Daily News Analysis » Zero Coupons, Zero Principal Instruments (ZCZP)

Zero Coupons, Zero Principal Instruments (ZCZP)

Here's everything you need to know about zero coupons, zero principal instruments (ZCZP)

Why in the News?

Recently, the Ministry of Finance has declared ZCZP as securities, For the purpose of the Securities Contracts (Regulation) Act, 1956.

Key Points:

  • Presently, this list includes shares, scrips, stocks, bonds, debentures, etc.
    • This instrument will be governed by rules made by the Securities and Exchange Board of India (SEBI).
  • ZCZP bonds are the funding instrument for the NGOs projects, on which the NGOs are not required to pay principal or pay interest after completion of the project.
Significance: It will help organizations/corporates utilize their social responsibility funds and support non-profit organizations more transparently.