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NATIONWIDE FINANCIAL LITERACY |
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Frequently Asked Questions (FAQ)
1. What is the definition of "financial literacy?"
There is no single, official definition. The ability to use knowledge and skills to manage one's financial resources effectively for lifetime financial security or the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial wellbeing.
2. What is bull and bear market?
If a person is optimistic and believes that stocks will go up, he or she is called a "bull" and is said to have a "bullish outlook". A bear market is when the economy is bad, recession is looming and stock prices are falling. Bear markets make it tough for investors to pick profitable stocks.
3. What is record date?
The record date is the cut-off date established by a company in order to determine which shareholders are eligible to receive a dividend or distribution. The determination of a record date is required to ascertain who the company's shareholders are as of that date, since the shareholders of an actively traded stock are continually changing. The shareholders of record as of the record date will be entitled to receive the dividend or distribution declared by the company. Also known as the date of record.
4. What is book closure?
The time period when a company will not handle adjustments to the register, or requests to transfer shares. The book closure date is often used to identify the cut-off date determining which investors of record will be sent a given dividend payment. The stock of publicly-traded companies changes hands daily as investors buy and sell shares. Due to this, when a company declares it will pay a dividend, it must set a specific date when the company will "close" its shareholder record book and commit to send the dividend to all investors holding shares as of that date.
5. What is settlement period?
A settlement period is the period of time between the settlement date and the transaction date that is allotted to the parties of a transaction to satisfy the transaction's obligations. The buyer must make payment within the settlement period, while the seller must deliver the purchased security within this period.
What is T+1, T+2, and T+3?
T+1, T+2, and T+3 refer to the settlement date of security transactions and denote that the settlement occurs on a transaction date plus one day, plus two days, and plus three days.
6. What is dividend?
A sum of money/stock paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves).
7. What is BO account?
The elaboration of BO account means Beneficiary Owners account. This account is opened with Central Depository Bangladesh Limited (CDBL) through a Depository Participant (DP).
8. Who is an Authorized Representative?
An authorized Representative is the only authorized person who can operate Trading Work Station (TWS).
9. What is derivatives?
A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, index or security. Common underlying instruments include: bonds, commodities, currencies, interest rates, market indexes and stocks.
10. What is Index?
A stock index or stock market index is a measurement of the value of a section of the stock market. It is computed from the prices of selected stocks (typically a weighted average). It is a tool used by investors and financial managers to describe the market, and to compare the return on specific investments.
11. Who are the target group of Nationwide Financial Literacy Program?
The following people/organizations will be gradually included in the Nationwide Financial Literacy Program:
Short-term 2016-2017
Existing investors
Capital market related organization personnel
Judge, Trainer, Military, Police, Lawyer, Journalist, and Teacher
Mid-term 2018-2019
Students of School, College, and University
Government/Non-Government official, Doctor, Engineer, and other professionals
Middle income people
12. What is the importance of Financial Literacy?
Financial Literacy is important due to the following reasons:
• Protection of wealth
• Proper management of resources
• Knowing about Investment products
• Personal and Domestic Financial management
• Risk Management
13. What are the financial sectors?
The financial sectors are:
• Money Market
• Capital Market
• Insurance
• Microfinance/Financing
14. What is BSEC's aim in Nationwide Financial Literacy Program?
• Financial literacy for various target groups
• Ensure the standard of education
• Arrange seminar, workshop, and training program to propagate the financial literacy program through the nation
15. What are Savings & Investment?
Savings: The surplus that remains after expenditure is called Savings.
Investment: Funding resources at present for future gain is called Investment.
16. What are the tax related benefits in the Bangladesh capital market?
• Up to 15% tax rebates on investments
• Tax free on the capital gains of small investors
• Tax free range on the dividend gained from shares is up to BDT 25,000
• Tax free range on the dividend gained from Mutual Fund unit is up to BDT 25,000
• Earnings from stock dividend is totally free
17. What are Investment products?
Investment products are:
• Equity/Share
• Mutual Fund
• Debenture
• Bond-Corporate, Zero Coupon, Treasury
• Resource based securities
• Alternative Investment Fund- Private Equity/Venture Capital & Equity Fund
• Derivatives
18. What Investor Protection Fund?
To protect the interests of the investors, both of the stock exchanges have the facilities of Investor Protection Fund under the Dhaka/Chittagong Stock Exchange Investor Protection Fund Regulations, 1999. If any stock broker is not able to pay back the money owed due to the insolvency declared by the court or by themselves or by any other cause, then the related stock exchange compensates the victim investors from the Investor Protection Fund.
19. What is Budgeting?
A tool of identifying, planning and controlling income/saving.
20. What are the benefits of Budgeting?
• Checks or balances to prevent overspending
• Manage unexpected need for funds
• Discipline
• Helps to maintain standard of living
21. What are the steps for Budget planning?
• Calculate your income
• Determine your expenditure for essentials
• Determine your expenditure for non-essentials
• Calculate your payment for debt
• Calculate your savings
22. What is a 'Merchant Bank'?
A merchant bank is a company that deals mostly in international finance, business loans for companies and underwriting. These banks are experts in international trade, which makes them specialists in dealing with multinational corporations. A merchant bank may perform some of the same services as an investment bank, but it does not provide regular banking services to the general public.
23. What is Microfinance?
Microfinance refers to an array of financial services, including loans, savings and insurance, available to poor entrepreneurs and small business owners who have no collateral and wouldn't otherwise qualify for a standard bank loan.
24. What is Insurance?
A practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.
25. What is the full form of IOSCO? What is the membership category of BSEC in IOSCO?
International Organization of Securities Commissions. This is the apex global body of capital market regulators.
As a full signatory of IOSCO MMoU, BSEC is now in 'A' category of IOSCO with other foreign regulators.
26. What is a Mutual Fund?
A mutual fund is a pool of money from numerous investors who wish to invest. Investing in a mutual fund can be a lot easier than buying and selling individual stocks and bonds on one's own.
There is no single, official definition. The ability to use knowledge and skills to manage one's financial resources effectively for lifetime financial security or the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial wellbeing.
2. What is bull and bear market?
If a person is optimistic and believes that stocks will go up, he or she is called a "bull" and is said to have a "bullish outlook". A bear market is when the economy is bad, recession is looming and stock prices are falling. Bear markets make it tough for investors to pick profitable stocks.
3. What is record date?
The record date is the cut-off date established by a company in order to determine which shareholders are eligible to receive a dividend or distribution. The determination of a record date is required to ascertain who the company's shareholders are as of that date, since the shareholders of an actively traded stock are continually changing. The shareholders of record as of the record date will be entitled to receive the dividend or distribution declared by the company. Also known as the date of record.
4. What is book closure?
The time period when a company will not handle adjustments to the register, or requests to transfer shares. The book closure date is often used to identify the cut-off date determining which investors of record will be sent a given dividend payment. The stock of publicly-traded companies changes hands daily as investors buy and sell shares. Due to this, when a company declares it will pay a dividend, it must set a specific date when the company will "close" its shareholder record book and commit to send the dividend to all investors holding shares as of that date.
5. What is settlement period?
A settlement period is the period of time between the settlement date and the transaction date that is allotted to the parties of a transaction to satisfy the transaction's obligations. The buyer must make payment within the settlement period, while the seller must deliver the purchased security within this period.
What is T+1, T+2, and T+3?
T+1, T+2, and T+3 refer to the settlement date of security transactions and denote that the settlement occurs on a transaction date plus one day, plus two days, and plus three days.
6. What is dividend?
A sum of money/stock paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves).
7. What is BO account?
The elaboration of BO account means Beneficiary Owners account. This account is opened with Central Depository Bangladesh Limited (CDBL) through a Depository Participant (DP).
8. Who is an Authorized Representative?
An authorized Representative is the only authorized person who can operate Trading Work Station (TWS).
9. What is derivatives?
A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, index or security. Common underlying instruments include: bonds, commodities, currencies, interest rates, market indexes and stocks.
10. What is Index?
A stock index or stock market index is a measurement of the value of a section of the stock market. It is computed from the prices of selected stocks (typically a weighted average). It is a tool used by investors and financial managers to describe the market, and to compare the return on specific investments.
11. Who are the target group of Nationwide Financial Literacy Program?
The following people/organizations will be gradually included in the Nationwide Financial Literacy Program:
Short-term 2016-2017
Existing investors
Capital market related organization personnel
Judge, Trainer, Military, Police, Lawyer, Journalist, and Teacher
Mid-term 2018-2019
Students of School, College, and University
Government/Non-Government official, Doctor, Engineer, and other professionals
Middle income people
12. What is the importance of Financial Literacy?
Financial Literacy is important due to the following reasons:
• Protection of wealth
• Proper management of resources
• Knowing about Investment products
• Personal and Domestic Financial management
• Risk Management
13. What are the financial sectors?
The financial sectors are:
• Money Market
• Capital Market
• Insurance
• Microfinance/Financing
14. What is BSEC's aim in Nationwide Financial Literacy Program?
• Financial literacy for various target groups
• Ensure the standard of education
• Arrange seminar, workshop, and training program to propagate the financial literacy program through the nation
15. What are Savings & Investment?
Savings: The surplus that remains after expenditure is called Savings.
Investment: Funding resources at present for future gain is called Investment.
16. What are the tax related benefits in the Bangladesh capital market?
• Up to 15% tax rebates on investments
• Tax free on the capital gains of small investors
• Tax free range on the dividend gained from shares is up to BDT 25,000
• Tax free range on the dividend gained from Mutual Fund unit is up to BDT 25,000
• Earnings from stock dividend is totally free
17. What are Investment products?
Investment products are:
• Equity/Share
• Mutual Fund
• Debenture
• Bond-Corporate, Zero Coupon, Treasury
• Resource based securities
• Alternative Investment Fund- Private Equity/Venture Capital & Equity Fund
• Derivatives
18. What Investor Protection Fund?
To protect the interests of the investors, both of the stock exchanges have the facilities of Investor Protection Fund under the Dhaka/Chittagong Stock Exchange Investor Protection Fund Regulations, 1999. If any stock broker is not able to pay back the money owed due to the insolvency declared by the court or by themselves or by any other cause, then the related stock exchange compensates the victim investors from the Investor Protection Fund.
19. What is Budgeting?
A tool of identifying, planning and controlling income/saving.
20. What are the benefits of Budgeting?
• Checks or balances to prevent overspending
• Manage unexpected need for funds
• Discipline
• Helps to maintain standard of living
21. What are the steps for Budget planning?
• Calculate your income
• Determine your expenditure for essentials
• Determine your expenditure for non-essentials
• Calculate your payment for debt
• Calculate your savings
22. What is a 'Merchant Bank'?
A merchant bank is a company that deals mostly in international finance, business loans for companies and underwriting. These banks are experts in international trade, which makes them specialists in dealing with multinational corporations. A merchant bank may perform some of the same services as an investment bank, but it does not provide regular banking services to the general public.
23. What is Microfinance?
Microfinance refers to an array of financial services, including loans, savings and insurance, available to poor entrepreneurs and small business owners who have no collateral and wouldn't otherwise qualify for a standard bank loan.
24. What is Insurance?
A practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.
25. What is the full form of IOSCO? What is the membership category of BSEC in IOSCO?
International Organization of Securities Commissions. This is the apex global body of capital market regulators.
As a full signatory of IOSCO MMoU, BSEC is now in 'A' category of IOSCO with other foreign regulators.
26. What is a Mutual Fund?
A mutual fund is a pool of money from numerous investors who wish to invest. Investing in a mutual fund can be a lot easier than buying and selling individual stocks and bonds on one's own.
| 2024 Copyright by Bangladesh Securities & Exchange Commission | Developed by Bondstein |
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