Cap Mkt Notes

8/13/2019 Cap Mkt Notes

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Notes : Overview of Securities Market

Primary MarketThe primary market issuance is done either through public issuesor privateplacement. Under Companies Act, 1956,an issue is reerred aspublic i it results inallotment o securities to5! investors or more."hen the issuer makes an issue o securities to a select group opersons not e#ceeding $9 is called a private placement.

Secondary MarketThe secondary market is operated through t"o mediums, namely,the %ver&the&Counter '%TC( market and the )#change&Tradedmarket.%TC markets are inormal markets "here trades are negotiated.

Index

*tock market indices are meant to capture the overall behaviour othe e+uity markets.The bluechip inde# o *) is *- C/ ity.

Market Capitalisation = Closing price of share * Number ofoutstanding shares

Market Capitalisation RatioThe market capitali0ation ratio is deined as market capitali0ation

o stocks dividedby 2.3t is used as a measure o stock market si0e.

Turnover


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;egistrars to an issue - *hare Transer Agentsrimary 2ealerserchant :ankers:ankers to an 3ssue

2ebenture TrusteesUnder"riters7enture Capital undsutual undsCollective 3nvestment *chemes

Wholesale Debt Market (WDM Se!ment!!!.

Currency Derivatives Se!ment (CDS Se!ment"

commenced on August >9, >!!?, & launch o U* 2o llar&3ndian;upee 'U*2&3;(.

@aunch o )uro&3;, ound *terling&3; and =apanese en&3; &ebruary >!1!.B3nterest rate utures & August D1, >!!9.

Market Re!ulator"*):3 & established under *):3 Act 199>

Screen &ased Tradin!"*) introduced a nation&"ide on&line ully automated screenbased trading system '*:T*( on the C segment on ovember D,199$.


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33s can invest in a company under portolio investment route upto>$F o the paid up capitalo the company.

The3ndian stock e#changes have been permitted to set up tradingterminals abroad.Thetrading platorm o 3ndian e#changes is no" accessible through the3nternet romany"here in the "orld.

)aunch o* India 0I17olatility inde# is a measure o markets e#pectation ovolatility over the near term.3t measures the amount by "hich an underlying 3nde#is e#pected to luctuate in the near term, based on the order book othe underlyinginde# options.

3ndias irst volatility inde#, India 0I1 'based on the ity 5!3nde#%ption prices( "as launched by *) in April >!!?.

Direct Market 2ccess" April >!!?2A allo"s brokers to oer their respective clients, direct accessto the )#change trading system through the brokers inrastructure"ithout manual intervention by the broker.

)aunch o* Securities )endin! $ &orro3in! Scheme" 3n April>!!?43t allo"s market participants to take short positions

2S&2" Application *upported by :locked Amount 'A*:A( is amaGor primary market


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reorm.enables investors to apply or 3%s H %s and rights issues"ithoutmaking a payment.

the amount is blocked in investors o"n account andonly an amount proportionate to the shares allotted goes out "henallotment is inali0ed.

)aunch o* Interest Rate #utures" %n August D1, >!!9,

Issue o* Capital and Disclosure Reuirements (ICDRRe!ulations ,..5governs all disclosure norms regarding issue o

securities.

NOTES : TRADING MEMBERSHIP

According to ;ule > 'e( o *):3 '*tock :rokers and *ub&

:rokers( ;ules, 199>,

A stockbroker means a member o a recogni0ed stock

e#change.


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o stockbroker is allo"ed to buy, sell or deal in securities,

unless he or she holds a certiicate o registration granted by

*):3.

*):3 shall take into account the ollo"ing namely, "hetherthe stock broker applicant I

is eligible to be admitted as a member o a stock e#changeJ

has the necessary inrastructure like ade+uate oice space,

e+uipment and man po"er to eectively discharge his

activitiesJ

has any past e#perience in the business o buying, selling or

dealing in securitiesJ

is being subGected to any disciplinary proceedings under the

rules, regulations and bye&la"s o a stock e#change

:eneits to the trading membership o *) include1

a#< 6! in1

or directors

*TATU* 3ndianCiti0en

Corporateregistered underThe CompaniesAct, 1956 '3ndian(

)2UCAT3%

At least a graduateor e+uivalent+ualiication

T"o 2irectorsshould be at leastgraduate ore+uivalent+ualiication

)/);3) > rs


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C)

in paid upe+uity capital

otapplicable

;s D! lakh

2DMISSI%6 PR%C'D7R' #%R 6'W M'M&'RS8IP *ubmission o application orm

%nline e#amination 'C(

embership ;ecommendation Committee ';C(

;CH:oard approval

*):3 ;egistration

ormalities or enablement

Submission o* application *orm application orm complete in all respects in the prescribed

ormat along "ith other relevant documents and accompanied

by a demand drat or ;s. 1!,!!!H& dra"n in avour o

ational *tock )#change o 3ndia @imited, payable at

umbai.

%nline examination At any point o time the applicant has to ensure that at least

the sole proprietorHone o the designated partnerHone o the

designated directorHcompliance oicer "ould have a valid

certiicate or at least one o the ollo"ing C odules +ualiied directors "ho should begraduates "ith minimum > years e#perience in stock brokingrelated activities.


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Merer(A!a%a!ation of Me!"ers#i$

The merged entity shall at all times consist o at least one or more

members o the dominant promoter group o the merging Tradinembers "ho "ould hold at least 51F o its total paid up capital'$!F in case o listed companies( H proit sharing ratio.

The emerging entity "ould be allo"ed to trade on the registrationo the e#tinguishing entity or a period o $5 days.

The emerging entity should apply to *):3 at the earliest and give

an undertaking to be liable or the act o the e#tinguishing entity

*uch applications in any case should be made not later than D!days o the registration granted by the ;egistrar o companies tothe emerging entity.

Reconstitution(Transfer of Me!"ers#i$

;econstitutionHTranser o embership takes place "hen theshareholdingHproit sharing ratio o e#isting 2ominantromoterH*hareholderHartner group alls belo" 51F '$!F in caseo listed corporates( "hich means that eectively they are no morein control o the trading member entity.

A processing ee o ;s.1 lakh "ould be payable on approval oproposal or transer.

The transer proposal "ould be subGect to recommendation by theembership ;ecommendation Committee ';C( and approval bythe :oard o the )#change, and, or this purpose, the )#changeKsre+uirements o online test and an intervie" by ;C, "ill apply.

Surren'er of Me!"ers#i$


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A Trading ember desirous o surrendering its membership o the)#change is re+uired to send its re+uest in "riting in the prescribedormat

An application or surrender is not allo"ed to be "ithdra"n unlesspermitted by the )#change at its discretion.

Sus$ension ) E*$u%sion of Me!"ers#i$

(+Miscon'uct"raud! "iolation! #mproper Conduct, $reachof Rules! $%e &a's and Regulations,ailure to compl% 'ith

Resolutions,ailure to submit to or abide b% (rbitration,

ailure to testif% or give information,ailure to submit)pecial Returns,ailure to submit (udited (ccounts,

ailure to compare or submit accounts 'ith efaulter,alseor misleading Returns, "exatious complaints,ailure to pa%dues and fees+

(, &n+"usiness%ike Con'uct"ictitious Names,ictitiousealings, Circulation of rumours,,re-udicial $usiness,Market Manipulation and Rigging, .n'arrantable $usiness,

Compromise,ishonoured Cheue,ailure to carr% outtransactions 'ith Constituents

(: &n$rofessiona% Con'uct" $usiness in )ecurities in 'hichdealings not permitted, $usiness for efaulting Constituent,$usiness for #nsolvent, $usiness 'ithout permission 'henunder suspension, $usiness for or 'ith suspended! expelledand defaulter trading members, $usiness for Emplo%ees ofother trading members, $usiness for Exchange Emplo%ees,

(dvertisement,Evasion of Margin Reuirements, $rokerage

Charge,ealings 'ith entities prohibited to bu% or sell ordeal in securities market+

(; Sus$ension of Business",re-udicial $usiness,.n'arrantable $usiness, .nsatisfactor% inancialCondition,


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('RSTrading members desirous o appointing sub&brokers are re+uiredto submit the ollo"ing documents to the embership 2epartmento the )#change


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LCopy o sub&broker & broker agreement duly certiied by thetrading membersLApplication orm or registration as a sub&broker "ith *ecuritiesand )#change :oard o 3ndia 'orm :(

L;ecommendation letter to be given by the trading member "ith"hom the sub&broker is ailiated 'orm C(

The sub&broker "ill be re+uired to adhere to *)s Bkno" yourclients re+uirements. The important documents relating to dealingthrough a subbroker are given belo"1 years o ageJ'>( not have been convicted o any oence involving raud

or dishonestyJ'D( passed 1>th standard e+uivalent e#amination

'$( should not have been debarred by *):3'5( The corporate entities applying or sub&brokership shallhave minimum paid up capital o ;s. 5 @akh

'6( and it shall identiy a dominant shareholder "ho holds aminimum o 51F shareseither singly or "ith theunconditional support o hisHher spouse

&R%>'R=C)I'6TS R')2TI%6S

1no' %our clientthe T shall seek inormation rom the client in the KClient;egistration Application ormK obtaining inormation like$ hours o thee#ecution o the contract duly signed by the T or his Authori0ed*ignatory.

The T shall ensure that5,!!!H& or less, it is notmandatory to hold a hearing o the parties and the matter is decidedbased on the documents and submissionsmade by the parties.


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Cap Mkt Notes

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