A Study on Indian Commodity Market

At

Sriram Insight, Hyderabad

Anusha E

HT No: 04413208

Project submitted in partial fulfilment for the award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

By

Layola Academy

Affiliated to Osmania University, Hyderabad -500007

1
 DECLARATION

I hereby declare that this Project Report titled Recruitment and Selection Process at

Penfos Systems, Hyderabad submitted by me to the Department of Business

Management, O.U., Hyderabad, is a bonafide work undertaken by me and it is not

submitted to any other University or Institution for the award of any degree diploma /

certificate or published any time before.

Name and Address of the Student Signature of the Student

2
 CERTIFICATION

This is to certify that the Project Report title Recruitment and Selection Process at

Penfos Systems, Hyderabad submitted in partial fulfilment for the award of MBA Programme

of Department of Business Management, O.U. Hyderabad, was carried out by Anusha E

under my guidance. This has not been submitted to any other University or Institution for

the award of any degree/diploma/certificate.

Name and address of the Guide Signature of the Guide

ACKNOWLEDGEMENT

I would like to extend my gratitude to my Project guide, Mr. Pradeep Pandey, Branch

Manager for his appreciable support and valuable time and guidance with providence of

resources in terms of knowledge, theoretical gains and practical experience.

3
A successful project can never be prepared by the singular effort of the person to whom

project is assigned, but it also demands the help and guardianship of some conversant

persons who undersigned actively or passively in the completion of a successful project. I

would like to extend my thankfulness to him for providing me with excellent instructors of

INDIABULLS whose guidance and co-operation have been of immense help for the successful

completion of this project. I would also thanks to all staff members of Indiabulls for guidance

and co-operation.

I would also like to thank Mr Ramanpreet (Director), and Mr. Prasad V. Bhat (Internal

Guide) who has been very cooperative and chose to remain anonymous, for giving me the

opportunity to gain from their experience in selection and recruitment processes. Without

their contributions, this project would have been rather incomplete.

HIMANSHU SINGH

Table of Contents

S.No. Particulars Page No.

1 INTRUDUCTION 2-

2 RESEARCH METHODOLOGY

3 INDUSTRY PROFILE

4 COMPANY PROFILE ”

4
5 DEMAT ACCOUNT

6 DATA ANALYSIS AND INTERPRETATION

7 FINDING

8 SUGGESTIONS AND RECOMMENDATIONS

9 CONCLUSION

10 BIBLIOGRAPHY

5
 INTRODUCTION

Over a period, the Indian securities market has undergone remarkable changes and grown

exponentially, particularly in terms of resource mobilization, intermediaries, the number of listed

stocks, market capitalization, and turnover and investor population.

The following paragraphs list the principal reform measures undertaken since 1992.Creation of

Market Regulator: Securities and Exchange Board of India (SEBI), the

Securities market regulator in India, was established under SEBI Act 1992, with the main objective

and responsibility for (i) protecting the interests of investors in

Regulating the securities market. Screen Based Trading: Prior to setting up of NSE, the trading on

stock exchanges in India was based on an open outcry system. The system was inefficient and

time securities, (ii) promoting the development of the securities market, and (iii) consuming

because of its inability to provide immediate matching or recording of trades. In order to provide

efficiency, liquidity and transparency, NSE introduced a nation-wide on-line fully automated

screen based trading system (SBTS) on the CM segment on November 3, 1994. Reduction of

Trading Cycle: Earlier, the trading cycle for stocks, based on type of securities, used to vary

between 14 days to 30 days and the settlement involved another fortnight. The Exchanges,

however, continued to have different weekly trading cycles, which enabled shifting of positions

from one Exchange to another. It was made mandatory for all Exchanges to follow a uniform

weekly trading cycle in respect of scripts not under rolling settlement. In December 2001, all

scripts were moved to rolling settlement and the settlement period was reduced progressively

6
from T+5 to T+3 days. From April 2003 onwards, T+2 days settlement cycle is being followed.

Equity Derivatives Trading: In order to assist market

OBJECTIVE OF THE STUDY

 The main objective of the study is to know about the potential of the market

regarding people’s dealing in share market.

 To know the role of DEMAT ACCOUNT.

 To know the procedure of opening DEMAT ACCOUNT.

 The objective is to know that how many people in the city are aware of the Angel

broking.

 To know where people have already opened their demat a/c and on what basis.

Need for the Study

 Create awareness among investors about the D-mat account.

 Understand the total investments through d-mat account

 Give basic knowledge to investors regarding risk and return companies.

 Also understand the Dmat and different way of trading

Scope of the Study

7
D-mat account Review can take review from market through this project. Management

people can get overall idea about the risk management regarding working of Investing. They

also understand what information provides to investor for avoiding the risk.

8
 RESEARCH METHODOLOGY

Research methodology refers to the search for Knowledge. It is a way to systematically solve

the research problem. In it we study the various steps that are generally adopted by the

researcher in studying his research problem along with logic behind them.

Research Methodology concerning a research problem or study provide answers to

various questions like; why a research study has been undertaken, how the research

problem has been defined, what data have been collected and what particular method has

been adopted to collect the data, what technique has been used for analyzing the data and a

host of similar other questions

Though there are more than one alternative approaches available to the researcher, but this

not enough to make the task of selecting the suitable research design simpler. Like the so-

called suitable research design may require some in between approach. The objective of

study being the main determinant of the validity and reliability of the method adopted the

degree of usefulness of the scientific method. Since there are many aspects of research

methodology, in line of action has to be chosen from variety of alternatives, so that

individual choice of suitable method is further complicated and make a viable whole. The

choice of suitable method is further complicated by the possibility of many permutations and

combinations. The fair selection can be arrived at through the objective assessment and of

course comparison of various alternatives. The finally selected line of action must ensure

that this is indeed best one as against those rejected by the researcher. in addition, the

9
circumstances and problems also having a bearing in the choice. To count a fem, limitations

could be imposed in the sense of funds available, time and urgency in conducting the

research. So the final choice must be based on assessment of its advantage and

disadvantages when weighted against affecting factors.

Research methodology can be said to have four major components namely-Research design,

Sample design, Data collection procedure and methods of analyzing and reporting the

findings.

10
 Research Design

The research problem having been formulated in clear cut terms, the researcher will be

required to prepare a research design i.e., he will have to state the conceptual structure with

in which research would be conducted. The preparation of such a design facilitates research

to be as efficient as possible yielding maximal information. But how all there can be achieved

depends mainly on the research purpose. Research purpose may be grouped into four

categories.

(1) Exploration

(2)Description

(3) Diagnoses and

(4) Experimentation.

Exploratory research studies are those whose main purpose is that of formulating a problem

for more precise investigation or of developing the working hypotheses from on operational

point of view.

Descriptive research studies are those studies which are concerned with describing the

characteristics of a particular individual, or of a group

Diagnostic research studies determine the frequency with which something occurs.

11
Experimental research studies are those where the researcher tests the hypothesis of casual

relationship between the variables.

Research design of this particular research study of dematerialization of shares is primarily

based on descriptive and diagnostic research design. As descriptive and diagnostic research

design describes the characteristics and determines the frequency with which something

occurs respectively, similarly this research determines the characteristics of the individuals

who deal in share and also determine the frequency of dealing on the basis of their

characteristics.

12
 Sample Design

All the items under consideration in any field of inquiry constitute a ‘Universe’ or

‘Population’. A complete enumeration of all the items in the population is known as a census

inquiry. This type of inquiry involves a great ideal of time, money and energy. Hence quite

often a few items so selected constitute what is technically called a sample.

The researcher must decide the way of selecting a sample or what is popularly known as

sample design. A sample design is a definite plan determined before any data are actually

collected for obtaining a sample from a given population. Samples can be either probability

or non-probability samples. With probability samples each element has a known probability

of being included in the sample but non-probability samples are those based on simples do

not allow the researcher to determine this probability.

Probability samples are those based on simple random sampling, systematic sampling , etc

where as non probability samples are those based on convenient sampling, judgment

sampling etc.

13
 Data collection techniques

The required data is collected both from primary as well as secondary sources.

Primary Sources: The primary data was collected through structured unbiased

questionnaire and personal interviews of investors. For this purpose questionnaire

included were both open ended & close ended & mulple-choice questions.

14
 Secondary Sources: Secondary data is the data, which is collected and

complied for different purposes, which are used in research for this study. The

secondary data includes material collected from:-

Megazines & Bulletines- Brochure of SHIRAM INSIGHT Stock Broking Limited investment

solutions.

Internet-

www.sebi.gov.in

www.nseindia.com

SIZE OF SAMPLE

The overall sample involved in the study consisted of 50 individuals. Keeping in view the

limited resources of time, a limited sample of individuals. It was fixed before hand and every

effort was made to cover the given number of individuals with available time for the

collection of data for this project. The data was collected with the help of the questionnaire

herself by the researcher.

Method used for analysis of study

15
 The methodology used for this purpose is Survey and Questionnaire Method. It is a time

consuming and expensive method and requires more administrative planning and

supervision. It is also subjective to interviewer bias or distortion.

16
Analysis of Data

After the data have been collected, the researcher turns to the task of analyzing them. The

analysis of data requires a number of closely related operations such as establishment of

categories, the application of these categories to raw data through coding, tabulation and

then drawing statistical inferences. The unwisely data should necessary be condensed into a

few manageable groups and tables for further analysis. Thus researcher should classify the

raw data into some purposeful and usable categories. In the process of analysis,

relationships or differences supporting or conflicting with original or new hypotheses should

be subjected to tests of significance to determine with what validity data can be said to

indicate any conclusion

Interpretation

The interpretation is done on the basis of the analyzed data and also some recommendations

are given to fill the loopholes of the actual scenario.

17
 Limitations Of The Research Study

 Due to the lack of time, it was not possible for the researcher to

approach all the people.

 The respondents were asked to indicate their true responses to the

questions being asked, but rather than giving the response, they might have been in a

form of expert comments which might have based the result of the study.

 The results of the study may not be universally applicable due to regional constraints.

 Money was also considered as a major constraint during the research work.

 Personal biasness may be included in the research work.

18
INDUSTRY PROFILE

19
 NATIONAL STOCK EXCHANGE

The National Stock Exchange of India (NSE) situated in Mumbai - is the largest and

most advanced exchange with 1016 companies listed and 726 trading members. Capital

market reforms in India and the launch of the Securities and Exchange Board of India (SEBI)

accelerated the incorporation of the second Indian stock exchange called the National Stock

Exchange (NSE) in 1992. After a few years of operations, the NSE has become the largest

stock exchange in India.

Three segments of the NSE trading platform were established one after another. The

Wholesale Debt Market (WDM) commenced operations in June 1994 and the Capital Market

(CM) segment was opened at the end of 1994. Finally, the Futures and Options segment

began operating in 2000. Today the NSE takes the 14th position in the top 40 futures

exchanges in the world.

In 1996, the National Stock Exchange of India launched S&P CNX Nifty and CNX Junior

Indices that make up 100 most liquid stocks in India. CNX Nifty is a diversified index of 50

stocks from 25 different economy sectors. The Indices are owned and managed by India

Index Services and Products Ltd (IISL) that has a consulting and licensing agreement with

Standard & Poor's.

20
In 1998, the National Stock Exchange of India launched its web-site and was the first

exchange in India that started trading stock on the Internet in 2000. The NSE has also proved

its leadership in the Indian financial market by gaining many awards such as 'Best IT Usage

Award' by Computer Society in India (in 1996 and 1997) and CHIP Web Award by CHIP

magazine (1999).

The NSE is owned by the group of leading financial institutions such as Indian Bank or Life

Insurance Corporation of India. However, in the totally de-mutualised Exchange, the

ownership as well as the management does not have a right to trade on the Exchange. Only

qualified traders can be involved in the securities trading.

The NSE is one of the few exchanges in the world trading all types of securities on a single

platform, which is divided into three segments: Wholesale Debt Market (WDM), Capital

Market (CM), and Futures & Options (F&O) Market.

Each segment has experienced a significant growth throughout a few years of their launch.

While the WDM segment has accumulated the annual growth of over 36% since its opening

in 1994, the CM segment has increased by even 61% during the same period. The National

Stock Exchange of India has stringent requirements and criteria for the companies listed on

the Exchange. Minimum capital requirements, project appraisal, and company's track record

are just a few of the criteria. In addition, listed companies pay variable listing fees based on

their corporate capital size.

The National Stock Exchange of India Ltd. provides its clients with a single, fully electronic

trading platform that is operated through a VSAT network. Unlike most world exchanges, the

NSE uses the satellite communication system that connects traders from 345 Indian cities.

21
The advanced technologies enable up to 6 million trades to be operated daily on the NSE

trading platform.

NSE Nifty:

The S&P CNX Nifty (nicknamed Nifty 50 or simply Nifty), is the leading index for large

companies on the National Stock Exchange of India. S&P CNX Nifty is a well diversified 50

stock index accounting for 22 sectors of the economy. It is used for a variety of purposes

such as benchmarking fund portfolios, index based derivatives and index funds.

Nifty was developed by the economists Ajay Shah and Susan Thomas, then at IGIDR. Later

on, it came to be owned and managed by India Index Services and Products Ltd. (IISL), which

is a joint venture between NSE and CRISIL. IISL is India's first specialised company focused

upon the index as a core product. IISL have a consulting and licensing agreement with

Standard & Poor's (S&P), who are world leaders in index services.

CNX stands for CRISIL NSE Indices. CNX ensures common branding of indices, to reflect the

identities of both the promoters, i.e. NSE and CRISIL. Thus, 'C' stands for CRISIL, 'N' stands for

NSE and X stands for Exchange or Index. The S&P prefix belongs to the US-based Standard &

Poor's Financial Information Services.

NSE other indices:

 S&P CNX Nifty

22
  CNX Nifty Junior

 CNX 100

 S&P CNX 500

 CNX Midcap

 S&P CNX Defty

 CNX Midcap 200

BOMBAY STOCK EXCHANGE:

The Bombay Stock Exchange Limited (formerly, The Stock Exchange, Mumbai; popularly

called The Bombay Stock Exchange, or BSE) is the oldest stock exchange in Asia. It is located

at Dalal Street, Mumbai, India.

Bombay Stock Exchange was established in 1875. There are around 5,600 Indian companies

listed with the stock exchange, and has a significant trading volume. As of October2006, the

market capitalization of the BSE was about Rs. 33.4 trillion (US $ 730 billion). The BSE SENSEX

(SENSitive indEX), also called the BSE 30, is a widely used market index in India and Asia. As

of 2005, it is among the 5 biggest stock exchanges in the world in terms of transactions

volume.

History:

An informal group of 22 stockbrokers began trading under a banyan tree opposite the Town

Hall of Bombay from the mid-1850s, 1875, was formally organized as the Bombay Stock

23
Exchange (BSE).In January 1899, the stock exchange moved into the Brokers’ Hall after it was

inaugurated by James M MacLean. After the First World War, the BSE was shifted to an old

building near the Town Hall. In 1956, the Government of India recognized the Bombay Stock

Exchange as the first stock exchange in the country under the Securities Contracts

(Regulation) Act.1995, when it was replaced by an electronic (eTrading) system named BOLT,

or the BSE Online Trading system. In 2005, the status of the exchange changed from an

Association of Persons (AoP) to a full fledged corporation under the BSE (Corporatization and

Demutualization) Scheme, 2005 (and its name was changed to The Bombay Stock Exchange

Limited).

BSE Sensex:

The BSE SENSEX (also known as the BSE 30) is a value-weighted index composed of 30 scrips,

with the base April 1979 = 100. The set of companies which make up the index has been

changed only a few times in the last 20 years. These companies account for around one-fifth

of the market capitalization of the BSE.

SENSEX, first compiled in 1986 was calculated on a "Market Capitalization-Weighted"

methodology of 30 component stocks representing a sample of large, well-established and

financially sound companies. The base year of SENSEX is 1978-79. The index is widely

reported in both domestic and international markets through print as well as electronic

media. SENSEX is not only scientifically designed but also based on globally accepted

construction and review methodology. From September 2003, the SENSEX is calculated on a

free-float market capitalization methodology. The "free-float Market Capitalization-

24
Weighted" methodology is a widely followed index construction methodology on which

majority of global equity benchmarks are based.

The growth of equity markets in India has been phenomenal in the decade gone by. Right

from early nineties the stock market witnessed heightened activity in terms of various bull

and bear runs. More recently, the bourses in India witnessed a similar frenzy in the 'TMT'

sectors. The SENSEX captured all these happenings in the most judicial manner. One can

identify the booms and bust of the Indian equity market through SENSEX.

The values of all BSE indices are updated every 15 seconds during the market hours and

displayed through the BOLT system, BSE website and news wire agencies.

SENSEX calculation:  

SENSEX is calculated using a "Market Capitalization-Weighted" methodology.

As per this methodology, the level of index at any point of time reflects the total market

value of 30 component stocks relative to a base period. (The market capitalization of a

company is determined by multiplying the price of its stock by the number of shares issued

by the company). An index of a set of combined variables (such as price and number of

shares) is commonly referred as a 'Composite Index' by statisticians. A single indexed

number is used to represent the results of this calculation in order to make the value easier

to work with and track over time. It is much easier to graph a chart based on indexed values

than one based on actual values. 

The base period of SENSEX is 1978-79. The actual total market value of the stocks in

the Index during the base period has been set equal to an indexed value of 100. This is often

indicated by the notation 1978-79=100. The formula used to calculate the Index is fairly

25
straightforward. However, the calculation of the adjustments to the Index (commonly called

Index maintenance) is more complex. 

The calculation of SENSEX involves dividing the total market capitalization of 30 companies in

the Index by a number called the Index Divisor. The Divisor is the only link to the original

base period value of the SENSEX. It keeps the Index comparable over time and is the

adjustment point for all Index maintenance adjustments. During market hours, prices of the

index scrips, at which latest trades are executed, are used by the trading system to calculate

SENSEX every 15 seconds and disseminated in real time.During market hours, prices of the

index scrips, at which trades are executed, are automatically used by the trading computer

to calculate the SENSEX every 15 seconds and continuously updated on all trading

workstations connected to the BSE trading computer in real time.

BSE - other Indices:

Apart from BSE SENSEX, which is the most popular stock index in India, BSE uses other stock

indices as well:

 BSE 500

 BSE PSU

 BSE MIDCAP

 BSE SMLCAP

 BSE BANKEX

26
COMPANY PROFLE

27
 Angel Broking's tryst with excellence in customer relations began in 1987. Today, Angel

has emerged as one of the most respected Stock-Broking and Wealth Management

Companies in India. With its unique retail-focused stock trading business model, Angel

is committed to providing ‘Real Value for Money’ to all its clients.

The Angel Group is a member of the Bombay Stock Exchange (BSE), National Stock Exchange

(NSE) and the two leading Commodity Exchanges in the country: NCDEX & MCX. Angel is

also registered as a Depository Participant with CDSL.

Our Business:

 Equity Trading

 Commodities

 Portfolio Management Services

 Mutual Funds

 Life Insurance

 IPO

 Depository Services

 Investment Advisory

 Angel Group

 Angel Broking Ltd.

 Angel Commodities Broking Ltd.

 Angel Securities Ltd.

28
 Our Vision
To provide best value for money to investors through

innovative products, trading/investments strategies,

state of the art technology and personalized service.

Our Motto

To have complete harmony between quality-in-process and

continuous improvement to deliver exceptional service that

will delight our Customers and Clients.

Our CRM Policy : Customer is King

“A Customer is the most Important Visitor on our

premises. He is not dependent on us, but we are

dependent on him. He is not an interruption in our

work. He is the purpose of it. He is not an outsider

in our business. He is part of it. We are not doing

him a favour by serving him. He is doing us a favour

by giving us an opportunity to do so.” 

- Mahatma Gandhi

Business Philosophy

 Ethical practices & transparency in all our dealings

 Customers interest above our own

 Always deliver what we promise

 Effective cost management

29
Our Quality Assurance Policy

We are committed to providing world-class products and

services which exceed

the expectations of our customers, achieved by teamwork and

a process of 

continuous improvement.

30
Mr. Dinesh Thakkar

Founder Chairman & Managing Director

The Angel Group of Companies was brought to life by Mr. Dinesh Thakkar. He ventured

into stock trading with an intention to raise capital for his own independent enterprise.

However, he recognized the opportunity offered by the stock market to serve

individual investors. Thus India’s first retail-focused stock-broking house was established

in 1987. Under his leadership, Angel became the first broking house to embrace new

technology for faster, more effective and affordable services to retail investors.

Mr. Thakkar is valued for his understanding of the economy and the stock-market. The print

and electronic media often seek his views on the market trend as well as investment

strategies.

Mr. Lalit Thakkar

Managing Director – Institutional broking

Mr. Lalit Thakkar is the motivating force behind Angel’s highly acclaimed Research team.

He’s been a part of the senior management team since the Angel Group’s inception. His

technical and fundamental outlook has provided impetus to Angel’s market research team.

Research-based & personalized advisory services are Angel’s forte, and Mr. Lalit Thakkar

has undoubtedly been the brain behind it.

31
 When it comes to analyzing the market, Mr. Lalit Thakkar is truly a genius. His hands-

on experience and fundamental knowledge of the market can predict the market trend

early. His views on the market trend are often quoted in the print and electronic media.

Investing in shares or stock market is inarguably the best route to long-term

wealth accumulation. However, it can also be a very risky proposition due to high risk-

return trade-off prevalent in the stock market. Hence, it is more appropriate to take help

of an experienced and trustworthy expert who will guide you as to when, where and

how to invest. Angel provides guidance in the exciting world of stock market with suitable

trading solutions and value-added tools and services to enhance your trading experience.

Online Trading

Three different online products tailored for traders & investors

Customized single screen Market Watch for multiple exchanges

Real-time rates

Flash news & intra-day calls

Intra-day & historical charts with technical tools

Online research

E-broking & back-office software training

Quality Research

Wide range of daily, weekly and special Research reports

Expert Sector Analysts with professional industry experience

Advisory

32
Real-time market information with News updates

Investment Advisory services

Dedicated Relationship Managers

Portfolio Management Services

Support

24x7 Web-enabled Back Office

Centralized Help Desk

Live Chat support system

The derivative segment is a highly lucrative market that gives investors an opportunity to

earn superlative profits (or losses) by paying a nominal amount of margin. Over past

few years, Future & Options segment has emerged as a popular medium for trading in

financial markets. Future contracts are available on Equities, Indices, Currency and

Commodities.

Angel with its membership as Trading and Clearing Member of NSE F&O Segment and BSE

Derivatives Segment, provides you a gateway to the exciting world of derivative

market.

Work Culture.At Angel, we keep exploring new paths to provide the best value to all our

internal and external customers. We consider people as our biggest asset and believe in

creating long term relationships by nurturing talent from within. A fast-growing, forward-

looking organization like ours, demands HR to be a key responsibility area of our core

management team.

33
 Our HR team constantly explores ways to enhance and augment the knowledge base

and productivity of all Angels by providing various learning and development Programs.

Our three tier Leadership Development program helps all star performers to grow and

develop their managerial skills to become effective mentors for their teams and thereby

take on the next level of responsibility effectively. Ours is a winning t eam of highly

determined, motivated, and adaptable people, all working diligently to take Angel's exciting

success story forward.

 Work  HR Philosophy  Employee  Performance

Culture  Leadership Engagement Management

 Career Academy  Proud to be an  PF and FNF Status

Angel

34
HR Philosophy

At Angel, People come first. Along with our customers, our employees are equally vital to our

organization. The Business of HR is to foster an entrepreneurial spirit – whereby Angels can

operate with ownership as an entrepreneur (profit center) within the confines of their job

role and earn over and above their fixed salaries. 

We believe in inculcating a sense of responsibility and ownership in all Angels which brings

out the entrepreneurial zeal to explore potential within as well as beyond job boundaries.

Our HR Philosophy is to engage employees at professional, emotional and material levels.

 We aim to create an environment conducive to both personal and professional

development of the employees, leading to a productive and happy work force

 Angel believes that people impact business and therefore each and every Angel is a

key resource and a valuable asset

 Our business philosophy of being transparent in all our dealings with our customers,

is equally applicable in dealings with employees

 We encourage initiative, provide professional freedom and empower Angels based

on trust

35
DEMAT ACCOUNT

36
 How to open a d-mat account in Shiram Insight securities

A/C opening charge- 450/-

Name of the software used- Odin

Software installation charge- 900/-

Maintenance charge- 250/- from 3rd year.

Exposure- 20 times for intraday.

Name of the bank with the help of which customer get the facility of net banking- AXIS

bank ,ICICI bank, HDFC bank.

Services provided- Equity, Commodities,Insurance,Wealth Management

Services,Insurance,Investment Banking.

DP sell charge- 8/-

Brokerage- intraday-.03% & Delivery-.3%

37
Transaction Report- Through mail(Free of Cost)

Prepaid Scheme- Not available.

Types of trading accounts provided- De-Mat a/c, Trading a/c, Margin a/c.

Network- 1837 locations more than 498 cities.

Margin money-50000/- for R-ALLY & R-ALLY Lite.

10000/-for R-ALLY Pro.

Secrecy- Password provided to the customer has to change every after 15 days.

38
 INTRODUCTION

Over a period, the Indian securities market has undergone remarkable changes and grown

exponentially, particularly in terms of resource mobilization, intermediaries, the number of

listed stocks, market capitalization, and turnover and investor population.

The following paragraphs list the principal reform measures undertaken since 1992.Creation

of Market Regulator: Securities and Exchange Board of India (SEBI), the

Securities market regulator in India, was established under SEBI Act 1992, with the main

objective and responsibility for (i) protecting the interests of investors in

Regulating the securities market. Screen Based Trading: Prior to setting up of NSE, the

trading on stock exchanges in India was based on an open outcry system. The system was

inefficient and time securities, (ii) promoting the development of the securities market, and

(iii) consuming because of its inability to provide immediate matching or recording of trades.

In order to provide efficiency, liquidity and transparency, NSE introduced a nation-wide on-

line fully automated screen based trading system (SBTS) on the CM segment on November 3,

1994. Reduction of Trading Cycle: Earlier, the trading cycle for stocks, based on type of

securities, used to vary between 14 days to 30 days and the settlement involved another

fortnight. The Exchanges, however, continued to have different weekly trading cycles, which

enabled shifting of positions from one Exchange to another. It was made mandatory for all

Exchanges to follow a uniform weekly trading cycle in respect of scrips not under rolling

settlement. In December 2001, all scrips were moved to rolling settlement and the

39
settlement period was reduced progressively from T+5 to T+3 days. From April 2003

onwards, T+2 days settlement cycle is being followed. Equity Derivatives Trading: In order to

assist market participants in managing risks better through hedging, speculation and

arbitrage, SC(R) A was amended in 1995 to lift the ban on options in securities. Trading in

derivatives, however, took off

13in 2000 with index futures after suitable legal and regulatory framework was put in place.

The market presently offers index futures, index options, single stock futures and single stock

options.

Demutualisation: Historically, stock exchanges were owned, controlled and managed by the

brokers. In case of disputes, integrity of the stock exchange suffered. NSE, however, was set

up with a pure demutualised governance structure, having ownership, management and

trading with three different sets of people. Currently, all the stock exchanges in India have a

demutualised set up. Dematerialisation: As discussed before, the old settlement system was

inefficient due to (i) the time lag for settlement and (ii) the physical movement of paper-

based securities. To obviate these problems, the Depositories Act, 1996 was passed to

provide for the establishment of depositories in securities with the objective of ensuring free

transferability of securities with speed and accuracy. There are two depositories in India, viz.

NSDL and CDSL. They have been set up to provide instantaneous electronic transfer of

securities. Demat (Dematerialised) settlement has eliminated the bad deliveries and

associated problems. To prevent physical certificates from sneaking into circulation, it has

been made mandatory for all newly issued securities to be compulsorily traded in

dematerialised form. Now, the public listed companies making IPO of any security for Rs.10

crore or more have to make the IPO only in dematerialised form. Clearing Corporation: The

40
anonymous electronic order book ushered in by the NSE did not permit members to assess

credit risk of the counter-party and thus

necessitated some innovation in this area. To address this concern, NSE had set up the first

clearing corporation, viz. National Securities Clearing Corporation Ltd.

(NSCCL), which commenced its operations in April 1996.

Investor Protection: In order to protect the interest of the investors and promote awareness,

the Central Government (Ministry of Corporate Affairs 1) established the Investor Education

and Protection Fund (IEPF) in October 2001. With the similar objectives, the Exchanges and

SEBI also maintain investor protection funds to take care of investor claims. SEBI and the

stock exchanges have also set up investor grievance / service cells for redress of investor

grievance. All these agencies and investor associations also organise investor education and

awareness programmes.

Globalisation: Indian companies have been permitted to raise resources overseas through

issue of ADRs, GDRs, FCCBs and ECBs. Further, FIIs have been permitted to invest in all types

of securities, including government securities and tap the domestic market. The investments

by FIIs enjoy full capital account convertibility. They can invest in a company under portfolio

investment route upto 24% of the paid up capital of the company. This can be increased up

to the sectoral cap/statutory ceiling, as

applicable to the Indian companies concerned, by passing a resolution of its Board of

Directors followed by a special resolution to that effect by its general body. The Indian stock

exchanges have been permitted to set up trading terminals abroad. The trading platform of

Indian exchanges is now accessible through the Internet from anywhere in the world. RBI

permitted two-way fungibility for ADRs / GDRs, which means that the investors (foreign

41
institutional or domestic) who hold ADRs / GDRs can cancel them with the depository and

sell the underlying shares in the market. 1 Earlier known as Department of Company Affairs.

Launch of India VIX 2: Volatility index is a measure of market’s expectation of volatility over

the near term. It measures the amount by which an underlying Index is expected to fluctuate

in the near term, based on the order book of the underlying index options. India’s first

volatility index, India VIX (based on the Nifty 50 Index Option prices) was launched by NSE in

April 2008.

Direct Market Access: In April 2008, SEBI allowed the direct market access (DMA) facility to

the institutional investors. DMA allows brokers to offer their respective clients, direct access

to the Exchange trading system through the broker’s infrastructure without manual

intervention by the broker. Launch of Securities Lending & Borrowing Scheme: In April 2008,

the

Securities Lending & Borrowing mechanism was allowed. It allows market participants to

take short positions effectively with less cost.

Launch of Currency Futures: On August 29, 2008, NSE launched trading in currency future

contracts in the USD-INR pair for the first time in India. Trading in other currency pairs like

Euro – INR, Pound Sterling – INR and Japanese Yen was further made available for trading in

March 2010.

ASBA: Application Supported by Blocked Amount (ASBA) is a major primary market

reform. It enables investors to apply for IPOs / FPOs and rights issues without making a

payment. Instead, the amount is blocked in investors’ own account and only an amount

proportionate to the shares allotted goes out when allotment is finalized. Launch of Interest

Rate Futures: On August 31, 2009, futures on interest rate was launched on the National

Stock Exchange.

42
Issue of Capital and Disclosure Requirements (ICDR) Regulations 2009: In August 2009, the

SEBI issued Issue of Capital and Disclosure Requirements (ICDR) Regulations 2009, replacing

the Disclosure and Investor Protection (DIP) Guidelines 2000. ICDR Regulations 2009 would

govern all disclosure norms regarding issue of securities.

The trading on stock exchanges in India used to take place through open outcry without use

of information technology for immediate matching or recording of trades. This was time

consuming and inefficient. This imposed limits on trading volumes and efficiency. In order to

provide efficiency, liquidity and transparency, NSE introduced a nation-wide on-line fully

automated screen based trading system where a member can punch into the computer

quantities of securities and the prices at which he likes to transact and the transaction is

executed as soon as it finds a matching sale or buy order from a counter party. Screen based

electronic system electronically matches orders on a strict price/time priority and hence cuts

down on time, cost and risk of error, as well as on fraud resulting in improved operational

efficiency. It allows faster incorporation of price sensitive information into prevailing prices,

thus increasing the informational efficiency of markets. It enables market participants,

irrespective of their geographical locations, to trade with one another simultaneous,

improving the depth and liquidity of the market. It provides full anonymity by accepting

orders, big or small, from members without revealing their identity, thus providing equal

access to everybody. It also provides a perfect audit trial, which helps to resolve disputes by

logging in the trade execution process entirety. The sucked liquidity from other exchanges

and in the very first year of its operation, NSE became the leading stock exchange in the

country, impacting the fortunes of other exchanges and forcing them to adopt SBTS also.

Today India can boast that almost 100% trading take place through electronic order

matching.

43
Now dematerialisation of shares is introduced “a new concept” which converts paper based

physical trading into electronic trading. It is a safe and convenient way to hold securities.

Screen based trading system helps in faster transfer of securities and no stamp duty is

required on transfer of securities. The trading system operates on a strict price time priority.

All orders received on the system are sorted with the best priced order getting the first

priority for matching i.e. the best buy order match with the best sell order. Orders are

matched automatically by the computer keeping the system transparent, objective and fair.

The trading system provides tremendous flexibility to the users in terms of kinds of orders

that can be placed on the system. The trading system also provides market information

online.

In order to promote dematerialization of securities, NSE joined hands with leading financial

institutions to establish the national securities depository Ltd. (NSDL), the first depository in

the country, with the objective of enhancing the efficiency in settlement systems as also to

reduce the menace of fake/forged and stolen securities. This has ushered in an era of

dematerialised trading and settlement. SEBI has made dematerialised settlement mandatory

in an ever –increasing number of securities in a phased manner, thus bringing about an

increase in the proportion of shares delivered in dematerialised form. There is an increasing

preference to settle trades, particularly in high value securities, in

WHAT IS DEMAT

44
In India, a demat account, the abbreviation for dematerialised account, is a type of banking

account which dematerializes paper-based physical stock shares. Conversion of Securities

from Physical (Paper) Mode into Electronic Mode is Called Dematerialisation. The Client

opens Demat Account with any DP. Upon Demat, the Certificates are destroyed and credit

entry of exactly equal number of Securities is created in Depository in Electronic mode. The

B.O. account of holder is credited and the securities loose their identities. The dematerialised

account is used to avoid holding physical shares: the shares are bought and sold through a

stock broker.

This account is popular in India. The market regulator, securities and exchange board of India

(SEBI) mandates a demat account for share trading above 500 shares. As of April 2006, it

became mandatory that any person holding a demat account should possess a permanent

account number (PAN), and the deadline for submission of PAN details to the depository

lapsed on January 2007.

Dematerialisation is the process by which physical certificates of an investor are converted to

an equivalent number of securities in electronic form and credited in the investor's account

with its DP. In order to dematerialize certificates; an investor will have to first open an

account with a DP and then request for the dematerialisation of certificates by filling up a

dematerialisation request form [DRF], which is available with the DP and submitting the

same along with the physical certificates. The investor has to ensure that before the

45
certificates are handed over to the DP for demat, they are defaced by marking "Surrendered

for Dematerialisation" on the face of the certificates.

46
 ACCOUNT OPENING

To avail the services of a depository an investor is required to open an account with a

depository participant of any depository.

PROCEDURE FOR OPENING AN ACCOUNT

A demat account are opened on the same lines as that of a Bank Account. Prescribed

Account opening forms are available with the DP, needs to be filled in. Standard Agreements

are to be signed by the Client and the DP, which details the rights and obligations of both

parties

 The DP officials will make available the relevant account opening form (depending on

whether the client is a retail investor or corporate client/clearing member) and

specify the list of documents regarding references that should be submitted along

with the form. It will also give a copy of the relevant agreement to be entered with

the client, in duplicate.

47
 The client will submit the duly filled in account opening form and client has to visit

personally for opening the account in DP. The DP officials have to do in person

verification and affix the “IN PERSON VERIFICATION” stamp on the account opening

form. It should also furnish such documents regarding references, as specified by the

DP, along with the account opening form. After executing the agreement the client

has to forward it to the DP.

 The DP officials will verify that the account opening form is duly filled in. It will also

verify the enclosed documents, if any. Incomplete forms will be forwarded to the

client for rectification.

 For Corporate Clients, the DP officials will verify if the board resolution for the

authorized signatories is enclosed.

48
 In case the documents are not proper, the DP officials will reject the form and

intimate the client of the same, stating the reasons for doing so.

 If the form is in order; the DP officials will accept the same and affix the stamp

“verified with original” on each and every proof after seeing the original proofs.

 After completion of all documentation, the DP officials will verify the pan from

income tax website. And affix the stamp “PAN VERIFIED” with date and sign on the

stamp.

 The DP officials will enter the client details as mentioned in the account opening form

in the DPM (software provided by NSDL & CDSL to the Participant) screen provided

for the purpose. In case of NSDL A/c opening the SR. Assist will capture all the details

in the DPM and record the client’s signature (on the form) as specimen for

authorizations in the future.

 After entering client details in the system, a client account number will be generated

by the DPM. The DP officials will enter this in the account opening form. After that

the officers will verify the details in the DPM captured by the SR. Assist. and activate

the account.

 The DP officials are not allowed to give the demat a/c no to the clients until the a/c is

activate, this is applicable for both NSDL & CDSL.

49
  When the demat a/c is activated the DP officials have to send the client master and

the copy of agreement between DP and client at the client’s address

The account holder is called 'beneficial owner' in a depository system and the account is

known as 'beneficiary account'.

Features of Beneficary Account·

 No minimum balance is required to be retained in a beneficiary account.

 An investor can close a beneficiary account with one DP and open an account with

another DP.

 To dematerialise existing physical holdings, the beneficiary account must be opened

in the same ownership pattern in which the securities are held in the physical form

e.g.,if one certificate is in individual name and another certificate is jointly held by X

50
& Y, two different accounts should be opened. However, in case of joint holders,

securities can be dematerialised in the same account even though share certificates

are in different sequence of names e.g., shares held in joint names of X & Y can also

be dematerialised in an account opened in the names of Y & X as well by submitting

an additional form (Transposition Form) alongwith Demat Request Form to the

DP.However, shares held jointly by X & Y cannot be dematerialised in an account

opened in the name of only X or only Y or any

51
 DOCUMENTS SHOULD BE REQUIRED FOR DEMAT ACCOUNT

Proof of Identity (POI):

 Passport

 Voter ID card

 Driving license

 PAN card with photograph

 Identity card with applicant’s photograph issued by

1. Central or state government and its department

2. Statutory/regulatory authorities

3. Public sector undertakings

4. Scheduled commercial banks

5. Public financial institutions

6. College affiliated to universities

Proof of Address (POA):

 Ration card

 Passport

 Voter ID card

52
  Driving License

 Bank passbook

 Verified copies of :

1. Electricity bills (not more than 2 months old)

2. Residence landline telephone bill (not more than 2 months old)

3. Leave & license agreement/agreement to sell (duly attested)

4. Self declaration by supreme court/high court judges, giving the new address in respect of

their own accounts.

 Identity card with applicants photograph issued by

1. Central or state government and its department

2. Statutory/regulatory authorities

3. Public sector undertakings

4. Scheduled commercial banks

5. Public financial institutions

6. College affiliated to universities.

53
  Passport-size photograph

 Copy of PAN card along with original PAN card for verification

Bank details:

 Copy of cancelled cheque with printed name from the bank.

 Copy of bank passbook with name and address and copy of cancelled cheque.

 Bank statement with name and address (duly authorized by the bank, if statement is

on plain paper) not more than 4 months old and copy of cancelled cheque of MICR &

bank detail verification.

In case of minor

 Date of birth certificate duly notarized

 Proof of address and identity documents of the guardian both minor and guardian’s

photograph and guardian to sign across both photographs

 PAN card of minor as well guardian is mandatory

54
In case of NRI

 Foreign address and RBI approval date attested copy of RBI approval

 NRO-Indian address alonwith proofs

 Bank account details

In case of joint holdings

In case of joint holdings, POI and POA documents alongwith PAN card must be submitted in

respect of all account holders. Original documents must be taken to the DP for verification.

 The DP will also provide a copy of the DP-Client agreement.

 Account opening form require the applicants to give the following details:

 (a) Name(s) of account holder(s) -The investor should ensure that the name is

identical to that which appears on the certificate(s) to be dematerialised. In case of

55
 joint holdings, account may be opened in any one combination, irrespective of the

sequence in which names are appearing on share certificates. Investors are advised

to open their account in their fully expanded name, i.e., to spell to the first name as

well as the middle name. This would obviate any doubts about the veracity of the

information.

 (b) Mailing and communication address(es) - The veracity of the applicant's address

is determined through the documents submitted for verification like ration card,

passport, voter ID, PAN card, driving license, bank passbook, etc. For NRI accounts,

proof is required for both addresses - that of the account holder as well as the

constituted attorney. For corporate accounts, a copy of Memorandum of Association,

Articles of Association, Board resolution permitting opening of account, the

registered address of the company have to be furnished.

 (c) Details of guardian in case account holder is a minor -Only a guardian can open a

depository account for a minor. The guardian is required to sign the application form,

and details of his name and address need to be given in addition to the details of the

minor.

 (d) Foreign Address and RBI approval details for NRI, FII or OCB accounts -For

foreign-based applicants like NRIs, Flls, OCBs, etc., the applicant must furnish original

56
 or attested copies of the power of attorney and the approval letter from RBI

permitting them to invest, as the case may be.If the account holder is an FII or an

OCB, SEBI registration details along with attested copy of registration certificate

issued by SEBI and authorisation letter is required.

 (e) Details of bank account -Details of bank account of the account holder, including

the nine digit code number of the bank and branch appearing on the MICR cheques

issued by the bank have to be filled in the application form. Companies use this

information for printing them on dividend/interest warrants etc.

 (f) Nomination declaration - A beneficial owner can make a nomination of his

account in favour of any person by filing the nomination form with his DP. Such

nomination is considered to be conclusive evidence of the account holder'(s)

disposition in respect of all the securities in the account for which the nomination is

made.

 (g) Standing Instruction - a facility of standing instruction is provided to the investors

for receiving securities to the credit of their accounts without giving a separate

receipt instruction.

57
 The demat account cannot be operated on "either or survivor" basis like the bank account.

In case of the joint account for the beneficial owners, all the joint holders have to sign the

account opening form.

 The investor will submit to his DP the duly filled in account opening form & DP-client

agreement along with the documents.

 The DP will verify whether the account opening form has been duly filled in or not. He will

also verify the submitted documents. For corporate investors, the DP will also verify whether

the board resolution for the authorized signatories has been enclosed. The DP will ensure

that client's signature is recorded on the form which will serve as specimen for

authorizations in future.

 If the application form and documents are in order, then the DP will accept them and give

an acknowledgement slip duly signed and stamped to the client. The DP will execute the

agreement and give a copy of it to the client.

 After completion of all documentation, the DP will enter the client details as mentioned in

the account opening form in the DPM (software provided by NSDL to the DP) screen

58
 provided for the purpose. After entering client details in the system, a client account number

will be generated by the DPM. The DP will enter this in the account opening form.

 On successful opening of the account, the DP will give:

 Client Id - an eight digit number to be used along with DP Id for any future

transactions.

 Delivery Instruction slip book.

 A copy of the report listing the client details captured in the DPM database to the

client. The report will be generated by the DPM.

PREREQUISTIES FOR DEMATERIALISATION REQUEST

1. The registered holder of the securities should make the request.

2. Securities to be dematerialised must be recognised by NSDL/CDSL as eligible. In other words,

only those securities whose ISIN has been activated by NSDL/CDSL, can be dematerialised.

3. The company/issuer should have established connectivity with NSDL/CDSL. Only after such

connectivity is established that the securities of that company/issuer are recognized to be

"available for dematerialization".

4. The holder of securities should have a beneficiary account in the same name as it appears on the

security certificates to be dematerialised.

59
5. The request should be made in the prescribed dematerialisation request form.

REASONS FOR DEMATERIALISATION REQUEST REJECTION

1. The quantity of shares mentioned in the DRF is more than the actual

    certificates sent.

2. The quantity of shares mentioned in the DRF is less than the actual certificates sent.

3The certificates sent are fake.

4. The certificates sent are reported Stolen.

5. Original certificates present are those for which the duplicates have already been issued.

6. Endorsements on the certificates are forged.

7. Securities stand on a different name than those mentioned in the DRF.

8. The details mentioned on the certificates do not match with the details on the DRF, or the

order of the holders name on the DRF is different from the names given on the certificates.

The scrutiny by the DP is incomplete.

60
9. The securities attached / DRF does not pertain to the R&T Agent to whom the DRF is sent.

10. Electronic request received but physical certificates are not received with in 15 days.

11. Specimen Signature on the DRF differs from the signatures recorded with the Registrar /

Transfer Agents.

12. The certificates sent have a court injunction against them

Precautions:

 Corporate investors to enclose Memorandum of Association/Trust deed/Board

resolution for the authorized signatories along with the account opening form.

 Details with respect to the bank account details of an investor must be indicated in

the space provided for the same in the account opening form.

 If an investor is interested in availing the facility of standing instructions for credits to

his account, then such instructions may be given to the DP. Otherwise, he will need

to give a receipt instruction to his DP for receiving credits to his account.

61
 BENEFITS OF DEMATERIALISATION

 No stamp duty for transfer of securities in the Depository System. In the case of

physical   shares, stamp duty of 0.25% of sale value is payable on transfer of shares.

 Elimination of bad deliveries and all risks associated with physical certificates such as

loss in    transit, theft, mutilation, damage, etc.

 Facility for freezing/locking of investor accounts to make it non-operational for

specified period.

 Instead of filling up transfer deed(s) a simpler form is to be given `to the DP.

 Facility to pledge and hypothecate securities. Pledging Dematerialised securities is

easier and   advantageous as compared to pledging physical shares. In respect of

shares in "compulsory Demat" category, banks prefer to lend against shares held in

electronic form, and offer better   terms.

62
 Odd lots are not differentiated in the electronic system. Even a single share can be

traded at   the market rates without any reduction in realisation.

 Just like a bank branch, the DP will give a periodical statement of

account of holdings. In   addition, investor can obtain a statement of holdings as

and when required for a fee.

 In case investor loses the statement of holdings, he can inform his DP and obtain a

duplicate   statement. Investor's statement of holdings cannot be used by anybody

else for trading in his   account.

 When an investor opens an account with a DP, he signs an agreement with the DP in

which   the DP will indemnify the investor for any mis-use of his holdings. The

depository will also   ensure thatthe interests of the investor are protected.

Grievances, if any, against his DP will  be resolved by the Depository.

 Every transaction in investor's account will have to be authorised by him, which

ensures total   control of the investor over his investment

 A safe and convenient way to hold securities and there is immediate transfer of

securities.

63
 Change in address recorded with DP gets registered with all companies in which

investor holds securities electronically eliminating the need to correspond with each

of them separately.

 Reduction in paperwork involved in transfer of securities and Reduction in

transaction cost

 Automatic credit into demat account of shares, arising out of

bonus/split/consolidation/merger etc.

DEMAT PROCESS

1. The registered holder of the securities makes the request.

2. Securities must be recognised by Depository as eligible.

3. Client submits DRF & physical certificates to DP. DP checks securities.

4. Client defaces certificates and DP punches two holes on name of company.

5. DP enters demat request in system for Depository.

64
6. DP dispatches certificates along with DRF to R&T.

7. Depository records the details and sends to R&T.

8. R&T agent verifies the details and confirms to Depository.

9. Depository credits the demat securities to BO a/c of client and intimates DP

electronically.

10. DP issues statement to client.

DEMAT -PROCESS

65
 Demat Process:

Shareholders With Physical Certificate

Depository Shareholder goes to DP with his

physical share certificates
Participants

Shareholder opens his account

Account Opening with DP.

Demat Request Shareholder fills DRF in

duplicate, defaces the shares
Form (DRF)
and hands over to DP

The DP sends R&T Depository DP sends information

Share certificates electronically to Depository
Agent
to R&T agent for
dematerialisation
Dematerialisation Upon confirmation of Demat by
R&T Agent, the Depository
confirms Dematerialisation.

Credit to the BO
A/c. of the Investor

INFORMATION NEEDED FOR DEMAT ACCOUNT

An investor has to give his bank account details at the time of account opening. It is for the

protection of investor’s interest. The bank account number will be mentioned on the interest

or dividend warrant, so that such warrant cannot be encashed by any one else.  Further, cash

66
corporate benefits such as dividend, interest will be credited to the investors account

directly through the ECS (Electronic Clearing Service) facility, wherever available, by the

company.

An investor can change the details of his bank account. Since in the depository system

monetary benefits on the security balances are paid as per the bank account details provided

by the investor at the time of account opening, the investor must ensure that any

subsequent change in bank account details is informed to the DP.

An Investor should immediately inform his/her DP if the address of the investor changes,

who in turn will update the records. This will obviate the need of informing different

companies.

An investor can open more than one account in the same name with the same DP and also

with different DPs.

An investor has not to keep any minimum balance of securities in his/her accounts.

Depository / DP can be chosen by investor as per convenience irrespective of the DP of the

broker.

The demat account must be opened in the same ownership pattern such as securities owned

individually in which the securities are held in the physical form. e. g. if one share certificate

is in the individual name and another certificate is jointly with somebody, two different

accounts would have to be opened.

67
 WHAT IS DEPOSITORY AND DEPOSITORY PARTICIPANT

Depository can in many ways be compared to a bank. Securities of the investors are held in

electronic / book entry form by the Depository. Apart from holding the securities, Depository

also provides services related to transactions in securities.

In India, a Depository Participant (DP) is described as an agent of the depository. They are

the intermediaries between the depository and the investors. The relationship between the

DPs and the depository is governed by an agreement made between the two under the

Depositories Act. In a

Strictly legal sense, a DP is an entity who is registered as such with SEBI

under the provisions of the SEBI Act.

68
Think of it like a bank. The head office where all the technology rests and details of all

accounts held is like the depository. And the DPs are the branches that cater to individuals.

At present two Depositories viz. National Securities Depository Limited (NSDL) and Central

Depository Services (I) Limited (CDSL) are registered with SEBI

NATIONAL SECURITIES DEPOSITORY LIMITED (NSDL)

NSDL was the first depository organization promoted by IDBI, UTI, and National Stock

Exchange (NSE). NSDL was set up to provide electronic depository facilities for securities

being traded in capital market. The depositories ordinance was promulgated by the

Government of India in September 1995. The Securities and Exchange Board of India (SEBI)

issued guidelines for depositories in May, 1996.

NSDL has minimum SHIRAM INSIGHT of Rs 100 crores. NSDL deals with shares in

dematerialized form through depository participants who are agents of investor banks,

stockbrokers and financial institutions. NSDL Depository Participant can be a public financial

institution, bank, custodian, registered stockbroker or a non-banking financial company

subject to the approval from the Depository Company and SEBI. NSDL aims at ensuring the

safety and soundness of Indian capital market by developing settlement solutions that

increase efficiency, minimize risk and reduce costs.

69
CENTRAL DEPOSITORY SERVICES (INDIA) LIMITED (CDSL)

CENTRAL DEPOSITORY SERVICEES LIMITED (CDSL) is second depository in India, is set up to

meet the objective the Act & to fulfill the user’s need. CDSL is secured “Certificate of

Commencement” of business on Feb 8, 1999 from SEBI. The balances in the investors’

account recorded and maintained with CDSL can be obtained through the DP. The DP is

required to provide the investor, at regular intervals, a statement of account, which gives the

details of the securities holdings and transactions. The depository system has effectively

eliminated paper-based certificates, which were prone to be fake, forged, counterfeit

resulting in bad deliveries. CDSL offers an efficient and instantaneous transfer of securities.

CDSL was promoted by Bombay Stock Exchange Limited (BSE) jointly with leading banks such

as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank,

70
Union Bank of India and Centurion Bank. Each and every activity of CDSL stem from the

essential reason behind forming this depository, i.e. to encourage India's individual investors

to benefit from actively participating in a depository.

Services provided by Depository system

 Dematerialisation (usually known as demat) is converting physical certificates to

electronic form.

 Rematerialisation, known as remat, is reverse of demat, i.e. getting physical

certificates from the electronic securities.

 Transfer of securities, change of beneficial ownership

 Settlement of trades done on exchange connected to the Depository

 Pledge / Hypothecation of demat shares, viz. Loan against shares

 Electronic credit in public offering of the Companies

 Non - Cash corporate benefits, viz. Bonus / Rights - direct credit into electronic form

 Depository restrict the risk of fraud

The charges for account closure and securities transfer due to account closing.

71
 

SEBI vide Circular No. MRD/DoP/Dep/Cir-22 /05 dated November 09, 2005 advised that with

effect from January 09, 2006, no charges shall be levied by a depository on DP and

consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers all the securities

lying in his account to another branch of the same DP or to another DP of the same

depository or another depository, provided the BO Account/s at transferee DP and at

transferor DP are one and the same, i.e. identical in all respects.   In case the BO Account at

transferor DP is a joint account, the BO Account at transferee DP should also be a joint

account in the same sequence of ownership.

All other transfer of securities consequent to closure of account, not fulfilling the above-

stated criteria, would be treated like any other transaction and charged as per the schedule

of charges agreed upon between the BO and the DP.

Freeze or lock of an account

Investors can freeze or lock their accounts for any given period of time, if so desired.

Accounts can be frozen for debits (preventing transfer of securities out of accounts) or for

credits (preventing any movements of hindrances into accounts) or for both. 

72
 Trading / Settlement 

Traditionally settlement system on Indian stock exchanges gave rise to settlement risk due to

the time that elapsed before trades were settled by physical movement of certificates. The

process of physical moving the securities from seller to his broker to clearing corporation to

the buyer’s broker and finally to the buyer took time with the risk of delay somewhere along

the chain. Now depository holds securities in dematerialised form. The procedure for buying

and selling dematerialised securities is similar to the procedure for buying and selling

physical securities.  The difference lies in the process of delivery (in case of sale) and receipt

(in case of purchase) of securities.

In case of purchase:-

73
  The broker will receive the securities in his account on the payout day

 The broker will give instruction to its DP to debit his account and credit investor's

account

 Investor will give ‘Receipt Instruction to DP for receiving credit by filling appropriate

form. However one can give standing instruction for credit in to ones accounts that

will obviate the need of giving Receipt Instruction every time.

In case of sale:-

The investor will give delivery instruction to DP to debit his account and credit the broker’s

account. Such instruction should reach the DP’s office at least 24 hours before the pay-in as

other wise DP will accept the instruction only at the investor’s risk.

74
Settlement Process in CM segment of NSE

Explanations:

(1) Trade details from Exchange to NSCCL (real-time and end of day trade

file).

(2) NSCCL notifies the consummated trade details to CMs/custodians who

affirm back. Based on the affirmation, NSCCL applies multilateral

netting and determines obligations.

(3) Download of obligation and pay-in advice of funds/securities.

(4) Instructions to clearing banks to make funds available by pay-in time.

(5) Instructions to depositories to make securities available by pay-intime.

(6) Pay-in of securities (NSCCL advises depository to debit pool account of

custodians/CMs and credit its account and depository does it).

(7) Pay-in of funds (NSCCL advises Clearing Banks to debit account of

custodians/CMs and credit its account and clearing bank does it).

(8) Pay-out of securities (NSCCL advises depository to credit pool account

of custodians/CMs and debit its account and depository does it).

(9) Pay-out of funds (NSCCL advises Clearing Banks to credit account of

custodians/CMs and debit its account and clearing bank does it).

(10) Depository informs custodians/CMs through DPs.

75
 'Standing Instruction' given in the account opening form

In a bank account, credit to the account is given only when a 'pay in' slip is

submitted together with cash/cheque. Similarly, in a depository account 'Receipt in' form has

to be submitted to receive securities in the account. However, for the convenience of

investors, facility of 'standing instruction' is given. If you say 'Yes' for standing instruction,

you need not submit 'Receipt in' slip everytime you buy securities. If you are particular that

securities can be credited to your account only with your consent, then do not say 'yes' [or

tick ] to standing instruction in the application form.

Delivery Instruction Slip (DIS) and the precautions which one need to observe with respect

to Delivery Instruction Slips

76
To give the delivery one has to fill a form called Delivery Instruction Slip (DIS). DIS may be

compared to cheque book of a bank account. The following precautions are to be taken in

respect of DIS:-

 Ensure and insist with DP to issue DIS book.

 Ensure that DIS numbers are pre-printed and DP takes acknowledgment for the DIS

booklet issued to investor.

 Ensure that your account number [client id] is pre-stamped.

 If the account is a joint account, all the joint holders have to sign the

instruction slips. Instruction cannot be executed if all joint holders have not signed.

 Avoid using loose slips.

 Do not leave signed blank DIS with anyone viz., broker/sub-broker.

 Keep the DIS book under lock and key when not in use.

 If only one entry is made in the DIS book, strike out remaining space to prevent

misuse by any one.

 Investor should personally fill in target account -id and all details in the DIS.

It is possible to give delivery instructions to the DP over Internet .Both NSDL and CDSL have

launched this facility for delivering instructions to your DP over Internet, called SPEED-e and

EASI respectively. The facility can be used by all registered users after paying the applicable

charges.

77
 Lending and borrowing of demat securities

  

If any person required to deliver a security in the market does not readily have that security,

he can borrow the same from another person who is willing to lend as per the Securities

Lending and Borrowing Scheme.

Lending and borrowing has to be done through an 'Approved Intermediary' registered with

SEBI. The approved intermediary would borrow the securities for further lending to

borrowers. Lenders of the securities and borrowers of the securities enter into separate

agreements with the approved intermediary for lending and borrowing the securities.

Lending and borrowing is affected through the depository system.

You can lend your securities through Approved Intermediaries registered with SEBI.

One can lend his/her demat seurities by entering into an agreement with the approved

intermediary to be a lender under this scheme. After that, you may lend securities any time

by submitting lending instruction to your DP.

Intermediary may return the securities at any time or at the end of the agreed period of

lending.  Intermediary has to repay the securities together with any benefits received during

the period of the loan. 

One can receive the corporate benefits which would accrue on these securities during the

period of lending.The benefits will be given to the Intermediary/borrower. However,

78
whenever the securities are being returned / recalled. Intermediary/borrower will return the

securities together with benefits received.

PHYSICAL SEGMENT

Change in Name / Status

- All requests for change of name should be accompanied by a copy of the notification

in Official Gazette or a Newspaper.

- Request for change of name consequent upon marriage/divorce should be

accompanied with marriage certificate/divorce decree.

- For effecting change of status from minor to major, please send proof of age (such as

attested copy of Birth Certificate or School Leaving Certificate)

79
- In the case of limited companies, a certified copy of the Certificate of Incorporation

consequent to Change of Name issued by the Registrar of Companies should be

submitted along with Memorandum & Articles of Association

- The new specimen signature duly attested by holder's banker should be lodged with

the Company to take on record the new signature.

Change of Address

Please inform the R&TA viz Integrated Enterprises (India) Limited immediately if there is any

change in address, quoting Folio No. Duly signed by the main (1st) holder as per specimen

signature recorded with us. This is the reason for which we would advise you not to send

change of address request by mail. If shares are held in demat form, please advice your DP

regarding change of address.

80
Loss of Share Certificates

Any communication to the Company regarding loss of share certificates should always be

signed by the shareholder as per specimen signature registered with the Company,

accompanied by FIR lodged with local police station giving full details of lost certificate(s)

such as certificate(s) Nos., Distinctive Nos. etc.

- Please immediately apply for injunction order in appropriate Court of Law for stopping

transfer, giving full details of Certificate Nos., Distinctive Nos. etc.

- Upon receipt of such communication, the procedure to be followed for obtaining duplicate

share certificates will be advised

Nomination

Nomination when shares are held in physical form

Nomination will enable smooth inheritance of ownership of the shares by the Nominee

without any procedural difficulties. (Presently, there is no difficulty where shares are

registered in joint names. But if the shares are held in an individual name, addition of a joint

name can only be done as a transfer, involving share transfer form, stamp duty, surrender of

original certificates etc. Following the nomination procedure eliminates all this

81
inconvenience). Therefore, if shares are held in a single name, , with the intention of holding

them for some more time, then please advise nomination immediately without delay

Following Instructions for the Nomination

1. Nomination can be made only by individuals, holding shares on their own behalf

singly or jointly. Non-individuals including society, trust, body corporate, partnership

firm, Karta of Hindu Undivided Family, holder of power of attorney cannot nominate.

If the shares are held jointly, all joint holders must sign the nomination form.

2. A minor can be nominated by a holder of shares and in that event the name and

address of the Guardian must be given by the holder.

82
3. The nominee shall not be a trust, society, body corporate, partnership firm, Karta of

Hindu Undivided Family or a power of attorney holder. A non-resident Indian can be a

nominee on repatriable basis.

4. Nomination will stand cancelled upon transfer of shares.

5. The Company will be fully discharged from its responsibility towards the legal heirs of

a shareholder, if the shares are transmitted as per the nomination filed with the

company, without any further reference to the legal heirs of a deceased individual

shareholder(s)

6. Where the space provided in the Form is not sufficient, shareholders are requested

to attach separate sheet(s) giving details of distinctive nos. of shares.

7. The Nomination Form should be filed in duplicate with the Company, who will return

one copy thereof to the shareholder.

8. Although Form 2B as prescribed does not provide for specimen signature of nominee,

this has been suggested in order to facilitate smooth transmission of title to the

nominee when the need arises.

9. Please note that if physical shares are subsequently converted into electronic form,

any nomination already filed will cease to have effect; the nomination details

furnished to the Depository Participant will prevail thereafter

83
 ISIN

 International Securities Identification Number (ISIN)

Each of the securities dematerialised in the NSDL depository bears a distinctive ISIN – an

identification number. International Securities Identification Number (ISIN) is a unique

identification number for each security issued in any of the International Standards

Organisation (ISO) member countries in accordance with the ISIN Standard (ISO 6166). ISO

6166 was developed for use in an international (cross-border) as well as domestic trades.

ISIN is a 12-character long identification mark. It has three components - a pre-fix, a basic

number and a check digit. The pre-fix is a two-letter country code as stated under ISO 3166

(IN for India). The basic number comprises nine alphanumeric characters (letter and/or

digits). The check digit at the end of the ISIN is computed according to the modulus 10

"Double-Add- Double". It establishes that the ISIN is valid.

Securities issued by the same company, issued at different times or carrying different rights,

terms and conditions are considered different securities for the purpose of allocating ISIN

84
and are allotted distinct ISINs. In India, SEBI assigns ISIN to various publicly traded securities.

Different ISINs are allocated to the physical and dematerialised securities of the same issue.

SEBI being the national numbering agency for India has permitted NSDL to allot international

securities identification number (ISIN) for demat shares. The ISINs allotted by NSDL does not

at any point of time breach the uniqueness of ISIN of physical form for the same security.

ISIN for a security is allotted when the security is admitted to NSDL. The numbering system is

simple. The numbering system of ISIN is in compliance with the structure of ISIN adopted by

SEBI.

International Securities Identification Number:

85
 1. Issued by International Standards Organisation (ISO) member countries in accordance

with ISO 6166.

2. ISIN is 12 digit alpha numeric number.

3. It has three components, prefix, basic & check digit.

4. Prefix is a two letter country code i.e. IN for India.

5. The basic number has nine alpha numeric characters.

6. The last digit is check digit. It ensures the ISIN is valid.

Numbering system of ISIN

The numbering structures for securities in NSDL is of 12 digit alpha numeric string. The first

two characters represent country code i.e. IN(in accordance wirh ISO 3166). The third

characters represents the issuer type as detailed below:

86
 Issuers type

Issuer type code allotted

Central government A

State government B

Municipal corporation C

Union territories D

Company, statutory corporation, E

Baking company

Mutual funds including UTI F

87
The list may be expanded per the needs. Maximum issuer types can be 35 (A to Z and 0 to 8.

the pro-rata dividend shares are identified by 9). The next 4 characters (fourth to seventh

character) represent company identity. The first 3 characters are numeric. The fourth

character is alpha character. The numbering begins with ‘001A’ and continues till ‘999A’ and

proceeds to ‘001B’. the next two characters (the eight and ninth characters) represent

security type for a given issuer. Both the characters are numeric. The next two characters

(the tenth and eleventh characters) are serially issued for each security of the issuer entering

the system. Last digit is double-add-double check digit.

The security types are planned which may be expanded as per the need as detailed below:-

Security type code

88
Equity 01

Non voting equity 02

Convertible preference shares 03

Non convertible preference shares 04

Mutual fund units –close ended 05

Mutual fund units-open ended 06

Secured debentures 07

Unsecured debentures 08

Regular return bonds-promissory notes 09

Floating rate bonds 10

Deep discount bonds 11

Step discount bonds 12

89
Warrants 13

DATA ANALYSIS AND

90
INTERPRETATION

91
Research is conducted for finding the solution of the problem. So to find the solution of the

problem data analysis and interpretation is must. There are some questions related to this

research to interpret the result. The sample size in this study consisted of 50 individuals and

data analyzed from the response of these 50 individuals.

1. ARE YOU AWARE OF STOCK MARKET?

The basic purpose of this question is to know about how many people are

aware of the stock market and its activities.

NUMBER % OF

RESPONSES OF RESPONSES

RESPONSES

YES 50 100

NO 0 0

TOTAL 50 100

92
 NO

Series1

YES

0 20 40 60 80 100 120

Analysis:-

This graph shows that all the 50 individuals were aware of stock market. So it can also be

possible that investors will rise in near future.

2. ARE YOU AWARE OF DEMAT ACCOUNT?

The basic purpose of this question is to know about awareness of demat account among

respondents.

93
 NUMBER % OF

RESPONSES OF RESPONSES

RESPONSES

YES 40 80

NO 10 20

TOTAL 50 100

YES
NO

94
Analysis:-

The above table clearly shows that from a sample size of 50 respondents, 40 individuals

were aware of demat account.

3. DURATION FOR WHICH INVESTOR HAS BEEN TRANSACT IN THE STOCK EXCHANGE

The NUMBER % OF purpose of

this DURATION OF RESPONSES question is

to know RESPONSES about the

duration
LESS THAN
for which
1 YEAR 20 40
investor has been

transact in stock
1 YEAR 5 10
exchange.
2 YEAR 10 20

MORE THAN

2YEAR 15 30

95
TOTAL 50 100
96
 40
35
30
25
20
15
10
5
0
AR AR AR HA
N
EA
R
YE YE YE T 2 Y
1 1 2 E
HA
N OR
T M
SS
LE

Analysis:-

97
The above table clearly shows that from a sample size of 50 respondents, 15 have been

trading in the stock exchange for more than 2 years. 10 investors were trading for 2 years

and remaining 25 for one year or less than a year.

4. DO YOU TRADE- FREQUENTLY OR OCCASIONALLY?

98
This purpose of this question is to find out how many persons trade frequently or

occasionally.

NUMBER % OF

TRADE OF RESPONSES

RESPONSES

FREQUENTLY 20 40

OCCASIONALLY 30 60

TOTAL 50 100

FREQUENTLY
OCCASIONALLY

99
Analysis:-

This chart shows that 30 individuals trade occasionally and 20 individuals trade frequently.

5. WHICH TYPE OF SCRIPTS YOU HAVE?

The purpose of this question is to know about which type of scripts the respondents

have.

100
 NUMBER % OF

SCRIPTS OF RESPONSES

RESPONSES

PHYSICAL 15 30

DEMATERIALISED 35 70

TOTAL 50 100

40
35
30
25
20 Series1
15
10
5
0
PHYSICAL DEMATERIALISED

101
Analysis:-

Above graph shows that many individuals have dematerialised scripts and some have

physical scripts.

6. DO YOU CONVERT YOUR SHARES ELECTRONICALLY?

NUMBER % OF

RESPONSE OF RESPONSES
The basic purpose of
RESPONSES
this question is to

know about how

many YES 30 60 persons are

interested to convert
NO 20 40
their shares

electronically.
TOTAL 50 100

102
 YES
NO

Analysis:-

This chart shows that 30 individuals wanted to convert their shares electronically and rest

were not.

103
7. ARE YOU SATISFIED WITH DEMAT SERVICE PROVIDER?

The purpose of this question is know satisfaction about demat service provider.

NUMBER % OF

RESPONSES OF RESPONSES

RESPONSES

YES 45 90

NO 5 10

TOTAL 50 100

104
 100
90
80
70
60
50 Series1
40
30
20
10
0
YES NO

Analysis:-

This graph shows that most of the people were satisfied with demat service provider.

8. PROBLEMS BEING FACED BY THE RESPONDENTS RELATING TO TRADING

This question tells us about the type of problems faced by the respondents.

105
 NUMBER % OF

PROBLEMS OF RESPONSES

RESPONSES

NO TRANSFER OR

BAD DELIVERY OF 10 20

SHARES

OTHER TYPE 20 40

OF PROBLEM

NO PROBLEM 20 40

TOTAL 50 100

106
 NO TRANSFER OR BAD
DELIVERY OF SHARES
OTHER TYPE OF PROBLEM

NO PROBLEM

Analysis:-

From the above chart we can see that 20 investors faced no problem due to the

introduction of DEMAT. Nearly 10 respondents faced problems due to non-transfer and

bad delivery of shares. Because of many sick companies being listed in the stock exchange,

107
the problem of non-receipt of dividend can be found among 7 investors. There were 20

persons who were facing other problems.

108
 9. Why do you like Your Securities In Electronic form

Chart Title

100%
90%
80%
70%
60%
Axis Title 50%
40%
30%
20%
10%
0%
Security Flexibulity Convence to buy or sellTransperance

in above chart showing 92% people for security reason they are investing dmat form and

89% people for flexibility in dmat account buying and selling is easy to trade 97% people

telling easy way to buy sell securities

109
 10. Do you know Rules and Regulation of D-mat account

Chart Title

100%
90%
80%
70%
60%
Axis Title 50%
40%
30%
20%
10%
0%
PAN Card SBTS Adress Proof Bank Account

Steps involved in opening a demat account First an investor has to approach a DP and fill up

an account opening form. The account opening form must be supported by copies of any

one of the approved documents to serve as proof of identity (POI) and proof of address

(POA) as specified by SEBI. Besides, production of PAN card in original at the time of opening

of account has been made mandatory effective from April 1, 2006

in above chart 55 people not aware of pan card is mandatory for d—mat account

110
 11. Do you Aware of D-mat Account Charges

Chart Title
100%
90%
80%
70%
60%
50%
40%
30%
20%
Axis Title 10%
0%
e ee e e
g fe ef fe fe
in c an on
en na
n
odi acti
p te st s
t-o ain Cu an
un m Tr
co l
Ac ua
A nn

Depending on the DP, there may or may not be an opening account fee. Private banks, such

as HDFC Bank and AXIS Bank, do not have one. However, players such as ICICI Bank, Globe

Capital, Karvy Consultants Bajaj capital limited and the State Bank of India to do so. But most

players levy this when you re-open a demat account, though the Stock Holding Corporation

offers a lifetime account opening fee, which allows you to hold on to your demat account

over a long period. This fee is refundable

This is also known as folio maintenance charges, and is generally levied in advance

The transaction fee is charged for crediting/debiting securities to and from the account on a

monthly basis. While some DPs, such as SBI, charge a flat fee per transaction, HDFC Bank and

ICICI Bank peg the fee to the transaction value, subject to a minimum amount. The fee also

111
differs based on the kind of transaction (buying or selling). Some DPs charge only for debiting

the securities while others charge for both. The DPs also charge if your instruction to buy/sell

fails or is rejected. In addition, service tax is also charged by the DPs.

112
 12. Please specify reasons D-mat Account With This Company

Chart Title

100%
90%
80%
70%
60%
50%
40%
Axis Title 30%
20%
10%
0%
s ge 's cy
v ice ra ger r en
r e a
Se ok an pa
a.)
r ns
)B m r a
b. sh
ip )T
o n d.
elati
R
c.)

most people satisfied with 84% good and only 10% people telling services are bad

brokerage also very good 60% telling

comapnay need to change the transperancey way

113
 13.What is Your Turnover in D-mat account ?

Turnover

A 10,000-50,000 32

B 50,001-100000 58

C 1,00,001-above 10

Chart Title

Turnover
A
B
C

114
 14,How much you are generating brokerage per day in your d-mat account ?

Brokerage

A 1000-5000 75

B 5,001-10,000 22

C 10,001-above 3

B; 3

A; 22

Brokerage; 75

115
 15.. where you have invested?
a) Futures b) Options
c) Commodities d) Others

where you have invested?

Percent Valid Percent
Futures 12 25
Commodities 8 16.67
Others 28 58.33
Total 48 100
Missing 52
Total 100

Table 23: where you have invested?

If yes then where you have invested?

Futures
Commodities
Others
Total
Missing

Graph 10: if yes then where you have invested?

Interpretation: Out of 50 Investors

[Majority of investors has invested in others, 12% investors have invested in Futures,

& only 8% investors have invested in commodities.]

116
117
 16. Which type of Investment do you prefer?
a) Bank Deposit b) Stock Market
c) Commodities d) Real Estate
e) Insurance f) Others

Type of Investment respondents Prefer

  Frequency Percent Valid Percent
Bank Deposit 56 56
Stock Market 26 26
Real Estate 2 2
Insurance 8 8
Others 8 8
Total 100 100

Table 18: Type of Investment Investors Prefer

8%
8%
2%

56% Bank Depost

26% Stock Market
Real Estate
Insurance
others

Graph-16 : Type of Investment Investors Prefer

Interpretation: Out of 100 Investors

118
 [Majority of investors invest still in bank & later followed by Stock market, investors still

consider banks as a safe way to invest & were the returns are assured when compared to

stock market because of its recent fluctuation, global meltdown etc.]

119
 17.in which segment you investing or trading?

Capital market Derivatives 85

Commodity Market 7

Currency market Derivatives 7

Interstate derivatives 1

Total 100

investing
Currency market Derivatives Interstate derivatives
7% 1%
Commodity Market
7%

Capital market Derivatives

85%

Majority of investors invest still in bank & later followed by Stock market, investors still

consider banks as a safe way to invest & were the returns are assured when compared to

stock market because of its recent fluctuation, global meltdown etc.]

120
18.you are using D-mat account for Intraday Short term Long Term?

Intraday 52

Short Term 28

Long Term 20

100

Investing Term
Intraday Short Term Long Term
20%

52%

28%

121
 19. From whom do you take advice?
a) Brokers b) Family
c) Friends d) Others

From whom do you take advice?

  Percent Valid Percent
Brokers 18 64.28
Family 6 21.42
Friends 2 7.14
Others 2 7.14
Total 28 100
Missing 72  
Total 100  

Table 27: From whom do you take advice?

2%
Brokers
Family
Friends
Others
Total

Graph 14: If yes then from whom do you take advice?

Interpretation: Out of 100 Investors

[Majority of investors takes advice from brokers, 6% investors take advice from

family, & 2% each take advice from Friends & others while investing in derivatives. the

outcome says that Brokers can educate well to the investors while investing in derivatives.]

122
123
 Do you Aware Any Security Analysis?

Fundamental analysis 15

Technical Analysis 9

No Idea 76

Analysis

Fundamental analysis
Technical Analysis
No Idea

Above Chart Showing there is no any education about technical analysis major people not

aware of security analysi 76%

124
 Finding

 the major finding of project is 100 individuals were aware of stock market. So it can

also be possible that investors will rise in near future.

 clearly shows that from a sample size of 100 respondents, 40 individuals were aware

of demat account

 15 have been trading in the stock exchange for more than 2 years. 10 investors were

trading for 2 years and remaining 25 for one year or less than a year

 20 investors faced no problem due to the introduction of DEMAT. Nearly 10

respondents faced problems due to non-transfer and bad delivery of shares. Because

of many sick companies being listed in the stock exchange, the problem of non-

receipt of dividend can be found among 7 investors. There were 20 persons who

were facing other problems

 92% people for security reason they are investing dmat form and 89% people for

flexibility in dmat account buying and selling is easy to trade 97% people telling easy

way to buy sell securities

 Steps involved in opening a demat account First an investor has to approach a DP and

fill up an account opening form. The account opening form must be supported by

copies of any one of the approved documents to serve as proof of identity (POI) and

proof of address (POA) as specified by SEBI. Besides, production of PAN card in

original at the time of opening of account has been made mandatory effective from

April 1, 2006

 in above chart 55 people not aware of pan card is mandatory for d—mat account

 This is also known as folio maintenance charges, and is generally levied in advance

125
 The transaction fee is charged for crediting/debiting securities to and from the

account on a monthly basis. While some DPs, such as SBI, charge a flat fee per

transaction, HDFC Bank and ICICI Bank peg the fee to the transaction value, subject to

a minimum amount. The fee also differs based on the kind of transaction (buying or

selling). Some DPs charge only for debiting the securities while others charge for

both. The DPs also charge if your instruction to buy/sell fails or is rejected. In

addition, service tax is also charged by the DPs.

126
 SUGGESTIONS AND RECOMMENDATIONS

 As many of the people who dealt in share market are aware of SHIRAM INSIGHT

STOCK BROKING LIMITED ’S name but not of its services. So company should

advertise its services , so that people can be made aware of all the services provided

by the company.

 Most if the people are not finding any spare time to convert their shares

electronically. So company should approach to such people at their doorstep to open

their demat account.

 As far as people preference regarding opening of demat a/c is concerned then they

mainly prefer two factors i.e. service and trust. So it becomes necessary for the

company to take care of these two factors.

127
 CONCLUSION

 From the above analysis we have come to this conclusion that most of the people

are aware of Demat Account and very much interested in screen based trading.

 This graph shows that most of the people were satisfied with demat service provider.

 The company can think of tapping the existing demat account holders and provide

them enough information on capital market and enable them to trade in the same.

This will help the company also to increase their income.

 The company has to create and maintain a database of prospective customers from

time to time, to keep track of the people falling in different income levels and their

128
 investing patterns. This is possible if continuous contacts are maintained with the

customers.

BIBLIOGRAPHY

 SHIRAM INSIGHT Stock Broking Limited forms for opening depository and trading

account.
129
 Study material of capital market and derivatives market of NCFM.

 Study material of capital market and derivatives market of BCFM.

 Zikmund, William G; “Business Research Methodology”, Seventh Edition, Thompson

South Western Publication

 Websites Visited

www.sebi.gov.in

www.nseindia.com

www.bseindia.com

www.nseindia.com

130
 QUESTIONAIRE

NAME: _________________________________

CONTACT NUMBER: _________________________________

OCCUPATION: _________________________________

ADDRESS: _________________________________

131
1. Are you aware of stock market?

(a) Yes (b) No

2. Do you deal in share?

(a) Yes (b) No

3. Are you aware of DEMAT?

(a) Yes (b) No

4. Are you aware of REMAT?

(a) Yes (b) No

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 5. How long have you been transacting in the stock exchange?

(a) Less than 1 year (b) 1 year

(c) 2 year (d) More than 3 year

6. Do you trade frequently or occasionally?

(a) Frequently (b) Occasionally

7. In which securities do you trade frequently?

(a) Equity (b) Bonds (e) All

(c) Debentures (d) Futures & Options

8. Which type of script you have?

(a) Physical (b) Dematerialized

9. Why you have not dematerialized your script?

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(a) Lack of awareness (b) Time constraint

(c) Liability of changes

10. Do you like to convert your shares electronically?

(a) Yes (b) No

11. On what basis you have taken your decisions of opening of demat A/c?

(a) Service (b) Changes (c) Convenience

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12. Are you satisfied with your demat service provider?

(a) Yes (b) No

13. What type of problems do you centrally face when you trade in securities?

(a) Non transfer of shares (b) Other type of problems

(c) Bad transfer of shares (d) No Problem

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