Stock on tap, Financial Management

Stock on Tap:

Most of the players who invest in these securities are institutions and hence the volumes are high. Considering that these securities are the first choice for banks to comply with SLR requirements, the demand is continuous. As all the institutional players deal with these securities in the demat form, the settlement procedures are also simple and thus enhance the liquidity. The secondary market transactions are essentially negotiated transactions between the players and hence they can be classified as OTC transactions.

The secondary market transactions in government securities are given in Table 1 of Appendix I. It is also known as the telephone market. In addition, the National Stock Exchange (NSE) has a wholesale debt market segment on which all the government securities are traded. Trading on NSE is screen-based. This facilitates all the participants to have online information about the trading. A participant who wants to initiate a deal or respond to an offer displayed on the screen, contacts one of the brokers who through his system places the order to buy or sell. The terms of the deal specify the details of the security, price, volume and date of settlement.

There is no prescribed settlement period in case of debt market as in the capital markets. Hence the deals may be entered for settlement on the same day or 1 or 2 days after the date of trading. Often, interbank GOI Sec trades settle on the same business day, whereas trades with non-bank counterparties settle either on the same day or up to five business days after the trade. If both the parties to the trade do not have current account but only an SGL account with the RBI, then the seller gives an SGL note detailing the transaction to the buyer. An SGL note is lodged with the RBI who makes the entries in the accounts of the two parties. All the institutional participants such as banks, FIs, Mutual Funds have an SGL account and Current Account with RBI. Both the buyer and the seller execute an SGL form under Delivery Versus Payment (DVP) system which is presented to the RBI. The RBI ensures the availability of funds with the buyer and security with the seller and posts these transactions in the Current Accounts and SGL Accounts.

 

Posted Date: 9/10/2012 7:38:17 AM | Location : United States







Related Discussions:- Stock on tap, Assignment Help, Ask Question on Stock on tap, Get Answer, Expert's Help, Stock on tap Discussions

Write discussion on Stock on tap
Your posts are moderated
Related Questions
Define operating cycle and long and short operating cycle? Use of operating cycle? Can someone give me assistance on these questions??

SAM Technology had AED 640,000,000 of retained earnings on December 31, 2012. The company paid common dividends of  AED 30,000,000 in 2012 and had retained earnings of  AED 500,000

The following are extracts of the Income Statement and Balance Sheet for Umar plc. Extract Balance Sheet at 30 June 20X2               20X1 £'000  £'000                £

Explain the pricing spill-over effect. Suppose a firm operating in a segmented capital market (such as China, for example) decides to cross-list its stock in New York or London.

What is Creative accounting Creative accounting (also termed as aggressive accounting or earnings management) distorts financial analysis of company accounts. Creative accounti


Taxation In the US, every state has a different set of rules governing the taxation of Hedge Funds and the investors who put their money in them. In some countries, Hedge Funds

Peak Inc. needs to order Canadian raw materials to use in its production process. The Canadian exporter typically invoices Peak in Canadian dollars. Assume that the current exchang

A proposal to extend the ABC Gas Company Ltd's gas distribution network to the NOIDA industrial cluster, about 40 km east of Delhi, at distance of about 20 kms from the ABC's exist

Brandon Michael Chu of Henry Law & Yang Yi Capital Limited believes that earnings and dividends at Alua Amanova & Shuwen Wang Technologies (AST) will continue to grow at 12% per ye