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)
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)
Below are the key differences between Bonus Issue and Stock Split A bonus issue is additional share issued to the shareholders while Stock split refers to split of existing shares For Bonus issue, reserve fund is converted to equity capital while for split, there is no change in equity capital For Bonus issue face value […]Continue Reading... Comments Off on Bonus Issue v/s Stock Splits
Corporate Action is a process initiated by a publicly traded or listed Company that brings material change to the company affecting all the shareholders which include change in its Name, Securities, strike price etc. Corporate Actions are approved by company’s board of directors and authorized by shareholders. Different types of Corporate Actions: Mandatory Corporate Actions […]Continue Reading... Comments Off on Corporate Actions