Comprehensive Guide to Capital Markets, Insider Trading, and Regulatory Framework

[music] Yes people [clears throat] so with all uh uh what

is that I'll try to go uh as deep as possible we'll try to cover uh [snorts] every possible topic

so uh if you guys have any doubts in between feel free to ask which topics I can go in detail let's Let's go in

detail. Uh agenda for the day. Let's try to aim at 9 to 10 chapters because we have all the big chapters in the first

part. It's okay even if you're doing nine chapters for the next day. Let's keep the remaining parts because anyways

we have small ones only. H yes. And I hope uh for the people who are watching this on recorded

uh please don't ask for the soft copy of the material that is being used here because of intellectual property rights.

We cannot share the soft copies because we have seen a lot of places they directly take the material and they

start teaching from this which I feel ethically is not right. So because of that we have stopped sharing soft copy

of the summary charts. If you still want it on the AIU pro website you guys will be able to place a order for the hard

copy. So again I'm telling you we'll be going in detail. Uh I think uh you you can expect uh first question uh if is

marathon a supplement for your regular classes? The answer is no. But even if you have studied something, marathons

will definitely make sense for you. So keeping that in mind, [clears throat] make sure

first you guys revise, first you guys learn something and then watch. But yes, you can definitely expect 50 55 marks

easily from watching marathons. That is more than sufficient. You will definitely get it because I'll also be

going through every topic. And one more thing, I'll also be uploading the supplements that is the amendments

separately. and inside the class wherever there is an amendment that part I'll be taking up inside the class

itself and I would want to tell one thing for those people who are using uh the in the new syllabus only if you guys

have been using uh the old book old book in the sense now there are two materials they have updated a new version of the

book in the new syllabus only I'm telling uh there is uh lot of changes that has been happened inside the book

which is not forming part of your supplements. So if I just to do a supplement that is if I just to do an

amendment video that does not cover every change that has taken place inside the book. So u to make sure that is

there I'm trying to cover as many amendments also possible inside the class only. Uh if there is something

which I have left it I'll let you know that as well. But yes uh probably another in one or two days you can

expect a complete supplement video also be to be uploaded on capital markets. Yes. So this is one headset I want to

give you before I start. And one more thing, always make sure it's a good habit before you go for your exam. At

least watch two uh attempts come amendments. So you'll be watching an amendment for June 2025. Also make it a

habit to see the amendments of December 2024 as well, which is already uploaded on Ariu Pro company secretary channel.

So keep these things in mind because if they're asking you, it'll be helpful and that's always a right practice to do.

So seeing all of that, let's start it people. Um, capital markets uh marathon [clears throat]

if I'm a little low excuse me I'm down with fever. So just mark. So people uh first two chapters are I hope you guys

know the classification of marks. Again I'm telling you whatever are the important chapters to concentrate on

never miss to concentrate on these chapters they play a very important role in your exam point of view. Basics of

capital market very important from exam point of view. Secondary market very important from these two you can

definitely expect around uh three to four questions altogether but they those two chapters form a very big chunk of

your uh paper. So never forget to miss that. It's very very important. And coming to SEBI part, this is also very

important. As I told you, I can classify that into three parts. We' have seen in class also the last two parts you can

expect a question that is semi-informal guidance schemes and scores that will play a little major role that is

important. So exam point of view remember and uh security market intermediaries one or two question a

comment based question or a note based question will be there from your exam point of view of course it's a little uh

students it's not a nonu it's basically a non- studentent friendly chapter most the people will leave and go I would say

no we have seen in the uh you know class also you have a reading order so try to keep that in mind you can definitely

focus on security market Intermediaries three to four marks question definitely will be there 100%.

Next one I suspect that this part attempt will have more questions on IFSC. I might be wrong. I'm just giving

you my view on it because uh whatever are the listing procedures that were there that has been changed almost like

all the four listing procedures have been changed in the amendments. I'll be covering the entire thing. So if you

guys are watching it that will be sufficient. I'll be explaining in detail like I explained the first time. Uh next

one. All of us know for a fact that ICDR uh this is like your uh the main heart of your chapter

plays a very important uh role in your marks. You can definitely expect around two questions to come uh more important

from your exam point of view. LODR definitely an important point uh and uh issue and listing of non-convertible

securities important because there are amendments for the people who are watching it I'll be doing it here also

as a part of marathon I've also uploaded uh this entire part on YouTube also if you guys want you can watch it that is

there are some amendments and issue and uh listing of non-convertible securities there are amendments

sorry not issue and delisting of equity shares uh there are amendments. I've uploaded that chapter on uh YouTube as

well as a different video. Uh full chapter is there if possible [clears throat] watch it. Important from

an exam point of view. Um and SAS yes here and there it's an important topic. Um and uh coming to uh the last one uh

buyback and mutual funds people important from your exam point of view. Mutual fund you will have one uh

practical question. There will be one uh uh question to solve NAV or to find out redemption price, issue price or holding

period, return yield, there will be one practical question paka. So go prepared and if you look at uh buyback of

securities there has been out of the last five attempts at least three attempts they have asked a practical

based question. So again I told you you will get a practical problem from these four topics you will have it. The first

one is buyback you may uh mutual fund you will options you will call and put option you will have a question on that

particular thing and next one is futures they may ask you a question. Apart from that yes we have seen uh reverse book

building process and all that is also a little important only. So pay attention on these topics very important from your

exam point of view. here. Yes. So, I'm not saying leave everything else but this will be your first priority.

Yes. Okay. Online I hope everything is going good. You guys are still there able to see here?

Hello. All good. Okay. The first part people let's start

with uh part A chapter one basics of capital market. Very very important. You will have a question here. They may ask

you any of the instrument. You will have a question. They will ask you any of the instrument. For example, FCCB, FCEBs,

depository receipts, RS one question. That entire part will become very very important. So I'm telling you exactly

where the questions will be picked. Instruments one question may be expected. Second one people is your

participants. You can expect one question. So one is financial market participants and next one is financial

market instruments. You can expect a question from these two particular places. Yes. So play I mean focus more

on those topics. Don't leave even one instrument or even one uh what is that participant. Okay. So financial system

in India I can classify this into three things. One is called financial market financial market instruments. Financial

market participants. The financial market per se can be classified into two. One is called money market. Second

one is called capital market. Now what is a basic difference? When the attempt is very easy, they can ask you what is

the difference between money market and capital market. What is the difference between money market and capital market?

Money market is basically regulated both by RBI and SEBI whereas your capital market comes more under SEI. What is

basically why do we have money market in place? The reason for money market being there is people whenever uh sovereign

that is government whenever a government wants to borrow money from various people the place they take the money

from people is called as money market just like our capital market companies come and borrow. In money market the

major borrower will be government. The government will always borrow money through RBI. And what are the

instruments we see in money market? What are the instruments? We see treasury bills, commercial papers,

certificate of deposits and so on. So these are the instruments RBI issues to people and people will give money and

through RBI government is raising money in money markets. Is it always like that sir? Need not be always but majority

will be always by government. And what what else is the difference between uh money market and capital market? Money

market is generally a short-term instruments. It is it will not exceed one year. Most of the instruments in

money market will be up to one year of maturity. Beyond it will go under capital market. Agreed? So this market

is regulated by RBI and SEBI. It performs crucial role to manage short-term liquidity deficits. This

deficits we have seen in the class. Government always comes up with third deficit budget. Now whenever we do not

have money so that we have to take care of the government. How do we take care? We raise money from here. Now once in a

while we have to launch operation and all. So you will need some keros and all you put. No no correct. No

you have to send. No that's what they're telling you people. So for all others you need money. So government can borrow

it in the form of funds. It can be in the form of bonds as the case may be. Through this market RBI raises money on

behalf of government by issuing treasury bills, commercial papers, certificate of deposits. Maturity of instrument range

from one day to one year usually short-term. On the other hand, so there is something called as capital markets.

Capital markets can be further classified into two. One is called securities market and other form of

lending and borrowing. Other form of lending and borrowing we'll not be seeing much. We have these two markets

in our syllabus. One is called as primary market, one is called as secondary market. Now what do you mean

by primary market? Primary market is always termed as a new issue market. What do you mean by that? A company is

raising the money from the public for the first time. So we generally call it as an IPO market. So whenever a company

unlisted public company gets listed on a stock exchange for the first time, we call such market as a primary market. So

it's also called as a new issue market. It's also called as an IPO market. And what else is the difference? Again

attempt is easy. They will ask you difference between what is the difference between primary and secondary

market. Correct. Uh [snorts] next one sir chart books on websites show shows out

of stock. Oh too much demand. No probably in a simply wait for two days. I think they will uh you know they will

I think it'll be back. Yeah. [snorts] Probably I would say 11th or 12th the books will be up and running by March

11th or 12th. Okay. So u primary market and secondary market as I told primary market is always called as a new issue

market. In a new issue market what do we generally have? We generally do a unlisted public company coming to the

for listing on stock exchange for the first time. So what is the difference sir? In

a IPO market people the company raises money. So who gets the money? Company gets the money. Who gives the money? It

will be the public or the institutions or whoever is investing it. What about secondary market? In secondary market it

is like a buy and sale that happens between investors. Who will get money? It is the investors who get money. Who

will give money? It is the investors who give money. So that is always called as a secondary market. We also call it as

an after issue market. Correct. And what is the need of we doing it here? We do it in the form of uh what is that

uh uh correct? Who are the major intermediaries? Underwriters come here. Why does underwriters come? Because to

meet minimum subscription 90%age sir who come here brokers come here. Upstock zeroda all your coin whatever you guys

are using they all come here right? Okay. Next one. Price. Price has given in the offer document. That is what red

herring prospect is here people it keeps fluctuating agreed utilization of fund fund gain from the primary market

becomes a capital of the company here people it becomes a income for the investors nothing but we also call it as

a capital appreciation okay done uh next one that is what we saw capital

market okay next one financial market instruments what are the different instruments we have it in uh financial

markets one is your normal equity shares We have here also what are the rights of equity shares which is as per companies

act as per se LODR companies act people you have a right to receive notice you have a right to receive a dividend you

can you have a right to oat you have all those rights as per companies act as per LODR you have a right to participate in

decision involving fundamental corporate changes remember the chance of this being asked is less the chances of this

being asked is more whenever there is rights And remember whatever we are seeing is based upon patterns. I'm

saying these you can expect at the last moment. These things you can expect. Next one right to participate and vote

in general meeting. Right to be informed of rules including voting procedures of the meeting. Ask questions to the board

of directors. You can come you can participate in the meeting. You can ask the questions to them. Participation in

key corporate decisions. uh example election of directors, mergers and acquisitions that is you have a right to

vote. Next one addressing shareholder grieviances that's your right right if you see by the end of the day you would

have seen this topic at least five six times coming grievance redress grievance redress result 100 places it comes

protection of minority shareholders from abusive actions in a company there will always be that minority 10%age or even

lesser people so we make sure that their interests are always protected okay next one uh that is your normal

share next one is called as differential ial voting rights also called as DVR shares. What do you mean by a DVR share?

DVR share means people a share which has a differential voting rights. What do you mean by differential Oing rights?

Generally a normal equity share will have one share is equal to one note but it's a differential voting rights means

people one share may have less than one note or if it's five shares you may have one note but it'll be compensated by

paying more dividend when compared to a normal share okay so to give that what is the procedure first one it should be

authorized by articles of association maximum DVR issue it shall not exceed 74% of the total Oing power at any given

point of time that is in a company whenever you have total oats DVR part should not be more than 74%age so at

least 26% should be normal equity shares at any given point of time the company needs to pass ordinary resolution to

issue DVR shares special ordinary no default in you should have not had default in filing annual returns or

financial statements in the last 3 years repayment of mature deposits or declared dividends, repayment of term loans,

statuto use of employees. So all this there has to be no default that the company has made in. However sir if at

all there is a default people the DVRs can be issued provided 5 years cool off period is there from when sir from the

day you make good the default. So if I have not paid statuto uh I mean employees dues now once I make good that

is after I pay the statuto dues imagine provident fund from the end of the year in which I made the default good imagine

in 2016 we did not pay statuto dues of employees meaning provident fund we didn't pay we paid it in the uh year

2018 in 2018 November we paid so what you need to take complete year 2019 that is 31st March 2020 that is 1920

financial year. So from 1st April 2020 5 years will be there. That's a cool off period. So up to that 5 years you cannot

issue DVRs. Clear? Hello. Okay. Next one sir. Not penalized by court or tribunal in the

last 3 years under various acts or by various bodies. RBI sebi security contract regulation act FEMA. In these

things you should have not been penalized. No penalty orders should be issued. If you satisfy those people, you

can go for uh DVD share. Next one, preference share. I hope we all know a comp a share which has a priority in

repayment of capital as well as dividends when compared to the equity shareholder. It's called as a preference

share. Next one is called as people debentures. A debenture is nothing but a debt on the

company. Uh and of course they can never carry a right. A simple one. Next one is called as people foreign

currency convertible bonds. What is a foreign currency convertible bond people? For example, how does a foreign

currency convertible bond works? There will be a company in India, they want to raise money from uh foreign countries.

I'm just taking it as a dollar. You can raise it in euro. You can raise it in any currency you want. So a Indian

company issues a bond. That bond is called as people FCCB to a foreign country. Let us take an example of US.

We issue a bond there. We are going to raise money from that market. From them we will raise the money. What in what

currency we will raise money? We will raise the money in the form of dollars. Remember sir their repayment also should

be made in dollars only. Their interest payment should also be made in dollars only. Sir FCCB is with the conversion

time. Imagine 3 years. Imagine 2 years. After that 3 years or after that 2 years people the bond holder that is whoever

is a person who has invested this person will have an option whether to redeem it into equity or to I mean to convert into

equity or ask for the money back. So if there will be 3 years time period after 3 years I can convert my shares my bonds

into equity of this company or people I can ask for a redemption at the option of the bond holder and sir it gets

converted to the same company's equity share whichever issued FCCB that's the difference between FCCB and FCEB what is

the difference in FCEBB also same thing a company will be there the company will issue a bond outside India the bond will

be called as FCEB. Same thing. You're again going to raise money in dollars. Again I need to pay in dollars. Again I

need to pay interest also in dollars only. Then what is the difference? If at all the person wants to convert this

into equity and he does not want redemption. He does not want money back. He has an option to either take the

money or convert it into equity. But he will not get the equity of the company that raised money. You will get the

equity of a company which belongs to the same group. Same group that's why we call them as

group companies. And what are these companies called as? One is called as Indian company that raises money. The

next company is called as offered company. What do you mean by offered company? The company whose equity shares

you can exchange with your bonds. You have raised FCB. You can exchange that FCB with the equity shares of another

company but these two companies belong to the same group. For example, Tata, Reliance, they all come under one group.

So one company is raising money, the other company's converting the shares into that company's equity. That's why

we call it as an exchange. Remember that word as a keyword convertible is your own exchange is with some other

company's equity. Clear chances they ask crazy times I have asked two three times I asked you what is FCCB what is FCEB

is clear hello >> okay in that there is one more points also uh

huh if CCB Carry a fixed rate of interest. Option to convert a interest and redemption

price is always paid in foreign currency. FCCB issue proceeds need to confirm to ECB end use requirements.

What is ECB means? External commercial borrowing. End use means people what can I use this money I have raised. What can

I use it for? So for that there are some guidelines. I have to follow those guidelines. In addition 25% of FCCB

proceeds can be used for general corporate restructuring. General corporate means people something which I

can use it for my internal reconstructions which is I I need not disclose it up to

25%age I can use it generally I need not disclose it up front okay worth noting the investor will have an option and it

is at his discretion correct next one is FCC FCEB whatever we saw next one sir uh R Indian depository receipts what is

Indian depository receipts sir There will be a foreign company who would want to raise money from Indian market. So

what will they do? The foreign company people will come and they will give their securities. They will give their

equity shares to one person outside India. A foreign company. Let us imagine people there's a company called as

standard charted. The standard charted bank wanted to raise money from Indian market. What did they do? They went it

is all happening globally only. So they went to US. They asked one of a person called as custodian like our bank locker

custodian. What did the standard charted bank do? They went and they gave their equity shares to the custodian outside

India that is US. Now that custodian will call a person in India. We call that person as a depository NSDL CDSL.

Why are we calling it as a foreign custodian domestic depository? because this person is in US, this person is in

India. Now the foreign standard shed bank they went and they gave their uh equity shares to a custodian. The

custodian will call a depository in India and say I have received the securities. You can create the

instrument. Now based on that word our depository will create some new instruments. The new instruments will be

called as people. We call them as Indian depository receipts. If we do opposite meaning

Indians doing abroad we generally call it as ADR GDR same thing opposite correct yes sir okay next one is called

as people municipal bonds initially it was a little important now it's okay okay only but yes see what is municipal

bonds basically it's uh what is that a municipality or a local statuto bodies who raise money from uh the public for

development purpose Now that is called as what people municipal bonds. Bangalore Metropolitan Corporation that

is Bangalore or Municipal Corporation BMC was the first municipality board to raise money in the form of uh money

bonds. We call the municipality bonds as money bonds. Of course it was a failure. We could not implement it properly post

which sei came up with the proper guidelines. If you want to do municipality bonds then there are some

things you need to satisfy just like a company going for IPO track record and all we check same way we check it in the

case of municipality bonds also that is also called as money bonds okay we refer to as people money bonds urban local

government and agencies issues these bonds for development of roads infrastructure airports etc BMC was the

first local body to issue municipal bonds in India CBE came up with guidelines for issue of municipal bonds

in 2015 according to which municipality should meet the following eligibility criteria. What is that? Municipality

must have must not have negative net worth in the three previous years. Basically, your body should be in a

positive numbers. No default in repayment of debt securities and loans taken from banks and NBFCs in the last

one year. If you have borrowed any money, there should not be any default on it. The third one, municipality,

promoter, director should not be a willful defaulters. Willful defaulters means what? People, those people in

spite of having money wantedly misreaying the interests or principle back to the source. Whoever they have

borrowed money from, we call such people as willful defaulters. Generally, the willful defaulter list is always

announced by RBI. Get the point? It's not like somewhere we get it in some uh newspaper. RBI

announces a list of uh willful defaulters. We consider them as uh willful defaulters only then they will

be disqualified. Clear. Municipality should have no record of default in paying interest and

principle. Okay. Done. Next one is called as people real estate investment trusts. We have seen what is real estate

investment trust. What is real estate investment trust? It generally functions in the same way as a mutual fund

function. If I have to tell you in short, they collect money from lacks and lacks and lacks of people and that money

will be considered in the form of trust. The trust raises money just like a mutual fund. Where will a mutual fund

invest money? Mutual fund invest money in a listed company. Where will this this type of trust invest money? If it's

called as a REIT, real estate investment trust, they invest into land, they invest into building, they invest into

uh renting, leasing. So the whatever is the buy and sell when they do they have that income that will be the return for

the unit holders. Such type of things are called as people real estate investment trust. So when the money

pulled it's also a pulled investment vehicle only. Sorry if the money always remember trust is common. This

[snorts] this particular route will happen in four places. The root is same. What is a

root? There will be a trust. We are going to raise money from uh thousands lakhs of people. That money we take we

invest it in some place and you're going to get return. All four bodies work like this only. What are the four bodies? One

is mutual fund. They invested into securities of listed companies. Next one is called as people uh reads real estate

investment trust. They pull money they invest into real estate. The third one is called as invit infrastructure

investment trust. They invest into infrastructure projects like highways like metros or it can be airports. So

they invest into that. The fourth one is people collective investment scheme. Same thing only know we raise money for

return. We saw it does not include some things. So all these are not included. Anything apart from that will be

considered as collective investment scheme. But the way they all operate is same. There is a trust they raise money

but where they invest is a difference. Based upon where they invest we call them as either reads or invits or as the

case may be. [snorts] Clear? Okay. Next one is called as people infrastructure investment trust. What is that? It is a

pulled fund which invests the funds further into infrastructure projects. So see this is the word you need to guys

you guys have to use when you're writing the uh answer for uh these things remember uh what is that

uh read init uh mutual funds collective investments AIF alternate investment fund what is

the difference between uh this and alternate investment funds alternate investment funds is a privately pulled

fund these are all publicly ly pulled funds meaning I me and you we can invest in these funds privately pulled means it

will be given only to a selected group of people that's the huge difference correct yes sir

okay next one people it comprises of four elements the first one is called as trustee the trustee is

always like board of directors in a Those registered as debenture trustee can only be appointed as a trustee. They

need to invest minimum 80% into infrastructure assets that generate steady revenue. That's the minimum

criteria to satisfy body corporate or LLP or company. It includes induced inducted sponsor. What do you mean by

inducted sponsor? Inducted sponsor means people. Who is a sponsor? The one who starts this particular scheme or a trust

or this entire thing is built by one person. We call such person as a sponsor. What do you mean by inducted

sponsor? Meaning the one who acquired. See the person who started it can be me. After 4 years I left it. Now yes joined

it. Now yes will be considered as an inducted sponsor. The third one investment manager

supervises operational activities. Where to invest? What to invest and next one is project manager authority for

executing projects. So for example real estate right? There will be so many things that related to that. So it will

be taken care by project manager. The next one is called as people options. What do you mean by an option contract?

Option contract is what is an option contract. >> Seller and buyer enters into a contract.

They enter into a contract today to settle anything. It can be commodities. It can be shares. It can be anything. If

it is commodities, we call it as a commodity market. If it is shares, we generally call it as futures or options.

What is an option sir? Option is generally where a buyer and seller enter into a contract to buy a predetermined

quantity of shares on a predetermined price at a predetermined date is called as what people an option contract.

Example, there is a buyer, there is a seller. A buyer purchases an option. What is that? He says, "Hey, I don't

know what is going to happen after one month D especially today. You know, after that Sindur attack, the market is

down completely dip. Now, I don't know how the market is going to react. So, what will a trader do? The trader wants

to be safe." What will a trader do? The trader will enter into a contract on the stock exchange. That contract is called

as options contract. Now what is options contract? In option contract people this buyer will say after 1 month I will buy

let us imagine example Reliance shares at 2,500 rupees. How many shares? I will buy 1,000 shares and we are agreeing all

of this today to buy it after 1 month. So I'm saying the buyer is saying after 1 month I want to buy Reliance shares at

2,500 rupees. Quantity is 1,000 rupees. Everything is agreed today. Now this type of contract is called as option

contract. Now my question who purchased this particular contract. Who who has an option? Is it buyer or a seller? If a

buyer has an option to buy we call it as a call option. If a seller has an option to sell same thing we call it as a put

option. So always remember for giving this option to you. Now after 1 month let us imagine Reliance share price has

come down to 2,200. Now in the market now because of all this global issues Reliance share price

has come to 2,200 but as per the contract I have agreed to buy it for 2500. You tell me will I buy it in the

contract or will I buy it outside the contract? I will buy it outside because I'm I'm getting the contract at a much

cheaper price. So I will let this contract lapse. So always remember because you have so much of flexibility

the person whoever has given you this choice charges something called as premium.

The premium is nonreoverable. It's always a loss to you. It's gone. So if a buyer is buying a call option, he will

be charged some premium called 10 rupees 15 rupees that you need to multiply it by number of units. So 15 uh rupees is

per unit. You have totally,000 units. So 15 into,000 will be your minimum cost. That is 15,000 will be your minimum

cost. This clear such type of contracts are called as what people option contracts. So option contract just gives

you a right and not an obligation to buy. >> [snorts]

>> Clear. Cut, copy, paste people. Future future does not give you an option. It is an obligation. Once you enter into a

future contract, same thing. But it does not give you a right. It's an obligation. You have to buy. Clear? And

sir, in option contract there are two types of options. One is called as European option, one is called as

American option. What do you mean by European option? Sir European option means people the the contract can be

exercised on the date of maturity. India follows European option. American option means people. The contract can be

exercised on any day before maturity. Meaning what people? European option means I told you that predetermined

date. It will be always people. The predetermined date will always be say for example a month end. And you can

exercise it only on that day. But if it is an American option, you can exercise it any day even before the maturity

also. That's the beauty clear. Yes sir. That is an option contract. That is a future contract. Next one is people

derivatives. What do you mean by derivative? Derivative means people uh it's a instrument that is created which

whose value people is decided upon an underlying asset is called as what people a derivative contract. The

example of derivative contracts are nothing but your bullion exchange. I told you right commodities for example

gold gets traded on the stock exchange. Bullions I say metals, crude oil, onion, all this gets traded. Now do they have a

value of their own? There is instruments that is being traded. They keep fluctuating. How do they fluctuate? They

based upon the demand and supply for the product. Now for example if there is a gold bond if gold bond price is going up

why will a gold bond price go up if the gold prices go up gold bond price also will go up. So the gold bond does not

have a value of its own it is getting derived from one of the underlying asset and such things are called as people

derivative contracts. Yes sir we have something called commodity derivative and currency derivative. We

had seen an example also for commodity derivatives. Example is that gold gold things uh currency derivatives nothing

but you would have seen an ECIPL. It's called as hedging. Correct? Huh? Today you enter into a contract to buy some

currency in the future date. We generally call it as currency futures. Agreed.

Okay. Next one people. Capital market participants. Have we covered every instrument? Any other instrument you

guys have doubt? What do you mean by warrant? Warrant is nothing but people. A company

gives you a choice to buy the share or let the option go. It works exactly like people your uh options only. But options

is being traded between two people. Warrant is nothing but an option given to you by the company directly. They

give you an option people that whether so imagine if the share price of the company is 600 rupees. Now you do not

know whether to buy this share or not because after say some five months the share price can go up or it can fall

down. So what will a company do? Company only will give you a choice. What will they do? They will say sir do one thing.

Do not buy directly our share. Buy our warrant. Now what is the beauty of the warrant? Warrant gives you a choice.

What is the choice? If you want people you can buy the share. If you do not want people there is some minimum uh

application money you would have paid. that application money will lapse. So the minimum application money that you

need to pay people is 25%age. That is the minimum application money you need to pay. Meaning what? Let us imagine if

the price of the share is 600. I would have paid 25%age of it. How much? 150. Huh? I would have paid 150 rupees. Now

imagine after 5 months people if 600 has become 900. It's a option. It is beneficial for me. I will pay the rest

of the amount also. Sir after some 5 months people this 600 will come down to say for example 400 now it it doesn't

make sense for me to buy by repaying the rest of the 350 rupees I will let this option lapse now this is called as what

people warrant what is the difference between options and warrant warrant is always traded between two people

for example if it is between me and lick lik is giving me a choice here people infor is giving me a choice that's the

difference between warrants and options and conversion shall not exceed more than 18 months. The minimum application

money you need to collect as people 25%age upfront. Correct? Hello read. [snorts] We saw infrastructure

investment trust securitized debt instruments is nothing but asset reconstruction companies. The banking uh

instruments uh you would have seen this as uh what is that non-performing assets. If at all any borrower does not

repay the money to the bank, what will a bank do? The bank will sell away all those loans to a third party company,

they will recover the money. So they will raise it from some people and they will give the money to the bank. So

there is a borrower who would have borrowed money from a bank and he does not repay the money to the bank. What

will bank do? Bank will transfer this complete loan to some companies called as asset reconstruction companies. they

will transfer those it's like gundas they recover the money I'm saying in this short they're not actual gundas now

people asset reconstruction company immediately will pay the money to the bank is happy now how will they get the

money they issue something called as securitized debt instruments they give it to QIBs they give it to a lot of

people and then that money they raise that they settle it to the bank agreed yes sir of course they will uh sell the

properties whatever they will get the income they will get the return that will be given back to the QIBs they have

raised the money from clear [snorts] okay next one people exchange traded funds

we'll be seeing it in mutual funds only what is exchange traded fund exchange traded fund is nothing but it's a

closedended scheme like a mutual fund which gets traded over a stock exchange the best example I can give you is

niftybs banks ITBs what is that exchange traded fund Now if you look at something called as ITBs

what is ITBS it has top 50 IT stocks. Now they have combined everything they have made it like a one fund. So if this

50 stocks are going up this fund also will go up. Now what is the advantage? You cannot now say for example I have

just 1,000 rupees. I can maximum invest in two three companies. If you invest in ETF it gets uh diversified.

So, Infosys, Reliance, TCS, everyone's stock will be in this ITBs. For example, there is something called as bank nifty

or you have something called bank BS. So, you invest in that that is like investing in some 30 banks, 50 banks as

the case may be. Clear up, derivatives, we saw futures, we saw options, we saw

that's all. Okay. And we have uh capital market participants. Who are the participants sir? The first one is

called as QIBs. Who are basically QIBs people? They are a very big fat financial institutions that come and

invest in the markets. Generally the examples of QIBs will be these people who are it's a uh popular ones once

people in the history once they have asked a definition of QB once they have asked they have asked to write the

entire definition. So in such cases what you need to do first thing I always tell you remember

see your task is to remember everything when everything is not possible something should be possible something

is always something which repeats more often which you can easily remember mutual fund venture capital funds easy

to remember foreign portfolio investors public financial institutions insurance companies uh provident fund pension fund

with a minimum corpus of 25 cr um where is that a scheduled commercial banks. Now these at least this we can uh easily

uh remember multilateral and bilateral development financial institutions like World Bank, uh International Monetary

Fund, IMFs. Yeah, this you can. So this try to remember first if you're able to remember this then go to other things

also. So again what is a QIB people? QIB is nothing but we call them as qualified institutional buyers. The name itself

says it is a institutional buyer. In a capital market there are always two types of people. One is individual

buyer, one is institutional buyer. These are all companies. Now why do we call them as a qualified institutional buyer?

Because they are coming up with a huge money large money that much of money they come up with. Now people how do

they get money sir? Remember they are also getting money from public or people or various companies. Example,

commercial banks, you guys are doing FTS, RDS, savings bank, that money they're getting. No pension fund, every

month you're contributing. Prominent fund every month you're contributing. That is the money they are getting.

Insurance companies, you guys are buying policies. Now all of these people are giving you

return. Where are they giving return from? They invest in these particular capital markets. They make some money.

That is what will be given to you as a return. Correct? Huh? What do you mean by an anchor investor?

Who is an anchor investor? Anchor investor. Angela, who is an anchor investor? I only tell

don't search. [clears throat] Is anchor investor also a QIB or they

both are different? >> But are they both is anchor investor also a QIB?

anchor investor. So remember people, anchor investor is also a QIB who is investing at least 10

crores in the IPO. So not every uh QIB will become an anchor investor. But if at all imagine if a insurance company is

investing in 10 cr minimum 10 cr in an IPO in a main board notme board if I'm investing at least 10 cr I call myself

as people what I'll call myself as an anchor investor that is what will come later also next people they can ask you

three times I've asked you high net worth individuals what do you mean by HNI people HNI means they only know what

is HNI high netw worth individuals what do you mean by that a person people there is no definition as such but

bailed upon They are rich people that's all they're rich people based upon the surplus they have they have total money

people they have a investable surplus people of more than 2 cr rupees they have more than 2 cr to invest we call

such people as high net worth individual but if at all you are participating in an IPO the person who is investing more

than two lakhs in an IPO we call such people also as an HNI this is on a normal day in IPO it is more than two

lakh on a normal an investable surplus of 2 cr. Now likit says sir I don't have 2 cr. I have 1.8 cr. What will you call

me as? >> We will call you as an emerging HNI. What do you mean by emerging HNI? A

person who has an investable surplus of more than 25 lakh but up to 2 cr rupees. We call such people as emerging HNIs.

Okay. Next one people alternate investment fund. First of all, lot of people will have a doubt of what is Aif,

what is QIB? First understand the difference only. What is the difference? Something which is not regulated by any

authority, we will call such things as an AIF. Next thing sir, whenever people there is a what do you say

the QIB is always a publicly pulled fund whereas on AFP is it's a privately pulled fund. They take money from a lot

of private people. So for example, there can be four or five companies. They come and give money to them. They will invest

on their behalf. We call such entities as alternate investment funds. Agreed. Hello. Yes. I need doubt.

Hello. Huh. So in the class also we had seen one thing. I'd given you a chart.

Remember this is for our understanding. The top person is always called as a Qi B. the person under him alternate

investment fund is also a QIB only. If you look at the definition, we'll see QIF uh alternate investment fund will be

here also. Correct? Huh? So AF is also a QIB only. So he comes under the category under AF

you guys will see private equity. Under private equity you guys will see who you will say venture capital funds. Under

venture capital funds you guys will say angel funds. So remember from exam point of view it'll this chain will be very

important. Clear now? Okay. Next one sir. So Aif uh according to SEBI uh regulations it

means any fund established in India in the form of company trust or LLP or any other body corporate which is a very

important privately pulled investment vehicle which collects funds from investors CU HNI large institutions

corporations whether it is Indian or foreign for investing in according to the investing policy they will further

invest. Okay, next one. It is not covered under semi mutual funds or collective investment scheme. See

pulled. No. So they're clearly telling you we are not mutual funds. Neither are we collective investment scheme. Sir

following will not be considered as AF. What and all is not considered. First one is a family trust set up for the

benefit of the relatives. ESOP trust because all of this we have a chapter only. Employee welfare trust, gradually

trust, holding company, funds managed by securization. basically securized debt instruments. Nothing but ARC, SR, SRC,

other special purpose vehicle not established by fund managers meaning any other thing but which is not led by a

fund manager. What is the difference? Fund manager means people there should be like a portfolio manager. There

should be a person to take investment decisions. If that is not there then you will not call it as an AIF. Next one sir

any such pool of funds regulated by other regulators in India try or IRA if someone is regulating I will not call it

as an AF categories of AF people I can classify the categories into three one is called as category 1 2 3 category one

which invest in startup which is early stage people basically they take a lot of risk it's early stage it is not at

proven so there's a lot of risk um infrastructure sectors social ventures what is social ventures who are trying

to make some impact to the society. We call such of such people as social ventures. They are making it for money

but they are having some impact on society. So if they're investing in such things people we call them as category 1

AF. Now category 1 AF includes see venture capital funds we don't know chainme funds infrastructure funds.

Category 2 which is simple one. This is the best thing for a student which is neither category one or neither category

three. It's called as category two. the best it includes private equity debt funds we wrote a private equity there

also hello AF which employ complex trading strategies like leveraging and all it's called as category 3 what is

category 3 AF for example privately pulled fun was just 50 cr that is not sufficient for us to make investment

what will we do we will borrow 50 cr more from a bank we will uh add the 50 cr we have raised plus 50 cr we have

borrowed and that we will invest So they're taking lot of risk and I showed you in class also on fund also they

employ in complex strategies like algorithm trading not a normal trading they do algorithm system based tradings

so such things will be called as category 3 AF then okay next one is called as venture capital funds what

does venture capital funds do people venture capital funds invest in uh startups early stage entities and uh

they wait for some time they exit for some returns. It's called as venture capital funds. It is an AIF which

invests primarily in unlisted securities of startups. It is a financing in which promoter gives up some level of

ownership and control for the business in exchange between 3 to 5 years. So this is nothing but your shark tank

whatever you guys say all of them are the best example for venture capital funds unlisted startups only 3 to 5

years once they find good rhythm they will sell it they will make their money they'll come out. It consists of group

of investors who pull investment with certain parameters. They are high risk because the company may work crazily or

it may fall down. The participants in venture capital are institutional investors generally who give money to

the venture capital funds. Institutional investors give the money to them. They will further invest. The next one is

called as people private equity. Uh private equity is a type of asset class who take securities in a operating

company that are not publicly traded on a stock exchange. Sir this also same only know sir then what is the

difference between private equity and venture capital fund the difference is people these funds usually invest in a

company by purchasing them gain access to assets and revenue so which leads to high return revenue sources means what

people these are established companies the these are early stage companies meaning revenue is not there they are

not earning even one rupee private equity comes much later in point of time these investments are for long-term they

are for 3 to 5 years. We saw that right? They are for long-term meaning it can go for 7 years, it can go for 8 years. What

is their general motive? The general motive people imagine if a company is going for IPO. Imagine if a company is

going for mergers and amalgamations. They'll wait until that day on the day of mergers amalgamation they will sell

it. They'll make their money they'll come out. That's called as private equity. Clear? Hello. Types of private

equity people. Leveraged buyout. What is leveraged buyout? I told you by borrowing we take loans we invest that

venture capital which we already seen. Next one is growth capital. These type of venture capitals give

money for a growth purpose. Expansion, opening up a new branch, you know, etc.

Okay, next one people is called as angel investor. What is the angel investor? Subcategory of venture capital. They do

not forget the chain of whatever we wrote very very important. What is the difference between angel venture and all

angel is people nothing but they are the seed people. The first person to come and touch you in life when you're

starting to set up your company is always called as angel investors. Angel investors are nothing but people. In

some cases they will be your friends, your relatives or the best angel I can give you example of

is Kunal Sha Ratant was himself of angel investor. Uh Dhoni is an angel investor. Yeah. For example, I don't know he's

promoting one cycle company. Now nowadays he's promoting one shoe company also everywhere that is only going

around. Ah yes yes yes yes so they invest in something that is called as what they

will come as angel investors. Yes. [snorts] Okay.

>> H uh if you have name why not they are the earliest equity investment made in a startup. Correct. That's the first one.

If I have to tell you it comes like this people. The first fund that comes in your company is called as angel fund.

The next fund that comes in you is called as venture capital fund. The next fund that comes in your company is

called as private equity because see earliest. This is coming for the initial stage 3

to 5 years they will exit. It is still growing. It is not yet grown. Next one is people private equity. What is

private equity? It comes in a revenue source meaning the companies already established. They are making money

there. They invest in such companies. Correct? No. Yes or no? That's the chain remember. The next one people anchor

investor important people. What is an anchor investor? They are QIBs only but they invest a minimum of 10 cr rupees.

If it's a main board, main board is nbsame exchange people a company coming on

board they invest a minimum of two cr rupees correct hello okay sir how now they are investing so

much how much should we give them now imagine they are telling they applying for minimum 10 crores what if they are

applying totally for 1,000 cr 2,000 cr can we give only alloted allotment to them we have others also to give so

people what should be The minimum allotment we need to make to the anchor investors that they're telling you. It

is the discretion of the company. You can give how muchever you want provided you need to keep this in mind. What is

that? If at all you're going on a IPO on a main board and you are thinking of giving up to 10 crores to QIB then

they're telling you the maximum number of investors to whom you can give it to is two investors.

Sir, if at all I want to allocate more than 10 cr up to 250 cr to the QIB, then they're telling you the minimum I I

should give it to is 2 QIAs. Maximum I can give it to his people 15 QAB. Subject to minimum allotment of rupees 5

cr to each investor. Meaning maximum 15 they're telling each person should get at least 5 cr. So that that will be my

minimum investment. Correct? Yes sir. Okay, next one. People, if at all I'm going above 250 cr people, then what are

they telling you? For the first 250 cr minimum five, maximum 10. But for every additional 250 crores that you bring in,

imagine if I'm coming up with 500 cr then what are they telling me? For the first 250 cr, it'll be minimum five,

maximum 15. That I don't have a doubt. For every additional 250 cr, I can add another 10 people. Clear? subject to a

minimum of rupees 5 cr to each investor that's the minimum amount I need to all lot same thing cut copy paste here also

the numbers will change it is two two about two up to 25 about 25 cr in the case of board and remember for anchor

investors there are some rules the bidding for anchor investor shall open one day before issue opening date for us

if it is opening tomorrow for anchor investors it open today. The allocation to anchor investors to be completed on

the day of bidding only whenever they apply that day only they need to get the allocation.

Such allotted shares shall be locked in for a period of 30 days. They cannot sell it. Up to 60% of QIB portion shall

be available for anchor investor for allotment. What is this sir? If you see if you remember uh in ICDR uh you will

be seeing regulation six. You would have seen there what is the minimum allotment? You have two roots 61 62

alternate route. What is the 62 route? >> True QB 75 percentage has to be given to QIB. They're telling whatever you want

to give it to QIB in that 60% of QIB portion shall be available to anchor investor. So this 7 75% let us imagine

is coming to 1,000 cr. In this 1,000 cr 60% be allocated to anchor investors that is people 600 cr I

have to give it to anchor investors only in that also one/ird of anchor investor shall be reserved for domestic 600 only

1/3 and how much will that be 200 crores shall be reserved for domestic mutual funds

is this clearer I hope it is clear online I hope you guys are understanding this clear all of you okay the next one

is called as people Foreign portfolio investors. What are for foreign portfolio investors? People coming from

outside and we are calling them as portfolio investors. They get registered with SEBI and they come in and they

invest in the Indian stock exchanges. Okay. So they have category 1 and category 2. In category one who and all

are coming government and government related like sovereign banks. What is sovereign bank? Central banks and all.

Central bank is nothing but for us it is RBI. If outside if they have any such uh institutions they can come and invest.

Sovereign wealth funds like your sovereign is nothing but government only government funds international or

multilateral organization world bank IMFs entities owned or controlled by government. So any other company in

which 75%age control is with the government they can also come and invest. They all will come under foreign

portfolio investors. Important from exam point of they can ask you. Next one is pension and university funds they also

have money right university funds they have money Oxford Harvards they have money you know they can also come here

appropriately regulated entities like banks insurance companies entities from FAT of member countries

what is FATF financial action task force finan I ask what is the FADF? Nothing but you should

be from a country who is having a good uh like Pakistan who is having a very good laws for terrorism.

Meaning they are they are all stopping terrorism in their best possible way. Yes or no? And money laundering they

stop money laundering. So a country where these two laws are very strong then you can be a member of FATF

compliant. Pakistan is one of such example who is a really good country with regards to uh having very very very

strong laws with regards to terrorism. Uh a propist in that area of

>> they keep moving it's like a lift game for them. They come in gray list they go to blacklist

and their ministers only will come and say that we are only the country who is fighting terrorism. All that happens

>> currently we are in appropriately regulated funds unregulated funds but investment manager

is regulated uh university related endowments in existence for more than 5 years. What is

endowments? Endowments is nothing but people generally char you guys would have received donations right?

University funds is the fees they collect. Donations are like you would have received from so many people alumni

right now once you guys pass out you guys will give to your college no so 1 crore check and all you guys will give

that and all will come under endowments an entity which is at least 75% owned by another eligible under BD what is that

sir B C D we have so many companies if they have invested at least 75% in another company say company X now they

are also eligible is what they're telling provided they come from FATF member compliant. The last one is called

category 2. Investors not eligible under category one shall be considered as category two such as charitable

organizations. What is charitable? Milap Gates foundation have money. No family offices, Ratant Tatas, Tata Trusts, Tata

Sons, Reliance, Adanis, individuals will come here. Endowment and foundations. [laughter]

Next one unregulated funds in form of limited partnership and trust. Unregulated people will come here.

Clear? Hello. Okay. Next one is called pension fund. What is a pension fund people? It's again a poolled investment

vehicle where an employer and employee contribute some percentage towards the retirement. Now that corpus will be

further invested. It will come under pension fund. A simple one. Okay. Anything you want me to cover here or

that's good to go. I hope uh I've gone in detail. Remember there are some chapters I will be going letter by

letter only like this chapter chapter 2 chapter 8 we'll be seeing everything clear.

Okay let us start with secondary markets in India chapter 2. So uh secondary markets in India. Now what are

the secondary markets sir? In this what are you going to see? The first one spoke more about uh who and all are the

participants. Here you're going to see more about what are secondary markets in India.

>> So you'll be seeing more about trading. Yes sir. What type of securities everything who and all are there

platforms NCB and all of that. Okay. for uh people who are watching it remember people in this you have an uh not a

supplement amendment so you do not your supplements does not cover it but uh it has been updated in our study materials

so BSE platform has undergone changes so that we'll be covering it here no for you listen secondary markets in India so

first one is dematerialization people first of all should we have all our securities dematerialized

>> we have a rule also we have seen Rule N of prospectors and allotment of securities of companies act. Yes, there

we have seen rule nine any listed company going forward if at all you are doing an IPO it has to be mandatorily in

demand form and all your existing securities should also be converted to demand form. Same thing we have a rule

called rule 9A. Unlisted public company coming up with a public offer going forward should be in demand form. Rule

9B all private companies coming up with any new issue should be in DMAT form except small companies. So rule 9A 9b

read with section 29 of companies act. Correct? Hello. Okay. But remember if a person does not want to trade if he just

keeps it he does not want to transfer or sell in such case that person has an option to hold such shares in physical

form. How? This is what you connect with rematerialization RRF rematerialization request form if you remember. Hello.

Okay. Types of securities. First one is listed securities. What do you mean by listed security? Whenever a company

enters into a contract with a stock exchange, the particular security gets listed. Always remember it's the

security that gets listed, not a company. So each security can be listed. Now imagine initially I came up with 10

lakh shares. a company later came with a bonus share even for that also you need to file an application correct it's not

like once a cup security is listed then uh all the issues under that will be listed it's not like that next one

permitted securities what do you say permitted securities if at all there is any security which is actively traded at

other stock exchanges but are not listed on exchange relevant norms of stock exchanges follow what is this sir what

do you mean by permitted security. Imagine a company is listed on NSE. Now a company is because listed on NSE. We

are following all the regulations of NSE. Kolkata stock exchange can say it's okay come I will let you trade your

securities on my stock exchanges also. If one stock exchange allows another company's security to get traded over