MBA PROGRAMME SIPS

Introduction

The commencement of E-Trading and Demat has transformed the capital

market in India. With the help of Demat and Trading account, buying and selling of

shares has become a much faster and even process than trading with the assistance of

a physical broker. It provides for the assimilation of bank, broker, stock exchange and

depository participants. This helps to get rid of the painstaking procedure of investing

in stock exchange.

Today, if one wants to invest in stock market, he has to contact a broker on

phone or meet him personally to place order. A broker generally gives such

importance and additional service only to high net worth customers. But the

introduction of Internet trading, even a common or a small investor gets an

opportunity to avail the service at an affordable price which is much lesser than what

is charged by a physical broker over the phone. Online trading has given customer a

real time access to account information, stock quotes elaborated market research and

interactive trading. The prerequisites of Internet trading are a computer, a modem and

a telephone connection, registration with broker, a bank a/c and depository account.

The introduction of depository service is considered as the beginning of the

trading of Stocks @ click. This means that you can arrange delivery of scrips sold

anytime, anywhere to anyone by click of a mouse. Dematerialization facilitates to

keep the securities in electronic form instead of paper form. It offers more

advantageous than the physical certificate form. Despite the advantages of

Dematerialization, the awareness levels among the investors relating to Demat

account is not adequate because of numerous reasons. The investors are not

sufficiently responsive of the concept of Demat account and the various financial

institutions providing such services.

This study involves understanding the various concepts of Demat and

analyzing the investment pattern of individuals in India and a study on Analysis of

awareness among investors regarding On Line Trading and Dematerialization has

been submitted to Siddarth Institute of P.G. Studies, Kantepudi in partial fulfillment of

Master of Business Administration.

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Stock Market:

Indian Stock Markets are one of the oldest in Asia. Its history dates back to

nearly 200 years ago. The earliest records of security dealings in India are meager and

obscure. The East India Company was the dominant institution in those days and

business in its loan securities used to be transacted towards the close of the eighteenth

century.

By 1830's business on corporate stocks and shares in Bank and Cotton presses

took place in Bombay. Though the trading list was broader in 1839, there were only

half a dozen brokers recognized by banks and merchants during 1840 and 1850. The

1850's witnessed a rapid development of commercial enterprise and brokerage

business attracted many men into the field and by 1860 the number of brokers

increased into 60. In 1860-61 the American Civil War broke out and cotton supply

from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The

number of brokers increased to about 200 to 250. However, at the end of the

American Civil War, in 1865, a disastrous slump began (for example, Bank of

Bombay Share which had touched Rs 2850 could only be sold at Rs. 87). In 1887,

they formally established in Bombay, the "Native Share and Stock Brokers'

Association" (which is alternatively known as "The Stock Exchange"). In 1895, the

Stock Exchange acquired a premise in the same street and it was inaugurated in 1899.

Thus, the Stock Exchange at Bombay was consolidated. Thus in the same way,

gradually with the passage of time number of exchanges were increased and at

currently it reached to the figure of 24 stock exchanges.

Importance of stock market:

The stock market is one of the most important sources for companies to raise

money. This allows businesses to go public, or raise additional capital for expansion.

The liquidity that an exchange provides affords investors the ability to quickly and

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easily sell securities. This is an attractive feature of investing in stocks, compared to

other less liquid investments such as real estate.

History has shown that the price of shares and other assets is an important part

of the dynamics of economic activity, and can influence or be an indicator of social

mood. Rising share prices, for instance, tend to be associated with increased business

investment and vice versa. Share prices also affect the wealth of households and their

consumption. Therefore, central banks tend to keep an eye on the control and behavior

of the stock market and, in general, on the smooth operation of financial system

functions. Financial stability is the raison d'être of central banks.

Exchanges also act as the clearinghouse for each transaction, meaning that they collect

and deliver the shares, and guarantee payment to the seller of a security. This

eliminates the risk to an individual buyer or seller that the counter party could default

on the transaction. The smooth functioning of all these activities facilitates economic

growth in that lower costs and enterprise risks promote the production of goods and

services as well as employment. In this way the financial system contributes to

increased prosperity.

STOCK EXCHANGE:

Stock exchange is an organized market place where securities are traded. These

securities are issued by the government, semi-government bodies, public sector

undertakings and companies for borrowing funds and raising resources. Securities are

defined as any monetary claims (promissory notes or I.O.U) and also include shares,

debentures, bonds and etc., if these securities are marketable as in the case of the

government stock, they are transferable by endorsement and alike movable property.

They are tradable on the stock exchange.

Stock exchange is defined as “an association, organization or body of individual

whether incorporated or not, Established for the purpose of assessing, regulating and

controlling business in buying , selling and dealing in securities”.

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Under the Securities Contract Regulation Act of 1956, Securities trading

is regulated by the Central Government and such place only in stock exchanges

recognized by the government under this Act. As referred to earlier there are at

present 23 such recognized stock exchanges in India. Of these, major stock exchanges,

like Bombay Stock Exchange , National Stock Exchange ,Inter-Connected Stock

Exchange, Calcutta, Delhi, Chennai, Hyderabad and Bangalore etc. are permanently

recognized while a few are temporarily recognized. The above act has also laid down

that trading in approved contract should be done through registered members of the

exchange. As per the rules made under the above act, trading in securities permitted to

be traded would be in the normal trading hours (9.55 A.M to 3.30 P.M) on working

days in the trading ring, as specified for trading purpose. Contracts approved to be

traded are the following

Spot delivery deals are for deliveries of shares on the same day or the next day

as the payment is made.

Hand deliveries deals for delivering shares within a period of 7 to 14 days from

the date of contract.

Delivery through clearing for delivering shares with in a period of two months

from the date of the contract, which is now reduce to 15 days.(Reduced to 2

days in demat trading)

Special Delivery deals for delivering of shares for specified longer periods as

may be approved by the governing board of the stock exchange.

Except in those deals meant for delivery on spot basis, all the rest are to be put

through by the registered brokers of a stock exchange. The securities contracts

(Regulation) rules of 1957 laid down the condition for such trading, the trading hours,

rules of trading, settlement of disputes, etc. as between the members and of the

members with reference to their clients.

HISTORY OF STOCK EXCHANGES IN INDIA

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The origin of the Stock Exchanges in India can be traced back to the later half of 19th

century. After the American Civil War (1860-61) due to the share mania of the public,

the number of brokers dealing in shares increased. The brokers organized an informal

association in Mumbai Named “The Native Stock and Share Brokers Association in

1875”.later evolved as Bombay stock exchange. Increased activity in trade and

commerce during the First World War and Second World War resulted in an increase

in the stock trading. The Growth of Stock Exchanges suffered a set after the end of

World War. World wide depression affected them most of the Stock Exchanges in the

early stages had a speculative nature of working without technical strength. After

independence, government took keen interest to regulate the speculative nature of

stock exchange working. In that direction, securities and Contract Regulation Act

1956 was passed, this gave powers to Central Government to regulate the stock

exchanges. Further to develop secondary markets in the country, stock exchanges

established at Mumbai, Chennai, Delhi, Hyderabad, Ahmedabad and Indore. The

Bangalore Stock Exchange was recognized in 1963. At present there are 23 Stock

Exchanges.

Till recent past, floor trading took place in all Stock Exchanges. In the floor trading

system, the trade takes place through open outcry system during the official trading

hours. Trading posts are assigned for different securities where by and sell activities

of securities took place. This system needs a face – to – face contact among the

traders and restricts the trading volume. The speed of the new information reflected

on the prices was rather than the investors.

The Setting up of NSE and OTCEI (Over the counter exchange of India with the

screen based trading facility resulted in more and more Sock exchanges turning

towards the computer based trading. BSE introduced the screen based

Trading system in 1995, which known as BOLT (Bombay on – line Trading System)

Madras Stock Exchange introduced Automated Network Trading System (MANTRA)

on October 7, 1996 Apart from Bombay Stock Exchanges have introduced screen

based trading.

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FUNCTIONS OF STOCK EXCHANGE

Maintain Active Trading: Shares are traded on the stock exchanges, enabling the

investors to buy and sell securities. The prices may vary from transaction to

transaction. A continuous trading increases the liquidity or marketability of the shares

traded on the stock exchanges.

Fixation of Prices: Price is determined by the transactions that flow from investors

demand and the supplier’s preferences. Usually the traded prices are made known to

the public. This helps the investors to make the better decision.

Ensures safe and fair dealings: The rules, regulations and bylaw of the Stock

Exchanges provide a measure of safety to the investors. Transactions are conducted

under competitive conditions enabling the investors to get a fair deal.

Aids in financing the Industry: A continuous market for shares provides a favorable

climate for raising capital. The negotiability and transferability of the securities,

investors are willing to subscribe to the initial public offering (IPO). This stimulates

the capital formation.

Dissemination of Information: Stock Exchanges provide information through their

various publications. They publish the share prices traded on their basis along with the

volume traded. Directory of Corporate Information is useful for the investor’s

assessment regarding the corporate. Handouts, handbooks and pamphlets provide

information regarding the functioning of the Stock Exchanges.

Performance Inducer: The prices of stocks reflect the performance of the traded

companies. This makes the corporate more concerned with its public image and tries

to maintain good performance.

Self-regulating organization: The Stock Exchanges monitor the integrity of the

members, brokers, listed companies and clients. Continuous internal audit safeguards

the investors against unfair trade practices. It settles the disputes between member

brokers, investors and brokers.

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REGULATORY FRAME WORK:

This Securities Contract Regulation Act, 1956 and Securities and Exchange board of

India (SEB1) Act, 1992, provides a comprehensive legal framework. A 3-tier

regulatory structure comprising the ministry of finance, SEB1 and the Governing

Boards of the Stock Exchanges regulates the functioning of Stock Exchanges.

Ministry of finance: The Stock Exchange division of the Ministry of Finance has

powers related to the application of the provision of the SCR Act and licensing of

dealers in the other area. According to SEBI Act, The Ministry of Finance has the

appellate and the supervisory power over the SEBI. It has powered to grant

recognition to the Stock Exchange and regulation of their operations. Ministry of

Finance has the power to approve the appointments of executives chiefs and the

nominations of the public representatives in the government Boards of the Stock

Exchanges. It has the responsibility of preventing undesirable speculation.

The Securities and Exchange Board of India:The Securities and Exchange Board of

India even though established in the year 1988. Received statutory powers only on

30th January 1992. Under the SEBI Act, a wide variety of powers are vested in the

hands of SEBI. SEBI has the powers to regulate the business of Stock Exchanges,

other security and mutual funds. Registration and regulation of market intermediaries

are also carried out by SEBI. It has responsibility to prohibit the fraudulent unfair trade

practices and insider dealings. Takeovers are also monitored by the SEBI has the multi

pronged duty to promote the healthy growth of the capital market and protect the

investors.

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The Governing Board of stock exchanges: The Governing Board of the Stock

Exchange consists of elected members of directors, government nominees and public

representatives. Rules, by laws and regulations of the Stock Exchange substantial

powers to the executive director for maintaining efficient and smooth day-to day

functioning of Stock Exchange. The Governing Board has the responsibility to

maintain and orderly and well-regulated market.

The Governing body of the Stock Exchange consists of 13 members of which

Six members of the Stock Exchange are elected by the members of the Stock

Exchange.

Central Government nominates not more than three members.

The board nominates three public representatives.

SEBI nominates persona not exceeding three and

The Stock Exchange appoints one Executive Director

One third of the elected members retire at annual general meeting (AGM). The retired

member can offer himself for election if he is not elected for two consecutive years. If

a member serves in the governing body for two years consecutively, he should refrain

offering himself for another two years.

The members of the governing body elect the president and vice-president.

It needs to approval from the Central Government or the Board. The office tenure for

the president and vice-president is on year. They can offer themselves for re-election,

if they have not held for two consecutive years. In that case they can offer themselves

for re-election after a gap of one-year period

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NATIONAL STOCK EXCHANGE

The National Stock Exchange (NSE) of India became operational in the capital market

segment on third November 1994 in Mumbai. The genesis of the NSE lies in the

recommendations of the pherwani committee (1991). Apart from the NSE. It had

recommended for the establishment of National Stock market System also. The

committee pointed out some major defects in the Indian stock market. The defects

specified are.

Lack of liquidity in most of the markets in terms of depth and breadth.

Lack of ability to develop markets for debt.

Lack of infrastructure facilities and outdated trading system.

Lack of transparency in the operations that affect investors’ confidence.

Outdated settlement system that are inadequate to cater to the growing volume,

leading to delays.

Lack of single market due to the inability of various stock exchanges to

function cohesively with legal structure and regulatory framework.

These factors led to the establishment of the NSE.

The main objectives of NSE are as follows

To establish a nation wide trading facility for equities, debt and hybrid

instruments

To ensure equal access investors all over the country through appropriate

communication network.

To provide a fair, efficient and transparent securities market to investors using

an electronic communication network.

To enable shorter settlement cycle and book entry settlement system.

To meet current international standards of securities market.

Promoters of NSE: IDBI, ICICI, IFCI, LIC, GIC, SBI, Bank of Baroda. Canara Bank,

Corporation Bank, Indian Bank, Oriental Bank of Commerce. Union Bank of India,

Punjab National Bank, Infrastructure Leasing and

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Financial Services, Stock Holding Corporation of India and SBE capital market are the

promoters of NSE.

MEMBERSHIP:

Membership is based on factors such as capital adequacy, corporate structure, track

record, education, experience etc. Admission is a two-stage process with applicants

requiring going through a written examination followed by an interview. A committee

consisting of experienced people from the industry to assess the applicant’s capability

to operate as an exchange member, interviews candidates. The exchange admits

members separately to Wholesale Debt Market (WDM) segment and the capital

market segment. Only corporate members are admitted on the debt market segment

whereas individuals and firms are also eligible on the capital market segment.

Eligibility criteria for trading membership on the segment of WDM are as follows.

1). The persons eligible to become trading members are bodies corporate, companies

institutions including subsidiaries of banks engaged in financial services and such

other persons or entities as may be permitted form time to time by RBI/SEBI.

2).The whole-time directors should possess at least two years experience in any

activity related to banking or financial services or treasury.

3).The applicant must possess a minimum net worth of Rs.2 crores.

4).The applicant must be engaged solely ion the business of securities and must not be

engaged in any fund-based activities.

The eligibility criteria for the capital market segment are;

1) Individuals, registered firms, bodies corporate, companies and such other persons

may be permitted under SCRA, 1957.

2) The applicant must be engaged in the business of securities and must not be

engaged in any fund-based activities.

3) The minimum nets worth requirements prescribed are as follows;

a) Individual and registered firms – Rs.100 Lacs.

b) Corporate bodies – Rs. 100 Lacs.

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4) The minimum prescribed qualification of graduation and two years experience of

handling securities as broker, sub-broker, authorized assistant, etc must be fulfilled by

a) Minimum two directors in case the applicant is a corporate

b) Minimum two partners in case of partnership firms and

c) The individual in case of individual or sole proprietary concerns.

The two experienced director in a corporate applicant or trading member should hold

minimum of 5% of the capital of the company.

Present Trading Mechanism

The National system provides single, nation wide Securities. It enables investors in

one part of the country to trade at the best quotes with an investors located in any other

part of the country through the members of the stock exchanges and subsequently

clears and settles the trade in an efficient and cost effective manner.

The primary objective of the stock market is to provide clear opportunity to the

investors throughout the country to trade any securities irrespective of the size of the

order or the broker through whom the order is routed. This provides the facility to

execute the buy out any extra cost to the investors.

There will be no trading floor in the exchanges. Instead, each trading member will

have a computer at his own office any where in India which will be connected to the

central computer system at the NSE through leased lines or VSAT’s (Very Small

Aperture Terminal).

A satellite network makes it possible to connect almost all the parts of the nation

quickly as it is easy to install, as against the ground lines Such as dial up modems

leased lines which are prone to disruptions, satellite links on ther hands ensure high

speed, availability and quality of the connection. This code of trading is known as

“On-line Trading”.

ONLINE TRADING BY NSE:

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To bring in the transparency, efficiency and depth in the market, NSE provides a fully

automated screen based trading system known as National Exchange for Automated

Trading (NEAT) also known as Online Trading. This system is used for trading in the

capital market segment by its trading members across the country to trade

simultaneously with enormous easy and efficiency.

This NEAT or online trading system has lent considerable depth in the market by

enabling large member of members all over the country to trade simultaneously and

consequently narrowed the spreads significantly. A single consolidated order book for

each stock displays, on a real time basis, buy and sell orders originating from all over

the country.

This makes NSE a real national market. It has improved information efficiency by

allowing faster incorporation of price sensitive information into market prices. High

speed of execution of trades has increased operational efficiency. It is possible for

market participants to see the full market, which made the market more transparent,

leading to increased investor confidence.

Since audit trail is absolutely perfect and disputes can be settled by logging the trade

execution process in its entirety, all investors irrespective of their financial standing or

geographical location are assured for fair treatment.

Technology has changed the land scope of the stock markets, they don't require a

trading floor and they can trade from the single location, service investors across the

country.

Before screen based trading was introduces Regional Stock Exchanges were playing a

major role in the capital market as there were local investors. Now all the exchanges

have gone in for online trading as per the stipulations of SEBI.

REASONS FOR INTRODUCTION OF ONLINE TRADING:

Previous when the out cry system of trading existed, the limitations of the system

decrease the level of confidence to investors on the Capital Market. Some of them are:

# Lack of Transparency in the previous system.

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# Delayed receipt of acknowledgement of transaction from the brokers.

# Procedure delays in share transfers.

In the present scenario to compete and to survive, the stock exchange requires strong

and sound infrastructure and trading systems per international standards. So in order to

facilitate that the online system of trading is introduced.

The NSE (National Stock Exchange) has first introduced the Online Trading System in

mid 1990's in India. The online trading system imparted a greater level of transparency

and investors preferred online trading facilities due to following factors;

# The ease of operation from the point of view of both the parties of the

transactions i.e., the members and the investors.

# Increase in the confidence of the investors due to higher level of transparency.

# Facilitates better monitoring of market of the market by the exchange.

EVOLUTION OF ONLINE TRADING:

Online trading has become very popular in the last couple of years because of the

convenience of ease and use. Number of companies have gone online to meet their

customer's demands, enabling them to trade when they want and how they want to.

Trading is the buying and selling of goods and services but in current context it refers

to buying and selling of financial services including securities, through World Wide

Web.

Online trading has basically replaced a phone call with internet. Instead of

interacting with broker's phone, the consumer is clicking the mouse, not to mention

that other options are still available, but at cost. Online trading has given customer

real-time access to account information, stock quotes, elaborate market research and

interactive trading. Further, online trading has led to additional features such as:

# Limit/stop orders that can go unfilled, but there is an extra change for this

leeway facility since it needs to hold a price.

# Market orders that can filled at unexpected prices, but this type is much more

risky since you have to buy stock at the given price.

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# Cash account- were orders can be placed against stocks.

BOMBAY STOCK EXCHANGE:

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich

heritage. Popularly known as "BSE', it was established as "The Native Share & Stock

Brokers Association" in 1875. It is the first stock exchange in the country to obtain

permanent recognition in 1956 from the Government of India under the Securities

Contracts (Regulation) Act, 1956.

The Exchange's pivotal and pre-eminent role in the development of the India

capital market is widely recognized and its Index, SENSEX, is tracked worldwide.

Earlier an Association of Persons (AOP), the Exchange is now a demutualised and

corporative entity incorporated under the provisions of the Companies Act 1956,

pursuant to the BSE (Corporatisation and Demutualised) Scheme, 2005 notified by the

Securities and Exchange Board of India (SEBI).

With demutualization, the trading rights and ownership rights have been de-

linked affectively addressing concerns regarding perceived and real conflicts of

interest. The Exchange is professionally managed under the overall direction of the

Board of Directors. The Board comprises eminent professionals, representatives of

Trading Members and the Managing Director of the Exchange. The Board is inclusive

and is designed to benefit from the participation of market intermediaries.

In terms of organization structure, the Board formulates larger policy issues

and exercised over-all control. The committees constituted by the Board are broad-

based. The Managing Director and a management team of professionals manage the

day-to-day operations of the Exchange.

The Exchange has a nation-wide reach with a presence in 417 cities and towns

of India. The systems as processes of the Exchange are designed to safeguard market

integrity and enhance transparency in operation. During the year 2004-2005, the

trading volumes on the Exchange showed robust growth.

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The Exchange provides an efficient and transparent market fore trading in

equity, debt instruments and derivatives. The BSE's On Line Trading System (BOLT)

is a proprietary system of the Exchange and is BS 7799-2-2002 certified. The

surveillance and clearing and settlement functions of the Exchange are ISO 2001:2000

certified.

ONLINE TRADING BY BSE:

Trading in dematerialized securities is quite similar to trading in physical

securities. The major difference is that at the time of settlement, instead of delivery in

the physical form, it is done through account transfer.

Trading at the stock exchange can be done only through registered trade

member's of the stock exchange irrespective of whether the securities are in physical

form of Demat form. DP's role will only be to facilitate the settlement in demat form.

Trading in dematerialized securities is presently available at NSE, BSE, LSE, MSE,

ISE and OCTEL. These exchanges have segments exclusive for trading in

dematerialized securities and a segment where trade could be done either in physical

or demat form as per the choice of the delivering client.

HISTORICAL BACKGROUND OF TRADING:

Earlier records of securities trading in India are available from the end of the

eighteenth century. Before 1850, there was business conducted in Mumbai in shares of

banks and the securities of the East India Company, Which were considered as

Securities for buying, selling and exchange. The shares of the commercial Bank,

Mercantile Bank and Bank of Bombay were some of the prominent shares traded. The

business was conducted under a sprawling banyan tree in front of the Town Hall,

which is now in the Harriman Circle Park.

In 1850, the Companies Act was passed and that heralded the

commencement of the joint stock companies in India. It was the American civil was

that helped Indians to establish broking business. The leading broker, Shri Premchand

Roychand designed and developed the procedure to be followed while dealing in

shares.

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In 1874,. the Dalal Street became the prominent place for meeting of the

brokers to conduct their business. The brokers organized an Brokers Association" to

protect the character, status and interest of the native brokers. That was the foundation

of The Stock Exchange, Mumbai. The Exchange was established with 318 members.

The Stock Exchange, Mumbai did not have to look back as it started riding

high in the ladder of growth. The Stock Exchange is a market place, like any other

centralized market, where buyers and sellers can transact business in securities at a

given point of time in a convenient and competitive manner at the fairest possible

price. In January 1899, Mr., James M.MacLean, M.P., inaugurated the Brokers" Hall.

After the First World Ear, the Stock Exchange was housed property at an old building

near the Town Hall. In 1928, the present premised were acquired surrounded by Dalal

Street, Bombay Samachar Marg and Hamam Street. A new building, the present

location, was constructed and was occupied on 1st December 1930.

In 1950 the regulation of business in securities and stock exchanges became an

exclusively Central government subject following adoption of the Constitution of

India. In Securities Contracts (Regulation) Act was passed by the Parliament of India.

To regulate the securities market, SEBI was initially established on October 12, 1988

as an interim board under control of the Ministry of Finance, government of India, in

1992, the SEBI Act was passed through which the SEBI came into existence.

Hence SEBI acquired statutory on 30th January 1992 passing an ordinance, which was

subsequently converted into an Act passed by the parliament on April 4, 1992.

The main objectives of SEBI are of protect the interest of the investors, regulate and

promote the capital market by creating an environment, which would facilitate

mobilization of resources through efficient allocation, and to generate confidence

among the investors.

As such, SEBI is responsible for regulating stock exchange and other intermediaries

who may be associated with capital market and the process of public companies

raising capital by issuing instruments that will be traded on the capital market, SEBI

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has been empowered by the Central Government to develop and regulate capital

markets in India and there by protect the interest of the investors.

In 1992, Over the Counter Exchange of India (OTCE) came into existence where

equities of small companies are listed. In 1994, National Stock Exchange (NSE) came

into existence, which brought an end to the open cut-cry system of trading securities

which was in vogue for 150year, and introduced Screen Based.

BSEs on line trading system were launched on March 14, 1995. Now the trading in

securities is done using screen based trading method through duly authorized members

of the exchange.

In SBT, investors place buy and sale orders with their brokers who enter the orders in

the automated trading system. Where buy and sale orders match, a trade is generated

and trade details are give to the respective brokers. After a trade has taken place, the

buyer has to pay money and the seller has to deliver securities.

On the stock exchange(s) hundreds and thousands of trades take place every day.

Buyers are spread over a large geographical are due to these problems completing a

trade by paying cash to seller and securities to buyer immediately in execution of

trades on an individual basis in virtually impossible. So the stock exchanges allow

trading to take place for a specified period, which is called as a "Trading Cycle".

A unique settlement numbers identifies each trading cycle. Once trading period is

over, buyer broker pays money and seller broker delivers securities to the CC/CH on a

predefined day. This process is called as pay-in, securities are given to the buyers and

the CC/CH gives money to the seller broker. This process is called as payout. This

process of pay-in and payout is called settlement.

Initially the trading cycle was of one fortnight, which was reduced to one week. The

transactions entered during this period, of a fortnight or one week, were used to be

settled either by payment for purchase or buy delivery of share certificates sold on

notified days one fortnight or one week after the expiry of the trading. The settlement

schedules are made known to the members of the exchange in advance.

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The weekly settlement period was replaced by daily settlements, popularly known as

rolling settlements, in which each day is separate trading day. With effect from

December 2001, T+5, rolling settlement cycle was introduced for all equities were 'T'

is the 'Trading Day' and pay-in and payout for the settlement was done on 5th business

day after trade day. For example, if T was Monday, the pay-in and payout were done

on next Monday, as Saturday and Sunday are not counted as business days. T+5

cycles were further shortened to T+3 settlement cycle w.e.f. April 1, 2002.

TRANSACTION CYCLE:

Decision to Trade

Placing Order

Trade Execution

Clearing of Trades

Settlement of Trades

Funds / Securities

A person holding assets (Securities/Funds), either to meet his liquidity needs or to

reshuffle his holdings in response to changes in his perception about risk and return of

the assets, decides to buy or sell the securities. He selects a broker and instructs him to

place buy/sell order on an exchange. The order is converted to a trade as soon as it

finds a matching sell/buy order. At the end of the trade cycle, the trades are netted to

determine the obligations of the trading member’s securities/funds as per settlement

cycle. Buyer/seller delivers funds/ securities and receives securities/ funds and

acquires ownership of the securities. A securities transaction cycle is presented above.

Just because of this Transaction cycle, the whole business of Securities and Stock

Broking has emerged. And as an extension of stock broking, the business of Online

Stock broking/ Online Trading/ E-Broking has emerged.

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At the end of the American Civil War, the brokers who thrived out of Civil War in

1874, found a place in a street (now appropriately called as Dalal Street) where they

would conveniently assemble and transact business. In 1887, they formally established

in Bombay, the "Native Share and Stock Brokers' Association" (which is alternatively

known as “The Stock Exchange "). In 1895, the Stock Exchange acquired a premise in

the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay

was consolidated.

ROLE OF ONLINE TRADING IN CAPITAL MARKETS:

PRIMARY MARKET:

Primary market refers to the new issue of securities by new companies as

well as the existing companies. Apart from the shares, other instruments commonly

issued are debentures convertible debentures and shares attached with options like

warrants etc.

The primary market, which changelises savings of investors to productive

uses, reflects interplay of the forces that affects the sentiments and confidence of the

corporate sector as well of the investors.

In order to regulate them, there are measures, which are initiated by the

government and the regulating body SEBI. The measures initiated during the year

1998-1999 include.

SEBI GUIDELINES FOR NEW ISSUES IN DIFFERENT CATEGORIES OF

COMPANIES:

The SEBI guidelines for different categories of companies are:

New Company:

A new company is a company, which has not completed 12 months of commercial

production and when ever the promoters do not have a track recode.

These companies have to issue shares only a Par.

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Private and Closely Held Co.:

These companies having a track record of consistent profitability for the past three

years are permitted to price their issues freely.

Existing Listed Companies:

The existing listed companies will be allowed to raise fresh capital by freely pricing its

securities provide the promoter’s contribution is 50% on first Rs.100 cores of Issue.

BOOK BUILDING THROUGH ONLINE IPO SYSTEM:

The normal method of offering securities to the investing public at a price fixed

buy the issuer does not take into account the investor’s demands.

On line other hand, Book Building Method takes into account the demand for

shares at various prices as an important input to finalize the price. In this strive

continuously improving Indian securities. Market, NSE offers its infrastructure for

conducting online IPO’s for Book Building.

It is fully automated screen based bidding system that allows trading members

to enter into bids on behalf of their clients. All the bids received by he system are

numbered, time stamped and stored in the book till the Book Building Process and the

offer price is determined after the bid closing date.

While ensuring efficient price discovery, this system reduces the time taken

for the completion of the issue process.

The merits of this new system are:

The investor parts with money only after the allotment.

It eliminates refunds except incase of direct applications.

It reduces the time taken for the issue process.

The securities can get listed on the stock exchange from the 15 th day from the

closure of the bidding date in the Issue process as against 45days incase of

normal issue.

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NSEs online IPO system launched with the book building process with issue of

Hughes Software System Lid, in September 1999, the book was oversubscribed nearly

26times.

HUL Technologies Ltd. (HUL) was the next issue handled by the NSE in which

189 trading members having 535 users across the country participated in the book

building issue of HUL, Book was opened between November 16th 199- November 24th

1999. Book built portion was 1,2780,000 equity shares of Rs.4 to Rs.820. HTL had

planned to raise Rs.741.24 crores. Instead the co., received a total subscription of

33,54,80,750 share worth of Rs.20,100crore which is 27times of the offer size. Issue

price for the fixed price portion was fixed at Rs.580 per share.

SEBI GUIDELINES FOR ISSUES MADE THROUGH 100% BOOK

BUILDING:

SEBI had issued guidelines in October 1997 for book building, which were

applicable for100% of the Issue size and for Issues aboveRs.100 crore. The guidelines

were revised subsequently to reduce the limit to issue of % Rs.25 crores to encourage

the use of this facility.

However, no Issuer used this facility. SEBI modified the framework for Book

Building fu8rther in October 1999 to make more attractive. The modified framework

did not replace the existing guidelines. The issuer would have option to issue securities

using book-building facility under the existing framework or the modified set up

broadly as:

The present requirement of geographical display of demand at bidding terminal

to syndicate members as well as the investors has been made optional.

The 15% reservation for individual investors bidding for up in 10 marketable

slots may be merged with the 10% fixed prices offer.

Allotments fore the Book Built portions shall be made in DANT form only.

The issue may be allotted to disclosure either the issue size or the number of

securities to be offered to the public.

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Additional disclosure with respect to the scheme for making up the deficit in

the sources of financing and the pattern of deployment of excess funds shall be

made in the offer document.

SECONDARY MARKET:

Secondary market refers to the stock exchanges where an investor can buy or

see the securities. Equity shares have dominated India’s stock markets with the

objectives of improving market efficiency, enhancing transparency, checking unfair

trade practices and bringing the India market to the International standards. A package

of reforms consisting of measures to liberalize, regulate and develop the securities

market introduced.

This measures were taken to broaden the market and make it function with

greater transparency and in the best interest of the investors.

The steps taken are:

Continuous monitoring of stock market operations:

SEBI monitors the operation of stock exchange with a view to ensure that the dealings

are conducted in the best interest of the financial environment in the country. Any

violation of rules and regulations on the part of the stock exchange or the trading

members involves penalties.

Change in management structure:

In the earlier periods, brokers whose decisions were self-centers and served their own

interests dominated the boards of stock exchanges. According to the recent guidelines.

50% of the directors must be not broker’s directors or government representatives and

a non-member professional shall be appointed as the executive director.

Safeguarding the interests the investors:

Stock exchanges are instructed to take timely action for the redresses of

investor grievances. It is mandatory foe stock exchanges to have an “investor’s

services cell” to look into the complaints of investors and take appropriate action

against the guilty.

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Investors have been permitted to form associations and register them under

SEBI. These associations are expected to promote the investors and create awareness

about various investment avenues dealing in stock exchanges, illegal transactions

etc…

Transparency of accounting practices:

To ensure correct pricing mechanism and wider participation, all attempts are being

taken to achieve transparency in trading and accounting procedure.

Prohibition of insider trading:

The ban of insider trading has prevented any insider from dealing in securities of any

listed company on the basis of any unpublished price sensitivity information.

Prevention of price rigging:

SEBI has greater power to curb price rigging on stock exchanges. SEBI has taken

stringent action against the brokers who indulge in price rigging. Thus all efforts are

being made to protect the interest of genuine investors.

Discouraging price manipulation:

The SEBI took all the step to prevent price manipulations in all stock exchanges. It has

instructed all stock exchanges to keep special margins in addition to the normal ones

on the scripts, which are subject to wide price fluctuation.

The stock exchange have been directed to suspend trading in a scrip incase any ones of

the stock exchange suspends trading in that script for more than a day due to price

manipulation or fluctuation.

Introduction of electronic trading:

The OTCEI and NSE started trading through electronic medium. Under this system

investment counters can be spread throughout the country under the electronic

network.

This has created a national market, with no physical location, no trading ring,

no stock exchange building, and no hustle and bustle scenes etc, which are a common

sight in a conventional exchange with a trading ring.

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Introduction of depository system:

A depository participant is an organization where the securities of a shareholder are

held in the electronic form through a process of dematerialization.

The physical transfer of shares is substituted through electronic media. Since

the operations are computer linked, they are transparent, speedier and cost effective.

The introduction of depository system has avoided deliveries, forgeries, theft and

delays in settlement.

Buy back of shares:

To strike a balance between the demand and supply of shares in the market,

companies are permitted to buy back their own shares.

It is expected that the idle cash in the hands of one company will be

channelized to another company having a pressing need and it will be used to correct

the valuation of their stock.

Trading in derivatives:

Dr.L.G.Gupta committee has recommended introducing trading in index futures and

options. The starting of derivative trading has opened a new chapter in history of stock

exchanges.

Rolling settlement:

To start with, SEBI has started rolling settlement on a T+5 cycle, then T+3

cycle, which is now T+2 cycle. It means the transactions on stock exchange have to be

settled 2days after the trade day. From that is further reduced to T+1.

The practice of allocation of resources among different competing entities as

well as its terms by a central authority was discontinued. The secondary market has

overcome the geographical barriers by moving to screen based trading. Physical

security certificates are disappearing very fast. The settlement period was shortened to

one week and it is approaching to one day.

Trading procedures and practices:

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A security is listed any one or more stock exchanges in addition to the

regional exchange, which is compulsory. A security that is listed on the stock

exchange can be permitted for trading from another stock exchange. Every stock

exchange follows its own trading practices and procedures in respect with:

Settlement of transactions.

Payment and delivery dates.

Closure of books.

Marketing of securities.

Control over curb-activity.

Trading hours etc…

Nowadays these procedures are being standardized. The fragmentation of markets,

particularly when the floating stock are not large, this leads to the situation where the same

security may be quoted widely different price at the same time.

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RESEARCH OBJECTIVES

An objective is the brainchild behind any project report. A project report will

always have a certain objective which needs to be accomplished. Following are the

objectives behind the preparation of my project at Shriram Insight Share Brokers Ltd.

To present an overview of the online trading of India.

To examine the buying and selling system of the online trading.

To know the trends involved in the online trading.

To know how we can open a demat, what are the benefits, requirements etc.,

for opening a demat account.

To find out the point of view of Investors regarding the services provided by

DP.

To find the awareness of Demat account among employed investors.

To find Potential customers of SHRIRAM INSIGHT in Guntur City.

To know about problems faced in trading by traders in Guntur city.

To know the challenges faced in trading by traders in Guntur city.

To assess the perception of traders about Shriram Insight Share Brokers

Limited in Guntur City.

To determine the satisfaction levels of consumers with Shriram Insight Share

Brokers Limited in Guntur city.

To assess the satisfaction level of traders regarding services of Shriram Insight

Share Brokers Limited in Guntur city.

To know the market share of SHRIRAM INSIGHT.

To know the competitors of SHRIRAM INSIGHT in Guntur city.

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RESEARCH METHODOLOGY

Sample size - 70

Sources of data - Primary data &

Secondary

Sampling used in data collection - Random sampling

Primary Data:

The required data was collected by way of distribution of questionnaires to

investors at random and by way of telephonic interviews and online distribution of

questionnaire.

Tools/Technique of data collection -

Personal Interview

Close observation

Survey conduction

Secondary data:

Already existing data is called secondary data. I collected them by following

methods–

Internet

Books

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Research Instrument:

               Questionnaire  ,  which  is used to  collect the primary  data  by personal 

interview  and  the day to day    fluctuation   in the stock markets of NSE & BSE.

Sampling Procedure:

The sample size is 70.  The method of sampling used was random sampling method

due to the busy-ness of the employee and their non-availability because of their market

activities. Random sampling refers to that sampling technique in which each and every

unit of population has an opportunity of being selected in the sample.

Descriptive Approach:

This approach is one of the most popular approaches these days. In this approach, the

researcher using questionnaire to explore new areas of investigation.

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Scope of Study:

It provides a complete knowledge of various fundamental concepts of share

market and online trading.

It will help in analyzing the behavior of consumers and help in Knowing the

parameters of investment on which they would like to invest..

Through this project I am not only bringing long term clients for my

organization but also creating a word of mouth publicity of my organization by

offering the best services to the clients so that more and more potential

customer will come and stick to my organization.

Also through this project I suggest the organization the behavioral pattern of

investor towards different instruments.

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Limitations of study:

The respondents who have not given any information are not included in the

sample but do come under the population.

It was not possible to cover each and every client of each and every broking

house and hence a sample of 70 people was taken.

The market share of all the online share trading products is only for the city

of Guntur. The market share of all the companies may differ in different

cities. It may also differ nationally.

Due to the tough competition each & every broking firm is offering different

schemes like, free opening A/c or different advance brokerage schemes where

SHRIRAM INSIGHT is lacking in this area.

From the study I have learned very much, about the company as well as the

strategy of the customers, which helps me a lot at my working days.

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PRESENTATION OF THE STUDY

The first chapter deals with Introduction relating to ONLINE TRADING AND

DEMAT DEMATERIALIZATION.

The second chapter devoted to objectives and methodology.

The third chapter presents brief profile of financial system and Shriram Insight.

The fourth chapter deals with theoretical frame work relating to ONLINE

TRADING AND DEMATERIALIZATION.

The further chapter discusses Data analysis and interpretations.

The sixth chapter meant for offering findings and suggestions of the study.

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INDUSTRIAL PROFILE

Following diagram gives the structure of Indian financial system:

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FINANCIAL MARKET:

Financial markets are helpful to provide liquidity in the system and for smooth

functioning of the system. These markets are the centers that provide facilities for

buying and selling of financial claims and services. The financial markets match the

demands of investment with the supply of capital from various sources.

According to functional basis financial markets are classified into two types.

They are:

Money markets (short-term)

Capital markets (long-term)

According to institutional basis again classified in to two types. They are

Organized financial market

Non-organized financial market.

The organized market comprises of official market represented by recognized

institutions, bank and government (SEBI) registered/controlled activities and

intermediaries. The unorganized market is composed of indigenous bankers,

moneylenders, individual professional and non-professionals.

MONEY MARKET:

Money market is a place where we can raise short-term capital.

Again the money market is classified in to

Inter bank call money market

Bill market and

Bank loan market Etc.

E.g.; treasury bills, commercial papers, CD's etc.

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CAPITAL MARKET:

Capital market is a place where we can raise long term capital.

Again the capital market is classified in to two types and they are

o Primary market and

o Secondary market.

E.g.: Shares, Debentures, and Loans etc.

PRIMARY MARKET:

Primary market is generally referred to the market of new issues or market for

mobilization of resources by the companies and government undertakings, for new

projects as also for expansion, modernization, addition, diversification and up

gradation. Primary market is also referred to as New Issue Market. Primary market

operations include new issues of shares by new and existing companies, further

E.g.: Shares, Debentures, and Loans etc.

The primary market is regulated by the Securities and Exchange Board of India

(SEBI a government regulated authority).

Function:

The main services of the primary market are origination, underwriting, and

distribution. Origination deals with the origin of the new issue. Underwriting contract

make the shares predictable and remove the element of uncertainty in the subscription.

Distribution refers to the sale of securities to the investors.

The following are the market intermediaries associated with the market:

1. Merchant banker/book building lead manager

2. Registrar and transfer agent

3. Underwriter/broker to the issue

4. Adviser to the issue

5. Banker to the issue

6. Depository

7. Depository participant

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Investors’ protection in the primary market:

To ensure healthy growth of primary market, the investing public should be

protected. The term investor protection has a wider meaning in the primary market.

The principal ingredients of investors’ protection are:

Provision of all the relevant information

Provision of accurate information and

Transparent allotment procedures without any bias.

SECONDARY MARKET

The primary market deals with the new issues of securities. Outstanding

securities are traded in the secondary market, which is commonly known as stock

market or stock exchange. “The secondary market is a market where scrip’s are

traded”. It is a market place which provides liquidity to the scrip’s issued in the

primary market. Thus, the growth of secondary market depends on the primary

market. More the number of companies entering the primary market, the greater are

the volume of trade at the secondary market. Trading activities in the secondary

market are done through the recognized stock exchanges which are 23 in number

including Over The Counter Exchange of India (OTCE), National Stock Exchange of

India and Interconnected Stock Exchange of India.

Secondary market operations involve buying and selling of securities on the

stock exchange through its members. The companies hitting the primary market are

mandatory to list their shares on one or more stock exchanges in India. Listing of

scrip’s provides liquidity and offers an opportunity to the investors to buy or sell the

scrip’s.

The following are the intermediaries in the secondary market:

1. Broker/member of stock exchange – buyers broker and sellers broker

2. Portfolio Manager

3. Investment advisor

4. Share transfer agent

5. Depository

6. Depository participants.

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ABOUT STOCK EXCHANGE:

A stock exchange, share market or bourse is a corporation or mutual

organization which provides facilities for stock brokers and traders, to trade company

stocks and other securities. Stock exchanges also provide facilities for the issue and

redemption of securities, as well as, other financial instruments and capital events

including the payment of income and dividends. The securities traded on a stock

exchange include: shares issued by companies, unit trusts and other pooled investment

products and bonds. To be able to trade a security on a certain stock exchange, it has

to be listed there.

Definition of a stock exchange:

“Stock exchange means any body or individuals whether incorporated or not,

constituted for the purpose of assisting, regulating or controlling the business of

buying, selling or dealing in securities.” The securities include:

Shares of public company.

Government securities.

Bonds

ROLE OF STOCK EXCHANGES:

Raising capital for businesses.

Mobilizing savings for investment.

Facilitating company growth.

Redistribution of wealth.

Corporate governance.

Creating investment opportunities for small investors.

Government capital-raising for development projects.

Barometer of the economy.

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STOCK EXCHANGES IN INDIA:

At present there are 23 stock exchanges recognized under the securities contracts

(Regulation), Act, 1956. Those are:

Ahmadabad Stock Exchange Association Ltd.

Bangalore Stock Exchange

Bhubaneshwar Stock Exchange Association

Calcutta Stock Exchange

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Cochin Stock Exchange Ltd.

Coimbatore Stock Exchange

Delhi Stock Exchange Association

Guwahati Stock Exchange Ltd

Hyderabad Stock Exchange Ltd.

Jaipur Stock Exchange Ltd

Kanara Stock Exchange Ltd

Ludhiana Stock Exchange Association Ltd

Madras Stock Exchange

Madhya Pradesh Stock Exchange Ltd.

Magadh Stock Exchange Limited

Meerut Stock Exchange Ltd.

Mumbai Stock Exchange

National Stock Exchange of India

OTC Exchange of India

Pune Stock Exchange Ltd.

Saurashtra Kutch Stock Exchange Ltd.

Uttar Pradesh Stock Exchange Association

Vadodara Stock Exchange Ltd.

Out of these major stock exchanges were:

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NSE (National Stock Exchange)

The National Stock Exchange of India Limited has genesis in the report of the High

Powered Study Group on Establishment of New Stock Exchanges, which

recommended promotion of a National Stock Exchange by financial institutions (FI’s)

to provide access to investors from all across the country on an equal footing. Based

on the recommendations, NSE was promoted by leading Financial Institutions at the

behest of the Government of India and was incorporated in November 1992 as a tax-

paying company unlike other stock exchanges in the country. On its recognition as a

stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993,

NSE commenced operations in the Wholesale Debt Market (WDM) segment in June

1994. The Capital Market (Equities) segment commenced operations in November

1994 and operations in Derivatives segment commenced in June 2000

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NSE's mission is setting the agenda for change in the securities markets in India. The

NSE was set-up with the main objectives of:

Establishing a nation-wide trading facility for equities and debt instruments.

Ensuring equal access to investors all over the country through an

appropriate communication network.

Providing a fair, efficient and transparent securities market to investors

using electronic trading systems.

Enabling shorter settlement cycles and book entry settlements systems, and

Meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology, have become

industry benchmarks and are being emulated by other market participants. NSE is

more than a mere market facilitator. It's that force which is guiding the industry

towards new horizons and greater opportunities.

The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as

"The Native Share and Stock Brokers Association". It is the oldest one in Asia, even

older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary

non-profit making Association of Persons (AOP) and is currently engaged in the

process of converting itself into demutualised and corporate entity. It has evolved over

the years into its present status as the premier Stock Exchange in the country. It is the

first Stock Exchange in the Country to have obtained permanent recognition in 1956

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from the Govt. of India under the Securities Contracts (Regulation) Act 1956.The

Exchange, while providing an efficient and transparent market for trading in

securities, debt and derivatives upholds the interests of the investors and ensures

redresses of their grievances whether against the companies or its own member-

brokers. It also strives to educate and enlighten the investors by conducting investor

education programmers and making available to them necessary informative inputs.

The Executive Director as the Chief Executive Officer is responsible for the

day-to-day administration of the Exchange and the Chief Operating Officer and other

Heads of Department assist him.

The Exchange has inserted new Rule No.126 A in its Rules, Byelaws

pertaining to constitution of the Executive Committee of the Exchange. Accordingly,

an Executive Committee, consisting of three elected directors, three SEBI nominees or

public representatives, Executive Director & CEO and Chief Operating Officer has

been constituted. The Committee considers judicial & quasi matters in which the

Governing Board has powers as an Appellate Authority, matters regarding annulment

of transactions, admission, continuance and suspension of memberbrokers, declaration

of a member-broker as defaulter, norms, procedures and other matters relating to

arbitration, fees, deposits, margins and other monies payable by the member-brokers

to the Exchange, etc.

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Members of the stock exchange:

The securities contract regulation act 1956 has provided uniform regulation for the

admission of members in the stock exchanges. The qualifications for becoming a

member of a recognized stock exchange are given below:

The minimum age prescribed for the members is 21 years.

He should be an Indian citizen.

He should be neither a bankrupt nor compound with the creditors.

He should not be convicted for fraud or dishonesty.

He should not be engaged in any other business connected with a company.

He should not be a defaulter of any other stock exchange.

The minimum required education is a pass in 12th standard examination.

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI):

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The securities and exchange board of India was constituted in 1988 under a

resolution of government of India. It was later made statutory body by the SEBI act

1992.according to this act, the SEBI shall constitute of a chairman and four other

members appointed by the central government.

With the coming into effect of the securities and exchange board of India act,

1992 some of the powers and functions exercised by the central government, in

respect of the regulation of stock exchange were transferred to the SEBI.

OBJECTIVES AND FUNCTIONS OF SEBI:

To protect the interest of investors in securities.

Regulating the business in stock exchanges and any other securities market.

Registering and regulating the working of intermediaries associated with

securities market as well as working of mutual funds.

Promoting and regulating self-regulatory organizations.

Prohibiting insider trading in securities.

Regulating substantial acquisition of shares and take over of companies.

Performing such functions and exercising such powers under the provisions of

capital issues (control) act, 1947and the securities to it by the central

government.

SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK EXCHANGES):

Board of Directors of Stock Exchange has to be reconstituted so as to include non-

members, public representatives and government representatives to the extent of 50%

of total number of members.

Capital adequacy norms have been laid down for the members of various stock

exchanges depending upon their turnover of trade and other factors.

All recognized stock exchanges will have to inform about transactions within 24

hrs.

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TYPES OF ORDERS:

Buy and sell orders placed with members of the stock exchange by the

investors. The orders are of different types.

Limit orders:

Orders are limited by a fixed price. E.g. ‘buy Reliance Petroleum at

Rs.50.’Here, the order has clearly indicated the price at which it has to be bought and

the investor is not willing to give more than Rs.50.

Best rate order:

Here, the buyer or seller gives the freedom to the broker to execute the order at

the best possible rate quoted on the particular date for buying. It may be lowest rate

for buying and highest rate for selling.

Discretionary order:

The investor gives the range of price for purchase and sale. The broker can use

his discretion to buy within the specified limit. Generally the approximation price is

fixed. The order stands as this “buy BRC 100 shares around Rs.40”.

Stop loss order:

The orders are given to limit the loss due to unfavorable price movement in the

market. A particular limit is given for waiting. If the price falls below the limit, the

broker is authorized to sell the shares to prevent further loss. E.g. Sell BRC limited at

Rs.24, stop loss at Rs.22.

Buying and selling shares:

To buy and sell the shares the investor has to locate register broker or sub

broker who render prompt and efficient service to him. The order to buy or sell

specifying the number of shares of the company of investors’ choice is placed with the

broker. The order may be of any type. After receiving the order the broker tries to

execute the order in his computer terminal. Once matching order is found, the order is

executed. The broker then delivers the contract note to the investor. It gives the details

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regarding the name of the company, number of shares bought, price, brokerage, and

the date of delivery of share. In this physical trading form, once the broker gets the

share certificate through the clearing houses he delivers the share certificate along

with transfer deed to the investor. The investor has to fill the transfer deed and stamp

it. The stamp duty is one of the percentage considerations, the investor should lodge

the share certificate and transfer deed to the register or transfer agent of the company.

If it is bought in the DEMAT form, the broker has to give a matching instruction to his

depository participant to transfer shares bought to the investors account. The investor

should be account holder in any of the depository participant. In the case of sale of

shares on receiving payment from the purchasing broker, the broker effects the

payment to the investor.

Share groups:

The scrips traded on the BSE have been classified into ‘A’,’B1’,’B2’,’C’,’F’

and ‘Z’ groups. The ‘A’ group represents those, which are in the carry forward

system. The ‘F’ group represents the debt market segment (fixed income securities).

The Z group scrips are of the blacklisted companies. The ‘C’ group covers the odd lot

securities in ‘A’, ‘B1’&’B2’ groups.

ROLLING SETTLEMENT SYSTEM:

SEBI has since introduced T+2 rolling settlements from April 1, 2003, T+2 settlement

cycle means that the final settlement of transactions done on T, i.e., trade day by

exchanges of monies and securities between the buyers and sellers respectively occurs

on second on second business day after the trade excluding Saturdays, Sunday, bank

holidays and exchange holidays.

DAY ACTIVITY

T Trading and daily downloading statements showing details of Transaction

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and margins at the end of each trading day.

6A/7A* entry by the member-brokers/confirmation by the custodians.

T+1 Confirmation of 6A/7A data by the custodians up to a specified deadline

time. Downloading of securities and funds. Obligation statement by

members.

T+2 Pay-in funds and securities and pay out of funds and securities by per-

specified dead line times. The members are required to submit the pay in

instructions for funds and securities to banks and depositories respectively.

T+3 Action for shortages in delivery of securities

T+4 Action pay-in and pay-out of funds and securities

6A/7A: A mechanism whereby the obligation of setting the transactions done by a

member broker on behalf of a client is passed on it a custodian based on his

confirmation. The custodian can confirm the trades done by the members on-line.

Treading on the on-line screen based system (BSE’s On-line Trading system,

BOLT for BSE and National Exchange for Automated Trading, NETA for NSE) is

conducted from Monday to Friday between 9:55a.m. And 3:30 p.m. the scripts trades

on the Stock Exchange, Mumbai are classified into ‘A’, ‘B1’, ‘B2’, ‘C’, ‘F’, ‘G’, and

‘Z’ groups.

A, B1, B2 and C group’s represent the equity market segment.

F group represents the debt market (fixed income securities) segment.

BSE has commenced trading in Govt. Securities for retail investors under G group

w.e.f, January 16,2003.

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Z group covers the companies, which have failed to comply with listing

requirements and/or failed to resolve investor complains or have not made the required

arrangements for dematerialization of their securities with both the depositories.

As in the physical segment, the clearing corporation at the end of the day

downloads cumulative obligation in the evening of the trade day.

The main purpose of introducing rolling settlement was to eliminate any kind

of manipulation in the prices of the stocks and to reduce the higher volatility in the

stocks by the operators. This was introduced by SEBI for investor protection and with

dematerialization of securities into force, this technique is growing fast.

ABOUT SHRIRAM INSIGHT

The Unique Retail Equity Broking house of India and part of prestigious

Shriram Group companies. We serve investment need of more than 1,00,000 of Indian

investors through country-wide branch base and state of art network backbone.

Shriram insight possesses competitive analytical and fundamental market research

team. We extend our superior market knowledge and Equity analysis to our clients

and help them in achieving their optimum investment requirement. We believe -

customer satisfaction is our living. Please navigate through category buttons above

and left to explore more. And feel free to ask about stock advice service and Stock

market Investment.

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Incorporated in 1995, Shriram Insight Share Brokers Ltd was promoted by

professional entrepreneurs and incubated by Shriram Group.

Shriram Insight commenced operations with corporate membership on NSE in

cash segment in 1996.

Membership in derivatives segment on NSE acquired in 2003.

Currently registered member of NSE & BSE for equities & derivatives, CDSL

for depository.

Corporate Vision:

Help smallest of Investors to create wealth

Take bourses to the masses through awareness

Provide efficient & transparent services

Build Relationship

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PROFILE OF THE COMPANY:

Name of the company Shriram Insight Share Brokers Ltd.

Founded 1995

Headquarters Kolkata, India.

Key people Akilesh Kumar Singh, Chairman & CEO,

Partha Hazrat, Director.

Industry Financial Services.

Products Depository Services, Online Services

Employees Around 4000

Website

http://www.shriraminsight.com.

Slogan Insightful Investment

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Why Shriram:

India’s one of the largest Financial Services Network

State-of-the- art Technology and Infrastructure

Comprehensive Service Offerings

40,00,000 customers, 5,000 branches & service centers across India

Rs.25,000 crores - assets under management

Active participation in social causes

Products & Services:

The different types of products and services offered by Shriram Insight are as

follows:

INTIAL PUBLIC OFFERING (IPO):

Shriram Insight is a leading primary market distributor across the country.

Their strong performance in IPO has been a result of their vast experience in the

Primary Market, strong distribution capabilities and a dedicated research team.

Shriram Insight research team provides clients with in-depth overviews of

forthcoming IPO’s as well as investment recommendations. Online filling of forms is

also available.

MUTUAL FUNDS:

Shriram Insight is one of Indian’s top mutual fund distribution houses. Their

success lies in their philosophy of providing consistently superior, independent and

unbiased advice to their clients backed by in-depth research. They firmly believe in the

importance of selecting appropriate asset allocations based on the client’s risk profile.

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Shriram Insight have a dedicated mutual fund research cell for mutual funds

that consistently churns out superior investment ideas, packing best performing funds

across asset classes and providing insights into performance of select funds.

INSURANCE:

Shriram Insight provide to their clients comprehensive risk management

techniques, both within the business as well as on the personal front. Risk management

includes identification, measurement and assessment of the risk and handling of the

risk, of which insurance is an integral part. The firm deals with both life insurance and

general insurance products across all insurance companies.

Shriram Insight guiding philosophy is to manage the client’s entire risk set by

providing the optimal level of cover at the least possible cost. The entire sales process

and product selection is research oriented and customized to the client’s needs. They

lay strong emphasis on timely claim settlement and post sales services.

DERIVATIVS:

Shriram Insight provides end-to-end equity solutions to institutional and

individual investors. Consistent delivery of high quality advice on individual stocks,

sector trends and investment strategy has established us a competent and reliable

research unit across the country. Clients can trade through online on BSE and NSE for

both equities and derivative. They are supported by dedicated sales & trading teams in

trading desks across the country. Research and investments ideas can be accessed by

clients either through their designated.

Depository Services:

Depository: A depository holds shares and securities in electronic form in your name,

just as a band holds your deposits in your account. Besides holding securities, a

depository also provides services related to your transactions in securities.

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Central Depository Services (India) Ltd., (CDSL) : It has receives approval from

SEBI in February 1996. It is promoted by the Stock Exchange, MUMBAI (BSE)

jointly with leading banks such as

State Bank of India, Bank of India, Bank of baroda, HDFC Bank, Standard Chartered

Bank, Union Bank of India and Centurion Bank, CDSL commenced its operations

from July 1996. It has depository participants (like agents called branches) through

out India.

We offer following services as D.P.,

Opening of Demat account

Dematerialization

Rematerialization

Maintaining record of holdings in electronic form

Settlement of trades by delivering/receiving underlying Securitas

Settlement of off-market trades

Providing electronic credit in respect of securities allotted under IPO

Receiving non-case corporate benefits, such as, allotment of bonus and rights

shares, stock split, etc.

Pledging/Un-pledging of securities

Providing periodical statement of transaction

Registering nomination.

ADVISOR SERVICES:

Shriram Insight., Advisors assists companies in realizing tangible

improvements in various facets of their businesses by providing a range of corporate

advisory services that includes the entire gamut from financial, organizational and

operational restructuring, to profit improvement and business turnaround strategies.

Highly qualified and thoroughly professional, our specialists, experts and associates

assist you in conceptualizing problems and devising effective solutions, whatever be

your need. Shriram Insight., have successfully handled various assignments.

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MANAGEMENT SERVICES:

As a Management Service Provider Shriram Insight., provides systematic &

timely information to the investors which helps in quick investing and increase

efficiency in business operations.

The company caters mainly to the requirements of corporate clients in the

variety of activities that include the following:

Leasing and Hire purchase finance

Inter corporate deposits

Bill Discounting

Loans Syndication

Placement of Commercial papers

Mergers, Amalgamations and Acquisitions

Project Counseling and Advisory Services

Project Appraisals

Under writings

Merchant Banking

Issue Management

Placement of Securities

Marketing of Public Issue

Placement of share to NRIs/OCBs, FIs, and FIIs

Fund Management

Equity Reassert Analysis

Investment Banking

Why Shriram Insight Demat Account?

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● Lowest fees.

        ● Demat access through Internet.

        ● Portfolio valuation on the account statements.

        ● Online execution of transactions at branches.

        ● Transactions update from back-office four times a day.

Transfer of shares and settlements:

Transfers of shares and settlements have never been easy. All you need to do is

to fill up the instruction slip and submit the same to your nearest Shriram insight

branch. If you are selling securities, then you have to issue a delivery instruction slip.

If you are purchasing securities, then you are required to issue a receipt instruction

slip or standing instructions for credit to your nearest Shriram branch.

Receipt of Corporate Benefits:

Even securities entitlements like bonus and rights can be credited to your

Demat account electronically. All you have to do is choose the right option in the

share application form. Cash benefits like dividends and interest will be forwarded to

you directly and not through the depository.

Holdings & Transaction Statements:

Shriram insighy provides statement of holding cum transaction statement every

month at Zero cost.

Dematerialization of shares:

At your request, we can convert your physical holdings into electronic form. For this

procedure, you need to open an account with CDSL through us called "Beneficiary

Account" in the name and style in which the shares are held. You have to lodge the

share certificates with us accompanied by a dematerialization request form, separate

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for each scrip. However, you should ensure that CDSL has admitted the scrip which

you want to dematerialize. An up to date list is available at our branches for your

convenience.

Rematerilialisation

You have the option to convert your electronic shares back to physical shares.

Pledge-Hypothecation:

You can also avail loans against your electronic shares.

HOW TO OPEN AN ACCOUNT WITH SHRIRAM INSIGHT?

For online trading with Shriram Insight Share Brokers Limited., investor has to

open an account. Following are the ways to open an account with Shriram Insight

Share Brokers Limited.:

One need to call them at phone number provided below and asks that he want

to open an account with them.

One can call on the Number: (033) 23587188/23594612/4614/4877 to

speak to a Customer Service executive.

Or If one stays in Guntur, he can call on 0863-6454535.

One can visit any one of Shriram Limited’s nearest branches. Shriram has a

huge network all over India (640 centers in 280 cities). One can also log on to

“http://shriraminsight.com” link to find out the nearest branch.

One can send them an email at helpdesk@shriraminsight.com to know about

their products and services.

One can also visit the site www.shriraminsight.com and click on the option

“Open an Account” to fill a small query form which will ask the individual to

give details regarding his name, city he lives in, his email address, phone

number, pin code of the city, his nearest Shriram Insight Share Brokers

Limited. shop and his preferences regarding the type of account he wants.

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These information are compiled in the headquarter of the company that is in Kolkata

from where it is distributed through out the country’s branches in the form of leads on

the basis of cities and nearest share shops. After that the executives of the respective

branches contact the prospective clients over phone or through email and give them

information regarding the various types of accounts and the documents they need to

open an account and then fix appointment with the prospective clients to give them

demonstration and making them undergo the formalities to open the account. After

that the forms that has collected from the clients, is scrutinized in the branch and then

it is sent to Kolkata for further processing where after a few days the clients’ account

are generated and activated. After the accounts are activated, a Welcome Kit is

dispatched from Kolkata to the clients’ address mentioned in the documents provided

by them. As soon as the clients receive the Welcome Kit, which contains the clients’

Trading ID and Trading Password, they can start trading and investing in shares.

Apart from two passport size photographs, one needs to provide with the following

documents in order to open an account with Shriram Insight.:

Photocopy of the clients’ PAN Card which should be duly attached

Photo copy of any of the following documents duly attached which will serve as

correspondence address proof:

Passport (valid)

Voter’s ID Card

Ration Card

Driving License (valid)

Electricity Bill (should be latest and should be in the name of the client)

Telephone Bill (should be latest and should be in the name of the client)

Flat Maintenance Bill (should be latest and should be in the name of the

client)

Insurance Policy (should be latest and should be in the name of the client)

Lease or Rent Agreement.

Saving Bank Statement** (should be latest)

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Two cheques drawn in favour of Shriram insight, one for the Account Opening

Fees and the other for the Margin Money (the minimum margin money is Rs. 5000).

NOTE: Only Saving Bank Account cheques are accepted for the purpose of Opening

an account.

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Charge structure:

Sr.No Particulars Individual

Other Than

Individual

   1.  Account Opening Charges  500  500

   2.  Account Maintenance Charges

 Rs.290/-(One

Time Payment)  Rs. 700/-

   3.  AMC for Clients with email  NIL  NIL

   4.  AMC for Clients without email* Rs.200/-  NIL

   5.  Purchase (Market or OffMarket)  Nil  Nil

   6.  Sale (Market or OffMarket)

 0.04%,Min Rs.

60/- Per

Transaction(Per

ISIN)

 0.04%,Min Rs.

60/- Per

Transaction(Per

ISIN)

   7.  Custody Charges  Nil  Nil

   8.  Dematerialisation Charges

 Rs. 3/- Per

Certificate

 Rs. 3/- Per

Certificate

   9.  Postage Per Demat Request  Rs. 50/-  Rs. 50/-

   10.  Rematerialisation Charges

 CDSL Charges

+ Rs. 100/- Per

Request

 CDSL Charges

+ Rs. 100/- Per

Request

   11.

Pledge

(Creation/Closure/Invocation) will

be charged seperately

 0.02% of the

Value of Shares

(Per ISIN)(Min

Rs 25/-)

 0.03% of the

Value of Shares

(Per ISIN)(Min

Rs 25/-)

  12.  Late Transaction [per Instruction]  Rs 50/-  Rs 50/-

  13.

 Settlement Charges for Clearing

Member  Nil

 Rs 500/- per

month

  14.  Easi / Easiest  Nil  Nil

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SWOT ANALYSIS

Strengths:

Very Strong Brand Image.

Low Charges with respect of its Services.

Facility to trade in office.

Very Good Customer Care Unit.

Weaknesses:

Only One branch in Guntur City.

Weak Advertisement Policies.

Lack of awareness campaigns about the company.

Lack of awareness about various financial services

Opportunities:

Large Untapped Market.

Opportunity to educate investors about their products & inspire them to invest

more & encourage others.

Good Opportunity to Cash its Brand Image and People Trust.

Convenience and easy way of online.

Threats:

Presence of very strong competitors Like, ICICI, Angel Broking, Share khan,

Religare etc.

Aggressive marketing by competitors.

Low brokerage offerings by competitors.

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Manual mode of trading (Out Cry System):

Prior to the introduction of online trading, securities used to be traded manually.

Manual mode of trading is also know as "Out Cry System". The process of manual

mode of trading is very laborious and cumbersome with lot of paper work at every

stage right from the order booking, order execution, to back office work. The process

involved the following steps.

* Placing of the order by the client, order can be placed as line order, best market price

or open under.

* Enter in order book by the broker,

* Execution of the order.

* Preparation of contract note.

* Entry in settlement registers, client registers.

* Actual delivery of shares by brokers of client.

* Preparation of bill or order delivery notes.

* Enter in client ledger, scrip ledger.

* Payments.

In the trading whenever an investor wants to sell/buy the shares he has to go to the

stock exchanges and consult the brokers to sell the securities at particular rate. Brokers

take the certificates and will go to trading hall and start shouting the order to one

another i.e., how the manual/outcry system has been arrived. The members who have

similar buy and sell orders will come together and the transaction would take place.

The brokers who wants to sell the securities gives the price and the bid price and both

the brokers strike a balance between the asked and bid price. Finally the securities

have been taken when the deal has strike by the buying broker and the selling order.

While negotiation, it is very important to specify the quantity and date.

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After the deal has truck the seller takes out the name, quantity, rate, selling number

code, buying member code and signs on it. The seller has one copy and buyer has one

copy and original copy is deposited with respective exchange. In the end the brokers

gets the daily volume sheet consisting of list of all the transactions done on that day.

Any discrepancies would be reported to the stock exchange by the members is

verified.

DRAWBACKS OF MANUAL MODE OF TRADING

* Lack of Transparency

* High scope for manipulation and frauds.

* Time consuming process.

* Identification of buyers and sellers is a tedious work.

* Knowing which share was lastly traded could be misleading.

* There was a time lag between trade done and reported.

* Sometimes price discovery could be inefficient, as another buyer may be willing to

pay more or seller willing to sell for fewer amounts.

* Each member was given four authorized assistants who could enter into

transaction on behalf of the member and there is greater exposure to risk factor, as

there is scope for frauds and illegal manipulations.

Online Trading and Demat:

Change is the law of nature”. There were times when man was a

Wanderer or a normal. He himself had to go place to place in search of food, water

and now everything is available at your doorstep just at the click of the mouse. The

growth of information technology has affected almost all sectors of life. Internet

has enabled us to get every information at our doorstep.

When Internet has affected all sectors he could “stock markets” the most important

player of the economy, has remained far behind? Like all other sectors Internet has

set its feet in the stock markets also.

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The Stock Market system provides single, nation wide securities. It enables LAN

investors in one part of the country to trade at the best quotes with an investor located

in any other part of the country through the members of the stock exchange and

subsequently clears and settle the trade in an efficient and cost effective manner. The

primary objective of the Stock Market is to provide clear opportunity to the investors

throughout the country to trade any security irrespective of the size of the order or the

broker through whom the order is routed. This provides the facility to execute the buy

order at the lowest price in the stock market located anywhere in the country without

any extra cost to the investors.

There will be no trading floor in the exchange. Instead, each trading member

will have a computer at his own office anywhere in India which will be connected to

the central computer system at the NSE through leased line or VSATs (very small

aperture terminals), for an interim transition period of 6 months & subsequently by

satellite link. VSATs are relatively smaller dishes similar to dish antenna for cable TV

& have the benefit of not being very expensive. A satellite network makes it possible

to connect almost all the parts of the nation quickly as it is easy to install, as against

the ground lines such as dial up modems leased lines, which are prone to disruptions,

satellite links, on the other hands ensure high speed, availability and quality of the

connection. This mode of trading is known as "Online Trading"

Online trading and Demat is nothing but a trader can trade where he

wants, when he wants, and conivent, flexible, easy Online trading India is the

internet based investment activity that involves no direct involvement of the broker.

There are many leading online trading portals in India along with the online trading

platforms of the biggest stock houses like the National stock exchange and the

Bombay stock exchange. The total portion of online share trading India has been

found to have grown from just 3 per cent of the total turnover in 2003-04 to 16 per

cent in 2006-07. Facilities of the online trading India.

The investor has to register with an online trading portal and get into an

agreement with the firm to trade in different securities following the terms and

conditions listed down on the agreement. The order processing is done in correct

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timings as the servers of the online trading portal are connected to the stock exchanges

and designated banks all round the clock. They can also get updates on the trading and

check the current status of their orders either through e-mail or through the interface.

Brokerages also provide research content on their websites, such that the clients can

take their own decisions on stocks before investing.

HISTORY OF ONLINE TRADING:

Online stock trading is very old concept for big institutions who trade thru

private networks owned by Reuter's "Instinet" and a system called "Posit" since 1969.

But it becomes internet based for lay men only in late 90s. Funny, that actually idea

was first time used by a company making Beer called "WIT beer" to help its

shareholders trade its shares. That’s how "WIT Capital" was born which is considered

pioneer of this concept. It was made mainstream and household name by a offshoot of

Charles Schwab & Co called eSchwab which is used by millions of people in USA.

Lot of NRI's i know play in US stock market even when they come to India for

holidays via website of eSchwabe. There are other serious players like E*trade,

DATEK online etc. All this companies ask you to start account with US $5000 and

you can buy and sell stock using these funds. They also issue you a check book which

you can use to make payments from this account. Or use their ATM card to withdraw

cash from your stock trading account. Today practically every big name brokerage

firm offers online stock trading as it reduces their costs. Earlier they had army of

brokers on phone with clients executing trade, which is done by computers accepting

orders from clients directly. This firm now offers human access to high net worth

accounts, and to rest at charge per trade.

Online trading started in India in February 2000 when a couple of brokers

started offering an online trading platform for their customers.

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INTERNET TRADING IN INDIA:

In the past, investors had no option but to contact their broker to get real time

access to market data. The Net brings data to the investor on line and net broking

enables him to trade on a click. Now information has become easily accessible to both

retail as well as big investors.

The development of broking in India can be categorized in 3 phases:

Stock brokers offering on their sites features such as live portfolio manager,

live quotes, market research and news to attract more investors.

Brokers offering on line broking and relationship management by providing

and offering analysis and information to investors during broking and non-

broking hours based on their profile and needs, that is, customized services.

Brokers (now e-brokers) will offer value management or services such as initial

public offerings on line, asset allocation, portfolio management, financial

planning, tax planning, insurance services and enable the investors to take

better and well- considered decisions.

In the US, 82 per cent of the deals are done on line. The European on line broking

market is expected to be of $8 billions and is likely to raise five fold by 2002. In India,

presently Internet trading can take place through the order routing system, which will

route client orders to exchanges trading systems for execution of trades on stock

exchanges (NSE and BSE). This will also require interface with banks to facilitate

instant cash debit or credit and the depository system for debit or credit of securities.

OBJECTIVES OF INTERNET TRADING:

Reduce and eliminate operational inefficiencies inherent in manual system

Increased trading capacity in Stock Market Improve market transparency

Eliminate unmatched trades and delayed reporting Provide for on-line and off-line monitoring control and surveillance of the market.

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Promote fairness and speedy matching Smooth market operations using technology while retaining the flexibility of conventional treading practices

Set up various limits, rules and controls centrally.

Consolidate the trades data on electronic media to interface will the broker‘s back office system

Provide public information on scrip prices, indices for all users of the system

Provide analytical data for use of Stock Market.

Online trading by NSE & BSE:

The central computer located at the Exchange is connected to the workstations

of the Brokers through satellite using Very Small Aperture Terminals (VSATs).

Orders placed at based on price and time priority. Both the exchanges have switched

over from the open outcry trading system to a fully automated computerized mode of

trading known as BOLT (BSE On Line Trading) and NEAT (National Exchange

Automated Trading) System. It facilitates more efficient processing, automatic

order matching, faster execution of trades and transparency. The scrips traded on the

BSE have been classified into 'A', 'B1', 'B2', 'C', 'F' and 'Z' groups.

The 'A' group shares represent those, which are in the carry forward system

(Badla). The 'F' group represents the debt market (fixed income securities) segment.

The 'Z' group scrips are the blacklisted companies. The 'C' group covers the odd lot

securities in 'A', 'B1' & 'B2' groups and Rights renunciations. key regulator governing

Stock Exchanges, Brokers, Depositories, Depository participants, Mutual Funds, FIIs

and other participants in Indian secondary and primary market is the Securities and

Exchange Board of India (SEBI) Ltd.

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MECHANICS OF ONLINE TRADING:

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CLIENT BROKER STOCK EXCHANGE

Places an order the net of the Broker’s website through the distinctive Id code

Accepts theorder, Checksthe client’sIdentity and Places theOrder

Accepts the orderafter checking thescrip limit of the

broker for the day

The settlement of the deal (buy/sell order) gets reflected in hisDemat account.

Pays theExchangethrough his owns accountand receives itfrom the clientaccount.

Receives themoney andcompletes thesettlement

The client is intimated aboutthe execution of the deal by e-mail.

MBA PROGRAMME SIPS

FEATURES OF ONLINE TRADING:

The Online Trading is having many features which make it most suitable for

the investors to go for. Some of these features are as follows:

Freedom of Information:

The Internet can provide a new sense of control over your financial future. The

amount of investment information available online is truly astounding. It's one of the

best aspects of being a wired investor. For the first time in history, any individual with

an Internet connection can:

Know the price of any stock at any time

Review the price history of any stock in chart format

Follow market events in-depth

Receive a wealth of free commentary and analysis about stock

markets and the global economy

Conduct extensive financial research on any company

Control our money:

One of the great appeals of using an online trading account is the fact that the

account belongs to you, and is under your direct control. When you want to buy or sell

stock, you no longer need to call your broker on the phone; hope that he is in the

office to place your order; possibly argue with the broker about the order; and hope

that the transaction is executed instantly.

Access to the market:

At the most basic level, an online trading account gives you more agility in

buying and selling stocks. This is through sophisticated information streams,

dedicated trading platforms and sophisticated tools for accessing the markets.

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Offers greater transparency:

Online trading offers you greater transparency by providing you with an audit

trail. This involves a complete integrated electronic chain starting from order

placement, to clearing and settlement and finally ending with a credit into your

depository account. All these stages are subject to inspection, thus bringing in

transparency into the system.

Reduces the settlement risk:

This method of trading reduces the settlement risk for the investor, as in this

case all short sell orders are squared off at the specified cut-off time and not allowed

to be carried forward.

Instant trade order confirmations:

Every trade is confirmed immediately and you will receive an on-

creen confirmation following every trade with full details for your records.

This avoids costly errors that would have been discovered when it is too late.

Integrated Accounts:

Our Bank, Depository and Trading account are integrated for our

convenience. Various broking houses provide access to many of the popular banks.

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BENEFITS OF ONLINE TRADING:

1) Less Costly:

The most significant advantage of the Online broking is the cost reduction in

the brokerage. Due to the power of the Internet one has the privilege of becoming the

clients of really large brokerages with the benefits of enjoying the low

charges before enjoyed only by the big players. As the DP account has got linked to

the trading account most players do not charge a minimum transaction cost thus truly

allowing one to buy a single share and achieve meaningful rupee price

averaging whatever be your buying power.

2) Peace of Mind:

One can never have complete peace of mind but online investing does away

with the hassles of filling up instruction slips, visits to the broker for handing over

these slips and consequent costs.

3) Keeping Records:

The site one trades on keeps a record of all transactions down to unexecuted

orders and cancelled orders thus keeping one abreast of all your transactions 24 hours

a day. No paperwork means more time at one’s disposal for research and analysis.

4.) Ease of trade:

It is the ease of doing the trade through net, with a click of mouse; one can buy

or sell any share that is dematerialized. Other than the above-mentioned

advantages, Internet trading provides some additional advantages to the

investors, brokers and also helps the nation to Channelize the resources.

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Net trading would increase competition in the market hence increase in the

bargaining power of the investors. The entire communication between the investor,

broker and exchange would take place within milliseconds.

PROBLEMS OF ONLINE TRADING:

.1) Server not found:

This may appear on one’s screens when he is desperately trying to get out of an

unprofitable position. Some of the online sites are providing a telephone number for

use in case their sites are overloaded or their server down.

2.) Connectivity of the Broker with NSE:

Recently ICICI Direct had a connectivity problem with the NSE for two and

halfhours during trading hours. This problem is rare but be alive to its possibility.

3.) Cyber attack:

In the event of a malicious attack on the systems of one’s broker he is protected

only if the company is taking proper precautions against such attacks and if proper

backup is regularly been taken. He may like to choose a brokerage that has a stated

security policy and contingency plan in place.

4) Non-availability of a seamless interface:

As a client one will access the NSE through a server of the online brokerage

and this may involve queuing delays. If a number of client access the server the server

takes its own time sending the orders to the NSE server. He must check

out the seamlessness of this interface before selecting an online brokerage. The faster

the orders are processed the more seamless is the interface.

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5.) Non- availability of personalized advice:

If one like to ask his broker "Aaj kya achcha lag raha hai" he may not be able

to do so. If he wants advice on a particular stock in his portfolio he may not even be

able to get that.

6.) Margin:

If Internet trading alone is not fast and furious enough; many people are trading

on margin. That is where the brokerage firm lends you money by eraging

his account, allowing him to buy a large amount of securities by putting up only a

small amount of money. He may have forgotten what he read in the small print of his

agreement, but the brokerage firm has the right to change the maintenance margin

requirements without any warning or notice to him. In fact, the firm has the right to

liquidate his securities holdings (and it can pick and choose which ones) without any

notice to one if he fail to meet the margin call. And there he was leveraged to the hilt,

hoping to hit a home run when he discovered that he is required to make a large

deposit that he cannot make. The next thing one know, the firm is selling off his

securities at a point in time that is not the best for him. These are the perils of trading

on margin.

THE MAJOR PLAYERS IN ONLINE TRADING IN GUNTUR

The main players in retail brokerage business right now are,

Angel Broking

India info line

Religare Securitie

ICICI Direct

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Angel Broking

Criteria Angel stock broking

Demat a/c opening charges 750

Brokerage intra day, delivery 5 paise,50 paise

AMC(Annual Maintenance Charges) Rs.300

Trading funding intra day, delivery 6times,4 times(minimum stock Rs

50000)

Debit period T+2 Days

Mode of trading Both online and offline

Margin money 5000

Software installation charges No extra charges

IndiaInfoline

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Criteria India infoline

Demat a/c opening charges 550

Brokerage intra day, delivery 5 paise,50 paise

AMC(Annual maintaince charges) NIL

Trading funding,intraday,Delivery 10 times, 4times

Debit period T+2

Mode of trading Both online and offline

Margin Money 2000

Software Installation charges No extra charges

Religare Securities

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Criteria Religare Securities

Demat a/c opening charges 550

Brokerage intra day, delivery 4 paise,40 paise

AMC(Annual maintaince charges) 250

Trading funding,intraday,Delivery 6times,4 times(minimum stock Rs

50,000)

Debit period T+2

Mode of trading Both online and offline

Margin Money No limit

Software Installation charges No Extra charges

ICICI Direct

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Criteria ICICI Direct

Demat a/c opening charges Rs.975

Brokerage intra day, delivery 50Paise,75Paise

AMC(Annual maintaince charges) Rs.500

Trading funding,intraday,Delivery 6times,4 times(minimum stock Rs

50,000)

Debit period T+2

Mode of trading Both online and offline

Margin Money No limit

Software Installation charges No Extra charges

DEMATERIALISATION:

DEFINITION:

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Dematerialization is the process by which a BO can get his physical securities

converted into electronic form.

Pre- requisites for dematerialization are:

1. Investor should have a demat account with any DP of CDSL.

2. Securities to be dematerialized must have been admitted in CDSL i.e.

ISIN for the securities should be available in CDSL.

Investor should be the registered holder for the securities in the books of the Company.

The BO submits a request to the DP in the Dematerialization Request Form(DRF)

along with the certificates. The DP verifies the information on the DRF and physical

certificates and enters the details in the system to setup a request electronically. The

DP sends the physical documents to the concerned issuer/RTA. If the Issuer/RTA find

the DRF and certificates in order, it registers CDSL as the registered holder of the

securities and confirms the DRF electronically to CDSL. On receiving such

confirmation, CDSL credits the BO account. The process flow of a demat request is

given below.

If the issuer/RTA rejects all or some of the certificates in a demat request the

same are sent back to the DP mentioning the rejection reasons(s).

DP will then ask the BO to rectify the reason of rejection and send the

certificates again for dematerialization under a fresh demat request.

Dematerialization can be normal dematerialization as explained above or it can

be "Transfer-cum-Dematerialization (TCD)" or "Transposition-cum-

Dematerialization".

PROCEDURE TO DEMATERIALIZE THE SECURITIES:

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To dematerialize the securities, initially the Dematerialization Request

Form(DRF) is to be duly filled, which is available with the depository participants.

Later the following steps are to be followed:

1. Ensure that the ISINs of the company indicated in the DRF are Activated.

2. Ensure that separate DREs are filled for partly paid up and fully paid up holdings.

3. Ensure that separate DRFs are filled for ISINSs Company.

4. Ensure that the investors deface the share certificates Surrendered for

dematerialization.

5. Ensure that all joint holders have signed the DRF.

6. Ensure that the signatures on the DRF match the ones indicating in the account

opening form or the record maintained at branch.

7. Ensure the share certificates along with the DRF.

8. Receive credit for the dematerialized shares into Beneficiary owner's account in

15days.

This investor can dematerialize only those certificates those are already

registered in his name and belong to the list of securities admitted for

dematerialization at NSDL.

If the shares the investor wants to dematerialize does not belong to the list of

the securities eligible for dematerialization specified by NSDL, can approach the

company and request them to sign up with NSDL to make their securities available for

dematerialization. Odd lots share certificates can also be dematerialized.

BENEFITS OF DEMAT SECURITIES:

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Various merits that associate the DEMAT securities are:

1. It reduces the risk of bad deliveries, in turn saving the cost and wastage of time

associated with follow up for rectification this had lead to reduction on brokerage to

the extent of 0.05% by quiet a few brokerage firms.

2. In case of transfer of electronic share, investor can save 0.05% in stamp duty. The

cost of courier/Notarization is avoided.

3. The investor can receive the Bonuses and rights into their DP as a direct credit, thus

eliminating the risk of loss on transit.

4. The investor can expect the lower interest charge for loans taken against DMAT

shares as compared to interest for loans on physical ones.

OPENING A DEMATERIALIZATION ACCOUNT (DEMAT A/C)

Demat refers to a dematerialized account. Just as we have to open an account with a

bank if we want to save your money, make cheque payments etc, we need to open a

demat account if we want to buy or sell stocks. So it is just like a bank account where

actual money is replaced by shares. We have to approach the DPs (remember, they are

like bank branches), to open our demat account.

Demat account allows you to buy, sell and transact shares without the endless

paperwork and delays. It is also safe, secure and convenient.

Let’s say our portfolio has 100 of Satyam, 50of Suzlon, 20 of ICICI BANK, 50 of

Tech Mahindra and 100 of TCS shares. All these will show in our demat account. So

we don’t have to possess any physical certificates showing that us own these shares.

They are all held electronically in our account. As we buy and sell the shares, they are

adjusted in our account. Just like a bank passbook or statement, the DP will provide

you with periodic statements of holdings and transactions.

Individuals, companies, Trusts, Partnership firms, NRIs, HUF, Banks and Institutions

are allowed to open a depository account with any depository through a depository

participant. The investor would need to execute a standard form giving all his details,

bank details, instruction details, nomination details and off-course photograph and

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signature. Along with this form, the investor would also have sign an agreement with

the depository participant which usually forms a standard part of the account opening

process. The details on the form have to be matched with a photocopy of the

investor‘s passport, driving license etc. to certify the mentioned details. If the investor

is an NRI, then the client will have to provide overseas address, provide copy of RBI

Approval, if any. The RBI Approval is not mandatory for opening of a DP. Account

but is required to receive shares into the account when purchased through the

secondary market.

Procedure for purchasing dematerialized securities:

The procedure for purchasing dematerialized securities is also similar to the procedure

for buying physical securities.

Investor instructs DP to receive credits into his account in the prescribed

form. There may be one time standing instruction or Separate

instruction each time to receive credits.

Investor purchases securities in any of the stock exchanges linked to

Depository throuth a broker.

Broker receives payment from investor and arranges payment to

Clearing corporations.

Broker gives instructions to DP to debit clearing account and credit Client’s

account. Investor receives shares into his account by way of book entry.

Procedure of selling dematerialized securities:

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The procedure for selling dematerialized securities in stock

exchanges is similar as selling physical securities. The only major difference is that

instead of delivering physical securities to the broker, the investor instructs his DP to

debit his demat account with the number of securities sold by him and credit the

brokers clearing account. The procedure for selling dematerialized securities

is given below:

1. Investor sells securities in any of the stock exchange linked to depository through a

broker.

2. Investor instructs his DP to debit his demat account with the number

of securities sold and credit the broker’s clearing account.

3. Before the pay-in-day, broker of the investor transfers the securities to

clearing corporation.

4. The broker receives payment from the stock exchange.

5. The investor receives payment from the broker for sale of securities in

the same manner as received in case of sale of physical securities.

BENEFITS OF DEMATERIALIZATION ACCOUNT:

Primary benefits:

1- Safety: If we are holding our shares, bonds etc in physical (paper) form, there

are chances of its theft, mutilation, and loss. Moreover, we are also exposed to

the risks of fake papers, bad-delivery or delays at the time of transfer of

physical securities. However, in DEMAT accounts; we can preserve our long-

term investments safely and securely.

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2- Convenience: When we want to sell our dematerialized shares or redeem our

debentures in DEMAT account; there are no hassles of filling up transfer

forms, sending redemption requests or any other messy, costly and time-

consuming paper work. We can conveniently transfer our securities through

electronic transfers or just by signing one ‘Delivery Instruction Slip’, which is

nothing but our chequebook for DEMAT Accounts.

Other Benefits:

Apart from the safety and convenience, there are lot more advantages of

opening DEMAT accounts. Here are few of the most necessary reasons for having a

DEMAT account. 

We can park most of our investments including shares, bonds, debentures, Gold

Units, NSC and bonds in our DEMAT account. We might not immediately

realize the benefits of having all the investments in DEMAT form. For

instance, if we change our residence, we just have to write to the DP

(Depository Participant), which automatically gets our new address registered

with all the companies where we have invested our money.

We do not have to remember the due dates of maturity of bonds, NSC and

debentures, as the redemption proceeds are automatically credited to our bank

account, which is linked with our DEMAT account.

We receive all the dividends and interests directly in our linked bank account.

In case of bonus, rights, split, merger or any other corporate actions, everything

takes place automatically. We do not have to do anything except to file the

physical intimation letters sent by the Registrar and Transfer Agents.

Nowadays with the advent of online trading, we can perform online all the

activities associated with buy, sell and transfer of shares.

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With a single nomination in your DEMAT account, we are nominating our

legal heirs to all the investments held by us.

For many public issues of bonds and debentures of reputed and trustworthy

companies, it is necessary to have a DEMAT Account, as the companies do not

allot securities in paper form.

Since most of the process of buying and selling dematerialized securities is

electronic, there are no chances of signature mismatch.

Elimination of problems related to selling securities on behalf of a minor.

Elimination of problems related to change of address of investor, transmission

etc.

Reduction in handling of huge volumes of paper periodic status reports.

So with Dematerialized Securities, the entire process of transferring shares, bonds and

other financial assets has become smooth and swift. DEMAT Accounts offer

numerous advantages and hence it makes sense for the retail investors to open

DEMAT Accounts as early as possible.

DIPOSITORY SYSTEM:

A Depository can be compared to a bank. A depository hold securities like

shares debentures, bonds, govt. Securities, unit's etc., of investors in electronic form.

Besides holding securities, a Depository also provides services related to transactions

in securities.

How to Avail the Services of a Depository?

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A Depository interfaces with the investors through its agents called

DEPOSITORY PARTICIPANTS (DP). If the investor wants to avail the services, he

has to open an account with the DP.

OPENING AN ACCOUNT WITH DEPOSITORY PARTICIPANT (DP):

Initially fill up the Account Opening Form, which is available with the DPs.

Sign the d-client Agreement, which defines the rights and duties of the person

wishing to open an account.

The investor receives the Client Account Number (Client ID), this client ID

along with the investor's DP ID gives the unique identification in the depository

system. There is no restriction on the number of depository accounts a person

can open.

However if the existing physical shares are joint names, the investor have to

open the account in the same order of names before the share the shares are

submitted for the DMAT.

A sole holder of the share certificates cannot add more names as joint holders at

the time of dematerialization of his share certificates.

A Beneficial Owner(BO) can open one or more accounts with one or more participants

and may close one or more account with any or all the participants or transfer his

securities in one account with a participant to another account with the same

participant for with other ones.

The BO shall pay fee, charges and deposits to the DP, as may be mutually

agreed upon, for carrying out the instructions and for rendering such other services as

are incidental or consequential to the BO holding securities in and transacting through

the said account with the DP. The DP shall be entitled to change or revise the said fees

charges or deposits or deposits form to time to time subject to such prior notice as may

be agreed between the parties.

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The main objectives of account opening are to allow the investors to perform:

Dematerialize physical securities currently held by them and reflect security

ownership by electronic book entries in the NSDL.

Buying and selling dematerialized securities, which are admitted in NSDL and

other depository.

Receive statements of all dematerialized holdings of securities as OBs.

Receive securities in electronic form in case of initial public offerings, rights

issued, bonus issue, mergers and acquisitions and amalgamations etc.,

BENEFITS IN DEPOSITORY PARTICIPATION:

Immediate transfer of securities.

No stamp duty on transfer of securities.

Elimination of risks associated with physical certificates such as bad delivery,

Reduction in paperwork involved in transfer of securities.

Reduction in transportation cost.

Nomination facility.

Change in address recorded with DP gets registered electronically with all

companies in which investor holds securities eliminating the need to correspond

with each of them separately.

DP eliminating correspondence with companies does transmission of securities.

Convenient method of consolidation of portfolios/accounts.

Holding investments in equity, debt instruments and government securities in a

single account.

Automatic credit into DMAT account of share, arising out of

split/consolidation/merger etc.

At present there are two depositories in India, NATIONAL SECURITIES

DEPOSITORIES LIMITED (NSDL) and CENTRAL DEPOSITORY

SERVICES LIMITED (CDSL).

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NATIONAL SECURITIES DEPOSITORIES LIMITED: (NSDL)

NSDL commenced its operations from November 1996. Holding and handling

of securities in the electronic form eliminates problems that normally associated with

physical certificates, like mutilation loss in transit, problem of bad delivery etc.,

Further it facilitates settlement cycles. number of users of NSDL depository system is

steadily increasing. It is our endeavor-to keep all the present and prospective uses of

NSDL depository system.

The shareholders of National Securities Depository Limited (NSDL) are

Industrial Development Bank of India (IDBI) Unit Trust of India (UTI), HDFC Bank,

Deutsche Bank Deena Bank, Global Trust Bank, Standard Chartered Bank, Citibank

NA and Hong Kong & Shanghai Banking Corporation Limited (HSBC). All the

shareholders of NSDL depository facilities.

FACILITIES OFFERED BY NSDL:

Some of the facilities offered by NSDL are:

Dematerialization i.e., converting certificates in electronic form.

Dematerialization i.e., conversion of securities in DMAT form into physical

certificates.

Facilitating repurchase/redemption of units of mutual funds.

Electronic settlement of trades in stock exchangers connected to NSDL.

Pledging/hypothecation of dematerialized securities against lone.

Electronic credit of securities allotted in public issues, rights issue.

Receipt of non-cash corporate benefits such as bonus, in electrical form.

Freezing of DMAT accounts, so that debits from the account are not permitted.

Nominations facility for DMAT accounts.

Services related to change of addressed, change in bank account details, and

change in nominee.

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Effecting transmission of securities.

Instructions to your DP over Internet through SPEED-e facility.

ONTIME PAYMENT SCHEME:

NSEL has announced the scheme under which of company as on time payment

of 5 basis point (0.05%) of the average market capitalization during the proceeding 26

weeks, then NSDL will not future issues by such companies would require a payment

pay any additional amount, if they make a bond issue.

Other Services:

Besides DMAT and trading depositories also offer other services.

Pledging/hypothecation of dematerializes securities.

Electronic credit in public offering of the companies.

Receipt of non- cash corporate such as bonus rights in electronic form.

Stock lending and borrowing.

Transmission of securities.

CENTRAL DEPOSITORY SERVICE LIMITED (CDSL):

A depository facilitates holding of securities in the electronic form and enables

securities transactions to be processed by book entry by a Depository participant (DP),

Who as an agent of the depository, offers depository services to investors. According

to SEBI guidelines, financial institutions, bank custodians, stockbrokers etc., are

eligible to act as DPs. The investor who is knows as Beneficial owner (BO). Has to

open a DMAT account through any DP for dematerialization of his holdings and

transferring securities.

The balances in the investors account is recoded and maintained with CDSL

can be obtained through the DP. The DP is required 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 certificates,

which are prone to be fake, forged counterfeit resulting in bad deliveries. CDSL,

offers an efficient and instantaneous transfer of securities.

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The Bombay Stock Exchange (BSE) promoted CDSL, jointly with leading

banks such as SBI, Bank of India, Bank of Baroda, HDFC bank, and Standard Charted

Bank, Union Bank of India and Centurion Bank.

CDSL was set up with the objective of providing convenient dependable and

secure depository services at affordable cost to all market participants.

Some of the important milestones of CDSL system are:

CDSL was set up with the objective of commencement of business form SEBI

in February 1999.

Honorable the then Union Finance Minister, Sri Yashwanth Sinha flagged off

the operations of CDSL on July 15, 1999.

Settlement of trades in the DMAT mode through BIO Share Holding Limited,

the clearinghouse of BSE, started in July 1999.

All leading stock exchanges like the NSE, BSE, Ahmedabad stock exchange

etc., have established connectivity with CDSL.

At the end of December 2005, over 5000 issuers were admitted their securities

(equities, bonds, debentures and commercial papers), units of mutual funds,

certificate of deposits etc., into CDSL system.

SETTLEMENT:

The Clearing Corporation/Clearing house of the corresponding stock

exchanges undertakes the settlement of trade in the stock exchange. While the

settlement of DMAT securities affected through Depository, the fund settlement is

effected through the clearing banks. The clearing members directly with the CC/CH

settle the physical securities.

Exclusively segment follows rolling settlement (T+2) cycle and the unified

segment follows account period settlement cycle.

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In case of settlement of trades done in DAMT segments the pay-in and payout

of he funds and securities are affected on the blockage of the funds and limiting

exposure to the clearing corporation.

Settlement of funds is effected through the clearing banks and the depository

plays no role in this.

PROCEDURE:

A BO wishing to become an account holder should approach a Depository

In order to have an account, the investors need to duly fill in the application

furnishing all the required information.

The BO and the DP will enter in to an agreement abiding by the terms of

agreement, however a BO belonging to any one of the categories specified

under the National Securities Depository Limited (NDL) bylaws need not enter

into an agreement as the DP has entered with the BO pursuant to SEBI

Regulations 1996.

The account opened for Individual Investors, intuitional Investors, Corporate

Investors, and CMS can be common. How ever a DP may print separate forms

for each type of BO if it is necessary or convenient.

The sections of the application form, which is not relevant to any particular

type of BO, should be marked Not Applicable (NA).

The documents specified in the instructions at the end of the account opening

from to be submitted alone with the account opening form.

The BOs DP may also specify additional documents to be supplied with the

account opening form.

A DP shall, before opening may account of any BO make enquires as may be

necessary and exercise due care and caution in ascertaining the benefited of the

intending BO, scrutinize the documents relating to the securities in respect of

which account is intended to be opened, for authentication.

The DP’s should ensure separate BO’s account fore different ISIN.

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The DP should obtain and maintain photocopies on regular paper

The DP must ensure that the BO’s desires to have their cash corporate

beneficiary like dividend, interest etc. On a reportable basis, must forward a

certified true copy of RBI approval to the R&Ts/issues where the BO is holding

the securities.

The DP will send the account opening form along with the relevant documents

to the DP.

The DP will check all the papers as correct and send the information to the BO.

Here, the DP accepts all the papers, and they will be sent back a conformation

to the BO.

The DP enters the account opening information to the front End system

provided by NSDL, from the account opening form duly filled by BOs. The DP

should accurately collect the BO details.

The DP will scan the signatures of the BOs as well as maximum of 2 power of

attorney signatures.

Once the DP commits the transactions, the date is collected and stored at

NSDL. A unique BO number is generated by the system and this can be seen at

the DP Front-End system. This will be done online and the information gets

transmitted to NSDL instantaneously. The DP should record the BOs ID, the

original application form and the DP BO agreement for future cross-reference.

The BOs account number is unique with the system and will serve as a

reference number for the BO in all his future dealing with the DPs.

The DP should ensure that the information entered into its Front-End system is

correct.

BOs status indicates if the BO is an individual minor, NRI, corporate body,

bank.

The field to be captured for each BO will be different. The system will allow

capturing only the relevant fields as per the BO status with help of “status

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codes”. By defining status codes, a user can decide which status code to use for

the set up of BO. Only these fields, which are defined in the status code, will

come up on the screen for the user to enter.

All correspondence/querying relating to BO account will be sent to the first

holder only.

Settlement of securities is affected through NSDL, depository system.

Clearing and settlement of the regular market trades is affected through the

clearing member of the clearinghouses of the respective stock exchange.

Clearing members of the clearinghouse, dealing in DMAT securities are expected to

open a clearing with any DP for the purpose of settling trades is dematerialized

securities. If there is any short delivery at the time of pay in the securities, these short

positions are auctioned in the DMAT segment as done in the unified segment.

DATA ANALYSIS AND INTRPRETATION

Questions regarding problems in trading:-

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Q.1) Do you invest in share market?

a) Yes

b) No

Interpretation: -35% people invest in share market in Guntur city

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Q.2) Please tick the following:-

a.) Type of trading you generally do intraday / delivery /both

Interpretation: - 26% people prefer intraday trading, 42. % prefer delivery and 32% do

both type of trading.

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b.)Time period of investment less 1 month/ 1-6 month /more than 6 month.

Interpretation: - Maximum people prefer to invest for 1 to 6 months and amount of

investment for majority of people was found to be between Rs. 20,000 to Rs. 1 lac.

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Q.3) In your opinion what is biggest problem in trading:-

a.) Lack of knowledge or experience

b.) Unsatisfactory services of broking firms

c.) Market uncertainty

d.) Charges by broking firm

Interpretation: - Most of the people facing biggest problem in trading, Lack of

knowledge and believe that unsatisfactory services by their broking firms create

problem in trading while 25 % people consider charges of broking firm as a problem

in trading.

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Q.4) What is your opinion about the problem of market uncertainty in trading?

a.) It's a big challenge

b.) It's manageable

c.) It's an opportunity

Interpretation: - majority of people consider market uncertainty as a big problem,

around 19% people consider it as an opportunity and rest says it is manageable.

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Q.5) Does unsatisfactory services provided by the broking firm create problem in

trading?

a.) Yes

b.) A little

c.) No

Interpretation :- 54.5% consider the Unsatisfactory services provided by the broking

firm create problem in trading, 20.5% people consider it a little and 25% were not

agree to that.

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Q.6) Which charge do you consider charged by the broking firms is a problem in

trading?

a.) Broking charge

b.) Undisclosed hidden charge

c.) Annual maintenance charge

Interpretation: - Most people considered undisclosed hidden charges and annual

maintenance charge as their problem in trading.

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Questions regarding perception of traders regarding SHRIRAM INSIGHT:-

Q.1) Name of the broking firm with which you are making your investment?

a.) Shriram Insight

b) Indian Bulls

c) Angel Broking

d) Religare

e) Karvy

f) Others

Interpretation: - Market share of SHRIRAM INSIGHT is around 35% in Guntur.

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Q.2) Are you satisfied in trading with your broking firm?

a.) Satisfied

b.) Neither satisfied nor dissatisfied

c.) Dissatisfied

Interpretation: - Most of the people are satisfied with their broking firm.

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Q.3) Are you aware of products and services offered by Shriram Insight?

a.) Yes

b.) No

Interpretation: - 47.1% of people are aware of products and services offered by

Shriram Insight.

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Q.4) Are you satisfied with them?

a.) Satisfied

b.) Neither satisfied nor dissatisfied

c.) Dissatisfied

Interpretation: - Majority of people are satisfied with them.

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Q.5) Are you satisfied with the charges charged by Shriram Insight for opening D-Mat

account?

a.) Satisfied

b.) Neither satisfied nor dissatisfied

c.) Dissatisfied

Interpretation: - Most of people are satisfied with the charges charged by Shriram

Insight for opening Demat account.

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Q.6) What is your perception regarding SHRIRAM INSIGHT?

a.) Good

b.) average

c.) Bad

Interpretation: - Except 12 people (17.7%) perceive positive perception about

SHRIRAM INSIGHT.

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Q.7) Please specify reasons?

a.) Services good /average / bad

b.) Brokerage good /average / bad

c.) Relationship manager's support good /average / bad

d.) Transparency good /average / bad

Interpretation: - In case of transparency and services SHRIRAM INSIGHT is

considered good and average in case of brokerage and relationship manager's support.

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a.)Service b.)Brokeragec.)Relationship

manager's supportTransparency

MBA PROGRAMME SIPS

FINDINGS

Most of the investors don’t have minimum knowledge about where he invests

his money.

Most of the people are unaware of what is DEMAT and how it is useful.

Most of the traders consider unsatisfactory services of broking firm as biggest

problem in trading.

Most of traders perceive SHRIRAM INSIGHT as a good broking firm.

In case of transparency and services SHRIRAM INSIGHT is considered good

and average in case, of brokerage and relationship manager's support.

People aware about SHRIRAM INSIGHT are satisfied regarding product and

services by SHRIRAM INSIGHT.

Market share of SHRIRAM INSIGHT in Guntur is about 35%

The main feature of SHRIRAM INSIGHT is that it provides best

security, hasslefree, convient, than other broking houses.

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SUGGESTIONS:

SHRIRAM INSIGHT has to improve on the customer service that it is

providing to its customers.

They have to give publicities in Newspapers, Hoardings, and Stallings.

Broking charges should revise to make them more competitive.

More relationship managers should be appointed to increase market share.

Relationship manager's support to the clients should be improved.

SHRIRAM INSIGHT should conduct some kind of mock Classes for new

Investors who even don’t know about share market.

There should be employee ID-Card for them so that when they go on it shows

good impression and Identity of employee.

SHRIRAM INSIGHT Organize training Program for their existing clients once

or twice in a year.

As long as a market is acting right, don't rush to take profits.

Don't watch or trade too many stocks at once

CONCLUSION:

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Before as we didn’t have proper growth the traders used to go near the brokers

and placed orders. But now as there is a drastic change and with the things like

globalization, liberalization, privatization. The things have changed. Now in this era

the trader can place his own orders and can do everything individually which saves

money for him but he must have sound knowledge about the issues. Online stock

trading sites offer investors access to a variety of tools and research that just a few

years ago were only available through full service brokerage accounts. Online trading

in shares has brought transparency to the business and attracted a whole new range of

investors into share trading and investment. Ordinary people with restricted amounts

of savings are educating themselves in the business and learning to make their small

investments grow steadily without taking too many risks.

ANNEXURE

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Questionnaire:

Q.1) Do you invest in share market:

a.)Yes

b) No

Q.2) Please tick the following:

a.)Type of trading you generally do intraday / delivery /both

b.)Amount of investment less than 20 k / 20k-l lacs /more than 1 lacs

c.)Time period of investment less than 1 month/1-6 month /more than 6 months

Q.3) In your opinion what is biggest problem in trading:

a.) Lack of knowledge or experience

b.)Unsatisfactory services of broking firms

c.)Market uncertainty

d.) Charges by broking firm

Q4) What is your opinion 'about the problem of market uncertainty in trading?

a.) It's a big challenge

b.) It's manageable

c.) It's an opportunity

Q.5) Does unsatisfactory services provided by the braking firm create problem in

trading?

a.) Yes

b.) Partially

c.) No

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Q.6) Which charge do you consider charged by the companies is a problem in

trading?

a.)Broking charge

b.) Undisclosed hidden charge

c.)Annual maintenance charge

Q.7) Name of the company with which you are making your investment?

a.) Shriram Insight

b.) Reliance money

c.) Share khan

d.) Other

Q.8) Are you satisfied in trading with your broking firm?

a.) Satisfied

b.)Neither satisfied nor dissatisfied

c) Dissatisfied

Q.9) Are you aware of products and services offered by Shriram Insight?

a.) Yes

b.) No

Q.10) Are you satisfied with the charges charged by Shriram Insight for opening

D-Mat account (with annual maintenance charge)?

a.) Satisfied

b.) Neither satisfied nor dissatisfied

c.) Dissatisfied

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Q.11) What is Your perception regarding Shriram Insight?

a.) Good

b.) Average

c.) Bad

Q.12) Please specify reasons?

a.) Services good/average / bad

b.) Brokerage good / average / bad

c.) Relationship manager's support good / average / bad

d.) Transparency good / average / bad

BIBLIOGRAPHY

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www.shriraminsight.com

www.investopedia.com

www.bseindia.com

www.nseindia.com

www.moneycontrol.com

Books:

1. Investment management

-V.K.Bhalla

2. Investment management

-Preethi Singh

3. Security Analysis And Portfolio Management

-V.A.Avadhani

4. Marketing of Financial Services

-V.A.Avadhani

5. Indian Financial System

-M.Y.Khan

If there are any quarries’ regarding this project mail me:

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Sankar922@gmail.com

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