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25152416 depositories-participant 25152416 depositories-participant Document Transcript

  • PROJECT REPORT ON ONLINE TRADING BY MR. AJAY SINGH T.Y.B.B.I SEMESTER VTHAKUR COLLEGE OF SCIENCE & COMMERCE MUMBAI PROJECT GUIDE PROF. PRITI AGGARWAL UNIVERSITY OF MUMBAI 2009-2010
  • DECLARATIONI, Mr.Ajay Singh of Thakur College of Science & Commerce of T.Y.B.B.I.(Third Year Bachelor Degree of Banking & Insurance Semester 5) herebydeclare that I have completed the project on “Online Trading” in theAcademic Year 2009-2010.The information submitted is true and original to the best of my knowledge. SIGNATURE OF THE STUDENT AJAY SINGH CERTIFICATEI Priti Aggrawal, hereby certify that Mr. Ajay Singh of Thakur College ofScience & Commerce of T.Y.B.B.I. (Third Year Bachelor Degree ofBanking & Insurance Semester 5) has completed his project on “TeamBuilding” in the academic year 2009-2010.The information submitted is true and original to the best of my knowledge.Signature of project Guide Signature of the PrincipalProf. Priti Aggarwal Dr. Chaitali ChakrobarthyDate:Place: Mumbai
  • ON-LINE TRADING Acknowledgement This project was made possible, by the efforts of many people who supportedme in this endeavor, whose names if not mentioned would be inconsiderate on mypart. The project “Online Trading” is a result of co-operation, hard work, and goodwishes of many people. I student of Thakur College would like to thank Prof. PritiAggarwal my project guide for her involvement and timely assessment which providedinspiration and her valued guidance throughout my study on this subject. I am also indebted to Principal Dr.Chaitali Chakrobarthy for giving us anopportunity to present a creative outcome in the form of a project. I’m thankful to MrRajan my teacher for their friendly guidance and constant encouragement. I would also take this opportunity to express sincere gratitude to the library staffthat provided me with the right information and study material at the right time. I extend my thanks to my college friends, family members, for their efforts andcreativity which helped in giving final shape and structure to the project. I am alsothankful to all seen and unseen hands and heads which helped in direct and indirectcompletion of the project. INDEX THAKUR COLLEGE OF SCIENCE AND COMMERCE 1
  • ON-LINE TRADINGPART – 1: ONLINE TRADING. 1. About Trading and Investors. 2. Introduction to Online Trading.  History  Objectives, Merits & Demerits  Dematerialization & Rematerialization 3. Place Where Trading Is Done.  The ‘Big Two’ Architectures  Who can invest in Indian Stock Exchange 4. Top Players in Online Trading. 5. Depository Systems.  About NSDL & CDSL  Objective, Activity, Benefits of Depositories.PART – 2: ICICI DIRECT.COM VS SHAREKHAN.COM 1. Introduction, Merits & Demerits 2. Products & Services 3. Brokerages 4. Types of Accounts 5. Case Study 6. Conclusion EXECUTIVE SUMMARY THAKUR COLLEGE OF SCIENCE AND COMMERCE 2
  • ON-LINE TRADINGSubject of the Project: This project is about the latest trend in trading through onlinenetworking that is taking the business world by storm. Online tradingnetworking or simply put ‘networking on the net’ is fast becoming theeasiest, fastest, very focused and a most effective means of growing yourchain of contract to help you climb the success ladder of investment fasterthan any other route can take you.Scope: This project study covers the different genres of networking, be theythe traditional trading through online or more relaxed.Methodology: This project provides a clear objective insight into the phenomenonof online trading. This project has been a primary data based project rightsince it conception. Besides a minuscule number of statistics and researchdata which was found on research online, all the inferences and conclusionshave been made on the basis of real time usage of networking websites bypeople through extensive surveys and research done for users oficicidirect.com and sharekhan.com.Objective: The objective of this project is to bring in to focus the mostinnovative upcoming technology trading or investing. So that more andmore people are connected each and every day as the world comes closer ina closely knit networking.Recommendations: THAKUR COLLEGE OF SCIENCE AND COMMERCE 3
  • ON-LINE TRADING Going through the traditional meet and greet routines for extendingand enriching our networks can be quite perfunctory and ineffective. Onlinetrading has held the helm for many ship on the brink of capsizing, manysuccess story has been written on the pages of online trading networking. Abudding entrepreneur needs networking more than anything else; his ship isthen assured of smooth sailing even in the rough seas. THAKUR COLLEGE OF SCIENCE AND COMMERCE 4
  • ON-LINE TRADING ABOUT TRADING & INVESTORS Trading A trading is the process in which someone who buys and sells financialinstruments such as stocks, bonds and derivatives. Traders are professionals, casualinvestors or speculators in financial instruments traded in the stock markets, THAKUR COLLEGE OF SCIENCE AND COMMERCE 5
  • ON-LINE TRADINGderivatives markets and commodity markets, comprising the stock exchanges,derivatives exchanges and the commodities exchanges.Why Investors do Trading Investors can deal with stock exchange securities either for a genuine tradingpurpose or for the purpose of speculative trading. Genuine investors generallygive/take delivery of shares with no intention to postpone the settlement to the nextperiod. Their primary motive is to get long term gains. On the other hand,speculators do not take/give delivery of shares. They deal in differences in thepurchase and sale prices. Their main intention is to carry forward the transactionsand get short-term gains due to price differences. THAKUR COLLEGE OF SCIENCE AND COMMERCE 6
  • ON-LINE TRADING INTRODUCTION OF ON-LINE TRADING, HISTORY OF ON-LINE TRADING OBJECTIVES, MERITS & DEMERITS OF ON-LINE TRADING DEMATERIALISATION & REMATERIALISATION On Line Trading The Information Technology has brought out revolutionary change in theoperations of stock exchanges in India. The traditional method trading without theuse of technology was time consuming and inefficient further, it imposed limits on THAKUR COLLEGE OF SCIENCE AND COMMERCE 7
  • ON-LINE TRADINGtrading volumes and efficiency. To overcome those defects and to provide efficientand transparent services, the NSE has introduced a national-wide ON-LINE fullyautomated Screen Based Trading System (SBTS). Now, other stock exchanges havebeen forced to adopt SBTS and today India can boast that almost 100% trading takeplace electronic order matching. Under SBTS, a member can punch into the computers quantities of securitiesand the prices at which he likes to transact the transaction. It is executed as soon as itfinds a matching sale or buy order from a counter party. Thus, technology is used tocarry the trading hall of the exchanges to the premises of the brokers. NSE hascarried the trading the internet and the hand held devices through WAP for theconvenience of the mobile investors.Small beginning Compared to the Western countries, ON-LINE trading is still in its infancy inIndia. With trading turnover at around Rs. 10 crores per day from ON-LINE tradingcompared to a combined gross turnover of around Rs. 9000-10,000 crores handledby the BSE and NSE together, ON-LINE trading has a long way to go. With someten dotcom players, such as icicidirect.com, investsmart, 5paisa.com, India bulls, anda host of brokers, such as kotakstreet, sharekhan, motilaloswal, Geojit Securities andduttstock, entering the ON-LINE ring promises exciting times ahead. History of On Line Trading ON-LINE stock trading is very old concept for big institutions who tradethru private networks owned by Reuters "Instinet" and a system called"Posit" since 1969. But it becomes internet based for lay men only in late 90s. THAKUR COLLEGE OF SCIENCE AND COMMERCE 8
  • ON-LINE TRADING Funny, that actually idea was first time used by a company making Beercalled "WIT beer" to help its shareholders trade its shares. That’s how "WITCapital" was born which is considered pioneer of this concept. It was mademainstream and household name by a offshoot of Charles Schwab & Co calledeSchwab which is used by millions of people in USA. Lot of NRIs i know playin US stock market even when they come to India for holidays via websiteof eSchwabe. There are other serious players like E*trade, DATEK ON-LINE etc. All thiscompanies ask you to start account with US $5000 and you can buy and sellstock using these funds. They also issue you a check book which you can useto make payments from this account. Or use their ATM card to withdraw cashfrom your stock trading account. Today practically every big name brokerage firm offers ON-LINE stocktrading as it reduces their costs. Earlier they had army of brokers on phone withclients executing trade, which is done by computers accepting orders fromclients directly. This firm now offers human access to high net worth accounts, andto rest at charge per trade. Objectives of Internet trading: 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. THAKUR COLLEGE OF SCIENCE AND COMMERCE 9
  • ON-LINE TRADING Provide management information system (MIS). Introduce flexibility in system, 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. Merit’s Of On-Line Trading The Merit of On-line Trading are as follows: Faster Trading Technology driven trading is faster than manual trading. Once the order is matched, it is executed immediately. Accessible to All It provides full anonymity by accepting order from members irrespective of the size of the order – whether big or small without disclosing their identity. Thus, it provides equal access to all. Faster Incorporation of Price Sensitive Information The SBTS allows faster incorporation of price sensitive information into the prevailing prices and thus, it increases the information efficiency of the markets. THAKUR COLLEGE OF SCIENCE AND COMMERCE 10
  • ON-LINE TRADING Widening the Market It also widen the market by enabling the market participants to trade with one another simultaneously irrespective of their geographical locations. Thus, it improves the depth and liquidity of the market. Saving of Time and Cost The SBTS electronically matches order on strict price condition as well as on time priority basis. Hence, it cuts down cost as well as time in executing orders. Fully Transparent ON-LINE trading is fully automated and screen-based. Everything is transparent on the screen and hence, there is no possibility to play any hide and seek game. No Errors and Frauds The price conditions, quantity conditions etc. are puched into the computers by the members themselves. So, the risk of error is very less moreover, the trading is fully automated and screen-based and hence frauds can not enter into the system Perfect audit trail It also provides perfects audit trail which helps to resolve disputes by logging in the trade execution on entirety. Thus, on-line trading measures efficiency, liquidity and transparency in the trading on stock exchanges. THAKUR COLLEGE OF SCIENCE AND COMMERCE 11
  • ON-LINE TRADING Demerits of On-Line Trading (Website based): Website performance - sometime the website is too slow or not enough user friendly. Little long learning curve especially for people who doesnt know much about computer and internet. Brokerages are little high. Dematerialisation: Dematerialisation is the process by which a client can get physicalcertificates converted into electronic balances maintained in its account with the DP.Features: Holdings in only those securities that are admitted for dematerialisation by NSDL can be dematerialised. THAKUR COLLEGE OF SCIENCE AND COMMERCE 12
  • ON-LINE TRADING Structure of holding in the securities should match with the account structure of the depository account If the shares are in the name of X and Y it cannot be dematerialised in to the account of either X or Y alone. Further, if the shares are in the name of X first and Y second and the account is in the name of Y first and X second, then these shares cannot be dematerialized in this account. The dematerialisation process can be initiated only by X first and Y second and for this a depository account will have to be opened in the name of X first and Y second. Only those holdings that are registered in the name of the account holder can be dematerialised. Rematerialisation: Rematerialisation is the process by which a client can get his electronicholdings converted into physical certificates. The client has to submit therematerialisation request to the DP with whom he has an account. The DP enters therequest in its system which blocks the clients holdings to that extent automatically.The DP releases the request to NSDL and sends the request form to the Issuer/ R&Tagent. The Issuer/ R&T agent then prints the certificates, despatches the same to the THAKUR COLLEGE OF SCIENCE AND COMMERCE 13
  • ON-LINE TRADINGclient and simultaneously electronically confirms the acceptance of the request toNSDL. Thereafter, the clients blocked balances are debited.Features: A client can rematerialise his dematerialised holdings at any point of time. The rematerialisation process is completed within 30 days. The securities sent for rematerialisation cannot be traded. THAKUR COLLEGE OF SCIENCE AND COMMERCE 14
  • ON-LINE TRADING PLACE WERE TRADING IS DONE THE BIG TWO ARCHITECTURESWHO CAN INVEST IN INDIAN STOCK EXCHANGE WERE DOES TRADING DONE: Trading basically done in Stock Exchange. There 22 stock exchanges inIndia which are situated in Ahmedabad, Bangalore, Calcutta, Chennai, Delhi etc.There are two major Stock Exchange functioning in India there are as follows:1. Bombay Stock Exchange in India. THAKUR COLLEGE OF SCIENCE AND COMMERCE 15
  • ON-LINE TRADING Bombay Stock Exchange Limited (the Exchange) is the oldest stockexchange in Asia with a rich heritage. Popularly known as "BSE", it was establishedas "The Native Share & Stock Brokers Association" in 1875. It is the first stockexchange in the country to obtain permanent recognition in 1956 from theGovernment of India under the Securities Contracts (Regulation) Act, 1956.TheExchanges pivotal and pre-eminent role in the development of the Indian capitalmarket is widely recognized and its index, SENSEX, is tracked worldwide. Earlieran Association of Persons (AOP), the Exchange is now a demutualised andcorporatised entity incorporated under the provisions of the Companies Act, 1956,pursuant to the BSE (Corporatisation and Demutualisation) Scheme, 2005 notifiedby the Securities and Exchange Board of India (SEBI).Bombay Stock ExchangeLimited received its Certificate of Incorporation on 8th August, 2005 and Certificateof Commencement of Business on 12th August, 2005. The Due Date for taking overthe business and operations of the BSE, by the Exchange was fixed for 19th August,2005, under the Scheme. The Exchange has succeeded the business and operations ofBSE on going concern basis and its recognition as an Exchange has been continuedby SEBI. With demutualisation, the trading rights and ownership rights have beende-linked effectively addressing concerns regarding perceived and real conflicts of THAKUR COLLEGE OF SCIENCE AND COMMERCE 16
  • ON-LINE TRADINGinterest. The Exchange is professionally managed under the overall direction of theBoard of Directors. The Board comprises eminent professionals, representatives ofTrading Members and the Managing Director of the Exchange. The Board isinclusive and is designed to benefit from the participation of market intermediaries. In terms of organisation structure, the Board formulates larger policyissues and exercises over-all control. The committees constituted by the Board arebroad-based. The day-to-day operations of the Exchange are managed by theManaging Director & CEO and a management team of professionals. The Exchange has a nation-wide reach with a presence in 417 cities andtowns of India. The systems and processes of the Exchange are designed tosafeguard market integrity and enhance transparency in operations. During the year2004-2005, the trading volumes on the Exchange showed robust growth. The Exchange provides an efficient and transparent market for tradingin equity, debt instruments and derivatives. The BSEs On Line Trading System(BOLT) is a proprietory system of the Exchange and is BS 7799-2-2002 certified.The surveillance and clearing & settlement functions of the Exchange are ISO9001:2000 certified.2. National Stock Exchange in India. THAKUR COLLEGE OF SCIENCE AND COMMERCE 17
  • ON-LINE TRADING The National Stock Exchange (NSE) is Indias leading stock exchangecovering various cities and towns across the country. NSE was set up by leadinginstitutions to provide a modern, fully automated screen-based trading system withnational reach. The Exchange has brought about unparalleled transparency, speed &efficiency, safety and market integrity. It has set up facilities that serve as a modelfor the securities industry in terms of systems, practices and procedures. NSE has played a catalytic role in reforming the Indian securities marketin terms of microstructure, market practices and trading volumes. The market todayuses state-of-art information technology to provide an efficient and transparenttrading, clearing and settlement mechanism, and has witnessed several innovations inproducts & services viz. demutualisation of stock exchange governance, screenbased trading, compression of settlement cycles, dematerialisation and electronictransfer of securities, securities lending and borrowing, professionalisation of tradingmembers, fine-tuned risk management systems, emergence of clearing corporationsto assume counterparty risks, market of debt and derivative instruments and intensiveuse of information technology. THE BIG TWO ARCHITECTURES THAKUR COLLEGE OF SCIENCE AND COMMERCE 18
  • ON-LINE TRADINGNSE and BSE, the big two exchanges believe in updating and upgrading itstechnology systems to keep delivering according to commitments and promisesmade to its members, partners, and customers.NSE architecture – NEAT NSE has deployed NIBIS (NSEs Internet Based Information System)for real-time dissemination of trading information over the Internet and NEAT aclient-server-based application to help its operations. NEAT stores all trading information in an in-memory database at theserver end to achieve minimum response time and maximum system availability forusers. The trading server software runs on a fault-tolerant STRATUS mainframe andthe client software runs on Windows PCs. The telecommunications network uses the X.25 protocol and is the backboneof the automated trading system. Each trading member trades on the NSE with othermembers through a PC located in the trading members office. The trading members on the Wholesale Debt Market segment are linked to thecentral computer at the NSE through dedicated 64 Kbps leased lines and VSATterminals. These leased lines are multiplexed using dedicated 2 MB optical-fiberlinks. The WDM participants connect to the trading system through dial-up links. The exchange uses RISC-based Unix servers from Digital and HP forbackoffice processing. Applications like Oracle 7 and SQL/Oracle Forms 4.5 frontends are used for the exchange functions.BSE architecture – BOLT THAKUR COLLEGE OF SCIENCE AND COMMERCE 19
  • ON-LINE TRADING BSE has deployed an On-Line Trading system (BOLT) on March 14, 1995. Itworks on a Tandem S74016 platform running on 16 CPUs. The Tandem HimalayaS74016 machines act as the backend to more than 8000 Trader Workstationsnetworked on Ethernet, VSAT and Managed Leased Data Network (MLDN). Thesystems claim to handle up to two million trades a day. BOLT has a two-tier architecture. The trader workstations are connecteddirectly to the backend server which acts as a communication server and a CentralTrading Engine (CTE). Other services like information dissemination, indexcomputation, and position monitoring are also provided by the system. A transactionmonitoring facility in the Tandem architecture helps keep data integrity through non-stop SQL. With the help of MTNL, BSE has setup a MLDN Network comprising 300 2Mbps lines and 1500 64 Kbps lines which connect all regional stock exchanges andoffices in Mumbai. Access to market related information through the traderworkstations is essential for the market participants to act on real-time basis and takeinstantaneous decisions. BOLT has been interfaced with various information vendorslike Bloomberg, Bridge, and Reuters. Market information is fed to news agencies inreal time. The exchange plans to enhance the capabilities further to have anintegrated two-way information flow. WHO CAN INVEST IN INDIAN STOCK EXCHANGE As you might know, most investors in any stock market in the world can bedivided into two broad groups- Individual investors and Institutional investors .*Individual investor* means an investor like you and me who is investing ownmoney. THAKUR COLLEGE OF SCIENCE AND COMMERCE 20
  • ON-LINE TRADINGOn the other hand, an *institutional investor* is a mutual fund, pension fund or acompany like Microsoft who is investing others money (I mean clients money orshareholders money). Another dimension for looking at investors is- Foreign or Domestic. So anIndividual Investor can be placed in one of the two groups: Resident or the Non-Resident. Citizen or non-citizen Similarly an institutional investor can be domestic orforeign. So broadly speaking, there are 4 different types of market participants whenit comes to investing in any country or stock market. Countries like the USA havefree markets and few investing/ trading restrictions but most emerging countrieshave different rules and restrictions for different entities. So let us take a look atinvesting implications for these four groups in India.1. Resident Indian Individuals: They can, directly or thro stock market, invest/trade in India without much restrictions. So if you are a citizen of India who lives in India, there are no restrictions on you to invest/trade in Indian stocks. (SEBI and NSE/BSEs regulations like Insider trading in India still apply to you like any other market participant in India.)2. Domestic Institutions: Subject to the Articles of Association and MoA of the charter and subject to SEBIs rules and regulations, a domestic company (including mutual funds, financial institutions) can also freely invest, directly or through stock market, in Indian securities.3. People who are not resident of India. Let us divide them in two subgroups 1. Nonresident Indians (NRIs) and institutions controlled by them: Subject to certain special provisions, more or less, NRIs can also, directly or thro Indian stock exchanges, invest/trade in Indian stocks. (Remember THAKUR COLLEGE OF SCIENCE AND COMMERCE 21
  • ON-LINE TRADING to read this whole article for details about how an NRI can buy and sell stocks bonds real estate in India.) 2. Foreign *Individual* Investors: Sorry, if you are a citizen of any other country (other than Nepal, Bhutan, Pakistan) and if you, or your parent or grandparents, had no ties with India at any time, currently you can **not** invest directly or through Indian Stock Exchanges in India. However there are some indirect ways for you to invest in India. Two most prominent ways are through ADRs (American Depository Receipts) issued by Indian companies in foreign markets or through mutual funds floated by foreign or domestic Institutional Investors. (Remember to read toward end of this page for details about how you can invest in India stocks and securities.) 3. Foreign Institutional Investors (FIIs): Subject to certain regulations by Indias central bank, Reserve Bank of India, and Indias security markets watchdog, SEC like entity- Securities and Exchange Board of India (SEBI), foreign institutions investors can invest/trade almost in any Indian securitiesTHAKUR COLLEGE OF SCIENCE AND COMMERCE 22
  • ON-LINE TRADING THE TOP 5 PLAYERS IN ON-LINE TRADING VIEWS OF SOME GREAT VISIONER THE TOP 5 PLAYERS IN ON-LINE TRADINGICICI Direct ICICI Direct has been our example throughout this article and they arewithout doubt one of the best. They normally give you three accounts 1. savings, 2.trading 3. DMAT. With these three accounts you are ready to go. Through their THAKUR COLLEGE OF SCIENCE AND COMMERCE 23
  • ON-LINE TRADINGextensive demo sections available ON-LINE at icicidirect, you can begin to tradefairly easily. Apart from ICICI ON-LINE trading service which can be visited aticicidirect.com, there are many other well known share trading facilitators inIndia. Some of those have been listed below. A serious evaluation of their services,charges, and efficiency is beyond our scope and intention.Sharekhan Headquartered in Mumbai, they have branches across the country and thesebranches provide full fledged services to its members. Portal address is sahrekhan.com."SSKI, a veteran equities solutions company with over eight decades of experiencein the Indian stock markets" they state on their website. They also proclaim that"they help you make informed decisions and simplifies stock investments". "In factSharekhan runs Indias largest chain of share shops with over hundred outlets across213 cities!" according to them.Geojit Geojit is another well known name. Like sharekhan, they also havecountrywide branches and offices overseas. From their website: "Mr. C.J. Georgeand Mr. Ranajit Kanjilal founded Geojit as a partnership firm in the year 1987." They also have major operations in the United Arab Emirates. " BarjeelGeojit Securities, LLC, Dubai, is a joint venture of Geojit with Al Saud Groupbelonging to Sultan bin Saud Al Qassemi having diversified interests in the area ofequity markets, real estates and trading". They are headquartered in Kochi in Kerala.They have a vast presence in Kerala and the rest of the country.Motilal Oswal THAKUR COLLEGE OF SCIENCE AND COMMERCE 24
  • ON-LINE TRADING They have a very impressive portal. Their site claims " Motilal OswalSecurities is a leading research and advisory based stock broking house of India,with a dominant position in both institutional and retail broking. Asiamoney BrokersPoll 2005 has ranked us the best Indian brokerage firm." Rediff.com, in one of theirevaluation available on the web, rates Motilal highly for their response and customercare.HDFC The ON-LINE share trading segment of HDFC bank is quiet impressive.Their portal is called HDFCSec.com. Like ICICI, HDFC also provide many features aswell as a well laid out and simple portal. Charges and services may differ slightly.However they are another THAKUR COLLEGE OF SCIENCE AND COMMERCE 25
  • ON-LINE TRADING DEPOSITARY SYSTEM ABOUT NSDL & CDSL OBJECTIVE, ACTIVE, BENEFITS OF DEPOSITARY DEPOSITARY SYSTEM A depository is an organisation which holds securities of investors inelectronic form at the request of the investors through a registered DepositoryParticipant. It also provides services related to transactions in securities. THAKUR COLLEGE OF SCIENCE AND COMMERCE 26
  • ON-LINE TRADING It can be compared with a bank, which holds the funds for depositors. ABank – Depository Analogy is given in the following table: BANK-DEPOSITORY – AN ANALOGYBANK DEPOSITORYHolds funds in an account Hold securities in an accountTransfers funds between accounts on the Transfers securities between accountsinstruction of the account holder on the instruction of the account holderFacilitates transfer without having to Facilitates transfer of ownershiphandle money without having to handle securitiesFacilitates safekeeping of money Facilitates safekeeping of securities At present two Depositories viz. National Securities Depository Limited(NSDL) and Central Depository Services (I) Limited (CDSL) are registered withSEBI.NSDL Although India had a vibrant capital market which is more than a century old,the paper-based settlement of trades caused substantial problems like bad deliveryand delayed transfer of title till recently. The enactment of Depositories Act inAugust 1996 paved the way for establishment of NSDL, the first depository in India.This depository promoted by institutions of national stature responsible for economic THAKUR COLLEGE OF SCIENCE AND COMMERCE 27
  • ON-LINE TRADINGdevelopment of the country has since established a national infrastructure ofinternational standards that handles most of the securities held and settled indematerialised form in the Indian capital market. Using innovative and flexible technology systems, NSDL works to support theinvestors and brokers in the capital market of the country. NSDL aims at ensuringthe safety and soundness of Indian marketplaces by developing settlement solutionsthat increase efficiency, minimise risk and reduce costs. At NSDL, we play a quietbut central role in developing products and services that will continue to nurture thegrowing needs of the financial services industry. In the depository system, securities are held in depository accounts, which ismore or less similar to holding funds in bank accounts. Transfer of ownership ofsecurities is done through simple account transfers. This method does away with allthe risks and hassles normally associated with paperwork. Consequently, the cost oftransacting in a depository environment is considerably lower as compared totransacting in certificates.CSDL The CDSL has been set up by Bombay Stock Exchange and co-sponsored bySBI, Bank of India, Bank of Baroda and HDFC Bank. It commenced its operation onMarch 22, 1999. THAKUR COLLEGE OF SCIENCE AND COMMERCE 28
  • ON-LINE TRADING Upto March 2000, 680 companies made available their shares for demat. Themarket value of dematerialised securities amounted to Rs. 8,188 crore. The numberof beneficial owners stood at 28,545.Objectives of DepositoryA depository enables the capital market to achieve the following objectives: 1. Reduce the time for transfer of securities. 2. Avoid the risk of settlement of securities. 3. Enhance liquidity and efficiency. 4. Reduce cost of transaction for the investor. 5. Create a system for the central handling of all secuirites. 6. Promote the countys competitiveness by complying with global standards. 7. Provide service infrastructure in a capital market.Activities of the DepositoryThe main activities of the depository are as follows: 1. Accepting deposit of securities for custody. 2. Making computerised book entry pledges of securities in its custody. THAKUR COLLEGE OF SCIENCE AND COMMERCE 29
  • ON-LINE TRADING 4. Providing for withdrawal of securities. 5. Undertaking corporate actions like distribution of dividend and interest. 6. Redemption of securities on maturity.Benefits of Depositories Services: o A safe and convenient way to hold securities; o Immediate transfer of securities; o No stamp duty on transfer of securities; o Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc.; o Reduction in paperwork involved in transfer of securities; o Reduction in transaction cost; o No odd lot problem, even one share can be sold; o Nomination facility; o Change in address recorded with DP gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separately; ICICI DIRECT.COM V/S SHAREKHAN.COM THAKUR COLLEGE OF SCIENCE AND COMMERCE 30
  • ON-LINE TRADING v/sTHAKUR COLLEGE OF SCIENCE AND COMMERCE 31
  • ON-LINE TRADING INTRODUCTION, MERITs & DEMRITs OF ICICI DIRECT.Com & SHAREKHAN.Com ICICI Direct.Com ICICI Direct brings you the international experience of ON-LINE investing.Buying and selling of shares is just a click away. Our powerful 3-in-1 concept will THAKUR COLLEGE OF SCIENCE AND COMMERCE 32
  • ON-LINE TRADINGenable you to tie in your saving bank account and your demat account to yourbrokerage account electronically. This integration ensures that money is transferredto/from your bank account and the shares are transferred from/to your demat accountautomatically without any paperwork. ICICI Direct keeps track of the transactions, the settlement dates and stockexchange rules, hence relieving you of the inconvenience of tracking stock exchangetrading calendars, settlement dates, writing cheques and Transfer Instructions ForDebit (TIFD). A multitude of resources like ON-LINE quotes, charts, news,research, fundamental database and detailed analysis is just a click away to help youmake smarter and better decisions. The URL ICICIDirect.com is owned by ICICI and managed by ICICI WebTrade Limited. ICICI Web Trade Limited facilitates trading and related services onthe internet through maintenance of the website. Trades put throughICICIDirect.com are executed by ICICI Web Trade Limited, which is a tradingmember of the National Stock Exchange and The Stock Exchange, Mumbai. SEBIregistration numbers for NSE and BSE are INB 231147639 and INB 011147635respectively.About ICICIdirect e-invest account Your ICICIdirect e-Invest account is more than a brokerage account. It offersyou a unique 3-in-1 feature, which integrates your Brokerage, Bank and one or moreDemat accounts. This means that you can buy and sell shares and forget about thehassles of settlements. Transfers of shares from/to your Demat account and transferof money from/to your Bank account take place automatically with no paperwork.ON-LINE investing is just a click away and settlements is no longer a problem. THAKUR COLLEGE OF SCIENCE AND COMMERCE 33
  • ON-LINE TRADING3-IN-1 concept ICICIdirect e-Invest account allows you to integrate your ICICIdirectBrokerage Account, your Bank account and one or more Demat accounts. Currentlythe Demat Account has to be opened with ICICI Bank Ltd as the DepositoryParticipant (DP) and the Bank Account has to be opened with ICICI Bank Ltd. as theBanker. You can choose the branch closest to you to open your bank account.No. of Demat and Bank Account with ICICI Direct.com you can link multiple Demat accounts to your e-Invest accounts with amaximum of 5 accounts but cant open more link more than one Bank accounts toyour e-invest accountsProcedure Of Trading In ICICI Direct.Com Deposit a cheque/cash in your Bank Account by filling the pay-in slip in caseu don’t have any balance in account above minimum balance require in savingaccount. In case of a cheque, the money should come into your Bank account as soonas the cheque is cleared. Once you have funds in your bank account, you need toallocate the required amount for trading. Alternatively you can sell some shares fromyour Demat Account in the Cash Segment and use the money to purchase the sharesyou want to buy. The amount of money required before placing a buy order or amargin sell order would depend on the value of the order. Sharekhan.com THAKUR COLLEGE OF SCIENCE AND COMMERCE 34
  • ON-LINE TRADING SSKI GroupSharekhan is ON-LINE stock trading company of SSKI Group,provider of India-based investment banking and corporate finance service.ShareKhan is one of the largest stock broking houses in the country. S.S. KantilalIshwarlal Securities Limited (SSKI) has been among India’s leading broking housesfor more than a century. Sharekhans equity related services include trade execution on BSE, NSE,Derivatives, commodities, depository services, ON-LINE trading and investmentadvice. Trading is available in BSE and NSE. Along with Sharekhan.com website,ShareKhan has around 510 offices (share shops) in 170 cities around the country. Share khan has one of the best state of art web portal providing fundamentaland statistical information across equity, mutual funds and IPOs. You can surf across5,500 companies for in-depth information, details about more than 1,500 mutualfund schemes and IPO data. You can also access other market related details such asboard meetings, result announcements, FII transactions, buying/selling by mutualfunds and much more.Advantage & Disadvantages Of ICICI Direct.Com AndSharekhan.Com• Advantages of ICICI Direct 1. 3-in-1 account integrates your banking, broking and demat accounts. All accounts are from ICICI and very well integrated. THAKUR COLLEGE OF SCIENCE AND COMMERCE 35
  • ON-LINE TRADING 2. Investment ON-LINE in IPOs, Mutual Funds, GOI Bonds, and Postal Savings Schemes all from one website. General Insurance is also available from ICICI Lombard. 3. Trading is available in both BSE and NSE. • Disadvantages of ICICI Direct 1. Getting access to ICICIDirect.com website during market session can be frustrating. 2. ICICI Direct brokerage is high and not negotiable. 3. Not all stocks are available under Margin Plus. • Advantages of Sharekhan 1. Trading terminal is fast 2. Their research report are excellent 3. Trading is available is both BSE and NSE 4. Excellent phone trading facility• Disadvantages of Sharekhan 1. Connot trade mutual funds or bonds THAKUR COLLEGE OF SCIENCE AND COMMERCE 36
  • ON-LINE TRADING PRODUCTS AND SERVICES PRODUCTS AND SERVICES OFFER BY ICICI DIRECT ICICI direct.com offers a wide range of products to suit the investmentneed for every investors. Products which are available for investor and in which theycan invest are as follows:• Equity• Derivatives,• IPO• Government of India bonds (GOI bonds) and, THAKUR COLLEGE OF SCIENCE AND COMMERCE 37
  • ON-LINE TRADING• Mutual fundsThis products can be futher classified, and which are shown through charts: ICICI DIRECT EQUITY DERIVATIVES MUTUAL FUNDS IPOS BONDS C Cash C F Futures P Purchases M Margin M O Options O R Redemption R B BTST B S SIP & SWP S Spot S Switch in/out M Margin Plus M T Transfer in T Cash on Spot: Cash on spot is another unique offering from ICICI direct.com Ifcustomer sells the shares, the money would be credited to you’re their account onlyon T+2 days. However, cash on spot helps you in liquidating shares in cutomerdemate account and realizing the sale proceeds on the same day before 5.00 PM. Buy Today Sell Tomorrow® (BTST®) THAKUR COLLEGE OF SCIENCE AND COMMERCE 38
  • ON-LINE TRADING Buy Today Sell Tomorrow® (BTST®) is a facility offered by ICICIDirectwherein the customer will be able to sell the shares that he has purchased evenbefore he receives the delivery of the shares from the Exchange. He will not have towait till the time he receives the delivery from the Exchange thus increasing hisliquidity. Sale in BTST® is permitted only till on T+1 (and not on T+2 i.e. pay-in/pay-out date of the Exchange). In other words, BTST® shall be permitted only up to theday prior to the scheduled payout of shares from the Exchange.  Margin: I In margin trading, you take buy/sell positions in stock(s) with theintention of squaring off the position within the same settlement cycle. If, during thecourse of the settlement cycle, the price moves in your favour (rises in case you havea buy position or falls in case you have a sell position), you make a profit. In case theprice movement is adverse, you incur a loss. However, you also have the option totake/give delivery of buy/sell position respectively if you have sufficientcash/securities to do so. Normally to buy shares, you have to place (ensure availability oflimit) 100% of the order value, while to sell shares, you need to have shares in yourdemat account. However, margins are blocked only to safeguard against any adverseprice movement. At present, you have to place 33.33% of the order value as margin.With margin trading, you can leverage on your trading limit by taking buy/sellpositions much more than what you could have taken in cash segment. However, therisk profile of your transactions goes up.  Margin Plus: THAKUR COLLEGE OF SCIENCE AND COMMERCE 39
  • ON-LINE TRADING Margin plus is a unique offering of ICICI direct.com this is ideal forcustomer who require very high leverage to do intra day trading. In Margin plus,trader have to specify a stop loss order at the time taking the position. Due to thistrader risk is limited only to the extent of their stop loss price. Margin Plus offers anorder placement features through which you can take an intra-day potion in theequity segment an at the same time, place a core order for this specifying the StopLoss Trigger Price and limit price. This cover order will help you to limit the loss, ifany, on the position. At the time of taking a position in Margin Plus, you would alsobe required to specify a stop loss order, and hence limiting your loss to that extent.Since the risk is now limit to the difference between your Buy/Sell rate and the Limitprice, margin will be primarily based on this difference.Features: Margin Plus in available for intra day trding in more than 60 stocks on ICICI direct.com Helps to limit your loss through a Stop Loss Order Open Margin Plus position can be closed any time before the End of Settlement timings as specified by ICICI direct.com Auto Square off process to help you close your open positon at the End of the Day.  Derivatives:Customers with different types of risk profile can use derivatives:  Hedging the cash market position- ideal for low risk profile.  Taking advantage of arbitrage opportunity in equity and derivatives THAKUR COLLEGE OF SCIENCE AND COMMERCE 40
  • ON-LINE TRADING  Taking a view on stock/index for as long as 3 - month period - medium risk profile.  Speculatives trading - high - risk profileICICI direct.com offer ON-LINE investment in Futures and Option, with benefits ofautomated settlement and ON-LINE risk monitoring system.  Futures Trading As a customer of ICICIdirect now, you can trade on index and stockfutures on NSE. It comes with a comprehensive tracking cum risk managementsolution to give you enhanced leveraging on your trading limits.In futures trading, you take buy/sell positions in index or stock(s) contracts expiringin different months. If, during the course of the contract life, the price moves in yourfavor (rises in case you have a buy position or falls in case you have a sell position),you make a profit. In case the price movement is adverse, you incur a loss. To take the buy/sell position on index/stock futures, you have to placecertain % of order value as margin. With futures trading, you can leverage on yourtrading limit by taking buy/sell positions much more than what you could have takenin cash segment. However, the risk profile of your transactions goes up.  Investing in Mutual funds: ICICIdirect.com brings you the ON-LINE convenience while investingin Mutual funds also - Hassle free and Paperless Investing.You can now invest on-line in 20 Mutual Funds through ICICIdirect.com.Alliance MF HDFC MF Reliance Capital MFBirla Sun Life MF HSBC MF SBI MFChola MF ING Vysya Standard Chartered THAKUR COLLEGE OF SCIENCE AND COMMERCE 41
  • ON-LINE TRADING MF MFDSP Merrill Lynch JM MF Sundaram MFMFDeutsche MF Kotak Tata MF Mahindra MFFranklin Templeton Principal MF UTI MFMFFidelity MF Prudential ICICI MFYou can invest in mutual funds without the hassles of filling application forms orany other paperwork. You need no signatures or proof of identity for investing.Once you place a request for investing in a particular fund, there are no manualprocesses involved. Your bank funds are automatically debited or credited whilesimultaneously crediting or debiting your unit holdings. In case of investments fromthe NRE account, the debit certificate is also submitted automatically to the MutualFund so as to enable repatriation of sale proceeds subsequently.You also get control over your investments with ON-LINE order confirmations andorder status tracking. Get to know the performance of your investments through ON-LINE updation of MF portfolio with current NAV.  IPOs IPO is another way of investing in equity market through primarymarket i.e., buying share from th company. Whenever a company comes out with aninitial public offerig the customers may choosse to apply for the shares. Based onnumber of valid applications received, the company woul than allot the shares to theapplicants. The offline way of investing in an IPO is by filling physical appliationforms, cheques, and submitting the forms through respective broker. With ICICIdirect.com all customer have to do is fill in number of share on site and submit. THAKUR COLLEGE OF SCIENCE AND COMMERCE 42
  • ON-LINE TRADING 8% GOI bonds Investing in government of India bonds is a risk free investment optionavailable to investors. Investment in government of india bonds offline, wouldinvolve filling physical application forms and writing cheques. ICICI direct.com offers a hassle free, paper less investment mode. All interstpayment and redemption would be credited to the customers account through ECSfacility. Also cutomers would receive physical holding statement by RBI SHAREKHAN PRODUCTS AND SERVICES: Equity Trading 1. Trading accounts With a Sharekhan ON-LINE trading account one can buy and sell shares in an instant. Any time, from anywhere. A Sharekhan ON-LINE trading account comes with a depository participant account where investors can keep all your shares, in safe custody with National Securities Depository. THAKUR COLLEGE OF SCIENCE AND COMMERCE 43
  • ON-LINE TRADING You can also link a Sharkehan ON-LINE trading account to an Internet banking account of your choice, so that you can move cash in and out of this account easily, without the bother of writing cheques all the time. Sharekhan offers two types of trading accounts to suit your trading habits: Sharekhan Classic account and Sharekhan SPEEDTRADE account. 2. Trading services Trading is super fast, extremely safe and highly secure at Sharekhan. Apart from providing the most advanced trading platform in the country, Sharekhan also offers facilities like instant cash transfer, after-market order, limit against shares and four times exposure on margin. Mutual funds: Sharekhan "Mutual Fund" section provides exhaustive information onvarious mutual fund schemes. You can also download from our site forms of variousmutual fund schemes including HDFC MF, JF MF, Pioneer ITI MF, Prudential ICICIMF, Templeton MF and Zurich India MF. Derivatives trading Sharekhan also provide derivatives trading services through our ground network of share shops. With Sharekhan you can invest in index and stock futures as well as stock and index options on the NSE. THAKUR COLLEGE OF SCIENCE AND COMMERCE 44
  • ON-LINE TRADING Keep track of the derivatives market with "Derivatives Info Kit" and find out which strike to buy/sell using Black & Scholes Option calculatorSHAREKHAN SERVICES Equity Trading Technical Research Depository Services Fundametal Research Dial and trade Share shops Commodities Portfolio Management Online Services Derivatives TradingTHAKUR COLLEGE OF SCIENCE AND COMMERCE 45
  • ON-LINE TRADING BROKERAGEs TYPES OF ACCOUNT HOW TO TRADE ON DIFFERENT SEGMENT DOCUMENT REQUIRE TO OPEN ACCOUNT IN ICICI DIRECT.COM AND SHAREKHAN1. THAKUR COLLEGE OF SCIENCE AND COMMERCE 46
  • ON-LINE TRADINGBROKERAGE OF ICICI DIRECT.COM & SHAREKHAN ICICIdirect.com can be opened for a one time non refundable fee of Rs 750/-Where as Sharekhan Trading account opening charges is also Rs750/- so openingcharges of both ICICI direct.com and Sharekhan.com is same. ICICI direct.com charges 0.1% to 0.15% for margin trades where as Sharekhan.com charges 0.1% all inclusive for intra-settlement trades Note: subject to a minimum brokerage of 5 paise per share (intra-settlement trade) ICICI direct.com charges 0.2% to 0.425% for squared off trades and 0.4% to 0.85% on delivery based trades Where as Sharekhan.com charges 0.5% all inclusive for trades that result into delivery [Note: 10 paise per share (delivery trade).] For all trades done through ICICIdirect.com there are NO separate charges. However, for all other trades and services like demat, pledge, annual maintenance charges etc, the charges shall be as per the existing rate card of ICICI demat. Where as in Sharekhan.com No transaction charges for depository participant (DP) account (Note: our non-trading DP clients are charged 0.02% and 0.04% of trade value for purchase and sale transactions respectively.) DP account maintenance charges (Rs75 per quarter) waived until October 31, 2002 About the bank account details. A minimum quarterly average balance of Rs 5000/- needs to be maintained. THAKUR COLLEGE OF SCIENCE AND COMMERCE 47
  • ON-LINE TRADING TYPES OF ACCOUNT IN ICICI DIRECT AND SHAREKHAN Types of Account in ICICI Direct 1. Share Trading Account Share Trading Account by ICICI direct is primarily for buying and selling of stocks in BSE and NSE. This account allows Cash Trading, Margin Trading, MarginPlUS Trading, Spot Trading, Buy Today Sell Tomorrow and Call and Trade on phone. ICIC direct.com Website is the primary trading platform for this trading account. They also provide installable application terminal based application for high volume trader. 2. Wise Investment Account Along with stock trading and IPO investing in BSE and NSE, wise investment account also provide options to invest in Mutual Funds and Bonds ON-LINE. ON-LINE Mutual funds investment allows investment allows investor to invest on-line in around 19 Mutual Fund companies. ICICI direct offers various options while investing in Mutual Funds like Purchase Mutual Funds, Redemption and switch between different schemes, Systematic investment plans, Systematic withdrawal plan and transferring existing Mutual Funds in to electronic mode. This account also provides facility to invest in Government of India Bonds and ICICI Bank Tax Saving Bonds. ICICI Direct.com website is primary tool to invest in Mutual Funds, IPOs, Bonds and Stock trading. THAKUR COLLEGE OF SCIENCE AND COMMERCE 48
  • ON-LINE TRADING 3. Active Trader Account Active Trader account gives more personalized investment options to the investors. It allows investor to use ON-LINE and offline stock trading. It also provides with independent market expertise and support through a dedicated Relationship Manager from ICICI. Active Trader also provides commodity trading. Types of Account in Sharekhan 1. Classic account Allow investor to buy and sell stocks ON-LINE along with the following features like multiple watch lists, Integrated Banking, demat and digital contracts, Real-time portfolio tracking with price alerts and Instant credit & transfer. a. ON-LINE trading account for investing in Equities and Derivatives b. Free trading through Phone (Dial-n-Trade) I. Two dedicated numbers for placing your orders with your cellphone or landline. II. Automtic funds tranfer with phone banking (for Citibank and HDFC bank customers) III. Simple and Secure Interactive Voice Response based system for authentication IV. Get the trusted, professional advice of our telebrokers V. After hours order placement facility between 8.00 am and 9.30 am THAKUR COLLEGE OF SCIENCE AND COMMERCE 49
  • ON-LINE TRADING c. Integration of: ON-LINE trading + 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 2. SpeedTrade account This accounts for active traders who trade frequently during the days tradingsession. Following are few popular features of SpeedTrade account: a. Single screen interface for cash and derivatives b. Real-time streaming quotes with Instant order Execution & Confirmation c. Hot keys similar to a traditional broker terminal d. Alerts and reminders e. Back-up facility to place trades on Direct Phone lines THAKUR COLLEGE OF SCIENCE AND COMMERCE 50
  • ON-LINE TRADING HOW TO TRADE ON DIFFERENT SEGMENTS Cash Cash order can be used if the customer intend to transact in order to takedelivery of asset. Cash trading can also be termed as delivery based trading.  To Trade in Cash:  Allocate funds in the equity segment through “Modify Allocation”. This will give the cutomer the limits to make their purchase.  Click on buy on the equity trading page  Select the Exchange i.e. NSE or BSE.  Put in the first 2 alphabets of the script name in which the customer wish to trade and click on “Find Stock Code” to search for the relevent stock code.  Select “Market” if customer wishes to buy at the best-offered price in the market.  Select “Limit” if customer wishes to quote the price at which customer want to buy the script.  Click on “Buy Now” to go through with deal. Clicking on “proceed” on the verification page, which will send the customer order, detail to the exchange.  For placing “Sell Order”, allocate shares for trading through “Allocates shares” link on “Demat Balances”. The other procedure is similar.  View the status of order in the “Order Book”. THAKUR COLLEGE OF SCIENCE AND COMMERCE 51
  • ON-LINE TRADING  To view the detail of exact date of credit/debit of shares/ money, check “Security/Cash Projection” link.  BTST BTST (Buy today Sell tommorrow) is a facility that allows the customr ortrader to sell shares enver one day after the buy trade date without having to wait forthe receipt of share in to your demat account.  To order on BTST:  Once the customer buy shares of any company allowed to be sold under BTST can be availed on “T+1” and “T+2” days.  The customer can get the lilst of stock allowed for trading under BTST through “Stock list”.  Margin With Margin Trading (Intra Day Trading) cutomers can do intra settlementtrading upt to 5 time with their available funds. Customers can also take buy/sellposition in stock with intention of squaring off the position withing the settlementcycle.  To Trade in Margin (Intra Day):  Click on “Buy/Sell” link on the equity-trading page  Select the exchange as NSE. THAKUR COLLEGE OF SCIENCE AND COMMERCE 52
  • ON-LINE TRADING  Put the first 3 alphabets of the script name in which the customer wish to trade an click on “Fine stock code” to search for the relevant stock code.  Select “market” if customer wishess to Buy/Sell at the best-offered price in the market. Select “Limit” if when cutomer or trder wish to quote the price at which he want to buy the scrip  Click on “Buy now/ Sell now” to go through will the deal. Clicking on “proceed” on the verificatioin page will send the customer order detail to the exchange  The customer can monitor your position through “Open Margin Postioin”.  He can also choose to convert his open Margin Position to Delivery Based Position. To do the same click on “Convert To Delivery” link in open Margin Position  Points to be remember in Margin Trading:  All position taken in Margin have to be squared off same ay  If you do not square off customer position, ICICI direct will initiate a Auto Square off process where by all open positin will be squared off at the market rate.  The extract timing for Auto Square off wouold be displayed in the “Open Margin Position” link. Margin Plus Margin Plus offer trade an order palcement feature through which they can takeintra day position in the equity segment and at the same time, place a conver order forthis position specifying the Stop Loss Trigger Price and Limit Price. THAKUR COLLEGE OF SCIENCE AND COMMERCE 53
  • ON-LINE TRADING  To place a Margin Plus Order:  Allocate the funds trading in equity segment  Select the link “Margin Plus Order” on the trading page  Select the Buy/Sell order can only be a market order.l  At the time of placing this ordr also select a cover Stop Loss Trigger Order. Demat and Saving account In ICICI Direct.com offer there customer facilities to open Demat andSaving Account in one form. Demat account is open with ICICI web trade andSaving account is open with ICICI Banks both of them are linked together. So whiletransaction transfer of money became easier and faster. Where as Sharekhan is only ON-LINE trading house so customer ofsharekhan has to open saving account with bank specified by sharekhan tradinghouses and at time settlement has been made by debiting or crediting the from hiscutomers account THAKUR COLLEGE OF SCIENCE AND COMMERCE 54
  • ON-LINE TRADING Document require to open account in ICICI direct.com and sharekhan1. Proof of residence (Address proof)  Driving License  Voters ID  Passport  Photo credit card  Photo ration card  Utility Bill (Telephone, Electricity etc.)  Bank Statement2. Proof of Identity  Driving License  Voters ID  Passport  Photo ration card3. PAN card4. Two Photographs THAKUR COLLEGE OF SCIENCE AND COMMERCE 55
  • ON-LINE TRADING CASE STUDYTHAKUR COLLEGE OF SCIENCE AND COMMERCE 56
  • ON-LINE TRADING CASE STUDY: SHAREKHANThe companySharekhan, a sister concern of SSKI Investor Services Pvt. Ltd is a retail securitiesand equities solutions provider.The needThe company was growing its business at a fast pace and needed to have systemsthat could support a large and growing user base in an efficient and reliable manner.A moments downtime will result in large financial losses and loss of faith amongcustomers, both critically bad for business.The solutionThe company deployed BEAs WebLogic solutions and ran its trading and riskmanagement functions on this platform.The benefitsThe platform has the business logic to interface with the various technology aspects,and provides encrypted transactions. The various components of Web trade like bankinterfaces, depository participants, and broker accounts have been integrated into asingle scalable entity. This helps optimize the architecture and provide scalability.And the transaction volume has increased by around four times over a period of sixmonths, without the addition of any hardware, and with minimum performanceissues. THAKUR COLLEGE OF SCIENCE AND COMMERCE 57
  • ON-LINE TRADING CASE STUDY: NATIONAL STOCK EXCHANGE OF INDIA LTD.NSE data center manager has trouble-free days and nights with StorageTek®solutions.Business issues at NSEAs the Indian economy grew, data at the National Stock Exchange of India (NSE)was also growing at an increasing rate. Given the nature of the business, dataprotection and high availability of the data are crucial. Downtime is unacceptable.Coping with the growth of data backup needs and a shrinking backup window wasfast becoming a nightmare. To further complicate matters, NSE was faced with thechallenge of online backup of their Oracle databases. The existing backup processinvolved 400 gigabytes of data to be backed up daily and 900 gigabytes for theweekend, over multiple servers and across different platforms such as HP, NT andSun. This involved various types of backup media as well as a large number ofcartridges. Heavy manual intervention was required as the jobs were manuallyqueued and cartridges manually mounted. Additionally, intensive supervision wasrequired to ensure that the entire backup process was executed in a disciplined andconsistent manner. As a result, backup was a tedious and laborious process requiringlogs to be maintained. The data center needed additional personnel to cope with thedemands.The solutionTo meet the backup requirements of NSE, a StorageTek® distributor, CMSComputers Ltd., proposed and implemented a SAN-based LanFree Backup solutioncomprised of a StorageTek L700 tape library (400 slots) with four DLT drives,Brocade switches and Fibre Channel bridges, and backup software from VERITAS THAKUR COLLEGE OF SCIENCE AND COMMERCE 58
  • ON-LINE TRADINGand BMC. To implement the solution, NSE’s servers were connected to the Brocadeswitches using Fibre Channel. The tape drives were then connected to the Brocadeswitches via bridges to implement a heterogeneous SAN comprising HP, NT andAlpha servers. VERITAS NetBackup Data Centerwas installed on the servers.Business benefitsToday, NSE boasts of being the only stock exchange in India with a live disasterrecovery site. With a more efficient and reliable backup process, NSE is assured ofmeeting the demands for high availability and business continuity, even withgrowing data needs and shrinking backup windows.Financial benefitsThe solution reduced the number of cartridges used daily. More importantly, byautomating all its manual tasks, NSE has saved more than 50 percent of the hourspreviously required in the backup process. NSE can now ensure higher productivityand re-deploy its personnel for more efficient utilization while ensuring that backupactivity is carried out in a consistent, disciplined and reliable manner.Technology benefitsWith SAN-based direct-connect technology and the use of automated tape backup,NSE enjoys better throughput and more reliable backup avoiding issues such as LANnetwork bandwidth bottlenecks and collision of data packets. NSE is able tomaintain a respectable backup window and restoration is systematic and fast. Guidedrecovery for Oracle databases was also put in place. This solution allows the poolingof tape drives to be shared among the multiple connected servers, acrossheterogeneous platforms, and eliminates the need to back up servers individually.NSE is able to seamlessly and efficiently manage its backup process and storage THAKUR COLLEGE OF SCIENCE AND COMMERCE 59
  • ON-LINE TRADINGdevices from a single management console. The solution also provides the scalabilityto increase storage capacity as NSE’s requirements grow. CASE STUDY: BOMBAY STOCK EXCHANGEThe product - BOLT: Bombay Online Trading System The online trading system in use at the Stock Exchange, Mumbai, since 1995The client - Mumbai Stock Exchange (BSE) Indias oldest stock exchange, its 30-share sensitive index (Sensex) of the most-traded securities is indicative of the health of the countrys securities markets, and isthe Indian equivalent of the Dow Jones index.CMC took over the task of developing the software for computerised securitiestrading knowing full well that it would be an extremely complicated job. Nosoftware company in India had ever tried developing software for automated trading.The BOLT system became operational in 1995. On March 14, 1995, 818 scrips weretransferred to the screen-based trading system. It is one of the few stock tradingsystem in the world that handles hybrid / mixed modes of trading; both order-drivenand quote-driven. It supports the normal segment, the auction segment, the odd-lotsegment and continuous net settlement. There are now more than 6000 BSE tradingterminals spread across the country. The main achievements of the BOLT system are:  An average response time of less than two seconds THAKUR COLLEGE OF SCIENCE AND COMMERCE 60
  • ON-LINE TRADING  On an average, 3.4 million market queries are handled daily  The system can support more than 10,000 usersBOLT implementation and maintenance is one of the major successes of CMC. Agroup of about 50 engineers continue to work for the maintenance and enhancementof the BOLT system. THAKUR COLLEGE OF SCIENCE AND COMMERCE 61
  • ON-LINE TRADING CONCLUSION On-line Trading in shares and securities has been already started inIndia. It has been made possible due to introduction of demat. Many otherinstitutions have been started the online trading system from this ICICI Direct.comand Sharekhan is one of them. The investors can carry out buying and selling ofsecurities while sitting in the house or office. Here ICICI and Sharekhan bothprovide the online trading system. Here the comparison is done between them. So to trade in shares investors have to open an account with theseinstitutions. There are three account opened into one place DEMAT ACCOUNT,BANK ACCOUNT and ON-LINE TRADING ACCOUNT. A password is given toeach investor which is secret. Investors can carry out buying and selling securities atBSE and NSE during normal trading hours. It is important to note that trading in demat shares is possible only inthose stock exchange whose clearing houses are linked to the depository. So theinvestors can trade easily with these institution which is convenient to them. Bibliography THAKUR COLLEGE OF SCIENCE AND COMMERCE 62
  • ON-LINE TRADING Books Referred :  Financial Markets and Services -------- E Gordan, K Natrajan by Himalaya Publication  Financial Management ------------------- M.Y.Khan & P.K. Jain Websites : 1. www.icicidirect.com 2. www.sharekhan.com 3. www.internet news.co.inTHAKUR COLLEGE OF SCIENCE AND COMMERCE 63