Trading and Settlement in Indian Stock Market

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Articles and Bye-laws of Gauhati Stock Exchange


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A PROJECT REPORT ON

Articles and Bye-laws of the GauhatiStock Exchange

SUBMITTED BY

SHUVOBROTO BHATTACHARYYADEPARTMENT OF BUSINESS ADMINISTRATION,

ASSAM UNIVERSITY, SILCHAR JUNE, 2010

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DECLARATION

I, Shuvobroto Bhattacharyya, hereby declare that the project report namely,Articles and Bye-laws of the Gauhati Stock Exchange prepared by me is anoriginal work, is the result of independent research carried out by me in partialfulfillment of the MBA program of Assam University, Silchar. To the best of my knowledge and belief, this research is an original piece of my work and is

the sheer outcome of my efforts and has not been submitted to any other University or Institution for the award of any degree or diploma.

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ACKNOWLEDGEMENT

At the very outset, I take the opportunity to convey my heartiest gratitudeto those persons whose cooperation, suggestions and support paved the way for the accomplishment of my work successfully.

I am extremely grateful to Shri R.C. Choudhury, the General Manager of The Gauhati Stock Exchange Limited, Guwahati for giving me the golden

opportunity to pursue my summer internship programme in this esteemedorganization.

I extend my warm thanks to all the members of this office, who haveextended their kind support whatever & wherever needed. I also extend mygratitude to the Department of Business Administration, Assam University

because it is the endeavor of the faculty that has given me such a scope.

Last but not the least, I am immensely grateful to my family members,who not only rendered sustained help, moral and encouragement but also

provide me the necessary motivation for this work.

With regards

Shuvobroto Bhattacharyya

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PREFACE

This project has been carried out while working as summer trainee in TheGauhati Stock Exchange Limited, Guwahati. All efforts have been made toknow the Articles and Bye-laws of the Gauhati Stock Exchange. All effortshave been made so that the information gathered is free from any biasness.

Besides gathering information from the institutional guide, it has been

my endeavor to gather information from the brokers and other trading staffsalso.

Many interesting facts have come out in course of investigation. Everyendeavor has been made so that the result remains meaningful as well asfruitful.

Further, I solemnly declare that all information furnished in this project is

true to the best of my knowledge.

Shuvobroto Bhattacharyya

MBA 3 rd Semester

Assam University

Silchar

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EXECUTIVE SUMMARY

Title of the project : Articles and Bye-laws of the Gauhati Stock Exchange

Name of the organization: The Gauhati Stock Exchange

Organizational Guide: Sri R.C.Choudhury

Objective of the study:

(a) To have an idea about the various Articles and Bye-laws of theGauhati Stock Exchange(b) To gather some knowledge about the Bye-laws of trading on

Exchange.(c) To understand the Articles in a better way.(d) To understand the trends of trade in the stock market in the last few

years.

Methodology: Descriptive research type

Data Source: For the collection of data secondary source has beenused . Data has been collected from the internal source of the organization.Further information is gathered from the records, Internet and staff of thecompany.

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CONTENTS

SECTION A Introduction 2 - 131.1 Introduction of Stock Exchange 10 - 111.2 Historical Background of Stock Exchanges 11 - 12

1.3 About the Organization 12 - 13

SECTION B - Research Design 14 - 152.1 Introduction 14

2.2 Research Objective 14

2.3 Scope of Research 14

2.4 Research Methodology 14

2.5 Data Source 15

2.6 Limitation of the Study 15

SECTION C Analysis of the topic 16 - 233.1 Introduction 17 - 19

3.2 History 19 - 20

3.3 Regulatory Framework related with Trade Practices in

Securities Market 20 - 23

SECTION D Bye-laws of tradingon the exchange 24 - 30

4.1 Trading days 24

4.2 Alteration or cancellation of Exchange Holidays 24

4.3 Trading Segments 24

4.4 Restrictions on trading 24

4.5 Trading Sessions 24

4.6 Eligibility to trade 254.7 Permission to trade through trader workstations 25

4.8 Trading during good behavior 25

4.9 Management of the ATS 25

4.10 Prices 25

4.11 Daily official list 25

4.12 Trading Facility 26

4.13 Registration and De-registration of Approved Users 26

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4.14 Operational Parameters for Trading

4.15 Loss of access to ATS 26

4.16 Loss of closing out-Trading members responsibility 26

4.17 Maintenance of Relevant Records 27

4.18 Trade management 27

4.19 Trading Member Liable for Trades 28

4.20 Trades Irrevocable 28

4.21 Order validation 28

4.22 Matching Rules 29

4.23 Types of Transactions Allowed 29

4.24 Transactions not allowed 29

4.25 Transactions in Government Securities and Debentures 30

4.26 Suspension of Trading 304.27 Use of technology 30

SECTION E Articles of Association 32 38

SECTION F Conclusion 39 - 40

SECTION G Bibliography 41 - 42

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List of AbbreviationGOI Government of India

GSE The Gauhati Stock Exchange Limited

IPO Initial Public Offerings

NSE - National Stock Exchange

BSE - Bombay Stock exchange

CDSL Central Depository Services (India) Limited

NSDL National Securities Depositories Limited

SEBI Securities and Exchange Board of India

SBTS Screen Based Trading System

WAP Wireless Application Protocol

BOLT - BSE On Line Trading (System)

TWS - Trader Work Station

CRSS - Compulsory Rolling Settlement Segment

CC Clearing Corporation

NSCCL National Securities Clearing Corporation

SAT - Securities Appellate Tribunal

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10

Section A

Introduction


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1.1 Introduction of Stock Exchange A Stock Exchange is the single most important institution in the secondary market for

providing a platform to the investors for buying and selling of securities through its member.

It is a place where already issued securities of companies are bought and sold by investors.Stock Exchanges are an organized marketplace, either corporation or mutual organisation,where members of the organisation gather to trade company stocks or other securities. Themembers may act either as agents for their customers, or as principals for their own accounts.It also facilitates for the issue and redemption of securities and other financial instrumentsincluding the payment of income and dividends.

Traditionally a stock exchange is an association of its members or stock brokers,formed for the purpose of facilitating the buying and selling of securities by the public andinstitutions at large and regulating its day to day operations. Of late however, stock

exchanges in India are operating now with due recognition from Security and ExchangeBoard of India (SEBI)/ the Government of India under the securities contracts (Regulation)Act, 1956. There are 24 recognized stock exchanges in India, out of which one has notcommenced its operations. Out of the 23 remaining stock exchanges, the trading volumes arerecorded. Most of the regional stock exchanges have formed subsidiary companies andobtained membership of Bombay Stock Exchanges (BSE), or National Stock Exchange(NSE) or both. Members of these stock exchanges are now working as sub brokers of BSE /

NSE brokers.

Securities listed on the stock exchange(s) have following advantages:- The stock exchange(s) provides a fair market place It exchanges liquidity There is continuous reporting of their prices Full information is available on the companies Rights of investors are protected

List of Stock Exchanges in India

Stock Exchanges inIndia

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Bombay Stock Exchange National Stock Exchange Interconnected Stock Exchange Regional Stock Exchanges

o Ahmedabad Stock Exchangeo Bangalore Stock Exchangeo Bhubaneshwar Stock Exchangeo Calcutta Stock Exchangeo Cochin Stock Exchangeo Coimbatore Stock Exchangeo Delhi Stock Exchangeo Guwahati Stock Exchangeo Hyderabad Stock Exchangeo Jaipur Stock Exchangeo Ludhiana Stock Exchangeo Madhya Pradesh Stock Exchangeo Madras Stock Exchangeo Mangalore Stock Exchangeo Meerut Stock Exchangeo OTC Exchange Of Indiao Pune Stock Exchangeo Saurashtra Kutch Stock Exchangeo Uttar Pradesh Stock Exchangeo Vadodara Stock Exchange

1.2 Historical Background of Stock ExchangesEarliest records of securities trading in India are available from the end of theeighteenth century. Before 1850, there was business conducted in Mumbai in shares of theEast India Company, which were considered as securities for buying, selling\ & exchange.The shares of the Commercial Banks, mercantile bank & the Bank of Bombay were some of the prominent shares traded.

In 1850, the Companies Act was passed & that heralded the commencement of the joint stock companies in India.

It was the American civil war that helped Indian to establish broking business.The leading broker, Shri Premchand Roy Chand designed & developed the procedure to be

followed while dealing in shares.In 1874, the Dalal Street became the permanent place for meeting the brokers to

conduct their business. The brokers organized an association on 9 th July 1875 known asNative share 7 stock Brokers Association to protect the stock & interest of the native

brokers. That was the foundation of the Stock Exchange, Mumbai. The Exchange wasestablished with 318 members. The Stock Exchange, Mumbai did not have to look back as itstarted riding high in the ladder of growth. In January 1899, Mr. James M.Maclen, M.Pinaugurated the Brokers hall.

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http://www.surfindia.com/finance/bombay-stock-exchange.htmlhttp://www.surfindia.com/finance/national-stock-exchange.htmlhttp://www.surfindia.com/finance/regional-stock-exchanges.htmlhttp://www.surfindia.com/finance/ahmedabad-stock-exchange.htmlhttp://www.surfindia.com/finance/bangalore-stock-exchange.htmlhttp://www.surfindia.com/finance/bhubaneshwar-stock-exchange.htmlhttp://www.surfindia.com/finance/calcutta-stock-exchange.htmlhttp://www.surfindia.com/finance/cochin-stock-exchange.htmlhttp://www.surfindia.com/finance/coimbatore-stock-exchange.htmlhttp://www.surfindia.com/finance/delhi-stock-exchange.htmlhttp://www.surfindia.com/finance/guwahati-stock-exchange.htmlhttp://www.surfindia.com/finance/hyderabad-stock-exchange.htmlhttp://www.surfindia.com/finance/jaipur-stock-exchange.htmlhttp://www.surfindia.com/finance/ludhiana-stock-exchange.htmlhttp://www.surfindia.com/finance/madhya-pradesh-stock-exchange.htmlhttp://www.surfindia.com/finance/madras-stock-exchange.htmlhttp://www.surfindia.com/finance/mangalore-stock-exchange.htmlhttp://www.surfindia.com/finance/meerut-stock-exchange.htmlhttp://www.surfindia.com/finance/otc-exchange-india.htmlhttp://www.surfindia.com/finance/pune-stock-exchange.htmlhttp://www.surfindia.com/finance/kutch-stock-exchange.htmlhttp://www.surfindia.com/finance/uttar-pradesh-stock-exchange.htmlhttp://www.surfindia.com/finance/vadodara-stock-exchange.htmlhttp://www.surfindia.com/finance/bombay-stock-exchange.htmlhttp://www.surfindia.com/finance/national-stock-exchange.htmlhttp://www.surfindia.com/finance/regional-stock-exchanges.htmlhttp://www.surfindia.com/finance/ahmedabad-stock-exchange.htmlhttp://www.surfindia.com/finance/bangalore-stock-exchange.htmlhttp://www.surfindia.com/finance/bhubaneshwar-stock-exchange.htmlhttp://www.surfindia.com/finance/calcutta-stock-exchange.htmlhttp://www.surfindia.com/finance/cochin-stock-exchange.htmlhttp://www.surfindia.com/finance/coimbatore-stock-exchange.htmlhttp://www.surfindia.com/finance/delhi-stock-exchange.htmlhttp://www.surfindia.com/finance/guwahati-stock-exchange.htmlhttp://www.surfindia.com/finance/hyderabad-stock-exchange.htmlhttp://www.surfindia.com/finance/jaipur-stock-exchange.htmlhttp://www.surfindia.com/finance/ludhiana-stock-exchange.htmlhttp://www.surfindia.com/finance/madhya-pradesh-stock-exchange.htmlhttp://www.surfindia.com/finance/madras-stock-exchange.htmlhttp://www.surfindia.com/finance/mangalore-stock-exchange.htmlhttp://www.surfindia.com/finance/meerut-stock-exchange.htmlhttp://www.surfindia.com/finance/otc-exchange-india.htmlhttp://www.surfindia.com/finance/pune-stock-exchange.htmlhttp://www.surfindia.com/finance/kutch-stock-exchange.htmlhttp://www.surfindia.com/finance/uttar-pradesh-stock-exchange.htmlhttp://www.surfindia.com/finance/vadodara-stock-exchange.html


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After the 1 st World War, the stock exchange was housed properly at an old building near the Town Hall. In 1928 the present premises were acquired surrounded byDalal Street, Bombay Samacher Marg and Hamman Street. At new building the presentlocation was constructed and was occupied on 1 st December 1930.

In 1950, the regulation of business in securities and stock exchanges became anexclusively Central Govt. subject following adoption of the constitution of India. In 1956,the Parliament of India passed the Security Contract (Regulation) Act. To regulate thesecurity market, SEBI was initially established on October 12, 1988, as an interim boardunder control of the Ministry of Finance, Govt. of India. In 1992 the SEBI Act came intoexistence.

In 1992 Over the Counter Exchange of India (OTCEI) came into existence wheresecurities of small companies are listed. In 1994, National Stock Exchange (NSE) cameinto existence, which brought an end to the open out cry system of trading securities whichwas in vogue for 150 years, and introduced Screen Board Trading (SBT) system. BSEs

one line trading system was launched on March 14, 1995. Now the trading in securities isdone using screen based trading system through duly authorized members of the exchange.

1.3 About the Organiation

The Gauhati Stock Exchange Ltd. (GSE) is located in Guwahati , Assam , India . Itwas incorporated on 29 November 1983 and it was recognized by the Government of India on1 May 1984 . Those were the heydays of the Indian stock market and the GSE really took off like anything. It was very vibrant and progressive. It was the fourth Stock Exchange in Indiato computerize. In the eighties when the Reliance tapped the investor market to raiseresources, GSE contributed almost ten percent of the total resources mobilized by reliancethrough numerous trances. Even local companies, like Premier Cryogenics and Prag Bosimisaw their IPOs oversubscribed eight times through GSE.

1.3.1 Companys Objective: - GSE has some organizational objective,which are:

(i) It has a mission to regulate and control the transactions of business in stocks, inshares, debentures, derivatives and other like securities and future and option transactions inany of such securities on the stock exchange;

(ii) It will protect and support the character and status of brokers, dealers and jobbersin stocks, shares and like securities and to further the interest of both brokers and the publicdealing in Guwahati and elsewhere in Assam and in India in stocks, shares and likesecurities .

1.3.2 Achievements of the Gauhati Stock Exchange

Limited:-

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http://en.wikipedia.org/wiki/Guwahatihttp://en.wikipedia.org/wiki/Assamhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/November_29http://en.wikipedia.org/wiki/November_29http://en.wikipedia.org/wiki/1983http://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/May_1http://en.wikipedia.org/wiki/1984http://en.wikipedia.org/wiki/Guwahatihttp://en.wikipedia.org/wiki/Assamhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/November_29http://en.wikipedia.org/wiki/1983http://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/May_1http://en.wikipedia.org/wiki/1984


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Though this stock exchange is situated at a remote corner of the country, GSE has beenrendering services to the investors of the North East Region. In spite of various location andinfrastructural bottlenecks, the GSE has been able to achieve some mile stones.

Increase its membership from 21 to 200 at one point of time, thus it is providingemployment opportunities.

Fully computerized with system integration (LAN & WAN) controlled by SYSTEMDEPARTMENT.

Implement a strict margin system thereby managing he risk of the brokerseffectively.

WAN connectivity through RF (MAIN) / ISDN LINE (BACKUP)/ LEASED LINEFOR ONLINE TRADING in National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) (Mumbai).

Setup investors service cell to provide service to investors, redress their grievancesand depart various information of interest of them.

Include the investment cult by increasing investors population in the region throughvarious investors awareness programmes, seminars, conferences etc. Develop an investors base for mobilizing fund to some industries set up in this

region. In future, it will help chanallising net saving into capital market, which in turn will

help installation of more industries, solving employment in the long run. It will increasing investment climate which will install confidence into enterprises to

come in a big way to put up industrial units in our region. Now days, the GSE member can operate the trading from any corner of the country. It has separate Investors Protection Fund, Investors Service Fund and Settlement

Guarantee Fund for full protection to the investing public .

1.3.3 Services Offered by GSE: Access to Cash market in NSE & BSE Access to derivatives market in NSE Depositary Participant (DP) services in CDSL. Investor Services Education Programme Training Programmes on Capital Markets, Depository & Derivatives. Distribution of mutual fund products. Primary Market offerings.

1.3.4 Departments of GSE: Personal Cell Accounts Cell Listing Cell Depository Participants Operation System Cell Investors Service Cell Market Surveillance Department Members Security Cell

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Training Institution which is coming very shortly (by next month itself)

1.3.5 Financial Results of the organization : -Profit/loss for the year ended: - Rs.2007..18,514,592.842008..16,873,762.582009..17,651,209.53

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Section BResearchDesign


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2.1 Introduction : -In this chapter, it is discussed in detail about the assigned topic, objective of the study, scopeof the study, research methodology used i.e., data source, research design and limitation of the study are described.

2.2 Research Objective:-

(a) To have an idea about the various important Articles and Bye-laws of the Gauhati Stock Exchange.

(b) To gather some knowledge about the Bye-laws of trading on Exchange.(c) To understand the settlement process in a better way.(d) To understand the trends of trade in the stock market in the last few years.

2.3 Scope of Research:-In this study, the Articles and Bye-laws of Gauhati Stock Exchange have been analyzed. Itgives an idea about the various courses of conduct made in the stock market in trading and

settlement part. And also, the various rules regulating trading and settlement have also beendiscussed here. Besides that, the trends of trade with the passage of time can also be knownfrom the analysis.

2.4 Research Methodology:-

The research conducted in the above case is an Analytical one. Here information has beengathered from the related sources to analyze them in a suitable order. Moreover, some datahave also been analyzed to know the market movement in a better way.

2.4 Data Source: -The source of information is both primary and secondary. The secondary data has been takenthrough the help of internet to get the figures required for the research purpose.

2.5 Limitations of the study: -

A portion of the study has been conducted with the help of different data collected fromsecondary sources. So, there is a possibility of including few less accurate or appropriateinformation in the report.

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Secondly, the time limit of the training is only 8 weeks, within such a small time it isvery uphill task to prepare a project on such an important and wide subject. Hence, the time

period is also a limitation for the project.

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Section CAnalysis of

the topic


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3.1 Introduction: -BYE-LAWS

PREAMBLE

In exercise of the powers conferred under the Securities Contracts (Regulation) Act,

1956, the Securities Contracts (Regulation) Rules, 1957, and the Securities and Exchange

Board of India Act, 1992, The Gauhati Stock Exchange Ltd., Guwahati, has made the

following Bye-laws which have been approved by the Securities and Exchange Board of

India.

These Bye-laws are known as The Bye-laws of The Gauhati Stock Exchange,

Guwahati and are for the sake of brevity and convenience, herein referred to as these Bye-

laws.

These Bye-laws came into force from the date of their publication in the Gazette of

India as per he provisions of the Securities Contracts (Regulation) Act, 1956.

These Bye-laws shall at all times be read subject to the provisions of the Securities

Contracts(Regulation) Act, 1956{hereinafter referred to as SCRA}, the Securities

Contracts(Regulation) Rules, 1957{hereinafter referred to as SCRR}, and the Securities

and Exchange Board of India Act, 1992 {hereinafter referred to as SEBI Act}as amended

from time to time and the rules, regulations, directives, orders, guidelines, norms and

circulars issued by the Government of India and/or SEBI there under from time to time and

in case of any inconsistency between these Bye-laws and any of the said enactments then the

specific enactments shall prevail.

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3.1.1 Who can be a Member:

Individual Corporate entity

Conditions for eligibility for becoming a member:

The selection criteria for individual members and directors in case of corporate

members are:-Qualifications for individuals 1. Minimum age of 21 years.2. Citizenship of India; provided that the Governing Board may in suitable case relax

this condition.3. Not been adjusted bankrupt or insolvent.4. Not compounded with his creditors.5. Not been convicted of an offence involving fraud or dishonesty.6. Not engaged as principal or employee in any business other than of securities.7. Not been at any time expelled or declared a defaulter by any other Stock Exchange.8. Either matriculate or has the 10 plus 2 years qualification. Generally, preference is

given to professionally qualified persons.

Conditions for getting corporate membership of the stock exchange:-

A company as defined in the Companies Act, 1956 shall be eligible to be elected as amember of a stock exchange if-

1. such company is formed in compliance with the provision of selection 322 of the saidAct,

2. a majority of the directors of such company are shareholders of such company andalso members of that stock exchange; and

3. the directors of such company, who are members of that stock exchange, have ultimateliability in such company:

A company as defined in the Companies Act, 1956 (1 of 1956), shall also be eligibleto be elected as a member of a Stock Exchange if-

1. such company is formed in compliance with the provisions of Section 12 of the saidAct;

2. such company undertakes to comply with such financial requirements and norms asmay be specified by SEBI for the registration of such company under sub-section (1) of section 12 of SEBI Act, 1992,

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3. the directors of the company are not disqualified for being members of a stock exchange under the provisions of the Act and the Director of the company had not held theoffices of the Director in any company which had been a member of the stock exchange andhad been declared defaulter or expelled by the stock exchange; and

4. not less than two directors of the company are persons who possess a minimum two

years experience-(a) in dealing in securities; or (b) as portfolio managers; or as investment consultants.

3.1.2 Trading Members Capital: - The trading members are required tomaintain the under mentioned capitals with the Exchange:

(i) BASE MINIMUM CAPITAL (BMC): BMC of Rs.10 lakh is to be kept by all the TradingMembers and the same is not available for adjustment towards margin obligations.

(ii) TRADE GUARENTEE FUND (TGF): Trading Members are also required to depositwith the Exchange a sum of Rs.10 lakhs towards his contribution to the Trade GuaranteeFund(TGF). The Trading Members are allowed to deposit cash/FDRs/Bank Guarantee (i.e.Cash & Cash Equivalent) towards their contribution to TGF. TGF will be available for adjustment towards margins (i.e. for taking trading exposure).

(iii) ADDITIONAL CAPITAL (AC): For availing higher trading limits, Trading memberscan deposit additional capital in form of cash & non-cash equivalents. AC will be availablefor adjustment towards margins.

3.2 HISTORY: -The trading on stock exchanges in India used to take place through open outcry

without use of information technology for immediate matching or recording of trades. Thiswas time consuming and inefficient. This imposed limits on trading volumes and efficiency.In order to provide efficiency, liquidity, and transparency, NSE introduced a nation-wide on-line fully-automated screen based trading(SBTS) where a member can punch into thecomputer quantities of securities and the prices at which he likes to transact and thetransaction is executed as soon as it finds a matching sale or buy order from a counter party.SBTS electronically matches orders on a strict price/time priority and hence cuts down ontime, cost and risk of error, as well as on fraud resulting in improved operational efficiency.It allows faster incorporation of price sensitive information into prevailing prices, thusincreasing the informational efficiency of markets. It enables market participants, irrespectiveof their geographical locations, to trade with one another simultaneously, improving thedepth and liquidity of the market. It provides full anonymity by accepting orders, big or small, from members without revealing their identity, thus providing equal access toeverybody. It also provides a perfect audit trial, which helps to resolve disputes by logging inthe trade execution process in entirety. This diverted liquidity from other exchanges and inthe very first year of its operation, NSE became the leading stock exchange in the country,impacting the fortunes of other exchanges and forcing them to adopt SBTS also. Today Indiacan boast that almost 100% trading takes place through electronic order matching.

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Technology was used to carry the trading platform from the trading hall of stock exchangesto the premises of brokers. NSE carried the trading platform further to the PCs at theresidence of investors through the Internet and to handheld devices through WirelessApplication Protocol (WAP) for convenience of mobile investors. This made a hugedifference in terms of equal access to investors in a geographically vast country like India.

Talking about BSE, the exchange had an open outcry trading till March 1995, wheremember-brokers used to assemble in a trading ring for doing transactions in securities. It hadswitched over to a fully automated computerized mode of trading known as BOLT (BSE OnLine Trading) System w.e.f. March 14, 1995. Through the BOLT system, the member-

brokers enter orders for purchase or sell of securities from Trader Work Stations (TWSs)installed in their offices instead of assembling in the trading ring. The trading in securities atthe exchange is conducted in an anonymous; environment and the counterparty identity arenot revealed. The buyers and sellers of securities do not know the names of each other. The

member-brokers of the Exchange were permitted to open trading terminals only within thecity limits of Mumbai till 1996. Later the Exchange obtained permission from SEBI for expansion of its BOLT network to locations outside Mumbai.

3.3 Regulatory Framework related with Tradepractices in Securities MarketThe four main legislations governing the securities market are: -

(a) the Securities Contracts (Regulation) Act, 1956, which provides for regulations of transactions in securities through control over stock exchanges;(b) the Companies Act, 1956, which sets out the code of conduct for the corporate sector inrelation to issue, allotment and transfer of securities, and disclosures to be made in publicissues;(c) The SEBI Act, 1992 which establishes SEBI to protect investors and develop and regulatesecurities market; and(d) the Depositories Act, 1996 which provides for electronic maintenance and transfer of ownership of dematerialized securities.

Securities Contracts (Regulation) Act, 1956

It was enacted to prevent undesirable transactions in securities by regulating the businessdealing therein and by providing for certain other matters connected therein. This is the

principal Act, which governs the trading of securities in India. It provides for direct andindirect control of virtually all aspects of securities trading and the running of stock exchanges and aims to prevent undesirable transactions in securities. It gives CentralGovernment regulatory jurisdiction over:

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(a) stock exchanges through a process of recognition and continued supervision,(b) contracts in securities, and(c) Listing of securities on stock exchanges.

As a condition of recognition, a stock exchange complies with conditions

prescribed by Central Government. Organized trading activity in securities takes place on aspecified recognized stock exchange. The stock exchanges determine their own listingregulations which have to conform to the minimum listing criteria set out in the Rules.

SECURITIES CONTRACT (REGULATION) RULES,1957

The Central Government has made Securities Contracts (Regulation) Rules, 1957, asrequired by sub-section (3) of the Section 30 of the Securities Contracts (Regulation) Act,1956 for carrying out the purpose of the Act. The powers under the SCR, 1957 are

exercisable by SEBI.

SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

To ensure effective regulation of the market, SEBI Act, 1992 was enacted to establishSEBI with statutory powers for:

(a) protecting the interests of the investors in securities,(b) promoting the development of the securities market, and(c) regulating the securities market.

SEBI has been obligated to protect the interest of the investors in securities and to promote and development of, and to regulate the securities market by such measures, as itthinks fit. SEBI, in particular, has powers for:-

(a) regulating the business in stock exchanges and any other securities markets;(b) registering and regulating the working of stock brokers, sub-brokers, share transfer

agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner;

(c) registering and regulating the working of the depositories, participants, custodiansof securities, foreign institutional investors, credit rating agencies and such other

intermediaries as SEBI may, by notification, specify in this behalf;

SEBI (STOCK BROKERS & SUB-BROKERS) RULES, 1992

The Central Government has made SEBI (Stock-brokers and Sub-brokers) Rules,1992 under the powers conferred by section 29 of SEBI Act, 1992. These rules provide these

provide the definition of a Stock-broker and a Sub-broker and specify that they shall not buy,sell and deal in securities, unless they hold a certificate granted by SEBI.

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SEBI (INSIDER TRADING) REGULATIONS, 1992

Insider trading is prohibited and is considered an offence vide SEBI (Insider Trading)

Regulations, 1992. The Regulations prohibits an insider from dealing (on his own behalf or on behalf of others) in securities on the basis unpublished price sensitive information,communicating such information and also counseling any other person to deal in securities of any company on the basis of such information.

In order to strengthen insider-trading regulations, SEBI has proposed a code of conduct for listed companies, its employees, analysts, market intermediaries and professionalfirms. The regulations also requires initial and continual disclosure of shareholding bydirectors or officers, who are insiders, and substantial shareholders (holding mare than 5%shares/voting rights) of listed companies. In this regard, SEBI can take any of the followingactions:

(a) directing the insider not to deal in securities in any particular manner;(b) prohibiting the insider from disposing of any of the securities acquired in

violation of these regulations;(c) restraining the insider to communicate or counsel any person to deal in

securities.

Any person aggrieved by an order of SEBI, on and after the commencement of thesecurities laws (Second Amendment) Act, 1999 (i.e., after 16 th December 1999), under theseregulations may prefer an appeal to a Securities Appellate Tribunal (SAT) jurisdiction in thematter.

SEBI (PROHIBITION OF FRAUDULENT AND UNFAIR TRADEPRACTICES RELATING TO SECURITIES MARKETS)REGULATIONS, 1995

This act enables SEBI to investigate into cases of market manipulation and fraudulentand unfair trade practices. These regulations empower SEBI to investigate into violationscommitted by person, including an investor, issuer or an intermediary associated with thesecurities market. The regulations specifically prohibit market manipulation, misleading

statements to induce sale or purchase of securities, unfair trade practices relating tosecurities. SEBI can conduct investigation upon information received by it, through aninvestigation officer in respect of conduct and affairs of any person dealing,

buying/selling/dealing in securities. Based on the report of the investigating officer, SEBI caninitiate action for suspension or cancellation of registration of an intermediary. SEBI, onreceipt of the report from the investigating officer may issue directions for ensuring duecompliance with the provisions of the Act, Rules and Regulations made thereunder. Thedirections may be issued for the following purposes:

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(a) directing the person concerned not to deal in securities in any particular manner;

(b) requiring the person concerned to call upon any of its of its officers, other employees or representatives to refrain from dealing in securities in any particular manner;

(c) prohibiting the person concerned from disposing of the securities acquired incontravention of these regulations;

(d)directing the person concerned to dispose of any such securities acquired in any suchcontravention of these regulations, in such manner as SEBI may deem fit, for restoring thestatus-queue ante.

SEBI may, in the circumstances specified in Regulation 11, and without prejudice toits power under Regulation 12, initiate action for suspension or cancellation of registration of an intermediary holding a certificate of registration under section 12 of the Act.

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25

SectionDBye-laws of

trading on theexchange


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The Bye-laws relating to trading on the exchange of the Gauhati Stock Exchange are:

4.1 Trading days

The exchange shall be open on all days except on such exchange holidays as the exchangeauthority may declare in advance, or as may be specified by SEBI. The days on which theATS of the exchange shall be available for trading and securities other than mock tradingshall be called as Trading Days

4.2 Alteration or cancellation of Exchange Holidays

In exceptional circumstances and for reasons to be recorded in writing the Managing Director may at any time:

(i) Alter or cancel any of the exchange holidays fixed in accordance with the Bye-laws.

(ii)Keep the ATS of the exchange available for trading on any day not withstanding that suchday had earlier been declared as Exchange Holiday.

(iii)Close trading on the ATS of the exchange for one day.

4.3 Trading Segments

The trading segment of the exchange may include cash market, debt market, governmentsecurities market, money market, futures and options market and other segments, as may bedecided by the Governing Board/Relevant Authority and as may be specified in the relevant

regulations from time to time. The Governing Board or the Managing Director may admitsecurities for dealing on the respective trading segments of the exchange, as may be eligibleunder the Securities Contracts (Regulation) Act, 1956.

4.4 Restrictions on trading

The Governing Board or Managing Director or the Relevant Authority may, from time totime impose such restrictions on trading in such securities or on such trading member, as may

be provided in the Bye-laws relating to risk management.

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4.5 Trading Sessions

The Governing Board or Managing Director or the Relevant Authority may prescribedifferent trading sessions on the ATS of the exchange and also decide on the timings and

operational requirements for the same, as may be provided in the relevant Regulations fromtime to time. The Governing Board or Managing Director or the Relevant Authority mayreduce, extend or otherwise alter the timings of the trading sessions for any particular tradingday.4.6 Eligibility to trade

Managing Director or the Relevant Authority may, at his / its discretion, grant permission tothe trading member of the exchange or their authorized persons or approved users to tradethrough the TWS connected to the ATS of the Exchange. The trading member shall be solelyresponsible for all the transactions done by or through the respective TWSs on the exchange ,subject to the provisions contained in this bye-laws.

4.7 Permission to trade through trader workstations

No person shall be permitted to trade through the TWS connected to the ATS unless such person complies with the requirements prescribed in the relevant Regulations or with suchrequirements as the Governing Board or Managing Director or Relevant Authority may

prescribe from time to time.

4.8 Trading during good behavior

A person shall be allowed to trade on the ATS of the exchange only during good behavior and shall be bound to observe the provisions contained in the rules, Bye-laws andRegulations of the exchange. The Governing Board or Managing Director or the RelevantAuthority may, in its / his absolute discretion, refuse any person to trade on the ATS andmay, at any time, withdraw or terminate the right of trading of any such person for anyreason whatsoever, to be recorded in writing for internal records.

4.9 Management of the ATS

The management of the ATS shall be under the charge of the employees of the exchange or such other agency authorized by the exchange on this behalf.

4.10 Prices

Prices of the transactions in securities dealt in on the ATS of the exchange shall be recordeddaily in the manner , as may be prescribed in the relevant Regulations from time to time. No

price of any transaction done on the exchange shall be recorded unless it is made in theregular course of trading on the ATS.

4.11 Daily official list

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The daily official list of prices shall be issued by or under the authority of the exchange. Suchdaily official list of the prices may be published or provided in such media as may be decided

by the exchange from time to time, or may be made available on the official website of theexchange.

4.12 Trading Facility

Transactions on the ATS of the exchange ay be effected through order driven, quotedriven( trough market makers or through jobbers) and or other such systems as the Exchangemay provide for training and as ay be specified in the relevant regulations from time to time.

The exchange at its discretion may provide the ATS to its trading members and their sub brokers, revisers, authorized persons and authorized users, which shall be on a non-discriminatory basis.

No trading member shall have any title, right or interest in the ATS of the Exchange, itsfacilities and software and the information provided on the ATS and no such claim shall lieagainst the exchange at any time.

The permission to use the ATS may be given to a trading member, subject to a compliancewith such terms and conditions as the Exchange may prescribe from time to time and as may

be specified in the relevant regulations which may, inter alia, include payment of suchdeposits and / or charges, as may be provided in the relevant regulations from time to time.

A trading member shall not by himself or through any person on his behalf publish, supply,show or make available to any other person or reprocess , retransmit, store or use thefacilities of the ATS.

4.13 Registration and De-registration of Approved Users

Trading members shall allow only their sub-brokers, authorized persons and / or approvedusers to operate the TWS approved by the Exchange, subject to the following conditions:

(i) The appointment of users by a trading member and approval thereto by the Exchangeshall be subject to such terms and conditions and submission of applications in such forms asthe Relevant Authority may prescribe from time to time.

(ii) The Exchange may, at its discretion, de-register sub-brokers, remisiers, authorized persons and approved users of a trading member for failure to comply with the applicable provisions of the Rules, Bye-laws and Regulations, as may be in force from time to time, andthe concerned trading member shall continue to be liable for acts of commissions and / or omissions and / or loss / damage consequent to the de-registration, for such acts of

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commissions and / or omissions and / or loss / damage committed by such person/s upto thetime of de-registration by the Exchange.

(iii) The Relevant Authority shall have the right to disallow any person from being registeredas a sub-broker, remisier, an authorized person or an approved user, without assigning any

reason whatever, and may allow registration with such conditions, as may be deemednecessary by the Relevant Authority.(iv) No person shall be appointed at any time as a sub-broker, remisier, an approved personor an approved user by more than one trading member.

(v) The Relevant Authority shall have the power to prescribe different levels of usage on theATS, provisions for enquiry on the TWS, provision for order entry, etc. by the sub-brokers,remisiers, an authorized person or approved user of member.

4.14 Operational Parameters for Trading

The Managing Director or Relevant Authority may prescribe from time to time in therelevant Regulations the operational parameters regarding transactions in securities on theATS of the Exchange. Such operational parameters may include:

(i) Determination of functional details of the TWS including the system design, user infrastructure, user interface and system operations .

(ii) Limits on the spread between bid and offer rates

(iii) Fixation of market lots and /or minimum quantity of securities which may be offered to be bought or sold.

(iv) Fixation of tick sizes

(v) Determination of the types of trades permitted for a trading member and for a security.

(vi) Specifications of different order books, types of orders, order conditions and other detailsrelated to orders and trades and other matters, which may affect smooth operation of trading in securities keeping inn view the public interest.

4.15 Loss of access to ATS

In the event of a failure or malfunctioning of a trading members TWS and / or loss of accessto the ATS, the Exchange may, at its discretion, and without any guarantee, undertake on

behalf of the trading member to close-out the outstanding transactions of the trading member on a valid request received from such trading member, subject to such terms and conditionsas the Exchange may impose from time to time.

4.16 Loss of closing out-Trading members responsibility

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The trading member shall be fully accountable for the closing out transactions affected by theexchange on his behalf and shall indemnify the exchange against any loss or cost arising outof or incidental to such close out of transactions, either directly or indirectly.

4.17 Maintenance of Relevant Records

A trading member shall maintain the relevant records relating to the orders received from hisclient or modifications there of, as may be specified in the chapter relating to compliancefrom time to time.

4.18 Trade management

Trading may be allowed on the ATS in such securities as may be admitted to dealings on theExchange and for such categories of trading members, trade types, market types, settlement

periods and for such trading hours, as the Managing Director or Relevant Authority mayspecify from time to time or as may be provided in the Regulations from time to time.

4.19 Trading Member Liable for Trades

A trading member shall be liable for all the trades executed on the ATS arising out of ordersentered into the system by him. The trading member shall be solely responsible for all theacts of commission and / or omission of authorized persons or approved users, employeesand other persons deployed by such trading members, sub-brokers, remisiers, in relation to

performance of obligations arising therefrom connected therewith and incidental to such actsof commission and / or omission.

4.20 Trades Irrevocable

Trades executed on the ATS are irrevocable and locked-in and shall be cleared and settled inaccordance to the Rules, Bye-laws and Regulations of the Exchange. The Exchange may,however, by a notice annul the trades on an application by a trading member in that behalf. If the Governing Board or Managing Director is satisfied, after hearing the other tradingmember /s to the trades, that the trades are required to be annulled on account of fraud or willful misrepresentation or the material mistake in the trade.

4.21 Order validation

Orders placed on the ATS shall be subject to such validation checks relating to quantity or value etc., as may be prescribed in the relevant Regulations from time to time.

4.22 Matching Rules

The Exchange may from time to time specify in the relevant Regulations the rules or principles to be applied for matching orders on the ATS of the Exchange, which may vary for the different order books.

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4.23 Types of Transactions Allowed

Save as otherwise provided, the following types of transactions in securities may be allowed by the Governing Board or Relevant Authority from time to time:

For spot delivery contract as defined in the SCRR

For hand delivery, that is, delivery of securities and payment of funds on the prescribed date,as may be notified by the Exchange from time to time, which date shall not be more thansuch number of days following the date of the transaction as may be specified by SEBI fromtime to time.

For rolling statement, i.e delivery of securities and payment of funds on such dates, followingthe date of such transaction, as may be notified by SEBI / Exchange / Clearing Agency fromtime to time.

4.24 Transactions not allowed

Transactions having any of the following characteristics shall not be allowed and shall beliable to be excluded from the purview of the Settlement Guarantee Fund:

Transactions for carry over of securities from one settlement to another between two or moretrading members, whether done on the ATS or not, structured deals, cross deals, negotiateddeals, financing or financial deals, or deals affected to manipulate or subvert the fair price of a security or orders of two or more clients matched by a trading member within his office or as may be transacted on a trade for trade basis directly between the buyer and the seller andwhose settlement maybe done through the clearing agency or directly between the buyingtrading member and selling trading member.

4.25 Transactions in Government Securities andDebentures

Transactions in Government Securities and in bearer and registered debentures admitted todealings on the Exchange may be for spot delivery or for rolling statement or for handdelivery. Transactions in Government Securities and in bearer and registered debentures shall

be made through the ATS of the Exchange or through any other automated trading

mechanism established with the approval of the relevant Regulatory authority, and thedelivery of such Government Securities and bearer and registered debentures shall be madein physical form or in demat form, as may be prescribed by SEBI and / or any other regulatory authority from time to time.

4.26 Suspension of Trading

The Exchange shall intimate to the other stock exchanges immediately about suspension of trading in any security by it for market manipulation, price rigging, or any other similar

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reason. Where information about suspension of trading in any security for reasons such asmarket manipulation, price rigging or any other similar reason is received by the Exchangefrom any other stock exchange, the Exchange shall ipso facto suspend trading in suchsecurity, if allowed for trading without notice to the issuer.

4.27 Use of technologyThe Exchange shall from time to time specify necessary norms and requirements relating touse of technology, which may include equipment, software, network, etc., to ensure safety,security and integrity of the ATS provided by the Exchange so as not to endanger or harm inany way the interest of investors and / or of the Exchange.

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SectionEArticles of

Association


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1. Title and Commencement

1.1 This Scheme shall be called The Gauhati Stock Exchange Limited (Corporatisation and

Demutualisation) Scheme, 2005 (hereinafter referred to as "this Scheme").

1.2 This Scheme shall have effect on its publication under sub-section (4) of Section 4B of

the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as "SCRA").

1.3 The Gauhati Stock Exchange Limited (herein after referred to as GSE) shall be

corporatised and demutualised in accordance with this Scheme on and from the Appointed

Date as may be notified by the Securities and Exchange Board of India (hereinafter referred

to as SEBI) in respect of GSE under Section 4A of the SCRA:

Provided that the activities specified in the respective clauses of this Scheme shall be

implemented as per the time schedule specified in those clauses.

2. Definitions

In this Scheme, unless the context otherwise requires, -

2.1 Due Date" means the date, as may be determined by the Council of Management of

GSE, which shall not be later than 3 months from the date of publication of the order under

sub-section (7) of section 4B of the SCRA .

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2.2 "Gauhati Stock Exchange Limited " (GSE) means the company limited by guarantee

registered under the Companies Act, 1956, having its principal place of business at Saraf

Building Annexe, A.T. Road, Gauhati 781 001 and recognised as a stock exchange by the

Central Government under the SCRA, and which shall be re-registered as a company limited

by shares, in pursuance of clause 3 of this Scheme.

2.3 "Governing Board " means the Board of Directors of GSE.

2.4 "Member " means a person who is a member of GSE on the day preceding the date of

re-registration, as per the register of members maintained by it.

2.5 "Shareholder " means a person who holds any equity share(s) of GSE.

2.6 "Trading Member " means a stock broker of GSE and registered with SEBI as such

under the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992.

2.7 Words and expressions used and not defined in this Scheme but defined in the SEBI

Act, 1992, the Depositories Act, 1996, the SCRA, the Companies Act, 1956, the Rules and

Regulations made under these Acts, the Memorandum and Articles of Association, Rules,

Bye-laws and Regulations of GSE shall have the same meanings respectively assigned to

them in the above mentioned Acts, Memorandum and Articles of Association, Rules, Bye-laws and Regulations.

3. Re-registration

3.1 GSE shall re-register itself, prior to Due Date, as a company limited by shares under

section 12 of the Companies Act, 1956, in the name and style of Gauhati Stock

Exchange Limited, in accordance with section 32 of the Companies Act, 1956.

3.2 The Members, as may be identified by the Council of Management of GSE, shall

each subscribe to and pay for 1,000 fully paid up equity shares of Rs. 10/- each for

cash at par, for the purpose of its re-registration .

4. Governing Board

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4.1 The first Governing Board on re-registration shall comprise of Directors as are named

as first directors in the Articles of Association of GSE, subject to the condition that

the representatives of the Members do not exceed one-fourth of the total strength of

the Governing Board.

4.2 The Governing Board, on and from the Due Date, shall be constituted in accordance

with the provisions of the Articles of Association of GSE in force from time to time:

Provided that

(i) the representation of Trading Members does not exceed one-fourth of the total

strength of the Governing Board, and the remaining directors are appointed in the

manner as may be specified by SEBI from time to time, and

(ii) the Chief Executive, by whatever name called, is an ex-officio director.

4.3 Notwithstanding anything contained in clause 4.2, SEBI may nominate directors onthe Governing Board as and when deemed fit.

5. Allotment of Shares 5.1 Every Member (other than the Members who have subscribed under clause 3.2) or

his nominee, as the case may be, shall be entitled to 1,000 fully paid-up equity shares

of the face value of Rs. 10/- each for cash at par of GSE.

5.2 GSE shall allot the equity shares to the entitled Members as referred to in clause 5.1or their nominees, as the case may be, by the Due Date:

Provided that the allotment to a Member suspended by GSE shall be held in abeyance

till the suspension continues.

5.3 The invitation to subscribe to, and the offer, issue and allotment of equity shares of

GSE pursuant to this clause shall not be considered as being an invitation, offer, issue

or allotment to the public.

6. Listing of Shares GSE may at any time list its securities on any recognized stock exchange.

7. Trading Rights7.1 A Member, who is registered as a stock broker on the day preceding the Due Date,

shall become a Trading Member on the Due Date.

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7.2 A Member, who is not registered as a stock broker on the day preceding the Due

Date, shall become a Trading Member on being registered as a stock broker under the

SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 within 3 months from the

Due Date.

7.3 After the Due Date, a person desirous of becoming a Trading Member shall be

admitted if he complies with requirements and brings in specified fees and deposits as

specified in the Rules, Bye-laws and Regulations of GSE.

7.4 GSE shall, for the purpose of admitting any person as a Trading Member, follow

uniform standards in terms of capital adequacy, deposits, fees, etc. irrespective of

mode of acquisition of trading rights by that person:

Provided that different standards may be followed for admission of a person as a

Trading Member who has acquired trading rights by way of transmission.

7.5 A Trading Member may surrender his trading rights to GSE in the manner specified

in the Rules, Bye-laws and Regulations of GSE.

7.6 Irrespective of the date or mode of acquisition of trading rights, the Trading Members

shall have uniform rights and privileges.

7.7 Trading Members on the Due Date shall continue to have the same rights and

privileges in respect of their clients and constituents and other members arising out of

or under any act, omission or contract or law, notification, order, direction, etc. as had

accrued to them while being Members on or before the Due Date.

7.8 Trading Members shall be bound by all obligations and liabilities towards their clients

and constituents, SEBI, GSE and other authorities or other persons arising out of or

under any act, omission or contract or law, notification, order, direction, etc. while

being Members on or before the Due Date.

7.9 It shall not be necessary for a person to be a Trading Member, in order for him to be a

Shareholder.

7.10 It shall not be necessary for a person to be a Shareholder, in order for him to be a

Trading Member.

8. Shareholding Rights

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8.1 GSE shall ensure that at-least 51% of its equity shares are held by public other than

shareholders having trading rights in the manner and within the period prescribed in

sub-section (8) of Section 4B of the SCRA.

8.2 On and from the Appointed Date, GSE shall ensure that public, other than

shareholders having trading rights, continuously hold at least 51% of equity shares.

8.3 On and from Due Date, no Shareholder, who is a Trading Member, shall have voting

rights (taken together with voting rights held by him and by persons acting in concert

with him) exceeding 5% of the voting rights in GSE.

9. Memorandum and Articles of Association, etc.9.1 The Memorandum and Articles of Association, Rules, Bye-laws and Regulations of

GSE on the day preceding the Due Date shall, unless contrary to or inconsistent with

or excluded by this Scheme, apply to it on and from the Due Date.

9.2 GSE shall incorporate the provisions of this Scheme appropriately in its

Memorandum and Articles of Association, Rules, Bye-laws and Regulations on or

before the Due Date.9.3 The Memorandum and Articles of Association, Rules, Bye-laws and Regulations of

GSE may be amended after the Due Date in accordance with the applicable laws,

provided that no such amendment is inconsistent with any provision of this Scheme.

10. Transfer of Clearing and Settlement Functions10.1 GSE shall, within two years of the Due Date, subject to the prior approval of SEBI,

transfer the duties and functions of its clearing house to a Clearing Corporation,recognised under the SCRA.

10.2 Until the duties and functions of the clearing house are transferred as provided in

clause 10.1, the clearing and settlement functions in relation to trading on GSE shall

be carried out by the clearing and settlement mechanism as used by GSE at present or

in such other manner as the Governing Board may determine.

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11. Utilisation of Assets and Reserves

11.1 GSE shall not do anything contrary to the provisions of section 4B (3) of the SCRA.

11.2 Without prejudice to the generality of the provisions in 11.1, GSE shall not use its

assets and reserves as on the date of publication of this Scheme or the proceeds from

disposal of such assets or the proceeds from disposal of successive species of assets

acquired from the proceeds of disposal of such assets for any purpose other than

discharging the current liabilities outstanding as on the date of publication of this

Scheme or the business operations of stock exchange.

12. Compliance with this Scheme12. 1 GSE shall ensure compliance with the provisions of this Scheme at all times and shall

not do anything contrary to the provisions of this Scheme.

12.2 GSE shall report compliance with the provisions of this Scheme in such manner as

may be required by SEBI from time to time.

13.

Removal of DifficultiesIf any difficulty arises in giving effect to the provisions of this Scheme, SEBI may, at

the written request of GSE, relax any of the provisions of this Scheme

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Dont be led by market rumours or get into shady transactions.

Do not sign blank Delivery instruction slip(s) while meeting security payinobligation

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SectionG Conclusion


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Conclusion : - Stock market is a place where the savers and the users if their funds come together in themarket for finance, and the rules of supply and demand are applicable and also subject toGovernment regulation. In the trading, several transfers of funds and securities take place

between various investors. And after this trading, the accounts of all those investors need to be settled within a specified time limit. SEBI has developed the rules and regulations to protect the common investors from market failures by fixing margins, capital adequacy of brokers, limits the turnover, indemnity insurance, on-line position monitoring etc .

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www.nseindia.com (website) www.bseindia.com (website) www.google.com (website) BSEs CERTIFICATION ON SECURITIES MARKET(BCSM) Securities Market (Basic) Module Work Book Research Methodology- Methods and Techniques (byC.R. Kothari) Financial Management (by Ravi M. Kishore)

Sandipan Bhattacharjee , Stock market Analyst

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Trading and Settlement in Indian Stock Market

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