FLAME Newsletter - September 18, 2013


"The consumers are always the weaker parties in need of protection. Consumers need to be enabled to navigate the financial markets to make choices beneficial to their needs" - Dr Deepali Pant Joshi, Executive Director, RBI


What is dematerialisation of securities?

As a share or debenture holder, it is important for you to be aware of the procedures to manage your investment in securities (the collective name for equity shares, debentures, bonds, mutual fund units etc.)

Managing your investment in securities is simple and easy in electronic form (dematerialised form) and it has many advantages over managing it in physical form (share / debenture certificates). Accordingly, this write-up details dematerialisation of securities, its advantages and how to manage your investment in demat mode.

Your investments in shares and debentures can be held in electronic or dematerialised form in a depository. Depository is an entity which holds securities (shares, debentures, bonds, government securities, mutual fund units etc.) of investors in electronic form at the request of the investors... Read more

Know more about demat accounts

Are demat & trading account the same?

The demat account does not trade (buy or sell) for you at the stock market. To invest in stocks you still need a trading account which will act as an interface between your demat account and the stock market and allow you to buy and sell shares.

Let's quickly examine the entire process to understand how the entire transaction happens. Suppose you are interested in buying shares of a company XYZ which are at Rs 50 a share. You determine that you want to buy around 100 shares of XYZ, so you transfer Rs 5,000 from your savings account. Once this transfer happens, you log into your trading account and using the money you just transferred, you buy 100 shares of XYZ for Rs 50 which costs you Rs 5,000 and you pay Rs 25 extra as brokerage... Read more

Understanding the basics of demat account


What is the clean price and dirty price while trading in bonds?

Bonds trade at clean price and dirty price in different markets. Clean price is the price of the bonds which excludes accrued interest. The dirty price includes clean price along with accrued interest.

In India, bonds trade at dirty price in the NSE (National Stock Exchange) corporate segment. Dirty price is the price of a bond with accrued interest. Thus, a bond trading in the NSE corporate segment has accrued interest included in it. Accrued interest is the interest that has got accrued on a bond from last coupon payment date. As a buyer of the bond, you are supposed to pay accrued interest to the seller of bond.  



A subsidy is the benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remove some type of burden and is often considered to be in the interest of the public.


PFRDA lets investors switch scheme for better returns

MF investments in debt funds at 6.4mn in April-July: SEBI

FM launches IRDA's Insurance Repository System

IRDA tightens advertising rules for life insurers


FLAME (Financial Literacy Agenda for Mass Empowerment) is an IIFL initiative to promote financial literacy amongst the masses in order to make them an integral part of India’s spectacular growth story.

In an era of accelerating GDP and rising per capita growth, financial literacy has become more critical than ever before such that we all reap the tangible benefits of the nation’s economic prosperity. Financial inclusion has been quite high on the governmental agenda, given its emphasis on widening the Banking & Financial services network across the country. IIFL’s FLAME initiative stands committed to complement this effort by helping common people gain financial growth and security though better awareness and education on the variety of financial products while avoiding the lure of and loss from unrealistic claims made by unscrupulous agents and ponzi schemes.

Our objective is to light a FLAME, as the name suggests, which will set ablaze a chain of FLAMEs across the country. The new-found light of knowledge will undoubtedly dispel the dark clouds of financial illiteracy and ensure the bright sunshine of financial growth and prosperity.

This portal is but one of the various IIFL initiatives that would be part of FLAME.

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