Financial Markets Test - 2

Money market instrument enjoy a higher degree of liquidity. A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded.

SEBI is not a participant in money market. The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India. In April 1988 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India.

TYPES OF MONEY MARKET INSTRUMENTS

•  Treasury Bills. Treasury bills (T-bills) are short-term notes issued by the U.S. government.
•  Federal Agency Notes.
•  Short-Term Tax Exempts.
•  Certificates of Deposit.
•  Commercial Paper.
•  Bankers' Acceptances.
•  Repurchase Agreements.

OTCEI (Over the Counter Exchange of India) was incorporated in the year 1990 on the lines of NASDAQ which is the OTC in USA. OTCEI is a fully computerized and transparent stock exchange.

A Settlement Cycle refers to a calendar according to which all purchase and sale transactions done on T Day are settled on a T+2 basis i.e. on the 2nd working day, At NSE.

The Securities and Exchange Board of India is the regulator for the securities market in India. It was established in the year 1988 and given statutory powers on 30 January 1992 through the SEBI Act, 1992.

A Treasury bill (T-Bill) is a short-term debt obligation backed by the Treasury Dept.

Capital Market is a market dealing in medium and long-term funds. It is an institutional arrangement for borrowing medium and long-term funds and which provides facilities for marketing and trading of securities.

The instruments traded (media of exchange) in the capital market are:

• Debt Instruments.
• Equities (also called Common Stock)
• Preference Shares.
• Derivatives.

A treasury bill is an instrument of short term debt. Treasury bills are sold with maturities of four, thirteen, twenty-six and fifty-two weeks.