India, or may be payable in India or drawn on a party in India or (b) It may be payable in India and payable to a party outside India.

XISS

A bill of lading is a document issued and signed by a transportation company to show receipt of goods for transportation from and to the point of destination.

A clean bill of lading, simply put, is when the goods received by the carrier (transportation company) are in appropriate condition with no defects or damage to goods and/or packaging. If, for example, the container received by the carrier was damaged, the carrier makes a notation that expressly declares the defective condition of the container. Ultimately, it is the exporter who will be responsible financially because of the damaged container and or package to be shipped.

A documentary bill Is used when the seller of goods to a customer abroad wishes to obtain payment or some form of security before the goods are actually delivered.

When drafts are deliverable only upon acceptance, the draft is known as a documentary acceptance bill; when deliverable only upon payment, the draft is called a documentary payment bill.

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With a view to eliminating movement of papers and facilitating multiple rediscounting, the RBI introduced an innovative instrument known as "Derivative Usance Promissory Notes" backed by such eligible commercial bills for required amounts and usance period (up to 90 days). Government has exempted stamp duty on derivative usance promissory notes. This has indeed simplified and streamlined the bill rediscounting by Institutions and made commercial bill an active instrument in the secondary money market. Rediscounting institutions have also advantages in that the derivative usance promissory note, being a negotiable instrument issued by a bank, is good security for investment. It is transferable by endorsement and delivery and hence is liquid. Thanks to the existence of a secondary market the rediscounting institution can further discount the bills anytime it wishes prior to the date of maturity. In the bill rediscounting market, it is possible to acquire bills having balance maturity period of different days upto 90 days. Bills thus provide a smooth glide from call/overnight lending to short term lending with security, liquidity and competitive return on investment. As some banks were using the facility of rediscounting commercial bills and derivative usance promissory notes for as short a period as one day merely a substitute for call money, RBI has since restricted such rediscounting for a minimum period of 15 days.

Import / Export Bills: Export bills are drawn by exporters in any country outside India and Import bills are drawn on importers in India by exporters abroad.

Hundi: It is an indigenous variety of BOE for financing the movement of agricultural produce. It has a long tradition of use in India and is in vogue among indigenous bankers for raising money or remitting funds or to finance inland trade. Indigenous bankers have so far dominated the bill market but with the reforms in the financial system and lack of private funds, their role is on a decline.

Derivative usance promissory notes: These are notes introduced by the RBI with a view to eliminating movements of papers and facilitating multiple rediscounting. These are backed by eligible commercial bills for the required amounts and a usance period (up to 90 ds.) The Govt. has exempted stamp duty on DUPNs. (the min period of rediscounting is 15ds)

Features of CBs in India

XISS

CBs ensure improved quality of lending, liquidity and efficiency in money management.

It is fully secured for investment since it is transferable by endorsement and delivery and it has a high degree of liquidity.

The bill market is highly developed in industrial countries but it is very limited in India.

CB rediscounted by commercial banks with Fis amount to less than 1000 cr.

In India the bill market is not developed due to (i) the cash-credit system of credit delivery (where the onus of cash management rests with the banks) (ii) an absence of an active secondary market.

Certificates of Deposits

XISS

CDs are unsecured, negotiable, short term instruments in bearer form issued by Commercial Banks and DFIs.

CDs were introduced from June 89. Only SCB excluding RRBs and local area banks were allowed to issue them initially. FIs were permitted to issue CDs within the limits fixed by RBI in 1992.

CDs are time deposits of specific maturity similar to FDs. The biggest difference is CDs are in bearer form and are transferrable and tradable whereas FDs are not.

CDs are subject to CRR and SLR requirements. There is no ceiling on the amount that can be raised by the banks.

The deposits attracts stamp duty and can be issued to individuals. Corporations, trusts, companies, funds, associates an others.