Distinguish between the following: Fund based financial activities and Non-fund based financial activities.

Fund based financial activities It refers to services that are used to acquire assets or funds for a customer. It consists of- Primary market activities Secondary market activities Foreign exchange activities Specialized financial services The traditional services which come under fund based activities are the following: Underwriting or investment in shares, debentures, bonds, etc. of new issues (primary market activities). Dealing in secondary market activities. Participating in money market instruments like commercial Papers, certificate of deposits, treasury bills, discounting of bills etc. Involving in equipment leasing, hire purchase, venture capital, seed capital etc. Dealing in foreign exchange activities. Examples of some important fund based activities are: Leasing Hire purchase Factoring Forfaiting Mutual funds Housing finance Venture capital etc. Non-fund based financial activities Financial intermediaries provide services on the basis of non-fund activities also. This is also called 'fee based' activity. When financial institutions operate in specialised fields to earn income in form of fees, commission, brokerage or dividend it is called a fee based service. They include: Managing the capital issue - i.e. management of pre-issue and post-issue activities relating to the capital issue in accordance with the SEBI guidelines and thus enabling the promoters to market their issue. Making arrangements for the placement of capital and debt instruments with investment institutions. Arrangement of funds from financial institutions for the client's project cost or his working capital requirements. Assisting in the process of getting all Government and other clearances. Examples of some Non-fund based activities are: Issue management Portfolio management Credit rating Stock broking Merchant banking Debt restructuring etc.