18498910 a-summer-training-project-report-on

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  • 1. A SUMMER TRAINING PROJECT REPORT ON AT UNICON SECURITIES PVT. LTD Submitted in partial fulfillment of the degree Of MASTER’S OF BUSINESS ADMINISTRATION SESSION (2007-2009)SUBMITTED TO: - SUBMITTED BY:-KURUKSHETRA UNIVERSITY, Sunny GambhirKURUKSHETRA. MBA (3rd semester) Marketing/finance College Roll no. –4019 University Roll no. _ DOON VALLEYINSTITUTE OF ENGG. & TECHNOLOGY KARNAL, HARYANA (Approved by AICTE, Affiliated to Kurukshetra University, Kurukshetra) 1
  • 2. DECLARATIONI sunny Gambhir, student of MBA IInd Semester, studying at DoonValley Institute of Engineering and Technology, Karnal, hereby declarethat the summer training report on “DEMAT ACCOUNT” submitted toKurukshetra University, Kurkshetra in partial fulfillment of Degree ofMaster’s of Business Administration is the original work conducted byme.The information and data given in the report is authentic to the best of myknowledge.This summer training report is not being submitted to any otherUniversity for award of any other Degree, Diploma and Fellowship. (SunnyGambhir) 2
  • 3. ACKNOWLEDGEMENTIt is my pleasure to be indebted to various people, who directly orindirectly contributed in the development of this work and whoinfluenced my thinking, behavior, and acts during the course of study.I express my sincere gratitude to Dr. Harish Abhichandani, worthyPrincipal for providing me an opportunity to undergo summer training atUnicon Investment SolutionsI am thankful to Mr. Sachin Arora, zonal head of unicon investmentSolution for his support, cooperation, and motivation provided to meduring the training for constant inspiration, presence and blessings.I also extend my sincere appreciation to Mr. Vineet sachdeva (lecturer,D.I.E.T) who provided their valuable suggestions and precious time inaccomplishing my project report.Lastly, I would like to thank the almighty and my parents for their moralsupport and my friends with whom I shared my day-to-day experienceand received lots of suggestion that improved my quality of work. (SunnyGambhir) 3
  • 4. Table of ContentsS.No. Particulars Page No. 1. COMPANY PROFILE OF UNICON INVESTMENT 1-19 SOLUTIONS 2. OBJECTIVES OF THE STUDY 20 3. INTRODUCTION TO DEMAT ACCOUNT 21-24 4. STUDY OF “DEMAT ACCOUNT PROCEDURE” 25-54 5. RESEARCH METHODOLOGY 55-59 6. DATA ANALYSIS & INTERPRETATIONS 60-70 7. LIMITATIONS OF THE STUDY 71 8. SUGGESTIONS AND RECOMMENDATIONS 72 9. BIBLIOGRAPHY 73 10. APPENDIX 74-76 ANNEXURE – 1 QUESTIONNAIRE 4
  • 5.  INTRODUCTION TO UNICON INVESTMENT SOLUTIONS MISSION AND VISION MANAGEMENT TEAM PRODUCTS AND SERVICES OFFERED BY UNICON 5
  • 6. INTRODUCTION TO UNICONUnicon has been founded with the aim of providing world class investingexperience to hitherto underserved investor community. The technologytoday has made it possible to reach out to the last person in the financialmarket and give him the same level of service which was available toonly the selected few.Unicon gives personalized premium service with reasonable commissionon the NSE, BSE & DERVATIVES market through their equity brokingarm Unicon Securities private ltd. and commodities on NCDEX andMCX through their Unicon Commodities Pvt Ltd. With theirsophisticated technology we can trade through our own computer and ifwe want human touch we can also deal through our relationshipsmanagers out of more than 100 branches.Unicon also give personalized services on insurance (Life and General)&Investments ( Mutual funds & IPO’S ) needs through their Insurance &Investment distribution arm Unicon Insurance Advisors Pvt. Ltd. Theirtailormade customized solutions are perfect match to different financialobjectives. Their distribution network is backed by in house back officesupport to serve their customers promptly 6
  • 7. MISSION AND VISION OF UNICON INVESTMENT SOLUTIONSMISSION:To create long term value by empowering individual investors throughsuperior financial services supported by culture based on highest level ofteam work, efficiency and integrityVISION:To provide the most useful and ethical investment solutions guided byvalues driven approach to growth, client service and development 7
  • 8. MANAGEMENT TEAM OF UNICON INVESTMENT SOLUTIONSFounder& CEO: Mr. Gajender NagpalMr Nagpal with his dynamic leadership brings vision to the company. Amanagement graduate by qualification, Mr. Nagpal brings with him over14 years of experience in the stock market. Before joining Unicon he hasserved at senior positions for 5 years with Kotak securities at a regionallevel and Indiabulls securities for 4 years at national level assignments.Mr. Nagpal brings with him the rich experience of building a retailbroking network.He is a familiar face on the electronic media and is well respected in thebroking industry for his stock market expertise.Co-Founder& President: Mr. Ram M GuptaMr. Gupta through his aggression and dynamism brings energy to theteam. He has 8 years of stock market experience behind him and isresponsible for driving the sales team. Mr. Gupta has held senior levelpostions in Karvy stock broking and Indiabulls Securities. Mr. Gupta issupported by a team of over 850 relationship mangers spread over 89locations across the countryChief Operating Officer: Mr. Sandeep AroraMr. Sandeep Arora brings with him over 11 years of experience ofmanaging operations of stock broking company. Mr. Sandeep Arorabefore taking over as head of operations at Unicon was responsible formanaging the operations of Indiabulls Securities Ltd. Mr. Sandeep Arorais supported by his team of over 400 people helping him to give worldclass service to the clients. 8
  • 9. Chief Financial Officer: Mr. Vikas MallanMr Mallan A Chartered Accountant, Company Secretary and CostAccountant by profession. Mr. Mallan has over 14 years of experience inthe area of finance. Before joining Unicon he has served at senior levelpositions with Rediff.com, Reliance Telecom and Koshika Telecom. Hisexperience includes a Nasdaq listing of an Indian internet company andHead of Finance of a leading Law firm. Mr. Mallan is headingDistribution / Mutual Fund initiative and is supported by around 1100dedicated employees nationwide.Chief Compliance Officer: Ms. Anjali MukhijaMs. Anjali Mukhija heads compliance. She brings with her 12 years ofexperience in the stock markets. Her current job profile includes brokingoperations, client relations & grievance redressal, coupled with Publicdealings. Prior to joining Unicon, she was with the National StockExchange, Delhi Regional Office for 10 years and had held seniorposition for a brief period in a reputed broking house.National Head (E-Broking): Mr. Trinadh KiranMr Trinadh Kiran is an MBA marketing professional from AligarhMuslim University and has done 10 months research in Capital Marketsfrom IIM-Ahmedabad. He brings with him a total work experience of 7years and has worked with almost all big giants of capital market likeIndia Infoline, India Bulls and Net worth Stock Broking. He is associatedwith Unicon since June 2005. He has extensive knowledge of RetailBroking and expertise in E-Broking. 9
  • 10. National Head (Business Alliances): Mr. Vijay ChopraMr. Vijay Chopra is a management graduate from Indian Institute ofForeign Trade, New Delhi. He has a illustrious professional track recordof spanning over 11 years wherein he has handled various assignments ata senior levels with some of the best names in the Consulting, FMCG &healthcare space. His forte has been supply chain management, NewProduct Launches, Sales, Marketing, Product management & Training.Mr. Chopra along with his team handles over 300 business partnernetwork which is spread over the entire geographical spread of thecountry.Head-Priveleged Client Group: Mr. Ashish KukrejaMr. Ashish has the responsibility of handling PCG business with Unicon.He brings with him a wide industry exposure and joined Unicon in July2006 after rendering his services to Kotak Securities, where he wastaking care of franchisee business and later started handling HNI desk.He is an MBA (finance) from ICFAI Business School.Vice President-HR &Training: Ms. Deepa MohamedMs Deepa Mohamed Sqn. Ldr.(Retd). Deepa Mohamed, pioneer as firstbatch of women Officer in Indian Air Force is an Electronics &Communications engineer from Netaji Subhas Institute of Technology(Delhi). She has also undergone Aeronautical Engineering course fromAFTC, Bangalore and Post graduation specialization in Human ResourceManagement from XLRI-Jamshedpur. She has 12 years of workingexperience in personnel management and administration and is associatedwith Unicon since September, 2006. She has been instrumental in settingup Human resource and Training division. She has worked as an ODconsultant and her expertise lies in Organization development and changemanagement. 10
  • 11. PRODUCT & SERVICES OFFERED BY UNICONUnicon deals with a numbers of products & services: • Equity • Commodity • Depository • Privileged Client Group • Properties • Distribution • NRI Services • Back Office 11
  • 12. EquityUnicon offers a unique feature of a single Screen Trading Platform ofNSE, BSE & Derivatives. Unicon offers both Offline & Online tradingplatforms. You can Walk in or place your orders through telephone at anyof our branch locationsOnline Trading Products: • Unicon plus • Unicon SwiftUnicon PlusBrowser based trading terminal that can be accessed by a unique ID andpassword. This facility is available to all our online customers themoment they get registered with us.Unicon SwiftApplication based terminal for active traders. It provides better speed,greater analytical features & priority access to Relationship Managers. 12
  • 13. CommodityUnicon offers a unique feature of a single screen trading platform inMCX and NCDEX.Unicon offers both Offline & Online tradingplatforms. You can Walk in or place your orders through telephone at anyof our branch location Online commodity internet trading platformthrough uniflex. • Live Market Watch for commodity market (NCDEX, MCX) in one screen • Add any number of scrips in the Market Watch • Tick by tick live updation of Intraday chart • Greater exposure for trading on the margin available • Common window for market watch and order execution • Key board driven short cuts for punching orders quicklyon • Real time updation of exposure and portfolio • Facility to customize any number of portfolios & watchlists. • Market depth, i.e. Best 5 bids and offers, updated live for all scripts • Facility to cancel all pending orders with a single click • Instant trade confirmations • Stop-loss feature. 13
  • 14. DepositoryUnicon depositories services offers dematerialization services as aparticipant in Central Depositry Services Limited (CDSL) through itsdepository operations. The company believes in efficient and cost-effective and integrated service support to its brokerage business. UniconSecurities Private Limited, as a depository participant, will offerdepository accounts for individual investors as well as corporates whichwill enable them to transact in the dematerialized segment, without anyhassles. Depository offers a safe, convenient way to hold securities ascompared to holding securities in paper form. Our service provides anintegrated single platform for all our clients ensuring a risk free, efficientand prompt depository process. Facilities Offered by Unicon* De-materialization:You can submit your physical shares at the Unicon branch fordematerialization into electronic form.* Re-materialization:You can also request for Re-materialization which enables you to convertthe dematerialized shares into physical form. 14
  • 15. * Transfer:Inter and intra depository services are available through which you cantransfer shares.IPO:You can apply for IPO using your demat account details and on allotmentthe securities are transferred directly to your demat account.* Corporate Actions:While holding your stock in demat account, in case you are eligible forany bonus and rights issues the allotment would be transferred to yourdemat account.* Easi:You can view your demat account over the Internet and avail a host ofservices. This facility empowers our clients to view, downloadPriveleged client groupWe provide customer focused transparent investment planning andsolutions. We offer products which benefit your special status. PCG has aspecialized advisory team which nurtures all your investment. We ensurethat your investments work for you rather than you for them. 15
  • 16. Products offered by unicon • Unicon Signature Account • Nifty Tracker • Unicon Trade Plus • Stastical Arbitrage • Unicon Wealth PlannerPropertiesUnicon is a specialized property broking company. Our highlyexperienced and professional teams present retail, office, industrial andresidential property opportunities to a broad base of clients. Whether it isa residential or commercial development, Unicon offers a total solution toour clients inclusive of market research, marketing strategy, interactionwith the professional teams and sales or leasing of the property.Unicon’s professional team of consultants will assist you to identifysuitable premises that satisfy your requirements. We will help younegotiate favorable leases and assist with the preparation of alldocumentation.“Whether you are looking for a home or a place to conduct businessUnicon shall find you one” 16
  • 17. DistributionUnicon is fast emerging as a leader in the Insurance and Mutual Fundsdistribution space. Unicon has over 100 branches and a huge number of“Business Development Executives” who help to source and service thecustomers throughout the country. Unicon is fast becoming the preferred“Vendor Independent” distribution houses because of providing efficientservice like free pick-up of collection of cheques/DD’s, Keeping track ofthe premiums etc to its customers.Unicon offers the following distribution products:- IPOs Mutual Funds Insurance 17
  • 18. IPOAt Unicon you can invest in the Primary markets (Initial PublicOfferings) online without going through the hassles of filling up any IPOapplication forms or any other paperwork.We shall make sure that you do not miss the opportunity tosubscribe/invest in a good IPO issue by providing you an online IPOapplication form, transfer of funds online through secured paymentGateways of leading banks like ICICI, HDFC, AXIS bank.In addition to the above we shall provide you with the In-Depth analysisof the IPO issues which shall be hitting the Indian Markets in near future,IPO Calendar, analysis on the recent IPO listings, prospectus, offerdocuments and other IPO research reports so as to help you take aninformed decision to invest in the IPO issues.Online IPO facility is open to all our registered clients at no costwhatsoever. All you need is the following to subscribe online to the IPOissues • A trading account with Unicon • A Demat account with Unicon • An access to the net banking facility with the Banks through which Unicon has operational Gateway facility (ICICI, HDFC and AXIS Bank). • You must have signed a Power of Attorney (POA) agreement for applying in IPO’s online 18
  • 19. Mutual FundsUnicon Provides expert advice to its clients for their investments inequity & debt markets through Mutual Funds. Our experts advice you thebest investment solutions that suit you and help you to reach yourfinancial goals.We help you ascertain your risk profile & guide you with the rightproduct mix which reduce your tax liability increase your savings &enhance your wealth. Weather you have a conservative, medium oraggressive investment risk appetite, our experts would guide you to builda portfolio to optimize the return of interest.Classification of Mutual Funds • By structure 1. Open-ended Scheme 2. Close-ended Scheme 3. Interval Schemes • By Investment objective 1. Growth Schemes 2. Income Schemes 3. Balanced Schemes 4. Money market Schemes • By Other Schemes 1. Tax saving schemes 2. Special schemes 3. Index Schemes 19
  • 20. InsuranceGeneral InsuranceUnicon offers all products of General Insurance under one umbrella.Unicon comprises of a team of distinguished professionals frominsurance, finance and other management disciplines who have vastbusiness & managerial experience.Unicon team evaluates the clients business environment and studies therisk profile based on the results of these evaluations, Unicon team thensuggests the most cost effective , integrated insurance package that isperfectly suited to the clients risk profile. Unicon has a nationwidenetwork of branches all over India, equipped with top qualityinfrastructure facilities, to provide you prompt & efficient service.Life InsuranceUnicon offers you a Peace of Mind by offering various life insuranceplans for your unique & specific needs. Our philosophy is that for everyfinancial problem, there is a solution also. And we are here to give youcomplete financial solutions. At the same time we offer you very Prompt& Reliable Policy related service for enduring relationship. We offer avery wide range of products to fulfill your particular requirements. Youcan always have an access to our 83 Branch Offices situated at primelocations of the city, or you can call our Relationship Manager to guideon your Investments. 20
  • 21. Following is the glimpse of Life Insurance Plans • Protection Plans • Investment Plans • Child Plans • Retirement/Pension Plans • Saving Plans • NRI Plans • Health PlansNRI SERVICESWith India becoming the epicentre of growth the Global Indian feels theneed to be connected to the domestic growth story.Unicon now offers a convenient and hassle-free way of Investing in theIndian Securities Market to the people who are living outside India andwish to participate in the Indian Growth story. 21
  • 22. Procedure for NRI operations in Indian Capital Markets • The NRI can deal with only one bank at any point of time • The NRI He is allowed to invest only 5% of the paid up capital of a company. The aggregate paid up value of equity of any company purchased by all NRIs and OCBs cannot exceed 10 percent of the paid up capital of the company and in the case of convertible debentures, the aggregate paid up value of each series of debentures purchased by all NRIs and OCBs cannot exceed 10 % of the paid up value of each series of convertible debentures. • He can enter only into delivery based trades; all deliveries must only be routed through beneficiary accounts and not directly through the broker. • Shares bought by him cannot be sold unless the payout of the same is received from exchange. • All purchase and sale transactions have to be reported to the RBI by the designated bank • Original brokers contract notes have to be submitted to the designated Bank branch, within 24 hours of the transaction. • He will be required to make bill to bill payments/ settlements. No adjustments of purchase against sale consideration should be done • Shares cannot be bought against the shares sold in the same settlement 22
  • 23. • All Purchase and Sales will be dealt separately for payments / receipts • Sale proceeds of any transaction not reported/approved by the RBI is allowed to be credited to the NRE/NRO savings/demat account. The transaction will have to be reversed in the account and losses if any will be borne by the client. • All tax liabilities arising out of buying and selling of securities will be handled by the designated bankBack OfficeUnicon through its online back-office aims to increase the transparencyand provides you the link to view the details of your account onlineanytime and anywhere.Here you have the advantage of viewing the following reports online • Sauda Details • Financial Ledger • Net position for the day • Net position Detail (for the complete financial year) • E-Contract Note 23
  • 24. OBJECTIVE OF THE STUDY• The main objective of the study is to know about the potential of the market regarding people’s dealing in share market.• To know the role of DEMAT ACCOUNT .• To know the procedure of opening DEMAT ACCOUNT.• The objective is to know that how many people in the city are aware of the UNICON SECURITIES PVT. LTD.• To know where people have already opened their demat a/c and on what basis. 24
  • 25. 25
  • 26. INTRODUCTIONThe trading on stock exchanges in India used to take place through openoutcry without use of information technology for immediate matching orrecording of trades. This was time consuming and inefficient. Thisimposed limits on trading volumes and efficiency. In order to provideefficiency, liquidity and transparency, NSE introduced a nation-wide on-line fully automated screen based trading system where a member canpunch into the computer quantities of securities and the prices at whichhe likes to transact and the transaction is executed as soon as it finds amatching sale or buy order from a counter party. Screen based electronicsystem electronically matches orders on a strict price/time priority andhence cuts down on time, cost and risk of error, as well as on fraudresulting in improved operational efficiency. It allows fasterincorporation of price sensitive information into prevailing prices, thusincreasing the informational efficiency of markets. It enables marketparticipants, irrespective of their geographical locations, to trade with oneanother simultaneous, improving the depth and liquidity of the market. Itprovides full anonymity by accepting orders, big or small, from memberswithout revealing their identity, thus providing equal access to everybody.It also provides a perfect audit trial, which helps to resolve disputes bylogging in the trade execution process entirety. The sucked liquidity fromother exchanges and in the very first year of its operation, NSE becamethe leading stock exchange in the country, impacting the fortunes of otherexchanges and forcing them to adopt SBTS also. Today India can boastthat almost 100% trading take place through electronic order matching. 26
  • 27. Now dematerialisation of shares is introduced “a new concept” whichconverts paper based physical trading into electronic trading. It is a safeand convenient way to hold securities. Screen based trading system helpsin faster transfer of securities and no stamp duty is required on transfer ofsecurities. The trading system operates on a strict price time priority. Allorders received on the system are sorted with the best priced order gettingthe first priority for matching i.e. the best buy order match with the bestsell order. Orders are matched automatically by the computer keeping thesystem transparent, objective and fair. The trading system providestremendous flexibility to the users in terms of kinds of orders that can beplaced on the system. The trading system also provides marketinformation online.In order to promote dematerialization of securities, NSE joined handswith leading financial institutions to establish the national securitiesdepository Ltd. (NSDL), the first depository in the country, with theobjective of enhancing the efficiency in settlement systems as also toreduce the menace of fake/forged and stolen securities. This has usheredin an era of dematerialised trading and settlement. SEBI has madedematerialised settlement mandatory in an ever –increasing number ofsecurities in a phased manner, thus bringing about an increase in theproportion of shares delivered in dematerialised form. There is anincreasing preference to settle trades, particularly in high value securities,in demat form. Such high level of demat settlement reassures success ofrolling settlement. 27
  • 28. WHAT IS DEMATIn India, a demat account, the abbreviation for dematerialised account, isa type of banking account which dematerializes paper-based physicalstock shares. Conversion of Securities from Physical (Paper) Mode intoElectronic Mode is Called Dematerialisation. The Client opens DematAccount with any DP. Upon Demat, the Certificates are destroyed andcredit entry of exactly equal number of Securities is created in Depositoryin Electronic mode. The B.O. account of holder is credited and thesecurities loose their identities. The dematerialised account is used toavoid holding physical shares: the shares are bought and sold through astock broker.This account is popular in India. The market regulator, securities andexchange board of India (SEBI) mandates a demat account for sharetrading above 500 shares. As of April 2006, it became mandatory that anyperson holding a demat account should possess a permanent accountnumber (PAN), and the deadline for submission of PAN details to thedepository lapsed on January 2007.Dematerialisation is the process by which physical certificates of aninvestor are converted to an equivalent number of securities in electronicform and credited in the investors account with its DP. In order todematerialize certificates; an investor will have to first open an accountwith a DP and then request for the dematerialisation of certificates byfilling up a dematerialisation request form [DRF], which is available with 28
  • 29. the DP and submitting the same along with the physical certificates. Theinvestor has to ensure that before the certificates are handed over to theDP for demat, they are defaced by marking "Surrendered forDematerialisation" on the face of the certificates. ACCOUNT OPENING To avail the services of a depository an investor is required to open an account with a depository participant of any depository.PROCEDURE FOR OPENING AN ACCOUNT A demat account are opened on the same lines as that of a Bank Account.Prescribed Account opening forms are available with the DP, needs to befilled in. Standard Agreements are to be signed by the Client and the DP,which details the rights and obligations of both parties • The DP officials will make available the relevant account opening form (depending on whether the client is a retail investor or corporate client/clearing member) and specify the list of documents regarding references that should be submitted along with the form. It will also give a copy of the relevant agreement to be entered with the client, in duplicate. • The client will submit the duly filled in account opening form and client has to visit personally for opening the account in DP. The DP 29
  • 30. officials have to do in person verification and affix the “IN PERSON VERIFICATION” stamp on the account opening form. It should also furnish such documents regarding references, as specified by the DP, along with the account opening form. After executing the agreement the client has to forward it to the DP.• The DP officials will verify that the account opening form is duly filled in. It will also verify the enclosed documents, if any. Incomplete forms will be forwarded to the client for rectification.• For Corporate Clients, the DP officials will verify if the board resolution for the authorized signatories is enclosed.• In case the documents are not proper, the DP officials will reject the form and intimate the client of the same, stating the reasons for doing so.• If the form is in order; the DP officials will accept the same and affix the stamp “verified with original” on each and every proof after seeing the original proofs.• After completion of all documentation, the DP officials will verify the pan from income tax website. And affix the stamp “PAN VERIFIED” with date and sign on the stamp.• The DP officials will enter the client details as mentioned in the account opening form in the DPM (software provided by NSDL & CDSL to the Participant) screen provided for the purpose. In case of NSDL A/c opening the SR. Assist will capture all the details in the DPM and record the client’s signature (on the form) as specimen for authorizations in the future.• After entering client details in the system, a client account number will be generated by the DPM. The DP officials will enter this in the account opening form. After that the officers will verify the 30
  • 31. details in the DPM captured by the SR. Assist. and activate the account. • The DP officials are not allowed to give the demat a/c no to the clients until the a/c is activate, this is applicable for both NSDL & CDSL. • When the demat a/c is activated the DP officials have to send the client master and the copy of agreement between DP and client at the client’s addressThe account holder is called beneficial owner in a depository system andthe account is known as beneficiary account.Features of Beneficary Account· • No minimum balance is required to be retained in a beneficiary account. • An investor can close a beneficiary account with one DP and open an account with another DP. • To dematerialise existing physical holdings, the beneficiary account must be opened in the same ownership pattern in which the securities are held in the physical form e.g.,if one certificate is in individual name and another certificate is jointly held by X & Y, two different accounts should be opened. However, in case of joint holders, securities can be dematerialised in the same account even though share certificates are in different sequence of names e.g., shares held in joint names of X & Y can also be dematerialised in an account opened in the names of Y & X as well by submitting an additional form (Transposition Form) alongwith Demat Request 31
  • 32. Form to the DP.However, shares held jointly by X & Y cannot be dematerialised in an account opened in the name of only X or only Y or any DOCUMENTS SHOULD BE REQUIRED FOR DEMAT ACCOUNT .Proof of Identity (POI): • Passport • Voter ID card • Driving license • PAN card with photograph • Identity card with applicant’s photograph issued by 1. Central or state government and its department 2. Statutory/regulatory authorities 3. Public sector undertakings 4. Scheduled commercial banks 5. Public financial institutions 6. College affiliated to universities Proof of Address (POA): • Ration card • Passport • Voter ID card • Driving License • Bank passbook • Verified copies of :1. Electricity bills (not more than 2 months old) 32
  • 33. 2. Residence landline telephone bill (not more than 2 months old)3. Leave & license agreement/agreement to sell (duly attested)4. Self declaration by supreme court/high court judges, giving the new address in respect of their own accounts. • Identity card with applicants photograph issued by Central or state government and its department 1. Statutory/regulatory authorities 2. Public sector undertakings 3. Scheduled commercial banks 4. Public financial institutions 5. College affiliated to universities. 6. • Passport-size photograph • Copy of PAN card along with original PAN card for verificationBank details: • Copy of cancelled cheque with printed name from the bank. • Copy of bank passbook with name and address and copy of cancelled cheque. • Bank statement with name and address (duly authorized by the bank, if statement is on plain paper) not more than 4 months old and copy of cancelled cheque of MICR & bank detail verification.In case of minor • Date of birth certificate duly notarized • Proof of address and identity documents of the guardian both minor and guardian’s photograph and guardian to sign across both photographs • PAN card of minor as well guardian is mandatory 33
  • 34. In case of NRI • Foreign address and RBI approval date attested copy of RBI approval • NRO-Indian address alonwith proofs • Bank account detailsIn case of joint holdingsIn case of joint holdings, POI and POA documents alongwith PAN cardmust be submitted in respect of all account holders. Original documentsmust be taken to the DP for verification. The DP will also provide a copy of the DP-Client agreement. Account opening form require the applicants to give the followingdetails: • (a) Name(s) of account holder(s) -The investor should ensure that the name is identical to that which appears on the certificate(s) to be dematerialised. In case of joint holdings, account may be opened in any one combination, irrespective of the sequence in which names are appearing on share certificates. Investors are advised to open their account in their fully expanded name, i.e., to spell to the first name as well as the middle name. This would obviate any doubts about the veracity of the information. • (b) Mailing and communication address(es) - The veracity of the applicants address is determined through the documents submitted 34
  • 35. for verification like ration card, passport, voter ID, PAN card, driving license, bank passbook, etc. For NRI accounts, proof is required for both addresses - that of the account holder as well as the constituted attorney. For corporate accounts, a copy of Memorandum of Association, Articles of Association, Board resolution permitting opening of account, the registered address of the company have to be furnished.• (c) Details of guardian in case account holder is a minor -Only a guardian can open a depository account for a minor. The guardian is required to sign the application form, and details of his name and address need to be given in addition to the details of the minor.• (d) Foreign Address and RBI approval details for NRI, FII or OCB accounts -For foreign-based applicants like NRIs, Flls, OCBs, etc., the applicant must furnish original or attested copies of the power of attorney and the approval letter from RBI permitting them to invest, as the case may be.If the account holder is an FII or an OCB, SEBI registration details along with attested copy of registration certificate issued by SEBI and authorisation letter is required.• (e) Details of bank account -Details of bank account of the account holder, including the nine digit code number of the bank and branch appearing on the MICR cheques issued by the bank have to be filled in the application form. Companies use this information for printing them on dividend/interest warrants etc.• (f) Nomination declaration - A beneficial owner can make a nomination of his account in favour of any person by filing the nomination form with his DP. Such nomination is considered to be conclusive evidence of the account holder(s) disposition in respect of all the securities in the account for which the nomination is made. 35
  • 36. • (g) Standing Instruction - a facility of standing instruction is provided to the investors for receiving securities to the credit of their accounts without giving a separate receipt instruction. The demat account cannot be operated on "either or survivor" basislike the bank account. In case of the joint account for the beneficialowners, all the joint holders have to sign the account opening form. The investor will submit to his DP the duly filled in account openingform & DP-client agreement along with the documents. The DP will verify whether the account opening form has been dulyfilled in or not. He will also verify the submitted documents. Forcorporate investors, the DP will also verify whether the board resolutionfor the authorized signatories has been enclosed. The DP will ensure thatclients signature is recorded on the form which will serve as specimenfor authorizations in future. If the application form and documents are in order, then the DP willaccept them and give an acknowledgement slip duly signed and stampedto the client. The DP will execute the agreement and give a copy of it tothe client. After completion of all documentation, the DP will enter the clientdetails as mentioned in the account opening form in the DPM (softwareprovided by NSDL to the DP) screen provided for the purpose. Afterentering client details in the system, a client account number will begenerated by the DPM. The DP will enter this in the account openingform. On successful opening of the account, the DP will give: • Client Id - an eight digit number to be used along with DP Id for any future transactions. • Delivery Instruction slip book. • A copy of the report listing the client details captured in the DPM database to the client. The report will be generated by the DPM. 36
  • 37. PREREQUISTIES FOR DEMATERIALISATION REQUEST1. The registered holder of the securities should make the request.2. Securities to be dematerialised must be recognised by NSDL/CDSL as eligible. In other words, only those securities whose ISIN has been activated by NSDL/CDSL, can be dematerialised.3. The company/issuer should have established connectivity with NSDL/CDSL. Only after such connectivity is established that the securities of that company/issuer are recognized to be "available for dematerialisation".4. The holder of securities should have a beneficiary account in the same name as it appears on the security certificates to be dematerialised.5. The request should be made in the prescribed dematerialisation request form. 37
  • 38. REASONS FOR DEMATERIALISATION REQUEST REJECTION1. The quantity of shares mentioned in the DRF is more than the actual certificates sent.2. The quantity of shares mentioned in the DRF is less than the actualcertificates sent.3The certificates sent are fake.4. The certificates sent are reported Stolen.5. Original certificates present are those for which the duplicates havealready been issued.6. Endorsements on the certificates are forged.7. Securities stand on a different name than those mentioned in the DRF.8. The details mentioned on the certificates do not match with the detailson the DRF, or the order of the holders name on the DRF is differentfrom the names given on the certificates. The scrutiny by the DP isincomplete.9. The securities attached / DRF does not pertain to the R&T Agent towhom the DRF is sent.10. Electronic request received but physical certificates are not receivedwith in 15 days. 38
  • 39. 11. Specimen Signature on the DRF differs from the signatures recordedwith the Registrar / Transfer Agents.12. The certificates sent have a court injunction against themPrecautions: • Corporate investors to enclose Memorandum of Association/Trust deed/Board resolution for the authorized signatories along with the account opening form. • Details with respect to the bank account details of an investor must be indicated in the space provided for the same in the account opening form. • If an investor is interested in availing the facility of standing instructions for credits to his account, then such instructions may be given to the DP. Otherwise, he will need to give a receipt instruction to his DP for receiving credits to his account. BENEFITS OF DEMATERIALISATION • No stamp duty for transfer of securities in the Depository System. In the case of physical shares, stamp duty of 0.25% of sale value is payable on transfer of shares. • Elimination of bad deliveries and all risks associated with physical certificates such as loss in transit, theft, mutilation, damage, etc. • Facility for freezing/locking of investor accounts to make it non- operational for specified period. • Instead of filling up transfer deed(s) a simpler form is to be given `to the DP. • Facility to pledge and hypothecate securities. Pledging Dematerialised securities is easier and advantageous as compared 39
  • 40. to pledging physical shares. In respect of shares in "compulsory Demat" category, banks prefer to lend against shares held in electronic form, and offer better terms.• Odd lots are not differentiated in the electronic system. Even a single share can be traded at the market rates without any reduction in realisation.• Just like a bank branch, the DP will give a periodical statement of account of holdings. In addition, investor can obtain a statement of holdings as and when required for a fee.• In case investor loses the statement of holdings, he can inform his DP and obtain a duplicate statement. Investors statement of holdings cannot be used by anybody else for trading in his account.• When an investor opens an account with a DP, he signs an agreement with the DP in which the DP will indemnify the investor for any mis-use of his holdings. The depository will also ensure thatthe interests of the investor are protected. Grievances, if any, against his DP will be resolved by the Depository.• Every transaction in investors account will have to be authorised by him, which ensures total control of the investor over his investment• A safe and convenient way to hold securities and there is immediate transfer of securities.• 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.• Reduction in paperwork involved in transfer of securities and Reduction in transaction cost• Automatic credit into demat account of shares, arising out of bonus/split/consolidation/merger etc. 40
  • 41. DEMAT PROCESS1. The registered holder of the securities makes the request.2. Securities must be recognised by Depository as eligible.3. Client submits DRF & physical certificates to DP. DP checks securities.4. Client defaces certificates and DP punches two holes on name of company.5. DP enters demat request in system for Depository.6. DP dispatches certificates along with DRF to R&T.7. Depository records the details and sends to R&T.8. R&T agent verifies the details and confirms to Depository.9. Depository credits the demat securities to BO a/c of client and intimates DP electronically.10.DP issues statement to client. 41
  • 42. DEMAT -PROCESS Demat Process: Shareholders With Physical Certificate Depository Shareholder goes to DP with his physical share certificates Participants Shareholder opens his account Account Opening with DP. Demat Request Shareholder fills DRF in duplicate, defaces the shares Form (DRF) and hands over to DPThe DP sends R&T Depository DP sends informationShare certificates electronically to Depository Agentto R&T agent fordematerialisation Dematerialisation Upon confirmation of Demat by R&T Agent, the Depository confirms Dematerialisation. Credit to the BO A/c. of the Investor 42
  • 43. INFORMATION NEEDED FOR DEMAT ACCOUNTAn investor has to give his bank account details at the time of accountopening. It is for the protection of investor’s interest. The bank accountnumber will be mentioned on the interest or dividend warrant, so thatsuch warrant cannot be encashed by any one else. Further, cash corporatebenefits such as dividend, interest will be credited to the investorsaccount directly through the ECS (Electronic Clearing Service) facility,wherever available, by the company.An investor can change the details of his bank account. Since in thedepository system monetary benefits on the security balances are paid asper the bank account details provided by the investor at the time ofaccount opening, the investor must ensure that any subsequent change inbank account details is informed to the DP.An Investor should immediately inform his/her DP if the address ofthe investor changes, who in turn will update the records. This willobviate the need of informing different companies.An investor can open more than one account in the same name withthe same DP and also with different DPs.An investor has not to keep any minimum balance of securities in his/heraccounts. Depository / DP can be chosen by investor as per convenienceirrespective of the DP of the broker.The demat account must be opened in the same ownership pattern such assecurities owned individually in which the securities are held in thephysical form. e. g. if one share certificate is in the individual name andanother certificate is jointly with somebody, two different accounts wouldhave to be opened. 43
  • 44. WHAT IS DEPOSITORY AND DEPOSITORY PARTICIPANTDepository can in many ways be compared to a bank. Securities of theinvestors are held in electronic / book entry form by the Depository.Apart from holding the securities, Depository also provides servicesrelated to transactions in securities.In India, a Depository Participant (DP) is described as an agent of thedepository. They are the intermediaries between the depository and theinvestors. The relationship between the DPs and the depository isgoverned by an agreement made between the two under the DepositoriesAct. In aStrictly legal sense, a DP is an entity who is registered as such with SEBIunder the provisions of the SEBI Act.Think of it like a bank. The head office where all the technology rests anddetails of all accounts held is like the depository. And the DPs are thebranches that cater to individuals.At present two Depositories viz. National Securities Depository Limited(NSDL) and Central Depository Services (I) Limited (CDSL) areregistered with SEBI 44
  • 45. NATIONAL SECURITIES DEPOSITORY LIMITED (NSDL)NSDL was the first depository organization promoted by IDBI, UTI, andNational Stock Exchange (NSE). NSDL was set up to provide electronicdepository facilities for securities being traded in capital market. Thedepositories ordinance was promulgated by the Government of India inSeptember 1995. The Securities and Exchange Board of India (SEBI)issued guidelines for depositories in May, 1996.NSDL has minimum net worth of Rs 100 crores. NSDL deals with sharesin dematerialized form through depository participants who are agents ofinvestor banks, stockbrokers and financial institutions. NSDL DepositoryParticipant can be a public financial institution, bank, custodian,registered stockbroker or a non-banking financial company subject to theapproval from the Depository Company and SEBI. NSDL aims atensuring the safety and soundness of Indian capital market bydeveloping settlement solutions that increase efficiency, minimize riskand reduce costs. 45
  • 46. CENTRAL DEPOSITORY SERVICES (INDIA) LIMITED (CDSL)CENTRAL DEPOSITORY SERVICEES LIMITED (CDSL) is seconddepository in India, is set up to meet the objective the Act & to fulfill theuser’s need. CDSL is secured “Certificate of Commencement” ofbusiness on Feb 8, 1999 from SEBI. The balances in the investors’account recorded and maintained with CDSL can be obtained through theDP. The DP is required to provide the investor, at regular intervals, astatement of account, which gives the details of the securities holdingsand transactions. The depository system has effectively eliminated paper-based certificates, which were prone to be fake, forged, counterfeitresulting in bad deliveries. CDSL offers an efficient and instantaneoustransfer of securities.CDSL was promoted by Bombay Stock Exchange Limited (BSE) jointlywith leading banks such as State Bank of India, Bank of India, Bank ofBaroda, HDFC Bank, Standard Chartered Bank, Union Bank of India andCenturion Bank. Each and every activity of CDSL stem from theessential reason behind forming this depository, i.e. to encourage Indiasindividual investors to benefit from actively participating in a depository. 46
  • 47. Services provided by Depository system • Dematerialisation (usually known as demat) is converting physical certificates to electronic form. • Rematerialisation, known as remat, is reverse of demat, i.e. getting physical certificates from the electronic securities. • Transfer of securities, change of beneficial ownership • Settlement of trades done on exchange connected to the Depository • Pledge / Hypothecation of demat shares, viz. Loan against shares • Electronic credit in public offering of the Companies • Non - Cash corporate benefits, viz. Bonus / Rights - direct credit into electronic form • Depository restrict the risk of fraud 47
  • 48. The charges for account closure and securities transfer due to account closing.SEBI vide Circular No. MRD/DoP/Dep/Cir-22 /05 dated November 09,2005 advised that with effect from January 09, 2006, no charges shall belevied by a depository on DP and consequently, by a DP on a BeneficiaryOwner (BO) when a BO transfers all the securities lying in his account toanother branch of the same DP or to another DP of the same depositoryor another depository, provided the BO Account/s at transferee DP and attransferor DP are one and the same, i.e. identical in all respects. In casethe BO Account at transferor DP is a joint account, the BO Account attransferee DP should also be a joint account in the same sequence ofownership.All other transfer of securities consequent to closure of account, notfulfilling the above-stated criteria, would be treated like any othertransaction and charged as per the schedule of charges agreed uponbetween the BO and the DP. Freeze or lock of an accountInvestors can freeze or lock their accounts for any given period of time, ifso desired. Accounts can be frozen for debits (preventing transfer ofsecurities out of accounts) or for credits (preventing any movements ofhindrances into accounts) or for both. 48
  • 49. Trading / SettlementTraditionally settlement system on Indian stock exchanges gave rise tosettlement risk due to the time that elapsed before trades were settled byphysical movement of certificates. The process of physical moving thesecurities from seller to his broker to clearing corporation to the buyer’sbroker and finally to the buyer took time with the risk of delaysomewhere along the chain. Now depository holds securities indematerialised form. The procedure for buying and selling dematerialisedsecurities is similar to the procedure for buying and selling physicalsecurities. The difference lies in the process of delivery (in case of sale)and receipt (in case of purchase) of securities. In case of purchase:- • The broker will receive the securities in his account on the payout day • The broker will give instruction to its DP to debit his account and credit investors account • Investor will give ‘Receipt Instruction to DP for receiving credit by filling appropriate form. However one can give standing instruction for credit in to ones accounts that will obviate the need of giving Receipt Instruction every time. In case of sale:-The investor will give delivery instruction to DP to debit his account andcredit the broker’s account. Such instruction should reach the DP’s officeat least 24 hours before the pay-in as other wise DP will accept theinstruction only at the investor’s risk. 49
  • 50. Standing Instruction given in the account opening formIn a bank account, credit to the account is given only when a pay in slipissubmitted together with cash/cheque. Similarly, in a depository accountReceipt in form has to be submitted to receive securities in the account.However, for the convenience of investors, facility of standinginstruction is given. If you say Yes for standing instruction, you neednot submit Receipt in slip everytime you buy securities. If you areparticular that securities can be credited to your account only with yourconsent, then do not say yes [or tick ] to standing instruction in theapplication form. Delivery Instruction Slip (DIS) and the precautions which one need to observe with respect to Delivery Instruction SlipsTo give the delivery one has to fill a form called Delivery Instruction Slip(DIS). DIS may be compared to cheque book of a bank account. Thefollowing precautions are to be taken in respect of DIS:- • Ensure and insist with DP to issue DIS book. • Ensure that DIS numbers are pre-printed and DP takes acknowledgment for the DIS booklet issued to investor. • Ensure that your account number [client id] is pre-stamped. • If the account is a joint account, all the joint holders have to sign the instruction slips. Instruction cannot be executed if all joint holders have not signed. • Avoid using loose slips. • Do not leave signed blank DIS with anyone viz., broker/sub- broker. • Keep the DIS book under lock and key when not in use. 50
  • 51. • If only one entry is made in the DIS book, strike out remaining space to prevent misuse by any one. • Investor should personally fill in target account -id and all details in the DIS.It is possible to give delivery instructions to the DP over Internet .BothNSDL and CDSL have launched this facility for delivering instructions toyour DP over Internet, called SPEED-e and EASI respectively. Thefacility can be used by all registered users after paying the applicablecharges. Lending and borrowing of demat securitiesIf any person required to deliver a security in the market does not readilyhave that security, he can borrow the same from another person who iswilling to lend as per the Securities Lending and Borrowing Scheme.Lending and borrowing has to be done through an ApprovedIntermediary registered with SEBI. The approved intermediary wouldborrow the securities for further lending to borrowers. Lenders of thesecurities and borrowers of the securities enter into separate agreementswith the approved intermediary for lending and borrowing the securities. Lending and borrowing is affected through the depository system.You can lend your securities through Approved Intermediaries registeredwith SEBI.One can lend his/her demat seurities by entering into an agreement withthe approved intermediary to be a lender under this scheme. After that,you may lend securities any time by submitting lending instruction toyour DP.Intermediary may return the securities at any time or at the end of theagreed period of lending. Intermediary has to repay the securitiestogether with any benefits received during the period of the loan.One can receive the corporate benefits which would accrue on thesesecurities during the period of lending.The benefits will be given to theIntermediary/borrower. However, whenever the securities are beingreturned / recalled. Intermediary/borrower will return the securitiestogether with benefits received. 51
  • 52. PHYSICAL SEGMENTChange in Name / Status- All requests for change of name should be accompanied by a copy of the notification in Official Gazette or a Newspaper.- Request for change of name consequent upon marriage/divorce should be accompanied with marriage certificate/divorce decree.- For effecting change of status from minor to major, please send proof of age (such as attested copy of Birth Certificate or School Leaving Certificate)- In the case of limited companies, a certified copy of the Certificate of Incorporation consequent to Change of Name issued by the Registrar of Companies should be submitted along with Memorandum & Articles of Association- The new specimen signature duly attested by holders banker should be lodged with the Company to take on record the new signature.Change of AddressPlease inform the R&TA viz Integrated Enterprises (India) Limitedimmediately if there is any change in address, quoting Folio No. Dulysigned by the main (1st) holder as per specimen signature recorded withus. This is the reason for which we would advise you not to send change 52
  • 53. of address request by mail. If shares are held in demat form, pleaseadvice your DP regarding change of address.Loss of Share Certificates Any communication to the Company regarding loss of share certificatesshould always be signed by the shareholder as per specimen signatureregistered with the Company, accompanied by FIR lodged with localpolice station giving full details of lost certificate(s) such as certificate(s)Nos., Distinctive Nos. etc.- Please immediately apply for injunction order in appropriate Court ofLaw for stopping transfer, giving full details of Certificate Nos.,Distinctive Nos. etc.- Upon receipt of such communication, the procedure to be followed forobtaining duplicate share certificates will be advisedNominationNomination when shares are held in physical formNomination will enable smooth inheritance of ownership of the shares bythe Nominee without any procedural difficulties. (Presently, there is nodifficulty where shares are registered in joint names. But if the shares areheld in an individual name, addition of a joint name can only be done as atransfer, involving share transfer form, stamp duty, surrender of originalcertificates etc. Following the nomination procedure eliminates all thisinconvenience). Therefore, if shares are held in a single name, , with theintention of holding them for some more time, then please advisenomination immediately without delay 53
  • 54. Following Instructions for the Nomination1. Nomination can be made only by individuals, holding shares on their own behalf singly or jointly. Non-individuals including society, trust, body corporate, partnership firm, Karta of Hindu Undivided Family, holder of power of attorney cannot nominate. If the shares are held jointly, all joint holders must sign the nomination form.2. A minor can be nominated by a holder of shares and in that event the name and address of the Guardian must be given by the holder.3. The nominee shall not be a trust, society, body corporate, partnership firm, Karta of Hindu Undivided Family or a power of attorney holder. A non-resident Indian can be a nominee on repatriable basis.4. Nomination will stand cancelled upon transfer of shares.5. The Company will be fully discharged from its responsibility towards the legal heirs of a shareholder, if the shares are transmitted as per the nomination filed with the company, without any further reference to the legal heirs of a deceased individual shareholder(s)6. Where the space provided in the Form is not sufficient, shareholders are requested to attach separate sheet(s) giving details of distinctive nos. of shares.7. The Nomination Form should be filed in duplicate with the Company, who will return one copy thereof to the shareholder.8. Although Form 2B as prescribed does not provide for specimen signature of nominee, this has been suggested in order to facilitate smooth transmission of title to the nominee when the need arises.9. Please note that if physical shares are subsequently converted into electronic form, any nomination already filed will cease to have 54
  • 55. effect; the nomination details furnished to the Depository Participant will prevail thereafter ISIN International Securities Identification Number (ISIN) Each of the securities dematerialised in the NSDL depository bears a distinctive ISIN – an identification number. International Securities Identification Number (ISIN) is a unique identification number for each security issued in any of the International Standards Organisation (ISO) member countries in accordance with the ISIN Standard (ISO 6166). ISO 6166 was developed for use in an international (cross-border) as well as domestic trades. ISIN is a 12-character long identification mark. It has three components - a pre-fix, a basic number and a check digit. The pre- fix is a two-letter country code as stated under ISO 3166 (IN for India). The basic number comprises nine alphanumeric characters (letter and/or digits). The check digit at the end of the ISIN is computed according to the modulus 10 "Double-Add- Double". It establishes that the ISIN is valid. Securities issued by the same company, issued at different times or carrying different rights, terms and conditions are considered different securities for the purpose of allocating ISIN and are allotted distinct ISINs. In India, SEBI assigns ISIN to various publicly traded securities. Different ISINs are allocated to the physical and dematerialised securities of the same issue. 55
  • 56. SEBI being the national numbering agency for India has permitted NSDLto allot international securities identification number (ISIN) for dematshares. The ISINs allotted by NSDL does not at any point of time breachthe uniqueness of ISIN of physical form for the same security. ISIN for asecurity is allotted when the security is admitted to NSDL. Thenumbering system is simple. The numbering system of ISIN is incompliance with the structure of ISIN adopted by SEBI.International Securities Identification Number: 1. Issued by International Standards Organisation (ISO) member countries in accordance with ISO 6166. 2. ISIN is 12 digit alpha numeric number. 3. It has three components, prefix, basic & check digit. 4. Prefix is a two letter country code i.e. IN for India. 5. The basic number has nine alpha numeric characters. 6. The last digit is check digit. It ensures the ISIN is valid. Numbering system of ISINThe numbering structures for securities in NSDL is of 12 digit alphanumeric string. The first two characters represent country code i.e. IN(inaccordance wirh ISO 3166). The third characters represents the issuertype as detailed below: 56
  • 57. Issuers typeIssuer type code allottedCentral government AState government BMunicipal corporation CUnion territories DCompany, statutory corporation, EBaking companyMutual funds including UTI FThe list may be expanded per the needs. Maximum issuer types can be 35(A to Z and 0 to 8. the pro-rata dividend shares are identified by 9). Thenext 4 characters (fourth to seventh character) represent companyidentity. The first 3 characters are numeric. The fourth character is alphacharacter. The numbering begins with ‘001A’ and continues till ‘999A’and proceeds to ‘001B’. the next two characters (the eight and ninthcharacters) represent security type for a given issuer. Both the charactersare numeric. The next two characters (the tenth and eleventh characters) 57
  • 58. are serially issued for each security of the issuer entering the system. Lastdigit is double-add-double check digit.The security types are planned which may be expanded as per the need asdetailed below:-Security type codeEquity 01Non voting equity 02Convertible preference shares 03Non convertible preference shares 04Mutual fund units –close ended 05Mutual fund units-open ended 06Secured debentures 07Unsecured debentures 08Regular return bonds-promissory notes 09Floating rate bonds 10Deep discount bonds 11Step discount bonds 12 58
  • 59. Warrants 13 RESEARCH METHODOLOGYResearch methodology refers to the search for Knowledge. It is a way tosystematically solve the research problem. In it we study the varioussteps that are generally adopted by the researcher in studying his researchproblem along with logic behind them. Research Methodology concerning a research problem or studyprovide answers to various questions like; why a research study has beenundertaken, how the research problem has been defined, what data havebeen collected and what particular method has been adopted to collect thedata, what technique has been used for analyzing the data and a host ofsimilar other questionsThough there are more than one alternative approaches available to theresearcher, but this not enough to make the task of selecting the suitableresearch design simpler. Like the so-called suitable research design mayrequire some in between approach. The objective of study being the maindeterminant of the validity and reliability of the method adopted thedegree of usefulness of the scientific method. Since there are manyaspects of research methodology, in line of action has to be chosen fromvariety of alternatives, so that individual choice of suitable method isfurther complicated and make a viable whole. The choice of suitablemethod is further complicated by the possibility of many permutationsand combinations. The fair selection can be arrived at through theobjective assessment and of course comparison of various alternatives.The finally selected line of action must ensure that this is indeed best oneas against those rejected by the researcher. in addition, the circumstances 59
  • 60. and problems also having a bearing in the choice. To count a fem,limitations could be imposed in the sense of funds available, time andurgency in conducting the research. So the final choice must be based onassessment of its advantage and disadvantages when weighted againstaffecting factors.Research methodology can be said to have four major componentsnamely-Research design, Sample design, Data collection procedure andmethods of analyzing and reporting the findings. Research DesignThe research problem having been formulated in clear cut terms, theresearcher will be required to prepare a research design i.e., he will haveto state the conceptual structure with in which research would beconducted. The preparation of such a design facilitates research to be asefficient as possible yielding maximal information. But how all there canbe achieved depends mainly on the research purpose. Research purposemay be grouped into four categories.(1) Exploration(2)Description(3) Diagnoses and(4) Experimentation.Exploratory research studies are those whose main purpose is that offormulating a problem for more precise investigation or of developing theworking hypotheses from on operational point of view.Descriptive research studies are those studies which are concerned withdescribing the characteristics of a particular individual, or of a groupDiagnostic research studies determine the frequency with whichsomething occurs.Experimental research studies are those where the researcher tests thehypothesis of casual relationship between the variables. 60
  • 61. Research design of this particular research study of dematerialization ofshares is primarily based on descriptive and diagnostic research design.As descriptive and diagnostic research design describes thecharacteristics and determines the frequency with which somethingoccurs respectively, similarly this research determines the characteristicsof the individuals who deal in share and also determine the frequency ofdealing on the basis of their characteristics. Sample DesignAll the items under consideration in any field of inquiry constitute a‘Universe’ or ‘Population’. A complete enumeration of all the items inthe population is known as a census inquiry. This type of inquiry involvesa great ideal of time, money and energy. Hence quite often a few items soselected constitute what is technically called a sample.The researcher must decide the way of selecting a sample or what ispopularly known as sample design. A sample design is a definite plandetermined before any data are actually collected for obtaining a samplefrom a given population. Samples can be either probability or non-probability samples. With probability samples each element has a knownprobability of being included in the sample but non-probability samplesare those based on simples do not allow the researcher to determine thisprobability.Probability samples are those based on simple random sampling,systematic sampling , etc where as non probability samples are thosebased on convenient sampling, judgment sampling etc. 61
  • 62. Data collection techniques The required data is collected both from primary as well as secondary sources. Primary Sources: The primary data was collected through structured unbiased questionnaire and personal interviews of investors. For this purpose questionnaire included were both open ended & close ended & mulple-choice questions. Secondary Sources: Secondary data is the data, which is collected and complied for different purposes, which are used in research for this study. The secondary data includes material collected from:-Megazines & Bulletines- Brochure of unicon investment solutions.Internet- www.sebi.gov.in www.nseindia.com www.uniconindia.inSIZE OF SAMPLE 62
  • 63. The overall sample involved in the study consisted of 50 individuals.Keeping in view the limited resources of time, a limited sample ofindividuals. It was fixed before hand and every effort was made to coverthe given number of individuals with available time for the collection ofdata for this project. The data was collected with the help of thequestionnaire herself by the researcher.Method used for analysis of study The methodology used for this purpose is Survey and QuestionnaireMethod. It is a time consuming and expensive method and requires moreadministrative planning and supervision. It is also subjective tointerviewer bias or distortion.Analysis of DataAfter the data have been collected, the researcher turns to the task ofanalyzing them. The analysis of data requires a number of closely relatedoperations such as establishment of categories, the application of thesecategories to raw data through coding, tabulation and then drawingstatistical inferences. The unwisely data should necessary be condensedinto a few manageable groups and tables for further analysis. Thusresearcher should classify the raw data into some purposeful and usablecategories. In the process of analysis, relationships or differencessupporting or conflicting with original or new hypotheses should besubjected to tests of significance to determine with what validity data canbe said to indicate any conclusion 63
  • 64. InterpretationThe interpretation is done on the basis of the analyzed data and also somerecommendations are given to fill the loopholes of the actual scenario. DATA ANALYSIS AND INTERPRETATIONResearch is conducted for finding the solution of the problem. So to findthe solution of the problem data analysis and interpretation is must. Thereare some questions related to this research to interpret the result.The sample size in this study consisted of 50 individuals and dataanalyzed from the response of these 50 individuals. 1. ARE YOU AWARE OF STOCK MARKET? The basic purpose of this question is to know about how many people are aware of the stock market and its activities. NUMBER % OF RESPONSES OF RESPONSES RESPONSES YES 50 100 NO 0 0 64 TOTAL 50 100
  • 65. NO Series1 YES 0 20 40 60 80 100 120Analysis:-This graph shows that all the 50 individuals were aware of stockmarket. So it can also be possible that investors will rise in nearfuture. 65
  • 66. 2. ARE YOU AWARE OF DEMAT ACCOUNT?The basic purpose of this question is to know about awareness ofdemat account among respondents. NUMBER % OF RESPONSES OF RESPONSES RESPONSES YES 40 80 NO 10 20 TOTAL 50 100 66
  • 67. YES NOAnalysis:-The above table clearly shows that from a sample size of 50respondents, 40 individuals were aware of demat account. 3. DURATION FOR WHICH INVESTOR HAS BEEN TRANSACT IN THE STOCK EXCHANGE The purpose of this question is to know about the duration for which investor has been transact in stock exchange. 67
  • 68. NUMBER % OFDURATION OF RESPONSES RESPONSESLESS THAN 1 YEAR 20 40 1 YEAR 5 10 2 YEAR 10 20MORE THAN 2YEAR 15 30 TOTAL 50 100 68
  • 69. LESS THAN 1 YEAR 1 YEAR 2 YEAR MORE THAN 2 YEAERAnalysis:-The above table clearly shows that from a sample size of 50respondents, 15 have been trading in the stock exchange for morethan 2 years. 10 investors were trading for 2 years and remaining 25for one year or less than a year. 69
  • 70. 4. DO YOU TRADE- FREQUENTLY OR OCCASIONALLY?This purpose of this question is to find out how many persons tradefrequently or occasionally. NUMBER % OF TRADE OF RESPONSES RESPONSES FREQUENTLY 20 40 OCCASIONALLY 30 60 TOTAL 50 100 70
  • 71. FREQUENTLY OCCASIONALLYAnalysis:-This chart shows that 30 individuals trade occasionally and 20individuals trade frequently. 5. WHICH TYPE OF SCRIPTS YOU HAVE? The purpose of this question is to know about which type of scripts the respondents have. 71
  • 72. NUMBER % OFSCRIPTS OF RESPONSES RESPONSESPHYSICAL 15 30DEMATERIALISED 35 70 TOTAL 50 1004035302520 Series1151050 PHYSICAL DEMATERIALISED 72
  • 73. Analysis:-Above graph shows that many individuals have dematerialisedscripts and some have physical scripts. NUMBER % OF RESPONSE OF RESPONSES RESPONSES YES 30 60 NO 20 40 TOTAL 50 100 6. DO YOU CONVERT YOUR SHARES ELECTRONICALLY? The basic purpose of this question is to know about how many persons are interested to convert their shares electronically. 73
  • 74. YES NOAnalysis:-This chart shows that 30 individuals wanted to convert their shareselectronically and rest were not. 7. ARE YOU SATISFIED WITH DEMAT SERVICE PROVIDER? The purpose of this question is know satisfaction about demat service provider. 74
  • 75. NUMBER % OF RESPONSES OF RESPONSES RESPONSES YES 45 90 NO 5 10 TOTAL 50 100 100 90 80 70 60 50 Series1 40 30 20 10 0 YES NOAnalysis:- 75
  • 76. This graph shows that most of the people were satisfied with dematservice provider. 8. PROBLEMS BEING FACED BY THE RESPONDENTS RELATING TO TRADING This question tells us about the type of problems faced by the respondents. NUMBER % OF PROBLEMS OF RESPONSES RESPONSES NO TRANSFER OR BAD DELIVERY OF 10 20 SHARES OTHER TYPE 20 40 OF PROBLEM NO PROBLEM 20 40 TOTAL 50 100 76
  • 77. NO TRANSFER OR BAD DELIVERY OF SHARES OTHER TYPE OF PROBLEM NO PROBLEM77
  • 78. Analysis:-From the above chart we can see that 20 investors faced no problemdue to the introduction of DEMAT. Nearly 10 respondents facedproblems due to non-transfer and bad delivery of shares. Because ofmany sick companies being listed in the stock exchange, the problemof non-receipt of dividend can be found among 7 investors. Therewere 20 persons who were facing other problems. Limitations Of The Research Study • Due to the lack of time, it was not possible for the researcher to approach all the people. • The respondents were asked to indicate their true responses to the questions being asked, but rather than giving the response, they 78
  • 79. might have been in a form of expert comments which might have based the result of the study.• The results of the study may not be universally applicable due to regional constraints.• Money was also considered as a major constraint during the research work.• Personal biasness may be included in the research work. SUGGESTIONS AND RECOMMENDATIONS 79
  • 80. • As many of the people who dealt in share market are aware of UNICON’S name but not of its services. So company should advertise its services , so that people can be made aware of all the services provided by the company.• Most if the people are not finding any spare time to convert their shares electronically. So company should approach to such people at their doorstep to open their demat account.• As far as people preference regarding opening of demat a/c is concerned then they mainly prefer two factors i.e. service and trust. So it becomes necessary for the company to take care of these two factors. 80
  • 81. BIBLIOGRAPHY• Unicon forms for opening depository and trading account.• Study material of capital market and derivatives market of NCFM.• Zikmund, William G; “Business Research Methodology”, Seventh Edition, Thompson South Western Publication• Websites Visited www.sebi.gov.in www.nseindia.com www.bseindia.com www.nseindia.com 81
  • 82. QUESTIONAIREI am a student of M.B.A. from Doon Valley Institute of Engineering &Technology, Karnal, Haryana. You are required to fill this questionnaireto enable me to undertake the study on the said project.NAME: _________________________________CONTACT NUMBER: _________________________________OCCUPATION: _________________________________ADDRESS: _________________________________ 1. Are you aware of stock market? (a) Yes (b) No 2. Do you deal in share? (a) Yes (b) No 3. Are you aware of DEMAT? (a) Yes (b) No 4. Are you aware of REMAT? (a) Yes (b) No 82
  • 83. 5. How long have you been transacting in the stock exchange?(a) Less than 1 year (b) 1 year(c) 2 year (d) More than 3 year6. Do you trade frequently or occasionally?(a) Frequently (b) Occasionally7. In which securities do you trade frequently?(a) Equity (b) Bonds (e) All(c) Debentures (d) Futures & Options8. Which type of script you have?(a) Physical (b) Dematerialized9. Why you have not dematerialized your script?(a) Lack of awareness (b) Time constraint(c) Liability of changes10.Do you like to convert your shares electronically?(a) Yes (b) No 83
  • 84. 11. On what basis you have taken your decisions of opening of demat A/c?(a) Service (b) Changes (c)Convenience12.Are you satisfied with your demat service provider?(a) Yes (b) No13. What type of problems do you centrally face when you trade insecurities?(a) Non transfer of shares (b) Other type of problems(c) Bad transfer of shares (d) No Problem 84
  • 85. 85