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1. LEGAL ASPECT OF FINANCE AND
SECURITY LAWS
LEGAL ASPECTS OF
FINANCE AND
SECURITY LAWS
Presented by : G.V.More

2. INTRODUCTION TO LEGAL ASPECT OF
FINANCE
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3. Introduction
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Indian Financial System is one of the
most important aspects of the economic
development of our country. This system
manages the flow of funds between the
people (household savings) of the
country and the ones who may invest it
wisely (investors/businessmen) for the
betterment of both the parties.

4. FINANCIAL MARKET :
A financial market is a word that describes a marketplace where bonds, equity, securities,
currencies are traded. Few financial markets do a security business of trillions of dollars
daily, and some are small-scale with less activity. These are markets where businesses
grow their cash, companies decrease risks, and investors make more cash.

5. QUIZ
Q._______ is a link between savers & borrowers, helps to establish a link between savers
& investors
(a) Marketing
(b) Financial market
(c) Money market
(d) None of these

6. Answer :
B

7. QUIZ
Which of the following is the function of financial market?
(a) Mobilization of savings
(b) Price fixation
(c) Provide liquidity to financial assets
(d) All of the above

8. Answer : D

9. CLASSIFICATION OF FINANCIAL MARKET
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10. QUIZ
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11. ANSWER :
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12. QUIZ
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13. INSURANCE
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 Insurance is a risk transfer mechanism, where you transfer your risk to the
insurance company and get the cover for financial loss that you may face due to
unforeseen events. And the amount that you pay for this arrangement is called premium.
 An agreement by which a person pays a company and the company promises to pay
money if the person becomes injured or dies or to pay for the value of property lost or
damaged.
 Insurance is a way to manage your risk. When you buy insurance, you purchase
protection against unexpected financial losses. The insurance company pays you or
someone you choose if something bad happens to you. If you have no insurance and an
accident happens, you may be responsible for all related costs.

14. Types of Insurance
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15. DERIVATIES
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A derivative is a contract between two or more parties whose value is based on an
agreed-upon underlying financial asset (like a security) or set of assets (like an index).
Common underlying instruments include bonds, commodities, currencies, interest rates,
market indexes, and stocks.
 Derivatives have become important in india sice 1995 with the amendments of the
securities contract regulation act 1956

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17. Classification of Derivatives
❖ Commodities Derivatives
❖ Financial Derivatives
❖ Basic Derivatives
❖ Complex Derivatives
❖ Complex Derivatives
❖ Exchange Traded Derivatives

18. Characteristics of Derivatives

19. PARTICIPANTS IN DERIVATIVES MARKET
Speculators
Arbitrageurs
Hedgers

20. FINANCIAL DERIVATIVES
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❑ FORWARDS
❑ FUTURE
❑ OPTIONS
❑ SWAPS

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COMMERCIAL BANKING
The term commercial bank refers to a financial institution that accepts deposits, offers
checking account services, makes various loans, and offers basic financial products like
certificates of deposit (CDs) and savings accounts to individuals and small businesses.
✓ Commercial banks accept deposits, make loans, safeguard assets, and work with many
different types of clients, including the general public and businesses.
✓ In addition to deposit products like checking and savings accounts, commercial banks
offer merchant services, commercial loans, global trade services, treasury services, and
other corporate-oriented products. Payment processing is an example of a commercial
banking service.

24. Commercial Bank
Public Sector Bank Private Sector Bank
State bank of
India
Nationalised
Bank
Indian Bank Foreign Bank

25. PUBLIC SECTOR BANK :
▪ Public sector banks are those banks where the government holds more than 50%
ownership. With these banks, the government regulates the financial guidelines.
Because of government ownership, most depositors believe that their money is more
secured in public sector banks.
▪ Public Sector Banks are a major type of government owned banks in India, where a
majority stake is held by the Ministry of Finance of the Government of India or State
Ministry of Finance of various State Governments of India.

26. PRIVATE SECTOR BANK :
▪ Private Sector Banks are those banks in which the majority of the
stake is held by shareholders of the bank and not by the
government. RBL bank, HDFC Bank, ICICI Bank, Yes Bank, etc. are the
private sector banks in India. They provide all the banking products and
services to the customers.
▪ Private Sector Banks offer quick service to the customers. These
banks also offer customized services according to the customer's
financial needs. Private Sector Banks has a streamlined management
system.

27. Forwards Market Commission
➢ The Forwards Market Commission is a statutory entity which is involved in monitoring and
regulating the operations, activities of the Commodities futures market in India. It is setup
under the Forward Contracts (Regulation) Act of 1952. FMC has its headquarters in Mumbai and a
regional office in Kolkata.
➢ Forward price = spot price − cost of carry. The future value of that asset's dividends (this could
also be coupons from bonds, monthly rent from a house, fruit from a crop, etc.) is calculated using
the risk-free force of interest.
➢ Commodities traded on these exchanges comprise:
➢ Edible oilseeds: Groundnut, mustard seed, cotton seed, sunflower, rice bran oil, soy oil, etc.
➢ Food grains: Wheat, gram, dals, bajra, maize etc.
➢ Metals: Gold, silver, copper, zinc etc.
➢ Spices: Turmeric, pepper, jeera etc.
➢ Fibres: Cotton, jute, etc.
➢ Others: Gur, rubber, natural gas, crude oil etc.

28. PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
✓ The primary function of PFRDA is to promote pension schemes in India by fostering compulsory
and voluntary pension schemes among the old aged and retired personnel and help them take care
of their income needs. Facilitate and overlook the operations of both the types of NPS – tier 1 and
tier 2.0
✓ The Pensions Regulator and the Financial Conduct Authority (FCA) regulate workplace
contract-based pension schemes, eg personal pensions or stakeholder policies where the employer is
responsible for making contributions or deductions from employees' pay.

29. THANK YOU…
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