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“A STUDY OF ONLINE TRADING AND STOCK BROKING” AT SHAREKHAN PVT LTD
A Project report submitted in partial fulfillment for the Award of the
Master of Business Administration (MBA) (FINANCE)
CHANDRASEKHAR GOUD.G Roll No. 08J81E0010
Under the Guidance of
(Assistant Professor of MBA Dept)
DEPARTMENT OF BUSINESS MANAGEMENT P.INDRA REDDY MEMORIAL ENGINEEING COLLEGE (Affiliated to Jawaharlal Nehru Technological University)
I here by declare that this project report entitled “A STUDY OF ONLINE TRADING AND STOCK BROKING” has been prepared by me is an original work submitted to Jawaharlal Nehru Technological University towards partial fulfillment of the requirement for the award of Master of Business Administration. I also here by declare that this project report has not been submitted at any time to any other university or institute for the award of any Degree or Diploma.
(G.CHANDRA SEKHAR GOUD) (08J81E0010)
This is to certify that the project work entitled
“A STUDY OF ONLINE TRADING AND STOCK BROKING”
Has been done by G.CHANDRA SEKHAR GOUD (08J81E0010) In the partial fulfillment of the requirements for the award of the degree of Master of Business Administration from P.Indra Reddy Memorial Engineering College, affiliated to Jawaharlal Nehru Technological University is a record of bonafide work carried out by them under my guidance and supervision. The result embodied in this has not been submitted to any other university or institute for the award of any degree.
Internal Guide: Mr. SRINIVAS
Head of the department Master of Business Administration
I take this opportunity to express my gratitude high regards and sincere thanks to our respected Principal Dr. R.V. Krishnaiah for providing excellent infrastructure. I thank Mr. D.H.B.R.Prasad Head of the Department of MBA for his constant help and support. I express my sincere thanks to our committed faculty Mr.SRINIVAS for his support and guidance. I have great regard for all the well wishers whose help is beyond acknowledgement.
(G.CHANDRA SEKHAR GOUD) (08J81E0010)
Chapter 1 Objectives & Methodology 5 .
there is need to assess the performance of the capital market. 6 .OBJECTIVES AND METHODOLOGY NEED FOR THE STUDY: The present study to review the online trading procedure a case study of ONLINE TRADING at SHAREKHAN as the exchange has changed it’s trading from the outcry mode to online trading on 20th February 1997.
To know about the latest and future development in the stock exchange trading system. 7 .OBJECTIVES OF THE STUDY: It is to analyze the changes in trading after the exchange shifted from outcry to online trading system. The appropriate configuration to set the network. It is to study the functions of SHAREKHAN through various departments. To know the online screen based trading system adopted by SHAREKHAN and about its communication facilities. which would link the SHAREKHAN to individual / members.
METHODOLOGY OF THE STUDY: The data collection methods include both primary and secondary collection methods. Primary method: This method includes the data collected from the personal interaction with authorized members of Sharekhan Securities limited.
Secondary method: The secondary data collection method includes: The lecturers delivered by the superintendents of respective departments. The brochures and material provided by Sharekhan Securities limited. The data collected from the magazines of the NSE, economic times, etc. Various books relating to the investments, capital market and other related topics.
LIMITATIONS OF THE STUDY: Despite of the training my level best, there were still some limitation which I think remains there to draw fruitful conclusion. There were some practical problem which come across and could not be properly death with The advisory services being promised by the brokers would be of little use to investors looking for an insight into the market. As a client one will access the NSE through a server of the online brokerage and this may involve queuing delays If one like to ask his broker "Aaj kya achcha lag raha hai" he may not be able to do so. If he want advice on a particular stock in his portfolio he may not even be able to get that.
Following diagram gives the structure of Indian financial system:
Financial markets are helpful to provide liquidity in the system and for smooth functioning of the system. These markets are the centers that provide facilities for buying and selling of financial claims and services. The financial markets match the demands of investment with the supply of capital from various sources. According to functional basis financial markets are classified into two types. They are: Money markets (short-term) Capital markets (long-term) According to institutional basis again classified in to two types. They are Organized financial market Non-organized financial market.
The organized market comprises of official market represented by recognized institutions, bank and government (SEBI) registered/controlled activities and intermediaries. The unorganized market is composed of indigenous bankers, moneylenders, individual professional and non-professionals.
Money market is a place where we can raise short-term capital. Again the money market is classified in to Inter bank call money market Bill market and Bank loan market Etc. E.g.; treasury bills, commercial papers, CD's etc.
operations include new issues of shares by new and existing companies. Primary market n.: Shares. E. modernization. further and 12 . Primary market is also referred to as New Issue Market. Again the capital market is classified in to two types and they are Primary market and Secondary market.g. and Loans etc. PRIMARY MARKET: Primary market is generally referred to the market of new issues or market for mobilization of resources by the companies and government undertakings. diversification and up gradation. for new projects as also for expansion.CAPITAL MARKET: Capital market is a place where we can raise long long-term capital. addition. Debentures.
Merchant banker/book building lead manager 2. Depository 7. underwriting. Adviser to the issue 5. The following are the market intermediaries associated with the market: 1. etc. Banker to the issue 6. Registrar and transfer agent 3. and issue of debt instruments such as debentures. Depository participant Investors’ protection in the primary market: To ensure healthy growth of primary market. public offers.right issues to existing shareholders. and distribution. Function: The main services of the primary market are origination. ] 13 . The principal ingredients of investors’ protection are: Provision of all the relevant information Provision of accurate information and Transparent allotment procedures without any bias. Underwriter/broker to the issue 4. Origination deals with the origin of the new issue. the investing public should be protected. Underwriting contract make the shares predictable and remove the element of uncertainty in the subscription. The term investor protection has a wider meaning in the primary market. bonds. Distribution refers to the sale of securities to the investors. The primary market is regulated by the Securities and Exchange Board of India (SEBI a government regulated authority).
Portfolio Manager 3. Broker/member of stock exchange – buyers broker and sellers broker 2. the growth of secondary market depends on the primary market. The companies hitting the primary market are mandatory to list their shares on one or more stock exchanges in India. Depository participants. Outstanding securities are traded in the secondary market. Secondary market operations involve buying and selling of securities on the stock exchange through its members. Trading activities in the secondary market are done through the recognized stock exchanges which are 23 in number including Over The Counter Exchange of India (OTCE). More the number of companies entering the primary market. 14 . which is commonly known as stock market or stock exchange. It is a market place which provides liquidity to the scrip’s issued in the primary market.SECONDARY MARKET The primary market deals with the new issues of securities. National Stock Exchange of India and Interconnected Stock Exchange of India. Thus. “The secondary market is a market where scrip’s are traded”. Share transfer agent 5. Depository 6. Listing of scrip’s provides liquidity and offers an opportunity to the investors to buy or sell the scrip’s. Investment advisor 4. the greater are the volume of trade at the secondary market. The following are the intermediaries in the secondary market: 1.
Under this act. central legislation was proposed and a committee headed by A.D. Government securities are traded outside the trading ring in the form of over the counter sales or purchase. 15 . During the war boom. the securities contract (regulation) act became law in 1956. In the stock market. Soon after it became a central subject.STOCK MARKETS IN INDIA: Stock exchanges are the perfect type of market for securities whether of government and semi-govt bodies or other public bodies as also for shares and debentures issued by the joint-stock companies. it was a state subject and the Bombay securities contracts (control) act of 1925 used to regulate trading in securities. a number of stock exchanges were organized. the Mumbai stock exchange was recognized in 1927 and Ahmadabad in 1937. These were organized as voluntary nonprofit-marking associations of brokers to regulate and protect their interests. The bargains that are struck in the trading ring by the members of the stock exchanges are at the fairest prices determined by the basic laws of supply and demand. Government securities. purchases and sales of shares are affected in conditions of free competition. On the basis of the committee’s recommendations and public discussion.” The securities include: Shares of public company. selling or dealing in securities. Bonds History of Stock Exchanges: The only stock exchanges operating in the 19th century were those of Mumbai setup in 1875 and Ahmadabad set up in 1894. Definition of a stock exchange: “Stock exchange means any body or individuals whether incorporated or not. Before the control on securities under the constitution in 1950. regulating or controlling the business of buying.Gorwala went into the bill for securities regulation. constituted for the purpose of assisting.
16 . Over the hundred and twenty years during which the stock exchanges have existed in this country and through their medium. public investment is increased and companies were able to raise more funds. organizing new ventures and completing projects of expansion.Functions of Stock Exchanges: Stock exchanges provide liquidity to the listed companies. they help trading and raise funds from the market. shares and debentures for financing their day-to-day activities. The quoted companies with wide public interest have enjoyed some benefits and assets valuation has become easier for tax and other purposes. and industry. trade and commerce. diversification and modernization. trust and local bodies have obtained from the public their financial requirements. Municipal corporations. By obtaining the listing and trading facilities. By giving quotations to the listed companies. the central and state government have raised crores of rupees by floating public loans.the backbone of the country’s economy-have secured capital of crores or rupees through the issue of stocks.
Act. Bangalore Stock Exchange Bhubaneshwar Stock Exchange Association Calcutta Stock Exchange Cochin Stock Exchange Ltd. Coimbatore Stock Exchange Delhi Stock Exchange Association 17 . Those are: Ahmadabad Stock Exchange Association Ltd.Various Stock Exchanges in India: At present there are 23 stock exchanges recognized under the securities contracts (regulation). 1956.
Mumbai Stock Exchange National Stock Exchange of India OTC Exchange of India Pune Stock Exchange Ltd. Uttar Pradesh Stock Exchange Association Vadodara Stock Exchange Ltd.Guwahati Stock Exchange Ltd Hyderabad Stock Exchange Ltd. Jaipur Stock Exchange Ltd Kanara Stock Exchange Ltd Ludhiana Stock Exchange Association Ltd Madras Stock Exchange Madhya Pradesh Stock Exchange Ltd. Magadh Stock Exchange Limited Meerut Stock Exchange Ltd. 18 . Saurashtra Kutch Stock Exchange Ltd.
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. which recommended promotion of a National Stock Exchange by financial institutions (FI’s) to provide access to investors from all across the country on an equal footing. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act. 1956 in April 1993. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000 19 . NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. Based on the recommendations.Out of these major stock exchanges were: NSE (National Stock Exchange) The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges.
efficient and transparent securities market to investors using electronic trading systems. have become industry benchmarks and are being emulated by other market participants.NSE's mission is setting the agenda for change in the securities markets in India. The standards set by NSE in terms of market practices and technology. It's that force which is guiding the industry towards new horizons and greater opportunities. The NSE was set-up with the main objectives of: Establishing a nation-wide trading facility for equities and debt instruments. Providing a fair. and Meeting the current international standards of securities markets. NSE is more than a mere market facilitator. Ensuring equal access to investors all over the country through an appropriate communication network. 20 . Enabling shorter settlement cycles and book entry settlements systems.
Mumbai. It also strives to educate and enlighten the investors by conducting investor education programmers and making available to them necessary informative inputs. even older than the Tokyo Stock Exchange. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into demutualised and corporate entity. It is the first Stock Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. debt and derivatives upholds the interests of the investors and ensures redresses of their grievances whether against the companies or its own member-brokers. which was established in 1878. 21 . It is the oldest one in Asia.BSE (Bombay Stock Exchange) The Stock Exchange.The Exchange. popularly known as "BSE" was established in 1875 as "The Native Share and Stock Brokers Association". of India under the Securities Contracts (Regulation) Act 1956. while providing an efficient and transparent market for trading in securities. It has evolved over the years into its present status as the premier Stock Exchange in the country.
who are from the broking community (one third of them retire ever year by rotation).A Governing Board having 20 directors is the apex body. an Executive Committee. continuance and suspension of memberbrokers. three SEBI nominees. norms. six public representatives and an Executive Director & Chief Executive Officer and a Chief Operating Officer. which decides the policies and regulates the affairs of the Exchange. The Executive Director as the Chief Executive Officer is responsible for the day-to-day administration of the Exchange and the Chief Operating Officer and other Heads of Department assist him.126 A in its Rules. procedures and other matters relating to arbitration. The Committee considers judicial & quasi matters in which the Governing Board has powers as an Appellate Authority. 22 . The Governing Board consists of 9 elected directors. Accordingly. margins and other monies payable by the member-brokers to the Exchange. Executive Director & CEO and Chief Operating Officer has been constituted. Byelaws pertaining to constitution of the Executive Committee of the Exchange. three SEBI nominees or public representatives. admission. etc. deposits. fees. consisting of three elected directors. The Exchange has inserted new Rule No. matters regarding annulment of transactions. declaration of a member-broker as defaulter.
He should be neither a bankrupt nor compound with the creditors. 1956” and “Securities Exchange Board of India 1952”. The qualifications for becoming a member of a recognized stock exchange are given below: The minimum age prescribed for the members is 21 years. He should be an Indian citizen. 23 . Three tier regulatory structure comprising Ministry of finance The Securities And Exchange Board of India Governing body Members of the stock exchange: The securities contract regulation act 1956 has provided uniform regulation for the admission of members in the stock exchanges. He should not be convicted for fraud or dishonesty. The minimum required education is a pass in 12th standard examination. He should not be engaged in any other business connected with a company.REGULATORY FRAME WORK OF STOCK EXCHANGE A comprehensive legal framework was provided by the “Securities Contract Regulation Act. He should not be a defaulter of any other stock exchange.
1947and the securities to it by the central government. Regulating substantial acquisition of shares and take over of companies. in respect of the regulation of stock exchange were transferred to the SEBI. Regulating the business in stock exchanges and any other securities market. the SEBI shall constitute of a chairman and four other members appointed by the central government. Prohibiting insider trading in securities.according to this act.SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) The securities and exchange board of India was constituted in 1988 under a resolution of government of India. 1992 some of the powers and functions exercised by the central government. With the coming into effect of the securities and exchange board of India act. It was later made statutory body by the SEBI act 1992. Performing such functions and exercising such powers under the provisions of capital issues (control) act. 24 . OBJECTIVES AND FUNCTIONS OF SEBI To protect the interest of investors in securities. Registering and regulating the working of intermediaries associated with securities market as well as working of mutual funds. Promoting and regulating self-regulatory organizations.
Stop loss order: The orders are given to limit the loss due to unfavorable price movement in the market. If the price falls below the limit.40”.22. The order stands as this “buy BRC 100 shares around Rs. Discretionary order: The investor gives the range of price for purchase and sale. The order to buy or sell specifying the number of shares of the company of investors’ choice is placed with the broker. The orders are of different types. Limit orders: Orders are limited by a fixed price. Generally the approximation price is fixed. After receiving the 25 . The broker can use his discretion to buy within the specified limit. All recognized stock exchanges will have to inform about transactions within 24 hrs. Best rate order: Here. A particular limit is given for waiting. TYPES OF ORDERS: Buy and sell orders placed with members of the stock exchange by the investors. Sell BRC limited at Rs.g. Capital adequacy norms have been laid down for the members of various stock exchanges depending upon their turnover of trade and other factors. E.g. ‘buy Reliance Petroleum at Rs.50.’Here. The order may be of any type.50. E. It may be lowest rate for buying and highest rate for selling. public representatives and government representatives to the extent of 50% of total number of members.SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK EXCHANGES): Board of Directors of Stock Exchange has to be reconstituted so as to include non-members. stop loss at Rs. the broker is authorized to sell the shares to prevent further loss.24. the order has clearly indicated the price at which it has to be bought and the investor is not willing to give more than Rs. Buying and selling shares: To buy and sell the shares the investor has to locate register broker or sub broker who render prompt and efficient service to him. the buyer or seller gives the freedom to the broker to execute the order at the best possible rate quoted on the particular date for buying.
’C’. Share settlement is likely to be completed much sooner after the transaction than under the fixed settlement system. The broker then delivers the contract note to the investor. The stamp duty is one of the percentage considerations. the settlement takes place n days (usually 1. The investor should be account holder in any of the depository participant. once the broker gets the share certificate through the clearing houses he delivers the share certificate along with transfer deed to the investor. 3 or 5days) after the trading day. In the case of sale of shares on receiving payment from the purchasing broker. which are in the carry forward system. number of shares bought. Share groups: The scrips traded on the BSE have been classified into ‘A’. Generally longer settlement periods are shortened gradually. and the date of delivery of share. If it is bought in the DEMAT form. brokerage. The shares bought and sold are paid in for n days after the trading day of the particular transaction. price. The ‘A’ group represents those.’F’ and ‘Z’ groups. ROLLING SETTLEMENT SYSTEM: Under rolling settlement system.e. 2. The investor has to fill the transfer deed and stamp it. the settlement period is n days after the trading day. the broker has to give a matching instruction to his depository participant to transfer shares bought to the investors account. the broker effects the payment to the investor. In this physical trading form. The rolling settlement system is noted by T+N i.1 26 . The ‘C’ group covers the odd lot securities in ‘A’.’B2’. the investor should lodge the share certificate and transfer deed to the register or transfer agent of the company. A rolling period which offers a large number of days negates the advantages of the system. ‘B1’&’B2’ groups. The ‘F’ group represents the debt market segment (fixed income securities).’B1’. It gives the details regarding the name of the company. the order is executed. The Z group scrips are of the blacklisted companies. SEBI made RS compulsory for trading in 10 securities selected on the basis of the criteria that they were in compulsory demat list and had daily turnover of about Rs. Once matching order is found.order the broker tries to execute the order in his computer terminal.
m and in electronic form upto 6 p. In the demat mode net basis settlement is allowed. A provision of an exception window would be available for late confirmation.m for same day processing. The buy and sale positions in the same scrip can be settled and net quantity has to be settled. Automated Lending and Borrowing Mechanism (ALBM) and Borrowing and lending Securities Scheme (BELSS) with effect from Dec 31. After the T+3 rolling settlement experience it was further reduced to T+2 to reduce the risk in the market and to protect the interest of the investors from 1st April 2003.30 p.30 a. SEBI has introduced T+5 rolling settlement in equity market from July 2001 and subsequently shortened the cycle to T+3 from April 2002.00 am. the depositories accept from other DPs till 8p.m on T+2 to the depositories and clearing banks.m on T+2 from the brokers’ pool accounts.00am/on T+2. 2001.30 p. The exchanges/clearing house/ clearing corporation would process and download the obligation files to the broker’s terminals late by 1. Then it was extended to “A” stocks in Modified Carry Forward Scheme. Depository participants accept the instructions for pay in securities by investors in physical form upto 4 p. Activities on T+2: The depository permits the download of the paying in files of securities and funds till 10.m. 27 . Activities on T+1: conformation of the institutional trades by the custodian is sent to the stock exchange by 11.crore or more. The depository processes the pay in requests and transfers the consolidated pay in files to clearing House/clearing Corporation by 11. The exchange/clearing house/clearing corporation executes the pay-out of securities and funds latest by 1. The time limit and the additional changes for the exception window are dedicated by the exchange.m on T+1.
sharekhan. like Sun Microsystems. Derivatives. is one of the leading retail stock broking house of SSKI Group which is running successfully since 1922 in the country. Oracle. Verisign Financial Technologies India Ltd. to build its trading 28 . Share khan’s ground network includes over 1288 centers in 325 cities in India which provide a host of trading related services. the site has a registered base of over one lakh customers. which has over eight decades of experience in the stock broking business. The objective has been to let customers make informed decisions and to simplify the process of investing in stocks. Spider Software Pvt Ltd. investment advice etc. The firm’s online trading and investment site . The content-rich and research oriented portal has stood out among its contemporaries because of its steadfast dedication to offering customers best-of-breed technology and superior market information. Sharekhan offers its customers a wide range of equity related services including trade execution on BSE. It is the retail broking arm of the Mumbai-based SSKI Group. NSE.was launched on Feb 8. Microsoft. Vignette. investor friendly language and high quality research. Nexgenix.ABOUT SHAREKHAN LIMITED Sharekhan Ltd. Sharekhan has always believed in investing in technology to build its business. On April 17.www. Known for its jargon-free.com . The site gives access to superior content and transaction facility to retail customers across the country. Cambridge Technologies. a net-based executable application that emulates the broker terminals along with host of other information relevant to the Day Traders. This was for the first time that a net-based trading station of this caliber was offered to the traders. 2002 Sharekhan launched Speed Trade. online trading. 2000. depository services. In the last six months Speed Trade has become a de facto standard for the Day Trading community over the net. The company has used some of the best-known names in the IT industry.
SSKI holds a sizeable portion of the market in each of these segments.engine and content. 29 . Presently SSKI is one of the leading players in institutional broking and corporate finance activities. The Corporate Finance section has a list of very prestigious clients and has many ‘firsts’ to its credit. With a legacy of more than 80 years in the stock markets. HSBC. It has 60 institutional clients spread over India. Intel & Carlyle are the other investors. UK and US. with a daily turnover of over US$ 2 million. sector tapped etc. Some of the clients include BPL Cellular Holding. Planetasia. Far East. Hutchison. the SSKI group ventured into institutional broking and corporate finance 18 years ago. The Morakhiya family holds a majority stake in the company. The group has placed over US$ 1 billion in private equity deals. and Shopper’s Stop. SSKI’s institutional broking arm accounts for 7% of the market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional portfolio investment in the country. Gujarat Pipavav. Foreign Institutional Investors generate about 65% of the organization’s revenue. in terms of the size of deal. Essar.
Online Services and Technical Research. INDIA. 1 player in online business • Largest network of branded broking outlets in the country serving more than 7. 00.com Your Guide to The Financial Jungle.• PROFILE OF THE COMPANY Name of the company: Year of Establishment: Headquarter : Sharekhan ltd. 1925 Sharekhan SSKI A-206 Phoenix House Phoenix Mills Compound Lower Parel Mumbai . Over 3500 Data Not Available www.400013 Service Provider Depository Services. Sharekhan is infact• Among the top 3 branded retail service providers • No.Maharashtra. Nature of Business Services : : Number of Employees : Revenue Website Slogan : : : Vision To be the best retail brokering Brand in the retail business of stock market.sharekhan. Mission To educate and empower the individual investor to make better investment decisions through quality advice and superior service.000 clients. 30 .
EDUCATION. SSKI won the 'India's Best Broking House for 2004' award. TOOLS AND EXECUTION services for EXECUTION investors. it has been providing institutional level research and broking services to institutional-level individual investors. These services are accessible through its centers across the country over the internet (through the website www. Technology With its online trading account one can buy and sell shares in an instant from any PC with an internet connection. one can get access to a wide range of information on Sharekhan limited’s content-rich portal. have a dedicated call centre to provide this service via a call-centre Toll Free Number 1800-22-7500 & 1800-22-7050 from anywhere in India.com) as well as over the Voice Tool. 7500 31 .REASON TO CHOOSE SHAREKHAN LIMITED Experience SSKI has more than eight decades of trust and credibility in the Indian stock market.sharekhan. Convenience One can call its Dial-N-Trade number to get investment advice and execute his Trade investment transactions. Sharekhan ltd. In the Asia Money broker's poll held recently. Ever since it launched Sharekhan as its retail broking division in February 2000. Knowledge In a business where the right information at the right time can translate into direct time profits. One can also get a useful set of knowledge-based tools that will ased empower him to take informed decisions. Accessibility Sharekhan provides ADVICE. One can get access to its powerful online trading tools that will help him take complete control over his investment in shares.
com.sharekhan. 32 . demat and other queries. Its analysts constantly track the pulse of the market and provide timely investment advice to its clients in the form of daily research emails. Investment Advice Sharekhan has dedicated research teams of more than 30 people for fundamental and technical researches. email or live chat on www. online chat. billing. printed reports and SMS on their mobile phone. Its customer service can be contacted via a toll-free number.Customer Service Sharekhan limited’s customer service team will assist one for any help that one may require relating to transactions.
SHAREKHAN LIMITED’S MANAGEMENT TEAM Dinesh Murikya Tarun Shah Shankar Vailaya : : : : : : : Owner of the company CEO of the company Director (Operations) Director (Products & Technology) Head of Research Vice President of Equity Derivatives Vice President of Research Jaideep Arora Pathik Gandotra Rishi Kohli Nikhil Vora PRODUCTS AND SERVICES OF SHAREKHAN LIMITED The different types of products and services offered by Sharekhan Ltd. are as follows: Equity and derivatives trading Depository services Online services Commodities trading Dial-n-trade Portfolio management Share shops Fundamental research Technical research 33 .
Demat and digital contracts. 34 . This account allow investors to buy and sell stocks online along with the following features like multiple watch lists. Integrated Banking.sharekhan.com and is suitable for the retail investor who is risk-averse and hence prefers to invest in stocks or who does not trade too frequently. Real-time portfolio tracking with price alerts and Instant credit & transfer.TYPES OF ACCOUNT IN SHAREKHAN LIMITED Sharekhan offers two types of trading account for its clints Classic Account (which include a feature known as Fast Trade Advanced Classic Account for the online users) and Speed Trade Account CLASSIC ACCOUNT This is a User Friendly Product which allows the client to trade through website www.
Simple and Secure Interactive Voice Response based system for authentication IV. Free trading through Phone (Dial-n-Trade) I. Online trading account for investing in Equities and Derivatives b.30 am c. get the trusted. Market summary (Cost traded scrip. Integration of: Online Trading +Saving Bank + Demat Account. d.This account comes with the following features: a. g. SPEED TRADE ACCOUNT This is an internet-based software application. This account comes with the following features: a. c. 35 . i. Automatic funds transfer with phone banking facilities (for Citibank and HDFC bank customers) III. Single screen trading terminal for NSE Cash. After hours order placement facility between 8. IPO investments. f.00 am and 9. Instant order Execution and Confirmation.) Hot keys similar to broker’s terminal. e. NSE F&O & BSE. d. f. Instant cash transfer facility against purchase & sale of shares. Instant order and trade confirmations by e-mail. Technical Studies. e. Back-up facility to place trades on Direct Phone lines. professional advice of Sharekhan limited’s Tele Brokers V. highest value etc. h. Real-time streaming quotes. g. which enables one to buy and sell in an instant. Two dedicated numbers(1800-22-7500 and 39707500) for placing the orders using cell phones or landline phones II. Multiple Charting. Single screen interface for cash and derivatives. It is ideal for active traders and jobbers who transact frequently during day’s session to capitalize on intra-day price movement. tic-by-tic charts. b. Alerts and reminders.
a.: One need to call them at phone number provided below and asks that he want to open an account with them. Live market debts.. investor has to open an account. from second calendar year onward Delivery .50 % Depository Charges: Account Opening Charges Annual Maintenance Charges Rs. 750/= Intra-day – 0.0. 36 . One can also log on to “http://sharekhan. Sharekhan has a huge network all over India (640 centers in 280 cities).50% Speed Trade Account Rs. he can call on 022-66621111 One can visit any one of Sharekhan Limited’s nearest branches. One can send them an email at firstname.lastname@example.org % Brokerage Delivery .0. Following are the ways to open an account with Sharekhan Ltd. 1000/= Intra-day .com/Locateus.10% HOW TO OPEN AN ACCOUNT WITH SHAREKHAN LIMITED? For online trading with Sharekhan Ltd. 300/= p. NIL first year Rs.com to know about their products and services. Or If one stays in Mumbai.aspx” link to find out the nearest branch.j. One can call on the Toll Free Number: 1-800-22-7500 to speak to a Customer Service executive b. NIL Rs.0.a. CHARGE STRUCTURE Fee structure for General Individual: Charge Account Opening Classic Account Rs.
his email address. shop and his preferences regarding the type of account he wants. which contains the clients’ Trading ID and Trading Password. they can start trading and investing in shares. After that the executives of the respective branches contact the prospective clients over phone or through email and give them information regarding the various types of accounts and the documents they need to open an account and then fix appointment with the prospective clients to give them demonstration and making them undergo the formalities to open the account. After that the forms that has collected from the clients. After the accounts are activated.com and click on the option “Open an Account” to fill a small query form which will ask the individual to give details regarding his name. As soon as the clients receive the Welcome Kit. These information are compiled in the headquarter of the company that is in Mumbai from where it is distributed through out the country’s branches in the form of leads on the basis of cities and nearest share shops.sharekhan. pin code of the city. a Welcome Kit is dispatched from Mumbai to the clients’ address mentioned in the documents provided by them. One can also visit the site www. city he lives in. is scrutinized in the branch and then it is sent to Mumbai for further processing where after a few days the clients’ account are generated and activated. phone number. his nearest Sharekhan Ltd. 37 .
Generally the process of opening an account follows the following steps: LEAD MANAGEMENT SYSTEM (LMS) / REFERENCES CONTACT THE PERSON OVER PHONE OR THROUGH EMAIL FIXING AN APPOINTMENT WITH THE PERSON GIVING DEMONSTRATION YES NO DOCUMENTATION FILLING UP THE FORM SUBMISSION OF THE FORM LOGIN OF THE FORM SENDING ACCOUNT OPENING KIT TO THE CLIENT TRADING 38 .
d. Passport (valid) Voter’s ID Card Ration Card Driving License (valid) Electricity Bill (should be latest and should be in the name of the client) Telephone Bill (should be latest and should be in the name of the client) Flat Maintenance Bill (should be latest and should be in the name of the client) h. one needs to provide with the following documents in order to open an account with Sharekhan Limited. f. one for the Account Opening Fees and the other for the Margin Money (the minimum margin money is Rs. Saving Bank Statement** (should be latest) Two cheques drawn in favour of Sharkhan Limited. g. Insurance Policy (should be latest and should be in the name of the client) i. Lease or Rent Agreement.: Photocopy of the clients’ PAN Card which should be duly attached Photo copy of any of the following documents duly attached which will serve as correspondence address proof: a.Apart from two passport size photographs. b. 39 . ** A cancelled cheque should be given by the client if he provides Saving Bank Statement as a proof for correspondence address. j. 5000). c. NOTE: Only Saving Bank Account cheques are accepted for the purpose of Opening an account. e.
High Noon. These exclusive trading picks come only to Sharekhan Online Trading Customer and are based on in-depth technical analysis. Sharekhan's trading calls in the month of November 2007 has given 89% strike rate. 40 . Daring Derivatives and Post-Market Report. one receives daily 5-6 Research Reports on their emails which they can use as tips for investing in the market. These reports are named as Pre-Market Report.RESEARCH SECTION IN SHAREKHAN LIMITED Sharekhan Limited has its own in-house Research Organisation which is known as Valueline. Apart from these. Investors Eye. Sharekhan Limited’s research on the volatile market has been found accurate most of the time. Out of 37 trading calls given by Sharekhan in the month of November 2007. Generally the research is based on the Fundamentals and Technical analysis of different companies and also taking into account various factors relating to the economy. Sharekhan Limited issues a monthly subscription by the name of Valueline which is easily available in the market. 33 hit the profit target. It comprises a team of experts who constantly keep an eye on the share market and do research on the various aspects of the share market. As a customer of Sharekhan Limited. Eagle Eye.
41 . Sharekhan Limited won the CNBC AWARD for the year 2004. twice by Euromoney Survey and four times by Asiamoney Survey.AWARDS AND ACHIEVEMENTS SSKI has been voted as the Top Domestic Brokerage House in the research category.
Chapter 3 Project Analysis 42 .
For this. DISADVANTAGES OF OUTCRY SYSTEM: It lacks transparency. the broker using ‘open outcry’ method makes an offer or bid price. the broker or his authorized representatives goes to the stock exchange.. he may turn to some other dealer. speculation and mal practice is more. In the post pit or wing. This method is called the open outcry system. also known as offer or bid price. he may loose the bargain. In audibility was another disadvantage of the outcry system. The dealer. the price agreed upon. are noted. 43 . the name of the party. On the close of the bargain. The floor of the stock exchange is divided into a number of markets also known as ‘post pit’ or wing based on particular securities dealt there. Basically the brokers shout while buying or selling the securities. Due to the above disadvantages of the outcry system the SHAREKHAN has shifted from outcry system to online trading from February 29th 1997. For making the necessary bargain. the dealer as well as the broker makes a brief note of the particulars of the deal. quotes his own price when the quotation of the dealer suits the broker.PROJECT ANALYSIS OUTCRY SYSTEM The broker has to buy or sell securities for which he has received the orders. If he is not satisfied with the quote price. Such notes are made on some pad and on it the number of shares. The scope of manipulation. to whom the price is quoted. what membership number etc. he quotes his purchase or sale price. Signal were more important in the outcry system any member who could not interpret the buy/sell signal correctly often landed himself in disaster situation.
Placement of order: The next step is the The prospective investor who wants to buy shares or the investors. the contract notes are drawn up and posted to the client. and a special one-hour session on Saturday. fax etc or in person. They carry a sauda Block Book or conformation memos. letter. which are duly authorized by the exchange when the deal is struck. Hence various stages have to be completed in executing a transaction at a stock exchange . Execution of order or contract: Orders are executed in the trading ring of the BSE. both broker and jobber make a note in their sauda block books. it is placed generally over the phone. Limit Order. Limited Discretionary Order. have to act through member brokers only. who wants to placing order for the purchase or sale of securities with a broker.The steps involved in this method of trading have given below: Choice of broker: sell shares and transact business.30 P.M on all working days Monday to Friday. The orders may take any one of the forms such as At Best Orders.MANUAL TRADING Trading procedure before introduction of online trading: Trading on stock exchanges is officially done in the trading ring. telephone. The stock exchanges operations are floor level are technical in nature . The order is usually placed by telegram. and Open Order. Stop Loss Order. They carry a sauda book or confirmation memos. The members or the authorized assistants have to wear a badge given by the exchange to enter into the trading ring. Immediate or Cancel Order. From the sauda book. They can also appoint their bankers for this purpose as per the present regulations.Nonmembers are not permitted to enter in to stock market. To avoid delay. duly authorized by the exchange and carry a pen with them. In the trading ring the space is provided for specified and non-specified sections. the members and their authorized assistants have to wear a badge or carry with them an identity card given by the exchange to enter the trading ring. A contract 44 . This works from 11:30 to 2.
Drawing Up and Bills: Both sale and purchase bills are prepared along with the contract note and it is posted on the same day or the next day. the investor gets the option to dematerialize such shares. In order to dematerialize the certificates. This in a purchase transaction. The investor has to ensure that he marks “Submitted for Dematerialization” on the certificates before the shares are handed over to the DP for demat. With this. the process is as follows: after completion of transfer. once the shares are delivered to the client effects payment for the purchases and pays the stamp fees for transfer. Dematerialization can only be done to those certificates. which is DP and submit the same along with the share certificates. These shares are fungible-which means that 100 shares of a security are the same as any other 100 shares of the security. 45 . Investor’s willing to exercise this option sends a Demat request along with the option letter sent by the company to his DP. an investor has to first open an account with a DP and then request for the Dematerialization Request Form. Odd lot shares certificates can also be dematerialized. Briefly. This list is steadily increasing. which are already registered in your name and belong to the list of securities admitted for Dematerialization at NSDL. Dematerialized shares do not have any distinctive or certificate numbers. Most of the active scrip’s in the market including all the scrip’s of S&P CNX NIFTY and BSE SENSEX have already joined NSDL. including other expenses incurred by the broker in the price itself. The company or its R&T agent would confirm the Demat request on its receipt from the DP to reduce risk of loss in transit. DEMATERLIZATION: Dematerialization is the process by which physical certificates of an investor are converted to an equipment number of securities in electronic from and credited in the investor account with his DP.note is written agreement between the broker and his clients for the transaction executed. the process ends. a bill is made out giving the total cost of purchase.
There is no lost in transit. To get back dematerialized securities in the physical form. RBI has also reduced the minimum margin to 25% for loans against dematerialized securities as against 50% for loans against physical securities. This has lead to reduction in brokerage to the extent of 0. You can also expect a lower interest charge for loans taken against Demat shares as compared to loans against physical shares. in turn saving the cost and wastage of time associated with follow up for rectification. you save 0. 46 . In case of transfer of electronic shares. thus the overheads of getting a duplicate copy in such circumstances is reduced. this eliminating risk of loss in transit. You avoid the cost of courier / notarization. Rematerialization is the process of converting electronic shares in to physical shares. request DP for Rematerialization of the same is made.Dematerialization normally takes about fifteen to thirty days.5% by quite a few brokerage firms.5% in stamp duty. You can receive your bonuses and rights issues into your DA as a direct credit. Benefits of Demat: It reduces the risk of bad deliveries.
to mega sources of information. leisure. banking. enables participation by individuals in business to business and business to consumer commerce. ubiquitous links to anyone anywhere and anytime to build up interactive relationships. downloaded and retransmitted. Internet or net is an interconnection of computer communication networks spanning the entire globe. growth of Internet is of recent times. through various websites. called the Internet promises to bring unprecedented changes in our lives and business. etc. It is expected to bring changes in every functional area of business activity including management and financial services. Internet can change the nature and capacity of stock broking business in India. trade. crossing all geographical boundaries. commerce and what not it is virtually changing every thing and we are living in dot. business. games. It has re-defined the methods of communication. A combination of time and space. This technology shrinks vast distances.com age. e-commerce and etc. self-governed network connecting several other smaller networks and millions of computers and persons. In India.ONLINE TRADING Before getting in to the online trading we should know some things about the internet. 47 . health. It offers stock trading at a lower cost. It allows direct. work study. visit to shopping arcades. in cyber space even the information can be copied. Net being an interactive two way medium. The use of Internet has grown 2000 percent in last decade and is currently growing at 10 percent per month. 1) What is Internet? Internet is a worldwide. education. accelerating the pace of business reforms and revolutionizing the way companies are managed.
E-commerce Electronic commerce is associated with buying and selling over computer communication networks. etc. E-commerce refers to the paperless exchange of business information using electronic data inter change. 48 . the various operating systems are the most basis program within a computer. investors had no option but to contact their broker to get real time access to market data. It manages the resources of the computer system in a fair and efficient manner. to attract more investors.e. market research and news. The net brings data to the investor on-line and net broking enables him to trade on a click of mouse. PC’s and networking attempts to introduce banks of the tools and technologies required for electronic commerce. The computers are either workstations of individual office works or serves where large databases and information reside. Information is electronically transferred from computer to computer in an automated way.2. It not only reduces manual processes and paper transactions but also helps organization move to a fully electronic environment and change the way they operated. Now we can enter in to the concept known as online trading. It helps conduct traditional commerce through new way of transferring and processing of information. In the past. live quotes. Now information has become easily accessible to both retail as well as big investor. customized services. Brokers will offer online broking and relationship management by providing and offering analysis and information to investors during broking and nonbroking hours based on their profile and needs. EVOLUTION OF BROKING IN INDIA: The evolution of a broking in India can be categorized in three phases Stockbrokers will offer on their sites features such as live portfolio manager. electronic technologies. i. Network connects both categories of computers.
Under the ORS the client enters his requirements (security. etc.” In online trading. In the real world you place orders on your stockbroker either verbally (personally or telephonically) or in a written form (fax). and enables the investors to take better and well considered decisions. insurance services. quantity. In India: Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. by increasing quote continuity and market depth. on-line asset allocation. 49 . The SEBI committees on internet based securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction. The actual definition of “Online Trading” is as explained below: “Online trading is a service offered on the internet for purchase and sale of shares. price buy/sell) on broker’s site. financial planning. you will access a stockbroker’s website through your internet enabled PC and place orders through the broker’s internet based trading engine. so as to handle growing volumes easily and to support nationwide expansion of market activity. Provide management information system. tax planning. Orders are communicated to the stock exchange through website. Brokers (now e-brokers) will offer value management or services like initial public offering online. The net is used as a mode of trading in internet trading. by elimination of mismatches. Objectives: Internet trading is expected to Increase transparency in the markets. Introduce flexibility in system. Reduce settlement risks due to open trades. Enhance market quality through improved liquidity. portfolio management. These orders are routed to the stock exchange without manual intervention and executed thereon in a matter of a few seconds.
Telephone connection 4. these are: Investor protection Creation of a fair and efficient market. etc. Bank manager’s signature along with bank’s seal. which are necessary First page of the bank pass book and last 6 months statement. Installation of a modem 3. Depository account 7.Besides. Compliance with SEBI guidelines for net trading The following should be produced to get a demat account and online trading account: As identity proof & address proof any one of the following: 1) 2) 3) 4) 5) 6) Voter ID card Driving license PAN card( in case of to trade more than 50000) Ration card Bank pass book Telephone bill Other requirements. manager registration code on photograph. Some of the brokers offering net trading include ICICI direct. Registration for on-line trading with broker 5. 50 . Requirements for net trading: For investors: 1. kotakstreet. Installation of a computer with required specification 2. and Reduction of the systematic risks. A bank account 6. through internet trading three fundamental objectives of securities regulation can be easily achieved.
and buy/sell) in broker's site. Adequate. Communication of order (trade confirmation to investor by e-mail) 7. Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. Net worth of Rs. He should also have demat account and bank account. The net is used as a medium of trading in internet trading. Use of authentication technologies 8. Setting up a website. The customer's portfolio and ledger accounts get updated to reflect the transaction. Under the Order Routing System the client enters his requirements (security.For stock brokers: 1. Order can be placed using place order window of the website. The SEBI committees on internet based securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction. price. Adequate back-up system 4. The client receives a confirmation on execution of the order. The user should have the user id and password to enter into the electronic ring. Permission from stock exchange for net trading 2. The system permits only a registered client to log in using user id and password. quantity. Secured and reliable software system 5. 50 lac 3. Issue of contract notes within 24 hours of the trade execution 9. Orders are communicated to the stock exchange through website. 51 . experienced and trained staff 6. They are checked electronically against the clients account and routed electronically to the appropriate exchange for execution by the broker.
Some brokers will take some advance payment from the investor and will fix their trading limits. Screen based trading provides more transparency. who are interested in doing the trading over internet system i. the order has to be sent by clicking on the send option. Thus. Step 3: Actual placement of an order. An order can then be placed by using the place order window as under: (a) First by entering the symbol and series of stock and other parameters like quantity and price of the scrip on the place order window. Step 2: After registration. series and the default quantity. With online trading 52 . At present. the broker will ask the investor for transfer of funds to his account. (b) Second. the investor has to review the order placed by clicking the review option. In the open outcry system. for which there are different mode. Step 8: It is regarding charging payment.Procedure for net trading Step 1: Those investors. Step 7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons such as invalid price limit. When the trade is executed. an appropriate message will appear at the bottom of the screen. Step 4: It is the process of review. only the broker knew the actually transacted price. fill in the symbol. He may also re-set to clear the values. Internet trading provides total transparency between a broker and an investor in the secondary market.e. Password and personal identification number (PIN). NEAT-IXS. Step 5: After the review has been satisfactory. the broker will provide to them a Login name. should approach the brokers and get them self registered with the Stock Broker. Step 6: The investor will receive an "Order Confirmation" message along with the order number and the value of the order. a time lag of about 10 seconds is there in executing the trade.
Instant feedback is available about the execution. mostly within 30 seconds. 53 . 10) Confirmation is e-mailed to investor by broker 11) Contract note is printed and mailed in 24 hours 12) Settlement will take place automatically on the settlement day 13) Demat account and the bank account will get debited and credited by electronic means. Confirmation and execution of trade reaches the investor within the least possible time. Some of the websites also offer. News and research report BSE and NSE movements Stock analysis IPO and mutual fund centers Step by step procedure in online trading: Following steps explain the step by step approach to on-line trading: 1) Log on to the stock broker's website 2) Register as client/investor 3) Fill the application form and client broker agreement form on the requisite value stamp paper 4) Obtain user ID and pass word 5) Log on to the broker's site using secure user ID and password 6) Market watch page will show real time on-line market data 7) Trade shares directly by entering the symbol or number of the security 8) Brokers server will check your limit in the on-line account and Demat account for the number of shares and execute the trade 9) Order is executed instantly (10-30 seconds) and confirmation can be obtained. The time gap has narrowed in every stage of operation.investors can see themselves the price at which the deal takes place.
5) Individuals’ benefit by saving comparatively a lot more when trading online as the cost per trade is less. 2) Online trading has let room for smaller organizations to compete with multinational organizations since it is no longer a leg it issue. government. ADVANTAGES OF ONLINE TRADING: 1) Online trading has made it possible for anyone to have easy and efficient access to more reports and charts than it was previously possible if one went to any brokers' office. unlike earlier when people bought bonds. Now they can invest in stocks. for instance where tax (sales and value added taxes) is best suited to them. and stock for long-term basis and sat on them. but this type is much more risky. therefore. and even insurance. stock and index options mutual funds. 2) Market orders: orders can be filled at unexpected prices. 4) Online trading gives control to individuals and they can exercise it over accounts thus comprehend what is going on when they trade. 3) Online trading has allowed companies to locate themselves where they want as physical location is not an issue anymore. 54 . but there is an extra Charge for this leeway facility since one need to hold a price. Being online does not identify the size of any particular organization. Margin account: where orders can be placed against stocks. It is like going back to school and re-educating oneself on how to trade online. Companies can establish themselves according to their gains and losses. 6) Individuals can invest in a variety of products. this additional power to the underdogs. 3) 4) Cash account: where funds have to be available prior to placing the order.ONLINE TRADING HAS LED TO ADDITIONAL FEATURES SUCH AS: 1) Limit / stop orders: orders that can be go unfilled. to increase Purchasing power. since you have to buy stock at the given price. mutual funds. Thus we have access to a lot more information online.
2) 3) 4) They have a reason to participate in the market and learn about it. 8) Investors will now go to place. 7) It will lead to brokerage commissions going down and brokers striving to increase business afloat. which have better trading conditions and also members to offer them better facilities. A lot of information is online so they can keep up-to-date with what is happening in the trading world. and convenient. 5) 6) It will give investors a greater choice and better realization. They are independent. cheap. 9) They have access to numerous tools to invest. can make their own decisions and don’t have to give reasons for their actions. 55 . fast. easy. It is interesting.INVESTORS REASONS TO TRADE ONLINE: 1) They have control over their accounts. The immediate impact will be competition and benefits will accrue to the investors. and can create their own portfolio.
3) A tax (sales tax and value added tax) evaluation becomes an issue. 6) Individuals think that they are trading with the market directly and know what they are doing. 56 . his trade goes through a broker. the more one trades the less returns one gets. It seems that the middleman has been removed. the basic rules of trading are the same. meaning that an addicted trader gets. 7) There is a need for more effective communication links over the Internet and the ability of the server to deal with a large volume of visitors. This simply means that the individual is himself / herself alone to. there will be problems and delays due to a large influx of rapid online trading criteria. especially when you are trading internationally. careful investor: is online trading bad for your portfolio. 4) 5) One has no idea with whom he is dealing with on the other end.HERE ARE THE POSSIBLE DISADVANTAGES: 1) When network crashes. carried away online and begins to trade for too much which causes losses for him / her. When the individuals click on the mouse. 2) Individuals are restricted to first-hand financial guidance. The commissions online pertain to the intermediary. According to a study conducted by Mary Rowland. but that is not so. but the truth is that even though technology has taken over.
the Bombay Stock Exchange (BSE) and the Over-TheCounter Exchange of India (OTCEI). Increase in the confidence of the investors because of higher level of transparency. The member or broker sitting in his office can send the quotations. negotiations. These computers are connected to the server at the stock exchanges through cable. auction orders etc. in-house deals. The main objective of CTS is to monitor the Stock Exchanges operations. orders. All these resulted in ever-increasing volumes on the exchanges offering the online trading. the transaction will be executed. CTS will reject the orders and send respective error message to the member concern. the order will be deleted 57 . Share Khan is provided with a computer and required software from their registered stock exchanges. Order placed by the broker will be sent for a match and if the match is found suitable. Otherwise. These centers are called “Broker Work Stations”. Facilities better monitoring of the market by the exchange. The best price achieved in buying and selling. TRADING PROCEDURE AT SHARE KHAN STOCK BROCKING ShareKhan deals in buying and selling equity shares and debentures on the National Stock Exchange (NSE). deals. All these operations are in built. through the computer. The Online trading system imparted a greater level of transparency and investors preferred exchanges that offered Online trading because of the following factors: The ease of operation from the view of the both members and the investors.. If there is any mistake in the order. The Central trading system (CTS) will accept these orders and send it for match.TRADING AND SETTLEMENT AT SHARE KHAN The NSE first introduced online trading in India.
3. Brokers are also provided with information relating to the companies in the matter of Book closure. 5. The carry forward transactions (Good Till cancellation) are forwarded to the next day. Other information will be available on query from the BWS. Useful links about Sharekhan: 1. Dividend declarations.Speed Trade: http://www. the last traded price. Trader-wise. highest and lowest prices. previous day’s closing price. information about liquidated companies. the order will not cancel. market summary etc. Sharekhan Website: http://www. Monday to Friday is the trading period in all the stock exchanges. 2. 58 .com/Demos/speedtrade/index. 7.com/KnowledgeCentre/Sharekhan_FAQ.com FAQs: http://sharekhan. SEBI has stipulated that all the stock exchanges in India must have same trading period.M.com Product Demo . the day‘s opening price. 6. resolutions in board meeting. top scrip by the volume/value. the weighted average price and total trade value will be available continuously. company report etc.ShareKhan.sharekhan. on all 5 days of the trading period.automatically after completion of trading time.com/Demos/classic/index.M. as the BBO for each scrip. scrip wise net position.sharekhan. Even if the match is not found with in the prescribed period. These include top gainers /losers of the day. client wise net position. 4.html Email: email@example.com Product Demo .aspx Phone: 022-66621111 Toll Free: 1-800-22-7500 TRADING SESSION Trading timings are from 9:55 A. BROKER WORK STATION: At the broker workstation the BBO’s. to 3:30 P.Classic: http://www.
For an order if the member selects the deal as good for the day. 59 . If the match is not found then after trade time the order gets cancelled that day. Good till cancellation: This order is forwarded to the last trading day of that settlement period. when such match is found a trade gets executed. If a “best bid” founds match with “best order” then the transaction gets executed. This order is not carried forward to the next settlement period.ORDERS: Orders can be done one at a time or in a batch mode. Both these traders are informed of the trade being executed at their respective BWS. Each trade involves two brokers and respective traders who sent the order. Orders sent by the brokers are two types: 1) Good for the day (GFD) 2) Good till cancellation(GTC) Good for the day: This is also called as “market order”. For example if a member wants to purchase 1000 shares of satyam info @ 400 each through Good for Day order. If the order finds match with in the trading settlement period. The submitted order will be accepted at the CTS. The order will then be taken up for matching. after validation if it finds any invalid reason the order is return back to the BWS. the order is executed. if it is a buy order the system tries to find a sell order. broker has to select the option of GTC for the order. Next day he has to place a new order. the order is cancelled on the last day of settlement period. which fits the requirement of the buy order. with the appropriate error message. order gets cancelled automatically and new quotation has to be placed the next day. the order is treated as market order. If the correct match is not found. If no match is found. This is also called as carry forward order like GFD. At the BWS the trade is added to the local trade book. If Accepted at the CTS it will be added to the local pending order book.
The buyer then fills up the certificates fills up the particulars in the transfer deed. if a member a place purchase order of 500 shares of SBI @ 690 per share and selects the order as GTC and place an order. In case on non-delivery. if Monday is trading day then Wednesday is the paying day . It bears a stamp of the selling broker. 60 . Buyers will take the delivery of shares through the depository participants like SHARE KHAN and others. DETAILS OF PROCEDURES: Delivery in : The members who are in pay-out position delivers share certificates in to clearing house within the settlement period along with the delivery Chelan filled in with the details of share certificates which has folio numbers or distinctive numbers etc. the settlement is made by means of delivering the share certificates along with the transfer deeds.basis i. Finally.e.For example. Spot settlement: under this method. Delivery out: The buyer of shares who made pay in position will take delivery of shares from the clearing house. SETTLEMENT OF TRANSACTIONS: Clearing of transaction in the form of shares and cash is called settlement. Rolling settlement: Under this rolling settlement the trading is on “T+2”. Settlement can be done in the following way. the securities will go for auction. The transferor (or the seller) duly signed transfer deed. the delivery of securities and payment for them are affected on the day of the contract itself. If the match is not found on that day it will be forwarded to the next day until trading settlement period day.
Pay-in: The member who is in paying position shall pay for value of shares with in the trading settlement period (T+2). 61 . good and bad deliveries pertaining to the settlement will be settled by the settlement committee of the exchange. non-payments. All disputes arising between members regarding non-deliveries. Payout: The cheques paid in the clearinghouse will be paid to members who are in paying position.
The given flow chart clearly explains the process of online trading: Login Buy transcation The system will check buying limits Sell transcation The system will check your dp account quantity Orders accepted Rejected orders would be communicated along with reasons orders accepted your order is transmitted to exchange for execution pending buy orders would be displayed on your screen on execution of your orders pending sell orders would be displayed on your screen you may edit your pending order you may delete your pending order you may edit your pending order you may delete your pending order flashed on your screen immediately on execution conformationcoul d be send to your e-mail and mobile contract note would be sent to by mail or hand delivery 62 .
Chapter 4 Comparative Analysis 63 .
and then open the file again. Your computer may not hav e enough memory to open the image. or the image may hav e been corrupted.COM 5) ICICIDIRECT. Restart your computer.92% 38 46 59 4.COM 4) INDIABULLS.COM 2) 5PAISA.67% 192 21. Your computer may not hav e enough memory to open the image.69% 121 13.… The image cannot be display ed. or the image may hav e been corrupted. If the red … Th e im ag The image cannot be display ed.45% 194 21. Your computer may not hav e enough memory to open the ima… 64 . Your co… The image cannot be display ed.THE MAJOR PLAYERS IN ONLINE TRADING 1) SHAREKHAN. If the red … The imag e can… The image cannot be display ed.COM POLL RESULTS: BROKER PREFERENCE 5paise Sharekhan Motilal oswal ICICI Direct HDFC Indiabulls Kotak Others The image cannot be display ed.29% 5.20% 6.COM 6) HDFCSEC.11% The image cannot be display ed. Your computer may not hav e enough memory to open the ima… 119 13.COM 3) KOTAKSTREET. Your computer may not hav e enough memory to open the image.67% 116 13. and then open the file again. Restart your computer.
Online Account Type: HDFC Online Trading A/c: Plain Vanilla Account with focus on 3 in 1 advantage.50%** each side + ST *Rs 25 Min Brokerage per transaction **Rs 8 Min Brokerage per transaction 65 . HDFC and Chase Capital Partners and their associates. Pioneers in setting up Dial-a-share service with the largest team of Tele-brokers.HDFC SECURITIES: Company Background: HDFC Securities Ltd is promoted by the HDFC Bank. 1st year charges included in Account Opening Initial Margin : Rs 5000/.for non HDFC Bank Customers (AQB) Brokerage: Trading 0. Pricing of HDFC Account Account Opening: Rs 750 Demat: NIL.15%* each side + ST Delivery 0.
1 Cr 1 Cr – 2 Cr 2 Cr – 5 Cr > 5 Cr 0. 1st year charges included in Account Opening Plus a facility to open additional 4 DP’s without 1st yr AMC.05% Both Sides .30% 0.035% Both Sides .04% Both Sides . These schemes are introduced 3-4 times a year.2%) on BROKERAGE land turnover tax is EXTRA.70% 0.08% Both Sides . Only Rs 100 as linking charges per DP Initial Margin : Nil Brokerage: ICICI’s brokerage rates are inclusive of Stamp duty (0.03% Both Sides -------- 66 .75% 0.25% < 50 lakhs 50 lakhs – 2 Cr 2Cr-5Cr 5Cr.10% Both Sides .10 Cr 10Cr -20 Cr > 20 Cr ---- Brokerage .45% 0.55% 0.M. < 10 lakhs 10 – 25 lakhs 25 – 50 lakhs 50 lakhs .002%) for trading and 0.ICICI Direct: Account Opening: Rs 750 Schemes: For short periods Rs 750 is refundable against brokerage generated in a qtr.010% for delivery while service tax (10.35% 0. Demat: NIL. Delivery Vol per QTR Brokerage Square Vol P.
450 + Relationship Managers who act as personal financial advisors. The equity analysis is a paid service even for A/c holders. No AMC for this DP * Initial Margin: NIL * Brokerage: Negotiable . No AMC for this DP * Initial Margin: NIL * Brokerage: Negotiable PAID Research: SCHEME WebBased-1-Month-500: WebBased-1-Month-6000: PrintReport-1-Month-750: 67 FACILITY View & Print on Website View & Print on Website View & Print on Website Power India Bulls * Account Opening: Rs 750 *Demat: Rs. Online Account Type: Signature Account: Plain Vanilla Account with focus on Equity Analysis.200 if POA is signed. Pricing of IB Accounts: Signature Account * Account Opening: Rs 250 * Demat: Rs 200 if POA is signed. It offers a full range of financial services and products ranging from Equities to Insurance. low commissions and priority access to R.M. Power India bulls: Account with sophisticated trading tools.INDIABULLS: Company Background: India Bulls is a retail financial services company present in 70 locations covering 62 cities.
03% per transaction High Trader : 6 Times Exposure Cash & Derivatives.m. Online Account Type Twin Advantage / Green Channel : 2 DP’s. Keat Desktop with advanced tools comes at a charge of Rs 500 p. Auto sq off 2:55 Cash Expressway : Spot payment.5% charges For Kotak FastLane / Keat Lite / Keat Desktop are trading interfaces. 0. Kotak Securities limited is a joint venture between Kotak Mahindra Bank and Goldman Sachs.m. Limit against shares Free Way: Flat Rs 999 Cover Charge p.f 1/4/2004 68 .m Initial Margin : Rs 5000(Compulsory) Min Margin Retainable : Rs 1000 Brokerage Slab wise: Higher the volume. Non refundable.40%) have been moved to the slab wise structure w. lower the brokerage.25% & 0.5 p.+ 10 Reports Delivered PrintReport-1-Month-9000: View & Print on Website + 10 Reports Delivered Kotakstreet: Company Background: Kotakstreet is the retail arm of Kotak Securities.e. PRICING OF KOTAK Account Opening : Rs 500 Demat: Rs 22. Even older customers (on 0. additional 0.
07% Both Sides 0.01 per share Brokerage 0.5.65% 0.5 Cr 5.05% Both Sides 0.30% 0.5 Cr – 10 Cr > 10 Cr * Brokerage is inclusive of All Taxes * Min Brokerage of Rs 0.05% Both Sides 0.05 per share Derivatives Vol off p m < 2 Cr 2 Cr .2 Cr >2 Brokerage * Square Vol P.20% < 10 lakhs 25 lakhs .04% Both Sides 0.04% Both Sides 0.Slab structure of Kotak Delivery Vol p m < 1 lakhs 1 lakhs – 5 lakhs 5 lakhs – 10 lakhs 10 lakhs .40% 0.M.10% Both Sides 0.2 Cr 2 Cr 5 Cr > 5 Cr ---do-----Brokerage ** 0.50% 0.20 lakhs 20 lakhs – 60 lakhs 60 lakhs .03% Both Sides -------- 10 lakhs – 25 lakhs 0. 0.60% 0.25% 0.03% Both Sides * Brokerage is inclusive of All Taxes.08% Both Sides * Brokerage is inclusive of All Taxes * DP Charges Extra * Min Brokerage of Rs 0. 69 .035% Both Sides 0.
It also acts as a distributor of various financial services i.10% each side + ST Delivery 0.5paisa Company Background Indiainfoline was founded in 1995 and was positioned as a research firm In 2000 e-broking was started under the brand name of 5paisa.50% each side + ST (Negotiable to 0. Apart from offering online trading in stock market the company offers mutual funds online. Insurance. Limited ground network.com. GOI securities. present in 20 cities Online Account Types Investor Terminal : Investors / Students Trader Terminal : Day Traders / HNI’s PRICING FOR RETAIL CLIENTS Investor Terminal Account Opening : Rs 500 Demat 1st Yr : Rs 250 Initial Margin : Rs 2500 (Compulsory) Min Margin Retainable : Rs 1000 Brokerage : Trading 0.25%) Account Access Charges Monthly Rs 800. adjustable against Brokerage Yearly Rs 8000.e.05% each side & 0. adjustable against brokerage 70 . Company Fixed Deposits.10% each side + ST Delivery 0.50% each side + ST PRICING FOR HNI CLIENTS Trader Terminal Account Opening : Rs 500 Demat 1st Yr : Rs 250 Initial Margin : Rs 5000(Compulsory) Min Margin Retainable : Rs 1000 Brokerage : Trading 0.
adjustable qtrly against brokerage of Rs 9000/.50% each side + All Taxes (Negotiable based on volume) Account Access Charges Monthly Rs 500. First Caryle.10% each side + All Taxes Delivery 0. and Intel Pacific Into broking since 80 years Focused on providing equity solutions to every segment Largest ground network of 210 Branded Share shops in 90 cities Online Account Types Classis Account / Applet : Investor in equities Speed Trade : Trader in equities & derivatives PRICING FOR HNI CLIENTS Speed Trade Account Opening : Rs 1000 ( Refundable against brokerage in Month + 1) Demat 1st Yr : Incl in Account Opening Initial Margin : Nil Min Margin Retainable : NIL Brokerage : Trading 0. No access charges for gold customers (Above 1 lac brokerage p.for qtr. balance ownership is HSBC.Sharekhan Company Background Sharekhan is the retail broking arm of SSKI Securities Pvt Ltd. SSKI owns 56% in Sharekhan.a) 71 .
50% each side + All Taxes Sharekhan online Trading Interfaces The customer can choose the online trading interface that meets his requirement based on his trading habits and preferences CLASSIC / APPLET The website is meant for customers who Invests in Equities SPEEDTRADE The speed trade is meant for customers who trade in Equities DIAL-N-TRADE – Toll Free The DNT is a value added services meant for all customers who Want to transact but are not online.Pricing for Retail Customers Classic / Applet Account Opening : Rs 750 Demat 1st Yr : NIL Initial Margin : NIL Min Margin Retainable : NIL Brokerage: Trading 0. the call is transferred Trusted. DNT – TOLL FREE FERTURES Dedicated Toll – Free number for Order placements Automatic fund transfer with phone banking* Simple and secure IVR based system for authentication No wait time. on entry of Phone Id & TPIN. professional advice of Tel-brokers who offer undiluted Sharekhan Research Inputs After-hours order placement facility ** Transfer of money using phone banking is available with Citibank only 72 .10% each side + All Taxes Delivery 0.
m CLASSIC/WEBSITE FEATURES Facility to integrate choice of 4 Banks/DP/Trading Account Instant credit for shares sold from DP Automatic pick-up of shares from linked DP for pay – in Automatic deposit of shares into linked DP after pay-out 4 Times leverage on Margin Trades Margin Trading available for entire marker session Slab wise brokerage structure for delivery and margin trades.55 am and 3.** Between 9 a.m to 6 p.30p. Professional advice of Tele-brokers Facility to enter After Market Orders online & via Phone CLASSIC/WEBSITE FEATURES Daily Research newsletter (Investor Eye) Via e-mail Access to new IPO without any paperwork Advanced portfolio monitoring Tools Integrated DP account with trading account Option of linking additional 4 DP accounts to trading account Choice of linking 4 banks to trading a/c for online payments Cash and Derivatives trading in a single account E-mail confirmations for all transactions Choice of electronic/Physical contracts SPEEDTRADE EXE FEATURES ALL THE FEATURES OF CLASSIC *Real – time streaming quotes using 2 Marker Watches *Trade Execution in 2-3 seconds * Instant Order/trade confirmations in the same window *Hot keys similar to a Broker’s Terminal 73 . shortly Free calls for order placement on Toll-Free Trusted.m to 9.
4. Highly sophisticated infrastructure. Quality research team. which by interpreting the economy and company’s performance accurately is enhancing the profitability of the clientele. Inadequate product awareness among the retail investors. Strong credibility among investors because of its heritage. Weaknesses 1. 6. Capability of providing superior customer service. 7. Excellent reputation among the business society. Abundant information about economy and companies. 2. Top Losers. Efficient research and analysis team. 5. Easier access to the customer due to largest ground network of 280 branded share shops in 120 cities. 2. 8. and Most Active updated Live SWOT ANALYSIS Strengths 1. 9.*MULTIPLE Tic-by-Tic Intra-day charts with multiple indicators * Availability of 2 ISP & 6 Servers ensuring maximum uptime * Customized alerts based on multiple parameters * Cancel All/Square Off All Facility * Window for Top Gainers. 74 . 3. Ability to attract and retain superior and quality personnel. Limited customer appeal as the company product line does not include mutual funds which is increasingly becoming a preferred customer investment option.
Threats 1. 3. 5. Opportunities 1. 4. Access to the BSE online space for the retail investors creates opportunity to increase clientele base. Hyderabad covers only 2% of investors which gives huge potential for the market penetration. Bullish phase of the market attracts investing public.3. Limited customer appeal as the company does not have access to the BSE online space. Brand awareness is low in the financial market. 2. 75 . Availability of Unit Linked Insurance Policies (ULIP’s) and mutual funds in the market. Awareness campaigns about online trading create new market. 2. 4. Threat of entry is high in this industry as the manpower required is less and capital requirement is medium. Promotional activities conducted by the company are not at par with the other firms.
Chapter 5 Finding & Observations 76 .
Previously rolling settlement is T+5 days. service 6. now it changed to T+2 days and further it will be changing to T+1 day. Information plays a vital role in the secondary market. The number of players is increasing at a steady rate and today there are over a dozen of brokerage houses who have opted to offer net trading to their customers and prominent among them are SHARE KHAN. 7. The Bombay stock exchange sensex zoomed past the 7700 barrier for the first time in history to achieve new all time high of 7800 intra day trade and ended at a historic close of 7732 points. India bulls. 4. 3. Fluctuations are more in secondary market than any other market. kotakstreet. 2. There are more speculators than investors. ICICI direct and geojit. 77 . 5. It was also observed that many broking houses offering internet trading allow clients to use their conventional system as well just ensure that they do not loose them and this instead of offering e-broking services they becomes providers.FINDINGS AND OBSERVATIONS: 1.
Conclusion & Recommendations 78 .
3. In the present scenario to compete with the Broker’s would require sound infrastructure and trading as per international standards. 79 . 4. I recommend the exchange authorities to take steps to educate Investors about their rights and duties. The concept of business has changed today. 6. things have changed dramatically over the last 3 to 4 years. settlement system with adequate protection to investors. I suggest to the exchange authorities to increase the investors’ confidences. 1. I recommend the exchange authorities to be vigilant to curb wide fluctuations of prices.CONCLUSION AND RECOMMENDATIONS 1. and have brought the countrywide market to doorstep. this is a service oriented industry hence the survival would require them to provide the best possible service to the clients. 2. The trading of SHAREKHAN of the first day was Rs. delivering. not attracting the genuine investors to the greater extent towards the market. Things have changed for the better with the SHAREKHAN going on-line coupled with endeavor to stream line the whole trading system. It has helped the brokers handling a vast amount of transactions and this can be an efficient trading. 7. The speculative pressures are responsible for the wide changes in the price. The broker’s has a greater scope than compared to the earlier times because of invention of online trading. New and advanced technologies have breached geographical and cultural barriers. 9. 5.8 crores. Due to invention of online trading there has been greater benefit to the investors as they could sell / buy shares as and when required and that to with online trading. The introduction of on-line trading would influence the investors resulting in an increase in the business of the exchange. 8.
Necessary steps should be taken by the exchange to deal with the situations arising due to break down in online trading.10. therefore the authorities of the exchange should be more vigilant to curb the speculation. 80 . Genuine investors are not at all interested in the speculative gain as their investment is based on the future profits. 11.
K.Y.Avadhani Indian Financial System -M.Bhalla Investment management -Preethi Singh 2. Newspapers: The Times of India The Economic Times 81 .A.Avadhani 4. Security Analysis And Portfolio Management -V.A.BIBLIOGRAPHY Books: 1. 3.Khan 5. Marketing of Financial Services -V. Investment management -V.
economictimes.bseindia. www.investors.com www.com www.gov.com 82 .com www.investopedia.moneycontrol.com www.com www.sebi.nseindia.sharekhan.com ANY FEEDBACK PLZ MAIL US: firstname.lastname@example.org www.in www.