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
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- ITDS U/S.194T of Firm
- Unregistered suppliers utility
- Difference between Date of Payment and Date of Deduction?
- Non-Compliance documents have not been submitted by the contractors debited
- The TDS balance for March 26 shows a mismatch between the books and the portal; what should be done
- EXPORT COMMERCIAL INVOICE HSN CODE
- GST Rate for Catering Services
- FCRA 6 E- Intimation
- Bank details not Visible on Traces Portal
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
