A STUDY ON SHAREKHAN ONLINE STOCK TRADING

Submitted in partial fulfillment for the award of the Degree of

Master of Business Administration, JNTU, Hyderabad

by

…………….

Under the guidance of

Dr

College details

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 Declaration

I hereby declare that this project report titled a study on sharekhan online stock trading submitted

by me to the Department of Master of Business Administration, as a record work done by me

under the supervision and guidance of………. Faculty of the Dept of MBA,……….This is a

bonafied work undertaken by me and it is not submitted to any other University or Institution for

the award of any degree/diploma/certificate or published any time before.

Date- name

Place-Hyderabad s,no

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 Acknowledgement
The satisfaction that accompanies the successful completion of any task would be incomplete

without the mention of the people who make it possible and whose constant guidance and

encouragement crown all the efforts with success

I would like to express my deep in deftness and whole hearted thanks to (company manger

company name), for allowing me to undertake this project work and for his valuable suggestions

and co-operation during the development of this project.

I express my thanks to,,,,,,,,,,,, Project Guide for her valuable guidance and help throughout the

project development. I wish to express my sincere thanks to………, Dean of MBA Department,

and (college name) Education Society’s Group of Institutions for their valuable suggestions,

constant help and encouragement in every stage during the preparation of project report.

I extend my humble thanks to (,,,,,,, guide name), Project Guide for her inspiring guidance and

valuable suggestions for rendering helpful hand in completion of the project.

I also thank the entire staff of Department of Business Administration, for their valuable

suggestions and help in completion of this project

I would like to thanks my brother and my family members for their support and guidance.

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 CONTENTS

Contents Page No

List of Tables I
List of Figures II

CHAPTER 1 – Introduction 5

1.1 Introduction to the study

1.2 Need for the study
1.3 Scope of the study
1.4 Objectives of the study
1.5 Source of data
1.6 Research Methodology
1.7 Limitations

CHAPTER 2- Industry Profile 8

CHAPTER 3 – Definitions& Explanations 24

CHAPTER 4 – Company Profile 29

CHAPTER 5 - Trading Procedure 35

CHAPTER 6- Comparative Analysis 57

– Finding & suggestions, conclusion 53

Bibliography

Annexure

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 INTRODUCTION

1.1 Introduction to The Study

Share trading may be financially rewarding if done in the proper way. Making an investment in the
share marketplace entails driving the diverse us .and downs of the marketplace. Since the creation
of on line buying and selling, making an investment inside the inventory marketplace has end up
simple and convenient. Inventory marketplace trading is a notable alternative when it comes to
lengthy-time period wealth creation. Even though, it might take a while with a view to hone your
competencies .online buying and selling is actually buying and selling property thru a brokerage's
internet-based totally proprietary trading systems. The use of online buying and selling multiplied
dramatically within the mid- to overdue-'90s with the advent of low priced excessive-speed
computers and internet connections. Stocks, bonds, mutual budget, ets, alternatives, futures, and
currencies can all be traded on line. Also called e-buying and selling or self-directed making an
investment. Sharekhan is the largest standalone retail brokerage inside the united states of america
and the third largest in terms of consumer base after icici direct and hdfc securities. Sharekhan is
one of the pioneers of online trading in india. It gives a broad variety of monetary services and
products together with securities brokerage, mutual fund distribution, mortgage against shares,
ESOP financing, ipo financing and wealth management. The arrival of on line trading has
decreased prices for both investors and discount agents. To inspire human beings to do their
investing themselves, brokers have decrease commissions for trades positioned on line than for
trades placed over the cell phone with a representative. The decrease prices have additionally made
the capital markets on hand to a much wider range of folks that may not were able to afford the
better commission fees of a non-public consultant or over-the-telephone change. As agents
transition into computerized trading, they store expenses on their ends from hiring fewer human
representatives. Any other gain of on-line trading is the development in the pace of which
transactions may be performed and settled, due to the fact there's no need for paper-based totally
files to be copied, filed and entered into an digital layout. When an investor enters an order on-line,
the order is located in a database which assessments for the best fee through looking all the
marketplace exchanges that exchange the inventory inside the investor's desired currency. The
exchange with the first-rate price suits the buyer with a supplier and sends the confirmation to both

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the client’s dealer and the vendor’s broking. All this is carried out inside seconds of putting a
change,

1.2 Need for The Study

Stock Exchanges are an indispensable a part of the capital marketplace. It is the precise .sort of
market for securities whether of govt. Or semi government. Bodies or different our bodies as for
proportion and debentures issued via the joint inventory corporations. Inventory exchanges offer
liquidity to the listed agencies; they give quotations to the listed groups and assist in trading and
raising funds from the market. An exchange affords ready market for the sale and buy of securities.
Inventory market in india is greater than century old and has been functioning efficaciously via the
medium of diagnosed inventory exchanges. The inventory market, that is indispensable a part of
the capital, has a first-rate effect on the functioning of the company sector particularly. For the
reason that capital marketplace is gambling, fundamental position within the indian economy from
the past several years there's an crucial need to take a look at the general functioning of stock
alternate.

1.3 Scope of the Study

The scope of the study analyses us to know how the On-line Trading activities are carried out in
SHAREKHAN

1.4 Objectives of the Study

1. It is to investigate the changes in buying and selling after the change shifted from outcry to
on line trading gadget.
2. Its miles to look at the features of sharekhan and thru diverse departments.
3. To know approximately the state-of-the-art and destiny development inside the inventory
exchange trading machine, in reality defining every time period of the inventory change
technique.
4. To take a look at the impact of the converting trends within the capital marketplace at the
investor, the dealer and at the usa in large part, specifically in hyderabad.
5. To Study the impact of the converting era at the capital market.
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 6. To look at the procedure of trading in online buying and selling and locating its blessings
over the manual buying and selling.

1.5 Source Of The Data

The data collection methods include both the primary and secondary collection methods.

Primary method: This method includes the data collected from the personal interaction with

authorized members, clerks of the SSKI Investor Services Private Limited. .

Secondary method: The secondary data collection method includes:

• The lecturers delivered by the superintendents of respective departments.

• The brochures and material provided by Share Khan Securities limited.

• The data collected from the magazines of the NSE, economic times, etc.

• Various books relating to the investments, capital markets and other related topics.

1.6 Research Methodology

The uncertainty and the fast fluctuations within the Indian capital marketplace made many

investors at domestic and overseas cautious about the destiny of their investments. so as a way to

lessen this uncertainty within the market, SEBI introduced many new tendencies by way of making

changes inside the way the capital market functions by using introducing on-line trading, rolling

agreement, dematerialization of shares, and so on. This mission is best an try to locate the effect of

these traits at the Indian market. This look at is done with reference of s.s.kantilal ishwarlal

securities&traders pvt. ltd. (SSKI), so its scope is limited to SSKI.

1.7 Limitation

 The study is confined to the past 2-3 years and present system of the trading procedure in

the SSKI and the study is confined to cover all the related issues in brief.

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 Online-trading procedure only exhaustive analysis, problems of listing, management of

trade, SEBI guidelines relating there to be not covered due to limited time and to keep the study in

manageable limits.

INDUSTRY PROFILE

FINANCIAL MARKET:

Financial markets are beneficial to provide liquidity in the gadget and for smooth functioning of
the gadget. these markets are the centers that offer facilities for purchasing and promoting of
financial claims and services. the monetary markets suit the needs of investment with the delivery
of capital from various resources.
According to functional basis financial markets are classified into two types .They are:
 Money markets (short-term)
 Capital markets (long-term)

According to institutional basis again classified in to two types. They are

1. Organized financial market
2. Non-organized financial market.

The organized market comprises of official market represented by recognized institutions, bank
and government (SEBI) registered/controlled activities and intermediaries. The unorganized
market is composed of indigenous bankers, moneylenders, individual professional and non-
professionals.

MONEY MARKET:

Money market is a place where we can raise short-term capital. Again the money market is
classified in to
 Inter bank call money market
 Bill market and
 Bank loan market Etc.

E.g.; treasury bills, commercial papers, CD's etc.

CAPITAL MARKET:

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The capital market is the market for securities, wherein corporations and the government can
enhance long term finances. The capital market consists of the inventory market and the bond
market. Economic regulators make sure that buyers are protected towards fraud. The capital
markets consist of the primary marketplace, wherein new troubles are disbursed to buyers, and the
secondary marketplace, wherein present securities are traded.
Capital market for that reason plays a critical role in channelizing the savings of people for
investment within the economic improvement of the us of a. As a end result the traders aren't
restricted by means of their character skills, however with the aid of the abilities of the agencies,
which in turn beautify the savings and investments within the u . S . A ., liquidity of capital market
is an vital thing affecting boom.
Because projects require long time finance, however then again, the investor may not like to
relinquish manipulate over their financial savings for a long term. A liquid stock market ensures a
quick go out without incurring heavy losses or expenses. For this reason improvement of efficient
marketplace system is necessary for creating conductive climate for investment and monetary
growth.
Capital market is a place where we can raise long-term capital.
Again the capital market is classified in to two types and they are
1. Primary market and
2. Secondary market.

E.g.: Shares, Debentures, and Loans etc.

FINANCIAL MARKET:

Monetary markets are useful to offer liquidity inside the gadget and for easy functioning of the
device. These markets are the centers that provide facilities for buying and promoting of financial
claims and services. The financial markets match the demands of funding with the deliver of
capital from numerous assets.
According to functional basis financial markets are classified into two types.They are:
 Money markets (short-term)
 Capital markets (long-term)

According to institutional basis again classified in to two types. They are

 Organized financial market
 Non-organized financial market.

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The organized market comprises of official market represented by recognized institutions, bank
and government (SEBI) registered/controlled activities and intermediaries. The unorganized
market is composed of indigenous bankers, moneylenders, individual professional and non-
professionals.

MONEY MARKET:

Money market is a place where we can raise short-term capital. Again the money market is
classified in to
 Interbank call money market
 Bill market and
 Bank loan market Etc.
 E.g.; treasury bills, commercial papers, CD's etc.

CAPITAL MARKET:

The capital market is the market for securities, where companies and the government can enhance
long term price range. the capital market consists of the stock marketplace and the bond market.
Financial regulators make sure that buyers are protected in opposition to fraud. the capital markets
consist of the are allotted to buyers, and the secondary marketplace, in which present securities are
traded. Capital marketplace thus plays a essential position in channelizing the financial savings of
people for funding inside the economic development of the united states. As a end result the buyers
aren't restricted by using their character abilities, however by way of the talents of the companies,
which in flip decorate the savings and investments in the country, liquidity of capital market is an
important issue affecting increase. Because projects require long term finance, but alternatively,
the investor may not like to relinquish control over their savings for a long term. a liquid stock
market ensures a brief exit without incurring heavy losses or charges. for this reason improvement
of efficient market device is necessary for growing conductive climate for funding and financial
increase.
Capital market is a place where we can raise long-term capital .Again the capital market is
classified in to two types and they are
 Primary market and
 Secondary market.

E.g.: Shares, Debentures, and Loans etc.

[

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SECONDARY MARKET:

The primary marketplace deals with the new troubles of securities. Tremendous securities are
traded within the secondary market, which is commonly referred to as inventory market or stock
alternate. “The secondary marketplace is a market where scrip’s are traded”. it's miles a
marketplace area which gives liquidity to the scrip’s issued within the number one market. as a
consequence, the boom of secondary marketplace depends at the number one marketplace. extra
the wide variety of businesses entering the primary marketplace, the greater are the volume of
exchange on the secondary market. trading activities inside the secondary market are done thru the
identified stock exchanges which are 23 in variety which includes over the counter exchange of
India (otce), country wide inventory trade of India and interconnected stock exchange of india.
Secondary market operations involve shopping for and promoting of securities at the stock change
thru its contributors. the groups hitting the primary marketplace are obligatory to listing their
shares on one or extra stock exchanges in India. Listing of scrip’s presents liquidity and offers an
opportunity to the traders to shop for or sell the scrip’s.

The following are the intermediaries in the secondary market:

1. Broker/member of stock exchange – buyer’s broker and seller’s broker
2. Portfolio Manager
3. Investment advisor
4. Share transfer agent
5. Depository
6. Depository participants.

STOCK MARKETS IN INDIA:

Inventory exchanges are the best type of marketplace for securities whether of presidency and
semi-govt our bodies or different public our bodies as also for stocks and debentures issued by
means of the joint-stock corporations. in the inventory market, purchases and income of stocks are
affected in conditions of unfastened competition. Government securities are traded outside the
buying and selling ring inside the shape of over the counter income or purchase. the bargains
which might be struck within the trading ring by the participants of the stock exchanges are on the
fairest fees determined by way of the basic laws of supply and demand.

Definition Of A Stock Exchange:

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“Stock exchange means anybody or individuals whether incorporated or not, constituted for the
purpose of assisting, regulating or controlling the business of buying, selling or dealing in
securities.” The securities include:
 Shares of public company.
 Government securities.
 Bonds

HISTORY OF STOCK EXCHANGES:

The only inventory exchanges working inside the 19th century had been the ones of mumbai setup
in 1875 and ahmadabad installation in 1894. these had been prepared as voluntary non-income-
making institutions of brokers to adjust and guard their interests. Before the manipulate on
securities beneath the constitution in 1950, it became a nation situation and the bombay securities
contracts (manage) act of 1925 used to adjust trading in securities. under this act, the mumbai
inventory exchange become diagnosed in 1927 and ahmadabad in 1937. During the war boom, a
number of stock exchanges had been organized. soon after it became a significant issue, vital
regulation was proposed and a committee headed by a.d.gorwala went into the bill for securities
law. On the idea of the committee’s recommendations and public discussion, the securities
agreement (regulation) act became regulation in 1956.

FUNCTIONS OF STOCK EXCHANGES:

Inventory exchanges provide liquidity to the listed businesses. By means of giving quotations to
the listed businesses, they assist buying and selling and lift budget from the market. Over the
hundred and 20 years for the duration of which the inventory exchanges have existed in this usa
and through their medium, the critical and kingdom authorities have raised crores of rupees by way
of floating public loans. Municipal businesses, consider and local our bodies have acquired from
the public their economic requirements, and industry, exchange and trade- the backbone of the
united states of America’s financial system-have secured capital of corers or rupees via the
problem of shares, shares and debentures for financing their daily activities, organizing new
ventures and finishing projects of growth, diversification and modernization. Through acquiring
the listing and buying and selling centers, public investment is expanded and businesses were able
to improve greater finances. The quoted companies with extensive public interest have enjoyed
some advantages and assets valuation has grow to be less difficult for tax and other purposes.

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Numerous inventory exchanges in India: at gift there are 23 inventory exchanges identified
beneath the securities contracts (regulation), act, 1956. Those are:
 Ahmadabad Stock Exchange Association Ltd.
 Bangalore Stock Exchange
 Bhubaneswar Stock Exchange Association
 Calcutta Stock Exchange
 Cochin Stock Exchange Ltd.
 Coimbatore Stock Exchange
 Delhi Stock Exchange Association
 Guwahati Stock Exchange Ltd
 Hyderabad Stock Exchange Ltd
 Jaipur Stock Exchange Ltd
 Kanara Stock Exchange Ltd
 Ludhiana Stock Exchange Association Ltd
 Madras Stock Exchange
 Madhya Pradesh Stock Exchange Ltd. etc

MAJOR STOCK EXCHANGES:

[

NSE
[

The national inventory change of india confined has genesis within the document of the excessive
powered study organization on establishment of recent stock exchanges, which encouraged
promotion of a national stock exchange by way of monetary institutions (fi’s) to offer get
admission to to buyers from all throughout the country on an same footing. Primarily based on the
pointers, NSE become promoted by leading financial institutions on the behest of the authorities of
India and turned into included in November 1992 as a tax-paying corporation unlike different
stock exchanges inside the country. on its recognition as a stock trade below the securities
contracts (law) act, 1956 in april 1993, NSE started out operations within the wholesale debt
marketplace (wdm) phase in june 1994. the capital market (equities) segment began operations in
november 1994 and operations in derivatives phase began in june 2000 NSE'S undertaking is
putting the time table for exchange within the securities markets in india. The NSE was set-up with
the primary goals of:
 Establishing a nation-wide trading facility for equities and debt instruments.
 Ensuring equal access to investors all over the country through an appropriate
communication network.

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  Providing a fair, efficient and transparent securities market to investors using electronic
trading systems.
 Enabling shorter settlement cycles and book entry settlements systems, and
 Meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology, have become industry
benchmarks and are being emulated by other market participants. NSE is more than a mere market
facilitator. It's that force which is guiding the industry towards new horizons and greater
opportunities.
BSE:
The stock exchange, mumbai, popularly known as "BSE" became installed in 1875 as "the local
share and inventory agents affiliation". it's miles the oldest one in asia, even older than the Tokyo
inventory change, which became installed in 1878. it's far a voluntary non-earnings making
association of folks (AOP) and is presently engaged inside the manner of changing itself into
demutualised and corporate entity. it has developed over the years into its gift fame as the most
advantageous inventory alternate inside the united states. it's miles the primary inventory exchange
within the usa to have received permanent popularity in 1956 from the govt. of india underneath
the securities contracts (regulation) act 1956.the alternate, whilst imparting an green and
transparent market for trading in securities, debt and derivatives upholds the hobbies of the
investors and ensures redresses in their grievances whether against the groups or its personal
member-agents. it also strives to educate and enlighten the buyers by way of accomplishing
investor schooling programmers and making to be had to them vital informative inputs.
A governing board having 20 administrators is the apex frame, which makes a decision the rules
and regulates the affairs of the alternate. the governing board includes nine elected directors, who
are from the broking community (one third of them retire ever year by way of rotation), three SEBI
nominees, six public representatives and an executive director & leader government officer and a
major working officer. the executive director because the chief govt officer is accountable for the
day nowadays administration of the exchange and the chief operating officer and different heads of
department assist him. The alternate has inserted new rule no.126 a in its rules, byelaws
concerning charter of the government committee of the alternate. as a result, an government
committee, inclusive of 3 elected directors, three SEBI nominees or public representatives,
government director & Ceo and chief operating officer has been constituted. the committee
considers judicial & quasi subjects in which the governing board has powers as an appellate
authority, matters concerning annulment of transactions, admission, continuance and suspension of
member brokers, declaration of a member-broker as defaulter, norms, processes and other topics

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relating to arbitration, costs, deposits, margins and other monies payable via the member-brokers
to the trade, and so on.

REGULATORY FRAME WORK OF STOCK EXCHANGE:

A comprehensive legal framework was provided by the “Securities Contract Regulation Act,
1956” and “Securities Exchange Board of India 1952”. Three tier regulatory structure comprising
 Ministry of finance
 The Securities And Exchange Board of India
 Governing body

MEMBERS OF THE STOCK EXCHANGE:

The securities contract regulation act 1956 has provided uniform regulation for the admission of
members in the stock exchanges. The qualifications for becoming a member of a recognized stock
exchange are given below:
 The minimum age prescribed for the members is 21 years.
 He should be an Indian citizen.
 He should be neither a bankrupt nor compound with the creditors.
 He should not be convicted for fraud or dishonesty.
 He should not be engaged in any other business connected with a company.
 He should not be a defaulter of any other stock exchange.
 The minimum required education is a pass in 12th standard examination.

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI):

The securities and exchange board of India was constituted in 1988 under a resolution of
government of India. It was later made statutory body by the SEBI act 1992.according to this act,
the SEBI shall constitute of a chairman and four other members appointed by the central
government. With the coming into effect of the securities and exchange board of India act, 1992
some of the powers and functions exercised by the central government, in respect of the regulation
of stock exchange were transferred to the SEBI.

OBJECTIVES AND FUNCTIONS OF SEBI:

 To protect the interest of investors in securities.
 Regulating the business in stock exchanges and any other securities market.
 Registering and regulating the working of intermediaries associated with securities
market as well as working of mutual funds.
 Promoting and regulating self-regulatory organizations.
 Prohibiting insider trading in securities.
 Regulating substantial acquisition of shares and takeover of companies.
 Performing such functions and exercising such powers under the provisions of capital
issues (control) act, 1947and the securities to it by the central government.
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SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK EXCHANGES):

1. Board of Directors of Stock Exchange has to be reconstituted so as to include non-

members, public representatives and government representatives to the extent of 50% of
total number of members.
2. Capital adequacy norms have been laid down for the members of various stock exchanges
depending upon their turnover of trade and other factors.
3. All recognized stock exchanges will have to inform about transactions within 24 hrs.

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 manner for promoting dematerialized securities in stock exchanges is comparable as

promoting bodily securities. the best foremost distinction is that in place of handing over physical
securities to the broking, the investor instructs his DP to debit his demat account with the wide
variety of securities bought by him and credit score 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.

REMATERILISATION OF SHARES:

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Rematerialization is the procedure of conversion of digital holdings of securities into bodily
certificates shape. For rematerilisation of scrip’s, the investor has to replenish a demat request
form (RRF) and publish it to the dp. the dp forwards the request to depository after verifying the
investor’s balances. Depository in flip initiates the registrars and transfer agent or the provider
corporation. RTA/ agency print the certificate and dispatch the equal to the investor.

INTERNET BASED TRADING THROUGH ORDER ROUTING SYSTEMS:

Internet based trading on conventional exchanges, uses the Internet as a medium for
communicating client orders to the exchange, through broker web sites. Broker’s web sites may
serve a variety of functions. These may include;
 Allowing the clients to directly trade through investors;
 Advertise the broker dealers’ services to potential investors;
 Offer market information and investment tools similar to those offered by information
vendor or SRO web sites;
 Offer real-time or delayed quote information, continuously update quotes while the user
visits other sites, or allow investors to create a personal stock ticker;
 Provide market summaries and commentaries, analyst reports and trading strategies and
market data on currencies, mutual funds, options, market indices and news; and
 Offer investors access to portfolio management tools and analytic programs;
 Information on commission and fees; and Account information and research reports.

In an Order Routing system, a broker offering Internet trading facility provides an electronic
template for the customer to enter the name of the security, whatever it is to be bought or sold, the
quantity and whatever the order is a market or limit order. Once the broker’s system receives this
information.

USE OF INTERNET AS ALTERNATIVE TRADING SYSTEMS (PROVISION FOR PRICE

DISCOVERY AND MATCHING OUTSIDE CONVENTIONAL EXCHANGES):

In overseas jurisdiction, alternative trading structures had been growing outside conventional
securities markets, which provide buyers with extra proprietary digital buying and selling centers
for securities which can be traded principally on securities exchanges, or other organized markets.
They have charge discovery features, matching structures and crossing structures. The structures
which might be presently in use in out of doors jurisdictions are closed systems and aren't handy to
most of the people via the internet. the securities markets regulators overseas the maintained bendy
and open guidelines designed to inspire innovation within the secondary securities markets. as a

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result, some of market individuals, generally dealer sellers, have developed automatic “opportunity
buying and selling structures” with the aid of which the gadget centralize, display, match, pass or
in any other case execute trading hobby.

USE OF INTERNET FOR MAKING INITIAL PUBLIC OFFERINGS:

Issues of securities of using the Internet to communicate directly with their shareholders, potential
investors and analysts by disseminating corporate information. In foreign jurisdiction, they are also
using the Internet to communicate to the public for the following:
1. Public offerings;
2. Private offerings; and
3. Disclosure and communication

Issuers are using the Internet to market themselves to potential investors. The Internet is also being
used for fulfilling necessary disclosure requirements, for disseminating the prospects in electronics
form and even for receiving share applications in public issues electronically. In India, 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.

INVESTMENT ADVISORY SERVICES:

Brokers as well as other service providers such as investment firms, research outfits etc. are using
the Internet for marketing and advertising purposes, for presenting information on portfolio
analysis and market information, and for communicating with and receiving orders from potential
investors. 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;
 Customer orders; and
 Record keeping

WORKING GROUPS SET UP BY THE COMMITTEE:

Thinking about the existing kingdom of capital markets in india and preserving in view the
ongoing traits in net primarily based securities business, it changed into felt that SEBI as a
regulator may want to strive to pick out areas in which use of net in the capital market is possible
within the existing legal framework. one such place recognized through the committee, which is

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likewise the significant within the existing legal framework. One such place diagnosed via the
committee, which is likewise the vital subject matter of this report, is the region of net buying and
selling on present digital exchange. in this place, thru early introduction of cyber laws might be
relatively describe but their existence isn't always a important precondition. to check out the
prevailing regulatory state of affairs and to carry out a few ground guidelines for use of the
medium of net, the committee therefore constituted the subsequent two working agencies to look
into the region of:

i. Security protocols and standardization of interfaces for Interest based securities trading, chaired
by Prof. Deepak B. Phatak, IIT, Pawai, Mumbai
ii. Surveillance and monitoring related issues arising due to Interest based securities trading,
chaired by Shri. L.K. Singhvi, Sr. ED, SEBI

The committee also requested ms d n raval, govt director, sebi to examine the legality of creation
of net trading and problem of alternative buying and selling structures. this file of the standing
committee examines the regulatory and security necessities net based totally buying and selling on
traditional exchanges. separate reviews (s) will cowl the other regions associated with net
programs inside the securities markets.
the record of the first running institution on protection protocols and standardization of interfaces
has seeing that been submitted and included within the report. the committee would really like to
region on report its sincere thanks to dr. D.B. Phatak, Ms. D.N. Raval and their crew contributors.
the worldwide monetary marketplace is undergoing a transformation because of rapid
technological traits. it as a result will become imperative that for developing in effective regulatory
framework traits in other components of the sector have to be studies and analyzed. With nearly
who million on-line traders, internet buying and selling in the United States is growing by leaps
and bounds. net buying and selling is being facilitated by way of massive brokerage homes,
accordingly converting the total concept of securities buying and selling. a group comprising of
participants from inventory exchanges and SEBI visited the us to those improvement and had
interactions with brokerages houses, net provider companies and different companies concerned in
facilitating net trading.
The crew additionally discussed the trends in the emerging regulatory and supervisory framework
in u.s. with the securities and change commission officers. They had been additionally tripped of
the diverse tasks taken by means of sec in this regard. These inputs were applied at the same time
as drafting this report.

19
RECOMMENDATIONS OF THE COMMITTEE

Application for Permission by Brokers:

SEBI registered inventory brokers inquisitive about supplying internet based trading offerings may
be required to use to the respective inventory trade for a formal permission. the inventory alternate
need to provide approval or reject the utility because the case can be, and talk its decisions to the
quantity inside 30 calendar days of the date of finished application submitted to the alternate. the
inventory change, earlier than giving permission to agents to start net based totally services shall
make sure the fulfillment of the subsequent minimum situations.

Net Worth Requirement:

[

The broker must have a minimum net worth of Rs. 50 lacs if the broker is providing the Internet
based facility on his own. However, if some brokers collectively approach a service provider for
providing the interest trading facility, net worth, criteria as stipulated by the stock exchange will
apply. The net worth will be computed as per the SEBI circular no FITTC/DC/CIR-1/98 dated
June 16, 1998.s

OPERATIONAL AND SYSTEM REQUIREMENTS:

Operational Integrity:
The stock change ought to make certain that the machine utilized by the broking has provision for
protection, reliability and confidentiality of records via use of encryption technology. this stock
change have to additionally make certain that facts encryption era. the stock exchange must
additionally ensure the records maintained in digital form by way of the broker are not prone to
manipulation.

Device Ability:
The inventory exchange ought to make certain that the brokers keep good enough backup
structures and records storage ability. the inventory trade ought to additionally make certain that
the people have adequate device capability for managing facts switch, and organized for
alternative method of communications in case of net hyperlink failure.

Qualified Employees:
The inventory trade has to lay down the minimum qualification for personnel to ensure that the
dealer has certainly certified and good enough personnel to deal with conversation such as

20
commands in addition to other back workplace work that's in all likelihood to increase due to
better volumes.

Written Procedures:

Stock Exchange must develop uniform written procedures to handle contingency Tuitions and for
review of incoming and outgoing electronic correspondence.

Signature verification/ authentication:

it's miles appropriate that contributors use authentication technology. for this purpose is should be
obligatory for contributors to use certification agencies as and when notified with the aid of
authorities/SEBI. They must also really specify when manual signatures would be required.

Purchaser Broker Relationship Recognize Your Purchaser:

The stock changes have to ensure that agents have enough, verifiable records approximately
clients, which could facilitate hazard evaluation of customers.

Dealer- Client Agreement:

Agents have to enter into an agreement with clients spelling out all duties and rights. This
agreement should additionally inter alia, the minimum carrier standards to be maintained by means
of the dealer for such provider certain by means of SEBI/alternate for the internet based totally
buying and selling sometimes. Exchange will prepare a version settlement for this reason. the
broking settlement with customers must now not have.

Investor Statistics:
The broker net website online presenting the net based totally buying and selling facility ought to
comprise data supposed for investor protection inclusive of guidelines and regulations affecting
patron broker dating arbitration regulations, investor protection guidelines and many others.The
broking net website supplying the net based trading facility ought to additionally provide and
display prominently, hyper link to the internet website/web page at the web website of the relevant
stock change (s) showing regulations/ guidelines/ circulars. ticker/quote/order book displayed at
the web-website of the broker must show the time stamp as well as source of such records in
opposition to the given facts.

Order/change confirmation:

21
Order/exchange affirmation have to also be sent to the investor through electronic mail at client’s
discretion on the time certain by way of the purchaser similarly to the other fabricated from show
of such confirmation of actual time basis at the dealer internet website. The investor need to be
allowed to specify the time c program language period at the internet web site itself with wherein
he would like to get hold of this information thru e mail. Facility for reconfirmation of orders that
are large than that special via the member's danger management system must be supplied on the
net primarily based device.

Coping with court cases by means of traders:

Exchanges must screen proceedings from investors regarding carrier supplied via agents to ensure
a minimal level of carrier. Alternate should have separate mobile mainly to address internet buying
and selling associated court cases. It is desirable that exchanges should also have facility for on
line registration of court cases on their web website online.

Chance management:

Exchanges must make sure that agents have a device-based manipulate at the buying and selling
limits of clients, and exposures taken by using clients. Brokers need to set predefined limits at the
exposure and turnover of each consumer. The broking systems need to be capable of assessing the
danger of the purchaser as quickly as the order comes in. The purchaser must be knowledgeable of
reputation/rejection of the order inside a reasonable length.
In case system based manipulate rejects an order because of patron having exceeded limits and so
on., the dealer system may have a evaluation and release facility to permit the order to pass thru.

Agreement notes:

Agreement notes have to be issued to clients as in line with current policies, inside 24 hours of the
trade execution.

Carss Trades:

As a depend of ample precaution, the committee seeks to reiterate that as III the case of current
gadget, brokers the use of net primarily based structures for routing patron orders can even no
longer be allowed to move trades of their clients with every other. All orders must be offered to the
market for matching.

22
Its miles emphasized that further to the requirements mentioned above, all current obligations of
the dealer as according to modern-day law will hold without adjustments. Exchanges can also want
to specify greater stringent standards as they will deem in shape for permitting net primarily based
buying and selling facilities to their brokers.

Enforcement:

A separate working institution has been set to check out the surveillance and enforcement
associated problems springing up because of net primarily based securities buying and selling.
However, trendy anti-fraud provisions (sebi fraudulent and unfair alternate practices guidelines,
1995) could follow to all transactions related to securities or financial offerings, irrespective of the
medium.

23
 DEFINITIONS AND EXPLANATIONS
1. SHARES:-

In regular language, while we communicate of shares we commonly confer with equity shares or
regular stocks of a business enterprise. The phrases stocks and stock essentially approach the equal
matters, the letter being a greater common american usage.
An equity share is proof of possession in a employer. The physical evidence of this possession of
this record is referred to as the share certificate. Now days, shares are usually kept in electronic, or
dematerialized, form with a depository participant (banks, agents, economic establishments) of the
country wide securities depository constrained (NSDL). However, if one wants you could
nonetheless keep the proportion in the physical shape which has your call endorsed on it, and is
proved which you are a element proprietor of the employer. Your ownership rights are
proportionate to the number of share your personal. Businesses difficulty stocks of a certain
constant denomination, called face fee or par value of that percentage, which is virtually indicated
on a share certificate within the bodily form.

2. FUNDING: -

Funding basically refers to what you do with your savings so as to hold them and cause them to
develop or yield an income. In case you maintain your financial savings within the form of coins,
they're absolutely going to diminish in fee due to the fact the shopping energy of money is
constantly happening as a result of inflation. (the cost of cash is judged by means of the quantity of
goods and offerings you could buy with it). Therefore, if you want to preserve or growth the value
of your savings, you have to preserve them in bureaucracy aside from cash.
This is what investment is all approximately, deployment of your saving with the intentions of
retaining or growing their cost. This deployment may be completed by using your financial savings
to buy land, residential residences, commercial houses, gold, earrings, works of art, fixed deposits
in banks and groups, stocks, bonds, infarct, whatever whose fee is probable to either stay regular or
respect with time. Funding additionally refers to the use of one's savings with the goal of incomes
an income.

3. Demat a/c:-

On doing a web enterprise ever customer has to open and demat account in any bank whichever he
likes. Demat account is the account wherein the trading finished by means of the customer is

24
mentioned. If the client sales or purchases any proportion the information of this sale and shopping
are in demat account. This account contents the name of the stocks and additionally the quantity of
shares held or bought and additionally the price of the proportion with this demat account. It's also
compulsory for each consumer to open a saving account in the bank because the quantity that is to
be received when the clients income the shares are transferred from the demat account to the
saving account. It is the duty of the clients that the proportion which he bought or sales are
properly transferred in demat account from the inventory alternate whichever he deals. The
quantity of dividend whichever to be obtained on the stocks when held for one or extra 12 months
also are transferred in this demat account. It's miles obligatory for each consumer to have a pan no.
For commencing a demat account. If pan no. Isn't always there is no danger for the patron to do
any buying and selling on-line. There is no limit of amount to deal in this account.

4. CIRCUIT RESTRICT:-

Even as issuing the stocks to the general public the company has to fix a particular restriction of
the charge of the in step with percentage this restriction is referred to as as circuit restrict. This
circuit restrict is usually fixed on the percentage foundation. This circuit restrict is applied to each
the ends of the share. This is to the top restrict additionally and also to the lower restrict clearly
circuit restrict is of two sorts
1) Upper limit
2) Lower limit
It is compulsory for every company to fix the circuit limit. This limit is beneficial to both. The
customer and also to the company generally every company fix below 10%of the rate of per share.

UPPER LIMIT: -
While issuing the shares to the public the company has to fix the upper limit this limit is also
calculated in percentage the limit is also beyond which the rate of the shares cannot exceed nor that
the customer doing the trading can sell above the level.
For ex. Customer wants to sell a share which is of Rs10 and its upper limit is fixed at 10% so in
this case the person will have to sell it at Rs11 or the rate which ever he wants but the person
cannot sell it beyond this Rs 11 because by addition of upper limit to the rate of share the
maximum amount of the shares is Rs 11 only and not above.

LOWER LIMIT: -
On the time of issuing share the agency has to restoration the lower restriction additionally. this
decrease restriction is calculated on the basis of the charge of the stocks. this limit bears the

25
identical percent, that's stated for the upper restrict of the percentage. like higher restrict on this
restriction additionally the proportion minimum fee of the proportion is fixed the customer who
wants to see; the holding shares has to first don't forget the top & lower restriction of the
proportion he cannot sell the proportion under the lower limit and now not above the upper restrict
like the higher restriction percentage commonly on this restrict additionally the proportion is
beneath 10% of the face value of the stocks the percentage is below 10% of the face fee of the
shares the proportion of the upper &decrease restrict is identical to each type of percentage
For ex. Suppose the person wants to sell the shares and the rate of the share is Rs. 10/- and the
lower limit percentage is 10% of the rate. So in this case the person cannot sell the share at below
Rs. 9/-. He will have to sell at above Rs. 9/- or up to the upper limit of the share.

5. SENSEX:-
When the shares are issued to the public the stock exchange gives a particular group to the
company. For ex. The Reliance Group is given the group “A” like this there are several companies
which fall in “A” Group. The weight age mean is calculated according to its equity when all the
companies of Group “A” has calculated this weight age mean they are added all together when this
addition is done the result which comes down is known as “Sensex”. The trading of shares of “A”
group is totally depended on this sensex value. The price of the share rises this sensex value also
rises and when the price of this
share comes down the sensex value also comes down. With the sensex
6. SCRIPTS:-
The company, which has more than one working area, it has to issue the share separately than that
company is the company which has the script of its name.
For Ex. The Reliance this company has its several working area Namely Reliance, Capital
Reliance, Infocom Reliance Energy, Reliance Industry. So reliance company issues separate share
for separate working area but the bold name which is given to the working area is “Reliance”. So
in this case Reliance has its own scripts. Other example Ambuja, Birla, Etc.

7. GROUPS:-
When the shares are issued by the company they are given the particular group by the Stock
exchange according to its demand in the market. There are mainly 7 groups. The scripts traded on
the BSE have been classified into ‘A’,’B1’,’B2’,’C’,’F’ and ‘Z’ groups. The ‘A’ group represents
those, which are in the carry forward system. The ‘F’ group represents the debt market segment
(fixed income securities). The Z group scripts are of the blacklisted companies. The ‘C’ group
covers the odd lot securities in ‘A’, ‘B1’&’B2’ groups.

26
8. TYPES OF ORDERS:
Buy and sell orders placed with members of the stock exchange by the investors. The orders are of
different types.

Limit Orders:
Orders are limited by a fixed price. E.g. ‘buy Reliance Petroleum at Rs.50.’Here,the order has
clearly indicated the price at which it has to be bought and the investor is not willing to give more
thanRs.50.

Best Rate Order:

Here, the buyer or seller gives the freedom to the broker to execute the order at the best possible
rate quoted on the particular date for buying. It may be lowest rate for buying and highest rate for
selling.

Discretionary Order:
The investor gives the range of price for purchase and sale. The broker can use his discretion to
buy within the specified limit. Generally the approximation price is fixed. The order stands as this
“buy BRC 100 shares around Rs.40”.
Stop Loss Order:
The orders are given to limit the loss due to unfavorable price movement in the market. A
particular limit is given for waiting. If the price falls below the limit, the broker is authorized to
sell the shares to prevent further loss. E.g. Sell BRC limited at Rs.24, stop loss at Rs.22.

9. BUYING AND SELLING SHARES:

To buy and promote the shares the investor has to discover sign up broking or sub broking who
render spark off and green service to him. the order to shop for or promote specifying the variety
of shares of the agency of traders’ choice is placed with the broker. The order may be of any kind.
after receiving the order the broker attempts to execute the order in his pc terminal. as soon as
matching order is found, the order is executed. the broker then can provide the agreement notice to
the investor. it gives the information regarding the call of the organization, quantity of shares
offered, charge, brokerage, and the date of shipping of share. in this physical trading shape, as soon
as the broker receives the percentage certificates via the clearing houses he grants the proportion
certificate along with switch deed to the investor. the investor has to fill the transfer deed and
stamp it. the stamp obligation is one of the proportion issues, the investor must resort the share
certificate and switch deed to the register or transfer agent of the employer. if it's far offered within
the demat form, the broker has to give a matching education to his depository participant to switch

27
stocks bought to the investors account. the investor have to be account holder in any of the
depository player. inside the case of sale of shares on receiving payment from the buying broker,
the dealer results the price to the investor.

10. ROLLING SETTLEMENT SYSTEM:

SETTLEMENT CYCLE SCHEDULE SR. NO. DAY DESCRIPTION OF ACTIVITY TRADE

1 T Trading Day
2 T+2 PAY IN BY 10.30 am.
3 T+2 PAY – OUT BY 2 pm.
4 T+3 Auction of shortage in deliveries
5 T+5 Auction pay-in by 10.30 (1 am/ pay Out by 2 pm.)

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 COMPANY PROFILE

ABOUT SHAREKHAN LIMITED:

Sharekhan ltd. Is one of the main retail inventory broker residence of SSKI organization that is
going for walks efficaciously when you consider that 1922 within the us of a. It is the retail dealer
arm of the mumbai-based totally SSKI institution, which has over eight a long time of enjoy in the
stock broker business. Sharekhan gives its clients a huge range of equity related services such as
exchange execution on BSE, NSE, derivatives, depository offerings ,on line trading, funding
recommendation and so on.
The company’s online trading and funding website online - www.sharekhan.com - become
released on feb eight, 2000. The website gives access to advanced content material and transaction
facility to retail clients throughout the country. Known for its jargon-free, investor pleasant
language and excessive great studies, the web site has a registered base of over one lakh
customers. The content-rich and studies orientated portal has stood out among its contemporaries
because of its steadfast determination to imparting clients quality-of-breed era and advanced
market records. The goal has been to allow clients make informed decisions and to simplify the
process of investing in shares. On april 17, 2002 sharekhan released speed alternate, a internet-
based executable software that emulates the dealer terminals along side host of other facts relevant
to the day investors. This turned into for the first time that a internet-primarily based trading
station of this caliber changed into supplied to the buyers. Within the remaining six months pace
exchange has turn out to be a defector general for the day trading network over the internet.
Share khan’s ground community includes over 1288 facilities in 325 towns in india which give a
bunch of buying and selling associated offerings.

Sharekhan has continually believed in investing in generation to build its business. The corporation
has used a number of the nice-regarded names inside the it industry, like sun Microsystems, oracle,
microsoft, cambridge technologies, nexgenix, vignette,verisign monetary technology india ltd,
spider software pvt ltd. To build it’s buying and selling 29 engine and content. The morakhiya
family holds a majority stake inside the organization. HSBC, INTEL & CARLYLE are the
alternative buyers.
With a legacy of greater than 80 years inside the inventory markets, the SSKI group ventured into
institutional broking and company finance 18 years ago. Presently SSKI is one of the main players
in institutional broker and company finance sports. SSKI holds a large portion of the marketplace
in every of those segments. SSKI’S institutional broker arm debts for 7% of the market for foreign

29
institutional portfolio funding and 5% of all domestic institutional portfolio funding inside the usa.
It has 60 institutional clients unfold over india, some distance east, united kingdom and us. Foreign
institutional investors generate about sixty five% of the organization’s revenue, with a daily
turnover of over us$ 2 million.
The company finance section has a listing of very prestigious customers and has many ‘firsts ’to its
credit, in terms of the scale of deal, area tapped and many others. The organization has positioned
over us$ 1 billion in private fairness deals. Some of the clients encompass bpl cellular conserving,
gujarat pipavav, essay, hutchison, planetasia, and client’s stop.

VISION:
To be the best retail brokering Brand in the retail business of stock market.

MISSION:
To educate and empower the individual investor to make better investment decisions through
quality advice and superior service.

Sharekhan Is Infact-
• Among the top 3 branded retail service providers
• No. 1 player in online business
• Largest network of branded broking outlets in the country serving more than 7, 00,000 clients.

REASON TO CHOOSE SHAREKHAN LIMITED:

Experience:

SSKI Has Greater Than Eight A Long Time Of Consider And Credibility Inside The Indian Stock
Market. Inside The Asia Cash Broking's Ballot Held Recently, Sski Received The For 2004'
Award. Ever Since It Launched Share khan As Its Retail Broking Department In February 2000,
It's Been Offering Institutional Character Buyers.
Technology:

With its online trading account one can buy and sell with an internet connection. One can get
access to its powerful online trading tools that will help him take complete control over his
investment in shares.
Accessibility:
Share khan provides ADVICE, EDUCATION, TOOLS AND EXE investors. These services are
accessible through its centers across the country over the internet (through the website
www.sharekhan.com) as well as over the Voice Tool.

Knowledge:

30
In a business where the right information at the right profits, one can get access to a wide range of
information on Sharekhan limited’s content-rich portal. One can empower him to take informed
decisions.

Customer Service:
Sharekhan limited’s customer service team will assist one for any help that one may require
relating to transactions, billing, demat and other queries. Its customer service can be contacted via
a toll-free number, email or live chat on www.sharekhan.com.
Investment Advice:
Sharekhan has dedicated research teams of more than 30 people for fundamental and technical
researches. Its analysts constantly track the pulse of the market and provide timely investment
advice to its clients in the form of daily research emails, online chat, printed reports and SMS on
their mobile phone.

PRODUCTS AND SERVICES OF SHAREKHAN LIMITED

The different types of products and services offered by Sharekhan Ltd. are as follows:
Equity and derivatives trading
Depository services
Online services
Commodities trading
Dial-n-trade
Portfolio management
Share shops
Fundamental research
Technical research

TYPES OF ACCOUNT IN SHAREKHAN LIMITED

Sharekhan offers two types of trading account for its clints
Classic Account (which include a feature known as Fast Trade Advanced Classic Account for
the online users) and
Speed Trade Account

CLASSIC ACCOUNT:
That is a user pleasant product which lets in the customer to alternate through website
www.sharekhan.com and is suitable for the retail investor who is chance-averse and therefore
prefers to spend money on stocks or who does no longer change too often. This account allow
traders to shop for and promote shares on line in conjunction with the subsequent functions like
multiple watch lists, integrated banking, demat and digital contracts, actual-time portfolio
monitoring with price indicators and on the spot credit & switch.
This account comes with the following features:
31
a. Online trading account for investing in Equities and Derivatives
b. Free trading through Phone (Dial-n-Trade)

I. Two dedicated numbers(1800-22-7500 and 39707500) for placing the orders using cell
phones or landline phones
II. Automatic funds transfer with phone banking facilities (for Citibank and HDFC bank
customers)
III. Simple and Secure Interactive Voice Response based system for authentication
IV. get the trusted, professional advice of Sharekhan limited’s Tele Brokers
V. After hours order placement facility between 8.00 am and 9.30 am
c. Integration of: Online Trading +Saving Bank + Demat Account.
d. Instant cash transfer facility against purchase & sale of shares.
e. IPO investments.
f. Instant order and trade confirmations by e-mail.
g. Single screen interface for cash and derivatives.

SPEED TRADE ACCOUNT:

This is an internet-based software application, which enables one to buy and sell in an instant. It is
ideal for active traders and jobbers who transact frequently during day’s session to capitalize on
intra-day price movement.

This account comes with the following features:

a. Instant order Execution and Confirmation.
b. Single screen trading terminal for NSE Cash, NSE F&O & BSE.
c. Technical Studies.
d. Multiple Charting.
e. Real-time streaming quotes, tic-by-tic charts.
f. Market summary (Cost traded scrip, highest value etc.)
g. Hot keys similar to broker’s terminal.
h. Alerts and reminders.
i. Back-up facility to place trades on Direct Phone lines.
j. Live market debts.

HOW TO OPEN AN ACCOUNT WITH SHAREKHAN LIMITED?

For online trading with Sharekhan Ltd., investor has to open an account. Following are the ways to
open an account with Sharekhan Ltd.:
 One need to call them at phone number provided below and asks that he want to open an
account with them.

a. One can call on the Toll Free Number: 1-800-22-7500 to speak to a Customer
Service executive

32
 b. Or If one stays in Mumbai, he can call on 022-66621111
 One can visit any one of Sharekhan Limited’s nearest branches. Sharekhan has a huge
network all over India (640 centers in 280 cities). One can also log on to
“http://sharekhan.com/Locateus.aspx” link to find out the nearest branch.
 One can send them an email at info@sharekhan.com to know about their products and
services.
 One can also visit the site www.sharekhan.com and click on the option “Open an Account”
to fill a small query form which will ask the individual to give detailsregarding his name,
city he lives in, his email address, phone number, pin code of the city, his nearest
Sharekhan Ltd. shop and his preferences regarding the type of account he wants.

Those records are compiled inside the headquarter of the business enterprise this is in mumbai
from in which it is allotted through out the u . S . A .’s branches within the shape of leads on the
basis of cities and nearest percentage shops. After that the executives of the respective branches
contact the prospective clients over cellphone or thru electronic mail and supply them information
regarding the numerous styles of accounts and the documents they want to open an account and
then fix appointment with the potential customers to provide them demonstration and making them
undergo the formalities to open the account. After that the bureaucracy that has collected from the
clients, is scrutinized in the branch after which it is sent to mumbai for similarly processing
wherein after some days the clients’ account are generated and activated. After the debts are
activated, a welcome kit is dispatched from mumbai to the clients’ cope with stated in the files
provided with the aid of them. As quickly because the clients acquire the welcome package, which
incorporates the clients’ trading identification and trading password, they are able to begin buying
and selling and making an investment in shares. Typically the method of establishing an account
follows the subsequent steps:
Apart from two passport size photographs, one needs to provide with the following

Documents In Order To Open An Account With Sharekhan Limited.:

Photocopy of the clients’ PAN Card which should be duly attached

Photo copy of any of the following documents duly attached which will serve as
correspondence address proof:
a. Passport (valid)
b. Voter’s ID Card
c. Ration Card
d. Driving License (valid)
e. Electricity Bill (should be latest and should be in the name of the client)

33
f. Telephone Bill (should be latest and should be in the name of the client)
g. Flat Maintenance Bill (should be latest and should be in the name of the client)
h. Insurance Policy (should be latest and should be in the name of the client)
i. Lease or Rent Agreement.
j. Saving Bank Statement** (should be latest)
Two cheques drawn in favour of Sharkhan Limited, one for the Account Opening Fees and the
other for the Margin Money (the minimum margin money is Rs. 5000).
** A cancelled cheque should be given by the client if he provides Saving Bank Statement as a
proof for correspondence address.
NOTE: Only Saving Bank Account cheques are accepted for the purpose of Opening an account.

RESEARCH SECTION IN SHAREKHAN LIMITED

Sharekhan restrained has its personal in-residence research company that is known as valueline. It
accommodates a crew of specialists who constantly hold an eye on the proportion market and do
studies at the numerous factors of the share market. Normally the studies is based at the basics and
technical analysis of various companies and additionally contemplating different factors regarding
the financial system.
Sharekhan limited’s studies on the volatile market has been discovered accurate most of the time.
Sharekhan's trading calls in the month of november 2007 has given 89% strike rate. Out of 37
trading calls given via sharekhan in the month of november 2007, 33 hit the profit goal. Those one
of a kind trading picks come simplest to sharekhan on-line buying and selling
Patron and are based on in-intensity technical analysis. As a client of sharekhan limited, one gets
daily five-6 studies reports on their emails which they can use as hints for making an investment
within the marketplace. Those reviews are named as pre-marketplace document, eagle eye,
excessive noon, traders eye, daring derivatives and put up-marketplace document. Apart from
those, sharekhan restricted issues a monthly subscription by the call of valueline which is easily to
be had inside the market.

AWARDS AND ACHIEVEMENTS

 SSKI has been voted as the Top Domestic Brokerage House in the research category, twice
by Euromoney Survey and four times by Asiamoney Survey.
 Sharekhan Limited won the CNBC AWARD for the year 2004.

34
 TRADING PROCEDURE

OUTCRY SYSTEM:
The broking has to buy or promote securities for which he has obtained the orders. For this, the
broker or his authorized representatives goes to the stock trade. This technique is known as the
open outcry system. Essentially the agents shout at the same time as buying or selling the
securities. The ground of the stock trade is split into some of markets additionally known as ‘post
pit’ or wing based on specific securities dealt there.
Inside the post pit or wing, the broker the use of ‘open outcry’ technique makes a proposal or bid
price. For making the necessary good deal, he rates his buy or sale charge, also called offer or bid
price. The provider, to whom the charge is quoted, quotes his personal price when the citation of
the dealer suits the broker, he may additionally lose the bargain. If he isn't happy with the quote
fee, he might also flip to a few other provider. On the close of the bargain, the dealer in addition to
the broker makes a quick notice of the particulars of the deal. Such notes are made on a few pad
and on it the quantity of stocks, the fee agreed upon, the name of the party, what membership
range etc., are referred to.

DISADVANTAGES OF OUTCRY SYSTEM:

 It lacks transparency.
 The scope of manipulation, speculation and mal practice is more.
 Signal were more important in the outcry system any member who could not interpret the
buy/sell signal correctly often landed himself in disaster situation.
 In audibility was another disadvantage of the outcry system.
 Due to the above disadvantages of the outcry system the SHAREKHAN has shifted from
outcry system to online trading from February 29th 1997.

MANUAL TRADING:

Trading procedure before introduction of online trading:

Trading on stock exchanges is officially done in the trading ring. In the trading ring the space is
provided for specified and non-specified sections, the members and their authorized assistants have
to wear a badge or carry with them an identity card given by the exchange to enter the trading ring.
They carry a Saluda book or confirmation memos, duly authorized by the exchange and carry a
pen with them. The stock exchanges operations are floor level are technical in nature .Non-
members are not permitted to enter in to stock market. Hence various stages have to be completed

35
in executing a transaction at a stock exchange .The steps involved in this method of trading have
given below:

Preference Of Broking:

Sell shares and transact business, have to act via member brokers best. They can also employ their
bankers for this motive as consistent with the existing guidelines.

Placement Of Order:

The subsequent step is the prospective investor who desires to buy shares or the traders, who
desires to region order for the purchase or sale of securities with a broking. The order is typically
positioned via telegram, cellphone, letter, fax and so forth or in person. To keep away from put off,
it's far located usually over the cellphone. The orders may take any individual of the forms
inclusive of at satisfactory orders, restrict order, instantaneous or cancel order, constrained
discretionary order, and open order, stop loss order.

Execution Of Order Or Agreement:

Orders are completed in the buying and selling ring of the bse. This works from eleven:30 to
two.30 p.m on all operating days monday to friday, and a unique one-hour consultation on
saturday. The individuals or the authorized assistants should put on a badge given with the aid of
the exchange to go into into the trading ring. They bring about a sauda block e book or
conformation memos, which might be duly legal by way of the change while the deal is struck;
both broking and jobber make a note of their sauda block books. From the sauda e book, the
agreement notes are drawn up and published to the purchaser. A settlement be aware is written
agreement between the broker and his customers for the transaction accomplished.

Drawing Up And Payments:

Each sale and purchase payments are organized along side the settlement note and it's far posted on
the same day or tomorrow. This in a purchase transaction, as soon as the stocks are added to the
client results fee for the purchases and will pay the stamp prices for switch, a bill is made out
giving the overall price of buy, along with different charges incurred by the broking within the fee
itself. With this, the manner ends.

36
Dematerlization:

Dematerialization is the system through which physical certificate of an investor are transformed
to an system range of securities in digital from and credited inside the investor account with his
DP. In an effort to dematerialize the certificate, an investor has to first open an account with a DP
and then request for the dematerialization request shape, that's dp and put up the equal along With
the proportion certificate. The investor has to ensure that he marks “submitted for
dematerialization” on the certificates earlier than the stocks are passed over to the dp for demat.
Dematerialization can handiest be finished to those certificates, which can be already registered for
your name and belong to the listing of securities admitted for dematerialization at NSDL.Most of
the active scrip’s inside the market which includes all of the scrip’s of S&P SENSEX nifty and bse
sensex have already joined nsdl. This list is progressively increasing. In brief, the technique is as
follows: after completion of transfer, the investor gets the option to dematerialize such shares.
Buyers willing to exercise this option sends a demit request along side the option letter despatched
with the aid of the company to his dp. The business enterprise or its r&t agent would confirm the
demat request on its receipt from the dp to lessen threat of loss in transit. Dematerialized stocks do
not have any distinctive or certificates numbers. These shares are fungible-this means that that one
hundred stocks of a safety are the same as some other a hundred stocks of the safety. Abnormal lot
shares certificates also can be dematerialized. Dematerialization typically takes approximately
fifteen to thirty days. To get again dematerialized securities within the physical shape, request dp
for dematerialization of the identical is made. Dematerialization is the process of changing
electronic shares in to physical shares.

BENEFITS OF DEMAT:
 It reduces the risk of bad deliveries, in turn saving the cost and wastage of time associated
with follow up for rectification. This has lead to reduction in brokerage to the extent of
0.5% by quite a few brokerage firms
 In case of transfer of electronic shares, you save 0.5% in stamp duty. You avoid the cost
of courier / notarization.
 You can receive your bonuses and rights issues into your DA as a direct credit, this
eliminating risk of loss in transit.
 You can also expect a lower interest charge for loans taken against Demat shares as
compared to loans against physical shares.
 There is no lost in transit, thus the overheads of getting a duplicate copy in such
circumstances is reduced.
 RBI has also reduced the minimum margin to 25% for loans against dematerialized
securities as against 50% for loans against physical securities.

37
ONLINE TRADING

Before getting in to the online trading we should know some things about the internet, e-commerce
and etc.

1. What is Internet?

Net is a international, self-governed community connecting several different smaller networks and
millions of computers and men and women, to mega sources of records. This generation shrinks
enormous distances, accelerating the tempo of enterprise reforms and revolutionizing the way
groups are managed. It allows direct, ubiquitous links to everybody anywhere and each time to
accumulate interactive
Relationships a combination of time and space, known as the net guarantees to carry unparalleled
modifications in our lives and business. Internet or internet is an interconnection of laptop
communication networks spanning the whole globe, crossing all geographical obstacles. It has re-
defined the strategies of conversation, work examine, schooling, commercial enterprise, leisure,
health, change, banking, trade and what now not it's far truely converting the whole thing and we
are residing in dot.com age. Net being an interactive two way medium, via numerous web sites,
permits participation by individuals in business to commercial enterprise and business to purchaser
commerce, go to shopping arcades, video games, etc. In cyber space even the facts can be copied,
downloaded and retransmitted. Using net has grown 2000 percentage in last decade and is
currently growing at 10 percentage according to month. In india, boom of net is of recent
instances. It's miles expected to carry changes in each functional place of enterprise interest along
with control and monetary offerings. It offers stock buying and selling at a decrease cost. Internet
can change the character and capacity of stock dealer commercial enterprise in India.

2. E-commerce
Digital commerce is associated with buying and promoting over computer conversation networks.
It facilitates behavior conventional trade through new way of moving and processing of data. Facts
is electronically transferred from pc to computer in an automatic way. E-trade refers back to the
paperless alternate of business statistics the usage of digital statistics inter change, electronic
technology. It no longer most effective reduces guide tactics and paper transactions but also
facilitates company circulates to a completely electronic surroundings and change the manner they
operated. Pc’s and networking tries to introduce banks of the tools and technology required for
digital commerce. The computers are both workstations of individual workplace works or serves
where large databases and statistics reside. Community connects both classes of computers; the

38
diverse running structures are the maximum basis software within a computer. It manages the
assets of the laptop device in a truthful and green manner. Now we are able to input in to the idea
known as online trading. Within the past, investors had no option but to touch their broking to get
real time access to marketplace statistics. The net brings records to the investor on line and net
broking enables him to exchange on a click on of mouse. Now statistics has end up effortlessly
available to both retail in addition to huge investor.

INVESTOR STOCK INVESTORS

BROKERS

SATELLITE
LINK

DEPOSITORY REGISTAR/COM
PANY

DEPOSITORY STOCK
PARTICIPANT EXCHANGE BANK

WHY ONLINE TRADING ENTERED LATE IN INDIA?

The Indian exchanges and brokering houses have been very slow in moving their transactions
online and the major reason has been the lot government regulations. The initial delay was due to
laying down the specifications for creating Closed User Groups (CUGs). This issue was resolved
between the Department of Telecommunications (Dot) and the Finance Ministry around 1998 and
after that soon came the online trading portals like IL&FS invests mart, ICICIDirect.com,
motilaloswal.com, sharekhan.com etc. Connectivity related issue was perhaps the most important
technological factor.RBI made regulation that it is mandatory for company to store at least 7 year
financial and transactional data.
In the non-stop, 24 hours a day, seven days a week world of investing, we are able to

 Obtain investment news around the clock

 Check quotes on exchanges all over the world – day or night
 Easily compare one investment to another via numerous ratios, charts, graphs, and tables

39
  Screen for the best investments to fit our individual goals and requirements
 Trade stocks as easily and quickly as professional traders
 Calculate retirement needs based on various scenarios
 Regularly monitor portfolios and make necessary changes quickly and almost effortlessly
 Control the routing of individual trades for the best possible price and execution

Even many years after the launch of the first online brokerage firm, there remain a large contingent
of individual investors who still pick up the phone and call their stock broker to buy and sell
investments. However, every year a growing number of investors are placing their trades using
online brokers.

EVOLUTION OF BROKING IN INDIA:

The evolution of a broking in India can be categorized in three phases -

 Stockbrokers will offer on their sites features such as live portfolio manager, live quotes,
market research and news, etc. to attract more investors.
 Brokers will offer online broking and relationship management b providing and offering
analysis and information to investors during broking and non-broking hours based on their
profile and needs, i.e. customized services.
 Brokers (now e-brokers) will offer value management or services like initial public offering
online, on-line asset allocation, portfolio management, financial planning, tax planning,
insurance services, etc. and enables the investors to take better and well considered
decisions.

The actual definition of “Online Trading” is as explained below:“Online trading is a service

offered on the internet for purchase and sale of shares. In the real world you place orders on your
stockbroker either verbally (personally or telephonically) or in a written form (fax).” In online
trading, you will access a stockbroker’s website through your internet enabled PC and place orders
through the broker’s internet based trading engine. These orders are routed to the stock exchange
without manual intervention and executed thereon in a matter of a few seconds. The net is used as
a mode of trading in internet trading. Orders are communicated to the stock exchange through
website.

IN INDIA:

Internet trading started in India on 1st April 2000 with 79 members seeking permission for online
trading. The SEBI committees on internet based securities trading services has allowed the net to
be used as an Order Routing System (ORS) through registered stock brokers on behalf of their
clients for execution of transaction. Under the ORS the client enters his requirements (security,
quantity, price buy/sell) on broker’s site.
40
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. 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. It facilitates more efficient processing, automatic
order matching, faster execution of trades and transparency. The scripts traded on the BSE have
been classified into 'A', 'B1', 'B2', 'C', 'F' and 'Z' groups. The 'A' group shares represent those,
which are in the carry forward system (Badla). The 'F' group represents the debt market (fixed
income securities) segment. The 'Z' group scripts are the blacklisted companies. The 'C' group
covers the odd lot securities in 'A', 'B1' & 'B2' groups and Rights renunciation

OBJECTIVES:

Internet trading is expected to

 Increase transparency in the markets,
 Enhance market quality through improved liquidity, by increasing quote continuity and
market depth,
 Reduce settlement risks due to open trades, by elimination of mismatches,
 Provide management information system,
 Introduce flexibility in system, so as to handle growing volumes easily and to support
nationwide expansion of market activity.

Besides, through internet trading three fundamental objectives of securities regulation can be easily
achieved, these are:

 Investor protection
 Creation of a fair and efficient market, and
 Reduction of the systematic risks.

Some of the brokers offering net trading include ICICI direct, kotakstreet, etc.

REQUIREMENTS FOR NET TRADING:

For investors:
1. Installation of a computer with required specification
2. Installation of a modem
3. Telephone connection
4. Registration for on-line trading with broker
5. A bank account

41
6. Depository account
7. Compliance with SEBI guidelines for net trading

The following should be produced to get a demat account and online trading
account:
As identity proof & address proof any one of the following:
 Voter ID card
 Driving license
 PAN card( in case of to trade more than 50000)
 Ration card
 Bank pass book
 Telephone bill

OTHER REQUIREMENTS, WHICH ARE NECESSARY:

 First page of the bank pass book and last 6 months statement.
 Bank manager’s signature along with bank’s seal, manager registration code on
photograph.

For stock brokers:

1. Permission from stock exchange for net trading
2. Net worth of Rs. 50 lac
3. Adequate back-up system
4. Secured and reliable software system
5. Adequate, experienced and trained staff
6. Communication of order (trade confirmation to investor by e-mail)
7. Use of authentication technologies
8. Issue of contract notes within 24 hours of the trade execution
9. Setting up a website.
The internet is used as a medium of trading in net buying and selling. Orders are communicated to
the stock exchange via website. Internet buying and selling started in India on 1st April 2000 with
seventy nine members looking for permission for on line trading. The SEBI committees on net
based securities buying and selling offerings has allowed the internet for use as an order routing
device (ors) through registered inventory brokers on behalf in their clients for execution of
transaction. Beneath the order routing machine the consumer enters his necessities (safety, amount,
fee, and purchase/sell) in broker's website. They're checked electronically against the clients
account and routed electronically to the best exchange for execution by using the broker. The
customer gets a confirmation on execution of the order. The client's portfolio and ledger bills get
updated to mirror the transaction. The person should have the consumer id and password to go into
into the digital ring. He must additionally have demat account and financial institution account.

42
The system lets in simplest a registered client to log in using consumer id and password. Order can
be located the usage of region order window of the website.
Step 1: Those investors, who are interested in doing the trading over internet system i.e. NEAT-
IXS, should approach the brokers and get them self registered with the Stock Broker.
Step 2: After registration, the broker will provide to them a Login name, Password and personal
identification number (PIN).
Step 3: Actual placement of an order. An order can then be placed by using the
place order window as under:
(a) First by entering the symbol and series of stock and other parameters like quantity and price of
the scrip on the place order window.
(b) Second, fill in the symbol, series and the default quantity.
Step 4: It is the process of review. Thus, the investor has to review the order placed by clicking the
review option. He may also re-set to clear the values.
Step 5: After the review has been satisfactory, the order has to be sent by clicking on the send
option.
Step 6: The investor will receive an "Order Confirmation" message along with the order number
and the value of the order.
Step 7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons such
as invalid price limit, an appropriate message will appear at the bottom of the screen. At present, a
time lag of about 10 seconds is there in executing the trade.
Step 8: It is regarding charging payment, for which there are different mode.Some brokers will
take some advance payment from the investor and will fix their trading limits. When the trade is
executed, the broker will ask the investor for transfer of funds to his account. Internet trading
provides total transparency between a broker and an investor in the secondary market. In the open
outcry system, only the broker knew the actually transacted price. Screen based trading provides
more transparency. With online trading investors can see themselves the price at which the deal
takes place.
The time gap has narrowed in every stage of operation. Confirmation and execution of trade
reaches the investor within the least possible time, mostly within 30 seconds. Instant feedback is
available about the execution. Some of the websites also offer;
 News and research report
 BSE and NSE movements
 Stock analysis
 IPO and mutual fund centers

STEP BY STEP PROCEDURE IN ONLINE TRADING:

Following steps explain the step by step approach to on-line trading:
 Log on to the stock broker's website
 Register as client/investor
 Fill the application form and client broker agreement form on the requisite value stamp
paper
 Obtain user ID and pass word
43
 Log on to the broker's site using secure user ID and password
 Market watch page will show real time on-line market data
 Trade shares directly by entering the symbol or number of the security
 Brokers server will check your limit in the on-line account and demat account for the
number of shares and execute the trade
 Order is executed instantly (10-30 seconds) and confirmation can be obtained.
 Confirmation is e-mailed to investor by broker
 Contract note is printed and mailed in 24 hours
 Settlement will take place automatically on the settlement day
 Demat account and the bank account will get debited and credited by electronic means.

Login

Buy transcation Sell transcation

The system will check your
The system will check buying dp account quantity
limits

Orders accepted Rejected orders would be orders accepted

communicated along with reasons

your order is transmitted to exchange for execution

pending buy orders on execution pending sell orders

would be displayed of your orders would be displayed
on your screen on your screen

you may edit your you may delete you may edit your you may delete your
pending order your pending order pending order pending order

flashed on your conformationcoul contract note would

screen immediately d be send to your be sent to by mail
on execution e-mail and mobile or hand delivery

44
ONLINE TRADING HAS LEAD TO ADDITIONAL FEATURES SUCH AS:

 Limit / stop orders: orders that can be go unfilled, but there is an extra Charge for this
leeway facility since one need to hold a price.
 ____________Market orders: orders can be filled at unexpected prices, but this type is
much more risky, since you have to buy stock at the given price.
 Cash account: where funds have to be available prior to placing the order.
 Margin account: where orders can be placed against stocks, to increase Purchasing power.

ADVANTAGES OF ONLINE TRADING:

 Online buying and selling has made it feasible for anybody to have smooth and efficient get
entry to to extra reviews and charts than it became previously possible if one went to any
agents' workplace. For this reason we've get right of entry to to loads extra facts online.
 On-line trading has let room for smaller companies to compete with
 Multinational companies considering that it's far no longer a leg it issue. Being on line does
no longer identify the size of any precise employer, consequently, this extra electricity to
the underdogs.
 On-line buying and selling has allowed companies to locate themselves in which they want
as bodily region isn't an difficulty anymore. Companies can set up themselves in step with
their profits and losses, as an example wherein tax (income and fee delivered taxes) is first-
rate suited to them.
 On-line trading offers control to individuals and they could workout it over accounts for
that reason recognize what goes on when they exchange. It's far like going lower back to
high school and re-educating oneself on a way to change on line.
 People’ gain by saving comparatively loads extra when buying and selling on-line as the
fee according to alternate is less.
 Individuals can invest in a selection of merchandise, not like in advance while people sold
bonds, mutual budget, and stock for lengthy-time period basis and sat on them.now they are
able to put money into stocks, stock and index alternatives mutual price range, government,
and even coverage.

45
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:

Freedom of Information:

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 awesome appeals of the usage of an online trading account is the fact that the account
belongs to you, and is under your direct control. When you need to buy or sell inventory, you now
not want to name your broking on the cell phone; hope that he is within the office to place your
order; probable argue with the broking about the order; and wish that the transaction is achieved
immediately. at the maximum fundamental stage, a web trading account gives you extra agility in
shopping for and promoting stocks. this is through state-of-the-art information streams, devoted
trading platforms and complicated tools for having access to the markets.
Every dealer house aims at presenting the investor with the exceptional rate available. Additionally
because of the high degree of transparency with regard to display of records relating to the
particular shares and employer profiles, you may be able to get the first-class quote on your orders.
on line trading offers you greater transparency with the aid of providing you with an audit trail.
this entails a entire incorporated electronic chain beginning from order placement, to clearing and
settlement and ultimately finishing with a credit score into your depository account. all these tiers
are concern to inspection, consequently bringing in transparency into the system. on line buying
and selling integrates your bank account, you’re buying and selling account and your demat money
owed, which results in clean and paperless buying and selling for you.
you as an funding online purchaser will be capable of execute the complete trading transaction,
right from logging directly to our website online, to the execution and agreement of your bank
account, in a completely quick time frame.
trading at the internet, offers even the smallest retail investor get admission to to information that
earlier became to be had simplest to the massive traders. this offers a level gambling subject for all

46
investors inside the securities marketplace. This approach of trading reduces the agreement hazard
for the investor, as in this example all quick promote orders are squared off at the required cut-off
time and not allowed to be carried ahead. Within the case of a demat account your demat account
is checked by us earlier than executing your sell transaction. this reduces the settlement risk for the
client, who is assured of the transport of the securities and for you as a vendor of the securities
every change is confirmed immediately and you may get hold of an on-display confirmation
following each exchange with full details to your information. This avoids high priced mistakes
that could had been discovered while it's miles too past due. your bank, depository and online
account are integrated on your comfort. Diverse broking houses offer get entry to the various
famous banks.

INVESTORS REASONS TO TRADE ONLINE:

 They have control over their accounts, can make their own decisions and don’t have to
give reasons for their actions. They are independent.
 They have a reason to participate in the market and learn about it.
 It is interesting, cheap, easy, fast, and convenient.
 A lot of information is online so they can keep up-to-date with what is happening in the
trading world.
 It will give investors a greater choice and better realization.
 The immediate impact will be competition and benefits will accrue to the investors.
 It will lead to brokerage commissions going down and brokers striving to increase
business afloat.
 Investors will now go to place, which have better trading conditions and also members to
offer them better facilities.
 They have access to numerous tools to invest, and can create their own portfolio.

BENEFITS OF ON LINE BROKING:

1) Much Less Expensive:

The most substantial gain of the online broking is the price discount within the brokerage. Due to
the strength of the internet one has the privilege of becoming the customers of really huge
brokerages with the benefits of taking part in the low expenses hit whats up earlier than loved
handiest via the massive gamers. As the dp account has were given linked to the buying and selling
account maximum gamers do now not price a minimal transaction fee for this reason absolutely
allowing one to buy a unmarried share and obtain meaningful rupee price averaging some thing be
your shopping for strength.
47
2) Peace Of Mind:
You may in no way have complete peace of mind however on-line investing does away with the
hassles of filling up coaching slips, visits to the broking for delivering those slips and consequent
costs.

3) Retaining Statistics
The website online one trades on maintains a document of all transactions down to unexecuted
orders and cancelled orders thus retaining one abreast of all of your transactions 24 hours a day.
No office work method extra time at one’s disposal for research and evaluation.

4) Get Right Of Entry To Statistics And Funding Tools:

Maximum on-line investing websites have a wealth of records for their registered members. This
consists of studies reports, consequences, analysis and even gossip and the buzz in the market.

5.) Unparalleled Liquidity:

The financial institution account connected with the trading account perpetually has an a tm
unfastened. Most partner banks offer net banking as well. This effects in a single’s money turning
into available to him every time he like from his trading account. Conversely in case he spots an
opportunity within the market he can immediately allocate cash from his savings account to his
buying and selling account and make income.

6.) Unheard Of Protection:

Maximum sites are cozy the use of 128-bit algorithms -maximum to be had commercially
anywhere inside the world. Moreover although any person broke in and tampered with one’s
account the cash from the stocks he offered or the stock bought from the cash in his account is in
his account best.

7.) Reduces The Settlement Threat:

This approach of buying and selling reduces the settlement risk for the investor, as in this case no
short sale is feasible i.e. The seller will now not be able to promote the securities except he has
their real possession. Inside the case of a demat account (required for an online transaction), when
a seller wants to promote the securities, his demat account is checked by way of the depository
player before executing the sale transaction. This reduces the settlement risk for the buyer, who's
confident of the shipping of the securities.

48
8.) Gives Greater Transparency:

On line trading gives more transparency to the buyers with the aid of imparting them an audit path.
This involves a whole incorporated electronic chain beginning from order placement, to clearing
and settlement and subsequently finishing with a credit to the depository account of the investor. A
lot of these ranges are issue to inspection, as a consequence bringing in transparency into the
device.

9.) Ease Of Alternate:

It is the ease of doing the alternate via internet, with a click of mouse; one should buy or sell any
proportion that is dematerialized. Aside from the above-referred to benefits, net trading affords
some
Additional benefits to the buyers, brokers and additionally facilitates the state to channelize the
sources. Internet trading would growth opposition inside the marketplace for this reason increase
in the bargaining strength of the buyers. The entire verbal exchange among the investor, dealer and
change might take vicinity within milliseconds.

HERE ARE THE POSSIBLE DISADVANTAGES:

• Whilst network crashes, there may be problems and delays because of a big inflow
of rapid on-line trading standards.
• Individuals are constrained to first-hand monetary guidance. This sincerely way
that the character is himself / herself on my own to.
• A tax (sales tax and cost brought tax) evaluation turns into an trouble, specifically
whilst you are buying and selling the world over.
• One has no concept with whom he is dealing with on the opposite quit.
• in step with a look at performed via mary Rowland, cautious investor: is on-line
trading bad to your portfolio, the extra one trades the much less returns one receives, that
means that an addicted trader gets, over excited online and begins to exchange for too
much which causes losses for him / her.
• people assume that they are buying and selling with the marketplace without delay
and recognize what they're doing, however the reality is that even though era has taken
over; the primary regulations of trading are the identical. Plainly the intermediary has been
removed, but that isn't always so. While the people click on the mouse, his change goes via
a dealer. The commissions on-line pertain to the intermediary.

49
• There’s a want for greater powerful conversation links over the internet and the
potential of the server to address a huge quantity of site visitors.

50
 COMPARATIVE ANALYSIS
HDFC SECURITIES:

Company Background:
[

HDFC Securities Ltd is promoted by the HDFC Bank, HDFC and Chase Capital Partners and their
associates. Pioneers in setting up Dial-a-share service with the largest team of Tele-brokers.

Online Account Type:

 HDFC Online Trading A/c: Plain Vanilla Account with focus on 3 in 1 Advantage.

Pricing of HDFC Account:

􀁸 Account Opening: Rs 750
􀁸 Demat: NIL, 1st year charges included in Account Opening
􀁸 Initial Margin : Rs 5000/- for non HDFC Bank Customers (AQB)
􀁸 Brokerage:
Trading 0.15%* each side + ST
Delivery 0.50%** each side + ST
*Rs 25 Min Brokerage per transaction
**Rs 8 Min Brokerage per transaction

ICICI DIRECT:

 Account Opening: Rs 750

 Schemes: For short periods Rs 750 is refundable against brokerage generated in a qtr.These
schemes are introduced 3-4 times a year.
 Demat: NIL, 1st year charges included in Account Opening Plus a facility to open
additional 4 DP’s without 1st yr AMC. Only Rs 100 as linking charges per DP
 Initial Margin : Nil
 Brokerage: ICICI’s brokerage rates are inclusive of Stamp duty (0.002%) for
 trading and 0.010% for delivery while service tax (10.2%) on BROKERAGE land turnover
tax is EXTRA.

51
Delivery Vol per QTR Brokerage Square Vol P.M. Brokerage
< 10 lakhs 0.75% < 50 lakhs .10% Both Sides
10 – 25 lakhs 0.70% 50 lakhs – 2 C .08% Both Sides
25 – 50 lakhs 0.55% 2Cr-5Cr .05% Both Sides
50 lakhs - 1 Cr 0.45% 5Cr- 10 Cr .04% Both Sides
1 Cr – 2 Cr 0.35% 10Cr -20 Cr .035% Both Sides
2 Cr – 5 Cr 0.30% > 20 Cr .03% Both Sides

INDIABULLS:

Company Background:

India Bulls is a retail financial services company present in 70 locations covering 62 cities. It
offers a full range of financial services and products ranging from Equities to Insurance. 450 +
Relationship Managers who act as personal financial advisors.

Online Account Type:

􀁸 Signature Account: Plain Vanilla Account with focus on Equity Analysis. The equity analysis is
a paid service even for A/c holders.
􀁸 Power India bulls: Account with sophisticated trading tools, low commissions and priority
access to R.M.

Pricing of IB Accounts:

Signature Account Power India Bulls

* Account Opening: Rs 250 * Account Opening: Rs 750
* Demat: Rs 200 if POA is signed * Demat: Rs.200 if POA is signed,
No AMC for this DP No AMC for this DP
* Initial Margin: NIL * Initial Margin: NIL
* Brokerage: Negotiable * Brokerage: Negotiable

PAID Research:
SCHEME FACILITY
WebBased-1-Month-500: View & Print on Website
WebBased-1-Month-6000 View & Print on Website
PrintReport-1-Month-750: View & Print on Website
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 + 10 Reports Delivered
PrintReport-1-Month-9000: View & Print on Website
+ 10 Reports Delivered

KOTAKSTREET:

Company Background:

Kotakstreet is the retail arm of Kotak Securities. Kotak Securities limited is a joint venture
between Kotak Mahindra Bank and Goldman Sachs.

Online Account Type:

􀁸 Twin Advantage / Green Channel: 2 DP’s, Limit against shares
􀁸 Free Way: Flat Rs 999 Cover Charge p.m, 0.03% per transaction
􀁸 High Trader : 6 Times Exposure Cash & Derivatives, Auto sq off 2:55
􀁸 Cash Expressway : Spot payment, additional 0.5% charges
For Kotak Fast Lane / Keat Lite / Keat Desktop are trading interfaces.
Keat Desktop with advanced tools comes at a charge of Rs 500 p.m, Non refundable.

Pricing Of Kotak:
􀁸 Account Opening : Rs 500
􀁸 Demat: Rs 22.5 p.m
􀁸 Initial Margin : Rs 5000(Compulsory)
􀁸 Min Margin Retainable : Rs 1000
􀁸 Brokerage Slab wise: Higher the volume, lower the brokerage.
Even older customers (on 0.25% & 0.40%) have been moved to the slab wise structure w.e.f
1/4/2004
Slab structure of Kotak
Delivery Vol p m Brokerage * Square Vol P.M. Brokerage **
< 1 lakhs 0.65% < 10 lakhs 0.10% Both Sides
1 lakh– 5 lakhs 0.60% 10 lakhs – 25 lakhs 0.08% Both Sides
5 lakhs – 10 lakhs 0.50% 25 lakhs - 2 Cr 0.05% Both Sides
10 lakhs - 20 lakhs 0.40% 2 Cr - 5 Cr 0.04% Both Sides
20 lakhs – 60 lakhs 0.30% > 5 Cr 0.035% Both Sides
60 lakhs - 2 Cr 0.25% ---do--- 0.03% Both Sides

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>2 0.20% --- - --------

* Brokerage is inclusive of All Taxes * Brokerage is inclusive of All Taxes

* DP Charges Extra
* Min Brokerage of Rs 0.05 per share * Min Brokerage of Rs 0.01 per share

Derivatives Vol off p m Brokerage

< 2 Cr 0.07% Both Sides
2 Cr - 5.5 Cr 0.05% Both Sides
5.5 Cr – 10 Cr 0.04% Both Sides
> 10 Cr 0.03% Both Sides
* Brokerage is inclusive of All Taxes.

INDIA INFOLINE:
Company Background:
Indiainfoline was founded in 1995 and was positioned as a research firm. In 2000 e-broking was
started under the brand name of 5paisa.com. Apart from offering online trading in stock market the
company offers mutual funds online. It also acts as a distributor of various financial services i.e.
GOI securities Company Fixed Deposits, Insurance. Limited ground network, present in 20 cities.

Online Account Types:

􀁸 Investor Terminal : Investors / Students
􀁸 Trader Terminal : Day Traders / HNI’s

Pricing For Retail Clients:

Investor Terminal:
􀁸 Account Opening : Rs 500
􀁸 Demat 1st Yr : Rs 250
􀁸 Initial Margin : Rs 2500 (Compulsory)
􀁸 Min Margin Retainable : Rs 1000
􀁸 Brokerage :
Trading 0.10% each side + ST
Delivery 0.50% each side + ST

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Pricing For Hni Clients
Trader Terminal
􀁸 Account Opening : Rs 500
􀁸 Demat 1st Yr : Rs 250
􀁸 Initial Margin : Rs 5000(Compulsory)
􀁸 Min Margin Retainable : Rs 1000
􀁸 Brokerage :
Trading 0.10% each side + ST
Delivery 0.50% each side + ST
(Negotiable to 0.05% each side & 0.25%)
􀁸 Account Access Charges
Monthly Rs 800, adjustable against Brokerage
Yearly Rs 8000, adjustable against brokerage

SHAREKHAN:
Company Background:

􀁸 Sharekhan is the retail broking arm of SSKI Securities Pvt Ltd. SSKI owns 56% in Sharekhan,
balance ownership is HSBC, First Caryle, and Intel Pacific
􀁸 Into broking since 80 years
􀁸 Focused on providing equity solutions to every segment
􀁸 Largest ground network of 210 Branded Share shops in 90 cities
Online Account Types
􀁸 Classis Account / Applet : Investor in equities
􀁸 Speed Trade : Trader in equities & derivatives

Pricing For Hni Clients:

Speed Trade
􀁸 Account Opening : Rs 1000 ( Refundable against brokerage in Month + 1)
􀁸 Demat 1st Yr : Incl in Account Opening
􀁸 Initial Margin : Nil
􀁸 Min Margin Retainable : NIL

Brokerage :
Trading 0.10% each side + All Taxes

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Delivery 0.50% each side + All Taxes
(Negotiable based on volume)

Account Access Charges:

Monthly Rs 500, adjustable qtrly against brokerage of Rs 9000/- for qtr. No access charges for
gold customers (Above 1 lac brokerage p.a)

Pricing for Retail Customers:

Classic / Applet
􀁸 Account Opening : Rs 750
􀁸 Demat 1st Yr : NIL
􀁸 Initial Margin : NIL
􀁸 Min Margin Retainable : NIL

Brokerage:

Trading 0.10% each side + All Taxes

Delivery 0.50% each side + All Taxes

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 FINDING AND CONCUSLION & SUGGECTION

FINDINGS:

 Fluctuations more in secondary marketplace than some other marketplace.

 There are extra speculators than buyers.
 Statistics plays a critical position in the secondary market.
 Previously rolling agreement is t+5 days, now it changed to t+2 days and similarly
it will likely be changing to t+1 day.
 it changed into additionally located that many broker houses imparting internet
buying and selling allow clients to use their conventional system as well just make
sure that they do not loose them and this as opposed to providing e-dealer offerings
they becomes provider providers.
 The quantity of gamers is increasing at a regular rate and today there are over a
dozen of brokerage houses who have opted to offer net trading to their customers
and outstanding amongst them are share khan, india bulls, kotakstreet, motilal
oswal securities and geojit.
 The number of players is increasing at a steady rate and today there are over a
dozen of brokerage houses who have opted to offer net trading to their customers
and prominent among them are SHARE KHAN, India bulls, kotakstreet, ICICI
direct and indiainfoline.

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 CONCUSLION

• Matters have changed for the better with the sharekhan going on-line coupled with
enterprise to circulation line the entire buying and selling gadget, matters have modified
dramatically over the last three to four years. new and superior technologies have breached
geographical and cultural barriers, and feature delivered the countrywide market to
doorstep.
• The local stock exchanges have their very own blessings like being nearer to the
retail traders and to allow the booking’s perish could be unfavorable to stock market
system there's no brokerage corporations with in india with countrywide attain.
• Within the present scenario and to compete the dealer’s would require sound
infrastructure and trading as in keeping with international standards. the ideas of enterprise
have changed and today this has emerge as service to customer or to provide the high-
quality feasible carrier to client or to have interaction into new business from the nearby
middle to the metro facilities and to impart liquidity introduction of on line trading is
important.

• Because of invention of on-line buying and selling there was extra gain to the
buyers as they could promote / buy shares as and while required and that to with online
buying and selling, it will encourage self assurance in buyers ensuing in growth enterprise
of the exchange.
• The dealer’s has a more scope than in comparison to the sooner times because of
invention of online buying and selling.
• The idea of commercial enterprise has modified today that is a service oriental
enterprise therefore the survival might require them to provide the quality viable carrier to
the consumer.
• The longer trading time had helped the traders in addition to the broker to take a
great deal interest within the buying and selling of the securities as that they had more time
to take within the security market.
• The existing machine can be further progressed by using creation of stop loss
facility on the way to assist to lessen investor’s losses.additionally there is need for an
change to setup status committee into breakdown of on-line buying and selling.

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 SUGGECTIONS
 I recommend the alternate authorities to take steps to educate traders approximately their
rights and obligations. i recommend to the alternate authorities to increase the buyers’
confidences.
 I endorse the exchange authorities to be vigilant to scale down extensive fluctuations of
expenses.
 The speculative pressures are responsible for the wide adjustments inside the fee, no longer
attracting the genuine investors to the greater extent closer to the marketplace.
 proper traders are not in any respect inquisitive about the speculative advantage as their
investment is based totally on the future income, therefore the government of the alternate
need to be greater vigilant in implementing to lower the speculative of securities.
 essential steps must be taken with the aid of the trade to cope with the conditions arising
because of ruin down in online trading.

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 BIBILOGRAPHY

BOOKS:

 Investment management V.K.Bhalla

 Investment management Preethi singh
 Security Analysis And Portfolio Management V.A.Avadhani
 Marketing of Financial Services V.A.Avadhani
 Indian Financial System M.Y.Khan
 Secondary market & its functions I.M. Pandey

WEBSITES:

 www.Share Khan.com
 www.bseindia.com
 www.sebi.com
 www.moneycontrol.com
 www.economictimes.com
 www.nseindia.com
 www.reuters.com

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