Indian Depository Receipt: It is a foreign company issuing equity share in Indian stock markets.
Standard Chartered Bank issue IDR in India denominated in rupees.
American Depository Receipt: In the Indian context, an Indian company issues equity shares denominated in US dollar issue in the US stock exchange. ADR represents one share in an Indian company.
Eg: Infosys issued ADR in New York Stock exchange.
Global Depository Receipt: In India context, Indian company issuing Equity share denominated in US dollar issue in an exchange other than US stock exchange. Each GDR represents 2 shares of Indian companies.
Sponsored Depository Receipt: Promoters reduces their holdings and converts that share as depository receipt and issued in respective stock exchange.
Automated Lending and Borrowing Mechanism: The scheme is introduced by NSE (National Stock Exchange) that acts as a facilitator financing and securities lending.
Applications Supported by Blocked Amount: ASBA is a system developed by SEBI (Securities Exchange Board of India) in the process of IPO (Initial Public Offer) for the sake of investor, the amount is only debited in case of allotment of shares.
At-The-Money: Here strike price is equal to current stock price. Either call option or put option the underlying stock price equals to strike price.
In-The-Money: Current market price > strike price of the call option
Current market price < strike price of the put option
For example, the market price is INR. 37.5 and strike price is INR. 35 and INR. 2.5 is the profit and which is intrinsic value.
Out-The-Money: Current market price < strike price of the call option
Current market price > strike price of the put option
Alternative trading system: It is an alternative trading stock exchange which is approved by the US SEC (United States Securities Exchange Commission) for non-exchange trading.
Base Minimum Capital: It is measurable for risk management by which brokers are required to deposit a certain amount of capital with the exchange.
Bombay Stock Exchange: One of the oldest stock exchange situated in India established in 1875 and Asia’s first stock exchange.
National Stock Exchange: India’s leading stock exchange established in 1992 as the first demutualized electronic exchange in the country.
Clearing Corporation of India Limited: A body to set up and overview the regulation of settlement procedure and efficiency and related issues.
Central Depository Services (India) Limited: It is promoted by BSE and second Central securities depository based in Mumbai to hold securities either certificated or D-mat form.
National Securities Depository Limited: India’s first electronic central securities depository limited based in Mumbai.
Carry Forward under Rolling Settlement: It is the system introduced and used by BSE to provide the proper amount of lubrication in the form of liquidity.
Clearing House: To facilitate clearing of payments, securities or derivative transactions on the exchanges between firms and members.
Collective Investment Management Company: A Collective Investment Management Company which has obtained a certificate under these regulations shall carry on or sponsor or launch a collective investment scheme.
Trading Members: Entitles the members only to trade on his own account as well as on account of his clients.
Trading cum Clearing Members: Entitles the members to trade and clear, both for themselves and/or on behalf of their clients.
Institutional Trading cum Clearing Member: In addition to TCM, also entitled to and liable to settle and clear the trades/transactions done by the Trading Members affiliated with them.
Professional Clearing Member: Entitles the members only to clear and settle the trades executed by their clients.
Commercial Papers: An unsecured short-term debt instrument issued by a corporation for the financing of account receivables for their needs.
Treasury Bills: Treasury bills are issued when the government needs money for a shorter period (less than one year), while bonds are issued when it need debt for more than say five years or more.
Earnings Per Share: An important financial measure that indicates the profitability of a company. The net profits divided by the total number of shares.
Exchange Traded Funds: Products that attempt to replicate the indices on NSE, so as to provide returns that closely correspond to the total returns of the securities represented in the index
International World Federation of Stock Exchanges: A trade association of 63 publicly regulated stock, futures, and options exchanges
Foreign Institutional Investors: An institution incorporated or established in a foreign country and which proposes to make an investment in our country insecurities.
Foreign Direct Investment: A major source of non-debt financial resource for the economic development of India. The Indian government’s favorable policy regime and robust business environment have ensured that foreign capital keeps flowing into the country. The government has taken many initiatives in recent years such as relaxing FDI norms across sectors such as defense, PSU oil refineries, telecom, power exchanges, and stock exchanges, among others. According to Department of Industrial Policy and Promotion (DIPP), the total FDI investments in India during 2017-18 stood at US$ 44.86 billion, indicating that government’s effort to improve the ease of doing business and relaxation in FDI norms is yielding results.
- Government of India allowed foreign airlines to invest in Air India up to 49 percent with government approval.
- No government approval will be required for FDI up to an extent of 100% in Real Estate Broking Services.
- Government of India is strengthening single window clearance system for fast-tracking approval processes for Japanese investments.
- Government of India allowed 100 per cent FDI in single brand retail through automatic route.
Forward Rate Agreements: An agreement made between two counterparts over the counter. These have not exchanged traded contracts.
International Finance Corporation: An institution that offers investment, advisory, and asset management services to encourage private-sector development in developing countries
International Organization of Securities Commission: An international body that brings together the world’s securities regulators and is recognized as the global standard setter for the securities sector.
Investor Protection Fund: As per the guidelines of the ministry of finance for investor protection, to compensate the claims if the brokerage companies defaulted to pay.
Initial Public Offer: A company is going to the public issue of stocks for the first time either it may be new, or old, or young company.
Interest Rate Swap: This is a type of contract between two counterparties who agreed to exchange their interest rate payments on their future transactions. Eg: Floating rate to fixed rate or vice-versa.
International Securities Identification Number: One unique numbering has been set up by ISO (International Organization for Standardization) for each and every scrip such as stocks, bonds, options, and futures.
Mumbai Inter-bank Bid Rate: This is a weighted average of all interest rates that the participating bank offers on deposit on a particular day.
Non-Convertible Debentures: The long-term financial instrument which acknowledges the debt obligation and can’t be converted into equity share.
National Stock Exchange Automated Trading: Any software or facility with the use of which, upon the fulfillment of certain specified parameters, without the necessity of manual entry of orders, buy/sell orders are automatically generated and pushed into the trading system of the Exchange for the purpose of matching.
Over the Counter: The agreements or contracts and related transactions which are happening outside an exchange.
Registrar of Companies: A body set up under the ministry of corporate affairs which deals with the administration of the companies act and overall 22 ROCs are operating in all major states in India.
Securities and Exchange Board of India: SEBI is a regulatory body has been set up in accordance with the provisions of SEBI Act 1992. It regulates all stock exchanges in India and bodies under it.
Securities Appellate Tribunal: A statutory body set up under the provisions of Sec 15k of SEBI Act, 1992 to hear and to dispose appeals against orders passes by SEBI or by an adjudicating officer under the act.
Securities Exchange Commission: An independent agency of the United States Federal Government to enforce federal security rules and regulations on national stock exchanges and related activities in the United States.
Value at Risk: The probability of losing more than a given amount of assets, based on a current portfolio.
Forward Market Commission: It is a statutory body set up under the Forwards Contract (regulations) Act, 1952 and functions under dept. of economic affairs. To advise, observe, recommendation, inspection and other duties related to forward markets.
ADR – American Depository Receipt
ASBA – Applications Supported by Blocked Amount
ATM – At-The-Money
ATS – Alternative trading system
BMC – Base Minimum Capital
BSE – Bombay Stock Exchange
CCIL – Clearing Corporation of India Limited
CDSL – Central Depository Services (India) Limited
CFRS – Carry Forward under Rolling Settlement
CH – Clearing House
CIMC – Collective Investment Management Company
CPs – Commercial Papers
CRR – Cash Reserve Ratio
CSD – Collateral Security Deposit
DPs – Depository Participants
DRR – Debenture Redemption Reserve
EPS – Earning Per Share
ETFs – Exchange Traded Funds
FDI – Foreign Direct Investment
FIIs – Foreign Institutional Investors
FMC – Forward market commission
FRAs – Forward Rate Agreements
GDR – Global Depository Receipt
IDR – Indian Depository Receipt
IFC – International Finance Corporation
IOSCO – International Organization of Securities Commission
IPF – Investor Protection Fund
IPO – Initial Public Offer
IRS – Interest Rate Swap
ISIN – International Securities Identification Number
ITCM – Institutional Trading cum Clearing Member
ITM – In-The-Money
MIBID – Mumbai Inter-bank Bid Rate
MIBOR – Mumbai Inter-bank Offer Rate
NCDs – Non-Convertible Debentures
NEAT – National Stock Exchange Automated Trading
NSDL – National Securities Depository Limited
NSE – National Stock Exchange
OTC – Over the Counter
OTM – Out-The-Money
PCM – Professional Clearing Member
SAT – Securities Appellate Tribunal
SDR – Sponsored Depository Receipt
SEBI – Securities and Exchange Board of India
SEC – Securities Exchange Commission
T-Bills – Treasury Bills
TCM – Trading cum Clearing Members
TM – Trading Members
VAR – Value at Risk
