The Best Practices for Exchange Online Mailbox Auditing. Exchange Online Mailbox Permission Review: Mailboxes are a treasure trove of personal information and sensitive business data, especially if they contain the most sensitive information in your organization.
Everything You Need to Know About Exchange Online Mailbox Auditing
One of the first things hackers do after breaking into your network is trying to find accounts with higher privileges and gain access to them. Also, They may even block others from accessing those account mailboxes, creating chaos.
How to Audit Exchange Online Mailbox
Mailbox auditing is disabled by default for all Exchange Online Mailboxes. To view the audit logs, you must manually enable the Exchange mailbox auditing.
The native Microsoft 365 portal does not support auditing mailboxes in bulk at all. You must either enable auditing separately for each mailbox or use scripting to automate the process for each mailbox.
Even if you are an expert in scripting, this can still take a lot of time if your organization has many mailboxes. That’s where M365 Manager Plus comes in.
M365 Manager Plus lets you enable auditing for any number of Mailboxes with just a couple of clicks, all without a single script.
You can:
Determine which mailboxes are auditing disabled
Also, Enable mailbox auditing
Mailbox Audit Permission
The Essential Guide to Exchange Online Mailbox Auditing. Mailbox permissions allow you to access the content of the mailbox. That includes not just the inbox, but also the folders, calendars, and contacts in the mailbox. That’s why it’s important to be careful when giving delegate access to the mailbox. Delegates don’t get elevated privileges unless you give them.
Agents can have full access to the mailbox:
They can open mailboxes
They can view, add and delete content
Also, They can’t send emails from the mailbox
They can send as:
An authorized representative sends emails from the delegate’s mailbox or group without revealing their identity
Also, The emails appear to come from the delegate’s mailbox or group
They can send it on behalf of
How to Export Mailbox Audit Logs in Exchange Online
When mailbox audit, Exchange Online records information in a mailbox audit log every time a non-owner accesses it. The log entry contains information such as:
Who accessed the mailbox
When did they do so?
What actions did they take?
Also, Did they succeed?
By default, the entries in the audit log are kept for 90 days.
You can use the audit log to check if a non-owner has accessed the mailbox.
How do I know if it worked?
You will receive a message from Exchange if you have successfully exported the mailbox audit logs. It may take a couple of days to receive the message. The message will attach.
The XML file (searchresult.xml) is saved by Exchange Online and attached to the email message that is sent to the recipients.
If you have set up Outlook on the Web to allow for XML attachments, please download the XML file.
Everything You Need to Know About Exchange Online Mailbox Auditing; Image by Gerd Altmann from Pixabay.
How to Possible and what is an easy way to Earn Money with Cryptocurrency, Crypto, and Bitcoin Exchange? Bitcoin is the biggest developing crypto coin that has topped the features and made individuals shock with its reasonable worth. With its expanding esteem, numerous individuals pull into it and discover ways to bring in money with Bitcoin. The fame of bitcoin has presented various and fascinating ways to earn through bitcoin. You can utilize the Paxful, Coinbase, Crypto application to bring in money with bitcoin exchanges.
How to Earn Money with Cryptocurrency, Crypto, Bitcoin Exchange? Possible and Easy Way, here is the article to explain.
Bitcoin is the most well-known type of cryptocurrency that is the reason it’s drawing increasingly more consideration, earn money in the crypto exchange. If you are keen on bringing in money with Bitcoins, we will show you various methodologies to do it right. Is it accurate to say that you are asking why many are joining the bitcoin bandwagon? Is it true that you are asking yourself how they bring in money from this advanced cryptocurrency? If you do, we will offer you the responses.
Bitcoin itself has a worth that you can change over into cash, so it’s an incredible resource. Yet, besides this, there are a few ways to bring in money from bitcoin. On the off chance that you need to benefit from this advanced money, here are the various things you can do to develop your abundance through Bitcoin.
A few groups frequently get confounded between different strategies and think that it’s hard to pick the correct money-production strategy. In actuality, the technique that you ought to pick should rely upon your speculation experienced, principal and specialized information, your portfolio, your objectives or assumptions, and the dangers that you can take. Pushing ahead, let us learn a few ways to bring in money with bitcoin. The following best option Possible and an easy way to Earn Money with Cryptocurrency, Crypto, and Bitcoin Exchange;
Bitcoin Investing or Contributing
Putting resources into Bitcoin implies purchasing and HODLing Bitcoin as long as possible, trusting its worth to increment with time. Crypto specialists accept that putting resources into bitcoin, a particularly unstable resource, required tolerance and specialized information. Bitcoin is dangerous speculation, and investors ought to just put resources into the sum they can stand to lose. Since contributing accomplish for a significant extensive stretch of time, investors should be patient and should notice the market and master the worth of bitcoins to develop. Contributing is perhaps the best strategy to earn money, however it blocks money for an extensive stretch.
Bitcoin or Crypto Mining
Satoshi Nakamoto presented the mining interaction of bitcoin. The best, most established, and certifiable way to bring in money is through the mining cycle. In Bitcoin Mining, the new crypto coins are made or found, and the bitcoin exchanges are checked and record on the blockchain record. Also, The excavators utilize a high preparing pace or registering ability to address muddled numerical riddles.
For utilizing powerful PCs and investing energy, diggers compensate with block awards for checking exchanges and adding blocks into the blockchain. The previous mining measure was easy as the numerical riddles weren’t mind-boggling. Over the long run, when an ever-increasing number of diggers were pulled into the mining cycle, the protocol changed the intricacy as per the number of excavators and figuring power. Also, The time given to diggers to address 1 MB of exchanges was 10 minutes.
Bitcoin Trading or Exchanging
Exchanging bitcoin implies a ton of dangers, yet, exchanging is a beneficial way. Information and experience are needed to exchange bitcoin because its market is profoundly unpredictable, and there are higher odds of losing money. In exchange, the merchants need to contribute or purchase bitcoin or other crypto tokens at less cost and sell them when the cost increments by earning the benefit. Also, It is just reasonable for individuals that know specialized examination.
The theoretical approach is unsafe. You would purchase Bitcoins and stand by until the cost increments to sell it for fiat cash. At the point when the value drops, you will purchase more. And rehash the cycle. You either should fortunate or equip for foreseeing the future to make this work for your potential benefit. A few groups are acceptable dealers and can perceive designs from value diagrams. Here are a few destinations that are best for Bitcoin exchanging, in alphabet list.
This site intends for customers who need a lightning-quick exchange execution, dependable computerized wallets, and industry-driving security rehearses.
This is perhaps the most confided in stages for exchanging cryptocurrency. Also, It offers you the capacity to exchange an assortment of computerized resources on a safe, protection-supported stage.
This backing is a real sense of many virtual cryptocurrencies with a low exchanging expense. Also, It centers around client experience with the joining of extra administrations including commercial center and wallet.
This exchange situates in New York and is accessible in 48 US states and different nations including Puerto Rico, Canada, UK, Singapore, South Korea, and Hongkong. It has no store and withdrawal expenses except for charges a 1% charge for exchanges to both the purchaser and the merchant.
This site incorporates progressed exchanging tools for exchanging, exchange, and loaning. Also, It has cold storage and all day, every day monitoring to keep your money ensured.
Guide and Tip for Bitcoin
If you are working at a café or any shop or work a site, you can ask individuals or encourage individuals to utilize real stages for working and request that they give tips in Bitcoin. Individuals online quest for different things like discovering an answer for an issue, recognizing a film or melody of a film, and more; you can give them arrangements or exhort them and get tipped in the crypto token.
Crypto or Bitcoin fixture sites
Bitcoin fixture sites are the sites that intend to give compensations to individuals that total the manual human test or watch a promotion or do any assignments as portrayed by the spigot site. Fixture sites can likewise allude to paid-to-click sites as these permit clients to earn a limited quantity of money or bitcoins. The little undertakings that sites expect visitors to finish may incorporate playing a game, testing a module, watching a video without stopping, and more.
Get a bitcoin wallet
To enroll in the majority of the free bitcoin earning locales, you start by entering your bitcoin address. And the best way to get one is to get a crypto wallet. As far as I might be concerned, the best arrangement is an equipment wallet for cold storage. And I’ve been utilizing my Trezor wallet throughout recent years. It can acknowledge more than 500 tokens and coins. And it’s really protected! For what reason do you require a wallet, when you can keep your coins in various locales? Since they’re not yours yet… You don’t possess private keys. And if a site closes tomorrow, you can lose everything. So get yourself a wallet now!
Bitcoin Loaning or Lending
You probably won’t have caught wind of the crypto loaning strategy to earn bitcoin; however, it is like loaning your assets and getting intrigued by it. By loaning bitcoin, it can give exceptional yields, yet in addition, it implies hazard. You can either decide to loan money through a go-between, or you can straightforwardly loan bitcoins to your companions or known individual and can request a particular percent of the financing cost. Also, The significant danger that implies in loaning is of the borrower though he and she don’t return the money or pay you the financing cost, you’ll lose your assets.
This isn’t just about as mainstream as ordinary exchanging, yet a few exchanges permit you to credit your Bitcoin to different clients. Locales like Bitfinex and Poloniex permit you to bring in money from your Bitcoin through edge subsidizing. At the point when you edge reserve, you will give Bitcoin to different dealers who are settling on utilized edge decisions. If you will chance more, you can utilize the program SALT. SALT (saltlending.com) permits you to use your blockchain resources for secure money advances. Thusly, you can bring in money from Bitcoins without selling your #1 speculation.
Convert your Bitcoin Into Cash
Bitcoin are computerized money, however, the incredible thing about this is that you can change over them into cash, earn money or reward in crypto or cryptocurreny exchange. Indeed, you read it right, you can transform this into genuine money that you can hold and use for your future buys. If you have a bitcoin and need to transform it into hard money, you have a few alternatives, as indicated by Sean Patterson.
Changing Out Online
You can associate with a potential purchaser straightforwardly and utilize a go-between site to work with your association for a specific expense. For this, you need to pick monetary assistance and make a vendor’s record. At the point when you’re account prepares; you can post a sell offer. When you get paid, the site will move your cryptocurrency to the purchaser. For this you can utilize the accompanying:
Coinbase; This monetary help offers to move your bitcoins free of charge. However, on the off chance that you are selling, you need to pay the assistance expense contingent upon what payout strategy you picked U.S. bank (1-2%), 1% for a Coinbase USD walled and 3.75% for PayPal
Bitbargain; This assistance has an assortment of expenses. If our ID isn’t confirmed you will be charged 0.005 BTC, the commission for exchanging activity is 1%. On the off chance that you need to get an SMS message; Also, you should pay 0.0003 BTC, and the financial check method costs 0.02 BTC.
Changing Out Offline
On the off chance that you need to stay away from administration or money withdrawal charges, you can likewise sell your bitcoins with an exchange accomplice by and by. For this, you can utilize unique monetary administrations that distinguish your geological area and show the genuine proposals around there.
Bitcoin Trading Exchange
Besides exchanging with someone else, you can discover an exchanging stage that joins the highlights of Forex exchanging and Bitcoin exchanges. For this, you need to open a record, put in a sell request, and state what kind of cash you wish to sell and its sum. At the point when a comparative buy is discovered, the exchange administration will finish the exchange, also, know about CFD trade. Kraken permits exchanging among bitcoins and EUR, USD, CAD, GPB, and JPY. The exchanging charges are around 0.10% to 0.35%.
This may differ contingent upon the statement cash volume. The handling expense for each paper duplicate of your correspondence is $60 per page. Then, the USD bank wire withdrawal is $5. Also, Bitfinex upholds diverse advanced monetary standards including Bitcoins, Litecoins, and ethers. Its exchanging expense is around 0.10% to 0.20%, the bank wire charge is 0.100% with a base charge of $20, the express bank wire expense is 1.000% with a base charge of $20.
Cryptocurrency Converters
There are a few ways to change over your bitcoins into cash. You can utilize an exchange administration to right away change over your computerized money into dollars, euros, or different monetary standards. At the point when the exchange is finished, you can withdraw the money at ATMs utilizing a pre-loaded charge from one of the accomplice administrations offered by the site. If you pick this course, try to just execute with genuine locales. To do as such, focus with regards to when the site was made and the hold accessible for your picked changesets. Additionally, set aside the effort to check their appraisals and audits.
Electronic Payment Systems
You can likewise play out all the change and withdrawal without help from anyone else utilizing a multi-practical electronic framework. You can do this by opening a bitcoin record and then withdrawing the money utilizing a wire move or pre-loaded check card.
How to Earn Money with Cryptocurrency, Crypto, and Bitcoin Exchange? Possible and Easy Way; Image by Icons8_team from Pixabay.
Meaning of Negotiable Instrument: A negotiable instrument is a specialized type of “contract” for the payment of money that is unconditional and capable of transfer by negotiation. The Concept of the study Explains – Negotiable Instruments: Types of Negotiable Instruments, Classification of Negotiable Instruments, Importance of Negotiable Instruments. Common examples include cheques, banknotes (paper money), and commercial paper. Also learned, Negotiable Instruments: Types, Classification, Importance!
Explain and Learn, Negotiable Instruments: Types, Classification, Importance!
A promissory note: is a Written promise by the maker to pay money to the payee. the most common type of promissory note is a bank note, Which is defined as a promissory note made by a bank and payable to bearer on demand. Through promissory note a person i.e. maker (drawer) promise to pay the payee a specific amount on a specified date Without any condition. “o the important points in a promissory note are 1) it is unconditional order 2) a specific amount 3) payable to the order of a person or on demand.
A bill of exchange: is a Written order by the drawer to the drawee to pay money to the payee. The most common type of bill of exchange is the cheque, which is defined as a bill of exchange drawn on a banker and payable on demand. &ills of exchange are used primarily in international trade and are written orders by one person to his bank to pay the bearer a specific sum on a specific date sometime in the future.
A cheque: is an unconditional order in writing drawn upon a specified banker signed by the drawer, directing to the banker to pay on demand a certain sum of money to or to the order of a person named therein or to the bearer.
#Types of Negotiable Instruments:
Parties to various types of Negotiable Instruments:
Drawer or Drawee:
The maker of a bill of exchange or cheque is called the “drawer”; the person thereby directed to pay is called the “Drawee”.
Drawee in case of need:
When in the bill or in any endorsement thereon the name of any person is given in addition to the Drawee to be resorted to in case of need such person is called a “drawee in case of need”.
Acceptor:
After the drawee of a bill has signed his assent upon the bill, or, if there are more parts thereof than one, upon one of such parts, and delivered the same, or given notice of such signing to the holder or to some person on this behalf, he is called the “acceptor”.
The acceptor for the honor:
When a bill of exchange has been noted or protested for non-acceptance or for better security, and any person accepts is supra protest for the honor of the drawer or of any one of the endorsers, such person is called an “acceptor for honor”.
Payee:
The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the “payee”.
Holder:
The “holder” of a promissory note, bill of exchange or cheque means any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto. Where the note, bill or cheque is lost or destroyed, its holder is the person so entitled at the time of such loss or destruction.
Holder in due course:
“Holder in due course” means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or endorse thereof, if (payable to order) before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.
Endorsement:
When the marker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, one the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to endorse the same, and is called the “endorser”.
Capacity to make, etc., promissory notes, etc.: Every person capable of contracting, according to the law to which he is subject, may bind himself and be bound by the making, drawing, acceptance, endorsement, delivery and negotiation of a promissory note, bill of exchange or cheque.
Minor:
A minor may draw, endorse, deliver and negotiate such instruments so as to bind all parties except himself. Nothing herein contained shall be deemed to empower a corporation to make, endorse or accept such instruments except in cases in which, under the law for the time being in force, they are so empowered.
Agency:
Every person capable of binding himself or of being bound, as mentioned in section 26, may so bind himself or be bound by a duly authorized agent acting in his name. A general authority to transact business and to receive and discharge debts does not confer upon an agent the power of accepting or endorsing bills of exchange so as to bind his principal.
#Classification of Negotiable Instruments:
The Following Classification of Negotiable Instruments are:
Inland Instrument:
A promissory note, bill of exchange or cheque which is 1) both drawn or made in India and made payable in India, or 2) drawn upon any person resident in India, is deemed to be an inland instrument. A bill of exchange drawn upon a resident in India is an inland bill irrespective of the place where it was drawn.
Foreign Instrument:
An instrument, which is not an inland instrument, is deemed to be a foreign instrument. Foreign bills must be protested for dishonor if such protest is required by the law of the place where they are drawn. But protest in case of inland bills is optional.
Instruments payable on demand:
A cheque is always payable on demand and it cannot be expressed to be payable otherwise than on demand. A promissory note or bill of exchange is payable on demand:
When no time for payment is specified in it.
When it is expressed to be payable ‘on demand’, or ‘at sight’ or ‘on presentment’. The words ‘on demand’ is usually in a promissory note, the words ‘at sight’ are in a bill of exchange.
Ambiguous Instrument:
When an instrument owing to its faulty drafting may be interpreted either as a promissory note or a bill of exchange, it is called an ambiguous instrument. Its holder has to elect once for all whether he wants to treat it an as a promissory note or a bill of exchange. Once he does so he must abide by his election.
Forged Instrument:
An instrument is a forged when it is drawn, made or alternated in writing to prejudice another man’s rights. The most common form of forgery is signing another person’s signature, signing the name of the fictitious or none existing person. Fraudulently writing the name of an existing person is also the forgery.
Forgery is a nullity and, therefore, it passes no title. No holder of a forged instrument acquires any right on the instruments. Even a holder in due course gets no title if he comes into the possession of a forged instrument. A person has to pay money on a forged instrument by mistake, can recover it from the person to whom he has paid for it.
Bearer And Order Instruments:
An instrument is a bearer instrument when the amount payable thereon is payable to the bearer and him as a holder and in lawful possession, thereof is entitled to enforce payment due on it.
Negotiable Instrument is a certain type of document, which transfers the money. It makes easy to carry money from one place to another place. So, it is very important for the transfer of money in the business sector.
The following points can grasp as the importance of a Negotiable Instrument.
Negotiable Instrument is an easier means of transfer of money.
It is easy to delivery from one place to another place.
It helps to flourish in the business sector.
It creates the right of property.
It has the easy negotiability and somewhere it provides the security.
It makes the fast transaction of money.
It makes the security of money as well as personal security in course of the transaction of money.
Negotiable Instrument is an easier way to transfer money from one place to another place. It provides a safe way to deliver the money. It has an important role to develop the way of money transaction as well as the business realm.
A Promissory Note is an instrument in writing, except government note or bank currency, containing unconditional undertaking signed by the Maker to pay a certain sum of money only to, or to the order of or to the bearer or to a certain person related to the instrument. Section 2(f) of Negotiable Instrument Act, 2034 The person, who makes the promissory note or promises, is called a ‘Maker’ and he has to sign that document as a debtor.
The person to whom payment is to be made is called the ‘payee’. A promissory note is an unconditional promise to pay put into writing by a person or entity and signed by the borrower or person making the promise. Promissory notes are often created between a borrower and a lender in which the borrower promises to pay the lender a specific amount of money by the specified date.
A promissory note, similar to a contract, contains all of the details pertaining to the transaction such as the amount borrowed, late fees, interest rates, and so forth, and should contain the term “promissory note” within the body. In terms of enforceability, a promissory note lies somewhere between an informal IOU and a formal loan contract.
Bill of exchange is another type of Negotiable Instrument. It is also in practice in the business sector. A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.
It is defined under section 2(g) of the Nepalese Negotiable Instrument Act, 2034. Section 2(g) defines as “A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money to, or to the order of a person or to a person or to the bearer of the instrument”.
On the basis of the above definition, there are three parties in the bill of exchange, which are as below:
Drawer: The maker of a bill of exchange.
Drawee: The person, who is directed to pay.
Payee: The person who receives the bill of exchange.
Another commonly used type of negotiable instrument is the bill of exchange. A bill of exchange is a financial document that states an individual or business will pay a certain amount on a specific date. The date may range from the date it is signed, to within six months into the future.
A bill of exchange must contain the signature of the individual promising to pay to be considered legally binding. Unlike a promissory note, a bill of exchange may be transferred to a third party, binding the payor to pay the third party who was not involved in the first place.
The cheque is a very common form of negotiable instrument. If you have a savings bank account or current account in a bank, you can issue a cheque in your own name or in favor of others, thereby directing the bank to pay the specified amount to the person named in the cheque. Therefore, a cheque may be regarded as a bill of exchange; the only difference is that the bank is always the drawee in case of a cheque.
The Negotiable Instruments Act, 1881 defines a cheque as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. From the above dentition, it appears that a cheque is an instrument in writing, containing an unconditional order, signed by the maker, directing a specified banker to pay, on demand, a certain sum of money only to, to the order of, a certain person or to the bearer of the instrument.
The person who draws a cheque is called the “Drawer”. The banker on whom it is drawn is the “Drawee” and the person in whose favor it is drawn is the “payee”. Actually, a cheque is an order by the account holder of the bank directing his banker to pay on demand, the specified amount, to or to the order of the person named therein or to the bearer.
Explain and Learn, Bill of Exchange: Content, Parties, and Advantages!
The Concept of the study Explains – Bill of Exchange: Content of Bill of Exchange, Parties of Bill of Exchange, and Advantages of Bill of Exchange! Definition of Bill of Exchange: Bill of Exchange, can be understood as a written negotiable instrument, that carries an unconditional order to pay a specified sum of money to a designated person or the holder of the instrument, as directed in the instrument by the maker. The bill of exchange is either payable on demand, or after a specified term. Also learned, Bill of Exchange: Content, Parties, and Advantages!
In a business transaction, when the goods are sold on credit to the buyer, the seller can make the bill and send it to the buyer for acceptance, which contains the details such as name and address of the seller and buyer, amount of bill, maturity date, signature, and so forth.
An instrument which a creditor draws upon his debtor.
It carries an absolute order to pay a specified sum.
The sum is payable to the person whose name is mentioned in the bill or to any other person, or the order of the drawer, or to the bearer of the instrument.
It requires to be stamped, duly signed by the maker and accepted by the drawee.
It contains the date by which the sum should be paid to the creditor.
For Example:
Sam gives a loan of Rs.1,00,000 to Alex, which Alex has to return after three months. Further, Joseph has bought certain goods from Peter, on credit for Rs. 1,00,000. Now, Joseph can create a document directing Alex, to pay Rs. 1,00,000 to Peter, after three months. The instrument will be called as Bill of Exchange, which is transferred to Peter, on whom the payment is due, for the goods purchased from him.
Parties to a Bill of Exchange:
There are three parties viz. ‘Drawer’, ‘Drawee’ and ‘Payee’ to a bill of exchange.
Drawer: A bill of exchange is drawn upon the buyer/debtor by the seller/creditor and the drawer is the person who makes and draws the bill. The drawer is entitled to receive money from the debtor.
Drawee: The person upon whom the bill of exchange is drawn is known as drawee. Bill of exchange is drawn on the drawee who is the purchaser of goods. The Drawee of a bill is called the acceptor when he writes the words “accepted” and puts his signatures on it. This process is known as acceptance. After acceptance, the bill of exchange becomes a legal document. This document now binds the drawee to honor the bill on the due date. This acceptance may be general or qualified. In the case of general acceptance, without stating any conditions, the only sign of the acceptor is required. However, in the case of qualified acceptance, the name of the bank or specified place for payment is mentioned.
Payee: The person to whom the payment is made is known as payee. In some cases, the drawer of the bill also becomes the payee when he himself keeps the bill till the date of maturity. Drawer and Payee is usually the same person.
However, in the following cases drawer and payee are two different persons:
(i) When the bill is discounted by the drawer, the person who discounted the bill becomes the payee.
(ii) When the bill is endorsed to a creditor, the endorsee will become the payee.
The content of Bills of Exchange:
The contents of bills of exchange are as under:
Date: The date of the bill on which it is drawn should be written on the top right comer of the bill. This aspect is very important to determine the maturity date of the bill.
Term: This is the tenure of the bill and runs from the date of the bill. This should be specified in the body of the bill. The grace period of three days should be given after the expiry of the term from the date of the bill.
Amount: Amount of the bill should be given both in figures and words. The amount in figures should be mentioned on the top left corner of the bill and amount in words should be mentioned in the body of the bill.
Stamp: Stamp of proper value which depends on the amount of bill shall be affixed on the bills of exchange.
Parties: There may be three parties to the bills of exchange, drawer, drawee, and payee. However, in some cases, drawer and payee may be the same person. All the names of the parties and their addresses should also be invariably mentioned in the bills of exchange.
For Value Received: This aspect is most important in the sense that law does not consider those agreements which have been made without consideration. Consideration means in lieu of and in the context of bills of exchange, it means that the bill has been issued in exchange of some consideration i.e., benefit has already been received.
Advantages of Bills of Exchange:
The bills of exchange are used frequently in business as an instrument of credit due to the following reasons:
Legal Relationship: Issuing bills of exchange provides a framework which converts and establishes a legal relationship between seller and buyer, from creditor and debtor to drawer and drawee. In the case of any dispute between the parties, this relationship provides a conclusive proof in the court of law.
Terms and Conditions: Bill of exchange contains all terms and conditions of payments viz., amount of the bill, date of payment, place of payment, interest to be paid if any. The maturity date of the bill is also known to the parties to the bill so they can make necessary arrangement for funds.
Mode of Credit: Bill of exchange has been defined as a negotiable instrument under the Negotiable Instruments Act, 1881. The buyer can buy the goods on credit and pay after the period of credit with the help of bill of exchange. In case of urgency, the drawer can also get the payment by discounting the bill from the bank and without waiting for the maturity period.
Easy Transferability: Bill of exchange can be used for settling the debt of the creditors. Mere delivery and endorsement of the bill give a valid title to the endorsee.
Wider Acceptance: In case of the foreign bill, wider acceptance is given to the parties through which payments can be received and made easily.
Mutual Accommodation: Sometimes, the bill can be issued for mutually accommodating the parties so that financial help can be given to each other.
Explain and Learn, Bill of Exchange: Meaning, Definition, and Features!
A bill of exchange is generally drawn by the creditor on his debtor. The Concept of the study Explains – Bill of Exchange: What is a Bill of Exchange? Meaning of Bill of Exchange, Definition of Bill of Exchange, and Features of Bill of Exchange! It should be accepted either by the debtor or any person(s) on his/her behalf. It is worth mentioning that before its acceptance by the debtor, it is just a draft. It should be accepted either by a person upon whom it is drawn or someone else on his/her behalf. The stage at which the purchaser of goods signs the draft and writes ‘Accepted’ on it, it becomes a bill of exchange. Also learned, Bill of Exchange: Meaning, Definition, and Features!
What is a Bill of Exchange?
According to section 5 of the Negotiable Instruments Act, 1881, defines Bill Of Exchange as “A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.”
A promise or order to pay is not “conditional”, within the meaning of this section and section 4, by reason of the time for payment of the amount or any installment thereof being expressed to be on the lapse of certain period after the occurrence of a specified event which, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain.
The sum payable may be “certain”, within the meaning of this section and section and section 4, although it includes future indicated rater of change, or is according to the course of exchange, or is according to the course of exchange, and although the instrument provides that, on default of payment of an installment, the balance unpaid shall become due.
The person to whom it is clear that the direction is given or that payment is to be made may be a “certain person,” within the meaning of this section and section 4, although he is misnamed or designated by description only.
Meaning of Bill of Exchange:
T.P Mukherjee law Dictionary with pronunciation defines Bill of Exchange as under: “A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay, on demand or at a fixed or determinable future time, a sum certain in money to or the order of a specified person or to bearer.”
The legal and commercial dictionary defines Bill of Exchange as under: “Bill of Exchange includes a hundi and a cheque. A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of certain. The person or to the bearer of the instrument.”
Black‘s Law Dictionary defines Bill of Exchange as under: “Bill of Exchange. A three-party instrument in which the first party draws an order for the payment of a sum certain on the second party for payment to a third party at a definite future time.”
Wharton ‘s law lexicon Dictionary defines Bill of exchange as under: “As an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person, or to bearer.”
K.J. Aiyers judicial Dictionary defines Bill of Exchange as under: “It is a written order or request by one person to another for the payment of money at a specified time absolutely and at all events. A bill of exchange is only a transfer of a chose in action according to the custom of merchants, it is an authority to one person to pay to another the sum which is due to the first.”
P.G. Osborn’s. The concise commercial Dictionary defines Bill of Exchange as under: “An unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time, a sum certain in money, to or to the order of, a specified person, or to bearer. A bill of exchange is a negotiable instrument.”
Mitra’s legal and commercial Dictionary defines Bill of Exchange as under: “A bill of exchange means a bill of exchange as defined in the Negotiable Instruments Act 1881, and includes also a hundi, and any other document entitling or purporting to entitle any person whether named therein or not, to payment by any other person of, or to draw upon any other person for, any sum of money.”
Stroud’s Judicial Dictionary defines Bill of Exchange as under: “An order to pay out of a particular fund is not unconditional within the meaning of this section, but an unqualified order to pay, coupled with (a) an indication of a particular fund out of which the drawee is to reimburse himself or a particular account to be debited with the amount, or (b) a statement of the transaction which gives rise to the bill, is unconditional.”
Jowitt’s Dictionary of English law defines Bill of Exchange as under: “An unconditional order in writing, addressed by one person (A) to another (B) signed by the person giving it, requiring the person to whom it is addressed to pay, on demand, or at a fixed or determinable future time, a sum certain in money to, or to the order of a specified person (c), or to bearer ( Bill of Exchange Act 1882, s3 ) A is called the drawee, B the drawer and C the payee. Sometimes, A the drawer is himself the payee. The holder of a bill may treat it as a promissory note (q.v) if the drawer and drawee are the same person s5(2), when B, the drawee, has, by accepting the bill, undertaken to pay it, he is called the acceptor.”
Definition of Bill of Exchange:
A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument. —Section 5 of the Negotiable Instruments Act, 1881.
Bill of exchange is a negotiable instrument which is payable either to order or to the bearer. Section 13 (1) of the Negotiable Instruments Act, 1881 defines negotiable instruments as “A promissory note, bill of exchange or cheque payable either to order or to bearer”.
Definition: Bill of Exchange, can be understood as a written negotiable instrument, that carries an unconditional order to pay a specified sum of money to a designated person or the holder of the instrument, as directed in the instrument by the maker. The bill of exchange is either payable on demand, or after a specified term.
In a business transaction, when the goods are sold on credit to the buyer, the seller can make the bill and send it to the buyer for acceptance, which contains the details such as name and address of the seller and buyer, amount of bill, maturity date, signature, and so forth.
Features of Bill of Exchange:
The definition of a Bill of Exchange under the act is fairly exhaustive and almost covers all the aspects related to it at one place. A Bill of Exchange requires three parties.
The drawer, i.e. the person who is the maker of the bill and who gives the order.
The drawee, i.e. the person who is directed to pay the bill and who on affixing his signature becomes the acceptor; and
The payee, i.e. the person to whom or to whose order the amount of the instrument is payable unless the bill is payable to bearer.
To analysis of the definition shows the following essential requisites of a bill of exchange:
A Bill of Exchange must be in Writing: A bill of exchange may be written in any language, and any form of words may be used, provided the requirements of this section are complied with.
A Bill of Exchange must Contain an Order to Pay: When a bill of exchange is drawn, the presumption is that there are funds in the hands of the person to whom the order is given, which are payable in any case to the person giving the order. The essence of a bill of exchange is that the drawer orders the drawee to pay money to the payee. As a bill of exchange is an order, it is necessary that it must, in its terms, be imperative and not perceptive.
The Order Contained in the Bill Should be Unconditional: It is the essence of a bill that it should be payable at all events, A bill of exchange cannot be drawn so as to be payable conditionally. The drawer’s order to the drawee must be unconditional and should not make the payment of the bill dependent on some contingency. Where an instrument is payable on a contingency, it does not cease to be invalid by the happening of the event before the expiry of the period fixed for the performance of the obligation, for the instrument must be valid ab initio, and carry its validity on its face. A conditional bill of exchange is invalid. The addition of the words as per agreement does not make a note conditional.
Bills Payable Out of a Particular Fund: On the same principle, a bill expressed to be payable out of a particular fund is conditional and invalid, because it is uncertain whether the fund will be in existence or prove sufficient when the bill becomes payable. Thus a bill containing an order to pay ‘out of money due from A as soon as you receive it, or out of money remaining in your hands belonging to X company is invalid.
A Bill of Exchange must be Signed by the Drawer: A Bill is not valid unless the drawer signs it and if Drawer has not signed it no action can be maintained against the acceptor or any other party who has affixed his signature these too. If the drawer is unable to write his name, he can sign by a mark in lieu of a signature.
The Drawee must be Certain: The next requisite is that the instrument must order a person to pay the amount of the bill. The person to whom the bill is addressed is called the ‘drawee’ and he must be named or otherwise indicated in the bill with reasonable certainty. So that the payee knows the person to whom he should present the instrument for acceptance and payment. A bill cannot be addressed to two or more drawee in the alternative because it would create difficulties as to recourse if the bill were dishonored.
The Sum Payable must be Certain: The sum payable is certain even though it is required to be paid with interest, or at the indicated rate of exchange or by installment with the proviso that on the default in the payment of installment, the whole amount shall become due and payable.
The Instrument must Contain an Order to Pay Money and Money only: The medium of payment should be the legal tender i.e. money and nothing else. An instrument containing the order to pay money along with some other thing or merely some other thing is not a valid bill. An instrument ordering the delivery up of houses and a wharf in addition to the payment of a sum of money is not a valid bill.
The Payee must be Certain: A bill must state with certainty the person to whom payment is to be made. A bill of exchange ought to specify to whom the same is payable, for in no other way can the drawee, if he accepts it, know to whom he may properly pay it so as to discharge himself from all further liability. Where a bill is payable to bearer, the payee is indicated with certainty. Bills are rarely drawn payable to bearer, but cheques are commonly so drawn. A bill cannot be drawn payable to bearer on demand. Where in a bill the drawee or payee is misnamed or misdescribed, extrinsic evidence is admissible to identify him.
Learn and Study, What is OTCEI (Over The Counter Exchange of India)?
Over the Counter Exchange of India (OTCEI) was incorporated in October 1990 under Section 25 of the Companies Act, 1956 with the objective of setting up a national, ring-less, screen-based, automated stock exchange. It is recognized as a stock exchange under Section 4 of the Securities Contracts (Regulations) Act, 1956. It was set up to provide investors with a convenient, efficient and transparent platform for dealing in shares and stocks; and to help enterprising promoters set up new projects or expand. Also learned, ISE, NSE, SEBI, What is OTCEI (Over The Counter Exchange of India)?
Their activities, by providing them an opportunity to raise capital from the capital market in a cost-effective manner. Trading in securities takes place through OTCEI’s network of members and dealers spanning the length and breadth of India.
Over The Counter Exchange of India was promoted by a consortium of financial institutions including:
Unit Trust of India.
Industrial Credit and Investment Corporation of India.
Industrial Development Bank of India.
Industrial Finance Corporation of India.
Life Insurance Corporation of India.
General Insurance Corporation and its subsidiaries.
SBI Capital Markets Limited.
Canbank Financial Services Ltd.
The Over the Counter Exchange of India is based on the model of the national association of securities dealers’ automated quotation (NASDAQ) of USA, with modifications to suit the Indian conditions. The OTCEI arose out of the need to have a second tire market in the country. It was set up to provide small and medium companies an access to the capital market for raising finance in a cost-effective manner and investors with a convenient, transparent and efficient avenue for capital market investment.
The OTCEI was the first ring less, electronic and national exchange with a screen-based trading system listing an entirely new set of companies of small size. It allowed companies with paid-up capital as low as 30 lacs to get listed, It brought the screen-based trading system in vogue for the first time; this was quite different from the open outcry system at BSE.
Moreover, each strip listed on the exchange had at least two market makers who continuously gave two way quotes. Market makers are merchant bankers willing to make a market in securities by continuously offering to buy and sell quotes. They act as a dealer cum stockiest and do not charge any commission or brokerage. Their profit margin is the spread between the bid and offer prices.
A voluntary market maker can be appointed for a period of six months. Market making is a unique concept of OTCEI. The other player on OTCEI is the custodian or registrar a safe keeper of share certificates. The OTCEI provides a liquid cash market for retail investors with a T+3 rolling settlement systems and no problem of bad of short deliveries.
Salient Features of Over the Counter Exchange of India:
Ring-less and Screen-based Trading: The over the Counter Exchange of India was the first stock exchange to introduce automated, screen-based trading in place of the conventional trading ring found in other stock exchanges. The network of on-line computers provides all relevant information to the market participants on their computer screens. This allows them the luxury of executing their deals in the comfort of their own offices.
Sponsorship: All the companies seeking the listing on Over the Counter Exchange of India have to approach one of the members of the OTCEI for acting as the sponsor to the issue. The sponsor makes a thorough appraisal of the project; as by entering into the sponsorship agreement, the sponsor is committed to making the market in that scrip (giving a buy sell quote) for a minimum period of 18 months, sponsorship ensures quality of the companies and enhance liquidity for the scrip’s listed on OTCEI.
Transparency of Transactions: The investor can view the quotations on the computer screen at the dealer’s office before placing the order. The OTCEI system ensures that trades are done at the best prevailing quotation in the market. The confirmation slip/trading document generated by the computers gives the exact price at which the deals has been done and the brokerage charged.
Liquidity through Market Making: The sponsor-member is required to give two-way quotes (buy and sell) for the scrip for 18 months from the commencement of trading. Besides the compulsory market maker, there is an additional market maker giving two way quotes for the scrip. The idea is to create an environment of competition among market makers to produce efficient pricing and narrow spreads between buy and sell quotations.
Listing of Small and Medium-sized Companies: Many small and medium-sized companies were not able to enter the capital market due to the listing requirement of Securities Contracts (Regulation) Act, 1956 regarding the minimum issued equity of Rs.10 crores in case of the Mumbai stock Exchange and Rs.3 crores in case of other stock exchanges. The OTCEI provides an opportunity to these companies to enter the capital market as companies with issued capital of Rs.30 lacks onwards can raise finance from the capital market through OTCEI.
Technology: Over The Counter Exchange of India uses computers and telecommunications to bring members/dealers together electronically, enabling them to trade with one another over the computer rather than on a trading floor in a single location.
Nation-wide Listing: Over the Counter Exchange of India network is spread all over India through members, dealers and representative office counters. The company and its securities get nation-wide exposure and investors all over India can start trading in that scrip.
Bought-out Deals: Through the concept of a bought-out deal, OTCEI allows companies to place its equity with the sponsor-member at a mutually agreed price. This ensures swifter availability of funds to companies for timely completion of projects and a listed status at a later date.
Benefits of getting OTCEI Listing for Companies:
The Over the Counter Exchange of India offers facilities to the companies having a issued equity capital of more than Rs. 30 lakhs.
The benefits of listing at the Over the Counter Exchange of India are:
Small and medium closely-held companies can go public.
The OTCEI encourages entrepreneurship.
Companies can get the money before the issue in cases of Bought-out-deals.
It is more cost-effective to come with an issue of OTCEI.
Small companies can get listing benefits.
Easy issue marketing by using the nation-wide OTCEI dealer network.
Nation-wide trading by listing at just one exchange.
Benefits of Trading on OTCEI for Investors:
The OTCEI trading counters are easily accessible by any investors.
The OTCEI provides greater confidence to investors because of complete transparency in deals.
At the OTCEl, the transactions are fast and are completed quickly.
The OTCEI ensures security, liquidity by offering two-way quotes.
The OTCEI is an investor friendly exchange with Single Window Clearance for all investor requests.
The OTC Exchange Of India (OTCEI), also known as the Over-the-Counter Exchange of India, is based in Mumbai, Maharashtra. It is India’s first exchange for small companies, as well as the first screen-based nationwide stock exchange in India. OTCEI was set up to access high-technology enterprising promoters in raising finance for new product development in a cost-effective manner and to provide a transparent and efficient trading system to investors.
OTCEI is promoted by the Unit Trust of India, the Industrial Credit and Investment Corporation of India, the Industrial Development Bank of India, the Industrial Finance Corporation of India, and other institutions, and is a recognised stock exchange under the SCR Act.
The OTC Exchange Of India was founded in 1990[3] under the Companies Act 1956 and was recognized by the Securities Contracts Regulation Act, 1956 as a stock exchange. The OTCEI is no longer a functional exchange as the same has been de-recognised by SEBI vide its order dated 31 Mar 2015.
Learn, What is ISE (Inter-Connected Stock Exchange)?
The formation of NSE changed the way in which the stock exchanges were functioning. Modern infrastructure, technology, transparency and corporate governance are now becoming the features in the corporate the world. It also forced BSE to adopt the new technology and with this, NSE and BSE crossed boundaries and started functioning, operating throughout India. This affected the functioning of small and regional exchanges. This led to the birth of the Inter-connected Stock Exchange of India Ltd. (ISE). Federation of Indian stock exchanges, in a meeting held in 1996, constituted a steering committee to evolve an interconnected market system. Also learned, NSE, SEBI, What is ISE (Inter-Connected Stock Exchange)?
In 1997, the market governing the body of India, Securities and Exchange Board of India (SEBI) granted approval to the proposal of the ISE to set up a national level stock exchange promoted by 14 regional stock exchanges. ISE was launched with an objective of converting small, fragmented and illiquid markets into a large, efficient and liquid market. Inter-Connected Stock Exchange (ISE) has set up an Inter-connected Market System (ICMS) which provides its trading members a facility to trade on the national market in addition to the trading facility at the regional stock exchanges. The trading members of the ISE, who are already the members of the 14 stock exchanges (which are the constituents of the ISE), satisfy the capital adequacy requirements of the ISE separately and in addition to the capital adequacy requirements of the regional stock exchange.
The ISE has set up a separate clearinghouse for settlement of the trades at the national market. The ISE has also made arrangement to appoint a clearing bank for online transfer of funds from regional centers to the national center. The ISE has an adequate risk management system for safety, integrity of the market and also to protect the interest of the investors. The participating exchanges of ISE have about 4,500 members and a large number of listed securities. It is a stock exchange of stock exchanges, members of the stock exchanges being traders on the ISE. The ISE has provided a highly automated trading system to the traders of the participating regional stock exchanges with direct access to the national level trading platform on an equal footing regardless of the location of the particular stock exchanges.
Important Features of Inter-Connected Stock Exchange of India
There are some of the features which make ISE a new age stock exchange are as follows:
ISE is a national level recognized stock exchange having moderate listing fees and granting listing and trading permission to small and medium-sized companies having a post public issue paid-up capital of Rs. 3 crore to Rs. 5 crores (subject to the appointment of market makers), besides companies with a capital of above Rs. 5 crores.
All traders and dealers of ISE have access to NSE through ISE securities and Services Ltd. (ISS), which ensures the continuous attention of investors.
ICSE has set up an ‘Investor Grievance and Service Cell’ which looks after all types of complaints of investors located across the country and provides decentralized support.
Listing of stocks with ISE would give the company an advantage of being identified as a technology-savvy and investor-friendly company.
Inter-connected Stock Exchange Ltd. (ISE) is an Indian national-level stock exchange, providing trading, clearing, settlement, risk management and surveillance support to its trading members. It started its operation in 1998 in Vashi, Mumbai, and has 841 trading members, who are located in 18 cities. These intermediaries are administratively supported through the regional offices at Delhi, Kolkata, Patna, Ahmedabad, Coimbatore, and Nagpur, besides Mumbai.
The ISE is promoted by 12 regional stock exchanges namely at Bangalore, Bhubaneshwar, Chennai, Kochi, Coimbatore, Guwahati, Indore, Jaipur, Kanpur, Mangalore, Magadh, and Vadodara. The participating exchanges of ISE have 4,500 members and listed securities. It is a stock exchange of stock exchanges, members of the stock exchanges being traders on the ISE.
A Mutual Fund is a special type of investment institution which collects or pools the savings of the community and invests large funds in the variety of Blue-chip Companies which are selected from a wide range of industries with the objects of maximizing returns/incomes on investments. Mutual Funds are basically a trust which mobilizes savings from the people and invests them in a mix of corporate and government securities. Money collected by the investors is invested in various issues of primary and secondary markets in order to gain profits on such investments. Also learned, the Process of Investment, What are a Mutual Funds?
A Mutual Fund is a Trust, which combines the investments of various investors having similar financial goals. The Trust issues units to the investors in the proportion of their investments. A fund manager then invests these funds in different types of assets, which provide returns in the form of dividends, interests, and capital appreciation. This is distributed to the various investors in the proportion of their contribution to the pool funds. Ordinary investors, who want to invest their savings, neither understand the complexities of financial markets nor have the time to watch, research and analyze different equities, securities or any other investments opportunities that are available in the market.
At present, all the markets viz. the debt market, the equity market, the money market, real estates, derivatives, and the market dealing with the other assets have now reached a stage where a minimal information affect the markets. Besides this, the economy has opened up and global events influence their performance.
It is very difficult for a layperson to keep track of various investments, transactions, brokerages etc. In the present scenario, mutual funds are some of the most efficient financial instruments as it offers services like managing investments at a very low cost.
What is NAV or Net Asset Value?
NAV of the Fund is the market value of all the assets of the Fund subtracting the Liabilities. NAV reflects the Fund that will be available to the shareholders if the Fund is liquidated and all the liabilities are paid. In the mutual fund industry NAV refers to Net Asset Value per unitholder, which NAV of the Fund divided by the outstanding number of the units.
It shows the performance of the Fund.
Calculation of NAV = Net Asset Value of the fund sum of market value of shares/debentures + Liquid assets/cash Dividends/interest accrued – All liabilities
Net asset value per unit =NAV of the fund / Outstanding number of units
The market value of the shares and debentures is calculated by multiplying the number of shares/units by the closing price of the shares/debentures. The closing price will be of the previous day of the stock exchange from where the shares have been purchased.
If the shares were not traded on the previous day in that stock exchange, then the closing price of the shares of any other stock exchange is taken where the shares were traded. If the shares were not traded on any stock exchange the previous day, then the closing price of the shares when they were last traded is taken.
For untraded shares, the value has to be determined by the other methods such as Book Value, comparable company approach, etc. Value of the illiquid bond is estimated on the basis of yields of comparable liquid bonds.
To many people, Mutual Funds can seem complicated or intimidating. We are going to try and simplify it for you at its very basic level. Essentially, the money pooled in by a large number of people (or investors) is what makes up a Mutual Fund. This fund is managed by a professional fund manager.
It is a trust that collects money from a number of investors who share a common investment objective. Then, it invests the money in equities, bonds, money market instruments and/or other securities. Each investor owns units, which represent a portion of the holdings of the fund. The income/gains generated from this collective investment is distributed proportionately amongst the investors after deducting certain expenses, by calculating a scheme’s “Net Asset Value or NAV. Simply put, a Mutual Fund is one of the most viable investment options for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
Securities and Exchange Board of India (SEBI) is the nodal agency to regulate the capital market and other related issues in India. It was established in 1988 as an administrative body and was given statutory recognition in January 1992 under the SEBI Act 1992 which came into force on January 30. The Act charged the SEBI, the first national regulatory body in India with comprehensive statutory powers over practically all aspects of capital market operations, “to protect the interests of the investors and to promote the development of, and to regulate the securities markets by such measures as it thinks fit.” Also learned, NSE, Explain, What is SEBI (Securities and Exchange Board of India)?
Learn, Explain, What is SEBI (Securities and Exchange Board of India)?
SEBI has been vested most of the functions and powers under the Securities Contract Regulation (SCR) Act, which brought stock exchanges, their members, as well as contracts in securities which could be traded under the regulations of the Ministry of Finance. It has also been delegated certain powers under the Companies Act.
In addition to registering and regulating intermediaries, service providers, mutual funds, collective investment schemes, venture capital funds and takeovers, SEBI is also vested with the power to issue directives to any person(s) related to the securities market or to companies in areas of issue of capital, transfer of securities and disclosures. It also has powers to inspect books and records, suspend registered entities and cancel the registration.
Before the establishment of Securities and Exchange Board of India (SEBI), the principal legislation governing the securities market in India was the capital issues control act 1956 and the securities contract act 1956. The regulatory powers were vested with the controller of capital issues for the primary market and the stock exchange division for the secondary market in the Ministry of Finance, Government of India.
SEBI has been constituted on the lines of Securities and Exchange Commission of USA. SEBI is consisting of the Chairman and 8 Members (one member representing the Reserve Bank of India, two members from the officials of Central Government and five other public representatives to be appointed by the Central Government from different fields). SEBI has been playing an active role in the Indian Capital Market to achieve the objectives enshrined in the SEBI Act, 1992.
The major objective of the Securities and Exchange Board of India (SEBI) may be summarized as follows:
To provide a degree of protection to the investors and safeguard their rights and to ensure that there is a steady flow of funds in the market.
To promote fair dealings by the issuer of securities and ensure a market where they can raise funds at a relatively low cost.
To regulate and develop a code of conduct for the financial intermediaries and to make them competitive and professional.
To provide for the matters connecting with or incidental to the above.
Section 11 of the SEBI Act deals with the powers and functions of the SEBI as follows:
It shall be the duty of Board to protect the interests of the investors in securities and to promote the development of and to regulate the securities market by measures as deemed fit.
To achieve the above, the Board may undertake the following measures:
Regulating the business in stock exchanges;
Registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, merchant bankers, underwriters, portfolio managers;
Registering and regulating the working of the depositories, participants, credit rating agencies;
Registering and regulating the working of venture capital funds and collective investment schemes, including mutual funds;
Prohibiting fraudulent and unfair trade practices relating to securities markets;
Promoting investors education and training of intermediaries of securities markets;
Prohibiting insider trading in securities;
Regulating substantial acquisition of shares and take-over of companies; and
Calling for information from undertaking, inspection, concluding inquiries and audits of the stock exchanges, mutual funds, other persons associated with the securities market intermediaries and self-regulatory organizations in the securities market.
In order to attain these objectives, SEBI has issued Guidelines, Rules, and Regulations from time to time. The most important of these is the “SEBI (Disclosure and Investor Protection) Guidelines,2000”. The provisions of these Guidelines,2000 are aimed to protect the interest of the investors in securities.
The Guidelines, 2000 deals with the following areas :
Eligibility norms for companies issuing securities,
Pricing of securities by companies,
Promoters contribution and lock-in requirements,
Pre-issue obligations of the merchant bankers,
Contents of the prospectus/abridged prospectus letter of offer,
Post issue obligation, of merchant bankers,
Green shoe option,
Guidelines on advertisements,
Guidelines for issue of debt instruments,
Guidelines for the book building process,
Guidelines on public offer through the stock exchange on-Line system,
Guidelines for issue of capital by financial institutions,
Guidelines for preferential issues of securities,
Guidelines for bonus issues,
Other operational and miscellaneous matters.
In order to regulate and control and to provide a code of conduct for the merchant bankers, other participants of the capital market, and other matters relating to the trading of securities, Securities, and Exchange Board of India (SEBI) has issued several Rules and Regulations.
These are related to Bankers to the issues, Buyback of securities, Collective Investments Schemes, Delisting of securities, Depositors, Derivatives, Employee stock options, Foreign Institutional Investors(FII’s), Insider Trading, Lead Manager, Market Makers, Merchant Bankers, Mutual Funds, Ombudsman, Portfolio Manager, Registrars and Share Transfer Agents, Securities Lending Scheme, Sweat Equity, Stock Brokers and sub-brokers, Takeover Regulations, Transfer of Shares, Underwriters, Unfair Trade Practices, venture capital Funds, Annual Reports, etc.
Learn, Explain, What is NSE (National Stock Exchange)?
The National Stock Exchange of India Limited (NSE) was set up by leading institutions to provide a modern, fully automated screen-based trading system with national reach. The Exchange has brought about unparalleled transparency, speed & efficiency, safety and market integrity. It has set up facilities that serve as a model for the securities industry in terms of systems, practices, and procedures. Also learned, Corporate Planning, Explain, What is NSE (National Stock Exchange)?
Image: #NSE (National Stock Exchange).
The National Stock Exchange of India Limited has played a catalytic role in reforming the Indian securities market in terms of microstructure, market practices, and trading volumes. The market today uses state-of-art information technology to provide an efficient and transparent trading, clearing and settlement mechanism, and has witnessed several innovations in products & services viz. demutualization of stock exchange governance, screen-based trading, compression of settlement cycles, dematerialization and electronic transfer of securities, securities lending and borrowing, professionalization of trading members, fine-tuned risk management systems, emergence of clearing corporations to assume counterparty risks, market of debt and derivative instruments and intensive use of information technology.
The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000.
The National Stock Exchange of India Limited’s mission is setting the agenda for change in the securities markets in India. The NSE was set-up with the following objectives:
Establishing a nation-wide trading facility for equities, debt instruments, and hybrids,
Ensuring equal access to investors all over the country through an appropriate communication network,
Providing a fair, efficient and transparent securities market to investors using electronic trading systems,
Enabling shorter settlement cycles and book-entry settlements systems, and
Meeting the current international standards of securities markets.
The standards set by The National Stock Exchange of India Limited in terms of market practices and technologies have become industry benchmarks and are being emulated by other market participants. NSE is more than a mere market facilitator. It’s that force which is guiding the industry towards new horizons and greater opportunities.
Till the advent of The National Stock Exchange of India Limited, an investor wanting to transact in a security not traded on the nearest exchange had to route orders through a series of correspondent brokers to the appropriate exchange. This resulted in a great deal of uncertainty and high transaction costs. One of the objectives of NSE was to provide a nationwide trading facility and to enable investors spread all over the country to have an equal access to NSE.
NSE has made it possible for an investor to access the same market and order book, irrespective of location, at the same price and at the same cost. NSE uses sophisticated telecommunication technology through which members can trade remotely from their offices located in any part of the country. NSE trading terminals are present in 363 cities and towns all over India.
The National Stock Exchange of India Limited has been promoted by leading financial institutions, banks, insurance companies and other financial intermediaries NSE is one of the first demutualized stock exchanges in the country, where the ownership and management of the Exchange is completely divorced from the right to trade on it. Though the impetus for its establishment came from policymakers in the country, it has been set up as a public limited company, owned by the leading institutional investors in the country.
From day one, NSE has adopted the form of a demutualized exchange – the ownership, management, and trading is in the hands of three different sets of people. NSE is owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries and is managed by professionals, who do not directly or indirectly trade on the Exchange. This has completely eliminated any conflict of interest and helped NSE in aggressively pursuing policies and practices within a public interest framework.
The NSE model, however, does not preclude, but in fact accommodates involvement, support, and contribution of trading members in a variety of ways. Its Board comprises of senior executives from promoter institutions, eminent professionals in the fields of law, economics, accountancy, finance, taxation, etc, public representatives, nominees of SEBI and one full-time executive of the Exchange.
While the Board deals with broad policy issues, decisions relating to market operations are delegated by the Board to various committees constituted by it. Such committees include representatives from trading members, professionals, the public and the management. The day-to-day management of the Exchange is delegated to the Managing Director who is supported by a team of professional staff.
The National Stock Exchange replaced open outcry system, i.e. floor trading with the screen based automated system. Earlier, the price information can be accessed only by few people but now information can be seen by the people even in a remote location. The paper-based settlement system was replaced by electronic screen-based system and settlement of trade transactions was done on time. NSE also created National Securities Depository Limited (NSDL) which permitted investors to hold and manage their shares and bonds electronically through a demat account.
An investor can hold and trade in even one share. Now, the physical handling of securities eliminated so the chances of damage or misplacing of securities reduced to the minimum and to hold the equities become more convenient. The National Security Depository Limited’s electronically security handling, convenience, transparency, low transaction prices and efficiency in trade which is affected by NSE, has enhanced the reach of Indian stock market to domestic as well as international investors.
#Promoters of National Stock Exchange of India (NSE):
Following financial institutions were the promoters of National Stock Exchange :
Industrial Development Bank of India(IDBI).
Industrial Finance Corporation of India(IFCI).
Industrial Credit and Investment Corporation of India(ICICI).
Life Insurance Corporation of India(LIC).
General Insurance Corporation of India(GIC).
SBI Capital Markets Limited.
Stock Holding Corporation of India Limited.
Infrastructure Leasing and Financial Services Limited.
#Market Segments of National Stock Exchange of India (NSE):
The National Stock Exchange of India Limited was intended to establish a viable and vibrant debt market which was in an underdeveloped stage. Now, it provides the traditional retail market for securities and also operates a Wholesale Debt Market (which may be termed as money market segment).
The NSE consists of three mutually exclusive segments :
Wholesale debt market segment, started operations in June 1994.
The capital market segment started operations in November 1994, and
Derivatives (Futures and Options) Trading, started operations in June 2000.
The Wholesale Debt Market segment of The National Stock Exchange of India Limited is a facility for institutions including subsidiaries of banks engaged in financial services and corporate bodies including companies to enter into high value transactions in instruments such as Public Sector Undertakings (PSUs) bonds, Treasury Bills (T-BilIs), Governments Securities, Units of UTI, Commercial Papers (CPs), Certificate of Deposits (CDs), Floating yields bonds, etc. Members of the Wholesale Debt Market segment can trade on their own behalf and on behalf of their clients. NSE trading system facilitates making two ways quotes in a highly flexible manner.
The Capital Market segment covers trading in equities and retail trade in the convertible or non-convertible debentures and hybrids. This particular segment comprises the securities of medium and large companies with nation-wide investors base. These will also include securities which are being traded on their stock exchanges. By virtue of equal access nationwide, such securities can be traded at the same price from any part of the country. This provides good trading and investment opportunities, increases the volume of the trade and increases the liquidity considerably.
Besides the capital market segment, The National Stock Exchange of India Limited also provides the opportunity to the investors to deal in the derivative products, i.e., futures and options. At present, NSE provides facility to trade in Nifty Futures, Nifty Options, Individual Stock Options and Individual Stock Futures.
