STATE BANK OF INDIA

GLOBAL MARKETS

MANUAL OF OPERATIONS
CHAPTER 8 : INVESTMENT IN EQUITY
 Equity Market Investment – Primary Market

After sanction Dealer advises Dealer advises

Dealer prepares BO about the IPO by
FO receives Liquidity
Investment Note letters.FO sends Master
prospectus from If result management cell
Start YES (IN) & seeks creation form via mid office to
Co & does a satisfactory about the
sanction from AA BO.
due diligence. investment to be
made
BO receives letters form FO for
IPO subscription. BO creates
master based on Master creation
form received from MO
Dealer takes approval for inserting
the deal under capital advances to
BO sends letter to the company and inserts the deal as
custodian who in turn fills capital advance to company in
application form and Murex.
submits it to the lead
manager
BO second validates the
deal
Settlement desk receives
Confirmed Allotment Note After settlement validation
(CAN) from Co & fwds a Settlement desk sends the funds
copy to FO. to counterparty in case PE and
to custodian in case of IPO/FPO
BO sends a Memo The custodian intimates the BO about
to the FO the allotment. The BO send a memo Dealer inserts deal
to FO for deal insertion of allotment in MUREX.
and unwinding of CA deal.

If refund
NO Dealer unwinds the BO verifies deal details in MUREX
due
capital advance deal on vis-à-vis CAN & second validates the
FO unwinds the
the basis receipt of BO deal in MUREX. Settlement desk
capital advances
memo and CAN validates the deal.
deal based on the YES
Memo. Partial refund
NO
Settlement desk
receives refund from
Co Report on holdings
Dealer prepares
in MUREX – DP
Daily journal report Portfolio Report at
and physical
BO second is presented to EoD & submit to
reconciliation to
validates the DGM (SSB) (daily) CGM (GM) via
DGM (SSB)
unwound deal DGM(ECM).
Full refund (monthly)

End
 Equity Market Investment – Secondary Market

FO takes
sanction of AA
Start for Universe on
half yearly
basis

The e-contract notes

A copy of the
approved universe is
sent to BO for their
records
FO prepares Equity
Portfolio report &
monitors triggers &
MTM. FO decides
trading strategy for
the day.
BO logs into STP Murex are accepted in STP.
Dealer places deal software & automatically On accepting files are
Dealer prepares orders with brokers BO receives downloads e- verifies the deal uploaded to be sent to
IN for sanction who executes and blotter and contract notes and matches broker as confirmations
from AA confirm the same IN from FO which are the deal with and custodian as
to the dealer uploaded in the e-contract instructions for
Murex notes settlement. Custodian confirms
trades on NSCCL
system on T+0
After BO validation
settlement desk Custodian sends tranactions
validates all deals for obligation report to
the day. Settlement settlement desk on T+1
desk also validates the
does netting validation
for the deals inserted
on previous day. Settlement Desk funds the
Margin requirement if
Settlement desk receives/ any.on T+2 margin
transfer’s funds to the amount is refunded by the
Dealer inserts the deal custodian on T+2. custodian
in Murex, prepares
Blotter and faxes the
same to Back office Scrip settlement and Fund settlement and
Brokerage payment Brokerage payment
done by the custodian done by the custodian

After FO validation the

Custodian intimates Settlement desk
deals appear for BO
BO by Memo for reconciles DP
validation
Closeout, shortage & statement with
Corporate Action MUREX on a
Monthly basis

End
 STATE BANK OF INDIA
GLOBAL MARKETS

MANUAL OF OPERATIONS
CHAPTER 8 : INVESTMENT IN EQUITY

TABLE OF CONTENTS

SECTION NAME SECTION

NO.

CHAPTER OVERVIEW

PRIMARY MARKET - FRONT OFFICE OPERATIONS 8.1.1

PRIMARY MARKET - BACK OFFICE OPERATIONS 8.1.2

PRIMARY MARKET – SETTLEMENT DESK OPERATIONS 8.1.3

SECONDARY MARKET - FRONT OFFICE OPERATIONS 8.2.1

SECONDARY MARKET - BACK OFFICE OPERATIONS 8.2.2

SECONDARY MARKET – SETTLEMENT DESK OPERATIONS 8.2.3

AUCTION, CLOSEOUT AND SHORT SALE 8.3

CORPORATE ACTIONS 8.4

 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

CHAPTER OVERVIEW

OBJECTIVE: To establish adequate controls and procedures related to equity

transactions/operations.

INTRODUCTION: Equity market investments are part of the Bank’s Non-Statutory

Liquidity Ratio (NSLR) Investments. Apart from the Bank’s
Internal Policy, the investment in Equity Markets is guided by
RBI Guidelines, SEBI Guidelines and Guidelines formulated by
the respective Exchanges for Institutional Investors. Equity
Market Investments are normally classified as Held for Trading
(HFT) and Available for Sale (AFS).

Front Office Operations

1. The Front Office (Front Office) shall trade in various shares forming part of the
Universe sanctioned for trading by Appropriate Authority or otherwise. The
decision to buy or sell will be taken by the Dealer based on market conditions.
The trade shall be executed after obtaining sanction from Appropriate
Authority in case it is not within the power delegated to the Dealer. In case of a
Primary Issue, the deal will be entered in Murex under “Capital Advance to
Company” for the application money amount. In case of secondary market
deals, the deal will be inserted in Murex after confirmation of trade by the
Broker.

Back Office Operations

2. Back Office validates the capital advances to company deal. On allotment, Back
Office sends a Memo to Front Office for unwinding the capital advances to
company deal, as well for inserting the fresh deal in the system. Back Office
validates the unwound deal as well as fresh deal for allotment after comparing
with the Confirmed allotment note (CAN).

Settlement desk Operations

3. The settlement desk receives the settlement obligation report from the
custodian mentioning the details of all the deals done for the previous day and
net amount payable/receivable. The settlement desk compares with the Murex
cash flow on T+2 basis and also with Journal report. Settlement desk makes the
payment for purchases and receives the funds in case of sales. In case of a
Primary Issue, the initial subscription amount will be paid to the custodian on
the basis of letter given by Front Office immediately to avoid delay .It will be
followed by the settlement validation of deals under capital advances to
company. The allotment money/refund will be paid/received only on the
receipt of CAN from the Company. All the deals entered by the Front Office
(Front Office) and second validated by the Back Office (Back Office) have to be
validated by the settlement desk. In case of secondary market, settlement desk
also validates the netted deals pertaining to the previous day. Monthly
reconciliation of the murex holding with custodian holding i.e. Demat &
Physical holdings is done by the settlement desk.
 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION PRIMARY MARKET - FRONT OFFICE SECTION NO. 8.1.1/1
OPERATIONS

SR. SYSTEMS AND CONTROLS RESP.

NO.
Procedure of initiating the investment in an IPO/ Right
Issue/FPO/OFS
1. Receive the Red Herring Prospectus (RHP) of the Company Dealer
making an Initial Public Offer (IPO)/Follow on Public Offer
(FPO)/Rights Issue of shares. Undertake appraisal of the
investment based on the past/present performance of the
Company, rating of the issue (not mandatory), etc. Determine the
amount to be invested based on the results of the appraisal,
analysis and valuation done by Equity Research Desk, market
conditions etc. Ensure that prudential limits/guidelines prescribed
by the Competent Authorities of the Bank, RBI or other Statutory
Authority are not breached or violated. In case of any breach in
ALCO/Prudential Guidelines, seek approval of Sanctioning
Authority for deviation.
OFS:-Download the OFS from Exchange (NSE/BSE), SEBI site.
Determine the amount to be invested based on the results of the appraisal,
analysis and valuations done by Equity Research, market conditions etc.
Ensure that prudential limits/guidelines prescribed by the competent
authority are not breached or violated. Note for inclusion of scrip in
Universe and approval for amount to be invested in obtained from AA.

2. Get the proposal approved from appropriate authority and Dealer/

2prepare the investment note. Chief
Dealer

3. Receive the sanctioned Investment Note and prepare a Memo to be Dealer

3sent to Back-Office for subscribing to the Issue. Prepare an
instrument master creation form (Exhibit-1) in the prescribed
format and forward it to Mid Office after appropriate approval.
Prepare and counterparty master creation form, if required and
send it to Back Office. The dealer will insert the deal under
IPO/Capital advances to the company.

4. Inform the Liquidity Management Cell (LMC) desk about the Dealer
4amount and date of investment proposed to be made in the Issue
in advance, to ensure that sufficient funds are available for funding
the payment towards subscription.

Procedure on allotment
5. On the basis of advice received from the Back Office (Back Office), Dealer
the Front Office (Front Office) will unwind the deal inserted under
IPO/Capital advances in Murex and insert a fresh deal for the
allotment and validate the same.
5
LEGEND ALCO : Asset Liability Committee
Back Office : Back Office
IPO : Initial Public Offer
RHP : Red Herring Prospectus
FPO : Follow-on Public Offer
CRR Cash Reserve Ratio
 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION PRIMARY MARKET - FRONT OFFICE SECTION NO. 8.1.1/2
OPERATIONS

SR. SYSTEMS AND CONTROLS RESP.

NO.
6. Receive intimation from Back Office regarding the allotment and Dealer
also that Master has been created. Enter a buy deal in Murex for
the shares allotted. Key details are:
➢ Trade Date
➢ Settlement Date (payout date)
➢ Scrip Name
➢ Investment Note Number
➢ Transaction Type (Buy in case of an IPO)
➢ Rate
➢ Quantity
➢ Exchange (Direct in case of an IPO)
➢ Investment Amount
Insert the deal in Murex as a Valid deal for the allotment amount.
6
 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION PRIMARY MARKET - BACK OFFICE SECTION NO. 8.1.2/1
OPERATIONS

SR. SYSTEMS AND CONTROLS RESP.

NO.
Procedure at the time of application
1. Receive the Investment Note (IN) and memo for investment Desk officer-
from Front Office BO-SSB

2. Advise the custodian for application formalities based on Desk officer-

memo received from the Front Office BO-SSB

Master creation
3. Verify the master creation form (instrument/counterparty) Desk officer-
received from Front Office via Mid office. Create master in BO-SSB
Murex.

4. Approve the master in the system based on the master SIC-Back

creation form received from Desk Officer-Back Office (Desk Office-SSB
Officer-Back Office).

5. Validate deal under capital advances to company. Desk officer-

BO-SSB
Procedure at the time of allotment
6. Receive the Confirmed Allotment Note (CAN) from the Desk officer-
Custodian with the following key details: BO-SSB
➢ Number of shares allotted
➢ Last date for payment of allotment money
➢ Refund details, if any
➢ Cut off price
Advice the Front Office of the allotment on the basis of the
allotment report received from the custodian. Forward a
copy of the CAN to Front Office.

7. Second validate the unwinding of IPO/Capital Advances Desk officer-

deal BO-SSB

8. Second validate the deal for scrip allotment Desk officer-

BO-SSB

End of Day reporting and MIS

9. Ensure deals done for the day are in “match” status in Murex Desk officer-
BO-SSB
The above-mentioned procedures are for IPO/FPO/QIP.
LEGEND CAN : Confirmed Allotment Note
MIS : Management Information System
IN : Investment Note
QIP : Qualified Institutional Placemen
SIC : Section In charge Back Office
 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION PRIMARY MARKET – SETTLEMENT SECTION NO. 8.1.3/1
OPERATIONS

SR. SYSTEMS AND CONTROLS RESP.

NO.
Procedure for at the time of application
1. 2Do the settlement validation of capital advances deal. Desk Officer-
. Settlement
Desk-SSB

2. Transfer funds through Core banking to custodian for the Desk Officer-
2subscription amount due. Settlement
Desk-SSB
Procedure on allotment
3. Receive the CAN from custodian and send it to Back Office. Desk Officer-
Settlement
Desk-SSB

4. Ensure credit to the Global Market Unit (GMU) in case of Desk Officer-
refunds if any. Settlement
Desk-SSB

5. Do the settlement validation of fresh deal on allotment. Desk Officer-

Settlement
Desk-SSB

Treatment of Refund received in an Issue

6. Custodian will receive the refund (cheque/RTGS) from the Desk Officer-
Company and deposit the same into the account and Settlement
Settlement Desk will ensure that the same is credited in the Desk-SSB
books of the Bank.
LEGEND GMU : Global Market Unit
RTGS : Real Time Gross Settlement
 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION SECONDARY MARKET - FRONT SECTION NO. 8.2.1/1
OFFICE OPERATIONS

SR. SYSTEMS AND CONTROLS RESP.

NO.
Sanction of Universe
1. Submit Note to Appropriate Authority for sanction by giving details Front
1of various shares (which are fundamentally strong or which have Office-
good potential) and prepare a Universe, wherein, the Bank may Desk
buy/sell at appropriate time/levels, for the following six months.

2. Forward copy of approved Universe to Mid Office (Market Risk Front

2Management Department – “MRMD”) and Back Office Office-
Desk

Beginning of the Day Operations

3. Monitor triggers (cut-loss and Management Action Triggers) on a Dealer
3real time basis. Receive intimation of triggers, if any from Mid Office
(MRMD). Identify shares where the trigger has been activated. In
case the Upper or Lower trigger is activated or otherwise, decide
whether to liquidate the investment or to continue to hold, after
seeking sanction from the Appropriate Authority.

4. Observe the market and take the decision to deal in any share which Dealer
4is part of the Universe. Ensure availability of sufficient holding in
Demat Account, before any sale deal is initiated.

5. Submit an Investment Note to Appropriate Authority for sanction of Dealer

5Investment/Sale in any shares in excess of Dealers’ Delegated
Powers or for sanction of hold decision in any share where the
triggers have been activated.

6. Receive the Investment Note sanctioned by Appropriate Authority. Dealer

6

7. Contact the Broker and place the Order with the Broker. Dealer
7

8. Receive intimation from the Broker about the rate and the quantity Dealer
8for which the Order has been executed.

LEGENDS: Front : Dealer and Front Office-Section-In-Charge

Office-
Desk
MRMD : Market Risk Management Department
 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION SECONDARY MARKET - FRONT SECTION NO. 8.2.1/2
OFFICE OPERATIONS

SR. SYSTEMS AND CONTROLS RESP.

NO.

9. Immediately enter the deal in Murex. Key details to be entered in Dealer

Murex are:
➢ Trade Date and Settlement Date
➢ Scrip Name
➢ Transaction type i.e. Buy or Sale.
➢ Investment Note number
➢ Quantity
➢ Rate
➢ Gross Amount
➢ Counterparty i.e. the Exchange Name.
➢ Broker Name
➢ Brokerage
➢ Securities Transaction Tax
➢ Net Amount
➢ Comment if any.
Insert the deal in Murex as a Valid Deal.

10. Send the signed deal blotter to the Back Office. Dealer

11. Put up the Investment Note to the Appropriate Authority (based on Dealer
Delegation of Powers) for control.

12. Send the Investment note to the Back Office after control from Dealer
appropriate authority.

Procedure for changing folders for securities

13. Receive report from Mid Office/Generate report on shares in Held Dealer
1For Trading (HFT) portfolio which are nearing 90 days holding
1period and monitor holdings in HFT portfolio. In case, the period of
holding exceeds 90 days, prepare a note for transfer of securities to
Available For Sale (AFS) folder and obtain sanction from
Appropriate Authority, as elaborated in Chapter – for Accounting
and Tax Deducted at Source (TDS).
 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION SECONDARY MARKET - FRONT SECTION NO. 8.2.1/3
OFFICE OPERATIONS

SR. SYSTEMS AND CONTROLS RESP.

NO.

End of day reporting by Front Office

14. Prepare the portfolio report and submit to Chairman through CGM Dealer
GM RM through DGM (ECM). The format of the Portfolio Report is
given in Exhibit 2.

15. Generate the Dealer Blotter from Murex. Initial the Dealer Blotter Dealer
1and forward it to Chief Dealer and DGM (ECM) for information.
3
LEGENDS: CGM (GM) : Chief General Manager (Global Markets)
DGM : Deputy General Manager
ECM : Equity and Commodity Markets
HFT : Held For Trading
AFS : Available for Sale
TDS : Tax Deducted at Source
 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION SECONDARY MARKET - BACK OFFICE SECTION NO. 8.2.2/1
OPERATIONS

SR. SYSTEMS AND CONTROLS RESP.

NO.

1. Receive the deal blotter from Front Office. Desk

officer-BO-
SSB

2. Receive the Investment Note from the Front Office. Desk

1 officer-BO-
SSB

3. Log in to the Straight Through Processing (STP) software to Desk

2download the online E-Contract Note and upload the same into officer-BO-
Murex. Matching of the E-Contract Note with the deal in Murex SSB
is done automatically. Compare the Blotter with the contract note
and the deals in Murex to ensure that the details match. Confirm
that the deals are in matched (second validate the deal) status in
the Murex

4. After the details have been verified, confirm the E-Contract Note Desk
online and acknowledge it to the Broker and send online officer-BO-
instructions to Custodian. SSB

5. Run necessary feeders in Murex to generate the “Daily Journal Desk

Report”. Send the journal report in CSV format to the custodian. officer-BO-
SSB

6. Put up the Equity Journal pertaining to all deals of the day to Desk
DGM (SSB) on the next day. officer-BO-
SSB

LEGENDS: STP : Straight Through Processing

DGM(SSB) : Deputy General Manager(Securities Service
Branch)
CSV : Comma Separated Values
 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION SECONDARY MARKET – SETTLEMENT SECTION NO. 8.2.3/1
DESK OPERATIONS

SR. SYSTEMS AND CONTROLS RESP.

NO.

1. Do the settlement validation of T+0 deals and netting validation Desk

of previous day deals. Officer-
Settlement
Desk-SSB

Transaction Obligation report

2. Receive the transaction obligation report from the custodian for Desk
4the deals done on the previous day Officer-
Settlement
Desk-SSB

3. Receive request for margin payment from the custodian on T+1 Desk
for T+0 transactions. Officer-
Settlement
Desk-SSB

4. Make margin payment for purchases of T+0 on T+1basis and Desk

receive the refund of margin paid on the previous day. Officer-
Settlement
Desk-SSB

Pay in or payout of Funds

5. Match the obligation report with the cash flow in Murex and the Desk
5Journal report. Transfer the funds for pay in to Custodian. In case Officer-
of a payout, receive the funds from the custodian Settlement
Desk-SSB

6. Upon receipt of advice from the custodian, prepare a note on the Desk
7minor differences, if any, between Murex and Exchange Officer-
Obligation, on account of rounding off for writing off or writing Settlement
back the difference, to Miscellaneous Charges Account and Desk-SSB
forward to DGM-SSB for sanction, through SIC-Back Office.

7. Receive the note on the difference and sanction it for write off or DGM-SSB
8write back, as the case may be.

LEGENDS: SIC : Section-In-Charge

 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION SECONDARY MARKET – SETTLEMENT SECTION NO. 8.2.3/2
DESK OPERATIONS

SR. SYSTEMS AND CONTROLS RESP.

NO.

8. Receive the sanctioned note and record necessary entries in Desk

9Murex for writing off or writing back the difference. Officer-
Settlement
Desk-SSB

9. Ensure that on a monthly basis the broker will send a Desk

conformation of the payment of the STT to the custodian. Officer-
Settlement
Desk-SSB

LEGENDS: STT : Security Transaction Tax

 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION AUCTION, CLOSEOUT AND SHORT SECTION NO. 8.3/1
SALE

SR. SYSTEMS AND CONTROLS RESP.

NO.
Treatment of Closeout

1. Receive the Memo from custodian and prepare an advice to be Desk officer-
2sent to Front Office to input a sale deal to give effect to the BO-SSB
Closeout received. Forward the advice to Front Office, through
DGM (SSB).

2. Receive the advice and input deals in Murex as advised by Back Dealer
3Office.

3. Second validate the deal in Murex after verifying it with the Desk officer-
4Memo. BO-SSB

4. Do the settlement validation of closeout deal. Desk Officer-

Settlement
Desk-SSB

Treatment of Delivery Versus Payment (DVP) Trades, if any

5. Front Office will send an advice to Settlement desk. Settlement Desk Officer-
5desk will in turn advice the custodian for transfer of shares Settlement
from Beneficiary Account to the Broker’s Pool Account Desk-SSB

6. Receive the Instruction slips. Initial the Instruction slips after SIC-
6verifying the details and forward it back to the Desk Officer- Settlement
Settlement Desk. Desk-SSB

7. Receive cash payout from the Custodian for the deal. Desk Officer-
8 Settlement
Desk-SSB

Treatment of Short Sale/Short Delivery, if any

8. If a short sale/short delivery occurs, prepare a Memo giving the Desk officer-
9details of the short sale and reasons therefor, and forward it to BO-SSB
Front Office after obtaining necessary approvals. The Memo
should state the price at which a buy deal is to be input in the
system by the Front Office for reversing the deal involving the
short sale. Forward the Memo to the Front Office.

LEGENDS: DVP : Delivery Versus Payment

 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION AUCTION, CLOSEOUT AND SHORT SECTION NO. 8.3/2
SALE

SR. SYSTEMS AND CONTROLS RESP.

NO.
9. Receive the Memo and insert the deal as per the instructions Dealer
1received from the Back Office with the value date of the deal
1being the date at which the short sale was done but at the rate at
which the short sale was finally settled.

10. Do the second validation of the deal in Murex. Desk

officer-BO-
SSB

Treatment of penalty levied by the Exchange

11. Prepare a note giving details of the penalty levied by the Desk
1Exchange for debiting the amount to Miscellaneous Charges Officer-
2Account and forward it to Appropriate Authority for sanction. Settlement
Desk-SSB

12. Receive the sanctioned note. Process payment of the penalty and Desk
pass necessary accounting entries in Murex. Officer-
Settlement
Desk-SSB

13. Do the settlement validation of the deals. Desk

Officer-
Settlement
Desk-SSB
 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION CORPORATE ACTIONS SECTION NO. 8.4/1

SR. SYSTEMS AND CONTROLS RESP.

NO.

1. For treatment of dividend and Bonus shares received refer Desk

Section 9.3 in Chapter 9 – Mutual Fund. Officer-
Settlement
Desk-SSB
Note: In case of Bonus Issues, the Company may settle the
fractional component of shares in the form of cash. In such cases,
the cash equivalent amount shall be credited to “Profit/Loss on
Sale of Shares”.

Procedure for Stock Split

2. Verify the Report from Portfolio Tracker to identify any case of Custodian
stock split.

In case there is no holding in the share on Stock Split date

3. On receipt of the advice from custodian, make changes in the Desk
Instrument Master for the Face Value and ISIN number on officer-BO-
account of stock split. The Back Office will send a memo to Front SSB
Office for initiating corporate action.

4. Front Office will initiate the corporate action which will be Desk
validated by the Back Office. officer-BO-
SSB

In case shares are held by the Bank on the date of Stock Split
5. Verify the demat account to ensure that the old shares have been Desk
debited and accurate number of shares with face value after the Officer-SSB
share split have been credited to the demat account.

6. Send a memo to Front Office for initiating corporate action. Desk

officer-BO-
SSB

7. Initiate the corporate action Dealer

8. Validate the corporate action initiated by the Front Office. Desk

officer-BO-
SSB
9. Ensure that the corporate action is executed in Murex on the Desk
listing date. officer-BO-
SSB
LEGEND: ISIN : International Security Identification Number
 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION CORPORATE ACTIONS SECTION NO. 8.4/2

SR. SYSTEMS AND CONTROLS RESP.

NO.
Treatment of Right Shares
10. Receive intimation from the custodian about the Rights issue and Desk
inform the Front Office. officer-BO-
SSB

11. Receive intimation of Rights Issue from Settlement Desk and Dealer
initiate the same procedure for investment like any other equity
investment.

Renouncing the Rights

12. Prepare a note seeking sanction for renouncing the Rights to Dealer
Appropriate Authority giving therein the reasons for the same.

13. Receive the sanctioned Investment Note. Receive the bids from Dealer
the market towards the premium to be received for renouncing
the Rights.

14. Convey acceptance to the highest bidder. Prepare a Memo to be Dealer

sent to Settlement desk through Back Office informing the
decision of renouncing the Rights and the price involved therein.

15. Receive the Investment Note and Memo from the Front Office. Desk
Initial the Memo after verifying it with the Investment Note. officer-BO-
Forward the Memo to Settlement Desk. SSB

16. Receive the Memo from Back office containing details of the Desk
decision of renouncing the Rights. Receive the proceeds from the Officer-
Company and record necessary accounting entries in Murex and Settlement
Core Banking System. Desk-SSB

Subscribing to the Rights Issue

17. Prepare a note to AA for subscribing to the rights issue on the Dealer
basis of holdings as on record date announced.

18. Receive the approval note. Dealer

19. Prepare a memo to be sent to Back Office based on point no. 2 Dealer

20. Inform Liquidity Management Desk about the amount and date
of investment proposed to be made in the Issue in advance, to Dealer
ensure that sufficient funds are available for funding the
payments towards subscription.

21. Desk Officer BO-SSB to receive the Confirmed Allotment Note Desk
(CAN) from the custodian with details of number of shares Officer-
allotted and advise the Front Office of the allotment on the basis Settlement
 of the allotment report received from the custodian. Forward a Desk-SSB
copy of the CAN to Front Office.

22. Insert the Deal in Murex systems. Dealer

23. Validate the Deal inserted by Front Office. Desk

Officer-
Settlement
Desk-SSB
 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION CORPORATE ACTIONS SECTION NO. 8.4/3

SR. SYSTEMS AND CONTROLS RESP.

NO.
Procedure in case of Buyback by the Company
24. Receive the notice from the company initiating the buyback of Dealer
shares. Appraise the decision whether to participate in buy back
or not based on various factors.

25. Submit the sanction note to appropriate authority for sanction. Dealer

26. Receive sanctioned note and prepare a Memo to be sent to Back Dealer
Office for subscribing to buy-back. The dealer will insert a
notional deal for buy back. The deal has to be validated by the
Back Office.

27. Advice the custodian of the formalities in buy back based on Desk
memo received from Front Office. officer-BO-
SSB

28. Second validate the notional deal based on the sanctioned noted. Desk
officer-BO-
SSB

29. Receive the intimation from the custodian of the number of Desk
shares agreed to be bought-back by the company and intimate officer-BO-
the same by means of memo to Front Office. SSB

30. Second validate the unwinding of notional entry on buy back. Desk
officer-BO-
SSB

31. Second validate the deal of actual buy back put by Front Office Desk
based on the memo from Back Office. Officer-
Settlement
Desk-SSB
 STATE BANK OF INDIA – GLOBAL MARKETS
MANUAL OF OPERATIONS

CHAPTER INVESTMENT IN EQUITY CHAPTER NO. 8

SECTION CORPORATE ACTIONS SECTION NO. 8.4/4

SR. SYSTEMS AND CONTROLS RESP.

NO.
When the actual proceeds are received:
32. The custodian will credit the amount to GMU A/c. The Back Desk
Office will send a memo to Front Office informing the amount officer-BO-
received. SSB

33. On the basis of Back Office memo cancel and re-issue the notional Dealer
deal at the cut off price.

34. In case of deduction of operational expenses, if any by the lead Dealer

managers to the issue, Front Office will take sanction for such
expenses and advise the Back Office accordingly.

35. Pass necessary entries debiting the charges to Miscellaneous Desk

charges account. Officer-
Settlement
Desk-SSB

Procedure for Merger and De-Merger

36. Receive of information from Custodians regarding merger and Desk

demergers. Create security master for the new entities and send a officer-BO-
memo to Front Office for buy/sale deal for inserting a sale deal in SSB
existing company for the existing holding at AVP in the ratio
announced by the company.

37. Insert buy/sale deal as per memo received from Back Office. Dealer

38. Validate the deal inserted by Front Office for merger/de-merger. Desk
officer-BO-
SSB