Financial Market and the Reforms

Examine the structure and instruments of the Financial Market and the Reforms in financial markets..

•      Structure of the Financial Market

•      The Money Market

•      The Capital Market

Money Market Instruments- Call Money, Repo, Reverse Repo and Treasury Bill Market

Certificate of Deposit, Commercial Paper.

1.Preference shares

2. Equity shares

3. Non-voting equity shares

4. Cumulative convertible preference shares

5. Company fixed deposits

6. Warrants

7. Debentures

8. Bonds

9. Mutual fund

10. Derivatives

11. Commodities

12. Currency exchange

Reforms in the Capital Market

1. The 1990s have witnessed the emergence of the securities market as a major source of finance for trade and industry in India.
2. 1992-93 - allowed the Indian corporate sector to have access to global capital markets through issue of Foreign Currency Convertible Bonds (FCCBs)/Equity Shares under the Global Depository Mechanism.
3. A growing number of companies have been accessing the securities market rather than depending on loans from financial institutions / banks.
4. The 1990s have witnessed the emergence of the securities market      as a major source of finance for trade and industry in India. The     corporate sector is increasingly depending on external sources for       meeting its funding requirements.
5. Several measures have been taken to make the securities market in India better regulated, more efficient and generally safer.
6. The regulator, SEBI, is regarded throughout the world as independent and effective. 1992-93 - allowed the Indian corporate sector to have access to global capital markets through issue of Foreign Currency Convertible Bonds (FCCBs)/Equity Shares under the Global Depository Mechanism. A growing number of companies have been accessing the securities market rather than depending on loans from financial institutions / banks.

• Dematerialisation of Securities-1997
• Screen Based Trading-2003-matching orders in time/price priority
• Derivative Trading
• Risk Management-
• Reforms in Foreign Exchange Market • Exchange Rate Regime • Finance Mobilization • Institutional Framework • Increase in Instruments in the Foreign Exchange Market • Liberalization Measures