CRISIL Complexity Levels of Financial Instruments

Instruments Simple Complex Highly Complex
Corporate Debt
Corporate Bond Fixed coupon Fixed coupon with features (say a put/call option)  
  Floating rate (Yield linked to benchmark)  
  Floating rate with features (say put/call option, floors/ caps)  
Others Commercial Paper    
Certificate of Deposit    
Fixed Deposit    
Derivatives
Exchange Traded Derivatives
Equity derivatives     Buying index/ stock options (Long position) Selling index/ stock options (Short position)
  Index/ stock futures (buying and selling)  
Commodity derivatives   Commodity futures  
Over The Counter (OTC) Derivatives
Foreign exchange derivatives   Simple single currency forward rate agreement without any features (cap, collar, knock in, knock outs etc.) Forward rate agreement with customised features
    Cross-currency forward rate agreements
    Currency options
    Currency swaps
Interest rate derivatives     Interest rate swaps
    Cross-currency interest rate swaps
Credit Derivatives   Credit Default Swaps - Protection buying - Single asset Credit Default Swaps - Protection selling - Single asset
    Credit Default Swaps - Multi asset (both buying and selling)
Equity
Equity shares Exchange traded equity shares    
Hybrid Instruments
Lower Tier 2 bonds by banks Fixed coupon Fixed coupon with features (say a put/call option)  
  Floating rate (Yield linked to benchmark) Floating rate with features (say put/call option, floors/ caps)
Hybrids issued by banks     Perpetual innovative Tier 1 bonds
    Perpetual Preference shares
    Upper Tier 2 bonds
Preference Shares   Plain Vanilla  
  Convertible preference shares  
Convertible Bonds   Optionally (fully/ partially) convertible bonds Foreign currency convertible bonds (FCCB)
  Compulsory (fully/partially) convertible bonds  
Others   Separate Trading of Registered Interest and Principal Securities (StrIPS) Security Receipts (issued by Asset Reconstruction Companies)
    Equity linked debentures
    Commodity linked debentures
Mutual Funds
Debt Funds Gilt funds Floating rate funds  
Liquid funds    
Debt funds    
Fixed maturity plans    
Interval Funds    
Monthly Income Plans    
Structured Mutual Funds   Capital protected fund - Static Hedge Capital protected fund - leveraged
    Arbitrage Funds CPPI (Constant Proportion Portfolio Insurance)
    DPI (Dynamic Portfolio Insurance)
Mutual funds - Equity and others Plain equity funds Derivative funds Art funds
Sector based funds Fund of funds  
Balanced funds International funds  
Gold funds Special situation funds  
Exchange traded funds    
Index linked mutual funds    
Others
Public Provident Fund (PPF) Unit Linked Insurance Plans Real Estate Investment Trusts (REIT)
National Savings Certificate/ Indra Vikas Patra / Kisan Vikas Patra    
Recurring Deposit    
Securitised Debt
Structured bonds   Bonds backed by escrow of identified cash flows such as water charges and property taxes  
  Bonds backed by guarantee Bonds backed by partial guarantee
Asset Backed Securities (ABS)/
Mortgage Backed Securities (MBS)/
Pass Through Certificates (PTCs)
  Fixed coupon - Prepayment protected Fixed coupon - Prepayment not protected
    Floating rate - (Both prepayment protected and not protected)
    MBS with reset of yields
    Repacked instruments backed by ABS/ MBS
Collateralised Debt Obligations (CDO)   Single Asset (Single loan sell downs) Multi Asset
Bonds structured for pool financing for Urban Local Bodies (ULBs)     Bonds structured for pool financing for ULBs

Disclaimer

 

CRISIL Complexity Levels are based on information obtained by CRISIL from sources it considers reliable. CRISIL Complexity Levels reflect the ease of understanding and analysing the risk elements in capital market instruments. The initiative is on a voluntary and pro-bono basis. CRISIL does not guarantee the completeness or accuracy of the information on which the categorisation is based. A CRISIL Complexity Level is not a recommendation to buy, sell or hold the instrument; it does not comment on the market price or suitability for a particular investor. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this product.

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