While trade is international, currencies are national. As international transactions are settled in global currencies, usually they are bought / sold for one another and this constitutes 'currency trading'.

1. Broader participation 2. Efficient risk management systems 3. Provide transparent trading platform 4. Efficiency in price discovery 5. Eliminate counterparty credit risk 6. Provide access to all types of market participants 7. Offer standardized products & settlement cycles 8. Small order up to 1 contract or 1000 USD can be executed 9. Underlying exposure is not mandatory

Currency Futures traded on Exchange Are standard contracts of a specified quantity To exchange one currency for another At a specified date in the future called settlement date At a price that is fixed on the purchase date called futures price

A currency futures contract is standardized version of forward contract that is traded on a regulated exchange. It is an agreement to buy or sell a specified quantity of an underlying currency on a specified date in the future at specified rate. (USD1 = INR 48.00). (Note: USD is abbreviation for the US Dollar and INR for the Indian Rupee)

OTC is the abbreviation of ‘Over the Counter’. It has no central marketplace and is linked to a network of dealers / traders who do not physically meet but instead communicate through a network of phone calls & via computers. OTC contracts are typically customized based on negotiations between counter parties. The counter party default risk depends on the counter party credit-worthiness and other factors.

Any resident Indian or company including banks and financial institutions can participate in the futures market. However, at present, Foreign Institutional Investors (FIIs) and Non Resident Indians (NRIs) are not permitted to participate in the currency futures market. Participants in the Currency Derivative Segment can be classified in to three broad categories. (A) Hedgers Given the recent geopolitical uncertainties, the foreign currency markets have been in turmoil. What little returns that can be achieved need protection by locking in your exchange rate for your exposure through currency futures. The Businessmen and investing public are increasingly exposed to global markets and the issue of protecting against foreign exchange risk becomes critical. Business Houses, Entrepreneurs and individuals who can benefit from hedging through Currency Futures: 1. Exporters, Importers & Money Changers 2. Individuals / HNI’s investors 3. Borrower, FCY Loans, Corporate 4. Commodity, Jewelers, Diamond & Bullion Traders 5. Petroleum Product Traders 6. Banks & Financial Institutions 7. Professionals receiving remuneration in foreign currency 8. Investors investing in assets exposed to currency risk (B) View Based Traders Currency futures provide investors / traders an efficient platform to observe the movement of local currency (INR) against other currency (USD) and trade. (C) Arbitragers Currency Futures provides opportunity for Arbitrage Trading by taking advantage of price difference of the same or similar product between two or more markets by striking a combination of matching deals and capitalize upon the imbalance without any additional market risk.

Yes. Minimum size of USD / INR futures contract is USD 1000. This is well within the reach of small traders. All transactions on the exchange are anonymous and are executed on a price-time priority ensuing that the best price is available to all the categories of market participants irrespective of their size. Also since the profits / losses in futures market are collected / paid on a daily basis, the scope of losses for participants gets limited.

Yes, it does if you want to invest purely as an investor. You can benefit from the exchange rate fluctuations just as you can benefit by investing in equities in the stock market. However, as in stock markets, you can also stand to lose money if price movements are not keeping with what you had anticipated. Participating in currency futures exchange is risky, just as the stock market is. You should therefore be knowledgeable about the currency market if you want to participate as an investor.

On a currency exchange platform you can buy or sell currency futures. If you are an importer you can buy futures to 'lock in' a price for your purchase of actual foreign currency at a future date. You thus avoid exchange rate risk that you would otherwise have faced. On other hand if you are an exporter, you sell currency futures on the exchange platform and 'lock in' a sale price at a future date.

Risk in currency futures pertain to movements in the currency exchange rate. There is no rule to determine whether the currency rate will rise or fall or remain unchanged. A judgment on this is the domain of experts with deep knowledge and understanding of the variables that affect currency rates.

A country’s exchange rate is typically affected by the supply and demand for the country’s currency in the international foreign exchange market. The demand and supply dynamics is principally influenced by the factors like interest rates, inflation, trade balance and political and economic scenarios in the country. The level of confidence in the economy of a particular country also influences the currency of that country.

Presently only USD / INR are available for trading.

In general insurance, an insurance broker would provide: 1. Pre sales and after sales service to customers 2. Relevant information to the underwriters for risk assessment and ascertain the premium 3. Accurate structuring of product and design covers that meet the specific requirements of customers. 4. Recommendations on risk improvement and loss minimization measures. 5. A collection of Premiums. 6. Risk management and insurance education.

The factors that can affect the cost of insurance include: The likelihood of a loss occurring – The greater the probability a loss will occur the higher the rate. E.g.: Flood Insurance in parts of North-east India. Purchase of a large amount of coverage, if the item you are insuring is quite valuable – The chances are there could be a large claim and the premium will need to cover that possibility.

Underwriting of a risk involves the consideration of material facts on the basis of which a decision will be taken whether to accept the risk and if so, at what rate of premium.

Claims are filed with the insurance company that issued your policy. In case of policies received on account of your employment you may have to file claims through the HR administrator.

Although most companies offer a call centre facility, alternatively, you can: 1. Contact your agent. 2. Write to your insurance company intimating the claim. There is usually a claim form that needs to be filled. This can be: 3. Downloaded from the insurance company’s website 4. Be obtained by visiting the insurance company’s office 5. Provided to you by your agent.

Be thorough and exact when reporting damage and always tell the truth. Withholding vital information or exaggerating the facts can not only lessen your chances of the claim being settled to your satisfaction, but also may be considered a crime. (Insurance fraud costs consumers crores of rupees a year. )

Yes. Minimum size of USD / INR futures contract is USD 1000. This is well within the reach of small traders. All transactions on the exchange are anonymous and are executed on a price-time priority ensuing that the best price is available to all the categories of market participants irrespective of their size. Also since the profits / losses in futures market are collected / paid on a daily basis, the scope of losses for participants gets limited. 1. Once your claim has been filed, the insurance company will assign a surveyor. 2. He or she is charged with investigating your claim and then making a recommendation to the insurance company. 3. The recommendation can be to accept the claim and pay the full amount requested, accept part of the claim and make partial payment or refuse the claim and make no payment. 4. The insurance company will then make a decision regarding your claim and notify you of its final decision. 5. The amount of compensation offered can vary according to the surveyor’s analysis.

Yes, it does if you want to invest purely as an investor. You can benefit from the exchange rate fluctuations just as you can benefit by investing in equities in the stock market. However, as in stock markets, you can also stand to lose money if price movements are not keeping with what you had anticipated. Participating in currency futures exchange is risky, just as the stock market is. You should therefore be knowledgeable about the currency market if you want to participate as an investor.

On a currency exchange platform you can buy or sell currency futures. If you are an importer you can buy futures to 'lock in' a price for your purchase of actual foreign currency at a future date. You thus avoid exchange rate risk that you would otherwise have faced. On other hand if you are an exporter, you sell currency futures on the exchange platform and 'lock in' a sale price at a future date.

Risk in currency futures pertain to movements in the currency exchange rate. There is no rule to determine whether the currency rate will rise or fall or remain unchanged. A judgment on this is the domain of experts with deep knowledge and understanding of the variables that affect currency rates.

A country’s exchange rate is typically affected by the supply and demand for the country’s currency in the international foreign exchange market. The demand and supply dynamics is principally influenced by the factors like interest rates, inflation, trade balance and political and economic scenarios in the country. The level of confidence in the economy of a particular country also influences the currency of that country.

Presently only USD / INR are available for trading.

Term assurances are the purest and cheapest form of insurance. Term assurances are plans where benefits are payable only on the death of the policy holder within the term.

Whole life plans are a special type of term assurance wherein the term of the policy lasts throughout a policy holder’s life. The benefits under the policy are payable only on death of the policy holder.

Endowment assurance plans are amongst the most popular forms of insurance as they provide both insurance coverage and acts as a savings instrument as well. In this plan benefits are either payable on death within the term or survival to maturity which ever is earlier.

Money back plans are a special type of endowment plans which are also known as anticipated endowment assurance plans. Under money back plans, survival benefits are spread over the term of the policy i.e. a certain percentage of sum assured is paid at regular intervals. Apart from the above, death benefit continues like an endowment plan i.e. full sum assured shall be payable on death within the term irrespective of earlier survival benefits.

'Assignor' is the person who holds the policy and can transfer the title of the policy holder. An 'Assignee' is the person who derives the title from the assignor.

Assignment is a means whereby the beneficial interest, right and title under a policy get transferred from the assignor to the assignee.

An assignment can be made only after acquiring the policy. Assignments can be done only for consideration like for money or money's worth and moral and meritorious consideration like for love and affection.

An assignment can be done by mere endorsement on the policy or by a separate duly stamped deed. Assignments can either be done by the proposer, policy holder or the absolute assignee.

For a valid assignment, the assignor must be a major. The assignor must have an absolute right over the policy. The assignment must be in writing. The assignor's signature along with a witness is a must and the notice of assignment is to be submitted to the insurer.

Nomination is the process of identifying a person who receives the policy money in the event of the death of the policy holder.

Nomination can be done at the inception of the policy by providing details of the nominee in the proposal form. However, if the nomination is incomplete at the inception of the policy, the policyholder can nominate at a later date. This nomination has to be put into effect by giving the insurer a notice in a prescribed form and getting it endorsed on a Policy Bond.

Policy holders are eligible to take loans on their policies subject to certain rules and regulations. The policy holder has to apply for a loan in a prescribed form and submit the duly completed form with a policy bond. The loan amount is calculated according to the Surrender Value (SV) that the policy would have acquired and approximately 85% of the Surrender Value is given as loan. Rate of interest charged varies from company to company and from time to time. A policy holder can repay the loan amount either in part or in full any time during the term of the Policy. If the loan amount is not repaid during the term of the Policy or earlier, the loan amount plus interest, if any, will be deducted from the claim money and the balance amount will be paid to the claimant.

A policy gets lapsed if the premiums are not paid within the due date or the period of grace permitted by the insurance company. However, a lapsed policy can be revived through procedures pertaining to the company.

Important Income Tax provisions applicable to policy holders are: An individual can claim rebate on premium paid on his / her life, his / her spouse, his / her children including adult children and married daughters. Under section 88 of the Income Tax Act, certain percentage of rebate is allowed on investment in the form of insurance premium with any of the insurance companies approved by IRDA. Percentage of rebate can be up to a maximum of 20% and varies depending upon the tax bracket it falls under. This rebate is deductible from the tax payable by the individual. The total amount of investment in the form of insurance premium and other specified investments like PPF, NSC, etc. is restricted to Rs. 60,000 per annum. Under Section 80 DDA a deduction of up to Rs. 40,000 per annum is allowed from total gross income. Under Section 80 CCC a deduction of up to a maximum of Rs. 10,000 per annum is allowed from total gross income.

The cash value payable by the insurance company on termination of the policy contract at the desire of the policy holder but before the expiry term is known as Surrender Value. A policy can be surrendered, provided the policy is kept in force for at least three years. The bonus will be added, provided the policy was in force for at least 5 years, i.e., premiums should have been paid for 5 years from the date of commencement of the Policy (this condition is not applicable in respect to claims by death.)

It is very difficult to place a monetary value on human life. Therefore, theoretically an individual can have life policies for any amount. However, in practice, it is determined based on the needs for insurance and the capacity to pay premiums regularly. Though there is no thumb rule to arrive at the exact amount of insurance, it is determined by taking 6 times the annual income of the person, if such income is not fluctuating. If the income is fluctuating it is desirable to calculate his average annual income and then determine the amount of insurance. From an individual’s stand point one should be able to save at least 10% of his annual income.

After payment of three years of premiums if subsequent premiums have not been paid under a policy, such a policy is said to have acquired a paid up value, though technically it is a lapsed policy. The paid up value is calculated by multiplying the sum assured by the ratio of premiums paid under the policy and the number of premiums payable under the policy. The value so arrived at should not be less than Rs. 250 excluding the accumulated bonus under such a policy. Such a reduced paid up policy will not be entitled to participate in future bonuses.

Riders /add-ons are the additional benefits which can be added to the basic policy by paying additional marginal premium. Each company has their own set of riders and most common riders offered by insurers are: Critical illness rider.

Permanent total disablement means that the life assured is incapacitated to work or follow an occupation and obtain wages, compensation or profit. The following are considered to constitute such disability: Irrecoverable loss of sight of both eyes. Amputation of both hands. Amputation of both feet Amputation of one hand and one foot.

Maximum accident benefit one can avail under all the policies is fixed and varies from company to company.

No, the benefit is available only along with a plan of assurance wherein it is permissible.

A policy issued under a ‘with profit’ scheme is eligible to participate for bonus additions arising out of surplus revealed on conducting an actuarial valuation. Premium under a with profit plan is always greater than the rate for a with out profit plan i.e. while computing the structure of a premium table a bonus loading is made to the rate determined by the other three factors viz., Mortality, Interest and Expenses.

A Mutual Fund is a corporate body registered with the Securities and Exchange Board of India (SEBI) that pools the savings of a number of investors and invests the same in a variety of different financial instruments or securities. This investment is made according to the common investment objective of an asset management company (AMC). The AMC offers to invest the money of hundreds of investors for a certain objective - to either keep money liquid or provide a regular income or help it grow on a long term basis. Investors buy a scheme if it fits in with their investment goals, like getting a regular income now or letting the money accumulate over the years. Investors pay a small fraction of their total funds to the AMC each year as investment management fees.

An Asset Management Company (AMC) is the authorized organization that pools money from investors and invests the same in a portfolio.

There are three broad categories of funds in the Indian market - money market, debt and equity. A money market fund invests in short-term government debt paper and is good for parking money for the short term since the principal is safe, liquidity is high and the returns are better than a bank deposit. Whereas, Debt funds invest mainly in debt instruments like government securities, corporate and institutional debt paper, etc. They are also called income funds since people buy them for their income needs. And lastly, Equity funds invest in the stock market and suit long term investors who want capital appreciation.

Investors with small portfolios may not have the necessary expertise nor get the required diversification across debt and equity products. For example, equity-seeking investors may find their money insufficient to buy enough companies to spread their risk. Or they may find the funds are insufficient to spread between cash, debt and equity products. Mutual funds offer a way out, for as little as Rs. 100 an investor can approach various schemes and get well-diversified portfolios, across product classes and instruments and the money is invested by market experts. As markets mature, funds begin to customize products according to needs. It is possible to match a unique need to a specific scheme from a fund house.

There are two ways of making money from a mutual fund: 1. Through dividend 2. Through capital appreciation. Let's assume a mutual fund scheme collects Rs. 1500 Crores by selling units priced at Rs. 10 each. The fund invests this money in stocks and debt paper. After a year the corpus grows to Rs. 3000 Crores. This amount can now be distributed amongst the unit holders as dividend. Or the other option is that it can remain in the fund, taking the Net Asset Value (NAV) or the price of the unit higher, to say Rs. 20. Investors can now sell and gain Rs. 10 per unit or can hold on for future appreciation. But mutual funds do not guarantee performance or returns. Risk depends on the type of fund bought and its performance. Thus, a debt fund is less risky than an equity fund. But within equity, an index fund is less risky than a sector fund.

Different funds have different risk profile which is stated in its objective. But sensible mutual fund investments mean including equity and debt funds in individual portfolios to see realistic growth. The mutual fund industry is well regulated in India and the market regulator, the Securities and Exchange Board of India (SEBI) has ensured it in the form of a Trust. This means that the money belongs to the investors and is only held in the name of the Trust. The investment arm, the AMC, acts as an investment manager and does not own the money. But this does not mean that the investments are risk-free. Investors need to take the risk of volatility or bad management and money can grow or lose value depending on the market and investment decisions. This risk is however diluted to a great extent when investing in funds that are suggested by the research desk who recommend schemes based on a very rigorous research process.