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Indian Market, Regulation & Taxation

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Indian Market, Regulation & Taxation

Indexation Benefit

An adjustment that raises an asset's cost of acquisition for inflation before computing a long-term capital gain.

Indexed Cost = Cost of Acquisition x (Cost Inflation Index of the Year of Sale / Cost Inflation Index of the Year of Purchase) ₹ Indian Market, Regulation & Taxation

India VIX

An index measuring the volatility the market expects in the Nifty over the next 30 days, derived from Nifty option prices.

Computed from the order book of near and next-month Nifty options, expressed as an annualised percentage % Indian Market, Regulation & Taxation

Investment Adviser

A SEBI-registered professional who advises on securities for a fee and owes a fiduciary duty to the client.

Test: the person holds a SEBI registration as an investment adviser and charges a fee for advice rather than earning commission on products qualitative Indian Market, Regulation & Taxation

Investor Protection Fund

A fund maintained by each exchange to compensate investors for losses arising from a defaulting trading member.

Test: the claim arises from a declared default of a trading member and falls within the compensation limit set by the exchange ₹ Indian Market, Regulation & Taxation

IPO Allotment

The process of distributing shares among applicants when an issue is subscribed, by lottery in the oversubscribed retail portion.

Test: in an oversubscribed retail portion, allotment is by lottery in minimum lots, so each application has an equal chance regardless of size qualitative Indian Market, Regulation & Taxation

KYC

The know-your-customer process of verifying an investor's identity, address and financial details before market access is granted.

Test: identity, address and PAN are verified against prescribed documents and recorded with a KYC registration agency qualitative Indian Market, Regulation & Taxation

Listing Gain

The profit from selling IPO-allotted shares on the day they begin trading.

Listing Gain % = (Listing Day Price - Issue Price) / Issue Price x 100 % Indian Market, Regulation & Taxation

LODR Regulations

SEBI's Listing Obligations and Disclosure Requirements Regulations, governing what listed companies must disclose and how they must be…

Test: the company has securities listed on a recognised exchange, bringing it within the continuous disclosure and governance obligations qualitative Indian Market, Regulation & Taxation

Long-Term Capital Gain

A capital gain on an asset held beyond the qualifying period, taxed at a concessional rate.

Test: listed equity or equity-oriented fund units held for more than 12 months; the first ₹1.25 lakh of aggregate such gains in a year is exempt ₹ Indian Market, Regulation & Taxation

Market Manipulation

Conduct intended to create a false or misleading appearance of trading or an artificial price in a security.

Test: the conduct creates a false appearance of trading activity or an artificial price, whether by matched trades, circular trading, wash trades or misleading statements qualitative Indian Market, Regulation & Taxation

MCX

The Multi Commodity Exchange of India, the country's largest exchange for commodity derivatives.

Test: the contract is a commodity derivative admitted to trading on the MCX, regulated by SEBI qualitative Indian Market, Regulation & Taxation

Muhurat Trading

A symbolic one-hour trading session held on Diwali to mark the start of the Hindu accounting year, Samvat.

Test: a special trading session is conducted by the exchanges on Diwali at a time announced in advance qualitative Indian Market, Regulation & Taxation

National Stock Exchange

India's largest stock exchange by trading volume, established in 1992 and fully electronic from the outset.

Test: the security is admitted to trading on the NSE, whose benchmark index is the Nifty 50 qualitative Indian Market, Regulation & Taxation

New Tax Regime

India's simplified personal income tax structure with lower slab rates and almost no deductions, now the default.

Taxable Income = Gross Income - the limited deductions permitted; tax computed on the new slab schedule ₹ Indian Market, Regulation & Taxation

Nifty 50

The NSE's benchmark index of 50 large Indian companies, weighted by free-float market capitalisation.

Index Value = (Current Free-Float Market Capitalisation of Constituents / Base Market Capitalisation) x Base Value index points Indian Market, Regulation & Taxation

NSDL

The National Securities Depository Limited, the first depository established in India, holding securities in electronic form.

Test: the demat account number is a 16-character alphanumeric identifier beginning with IN qualitative Indian Market, Regulation & Taxation

Old Tax Regime

India's original personal income tax structure, with higher slab rates but a wide range of deductions and exemptions.

Taxable Income = Gross Income - Deductions and Exemptions claimed; tax computed on the old slab schedule ₹ Indian Market, Regulation & Taxation

PAN

The Permanent Account Number, a ten-character identifier issued by the income tax department and mandatory for securities transactions.

Test: the ten-character alphanumeric identifier is quoted and linked for every securities market transaction and tax filing qualitative Indian Market, Regulation & Taxation

Pump and Dump

A manipulation in which operators inflate a security's price through false or misleading promotion, then sell into the demand they created.

Test: coordinated promotion raises price and volume in a low-float security, followed by concentrated selling by the promoters of that message qualitative Indian Market, Regulation & Taxation

Red Herring Prospectus

The offer document filed before an IPO containing all details except the final issue price and size.

Test: the document is filed with the registrar and contains complete disclosure other than the final price and number of shares qualitative Indian Market, Regulation & Taxation

Research Analyst

A SEBI-registered person or entity that publishes research reports and recommendations on securities.

Test: the person holds a SEBI registration as a research analyst and complies with the disclosure and conduct requirements for published research qualitative Indian Market, Regulation & Taxation

Reserve Bank of India

India's central bank, responsible for monetary policy, currency, banking regulation and the government securities market.

Test: the matter concerns monetary policy, banking regulation, payment systems, foreign exchange or government debt management qualitative Indian Market, Regulation & Taxation

SCORES

SEBI's online complaint redress system, through which investors lodge and track grievances against market intermediaries.

Test: the complaint concerns a SEBI-registered intermediary or listed company and is filed on the SCORES platform after approaching the entity directly qualitative Indian Market, Regulation & Taxation

SEBI

The Securities and Exchange Board of India, the statutory regulator of India's securities markets.

Test: the entity or activity falls within the securities market, bringing it under SEBI's registration, disclosure and enforcement powers qualitative