Final Project of Pathak

8/8/2019 Final Project of Pathak

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A

project Report

on

DEMATE ACCOUNT

At

(SHAREKHAN)

Submitted by

Ashutosh Pathak

Roll No.

Batch (2009-2011)

Name of specialization

MMM

Submitted to

University of Pune

Raja Shri Shivraya Pratishthan

Institute of Management of Computer studies, Kothrud, Pune 411038


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CERTIFICATE

This is to certify that Mr. Ashutosh Pathak ,Roll No. ..has successfully

completed the project work aspart ofUniversity of Pune course as per following details.

Name of the course -------- MMM

Name of the company selected for the project----- Sharekhan

Title of the project--------- Demat Account

Academic year --------- 2009-2011

Signature of Project Guide Signature of Director

IMCS IMCS


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TO WHOMSOEVER IT MAY CONCERN

To,

Sub : Project Workfor MMM Course.

DearSir/ Madam,

RAJA SHREE SHIVRAYA PRATISHTHAN is engaged in themultitude of educational

and otheractivities benefiting over2000 students and public ingeneral. Shri Shashikant Sutar (

Ex M.L.A ) is the FounderPresident of Pratishthan.

In the year 1998 Pratishthan has ventured into the Management Education by establishing

Institute of Management and Computer Studies. This Institute is affiliated to Pune

University and conducts the M.C.M., M.P.M., M.M.M., P.G.D.B.M. and P.G.D.C.A. courses.

We are committed to groom the young generation with appropriate skills. It has been our

constant endeavour to mould ourstudents not merely as softwareandmanagement professionals

but also successful entrepreneurs equipped with acumen and vision in tune with challenges

presented by thenew millennium.

During the MMM course the students arerequired to do thePROJECT WORKas a part of

University Curriculum, inaMarketing Dept. ofa leading organization like yours. This satisfies

not only the University requirements but also gives better insight and understanding to the

students of the intricacies of the business situations. It would beextremely helpful if you could

allow our student Mr.Ashutosh Pathak to do his PROJECT WORK in your esteemed

organization. We look forward to your co-operation in our efforts to elevate the standard of

Management Education.

Thanks & Regards

Director

IMCS


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DECLARATION

I, Mr. Ashutosh Pathak Hereby declare that this project report is the record of authentic work

carried out by meduring the period from1st June to 31st July2010. and has not been submitted

earlierto any university orinstitute fortheaward ofany degree/diplomaetc.

Name of the Student: Ashutosh Pathak

Date:

Acknowledgement

In this project I havemade an honest anddedicated attem pt to make the research material as

authentic as it could. And I earnestly hope that it provides useful and workable informationand

knowledge to any personreading it.

During this small time frame of 605days in which the project reached its completion, therearea

few people whom I would like to makeamention ofand without whose help the project would

haveneverseen the light of theday.


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I would like to thank thosemany of people,managers, supervisors,employees workers who at

times took time out of theirbusy schedules and co-operated with me forthe Project work.

TABLE OF CONTENTS:

Sr.No.

Topics

Introduction and objective of company 9

1. About demate account 15

2 Company profile 18

3 Detail of the Product 26

4 Contribution to the Company 39

5 Objective of Study 49

6. Research Methodology 57

7 Recommendation 58

8 Limitation 59


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9 Conclusion 60

10 Bibliography. 61

ABOUT SHAREKHAN

It is one of Indias leading broking houses providing a solution in Equities, Derivatives and

Commodities, Mutual Fund,PMS (Portfolio Management Service). In 2005 Sharekhan got

ConsumerAwards 2005 voted by CNBC Awaaz as themost perfect Stock Broker in India.It

has a strong recall value.When it was started? It was started in 1925. First it started offline

trading on stock services and it was first to start online trading on shares and stock services

operation.

What Sharekhan offer to its Customer?

Simplified, userfriendly online trading products. Investment Consultant/Pertaining to the Stock Market. Vital information but thedynamic market-aresult of indepth research by competent.

Whereare Sharekhanroots?

It is a retail broking arm of SSKI, and organization with more than decades of trust and

credibility in the Stock Market.It has a business leadership in Institutional Broking and

Investment Banking.


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It is best amongst the pioneers of investment research in the Indian Market.

In 1984 ventured into institution brokingand corporate business finance.

It is one of the leadingdomestic players in Indian institutional. Sharekhan comes among the top 3 broking houses in terms of overall Stock Market

turnovers.

It comes among top 3 online brokers in India. It has over300000 + Trading Customers. It has largest groundnetwork in broking with 510 retail outlets spanning 140 cities. Its research department is the best. It provides aexcellent customerservices,authentic, in-depth research. It is pioneers of online trading in India. It is amongst the top 2 online trading Sharekhan sites from India. It is mast preferred financial destinationamongst online banking customers. In 2001 Banking Partners:-


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y HDFC (quarterly minimum balance of Rs.2500)

y ICICI Bank (zero balance)y UTI Bank (axis bank)y CITI Banky OBCy Union Banky IDBI Banky IndusInd Banky YES Banky Bank of Indiay Centurion Bank Of Punjab

DIFFERENT SERVICES IF SHAREKHAN

3CETT

Company Sharekhan is the leading stock Broking Company. Sharekhan offer a wide range of

products and service in to the stock broking (including NSE, BSE,Derivatives, Trading

Mutual funds), Internet based online trading, PMS, commodities trading, IPO, insurance

etc.

A Sharekhan outlet offers the following services:1. Online BSE and NSE executions


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2. Freeaccess to investment advice from Sharekhan's Research team

3. SharekhanValue Line (amonthly publication with reviews of Recommendations,

stocks to watch out foretc)

4. Daily research reports andmarket review (High Noon &Eagle eye)

5. Pre-market Report

6. Daily trading calls based on Technical Analysis

7. Personalized Advice

8. Live Market Information

With over 640 share shops in 280 cities, and Indias premier online trading portal

www.sharekhan.com. Sharekhan offera widerange of product and service into the stock broking

(Including NSE, BSE, Derivatives Trading), Depository Services, Internet Based Online

Trading, Portfolio Management, Commodities Trading, Online IPO, Insuranceetc

DISTRIBUTION CHANNELS AT SHAREKHAN


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F RANCHISEE

TRAINEE

REMISSAR

salesexecutive

POWER BROKER

FRANCHISEE

It is theauthorizedretail out let of the company with flexibility of having its ownRMS (riskmanagement system) and thereforeextending credit facilities to the customers on its own terms

and condition. Due to this feature thedeposit payableat the time of taking franchisee is higher

(approximately Rs 3, 50,000/- to Rs 5, 00,000/-).

There is a fixed profit sharing ratio between the company and the franchisee

which depends upon thenegotiation between the two parties. Like 50 50 or40 60 (company

franchisee).

Franchisee can sell all the financial products availableat the company.

POWER BROKER


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It is more orless same likea franchisee thedifference being that RMS is in the hands of

the company and without companys assent the power broker cant extend credits to its

customers.

Powerbrokeris forthose people who dont haveenough money to pay deposit fora franchisee.

Deposit payable forpowerbrokeris Rs 1, 50, 000/- only.

SALES EXECUTIVE

These are the paid employees of the company who have to sell all the financial products

available to the company. They have fix targets and only afterachieving their target, they are

eligible forgetting incentives

TRAINEE

Trainees are the contractual employees who are paid inaccording to the business they havebrought to the company. They can sell all the financial products available to the company. They

are paid Rs 330 for each demat cum trading account logged in, and 0.5% of the amount of

mutual funds sold. They arealso paid special spot incentives for theamount of stock transferred

in sharekhans demats account.

REMISSAR

These are mainly influential people who can log-in lots of business mainly on basis of their

references. They have an agreement with the company according to which they get a fixed

percentage of brokerageon the total amount of brokerage generated by the clients introducedby the remissar.


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COMPETITORS OF SHAREKHAN:-

India bulls is India's leading Financial Services and Real Estate Company having presence over

414 locations inmore than 124 cities. India bulls Financial Services Ltd is listed on the National

Stock Exchange, Bombay Stock Exchange, Luxembourg Stock Exchange and London Stock

Exchange.

Typeof Account

India bulls Equity Trading Account

India bulls Equity Trading Account is standard Online trading account from India bulls and

along with online trading it also provides priority telephoneaccess that gives you direct access to

yourRelationship Managerand full access to 'India bulls Equity Analysis'.

Application Trading Terminal (Need Installation)

Power India bulls

Power India bulls trading terminal is themost advancednew generation trading platform with

great speed. This trading terminal is built in JAVA.

Power India bulls is extremely reach in features including Live Streaming Quotes, Fast

OrderEntry andexecution, Tic by Tic Live Charts, Technical Analysis, Live News and

Alerts, Extensive Reports forReal-time Accounting.

Brokerage and fees:

y Account opening fees : Rs 1200/- (One -time non-refundable) as below:250/- Equity Trading Account opening charge


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y It is a browser based trading platform. The rates are updated on clicking the refreshbutton. This facility ensures it is not blocked by firewall. Thus it is useful for investor

blocks such data who needs to access information from places where firewall

Angel Trade

y It is a browserbased trading platform. Therates are updatedautomatically. This platformis useful forinvestors & traders to access market fromdifferent terminals.

Angel Diet

y It is an application based trading platform where rates are updated automatically. Allsegments areavailable ona single screen. This is ideal platform forthedaily traders.

Angel Anywhere

It is ideal for investors & traders who are inclined towards trading based on charts &technical tools. This is an application based trading platform where rates are updated

automatically.

Brokerage and fees:

y Accountopening fees

Stock trading account Rs 575/-

Demat account - Rs 200/-

Commodity trading - Rs 625/-


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Advantagesof Angel Trade

1. Userfriendly browser-based / application based online trading platform.2. Theauto square off time is at 3:15 andan investorcan buy up to 4 times the value in his

account.

3. Tradingaccount can be linked with popularprivate banks like HDFC Bank, ICICI Bank,UTI banketc.

4. Trading is available in both BSE and NSE.Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, was set up in 1994. Kotak

Securities is a corporatememberof both Bombay Stock Exchange (BSE) and National Stock

Exchange (NSE). Currently, Kotak Securities is one of the largest broking houses in India with

widegeographical reach.

Kotak securities online trading, is the online trading portal of the Kotak Securities Ltd, the

leading stock broking house of India. The onlinedivision of Kotak Securities Limited provides

services like internet broking services, online IPO andmutual fund investments.

Trade In: BSE and NSE

Account Types:

Kotak offers different account types according to users requirement:

y KotakGatewayy

Kotak securities gateway account opens thegateway to a world of investing opportunitiesfor beginners. Kotak gateway user can trade anywhere, anytime using internet. Kotak

also offers call and trade facility.

They provide sms alert, research report, freenews andmarket updates. Best feature of Kotak

gateway is call and trade facility. Anybody canactivate Kotak securities gateway account with

any amount between Rs 20,000 to 5, 00,000. This can be in form of cash deposit or the value of


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the shares you buy. Brokerage will be charged based on theaccount type. For intraday trading

brokerage is .06% both sides forless then 25 lakes and .023% formore than 25 crores

KotakPrivilege Circle

y This is the premiumaccount for its users. Along with kot gateway account benefits theyprovides independent market expertise and support through a dedicated relationship

manager and a dedicated customer service desk which provides assistance in openingaccounts, handling day-to-day problems, and more. They provides KEAT premium

which is anexclusive online tool that lets you monitorwhat is happening in themarket

and view yourgains and losses inreal-time.

y One canactivate Kotak securities privilege circleaccount with any amount more than Rs.10, 00,000/- as margin, by way of cash or stock. For intraday trading brokerage is .06%

both sides for less then 25 lakhs and .03% formore than 25 crores.

KotakHigh Trader

y This is the best offer for daily trader or intraday traders. This is an Auto Square Offproduct where you canenjoy the benefits of intra-day trading. Tradercanget the 6 times

exposure on themargin. They provideall the benefits which kotakgateway and privilege

account provides. Trader canapply paper free order for IPO. One canactivate Kotak

securities high traderwith any amount less than Rs 5, 00,000/- as margin, by way

of cash or stock. The minimum brokerage that is applicable in the Kotak high trader

account is 4 paisa ondelivery and 4 paisa in the cash segment

KotakFreeway


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y Frequent traderuse this account type because freeway account enables its users to tradeas many times as they like - at a fixed brokerage.

y One canactivate Kotak securities freeway with any amount less than Rs. 1, 25,000/- asmargin, by way of cash or stock. They charge fixed brokerage of Rs.999/- amonth and

ondelivery transaction brokerage is .59% on less then 1lakhs and .18% onmore than 2

crores.

KotakFlat

y This product is best suited for theneeds of the Indianretail investorwho actively investsthrough the internet. Kotak flat introduces the international trend of charging brokerages

on per trade basis. Brokeragerate works up to 0.18% ondelivery trades and 0.018% for

intraday trades.

Kotak Assist

y This account most suits to long term investors. This account provides completeassistanceonall yourfinancial investment.

Brokerage and Accountopening fees:

y A tradingaccount in Kotakrequires you to haveaminimum of Rs.1000 to start with, thebankaccount to haveaminimum of Rs.2500.

Brokerage:

y ForIntra-day trading, Kotak brokerage is around 0.05%.y Fordelivery trading, Kotak brokerage is around 0.45%.


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ICICI Direct (or ICICIDirect.com) is stock trading company of ICICI Bank. Along with stock

tradingand trading inderivatives in BSE and NSE, it also provides facility to invest in IPOs,

Mutual Funds and Bonds. Trading is available in BSE and NSE.

Trade In: BSE and NSE

Typeof Account

ICICI Direct offers 3 different online trading platforms to its customers:

y Share Trading Accounty Share Trading Account by ICICI Direct is primarily for buyingand selling of stocks in

BSE and NSE.

y This account allows Cash Trading, Margin Trading, Margin PLUS Trading, SpotTrading, Buy Today Sell Tomorrow and Call and Trade on phone.

y ICICIDirect.com website is the primary trading platform for this tradingaccount. Theyalso provide installableapplication terminal basedapplication forhigh volume trader.

Wise Investment Account

Along with stock trading and IPO investing in BSE and NSE, Wise Investment account also

provide options to invest in Mutual Funds and Bonds online. Online Mutual funds investmentallows investor to invest on-line in around 19 Mutual Fund companies. ICICI Direct offers

various options while investing in Mutual Funds like Purchase Mutual Fund, Redemptionand

switch betweendifferent schemes, Systematic Investment plans, Systematic withdrawal planand

transferringexisting Mutual Funds in to electronic mode. This account also provides facility to

invest in Government of India Bonds and ICICI Bank Tax Saving Bonds.

ICICIDirect.com website is the primary tool to invest in Mutual Funds, IPOs, Bonds and stock

trading

Active Trader Account

Active Trader account gives more personalized investment options to the investors. It allows

investor to use online and offline stock trading. It also provides with independent market

expertiseand support through adedicated Relationship Manager from ICICI. Active Traderalso

provides commodity trading.


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Brokerage and fees

yAccountopening fees : Rs 750/- (One -timenon-refundable)

Brokerage : ICICI Direct.com brokerage varies on volume of trade and inclusive of demat

transaction charges, service taxes and courier charges for contract notes. It ranges from 0.1% to

0.15% formargin trades, 0.2% to 0.425% for squared off trades and 0.4% to 0.85% ondelivery

based trades.

Advantagesof ICICI Direct

y 3-in-1 account integrates your banking, broking and demat accounts. All accounts arefrom ICICI and very well integrated. This feature makes ICICI the most interestingplayer in online trading facility. There is absolutely no manual interfererequire. This is

truly online tradingenvironment.

y Unlikemost of the online trading companies in India which require transferringmoney tothe broker's pool or towards deposits,at ICICI Direct you canmanage your owndemat

and bank accounts through ICICIdirect.com. Money from selling stock is available in

ICICI bankaccount as soonas the ICICI Direct receive it.

y Investment online in IPOs, Mutual Funds, GOI Bonds,and Postal Savings Schemes allfrom one website. General Insurance is also available from ICICI Lombard.

y Trading is available in both BSE and NSE.

Motilal Oswal Securities Ltd. (MOST) is one of the best broking houses in India. Founded in

1987,most has in 200 cities through 400 outlets. Most provideadvice-based broking (equities

and derivatives), portfolio management services (PMS), e-Broking, depository services,

commodities trading, IPO andmutual fund investment advisory services

Typeof Account

1. Most E-BrokingMost E-Broking is complete online stock trading solution for Indianan stockmarket.

Followingare the features ofmost E-Brokingaccount:


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y Easy single screen trader with instant trade confirmation similar to exchange basedtrading terminals.

y Access to various online reports likemargin report,Demat A/c details, and tradesexecuted, turnover report, net position report with mark to market profit/loss and

realized profit.

Online transferfunds through HDFC Bank

Share Market Terminology.

Whatis Share?

In simple Words,ashareorstock is adocument issued by a company, which entitles its holder

to be one of the owners of the company. A share is issued by a company or can be purchased

from the stockmarket.

What are active Shares?

Shares in which thereare frequent andday-to-day dealings,as distinguished from partly active

shares in which dealings are not so frequent. Most shares of leading companies would be

active, particularly those which are sensitive to economic and political events andare, therefore,

subject to sudden pricemovements. Somemarket

analysts woulddefine active shares as those which are bought and sold at least three times a

week. Easy to buy orsell.

Whatis Demat?

Dematrefers to adematerialized account.

Though the company is under obligation to offer the securities in both physical and demat

mode, you have the choice to receive the securities ineithermode.

If you wish to have securities indematmode, you need to indicate thename of thedepository

and also of the depository participant with whom you have depository account in your

application.


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Fundamental Analysis:-

Fundamental analysis looks at a shares market price in light of the companys underlyingbusiness propositionand financial situation. It involves making both quantitativeandqualitative

judgements about a company. Fundamental analysis can be contrasted with 'technical analysis,

which seeks to make judgements about the performance ofa share based solely on its historic

price behaviorand without reference to

the underlying business, the sector it's in, or theeconomy as a whole. This is done by tracking

and charting the companies stock price, volume of shares traded day to day, both on the

company itself and also on its competitors. In this way investors hope to build up a picture offuture pricemovements.

Investing V/s Trading

The biggest difference between them is the length of time you hold onto theassets. Aninvestor

is more interested in thelong-term appreciation of his assets, counting on that historical rise in

marketequity.

An investor relies mostly on Fundamental Analysis, which is the analytical method of

predicting long-term prospects ofa particularasset.

Most investors adopt abuy and hold approach to assets, which simply means they buy shares

of some company and hold onto them fora long time.

Traders, on the otherhand,areattempting to profit on just thoseshort-termprice fluctuations.

Theamount of timeanactivetrader holds onto anasset is very short: inmany cases minutes, or

sometimes seconds. If you can catch just two index points onanaverageday, you canmakea

comfortable livingas a Trader.

To help make theirdecisions, Traders rely onTechnical Analysis,a form ofmarketinganalysis

that attempts to predict short-term price fluctuations

IPO (InitialPublic Offer):-


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IPO is New shares Offered to the public in the Primary Market .The first time the company is

traded on the stockexchange. A prospectus is issued to readabout its risk before investing. IPO

is A company's first sale of stock to the public. Securities offered inan IPOare often, but notalways, those of young, small companies seeking outsideequity capital anda public market for

their stock. Investors purchasing stock in IPOs generally must be prepared to accept very large

risks forthe possibility of largegains.

Bull Market A market in which prices are inan upward trend. "Bear" refers to amarket ona

downward trend.

Close The periodat theend of the trading session. Also used to refer to the last pricea stock

sells foronagivenday. The previous close is the pricea stock closedat the previous day.

Dividend A taxable payment given to shareholders from the company's current or retained

earnings.

High The highest price paid fora security ina certain time period (i.e.,aday, week,month,

year). Forexample, the high for theday was $23, but the high for the yearwas $41. The low

represents the lowest price ofa security in thegiven period.

Market Order An order for immediateexecutiongiven to a broker to buy or sell at the best

obtainable price.

SWOT ANALYSIS OF PRODUCT

STRENTH

1. Online trading is very userfriendly and onedoesn't needany software to access.2. They provides good quality of services like daily SMS alerts, mail alerts, stock

recommendations etc.

3. Sharekhan has a bility to transfer funds from most banks. Unlike ICICI Direct, HDFCSec,etc., so investornot really needs to open

4.


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anaccount with a particularbankas it canestablish link with most modern banks.

WEAKNESSIS

1. They chargeminimum brokerage of 10 paisa per stock wouldnot let you trade stocksbelow 20 rs. (If you trade, you will loosemajority of yourmoney in brokerage).

2. Lots of hiddenrules and charges.3. They do not provide facility to book limit ordertrades duringafter-hours.4. Classic account holders cannot trade commodities.

OPPERTUNITIES

1) It is expandedacross 280 different cities with 640 branches.2) It is fastest growing company amongall otherbroking companies in India .

THREATS

Company has to face competition from other local companies likereligare, india Infoline, India

bulls andangel etc. apart from theabove companies they face competition from themultinational

companies.

STRATEGY:

Tele Calling Stall Marketing LMS(Lead Management System) References

Telecalling:


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I do calling work it means first I have to call orphonea customers and I have to

explain the product, its features, its benefits,and charges of the products. And if

customer is ready orconvinceand if he will give theappointment to fill the fromthen I have to go personally to meet the client and fill the Trading and demat

account form.

Stall Marketing:Sharekhandoing Stall Marketing to promote its product. I havedone Stall Marketingat

VACATION 2008,Drive in Road,

Ahmedabadandgenerate leads from Stall Marketingand I got goodresponse from StallMarketing.

LMS(Lead Management System):I am getting lead from the company. The person who are interested and have

registered on Sharekhans website, I amgetting that lead and on this lead I dotelecallingand if customer is interested then I takeanappoinment from themand

then I go to fill the form.

References:Here I am using two types ofreference, 1) Own Reference 2) Client Reference.

Promotion Strategy:In promotion strategy, First I convey the people through companys products,

services and charges, Company take only Rs. 5049/- for opening account, and after that

they arenot takingany kind of Script charges as compare to others stock broking company,

after that if personarenot convey then I promote product through providing ICICI Zerobalanceaccount at free of cost.

The pool of funds is invested ina portfolio ofmarketable investment.The value of theportfolio is updatedeveryday.

Introduction Of Demat Account


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When an investor is interested to purchase shares, he has toinform the broker a bout his

Depository Account Numberto get shares credited into his account.

List of documents required for opening an account is given in the right side bar. All the

documents listedarenot required. DP may ask to makeavailableany two or threedocuments

from the list. PAN card is amust foropeningademat account

SHERKHAN DEMAT ACCOUNTS

Overviewof Demat Account

Demat account allows you to buy, sell and transact shares without theendless paperworkand

delays. It is also safe, secure and convenient. In India, a demat account, the abbreviation for

dematerializedaccount, is a type of bankingaccount which dematerializes paper-based physical

stock shares. Thedematerializedaccount is used to avoid holding physical shares: the shares are

bought and sold through a stock broker. This account is popular in India. The Securities and

Exchange Board of India.

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

Is a demat account a must

Now a day, practically all trades have to be settled in dematerialized form.

Although the market regulator, the Securities and Exchange Board of India (SEBI),

has allowed trades of up to 500 shares to be settled in physical form, nobody wants

physical shares any more. So ademat account is amust fortradingand investing.

Why demat?


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Thedemat account reduces brokerage charges,makes pledging/hypothecation of shares easier,

enables quick ownership of securities on settlement resulting in increased liquidity, avoids

confusion in the ownership title of securities, and provides easy receipt of public issueallotments. It also helps you avoid baddeliveries caused by signaturemismatch, postal delays

and loss of certificates in transit. Further, it eliminates risks associated with forgery,

counterfeiting and loss due to fire, theft ormutilation. Demat account holders can also avoid

stamp duty (as against 0.5 percent payable on physical shares),avoid filling up of transferdeeds,

and obtainquickreceipt of such benefits as stock splits and bonuses.

Stepsinvolved in opening a demat account

First an investorhas to approach aDP and fill up anaccount opening form. Theaccount opening

formmust be supported by copies ofany one of theapproveddocuments to serveas proof ofidentity (POI) and proof ofaddress (POA) as specified by SEBI. Besides, production of PAN

card in original at the time of opening ofaccount has beenmademandatory effective from April

01, 2006.

All applicants should carry original documents forverification by anauthorized

official of thedepository participant, underhis signature.

Further, the investor has to sign an agreement with DP in a depository prescribed standard

format, which details rights andduties of investorandDP. DP should provide the investorwith a

copy of theagreement and schedule of charges for their futurereference. TheDP will open the

account in the system and give an account number, which is also called BO ID (Beneficiary

OwnerIdentificationnumber).

TheDP may revise the charges by giving 30 days notice inadvance. SEBI has

rationalized the cost structure fordematerialization by removingaccount opening

charges, transaction charges forcredit of securities,and custody charges vide

circulardated January 28, 2005.

Further, SEBI has vide circulardated November09, 2005 advised that with effect from January

09, 2006,no charges shall be levied by adepository onDP and consequently, by aDP on a

Beneficiary Owner (BO) whena BO transfers all the securities lying in his account to another


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branch of the sameDP or to anotherDP of the samedepository oranotherdepository, provided

the BO Account/s at transfereeDP andat transferorDP are oneand the same, i.e. identical inall

respects. In case the BO Account at transferor DP is a joint account, the BO Account attransfereeDP shouldalso bea joint account in the same sequence of ownership

Rights

1. You can openmore than onedepository account in the samename with singleDP/ multiple

DPs.

2. No minimum balance is required to bemaintained inadepository account.3.You cangivea onetime standing instruction to yourDP to receiveall the credits coming to

yourdepository account automatically.

Procedure

1. Fill account opening form (available with yourDP).

2. Give yourDP theduly filledaccount opening form with introduction

documents as may berequired.

3. Sign agreement with DP (agreement will state rights & obligations of both parties). The

agreement will contain the fee structure of yourDP.YourDP would give you a copy of this

signedagreement foryourrecord.

4. DP wouldgive you Client Idno. (Account no.) Once yourdepository accountis opened. This

Client Idno. along with yourDP Idno. Forms a unique combination. Both thesenos. should be

quoted in all your future

correspondence with DP/NSDL / Issuing Company/theirregistrar& transfer(R&T) agent.

5.YourDP wouldgive you pre-printed instruction slips fordepository services

viz.,dematerialization,delivery instruction fortrades,etc..Preserve these carefully

.


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6.Your DP would give you a list of deadlines for giving instructions for various depository

activities viz., transferforeffecting sale, purchaseetc.. Ifnot, check

with theDP

Required Documents

The extent of documentation required to open a demat Account may vary according to your

relationship with the institution. If you plan to open a demat account with a bank, a savings

account holder has anedge over thenon-account holder. In fact, banks usually offeradditional

incentives to customers who open a demat account with them.

Along with the application form, your photogra phs (with co-applicants) and proof of

identity/residence/date of birth have to be submitted. The DPs also ask for a DP- client

agreement to beexecuted onnon-judicial stamp paper. Here is a broad list (you wont needall ofthem though):

PAN card

A canceled check,

VotersID

Passport

Ration card

Driverslicense

Photo credit card

Employee IDcard

Bankattestation

ITreturns

Electricity/ Landline phone billWhile they only ask for photocopies of the documents, they will need the originals for

verification. You will have to submit a passport size photograph on which you signacross.

Procedure

1. Fill account opening form (available with yourDP).


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2. Give yourDP theduly filledaccount opening form with introduction

documents as may berequired.

3. Sign agreement with DP (agreement will state rights & obligations of both parties). Theagreement will contain the fee structure of yourDP. YourDP wouldgive you a copy of this

signedagreement foryourrecord.

4.DP wouldgive you Client Idno. (Account no.) once yourdepository account

is opened. This Client Id no. along with your DP Id no. forms a unique

combination. Both these nos. should be quoted in all your future

correspondence with DP/NSDL / Issuing Company/theirregistrar& transfer(R&T) agent.

5.YourDP wouldgive you pre-printed instruction slips fordepository services

account ofmismatch of signatures, forgery of signatures, fake certificates,etc.

It is a safeand convenient way to hold securities compared to holding securities in physical

form..

No stamp duty is levied on transferof securities held inDemat form.

Instantaneous transferof securities enhances liquidity It eliminates delays, thefts, interceptions

and subsequent misuse of certificates.

Change ofname,address,registration of powerofattorney,deletion ofdeceased's name,etc. -

can beaffectedacross companies by one single instruction to theDP.

Each share is amarket lot forthe purpose of transactions - so no odd lot problem.

Any number of securities can be transferred/delivered with one

delivery order. Therefore, paperwork and signing of multiple

transfer forms is done away with. It facilitates taking advances

against securities on low margin/low interest


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How To Open Demate account

Openingan individual Demat account

is a two-step process: You approach aDP and fill up theDemat account-opening booklet. The

Web sites of the NSDL and the CDSL list theapprovedDPs. You will thenreceiveanaccount

number and a DP ID number for the account. Quote both the numbers in all future

correspondence with yourDPs.So it is just likea bankaccount whereactual money is replaced

by shares. You have to approach theDPs (remember, they are like bank branches), to open your

demat account. Let's say your portfolio of shares looks like this: 150 of Infosys, 50 of Wipro,

200 of HLL and 100 of ACC. All these will show in yourdemat account. So you don't have to

possess any physical certificates showing that you own these shares. They are all held

electronically in your account. As you buy and sell the shares, they are adjusted in youraccount. Just like a bank passbook or statement, the DP will provide you with periodic

statements of holdings and transactions.

Is a demat account a must?

Nowadays, practically all trades have to be settled indematerialised form. Although themarket

regulator, the Securities and Exchange Board

of India (SEBI), has allowed trades of upto 500 shares to be settled in physical form, nobody

wants physical shares any more.

So ademat accountis a must for tradingand investing. Most banksarealso DPparticipants,

as aremany brokers. You can choose your very ownDP. A broker is amember of the stock

exchange, who buys and sells shares on his behalfand on behalf of his clients.

A DP will just give you anaccount to hold those shares. You do not have to take the sameDP

that yourbrokertakes. You can choose yourown.

Banks are also advantageous because of thenumber of branches they have. Some banks give

the option of opening a Demat account in any branch, while others restrict themselves to a

selected set of branches.


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Some private banks also provide onlineaccess to theDemat account. So, you can check on your

holdings, transactions and status ofrequests through thenet banking facility. A brokerwho acts

as aDP may not beable to provide these services.

DEMAT ACCOUNT OPENING COST AND OTHER CHARGES

The cost of openingand holdingaDemat account.

Thereare four major charges usually levied onaDemat account:

Account opening fee,

annual maintenance fee,

custodian fee

and transaction fee.

All the charges vary fromDP to DP.

Depending on theDP, theremay ormay not bean openingaccount fee. Private banks, such as

ICICI Bank, HDFC bank and UTI bank, do not have it. However, players such as Karvy

Consultants and the State Bank of India charge it. But most players levy this when you re-opena

Demat account, though the Stock Holding Corporation offers a lifetime account opening fee,

which allows you to hold on to yourDemat account overa long period. This fee is refundable.

Annualmaintenance fee: This is also known as folio maintenance charges, and is generally

levied inadvance.

Custodian fee: This fee is charged monthly and depends on the number of securities

(international securities identificationnumbers ISIN) held in theaccount. It generally ranges


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between Rs. 0.5 to Rs. 1 perISIN permonth.DPs will not charge custody fee for ISIN on which

the companies have paid one-time custody charges to thedepository.

Transaction fee: The transaction fee is charged forcrediting/debiting securities to and from the

account onamonthly basis. While someDPs,

such as SBI, chargea flat fee per transaction, HDFC Bankand ICICI Bank peg the fee to he

transaction value, subject to aminimumamount.

The feealso differs based on the kind of transaction (buying or selling). SomeDPs charge only

fordebiting the securities while others charge forboth. TheDPs also charge if your instruction to

buy/sell fails oris rejected. Inaddition, service tax is also charged by theDPs.

reputed companies listed in the stockexchange. There were otherproblems also, like fake shares,

theft or loss of share certificates and untimely payment. Demat account eliminated theendless

paperworkanddelays andallowed investors to buy, sell and transact shares ina safe, secureand

convenient manner.

Demat refers to adematerializedaccount that is similar to anaccount with a bankrequired forthe transactions ofmoney. Investors can buy or sell stocks with ademat account. Actual money

is replaced by shares in case ofademat account. One can trade only 500 shares in physical form

without ademat account as per the limit set by the the Securities and Exchange Board of India

(SEBI). So a demat account is a must for trading and investing. Share trading have to be

practically acrried out indematerialized form.

Benefitsof demat accounts:

y it eliminates risks associated with forgery, counterfeiting and loss due to fire, theft ormutilationandreduces brokerage charges,


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y It enables quick ownership of securities resulting in increased liquidity and makes theprocesses like pledgingand hypothecation of shares much easier,

y It reduces time taken to stock tradingdrastically avoiding problems encountered in case ofphysical shares like signaturemismatch, postal delays and loss of certificates in transit.

y It helps ineasy settlement of the ownership title of securities,and provides easy receipt ofpublic issueallotments.

y Demat account holders neednot pay stamp duty posted in case of physical sharesy It do away therequirements of filling up of transferdeeds,

Benefittothe Company

The depository system helps in reducing the cost of new issues due to less printing and

distribution cost. It increases the efficiency of the registrars and transfer agents and the

Secretarial Department of the company. It provides better facilities for communication and

timely services with shareholders, investoretc.

Benefittothe Investor

Thedepository system reduces risks involved in holding physical certificated,e.g., loss, theft,

mutilation, forgery,etc.It ensures transfersettlements andreduces delay inregistration of shares.

It ensures faster communication to investors. It helps avoid bad delivery problem due to

signaturedifferences,etc.It ensures faster payment on sale of shares. No stamp duty is paid on

transferof shares. It provides moreacceptability and liquidity of securities.

Benefitsto Brokers

The depository system reduces risk of delayed settlement. It ensures greater profit due to

increase in volume of trading. It eliminates chances of forgery baddelivery. It increases overall

of tradingand profitability. It increases confidence in investors.

Dematconversion


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Converting physical holding into electronic holding (dematerialising securities) In order to

dematerialise physical securities one has to fill in a DRF (Demat Request Form) which is

available with theDP and submit

the samealong with physical certificates one wishes to dematerialise. SeparateDRF has to be

filled for each ISIN Number. The complete process of dematerialisation is outlined below:

Surrender certificates for dematerialisation to your depository participant. Depository

participant

intimates Depository of the request through the system. Depository participant submits the

certificates to the registrar of the Issuer Company. Registrar confirms the dematerialisation

request fromdepository. Afterdematerialising the certificates, Registrar updates accounts and

informs depository of the completion ofdematerialisation. Depository updates its accounts and

informs the depository participant. Depository participant updates the demat account of the

investor.

Account-opening fee

Depending on theDP, theremay ormay not bean openingaccount fee. Private banks, such asHDFC Bank and UTI Bank, do not have one. However, players such as ICICI Bank, Globe

Capital, Karvy Consultants and the State Bank of India to do so. But most players levy this when

you re-openademat account, though the Stock Holding Corporation offers a lifetimeaccount

opening fee, which allows you to hold on to yourdemat account overa long period. This fee is

refundable.

Annualmaintenance fee

This is also knownas folio maintenance charges,and is generally levied inadvance.

Custodian fee

This fee is chargedmonthly and depends on the number of securities (international securities

identificationnumbers ISIN) held in the


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account. It generally ranges between Rs 0.5 to Rs 1 per ISIN permonth. DPs will not charge

custody fee for ISIN on which the companies have paid one-time custody charges to the

depository.

Transaction fee

The transaction fee is charged for crediting/debiting securities to and from the account on a

monthly basis. While someDPs, such as SBI, chargea flat fee per transaction, HDFC Bankand

ICICI Bank peg the fee to the transaction value, subject to aminimum amount. The fee also

differs based on the kind of transaction (buying or selling). SomeDPs charge only fordebiting

the securities while others charge for both. TheDPs also charge if your instruction to buy/sell

fails oris rejected. Inaddition, service tax is also charged by theDPs.

In addition to the other fees, the DP also charges a fee for converting the shares from the

physical to theelectronic form orvice-versa. This fee varies forboth demat andremat requests.

Fordemat, someDPs chargea flat fee perrequest inaddition to the variable fee per certificate,

while others charge only the variable fee.

Opening an account

Steps involved in openingademat account First an investorhas to approach aDP and fill up an

account opening form. Theaccount opening formmust be supported by copies ofany one of the

approveddocuments to serveas

proof of identity (POI)

proof ofaddress (POA)

as specified by SEBI. Besides, production of PAN card in original at the time of opening of

account has beenmademandatory effective from April 1, 2006.

All applicants should carry original documents for verification by anauthorized official of the

depository participant, under his signature. Further, the investor has to signanagreement with

DP inadepository prescribed standard format, which details rights andduties of investorand

DP. DP should provide the investorwith a copy of theagreement and schedule of charges for

their futurereference. TheDP will open theaccount in the systemandgiveanaccount number,

which is also called BO ID (Beneficiary Owner Identificationnumber). TheDP may revise the


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charges by giving 30 days notice in advance. SEBI has rationalised the cost structure for

dematerialisation by removing account opening charges, transaction charges for credit of

securities, and custody charges vide circular dated January 28, 2005. Further, SEBI has videcirculardated November9, 2005 advised that with effect from January 9, 2006,no charges shall

be levied by adepository onDP and consequently, by aDP ona Beneficiary Owner(BO) when

a BO transfers all the securities lying in his account to another branch of the sameDP or to

another DP of the same depository or another depository, provided the BO Account/s at

transfereeDP andat transferorDP are oneand the same, i.e. identical inall respects. In case the

BO Account at transferorDP is a joint account, the BO Account at transfereeDP shouldalso be

a joint account in the same sequence of ownership.

Processof Demating Shares

The process of openinganaccount with aDepository Participant is similar to the opening ofa

bankaccount.

One has to openanaccount with aDepository Participant (DP) by filling up an Account Opening

Form and signing a Participant-Client Agreement. Then a unique client ID number will begiven, which must be quoted in all correspondence with the DP.

Thereafter, one has to fill up and submit aDematerialization Request Form (DRF) provided by

theDP duly signed by all the holders and surrender the physical shares intended to bedematted

to theDP.

TheDP uponreceipt of the shares and theDRF will issueanacknowledgement and will sendan

electronic request to the Company/ Registrars and TransferAgents of the Company through the

Depository forconfirmation ofdemat. TheDP will simultaneously surrenderthe

DRF and the shares to the Company / Registrars and Transfer Agents of the Company with acovering letterrequesting the Company to confirmdemat.

The Registrars and Transfer Agents of the Company, after necessary verification of the

documents received from the DP, will cancel the physical shares and confirm demat to the

Depository. This confirmation will be passed on by the Depository to the DP which holds

investors


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account. After receiving this confirmation from the Depository, the DP will credit investoraccount with the number of shares dematerialized. The DP will hold the shares in the

dematerialized form thereafteron behalf of the investor. And hence one becomes the beneficial

ownerof thesedematerialized shares.

When the beneficial ownersubmits the shares fordematerialization, his DP will deface the share

certificates with the stam p SURRENDERED FOR DEMATERIALISATION. This ensures

that shares arenot lost in transit ormisused till credit is received indemat account.

RESEARCH METHODOLOGY

Theresearch methodology adopted forthe study is described below:


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Researchers studied the performance of demate account over a long period of time, usually

spanning overa period of five to ten years to ascertain the long termand sustainable financial

performance of the funds. Thereasons foradoptinga shorterspan of time for this study aredueto the followingreasons:

1 A largenumber ofdemateaccount schemes have been initiatedduring the last two to three

years.

2.The demate account industry in India registered impressivegrowth during the year 2005-06

due to the bullish trend of India stockmarket andmost of the scheme had reported impressive

growth in theirNet Asset Values

The India stockmarket has done exceptionally well, particularly during the year 2005-06 and

stockmarket hadgained 5000 points ina span of 10 months(in 205 trading sessions BSE hadrisen from

LIMITATION

a. Thedemat a/c is more thanadecade oldnow as such has, i gained sufficient experienceand

expertise overthe period of time.

b. Individual investors may find it difficult to diversity theirportfolio with their limitedresources

for investment.

c. A demate account distribution is set to be very lucrative sincemutual fund distribution by

banks is emerging very fast.

de-banking is becomingan increasingly important channel forcommodity product sales.

e. Investment in MF,s are opportunities forcustomers to creat wealth.


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f. selling financially products such as demateaccount is lucrative business worth overRs.1 lakh

croreevery year.

g An important thing that one should keep inmindregardingdiversification, is thenation that,

one should be interested inriskas well as returns.

RECOMMENDATIONS

Certain recommendation can be made after taking responses from various shareholder at

different levels with the ofmy questionnaire. Somerecommendations areas follows:-

1 .I suggest there has to be certain parameter that can judge and judge and analyze the

individuals overall personality as this would help a oot in performanceevaluation.

2. Reduce therisk factorto encourage the people who want to invest.

3 If you want to increase your strength, then you will have to start somedifferent schemes, the

minimum investment is less then Rs.5000/-

4. The management should make improvement in communication information flow in equity

market for mutual funds because communication is very important in any organization.

Interpersonal relationandgroup relationaremaintainedanddeveloped only through the systemof communication. Communication is essential to integrateand co-ordinate theactivities ordinate

theactivities of the people in themarket.


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CONCLUSION

As apart ofmy summer training I was supposed to learnabout the PREFORMANCE 0F demet

account to learnabout various function of themarketing DEPARTMENT.

With the changing world the skill ofman is exploited yet he has been usedas funds. We should

always remember that it is the human being who is always sin dispensable. Demat account

created when investors put theirmoney together. It is thereforea pool of the investors according

to certain investment objective. It is amechanism for pooling the resources by issuing units to

the investors and investing funds in securities inaccordance with objectives as disclosed in offerdocument.

Investment and securities are spreadacross a wide cross section of industries and sectorand thus

theriskarereduced. Diversificationreduces therisk becauseall the same time. Demateaccount

issue units to the investors inaccordance with quantum ofmoney invested by them. Investorof

mutual funds are know as unit holder.

Themost important characteristics ofamutual fundare that the contributorand the beneficiaries

of the fundare the same class of people,namely the investors. The termmutual fundmeans that

investors contribute to the pool and benefit from the pool .There barrenno otherclaimants to the

funds. The pool of funds heldmutually by investors is thedemateaccount.

BIBLIOGRAPHY

a. Financial Accounting : I.M.Pandey

b. Dimet accounthistory : Mohan Raj

c. Internet Website www.sharekhan.com


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Final Project of Pathak

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