dilawar khan project on share khan

7/30/2019 Dilawar Khan Project on Share Khan

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A

PROJECT REPORT

ON

STUDY OF FACTORS AFFECTING MOVEMENT OF

STOCK PRICES

At

SUBMITTED IN THE PARTIAL FULFILLMENT FOR

THE AWARD OF THE DEGREE OF

BACHELOR OF BUSINESS ADMINISTRATION

(BBA ) University of Rajasthan, Jaipur .

(SESSION 2010-11)

Submitted to; Submitted by;

Dr. Meenakshi bindal Vishnu kumar gupta

H.O.D (BBA) BBA IIIrdyear

LORDS INTERNATIONAL COLLEGE

CHIKAANI,ALWAR
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DECLARATION

I am VISHNU KUMAR GUPTA, student of BBA at Lords

international college, hereby declare that the survey report

entitled on the topic of, STUDY OF FACTORS AFFECTING

MOVEMENT OF STOCK PRICES is the result of my own

efforts & is based on the guidance given by the company

guide & faculty guide from time to time.


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PREFACE

An ounce of practical is equal to a ton of theory

It is good to have good knowledge . It is good to have good will but it is

essential to have a good training.

(Pandit Jawahar Lal Nehru)

To excel in any field practical training is integral part to imply theoretical

studies to a practical approach. It makes the individual to the actual practical

condition, which could have been impossible to be tought in classroom.

In addition technological changes we are witnessing power shift from old

hectic and weird ways of doing business. These technological development

have brought revolutionary changes in the market and also in the mindset of

the people which might be positive and encouraging for a section of society

and adverse for the others. Introduction of paper less working in stock

market and any where trading has given a fresh impetus to the market andhas secure a distinct image in the minds of the potential clients.

Sharekhan is today a key player in the online share trading market with a

market share of 20%. Unlike other big player it has scaled the new heights of

success in a short span of 5 years Currently it is giving a very stiff competition

to old established players by incorporating new and dynamic management

tactics.

It is always desirable by the management to know the perception and the new

segment if any to foray to increase the consumer base and business eventually

.I am thankful to the management for assigning such a challenging project to

me for jaipur city.


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ACKNOWLEDGEMENT

Its my privilege and pleasure to thank to all those who have

extended their full cooperation individually or collectively to me

and encouraged me to carry out this project as a part of my

training.I take this opportunity to express my gratitude towards

online division of Sharekhan ltd. as a whole. I am extremely

thankful to Mr. Subhash Kumar Jha, Regional Head, Sales for

permitting me to carry out the summer project in this organization.

I am highly grateful to Mr. Prashant kumar Sharma, Branch Head

and to Mr. Nitin Mathur, Assistant Manager for their valuable

guidance to carry out this study. I cannot ignore his valuable piece

of advise which helps me to get more deeper look of the market

and also about the working and the perception of the people in

this market. I am also very thankful to all the concerned

relationship officers and staff members who are directly or

indirectly involved in carrying out my project and have extended

their able guidance and cooperation in this project work.

Finally I thank to Miss Vibha Bhatia, lecturer Lords International

College and all other faculty members and all my colleagues those

who provided their guidance and enthusiastic support to carry outthis project report.

Vishnu kumar gupta


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EXECUTIVE SUMMARY

The sharp swings in global markets recently have rocked Indian markets

leaving investors nervous. To put matters in context, stock markets should

continue their role as allocator of capital for most productive uses. Retail

investors whose money is being invested should get a fair chance to create

wealth proportionate to their risk taking appetite. Regulators should ensure

fair play, control systemic risks and penalize fraud. The process of long-term

wealth creation should not become hostage to the avarice of a few short-term

speculators. The stock market is a barometer of the future wealth creation

capacity of the industrial enterprise system. In whatsoever manner the

industrial enterprise system and the stock markets are evolving, these things

remain the same.

Given that, why do individual stocks show volatile price movements? A stock

price moves up or down depending on whether for that day or for that period

supply exceeds demand or vice versa. It is this fragile balance in supply and

demand, which would determine the price movements for a stock and in

aggregate terms the price movement for a group of stocks or for the stock

market as a whole.

Individual stocks can be volatile if, there is extremely positive or negative

information for that particular stock which is available to traders. Or, prices

may swing if a group of traders collude, to create artificial scarcity or demand

for a stock. Finally, price movements may happen, if at a macro level, there is

national or international news, which has some impact on some stocks or the

entire market.

The current volatility is the outcome of all these factors acting together, like

Newtons Laws. Stock prices move as a function of all the above -mentioned

factors. Whats new now are how the process of global knowledge

dissemination has expanded and the reduced cost of stock market

transactions for individuals. Thanks to IT, individuals across the globe have


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access to information almost simultaneously. Technology has also made

transactions easier and cheaper. More information and ease of transactions

mean that Mr. Sure Shot Singh in Jalandhar wants to sell or buy depending

on what Mr. John Brown is doing in Manchester. Two decades ago, Indians

used to stay up past midnight to hear or see what Sunil Gavaskar was doing

on the cricket fields of Lords. Now they stay up to watch what the NASDAQ is

doing. Information on factors affecting price movements is available to more

people and they are able to act quicker, leading to steep swings in prices.

While IT has accentuated short-term movements, its medium term impact is

salutary. Information removes imperfections and lets people align investments

with risks. Collusion becomes difficult, regulation easier and systemic risks

are reduced. Despite the turbulence long-term investors have made good

returns in the past, as they will in future.

The recent volatility serves to prick this bubble of a fiction gaining currency

recently in the Indian stock markets -- that equity stocks and mutual funds are

a way to overnight riches.

Let us be clear in our minds that equity stocks and equity mutual funds offer a

way of long term financial life cycle planning. People who have invested in

these over a long period have obtained excellent returns. People who invest

in stock markets based on tabloid advice and with the greed of overnight

returns are not investors but speculators. They can, and do get, burnt. For all

the essays we may write and all that market regulators might try to do, no one

can protect a speculator against himself.

With the integration of our stock markets with international markets, the rules

of the game have changed. No one influence can guide the short-term

movements in the stock markets. As investors, we have to learn to live withvolatility.


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TABLE OF CONTENTS

CHAPTERS:

ACKNOWLEDGEMENT

II. Declaration

III.Preface

IV.Executive Summary

V. Company profile

1.Objectives of the Study

2.Research Methodology

3.Introduction

3.1.About BSE

3.2.About NSE

Opportunities available for Foreign Investors

4.Overview of the factors

5.Short Term Vs Long Term

6.Investors and Traders

7.Growth Vs Value Investing

8.Fiscal Policy and the stock markets

9.Monetary Policy and the stock markets


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10.The MSCI Index

11.Auctions

12.Management Perception

Conclusion

SIGNIFICANCE OF THE STUDY

LIMITATIONS OF THE STUDY

BIBLIOGRAPHY/REFERENCES


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COMPANY PROFILE

Sharekhan was launched by the Mumbai-based SSKI Group, which has over

eight decades of experience in the stock broking business. Sharekhan Ltd is

India's leading retail broking house with more than 679 share shops in 234

cities, and the country's premier online trading destination,

http://www.sharekhan.com/, customers enjoy multi-channel access to the

stock markets. Sharekhan offers its clients trade execution facilities for cash

as well as derivatives, on the Bombay Stock Exchange (BSE) and the

National Stock Exchange (NSE), depository services, mutual funds, initial

public offerings (IPOs), and commodities trading facilities on the MCX and the

NCDEX. The company's online trading and investment site

http://www.sharekhan.com/ was launched on Feb 8, 2000 . The site gives

access to superior content and transaction facility to retail customers across

the country. Known for its jargon-free, investor friendly language and high

quality research, the site has a registered base of over 2 lakh customers. The

number of trading members currently stands at over 3.82 Lacs.

SHAREKHAN is promoter of Bullions Industry. It possesses 100% qualified

professionals including MBA (Marketing, Finance, HR, and IT), M.Sc.

(Physics), M.A (Statistics/Mathematics), M.A (Economics) etc. Staffs. We

offer total transparency of deal and proper service to our clients. We take

integrity Seriously. SHAREKHAN is a member of MCX (Multi Commodity

Exchange), it's a leading Commodity exchange in India under Forward

Contract (Regulation) Act 1952 by Forward Market Commission
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. SHAREKHANs strives for total commitment and fair dealing with its

prospects and client through its services in an unwavering and exemplary

manner.

COMPETITORS

These are the competitors of our company: -

Motilal oswal securities

India Bulls

KARVY

Religare

Reliance Money

Anand Rathi

VISION

To be the best retail broking brand in the Indian Equities market

MISSION

To educate and empower the individual investor to make better

investment decisions through quality advice and superior service.

SSKI GROUP COMPANIES

SSKI Investor Services Ltd (Share khan)

S.S. Kantilal Ishwarlal Securities

SSKI Corporate Finance

Idream Productions


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SSKI AS AN INSTITUTIONAL BROKER

Serving Institutional InvestorsDomestic / International

In the Indian securities business since 1922.

Our institutional Research team is rated as one of the best in the industry

Rated 1st by Asia Money

Research Coverage

Amongst the widest coverages among broking houses in India.

Total coverage exceeds some 100 stocks spread over 20 sectors

Sector wise investment strategies are in place

Stock ideas are presented from time to time, in tune with overall strategy.

Active coverage of political developments, economy changes

HIGHLY RATED RESEARCH

Research team ranks very high in fund-manager surveys

Best Domestic Securities House

oEuromoney Survey July 1995

oEuromoney Survey July 1996

Top ranked Domestic Brokerage House

oAsiamoney Survey September 1994


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oAsiamoney Survey October 1998

oAsiamoney Survey October 2004

LIST OF KEY FOREIGN INSTITUTIONAL CLIENTS

Alliance Capital Management

Emerging Markets Investment Management

Edinburgh Fund Management Limited

Foreign & Colonial Emerging Markets

Goldman Sachs Investment Management

Government of Singapore Investment Corporation

Grantham, Mayo, Van Otterloo & Co.

Indosuez Asset Management

Jardine Fleming Investment Management Limited

LGT Asset Management


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Lloyd George Investment Management

Martin Currie Investment Management Limited ETC.

SERVICES PROVIDED BY THE SHAREKHAN

1. Equities and Derivatives

Our Retail Equity Business caters to the needs of individual Indian and Non-

Resident Indian (NRI) investors. Sharekhan offers broker assisted trade

execution, automated online investing and access to all IPO's.Through various types of brokerage accounts, Sharekhan offers the purchase

and sale of securities, which includes Equity, Derivatives and Commodities

Instruments listed on National Stock Exchange of India Ltd (NSEIL), The

Stock Exchange, Mumbai (BSE) and NCDEX.

Sharekhan Classic account - Comprehensive services including

research and investing guidance for independent investors.

Sharekhan Fast trade - Sharekhan is dedicated to empower Active

Traders through personal service and advanced trading technology.

Sharekhan Speed trade plus - With an extensive range of investmentproducts, you will discover an unwavering commitment to helping you invest

in India.


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2. Sharekhan equity analysis

Building and maintaining your ideal portfolio demands objective, dependable

information. Sharekhan Equity Analysis helps satisfy that need by rating

stocks based on carefully selected, fact-based measures. And because we're

not focused on investment banking, we don't have the same conflicts of

interest as traditional brokerage firms. This objectivity is only one important

difference in our ratings.

3. Depository Services

Sharekhan is a depository participant with the National Securities

Depository Limited and Central Depository Services (India)

Limited for trading and settlement of dematerialized shares. Sharekhanperforms clearing services for all securities transactions through its accounts.

We offer depository services to create a seamlesstransaction platform

execute trades through Sharekhan Securities and settle these transactions

through the Sharekhan Depository Services. Sharekhan Depository Services

is part of our value added services for our clients that create multiple

interfaces with the client and provide for a solution that takes care of all your

needs.


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FUTUREPLANS

5,00,000+ retail customersbeing serviced through centralized call

centre / web solution.

90 branches/semi branchesservicing affluent/aggressive traders

through highly skilled financial advisors.

550 independent investment managers/franchiseesservicing

90000 highly valued clients.

Strong advisoryrole through Fundamental & technical research.

New initiatives- Portfolio Management Services& Commodities

trading


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ON THE JOB TRAINING

Objective:-

The objective of the on the job training are-

To open Demat a/c according to target given to me.

To create awareness among the customers about the demat a/c & now to

open it.

To Undertake assignment/jobs along with the day-to-day functions of the

company.

To gain a deeper understanding of the work culture, deadlines, pressure

etc. of an organization.

Target: -

The target of the training is assigned us are: -

oTo inward 6 demat a/c in 1 month (26th May to 25th June) stipend Rs.2500/-

oTo open 6 demat a/c in 2nd month (26th

June to 25th

July) and stipend

received is Rs 2500/-

Strategy:-

The Strategies employed to achieve the proposal target are: -


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oGenerate the leads by work in branch and talk to the target customer and

take their contact no. and address.

oCall the customers on the given contact no. And take appointment and meet

them personally and convince them to open demat a/c.

o Arrange canopy and contact the customer.

oVisit any corporate office and take where H.R. manager appointment and

given all detail about the schemes which is offer by the Share khan like open

a/c free of cost.

oUse the references of the existing customers.

oUse personal contacts.

Achievements: -

In first month I have inward 3 demat a/c and earn stipend worth Rs.1475/-

In second month I opened 4 demat a/c, and earn stipend worth Rs.1750/-


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RESEARCH METHODOLOGY

The study will be carried on in a proper planned and systematic

manner. This methodology includes

i. Familiarization with the Stock Exchanges

ii. Observation and collection of data.

iii. Analysis of data.

iv. Conclusion and suggestion based on analysis.

OBJECTIVES OF THE STUDY


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The objective of the project is to study the various factors that affect

the movement of stock prices in the Indian Stock markets.

Analyzing the various factors would help us in understanding the

stock markets in a better manner and hence ensuring the safety of

our investments as well as maximizing returns on such investments

Types of Research are :-

1) Exploratory research

2) Descriptive research

3) Casual research

Research methodology used in this project is exploratory

research.

SOURCES OF DATA COLLECTION:


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1) PRIMARY DATA

2) SECONDARY DATA

The primary as well as the secondary sources will be used for collection of

data. In primary source of data collection the interview schedule opinion

survey will be used and in secondary source of data collection relevant

records, books, diary and magazines were used.

INTRODUCTION

One of the major factors causing todays volatility is the unanimity in

investors inclination towards new economy stocks and their shunning of old

economy stocks. This has led to a huge polarization in the markets. Todays

markets are characterized by large investment flows into companies with

emerging businesses -- which typically have low floating stock -- leading to

wild price swings.

Volatility has gone up as actively managed funds churn their portfolios more

often. Momentum investing by day traders and fund managers exacerbates

this. Soon, stocks are not bought on the basis of their fundamental value buton the greater fool theory.

Unrealistic investor expectations driven by the recent history of the boom in IT

stocks is a cause for concern: now, the quality of the stock and fundamentals

are ignored in a market characterized by daily assessment of profits and

losses. Recent price history clouds the investors minds so much that they

start treating that price as the real value of the stock and dont take a longer

perspective of the company.

The new economy stocks are a different breed. There is a lot of theme or

concept investing taking place in these stocks now. It is difficult to quantify the

future of the businesses and put a value to those. To discount all the future

cash flows and put a value to the company is passe and PEG ratios based on


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the next couple of years earnings is in. The near term high growth rate in

these businesses is overshadowing the pricing of risk and technological

obsolescence for a particular company. Market volatility is a sign that

investors are unsure of how to value these stocks. In the minds of investors,

there is a battle going on between this great new paradigm and the valuations

of the stocks. In such a scenario, mood swings between hope and fear cause

volatility.

The volatility in new economy stocks reflects systemic changes taking place

in the underlying businesses. In the boardrooms of companies, long gone are

the months of planning and debate on capital allocation, mergers/acquisitions

and joint ventures. In the Internet age, a three-month delay can be the

difference between success and failure. Also, we are now in an age when

companies can think of becoming multinationals in a short span (e.g. Yahoo,

Amazon), when established age old companies see their fortunes dip very

fast (e.g. Britannica) and when companies can go boom and then come

tumbling down in a couple of years (e.g. Netscape). When businesses are

witnessing such rapid stratospheric booms and busts, it is natural to expect

their stocks to be volatile.

In times of extreme volatility, investments in diversified equity funds offer a

hedge against stock specific risk. The regulator should leave the pricing of thestocks to markets and its play on fear and greed, but should come down

heavily on rigging induced volatility. It should clamp down on insider trading

and selective information leaks. Information dissemination when done timely

and uniformly to all investors would bring in transparency and should help

arrest volatility to some extent.

The margin requirement in the new economy stocks should be fixed at a high

level, as investors will have to learn to live with high volatility in these stocks.

All said and done, short term volatility in the stock markets is the friend of long

term investor who understands value as it opens up for him opportunities for

both entry and exit at his price levels.

Volatility in stock markets is a global phenomenon. More and more people are


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getting lured by the phenomenal, albeit unsustainable, returns (especially in

the long run), which some stocks have seen in the recent past. This is

especially true of tech stocks. Even as I write this, markets world over have

tumbled, with the dotcom and tech stock-plunge causing some panic among

investors.

There are as many as 10 million day traders in the US. While no such statistic

is available for India, my guesstimate is that this number should be quite high

given that close to 80 to 90 per cent of trades in the two main exchanges,

BSE and NSE are carried forward or squared off respectively. This is a sign of

the times, that get rich quick attitude presently in existence among the

younger lot in India.

The extreme volatility in the stock markets is certainly of concern. When the

markets are in a bullish phase, investors blindly enter, like mice following the

proverbial Pied Piper. When the markets start rapidly going down, the same

investors exit in a hurry. More often than not, investors get their timing totally

wrong, both on entry as well as on exit.

However careful one is, volatility cannot be eliminated totally. In fact healthy

corrections both upward as well as downward on a periodic basis are good for

the long-term development of any market. At the same time, it is the violent

movements, either up or down that are not good for either the market or thepsyche of the retail investor.

In the long run, the only way the volatility can be brought down to some

acceptable level is by effecting certain structural changes in the market.

Some of them are as follows:

One, privatize pension and provident funds and allow them to begin with,

invest a small portion of their corpus (say five to 10 per cent) in the stockmarket. In the US, 401K Plans, which are akin to our provident funds, have

been one of the major sources of regular supply of funds to the stock

markets. They help to stabilize markets.


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Two, privatize insurance as soon as possible; allow insurance companies to

invest a larger percentage of their corpus in the stock markets.

Both the insurance companies as well as the pension funds are long-term

players and would bring in a lot more stability in the markets. While the

speculators would continue to perform their role and certainly assist in price

discovery, FIIs will also continue to be important players, given the sheer size

of funds at their command. Despite the growing size of the domestic mutual

funds, neither those, nor FIIs can mobilize the kind of funds that can be

mobilized by long term players like insurance and pension funds.

Three allow institutions, banks and mutual funds to participate in badla

financing. Four introduce as soon as possible index-based futures; after the

initial teething period and once the index based futures market stabilizes,

consider doing away with badla.

Once the index and futures market is stabilized, serious thought should be

given to uniform settlement across the stock exchanges. Once these reforms

take hold, futures markets are stabilized, and then rolling settlement should

be considered and phased in, for more and more scrips.

In the immediate future, thought should be given to reducing the eight per

cent circuit filter presently in operation on a scrip wise basis.

Once the index and futures markets truly develop, the circuit filter should be

looked at for the market as a whole and not at a scrip level.


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ABOUT BOMBAY STOCK EXCHANGE (BSE)

INTRODUCTION

The Stock Exchange, Mumbai, which was established in 1875 as "The

Native Share and Stockbrokers Association" (a voluntary non-

profit making association), has evolved over the years into its present status

as the premier Stock Exchange in the country. It may be noted that the Stock

Exchange is the oldest one in Asia, even older than the Tokyo Stock

Exchange, which was founded in 1878.

The Stock Exchange, Mumbai (BSE) is generally referred to as the Gateway

to the capital market in India. It is a lynchpin of the Indian Capital market. Its

governing board and administration are keenly aware of the future needs of

the exchange to maintain its lead role. As Indian economy is opening up, the

Exchange has brought its operations at par with international standards. It is

poised to take advantage of changes in Indian economic deregulation toexpand the market and make the security market, in India, more transparent

and more liquid.

However, the objectives and the role of the Stock Exchange, Mumbai has

remained the same as enunciated by our founding fathers and given to us as

a mandate in 1887 through the charter. These objectives are:

1. To safeguard the interest of investing public having dealings on theExchange and the members.

2. To establish and promote honorable and just practices in securities

transactions.

3. To promote, develop and maintain a well-regulated market for

dealing in securities.


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4. To promote industrial developments in the country through efficient

resource mobilization by way of investment in corporate securities.

The Exchange while providing an efficient market also upholds the interests

of the investors and ensures redressal of their grievances, whether against

the companies or its own member-brokers. It also strives to educate and

enlighten the investors by making available necessary informative inputs.

A Governing Board comprising of 9 elected directors (one third of them retire

every year by rotation), an Executive Director, three Government nominees, a

Reserve Bank of India nominee and five public representatives, is the apex

body, which regulates the Exchange and decides its policies.

The Governing Board following the election of directors annually elects a

President, Vice-President and an Honorary Treasurer from among the elected

directors.

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

day-to-day administration of the Exchange.

The Exchange has obtained permission from Securities and Exchange Board

of India (SEBI) for expansion of its BSE-On-Line-Trading (BOLT) network to

locations outside Mumbai. In terms of the permission granted by SEBI, themembers of the Exchange are free to install their trading terminals to cities

where there are no Stock Exchanges. However, at centres where the other

Exchanges are located, the Exchange is required to sign a Memorandum of

Understanding with these Exchanges permitting it to install the BOLT

terminals in their jurisdictional areas.

The expansion of BOLT network was inaugurated by the then Finance

Minister, Government of India, Shri P. Chidambaram on August 30, 1997. The

Exchange has signed Memorandum of Understanding with eleven Stock

Exchanges, viz., Calcutta, Pune, Ahmedabad, Saurashtra-Kutch (Rajkot),

Madhya Pradesh, Vadodara, Bhubaneshwar and Magadh (i.e., Patna),

Jaipur, Coimbatore & Chennai (Madras) to provide BOLT connections to the


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members of these Exchanges after obtaining necessary clearance from SEBI.

The BOLT network has been expanded to centres outside Mumbai and

covers 227 centres having 672 VSATs (Very Small Aperture Terminals) and

949 TWSs (Trader Work Stations) as on August 31, 1999. Of these, 595

VSATs and 807 TWSs respectively are installed outside Mumbai.

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 Indian 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 Demutualisation) Scheme,

2005 notified by the Securities and Exchange Board of India (SEBI).

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

linked effectively 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 eminentprofessionals, 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 organisation structure, the Board formulates larger policy issues

and exercises 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 and processes of the Exchange are designed to

safeguard market integrity and enhance transparency in operations. During


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the year 2005-2006, the trading volumes on the Exchange showed robust

growth.

The Exchange provides an efficient and transparent market for 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 & settlement functions of the

Exchange are ISO 9001:2000 certified.

LISTING OF SECURITIES

Listing means admission of the securities to dealings on a recognised stock

exchange. The securities may be of any public limited company, Central or

State Government, quasi-governmental and other financial

institutions/corporations, municipalities, etc.

The objectives of listing are mainly to:

Provide liquidity to securities;

Mobilize savings for economic development;

Protect interest of investors by ensuring full disclosures.

The Exchange has a separate Listing Department to grant approval for listingof securities of companies in accordance with the provisions of the Securities

Contracts (Regulation) Act, 1956, Securities Contracts (Regulation) Rules,

1957, Companies Act 1956, Guidelines issued by SEBI and Rules, Bye-laws

and Regulations of the Exchange.

A company intending to have its securities listed on the Exchange has to

comply with the listing requirements prescribed by the Exchange, which are

as under:

[I] New Companies


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(A)Minimum Capital: New companies can be listed on the Exchange, if

their Issued & Subscribed Equity Capital after the public issue, is Rs.5 crores

and above.

(B)Minimum Public Offer:As per Rule 19(2) (b) of the Securities

Contracts (Regulation) Rules, 1957, securities of a company can be listed on

a Stock Exchange only when at least 25% of each class or kind of securities

is offered to the public for subscription. For this purpose, the term "offered to

the public" means only the portion offered to the public and does not include

reservations of securities on firm or competitive basis.

SEBI may, however, relax this condition on the basis of recommendations of

stock exchange(s), only in respect of a Government company defined under

Section 617 of the Companies Act, 1956.

[II] Companies listed on other stock exchanges

The companies listed on other Stock Exchanges and seeking listing on this

Exchange are required to fulfill the following criteria:

Minimum Issued Equity Capital of Rs.3 crores to Rs.10 crores;

Profit track record for at least three years;

Minimum Market Capitalisation of Rs.20 Crores, based on average price of

last six months;

Trading for a minimum 50% of the total trading days during the same six

months on any stock exchange;

Minimum average volume traded per day during the last three complete

months should be 500 shares and minimum 5 trades per day;

25% of the issued capital should be with public (including body corporates)

and minimum 15 shareholders per Rs. 1 lakh of capital in the public category.

[III] Companies delisted by this Exchange seeking relisting on

this Exchange


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The companies delisted by this Exchange and seeking relisting are required

to have a minimum Issued & Subscribed Equity Capital of Rs.10 crores

"Z" Group

The Exchange has introduced a new category called "Z Group" from July

1999 for companies who have not complied with and are in breach ofprovisions of the Listing Agreement. The numbers of companies placed under

this group as of August 31, 1999 are 293.

One Window Clearance

Since April 1997, the Exchange has introduced the concept of "One Window

Clearance" for listing of public issue of securities of companies, by allocating

the companies public issues alphabetically amongst the Exchange officials. A

company is served by one official of the Listing Department during the entire

process of listing of its securities, commencing from approval of its

Memorandum and Articles of Association upto granting of trading permission

for its securities and release of 1% security deposit.

The number of companies listed at the Exchange as on August 31, 1999 was

5852. This is the highest number among the Stock Exchanges in the country.

TRADING

The Exchange has switched over from the open outcry trading system to a

fully automated computerized mode of trading known as BOLT (BSE On Line

Trading) System. This system, which is both order and quote driven, was

commissioned on March 14, 1995. It facilitates more efficient processing,

automatic order matching and faster execution of trades. Above all, the

system is more transparent. The members now enter orders/quotes on their

Trader Work Stations (TWSs) in their offices instead of assembling in the

trading ring.


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The scrips traded on the Exchange have been classified into A, B1, B2, C

F and Z group. The number of scrips listed on the Exchange under A, B1

and B2 groups which represent the equity segments as on August 1999 was

149, 1116 and 4740 respectively. The F group represents the debt market

(fixed income securities) segment wherein 650 securities were

listed as at the end of August 1999. The 'Z group comprises of 293 scrips as

of August 1999. The C group covers the odd lot securities in A, B1 & B2

groups and Rights renunciations.

The Stock Exchange, Mumbai, is the only Stock Exchange in the country to

provide a facility of on-line trading in odd lot securities and Rights

renunciations. This facility of trading in odd lots of securities and Rights

renunciations not only offers an exit route to investors to dispose of their odd

lot of securities but also provides them an opportunity to consolidate their

securities into market lots. Trading in this segment covers all the scrips listed

in the equity segment.

The trading cycle for all these groups of securities is weekly.

The trading cycle for A, B1, B2 and C group securities representing the

physical segment is from Monday to Friday and that for F group securities is

from Thursday to Wednesday. The transactions in A group scripts are

allowed to be carried forward from one settlement to another settlement

subject to a maximum of 75 days from the date of original transaction. The

Stock Exchange, Mumbai is the first Exchange in the country to provide the

facility of carry-forward of outstanding positions in A group scrips. The

trading session for carry forward of transactions from one settlement to

another is conducted on Saturdays, i.e., at the end of every trading cycle in

the physical segment.

Trading on the BOLT system is conducted from Monday to Friday between

10:00 a.m. and 3:30 p.m. while the carry-forward session for A group

securities is conducted on Saturdays between 10:00 a.m. and 12:30 p.m.


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The Information Systems Department of the Exchange generates the

following statements, which can be downloaded by the members in their back

offices on a daily basis:

c. Statements giving details of the daily transactions entered into by the

members.

d. Statements giving details of margins payable by the members in

respect of the trades executed by them.

The members are allowed to enter into transactions on behalf of their

Institutional clients, viz., Scheduled Commercial Banks, Indian Financial

Institutions (IFIs) & Foreign Institutional Investors (FIIs) and Mutual Funds

registered with SEBI. The settlement of the trades (money and securities)

done on behalf of the Institutions may be either through the member himself

or through a SEBI registered Custodian appointed by an Institution. In case

the delivery/payment is to be given or taken by a Custodian on behalf of an

Institution, the former has to confirm the trade done by a member. For this

purpose, the Custodians have been admitted as members of the Clearing

House. In case the Custodian does not confirm an institutional transaction,

the liability for pay-in of funds or securities devolves on the concerned

member.

SETTLEMENT AND CLEARING

Pay-in and Pay-out for "A, B1, B2 & C group of securities

The trades done by the members during the weekly trading period from

Monday to Friday are settled by payment of money and delivery of securities

in the following week. All deliveries of securities are required to be routed

through the Clearing House, except for certain off-market transactions, which,

although are required to be reported to the Exchange, may be settled directly

between the members concerned.

The Information Systems Department of the Exchange nets off all deliverable

trades (purchases and sales in each scrip) done by a member during a


32/104

settlement and generates delivery/receive orders and money statements

which are downloaded by the members in their back offices.

The delivery orders provide information like scrip, quantity and the name of

the receiving member to whom the securities are to be delivered through the

Clearing House. The Money Statement provides details of payments/receipts

for the settlement.

Earlier the members were required to submit along with the balance sheet

(Form 31-A) which includes the details of Money Statement, margins

payable/receivable, and other credits/debits arising out of auction for

shortages, objections, bad delivery, etc., a cheque /draft depending on

whether the settlement liability is a payable or receivable position on

Thursday, i.e., pay-in day. However, with effect from December 22, 1997 (i.e.,

Sett.No.39/97-98), the bank accounts of members maintained with Bank of

India, Stock Exchange Branch, the only clearing bank at that time, were

directly debited through computerized posting on the pay-in day for their

settlement dues. The list of clearing banks has since been expanded to

include HDFC Bank Ltd., Global Trust Bank Ltd. and Standard Chartered

Bank. Thus, the members are no longer required to submit physical Form 31-

A and cheque/draft, as was the earlier practice.

The securities, as per delivery orders issued by the Exchange, are to be

delivered in the Clearing House on the day designated for pay-in, i.e., on

Wednesday and Thursday as per prescribed time slots upto 1:00 p.m. No late

delivery of shares is permitted. Members have to deliver the securities in

special closed pouches issued by the Exchange along with the relevant

details (distinctive numbers, scrip code, quantity, and receiving member) on a

floppy. The data submitted by the members on floppies is matched against

the master file data on the Clearing House computer systems. If there are no

discrepancies, then a scroll number is generated and a scroll slip is issued.

The members then submit the securities at the receiving counter. The

Clearing House personnel arrange and tally the securities received against

the receiving member wise report generated on the Pay-in day. Once this


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reconciliation is complete, the bank accounts of members having pay-in

positions are debited on Thursday. This procedure is called Pay-in. The

Receiving Members collect securities on Friday and the accounts of the

members having payout are credited on Saturday. This is referred to as

Payout.

Auction is conducted for those securities which members fail to deliver/short

deliver during the Pay-in. In case the securities are not received in an auction,

the positions are closed out as per the closeout rate fixed by the Exchange in

accordance with the prescribed rules. The close out rate is calculated as the

highest rate of the scrip recorded in the settlement in which the trade was

executed or in the subsequent settlement upto the day prior to the day of

auction or 20% above the closing price on the day prior to the day of auction,

whichever is higher.

The following table summarizes the steps in the trading and settlement cycle

for "A+B1, B2& C group securities:

DAY ACTIVITY

Monday to

Friday

(Monday is

the 1st day

and Friday

is the last

day of

trading)

Trading on

BOLT and

daily

downloading

of statement

showing

details of

transactions

and margin

statement, at

the end of

each trading

day.

Saturday Carry


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Forward

Session (for

A Group

Securities)

and

downloading

of money

statement.

Monday Marking the

mode of

delivery -

physical or

demat

Wednesday Pay-in of

physical

securities.

Thursday Delivery of

securities in

the Clearing

House as per

prescribed

time slots

upto 1:00

p.m. only.

Debiting of

members

bank

accountshaving

payable

position at

5:00 p.m.


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Reconciliation

of securities

delivered and

amounts

claimed.

Friday Pay-out

(Physical

securities

only)

Saturday Funds pay-

out

If a transaction is entered on the first day of the settlement, i.e., Monday, the

same will be settled on the 8th

working day excluding the day of transaction.

However, if the same is done on the last day of the settlement, i.e., Friday, it

will be settled on the 4th

working day excluding the day of transaction.

The trading and settlement cycle for "F" group, i.e., Debt Market is indicated

below:

DAY ACTIVITY

Thursday First day of

Trading

Wednesday Last day of

Trading

Thursday Issue of

Delivery

Orders,

Money

statements

Friday Debiting of


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the

members

bank

accounts at

10:30 a.m.

Payout of

securities

from 4.30

p.m. to 5.30

p.m. and

crediting

the bank

accounts of

members

with

payout.

The settlement schedules for various groups of securities have been strictly

adhered to by the Exchange and there has been no case of clubbing of

settlements or postponement of pay-in and pay-out during the last over three

years. The Exchange is also maintaining a database of fake/forged/stolen

securities with the Clearing House so that distinctive numbers submitted by

members on delivery may be matched against the database to weed out bad

paper from circulation.


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Introduction of the Demat Segment

The Exchange has commenced trading in the Dematerialized (Demat)

segment with effect from December 29, 1997 where there is no physical

delivery of securities as in the physical segment. Trading in the Demat

segment is on a Rolling Settlement basis (T+5) where T stands for Trade

Day. The pay-in and payout for the transactions in this segment are both

conducted on a single day. The Pay-in & Pay-out for transactions executed

on Monday is conducted on the following Monday, i.e., corresponding day in

the following week. Auction session for shortages in demat segment is

conducted on BOLT on the day after pay-in/pay-out. The pay-in / pay-out

(money part) takes place through computerized posting of debits and credits

in the members bank accounts as in the case of physical segment.

With effect from April 6, 1998, deliveries in the demat mode are permitted in

the physical segment. This is so because sellers are allowed to give delivery

in demat or electronic form. As of today, this is applicable to 278 scrips. As

such, a break-up session is scheduled every Monday where members may

mark the mode of delivery, i.e., physical or demat. They, however, have an

option to change the mode of delivery till the pay-in day, i.e., Thursday.

SEBI has directed the stock exchanges in January 1998 that all the tradesdone by institutional investors, viz., domestic financial institutions, banks,

mutual funds, FIIs and overseas corporate bodies in certain select scrips

should be compulsorily settled in dematerialized form. This list has been

expanded by SEBI from time to time and as on -required to be compulsorily

settled in dematerialized form. 29 more scripts have been specified for

compulsory demat trading for institutional investors with effect from April 15,

1999 making the total scrips in demat form for institutional investors to 143.

Further, under directions from SEBI, trades in 12 and 19 scrips are to be

compulsorily settled by all investors in dematerialized form with effect from

January 4, 1999 and February 15, 1999 respectively. Further, trades in

another 33 scrips and 40 scrips are to be compulsorily settled in demat form


38/104

by all investors with effect from April 5 & May 31, 1999 respectively. Thus, as

of now, trades in 104 scrips are to be compulsorily settled by all investors in

dematerialized form.

ABOUT NATIONAL STOCK EXCHANGE (NSE)

THE ORGANISATION

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 (FIs) 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 theWholesale 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.

NSE Milestones


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November

1992

Incorporation

April 1993 Recognition as a

stock exchange

May 1993 Formulation of

business plan

June 1994 Wholesale Debt

Market segment

goes live

November

1994

Capital Market

(Equities)

segment goes

live

March 1995 Establishment of

Investor

Grievance Cell

April 1995 Establishment of

NSCCL, the first

Clearing

Corporation

June 1995 Introduction of

centralized

insurance cover

for all trading

members

July 1995 Establishment of

InvestorProtection Fund

October

1995

Became largest

stock exchange

in the country
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April 1996 Commencement

of clearing and

settlement by

NSCCL

April 1996 Launch of S&P

CNX Nifty

June 1996 Establishment of

Settlement

Guarantee Fund

November

1996

Setting up of

National

Securities

Depository

Limited, first

depository in

India, co-

promoted by NSE

November

1996

Best IT Usage

award by

Computer Society

of India

December

1996

Commencement

of

trading/settlement

in dematerialized

securities

December

1996

Dataquest award

for Top IT User

December

1996

Launch of CNX

Nifty Junior

February

1997

Regional clearing

facility goes live
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November

1997

Best IT Usage

award by

Computer Society

of India

May 1998 Promotion of joint

venture, India

Index Services &

Products Limited

(IISL)

May 1998 Launch of NSE's

Web-site:

www.nse.co.in

July 1998 Launch of NSE's

Certification

Programme in

Financial Market

August 1998 CYBER

CORPORATE

OF THE YEAR

1998 award

February

1999

Launch of

Automated

Lending and

Borrowing

Mechanism

April 1999 CHIP Web Award

by CHIP

magazine

October

1999

Setting up of

NSE.IT

January

2000

Launch of NSE

Research
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Initiative

February

2000

Commencement

of Internet

Trading

June 2000 Commencement

of DerivativesTrading (Index

Futures)

September

2000

Launch of 'Zero

Coupon Yield

Curve'

November

2000

Launch of Broker

Plaza by Dotex

International, a

joint venture

between NSE.IT

Ltd. and i-flex

Solutions Ltd.

December

2000

Commencement

ofWAPtrading

June 2001 Commencement

of trading inIndex

Options

July 2001 Commencement

of trading in

Options on

Individual

Securities

November

2001

Commencement

of trading in

Futures on

Individual
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Securities

December

2001

Launch of NSE

VaR for

Government

Securities

January2002

Launch ofExchange Traded

Funds (ETFs)

May 2002 NSE wins the

Wharton-Infosys

Business

Transformation

Award in the

Organization-

wide

Transformation

category

October

2002

Launch of NSE

Government

Securities Index

January

2003

Commencement

of trading in

Retail Debt

Market

June 2003 Launch of

Interest Rate

Futures

August 2003 Launch of

Futures & options

inCNXIT Index

June 2004 Launch of STP

Interoperability
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August 2005 Launch of NSEs

electronic

interface for listed

companies

Feb. 2006 Launch of

Futures & options

in BANK Nifty

Index

CAPITAL MARKET (EQUITIES) SEGMENT

Nu

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er

of

VS

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p

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0

,

2

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0

5

2

,

7

7

8

Nu

mb

er

of

citi

es

cov

ere

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Facts and Figures

Developments on the Exchange

NSE and NSCCL went live with the inaugural session for Automatic Lending and Borrowing

Mechanism (ALBM) for lending and borrowing of securities on February 10,1999. This is the

first time an Indian agency approved by SEBI will be conducting the securities lending &

borrowing transactions based on international practices.

Membership

890 trading members on the Capital Market segment, of which around 86%account for corporates and the remaining are individuals and firms.

Out of these 890 trading members, 89 trading members are also members

of Wholesale Debt Market segment, all of which are corporates and there are

7 trading members excclusively on Wholesale Debt Market Segment.

Geographic Distribution

Over 6839 trading terminals given to the members as on November 25,1999

Over 2342 VSAT's across the country with a 24 hour Network monitoring

system in over 291 cities as of November 01, 1999.


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Future Plans

Expansion

The Capital Market segment of the Exchange became operational in

November 1994.The entire turnover accounted from Mumbai. After stabilizing

operations in Mumbai, NSE expanded its operations to other cities. The

turnover from Mumbai accounts for 43%, Delhi accounts for 19%, Calcutta

accounts for 11% and 28% from other centres. NSE will add more terminals

in cities where it already has presence to provide better services to investors.

The satellite hub and computer equipment for the disaster recovery site at

Pune has been procured, installed and tested for proper operations. A

detailed Business Continuity Plan (BCP) has been worked out to put the

disaster recovery site for live operations. The back-up site of the Exchange at

Pune will be made operational soon. This facility is in line with international

practices and the NSE will be able to commence normal business operations

within a very short time frame should a disaster occur.

In keeping with the fast changing scenario in the Capital Markets, NSE has

chalked out plans for the various business segments, some of which are.

Initial Public Offerings

Initial Public Offerings in India have been typically fixed price offers. A major

problem with such fixed price offerings has been the information asymmetries

between the issuers and the investors. To revive the primary market, NSE is

proposing to provide a facility for conducting primary issues for Initial Public

Offers (IPOs), subsequent issues by companies, private placements as well


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as book building through screen based automated trading system. The

advantages of this system will be on-line issue of securities thereby reducing

the cost of issue of securities and an efficient retail distribution network

among others.

Retail Debt Market

Fixed income securities such as debentures are an ideal investment avenue

for risk adverse investors. It provides a fixed and regular income with safety of

capital. The deregulation of interest rates has led to borrowings by the

Government, Corporates and Institutions at market-determined rates. This

has enabled retail investors to invest in fixed income securities particularly

Corporate and Institutional bonds in favourable terms vis a vis other

investment opportunities.

With a view to providing liquidity to these instruments, the Exchange plans to

start a retail debt segment to cater to the growing demands of the investors in

the debt segment. Debentures are presently traded on the Capital Market

(CM) and the Wholesale Debt Market (WDM) segment of the Exchange.

However, as WDM segment continues to be wholesale in nature and CM

segment focuses on equity, there was a need for a separate market for

debentures. A separate RDM trading system would be developed for thesame.

The securities traded on the Retail Debt Market segment would comprise of

Corporate Debentures and Institutional Bonds. Members of the Exchange

from all the NSE centres would be eligible to trade on the RDM system.

The National Securities Clearing Corporation Ltd. (NSCCL) would settle the

trades done on the RDM segment on a net basis. The NSCCL would also

extend settlement guarantee for trades done on NSE.

Derivatives


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As soon as regulatory approvals are obtained, NSE plans to launch

a futures and options segment. NSE initially plans to launch trading

of futures and options on Nifty, an index that is uniquely suited to the

demands of index-based products. The Exchange will subsequently initiate

trading in options on individual stocks and select securities. The Exchange

also has plans to launch fixed income derivatives. The Clearing Corporation

will guarantee settlement through a separate settlement fund. There will be an

equally focussed margin and risk management system in place to monitor

and manage the clearing and settlement of the derivatives segment

OPPORTUNITIES AVAILABLE FOR FOREIGN

INVESTORS

Direct Investment

Foreign companies are now permitted to have a majority stake in their Indian

affiliates except in a few restricted industries. In certain specific industries,

foreigners can even have holding upto 100 percent.

Investment through Stock Exchanges

Foreign Institutional Investors (FII) upon registration with the Securities and

Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) areallowed to operate in Indian stock exchanges subject to the guidelines issued

for the purpose by SEBI.

Important requirements under the guidelines are as under:


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5. Portfolio investment in primary or secondary markets will be subject

to a ceiling of 30 percent of issued share capital for the total holding of all

registered FII's. In any one company an FII holding is subject to a ceiling of 10

percent of the total issued capital. However, in applying the ceiling of 30

percent the following are excluded:

Foreign investment under a financial collaboration, which is, permitted upto

51 percent in all priority areas.

Investment by FII's through offshore single/regional funds, GDR's and euro

convertibles.

2 Disinvestment is allowed through a broker of a Stock Exchange.

3 A registered FII is required to buy or sell only for delivery. It is not allowed to

offset a deal. It is also not allowed to sell short.

Investment in Euro Issues/Mutual Funds floated overseas

Foreign investors can invest in Euro issues of Indian companies and in India-

specific funds floated abroad.

Broking Business

Foreign brokers upon registration with the SEBI are now allowed to

route the business of registered FIIs. Guidelines for the purpose have

been issued by SEBI.


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Asset Management Companies / Merchant Banking

Foreign participation in Asset Management Companies and Merchant

Banking Companies is permitted.

An o verview of the factorsWe all want to make money in the stock market. We do so by selling stock at

a price higher than what we buy it for. It makes sense, then, that to make

money in the stock market; we need to understand what causes prices to

change. By having an appreciation for the things that motivate stock price

change, we can be better at anticipating the direction and velocity of price

moves.

What is Price?

To begin, we must first understand what price is. Financial theorists define

stock price as the present value of all future earnings expectations for the

company, divided by its number of shares outstanding. What this means is

that the earning capacity of the company is what defines price. Often,

companies can get significant value out of a relatively small investment inassets because the ability for those assets to make money is significant.

Even companies that lose money today can have a high share price because

price is based on the future earnings of the company. No enterprise is in

business to lose money, so the expectation is that every business will make

money some day. So long as there is the potential for future revenue streams

to shareholders, there will be a price that someone is willing to pay for the

shares.

The earnings that a company could make in the future, the growth that the

company could realize and the time to the realization of those goals are all

factors, which affect the estimate that the market makes on the earnings

potential of the company.


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The Market Mechanism

The value of publicly traded shares is liquidity. Publicly traded companies are

worth more than private ones simply because there is greater access to

buyers and sellers, and market efficiency can better determine share price.

The stock market provides value to any company that chooses to list its

shares because the company gains liquidity.

In a theoretical sense, any time someone buys the shares of a company in

the market, they are effectively stating that they believe the shares of the

company are undervalued. The fact that they are buying implies a belief and

expectation that the shares will increase in value in the future. At the same

time, the person who is selling the shares is expressing the opposite belief.

By selling, they imply that the stock is overvalued and the expectation that the

stock will go lower in the future. In this way, the stock market is forum for

debate on what the value of the company and its shares is.

What Affects Price?

There are four main factors that cause movements in stock price:

New information

Uncertainty

Psychological Factors

oFear

oGreed

Supply and Demand


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Limitation:-

In On the job training when we try to open demat a/c some problem that

we face it this is some limitation: -

Some time customer doesnt know about demat a/c and how to the process

is done so we need to gives more explanations to customer.

Some customer compare Share khan brokerage rate to another companys

brokerage.

Some time old or existing customer complains Share khan facilities.

Unawareness about the allotted area for survey

Lack of cooperation from the employees of other companies : During the

visit to the area of the project the customers were not co-operative. Theywere engrossed in their work and could hardly spare much time for detailed

discussions.

Customers dont have trust in private companies.

To get contact numbers of individual is a difficult task.


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Even after getting contact numbers of individuals it is somewhat difficult to

make them interested towards different schemes and get the next

appointment.

OBJECTIVE

To know the insights of stock market

To analyze different services offered by Sharekhan as Depository

Participant

To understand the problem faced by the existing clients and find ways to

solve their queries

To convince them about how Sharekhan services out score their rivals


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METHODOLOGY

My training includes the following stages:

In the first phase we are trained and they taught us different things aboutcapital market as well as share market.

After that they conduct a mock viva & asked about the real life problems

faced by the customers and our understanding with the services offered by

Sharekhan.

I got practical understanding of the services by the seniors.

They provide leads and I have tried converting them into clients.

Providing them live information about stock trading.

Understanding of technical as well as fundamental research reports.

Help company in its promotional activities, as company is an expansion

mode.


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ACCOUNT OPENING

The investor can open an account with any depository participant of NSDL.

An investor may open an account with several DPs or he may open several

accounts with a single DP. There are several DPs offering various depository-

related services. Each DP is free to fix its own fee structure.

Investors have the freedom to choose a DP based on criteria like

convenience, comfort, service levels, safety, reputation and charges.

After exercising this choice, the investor has to enter into an agreement with

the DP. The form and contents of this agreement are specified by the

business rules of NSDL

1. TYPE OF ACCOUNT


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Type of depository account depends on the operations to be performed.

There are three types of Demat accounts, which can be opened with a

depository participant viz.

a. Beneficiary Account

b. Clearing Member Account and

c. Intermediary Account.

2. DOCUMENT FOR VERIFICATION

For the purpose of verification, all investors have to submit the following

documents along with the prescribed account opening form.


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2.1 PROOF OF IDENTITY

A beneficiary account must be opened only after obtaining a proof of identity

of the applicant. The applicant's signature and photograph must be

authenticated by an existing account holder or by the applicant's bank or after

due verification made with the original of the applicant's

Valid passport,

Voter ID, driving license

PAN card with photograph;

And further,

2.2 PROOF OF ADDRESS

The account opening form should be supported with proof of address such as

Verified copies of ration card

Passport

Voter ID

PAN card

Driving license

Bank passbook.

An authorized official of the Participant, under his signature, shall verify the

original documents. In case any account holder fails to produce the original

documents for verification within the aforesaid period of 30 days, it must be

immediately brought to the notice of NSDL.

dilawar khan project on share khan

Documents