Motilal Oswal- Priyadarshini-06036 | Investing | Financial Markets



A Report submitted to MPBIM Bangalore in partial fulfillment of the requirement for the award of MASTER OF BUSINESS ADMINISTRATION (MBA)


Under the Guidance and Supervision Of

B.Srinivasan Professor MPBIM

Mr. Shivanna T. R. Branch Manager Motilal Oswal Securities Shantinagar, Bangalore


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I hereby declare that this report titled, “AN INTERNSHIP REPORT ON ORGANIZATIONAL STUDY AT MOTILAL OSWAL SECURITIES” is a record of independent work carried out by me, towards the partial fulfillment of Master of Business Administration (MBA) program of Bangalore University at M. P. Birla Institute of Management. This is my original work and has not been submitted for the award of any other degree, diploma, fellowship or other similar title or prizes.

Place: Bangalore Date:



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This is to certify that the internship report titled, “AN INTERNSHIP REPORT ON ORGANIZATIONAL STUDY AT MOTILAL OSWAL SECURITIES” has been prepared by Ms. PRIYADARSHINI.R, bearing registration number 06XQCM6063, under the guidance of Prof. SRINIVASAN, M P Birla Institute Of Management, Associate Bhartiya Vidya Bhavan, Bangalore.

Place: Bangalore Date:

Principal Dr. N.S.Mallavalli


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SRINIVASAN (internal guide) M. Place: Bangalore Date: Prof B. “AN INTERNSHIP REPORT ON ORGANIZATIONAL STUDY AT MOTILAL OSWAL SECURITIES” done by Ms. To the best of my knowledge this report has not formed the basis for the award of any other degree.P. GUIDE’S CERTIFICATE This is to certify that the internship Report entitled.06XQCM6063 is a bonafide work done under my guidance in a partial fulfillment of the requirement for the award of MBA degree by Bangalore University. BIRLA INSTITUTE OF MANAGEMENT  Page 4  .MOTILAL OSWAL SECURITIES LTD. PRIYADARSHINI.R bearing Registration No.


as part of my study. I am deeply indebted to Mr.SRINIVASAN (internal guide) for helping me in various aspects the study. Most) for his help and cooperation. VIJAY KUMAR (Business Development Manager. R. invaluable help and cooperation to successfully complete the project. First of all I would like to express my gratitude to beloved principal for boosting moral during the training period. B. Last but not the least I would like to express my profound gratitude to my family and friends who have indirectly encouraged me in completing this study. M. I would like to express my sincere thanks to Prof.MOTILAL OSWAL SECURITIES LTD. which gives me opportunity to thanks everyone who has contributed in my practical training at MOTILAL OSWAL SECURITY LTD. SHIVANNA T. I am grateful to Mr. I am very thankful to the management and staff of Motilal Oswal securities for their invaluable cooperation during my study. Shanthinagar) for giving me an opportunity and guidance. ACKNOWLEGDEMENT This is the moment. (Br. MOSt. BIRLA INSTITUTE OF MANAGEMENT  Page 6  .P. Manager.

PART:A Chapter no. BIRLA INSTITUTE OF MANAGEMENT  Page 7  . Topic particulars Page no DECLARATION PRINCIPAL’S CERTIFICATE GUIDE’S CERTIFICATE EXTERNAL GUIDE’S CERTIFICATE ACKNOWLEDGEMENT Chapter:1 Organizational study Brief profile about organisation MOSt history People behind the organisation MOSt shareholding pattern MOSt management Milestones Location matrix MOSt vision MOSt guiding principles Investment philosophy Management team Wealth creation study & awards MOFSL customer & retail business 14 16 17 19 21 22 30 31 32 33 34 35 36 Executive summary 2 3 4 5 6 12 M.P.MOTILAL OSWAL SECURITIES LTD.

Bull’s Eye PMS 2. BIRLA INSTITUTE OF MANAGEMENT  Page 8  .MOTILAL OSWAL SECURITIES LTD.P. MOSt research based advisory products Services 36 41 42 EAG BUSINESS ASSOCIATE E-BROKING PORTFOLIO MANAGEMENT SERVICE 1. Value Hedging PMS MUTUAL FUNDS COMMODITIES Chapter:2 Chapter:3 Organizational Structure Operational Aspects of Different Functional Department Performance Evaluation Problem Areas Observed Recommendations Conclusion organizational hierarchy Functional Departments MARKETING ACCOUNTS HR & ADMINISTRATION SUPPORT & FUNCTION ADVISORY SERVICES SWOT ANALYSIS Findings Recommendations Conclusion BIBILOGRAPHY 60 63 Chapter:4 Chapter:5 Chapter:6 Chapter:7 67 72 76 79 PART :B A Microscopic Study On t+1 settlement cycle M.


P. Motilal Oswal Financial Services Ltd Motilal Oswal Financial Services Ltd consists of four companies. BIRLA INSTITUTE OF MANAGEMENT  Page 10  .MOTILAL OSWAL SECURITIES LTD. Ltd. is our Investment Banking arm with collective experience of over 100 years in investment banking/corporate banking and advisory services Motilal Oswal Commodities Broker (P) Ltd. Motilal Oswal Venture Capital Advisors Private Limited has launched the India Business Excellence Fund (IBEF). has been providing commodity trading facilities and related products and services since 2004. Motilal Oswal Investment Advisors Pvt. M. a US$100 mn India focused Private Equity Fund.

(MOSt) our services include equities. derivatives.MOTILAL OSWAL SECURITIES LTD. mutual funds. Motilal Oswal Securities Ltd. IPOs and depository services. BIRLA INSTITUTE OF MANAGEMENT  Page 11  . portfolio management. e-broking. M. commodities.P.

Rule 1: Never lose money. Asia money Brokers Poll 2005 has ranked them the best Indian brokerage firm. with a dominant position in both institutional and retail broking. Rule 2: Never forget rule one. M.most independent research. sales and service etc by the Brokers Poll. Motilal Oswal Securities Ltd. An Executive Summary MOFSL strongly believes in Buffett's following two principles.P.MOTILAL OSWAL SECURITIES LTD. BIRLA INSTITUTE OF MANAGEMENT  Page 12  . Motilal Oswal Securities is a leading research and advisory based stock broking house of India. There are various other categories where they have been rated number one .

Kerala and U.P. Over a period of time many more regional broking firms may be acquired to gain solid footing in various regions of India.MOTILAL OSWAL SECURITIES LTD. For a more unbiased opinion.P. FY05 and FY06 saw the company grow inorganically through acquisition of three significant regional broking firms from Karnataka. Motilal Oswal Securities has witnessed rapid organic growth due to favorable market conditions as well as efforts put in by the company itself. BIRLA INSTITUTE OF MANAGEMENT  Page 13  . in March 2006. AQ Research (a UK-based firm that analyses the accuracy of a broker’s research call) declared Motilal Oswal the best research house for Indian stocks. M.

M. research-based value investing and implementation of cutting-edge technology have enabled us to blossom into an almost two thousand-member team. e-Broking. respect for professionalism. Our institutional business unit has relationships with several leading foreign institutional investors (FIIs) in the US. Hong Kong and Singapore. Brief profile about organization: Introduction: The company was founded in 1987 as a small sub-broking unit.10 brokers in terms of business transacted for FIIs. UK. We provide advice-based broking (equities and derivatives). IPO and mutual fund investment advisory services. In a recent media report we were rated as one of the top. Focus on customer-first-attitude.MOTILAL OSWAL SECURITIES LTD. The retail business unit provides equity investment solutions to more than 200000 investors through 1160 outlets spanning over 363 cities. commodities trading. with just two people running the show. depository services.P. portfolio management services (PMS). These solutions are provided by a force of over 2000 employees and over 780 Business Associates. BIRLA INSTITUTE OF MANAGEMENT  Page 14  . ethical and transparent business practices.

M. talented and confident individuals. Managing Director.69% & Nifty is 245. Our Value PMS Scheme gave a 402. Qualified professionals carry out different functions under the able leadership of its promoters. focus on continuous training and adoption of best management practices drive the quest to achieving there Vision. Our unique Wealth Creation Study. Such an outstanding performance can be only attributed to our single-indeed focus on research-based value investing.74% return since inception (Feb 2003) (Sensex is 270. The organization finds its strength in its team of young. Investors keenly await this annual study for the wealth of information it has on how companies created wealth during the preceding five years. authored by Mr. is now in its eleventh year. Mr. The performance of Value Hedging since inception (Oct 2005) is 32. Raamdeo Agrawal. Raamdeo Agrawal.76%. Motilal Oswal and Mr. BIRLA INSTITUTE OF MANAGEMENT  Page 15  . Stringent employee selection process.11%).P. Motilal Oswal Securities invests almost 5-10% of its revenue on equity research and hires and trains the best resources to become advisors to its valued clients.MOTILAL OSWAL SECURITIES LTD.

MOTILAL OSWAL SECURITIES LTD. when Mr. to provide reliable & honest investment advice to investors'. Motilal Oswal Securities Ltd (MOSt) History: The story of MOSt goes back many years. BIRLA INSTITUTE OF MANAGEMENT  Page 16  . Motilal Oswal and Mr.P. Raamdeo Agrawal met each other as students in a Mumbai suburban hostel in the early eighties. Both the young chartered accountants hailing from a rural & an unpretentious background had a common dream viz'to build a professional organization with strong value systems. M. Thus was born their first enterprise called "Prudential Portfolio Services" in 1987.

M. He is a member of Institute of Chartered Accountants of India and started the business along with the co-promoter Mr. He is currently a member of the NSE committee for F&O and a member of the Managing Committee of Indian Merchant Chambers. Motilal Oswal Chairman and Managing Director Mr. Motilal Oswal is the promoter of Motilal Oswal Securities Ltd.P. People behind the organization: Mr.MOTILAL OSWAL SECURITIES LTD. it will translate into good business” He has received the Rashtriya Samman Patra awarded by the Government of India for being amongst the top 50 income tax payers in the country. Raamdeo Agarwal in 1987. He is currently a member of various committees of CDSIL and SEBI. in research. If you give good service and value to your clients. He was elected as a Director of BSE and joined its governing board in 1998. It is going to be the key to survival. BIRLA INSTITUTE OF MANAGEMENT  Page 17  . in execution and in settlement. “Service is required in everything.

MOTILAL OSWAL SECURITIES LTD.P. Mr. Raamdeo Agrawal JMD MOSt & portfolio Profile of Raamdeo Agrawal Date of Birth: 5th April 1957 Educational Qualification: Chartered Accountant Achievements: Co-Author of the book "CORPORATE NUMBERS GAME" in 1986 Joint Managing Director of Motilal Oswal Securities Ltd Author of annual "Wealth Creation Study * " M. BIRLA INSTITUTE OF MANAGEMENT  Page 18  .

MOTILAL OSWAL SECURITIES LTD.85%] 3rd Qtr: New Vernon Private Equity Limited [7.P. MOFS Shareholding pattern: 1st Qtr: Promoters & Promoter group [78.67%] 2nd Qtr: Directors and employees [11.20%] 4th Qtr: Bessemer Venture Partners Trust [2.27%] M. BIRLA INSTITUTE OF MANAGEMENT  Page 19  .

P. BIRLA INSTITUTE OF MANAGEMENT  Page 20  . Top ten shareholders as on the date of filing of the Draft Red Herring Prospectus with SEBI: M.MOTILAL OSWAL SECURITIES LTD.

CA Mr. Raamedeo Agrawal Mr. Ashutosh Maheshvari Mr. CFA Post Graduation in Marketing Management ICWA. Com. BIRLA INSTITUTE OF MANAGEMENT  Page 21  .MBA B.MOTILAL OSWAL SECURITIES LTD. Vishal Tulsyan Director .P. CA B. CS. Hitungshu Debnath Mr.MOVC M.Retail Business CEO .(IIT-k). CA Mr.Com CA.MOIA CEO . Navin Agarwal Director B. Com. Motilal Oswal Designation Chairman and Managing Director Joint Managing Director Qualification B. MOSt Management Name Mr. Com.

Motilal Oswal .MOTILAL OSWAL SECURITIES LTD.Chairman and Managing Director has been appointed as a member of the Managing Committee of Indian Merchant Chambers. features as a case study in Harvard Business School Motilal Oswal Financial Services Ltd ties up with Punjab National Bank to offer online trading to its customers M. BIRLA INSTITUTE OF MANAGEMENT  Page 22  .P. Milestones: 2007 Mr. Motilal Oswal Financial Services Ltd files for an IPO Motilal Oswal Financial Services Ltd.

First advice-based online trading proposition in the Indian markets Another milestone in distribution . BIRLA INSTITUTE OF MANAGEMENT  Page 23  . M.29% with two leading private equity investors – New Vernon Private Equity Limited and Bessemer Venture Partners Issues 14% of companies equity to employees as ESOPs Acquires a leading south Indian brokerage firm – Peninsula Capital Markets Enters Private Equity and plans entry into Investment Banking businesses Value PMS gives 390% returns to its investors between Feb 2003 and March 2006 Re launches its e-Broking service through a nationwide campaign.1017 outlets.61 lakh clients Has a 1400 member team working to achieve the company's vision. 375 cities. 2006 Places 9.P.MOTILAL OSWAL SECURITIES LTD. serving 1.

Best in Sales and Service Launches two new Portfolio Management Schemes .Best Local Brokerage. 2005: Asia money Brokers Poll 2005 rates Motilal Oswal Securities .Value Hedging for derivatives and Discover Value for the Rs5 lakh to Rs50 lakh category Acquires local brokerage Gayatri Capitals from Andhra Pradesh and Varghese from Bangalore Deepest distribution in the stock broking segment with 700 outlets in 320 cities and 1.P. Most Independent Research House.A momentum based PMS launched Start of the Solid Research Solid Advice campaign M. BIRLA INSTITUTE OF MANAGEMENT  Page 24  .2 lakh clients 2004: Presence expanded to 270 outlets in 150 cities and 20 states Value PMS delivers a whopping 160% post tax returns for the period ended April 2004 Bulls Eye PMS .MOTILAL OSWAL SECURITIES LTD.

Inquire team is successful in capturing the uptrend in Banking. is inducted in the Board of Directors MOSt consolidates its retail operations & upgrades its IT / Back Office infrastructure to cater to its growing network of branches.000 Retail and Institutional Investors. 9 own branches setup at 7 cities to provide Equity Advisory Services. 2002: Mr. Franchisees and Channel Partners. 150 outlets in 110 cities across 18 states & one Union Territory in India manned by 1000 people servicing over 15. Head of Equity Research & Institutional sales. BIRLA INSTITUTE OF MANAGEMENT  Page 25  .MOTILAL OSWAL SECURITIES LTD.P.000 Depository clients acquired. More in the pipeline. 2003: MOSt Portfolio Management Services launched with Mr. Raamdeo Agrawal as the Portfolio Manager. 15. Auto and Infrastructure sectors. Navin Agarwal. M. Uniquely structured performance related fees.

Direct servicing of HNI clients is initiated. BIRLA INSTITUTE OF MANAGEMENT  Page 26  .000 Depository clients acquired.10. 2001: Legendary marketing guru Shunu Sin’s services taken to revitalise retail marketing strategy and branding efforts. Retail network completes coverage of 100 cities in India. Raamdeo Agrawal receive Rashtriya Samman Patra from Central Board of Direct Taxes for being amongst the top 50 tax payers in India from FY94-FY98 Acquires its 100th Franchisee / Channel Partner and emerges as a leading player in the Indian Broking Sector Becomes a Depository Participant of Central Depository Services Limited (CDSIL) M.MOTILAL OSWAL SECURITIES LTD. Starts offering Derivatives products and advisory services on both BSE as well as NSE 2000: Both Mr.P. Motilal Oswal and Mr.

He still continues to attend it every year. The Wealth Creation Study started in 1996 culminates into Wealth Creation Seminar and Awards function in 1998. M. “Wealth Creation” Campaign started.MOTILAL OSWAL SECURITIES LTD. on its Board to Directors to shape HR initiatives. Raamdeo Agrawal starts attending legendary billionaire investor Warren Buffett’s Annual General Meetings of Berkshire Hathway Inc. First Stock Broking house to brand its services as a research and advice based broker. Ivan Mathias. BIRLA INSTITUTE OF MANAGEMENT  Page 27  .P. Becomes a Depository Participant of National Securities Depository Limited (NSDL). former country head of Watson Wyatt Worldwide. 1999: Mr. launched. Inducts Mr. First broking house in India to go on the web.MotilalOswal.

1994: MOSt acquires NSE Membership and plans for major expansion of its retail network.Motilal Oswal. Mumbai. First of its kind study initiated to identify biggest and fastest wealth creating companies in Indian Stock markets. First Domestic Stock broking house to have such a strong Research focus . 1998: Mr.P. enters Institutional Broking business M.MOTILAL OSWAL SECURITIES LTD. Inquire (Indian Equity Research) is formally created at a 2500 sq. Since then nearly 20% of revenue is allocated to research. Motilal Oswal joins the Governing Board of The Stock Exchange. BIRLA INSTITUTE OF MANAGEMENT  Page 28  . ft office in South Mumbai with bigger and better quality infrastructure than the corporate office. 1996: Wealth Creation Study started. 1995: Motilal Oswal gets incorporated as Motilal Oswal Securities Ltd.

 BIRLA INSTITUTE OF MANAGEMENT  Page 29  . Three more memberships taken in later years.P. 1990: After just three years in the business. Motilal Oswal and Mr. M. 1987: Mr.MOTILAL OSWAL SECURITIES LTD. The venture stands out from the rest due to their approach of Research-based broking even when sub-brokers. Raamdeo Agrawal lay the foundation of a great partnership by starting a sub-broking firm. “Motilal Oswal” is formed through acquisition of membership on The Bombay Stock Exchange (BSE).



 BIRLA INSTITUTE OF MANAGEMENT  Page 32  . Passion & Attitude: High energy and self motivated with a “Do It” attitude and entrepreneurial spirit. recognized and rewarded in an apolitical environment.P. Meritocracy: Performance gets differentiated. Excellence in Execution: Time bound results within the framework of the company’s value system M.MOTILAL OSWAL SECURITIES LTD. Our Core Purpose: To be a well respected and preferred global financial services organization enabling wealth creation for all our customers. Team Work: Attaining goals collectively and collaboratively. Values: Integrity: A company honoring commitment with highest ethical and business practices.


Quintessential Investment Philosophy of MOSt
Emphasis on return on net worth A focused approach to investing Patience is an invaluable virtue Pick high quality companies Invest for the long term Investing is the art of controlling emotions Find good companies that are currently out of favour Companies that generate sustainable cash flow are safer If you make a mistake, admit it and get out Look for sufficient 'margin of safety Consistent portfolio returns over time lead to substantial wealth creation


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Management Team
MOSt management team is regularly engaged in finding ways to improve operational efficiencies and customer satisfaction. You will find CAs, CFAs, ICWAs, CSs, MBAs and IT professionals managing crucial functions, to bring you best products and services - from research & advice to trade execution & settlement. At MOSt we practice meritocracy and each of the team members is provided extensive training.

Training & Manpower Development
MOSt conducts various training and development programs regularly to enhance the capabilities of its team. As much as 5% of the salary bill is spent on such programs, which is amongst the highest for a broking organization in India. MOSt is truly a learning organization with lead being taken by the Directors, who regularly participate in top management learning programs like Strategic Management Program at Indian School of Business, Hyderabad, Strategy Summits with Management Gurus like Tom Peters and Dr. Lester Thurow, Dean, Sloan School of Management, (MIT) and Brand Management Seminar by Al Ries etc


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MOSt Wealth Creation Study and Awards function
MOSt Wealth Creation Study and Awards function has become a key event in the Indian Capital Market. The Wealth Creation Study, initiated, in 1996 is widely appreciated in the investment community and the Indian Corporate Sector. This annual study identifies the fastest and the biggest wealth creators in the Indian markets over the last 5 years and felicitates them at a public event, attended by several leading investors and equity specialists. The 10th Wealth Creation Awards function was held at the Grand Hyatt, Mumbai on Dec, 2005.

Foundation Day
Arising from its deep respect for Knowledge & Value Addition, MOSt celebrates its Foundation Day in a truly unique manner. Not only are the top performing team members and Business Partners rewarded for their contributions, but they are also provided training on important subjects like Customer Profiling, Selling, Investment Advising etc. Lot of learning takes place through sharing of successful practices by MOSt Business Partners.


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investment strategies and latest opportunities in the stock markets.P. BIRLA INSTITUTE OF MANAGEMENT  Page 36  . research analysts and investment strategists address the audience and personally interact with the investors. MOSt combines its Research. ethical business practices and "Customer First Attitude " to provide end-to-end equity solutions. They believe that no automated system can be a substitute for the human touch.MOTILAL OSWAL SECURITIES LTD. M. End to End Equity Solutions MOSt provides end-to-end equity solutions to all categories of its valued clients by using a combination of its numerous products and services. derivatives market. It offers world-class research-based investment and trading ideas coupled with efficient and reliable trade execution & settlement. Wealth Creation Seminars MOSt conducts Wealth Creation Seminars across the country regularly to educate individual investors about there research products. There senior executives. Its "default free" record since inception is a unique and exceptional feature in the Indian Stock Markets. MOSt values client trust and is committed to upholding it at all costs. IT strengths.






You receive regular account reports and an efficient service at all times.P. Services: Depository Services In the times of T+2 having a demat account linked to your trading account becomes really convenient. The non-trading members also can avail of our Depository services. Depository Service Provided By MODES Account Opening Dematerialization Rematerialization Account Transfer Transmission Nomination Pledging and Hypothecation Account Closures M. MOSt is a member of both NSDL and CDSL and the service is available at all our outlets in India. BIRLA INSTITUTE OF MANAGEMENT  Page 42  .MOTILAL OSWAL SECURITIES LTD.

Derivatives Derivatives (Futures & Options) are ideal instruments to protect your portfolio against risk. hedge and leverage your portfolio by limiting risk but keeping your upside unlimited. MOSt believes in picking investment opportunities where the underlying value is higher than the market price. Equity Research Equity Research is an inherent strength of MOSt. A feather in the cap.MOTILAL OSWAL SECURITIES LTD. BIRLA INSTITUTE OF MANAGEMENT  Page 43  . M. Asiamoney Brokers Poll 2005 has ranked us the best Indian brokerage firm. You can trade with index movements.P.

MOTILAL OSWAL SECURITIES LTD. We believe in picking investment opportunities where the underlying value is higher than the market price. M. Most RMs proactively helps you take informed equity investment decisions and build a healthy portfolio.P. who act as your Relationship Managers (RMs). Equity Research is an inherent strength of MOSt. Motilal Oswal Securities Limited set up MOSt EAG to provide customized and integrated equity solutions to High Networth Investors. BIRLA INSTITUTE OF MANAGEMENT  Page 44  . Most EAG team has highly trained equity professionals. MOSt EAG: In keeping with its tradition of personalized service.

investment horizon.MOTILAL OSWAL SECURITIES LTD. life stage. Integrated Approach: M. return expectation and investment objectives Investments & Trading: MOSt RMs are experts in providing value based investment solutions as well as advising you in positional trading. Profiling takes into consideration issues like your attitude towards risk. as per your profile.P. Portfolio Tracking Software: Client’s portfolio is continuously monitored using Portfolio Tracking Software. Client Profiling MOSt RMs determines each EAG client's profile before deciding the ideal asset allocation. BIRLA INSTITUTE OF MANAGEMENT  Page 45  .

MOTILAL OSWAL SECURITIES LTD. Kolkata. This is to help client reach there investment goal. Clients can avail of there services from all there branches in Mumbai. BIRLA INSTITUTE OF MANAGEMENT  Page 46  . Hyderabad. The RMs keep a close watch on the performance of each stock in client’s portfolio and suggest changes as and when there is a significant trend reversal or deterioration in a company's performance. The RM doesn't stop at just that. Delhi. MOSt RMs proactively help there client take informed equity investment decisions and build a healthy portfolio. Chennai. Clients will receive regular portfolio valuation reports to enable them to monitor performance and view the progress towards the investment objective. They use integrated approach in there investment strategy using a combination of cash. Vadodra. Ahmadabad. who act as client’s Relationship Managers (RMs). Surat. he goes a step further to ensure that client’s trades are settled and stocks credited in there Demat account in a timely manner.P. Benefits MOSt EAG team has highly trained equity professionals. Bangalore. Kochi. M. This allows MOSt to give client’s a convenient single window service and client’s RM becomes the single point contact for all equities related matters. derivatives and other leverage products to help client reach there investment goal.

a sound client base and having the M. MOSt builds partnership with high caliber and like minded individuals and companies who share similar business philosophy. ethics and values. (MOSt) is arguably one of the best brands among Indian Domestic broking houses enjoying an unmatched and unparallel brand recall. with an excellent track record of consistent market growth in all key business segments.P. BUSINESS ASSOCIATE MOSt Business Associate Motilal Oswal Securities Ltd. To reach out to more investors across India. BIRLA INSTITUTE OF MANAGEMENT  Page 47  . MOSt is spread across 24 states in 375 cities through 300 Business Associates and 52 branches.MOTILAL OSWAL SECURITIES LTD. Financially sound.

monthly & annually Strong technology and infrastructure support with regular exclusive training on risk management and IT systems Strong national brand name and continuous marketing support through advertisements. wealth creation seminars. How do Business Associates benefit Access to world-class research. PR.MOTILAL OSWAL SECURITIES LTD. daily. Derivatives and Commodities*) Portfolio Management Services (PMS) E-Broking Depository Services (MODES) Mutual Funds & IPOs M.P. etc A bouquet of equity investment solutions to facilitate cross selling of products and servicesAdvice-based broking on BSE / NSE (Cash. zeal and potential to capture a larger market share within their allotted territory. BIRLA INSTITUTE OF MANAGEMENT  Page 48  . marketing collaterals. fortnightly. exclusive training programs.

P. advice and online assistance helps you take informed decisions. Our robust risk management system and 128 bit encryption gives you a complete security about money. M. more daring and more rewarding than making the right trade at the right time. charts. E-Broking platform brings a world class experience of online investing. and transaction documents. Buying and selling of shares is now just a click away. research. E-BROKING MOSt E-Broking There is nothing more exhilarating. A multitude of resources like live quotes. BIRLA INSTITUTE OF MANAGEMENT  Page 49  .MOTILAL OSWAL SECURITIES LTD. shares.

net position report with mark to market profit/loss and realized profit Online transfer of funds through HDFC Bank Access to latest research reports. Benefits of Trading Online Single screen order/trade entry. Derivative & BSE script on the same market watch Get access to various online reports like margin report. daily market dairy. Demat A/c details. SENSEX. and Industrial. Commodity. BIRLA INSTITUTE OF MANAGEMENT  Page 50  . You can add NSE-Cash. along with top gainers / losers M.P. default market watch . BSE Cash.MOTILAL OSWAL SECURITIES LTD. pivot points. Create multiple market watches. turnover report. writing cheques. derivative dairy View top 20 shares by value or volume traded.NIFTY. Instant order/trade confirmation gives you similar trading experience as exchange based software without the burden of overhead and maintenance cost A refreshing experience of getting outstanding research based advice on intra day and delivery trades on the same screen Live quotes of NSE-Cash/Derivative. trades executed. without going through the hassles of giving transfer instruction.

we have some of the sharpest resources that produce excellent research insights on companies. The same is then passed to our M.P. While our Value PMS scheme is meant for investors with long-term interest in the market. Its clients. BIRLA INSTITUTE OF MANAGEMENT  Page 51  . With about 15% of our revenue invested in our research capability.MOTILAL OSWAL SECURITIES LTD. PORTFOLIO MANAGEMENT SERVICE MOSt PMS Motilal Oswal Securities runs two types of PMS schemes meant for investors with different investment preferences. investor community and some of the most prestigious publications like Asia money and Institutional Investors amongst others acknowledge Motilal Oswal Securities as one of the leading research based equity broking house in India. there Bull's Eye PMS scheme is meant for investors who want to take moderate risk and generate healthy returns from the equity market from time to time.

Portfolio Manager. settlement and performance reporting is all assumed by the PMS provider. Our investment decision will cushion in high . The client derives the benefit of the professional expertise and experience of Mr. FOR WHOM Portfolio Management Service (PMS) is meant for investor with long-term time horizon. They would prefer Mr. Idea generation. This service is particularly advisable for investors who cannot afford to give time or don’t have those expertises for day-to-day management of their equity portfolio. PMS is a product wherein a customised investment portfolio is created to suit the investment objectives of a client. highly rated portfolio management and investment advisory team that works on its personalized investment strategy.MOTILAL OSWAL SECURITIES LTD.margin of safety. Low portfolio churn and capital preservation will be key to success. order execution.P. BIRLA INSTITUTE OF MANAGEMENT  Page 52  . Raamdeo Agarwal. M. to manage the same. In PMS. Raamdeo Agarwal. the responsibility of creating and tracking the portfolio is handled by the portfolio manager. So that it leaves sufficient room for investor to be invested and nurture his portfolio.

proven Fundamental Analysis skill allows them to understand the profile and the M. They believe Investing = Hunting. Here is the investment strategy MOSt employ to generate desired returns through there Bull's Eye PMS scheme. . Identifying the right stocks: There strong. . BIRLA INSTITUTE OF MANAGEMENT  Page 53  . picking and exiting at the right times and then continuing the cycle. Bull’s Eye PMS Bull's Eye strategy to better returns .P.MOTILAL OSWAL SECURITIES LTD. It’s about identifying the right stocks.

read the market condition and pick up the stocks in opportune sectors. This allows them to pick the wheat from the chaff. Moderate risk is the key philosophy: they take moderate risk while making any investment.MOTILAL OSWAL SECURITIES LTD. M. selling at the right time is equally important.* Determining Entry and Exit Points: After identifying the companies for investment. And this completes there hunt for good returns. they employ similar strategy while exiting the stock. Duration of the investment is one to six months. they resort to technical analysis. Therefore. BIRLA INSTITUTE OF MANAGEMENT  Page 54  .P. So even while a stock may look fundamentally strong. the age of there investment in it may depend on the reality based on technical research along with the prevailing market conditions. They believe that apart from the right entry levels. performance of various companies.

They will do the following to bring best results: They will pick stocks based on there value investing philosophy M. Not only will there clients benefit from there exceptional stock-picking ability.P. The Value Hedging PMS is primarily a hedging based discretionary PMS product. but also capitalise on short-term price volatility. BIRLA INSTITUTE OF MANAGEMENT  Page 55  . Through this scheme they offer that delicate balance between long-term returns and short-term gains.MOTILAL OSWAL SECURITIES LTD. Value Hedging PMS Value Hedging PMS is a promising scheme that may be a unique and pioneering effort in its segment.

P. The Value Hedging PMS might also invest in some non-F&O stocks in case the investment rationale is very compelling. Mr. Shah has a proven track record of more than 5 years advising top High Networth Clients on their equity investments. Needless to say.MOTILAL OSWAL SECURITIES LTD. in a bearish market they can hedge position by writing the calls and collecting premiums and at the same time they can buy the puts to avoid the fall in asset value visa-vis market fall. With an increasing list. almost every important stock will be a part of the derivatives segment. M. Various derivatives strategies will be used to hedge portfolio based on prevailing market conditions. most of the stocks they pick will have to be on the derivatives list. For example. BIRLA INSTITUTE OF MANAGEMENT  Page 56  . Jigar Shah. Value Hedging PMS is managed by Mr.

P. BIRLA INSTITUTE OF MANAGEMENT  Page 57  .MOTILAL OSWAL SECURITIES LTD. MUTUAL FUNDS Emergence of Mutual Funds Markets are increasingly becoming more sophisticated and complex investors need a financial intermediary who provides the required knowledge and professional expertise on successful investing M.

which are best.P. Being one of the stock brokers they keep a close watch on the markets. M. Incremental flow of funds into mutual funds rather than traditional avenues Started in India since 1964. BIRLA INSTITUTE OF MANAGEMENT  Page 58  . The fund and scheme selection is done after an in-depth research on parameters like risk adjusted returns. they go a step further to ensure that client get the right NAV.MOTILAL OSWAL SECURITIES LTD. They provide client with regular updates on products and new schemes. Based on client risk appetite. rolling returns. investment horizon and there existing investments team will suggest investment in mutual fund schemes. MOSt Mutual doesn't stop at just that. suited to client. MOSt Mutual To enable clients diversify their investments Motilal Oswal Securities Limited has added another product in its bouquet and will now offer mutual funds. there dividends are credited on time and there account statements are regularly received. volatility and portfolio churn. MOSt mutual team is in close contact with various fund houses and interactive sessions are held with fund managers. Team advises a mature and long-term view on mutual fund investments.

Food grains. The Commodity Exchange is a M. COMMODITIES Commodities are a integral part of our life.P. Oil & Oil seeds) Clothes we wear (Cotton. Silk) Precious Metals (Gold & Silver) Investors looking for a fast-paced dynamic market with excellent liquidity can trade in Commodity Futures Market. BIRLA INSTITUTE OF MANAGEMENT  Page 59  .MOTILAL OSWAL SECURITIES LTD. They form a part of the: Food we eat (Pulses.

MOCB is a registered trading-cum-clearing member of NCDEX.MOTILAL OSWAL SECURITIES LTD.P. BIRLA INSTITUTE OF MANAGEMENT  Page 60  . MOCB offers advice on investments. Public Market forum and anyone can play in these vital Commodity Markets. Motilal Oswal Commodities Broker (P) Ltd can provide an entry to the Commodity Markets. Chapter: 2 Organizational Structure M. strategy & provide research with trading advice.

 BIRLA INSTITUTE OF MANAGEMENT  Page 61  .P. The basic organizational structure is as follows: M.MOTILAL OSWAL SECURITIES LTD.


The internship was undertaken at Shanthinagar Branch of MOSt. BIRLA INSTITUTE OF MANAGEMENT  Page 63  . Each of these fields has separate hierarchy followed.Advisory & -Support & Function. . .P.MOTILAL OSWAL SECURITIES LTD. The split takes place right after Regional Manager.Marketing. The following was the organizational structure at this branch: M.

MOTILAL OSWAL SECURITIES LTD. BIRLA INSTITUTE OF MANAGEMENT  Page 64  . Chapter: 3 Operational Aspects of Different Functional Department Functional Departments M.P.


MARKETING In this department where the demat account as well as Mutual Funds is marketed, marketing executives are seeks for prospective customers, they helps in opening of an account and also these executives collects AMCs and provide other services.

ACCOUNTS Maintaining the purchases of stores department Internal auditing Payments and receipts

HR & ADMINISTRATION PAY ROLL MAINTAINANCE: maintenance of employee details like salary incentives, bonus, and performance records etc RECRUITMENT DEPARTMENT: this department helps in assessing the needs of Labor force and recruiting the needs of Labor and giving the orientation programme to new employees.


HRD: Maintain good relation ship with the employees Identifying the demotivated employees and providing the necessary motivation Accepting problems of the workers and helps in solving them,,

SUPPORT & FUNCTION FRONT OFFICE In front office the following services are done. · Account opening · Holding enquiries · Transfer of physical shares to demat form · Transfer of demat shares to physical form · Transformations of shares from demat to trading account etc...



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· Maintenance of all demat account · Giving intimation related to the due of AMC’s to their account holders · Sends quarterly information to the holders related to the holdings

ADVISORY SERVICES This is the main function done by the department, MOSt gives every financial advisory service to investors e.g.: portfolio management, equity tips, tax planning etc.


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Asia money rated a member of their sales team as the best sales person for Indian equities. Experienced top management Both of Promoters. Motilal Oswal and Mr. Strength Large and diverse distribution network MOSt financial products and services are distributed through a pan-India network. In addition. our top management team comprises qualified and experienced professionals with a successful track record Well-established brand M.P. Mr. Raamdeo Agrawal.MOTILAL OSWAL SECURITIES LTD. are qualified chartered accountants with over two decades of experience each in the financial services industry. In 2006.160 Business Locations operated by them and their Business Associates in 363 cities and towns. BIRLA INSTITUTE OF MANAGEMENT  Page 69  . Strong research and sales teams 28 equity research analysts covering 208 companies in 25 sectors and 5 analysts covering 18 commodities. The business has grown from a single location to a nationwide network spread across 1.

Trading volumes drop sharply during a downturn. Dependency on third parties exposes us to losses caused by financial or other problems experienced by them. When the Indian stockmarket enters the bear phase.MOTILAL OSWAL SECURITIES LTD. Motilal Oswal will be affected. BIRLA INSTITUTE OF MANAGEMENT  Page 70  . Motilal Oswal is a well-established brand among retail and institutional investors in India. like integrity and excellence in execution. Wide range of financial products and services Healthy Financial Market Excellent Infrastructure 1 of the top 5 broker in the country MOFSL’ presence in the field of finance for a long time. Opportunities M. They believe that their brand is associated with high quality research and advice as well as our corporate values. MOFSL have entered into a number of related party transactions. Weakness The main concern with the brokerage business is cyclicality. MOFSL operate on leased premises.P. Leading firms are better placed to weather a downturn and may even be able to accelerate industry consolidation by rolling up smaller firms that have been affected to a much larger extent.

under 3% of India's retail assets are invested in stock markets. Right now. Threats M. BIRLA INSTITUTE OF MANAGEMENT  Page 71  . Economic growth in India Rising of FDI Growing consumer awareness about equity related product. Good Customer Base Rising consumer incomes will translate into disproportionately higher allocation of these funds into equities.MOTILAL OSWAL SECURITIES LTD. there is all possibility that this % rises. real estate and gold dominate the piechart on how Indians invest their wealth. Cash.P. the stock broking industry is highly fragmented and seeing a gradual consolidation. bank deposits. Motilal Oswal's growth has outpaced that of the industry and the company should continue to gain from this consolidation in stock markets. As economies develop. Growing IPO issues Can make use of sustained growth in retail segment of financial Product. Further.

Existing Competitors Market Uncertainty Political instability or changes in the government could delay the liberalisation of the Indian economy and adversely affect economic conditions in India generally.P. BIRLA INSTITUTE OF MANAGEMENT  Page 72  . and could cause a decline in the business and impact profitability.MOTILAL OSWAL SECURITIES LTD. Broad economic factors like inflation etc. M. We have reputational risks in respect of our distribution of third party products Downturns or disruptions in the securities markets could reduce transaction volumes. which could impact our financial results and prospects.


MOFSL is the holding company of Motilal Oswal Securities Limited (MOSL-broking business).400 equity shares of Rs 5 each and a reservation of 142.710 equity shares of Rs 5 each for cash at a price band between Rs 725 and Rs 825 per share with 100% book building process. The issue will constitute 10.MOTILAL OSWAL SECURITIES LTD. 82.310 equity shares of Rs 5 each for subscription by eligible employees at the issue price. HNI and retail customers. The equity shares are proposed to be listed on the BSE and NSE. BIRLA INSTITUTE OF MANAGEMENT  Page 74  . Motilal Oswal Financial Services (MOFSL). The issue comprises a net issue to the public of 2. a financial services company focused on wealth creation for all its customers such as institutional and corporate clients. Citigroup Global Markets India Pvt Ltd is the book running lead manager and In time Spectrum Registry is the registrar to the issue.840. Ltd M.50% and the net issue will constitute 10. The company is going to raise Rs 216.00% of the post issue paid-up equity capital of the company. as per its DRHP filed with Sebi.25 crore in lower end of the price band and Rs 246 crore at higher band. proposes to enter capital markets with an initial public offering (IPO) of 29.P. Motilal Oswal Commodities Brokers Pvt.

In the year 2006.MOTILAL OSWAL SECURITIES LTD. BIRLA INSTITUTE OF MANAGEMENT  Page 75  . private equity investors New Vernon Private Equity Limited and Bessemer Venture Partners Trust bought a 9. MOSt has good success rate as lead managers.47% stake in the company for Rs 518. Ltd (MOVC-venture capital advisory). MOSt is one of the leading broking houses in the Equity Market. MOFSL provides a financing facility to its retail broking customers.9 per share (the face value per share being Rs 5). Ltd (MOIA-investment banking business) and Motilal Oswal Venture Capital Advisors Pvt. Such capital infusion will help strengthen their respective balance sheets and thus enable them to increase trading volumes in the equities and commodities market. (MOCB-commodity business). Motilal Oswal Financial Services Ltd proposes to infuse funds into MOSL and in MOCB in the form of a subscription for their equity shares.P. PROBLEMS AREAS M. Its biggest strength is their presence in the field of finance for a long time. MOFSL proposes to enhance this financing facility. It has Branches all over country. unsecured loan or any combination thereof. Motilal Oswal Investment Advisors Pvt.

Lack of penetration in market of Mutual funds. is volatile. 2006. Advertisement policy of MOSt is not as effective as it should be.MOTILAL OSWAL SECURITIES LTD. The market. MOSL contributed 99.95% of our total consolidated revenues for the Financial Year 2006 and nine months ended December 31.P. in which the organization is a part.99% and 91. Advices related to equity market are given to HNI clients only. respectively. M. Risk is the major concern which is of prime concern in the trading associated with the cash market. BIRLA INSTITUTE OF MANAGEMENT  Page 76  . We are substantially dependent on MOSL and any decline in MOSL’s revenues and profit margins will adversely affect our consolidated results.


like investment banking and venture capital management will be critical to achieving widespread recognition. Most of the existing investors not aware about the different products of MOSt. debts and government securities. Addressing the customer’s queries and receiving constant feedback is a must because MOSt is an online portal and there is very less exchange of communication between the customers and the principal. Providing Multi department skill. Continuing to build our brand. Should pay more attention to the market of Mutual Funds. It can take advantage of this and start a separate mutual fund. It has a special and dedicated Research Desk who are into constant monitoring of the share markets. so there is urgent need to publicize the services.MOTILAL OSWAL SECURITIES LTD. The company can start its own mutual fund and start investing in stocks. Multi work skill training to employees in order to give the tough competition to competitors and also employees become more skilled.P. BIRLA INSTITUTE OF MANAGEMENT  Page 78  . People will have good confidence in this and the business can also be profitable. particularly in our new businesses. M.


P. It was a very fruitful experience working in MOSt as a management trainee. As the interest rates all over are dropping. The decision in regard to investments is based on the sector performance as well as the strong fundamentals of the company. but the present day has given people to try a wide range of companies. The act of speculation has considerably been reduced due to the statistical data and its analysis that companies like MOSt do and people have become intelligent investors rather than mere speculators. into a good planning package. discovered by the economists. Investment in India has become more of a security necessity than a business lifestyle. people are switching to other avenues which fetch better results. BIBILOGRAPHY: M.MOTILAL OSWAL SECURITIES LTD. It offered exposure to the wide range of investment options available. Not only did it give a learning experience but also gave an idea on how we could incorporate the various investment options. The risk band that initially existed as been eased out and people are on the lookout for new and better stuff. BIRLA INSTITUTE OF MANAGEMENT  Page 80  . one could invest only in a few companies. In olden days. The risk factors involved could be understood easily.




As a result many jurisdictions around the world are adopting shorter settlement cycle. Internationally. Technology has also enabled the formation of a larger and a fair market place. This platform has been a launching pad for the exponential growth in volumes showing a widespread and diverse interest in the securities market. Communication and technology have enabled individual financial markets to link together creating one global market.MOTILAL OSWAL SECURITIES LTD. BIRLA INSTITUTE OF MANAGEMENT  Page 84  . systemic restructuring. retail and institutional investors have been empowered leading to a more dynamic and sensitive market. the need for shortening the settlement and clearance cycle as a cost saving and risk management discipline has become critical to the orderly conduct of business. INTRODUCTION BACKGROUND Capital markets are in the midst of a global. The use of technology has enabled the investor populace to discount news more quickly and comprehensively. As the volume of securities trading in the global market place has increased in the recent years.P. M.

MOTILAL OSWAL SECURITIES LTD. BIRLA INSTITUTE OF MANAGEMENT  Page 85  . M. It is therefore really believed that achieving a reduced settlement cycle is critical for further development of the securities market.P. A reduced settlement cycle aligns efficiency of the clearing and settlement process with the efficiency and effectiveness clients can expect from the front end of the trade processes.

The cross border trades. SEBI is being advised to take necessary action in this regard in consultation with the RBI. The volumes in the domestic markets have increased substantially over the years. " Shri Jaswant Singh (2002) The Indian securities market too has tackled challenges and embraced innovations in technology. THE INDIAN CONTEXT "… . in april 2002. M. BIRLA INSTITUTE OF MANAGEMENT  Page 86  . have also increased over a period of time. to move to T+1 rolling settlement from the existing T+3 by tuning up the funds and securities processing cycle. There is need. In July 2001. more popularly known as FII trades.P. market risk management becomes far more efficacious at shorter settlement cycle.MOTILAL OSWAL SECURITIES LTD. therefore. the Indian capital markets joined the league of developed markets in the world by the introduction of the T+3 settlement cycle. the Indian securities market made a paradigm shift from the century old account period settlement to a T+5 rolling settlement.. Keeping abreast with the dynamics of the securities market and to integrate with the world markets.

and 4) Concurrent and no sequential exchange of data and information – many steps in the transaction processing which are now occur sequentially or in batch modes would have to be concurrent. 3) Virtual and not physical processing – there will be reduction if not a gradual elimination of physical securities and cheques.MOTILAL OSWAL SECURITIES LTD. However the increasing volumes and the need for greater finance to fund the higher volumes have prompted policy makers and regulators to consider reducing the settlement cycle to T+1 rolling settlement. 2) Significant real time processing – as settlement time frames are compressed real time or near real time processing needs to be achieved by all participants and dependencies on manual processes would be reduced significantly. M. There are four key features which characterise the reduction in the settlement process: 1) Seamless communication among all relevant market participants – multiple service providers are to be linked together in a seamless and costeffective manner. BIRLA INSTITUTE OF MANAGEMENT  Page 87  .P.

while others contend that the cost / benefit equation doesn't warrant the necessary work. A reduced settlement cycle aligns efficiency of the clearing and settlement process with the efficiency and effectiveness clients can expect from the front end of the trade processes. second it has economic benefits and increases greater flexibility of trading and investing Some policy thinkers agree with the above contention and feel that it is necessary to handle growing trade volumes and reduce risk. M. investment managers and institutions. To achieve this shift effectively.MOTILAL OSWAL SECURITIES LTD. banks. For one it significantly reduces settlement risk. custodians. all market participants would be required to join in the efforts and begin preparing their own internal systems. BIRLA INSTITUTE OF MANAGEMENT  Page 88  . transfer agents. It is therefore generally believed that achieving a reduced settlement cycle is critical for further development of the securities market. The shortened cycle will affect all facets of the industry including broker / dealers.P.

MOTILAL OSWAL SECURITIES LTD. which itself testifies the difficulties and the investments required. in completely automating the process from trade order and execution to settlement.S. INTERNATIONAL CONTEXT The current T+2 settlement cycle was achieved in the US after an experience with times of market turbulence made the risks of a five-day settlement cycle abundantly clear.P. Though. a proactive regulatory environment is accelerating the trends towards further streamlining and automating processes towards further risk reduction and improved customer service. has recommended quite sometime back that U. For example the Securities and Exchange Commission (SEC). The move to T+1 would imply automation of each step in the settlement process ("commonly referred to as Straight through processing"). it must be said in the same breath that the US markets have number of times postponed deadlines for achieving this.. T+5 allowed too much time between trade execution and settlement for a trading party to become insolvent or for the value of a trade to deteriorate. BIRLA INSTITUTE OF MANAGEMENT  Page 89  .S. financial markets should reduce the settlement window from three days after trade date (T+3) to next day or Trade Date + 1 (T+1). M. But the U.

The reasons for moving to T+1 are the same as they were back then: significantly increasing trading volumes. The other consideration is that many securities are traded on both countries’ exchanges. the Canadian Capital Markets Association (CCMA) is leading the move to T+1. significant progress has been made to establish shortened settlement cycles in recent years. M. particularly in Japan. BIRLA INSTITUTE OF MANAGEMENT  Page 90  . The CCMA has set its timetable with the US. In Canada. In Europe.P. Given the interconnectedness of the Canadian industry with that of the US. Efforts are underway to develop industry communication standards and to normalize exchange services to prepare for effective global capital movement. the CCMA hopes to avoid crossborder arbitrages whereby investors can trade wherever the system is most efficient. market volatility and competitive pressures from other markets. the CCMA decided it was essential to follow the US timetable. By synchronizing T+1 with the US. In 1997 a Trade Date +3 (T+3) settlement convention was adopted for Japanese government bonds (JGBs)— a substantial decrease from the previous mark of Trade Date +7 (T+7).MOTILAL OSWAL SECURITIES LTD. firms are now creating direct links to settle stock exchange-listed equities resolve cross-border settlement issues. Singapore and Hong Kong. In Asia. which achieved the change from T+5 to T+3 in 1995.

widespread moves to adopt T+1 are underway. BIRLA INSTITUTE OF MANAGEMENT  Page 91  . M. although cross-border implementation initiatives. such as those in Europe. In addition. In Singapore and Hong Kong. In those markets where there are currently no plans to shorten the settlement cycle to T+1. Widespread adoption of a T+1 standard.P. and marks a critical step in developing a local infrastructure that will eventually permit T+1 settlement. however.MOTILAL OSWAL SECURITIES LTD. remains several years away. the Bank of Japan had taken the lead in developing a Real Time Gross Settlement (RTGS) system for JGBs. the SEC's recent pronouncements has stimulated debate and introspection on the issue and serve as a catalyst for change. do not exist to date. RTGS will provide live intra-day settlement. Finance ministries across Asia recognize that reducing the duration of the settlement cycle and implementing RTGS is desirable.

bonds. BIRLA INSTITUTE OF MANAGEMENT  Page 92  . Kinds of Security transactions under T+2 Most security transactions. M. municipal securities. and limited partnerships that trade on an exchange. mutual funds traded through a broker. As T+5 allowed too much time between trade execution and settlement for a trading party to become insolvent or for the value of a trade to deteriorate. The reasons that took exchanges from T+5 to T+2 are now leading them to T+1. However. For many years.P. must settle in three days. our markets operated on a "T+5" settlement. which in turn lessened the amount of money that needs to be collected at any one time and strengthened our financial markets. the SEC reduced the settlement cycle from five business days to three business days.MOTILAL OSWAL SECURITIES LTD. the road to T+1 is even more difficult than the one to T+2. CURRENT SCENARIO The success of T+3 system and the rapid growth shown by depositories and depository participants and the ease at which the market intermediaries adapted to the changing environment saw the emergence of T+2 settlement cycle that is presently in vogue. including stocks.

MOTILAL OSWAL SECURITIES LTD.S. For certificates of deposit and commercial paper. Exceptions Government securities and stock options settle on the next business day following the trade. M. treasuries. For U.P. the transaction on the same day. and forex transactions are settled two days after (T+2). BIRLA INSTITUTE OF MANAGEMENT  Page 93  . it is the next day (T+1).

In the depository environment. The broker removes M. the seller gives a delivery instruction to his DP to transfer securities to his broker's account.P. BIRLA INSTITUTE OF MANAGEMENT  Page 94  . The broker has to then complete the pay-in before the deadline prescribed by the stock exchange.MOTILAL OSWAL SECURITIES LTD. Once the trade is executed by the broker on the stock exchange. Working of stock market: A market trade is one that is settled through participation of a Clearing Corporation. the securities move through account transfer.

2. BIRLA INSTITUTE OF MANAGEMENT  Page 95  . 1.P. On pay-out. Seller gives delivery instructions to his DP to move securities from his account to his broker's account. Buying broker gives instructions and securities move to the buyer's account. Securities are transferred from broker's account to CC on the basis of a delivery out instruction. The broker then gives delivery instructions to his DP to transfer securities to the buyer's account. M.MOTILAL OSWAL SECURITIES LTD. 3. securities from his account to CC/CH of the stock exchange concerned. The movement of funds takes place outside the NSDL system. securities are moved from CC to buying broker's account 4. The CC/CH gives pay-out and securities are transferred to the buying broker's account. before the deadline given by the stock exchange.

The settlement period T+1 denotes “transaction date plus one day”. The deal is done on the transaction day--it's just the transfer that does not take place until later. for two parties involved in a futures contract. BIRLA INSTITUTE OF MANAGEMENT  Page 96  . The number 1 denote how many days after the transaction date the settlement or the transfer of money and security ownership takes place. which is the day the transaction takes place. The period between transaction and settlement should not be considered as a flex time in which one can back out of the deal.MOTILAL OSWAL SECURITIES LTD. Investors purchasing securities may need to have funds at their brokerage firm before their brokerage firm will execute their orders. investors will probably have to change the way in which they buy and sell securities. For determining the settlement date the only days that are counted are those on M. which the stock market is open. The parties participating in a transaction an obligation to perform their par. the seller is obligated to sell and deliver the underlying asset and the buyer is contractually obligated to pay the agreed upon price and accept the delivery.P. For example. investors who hold certificates may have to deliver the certificates to their brokerage firm before their brokerage firm will execute their orders. AN OVERVIEW OF T+1 SETTLEMENT CYCLE Under a T+1 settlement cycle. For example. The T stands for transaction date.

 BIRLA INSTITUTE OF MANAGEMENT  Page 97  . “The mag. When one sells a security. when one buys securities. certificates are kept by their holders or securities custodians. the brokerage firm must receive the payment no later than one business day after the trade is executed. Currently. Under T+1 rule. almost all trades will be executed electronically. With T+1. Simply put. The securities are generally held in the form of electronic accounts under this context In a T+1 environment. electronic positions will have to exist for any remaining certificates before those stocks are traded.P.nitude of the changes required is better understood when one considers that the work that took three days to complete will [with T+1] be completed in one day. M.MOTILAL OSWAL SECURITIES LTD.” says Jean-Pierre Maisonneuve of the Ontario Securities Commission. he/she must deliver to the respective brokerage firm the securities certificate no later than one business day after the sale. Regulatory amendments will be required as electronic certificates replace the majority of paper ones.

MOTILAL OSWAL SECURITIES LTD. • Lack of data integrity and standards. Problems in the way of implementing T+1 • Manual processing and the lack of automation even after the T+3. • Lack of standard interfaces and the inter operability. • The need to overhaul the prospectus delivery rules M. • The need to fully immobilize securities to prevent lengthy processing and turn-around times. BIRLA INSTITUTE OF MANAGEMENT  Page 98  . • Lack of real time functionality where the technology is employed.P..

fewer fails will occur by human error. and accurate trade data will reach the clearing corporation and the depository more quickly. but primarily it is the desire to move to the T+1 that is behind introducing the STP. to settlement without the manual interventions and the redundant processing. Back-office staff can then focus on processing today's trades rather than correcting yesterday's. "Achieving straight through processing will streamline back-office procedures. cut costs. The benefits of the STP go beyond introducing the T+1.MOTILAL OSWAL SECURITIES LTD. As a result. BIRLA INSTITUTE OF MANAGEMENT  Page 99  . The Straight Through Processing (STP) is an overall business and technology strategy to reduce the risk. Bruce Striegler M. and have greater ability to introduce new products. and the processes to automate the trade process from end to end. Through automation." R. improve the customer services. manual intervention will become the exception rather than the norm. That is from the trade execution. to confirmation. handle larger volumes. Removing these obstacles means introducing the Straight Through Processing. It is best described as the seamless integration of systems. increasing efficiency to the system while minimizing operational risk.P.

MOTILAL OSWAL SECURITIES LTD. The STP requires (i) Standardization of the software and the hardware in brokerage houses and other places.P. and (iii) reliable and flexible technology infrastructure. M. BIRLA INSTITUTE OF MANAGEMENT  Page 100  . (ii) Real time information flows to all participants.

Reducing manual processing associated with recalling securities lending arrangements and e physical certificates decrease the likelihood of operational risk.Others thinks that to achieve T+1 firms need to be STP ready first. Then they can respond more effectively to external pressures and interact with other industry participants in a timely manner during the transaction lifecycle. Implementing these M. T+1 Is Anticlimactic Achieving STP industry initiatives will reduce the overall risk experienced in today’s processing environment – significantly enough to make T+1 anticlimactic. we believed – and still do – that STP is the answer. Focusing on institutional transaction matching as a prerequisite for settlement will reduce credit and. therefore. firms must efficiently process internally. market exposure for a substantial portion of the marketplace. Before T+1 can be a reality.P. Even before the postponement of T+1.MOTILAL OSWAL SECURITIES LTD. FACTS ABOUT STRAIGHT THROUGH PROCESSING (STP) Distinguishing STP from T+1 Some believe T+1 is the only way for firms to forward their STP agenda. BIRLA INSTITUTE OF MANAGEMENT  Page 101  .


types of STP initiatives will go a long way to reducing overall risk without having to change the settlement cycle.

The Real-Time Difference Regardless of T+1, real-time or “near” real time processing does make a difference. Being able to identify potential problems or discrepancies as soon as they occur allows firms to respond better to risk – credit, market, Operational – associated with “broken” transactions. Indeed, providing realtime information for transactions across the enterprise allows the firm to make more timely business decisions to mitigate risk or take advantage of market opportunities. Add to that the fact that customers are demanding more timely information to make their own business decisions and you’ll arrive at the conclusion that real-time does matter.

Start with Strategic Processes Although all firms will benefit from having an STP environment, one should understand the practical reality that it may not be cost-effective for every process in every firm to be “straight through”. Each internal STP initiative should be analyzed to ensure that the benefits are worth the effort, time and cost associated. However, to completely ignore STP would leave an organization unable to compete.


Gain a Competitive Advantage Without STP, firms limit utilizing their ability in a world that increasingly calls for agility and cost effectiveness. Firms can get rid of manual and batch processing, employ consistent standards, move to relying on “thinkers” instead of processors and “break down the data walls “of business silos. Getting “straight through” offers an institution the ability to provide consistent, consolidated data that customers demand and that firms need to make appropriate business decisions. STP also allows them to focus on their core competencies and increase capacity without adding infrastructure.


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Business processes and technology play key roles in realizing STP. Still, to achieve the full benefits of STP requires more than simply restructuring processes and deploying new technology. Other key perspectives are essential to ensure STP allows a firm to better achieve all its business objectives. In addition to business processes and technology, we encourage our clients to address other perspectives as part of the holistic process of achieving straight through processing.


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Firms should ask themselves the following critical questions to ensure they are addressing all aspects of their straight through processing environment.MOTILAL OSWAL SECURITIES LTD. BIRLA INSTITUTE OF MANAGEMENT  Page 105  . Regulatory/Compliance • Does the processing environment satisfy the regulatory requirements? Organizational Design • Does the organizational structure support the processing environment? • What are the needed skill sets and how can the regulatory requirements? Risk Management • What are the risks associated with the new processing environment? • What are the risks associated with not implementing the new processing environment? • What actions are required to mitigate the new risks? M.P.

MOTILAL OSWAL SECURITIES LTD. BIRLA INSTITUTE OF MANAGEMENT  Page 106  .P. Internal Controls Practices • Are the proper ‘checks and balances’ in place? • What are the key metrics to monitor business and controls performance? Financial Reporting and Corporate Responsibility • Is there transparency of information across the organization? • Do the processes reflect the governance policies and culture? Business Continuity • Are recovery processes in place to ensure minimal loss of business and reputation? Change/Leadership Management • Is there a communication plan to garner “buy-in” and promote commitment? M.

Risks Prior to Settlement Pre-settlement risk is defined as the risk that counterparty to a transaction for completion at a future date will default before final settlement. During those five days. it might suffer credit losses as large as to create systemic problems. This is also known as replacement cost risk.MOTILAL OSWAL SECURITIES LTD. There are other examples … on October 27. If the default is by a major player.26 points … on August 31. Risk Reduction Benefits of Shorter Settlement Cycles The goal of shortening the settlement cycle is to reduce risks that can lead to systemic disruptions in the financial markets. Pre-settlement risk is of concern because it involves a change in the value of the securities if one of the party’s defaults.P.61 points. M. If you reduce the time you reduce pre-settlement risk. BIRLA INSTITUTE OF MANAGEMENT  Page 107  . ten of the 30 DJIA stocks declined 35% or more. 1998. the DJIA fell by 512. 1997 the DJIA declined by 554. A default by the buyer of one of those stocks would have exposed the seller to big losses. The resulting exposure is the cost of replacing the original transaction at current market prices. A good example of this is the 1987 market break – where the settlement cycle was T+5.

It also includes risk that the buyer does not receive delivery when due and may have to borrow the security in order to complete its own delivery obligation. both parties are exposed to liquidity risk on settlement date. Liquidity problems have the potential to create systemic disruptions. This is also known as principal risk – the risk of loss of securities or payments made to the defaulting party before the detection of the default. Risks at Settlement Settlement risk means the risk that settlement in a transfer system will not take place as expected. Liquidity risk is the risk that the seller of a security who does not receive payment when due may have to borrow or liquidate assets to complete other payments. With sharp price movements. In particular. if liquidity problems arise when securities prices are changing rapidly. In the absence of a strong linkage between M. The Commission believes that liquidity problems have the potential to create systemic disruptions.P. BIRLA INSTITUTE OF MANAGEMENT  Page 108  . In addition. In this scenario. both the buyer and seller are exposed to risk of loss of the full principal value of the securities or funds transferred. failures to meet obligations when due are more likely to elevate concerns about solvency.MOTILAL OSWAL SECURITIES LTD. This might be both credit and liquidity risk. traders may be unwilling or unable to meet margin calls and default on their delivery obligations.

system outages. a clearing corporation. or hamper the system's ability to monitor and manage credit exposures. delivery and payment. As clearing and settlement systems become more dependent on information systems. the reliability of these systems (errors or delays in processing. in turn. For example. The fear of losing the full principal value of securities or funds could induce some participants to withhold deliveries and payments.MOTILAL OSWAL SECURITIES LTD. Possible operational failures include errors or delays in processing. Operational Risk Operational risk is the risk that deficiencies in information systems or internal controls. or at an exchange can increase the risk of loss to market participants and investors. which. create liquidity pressures on the market or participants. the emergence of systemic liquidity problems at such times is especially likely. Operational deficiencies within a broker-dealer. BIRLA INSTITUTE OF MANAGEMENT  Page 109  . These deficiencies can reduce the effectiveness of other measures that the settlement system takes to manage risk. system outages. human errors or management failures will result in unexpected losses. operational problems could impair the system's ability to complete settlement. and fraud) is a key element in operational risk. may prevent other participants from meeting their obligations. insufficient capacity. or fraud by staff M. insufficient capacity.P.

The events of September 11. M. although some firms were severely affected. the systemic consequences could have been severe. BIRLA INSTITUTE OF MANAGEMENT  Page 110  . the events of September 11. the attacks did highlight the need to examine the risks in the clearance and settlement system. 2001. Generally.MOTILAL OSWAL SECURITIES LTD.P. If credit problems had arisen. No firm failed in the immediate aftermath of the terrorist attacks. 2001. However. financial crises involve both operational and credit issues. demonstrated how operational risk results from unforeseen events that can directly and severely affect market functions. including the need for a resilient clearance and settlement infrastructure. were unusual in that the settlement problems that did occur resulted almost exclusively from operational problems. In contrast.


the SIA purported that T+1 settlement could reduce participants' clearing fund obligations by one-third. Additionally. a leading research and advisory firm puts the figure at $19billion. The SIA estimated that settlement exposure would decrease by $250 billion in a T+1 environment. M. but will save the industry $2. BIRLA INSTITUTE OF MANAGEMENT  Page 112  .7 billion. and would therefore recoup their investment three years after implementing a T+1 settlement cycle. a number of critics questioned the assumptions and conclusions contained in the SIA's Business Case Report. moving to T+1 will cost approximately $8 billion. operational risk for custodians would also be reduced as the number of pending settlements decreased. With fewer open positions at the clearing agencies. However. The SIA further concluded that firms would benefit from an annual cost savings of approximately $2. Critics also argued that the SIA's Business Case Report did not adequately quantify the risk reduction benefits of moving to T+1.P. purchasing new software and training. 1) SIA’s Business Case Model Report According to SIA's Business Case Model report. a figure that covers upgrading information systems and processes.7 billion a year.MOTILAL OSWAL SECURITIES LTD. Towergroup. arguing that it would cost the industry more than $8 billion and the cost recovery would take longer than three years. Since its publication.

Without such investments. M.P. substantial system improvements may be essential to shortening settlement cycles. replacement cost risk would not be reduced as much as anticipated and operational risk and liquidity risk could increase. BIRLA INSTITUTE OF MANAGEMENT  Page 113  . a move to a shorter settlement cycle could generate increased settlement fails.MOTILAL OSWAL SECURITIES LTD. In most markets. make timely confirmation more difficult. and the frequent involvement of multiple intermediaries. For markets with a significant share of cross-border trades. 2) Costs to Cross-Border Trading Reducing the settlement cycle is neither costless nor without risk. with a higher proportion of participants unable to agree and exchange settlement data or to acquire the necessary resources for settlement in the time available. a move to T+1 would require a substantial reconfiguration of the trade settlement process and an upgrade of existing systems. Consequently. "This is especially true for markets with significant cross-border activity because differences in time zones and national holidays.

T+1 is another important plank in our quest to improve the global competitiveness of our capital markets. To reduce risk and increase efficiency in securities. 3. 6. To increase operating efficiency and reduce the probability of settlement errors. To reduce counterparty credit risks by reducing the number and value of trades awaiting settlement and by reducing the potential for losses from those unsettled trades should a participant default. BIRLA INSTITUTE OF MANAGEMENT  Page 114  . The longer the period between trade and settlement. the larger the volume of unsettled trades at any given moment and greater the exposure to the risk.P. M. 5. To cope with increasing trading volumes. 4.MOTILAL OSWAL SECURITIES LTD. Why T+1? 1. 2. To remain competitive and please investors by reducing cost.

This patch-work approach is more likely to increase maintenance requirements and processing errors. NO EASY APPROACH Many buy-side firms are taking the approach that STP can be implemented by tacking on an order-management system to the front end. these firms are missing the opportunity to implement the parallel-processing capability needed to support the reducedM. automating some manual procedures in the back office and buying some middleware to integrate diverse hardware and software platforms.MOTILAL OSWAL SECURITIES LTD. system functions and operations must occur simultaneously. This highly parallelprocessing environment will need to be supported by a complementarytechnical architecture and organization design. ARE WE READY? To achieve "real STP" and T+1. many diverse transactions. As a result. Many of these same firms are finding that these adjustments do not guarantee T+1 processing capability and that it certainly isn't easier to support nor any less expensive. BIRLA INSTITUTE OF MANAGEMENT  Page 115  . MOVING TO T+1…. reduce efficiency and thereby increase operational risk.P.

MOTILAL OSWAL SECURITIES LTD. require a high degree of parallel processing. This will require real-time. a better understanding is developing of the implementation requirements for these processes.P. BIRLA INSTITUTE OF MANAGEMENT  Page 116  . TECHNOLOGY UPGRADES REQUIRED As the T+1 settlement models are developed and published. The integration M. increase operating efficiency and reduce the probability of settlement errors. In other words. the scope of changes required to support T+1 is far beyond the changes most buy-side firms are planning or implementing today. Current systems and processes will need to be modified to allow for partial. The core processes of these models. handled and communicated to other systems on a real-time basis. and the time frame in which they must be executed. as well as basic business practices and organizational design. allocating and settling trades which will be particularly true for high-volume environments. This approach represents a major change from the way most investment systems have been designed. asynchronous updates of information. settlement cycle. Parallel processing requires fundamental changes in back-office operations and technology architecture. Trade interrupts will have to be recognized. concurrent multi-stage trade-data enrichment for executing.

best-of-breed solutions.MOTILAL OSWAL SECURITIES LTD. Technical architecture. Predictably. often an afterthought in an industry focused on multi-vendor. This approach may begin to make more sense as organizations consider the impact of the reduced-settlement cycle and struggle to support it with multiple vendors on multiple platforms. of the virtual-matching utilities (VMUs).P. Many organizations will look toward technology as the primary enabler (or disabler) for achieving T+1. parallel processing requires substantial upgrades in processing capacity. may ultimately determine a firm's ability to support T+1. M. GSTP. is critical to any solution and many internal processes and systems will have to be modified to take advantage of the VMU capabilities. or SunGard. few order-management or portfolio-accounting systems have been designed to take advantage of functionality such as guaranteed message delivery or rules-based processing that middleware can support. BIRLA INSTITUTE OF MANAGEMENT  Page 117  . whether it is Omgeo. attempts at ERP-like (Enterprise Resource Planning) application suites for the buy side have not been well accepted. While integration tools such as middleware may be part of the solution. Historically.

such as a data warehouse. BIRLA INSTITUTE OF MANAGEMENT  Page 118  . M. Unless the data is managed and sourced from a single internal or external source. such as corporate-action processing. At the very least. DATA INTEGRITY IS THE KEY A fundamental dedication to data integrity that currently exists in few organizations will be essential to supporting T+1. Because of the shorter settlement cycle there will be less time to find and correct data problems. Because information integrity is fundamental to the investment process and T+1 reduces the window to get accurate information. buy-side organizations will have to focus on data integrity and determine whether related functions. multiple security masters will increase the risk of data errors occurring. In many organizations this will require a new technology architecture and corresponding process redesign.P. Multiple accounting systems and multiple security-master databases become increasing burdens in the T+1 environment due to the limited time to reconcile and correct data.MOTILAL OSWAL SECURITIES LTD. can be supported internally or should be outsourced to specialists. data management will require a new level of concentration and attention.

in addition to market. will need to become standard buy-side operations and management tools. awareness of the need to have a carefully conceived recovery plan has been elevated to the executive level in many organizations. As a result. T+1 will require recovery planning at a much more fundamental. investment in high-availability capabilities is more easily justified. 11.and credit-risk systems. M.MOTILAL OSWAL SECURITIES LTD. transaction level. However. NEW DEMANDS FOR DISASTER RECOVERY There is no question that disaster recovery has taken on new meaning after the events of Sept. BIRLA INSTITUTE OF MANAGEMENT  Page 119  . In conjunction with disaster-recovery capabilities. Few buy-side organizations have implemented high-availability systems such as real-time data and application backups or the ability to cut over to a 'hot' standby without losing any transactions.P. active monitoring of trade status on a real-time basis and implementation of operational-risk systems. Under the T+1 scenario. Potential financial and operational exposure will have to be recalculated and rethought based on the timing of the shorter settlement cycle and factors such as trade-execution exposure.

MOTILAL OSWAL SECURITIES LTD. Likewise. KNOW THE PARTNERS Preparing for T+1 will extend beyond the walls of the buy-side organization and the selection of the right VMU to include careful selection of business partners as well. The operational-efficiency requirements of T+1 will demand a new approach to adding business partners. M. including an assessment of the partners capabilities to support electronic communication such as ISITC for custodians and FIX for brokers.P. In this extended enterprise each partner will have to support minimum operating standards. BIRLA INSTITUTE OF MANAGEMENT  Page 120  . buy-side managers will find themselves. frequently without concern as to the impact on operations or systems overhead. similarly evaluated. In the past. if they have not already. Brokers and custodians may charge higher fees or discontinue the relationship if the manager cannot support electronic-transaction processing using industry-standard protocols. buy-side firms often expanded brokerage and custodian relationships in order to increase potential sources of new business referrals.

outsourcing is likely to become an essential tool. In any case. which are just a small subset of the full impact of T+1.MOTILAL OSWAL SECURITIES LTD. Without a clear organizational plan for managing the migration to become T+1 ready. Implementing the changes described in this article will be expensive and may require organizational changes that are not desirable to every buy-side organization. Operations and technology requirements for T+1 support will cause a rethinking of the outsourcing option. or a 'lift-out' of the entire technology and operations function.P. for functions like corporate-action processing. Bureaucratic or dispersed organizations may find it challenging to support the reduced-decision-making time required by T+1. As a result. interfere with the investment process. BIRLA INSTITUTE OF MANAGEMENT  Page 121  .. buy-side firms risk getting bogged down in a myriad of operational challenges that will. in the end. Likewise. T+1 can only M. matrix-style organizations may find it difficult to integrate or consolidate the operational and investment decision-making resources. will require an organization to rethink its design and preparedness. PREPARING THE ORGANIZATION All of these considerations. This will be true whether the option is selective.

be supported through an integrated approach. asset managers. --The SIA identified ten building blocks as essential to realizing the goal of improving the speed. 4. Rewrite Continuous Net Settlement processes at NSCC to enhance speed and efficiency. 8.MOTILAL OSWAL SECURITIES LTD. such as automatic debits allowed by the National Automated Clearing House Association. and custodians to ensure compliance with compressed settlement deadlines. Develop industry matching utilities and linkages for all asset classes. safety. 9. BIRLA INSTITUTE OF MANAGEMENT  Page 122  . Amend the National Securities Clearing Corporation's ("NSCC") trade guarantee process so that the guarantee is provided on trade date. 7. which achieves a highly parallel-processing environment for buy-side managers. Reduce reliance on checks and use alternative means of payment. Report trades to clearing corporations in locked-in format and revise clearing corporations' output. Modify internal processes at broker-dealers. 3. 6. Revise the prospectus delivery rules and procedures for initial public offerings. 2. Immobilize securities shares prior to conducting transactions.P. 5. Identify and comply with accelerated deadlines for submission of trades to the clearing and settlement systems. and efficiency of the trade settlement process:5 1. M.

Consolidating data across the enterprise will allow improved customer service and facilitate reporting. broker/dealers and custodian banks recognize the benefits that a T+1 environment can provide. The reduction of manual processes will be more cost effective and minimize risk. investors expect the process to be reliable.P. the industry as a whole should benefit. However. our industry is able to meet these expectations. BIRLA INSTITUTE OF MANAGEMENT  Page 123  . Employees can move from merely processing transactions to focus on the firm’s core competencies in providing value to customers. with minimal exposure to risks. First. Finally. our ability to offer investors M. the process must be transparent. investors want high quality.MOTILAL OSWAL SECURITIES LTD. fewer risks. faster service and. and custodians. CONCLUSION Investment management firms. 10. also. T+1 settlement cycle is synonymous to greater automation. Second. Standardize reference data and move to standardized industry protocols for broker-dealers. they have three expectations. asset managers. And since brokers will reduce their credit exposure. This means a pricing system better matched to the actual value of securities. When investors go to their brokers to buy or sell securities. At present. greater market liquidity. affordable services. as trading volumes continue to rise and as our markets become more global.

M. but once implemented it will benefit the whole industry by increasing the overall efficiency. exceptional services at competitive prices will be tested. BIRLA INSTITUTE OF MANAGEMENT  Page 124  .P. The road to T+1 is definitely a toughest one in terms of cost involved. One way to maintain our standards and retain investor confidence is to increase efficiency and reduce risk in the clearance and settlement system. technology upgradation. data integrity etc.MOTILAL OSWAL SECURITIES LTD.


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