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Capital Markets NCFM

Capital Markets NCFM

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Published by Chetan Sharma
NCFM Capital MArkets Dealers MOdule
NCFM Capital MArkets Dealers MOdule

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Categories:Types, School Work
Published by: Chetan Sharma on Feb 21, 2009
Copyright:Attribution Non-commercial

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03/18/2015

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1
CONTENT................................................................................................................................PAGE NO.S
LIST OF ABBREVIATIONS.....................................................................................................................5
 
CHAPTER 1....................................................................................................................................................7
 
TRADING........................................................................................................................................................7
 
1.1
 
INTRODUCTION
....................................................................................................................7
 
1.2
 
NEAT
 
SYSTEM
........................................................................................................................9
 
1.3
 
MARKET
 
TYPES
......................................................................................................................9
 
1.3.1
 
 Normal Market.....................................................................................................................9
 
1.3.2
 
Odd Lot Market....................................................................................................................9
 
1.3.3
 
 Retdebt Market...................................................................................................................10
 
1.3.4
 
 Auction Market...................................................................................................................10
 
1.4
 
CORPORATE
 
HIERARCHY
..............................................................................................10
 
1.5
 
LOCAL
 
DATABASE
.............................................................................................................11
 
1.6
 
MARKET
 
PHASES
................................................................................................................11
 
1.6.1
 
Opening................................................................................................................................11
 
1.6.2
 
Open Phase.........................................................................................................................11
 
1.6.3
 
 Market Close.......................................................................................................................12
 
1.6.4
 
Surcon..................................................................................................................................12
 
1.7
 
LOGGING
 
ON
........................................................................................................................12
 
1.8
 
LOG
 
OFF/EXIT
 
FROM
 
THE
 
APPLICATION
..............................................................14
 
1.9
 
NEAT
 
SCREEN
......................................................................................................................15
 
1.10
 
INVOKING
 
AN
 
INQUIRY
 
SCREEN
..............................................................................16
 
1.10.1
 
 Market Watch.................................................................................................................16 
 
1.10.2
 
Security Descriptor........................................................................................................18
 
1.10.3
 
 Market by Price..............................................................................................................19
 
1.10.4
 
Previous Trades.............................................................................................................20
 
1.10.5
 
Outstanding Orders.......................................................................................................21
 
1.10.6 
 
 Activity Log.....................................................................................................................21
 
1.10.7 
 
Order Status....................................................................................................................22
 
1.10.8
 
Snap Quote......................................................................................................................23
 
1.10.9
 
 Market Movement..........................................................................................................24
 
1.10.10
 
 Market Inquiry................................................................................................................24
 
1.10.11
 
 Auction Inquiry...............................................................................................................25
 
1.10.12
 
Security/Portfolio List...................................................................................................26 
 
1.10.13
 
 Multiple Index Broadcast and Graph.........................................................................26 
 
1.10.14
 
Online Backup................................................................................................................27 
 
1.10.15
 
 Basket Trading...............................................................................................................27 
 
1.10.16 
 
 Buy Back Trades............................................................................................................28
 
1.10.17 
 
Supplementary Functions.............................................................................................29
 
1.11
 
ORDER
 
MANAGEMENT
...................................................................................................42
 
1.11.1
 
 Entering Orders.............................................................................................................42
 
1.11.2
 
Order Modification........................................................................................................49
 
1.11.3
 
Order Cancellation.......................................................................................................49
 
1.11.4
 
Order Matching..............................................................................................................50
 
1.12
 
TRADE
 
MANAGEMENT
....................................................................................................53
 
1.12.1
 
Trade Cancellation........................................................................................................54
 
 
2
1.13
 
AUCTION
...............................................................................................................................54
 
1.13.1
 
 Entering Auction Orders..............................................................................................55
 
1.13.2
 
 Auction Order Modification.........................................................................................56 
 
1.13.3
 
 Auction Order Cancellation.........................................................................................56 
 
1.13.4
 
 Auction Order Matching...............................................................................................57 
 
1.14
 
LIMITED
 
PHYSICAL
 
MARKET
.....................................................................................57
 
1.15
 
RETDEBT
 
MARKET
 
(RDM)
...........................................................................................57
 
1.16
 
TRADING
 
INFORMATION
 
DOWNLOADED
 
TO
 
TRADING
 
MEMBERS
....60
 
1.17
 
INTERNET
 
BROKING
.....................................................................................................63
 
 Model Questions..................................................................................................................................63
 
CHAPTER 2..................................................................................................................................................66
 
CLEARING AND SETTLEMENT........................................................................................................66
 
2.1
 
INTRODUCTION
................................................................................................................66
 
2.1.1
 
Transaction Cycle..............................................................................................................67 
 
2.1.2
 
Settlement Process.............................................................................................................68
 
2.1.3
 
Settlement Agencies...........................................................................................................69
 
2.1.4
 
 Risks in Settlement.............................................................................................................72
 
2.2
 
SETTLEMENT
 
CYCLE
.........................................................................................................73
 
2.3
 
SECURITIES
 
SETTLEMENT
...........................................................................................77
 
2.4
 
FUNDS
 
SETTLEMENT
.......................................................................................................79
 
2.5
 
SHORTAGES
 
HANDLING
................................................................................................81
 
2.5.1
 
Valuation Prices.................................................................................................................82
 
2.5.2
 
Close-out Procedures........................................................................................................82
 
2.6
 
RISK
 
CONTAINMENT
 
MEASURES
.............................................................................86
 
2.6.1
 
Capital Adequacy Requirements.....................................................................................86 
 
2.6.2
 
 Margins................................................................................................................................88
 
2.6.3
 
On-Line Exposure Monitoring.........................................................................................97 
 
2.6.4
 
Off-line Monitoring............................................................................................................97 
 
2.6.5 Index-based Market-wide Circuit Breakers/ Price Bands for Securities.................98
 
2.6.6 
 
Settlement Guarantee Mechanism...................................................................................99
 
2.6.7 
 
 No-delivery Period.........................................................................................................100
 
2.7
 
INTERNATIONAL
 
SECURITIES
 
IDENTIFICATION
 
NUMBER
.........................100
 
2.8
 
DEMAT
 
AND
 
ELECTRONIC
 
TRANSFER
 
OF
 
SECURITIES
.................................101
 
2.9
 
INVESTOR
 
PROTECTION
 
FUND
...................................................................................103
 
2.10
 
CLEARING
 
SOFTWARE
 
 
DATA
 
AND
 
REPORTS
 
DOWNLOAD
......................104
 
2.10.1
 
Obligation Reports.....................................................................................................104
 
2.10.2
 
Custodial Trade Reports............................................................................................105
 
2.10.3
 
 Deliveries Reports.....................................................................................................10
 
2.10.4
 
 Receipts Reports.........................................................................................................10
 
2.10.5
 
 Bad Deliveries Reports..............................................................................................10
 
2.10.6 
 
Funds Reports..............................................................................................................10
 
2.10.7 
 
 Auction Reports...........................................................................................................108
 
2.10.8
 
Objections Reports.....................................................................................................108
 
2.10.9
 
 Margin Reports...........................................................................................................110
 
2.10.10
 
Securities Reports.......................................................................................................111
 
2.10.11
 
 Miscellaneous Reports...............................................................................................111
 
2.11
 
FILE
 
TRANSFER
 
PROTOCOL
....................................................................................112
 
 
3
 Model questions................................................................................................................................112
 
CHAPTER 3...............................................................................................................................................115
 
TRADING MEMBERSHIP...................................................................................................................115
 
3.1
 
STOCK
 
BROKERS
.............................................................................................................115
 
3.1.1
 
 Introduction......................................................................................................................115
 
3.1.2
 
 Membership in NSE........................................................................................................11
 
3.2
 
SUB-BROKERS
..................................................................................................................154
 
3.3
 
BROKER-CLIENTS
 
RELATIONS
................................................................................157
 
3.3.1. Know your client...........................................................................................................15
 
3.3.2
 
Unique Client Code.......................................................................................................158
 
3.3.3 Margins from the Clients..............................................................................................158
 
3.3.4
 
 Execution of Orders........................................................................................................158
 
3.3.5
 
Contract Note...................................................................................................................159
 
3.3.6 Payments/Delivery of Securities to the Clients..........................................................160
 
3.3.7 
 
 Brokerage.........................................................................................................................160
 
3.3.8
 
Segregation of Bank Accounts......................................................................................160
 
3.3.9
 
Segregation of Demat (Beneficiary) Accounts...........................................................160
 
3.4
 
SUB-BROKER-CLIENTS
 
RELATIONS
.....................................................................161
 
3.4.1
 
Sub-broker........................................................................................................................161
 
3.4.2
 
 Registration......................................................................................................................161
 
3.4.3
 
 Relationship with clients/role........................................................................................161
 
3.4.4
 
Contract notes..................................................................................................................162
 
3.4.5
 
Securities/ Funds.............................................................................................................162
 
3.4.6 
 
Sub-brokerage.................................................................................................................162
 
3.5
 
DISPUTE,
 
ARBITRATION
 
AND
 
APPEAL
................................................................162
 
3.6
 
CODE
 
OF
 
ADVERTISEMENT
.......................................................................................164
 
 Model Questions...............................................................................................................................16
 
CHAPTER 4...............................................................................................................................................168
 
LEGAL FRAMEWORK........................................................................................................................168
 
4.1
 
SECURITIES
 
CONTRACTS
 
(REGULATION)
 
ACT,
 
1956
.................................173
 
4.2
 
SECURITIES
 
CONTRACTS
 
(REGULATION)
 
RULES,
 
1957
...........................176
 
4.3
 
SECURITIES
 
AND
 
EXCHANGE
 
BOARD
 
OF
 
INDIA
 
ACT,
 
1992
....................176
 
4.4
 
SEBI
 
(STOCK
 
BROKERS
 
 
SUB-BROKERS)
 
REGULATIONS,
 
1992
.......180
 
4.5
 
SEBI
 
(PROHIBITION
 
OF
 
INSIDER
 
TRADING)
 
REGULATIONS,
 
1992
...186
 
4.6
 
SEBI
 
(PROHIBITION
 
OF
 
FRADULENT
 
AND
 
UNFAIR
 
TRADE
 
PRACTICES
 
RELATING
 
TO
 
SECURITIES
 
MARKETS)
 
REGULATIONS,
 
2003
...............................190
 
4.7
 
THE
 
DEPOSITORIES
 
ACT,
 
1996
................................................................................193
 
4.8
 
INDIAN
 
CONTRACT
 
ACT,
 
1872
.................................................................................195
 
4.9
 
THE
 
COMPANIES
 
ACT,
 
1956
.......................................................................................197
 
4.10
 
INCOME
 
TAX
 
ACT,
 
1961
...............................................................................................200
 
4.11
 
MONEY
 
LAUNDERING
 
ACT,
 
2002
............................................................................203
 
 Model questions................................................................................................................................205
 
CHAPTER 5...............................................................................................................................................208
 
AN OVERVIEW OF THE INDIAN SECURITIES MARKET...................................................208
 

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