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

Explanation

All are correct

• All three categories, Insurance Companies, Pension Funds, and Retail Investors, are permitted to trade in both corporate bonds and government securities in India.
  • Insurance companies can invest in both corporate bonds and government securities. Investment guidelines for Insurance companies are regulated by IRDAI.
  • Pension funds can invest in both corporate bonds and government securities for diversification and steady income. Investment guidelines for Pension funds are prescribed by PFRDA.
  • Retail investors, too, can invest in both corporate bonds and government securities in India. RBI Retail Direct Scheme, launched in November 2021, gives access to individual investors to maintain gilt accounts with the RBI and invest in government securities.

Answer: (d) 1, 2 and 3: Difficulty Level: Easy