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“RISK MANAGEMENT REGARDING WORKING OF A BROKING FIRM, AND ITS INVESTORS”
RELIGARE SECURITIES LTD
SUBMITTED TO UNIVERSITY OF PUNE IN PARTIAL FULFILMENT OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION SUBMITTED BY
KIRAN V. SHENDE
MBA Finance UNDER THE GUIDANCE OF
PROF. RAJESH KUMAR HUKRE
SSMS’s, INSTITUTE OF MANAGEMENT & RESEARCH, PARVATI, PUNE-09. (2008-2010)
I, the undersigned, hereby declare that the Project Report entitled “RISK MANAGEMENT REGARDING WORKING OF A BROKING FIRM, AND ITS INVESTORS” written and submitted by me to the University of Pune, Pune in partial fulfillment of the requirement for the award of degree of Master of Business Administration under the guidance of Prof. Rajesh Kumar Hukre is my original work and the conclusions drawn therein are based on the material collected by myself.
Place: Pune Date: /09/2009
Kiran Shende Research Student
It’s a great privilege that I have done my project in such a well-organized and diversified organization. I am great full to all those who helped and supported me in completing the project.
First of all I would sincerely like to thank Mr. Rajendra Vadzirkar (Branch Manager, Ahmednagar), for his valuable guidance and kind co-operation during the project. I am highly grateful to Mrs. Priya Venkatraman (Sr. Relationship Manager) for the help provided by them in various forms.
I am also thankful to our director Dr. P. D. Nare and my project guide Prof. Rajesh Kumar Hukre for helping me in completing the project.
Last but not least, I am also thankful to my parents, all college staff and my friends for helping me directly or indirectly in my project
KIRAN VITTHAL SHENDE
Executive Summary 1 INTRODUCTION
1.1 1.2 1.3 1.4 1.5 1.6 1.7 Basic Concepts of the Topic Literature Review Need for the Study Statement of the Problem Objectives of the Project Research Hypothesis Scope of the Study
PROFILE OF THE ORGANISATION
2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 Name of the Organisation Vision and Mission History and Background Group Structure Services Organisation Structure Competitors of Religare Sec. Ltd. About Religare Sec. Ltd. The Religare Edge
RESEARCH DESIGN & METHODOLOGY
3.1 3.2 3.3 3.4 Introduction to Research Methodology Sampling Design Sources of Data Collection Limitations of Study
DATA PRESENTATION, ANALYSIS INTERPRETATION FINDINGS & SUGGESTIONS
5.1 Main Findings (Conclusions) 5.2 Policy Suggestions 5.3 Scope of Development
4 5. 5.6 5. Title of the Table Page No.2 5.1 5.3 5.5 5.LIST OF TABLE Table No.7 Preference of Investment Awareness of Online Share Trading Awareness of Religare as a Brand Awareness of Religare’s Facilities DEMAT Account Market Satisfaction level of Customer Frequency of Trading % of Earning Invested in Trading 30 31 32 33 34 35 36 2 .
4 5.3 5.LIST OF CHART Chart No.2 5.1 5. Title of the Chart Page No.7 Preference of Investment Awareness of Online Share Trading Awareness of Religare as a Brand Awareness of Religare’s Facilities DEMAT Account Market Satisfaction level of Customer Frequency of Trading % of Earning Invested in Trading 30 31 32 33 34 35 36 2 .5 5.6 5. 5.
EXECUTIVE SUMMARY 2 .
capital market. Need of the Study:➢ Create awareness among investors about the different risks involved in the broking firms. bullion. ➢ To understand various risk for the investors of the broking firm. banking. managing it was felt most essential by the regulatory bodies and exchanges. ➢ To understand various risks involved in the broking firm. time frame or the issuer of the security etc.“Risk Management Regarding Working of a Broking Firm and Its Investors” Name of the Organisation: . whether in stock. gold etc. Risk can be defined as “Possibility of suffering losses” “The chance of something happening that will have an impact upon objectives. the mode of investment.Project Title: . Objectives of the Project:➢ To get familiar with the working of a broking firm. Risk management in a Broking Industry is a new concept in India. since it Posses’ maximum risk in the financial market. investments instrument. The degree of risk however varies on the basis of the features of the assets. ➢ To manage and reduce the identified risks. real estate. It is measured in terms of consequences and likelihood”. ➢ Understand the total transparency and automation of broking firm ➢ Give basic knowledge to investors regarding risk in broking firm ➢ Also understand the equity market and different way of trading 2 .All investments are risky. financial sector.Religare Securities Ltd Introduction: .
➢ The risk prevailing in the business is recognized therefore an efficient risk management department is essential in every broking firm. very few investor and agents have a detail knowledge of the study. Suggestions:➢ An Organization should have a risk management function that is independent of its trading staff i. Limitations of Study:➢ To understand the overall working of share market. turnover wise as well as area of operation wise. The recent trend of voluminous increase in investors has also increased the risk involved in it.e. ➢ The designated compliance officer should perform a review of trading Practices annually. ➢ Broking business is a client-based business. the period of 60 days is not enough. There is need of continuous up gradation of internal control measures ➢ Staff in a broking firm is continuous busy and due to which they are always under stress. Conclusions:➢ The researcher found that the working of a broking firm is a very risky job because risk is involved in each and every activity of the business.Research Hypothesis: . So there is increase in various broking firms. The activities have reached through lengths and breadth of the country.Capital Market is growing very fast. personnel responsible for the risk management function should be separate from trading floor personnel. 2 . The working of a broking firm is a very risky job because risk is involved in each and every activity of the business. ➢ Moreover. ➢ A periodical compliance review should be conducted to ensure conformity with the rules and regulations.
➢ The study was conducted in Ahmednagar only. which restricted the scope of the study. CHAPTER I INTRODUCTION 1 .
1 Basic Concepts of the Topic Introduction to Capital Markets Financial System The financial system of every economy consists of various constituents such as 1) Financial Institutions 2) Financial Companies 3) Financial Markets 4) Financial Instruments 5) Financial Services 6) Financial regulations The financial market in India comprised of capital market and money market whereas the financial system of the country comprised of institutions. mutual fund. If the 2 .1. Money market (short term) What is Capital Market? A Capital Market deals in financial assets. debentures. excluding coins and currency. Capital market (long term) 2. On a functional basis we can divide financial markets into 1. which operate the financial markets and the financial instruments with which the financial system is put into operation. insurance policy. The financial assets comprise of banking accounts. sectoral and institutional basis. pension funds. provident fund. shares. and other securities. Tax anomy of financial markets can be understood on functional.
Stock exchange provide a good leverage of the capital market and their relationship is directly proportional. 2 . It provides a platform for short term surplus funds of lenders or investors and short term requirements of borrowers. They may issue the securities at face value. to raise resources to meet their requirements of investment and/or discharge some obligation. or at a discount/premium and these securities may take a variety of forms such as equity. It deals in short term financial assets which can be readily converted into cash. In our country.stock exchanges are well regulated and function smoothly. debt etc. The Indian Capital Markets can be broadly classified into three types of markets. then it is an indication of healthy capital market. Secondary market Money market The money market is part of overall financial system and securities or capital market. 1. Government as well as corporates. Primary market provides opportunity to issuers of securities. Primary market 3. India has multi-stock exchange system with more than 24 stock exchanges functioning across the country. the instruments can be traded at low cost and are highly liquid. Primary market The primary market provides the channel for sale of new securities. They may issue the securities in domestic market and/or international market. Money market 2. capital markets are generally also known as security/stock market. Money market is a place for trading in money and short tern financial assets that are as liquid as money.
Secondary market comprises of equity markets and the debt markets. Principles of Risk management are as follows 1 Global Perspective – Viewing development within the context of large level developments – Recognizing both the potential value of opportunity and the potential impact of adverse effects 1 Forward looking view – Thinking towards tomorrow. identifying uncertainties. and failure is often key part of learning. but we must learn to balance the possible negative consequences of risk against the potential benefits of its associated opportunities. Majority of the trading is done in the secondary market. risk is essential to progress. anticipating potential outcomes – Managing project resources and activities while anticipating uncertainties 1 Open Communications – Encouraging free-flowing information at and between all project levels 2 .Secondary Market 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. RISK MANAGEMENT Risk is defined as “possibility of suffering losses” This risk in itself is not bad. This is risk management.
informal. and time frame. skills. Analyze . classify risks. and proper communication – Using processes that value the individual voice (bringing unique knowledge and insight to identifying and managing risk) 4 Integrated management – Making risk management an integral and vital part of project management – Adapting risk management methods and tools to a projects infrastructure and culture 5 Continuous processes – Sustaining constant vigilance – Identifying and managing risks routinely through all phases of the projects lifecycle 6 Shared product vision – Mutual product vision based on common purpose. Evaluate impact.– Enabling formal. probability.Search for and locate risks before they become problems ii.Transform risks data into decision-making information. and knowledge Functions of Risk Management are as follows i. Identify . and prioritize them 1 . and collective communication – Focusing on results 7 Team work – Working cooperatively to achieve common goal – Pooling talents. shared ownership.
Whereas SEBI has given some guidelines under Investors Protection to protect investors risks. Margins depend upon the volatility and market conditions. Track .Correct for deviations from the risk mitigation plan.Monitor risk indicators and mitigation actions v. Value at Risk Margins 2. These measures were taken to reduce the brokers’ risks. Mark to Market Margins 1 . since it poses maximum risk in the financial market.iii.Translate risk information into decision and mitigating actions (both present and future) and implement those actions iv.Provide information and feedback internal and external to the project on the risk activities. NSCCL has put in place a comprehensive risk management system. vi. Plan . risk containment measures that were common internationally but were absent from the Indian Securities Market. Therefore NSE introduced for the first time in India. Control . current risks. NSE has given the following risk management measures Margins NSE has specified Different margins for different instruments like stocks futures and options etc. It vary from stock to stock and instrument to instrument Categorization of stocks for imposition of margins Daily margins payable by members consists of the following: 1. RISK MANAGEMENT IN A BROKING FIRM Risk management in a Broking Industry is a new concept in India. and emerging risks. managing it was felt most essential by the regulatory bodies and exchanges. which is constantly upgraded to preempt market failures. Communicate .
in case of a member. it is grossed across all the clients for a member to compute gross exposure for margin calculation. VaR margin rate & Security category Mark-to-Market Margin Mark to market margin is computed on the basis of mark to market loss of a member. if client A has a buy position of 1000 in a security and client B has a sell position of 1000 in the same security. Mark to market loss is the notional loss which the member would incur in case the cumulative net outstanding position of the member in all securities. The VaR margin rate computed as mentioned above will be charged on the net outstanding position (buy value-sell value) of the respective clients on the respective securities across all open settlements. The net positions at a client level for a member are arrived at and thereafter. comprising of the sum of VaR margin and mark to market margin is payable.: if the VaR based Margin rate is 10. at the end of the relevant day were closed out at the closing price of the securities as announced at the end of the day by the NSE. it would be rounded off to 11. The VaR based margin would be rounded off to the next higher integer (For E. It would be summed up to arrive at the member's exposure for the purpose of margin calculation.g. Mark to market margin is calculated 2 . the net position of the member in the security would be taken as 2000. Value at Risk Margin VaR margin is applicable for all securities in rolling settlement.Daily margin. The buy position of client A and sell position of client B in the same security would not be netted. All securities are classified into three groups for the purpose of VaR margin. 00) and capped at 100%. For example. 0 1.
e. the latest available closing price at the NSE is considered as the closing price. Verification of shares at members office The exchange has outlined the process i. The department is carrying out inspection of the member brokers records as regards compliance of the risk management procedures 3. 2. Insurance 2 . in case the transaction in a script with one particular client in a settlement exceeds Rs 10 laks then the member are to send the photocopies of the transfer deeds and the share certificates to the company/ registrar for verification of the material particulars. Inspection 4. A similar procedure is also to be followed for existing clients. Know your client scheme Under the procedure the member brokers of the exchange are compulsory required to obtain detailed information of clients prior to commencement of any transactions with new clients.by marking each transaction in scrip to the closing price of the scrip at the end of trading. the difference between the buy and sell values would be considered as notional loss for the purpose of calculating the mark to market margin payable. In case the member broker fails to furnish the same it is viewed seriously. Some Risk management are also taken by BSE they are as follows 1. The basic idea behind the introduction of this procedure is to prevent fake/forged/stolen shares from being introduced in the market. In case the security has not been traded on a particular day. This information is to be made available to the exchange authorities whenever called for. In the event of the net outstanding position of a member in any security being nil.
– Loss to members on account of infidelity of employees – Loss of member on account of fake/forged/ stolen shares being introduced by his clients – Direct financial losses suffered by the member broker on account of physical loss.The exchange presently has in place insurance policies to protect itself in the event of losses on account of fire. Regulation on insider trading with the object to curb it completely and punish the guilty 2 . – Loss on account of securities lost in transit – Loss suffered on account of incomplete transaction – Loss sustained as final receiving member on exchange on account of default of the introducing member – Loss on account of errors and omission – Directors and officials liability cover Measures taken by SEBI for Investors protection are as follows Government of India and SEBI have been stressing upon the need for regulating the secondary market and bringing transparency in transactions on the floor of stock exchanges The steps taken by SEBI to regulate and control the business of stock exchanges and reduce the risks of investors are as follows 1. destruction. damage to computer systems and a comprehensive policy that covers risks faced by the exchange. The risks covered under the basic cover of the policy are detailed as below. its member brokers and the clearinghouse. theft or damage to securities and cash.
brokers. registrars to issues. 5. Effective margin system for smooth settlement. Introduction of modified carry forward system and automated lending borrowing mechanism (ALBM). 6. 16. penalties and fines. 12. Gradual automation to reduce paper work and ensure transparency in transactions this is now almost complete and all stock exchanges have been computerized. merchant bankers. DSE and other exchanges. Dematerialization of securities permitted on a selective basis. Total transparency and automation of stock exchanges. etc. stock exchanges. underwriters. Derivative trading in index based futures of 30. Circuit breaker system to check volatility on the exchanges 17. Brokers contact notes to mention brokerage separately. 18. non member brokers. debenture trustees. custodians etc so as to have access/inspection of their books. 19. Introduction of Internet trading. National Stock Exchange. 8. 15. 11. Nationwide paperless trading through over the counter exchange of India. 1 . records and verification of transactions. 3. By March 2001. Regulation for fraudulent trade practices 14. companies. Registration of market players. sub brokers. merchant bankers. 13. about 3500 companies will have compulsory trading in Demat mode. 9. imposing curbs. 60 and 90 days.. Brokers to keep clients money in a separate bank account. 4. Uniform Trading hours at all the stock exchanges in the country to check arbitrage. portfolio managers. BSE. Stress upon shorter settlement period. 7. Forward trading being banned on stock exchanges 10.2. Stern action against erring brokers. Indirect supervision through stock exchanges in day-to-day business by fixing margins.
regulations. Practicing prudent governance norms. 1 . SEBI has decided to appoint administrator to implement the signature guarantee and certificate authentication programs. The administrators appointed by SEBI act on behalf regulator in resolving problems arising out of signature mismatch 2. – Trustees to ensure that fund is not deployed in risky instruments or for the benefit of any member but only in prescribed avenues. rules. Recent Development steps taken by SEBI for Investor protection 1. 1882 with independent trustees – Regular contributions from active member brokers and stock exchanges – Fund to be utilized only for investor claims and not broker claims. Appointment of administrators to check bad deliveries To get rid of bad deliveries. Streamlining Investor protection fund The committee set up by SEBI to review the sources and utilization of investor protection fund of stock exchanges has made following recommendations – Funds should be on trust structure and set upon under Indian Trust Act. etc. Service centers for investors SEBI has directed all stock exchanges to constitute service centers for investors to enable the investors to have a form for recording and counseling of their grievances as well as access financial and other information of companies on government policies. – Time schedule to be specified while setting investor claims. 1.20.
C. Gurusamy ii)RESEARCH METHODOLOGY METOHDS & TECHNIQUES Author: .R. And also read the following books: i) FINANCIAL SERVICES AND MARKETS Author: . In this I reffer the Demat form of the Religare Sec. on this topic.2 Literature Review No one has done work over there yet. 3. Compliance Officer Each company is required to appoint compliance officer who would be able to verify rumors and information floating in the market about the company to the stock exchange. In this I also read the various modules of NCFM.Kothari 2 .Dr. This will reduce motivated rumors about companies. In literature review I read various documents provided by the manager of Religare Sec.2. And Visiting various websites. 4. Corporate Governance SEBI has prescribed prudent corporate governance norms for all listed companies to ensure transparency and better disclosure practices. Investor Education SEBI has taken steps to educate investors through various awareness programmes and publications 1. which aids in price manipulation.
But People don’t have basic knowledge regarding stock market. So they not understand there is various risk involved in the working of broking firm.3 Objectives of the Project ➢ To get familiar with the working of a broking firm. ➢ To understand various risks involved in the broking firm.2 Statement of the Problem There are several financial security companies playing their roles in Indian equity market. Due to none availability of the proper guidance most of the person take stock market as gambling.L. 2 .3 Need for the Study ➢ Create awareness among investors about the different risks involved in the broking firms.M. Gupta 1. ➢ To manage and reduce the identified risks.iii)PROJECT REPORT WRITING Author: . ➢ Understand the total transparency and automation of broking firm ➢ Give basic knowledge to investors regarding risk in broking firm ➢ Also understand the equity market and different way of trading ➢ Convert our therotical knowledge in to practical knowledge 1. ➢ To understand various risk for the investors of the broking firm. 1.K.Rampal & S.
The activities have reached through lengths and breadth of the country. turnover wise as well as area of operation wise. 2 .2 Research Hypotheses Capital Market is growing very fast.3 Scope of the Study Company can take review from market through this project. Management people can get overall idea about the risk management regarding working of broking firms. 1.1. The working of a broking firm is a very risky job because risk is involved in each and every activity of the business. So there is increase in various broking firms. They also understand what information provide to investor for avoiding the risk.
CHAPTER II PROFILE OF THE ORGANISATION 2 .
in : RELIGARE to 58888 PUNE: Ground Floor.1 NAMERELIGARE SECURITIES LTD. Ahmednagar . Opp. Savedi Road. BMCC Road. Himalaya Tower.414003 2 . Amar Caliber.2. Pune – 411004 AHMEDNAGAR: 5&6. Shivajinagar.religare.in : info@religare. New Delhi – 110019 Website Email SMS : www. Deepak Hospital. Corporate Office: 19 Nehru Place.
43 sub-regional offices.3 History and background RELIGARE Securities Ltd.2. Brand Essence – “Core brand essence is Diligence and Religare is driven by ethical and dynamic processes for wealth creation”. 2. a Company promoted by the late Dr. 1 . Company’s Mission – “Providing complete financial care driven by the core values of diligence and transparency”. (RSL) is a wholly owned subsidiary of RELIGARE Financial Services Ltd. REL operates from seven domestic regional offices.837* business locations all over India. Ex-CMD of Ranbaxy Laboratories Ltd. The primary focus of Religare Securities Ltd. is to cater to services in Capital Market Operations to Institutional Investors.2 VISION & MISSIONCompany’s Vision – “To build Religare as a globally trusted brand in the financial services domain and present it as the ‘Investment Gateway of India”. and has a presence in 498* cities and towns controlling 1.Parvinder Singh. The Company is a member of the National Stock Exchange (NSE) and OTCEI. (RFSL). The growing list of financial institutions with whom RSL is empanelled as approved Broker is a reflection of the high levels of services maintained by the Company.
Brazil. Pursuant to expansion of REL's business. other than India. Commodity and Financial Services business & Religare Insurance Advisory Ltd. The bouquet of services offered by RELIGARE includes Broking (Stocks and Commodities). Depository Participant Service. depository services etc. portfolio management services. was incorporated in London in the year 1803 and is believed to be one of the oldest firms of stockbrokers in the City of London. RELIGARE GROUP: RELIGARE in recent years has expanded its reach in health care and financial services wherein it has multiple specialty hospital and labs which provide health care services and multiple financial services such as secondary market equity services. Besides the reach of RELIGARE. Advisory on Mutual Fund Investments and Portfolio Management Services. in 2008 which was subsequently re-named as Religare Hichens Harrison PLC ("RHH"). REL acquired UK-based Hichens. the company has grown from largely an equity trading company into a diversified financial services company. Dubai and Singapore). which encompasses fundamentals as well as technical knowledge.To make a mark in the global arena. RELIGARE Comdex Limited and RELIGARE Finvest Limited which provide services in Equity. RELIGARE is a pioneer in the concept of partnership to reach multiple locations in order to effectively service its large base of individual clients. Harrison & Co. RELIGARE was founded with the vision of providing integrated financial care driven by the relationship of trust. the clients of the company greatly benefit by its strong research capability. Harrison & Co. South Africa. With the addition of RHH the REL group now operates out of multiple global locations. (the UK. the USA. Hichens. 1 . RELIGARE financial services group comprises of Religare Securities Limited.
is 33764. 2. of the Religare Securities Ltd. RSL provides platform to all segments of the investor to leverage the immense opportunity offered by equity investing in India either on their own or through managed funds in Portfolio Management. Member of National Stock Exchange of India and Bombay Stock Exchange of India. is required by to be available with the broker who deals on behalf of investors or sell the mutual funds of the different companies present in the market. Depository Participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). 2.RELIGARE SECURITIES LIMITED 1. The ARN No. A SEBI approved Portfolio Manager. The ARN No.4 Religare Enterprises Limited Religare Securities Limited Equity Broking Online Investment Portal Portfolio Management Services Depository Services Religare Commodities Limited Commodity Broking Religare Finvest Limited Lending and Distribution business Proposed Custodial business Religare Insurance Broking Limited Life Insurance General Insurance Reinsurance 1 .
5 SERVICES :- 2 .arts-i Religare Venture Capital Limited Private Equity and Investment Manager Religare Asset Management* Derivatives Sales Corporate finance 2.Religare Capital Markets Limited Investment Banking Proposed Institutional Broking Religare Realty Limited In house Real Estate Management Company Religare Hichens Harrison** Corporate Broking Institutional Broking Religare Arts Initiative Limited Business of Art Gallery launched .
6 Organization Structure: 2 .2.
2.7 Competititors of Religare:There are several financial security companies playing their roles in Indian equity market. But Religare faces competitions from these few companies. 1 .
8 About Religare Securities Limited (RSL) One of the leading integrated financial services groups of India Diverse range of offerings 2 .com ➢ India Bulls ➢ HDFC Securities ➢ 5paisa.➢ ICICI Direct.com ➢ Share Khan (SSKI) ➢ Kotak Securities.com ➢ Motilal Oswal ➢ IL&FS ➢ Karvy 2.
000 and growing across the retail. wealth and Institutional Spectrum. 2. Pan India and global footprint. Best-in-class Research. Client base of more than 5000. Width and depth of management leading a formidable employee base.9 The Religare Edge Diverse offerings Dynamic Management Team State-of-the art technology Vast Distribution and Reach Robust Brand Recognition Synergistic partnerships Innovative Initiatives 1 . “Sweetly placed” to spot new opportunities and power ahead.
CHAPTER III RESEARCH DESIGN & METHODOLOGY 3.1Introduction to Research Methodology- 2 .
3 Sources of Data Collection- Primary source includes:1) Discussion with branch manager 2) Discussion with experts 3) Discussion with investors of the firm. collecting.Research Methodology comprises defining and redefining the problem. formulating hypothesis or suggesting solution. I have gathered secondary data and primary data and collected information from the combination of these two data. 3. Research Methodology is a way to solve research in study and solving research problems along with logic behind them are defined through research methodology. 3. 4) Live trading in the market 1 .2Sampling Design – I have taken sample size of 50 respondents. During my project. Because the population is too large so it is difficult to survey. I collected data through various sources primary & secondary. private or public need different types of information are to know its popularity. Thus while talking about research methodologies we are not only talking of research methods but also consider the logic behind the methods. making deduction and reaching to conclusions and determines whether the formulated hypothesis is right and wrong. Any organization whether big or small. organizing and evaluating the data.
➢ Moreover. 2 .4 LIMITATIONS OF STUDY ➢ To understand the overall working of share market. ➢ The study was conducted in Ahmednagar only. ➢ The study was conducted to understand with respect to Risk involved in broking firm and investors. which is a part of the equity share market. the period of 60 days is not enough. Secondary source includes:1) Various books related to stock market 2) Books related to Financial Management 3) Web sites were used as the vital information source 4) References given by Relationship Manager 3. very few investor and agents have a detail knowledge of the study.5) Data collected from questionnaire. which restricted the scope of the study ➢ The data provided by the investor and the agents can’t be held true as 100% correct.
ANALYSIS & INTERPRETATION 2 .CHAPTER IV DATA PRESENTATION.
with a more transparent system.1 Interpretation: This shows that although the mutual funds market is on the rise yet.1) Chart 5. investment in the Stock Market can definitely be increased. Of Investors (50) 37 8 4 1 (Table No.2) 1 . 5.1) Preference of Investment: Financial Instruments Shares Mutual Funds Bonds Derivatives Source: Primary Data No. 2) Awareness of online Share trading : YES 45 NO 5 Source: Primary Data (Table No. So. 5. the most favored investment continues to be in the Share Market.
2 Interpretation: With the increase in cyber education. YES 29 NO 21 Source: Primary Data (Table No.3) A A E E SO R L A EA AB A DW R N S F E IG R SRN 4%3 YSE NO 5%7 1 . 5. This awareness is expected to increase further with the increase in Internet education.Chart 5. 3) Awareness of Religare as a Brand. the awareness towards online share trading has increased by leaps and bounds.
The company to increase its market share over its competitors should further leverage this brand image. it is to be noted that the customers are not aware of the facilities provided by the company meaning thereby. that. the company should concentrate more towards promotional tools and increase its focus on product awareness rather than brand awareness. 1 .4) Chart 5. 4) Awareness of the facilities provided by Religare : YES 42 NO 8 Source: Primary Data (Table No.4 Interpretation: Although there is sufficiently low brand equity among the target audience yet. 5.Chart 5.3 Interpretation: This pie chart shows that Religare has a reasonable amount of Brand awareness in terms of a premier Retail stock broking company.
Lack of promotion and unfocussed approach towards Product awareness 1. the company should crystallize its products and should indulge in aggressive marketing and promotion.5) Chart 5. 5. 1) Satisfaction level among Customers with current Broker : 1 . This is probably because of two main reasons: 1.5 Interpretation: This shows that even with sufficiently high Brand Equity. Non – transparent marketing policies of the company Hence.5) DEMAT Account Market : BROKING FIRMS Religare Securities ICICI Direct Kotak Securities India Bulls Others INVESTORS 6 15 4 12 13 Source: Primary Data (Table No. Religare ranks only 3rd amongst the Demat account providers.
2) How often do you trade: 1 .5.6) Satisfaction le e amv l ong Custom rs we ith curre brokentr Yes . today. It shows that all the competitors are striving hard not only to woo the customers but also to make them Brand loyal by generating customer satisfaction.8% Chart 5.6 Interpretation: This pie chart accentuates the fact that Strategic marketing.92% No. has gone beyond only meeting Sales targets and generating profit volumes.YES 46 NO 4 Source: Primary Data (Table No.
This is because of the non – transparent structure of the Indian share market and the skepticism of the target audience that is generated by the volatility of the stock market.27% M o n th ly -53% Yea rly -11% Chart 5.7 Interpretation: In spite of the huge returns that the share market promises. OF INVESTORS 5 13 26 6 Source: Primary Data (Table No.9% W ee kly .7) Frequency of T rading D aily . 3) Percentage of earnings invested in Share Trading : 1 . It requires efficient bureaucratic intervention on the part of the Government. 5. we see that there is still a dearth of active traders and investors.FREQUENCY OF TRADING Daily Weekly Monthly Yearly NO.
8) Chart 5.% of Earning Invested Up to 10 % Up to 25 % Up to 50 % Above 50 % Source: Primary Data No. again reiterating the volatile and non-transparent structure of the Indian stock market. 5. 1 . of Investors 35 9 4 2 (Table No. effective and efficient steps should be undertaken to woo the customers to invest more in the lucrative stock market. Hence.8 Interpretation: This shows that people invest only upto 10% of their earnings in the stock market.
➢ The researcher found that the working of a broking firm is a very risky job because risk is involved in each and every activity of the business. 2 .1 MAIN FINDINGS (CONCLUSION) Working with a broking firm especially was really a great experience.CHAPTER V FINDINGS & SUGGESTIONS 5.
➢ The risk prevailing in the business is recognized therefore an efficient risk management department is essential in every broking firm. All these necessitated in the introduction of latest technology in the form of advanced software’s. There is need of continuous up gradation of internal control measures ➢ Staff in a broking firm is continuous busy and due to which they are always under stress. ➢ Broking business is a client-based business. The activities have reached through lengths and breadth of the country. The recent trend of voluminous increase in investors has also increased the risk involved in it. 5. ➢ Capital Market is growing very fast. 2 .2 POLICY SUGGESTIONS ➢ An Organization should have a risk management function that is independent of its trading staff i.e. turnover wise as well as area of operation wise. personnel responsible for the risk management function should be separate from trading floor personnel.
➢ Risk management or control function should be able to produce a risk management report that highlights positions. 1 . sub brokers. staff of risk management function and investors regarding procedures for measuring and managing risk. which would help the organization in a big way. This report should be sent to senior management. reviewed.➢ Senior management should regularly evaluate the risk management procedure in place to ensure they are appropriate and sound. ➢ Highly qualified staff not only in front office positions such as trading desk. franchisee. ➢ Auditors should perform a comprehensive review of risk management annually. emphasizing segregation of duties and validation of data integrity. 5. ➢ The designated compliance officer should perform a review of trading Practices annually. signed and returned to control staff. However I would like to make a few points. ➢ Senior management should also foster and participate in active discussions with the board of directors. relationship officer and sales but also all back office functions responsible for risk management and internal control.3 SCOPE FOR DEVELOPMENT RELIGARE SECURITIES) RELIGARE SECURITIES have set themselves very stringent and high standards of Risk Management. limits and excess on a basis commensurate with trading activity.
➢ Regarding dealers risks. ➢ Along with large client base. ➢ In settlement department the persons have be appointed with utmost care and their periodic check can be conducted to avoid any employee fraud. ➢ Periodical visits to the sub brokers and franchisee by the RELIGARE SECURITIES personnel for interaction and inspection will help in minimizing the risk to great extent. the sub brokers and client will help in reducing the delay in giving limits. HRD must help in this matter. It has been observed that most of the mistakes are done when they are under stress. 2 . well-trained and less stressed dealers will help in reducing the mistakes. quality of clientele will help in balanced growth of business and minimizing the risk. ➢ Fast and frequent interaction between the risk managers.➢ Recording of trader and dealer telephone calls. which will facilitate to resolve the disputes at different levels.
CHAPTER VI BIBLIOGRAPHY & WEBLIOGRAPHY ➢ FINANCIAL SERVICES AND MARKETS Author: .C.R.Kothari 1 . Gurusamy ➢ RESEARCH METHODOLOGY METOHDS & TECHNIQUES Author: .Dr.
➢ PROJECT REPORT WRITING Author: .L.bseindia.Rampal & S. 2 .google.com ➢ www.nseindia.co.K.religare.M.in ➢ www.in ➢ Dalal Street ➢ Various books of Equity Management.com ➢ www. Gupta ➢ www.
ANNEXURE QUESTIONNAIRE Q1. In which of these Financial Instruments do you invest into? Shares Mutual Funds Bonds 3 Derivatives .
Is broking firms are always risk free? Yes No Q10.What more facilities do you think you require with your DEMAT account? ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 3 . What percentage of your earnings do you invest in share trading? Up to 10% Up to 25% Up to 50% Above 50% Q9. How often do you trade? Daily Weekly Monthly Yearly Q8. Are you aware of online Share trading? Yes No Q3. Are you currently satisfied with your Share trading company? Yes No Q7. Do you know about the facilities provided by Religare? Yes No Q5. With which company do you have your DEMAT account? Religare ICICI Direct Kotak Mahindra India Bulls Others (please specify)__________ Q6. Heard about Religare? Yes No Q4.Q2.
Additional Information (optional) Name: Age: Phone No: Occupation: 1 .
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