Bond

YOGESH NAMDEO INGLE. MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.

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BONDS

It is a fixed income (debt) instrument issued for a period of more than one year with the purpose of raising capital.

The central or state government, corporations and similar institutions sell bonds.

A bond is generally a promise to repay the principal along with a fixed rate of interest on a specified date, called the Maturity Date

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In the Indian securities markets, the term ‘debenture’ is used for debt instruments issued by the Central and State governments and public sector organizations and the term ‘bond’ is used for instruments issued by private corporate sector.

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TYPES OF BONDS

Zero Coupon Bond Bond issued at a discount and repaid at a

face value. No periodic interest is paid. The buyer of these bonds receives only

one payment, at the maturity of the bond.

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CONVERTIBLE BOND

A bond giving the investor the option to convert the bond into equity at a fixed conversion price.

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TREASURY BILLS

Short-term (up to one year) bearer discount security issued by government as a means of financing their cash requirements.

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MUTUAL FUNDS IN INDIA

The first introduction of a mutual fund in India occurred in 1963, when the Government of India launched Unit Trust of India (UTI).

Market was made open to private players in 1993.

The first private sector fund to operate in India was Kothari Pioneer, which later merged with Franklin Templeton

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http://en.wikipedia.org/wiki/Mutual_fund

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Government_of_India

http://en.wikipedia.org/wiki/Unit_Trust_of_India

http://en.wikipedia.org/wiki/Private_sector

http://en.wikipedia.org/wiki/Franklin_Templeton_Investments


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MUTUAL FUNDS

Collective investment Pools money from many investors Invests it in stocks, bonds, short-term

money market instruments and other securities.

Fund manager

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MUTUAL FUNDS : STRUCTURE IN INDIA

3-tier structure First tier- Sponsor, who thinks of

starting a mutual fund. The Sponsor approaches the Securities

& Exchange Board of India (SEBI), which is the market regulator and also the regulator for mutual funds.

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Second tier- Once SEBI is convinced, the sponsor creates a Public Trust as per the Indian Trusts Act, 1882.

Once the Trust is created, it is registered with SEBI after which this trust is known as the mutual fund.

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Third tier-Trustees appoint the Asset Management Company (AMC), to manage investor’s money.

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The AMC’s Board of Directors must have at least 50% of Directors who are independent directors.

It is the AMC, which in the name of the Trust, floats new schemes and manage these schemes by buying and selling securities.

Whenever the fund intends to launch a new scheme, the AMC has to submit a Draft Offer Document to SEBI.

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After getting SEBI approval it becomes the offer document of the scheme.

This certificate says that all the information Provided inside the OD is true and correct.

A compliance Officer is one of the most important persons in the AMC.

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CUSTODIAN

A custodian’s role is safe keeping of physical securities and also keeping a tab on the corporate actions like rights, bonus and dividends declared by the companies in which the fund has invested.

Custodian is appointed by the Board of Trustees.

Only the physical securities are held by the Custodian.

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AMC

Manage investor’s money on a day to day basis.

All activities by the AMC are done under the name of the Trust, i.e. the mutual fund.

The AMC charges a fee for providing its services.

The fee is charged as a percentage of the scheme’s net assets.

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HELP YOURSELF

MF

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Economy & Finance

Transcript of Bond