Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Jayati project summer internship project

2,869 views

Published on

this project is about the descriptive analysis of depository participants

Published in: Economy & Finance, Business
  • Be the first to comment

Jayati project summer internship project

  1. 1. PROJECT REPORTATSTOCK HOLDING CORPORATION OF INDIA LIMITEDON“A Descriptive Analysis of Depository Participant WithStock Holding Corporation of India Ltd”DR. GAUR HARI SINGHANIA INSTITUTE OF MANAGEMENT AND RESEARCHDr. Gaur Hari Singhania Institute Of Management and ResearchSubmitted by:Jayati Poddar1340(2010-2012)Submitted to:Faculty Guide- Jyotika KukretyCompany Guide: Mr. Vinay Singh
  2. 2. DECLARATIONI, Jayati poddar studying in Dr.Gaur Hari Singhania Institute Of Management Andresearch do hereby declare that this Project relating to Stock Holding Corporationof India Ltd (SHCIL) and the title “A Descriptive analysis of the depositoryparticipant with Reference to SHCIL” has been prepared by me afterundergoing the prescribed industrial survey as part of the requirement of thePGDM program of GHS-IMR.My guide for the training was Mr. Vinay Singh (Branch manager) and Mentorlecturer Mrs.Jyotika Kukrety.I, further declare that this project work is the outcome of my efforts and not areplica of any other report/work submitted to any university or boards.Name of student: Jayati PoddarPlace: Kanpur
  3. 3. ACKNOWLEDGEMENTI express my gratitude to Prof.Prithvi Yadav sir, DirectorOf GHS-IMR for providing me an opportunity to undergo summer training. Andalso for those who have guided and inspired me in completing this study. I wouldlike to express my deep sense of gratitude to our faculty mentor Mrs. JyotikaKukrety for giving me support and helping me during my project study.I would like to express my gratitude to my project guide Mr. Vinay Singh forhis constant encouragement and guidance without the task would not havebeen completed.Last but not the least I would like to thank my parent and friends for their support.THANKYOU ALLJayati Poddar
  4. 4. STOCK HOLDING CORPORATION OF INDIA LTD.EXECUTIVE SUMMARYThe study is about describing the different services and products offered atSHCIL.Project mainly deals with how the resources of the organization are used intheir day to-day activities.Stock holding has various financial Products and Services to be offered to theclients but problem lies in the low promotional activities undertaken by it,due to which though it has the services not offered by other DPs it fails incaptivating customers.The past few years have seen a phenomenal growth in the capital marketleading to an explosion in transaction holding despite the transparencyoffered by NSE and BSE, the primitive settlement and transfer process keptthe biggest chunk of the market risk- bad delivery, delayed transfer, fakecertificates, loss and theft etc, unresolved. The Depositories is the answer tosuch risk and problems.Along with it a brief introduction to India‟s largest financial intermediary,SHCIL has been given and it is shown that what are demat a/c, mutual fundsand life insurance and how they work.The main objective of this project is concerned with studying the Depositorysystem the services provided by the depositories to the customers and whatare procedures for opening the various types of accounts like Demat a/c etcThus, I got interested to conduct study on the Depository Services under thetitle “Descriptive analysis of Depository Participants with reference to StockHolding Corporation of India limited.
  5. 5. How to open demat accountBefore opening the account the form can be collected from any of our branches.The name should appear same as it on the share certificateAll columns must be filled in.Write bank account number and 9 digit MICR number correctly issued by yourbank as it will facilitate effective disbursement of monetary corporate actions intoyour account.Signature of the holder must be with BLACK pen.Fill the details regarding PAN card and all financial details required to be filledFor proof identity and address proof , there must be any one among them-passport, voter ID, driving license, college ID.2 recent photograph and signature across itClient ID is given to the customers
  6. 6. Charges for accounts opening Investors traders1. annual membership charges 500 12002. charges (one time)kit charges 30 303. custody charges nil nil4. dematerialisation 3/- 3/-5. rematerialisation 25/- 25/-6. postage 25/- 25/-7. invocation of pledge 50/- 50/-8. transaction charges 10/- 10/-Once the account is opened then, you will be allotted client identity number.You will be sent a kit containing:-Details of your account as recorded by SHCIL.Copy of the agreement entered into with SHCIL."Delivery instruction by client" booklet allotted to your demat account. Thisbooklet helps you transfer shares from your account to broker account and otheraccounts.Now you are ready to operate your DP account.
  7. 7. MaintenanceChange in permanent/correspondence addressA request letter ( format available on the site) signed by all the holders is requiredAlong with this Photocopy of proof of identification and proof of new address isrequired. Please also bring the originals with you for verification purpose. Client orthe authorized bearer can visit our branch for the same. Copy of the latest transactionstatement received from SHCIL is also required.Change in signatureRequest letter (format available) signed by the client. The new signature to be attestedby the bank. The request may be submitted along with the copy of POI and thephotocopy of the latest transaction statement received from SHCIL.Addition of PAN/Map inRequest letter signed by the client giving the PAN/Map in number.Accounts with Power of AttorneyThese accounts can be operated by both the client and the POA Holder. In case theclient has given the POA in favour of 2 or more persons, then the mode of operation ofthe POA holders is also to be mentioned. In case the power of attorney is to be revoked,a letter signed by the client is required.Change of Telephone NumberRequest letter signed by all the holders, with a photocopy of the recent telephone billand proof of identification of one of the holder.Instruction by FaxClients may avail this facility by faxing their delivery instructions to SHCIL, by
  8. 8. executing the fax indemnity.Change in Standing InstructionFor recording any change in the standing instruction (for receiving direct credits) inthe demat account, we require a letter signed by all the holders.Change in Power of Attorney DetailsIf you have given POA details and you wish to operate the account yourself, the POAhas to be revoked by you in writing.Death of Beneficiary account holder(s) - Transmission of accountTransmission of account takes place in the event of death of the beneficiary accountholder(s). There can be three situations in transmission of account. See whichcategory you fit into and follow the relevant procedure:- When the account has joint holders and one of the holder dies.- When the account has a sole holder with a nominee.- When the account has a sole holder without a nominee.If the shares are transmitted to beneficiary accounts of surviving holders and thisbeneficiary account is in a DP other than SHCIL.Classify the transmission case into the above categories. Over and above the documents explained above, the client master list from thetarget DP has to be submitted. Freezing of accountAn account is frozen/suspended- Only on your instruction.- By competent authority i.e. by the Depository / SEBI.
  9. 9. - On receipt of court order. Defreezing of accountDefreezing of an account takes place,- Only on your instruction.- For defreezing pledge accounts, your instruction has to beaccompanied by bank authorization.
  10. 10. Research TitleA Descriptive Analysis of Depository Participants with “StockHolding Corporation Of India Ltd.”PurposeThe past few years have seen a phenomenal growth in the capital market leading toan explosion in transaction holding despite the transparency offered by NSE andBSE, the primitive settlement and transfer process kept the biggest chunk of themarket risk- bad delivery, delayed transfer, fake certificates, loss and theft etc,unresolved. The Depositories is the answer to such risk and problems.Introduction of the depositories has paved the way for instituting an infrastructurefor eliminating these risks and increasing the efficiency of the system. The purposeof this study is to provide information to both the organization and theinvestors/savers, providing to the former present state and future prospect and tothe later differences among the services provided by the various depositoryparticipants.This Analysis will help to have a better understanding about where SHCIL standsin the market today and also to compare various DPs on certain parametersObjectivesThe main objectives of the project undertaken are:1. To understand the attitude and perception of investors/savers towards the DP‟s2. To ascertain SHCIL‟s position in the competitive market.3. To develop and analyze strategies of SHCIL4. To help improve its market share.
  11. 11. 5. To offer suggestions based upon the findingsLimitations of the study1. The study is limited only to SHCIL, BO Govind Nagar, Kanpur2. There was a constraint of time.3. The entire study is based on the information provided by the various respondents4. The policy of the company does not allow getting all the information.
  12. 12. STOCK HOLDING CORPORATION OF INDIA LTDINTRODUCTION TO SHCIL
  13. 13. Introduction to SHCILBackground1. Depository:A depository is a facility for holding securities, which enables securities transactionsto be processed by book entry. To achieve this purpose, the depository mayimmobilize the securities or dematerialize them (so that they exist only as electronicrecords). India has chosen the dematerialization route. In India, a depository is anorganization, which holds the beneficial owners securities in electronic form, througha registered Depository Participant (DP). A depository functions somewhat similar toa commercial bank. To avail of the services offered by a depository, the investor hasto open an account with it through a registered DP.2. Depository ParticipantA Depository Participant (DP) is an agent of the depository who is authorized to offerdepository services to investors. Financial institutions, banks, custodians andstockbrokers complying with the requirements prescribed by SEBI/ Depositories can beregistered as DP.Benefits of Depository1. Bad delivery eliminated2. Immediate transfer of shares3. No stamp duty on such transfers4. Elimination of risks that are normally associated in dealing with Physicalcertificates - loss / theft / mutilation due to careless handling / forgery / etc5. Reduced transaction cost
  14. 14. Services provided by Depository1. Dematerializations (usually known as demat) is converting physical certificatesto electronic form2. Rematerializations, known as remat, is reverse of demat, i.e. getting physicalcertificates from the electronic securities3.Transfer of securities, change of beneficial ownership4. Settlement of trades done on exchange connected to the Depository5. Pledge / Hypothecation of demat shares, viz. Loan against shares6. Electronic credit in public offering of the Companies7. Non - Cash corporate benefits, viz. Bonus / Rights - direct credit intoelectronic form.No. of Depository in the countryNational Securities Depository Ltd.Central Depository Services Ltd
  15. 15. Stock Holding Corporation OfIndia Ltd.Industry Profile
  16. 16. Industry profileFinancial MarketsStock Holding Corporation Of India Ltd. (SHCIL), the premier custodian ofIndian Capital Market providing services of international standards, isgeared up to reposition itself in the changed scenario.The corporation has restructured and geared itself to serve the growing needs ofindividual investors in the paperless environment. The organization in itswillingness to provide its state of art of financial services in securities industries tothe various segments of the investors has expanded itself to more than 100 citiesacross the country. SHC desires to give investors the time and attention inmonitoring the performance of their securities consistently. All aimed at providingthe investor with optimum financial gain.India has a well established capital market mechanism where in effective andefficient transfer of money capital or financial resources from the investing class tothe entrepreneur class in the private and the public sector of the economy occur.Indian capital market has a long history of organized trading which started with thetransaction in the loan stocks of the East India Company; from that time it hasundergone drastic changes to meet the requirements of the globalization.There has been a shift of house hold savings from physical assets to financialassets, particularly the risk bearing securities such as shares and debentures.Capital market structure has also undergone sea changes with number of financialservices and banking companies, private limited companies coming into the scenewhich made the competition in the market stiffer.
  17. 17. CAPITAL MARKETThe capital market consists of primary market and secondary market segments.The primary market deals with the issue of new instruments by the corporate sectorsuch as equity shares, preference shares and debentures. The public sectorconsisting of central and state governments, various public sector industrial units(PSUs), statutory and other authorities such as state electricity boards and port trustalso issue bonds.The primary market in which public issue of securities is made through aprospectus is a retail market and there is no physical location. Direct mailing,advertisements and brokers reach the investors. Screen based trading eliminates theneed of trading floor.The secondary market or stock exchange where existing securities are traded is anauction arena. Since 1995, trading in securities is screen based. Screen basedtrading has also made an appearance in India. The secondary markets consist of 23stock exchanges including the NSE and OTCE and Inter Connected StockExchanges of India ltd. The secondary market provides a trading place for thesecurities already issued to be bought and sold. It also provides liquidity to theinitial buyers in the primary market to re-offer the securities to any interested buyerat a price, if mutually accepted. An active secondary market actually promotes thegrowth of the primary market and capital formation because investors in theprimary market are assured of a continuous market and they can liquidate theirinvestments in the stock exchange.DEPOSITORY
  18. 18. Depository is an organization where the securities of a share holder are keptin the electronic form at the request of the shareholder through a medium of adepository participant (DP). The principal function of a depository is todematerialize securities and enable their transactions in book formelectronically.In India, the Depository Act defines a depository to mean “A companyformed and registered under the companies act, 1956 and which has beengranted a certificate of registration under sub-section (la) of section 12 of theSecurities and Exchange Board of India (SEBI) act, 1992”. A depositoryestablished under the Depositories Act can provide any service connectedwith recording of allotment of securities or transfer of ownership of securitiesin the record of a depository. A depository cannot directly open accounts andprovide services to clients. Any person willing to avail of the services of thedepository can do so by entering into an agreement with the depositorythrough any of its Depository Participants.Legal Framework of Depositories:The depositories act of 1996 provides for regulation of depositories insecurities and for matter there with or incidental there to and came into forceon 2Oth of September, 1995. SEBI formulated the Depositories andparticipants regulations act, 1996 to oversee the matter regarding admissionand working of depositories and its participant. The depositories act passedby parliament received the presidents‟ assent on August 10, 1996 enables thesetting up of multiple depositories in the country. Only a company registeredunder the Companies Act Of 1956 and sponsored by the specified categoriesof institution can setup depositories in India. The depository offers servicesrelating to holding of securities and facility processing of transactions in suchsecurities in book entry form. The transactions handed by depositoriesinclude settlement of market trades, settlement of off trades, Securitieslending and borrowing, pledge and hypothecations.
  19. 19. Eligibility criteria for a depository:1.A public financial institution as defined in section 4a of companies actof 1956.2. A bank included in second schedule to the RBI act, 19343. A foreign bank operating in India with the approval of the RBI.4. Recognized Stock Exchanges5. An institution engaged in providing financial services where not lessthan 75% of equity held jointly or severely by these institution.6. A custodian of securities approved by government of India.7. A foreign financial services institutions approved by government ofIndia.8. The promoters of depository are also known as its sponsor.9. A depository company must have a minimum worth of Rs. 100 Cr.10. The sponsor of the depository has to hold at least 51% of capitalof the depository company.Agreement Between Depository and Issuers:If either the issuer (a company which has issued securities) or the investoropts to hold his securities in a demat form, the issuer enters into an agreementwith the depository to enable the investors to dematerialize their securities.No such agreement is necessary where :i. Depository, is the issuer of securities, or;ii. The State or Central Government is the issuer of government securities.Where the issuer has appointed a registrar to the issue or share transfer, thedepository enters into a tripartite agreement with the Issuer and Registrar &Transfer (R&T) Agent, as the case may be, for the securities declared eligiblefor dematerialisation. At present, NSDL is discharging the responsibility ofR&T Agent for the securities issued by State and Central Governments.
  20. 20. Rights and Obligations of Depositories:1. Every depository should have adequate mechanisms for reviewing monitoringand evaluating the controls, systems, procedures and safeguards.2. Annual inspections of the procedures and same should be reported to SEBI.3. To ensure that the integrity of automatic data processor systems is maintained tosafeguard information.4. Adequate measures including insurances, to protect the interests of the beneficialowners against any risk.5. It should conduct an annual inspection of these procedures and forward a copyof the inspection report to SEBI.Functions of Depository:DematerlisationOne of the primary functions of depository is to eliminate or minimize themovement of physical securities in the market. This is done throughconverting securities held in physical form in to holdings in to back entryform.Accounts TransferThe depository gives effects to all transfers resulting from the settlement of tradeand other transaction between various beneficial owners by recording entries in theaccounts of such beneficial owners.Transfer and registrationA transfer is a legal change of ownership of a security in the records of theissuer. Transfer of securities under demat occurs merely by passing bookentries in the records of the depositories, on the instructions of beneficialowner.Pledge and hypothecationDepositories allow the securities placed with them to be used as collateral tosecure loans and other credits. The securities pledged are transferred to asegregated or collateral account through book entries in the records of thedepository.
  21. 21. Linkages with clearing systemThe clearing system performs the functions of ascertaining the pay-in (sell) orpay (buy) of brokers who leave traded on the stock-exchange. Actual deliveryof securities to the clearing system from the selling brokers and delivery ofsecurities from the clearing system to the buying broker is done bydepository.To achieve this, depositories and the clearing system are linkedelectronically.To handle the securities in electronic as per the Depositories Act 1996, twodepositories are registered with SEBI. They are: National SecuritiesDepository Limited (NSDL), Central Depository Services (India) Limited(CDSL).DEPOSITORY PARTICIPANTSDepository participants (DPS) are described as an agent of the depository.They are the intermediaries between the depository and the investors. Therelationship between the DP‟s and the depository is governed by anarrangement made between the two under the depositories act. In a strictlylegal sense a DP is an entity who is registered as such with SEBI under theprovisions of the SEBI Act. As per the provisions of this act a DP can offerdepository services only after obtaining a certificate of registration fromSEBI.Eligibility Criteria For Depository Participant1. A public financial institution as defined in sections of the companies act.2. A bank included for the time being in the second schedule to the RBI.3. A foreign bank operating in India with the approval of RBI.4. A state financial corporation established under the provisions of section 3of the state financial corporation‟s act, 1951.5. An institution engaged in providing financial services promoted jointly orseverally by any of the institutions mentioned above.6. A custodian of securities who has been granted a certificate of registrationby SEBI.7. A clearing corporations or a clearinghouse of stock exchange.
  22. 22. 8. A stock broker who has been granted a certificate of registration by SEBI.9. A non-banking finance company.10. A R& T agent who has been granted a certificate of registration bySEBI.A person desirous of becoming a DP of NSDL should make an application toSEBI through NSDL. NSDL evaluates and sends to SEW within 30 withrecommendations. If all the conditions are met SEBI grants the registrationcertificate to the applicant. SEBI prescribes a minimum net worth of Rs.50Lakh for stock brokers and non-banking finance companies (NBFCs) forgranting them a certificate & registration to act as a DR. A certificate ofregistration is valid for a period of 5 years. It may be renewed after 5 years.Rights and Obligations of Depository Participant1. Agreement with beneficial owners:The DP must enter into an agreement with a beneficial owner before acting as aDR on his behalf. A DR while conducting business with a client, acts as an agentof NSDL and is liable to the clients for all the acts and deeds performed by him.2. Separate accounts:The DP shall open a separate account in the name of each beneficial owner‟saccount only on receipt of instructions from beneficial owner.3. Statement of account:The DP should provide statements of accounts to the beneficial owner as laid in theagreement with the beneficial owner. It should be done fortnightly if anytransactions are made and at least quarterly if no transactions are done, It can beprovided through internet.4. Transfer or withdrawal by beneficial owner:The DP should allow a beneficial owner to withdraw or transfer securities from itsaccounts in such manner as specified in the agreement with beneficial owner.5. Connectivity:The DP should maintain continuous electronic communication with eachDepository in which it is participant.
  23. 23. 6. Monitoring, reviewing & evaluating internet systems &controls:DP should have an adequate mechanism for the purposes of reviewing monitoringand evaluating its internal accounting controls and systems. It has to get an auditdone on quarterly basis.7. Reconciliation:The DP shot reconcile its records with every depository in which it is participanton a daily basis. The NSDL system is designed to do this automatically every dayat the end of the day (EOD).8. Returns:The DP should submit periodic returns to SEBI and to every depository in which itis a participant.9. DP to indemnify depositoryA DP has to indemnify the depository, its officers and employees for all costs, fees,expenses, liability, taxes, actual losses and damages of any nature whatsoeversuffered like failure to company with laws, failure to deliver eligible securities etc..10. Prohibition Of AssignmentNo DP can assign or delegate its functions as a participants to any other personprior approval of NSDL.11. InsuranceDP‟s should take appropriate insurance cover to insure against losses arising from anybusiness risk and system failure.12. Record Of ServicesThe DP should maintain and preserve the documents for all transactions for aminimum period of 5 years.13. DP to ensure integrity and back-up of dataWhile DP‟s maintain electronic records, they should ensure the integrity of the dataprocessing system. All necessary precautions should be taken to ensure that therecords are not lost, destroyed. It should be tampered with sufficient back-up ofrecords should be taken and made available at all times at different places. AllDP‟s must comply with the rules of SEBI. If not, SEBI may cancel the registrationof DP.
  24. 24. GOVERNING BODIES OF DEPOSITORY PARTICIPANTGoverning bodies of depository participantsNational Securities Depository Limited (NSDL)National securities depository limited is the first depository to be set up in India. Itwas incorporated on December 12, 1995. The Industrial Development Bank OfIndia (IDBI) largest development bank in India, UTI largest Indian mutual fundand the National Stock Exchange In India sponsored the setting up of NSDL andsubscribed to the initial capital. NSDL commenced operations on November8,1996.Following organizations are shareholders of NSDL as on March 31, 2001:1.Industrial Development Bank Of India2. United Trust Of India3. National Stock Exchange Of India4. State Bank Of India5. Global Trust Bank6. CITI BANK7. Standard Charted Bank8. HDFC Bank (housing and development finance corporation)9. HSBC (hongkong and shinghai banking corporation)10. Deutsche Bank11. Dena Bank12.Canara BankOwnership:NSDL is a public limited company incorporated under the companies act,1956. NSDL had a paid up equity capital of Rs.10 crore. The paid-up capitalhas been reduced to Rs.80 crore since NSDL has bought back its shares of theface value of Rs.4.2 crore in the year 2000. However, its network is aboveRs.100 crore as required by SEBI regulations.Management of NSDL:NSDL is managed by professional board of director. The managing directorconducts the day to day operations. To assist the MD in his functions, the boardappoints an executive committee of not more than 16 members. The eligibility
  25. 25. criteria and period of nomination of the members of eligibility criteria etc. aregoverned by the bye-laws of NSDL in this regard.Bye-laws of NSDL:The bye-laws approved by SEBI which contain 14 chapters they are:a) Short title and commencementb) Definitionsc) Board of directorsd) Executive committeee) Business rulesf) Participatesg) Safeguards to protect interest of clients and participants.h) Securitiesi) Accounts by book entryj) Reconciliation accounts and auditk) Disciplinary action appeall) Appealsm) Conciliationn) ArbitrationFunction of NSDL:NSDL performs the following functions through Depository participants (DP)1. Enables the surrender and withdrawal of securities to and from the depository(dematerialisation and rematerialisation).2. Maintains investor holdings in the electronic form.3. Effects settlement of trades not done on the stock-exchange (offmarket trades).4. Transfer of securities.5. Pledging I hypothecation of companies or corporates.6. Receipt of non-cash corporate benefits like bonus rights r electronic form.7. Stock lending and borrowing.The investors interact with a depository participant (DP) of NSDL. A DP can be abank, financial institution, a custodian or a broker. Just as one opens a bankaccount to avail of the services of a bank, an investor has to open an account with aDP in order to avail of the depository facilities.
  26. 26. Milestone of NSDLAugust 2009 Demat Accounts cross one croreAugust 2008Launch of Central Recordkeeping Agency (for New PensionSystem)May 2008NSDL and Japan Securities Depository Center sign InformationSharing and Collaboration PactApril 2008NSDL and National Depository Center (Russia) signInformation Sharing and Collaboration PactFebruary 2008NSDL and Euroclear (Belgium) sign Information Sharing andCollaboration PactSeptember 2007Value of securities held in dematerialised form at NSDL crossesUS$ 1 trillionSeptember 2007 Launch of SMS alert facility for investorsJune 2007NSDL and DTCC (US Depository) sign Information Sharingand Collaboration PactJanuary 2007NSDL and TDCC (Taiwan Depository) sign InformationSharing and Collaboration PactNovember 2006 NSDL completes a decade of depository operationsJanuary 2006 Launch of National Skills Registry by NDMLJuly 2005 Launch of Tax Information Network - PAN LedgerJanuary 2005 Launch of online upload of Central Excise challan dataOctober 2004 Intraday production shifting to Disaster Recovery SiteJune 2004Incorporation of NSDL Database Management Limited (NDML)- wholly owned subsidiary company of NSDLJune 2004 Launch of Online Tax Accounting System (OLTAS)June 2004 Launch of PAN card servicesJanuary 2004 Launch of Tax Information Network (TIN)January 2004 Launch of IDeASNovember 2003 Introduction of demat of Warehouse ReceiptsNovember 2003 Launch of Market Participants and Investors Database (MAPIN)October 2003 Demat Accounts cross 6 millionApril 2003 Introduction of T+2 Rolling SettlementDecember 2002 Demat Accounts cross 5 million
  27. 27. November 2002 Launch of STEADY - An STP initiative by NSDLApril 2002 Introduction of T+3 Rolling SettlementSeptember 2001 NSDL launches SPEED-eJuly 2001Introduction of T+5 Rolling Settlement and Uniform SettlementCycleJune 2000 98% settlement in demat formJune 2000 Commencement of Demat of Debt InstrumentsMay 2000 Demat accounts with NSDL cross 2.5 mnFebruary 2000 NSDL launches internet based service - SPEED - for CMsMay 1999 NSDL launches NCFM - Depository Operations ModuleJanuary 1999 Commencement of compulsory trading for retail investorsDecember 1998 Introduction of Demat of Government SecuritiesDecember 1998 Establishment of NSDL branches at Chennai, Delhi & KolkataNovember 1998 Demat accounts with NSDL cross 100,000April 1998 Demat delivery in physical segment at NSE and BSEMarch 1998Value of securities held in dematerialised form at NSDL crossesUS$ 5 bn.January 1998 Compulsory demat trading for Institutional investorsDecember 1997 Commencement of Demat trading at BSEJune 1997Value of securities held in dematerialised form at NSDL crossesUS$ 1 bn.December 1996 Commencement of Demat trading at NSENovember 1996 NSDL InaugurationAugust 1996 Enactment of Depositories ActDecember 1995 NSDL IncorporationSeptember 1995 Promulgation of Depositories Ordinance
  28. 28. Central Depository Services Of India Limited(CDSL)Central depository services of India ltd were the second depository to be grantedthe commencement certificate by SEBI on 8 February 1999, inaugurated on 15July 1999. It is promoted by the Bombay stock exchange, in association of bank ofIndia. Both NSDL and CDSL interface with investors through their serviceproviders known as DP. The depository is interconnected. It is possible to transfershares from one depository to another.CDSL was promoted by The Stock Exchange, Mumbai (BSE) jointly with leadingbanks such as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank,Standard Chartered Bank, Union Bank of India and Centurion Bank. CDSL was setup with the objective of providing convenient, dependable „and secure depositoryservices at affordable cost to all market participants.Milestones of CDSL system :1.CDSL received the certificate of commencement of business from SEBI inFebruary 1999.2. Honorable union finance minister, Shri Yashwanth Sinha flagged off theoperations of CDSL on July 15 1999.3. Settlement of trades in the demat mode through BOl shareholding limited,the clearing house of BSE started in July 1999.4. All leading stock exchanges like national stock exchange, Calcutta stockexchange, Delhi stock exchange, stock exchange Ahemdabad, etc haveestablished Connectivity with CDSL.5. As at the end of Dec 2004, over 4900 issuers have admitted their securities(equities, bonds, debentures, and commercial papers), units of mutual funds,certificate of deposits etc. into the CDSL system. CDSL‟s demat services areextended through its agents called Depository Participants (DP). The DP is
  29. 29. the link between the investor and CDSL. An investor who opens a demataccount with a DP can utilize the services offered by CDSL. While the OPprocesses the instructions of the investor , the account and records thereof ismaintained with CDSL.6. The recurring costs to be incurred by a CDSL DP in terms of maintainingback-upsand the related data storage are minimal. This enables a CDSL DP to offerdepository services to investors at an attractive price and at the same timeachieve break-even faster at much lower volumes. The centralizedarchitecture also allows CDSL-DP to make available to the investors a to-theminute status of their account and transactions.BENEFITS AND SAFETY OF DEPOSITORY SYSTEM1. Elimination of bad deliveries:Once the holdings of investors are dematerialized, the question of bad deliveriesdoesn‟t arise because both transfer deed and share certificate are eliminated indepository system.2. Elimination of all risks associated with physicalcertificate:Dealing with physical securities have the associated risks of loss of certificatesduring movements to and from the registrars. These expose the investor to cost ofobtaining duplicate certificates, advertisement etc., such problems don‟t arise in thedepository environment.3. No stamp duty:No stamp duty for transfer of equity instruments and units of mutual funds in thissystem.4. Immediate transfer and registration of certificate:Once the securities are credited, to the investors account on payout, he becomes thelegal owner of the securities.
  30. 30. 5. Faster settlement cycle:The exclusive demat segment follow rolling settlement of T+2 days which enablesfaster turnover of stock and enhance liquidity with the investor.6. Buyer is secured:In physical environment, the buyer is not secured since the shares purchased maynot be transferred. This is not the case with depository system.7. Faster disbursement of non-cash corporate benefits:NSDL provides for direct credit of non-cash corporate entitlements like rights,bonus etc., to an investors account ensuring faster disbursement.8. Reduction in rate of interest on loan:Some banks provide these benefits against pledge of departmentalized securities.9. Increase in maximum limit of advances:This increases from Rs.l0 lakh to Rs.20 Lakh per borrower. There is also areduction in minimum margin from 50% to 25% by banks to advances againstdemat securities.10. Reduction in brokerage:Brokers may provide a reduction in the brokerage of 0.25% to 0.5% for tradingin dematerialised securities as it reduces their back office cost of handlingpaper.11. Reduction in handling huge volumes of paper:In the physical environment every entity involved in purchase or sale of securitieswas to handle paper and pass on the paper to the next entity. But in the depositorysystem only the delivery instruction to be given by the client is in the form ofpaper.
  31. 31. 12. Periodic status reports:DP‟s need to provide periodic reports to investors on their holding andtransactions. Dematerialized securities can be delivered in the physical segment:From April 1998 this facility is available at stock-exchange where trading indematerialized securities is allowed. But physical securities are not allowed to bedelivered in the dematerialized segment, making dematerialized stocks held withthe investors more liquid than physical stocks.13. Elimination of problems related to change of address ofinvestors,transmission etc:Investors have to inform the change of address which will be reflected in thedatabase of all the companies where the investor is a registered holder of securities.14. Elimination of problems related to nominations:An account holder can get securities in all companies transmitted transferred to hisaccount by completing formalities with a single entity.15. Elimination of problems related to selling securities onbehalf of a minor:A natural guardian is not required to take court approval for selling dematsecurities on behalf of a minor.16. Convenient consideration of account:To multiple accounts opened by investors, all accounts can be consolidated intoone account by giving instructions to DP.17. Convenient portfolio monitoring:Client can monitor portfolio by checking a single statement ofholding/transactions.18. Increased volumes:Due to case in transaction and related costs, many players have entered/increasedtheir transaction, which increases liquidity.
  32. 32. 19. Newer services:Opportunities like pledge / hypothecation and stock lending are given specificallyby depository system. Many safety measures like investor grievances, insurancescover, computer and communication infrastructure, periodic review, certificate ofregistration were made necessary to protect investors.
  33. 33. STOCK HOLDING CORPORATION OF INDIALIMITEDCOMPANY PROFILE
  34. 34. STOCK HOLDING CORPORATION OF INDIALIMITEDIntroduction to the company:Stock Holding Corporation of India ltd (SHCIL) was incorporated under thecompanies Act, 1956 on July 28, 1986 at the initiative of the Government of India,with an authorized capital of Rs.25 cores and a paid up capital of Rs.10.5 cores,subscribed by seven All India financial and investment institutions and insurancecompanies, viz.Industrial Development Bank of India (IDBI)Unit Trust of India (UTI)Life insurance corporation of India (LIC)ICICI LtdIndustrial finance corporation of India Ltd (IFCI)Industrial Investment Bank of India (IIBI)General Insurance corporation of India and its subsidiaries, viz.1. Oriental insurance co ltd2. New India insurance co ltd3. National insurance co ltd4. United India insurance co ltd.SHCIL was incorporated as a public limited company on July 28, 1986 andprovides custodial services to institutional investors and depository services toretail investors. SHCIL commenced operations in August 1988 and has beenproviding custodial and related services of international standards for nearly adecade to the promoter and other institutions, foreign institutional investors (FIIs),commercial banks and mutual funds.It is headed by luminaries from its promoter institutions who constitute its Board ofDirectors and take policy decisions pertinent to the affairs of the corporation. Asenior management team that reports to the Managing Director and the CEO aids,assists and strategies business lines for the Corporation.The primary focus of the corporation was specific – to set up custodial services ofinternational standards in India and in the process to manage the entire array ofpost trade activities of Financial Institutions and Foreign Institutional Investorswith dedicated client relationship teams and state-of-the-art reporting systems.
  35. 35. The corporation quickly garnered nearly 70% market share of the domesticcustodial business and the financial figures shot up impressively for the firstdecade of it existence.SHCIL has also received “No Action Letter” from Securities ExchangeCommission (SEC) of USA, which renders it an eligible institution to hold assetsof US-based funds.SHCIL subsidiaries: SHCIL Projects Ltd. SHCIL Services Ltd. SHCIL ltd. SHCIL Commodities& Derivatives Trading Co. ltd.Vision of the Company:“To become one stop shop for all financial services”.This vision of the company is slowly being achieved with the foray of thecompany into new financial services and products into its portfolio the latestto be the Insurance product, which would be soon distributed.Mission of the Company:“To spread Quality Service through the innovative use of technology”.
  36. 36. Objectives of the Company:1. To retain the No. 1 position in the DP industry by being ahead of all other DP serviceproviders with the innovative use of technology would be soon distributed.2. To provide justified service to every rupee the client pays.3. To ensure security and convenience of transaction to its clients at reasonable price.4. To channel technology to make convenient products for financial market that givequantum benefits to investors, corporate houses and brokers.5. To reach 37 million Internet users in the years to come with e-commerce projectionscaling USD 1.7 billion.6. To move with speed and ease, diversifying into new areas, considerably on others andsharpening its focus and paradigms.7. To increase its customer base, this at present is 7 lakh.8. To evolve a new strategy to emerge as a broad based financial powerhouse in the yearsto come.9. To find ways to make information and reporting system more effective for theinstitutional clients.10. To expand to the South-East Asia, with the aim of becoming the leader.Basic facts about SHCIL1. SHCIL is India‟s largest depository participant.2. SHCIL has around 20% market share i.e. over 8 lakhs demat accounts.3. SHCIL has approx, 50% market share of delivery- based transaction whichamount to1.33 crore transaction.
  37. 37. Our Values1.Safety and Efficiency of operations is a hallmark of SHCIL2.Professionalism and Integrity3.Customer First4.Relationship Building5. Commitment to Quality irrespective of asset size
  38. 38. STOCK HOLDING CORPORATION OF INDIA LIMITEDPRODUCTS AND SERVICES
  39. 39. STOCK HOLDING CORPORATION OF INDIA LIMITEDPRODUCT PROFILE1. ADDSHARES2. FUNDINVEST3. GOI BONDS4. INSURANCE5. PENSION FUNDS1. ADDSHARESIntroductionSHCIL arranges loan against DEMAT shares.1· Tie-up with reputed banks which offer you the most competitive interest rates inthe market.2· You can use the shares in your free account as collateral and take a loan fromany of our empanelled banks.3· SHCIL completes your documentation and processing and gives you a chequewithin 48 hours of application.AdvantagesOur tie ups with banks give you a wider range of banks to choose from. This leadsto a wider range of specified and non-specified shares to get loan against.
  40. 40. The add shares team helps you with the paper formalities precedent to a loan. Youcan now get a loan at a competitive interest rates and Margins. This is a resultant oftheir tie up with a wide range of banks.· Add shares simplify long-winded loan procedures for you and facilitates earlydisbursements of funds.· Add shares are available at any of our branches numbering over 120.3. FUNDINVESTIntroductionFund Invest is a basket of financial products, ranging from fixed incomesecuritieslike fixed deposits, Infrastructure bonds and Capital Gain Bonds to variableincomesecurities like Initial Public Offers (IPO‟s) of Equities and Mutual Funds. It isanattempt to offer financial products that cater to the various investment needsof ouresteemed clients. An effort to guide the investor to a product portfolio thatbest suitshis risk- return profile.Applications for investments can be source from any of the SHCIL offices.Apartfrom guiding our investor to pick up the right combination of investmentinstruments, we help them after-sales service, by acting as an interlocutorbetween the investor and the issuer of the securities. SHCIL is an AMFIRegistered Mutual Fund Advisor (ARMFA).4. GOI BONDSSavings Bonds are issued by RBI on behalf of Government of India in thefollowingseries.8.0% taxable bonds
  41. 41. These Bonds are held in electronic form in an account called Bond Ledger Account(BLA). Bond Ledger Accounts can be opened and operated with RBI designatedReceiving Offices. SHCIL has been designated as one of the Receiving Offices byRBI for this purpose. Subscriptions for Savings Bonds can be submitted at any ofourbranches.The following categories can subscribe to Savings Bonds:Category of Investor 8.0% (Taxable)1. IndividualHis or her individual capacity.Individual capacity on joint basis.Individual capacity on anyone or survivor basis.On behalf of a minor as father/mother/legal guardian.2. HUF (Hindu Undivided Family)3. Charitable InstitutionCharitable Institution to mean a Company registered under Section 25 of the IndianCompanies Act 1956An Institution which has obtained a Certificate of Registration as a CharitableInstitution in accordance with a law in force.Any institution which has obtained a certificate from Income tax Authority for thepurposes of Section 80G of the Income Tax Act, 1961.AdvantagesHassle free maintenance: The GOI Bonds are held in electronic form in an accountcalled Bond Ledger Account. This ensures smooth investing minus paperwork.1. Electronic Clearing Services: You can avail of Electronic Clearing System(ECS) services. This ensures automatic credit of benefits and redemptionswhen they accrue.2. Easy access: You can apply for subscriptions into these Bonds in any SHCILcenter across the country.3. Dispatch: Certificate of Holdings is dispatched to the client through courier onrealization of subscription.5. INSURANCE:Introduction:SHCIL, a company promoted by Insurance majors & Financial Institutions, is aCorporate Agent of LIC for Life Insurance products and NIA for GeneralInsurance products.
  42. 42. SHCIL has a dedicated team of IRDA Certified Insurance Advisors to provide allservices relating to Insurance. We also provide Free Professional advice to clientsonneed base insurance. SHCIL has 200 plus odd Branches all over India to take careof all your Insurance related queries and needs.LIC products:1. KEY MAN INSURANCEKey Man Insurance is an insurance taken by a business firm on life of an employee(Key Man) whose services contribute substantially to the success of the business ofthe firm.The object of Key man insurance is to indemnify business firm from the loss ofearnings may occur because immediate replacement of the Key Man may not bepossible. Section 37 (1) of the Income Tax Act ,1961 provides that any expenditurelaid out orexpended wholly and exclusively for the purposes of business or profession shallbeallowed as a deduction in the computation of income from business or profession.Only Partnership firms and Companies are eligible for Key Man Insurance.2. CHILDREN POLICYKOMAL JEEWAN Plan 159Under this children‟s plan, the payment of premium ceases on policyanniversary immediately after the child attains 18 years of age. The plan,besides offering risk cover, also offers payment of sum assured ininstallments at age 18, 20, 22, 24 and guaranteed and loyalty additions, ifany, at 26 years of age.JEEWAN KISHORE Plan1021. High bonus from day one.2. Child becomes owner of the policy automatically at the age of 18 years.JEEWAN CHAYYA Plan 1031. Ideal for parents having less than a year old child.2. Makes provision for education/ marriage of the child.3. Extra benefit of waiver of premium in case of death of the policy holder.This policy is given under non-medical scheme up to sum assured of Rs.1 lakh,3. ENDOWMENT POLICYENDOWMENT WITH PROFITS Plan 141. Moderate Premiums2. High bonus3. High liquidity4. Savings oriented
  43. 43. This policy not only makes provisions for the family of the Life Assured in eventof his early death but also assures a lump sum at a desired age. The lump sum canbe reinvested to provide an annuity during the remainder of his life or in any otherway considered suitable at that time.LIMITED PAYMENT ENDOWMENT WITH PROFITS Plan 48Just as in the case of limited payment whole life polices, here, too, the payment ofpremium can be limited either to a single payment or to a term shorter than thepolicy.The endowment is, however, payable only at the end of the policy term, or upondeathof the policy holder if it takes place earlier.If payment of the premiums ceases after at least three years premiums have beenpaid,a free paid-up Policy for an amount bearing the same proportion to the sum assuredas the number of premiums actually paid bears to the number stipulated for in thepolicy, will be automatically secured provided the reduced sum assured, exclusiveof any attached bonus, is not less than Rs.250 Such reduced paid-up policy will notbe entitled to participate in the profits declared thereafter, but such bonus as hasalready been declared on the policy will remain attached thereto.JEEWAN MITRA Plan 133The benefits of this policy can be considered only for standard and substandardlivesClass I and II. It cannot be allowed for people engaged in hazardous occupations.Individuals engaged in dangerous pursuits will be rated against the revised tabularoccupational extra rates. This policy covers the risk for triple the sum assured.JEEWAN ANAND Plan 149Jeevan Anand is a With Profit Assurance Plan. It is a combination of theWhole Life Plan and the most popular Endowment Assurance Plan. The planprovides the predecidedSum Assured and Bonuses at the end of the stipulated premium paying term,but the risk cover on the life continues till death.1. Moderate Premiums2. High bonus3. High liquidity4. Savings orientedJOINT LIFE (Jeewan Saathi) POLICY Plan 89
  44. 44. This policy is issued on the lives of the husband and wife provided thefemales life belongs to Category I or is actively engaged in her spousesbusiness. In case of death of one of the policy holder the surviving partnergets the sum assured, the premium is stopped and on death or maturity fullsum assured along with bonus is paid back.4. RETIREMENT PLANIts once again that time of the year when most of you are on the look out for taxsaving avenues for investment. And for most, insurance has been on the top of thelist of choices. While earlier, buying insurance was mainly for tax benefits, butthese days with increased awareness, consumers have been narrowing down onpicking up the right policy that suits their future needs.NIA Products:1. MEDICLAIM POLICY2. FIRE INSURANCE3. PRIVATE CAR INSURANCE4. HOUSEHOLDER‟S POLICYMEDICLAIM POLICYThis insurance policy can be used to protect the insured party against expensesincurred for hospitalization for illness/ injury/ diseases as well as domiciliaryhospitalization.Suitable for:1. Each and every person aged between 5 and 75 years of age. Children agedbetween 3 months and 5 years have to be insured along with their parents.2. Government or private institutions for their employees.3. Clubs or associations for their bona-fide members.FIRE INSURANCEThis policy offers protection against loss or damage of property/ materials causedbyfire. The insurance should be taken for a maximum amount of its current valueafterconsidering factors of wear and tear as well as depreciation.Suitable for: This policy is vital for every individual or corporate body with respectto the property where they have insurable interest. Since insurable interest signifies
  45. 45. the right to insure, the person or corporate body must be legally competent to enterinto a fire insurance contract.PRIVATE CAR INSURANCERiskscoveredThis insurance policy protects the motor vehicle from loss or damage1. By fire, lightning, self-ignition, explosion, burglary, housebreaking or theft.2. Riot or strike.3. Flood, earthquake, cyclone or inundation.4. Transit by road, air, elevators or lifts.5. Liability for third partys injury or death, third party property and towards thepaid driver too.6. Drunken driving.HOUSEHOLDER’S POLICYThe Householders Insurance Policy comprises of ten sections covering of theinsureds building, fixtures and fittings, contents, jewellery and valuables,television sets and VCRs, bicycles, accompanied baggage as well as personalaccident and public liability benefits. Of these ten, the insured party must opt for atleast three sections and section 2 is compulsory.If the insured party opts for cover for more than 4 sections excluding compulsorysections, a discount of 15 percent is offered on the Non-Tariff sections. For morethan6 sections, excluding Sections I and II, 20 percent discount is offered on Non-Tariff sections.5. STOCK DIRECTStock direct has changed the way you look at trading in securities.A three way hands shake between leading brokers, national and international banksand SHCIL is the crux of stock direct. Stock direct – India‟s first online tradingplatform was launched in 1999.Today stock direct is the most secure online trading platform which combinesencryption technology/digital signature features. A few clicks will seamlesslycheck your funds and security positions, route the order to the broker of yourchoice and do the necessary fund and share movements for you.
  46. 46. AdvantagesOne Stop ShopGive a single instruction towards funds confirmation for buy orders, order routingto your broker and fund and share movements for settlement purpose.ConvenienceTrade from home through the net or use the RTMs placed at specified SHCILcenters.SecurityDigital Signature & Smart Card technology based on 128 bit Encryption makeyour transactions 100% secure.Cost-EffectiveNo minimum value of transaction.Choice of Stock ExchangesBuy/Sell shares on BSE / NSE(G) PENSION FUNDSSHCIL offers pension fund administration services to pension fund trusts. Thepension fund scheme administered by the trust could be a defined benefit or a definedcontribution scheme. For both the scheme types, SHCIL offers the entire range ofservices that include design, development and maintenance of a customized pension.
  47. 47. SERVICE PROFILEVarious Services Provided By Stock HoldingCorporation Of India Limited :-DP SERVICES:-SHCIL Depository Participant services address customers individual investmentneeds. With a parentage of leading financial institutions and insurance majors anda proven track record in the Custodian business, Company have reiterated theirpast success by establishing ourselves as the first ever and largest DepositoryParticipant in India. From a tentative foray in 1998 into the individual investorarena to servicing around seven lakh accounts, it have endeavored to constantlyadd and innovate to make business a pleasure for you.At SHCIL, company places a very high premium on client reporting. Periodicstatements sent to you keep you informed of customers account status. DedicatedCustomer Care lines manned by trained staff answer customer queries on demat /trades / holdings. The latest in client response at SHCIL is Interactive VoiceResponse (IVR) system for round the clock information on customers account.DEMAT:-Dematerialisation is the process of conversion of shares from physical formto the electronic mode. Companies dedicated demat team enable you toconvert customer‟s physical holdings into electronic mode in a quick andhassle-free manner.CLEARING MEMBER SERVICES:-SHCILs long-standing association with Clearing Members has enabled it todevelop services based on an understanding of their working and their requirementfor timely and accurate information .It accepts deposits of base capital andAdditional base capital requirements stipulated by NSE for clearing memberstrading on its capital market segment. Besides, SHCIL s new products with abroker empanelment clause ensure a mutually beneficial tie-up. Clearing members
  48. 48. stand to earn a steady income from SHCIL s product transactions and new add totheir client-base, while they capitalize on their rapport with the market. It currentlyoffers Depository services to more than 680 clearing members of variousexchanges connected with NSDL and CDSL. SHCIL s Customer Care lines answerall customers DP queries while the Interactive Voice Response (IVR) system givesyou information on customers account and other valuable data like CC calendardetails, tariff, ISIN information, etc. via telephone, fax and e-mail.Advantage:- SHCIL s Customer Care help lines give timely and accurate information toCMs.The Interactive Voice Response (IVR) system at SHCIL gives round the clockinformation on holdings & transactions Pay in / Pay out details, overdue cumholding details, etc. via telephone, fax or e-mail.DERIVATIVE SERVICES:-SHCIL provides Clearing Services for derivative segment of BSE/NSE andCommodity segment of MCX/NCDEX. STOCK DERIVATIVES-SHCIL is a Custodian/Professional Clearing Member of derivative segment at theBombay Stock Exchange and at the Futures & Options Segment of the NSEILrespectively. COMMODITY DERIVATIVES:-SHCIL is the first Professional Clearing Member of Commodity segment on theMulti Commodity Exchange (MCX) and National Commodity & DerivativeExchange (NCDEX).SHCIL has a full fledged in-house back office systems and procedures to cater tothe needs of trading members and other institutional / corporate clients in thissegment. A dedicated team of professionals handles derivative operations andassists its clients.As a professional clearing member, SHCIL performs the following functions;Clearing - Computing obligations of all his TM s i.e. determining positionsto settle.Settlement - Performing actual settlement.Collateral Management - Collection of collateral (cash and cash/cashequivalents and setting up exposure limits for TMs and Institutional clients.Risk Management - Setting position limits based on upfrontdeposits/margins for each TM and monitoring positions on a continuousbasis.
  49. 49. Advantage:SHCIL has always been a pioneer in clearing and settlement services in the cash.SHCIL has the capability to handle large volumes of business with greatestaccuracy, keeping customer interests as the top priority.SHCIL being a professional clearing member has no trading interests in theCommodity segment. There is strictly no dissemination of information on tradingor any other operation of any of its clients.Collateral ManagementSHCIL has excellent system to manage cash and cash equivalents deposited ascollateral for derivatives trading.Continuous Patronage from Institutional clients:SHCIL being a custodian clearing member having major institutional clients,provides more credibility. Tie-up with banks having nation-wide reach for bankingactivities: Since settlement in derivatives trading takes place daily. Fundsmovement has to be fast. SHCIL has tie up with new generation banks having widereach and modernfacilities like TT / anywhere banking etc. to contain the time lag in bankingtransactions.Competitive service charges:SHCIL is the pioneer in introducing Derivatives Clearing and Settlement servicesin the country. Service charges are so competitively structured to facilitate anyentrant.Low investment:The clearing function in the Commodity derivative segment requires hugeinvestment in back office systems and requires strict compliance to the regulatoryframework.BROKINGStock Holding Corporation of India Ltd. (SHCIL) in its endeavor to provide onestop shop to its large retail & institutional clients has promoted SHCIL ServicesLimited (SSL) as its broking arm.SHCIL has been promoted by All India Public Financial Institutions and InsuranceMajors. SHCIL is known for its Security, Integrity, wide network and focus ontechnology. SHCIL Services Ltd will continue this tradition .NRI SERVICES:-SHCIL has grown to become a major player in the capital market. With a networkof more than 120 offices operating across the country and franchisees operating
  50. 50. abroad, SHCIL provides Depository Participant and related services close to 0.7million satisfied investors out of which over 6000 are NRI Clientele.SHCIL has a full fledged NRI cell operating specifically to cater needs pertainingto Depository account opening and maintenance. NRI cell co-ordinates withprospective NRI customers, collects and assists in obtaining the relevantdocuments and ensures the Depository Account is opened hassle free.CUSTODIAL SEGMENT:-SHCIL has been providing Custodial Services of international standards toDomesticMutual Funds, Financial Institutions and Foreign Institutional Investors. Withalmost 70% of the Institutional business in its fold, SHCIL has evolved over thetimes to meet the changing requirements of dynamic markets and demandingclients. A dedicated pool of trained and highly experienced professionals workliterally round the clock on state of the art computer systems, dedicatedcommunication channels, well connected to Client institutions, Stock Exchanges,Clearing houses, Depositories and leading Institutional brokers. In terms ofcollective man-years, SHCIL has the most experienced team in the entire Industry.Tariff:-1. Annual membership charges Rs 500/-2. Purchase Nil3. Sale( market&off market) 0.05%(min Rs 25/-)+NSDLcharges4. Custody charges NIL5. Dematerialisation Rs 3/- per certificate6. Postage per Demat request Rs 25/-7. Rematerialisation Rs 15/- per certificate8. Postage per remat request Rs 25/-9. Creation/confirmation of creation of 0.02%+NSDL charges
  51. 51. pledge10. Closure/confirmation of closure ofpledge0.02%+NSDL charges11. Invocation Rs. 50/- per transaction12. Late transaction charges Rs. 10/-Trade processing services:SHCIL has specially trained personnel handling thousands of trade instructionsinvolving large values on sophisticated systems using digital signature on STP(Straight Through Processing) systems, ensuring smooth trade confirmations toStock Exchanges, reporting and resolution of mismatches with Clients, etc.Settlement services:Institutional trades are either settled through the Clearing House of the StockExchanges or as DVP directly with the contracting broker or Counter Party. As aCustodian SHCIL strives for timely settlement of Funds and Securities. Funds arecollected/ deposited from/to client and settled with the Clearing Houses/ Brokers/Counter Parties.In the present context, most of the Institutional trades are settled in the Depositorymode. For the Institutional segment alone, SHCIL has a unique clearing code onthe two principal stock exchanges and separate DPM units on both NSDL andCDSL. This ensures smooth settlement of transactions on bothExchanges/Depositories, based on the deliverables and receivables received bythem for each settlement. For the occasional delivery and receipt of securities inthe physical mode,Institutional services:SHCIL has installed dedicated DPM‟s (Depository Participant Modules) on boththe Depositories, viz. NSDL (National Securities Depository Ltd) and CDSL(Central Depository Services Ltd). A dedicated Institutional DP team at SHCILaddresses your need for all core DP services like conversion of physical holdingsinto electronic form, settlement of trade instructions, rematerialisation, repurchaseand pledge instructions, providing of holding and transaction statements and dailyreconciliation of client holdings.
  52. 52. COMPETITORS:Kotak SecuritiesKarvy SecuritiesMotilal OswalAnand RathiIndia Bull1. Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking anddistribution arm of the Kotak Mahindra Group. One of the oldest broking houses in India, itsoperations include stock broking and distribution of various financial products. It is a corporatemember of both the Bombay Stock Exchange and the National Stock Exchange of India. KotakSecurities was founded in 1994 and is headquartered in Mumbai, India.Motilal Oswal financial services ltd. is a diversified financial services firmoffering a range of financial products and services such as Wealth Management ,Broking & Distribution, Commodity Broking, Portfolio Management Services ,Institutional Equities, Private Equity, Investment Banking Services and PrincipalStrategies. Motilal Oswal Securities is a Depository Participant of NSDL and aDepository Participant of Central Depository Services Limited (CDSIL) in 2000.The company started offering Derivatives products and advisory services on bothBSE as well as NSE in 2001.Anand Rathi is a leading full service securities firm providing the entire gamut offinancial services. The firm, founded in 1994 by Mr. Anand Rathi, today has a panIndia presence as well as an international presence through offices in Dubai andBangkok. AR provides a breadth of financial and advisory services includingwealth management, investment banking, corporate advisory, brokerage &distribution of equities, commodities, mutual funds and insurance, structuredproducts - all of which are supported by powerful research teams. The firmsphilosophy is entirely client centric, with a clear focus on providing long termvalue addition to clients, while maintaining the highest standards of excellence,ethics and professionalism. The entire firm activities are divided across distinct
  53. 53. client groups: Individuals, Private Clients, Corporates and Institutions and wasrecently ranked by Asia Money 2006 poll amongst South Asias top 5 wealthmanagers for the ultra-rich. In year 2007 Citigroup Venture Capital Internationaljoined the group as a financial partner.India bulls is an Indian company with its presence in the Real Estate,Infrastructure, Financial Services, Securities, Retail, Multiplex and Power sectors.The company was founded in May 2000 as an online stock brokerage and has sincethen diversified into its current portfolio. India bulls Group is one of Indias largeBusiness houses. The Group has several businesses which cover a wide spectrumof Real Estate, Financial Services, Securities, Power and Chartered Aviation.Many of the companies are public entities and are listed on Indian stock markets.Karvy has presence with leadership position in a wide range of financial servicesincluding Broking, Commodities, Registry Services, Merchant Banking, Realtyservices etc. The group also has presence in the BPO services and technologyservices space. A professionally managed and highly focused financialintermediary in the Indian markets.
  54. 54. SWOT ANALYSISSTOCK HOLDING CORPORATION OF INDIA LIMITEDSTRENGTH1. Wide coverage throughout the country.2. Promoted by 7 financial institutions.3. Largest account holders4. Largest custodian.5. Catering to Indians as well as NRIs and FIIs.6. One stop shop for all financial solutions.7. Advanced system network.8. SHCIL is the first depository participant. It has the opportunity of holding morethan 7000000 accounts at all centers.9. Multiple products and services: SHCIL provides a variety of services under thesame roof.10. It is the member of both NSDL and CDSL.WEAKNESS1. Lack of aggressive marketing.2. Improper billings.3. Expensive.(Because separate account has to be opened according to holdings).4. Less investment in advertising.5. The clients are not provided any incentives or motivations, which wouldencourage them to make timely payment.6. The company has not undertaken sufficient steps to create awareness among theclients about SHCIL. The only procedure adopted is the Internet.7. The HR department is placed in Mumbai. So the newly recruited employees lacksufficient training facilities.OPPORTUNITIES
  55. 55. 1. E – Broking.2. Acquisition of smaller DPs.3. Collaboration with banks.4. New products.5. The company can take steps to increase the awareness among theclients and thereby increase the business.6. The company can attract more number of franchises.THREATS1. Increased cost as perceived by customers.2. Fluctuating market conditions affect the business.3. The number of competitors is increasing at a higher rate. Their charges are alsolow when compared to the charges of SHCIL. The nearest competitors are banksproviding DP services along with their regular services.4. The company does not charge any amount for closing the account. Sinceretaining the customer is very important and most of the customers will not thinkof closing the account at time of opening the account the company can chargesome for closure.5. The discounts and offers given by other DP‟s when compared to offers ofSHCIL are leading to reduction in the number of clients.SWOT ANALYSIS OF KARVYSTRENGTH·Employees are highly empowered.·Strong Communication Network.·Good co-operation between employees.·Number 1 Registrar and Transfer agent in India.·Number 1 dealer of Investment Products in India.WEAKNESSHigh Employee TurnoverOPPORTUNITY1. Growth rate of mutual fund industry is 40 to 50% during last year and
  56. 56. it expected that this rate will be maintained in future also.2. Marketing at rural and semi-urban areas.THREATS1. Increasing number of local players.2. Past image of Mutual Fund.SWOT ANALYSIS OF INDIA BULLSSTRENGTH• Online trading platform.• Diverse Branch Network provides ample opportunities to penetratedeep into the existing & untapped market.• India bulls offers its clients a pool of financial services andproducts:• No annual maintenance charges.• No custodial charge.• It does not keep any condition as to collect minimum amount ofbrokerage from its clients• Most competitive BROKERAGE and DP charges (on delivery0.5% and on intraday 0.1%)• Equity analysis report to support the investment decision of itsclients• Trading via branch network, telephones and internet account i.e.both online and offline• Induction of new employees through an extensive computer basedtraining module.WEAKNESS• It should have its own mutual funds as India bulls is providingadvises in mutual fund.• It should provide tips via SMS.
  57. 57. • There should be a separate set of staff working in fields and tradingon behalf of their clients:• Position to answer the questions of their clients relating to thecurrent market position as they are on fields.• Commodities are not traded online.• It does not provide with the indices of major world markets, ADRprices of Indian scripts.• Unlike some of its competitors like ICICI and Kotak, India bullsdoes not provide a complete catalogue of financial services (e.g.Banking facility).OPPORTUNITIES1. Financial services like banking .2. Market expansion i.e. opening branches at untapped areas.3. India bulls is registered with Luxembourg stock exchange and so cantarget other stock exchanges.4. ATM facility should be provided for easy withdrawals.5. The Capital market in the last few years has turned out to be one ofthe favorable avenues for the retail investors6. Scope of online trading on BSE.7. India bulls has tied up with other third party companies to sell theirproducts. Due to the high client base of India bulls, there exists anopportunity to cross sell these products in the market.THREATS1. Companies like Share khan, ICICI Direct, Kotak, and Private Brokersare major threats to India bulls.2. Banks with demat facility jockeying for position.3. Local brokers capable of charging lower brokerage.4. Industry competitors vying for the same target segment.5. Changes in SEBI guidelines & other tax implications.6. Government Regulations.
  58. 58. STRENGTH: Breadth of ServicesIn line with its client-centric philosophy, the firm offers to its clients the entirespectrum of financial services ranging from brokerage services in equities andcommodities, distribution of mutual funds, IPOs and insurance products, realestate, investment banking, merger and acquisitions, corporate finance andcorporate advisory.Clients deal with a relationship manager who leverages and brings together theproduct specialists from across the firm to create an optimum solution to the clientneeds. Management TeamAnand Rathi brings together a highly professional core management team thatcomprises ofindividuals with extensive business as well as industry experience. In-Depth ResearchOur research expertise is at the core of the value proposition that we offer to ourclients. Research teams across the firm continuously track various markets andproducts. The aim is however common - to go far deeper than others, to deliverincisive insights and ideas and be accountable for resultsWEAKNESSThe name of the organization ANAND RATHI indirectly indicates that it belongsto an individual.Small range of product line.SWOT ANALYSIS OF MOTILAL OSWALStrengths Large and diverse distribution network Strong research and sales teams Brand recognition Experienced top management Strong financial resultsWeaknessesCharges are high compare to other companies in industry
  59. 59. Opportunities Growing Financial Services industrys share of wallet for disposable income.Huge market opportunity for wealth management service providers as Indianwealth management business is transforming from mere wealthsafeguarding to growing wealth. Regulatory reforms would aid greater participation by all class of investors Leveraging technology to enable best practices and processes Increased appetite (need) of Indian corporate for growth capitalThreats Execution risk Slowdown in global liquidity flows Increased intensity of competition from local and global players Unfavorable economic conditions
  60. 60. RESEARCH METHODOLOGYMETHODOLOGYType of research descriptive and explanatorySampling technique non-probability samplingSample size 88Instrumentation technique Interview and QuestionnaireSources of data collection Primary Data was collected by InterviewandQuestionnaire while Secondary Datacollected from books, internet, magazine.It is a survey method. The questionnaire and interview schedule, personalinterview will be relied upon for gathering primary data. An aggregate of 96respondents from various Depository Participants responded to the questionnaire.For the purpose of secondary data books, articles, reports, annual reports of thestock exchanges, Internet are used.
  61. 61. Analysis:Age-investment amountIncome-investment amountEducation-investment amount1. age –investment amountResearch HypothesisHo: there is independency of investment amount on age.Ha: there is no independency of investment amount on age.Test applied: chi-square contingency testFormula:X2= ∑∑(fo-fe)^2/feα=5% (assume)df= (r-1)(c-1)=2X20.05,2= 5.9915
  62. 62. investment amountage20-40 20 5 2540-50 15 6 2150-above 60 33 8 4168 19 87I II III=(I-II)^2 IV=III/IIobserved expected (O-E)^220 19.54023 0.211388559 0.0108185 5.45977 0.211388559 0.03871715 16.41379 1.998810939 0.1217766 4.586207 1.998810939 0.43583133 32.04598 0.910159863 0.0284028 8.954023 0.910159863 0.1016480.737193X2calculated= 0.737193X2table value> X2calculated5.9915> 0.737193Result: Ho: acceptedBusiness Implication:As the null hypothesis is accepted, it means that the investment amount invested by the investors isindependent of age.2. income- investment amountResearch methodologyHo: there is independency of investment amount on the income of the investors.Ha: there is no independency of investment amount on the income of the investors.Test applied: chi-square contingency test
  63. 63. Formula:X2= ∑∑(fo-fe)^2/feα=5% (assume)df= (r-1)(c-1)= 2 X20.05,2= 5.9915investment amountincomebelow 1L 1L-1.5L10000-20000 32 5 3720001-30000 12 5 17above 30000 24 9 3368 19 87I II III=(I-II)^2 IV=III/IIobserved expected (O-E)^232 28.91954 9.4892324 0.3281255 8.08046 9.4892324 1.17434312 13.28736 1.6572863 0.1247275 3.712644 1.6572863 0.4463924 25.7931 3.21522 0.1246549 7.206897 3.21522 0.446131Calculated value 2.64437X2calculated= 2.64437
  64. 64. X2table value< X2calculatedX2calculated = 2.64437X2table value> X2calculated5.9915> 2.64437Result: Ho. acceptedBusiness Implication:As the null hypothesis is accepted which means that the amount invested on the preferred investmentis independent of their education.3. education- investment amountResearch hypothesis:Ho: there is independency of investment amount invested by the investors on education.Ha: there is no independency of investment amount invested by the investors on education.Test applied: chi-square contingency testFormula:X2= ∑∑(fo-fe)^2/feα=5% (assume)df= (r-1)(c-1)= 2
  65. 65. X20.05,1= 3.8415investment amounteducation below1L 1L-1.5LGRAD 31 9 40PG+UG+OTHER 37 10 4768 19 87e11 31.26437e12 8.735632e21 36.73563e22 10.26437I IIIII=(I-II)^2 IV=III/IIobserved expected (O-E)^231 31.26437 0.06989 0.0022359 8.735632 0.06989 0.00800137 36.73563 0.06989 0.00190310 10.26437 0.06989 0.006809calculated value 0.018948X2calculated= 0.018948X2table value< X2calculated3.8415< 0.018948Result: Ho. accepted
  66. 66. Business Implication:As the null hypothesis is accepted which means that the amount invested on the preferred investmentis independent of their education.

×