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Consider the following statements regarding Electronic Trading Platform:
1. It is where eligible instruments like securities and money market instruments are contracted.
2. It is authorized by the Securities and Exchange Board of India (SEBI).
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements regarding Electronic Trading Platfor...
Recently, the Reserve Bank of India (RBI) Governor raised concerns over unauthorised forex trading platforms and asked banks to maintain vigil against such illegal activities.
- Electronic Trading Platforms are electronic system, other than a recognised stock exchange, on which transactions in eligible instruments like securities, money market instruments, foreign exchange instruments, derivatives, etc. are contracted.
- In India no entity shall operate an ETP without obtaining prior authorisation of RBI under The Electronic Trading Platforms (Reserve Bank) Directions, 2018.
- Resident persons operating ETPs without authorisation from RBI, collecting and effecting/remitting payments directly/indirectly outside India shall render themselves liable for penal action, including the Foreign Exchange Management Act, 1999 and the Prevention of Money Laundering Act, 2002.
- ETPs authorised by the Reserve Bank shall host transactions only in instruments approved by the Reserve Bank.
- Criteria for authorization of ETPs
- The entity shall be a company incorporated in India.
- An entity seeking authorisation as an ETP operator shall maintain a minimum net-worth of Rs.5 crore (Rupees five crore only) and shall continue to maintain the minimum net-worth prescribed herein at all times.
- The existing entities operating ETPs with a net-worth lower than the prescribed net-worth requirement shall achieve the minimum net-worth of Rs.5 crores within one year from the date of authorisation by the Reserve Bank.
- Banks seeking authorisation to operate ETP shall earmark a minimum capital of Rs.5 crore for the purpose.
Hence only statement 1 is correct.
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Consider the following statements regarding Electronic Trading Platfor...
Explanation:
Statement 1:
- An Electronic Trading Platform is indeed where eligible instruments like securities and money market instruments are contracted. These platforms provide a digital marketplace for buying and selling financial instruments.
- Investors can access these platforms electronically, making trading more efficient and convenient.
Statement 2:
- While Electronic Trading Platforms are regulated by SEBI in India to ensure fair and transparent trading practices, the platforms themselves are not authorized by SEBI.
- SEBI's role is to oversee the functioning of these platforms and ensure that they comply with regulatory standards.
Therefore, only Statement 1 is correct.
Statement 1:
- An Electronic Trading Platform is indeed where eligible instruments like securities and money market instruments are contracted. These platforms provide a digital marketplace for buying and selling financial instruments.
- Investors can access these platforms electronically, making trading more efficient and convenient.
Statement 2:
- While Electronic Trading Platforms are regulated by SEBI in India to ensure fair and transparent trading practices, the platforms themselves are not authorized by SEBI.
- SEBI's role is to oversee the functioning of these platforms and ensure that they comply with regulatory standards.
Therefore, only Statement 1 is correct.
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Consider the following statements regarding Electronic Trading Platform:1. It is where eligible instruments like securities and money market instruments are contracted.2. It is authorized by the Securities and Exchange Board of India (SEBI).Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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