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Submitted in partial fulfillment of the requirement for the award of degree of
POST GRADUATE DIPLOMA IN MANAGEMENT(FINANCE) By RATHNAM RAMCHENDER PGDM/09-11/25
NOVA BUSINESS SCHOOL (affiliated to autonomous university) Hyderabad 2009-2011
CERTIFICATE This is to certify that R.RAMCHENDER, bearing of reg.no:PGDM/09-11/25 Student of PGDM, from NOVA BUSINESS SCHOOL, HYDERABAD, has completed the project titled “FINANCE” Curriculum in our Organization. He has done the project using ONLINE TRADING during the period 17-05-2010 to 07-07-2010, Supervision of Mr.V.Bhushan, from JRG SECURITIES, HYDERABAD.
He has completed the assigned project well within the time frame. He is sincere, hardworking and his conduct during period is commendable.
We wish all the best in his future endeavor.
For JRG SECURITIES,
I Ramchender Rathnam
here by declare that the project
report on “ONLINE TRADING” submitted by me to “NOVA BUSINESS SCHOOL” as partial fulfillment for the award of my own and it has not been submitted to any other institution or published any where before. Date: RATHNAM RAMCHENDER Place : Hyderabad Ht no:PGDM/09-11/25
I respectfully express my gratitude for giving me opportunity to undertake this project work.ACKNOWLEDGEMENT I take this opportunity to acknowledge. all the people who rendered their valuable advice in bringing the project to function. I have tried my level best to put my experience and trading in writing this reports I am grateful to jrg securities as an organization and its various employees for helping me to learn and explore may fields. Hyderabad for his unparallel support through out my project. I express my gratitude to my faculty guide Miss Sangamitra das (Finance lecturer) Nova Business School. ABSTRACT 4 . As part of curriculum at NOVA BUSINESS SCHOOL under AUTONOMOUS UNIVERISTY Hyderabad the project enables us to enhance our skills expand our knowledge by applying various theories concepts and laws to real life scenario which would further prepare us to face the extremely competitive corporate world in near future.
This study helps to prepare budgets such as flexible budgets. The study helps to show the relative importance of fixed cost and Variable cost with the help of breakeven chart. It also analyze the variations. It helps to know the amount over head costs at various levels of operations.The establishment of costs relating the responsibilities of executives to the requirement of a policy and the continuous comparison of actual with cost sheet results either to secure by individual action the objectives of that policy or to provide a basis for its revision The project is taken up with the object to study “ ONLINE TRADING “ IN JRG SECURITIES. The project is mainly a study to examine the cost structure to examine the cost structure of product in Sagar Cement Limited to examine which production is more profitable and to compare the position of past with present and to position itself. INDEX chapter Content 5 Page no .
1 Introduction BRIEF ABOUT THE STOCK EXCHANGE NEED FOR STUDY OBJECTIVES OF THE STUDY RESEARCH METHODOLOGY LIMITATIONS OF THE STUDY 09-19 3 2 4 5 6 Company profile Introduction to Online Analysis & Interpretation Trading Findings & Suggestions DEFFERENCE BETWEEN ONLINE &OFFLINE TRADING 63-73 20-62 74-82 83-90 91-94 INVESTMENT ADVISORY SEVICES Bibliography & Questionare BENEFITS OF ONLINE BROKING PROCESS OF ONLINE TRADING 6 .
4(year 2008) Table 1.1(year 2005) Table 1.3(year 2007) Table 1.5(year 2009) 7 .TABL E 1 LIST OF TABLES Indian Capital Market at Glance • • PAGE NO 12-13 2020 century 21st century 30-34 2 Share of Online Trading in Total Cash Turnover of National Stock Exchange • • • • • Table 1.2(year 2006) Table 1.
TABLE 1 2 LIST OF FIGURES Problems of Online Broking PAGE NO 53 75-82 Analysis of Interpretation • • • • • • • • For how long you have been trading with online trading How will you describe your experience with online trading till date What amount of money you invest normally How often do you trade Which trading you prefer Whether online trading settled in Indian investor psyche What shortcomings do you feel in Indian online trading Which media would you prefer the most for investment 8 .
CHAPTER-1 ONLINE TRADING 9 .
Thus development of efficient market system is necessary for creating conductive climate for investment and economic growth.INTRODUCTION The capital market is the market for securities. where new issues are distributed to investors. Financial regulators ensure that investors are protected against fraud. but on the other hand. The capital market includes the stock market and the bond market. 10 . A liquid stock market ensures a quick exit without incurring heavy losses or costs. where companies and the government can raise long term funds. which in turn enhance the savings and investments in the country. The capital markets consist of the primary market. As a result the investors are not constrained by their individual abilities. Since projects require long term finance. where existing securities are traded. but by the abilities of the companies. the investor may not like to relinquish control over their savings for a long time. liquidity of capital market is an important factor affecting growth. and the secondary market. Capital market thus plays a vital role in channelizing the savings of individuals for Investment in the economic development of the country.
governmental guaranteed loans etc 11 . National Stock Exchange NSE.Capital market Segment – Primary And Secondary Broadly . An organized market for used securities. You may not get par value. bond markets. you can sell it in the secondary market. residential mortgage loans. If you bought a bond last year. If rates are up since you bought the bond. A secondary market is where you sell or buy existing issues. it is trading in previously issued financial instruments. over-the-counter markets. Secondary The market where securities are traded after they are initially offered in the primary market.E. If rates have fallen since you bought it. such as with a corporate bond. usually. you could get a premium for it. Bombay Stock Exchange (BSE). then you will likely have to sell it at a discount to be able to get rid of it. means you are buying it directly from the issuer.PRIMARY 2. I. 1. at par value.SECONDERY Primary A primary offering. the comprises of two segments – the new issue market which is commonly known as primary market and the stock market which is known as secondary market. To explain further. now need to get your principal. Most trading is done in the secondary market.
Secondary market comprises of equity markets and the debt markets. For the general investor. the secondary market provides an efficient platform for trading of his securities. and aggregating information (via price discovery) that guides management decisions. enabling implementation of incentive-based management contracts. For the management of the company.Secondary Market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange. Majority of the trading is done in the secondary market. Secondary equity markets serve as a monitoring and control conduit—by facilitating value-enhancing control activities. 12 .
1992 Formation of National stock exchange HARSHAD MEHTA Scam SESA GOA Scam CRB scam BPL And Videocon Scam 13 .INDIAN CAPITAL MARKET AT GLANCE 2020th century 190 8 1800 193 9 1850 194 1860 0 1875 195 6 1894 195 7 198 8 199 1 199 2 199 3 199 5 199 5 199 7 199 8 Formulation of Calcutta stock exchange Trading of shares of east India company in Kolkata And Mumbai Formulation of Lahore and madras stock exchange Joint stock company came into existence Formulation of U.P and Delhi stock exchange Speculation and feverish dealing in securities Formulation of stock exchange of Mumbai Securities contract and regulation act enacted Formulation of Ahmadabad stock exchange Scam of Haridas Mundhra Securities and exchange board of India set up Scam of MS Shoes SEBI given power Under SEBI act.
21st century 200 0 200 1 200 2 200 2 200 3 200 5 200 6 200 7 200 8 200 8 200 8 2009 Depositories came into existence (electronic form of shares) Ketan Parekh scam Start of rolling settlement and banning of Badla trading Introduction of T+3 settlement in April Introduction of T+2 settlement in April BSE Sensex touches all time high 6954 in January BSE Sensex touches all time high 12500.the highest intraday fall of 1100 BSE reaches the level of BSE touches all time high in January 2008 Sensex saw its highest ever loss of 1. Sexsex saw its 15 month low.408 points at the end of the session.from its all time high Sexsex saw its down trend & highest ever loss because of Satyam case. 14 .
it is a market place for shares and securities where trading takes place in a controlled and protected environment. The securities traded on a stock exchange include: shares issued by companies. as modern markets are electronic networks. share market or bourse is a corporation or mutual organization which provides "trading" facilities for stock brokers and traders. but trade is less and less linked to such a physical place. Trade on an exchange is by members only. to trade stocks and other securities. To be able to trade a security on a certain stock exchange. In other words. MEANING OF STOCK EXCHANGE A stock exchange. A stock exchange is often the most important component of a stock market. Supply and demand in stock markets is driven by various factors which. it has to be listed there. Usually there is a central location at least for recordkeeping. which gives them advantages of speed and cost of transactions. The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. affect the price of stocks (see stock valuation). 15 . Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends.BRIEF ABOUT THE STOCK EXCHANGES Stock Exchange is a market like any other centralized market where both buyers and sellers come and conduct their business of purchase and sale of shares & securities. unit trusts and other pooled investment products and bonds. as in all free markets.
which used to bring the buyers and sellers together for the trade of the shares. Such trading is said to be off exchange or over-the-counter. the Indian securities market has evolved continuously to become one of the most dynamic. The origination of the Indian securities market may be traced back to 1975. a group of persons came into picture. it was difficult to find out the buyers of the shares who want to buy the shares at the price the seller want to sell. when 22 enterprise brokers under a Banyan tree established the Bombay Stock Exchange (BSE). To solve this problem. stock exchanges are part of a global market for securities. At that time a need was felt to bring the buyers and sellers on a common platform. 16 . The ownership of the companies was divided into small parts and that every part was called share. CONCEPT OF SHARE TRADING The concept of share broking emerged after the establishment of the joint stock companies. Over the last 130 years. Increasingly. the term “Share” denominates some part in the ownership of the company. These persons are called the share Brokers who find the persons who wish to buy or sell their securities. nor must stock be subsequently traded on the exchange. The whole process of finding the buyers and sellers of the securities by the brokers is called the Share Broking. When the need was felt to sell the shares by the owner of the shares. The shares are freely transferable subject to the some certain restrictions.There is usually no compulsion to issue stock via the stock exchange itself. modern international standards both in terms of structure and in terms of operating efficiency. So. This is the usual way that bonds are traded.
NEED FOR STUDY • • • • • • To know the operation of the company To know the companys online trading in the above mentioned period. To need for study is to improve the online trading position of the company To analysis the existing situation of the company . To improve the grey areas of the company . and Symbols for the purpose of generalization is inevitable. The online department can implement and can get position result by maintaining proper online trading reports.2006. concepts. Sources of data collection are: For the successful research the manipulation of certain things.2008and2009.2007.PERIOD OF THE STUDY The present study of online trading in motilal oswal financial services limited covers 5 years from 2005. Research is simply the pursuit of truth with the help of the study 17 .
RESEARCH METHODOLOGY The basic task of research is to generate accurate information for use in decision making. recording and analyzing data for aid in making business decisions. 2.There are basically two techniques adopted for obtaining information: 18 . To understand the appropriate organizational structure of the JRG securities . To analyse the online trading and its process. Research can be defined as the systematic and objective process of gathering.OBJECTIVES OF THE STUDY 1.
Primary Data Primary Data is gathered specifically for the project at hand through personal interviews with the accounts officers.1. It is less expensive than the primary data. Secondary data is previously collected and assembled for some project other than the one at hand.SECONDARY DATA Secondary data was collected from JRG SECURITIES Scope of study: The study is limited to JRG SECURITIES Data Collection: Data is collected from secondary sources. 19 . 2. It is gathered and recorded by someone else prior to current needs of the researcher.
LIMITATIONS Despite of the training my level best. If he want advice on a particular stock in his portfolio he may not even be able to get that. 20 . there were still some limitation which I think remains there to draw fruitful conclusion. There were some practical problem which come across and could not be properly death with The advisory services being promised by the brokers would be of little use to investors looking for an insight into the market. As a client one will access the NSE through a server of the online brokerage and this may involve queuing delays If one like to ask his broker "Aaj kya achcha lag raha hai" he may not be able to do so.
CHAPTER-2 INTRODUCTION TO ONLINE TRADING INTRODUCTION TO ONLINE TRADING 21 .
Unfortunately. an Interest investor always knows what commission he is being charged on each trade. depending upon the type of security being traded and the size of trade. water and now everything is available at your doorstep just at the click of the mouse. the only person who is authorized to trace in a the account is the actual investor. Internet has enabled us to get every information at our doorstep. and are typically a fixed rate charge. Similarly the online investor likely does not have to worry that his broker is making unauthorized trades. Internet investors can take as much time as they would like to take prior to placing a trade order. the internet investor can never become a victim of excessive trading (where for the broker) since the investor maintains total control over the number of transactions which take place in the account. In theory. He himself had to go place to place in search of food. All of these positive features of internet trading may lead the unwary investor to believe that Internet trading is a way to take control of their finances and save more money in the process. The 22 . therefore. Furthermore. The growth of information technology has affected almost all sectors of life. this is not always the case. Internet trading commissions are clearly posted on the websites of the various services. has remained far behind? Like all other sectors Internet has set its feet in the stock markets also. There were times when man was a wanderer or a normal. Since there is no individual broker making a commission. When Internet has affected all sectors he could “stock markets” the most important player of the economy.Meaning of Online Trading “Change is the law of nature”.
the average investor is not an expert in the financial markets. of course. There are. There is a danger for allowing the autonomy of online trading to hull you into the belief that you are an expert investor. resource against the brokerage firm for the breach of security. perhaps among the most valuable services provided by traditional brokers. First and foremost. if any. An online investor sitting at home at a personal computer also foregoes proper investment advice and financial planning. additional risks relative to performing transactions over the Internet especially on a shared computer. 23 . Those people whom investors have provided their account number and password can freely trade that account while the investor will have little.advantages of Internet stock trading have also its weaknesses and these weaknesses present significant drawbacks for the average investor.
automatic order matching. The 'Z' group scrips are the blacklisted companies. faster execution of trades and transparency. The 'A' group shares represent those. DIFFERENCE BETWEEN ONLINE AND OFFLINE TRADING 24 . Depository participants. It facilitates more efficient processing. The scrips traded on the BSE have been classified into 'A'. ONLINE TRADING BY NSE & BSE The central computer located at the Exchange is connected to the workstations of the Brokers through satellite using Very Small Aperture Terminals (VSATs). Orders placed at the Brokers' workstations reach the central computer and are matched by the computer based on price and time priority. 'B1'. The 'C' group covers the odd lot securities in 'A'. Depositories. 'C'. 'B1' & 'B2' groups and Rights renunciations. Both the exchanges have switched over from the open outcry trading system to a fully automated computerized mode of trading known as BOLT (BSE On Line Trading) and NEAT (National Exchange Automated Trading) System. FIIs and other participants in Indian secondary and primary market is the Securities and Exchange Board of India (SEBI) Ltd. which are in the carry forward system (Badla). key regulator governing Stock Exchanges. Brokers.When was online trading introduced in INDIA? Online trading started in India in February 2000 when a couple of brokers started offering an online trading platform for their customers. 'B2'. The 'F' group represents the debt market (fixed income securities) segment. Mutual Funds. 'F' and 'Z' groups.
Offline trading has lost some popularity but it is still the main form of investing. there is someone there to answer any questions that may cause concerns. 1.Nevertheless. 4. It may be wise to hire a professional to assist you in making the correct investment decisions if you feel you lack the knowledge necessary. 2. No one wants to throw their money away or stand by and watch someone else throw their money away. The one benefit that an investor appreciates the most is that they are not alone when making investment decisions. with offline trading mistakes are less likely to take place. 3. with all the convenience of online trading there are still investors who prefer the old fashion way of offline trading. There are experienced and professional brokerage companies that handle their investments for them. Investors are not faced with the challenge of making these vital investment decisions. if they do not have the experience necessary to make the appropriate investments. Also. Not to mention. Offline trading offers many benefits as well. especially. 25 .
Points of difference between online trading and ofline trading are as follows:
1. Online trading is very expensive as compare to manual trading or offline trading. 2. Online trading consumes less time as compare to manual trading. 3. Online trading has very helpful to finding the records easily but offline trading takes more time to finding the records. 4. In the help of online trading, there is no chance of any errors while doing the trading. in offline trading there are some errors exist like barriers of communication . 5. With the help of online trading, we know the international market rate of share very easily.
DEMATERIALISATION OF SHARES
Dematerialization is the process wherein shares certificates or other securities held in physical form are converted into electronic form and credited to demat account of an investor opened with a depository participant. SEBI has made compulsory trading of shares of all the companies listed in stock exchanges in demat form with effect from 2nd January 2002.The procedure of opening a demat account with DP is similar to opening an account with a bank.
ELECTRONIC SETTLEMENT OF TRADE A. Procedure for purchasing dematerialized securities
The procedure for purchasing dematerialized securities is also similar to the procedure for buying physical securities. 1. Investor instructs DP to receive credits into his account in the prescribed form. There may be one time standing instruction or separate instruction each time to receive credits. 2. Investor purchases securities in any of the stock exchanges linked to depository through a broker. 3. Broker receives payment from investor and arranges payment to clearing corporation. 4. Broker receives credit to securities in clearing account on the payout day. 5. Broker gives instructions to DP to debit clearing account and credit client’s account. Investor receives shares into his account by way of book entry.
B. Procedure of selling dematerialized securities
The procedure for selling dematerialized securities in stock exchanges is similar as selling physical securities. The only major difference is that instead of delivering physical securities to the broker, the investor instructs his DP to debit his demat account with the number of securities sold by him and credit the brokers clearing account. The procedure for selling dematerialized securities is given below:
1. Investor sells securities in any of the stock exchange linked to depository through a broker. 2. Investor instructs his DP to debit his demat account with the number of securities sold and credit the broker’s clearing account. 3. Before the pay-in-day, broker of the investor transfers the securities to clearing corporation. 4. The broker receives payment from the stock exchange. 5. The investor receives payment from the broker for sale of securities in the same manner as received in case of sale of physical securities.
The DP forwards the request to depository after verifying the investor’s balances. the investor has to fill up a remat request form (RRF) and submit it to the DP. Market timings: Trading on the derivatives segment takes place on all days of the week (except Saturdays and Sundays and holidays declared by the Exchange in advance).REMATERILISATION OF SHARES Rematerialization is the process of conversion of electronic holdings of securities into physical certificate form. RTA/ Company prints the certificates and dispatches the same to the investor. For rematerilisation of scrips. The market timings of the derivatives segment are: Normal Market / Exercise Market Open time Normal market close : 15:30 hours : 09:55 hours Set up cut of time for Position limit/Collateral value : till 15:30 hrs Trade modification end time / Exercise Market : 16:15 hours 29 . Depository in turn initiates the registrars and transfer agent or the issuer company.
he saw the solution at hand. what began with a single click over 16 years ago has now taken the world by storm. The concept was visualized by one bill porter. Charles Schwab. And today his dream has become a reality. who provided online quotes and trading services to fidelity.Advent of online trading online trade using E*TRADE technology. This led bill to wonder why. some day everyone would own computers and invest through them with unprecedented efficiency and control. as an individual investor. he had to pay a broker hundreds of dollars for stock transactions. with incredible foresight. a physicist and inventor with more than dozen of patents to his credit. 30 . and quick and Reilly.
024.62 3.1(Year 2005) MONTH January Feb March April May June July August September October November December CASH TURNOVER(cr.87 3.58 1.372.923.36 2.) 1.23 3.762.33 5.59 3.24 48.93 48.88 3.346.585.02 5.2 (Year 2006) 31 .88 4.63 85.14 61.981.10.02 2.64 ONLINE TURNOVER(cr.32 92.97 3.) 64.18 43.885.302.345.48 3.71 1.41 2.15.35 78.03.34 1.720.559.971.142.877.45 3.50 1.301.32 Source: Ludhiana stock exchange TABLE-1.83 1.159.76 4.289.31 54.33 4.07 1.344.690.21 RATIO(%) 2.595.SHARE OF ONLINE TRADING IN TOTAL CASH TURNOVER OF NATIONAL STOCK EXCHANGE Table 1.825.70 3.69 1.425.91 3.876.
27 7.836.000.718.20 5.3 (Year 2007) 32 .187.04 5.23 5.95 6.13 9.876.13 5.17 98.898.508.05 75.MONTH January February March April May June July August September October November December CASH TURNOVER 1.919.00.52 Source: Ludhiana stock exchange TABLE-1.45 6.951.47 93.13 7.244.88 8.976.593.31 6.819.24 6.31 7.330.13 86.170.72 88.27 9.16 11.268.72 1.41 6.34.08.697.32 82.490.261.90 7.01 5.62 RATIO 4.93 84.53 1.10 ONLINE TURNOVER 6.15.01 4.192.035.76 4.855.48 4.06 1.27 1.358.27 5.015.04..
902.51 2.251.72 2.09 33 .310.639.34 ONLINE TURNOVER 1.108.290.85 3.80 868.43 46.563.22 51.973.476.48 61.25 2.96 1.320.28 1.498.02 54.113.07 51.351.979.19 3.237.398.77 44.84 2.262.50 53.84 2.84 917.318.65 RATIO .66 1.51 1.85 1.28 1.MONTH January February March April May June July August September October November December CASH TURNOVER 68.95 49.57 1.06 44.73 1.241.78 1.718.62 51.05 46.51 2.915.85 914.82 1.01 1. 1.
Source: Ludhiana stock exchange 34 .
68 57.09 229.42.479.21 1.29 0.07 0.04 0.11 1.10 5.85 29.414.43 1.49 165.01 0.21 79.4(Year 2008) MONTH January February March April May June July August September October November December CASH TURNOVER 220.127.116.11 0.10.98 190.22.22 1.65 ONLINE TURNOVER 5.44 18.104.22.168 1.10 88.04 1.229.18 0.18 350.28 Source: Ludhiana stock exchange 35 .44 1.347.85 190.13 0.18 29.04 0.056.18 0.06.TABLE-1.79 366.01 0.06.58 97.731.09 0.854.75 RATIO 0.78 1.854.036.036.373.
92 Source: Ludhiana stock exchange 36 .130.56 1.21 35.226.11 42.467.23 60.47 401.932.81 268.16 1.322.15 35.783.417.132.TABLE-1.00 27.76 1.92 238.68 388.79 ONLINE TURNOVER (RS.35.48.91 1.32 1.326.573.63 48.23 54.71 1.76 29.24 RATIO 0.98 453.49 1.17 805.829.84 1.58 604.41 0.71 0.048.454 42.615.62 849.48 1. CRORES) 1.86 1.227.28 1.9 343.5(year 2009) MONTH January February March April May June July August September October November December CASH TURNOVER 1.82 35.76 0.329.
uses the Internet as a medium for communicating client orders to the exchange.Internet Based Trading through Order Routing Systems Internet based trading on conventional exchanges. • • • • Allowing the clients to directly trade through investors. a broker offering Internet trading facility provides an electronic template for the customer to enter the name of the security. Information on commission and fees. analyst reports and trading strategies and market data on currencies. Offer market information and investment tools similar to those offered by information vendor or SRO web sites. and Account information and research reports. the quantity and whatever the order is a market or limit order. 37 . Broker’s web sites may serve a variety of functions. mutual funds. market indices and news. These may include. • Provide market summaries and commentaries. Offer real-time or delayed quote information. or allow investors to create a personal stock ticker. whatever it is to be bought or sold. continuously update quotes while the user visits other sites. Once the broker’s system receives this information. through broker web sites. and • • • Offer investors access to portfolio management tools and analytic programs. options. Advertise the broker dealers’ services to potential investors. In an Order Routing system.
Private offerings. and Disclosure and communication Issuers are using the Internet to market themselves to potential investors. SEBI has taken initiative in permitting use of the network of stock exchange for collection of investor applications in public offerings by the issuer companies. display. The systems that are currently in use in outside jurisdictions are closed systems and are not accessible to the general public through the Internet. a number of market participants. for disseminating the prospects in electronics form and even for receiving share applications in public issues electronically. they are also using the Internet to communicate to the public for the following: • • • Public offerings. The securities markets regulators abroad the maintained flexible and open policies designed to encourage innovation in the secondary securities markets. potential investors and analysts by disseminating corporate information. In foreign jurisdiction. or other organized markets. As a result. match. Use of Internet for making Initial Public Offerings Issues of securities of using the Internet to communicate directly with their shareholders. which provide investors with additional proprietary electronic trading facilities for securities that are traded principally on securities exchanges. Alternative trading systems have been developing outside conventional securities markets. cross or otherwise execute trading interest. usually broker-dealers. matching systems and crossing systems. They have price discovery functions. In India.Use of Internet as Alternative Trading Systems (Provision for price discovery and matching outside conventional exchanges) In foreign jurisdiction. Investment Advisory Services 38 . have developed computerized “alternative trading systems” by which the system centralize. The Internet is also being used for fulfilling necessary disclosure requirements.
research outfits etc. are using the Internet for marketing and advertising purposes. and Record keeping • • • • • Working Groups set up by the Committee 39 . and for communicating with and receiving orders from potential investors. for presenting information on portfolio analysis and market information. Customer orders.Brokers as well as other service provides such as investment firms. The services offered by the service providers to the investors are generally the following: • Advertising Providing investment information and investment advice. Underwriting Communicating with the investors.
K. This report of the standing committee examines the regulatory and security requirements Internet Based Trading on Conventional Exchanges. Deepak B. Security protocols and standardization of interfaces for Interest based securities trading. One such area identified by the Committee. is the area of Internet trading on existing electronic exchange. In this area. the Committee therefore constituted the following two working groups to look into the area of: i. through early introduction of Cyber Laws would be highly describe but their existence is not a necessary precondition. Singhvi. Phatak. 40 . SEBI The committee also requested Ms D N Raval. IIT. Pawai.Considering the present state of capital markets in India and keeping in view the ongoing developments in Internet based securities business. SEBI to examine the legality of introduction of Internet trading and issue of Alternative trading systems. chaired by Prof. Mumbai Surveillance and monitoring related issues arising due to Interest based securities trading. which is also the central within the existing legal framework. it was felt that SEBI as a regulator could strive to identify areas where use of Internet in the capital market is possible within the existing legal framework. ii. L. Sr. chaired by Shri. To look into the existing regulatory scenario and to bring out some ground rules for use of the medium of Internet. ED. which is also the central theme of this report. One such area identified by the Committee. Separate reports (s) will cover the other areas related to Internet applications in the securities markets. Executive Director.
With nearly who million on-line investors. D. Phatak. thus changing the total concept of securities trading. The committee would like to place on record its sincere thanks to Dr. Internet service providers and other agencies involved in facilitating Internet trading.B. Internet trading is being facilitated by large brokerage houses. It thus becomes imperative that for developing in effective regulatory framework developments in other parts of the world should be studies and analyzed. They were also tripped of the various initiatives taken by SEC in this regard. The global financial market is undergoing a transformation due to rapid technological developments. Raval and their team members. D. Recommendations of the Committee Application for Permission by Brokers 41 . Internet trading in the United States is growing by leaps and bounds. A team comprising of members from stock exchanges and SEBI visited the United states to these development and had interactions with brokerages houses.N. Ms. The team also discussed the developments in the emerging regulatory and supervisory framework in United States with the Securities and Exchange Commission officials.The report of the first working group on security protocols and standardization of interfaces has since been submitted and incorporated in the report. These inputs have been utilized while drafting this report.
reliability and confidentiality of data through use of encryption technology. if some brokers collectively approach a service provider for providing the interest trading facility. criteria as stipulated by the stock exchange will apply. This stock exchange must also ensure that records encryption technology. Operational and System Requirements: Operational Integrity: The stock Exchange must ensure that the system used by the broker has provision for security. Net worth Requirement The broker must have a minimum net worth of Rs. 1998. The stock 42 . before giving permission to brokers to start Internet based services shall ensure the fulfillment of the following minimum conditions. The net worth will be computed as per the SEBI circular no FITTC/DC/CIR-1/98 dated June 16. The stock exchange. net worth.SEBI registered Stock Brokers interested in providing Internet based trading services will be required to apply to the respective stock exchange for a formal permission. The stock exchange should grant approval or reject the application as the case may be. 50 lacks if the broker is providing the Internet based facility on his own. and communicate its decisions to the number within 30 calendar days of the date of completed application submitted to the exchange. However.
Written Procedures: Stock Exchange must develop uniform written procedures to handle contingency s tuitions and for review of incoming and outgoing electronic correspondence. The stock Exchange must also ensure that the workers have adequate system capacity for handling data transfer. 43 . Qualified Personnel: The stock Exchange must lay down the minimum qualification fro personnel to ensure that the broker has suitably qualified and adequate personnel to handle communication including instructions as well as other back office work which is likely to increase because of higher volumes. and arranged for alternative means of communications in case of Internet link failure. System Capacity The stock Exchange must ensure that the brokers maintain adequate backup systems and data storage capacity.Exchange must also ensure the records maintained in electronic from by the broker are not susceptible to manipulation.
investor protection rules etc. For this purpose is should be mandatory for participants to use certification agencies as and when notified by Government/SEBI. Exchange will prepare a model agreement for this purpose. hyper link to the web site/page on the web site of the relevant stock exchange (s) displaying rules/ regulations/ circulars. They should also clearly specify when manual signatures would be required. verifiable information about clients. Investor Information: The broker web site providing the internet based trading facility should contain information meant for investor protection such as rules and regulations affecting client broker relationship arbitration rules. the minimum service standards to be maintained by the broker for such service specified by SEBI/Exchange for the internet based trading from time to time. Ticker/quote/order book displayed on the website of the broker should display the time stamp as well as source of such information against the given information. Client Broker Relationship Know Your Client: The stock Exchange must ensure that brokers have sufficient. which would facilitate risk evaluation of clients.Client Agreement: Brokers must enter into an agreement with clients spelling out all obligations and rights. The broker agreement with clients should not have any clause that is less stringent/contrary to the conditions stipulated is the model agreement. 44 . This agreement should also inter alia.Signature Verification/ Authentication: It is desirable that participants use authentication technologies. The broker web site providing the Internet based trading facility should also provide and display prominently. Broker.
Order/Trade confirmation should also be sent to the investor through email at client’s discretion at the time specified by the client in addition to the other made of display of such confirmation of real time basis on the broker web site. The investor should be allowed to specify the time interval on the web site itself within which he would like to receive this information through email. Facility for reconfirmation of orders which are larger than that specified by the member's risk management system should be provided on the internet based system.
Handling Complaints by Investors:
Exchanges should monitor complaints from investors regarding service provided by brokers to ensure a minimum level of service. Exchange should have separate cell specifically to handle Internet trading related complaints. It is desirable that exchanges should also have facility for on-line registration of complaints on their web site.
Exchanges must ensure that brokers have a system-based control on the trading limits of clients, and exposures taken by clients. Brokers must set predefined limits on the exposure and turnover of each client. The broker systems should be capable of assessing the risk of the client as soon as the order comes in. The client should be informed of acceptance/rejection of the order within a reasonable period. In case system based control rejects an order because of client having exceeded limits etc., the broker system may have a review and release facility to allow the order to pass through.
Contract notes must be issued to clients as per existing regulations, within 24 hours of the trade execution.
As a matter of abundant precaution, the committee seeks to reiterate that as III the case of existing system, brokers using Internet based systems for routing client orders will also not be allowed to cross trades of their clients with each other. All orders must be offered to the market for matching. It is emphasized that in addition to the requirements mentioned above, all existing obligations of the broker as per current regulation will continue without changes. Exchanges may also like to specify more stringent standards as they may deem fit for allowing Internet based trading facilities to their brokers.
A separate working group has been set to look into the surveillance and enforcement related issues arising due to Internet based securities trading. However, general antifraud provisions (SEBI Fraudulent and Unfair Trade Practices Regulations, 1995) would apply to all transactions involving securities or financial services, regardless of the medium.
FEATURES OF ONLINE TRADING:
The Online Trading is having many features which make it most suitable for the investors to go for. Some of these features are as follows:
The Internet can provide a new sense of control over your financial future. The amount of investment information available online is truly astounding. It's one of the best aspects of being a wired investor. For the first time in history, any individual with an Internet connection can:
• • • • •
Know the price of any stock at any time Review the price history of any stock in chart format Follow market events in-depth Receive a wealth of free commentary and analysis about stock markets and the global economy Conduct extensive financial research on any company
One of the great appeals of using an online trading account is the fact that the account belongs to you, and is under your direct control. When you want to buy or sell stock, you no longer need to call your broker on the phone; hope that he is in the office to place your order; possibly argue with the broker about the order; and hope that the transaction is executed instantly.
thus bringing in transparency into the system. Also due to the high level of transparency with regard to display of information relating to the specific stocks and company profiles. This involves a complete integrated electronic chain starting from order placement. dedicated trading platforms and sophisticated tools for accessing the markets. an online trading account gives you more agility in buying and selling stocks. Every broker house aims at providing the investor with the best price available. All these stages are subject to inspection. Online trading offers you greater transparency by providing you with an audit trail. your trading account and your demat accounts. you will be able to get the best quote for your orders. This is through sophisticated information streams.At the most basic level. which leads to easy and paperless trading for you. 48 . Online trading integrates your bank account. to clearing and settlement and finally ending with a credit into your depository account.
who is assured of the delivery of the securities and for you as a seller of the securities Every trade is confirmed immediately and you will receive an on-screen confirmation following every trade with full details for your records. In the case of a demat account your demat account is checked by us before executing your sell transaction. as in this case all short sell orders are squared off at the specified cut-off time and not allowed to be carried forward. This method of trading reduces the settlement risk for the investor. in a very short period of time. This provides a level playing field for all investors in the securities market. gives even the smallest retail investor access to information that earlier was available only to the big traders. Trading on the net. This avoids costly errors that would have been discovered when it is too late.You as an Investment online customer will be able to execute the entire trading transaction. to the execution and settlement of your bank account. right from logging on to our site. 49 . This reduces the settlement risk for the buyer.
Your Bank. From updated security technology to advanced fraud prevention measures. Depository and online account are integrated for your convenience. Broking houses work hard to keep our account and personal information secure. 50 . Various broking houses provide access to many of the popular banks. they have the people and tools in place to provide a strong defense against electronic scams and fraud.
Due to the power of the Internet one has the privilege of becoming the clients of really large brokerages with the benefits of enjoying the low charges hithelio before enjoyed only by the big players. analysis and even gossip and the buzz in the market. results. visits to the broker for handing over these slips and consequent costs. No paperwork means more time at one’s disposal for research and analysis. 51 . 4) Access to Information and investment Tools: Most online investing sites have a wealth of information for their registered members. 3) Keeping Records: The site one trades on keeps a record of all transactions down to unexecuted orders and cancelled orders thus keeping one abreast of all your transactions 24 hours a day. As the DP account has got linked to the trading account most players do not charge a minimum transaction cost thus truly allowing one to buy a single share and achieve meaningful rupee price averaging whatever be your buying power. This includes research reports. 2) Peace of Mind: One can never have complete peace of mind but online investing does away with the hassles of filling up instruction slips.BENEFITS OF ONLINE BROKING 1) Less Costly: The most significant advantage of the Online broking is the cost reduction in the brokerage.
) Offers greater transparency: 52 . Conversely in case he spot an opportunity in the market he can immediately allocate money from his savings account to his trading account and make profits.) Unparalleled Safety: Most sites are secure using 128-bit algorithms -highest available commercially anywhere in the world. Most partner banks offer Internet banking as well. 6. who is assured of the delivery of the securities. In the case of a demat account (required for an online transaction). when a seller wants to sell the securities.5.e. 8.) Reduces the settlement risk: This method of trading reduces the settlement risk for the investor. his demat account is checked by the Depository Participant before executing the sale transaction. as in this case no Short sale is possible i. This results in one’s money becoming available to him whenever he like from his trading account. This reduces the settlement risk for the buyer.) Unparalleled Liquidity: The bank account linked with the trading account invariably has an A TM free. Moreover even if somebody broke in and tampered with one’s account the money from the stocks he sold or the stock bought from the money in his account is in his account only. 7. the seller will not be able to sell the securities unless he has their actual possession.
thus bringing in transparency into the system. Internet trading provides some additional advantages to the investors.Online trading gives greater transparency to the investors by providing them an audit trail.) Ease of trade: It is the ease of doing the trade through net. Net trading would increase competition in the market hence increase in the bargaining power of the investors. broker and exchange would take place within milliseconds. 9. All these stages are subject to inspection. PROBLEMS OF ONLINE BROKING 53 . one can buy or sell any share that is dematerialized. with a click of mouse. This involves a complete integrated electronic chain starting from order placement. brokers and also helps the nation to channelize the resources. Other than the above-mentioned advantages. The entire communication between the investor. to clearing and settlement and finally ending with a credit to the depository account of the investor.
There is a flip side to everything and online trading is no exception. So. Chart 4% 14% 21% More Costly Lack Of Know ledge 11% Loyalty to Traditional Broker Lack of Trust Slow Speed 23% Other 27% 27% Loyality is of traditional broker 23% people says that online trading is more costly than manual trading. 21% people not prefer online trading because of lack of knowledge. the main problems of online trading are as follows: 54 .
1. If he want advice on a particular stock in his portfolio he may not even be able to get that.) "Server not found": This may appear on one’s screens when he is desperately trying to get out of an unprofitable position.availability of personalized advice: If one like to ask his broker "Aaj kya achcha lag raha hai" he may not be able to do so. The faster the orders are processed the more seamless is the interface. 5. 3. He must check out the seamlessness of this interface before selecting an online brokerage. Some of the online sites are providing a telephone number for use in case their sites are overloaded or their server down.) Non-availability of a seamless interface: As a client one will access the NSE through a server of the online brokerage and this may involve queuing delays.) Non. 2.) Cyber attack: In the event of a malicious attack on the systems of one’s broker he is protected only if the company is taking proper precautions against such attacks and if proper backup is regularly been taken. This problem is rare but be alive to its possibility. If a number of client access the server the server takes its own time sending the orders to the NSE server. He may like to choose a brokerage that has a stated security policy and contingency plan in place. 55 .) Connectivity of the Broker with NSE: Recently ICICI Direct had a connectivity problem with the NSE for two and halfhours during trading hours. 4.
7. the firm is selling off his securities at a point in time that is not the best for him. But with increased volumes.) Increased charges: Some of the brokers are of the view that they would have to provide advisory services to the customers. So. allowing him to buy a large amount of securities by putting up only a small amount of money. In fact. And there he was leveraged to the hilt. That is where the brokerage firm lends you money by leveraging his account.) Margin: If Internet trading alone is not fast and furious enough. which are there for all. whether wild or wise. many people are trading on margin. He may have forgotten what he read in the small print of his agreement. The next thing one know.) Little use of advisory services The advisory services being promised by the brokers would be of little use to investors looking for an insight into the market. WHY PEOPLE ARE BENDING TOWARDS ONLINE TRADING 56 . Many would not like to rely on research reports. These are the perils of trading on margin. the firm has the right to liquidate his securities holdings (and it can pick and choose which ones) without any notice to one if he fail to meet the margin call. net investors will have to do their own research and take their own decision.6. 8. but the brokerage firm has the right to change the maintenance margin requirements without any warning or notice to him. they will have to follow the international practice of charging a little more than the normal charges from a customer looking for personal advice. hoping to hit a home run when he discovered that he is required to make a large deposit that he cannot make.
or at least another avenue of trading. ensuring a smooth transaction process. Kotakstreet. here are few reasons why you may consider switching to trading online. You can trade online with ebrokerages such as ICICI Direct. If you are already comfortable trading with your regular broker. or arranging for a payment in case of purchaser of shares. an obvious advantage of online trading is that your transaction would be virtually paperless. You can also make better decision as you have a clear record of all your previous transaction. is all taken care of the minute your order is executed online. where you have just two days to settle your transaction. India info line’s 5paisa. Your trading account would be linked to your demat and bank account. This is especially helpful in the extent T+2 settlement system. The amount of investment information available online is truly astounding.keeping track of your portfolio can be a hassle in such a case. in case of a sale.com and HDFC securities. any individual with an internet connection can • • Know the price of any stock at any time Review the price history of any stock in chart format 57 . as your order is always confirmed before it is executed. a demat statement is normally sent to you only on a quarterly basis . India bulls. The normal process of issuing of delivery note. The inter net can provide a new sense of control over your financial future. When you trade offline.Several broking houses now offer online trading facilities. The absence of manual intervention ensures that you are completely in control of all transaction. Its one of the best aspect of being a wired investor for the first time in history. There is also little room for error.
when it is day time India and the markets are open. What is more. market information and company research. experts commentary. during off market hours. Your order would join the queue and be expected the next day.perhaps you are at work. daily roundups of the stock market. most e-brokerages also provide a facility to trade offline by placing our order via the phone. we can get the latest news. 58 . for instance. you can log on the web-trading site and place your order offline. Moreover. the time difference. for you to be able to reach him in the late hours. You would need to enjoy a good relationship with your broker. Convenience is probably the greatest advantage online trading offers investors. if our connection is maddeningly slow and we want to get your order executed immediately.• • • • Follow market events in-depth Receive a wealth of free commentary and analysis about stock markets and globe economy. if don’t have time to trade during market hours . in some cases. an NRI-based in New York. We also have access to considerable information online.Antony. can work to their advantage . For nonresident Indians (NRI). and a deep community of fellow investors. By just logging on to ICICI direct online. Conduct extensive financial research on any company Talk with other investors around the world At invests mart you can get real-time stock quotes. places his order in the evening after work. trading online is perhaps their easiest option to invest in the Indian stock markets.
copy of residence proof are made to register himself with the e-trader.PROCESS OF ONLINE TRADING An investor interesting in trading through Internet shall have to. The broker makes the payment either directly via the client bank account or pays through its own account and recovers it later from the client. Secondly. The client places order via the net by logging on to his Broker’s site. Thirdly he would be required to open account with a depository participant because only dematerialized shares can be traded on Internet. firstly register himself with an Internet brokerage firm. Some formalities such as filling the account opening form of the e-broker. generally following steps are followed while doing the trading through the Internet: 59 . So. the investor would be required to open a bank account with a scheduled bank and sufficient balance should be kept in the account. The exchange receives money and completes the settlement. The broker accepts and executes the order and places it with the exchange The exchange accepts the order after checking the share limit for the day. The client is intimated about the settlement either through the demat or via e-mail. copies of identity proof.
Step-I: Those investors interested in doing the trading over Internet system. series and the default quantity. password and a personal identification number (PIN). the investor has to review the order placed by clicking the review option. Step-4: It is the process of review. fill in the symbol. Using the place order window as under can then place an order: (a) First by entering the symbol and series of stock and other parameters such as quantity and price of the scrip on the place order window. should approach the brokers and register with the Stock Broker. Step-2: After registration. Step-3: Actual placement of an order.ISX (NSE). Step-5: After the review has been satisfactory. Step-6: 60 . He may also re-set to clear the values. the broker will provide to them a login name. Thus. (b) Second. the order has to be sent by clicking on the send option. NEAT . that is.
a time lag of about ten seconds is there in executing the trade. Step. for which there are different modes. Some brokers will take some advance payment from the. an appropriate message will appear at the bottom of the screen. investors and will fix their trading limits. THE MECHANICS OF ONLINE TRADING 61 .The investor will receive an "Order Confirmation" 'message along with the order number and the value of the order. the broker will ask the investor for transfer of funds by the investor to his account.7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons such as invalid price limit. At present. When the trade is executed. Step-8: It is regarding charging payment.
code The settlement of the deal (buy/sell order) gets reflected in his Demat account. each trading day is considered as a trading period and trades executed during the day are settled based on the net obligations for the day. Pays the broker pending physical delivery. Checks the client’s Identity and places the order with the stock exchange Accepts the order after checking the scrip limit of the broker for the day Executes the order Pays the Exchange The client is intimated about the execution of the deal by e-mail. At NSE and BSE. though his owns account and receives it from the client account. Receives the money and completes the settlement Rolling Settlement Cycle: In a rolling settlement.e.D. on the 2nd 62 . trades in rolling settlement are settled on a T+2 basis i. Accepts the order.CLIENT BROKER STOCK EXCHANGE Places an order on the net on the broker’s website through the distinctive I.
Typically trades taking place on Monday are settled on Wednesday.50. Assume that you sell shares worth Rs 1.000. which include bank holidays. Suppose you have Rs 1.000. Tuesday's trades settled on Thursday and so on. To simplify things for ICICI Direct customers.000 on the NSE on Monday. As you have made the sale of shares on NSE for Rs.000 on Tuesday on NSE your BL will naturally reduce to Rs75. which is the amount set aside by you from your Bank account for purchase is available for BSE and NSE. Assume that you have enrolled for a ICICI Direct account. Your Buying Limit is Rs 50.00. which requires 100% of the money required to fund the purchase. The amount from sale of shares in NSE will also be available for purchase on BSE. Buying Limit simply tells the customer what is his limit for a given settlement for the desired exchange. we have introduced the concept of Buying Limit (BL). For arriving at the settlement day all intervening holidays. Your BL of Rs 50. be available. If you buy shares worth Rs 75. the BL for NSE & BSE rises to 1. NSE/BSE holidays.50.working day.000 on NSE or BSE. Saturdays and Sundays are excluded.50.000.100000. Concept Of Buying Limit Suppose you have sold some shares on NSE and are trying to figure out that if you can use the money to buy shares on NSE in a different settlement cycle or say on BSE.00. The BL therefore for the NSE at that point of time goes up to Rs 1. Hence your BL is simply the amount set aside by you from your bank account and the amount realized from the sale of any shares you have made less any purchases you have made. ICICI Direct 63 . This means you can buy shares up to Rs 1.000 in your Bank A/C and you set aside Rs 50.000.000.000 for which you would like to make some purchase.
SEBI registered brokers can offer trading on Internet through order is routing systems. providing investment advisory services to the clients. we have to evolve fisher steps in this direction it is therefore proposed that as the next step link between the depositories and banks shall be established after the necessary regulations have been passed. 64 . However. clearing and settlement etc. We have to look forward towards achieving an ideal scenario where all the services related to securities markets including marketing of initial public offers on internet. are provided on the Internet by an intermediary. broking..Future Agenda: Under the existing legal and regulatory framework. This would reduce the clearing and settlement time and would also minimize the risk of all the participants involved in the transactions. with the rapid development of the technology. In a nutshell it can be said that we are moving towards a one-stop service center.
CHAPTER-3 COMPANY PROFILE 65 .
JRG is a member of the National Stock Exchange of India (NSE). subsidiary of Baring India Private Equity Fund II Limited. Please remember to save the PDF to your computer. JRG SECURITIES Dossier Report . major shareholders. took complete control of the Company. Duckworth Limited. presented in a one page standard company report. There are five types of reports available. key financial data items and ratios. The report provides a quick company overview for three years. major shareholders as well as business and geographical breakdown is also covered. income statement and balance sheet data in addition to key financial ratios. In order to purchase a report.COMPANY PROFILE JRG SECURITIES company profiles provided detailed financial data and key credit information. Substantial supplementary information including subsidiaries. including analytic ratios presented in a five page standard company report. financial portfolio management and marketing and distribution of financial products.A snapshot containing company description. directors. and are also the depository participants of the National Securities Depository Ltd (NDSL) and Central Depository Services (India) Limited (CDSL). This report covers six years of financial information and includes shares information. JRG SECURITIES Trader Report . the Multi Commodity Exchange of India Ltd Stock Exchange (MCX-SE).A trading document with concise and objective company information in a consistent format. You will be able to download report(s) purchased in PDF format from your Customer Area (you need to be logged in to view) and the links are valid for 14 days. please select a report type from the dropdown list above and Add to Cart. a member of various exchanges in the capital and commodity markets and the insurance sector. Bombay Stock Exchange (BSE). JRG SECURITIES Quickview Report . JRG SECURITIES predominantly operates in the Finance Services sector. In August 2008. immediately after purchase. designed to answer basic trading needs. The Company is a brokerage house.Gives you 10 years of financial history up to 150 lines of numerical data. a 100% subsidiary. the Colombo Stock Exchange (CSE). 66 . JRG Business Investment Consultants Ltd was floated to undertake the business of investment advisory services. Data is presented in local currency and in a standardised GAAP format for easy comparison.
asset.A one-page standard business risk measurement report. capitalization and debt service capacity. other standard credit scoring measurements. JRG SECURITIES Credit Risk Report . profitability. major shareholders. strategic. The report provides peer-to-peer comparisons of business risk factor analyses including operating.Provides an analysis of a company's creditworthiness and debt capacity including a rating and a number of standard ratios analysis & model results. It provides peer-to-peer comparisons of credit risk factors analyses including credit rating. overall adjustment and industry standard deviation. 67 . being a member of various exchanges in the capital and commodity markets and the insurance sector. liquidity.JRG SECURITIES Business Risk Report . subsidiaries. The report includes an analysis of a company's creditworthiness and debt capacity by using a methodology based on wellestablished academic research. * Wealth Management * Broking & Distribution * Commodity Broking * Portfolio Management Services * Institutional Equities * Private Equity * Investment Banking Services and * Principal Strategies Today JRG is one of the foremost brokerage houses. size & diversity. interest coverage. balance sheet and income statement. non-financial information.
JRG constantly infuses quality into service. Commitment. commitment and integrity in all dealings have earned us trust. the National Commodities Derivatives Exchange Ltd (NCDEX). but also make their clients earn the maximum from their hard-earned money. What has made this remarkable growth possible at JRG? Trust. 68 . we have located our offices in major towns and placed highly qualified and experienced financial experts to man them. the Bombay Stock Exchange. A team of dynamic finance professionals with decades of experience leads them. These professionals share a common vision not only to transform the company into a highly professional organization. the Financial Supermarket. JRG is also one of southern India's leading Insurance Brokers. the National Multi Commodity Exchange of India Ltd (NMCEIL). we call ourselves. To help our clients better. which in turn has enabled us to build long term relationships.JRG is a member of the National Stock Exchange of India (NSE). We provide our clients full expertise to play in the market with confidence. Integrity. No wonder. Our transparency. the Multi Commodity Exchange of India Ltd (MCX) and the Indian Pepper and Spices Trades Association (IPSTA). JRG is a full-fledged depository participant of the National Securities Depository Ltd and Central Depository Services (India) Limited. They avail full-fledged trading facilities and services through our nation-wide offices in securities and in commodities.
in Millions ) Velliappallil Buildings. S K K Nair. 403. They started functioning in the stock market in 1992.in Chairperson . Kerala www.T B Road . Regi Jacob. Rahul Bhasin. Pradeep Mallick.674134 Million ( year ending Mar 2009) Net Profit . they grew from strength to strength to become a major player in India’s broking services sector.co. P Viswanathan. In the last one decade.Rs.B R Menon. Munish Dayal.993871 Million ( year ending Mar 2009) Syam Kumar R Management Details Business Operation Background Financials Company Secretary Bankers Auditors BSR & Associates 69 . being a member of Total Income . Gaurav Vivek Soni.jrg.PalaKottayam-686575. Over the years.Rahul Bhasin MD . JRG is one of the foremost brokerage houses.Date of Establishment Revenue Market Cap Corporate Address 1994 7.Rs. -10.8563795 ( Rs. T M Venkataraman Finance . Syam Kumar R.Investment JRG Securities Ltd is a premier brokerage house in India on the fast growth track.90482 ( USD in Millions ) 834.Gaurav Vivek Soni Directors . they have emerged as a powerhouse in the financial services industry.
As of December 31st. 70 . Trillion Dollar Opportunity Strategy and Focused Strategy Series I. Besides access to the best of research in the form of Daily Fundamentals & Technical Reports on highly traded commodities. Business Partner locations. being a member of various exchanges in the capital and commodity markets and the insurance sector. the National Multi Commodity Exchange of India Ltd (NMCEIL). the internet and mobile channels Portfolio Management Services Jrg securities Portfolio Management Services offer a range of investments solutions through discretionary services. MOFL knowledge of the markets together with MOFL understanding of MOFL customers and their risk profiles has helpedMotilaldesign a range of portfolio offerings for MOFL clients.5. the National Commodities Derivatives Exchange Ltd (NCDEX) Commodity Broking Through JRG securities Commodities Broker (P) Ltd MOFL fully owned subsidiary.04 bn. MOFL clients also get access to MOFL exclusive Customized Trading Advice on both the trading platforms. 2009. the Assets Under Management of MOFL various portfolio schemes stood at Rs. These include the Value Strategy. JRG provide commodity trading facilities and related products and services on MCX and NCDEX. the Bombay Stock Exchange. JRG is a member of the National Stock Exchange of India (NSE).JRG offer these services through MOFL branches. Bulls Eye Strategy. At jrg have helped create Wealth for MOFL customers through MOFL Portfolio Management Services.JRG is one of the foremost financial services companies in India.
8 billion and had 18 mandates in hand as at March 31. rights issues. financial institutions. 71 . (MOIAPL) Motilal also offer capital raising and other investment banking services such as the management of public offerings. restructurings and spin-offs through JRG securities Investment Advisors Private Ltd. jrg service these clients through dedicated sales teams across different time zones.jrg group has applied to the regulatory bodies for a license to operate as a Domestic Asset Management Company (Mutual Fund) and Motilal expect to begin operations soon. private placements (including qualified institutional placements). mutual funds. These clients include companies. Investment Banking Motilal offer financial advisory services relating to mergers and acquisitions (domestic and cross-border). divestitures. and FIIs. Institutional Equities jrg offer equity broking services in the cash and derivative segments to institutional clients in India and overseas. MOIAPL has closed 23 transactions in 2008-09 worth US$ 1. As at December 31st. 2009. banks. 2009. open offers/delistings and syndication of debt and equity. insurance companies. share buybacks. jrg Were empanelled with over 300 institutional clients including 200 FIIs.
jrg securities research reports have received wide coverage in the media (over a 1000 mentions last year). At present JRG have 23 equity analysts researching over 27 sectors. Principal Strategies Group For effective management of treasury operations and to capitalize on market opportunities.875 mn) from investors in India and overseas. The fund is aimed at providing growth capital to small and medium enterprises in India. In its final closing. the fund obtained commitments of US$125 mn (Rs. The Fund has deployed/ committed $ 58 mn across 8 deals. MOFL consistent efforts towards quality equity research has 72 . MOPEAPL will manage and advise the fund and other private equity funds.4. JRG SECURITIES Private Equity Advisors Private Ltd (MOPEAPL) was appointed as the investment manager and advisor to a private equity fund. in December 2008. MOPEAPL has recently launched an INR 750 crores domestic Real Estate Private Equity Fund called “India Realty Excellence Fund” sponsored by JRG SECURITIES Financial Services Ltd.Private Equity In 2006. Focus on Research Research is the solid foundation on which JRG Securities advice is based. Almost 10% of revenue is invested on equity research and Motilal hire and train the best resources to become advisors. which may be raised in the future. From a fundamental. India Business Excellence Fund. with investments typically in the range of US$3 mn to US$7 mn. MOFL private equity subsidiary. technical and derivatives research perspective. which was launched with a target of raising US$100 mn. the Group has set up a 30 member team which would be responsible for effective deployment of funds into different trading and arbitrage strategies.
Qualified professionals carry out different functions under the able leadership of its promoters. strong technical expertise.re Capital Management. leadership skills.reflected in an increase in the ratings and rankings across various categories in the AsiaMoney Brokers Poll over the years Awards and Accolades Jrg securities Financial Services has received many accolades in the year gone by. MOFL talented pool of people comprises qualified and experienced professionals with an established track record. ‘MOFSL Code of Conduct’ – applicable to all Directors & the Senior Management The Board of Directors (“the Board”) and the Senior Management of jrg securities 73 . Some of them are: * Rated ‘Best Overall Country Research’ for a Local Brokerage in the 2008 AsiaMoney Brokers poll * Rated India’s top broking house in terms of total number of trading terminals by the Dun & Bradstreet survey * Rated ‘Outstanding Commodity Broking House-2008’ by Globoil India * Ranked second best for Customer Responsiveness in the Financial Sector at the Avaya GlobalConnect Customer Responsiveness awards Strong Management Team The organization finds its strength in its team of young. insight into market/customer needs provideMotilalwith a competitive strength which will helpMotilalimplement MOFL business strategies. Motilal believe that MOFL management's entrepreneurial spirit. talented and confident individuals.
or the person from whom the information is provided. Any confidential information is only disclosed if authorised by the Company. v) disclose potential conflicts of interest that they may have regarding any matter that may come before the Board and abstain from discussion and voting on any matter in which the Director has or may have a conflict of interest. energy and attention to the Company so as to ensure diligent performance of their duties of office and in exercising their powers attached to that office. 74 . iv) ensure the confidentiality of information and proper use of information for the purpose the information is provided for or received whilst being in office of Director. or as required by law. This Code of Conduct is applicable to all the Directors and to the Senior Management of the Company (from CEO level up to the Associate Director level).Financial Services Limited (“the Company”) subscribe to the ‘MOFSL Code of Conduct’ adopted by Company. ii) act honestly and use their powers of office. vii) ensure adequacy of systems and controls to protect the Company’s assets and property and ensure its efficient use for business purposes. To inform shareholders about all relevant aspects of the Company’s business and disclose such information in accordance with the respective regulations and agreements. vi) not engage in conduct likely to bring discredit upon the Company. iii) enhance shareholders value and comply with all regulations and laws that govern shareholders’ rights. in good faith and in the best interests of the Company as a whole and fulfill their obligations to the Company’s shareholders. It is expected that all concerned would: i) Dedicate sufficient time.
ix) report the suspected violations of this Code to the Chairman of the Board. if any. Company’s Policies and Codes of the Company including the ‘Code of Conduct for Prevention of Insider Trading in Shares of Motilal Oswal Financial Services Limited’ and the Corporate Press Norms for communication. comply with all the applicable laws.viii) ensure that use of intellectual properties of the Company and ‘MOFSL’/‘MOSL’ brand and logo’s shall be governed by the manual/code prepared in this behalf by the Company and in accordance with the Agreement(s). in the ‘Form .A’ given in the Annexure to this Code. xi) affirm the compliance with the code on annual basis to the Company Secretary. x) not accept gifts from persons or firms who deal with the Company where the gift is being made in order to influence the Directors/Senior Management actions as a member of the Board/Company. xii) In addition to this code. or where acceptance of gifts could create the appearance of a conflict of interest. regulations. The Annual Report of the Company shall carry a declaration to this effect signed by the Chief Executive Officer of the Company. entered/to be entered by the Company in this behalf. 75 .
CHAPTER-4 Analysis and Interpretation 76 .
so we can say that now online trading is very popular in the modern market. 2. For how long you have been trading with on line-trading? (a)1 year (c) 3 year Sample size 100 (b) 2 year (d) 4 year 5 0 4 0 3 0 2 0 1 0 0 Y R EA 1year 2year 3year 4year According to this survey we find that 44% people says that we are investing the money online from one year and 26% people says that we are investing the money online from 2 years and 19% to 11% people says that we are investing money online from 3 to 4 year.Analysis and Interpretation 1. How will you describe your experience with on-line trading till date? 77 .
(a) very easy to operate (b) very difficult to operate (c) not secure (d) Any other Sample size 100 6 0 5 0 4 0 3 0 2 0 1 0 0 Ex perience I find it very easy to operate I find it very difficult to operate I feel it is not secure A other ny According to this survey we find that 60% of people find very easy to operate and 15% people find diffcuilt two operate and 10% and 15% people find no secure and any other. 3. what amount of money you invest normally ? (a) 50000 (c) 150000 to 2000000 78 (b) 100000 to 150000 (d) Any other amount . so we can say that online trading is very simple to operate and easy to understand.
Sample size 100 35 30 25 20 15 10 5 0 Money 50000 100000to150000 150000to200000 Any Other According to this survey we find that 35% of people invest money normally 50000 and 28% of people invest money 100000to150000 and 23% and 14% of people invest money between 150000to200000 and any other. So we can say that the people are not invest more money in the share market because there is a great risk involved while doing the trading. 79 .
which trading you prefer? 80 . 5.4 . How often do you trade? (a)Daily (c) Monthly Sample Size 100 40 35 30 25 20 15 10 5 0 Tim e daily weekly m onthly m than 1 m ore onth (b) Weekly (d) More than one month According to this survey we find that 10% of people do trade Daily and 40% people do trade weekly and 32% and 18% people do trade month and more than month. So we can say that people are generally invest in stock market weekly basis.
Whether online trading settled in Indian investor psyche (a) Yes Sample Size 100 81 (b) No . 6. So we can say that mostly people are awareness about the on line trading and because of this reason the mostly people are optimizing offline trading.(a) On line trading (c) Both (b) Manual trading Sample Size 100 50 40 30 20 10 0 Relationship On line trading Offline trading Both According to this survey we find that 20% people prefer online trading and 32% people prefer offline trading rest of 48% people prefers both.
so we can find that on line trading is not settled in the Indian psyche because some people are not experience towards online trading.70 60 50 40 30 20 10 0 Settleled Yes No According to this survey we find that 30% people says yes and 70% people says no. 82 .
What shortcomings do you feel in Indian On-Line trading ? (a) Lack of awareness the investors about on-line trading (b) Shortage of domestic technical expertise (c) Shortage Of Infra structure (c) any other Sample Size 100 50 40 30 20 10 0 Shortcomings Lack of awareness Shortage of expertise Shortage Of Infra structure any other According to this survey we find that 15% of people says lack of awareness 49% says Shortage of expertise and 14% people says Shortage Of Infra structure and 22% says any other. Which media would you prefer the most for investment? 83 . 8. So we can say that mostly people are shortage of experience about the Indian derivatives market or share market.7.
(a) T. So we can suggest that mostly people are very easily grapped the knowledge through T.V.V (c) Magazines 60 50 40 30 20 10 0 Media (b) Newspaper (D) Journals T. 84 .V Newspaper Magazines Journals According to this survey we find that 55% people Prefer T.V and 25% people prefer newspaper and 10% people prefer magazines and 10% people prefer journals.
CHAPTER-5 FINDINGS 85 .
FINDINGS 1. How often do you trade? According to this survey we find that 10% of people do trade Daily. what amount of money you invest normally ? According to this survey we find that 35% of people invest money normally 50000. 4. For how long you have been trading with on line-trading? According to this survey we find that 44% people says that we are investing the money online from one year. and15% people find no secure. 11% people says that we are investing money online from 4 year. So we can say that people are generally invest in stock market weekly basis. 14% of people invest money between 150000to200000. so we can say that now online trading is very popular in the modern market. 18% people do trade more than month. How will you describe your experience with on-line trading till date? According to this survey we find that 60% of people find very easy to operate. 86 . So we can say that the people are not invest more money in the share market because there is a great risk involved while doing the trading. 2. so we can say that online trading is very simple to operate and easy to understand 3.
What shortcomings do you feel in Indian derivatives market? According to this survey we find that 37% of people says lack of awareness 49% says Shortage of expertise and 14% people says any other. which trading you prefer? According to this survey we find that 20% people prefer online trading and 32% people prefer offline trading. 8.V and 39% people prefer newspaper and 20% people prefer magazines. CONCLUSION 87 .5.V. So we can say that mostly people are shortage of experience about the Indian derivatives market or share market. So we can suggest that mostly people are very easily grapped the knowledge through T. So we can say that mostly people are awareness about the on line trading and because of this reason the mostly people are optimizing offline trading. 7. so we can find that on line trading is not settled in the Indian psyche because some people are not experience towards online trading. 6. Whether online trading settled in Indian investor psyche According to this survey we find that 30% people says yes and 70% people says no. Which media would you prefer the most for investment? According to this survey we find that 41% people Prefer T.
They find it difficult to trade them selves. Nevertheless to say that online trading has the bright future as the percentage of the trade done through online trading is increasing day by day. Online trading has made it easy to trade in the stock market as now people can trade while sitting at their home. Another major problem is that the people don't have full knowledge regarding online trading. online trading is still at its infancy stage. There are some problems while doing the trade through the internet. Now stock market is easily accessible by the people. as a wrong entry made by them. In India. Major problem faced by online trader is that the investors are loyal to their traditional brokers. can bring them huge losses. SUGGESTIONS 88 .Online trading is the new concept in the stock market. they rely upon the suggestions given by their brokers.
Internet has transformed the way investment companies operate their business and has made it easy for private investors to gain straight access to a range of different markets and online tools that were at one point only reserved by the use of investment professionals. Every thing is just a few clicks away. 89 . Internet has introduced a way for consumers to manage their money online.The introduction of the Internet has surprisingly changed our way of life as a society. This makes online trading most convenient. It has defined the way we do business and the way we correspond. The Internet has opened many opportunities for online trading. But there are still investors who prefer the old fashion way of offline trading and they mainly prefer offline trading for security reasons. Not to mention. The financial industry revolves around the Internet.
the value of your portfolio updates immediately before your eyes. As mentioned above. 1. this will depend on the online brokerage firm. Of course. There are several wonderful reasons to invest online and consider online trading. 2. similar to bank regulations. No two firms are the same. Not to mention. Money saving opportunities the amount of money you save depends primarily on the online brokerage firm that you choose. online trading has many pros. such as telephone interface systems. it has subsequently expanded in conjunction with ground-breaking improvements to the traditional trading interface.Consumer investing and online trading has dramatically changed over the last decade. There are minimum deposits required that must be maintained. 90 . There may be different regulations. Services have expanded to include integrated management of additional financial accounts. Instant online access You can gain instant access to your account. Online trading dynamically continues to be redefined.
91 . You decide where to invest your money. Enter online trades at anytime You can enter online trades at anytime and from anywhere. With online trading you are in charge You are in control of your investments. No sales pitches and no hassle.3. 4. Not to mention. it is especially fit for investors with busy schedules. This is very convenient if you live in a different time zone than the country you are trading in.
CHAPTER-6 BIBLIOGRAPHY 92 .
on-linetrading.com www.com www.com • • • • • • • • • Questionaire 93 .nsdl.cdsl.sebi.com www.in www.gov.com www.BIBLIOGRAPHY • MAGAZINES Business World INTERNET SITES www.jrgsecurities.bseindia.nseindia.com www.
How often do you trade? (a)Daily (c) Monthly 94 (b) Weekly (d) More than one month .How will you describe your experience with on-line trading till date? (a) very easy to operate (b) very difficult to operate (c) not secure (d) Any other 3. I am student of PGDM. I am working on the project of “On-Line trading”. to undertake the study on the said Project.Dear respondent. Name………………………. You are requested to fill the questionnaire to enable. 1. What amount of money you are invested normally ? (a) 50000 (c) 150000 to 2000000 (b) 100000 to 150000 (d) Any other amount 4. Occupation……………… Address …………………… Phone no…………………. For how long you have been trading with on line-trading? (a) 1 year (c) 3 year (b) 2 year (d) 4 year 2 .
Which media would you prefer the most for investor? (a) T. specify: ____________________ b) No 95 . In which trading you will prefer? (a) Online trading (c) Both (b) offline trading 6. a) Child plan b) Pension plan c) Endowment plan d) Protection plan others. please mention.5.V (c) Magazines (b) Newspaper (d) Journals 9. What shortcomings do you feel in Indian On-line Trading ? (a) Lack of awareness the investors about on-line trading (b) Shortage of domestic technical expertise (c) Shortage Of Infra structure (d) If any other 8. According to you online trading setteled in Indian investor psyche (a) Yes (b) No 7. Do you have any of the 80(C) and 80(D) tax plans? a) Yes If yes.
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