Online project

BBA Programme Bharati Vidyapeeth Deemed University, Pune

STOCK MARKETS IN INDIA:

Stock exchanges are the perfect type of market for securities whether of
government and semi-govt bodies or other public bodies as also for shares and
debentures issued by the joint-stock companies. In the stock market, purchases and
sales of shares are affected in conditions of free competition. Government securities
are traded outside the trading ring in the form of over the counter sales or purchase.
The bargains that are struck in the trading ring by the members of the stock
exchanges are at the fairest prices determined by the basic laws of supply and
demand.

Definition of a stock exchange:

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

History of Stock Exchanges:

The only stock exchanges operating in the 19th century were those of Mumbai setup
in 1875 and Ahmadabad set up in 1894. These were organized as voluntary non-
profit-marking associations of brokers to regulate and protect their interests. Before
the control on securities under the constitution in 1950, it was a state subject and the
Bombay securities contracts (control) act of 1925 used to regulate trading in
securities. Under this act, the Mumbai stock exchange was recognized in 1927 and
Ahmadabad in 1937. During the war boom, a number of stock exchanges were
organized. Soon after it became a central subject, central legislation was proposed
and a committee headed by A.D.Gorwala went into the bill for securities regulation.
On the basis of the committee‟s recommendations and public discussion, the
securities contract (regulation) act became law in 1956.

Yashwantrao Mohite Institute Of Management, Karad


Introduction
To The
Study



Functions of Stock Exchanges:
Stock exchanges provide liquidity to the listed companies. By giving quotations to
the listed companies, they help trading and raise funds from the market. Over the
hundred and twenty years during which the stock exchanges have existed in this
country and through their medium, the central and state government have raised
crores of rupees by floating public loans. Municipal corporations, trust and local
bodies have obtained from the public their financial requirements, and industry, trade
and commerce- the backbone of the country‟s economy-have secured capital of
crores or rupees through the issue of stocks, shares and debentures for financing
their day-to-day activities, organizing new ventures and completing projects of
expansion, diversification and modernization. By obtaining the listing and trading
facilities, public investment is increased and companies were able to raise more
funds. The quoted companies with wide public interest have enjoyed some benefits
and assets valuation has become easier for tax and other purposes.



Various Stock Exchange in India.
At present there are 23 stock exchanges recognized under the securities
contracts (regulation), Act, 1956. Those are:

National Stock Exchange of India (NSE)

Bombay Stock Exchange (BSE)

Ahmadabad Stock Exchange Association Ltd.

Bangalore Stock Exchange

Bhubaneshwar Stock Exchange Association

Calcutta Stock Exchange

Cochin Stock Exchange Ltd.

Coimbatore Stock Exchange

Delhi Stock Exchange Association

Guwahati Stock Exchange Ltd

Hyderabad Stock Exchange Ltd.

Jaipur Stock Exchange Ltd

Ludhiana Stock Exchange Association Ltd

Madras Stock Exchange

Madhya Pradesh Stock Exchange Ltd.

Magadh Stock Exchange Limited

Meerut Stock Exchange Ltd.

Pune Stock Exchange Ltd.

Saurashtra Kutch Stock Exchange Ltd.

Uttar Pradesh Stock Exchange Association

Vadodara Stock Exchange Ltd.



Out of these major stock exchanges were:

NSE (National Stock Exchange)

The National Stock Exchange of India Limited has genesis in the report of the High
Powered Study Group on Establishment of New Stock Exchanges, which
recommended promotion of a National Stock Exchange by financial institutions (FI‟s)
to provide access to investors from all across the country on an equal footing. Based
on the recommendations, NSE was promoted by leading Financial Institutions at the
behest of the Government of India and was incorporated in November 1992 as a
tax-paying company unlike other stock exchanges in the country. On its recognition
as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April
1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment
in June 1994. The Capital Market (Equities) segment commenced operations in
November 1994 and operations in Derivatives segment commenced in June 2000.



NSE (NIFTY)

NSE's mission is setting the agenda for change in the securities markets in India. The
NSE was set-up with the main objectives of:

 Establishing a nation-wide trading facility for equities and debt instruments.
 Ensuring equal access to investors all over the country through an appropriate
communication network.
 Providing a fair, efficient and transparent securities market to investors using
electronic trading systems.
 Enabling shorter settlement cycles and book entry settlements systems, and
 Meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology, have
become industry benchmarks and are being emulated by other market participants.
NSE is more than a mere market facilitator. It's that force which is guiding the
industry towards new horizons and greater opportunities.



BSE (Bombay Stock Exchange)

The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875
as "The Native Share and Stock Brokers Association". It is the oldest one in Asia,
even older than the Tokyo Stock Exchange, which was established in 1878. It is a
voluntary non-profit making Association of Persons (AOP) and is currently engaged
in the process of converting itself into demutualised and corporate entity. It has
evolved over the years into its present status as the premier Stock Exchange in the
country. It is the first Stock Exchange in the Country to have obtained permanent
recognition in 1956 from the Govt. of India under the Securities Contracts
(Regulation) Act 1956.The Exchange, while providing an efficient and transparent
market for trading in securities, debt and derivatives upholds the interests of the
investors and ensures redresses of their grievances whether against the companies or
its own member-brokers. It also strives to educate and enlighten the investors by
conducting investor education programmers and making available to them
necessary informative inputs.



BSE (Bombay Stock Exchange

A Governing Board having 20 Directors in a apex body which decides the policies &
regulates the affairs of the Exchange. The Governing Board consists of 9 elected
Directors, who are from the broking community(one third of them retire ever year by
rotation) three SEBI nominiees, six public representatives and an executive Director
& Chief Executive officer and a Chief Operating Officer.

The Executive Director as the Chief Executive Officer is responsible for the day-to-day
administration of the Exchange and the Chief Operating Officer and other Heads of
Department assist him.

The Exchange has inserted new Rule No.126 A in its Rules, Byelaws pertaining to
constitution of the Executive Committee of the Exchange. Accordingly, an Executive
Committee, consisting of three elected directors, three SEBI nominees or public
representatives, Executive Director & CEO and Chief Operating Officer has been
constituted. The Committee considers judicial & quasi matters in which the
Governing Board has powers as an Appellate Authority, matters regarding
annulment of transactions, admission, continuance and suspension of
memberbrokers, declaration of a member-broker as defaulter, norms, procedures and
other matters relating to arbitration, fees, deposits, margins and other monies payable
by the member-brokers to the Exchange, etc.



REGULATORY FRAME WORK OF STOCK EXCHANGE
A comprehensive legal framework was provided by the “Securities Contract
Regulation Act, 1956” and “Securities Exchange Board of India 1952”. Three tier
regulatory structure comprising
 Ministry of finance
 The Securities And Exchange Board of India 
Governing body
Members of the stock exchange:
The securities contract regulation act 1956 has provided uniform regulation for the
admission of members in the stock exchanges. The qualifications for becoming a
member of a recognized stock exchange are given below:
 The minimum age prescribed for the members is 21 years.
 He should be an Indian citizen.
 He should be neither a bankrupt nor compound with the creditors.
 He should not be convicted for fraud or dishonesty.
 He should not be engaged in any other business connected with a company.
 He should not be a defaulter of any other stock exchange.
 The minimum required education is a pass in 12th standard examination.



SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

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

OBJECTIVES AND FUNCTIONS OF SEBI

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



SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK EXCHANGES):

 Board of Directors of Stock Exchange has to be reconstituted so as to include
non-members, public representatives and government representatives to the
extent of 50% of total number of members.
 Capital adequacy norms have been laid down for the members of various stock
exchanges depending upon their turnover of trade and other factors.
 All recognized stock exchanges will have to inform about transactions within 24
hrs.

TYPES OF ORDERS:
Buy and sell orders placed with members of the stock exchange by the investors. The
orders are of different types.
Limit orders: Orders are limited by a fixed price. E.g. „buy Reliance Petroleum at
Rs.50.‟Here, the order has clearly indicated the price at which it has to be bought
and the investor is not willing to give more than Rs.50.
Best rate order: Here, the buyer or seller gives the freedom to the broker to execute
the order at the best possible rate quoted on the particular date for buying. It may be
lowest rate for buying and highest rate for selling.
Discretionary order: The investor gives the range of price for purchase and sale. The
broker can use his discretion to buy within the specified limit. Generally the
approximation price is fixed. The order stands as this “buy BRC 100 shares around
Rs.40”.
Stop loss order: The orders are given to limit the loss due to unfavorable price
movement in the market. A particular limit is given for waiting. If the price falls below
the limit, the broker is authorized to sell the shares to prevent further loss. E.g. Sell
BRC limited at Rs.24, stop loss at Rs.22.
Buying and selling shares: To buy and sell the shares the investor has to locate
register broker or sub broker who render prompt and efficient service to him. The
order to buy or sell specifying the number of shares of the company of investors‟
choice is placed with the broker. The order may be of any type. After receiving the



order the broker tries to execute the order in his computer terminal. Once matching
order is found, the order is executed. The broker then delivers the contract note to
the investor. It gives the details regarding the name of the company, number of
shares bought, price, brokerage, and the date of delivery of share. In this physical
trading form, once the broker gets the share certificate through the clearing houses
he delivers the share certificate along with transfer deed to the investor. The investor
has to fill the transfer deed and stamp it. The stamp duty is one of the percentage
considerations, the investor should lodge the share certificate and transfer deed to
the register or transfer agent of the company. If it is bought in the DEMAT form, the
broker has to give a matching instruction to his depository participant to transfer
shares bought to the investors account. The investor should be account holder in
any of the depository participant. In the case of sale of shares on receiving payment
from the purchasing broker, the broker effects the payment to the investor.
Share groups: The scrips traded on the BSE have been classified into
„A‟,‟B1‟,‟B2‟,‟C‟,‟F‟ and „Z‟ groups. The „A‟ group represents those, which are in the
carry forward system. The „F‟ group represents the debt market segment (fixed
income securities). The Z group scrips are of the blacklisted companies. The „C‟
group covers the odd lot securities in „A‟, „B1‟&‟B2‟ groups.

ROLLING SETTLEMENT SYSTEM:
Under rolling settlement system, the settlement takes place n days (usually 1, 2, 3 or
5days) after the trading day. The shares bought and sold are paid in for n days after
the trading day of the particular transaction. Share settlement is likely to be
completed much sooner after the transaction than under the fixed settlement
system.
The rolling settlement system is noted by T+N i.e. the settlement period is n days
after the trading day. A rolling period which offers a large number of days negates
the advantages of the system. Generally longer settlement periods are shortened
gradually.
SEBI made RS compulsory for trading in 10 securities selected on the basis of the
criteria that they were in compulsory demat list and had daily turnover of about Rs.1



crore or more. Then it was extended to “A” stocks in Modified Carry Forward
Scheme, Automated Lending and Borrowing Mechanism (ALBM) and Borrowing and
lending Securities Scheme (BELSS) with effect from Dec 31, 2001.
SEBI has introduced T+5 rolling settlement in equity market from July 2001 and
subsequently shortened the cycle to T+3 from April 2002. After the T+3 rolling
settlement experience it was further reduced to T+2 to reduce the risk in the market
and to protect the interest of the investors from 1st April 2003.
Activities on T+1: conformation of the institutional trades by the custodian is sent to
the stock exchange by 11.00 am. A provision of an exception window would be
available for late confirmation. The time limit and the additional changes for the
exception window are dedicated by the exchange.
The exchanges/clearing house/ clearing corporation would process and download
the obligation files to the broker‟s terminals late by 1.30 p.m on T+1. Depository
participants accept the instructions for pay in securities by investors in physical form
upto 4 p.m and in electronic form upto 6 p.m. the depositories accept from other DPs till
8p.m for same day processing.
Activities on T+2: The depository permits the download of the paying in files of
securities and funds till 10.30 a.m on T+2 from the brokers‟ pool accounts. The
depository processes the pay in requests and transfers the consolidated pay in files to
clearing House/clearing Corporation by 11.00am/on T+2. The exchange/clearing
house/clearing corporation executes the pay-out of securities and funds latest by 1.30
p.m on T+2 to the depositories and clearing banks. In the demat mode net basis
settlement is allowed. The buy and sale positions in the same scrip can be settled and
net quantity has to be settled.



Primary Market:

A Primary market is generally reffered to the market of new issues or market for
mobilization of resources by the companies and government, for new projects as
also for expansion, modemization, addition, diversification and upgradation.
Primary market is also reffered to as New Issue Market. Primary market
seperations include new issues of shares by new and existing companies, further
and right issues to existing shareholders, public offers, and issue of debt

instruments such as debentures, bonds, etc.
The primary market is regulated by the Securities and Exchange Board of India
(SEBI a government regulated authority).
Function:
The main services of the primary market are origination, underwriting, and
distribution. Origination deals with the origin of the new issue. Underwriting contract
make the shares predictable and remove the element of uncertainty in the
subscription. Distribution refers to the sale of securities to the investors.
The following are the market intermediaries associated with the market:
1. Merchant banker/book building lead manager
2. Registrar and transfer agent
3. Underwriter/broker to the issue
4. Adviser to the issue
5. Banker to the issue
6. Depository
7. Depository participant



Investors’ protection in the primary market:
To ensure healthy growth of primary market, the investing public should be
protected. The term investor protection has a wider meaning in the primary market.
The principal ingredients of investors‟ protection are:
 Provision of all the relevant information
 Provision of accurate information and
 Transparent allotment procedures without any bias.



SECONDARY MARKET
The primary market deals with the new issues of securities. Outstanding securities
are traded in the secondary market, which is commonly known as stock market or
stock exchange. “The secondary market is a market where scrip‟s are traded”. It is a
market place which provides liquidity to the scrip‟s issued in the primary market.
Thus, the growth of secondary market depends on the primary market. More the
number of companies entering the primary market, the greater are the volume of
trade at the secondary market. Trading activities in the secondary market are done
through the recognized stock exchanges which are 23 in number including Over The
Counter Exchange of India (OTCE), National Stock Exchange of India and
Interconnected Stock Exchange of India.

Secondary market operations involve buying and selling of securities on the stock
exchange through its members. The companies hitting the primary market are
mandatory to list their shares on one or more stock exchanges in India. Listing of
scrip‟s provides liquidity and offers an opportunity to the investors to buy or sell the
scrip‟s.
The following are the intermediaries in the secondary market:
1. Broker/member of stock exchange - buyers broker and sellers broker
2. Portfolio Manager
3. Investment advisor
4. Share transfer agent
5. Depository
6. Depository participants.



Objectives
&
Methodology



OBJECTIVES AND METHODOLOGY

NEED FOR THE STUDY:

The present study to review the online trading

procedure a case study of ONLINE TRADING at

SHAREKHAN as the exchange has changed it‟s

trading from the outcry mode to online trading on

20th February 1997, there is need to assess the

performance of the capital market.

OBJECTIVES OF THE STUDY:

 It is to analyze the changes in trading after the exchange shifted from outcry

to online trading system.

 It is to study the functions of SHAREKHAN through various departments.

 To know the online screen based trading system adopted by SHAREKHAN

and about its communication facilities. The appropriate configuration to set

the network, which would link the SHAREKHAN to individual / members.

 To know about the latest and future development in the stock exchange

trading system.



METHODOLOGY OF THE STUDY:

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

Primary method: This method includes the data collected from the personal
interaction with authorized members of Sharekhan Securities limited.

Secondary method: The secondary data collection method includes:
The lecturers delivered by the superintendents of respective departments.
The brochures and material provided by Sharekhan Securities limited.
The data collected from the magazines of the NSE, economic times, etc.
Various books relating to the investments, capital market and other related topics.

LIMITATIONS OF THE STUDY:

Despite of the training my level best, there were still some limitation which I think
remains there to draw fruitful conclusion. There were some practical problem which
come across and could not be properly death with

 The advisory services being promised by the brokers would be of little use
to investors looking for an insight into the market.

 As a client one will access the NSE through a server of the online
brokerage and this may involve queuing delays

 If one like to ask his broker "Aaj kya achcha lag raha hai" he may not be able to do
so.If he want advice on a particular stock in his portfolio he may not even be able to
get that.



Company profile



Introduction to the company
SHAREKHAN
Sharekhan Ltd is India‟s leading online retail broking house with its presence
through 1288„Share Shops‟ in 325 cities and serving more than 8, 00,000 customers

across the nation. Launched on Feb 8th 2000 as an online trading portal, Sharekhan offers its
clients trade execution facilities for cash as well as derivatives, on BSE and NSE, depository
services, mutual funds, initial public offerings (IPOs), and commodities trading facilities
on MCX and NCDEX. Besides high quality investment advice from an experienced
research team Sharekhan provides market related news, stock quotes fundamental and
statistical information across equity, mutual funds, IPOs and much more.

Sharekhan has set category leadership through pioneering initiatives like „Speed
Trade‟, a net based executable application that emulates a broker terminal besides
providing information relevant to Day traders. Their second initiative, „First Step‟ is
targeted at empowering first time investors. Sharekhan has also set their global
footprints through the „India First‟ initiative, a series of seminars conducted by
Sharekhan to help NRIs participate and benefit from the huge investment
opportunities in India.
These exchange do not work of its own, rather, these are run by some persons and with the help
of some persons and institution. All these are down as functionaries on stock exchange. These are
1. Stockbrokers
2. Sub-broker
3. Market makers
4. Portfolio consultants etc.



1.) Stockbrokers

A Stock broker is a member of a recognized stock exchange, who is permitted to do
trades on the screen-based trading system of different stock exchanges. He is
enrolled as a member with the concerned exchange and is registered with SEBI.
These are the persons who buy, sell or deal in securities. A certificate of registration
from SEBI is mandatory to act as a broker. SEBI can impose certain conditions
while granting the certificate of registrations. It is obligatory for the person to abide
by the rules, regulations and the buy-law. Stock brokers are commission broker,
floor broker, arbitrageur etc.

Details of registered brokers

Total no. of registered Total no. of sub-brokers as on
brokers as on 31.03.2009 31.03.2009

9000 Approx 2,40,000 Approx

2.) Sub-broker

Sub broker is a person who is registered with SEBI as such and is affiliated to a member of a
recognized stock exchange.
A sub-broker acts as agent of stock broker. He is not a member of a stock
exchange. He assists the investors in buying, selling or dealing in securities through
stockbroker. The broker and sub-broker should enter into an agreement in which
obligations of both should be specified. Sub-broker must be registered SEBI for a
dealing in securities. For getting registered with SEBI, he must fulfill certain rules
and regulation.



3.) Market Makers

Market maker is a designated specialist in the specified securities. They make
both bid and offer at the same time. A market maker has to abide by bye-laws, rules
regulations of the concerned stock exchange. He is exempt from the margin
requirements. As per the listing requirements, a company where the paid-up capital
is Rs. 3 crore but not more than Rs. 5 crore and having a commercial operation for
less than 2 years should appoint a market maker at the time of issue of securities.

4.) Portfolio consultants
A combination of securities such as stocks, bonds and money market instruments
is collectively called as portfolio. Whereas the portfolio consultants are the persons, firms or
companies who advise, direct or undertake the management or administration of securities or funds
on behalf of their clients.
It is basically a stock brokering company which deals in security and derivative market,
Commodity market, mutual funds and Insurance etc.



SHAREKHAN- ONE OF THE FASTEST GROWING FINANCIAL
SERVICES COMPANY IN INDIA



Shareholders & Management Team



WORK STRUCTURE OF SHAREKHAN
Sharekhan has always believed in investing in technology to build its business. The company
has used some of the best-known names in the IT industry, like Sun Microsystems,
Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, Verisign Financial
Technologies India Ltd, Spider Software Pvt Ltd. to build its trading engine and content.
The Citi Venture holds a majority stake in the company. HSBC, Intel & Carlyle are the other
investors.
On April 17, 2002 Sharekhan launched Speed Trade and Trade Tiger, are net-based
executable application that emulates the broker terminals along with host of other
information relevant to the Day Traders. This was for the first time that a net-based
trading station of this caliber was offered to the traders. In the last six months
SpeedTrade has become a de facto standard for the Day Trading community over
the net.
Sharekhan‟s ground network includes over 1288+ Shareshops in 325+ cities in
India.
The firm‟s online trading and investment site - www.sharekhan.com - was launched
on Feb 8, 2000. The site gives access to superior content and transaction facility to
retail customers across the country. Known for its jargon-free, investor friendly
language and high quality research, the site has a registered base of over 3 Lacs
customers. The number of trading members currently stands at over 8 Lacs. While
online trading currently accounts for just over 5 per cent of the daily trading in
stocks in India, Sharekhan alone accounts for 27 per cent of the volumes traded
online.

The Corporate Finance section has a list of very prestigious clients and has many
„firsts‟ to its credit, in terms of the size of deal, sector tapped etc. The group has
placed over US$ 5 billion in private equity deals.Some of the clients include



BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and
Shopper’s Stop. Finally, Sharekhan shifted hands and Citi venture get holds on it.



Sharekhan offers the following products.

CLASSIC ACCOUNT

This is a User Friendly Product which allows the client to trade through website
www.sharekhan.com and is suitable for the retail investors who is risk-averse and
hence prefers to invest in stocks or who does not trade too frequently.

Features

• Online trading account for investing in Equity and Derivatives via
www.sharekhan.com

• Live Terminal and Single terminal for NSE Cash, NSE F&O & BSE.

• Integration of On-line trading, Saving Bank and Demat Account.

• Instant cash transfer facility against purchase & sale of shares.

• Competitive transaction charges.

• Instant order and trade confirmation by E-mail.

• Streaming Quotes (Cash & Derivatives).

• Personalized market watch.

• Single screen interface for Cash and derivatives and more.

• Provision to enter price trigger and view the same online in market watch.

SPEEDTRADE

SPEEDTRADE is an internet-based software application that enables you to buy and sell
in an instant.
It is ideal for active traders and jobbers who transact frequently during day‟s session to
capitalize on intra-day price movement.


Features
• Instant order Execution and Confirmation.
• Single screen trading terminal for NSE Cash, NSE F&O & BSE.
• Technical Studies.
• Multiple Charting.
• Real-time streaming quotes, tic-by-tic charts.
• Market summary (Cost traded scrip, highest clue etc.)
• Hot keys similar to broker‟s terminal.
• Alerts and reminders.
• Back-up facility to place trades on Direct Phone lines.
• Live market debts.

DIAL-N-TRADE

Along with enabling access for trade online, the CLASSIC and
SPEEDTRADE ACCOUNT also gives Dial-n-trade services. With this service, one can dial
Sharekhan‟s dedicated phone lines 1-800-22-7500, 3970-7500.
Beside this, Relationship Managers are always available on Office Phone and Mobile to
resolve customer queries.

ShareMobile

Sharekhan had introduced ShareMobile, mobile based software where one can watch
Stock Prices, Intra Day Charts, Research & Advice and Trading Calls live on the Mobile.



PREPAID ACCOUNT

Customers pay Advance Brokerage on trading Account and enjoy
uninterrupted trading in their Account. Beside this, great discount are also available on brokerage.
Prepaid Classic Account : - Rs750 < Rs. 2000
Prepaid Speed trade Account : - Rs. 2000 < Above.

IPO ON-LINE

Customers can apply to all the forthcoming IPOs online. This is quite hasslefree,
paperless and time saving. Simply allocate fund to IPO Account, Apply for the IPO and Sit Back
& Relax.

Mutual Fund Online

Investors can apply to Mutual Funds of Reliance, Franklin Templeton
Investments, ICICI Prudential, SBI, Birla, Sundaram, HDFC, DSP Merrill Lynch,
PRINCIPAL and TATA with Sharekhan.


2



CHARGE STRUCTURE

Fee Structure for General Individuals: -

Charges* Classic Account Speed Trade Account

Account Opening Rs. 750 Rs. NIL

Monthly Rs. NIL Rs. NIL

Commitment

Brokerage Intra-day - 0.05 % Intra-day - 0.05%

Delivery - 0.50 % Delivery - 0.50%

* Taxes as per govt.

EXPOSURE: 4 TO 6.7 TIMES (ON MARGIN MONEY)

BROKERAGE RATES OF SHAREKHAN.COM



MAJOR PLAYERS IN THE REGION



Project Analysis



PROJECT ANALYSIS

OUTCRY SYSTEM

The broker has to buy or sell securities for which he has received the orders. For
this, the broker or his authorized representatives goes to the stock exchange. This
method is called the open outcry system. Basically the brokers shout while buying or
selling the securities. The floor of the stock exchange is divided into a number of
markets also known as „post pit‟ or wing based on particular securities dealt there.
In the post pit or wing, the broker using „open outcry‟ method makes an offer or bid
price. For making the necessary bargain, he quotes his purchase or sale price, also
known as offer or bid price. The dealer, to whom the price is quoted, quotes his own
price when the quotation of the dealer suits the broker, he may loose the bargain. If
he is not satisfied with the quote price, he may turn to some other dealer. On the
close of the bargain, the dealer as well as the broker makes a brief note of the
particulars of the deal. Such notes are made on some pad and on it the number of
shares, the price agreed upon, the name of the party, what membership number
etc., are noted.

DISADVANTAGES OF OUTCRY

SYSTEM:

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



MANUAL TRADING

Trading procedure before introduction of online trading:
Trading on stock exchanges is officially done in the trading ring. In the trading ring
the space is provided for specified and non-specified sections, the members and
their authorized assistants have to wear a badge or carry with them an identity card
given by the exchange to enter the trading ring. They carry a sauda book or
confirmation memos, duly authorized by the exchange and carry a pen with them.
The stock exchanges operations are floor level are technical in nature
.Nonmembers are not permitted to enter in to stock market. Hence various stages
have to be completed in executing a transaction at a stock exchange .The steps
involved in this method of trading have given below:
Choice of broker:
sell shares and transact business, have to act through member brokers only. They
can also appoint their bankers for this purpose as per the present regulations.
Placement of order:
The next step is the The prospective investor who wants to buy shares or the
investors, who wants to placing order for the purchase or sale of securities with a
broker. The order is usually placed by telegram, telephone, letter, fax etc or in
person. To avoid delay, it is placed generally over the phone. The orders may take
any one of the forms such as At Best Orders, Limit Order, Immediate or Cancel
Order, Limited Discretionary Order, and Open Order, Stop Loss Order.
Execution of order or contract:
Orders are executed in the trading ring of the BSE. This works from 11:30 to 2.30
P.M on all working days Monday to Friday, and a special one-hour session on
Saturday. The members or the authorized assistants have to wear a badge given by
the exchange to enter into the trading ring. They carry a sauda Block Book or
conformation memos, which are duly authorized by the exchange when the deal is
struck; both broker and jobber make a note in their sauda block books. From the
sauda book, the contract notes are drawn up and posted to the client. A contract



note is written agreement between the broker and his clients for the transaction
executed.
Drawing Up and Bills:
Both sale and purchase bills are prepared along with the contract note and it is
posted on the same day or the next day. This in a purchase transaction, once the
shares are delivered to the client effects payment for the purchases and pays the
stamp fees for transfer, a bill is made out giving the total cost of purchase, including
other expenses incurred by the broker in the price itself. With this, the process ends.

DEMATERLIZATION:
Dematerialization is the process by which physical certificates of an investor are
converted to an equipment number of securities in electronic from and credited in
the investor account with his DP. In order to dematerialize the certificates, an
investor has to first open an account with a DP and then request for the
Dematerialization Request Form, which is DP and submit the same along with the
share certificates. The investor has to ensure that he marks “Submitted for
Dematerialization” on the certificates before the shares are handed over to the DP for
demat. Dematerialization can only be done to those certificates, which are
already registered in your name and belong to the list of securities admitted for
Dematerialization at NSDL.
Most of the active scrip‟s in the market including all the scrip‟s of S&P CNX NIFTY and
BSE SENSEX have already joined NSDL. This list is steadily increasing.
Briefly, the process is as follows: after completion of transfer, the investor gets the
option to dematerialize such shares. Investor‟s willing to exercise this option sends a
Demat request along with the option letter sent by the company to his DP. The
company or its R&T agent would confirm the Demat request on its receipt from the DP
to reduce risk of loss in transit.
Dematerialized shares do not have any distinctive or certificate numbers. These
shares are fungible-which means that 100 shares of a security are the same as any
other 100 shares of the security. Odd lot shares certificates can also be
dematerialized.



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



ONLINE TRADING

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

1) What is Internet?
Internet is a worldwide, self-governed network connecting several other smaller
networks and millions of computers and persons, to mega sources of information.
This technology shrinks vast distances, accelerating the pace of business reforms
and revolutionizing the way companies are managed. It allows direct, ubiquitous
links to anyone anywhere and anytime to build up interactive relationships.

A combination of time and space, called the Internet promises to bring
unprecedented changes in our lives and business. Internet or net is an inter-
connection of computer communication networks spanning the entire globe, crossing
all geographical boundaries. It has re-defined the methods of communication, work
study, education, business, leisure, health, trade, banking, commerce and what not it
is virtually changing every thing and we are living in dot.com age. Net being an
interactive two way medium, through various websites, enables participation by
individuals in business to business and business to consumer commerce, visit to
shopping arcades, games, etc. in cyber space even the information can be copied,
downloaded and retransmitted.
The use of Internet has grown 2000 percent in last decade and is currently growing at
10 percent per month. In India, growth of Internet is of recent times. It is expected to
bring changes in every functional area of business activity including management and
financial services. It offers stock trading at a lower cost. Internet can change the nature
and capacity of stock broking business in India.



2. E-commerce
Electronic commerce is associated with buying and selling over computer
communication networks. It helps conduct traditional commerce through new way of
transferring and processing of information. Information is electronically transferred
from computer to computer in an automated way. E-commerce refers to the
paperless exchange of business information using electronic data inter change,
electronic technologies. It not only reduces manual processes and paper
transactions but also helps organization move to a fully electronic environment and
change the way they operated.

PC‟s and networking attempts to introduce banks of the tools and technologies
required for electronic commerce. The computers are either workstations of
individual office works or serves where large databases and information reside.
Network connects both categories of computers; the various operating systems are
the most basis program within a computer. It manages the resources of the
computer system in a fair and efficient manner.
Now we can enter in to the concept known as online trading.
In the past, investors had no option but to contact their broker to get real time access to
market data. The net brings data to the investor on-line and net broking enables him to
trade on a click of mouse. Now information has become easily accessible to both retail
as well as big investor.

EVOLUTION OF BROKING IN INDIA:
The evolution of a broking in India can be categorized in three phases -
 Stockbrokers will offer on their sites features such as live portfolio manager,
live quotes, market research and news, etc. to attract more investors.
 Brokers will offer online broking and relationship management by providing
and offering analysis and information to investors during broking and non-
broking hours based on their profile and needs, i.e. customized services.



 Brokers (now e-brokers) will offer value management or services like initial
public offering online, on-line asset allocation, portfolio management, financial
planning, tax planning, insurance services, etc. and enables the investors to
take better and well considered decisions.
The actual definition of “Online Trading” is as explained below:
“Online trading is a service offered on the internet for purchase and sale of shares.
In the real world you place orders on your stockbroker either verbally (personally or
telephonically) or in a written form (fax).” In online trading, you will access a
stockbroker‟s website through your internet enabled PC and place orders through
the broker‟s internet based trading engine. These orders are routed to the stock
exchange without manual intervention and executed thereon in a matter of a few
seconds.
The net is used as a mode of trading in internet trading. Orders are communicated to
the stock exchange through website.
In India:
Internet trading started in India on 1st April 2000 with 79 members seeking
permission for online trading. The SEBI committees on internet based securities
trading services has allowed the net to be used as an Order Routing System (ORS)
through registered stock brokers on behalf of their clients for execution of
transaction. Under the ORS the client enters his requirements (security, quantity,
price buy/sell) on broker‟s site.
Objectives:

Internet trading is expected to
 Increase transparency in the markets.
 Enhance market quality through improved liquidity, by increasing quote

Continuity and market depth.
 Reduce settlement risks due to open trades, by elimination of mismatches.
 Provide management information system.
 Introduce flexibility in system, so as to handle growing volumes easily and to
support nationwide expansion of market activity.



Besides, through internet trading three fundamental objectives of securities
regulation can be easily achieved, these are:
 Investor protection
 Creation of a fair and efficient market and
 Reduction of the systematic risks.

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

Requirements for net trading:

For investors:

1. Installation of a computer with required specification
2. Installation of a modem
3. Telephone connection
4. Registration for on-line trading with broker
5. A bank account
6. Depository account
7. Compliance with SEBI guidelines for net trading

The following should be produced to get a demat account and online trading
account:

As identity proof & address proof any one of the following:

1) Voter ID card
2) Driving license
3) PAN card ( in case of to trade more than 50000)
4) Ration card
5) Bank pass book
6) Telephone bill

Other requirements, which are necessary

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



For stock brokers:

1. Permission from stock exchange for net trading
2. Net worth of Rs. 50 lac
3. Adequate back-up system
4. Secured and reliable software system
5. Adequate, experienced and trained staff
6. Communication of order (trade confirmation to investor by e-mail)
7. Use of authentication technologies
8. Issue of contract notes within 24 hours of the trade execution
9. Setting up a website.

The net is used as a medium of trading in internet trading. Orders are communicated to
the stock exchange through website. Internet trading started in India on 1st April 2000
with 79 members seeking permission for online trading. The SEBI committees on
internet based securities trading services has allowed the net to be used as an
Order Routing System (ORS) through registered stock brokers on behalf of their
clients for execution of transaction.
Under the Order Routing System the client enters his requirements (security,
quantity, price, and buy/sell) in broker's site. They are checked electronically against
the clients account and routed electronically to the appropriate exchange for
execution by the broker. The client receives a confirmation on execution of the order.
The customer's portfolio and ledger accounts get updated to reflect the transaction.
The user should have the user id and password to enter into the electronic ring. He
should also have demat account and bank account. The system permits only a
registered client to log in using user id and password. Order can be placed using
place order window of the website.



Procedure for net trading

Step 1: Those investors, who are interested in doing the trading over internet
system i.e. NEAT-IXS, should approach the brokers and get them self registered
with the Stock Broker.
Step 2: After registration, the broker will provide to them a Login name, Password
and personal identification number (PIN).
Step 3: Actual placement of an order. An order can then be placed by using the
place order window as under:
(a) First by entering the symbol and series of stock and other parameters like
quantity and price of the scrip on the place order window.
(b) Second, fill in the symbol, series and the default quantity.
Step 4: It is the process of review. Thus, the investor has to review the order placed by
clicking the review option. He may also re-set to clear the values.
Step 5: After the review has been satisfactory, the order has to be sent by clicking on
the send option.
Step 6: The investor will receive an "Order Confirmation" message along with the
order number and the value of the order.
Step 7: In case the order is rejected by the Broker or the Stock Exchange for certain
reasons such as invalid price limit, an appropriate message will appear at the bottom
of the screen. At present, a time lag of about 10 seconds is there in executing the
trade.
Step 8: It is regarding charging payment, for which there are different mode. Some
brokers will take some advance payment from the investor and will fix their trading
limits. When the trade is executed, the broker will ask the investor for transfer of
funds to his account.
Internet trading provides total transparency between a broker and an investor in the
secondary market. In the open outcry system, only the broker knew the actually
transacted price. Screen based trading provides more transparency. With online trading


investors can see themselves the price at which the deal takes place.
The time gap has narrowed in every stage of operation. Confirmation and execution
of trade reaches the investor within the least possible time, mostly within 30
seconds. Instant feedback is available about the execution. Some of the websites
also offer;
News and research report
BSE and NSE movements
Stock analysis
IPO and mutual fund centers

Step by step procedure in online trading:

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



ONLINE TRADING HAS LED TO ADDITIONAL FEATURES SUCH AS:
1) Limit / stop orders: orders that can be go unfilled, but there is an extra Charge
for this leeway facility since one need to hold a price.
2) Market orders: orders can be filled at unexpected prices, but this type is much
more risky, since you have to buy stock at the given price.
3) Cash account: where funds have to be available prior to placing the order.
4) Margin account: where orders can be placed against stocks, to increase
Purchasing power.

ADVANTAGES OF ONLINE TRADING:

1) Online trading has made it possible for anyone to have easy and efficient access
to more reports and charts than it was previously possible if one went to any
brokers' office. Thus we have access to a lot more information online.
2) Online trading has let room for smaller organizations to compete with
multinational organizations since it is no longer a leg it issue. Being online does
not identify the size of any particular organization, therefore, this additional power
to the underdogs.
3) Online trading has allowed companies to locate themselves where they want as
physical location is not an issue anymore. Companies can establish themselves
according to their gains and losses, for instance where tax (sales and value
added taxes) is best suited to them.
4) Online trading gives control to individuals and they can exercise it over accounts
thus comprehend what is going on when they trade. It is like going back to school
and re-educating oneself on how to trade online.
5) Individuals‟ benefit by saving comparatively a lot more when trading online as the
cost per trade is less.
6) Individuals can invest in a variety of products, unlike earlier when people bought
bonds, mutual funds, and stock for long-term basis and sat on them. Now they
can invest in stocks, stock and index options mutual funds, government, and
even insurance.



INVESTORS REASONS TO TRADE ONLINE:

1) They have control over their accounts, can make their own decisions and don‟t

have to give reasons for their actions. They are independent.

2) They have a reason to participate in the market and learn about it.

3) It is interesting, cheap, easy, fast, and convenient.

4) A lot of information is online so they can keep up-to-date with what is happening

in the trading world.

5) It will give investors a greater choice and better realization.

6) The immediate impact will be competition and benefits will accrue to the

investors.

7) It will lead to brokerage commissions going down and brokers striving to increase

business afloat.

8) Investors will now go to place, which have better trading conditions and also

members to offer them better facilities.

9) They have access to numerous tools to invest, and can create their own portfolio.



HERE ARE THE POSSIBLE DISADVANTAGES:

1) When network crashes, there will be problems and delays due to a large influx of

rapid online trading criteria.

2) Individuals are restricted to first-hand financial guidance. This simply means that

the individual is himself / herself alone to.

3) A tax (sales tax and value added tax) evaluation becomes an issue, especially

when you are trading internationally.

4) One has no idea with whom he is dealing with on the other end.

5) According to a study conducted by Mary Rowland, careful investor: is online

trading bad for your portfolio, the more one trades the less returns one gets,

meaning that an addicted trader gets, carried away online and begins to trade for

too much which causes losses for him / her.

6) Individuals think that they are trading with the market directly and know what they

are doing, but the truth is that even though technology has taken over, the basic

rules of trading are the same. It seems that the middleman has been removed,

but that is not so. When the individuals click on the mouse, his trade goes

through a broker. The commissions online pertain to the intermediary.

7) There is a need for more effective communication links over the Internet and the

ability of the server to deal with a large volume of visitors.



TRADING AND SETTLEMENT AT SHARE KHAN

The NSE first introduced online trading in India. The Online trading system imparted a
greater level of transparency and investors preferred exchanges that offered
Online trading because of the following factors:

 The ease of operation from the view of the both members and the investors.
 Increase in the confidence of the investors because of higher level of
transparency.
 Facilities better monitoring of the market by the exchange.
 The best price achieved in buying and selling.

All these resulted in ever-increasing volumes on the exchanges offering the online
trading.

TRADING PROCEDURE AT SHARE KHAN STOCK BROCKING

ShareKhan deals in buying and selling equity shares and debentures on the National
Stock Exchange (NSE), the Bombay Stock Exchange (BSE) and the Over-The-
Counter Exchange of India (OTCEI).

Share Khan is provided with a computer and required software from their registered
stock exchanges. These centers are called “Broker Work Stations”. These
computers are connected to the server at the stock exchanges through cable.
The member or broker sitting in his office can send the quotations, orders,
negotiations, deals, in-house deals, auction orders etc., through the computer. The
Central trading system (CTS) will accept these orders and send it for match. If there is
any mistake in the order, CTS will reject the orders and send respective error
message to the member concern. All these operations are in built. The main
objective of CTS is to monitor the Stock Exchanges operations.
Order placed by the broker will be sent for a match and if the match is found
suitable, the transaction will be executed. Otherwise, the order will be deleted



automatically after completion of trading time. The carry forward transactions (Good Till
cancellation) are forwarded to the next day. Even if the match is not found with in the
prescribed period, the order will not cancel.

Useful links about Sharekhan:

1. Sharekhan Website: http://www.ShareKhan.com
2. Product Demo - Speed Trade: http://www.sharekhan.com/Demos/speedtrade/index.html
3. Product Demo - Classic: http://www.sharekhan.com/Demos/classic/index.html
4. Email: info@sharekhan.com
5. FAQs: http://sharekhan.com/KnowledgeCentre/Sharekhan_FAQ.aspx
6. Phone: 022-66621111
7. Toll Free: 1-800-22-7500

TRADING SESSION

Trading timings are from 9:15 A.M. to 3:30 P.M. on all 5 days of the trading period.
Monday to Friday is the trading period in all the stock exchanges. SEBI has
stipulated that all the stock exchanges in India must have same trading period.

BROKER WORK STATION:

At the broker workstation the BBO‟s, the last traded price, the day„s opening price,
previous day‟s closing price, highest and lowest prices, the weighted average price
and total trade value will be available continuously, as the BBO for each scrip.
Other information will be available on query from the BWS. These include top
gainers /losers of the day. Trader-wise, scrip wise net position, client wise net
position, top scrip by the volume/value, market summary etc.
Brokers are also provided with information relating to the companies in the matter of
Book closure, Dividend declarations, resolutions in board meeting, information about
liquidated companies, company report etc.



ORDERS:

Orders can be done one at a time or in a batch mode.
The submitted order will be accepted at the CTS, after validation if it finds any invalid
reason the order is return back to the BWS, with the appropriate error message. If
Accepted at the CTS it will be added to the local pending order book.
The order will then be taken up for matching, if it is a buy order the system tries to
find a sell order, which fits the requirement of the buy order, when such match is
found a trade gets executed. Each trade involves two brokers and respective traders
who sent the order. Both these traders are informed of the trade being executed at
their respective BWS.
At the BWS the trade is added to the local trade book.
Orders sent by the brokers are two types:
1) Good for the day (GFD)
2) Good till cancellation(GTC)

Good for the day:

This is also called as “market order”. For an order if the member selects the deal as
good for the day, the order is treated as market order. If a “best bid” founds match
with “best order” then the transaction gets executed. If the match is not found then
after trade time the order gets cancelled that day. Next day he has to place a new
order.
For example if a member wants to purchase 1000 shares of satyam info @ 400 each
through Good for Day order. If the correct match is not found, order gets cancelled
automatically and new quotation has to be placed the next day.

Good till cancellation:

This order is forwarded to the last trading day of that settlement period. This is also
called as carry forward order like GFD; broker has to select the option of GTC for the
order. If the order finds match with in the trading settlement period, the order is
executed. If no match is found, the order is cancelled on the last day of settlement
period. This order is not carried forward to the next settlement period.


For example, if a member a place purchase order of 500 shares of SBI @ 690 per
share and selects the order as GTC and place an order. If the match is not found on
that day it will be forwarded to the next day until trading settlement period day.

SETTLEMENT OF TRANSACTIONS:

Clearing of transaction in the form of shares and cash is called settlement. Buyers
will take the delivery of shares through the depository participants like SHARE
KHAN and others.
Finally, the settlement is made by means of delivering the share certificates along
with the transfer deeds. The transferor (or the seller) duly signed transfer deed. It
bears a stamp of the selling broker. The buyer then fills up the certificates fills up the
particulars in the transfer deed. Settlement can be done in the following way.

Spot settlement: under this method, the delivery of securities and payment for
them are affected on the day of the contract itself.

Rolling settlement: Under this rolling settlement the trading is on “T+2”,basis i.e. if
Monday is trading day then Wednesday is the paying day . In case on non-delivery,
the securities will go for auction.
DETAILS OF PROCEDURES:

Delivery in : The members who are in pay-out position delivers share certificates in
to clearing house within the settlement period along with the delivery Chelan filled in
with the details of share certificates which has folio numbers or distinctive numbers
etc.

Delivery out: The buyer of shares who made pay in position will take delivery of
shares from the clearing house.



Pay-in: The member who is in paying position shall pay for value of shares with in the
trading settlement period (T+2).

Payout: The cheques paid in the clearinghouse will be paid to members who are in
paying position.

All disputes arising between members regarding non-deliveries, non-payments,
good and bad deliveries pertaining to the settlement will be settled by the settlement
committee of the exchange.


The given flow chart clearly explains the process of online trading:

Login

Buy Sell
Transaction Transaction

The system will check your The system will check your
selling quantity dp amount quantity

Order
Order Accepted Rejected orders would be
Accepted
communicated along with reasons

Your order is transmitted to exchange for execution

Pending buy orders would On execution of your Pending sell orders
be displayed on your orders would be displayed on
screen your screen

You may edit You may delete You may edit your You may delete
pending orders your pending pending orders your pending
orders orders

Flashed on your Confirmation could Contract note would be sent to
screen immediately be send to your e- by e-mail or hand delivery
on execution mail and mobile


Investment Solution Profile

 Punch line: “Working Together For A Better Tomorrow”
 Investment Solution was established on 2nd May 2011
 Working under Sharekhan Ltd.

Over 3,50,00,000 Turnover per day.
Open 250 A/c within 6 months.
Over 2000 client relations in Insurance & Mutual Fund Sector.
They guide a complete investment solution in Equities,Derivatives,Insurance,Mutual Fund &
Depository Services.
They have number of employee and client having over 15 years experience in Stock Market.

Employee Profile

Mr. Nitesh Kumar Equity & Derivative Head
Premnath Roy Commodity Head
Dhirendra Gupta Marketing Head
Vijay Kumar Authorised Signatory
Raju Kumar Back Office Head
Nirbhay Kumar Singh Marketing Executive



Comparative
Analysis



THE MAJOR PLAYERS IN ONLINE TRADING
1) SHAREKHAN.COM
2) 5PAISA.COM
3) KOTAKSTREET.COM
4) INDIABULLS.COM
5) ICICIDIRECT.COM
6) HDFCSEC.COM

POLL RESULTS: BROKER PREFERENCE

5paise The image cannot bedisplay ed. Your computermay not hav e enoughmemory to open the ima…
119 13.45%
Sharekhan The image cannot be display e d. Your computer maynot have enough memory to open the image, or theimage may hav e been corrupted. Restart your

computer, and then open the file agai n. If the red…
194 21.92%
Motilal oswal T h eim a g 38 4.29%
ICICI Direct The im age cannot be display ed. Your computer maynot have enough memory to open the image, or the
image may hav e been c orrupted. Restart yourcomputer, and then open the file again. If the red… 192 21.69%
HDFC T h eim a ge c a n… 46 5.20%
Indiabulls The image cannot bedisplay ed. Your computermay not hav e enoughmemory to open the image,…
121 13.67%
Kotak T h e im a g ec a n not b e dis pl ay e d. Y ou r c o …
59 6.67%
Others The image cannot bedisplay ed. Your computermay not hav e enoughmemory to open the ima…
116 13.11%



HDFC SECURITIES:

Company Background:

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

Online Account Type:

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

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

*Rs 25 Min Brokerage per transaction
**Rs 8 Min Brokerage per transaction



ICICI Direct:

 Account Opening: Rs 750
 Schemes: For short periods Rs 750 is refundable against brokerage generated in a
qtr.These schemes are introduced 3-4 times a year.

 Demat: NIL, 1st year charges included in Account Opening Plus a facility to open
additional 4 DP‟s without 1st yr AMC. Only Rs 100 as linking charges per DP

 Initial Margin : Nil

 Brokerage: ICICI‟s brokerage rates are inclusive of Stamp duty (0.002%) for
trading and 0.010% for delivery while service tax (10.2%) on BROKERAGE land
turnover tax is EXTRA.

 Delivery Vol per QTR Brokerage Square Vol P.M. Brokerage
< 10 lakhs 0.75% < 50 lakhs .10% Both Sides
10 - 25 lakhs 0.70% 50 lakhs - 2 Cr .08% Both Sides
25 - 50 lakhs 0.55% 2Cr-5Cr .05% Both Sides
50 lakhs - 1 Cr 0.45% 5Cr- 10 Cr .04% Both Sides
1 Cr - 2 Cr 0.35% 10Cr -20 Cr .035% Both Sides
2 Cr - 5 Cr 0.30% > 20 Cr .03% Both Sides
> 5 Cr 0.25% ---- --------



INDIABULLS:

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

Online Account Type:
 Signature Account: Plain Vanilla Account with focus on Equity Analysis. The
equity analysis is a paid service even for A/c holders.

 Power India bulls: Account with sophisticated trading tools, low commissions and
priority access to R.M.

Pricing of IB Accounts:
Signature Account Power India Bulls
* Account Opening: Rs 250 * Account Opening: Rs 750
* Demat: Rs 200 if POA is signed, *Demat: Rs.200 if POA is signed,
No AMC for this DP No AMC for this DP
* Initial Margin: NIL * Initial Margin: NIL
* Brokerage: Negotiable * Brokerage: Negotiable

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

Kotakstreet:

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

Online Account Type

 Twin Advantage / Green Channel : 2 DP‟s, Limit against shares

 Free Way: Flat Rs 999 Cover Charge p.m, 0.03% per transaction

 High Trader : 6 Times Exposure Cash & Derivatives, Auto sq off 2:55

 Cash Expressway : Spot payment, additional 0.5% charges

For Kotak FastLane / Keat Lite / Keat Desktop are trading interfaces.

Keat Desktop with advanced tools comes at a charge of Rs 500 p.m, Non
refundable.

PRICING OF KOTAK

 Account Opening : Rs 500

 Demat: Rs 22.5 p.m

 Initial Margin : Rs 5000(Compulsory)

 Min Margin Retainable : Rs 1000

 Brokerage Slab wise: Higher the volume, lower the brokerage.

Even older customers (on 0.25% & 0.40%) have been moved to the slab wise
structure w.e.f 1/4/2004



Slab structure of Kotak
Delivery Vol p m Brokerage * Square Vol P.M. Brokerage **
< 1 lakhs 0.65% < 10 lakhs 0.10% Both Sides
1 lakhs - 5 lakhs 0.60% 10 lakhs - 25 lakhs 0.08% Both Sides
5 lakhs - 10 lakhs 0.50% 25 lakhs - 2 Cr 0.05% Both Sides
10 lakhs - 20 lakhs 0.40% 2 Cr - 5 Cr 0.04% Both Sides
20 lakhs - 60 lakhs 0.30% > 5 Cr 0.035% Both Sides
60 lakhs - 2 Cr 0.25% ---do--- 0.03% Both Sides
>2 0.20% ---- --------

* Brokerage is inclusive of All Taxes * Brokerage is inclusive of All Taxes
* DP Charges Extra
* Min Brokerage of Rs 0.05 per share * Min Brokerage of Rs 0.01 per share
Derivatives Vol off p m Brokerage
< 2 Cr 0.07% Both Sides
2 Cr - 5.5 Cr 0.05% Both Sides
5.5 Cr - 10 Cr 0.04% Both Sides
> 10 Cr 0.03% Both Sides
* Brokerage is inclusive of All Taxes.



5paisa

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

Online Account Types
 Investor Terminal : Investors / Students
 Trader Terminal : Day Traders / HNI‟s

PRICING FOR RETAIL CLIENTS
Investor Terminal

 Demat 1st Yr : Rs 250
 Initial Margin : Rs 2500 (Compulsory)
 Brokerage :
Trading 0.10% each side + ST
Delivery 0.50% each side + ST

PRICING FOR HNI CLIENTS
Trader Terminal
 Demat 1st Yr : Rs 250
 Initial Margin : Rs 5000(Compulsory)
 Brokerage :
Trading 0.10% each side + ST
Delivery 0.50% each side + ST
(Negotiable to 0.05% each side & 0.25%)
 Account Access Charges
Monthly Rs 800, adjustable against Brokerage
Yearly Rs 8000, adjustable against brokerage



Sharekhan

Company Background

 Sharekhan is the retail broking arm of SSKI Securities Pvt Ltd. SSKI owns 56%
in Sharekhan, balance ownership is HSBC, First Caryle, and Intel Pacific
 Into broking since 80 years
 Focused on providing equity solutions to every segment
 Largest ground network of 210 Branded Share shops in 90 cities

Online Account Types
 Classis Account / Applet : Investor in equities
 Speed Trade : Trader in equities & derivatives

PRICING FOR HNI CLIENTS
Speed Trade

 Account Opening : Rs 1000 ( Refundable against brokerage in Month + 1)
 Demat 1st Yr : Incl in Account Opening
 Initial Margin : Nil
 Min Margin Retainable : NIL
 Brokerage :
Trading 0.10% each side + All Taxes
Delivery 0.50% each side + All Taxes
(Negotiable based on volume)
 Account Access Charges
Monthly Rs 500, adjustable qtrly against brokerage of Rs 9000/- for qtr.
No access charges for gold customers (Above 1 lac brokerage p.a)



Pricing for Retail Customers
Classic / Applet
 Demat 1st Yr : NIL
 Initial Margin : NIL
 Min Margin Retainable : NIL 
Brokerage:
Trading 0.10% each side + All Taxes
Delivery 0.50% each side + All Taxes

Sharekhan online Trading Interfaces
The customer can choose the online trading interface that meets his requirement
based on his trading habits and preferences

CLASSIC / APPLET
The website is meant for customers who Invests in Equities

SPEEDTRADE
The speed trade is meant for customers who trade in Equities
DIAL-N-TRADE - Toll Free
The DNT is a value added services meant for all customers who
Want to transact but are not online.
DNT - TOLL FREE FERTURES
 Dedicated Toll - Free number for Order placements
 Automatic fund transfer with phone banking*
 Simple and secure IVR based system for authentication
 No wait time, on entry of Phone Id & TPIN, the call is transferred
 Trusted,professional advice of Tel-brokers who offer undiluted Sharekhan
Research Inputs
 After-hours order placement facility



CLASSIC/WEBSITE FEATURES
 Facility to integrate choice of 4 Banks/DP/Trading Account
 Instant credit for shares sold from DP
 Automatic pick-up of shares from linked DP for pay - in
 Automatic deposit of shares into linked DP after pay-out
 4 Times leverage on Margin Trades
 Margin Trading available for entire marker session
 Slab wise brokerage structure for delivery and margin trades, shortly
 Free calls for order placement on Toll-Free
 Trusted, Professional advice of Tele-brokers
 Facility to enter After Market Orders online & via Phone

CLASSIC/WEBSITE FEATURES
 Daily Research newsletter (Investor Eye) Via e-mail
 Access to new IPO without any paperwork
 Advanced portfolio monitoring Tools
 Integrated DP account with trading account
 Option of linking additional 4 DP accounts to trading account
 Choice of linking 4 banks to trading a/c for online payments
 Cash and Derivatives trading in a single account
 E-mail confirmations for all transactions
 Choice of electronic/Physical contracts

SPEEDTRADE EXE FEATURES

ALL THE FEATURES OF CLASSIC
* Real - time streaming quotes using 2 Marker Watches
* Trade Execution in 2-3 seconds
* Instant Order/trade confirmations in the same window
* Hot keys similar to a Broker‟s Terminal



* MULTIPLE Tic-by-Tic Intra-day charts with multiple indicators

* Availability of 2 ISP & 6 Servers ensuring maximum uptime

* Customized alerts based on multiple parameters
* Cancel All/Square Off All Facility
* Window for Top Gainers, Top Losers, and Most Active updated Live



SWOT ANALYSIS
Strengths

1. Strong credibility among investors because of its heritage.

2. Excellent reputation among the business society.

3. Capability of providing superior customer service.

4. Quality research team.

5. Easier access to the customer due to largest ground network of 280 branded

share shops in 120 cities.

6. Abundant information about economy and companies.

7. Ability to attract and retain superior and quality personnel.

8. Highly sophisticated infrastructure.

9. Efficient research and analysis team, which by interpreting the economy and

company‟s performance accurately is enhancing the profitability of the clientele.

Weaknesses

1. Limited customer appeal as the company product line does not include mutual

funds which is increasingly becoming a preferred customer investment option.

2. Inadequate product awareness among the retail investors.



3. Limited customer appeal as the company does not have access to the BSE

online space.

4. Brand awareness is low in the financial market.

5. Promotional activities conducted by the company are not at par with the other

firms.

Opportunities

1. Bullish phase of the market attracts investing public.

2. Access to the BSE online space for the retail investors creates opportunity to

increase clientele base.

3. Awareness campaigns about online trading create new market.

Threats

1. Availability of Unit Linked Insurance Policies (ULIP‟s) and mutual funds in the

market.

2. Threat of entry is high in this industry as the manpower required is less and

capital requirement is medium.



75



Finding
&
Observations



FINDINGS AND OBSERVATIONS:
1. Fluctuations are more in secondary market than any other market.
2. There are more speculators than investors.
3. Information plays a vital role in the secondary market.
4. Previously rolling settlement is T+5 days, now it changed to T+2 days and further
it will be changing to T+1 day.
5. It was also observed that many broking houses offering internet trading allow
clients to use their conventional system as well just ensure that they do not loose
them and this instead of offering e-broking services they becomes service
providers.
6. The number of players is increasing at a steady rate and today there are over a
dozen of brokerage houses who have opted to offer net trading to their
customers and prominent among them are SHARE KHAN, India bulls,
kotakstreet, ICICI direct and geojit.
7. The Bombay stock exchange sensex zoomed past the 7700 barrier for the first
time in history to achieve new all time high of 7800 intra day trade and ended at a
historic close of 7732 points.



Conclusion
&
Recommendations


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