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AN ASSIGNMENT ON

TYPE OF FINANCIAL SERVICES

Submitted To: By:Ms. Jinendra Mehta Asst .Professor

Submitted

MBA Part II (Finance)

OM KOTHARI INSTITUTE OF MANAGEMENT & RESEARCH, KOTA.


Affiliated to Rajasthan Technical University, Kota

INTRODUCTION
Services that are offered by financial companies connote financial services. Financial companies include both assets management companies and liability management companies include leasing companies, mutual fund, merchant bankers and issue/portfolio managers. Liability management companies comprise of the bill discounting and acceptance houses.

TYPES OF FINANCIAL SERVICES 1) TRADITIONAL ACTIVITIES 2) MODERN ACTIVITIES TRADITIONAL ACTIVITIES: The financial intermediaries have been rendering a wide range of services encompassing both capital and money activities. they can be grouped under two heads, viz. 1) FUND BASE ACTIVITIES: A) Underwriting or investment in shares, debentures, bonds, etc. B) Dealing in secondary market activities. C) Dealing in foreign exchange market activities.

2) FEE BASED ACTIVITIES:

A) arrangement of funds from financial institutions for the clients project cost or his working capital requirements. B) Making arrangements for the placement of capital and debt instruments with investment institution. C) Assisting in the process of getting all government and other clearances. Examples: stock broking, credit rating etc.

STOCK BROKING: in India, stock exchanges were almost self regulatory till 1988, supervised by ministry of finance. They are
1) STOCK BROKERS 2) SUB-BREKERS 3) FOREIGN BROKERS 1) STOCK BROKRERS: its means who buys and sell shares and other securities through market makers on behalf of investors. 2) SUB-BROKERS: a sub-broker acts on behalf of a stockbrokers as an agent or otherwise for assisting investors in buying, selling or dealing in securities. But he is not a member of a stock exchange. 3) FOREIGN BROKERS: foreign institutional investors now play a significant role in the stock markets.

CREDIT RATING: It is an opinion on the future ability and legal obligation of


the issuer to make timely payment of principal of interest on a specific fixed income security.

Feature of credit rating Rating is based on information Many factors affect rating
Rating by more than one agency Monitoring the already rated issues Publication of ratings Right of appeal against assigned rating Rating of rating agency Rating is for instrument and not for the issuer company. Rating not applicable to equity shares Credit versus financial analysis

MODERN ACTIVITIES
Beside the above traditional services, the financial intermediaries render innumerable services in recent times. Some of the modern services provided by them are given in brief here under. 1. Planning for am and a and assisting for their smooth carryout 2. Guiding corporate customer in capital restructuring 3. Acting as trustees to the debenture holders 4. Managing the portfolio of large public sector corporation 5. Undertaking risk management services like insurance service byoptions etc. 6. Promoting crediting rating agencies for the purpose of rating company which want to go public by the issue of debt instrument. 7. Under taking services relating to the capital market. 8. Guiding the client in the minimisation of the cost of debt and in the determination of the optimum debt equity mix. 9. Advising the clients on the questions of selecting the best source of funds taking in to consideration the quantum of fund required their cost, landing period, etc. 10. Rendering project advisory services right from the parathion of the project report till the raising of the funds from starting the project with necessary govt. Approvals.