terminologies
This query is : Resolved
19 January 2009
HII
PL explain the foll terms
1.Hedge funds
2. Pledging of shares
PL explain the foll terms
1.Hedge funds
2. Pledging of shares
20 January 2009
‘To hedge’ means to minimize risk or insulate oneself. Conventionally the term 'hedge fund'is used to refer to a type of private investment vehicle that invests all or most of its assets in
publicly traded securities and hedges the investors’ risk from market exposure. These
investment vehicles are commonly structured as limited partnerships in which the investment manager, or the investment manager's capital management company, acts as the general partner while the investors act as the limited partners. These funds are alternative investment vehicles and are generally available to high net worth individuals and institutional investors. For the investors who make up the fund, there is usually little or no market liquidity. In fact they usually have a minimum lock in period ranging from one to three years.
What is a Pledge?
If you wish to take a loan from a Bank against the security of your physical share, the certificate must be physically lodged with the Bank.This action is called a Pledge.In electronic holding also you can pledge the shares by making a request with your DP in favour of any Bank.
Where can the shares be pledged?
You can pledge your shares in a bank which is a DP or a client of a DP.
What are the rules for Pledge Of Locked-in Securities?
Locked-in shares can be pledged with a Lendor (such as a Bank) for a loan.However, the pledge cannot be closed or invoked before the lock-in release date.
How can we Pledge / Hypothecate Shares?
First of all the Bank granting the loan should be a DP or a Client of a DP.You may submit the written Pledge instruction to your DP.The Pledged quantity is blocked in your DP Account by the Bank electronically.The loan is now available for use by you.
Can we dematerialize shares which are Pledged with a Bank if the Bank is also a DP?
Yes. It may be, with the permission of the Bank.
How to revoke pledged/hypothecated shares?
To revoke pledged/hypothecate shares, you need to submit a pledge revocation form to the DP asking for the revocation of your pledged securities.
What happens after the closure of the loan with the Bank in case of a Pledge?
Upon closure of the loan with the Bank, the Pledge is closed in DP account by the Bank directly.Those released shares in DP account are once again available to as free balances.
What is Pledge Invocation?
When a pledgee does not repay the loan amount the shares pledged with the Bank can be transferred in their favour. This is similar to the physical shares being transferred in the name of the lendor in the event of a default.Who will receive the corporate actions like dividends, bonus etc in Pledged shares . You continue to remain the beneficial holder of pledged shares. You will continue to receive the Dividends, Bonus and all other Corporate actions.
publicly traded securities and hedges the investors’ risk from market exposure. These
investment vehicles are commonly structured as limited partnerships in which the investment manager, or the investment manager's capital management company, acts as the general partner while the investors act as the limited partners. These funds are alternative investment vehicles and are generally available to high net worth individuals and institutional investors. For the investors who make up the fund, there is usually little or no market liquidity. In fact they usually have a minimum lock in period ranging from one to three years.
What is a Pledge?
If you wish to take a loan from a Bank against the security of your physical share, the certificate must be physically lodged with the Bank.This action is called a Pledge.In electronic holding also you can pledge the shares by making a request with your DP in favour of any Bank.
Where can the shares be pledged?
You can pledge your shares in a bank which is a DP or a client of a DP.
What are the rules for Pledge Of Locked-in Securities?
Locked-in shares can be pledged with a Lendor (such as a Bank) for a loan.However, the pledge cannot be closed or invoked before the lock-in release date.
How can we Pledge / Hypothecate Shares?
First of all the Bank granting the loan should be a DP or a Client of a DP.You may submit the written Pledge instruction to your DP.The Pledged quantity is blocked in your DP Account by the Bank electronically.The loan is now available for use by you.
Can we dematerialize shares which are Pledged with a Bank if the Bank is also a DP?
Yes. It may be, with the permission of the Bank.
How to revoke pledged/hypothecated shares?
To revoke pledged/hypothecate shares, you need to submit a pledge revocation form to the DP asking for the revocation of your pledged securities.
What happens after the closure of the loan with the Bank in case of a Pledge?
Upon closure of the loan with the Bank, the Pledge is closed in DP account by the Bank directly.Those released shares in DP account are once again available to as free balances.
What is Pledge Invocation?
When a pledgee does not repay the loan amount the shares pledged with the Bank can be transferred in their favour. This is similar to the physical shares being transferred in the name of the lendor in the event of a default.Who will receive the corporate actions like dividends, bonus etc in Pledged shares . You continue to remain the beneficial holder of pledged shares. You will continue to receive the Dividends, Bonus and all other Corporate actions.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Unanswered Queries
- Is this income indian or foreign income?
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- ITC temporary reversal and reclaim
- GST on export of services and Input Credit
- Inventory of finished goods
- Applicable TDS rate for sale of property in Nov 2024
- RCM INVOICING FROM NOV-2024
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Should I report my US salary for January, February, March in Schedule FA?
- Sale of property furniture sale
- Confusion around Form 26QB fields
- Adjustment entry in the case of Individual and HUF on 31st March
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
Trending Online Classes
CAclubindia
