REPORT-2

❖ AUCTION SHARE AND AUCTION WINDOW -:

• Auction share is the process of buying and selling of
securities (share/stock) through public bidding. When
company promote share for auction, investor willing to buy
can bid for securities. Those investor who bid highest price
will get securities.
• The auction price is taken at the lowest price offered in the
auction. The highest price would be not more than 20% and
not less than 20% of the closing price of the T+1 day i.e. the
previous day prior to settlement day. If the shares are
offered, the shares are given to the buyer of the shares on
T+3 day.
• The call auction window for trading is similar to the pre-
market session conducted for equity stocks. There will be a
45-minute window for order placement.

❖ ASM CATEGORIES -:
• ASM is Additional Surveillance Measures. It is a new category
formulated by SEBI to check market manipulation. High-risk stocks
are placed under ASM list.
• In India, the bourses often impose curbs such as price bands and
circuit filters to safeguard investors from excessive volatility in
individual stocks. The latest such move is the Additional
Surveillance Measures (ASM) introduced by the Securities and
Exchange Board of India (SEBI) and the domestic exchanges.
 ❖ DOUBLE TAXATION -:
Double taxation refers to income tax being paid twice on the
same source of income. Double taxation occurs income is taxed at
both the corporate level and personal level, as in the case of stock
dividends. Double taxation also refers to the same income being
taxed by two different countries.

❖ Securities Transaction Tax -:

• What is Securities Transaction Tax. STT is a kind of financial
transaction tax which is similar to tax collected at source
(TCS). STT is a direct tax levied on every purchase and sale of
securities that are listed on the recognized stock exchanges
in India.
• Securities Transaction Tax is a direct tax charged on
purchase and sale of securities that are listed on the
recognized stock exchanges in India. STT is always calculated
on the Average Price. ... STT for the delivery transaction will
be charged @ 0.1% on both the
buy and sell = 200*103.75*0.1% = 20.75.

❖ SETTLEMENT CHARGES -:
• n the stock market, there is always a buyer and a seller. So, when
a person buys a certain number of shares, there is another trader
who sells the shares. This trade is settled only when the buyer
receives the shares and the seller receives the money.
• Settlement is the process for transferring property from buyer to
seller. It involves various legal, financial and administrative tasks.
A conveyancer or solicitor can perform most of these tasks on
your behalf. Settlement generally takes between 1 and 4 months
as agreed between the buyer and seller.

❖ DEPOSITORY -:

• A depository is an entity which helps an investor to buy or

sell securities such as stocks and bonds in a paper-less
manner. Securities in depository accounts are similar to
funds in bank accounts.
• A depository is an organization where the securities of an
investor are held in electronic form. A depository can be
compared to a bank. To avail of the services of a depository,
an investor has to open an account with the Depository
through a depository participant, just as he opens an
account with the bank.

❖ FACE VALUE -:

• Face value (also known as par value) is the value of a

company listed in its books and share certificate. The
company decides the face value when it offers shares at the
time of issuance. For example, when a company goes public,
it can have a face value of Rs 10. And it may trade at a
market price of Rs 500.
• This simply means the value of shares in the company's
books. It is calculated by dividing the company's net worth
 or the difference between its assets and liabilities with the
number of issued shares.

❖ CORPORATE AUCTION -:

1. BONUS SHARE -:
A bonus issue is an offer given to the existing shareholders of the
company to subscribe for additional shares. Instead of increasing
the dividend payout, the companies offer to distribute additional
shares to the shareholders. For example, the company may decide
to give out one bonus share for every ten shares held.

2. BUYBACK SHARE-:
Buy-Back is a corporate action in which a company buys back its
shares from the existing shareholders usually at a price higher
than market price.A buyback allows companies to invest in
themselves. By reducing the number of shares outstanding on the
market, buybacks increase the proportion of shares a company
owns.

3. RIGHT ISSUE -:
A rights issue is an offer to the existing shareholders to purchase
additional shares of the company at a discounted price. The offer
is made to the existing shareholders and not to the general public.
It is the right of the shareholder and not an obligation to buy the
additional shares.
4. DIVIDEND -:
Dividend refers to a reward, cash or otherwise, that a company
gives to its shareholders. Dividends can be issued in various forms,
such as cash payment, stocks or any other form. Dividend is
usually a part of the profit that the company shares with its
shareholders.

5. STOCK SPLIT -:
A stock split is a decision by a company's board of directors to
increase the number of shares that are outstanding by issuing
more shares to current shareholders. For example, in a 2-for-1
stock split, an additional share is given for each share held by a
shareholder.

❖ MARK TO MARKET -:

Mark to market (MTM) is a method of measuring the fair value of

accounts that can fluctuate over time, such as assets and
liabilities. In trading and investing, certain securities, such as
futures and mutual funds, are also marked to market to show the
current market value of these investments.

❖ EARLY PAY IN AND EARLY PAY OUT -:

Payin is the process of delivering shares sold by the broker on

behalf of their clients to the designated account of the clearing
corporation. Payout is the process by which the clearing
corporation allocates the securities to be received by the member
broker on behalf of their clients.

❖ NO DELIVERY PERIOD -:

No-delivery period means that trading during the record date

would not result in any delivery of shares. However, this system
was useful when trading used to take place in the physical form as
certificates had to be delivered before record date starts to the
registrars of companies.

❖ OVER THE COUNTER -:

❖ Over-the-counter (OTC) refers to the process of how

securities are traded for companies not listed on a formal
exchange. Securities that are traded over-the-counter are
traded via a dealer network as opposed to on a centralized
exchange. Companies with OTC shares may raise capital
through the sale of stock.

❖ In an OTC market, dealers act as market-makers by quoting

prices at which they will buy and sell a security, currency, or
other financial products. A trade can be executed between
two participants in an OTC market without others being
aware of the price at which the transaction was completed.
❖ HAIRCUT -:

In finance, a haircut is the difference between the current

market value of an asset and the value ascribed to that asset
for purposes of calculating regulatory capital or loan
collateral. The amount of the haircut reflects the perceived
risk of the asset falling in value in an immediate cash sale or
liquidation.

❖ VALUE AT RISK [VAR] MARGIN -:

• Value at Risk (VaR) Margin: Definition, Meaning &

BasicsValue at Risk margin is a measure of risk. It is used
to estimate the probability of loss of value of a share or a
portfolio, based on the statistical analysis of historical
price trends and volatilities.
• The VaR margin is collected on an upfront basis by
adjusting against the total liquid assets of the Member at
the time of trade. The ELM is collected/ adjusted from the
total liquid assets of the Member on a real time basis. The
MTM is computed after trading hours on T day on the
basis of closing price, of that day.

❖ CIRCUIT -:

A circuit filter or circuit breaker is the band of upper and

lower limits within which a benchmark market index can
fluctuate on a particular day. These are regulatory
 mechanisms put in place in stock markets to temporarily
halt trading on an exchange to curb panic-selling. Circuit
breakers are a form of market curbs.

❖ DEMAT ACCOUNT -:

• Demat Account is short for dematerialisation account and

makes the process of holding investments like shares,
bonds, government securities, Mutual Funds, Insurance
and ETFs easier, doing away the hassles of physical
handling and maintenance of paper shares and related
documents.
• While trading online, demat account is used to hold
shares and securities in dematerialised/electronic format.
Under dematerialisation, your share certificates are
converted from physical form to electronic form so as to
increase their accessibility. You need a Demat Account
number to settle trades electronically.
• They are as safe and secure as any asset can be. But,
eternal vigilance is the price you have to pay as an
investor. But just saying that the shares are safe with the
DP is to miss the core point. We have heard of numerous
cases where shares have got debited to demat accounts
without the knowledge of the holder.
• In India, depositories like National Securities Depository
Limited (NSDL) or Central Depository Services Limited
(CDSL) are the two well recognized existing depositories
which provide free demat account services. Apart from
 this stockbroker or depositary participants, intermediaries
facilitate these services.

❖ INVESTORS GRIEVANCE REDRESSAL COMMITTEE

[IGRC] -:

• To speed up redressal of investor grievances, Sebi wants

stock exchanges to set up Investor Grievance Redressal
Committee (IGRC) at every investor service centre.
• For any dispute between the member and the client
relating to or arising out of the transactions in Stock
Exchange, which is of civil nature, the complainant/
member shall first refer the complaint to the IGRC and/ or
to arbitration mechanism provided by the Stock Exchange
before resorting to other remedies available.

❖ Z GROUP -:

• A Z-share is a class of mutual fund shares that

employees of the fund's management company are
allowed to own. Employees may have the option to
buy Z-shares. They are also used in employee benefit
plans and offered as a part of compensation or
through a reward package.
• A company will be transferred to the "Z" category if its
production remains closed for six months or more. The
BSEC also said that a company having net operating
loss or negative cash flow from operations for two
consecutive years would also be transferred into the
"Z" category.