The European Securities and Markets Authority (ESMA) is a EU financial regulatory institution and European Supervisory Authority which was set up with the aim of enforcing regulation in financial market across EU. It works in the fields of securities regulation to improve the stability and functioning of the European Union Financial Market and increase competition […]Continue Reading... No Comments.
The Dodd-Frank “Wall Street Reform and Consumer Protection Act” (also known as Dodd-Frank act) was passed as a bill by President Barack Obama in 2010. The act was passed after the financial crisis in 2008-09 to plug all the loop holes in the financial industry and avoid any such crisis to happen in future. It […]Continue Reading... No Comments.
Closeout Netting is used when a counterparty is defaulted on its payment and termination/settlement of all the contracts associated with the counterparty need to be completed. It helps to terminate and settle all the net values of all the trades with the counterparty. It has two components, ⦁ Closeout- this enables the other party to […]Continue Reading... No Comments.
Payment Netting is used by the financial institutions on daily basis to combine different types of payments into one single net payment. For Example on a particular day, Company A is expected to pay USD 10 Million as floating rate swap payment and USD 5 million as fixed rate swap payment and expected to receive […]Continue Reading... No Comments.
World-wide Derivatives market is huge and fast moving with different players changing their positions or taking new positions frequently. For many cases, some derivative positions offset other positions and there should be an effective way to reduce overall liability or counterparty risk for these derivatives transactions. Hence Netting is used to offset what one party […]Continue Reading... No Comments.
Arbitrage is a prospect to buy a product at low price in one market place and immediately sell it in a different market for a higher price in order to book some profit. An arbitrage opportunity is present when a commodity I available at low price in one market and there are buyers who want […]Continue Reading... Comments Off on Arbitrage
Collateralized Debt Obligation (CDO) is a financial product that combines cash flows generated from different underlying loans or debts secured by collaterals and packaged into different tranches in order to sell to different investors or funds. The tranches in a CDO have different risk level which is mapped with the risk appetite of various investors. […]Continue Reading... Comments Off on Collateralized Debt Obligation (CDO)
Crowd funding is an exercise of funding a project or idea by raising small amounts of contribution money from a large number of crowd, mostly done through online resources. Crowd funding offers individuals and groups a chance to showcase their ideas, businesses and projects to the world. Every campaign or project has a goal with […]Continue Reading... Comments Off on Crowd Funding
Ringfencing is a process of separating out company’s assets, profits or business of a particular entity to form a subsidiary for legal, taxation or regulatory purposes. It’s a technique to isolate risks & losses associated with one entity from the rest of the business. Though after ringfencing the company is legally & financially separated with […]Continue Reading... Comments Off on Ringfencing
Mergers and acquisitions refer to Corporate Finance, Management and Strategy changes related to one company acquiring other company or joining with other company in order to create more business synergy. Companies acquire another small or similar companies in order to improve market share, expand business, improve cost efficiency, improve effectiveness and competitiveness etc. Company’s board […]Continue Reading... Comments Off on Mergers and Acquisitions (M&A)