[Solved] In India, which of the following can trade in Corporate Bonds and Government Securities? Insurance Companies Pension Funds Retail Investors

Q53. In India, which of the following can trade in Corporate Bonds and Government Securities?

1. Insurance Companies
2. Pension Funds
3. Retail Investors

Select the correct answer using the code given below:

1. 1 and 2 only
2. 2 and 3 only
3. 1 and 3 only
4. 1, 2 and 3

Answer: 4

Government Securities

• Tradable instrument issued by the Central Government or the State Governments.

• It acknowledges the Government’s debt obligation.

• Such securities are:

• short term (T-bills, with maturities of less than one year)

• long term (Government bonds or dated securities with maturity of more than one year).

• Major players in the G-Secs and Corporate Bond market include commercial banks and Primary Dealers besides institutional investors like insurance companies.

• Other participants include co-operative banks, regional rural banks, mutual funds, provident and pension funds.

• Through the Retail Direct scheme, individual investors can invest in Government bonds. Under this scheme, individuals must register with the RBI for a Gilt Securities Account, called RDG or Retail Direct Gilt.

• Account holders can take part in the primary issuance of State Govt./ Central Government/Sovereign Gold Bonds/T-bill.

• One can directly invest In Corporate Bonds through apps like Zerodha etc.

• Hence option (d) is the correct answer.