Understanding the Business of Stock Broking

A
PROJECT REPORT
ON
UNDERSTANDING AND LEARNING BUSINESS
OF
STOCK BROKING HOUSE
AT
“ANGEL BROKING LIMITED”
PROJECT REPORT
PRESENTED TO
MR. BHAVIN PANDYA,
FACULTY MEMBER
S.V.INSTITUTE OF MANAGEMENT STUDIES,
NORTH GUJARAT UNIVERSITY (KADI).
ON:
DECEMBER 12TH
, 2003.
IN PARTIAL FULFILLMENT FOR THE AWARD
OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
(M.B.A.)
SUBMITTED BY
BHAVIN. S. SHAH
(ROLL NO 45)

ACKNOWLEDGEMENT
My indebtedness and gratitude to many individuals, who have helped me
shape this project, cannot be adequately conveyed in a few sentences.
I would like to thank Mr.Nikhil Daxani (Branch Manager) for giving me an
opportunity to do my project at ANGEL BROKING LIMITED and helping
me to understand the practical aspects of Stock Markets Business.
I am very grateful to MRS.ANKITA PATEL & MR.PRAKESH SHAH for
helping me in learning Risk Management. MISS. KOMAL KANSARA, for
helping me in understand Demat and Back office operation MR.HIRAK
SHAH, MR.DAXESH BHAVSAR, SNEHAL PUROHIT, MR.HIREN SHAH
for making me understand the process of Dealing & Compliance.
MR.RAKESH GAJJAR & MR.TANMAY BELANI for the Financial
Transaction MR LOMASH THAKKAR for Marketing. MR.MUKESH
SINGH for helping in understanding of Technical Analysis MR.KEDAR
BHATT for the Information Technology without their hole hearted
cooperation support and encouragement this project would have not been
possible.

EXECUTIVE SUMMERY
WHY SECONDARY EQUITY STOCKMARKET ONLY
 As it is one of the parameter and barometer to the economy of the
Country.
 Its one of the most complex investment avenue. &Currently service
sector is in boom like insurance sector, IT sector, banking sector, BPO
sector, telecom sector and stock market.
 One of the highest paid returns is there in this market, which is <
18 % annually from the last 24 years. In compared to the safest bank
deposit, which has came down 50% from 12 % to round about 6 %. So
there is huge potential in this market.
 In over all world use there 30 %-40% of GDP in this market while in
India there is just 2% - 3% usage so definitely there is huge potential in
this market
 Till know this market was been operated traditionally but now as there
is aware ness in the traders & investors this market need well qualified,
knowledgeable professionals. Currently and in near future there is huge
shortage of professionals who is aware of laws, rules and regulation,
understanding of equity market and broking firms.
 To secure the job at management carder as there is best opportunity in
this field.

1TITLE PAGE
2ACKNOLEDGEMENT
3EXECUTIVE SUMMERY
4CONTENTS
5INTRODUCTION TO MARKET
6DIFFERENT SEGMENT OF STOCK MARKET
7INTRODUCTION TO DIFFTENT PARTICIPENT IN STOCK MARKET
8INTRODUCTION TO DIFFTENT STOCK EXCHANGES
9GRAPHS OF SENSEX & NIFTY
10TECHNICAL ANALYSIS OF THE GRAPHS
11REGULATORY BOARD OF MARKET
12COMPANIES PROFILE
ANGEL BROKING LTD
13COMPITITORS PROFILES
13.1MOTILAL OSWAL SECURITIES
13.2KIOTAK SECURITIES
13.3ICICI DIRECT
14DIFFERENT DEPARTMENT OF STOCK BROKING HOUSE
14.1HUMAN RESOURSES DEPARTMENT
14.1.
1 RECOMMENDATION
14.2FINANCE DEPARTMENT
14.2.
1 RECOMMENDATION
14.3MARKETING DERPARTMENT
14.3.
1 MARKETING STRITERGIES
14.3.
2 SPECIAL ASSINMENTS
14.3.
3 RECOMMENDATION
14.4RISK MANAGEMENT DEPARTMENT
14.4.
1 RECOMMENDATION
14.5BACKOFFICE DEPARTMENT
14.5.
1 RECOMMENDATION
14.6DEPOSITORY PARTICIPANT &DEMAT DEPARTMENT

OBJECTIVE OF THE PROJECT
TO UNDERSTAND THE BUSINESS OF STOCK BROKING AND TO
MAKE SURE THAT AS A PROFFESSIONAL I SECURE A
POSITION TO APPLY THE PROFFESSIONAL AND SCIENTIFIC
KNOLWLEDGE I HAVE ACQUIRED THRU MBA DEGREE
INTRODUCTION TO MARKET
CAPITAL MARKETS
Capital Market provides the resources needed by medium and long scale
industries for investment purpose while the money market provide the
recourses for working capital needs.
Capital Market

Primary Market Secondary Market
(Stock Market)
Public Right Bonus Private Listing Trading Practices
Issue Issue Issue Placement of
Settlements
& Clearing
Players Operators
PRIMARY MARKET
Companies in order to meet the financial requirements of its projects raises
capital through issue of securities (shares &debentures) in the primary market.
SECONDARY MARKET
The secondary market is that segment of the capital market where the
outstanding securities (securities already issued) are traded. From the
investors point of view the secondary market imparts liquidity to the long term
securities held by them by providing an auction market for these security.
The secondary market operates through the medium of stock exchanges,
which regulates the trading activities in this market and ensures a measure of
safety and fair dealing to the investors
Companies
(issuers)
Intermediates
(merchant banks
,FII, Brokers
Investors
(Public)
Procedures
Interest Rates
Instruments

DIFFERENT SEGMENT IN STOCK MARKET
Secondary Market
Cash Market Derivatives Market
Future Options
Buyer Seller
Right Obligation
To Buy To Sell To Sell To Buy
(CALL) (PUT) (CALL) (PUT)
FUTURE MARKET
Future contracts are highly uniform and well specified commitments for
carefully described stocks to be delivered at a certain time and in certain
manner. it also specifies the quantity and quality of the stocks that can be
delivered to fulfill the futures contract. The quality specifications became less
relevant in case of futures on interest rates or currencies.
OPTION
Option is a contract that confers the right but not an obligations to the holder
to buy (call option) or to sell(put option) an underlying asset (the asset may be
a stock, currency, commodity, financial instrument or a futures contract)at a
price agreed on specific date or by a specific expiry date. The seller has the
obligation to fulfill the contract if the buyer wishes to exercise the option for
which a premium is paid

INTRODUCTION TO STOCK EXCHANGES PARTICIPANTS
STOCK EXCHANGES
The stock exchanges is an auction market in shares and other securities and is
mainly chastised by bull and a bear.
A BULL is the buyer in the market he always takes an optimistic view of the
market
A BEAR on the other hand is the seller he is basically a pessimist and always
considers that the things have reached its peak. He believes in selling at the
sight of minimum of profits he some times sells even without owning the
shares. This maneuver is reffede4d to as a Short Sale.
HEDGERS
Hedging is an act in which investors seeks to protect a position of anticipate
position in the spot market by using an opposite position in derivatives the
parties which perform hedging are known as hedgers.
SPECULATORS
Speculators are basically traders who enter the in the market with a view of
making profit from the subsequent price movements they do not have any risk
to hedge, in fact they operate at a high level of risk in anticipation of profits.
ARBITRAGEURS
The act of obtaining risk free profits by simultaneously buying and selling
similar instruments in different markets is known as arbitrage the person who
does this activity is referred to as arbitrageurs

INTRODUCTION TO DIFFRENT STOCK EXCHANGES
HISTORY OF BSE (BOMBAY STOCK EXCHANGE)
The BSE is the premier or apex stock exchange in India .it is the biggest in
size in terms of the amount of fresh capital raised, secondary market turnover
and capitalization and the total listed companies and their paid up capital. Ti is
also the oldest market and has been recognized permanently, while the
recognition for other exchanges is renewed every 5years. Its business is no
longer confined to Mumbai alone at the end of 1997 it is spread all over India.
The trading in securities has been in vogue in India since 1793. The earliest
dealings were in loan securities of the East India company .The BSE WAS
ESTRABLISHED IN 1857. THE BSE member ship was 1Rs. in1857 it
increases to Rs 5 in 1877 Rs 1000 in 1896 to Rs. 3 crore in 1992 was about 2
core in 1997.
BSE has listed more then 10000 companies in it now all the transaction is
online and computerized.
HISTORY OF NSE (NATIONAL STOCK EXCHANGE)
The National Stock Exchange is India’s latest bourse. After the regional stock
exchanges.
It’s fully computerized but unlike it is not confined to scattered pockets and
has a national reach through satellite linkage
Like the BSE only members conduct transactions but professionals who do
not have a stake in the system run it.
The idea of forming NSE was conceived by late Mr. M.J. Pherwani who was
then the chairman of National Housing Bank. The trading on NSE
commenced with debt instruments form June 30,1994.
The main objective of the NSE is to provide speedy transactions, fast
settlement and to benefit the small investor who often fined it difficult to sell
shares at BSE

TECHNICAL ANALYSIS OF NSE & BSE
In the bottom are of 2820 –3000 the valuation of the stocks were so cheap
that some value based buying started emerging slowly & steadily the buying
got reflected on the charts as one can see. The Sensex &Nifty started forming
higher tops & higher bottoms & we can observe a support trendline getting
formed on the charts every time the prices dipped to the support trendline
fresh buying emerged the uptrend lasted till the process were above this line
once the prices broke below the line it signaled the culmination of the uptrend
we can see how the prices since then have been getting knocked down &on
17th
May the bearishness reached the cresando as the market at one point of
timewas down by 800 odd-points after 17th
things are trying to stabilize & till
the time we have this lower top lower bottom formation continuing
investors are advised to stay away from market

REGULATORY BOARDS
RBI (THE RESERVE BANK OF INDIA)
The Reserve Bank of India is considered as nerve center in India monetary
system. It was established on 1st April 1935 under The Reserve Bank of India
Act .it was a private shareholders institutions till1947. The band was
nationalized in 1948Unde the RBI Act 1948, immediately after second world
war the central bank all over the world were nationalized, secondly to control
inflation that was prevailing since 1939.
And thirdly to embark upon a program of economic development and growth
in the country.
Since its inception, the RBI is guiding monitoring, regulating, promoting and
controlling the Indian financial system .the apex bank was given powers to
regulate the issuance of notes, act as banker to the Gov. money supply in the
country it also has been allowed to carry out open market operations all the
powers a were given to The Reserve Bank of India, like any other central bank
in the world to promote economic development.
SEBI (SECURITIES EXCHANGE BOARD OF INDIA)
The CCI Controls on Issue of Capital by the companies have been substituted
by the transparent and simplified by the securities Exchange Board of India
under the SEBI Act.1992.
The ever expanding investors population led to horde of malpractices on the
part of companies, brokers, merchant bankers, investment consultants and
various other agencies involved in new issues. This led to an erosion of
investors’ confidence and the stock exchanges were helpless because the
existing legal framework was just not enough. Realizing this SEBI was
constituted by the government in April 1988 and given legal status in 1992 as
a supervisor body to regulate and promote the securities market.

COMPANIES PROFILE
INTRODUCTION TO ANGEL BROKING LIMITED
Angel group is one of the highly reputed business groups in the field of stock
broking. Angel is among the first five-broking company of India. They have
two corporate memberships of the Bombay stock exchange viz. angel broking
limited and angel securities limited. Angel is also having a national stock
exchange membership on the capital markets segment as well as the
derivatives segment. Recently angel has got license of commodity market &
CDSL license for Demat account
Angel group is one of the leading and professionally managed stick broking
firms involved in quality services and research. Angel group of companies
comprises of corporate memberships on the Bombay stock exchange and the
national stock exchange under both the cash and derivatives segment (clearing
and trading members). Angel has 19 branches spread all over the country and
around 10000 investors. Angel has 350 BOLT and NEAT terminals spread all
over the country. Moreover the company has 1000 business associates spread
all over the country.
MANAGEMENT
Professional and highly experienced people headed by Mr Dinesh Thakkar
manage the group. He has 15 years experience in the field of stock broking.
He is well supported by Mr.Mukesh.R.Gandhi, a 17 years veteran in stock
markets & Mr. Lalit.Thakkar with 8 years experience in the field of equities
research. MR.VINAY AGRAWAL at the post of Vise Prasident. The
directors are well supported by a professional research team and dependable
operations team.
GROUP ACTIVITIES
Angel group has very well set research division managed by strong
professional team. They provide fundamental as well as technical analysis to
their clients. They have subscribed to various software packages including
Cline 2000, Capita Clips, Trends, DART, VITAL, INFAC reports, CMIE
reports fundamental package form internet securities etc. angel group has 165
BOLT terminals spread all over the country amongst its branches. They have
branch offices at Fort, Vile Parle, Malad, Borivali, Mulund, Thane,
Santacruz , Dombivali, Goregaon, Andheri, Kalbadevi, Chembur and Surut

(Gujarat) Hyderabad , Indore. Angel has expanded their might in to
institutional broking segment also to provide the highest level of services to
Indian financial institutions, banks, mutual funds and foreign institutional
investors.
TRADING AND RESEARCH ON INTERNET
Trade on line privacy of your office or home to keep up with the furious pace
of growth that we have set for ourselves, we are launching the concept of ON
LINE TRADING in India. We are the first to give the ODIN which is
approved software by NSE & BSE we believe that all investors should have
direct access. The software system allows investors to view prove quotes and
other market related data and allows them to enter the trades and receive
confirmations ‘ONLINE’ and access software is provide free of cost to our
esteemed clients. Else it is costing Rs.1500 to company which company share
with its client 50 –50 percentages.
BROKERAGE
Now broking house or broker is giving such a flexible brokerage structure.
Its charges are very nominal which starts maximum for retail client which
are 0.05% on the both side for the square off while 0.5% for delivery base
even for derivative they charge 0.05% .This is the core strength company
don’t charge any charges for the research material and portfolio advise to
their clients. Company gives exposure 7 to 10 times on the funds client
has deposited.

COMPETITORS PROFILE
MOTILAL OSWAL SECURITIES LTD.
Motilal Oswal Securities Ltd (MOSt) is one of the leading equity research and
broking houses of India. It is known for its strong belief in Value-Investing
ideas, which forms the core of its investment philosophy. MOSt provides end-
to-end equity solutions to institutional and individual investors.
MOSt has a 20-member research team, which is engaged round the clock in
analyzing the Indian economy and corporate sectors to identify equity
investment ideas. More popularly known by its acronym "Inquire", the
research team staunchly practices value-investing philosophy and advises
investors to take a mature and long-term view of equity investments.
Consistent delivery of high quality advice on individual stocks, sector trends
and investment strategy has established Inquire as a competent and reliable
research unit amongst leading Indian as well as International investors. Asia
Money Broker's Poll 2002 has rated MOSt as one of the best Indian broking
house, for research, for the second time since 2000.
The MOSt sales team, comprising top equity professionals, translates the
research findings into actionable advise for you, based on your specific needs.
Sophisticated computerized tools are used to understand your investment
profile and objectives, which ensures proactive and timely service.
MOSt has distinguished itself by its close relationship with some of the
leading Foreign and Domestic Institutional Investors like Morgan Stanley,
Battery March, EMIC, UTI, LIC, Alliance, ICICI Prudential, HDFC MF,
HSBC MF, Birla MF etc.
Its more in to portfolio management and it has client which are more
then Rs. 50 lacks of portfolio they charge 3% on portfolio management
and 5% for FII.

KOTAK SECURITIES
Kotakstreet.com is the internet share trading arm of kotak securities ltd.
It offers different and wide range of investments
Shares
Derivatives
IPO
Mutual funds
ADDED ADVANTAGES
The 3in 1 account
Integrate your banking, broking and demate accounts with the 3in1 account
and trade in shares without the bother of tracking settlement cycles
K.E.A.T
Kotakstreet e-trading access terminal is an online trading system that allows
you to view thick by tick live rates of your watch list of shares with K.E.A.T.
you can view intra day and historical charts for a share set price alerts and
derivative chains and many mare features.
BNST-G
Buy now sell tomorrow with a guarantee lets you sell 75% of the specified
shares you have purchased before you get delivery of them from the
exchange. You needn’t worry about short allotment BNST-G is available at no
additions charge.
Call and Trade
There is facility of call to tall free number and trade offline
After market orders
Place your orders with us after market hours these orders will get placed in the
market on the next trading day.

Brokerage & other charges
Cash market –squaring up
Volume per months
Rs.
Brokerage on both
side
> 5 crores 0.04%
2 crores - 5 crores 0.05%
25 lakhs -2 crores 0.06%
10 lakhs - 25 lakhs 0.08%
<10 lakhs 0.10%
Cash market –delivery base
Volume per months
Rs.
Brokerage on both
side
>2corores 0.20%
60 lakhs - 2 crores 0.25%
20 lakhs -60 lakhs 0.30%
< 1 lakhs 0.65%
D.P charges extra
Derivatives market
Volume per months
Rs.
Brokerage on both side
(settlement)
Brokerage on both side
(square up)
>10corores 0.05% 0.03%
5.5 crores - 10 crores 0.05% 0.04%
2 crores - 5.5 crores 0.08% 0.05%
< 2 crores 0.10% 0.07%

THE ICICIDIRECT
A Unique 3-in-1 account that gives you:
Convenience: The 3-in-1 account integrates your banking, broking and demat
accounts. This enables you to trade in shares without going through the
hassles of tracking settlement cycles, writing cheques and Transfer
Instructions, chasing your broker for cheques or Transfer Instructions etc.
Speed: You can now get the latest quotes of scripts on ICICIdirect.com and
place an order almost instantly.
Control: You can be assured that you have in fact placed an order at the price
you always wanted to, but may not have been able to do so till now. Thereby
giving you control over your own trades.
Independence: Instead of transferring monies to a broker's pool or towards
deposits, you can manage your own demat and bank accounts when you trade
through ICICIdirect.com.
Trust: ICICIdirect.com comes to you from ICICI, the organization trusted by
millions of Indians
Products and Services
A product for every need: ICICIdirect.com is the most comprehensive
website, which allows you to invest in Shares, Mutual funds,
Derivatives (Futures and Options) and other financial products.
Simply put we offer you a product for every investment need of yours.
1. Trading in shares:
ICICIdirect.com offers you various options while trading in shares.
Cash Trading : This is a delivery based trading system, which is generally done
with the intention of taking delivery of shares or monies.
Margin Trading : You can also do an intra-settlement trading up to 3 to 4 times
your available funds, wherein you take long buy/ short sell positions in
stocks with the intention of squaring off the position within the same day
settlement cycle.

MarginPLUS Trading : Through MarginPLUS you can do an intra-settlement
trading up to 25 times your available funds, wherein you take long buy/
short sell positions in stocks with the intention of squaring off the position
within the same day settlement cycle. MarginPLUS will give a much higher
leverage in your account against your limits.
Spot Trading : This facility can be used only for selling your demat stocks
which are already existing in your demat account. When you are looking at
an immediate liquidity option, 'Cash on Spot' may work the best for you, On
selling shares through "cash on spot", money is credited to your bank a/c the
same evening & not on the exchange payout date. This money can then be
withdrawn from any of the ICICIBank ATMs.
BTST : Buy Today Sell Tomorrow (BTST) is a facility that allows you to sell
shares even on 1st
and 2nd
day after the buy order date, without you having to
wait for the receipt of shares into your demat account.
CallNTrade® : CallNTrade® allows you to call on a local number in your
city & trade on the telephone through our Customer Service Executives.
This facility is currently available in over 11 major states across India.
Trading on NSE/BSE : Through ICICIdirect.com, you can trade on NSE as
well as BSE.
Market Order: You could trade by placing market orders during market
hours that allows you to trade at the best obtainable price in the market at the
time of execution of the order.
Limit Order: Allows you to place a buy/sell order at a price defined by you.
The execution can happen at a price more favorable than the price, which is
defined by you, limit orders can be placed by you during holidays & non-
market hours too.
Other advantages
Trade in Derivatives
Investing in Mutual funds:
IPOs and Bonds Online:
Content Features
Personal Finance

BROKERAGE
On Derivatives Segment Brokerage on trades done in Spot Segment:
Time for Pay-out Brokerage
1 to 7 days
1.25%
8 to 14 days
1.75%
15 –18 days
2.00%
19 days and more
2.25%
Futures & Options Segment & Margin Segment:
Total Eligible Turnover (Volume of
Transaction) per month
Brokerage
> Rs. 4.0 crore
0.050%
> 1.5 crore and upto Rs. 4.0 crore
0.075%
> 0.5 crore and upto Rs. 1.5 crore
0.100%
Up to Rs. 0.5 crore
0.150%
ICICIDirect.com Account Opening Fee : Rs. 750

DIFFERENT DEPARTMENT OF STOCK BROKING HOUSE
HRD (HUMAN RESOURCES DEPARTMENT)
As such company does not have any specific HR department, which closely
take care about it, but all the top-level management is looking after it.
Recently company has we have employed Mr. Rajiv Phadke as out hr
consultant- whose basic function is to develop a performance appraisal system
and to take care of training needs ot diff dept heads and senior people to start
with.
 Recently Angel is in to huge expansion process as they are in the
process of forming of Regional office at the Ahmedabad center for the
Gujarat region.
 Human recourse planning is done as the company has done the Job
Analysis the need of the employees they need for the regional office in
prier 6month and they have given the advertisement in the all-leading
newspaper of Gujarat.
 Company has received more than 500 application through different
ways like Internet, currier, physical etc. the cut off criteria was strictly
been followed. On which basses the candidates were been called for the
first round of interview.
 The short-listed candidates where been called for final interview
which where been taken by the top-level management & the expert of
the concerned field.
 Finally they where recruited and selected for the appropriate job and
where been placed
 Training is been provide at Ahmedabad branch it self but if
requirement is there for extra training then company send them to
Bombay head office also.
 Company is giving motivation in all the terms as the employee wants
may be in position form or in monitory way.

 There is no structured way of communication it is very flexible and
for every decision participation management is used.
 There is two-way communication channel in the organization with an
open door strategy.
 Company is providing provident fund facility to its every employee.
 All the employees are been taken on Angel’s payroll system none of
them are hired.
Recommendation
 As company is in to huge expansion process and they have
recruited many new employee at regional office of Ahmedabad in
near future there are chances to internal dispute as many of them
are directly posted at senior level so there may be possibility of ego
clash and many other problems so every time to get it solved by the
top level manager they can recruit a HR person at regional level
also so that top level management time will be utilized in more on
administrator then this kind to dispute solving.

FINANCE DEPARTMENT
 As company has tie up with big banks like HDFC bank, who provide
them facility like O.D., same day clearance facility etc. recently
according to SEBI’s rule company has done tie up for margin funding
also which will be starting in very short time span There are two
employees in finance department in this branch and they are
responsibility is as under.
o Maintaining records
o Maintaining ledger of clients
o Collection of bill
o Collection of payment
o Pending bill
o Salaries, currier electricity bills telephone bills, etc
o Reminding clients for the payment.
o Payment to clients as and according to terms and conditions
 As company’s procedure is that all the payments are made by cheques
and they are issued and authorized by the Management at the
Mumbai head office. So according this branch has to convey the
details of cheques required to H.O. which send the cheques by currier,
which reaches at all branches before the next day noon and the cheque
received will be entered in the HDFC bank at each branch which detail
entry are been made in the online back office
 Companies’ working capital is coming from the brokerage that they
charge to their clients.
 The brokerage they charge varies from customer to customer the
maximum brokerage they charge to their retail customer on trading is
0.05 % on one side and 0.5% on delivery

 There is know fixed slab structure in the company the branch
manager is the final authority for brokerage decision
CASH IN FLOW OUTFLOW
Brokerage
Margin collection
Pay out from NSE,
BSE
Pay in from customer
 Brokerage paid to
NSE, BSE
 Margin paid to NSE,
BSE
 Pay out customer
 Pay in to NSE, BSE
 Salary
 Electricity
 Currier
 Expansion
 Telephone
 Seminaries, other
stationary materials

MARKETING DEPARTMENT
Currently branch has two sales officer, four dealers and one assistant manager
Marketing department but they have employed one marketing manager, ten
new sales officers and one relational manager for high net worth clients.
Marketing department is divided in to parts like
 Traders
 Retailers
 Sub brokers
 Franchisee
For each and every department they are having special person employed
Who takes care from making clients for company to satisfy the client by
service.
Different Marketing Strategies
 Low cost of trade
Due to economies of scale Angel Broking Company offer
o Competitive brokerage rates
o Flexible deposit structures
o Attractive revenue sharing models
 Financial stability
o Sound track record since inception
o Prompt pay out of funds/securities
o Strong financial products like Margin Trading, Spot
Facilities, etc.

 Technology Edge
o BSE and NSE (cash and F&O) through a single terminal
o Online tick by tick charts, news flashed on the same
terminal
o Team of well qualified engineers for technical support
o State of the art backup and disaster recovery system
o Instant access for trading in remote areas through Angels
private V-SAT network
 Quality Research Activities
o Fundamental research
o Technical research
o Derivatives strategies
 Research Team
o Dedicated fundamental research team conducting trough
analysis and study of a variety of factors/facts and latest
developments in the industry /sector/scrip
o Involved in technical analysis since many years resulting
in effective analysis and sound recommendations
o Clients can directly contact research team member and ask
for the next move in terms of any confusions.
 Market outlook at 9.30 am
A crisp pre-market report that arms the clients with sensitive
information before the opening bell key corporate developments,
announcements geo-political situations and strategic recommendations
are encapsulated in the report.

 Technical Reports
o Weekly, daily, intra day calls
o Post market review
Angel provides the entry target, exit target and stop loss levels.
Angel distribute the calls trough flashes on terminals or its is on
its website
 Post market review
o Prepared after the market close
o Describes the whole day activity
o Our analysis on the same
o Our expatiation about the next trading day
 Derivative research
o For day traders and short tem trade- intraday calls short
term trading recommendations
o For portfolio holders-hedging and risk containment
strategies
o For arbitrageurs and jobbers- advanced strategies based on
changing market conditions purely for arbitrageurs and
jobbers.

 Value added services
o Portfolio guidance
o Marketing and promotional activities
o Training and education
o Online char facility with our research analysts
o Depository participant (D.P.) account of CDSL is been
provided.
 Angel continuously holds seminars, educational meetings to keep the
associates abreast with the latest development in the fields.
 Angel imparts training on technical analysis and derivatives
strategies.
 Angel publishes promotional brochures/marketing material that
ensures higher volumes for Angel associates.
SPECIAL ASSIGNMENT
 As currently Angel has holds Seminar for the clients on the Budget
and its impact on the 14 of July more then 600 invites are been
expected to attend this seminar, which will be with dinner associated
with it. Different media like T.V. channels, Newspapers will be
covering this event.

 To target different segment of clients angel has taken successful
part in the 11days event ‘vacation 2004 ‘at Ahmedabad which was
been visited by more than 6,50,000 visitors from which angel has got
very good data base for retail client as well as high valued clients.
RECOMMANDATION
 As company can widely spread in its network other then Ahmedabad
city like Shaurastra region. north Gujarat region, eastern part of
Gujrat, as there is very huge potential of expansion in this region
which are still untouched by the company. Company can open its
own branch but the best way out is to give franchisee of Angel,
which will save lot of expanse of the company.
 For targeting HNI Company can get access to the database of big
club or even can market it product at this place. Even huge
database of travel agency of the client who has been to foreign trip,
regular visitor of big hotels can be use.

RISK MANAGEMENT BY A BROKING HOUSE
CLIENT SIDE
 Risk management work starts as and when suspect becomes client of
the company.
 As company earn from the brokerage so company has made
mandatory to take deposit from the clients on its basses company give
exposure to trade in Cash and F&O.
 To keep company risk free company count hair cut and give the
exposure
Deposit
Cash (cheque) approved securities
Exposure = 7 to 10 times on 60% 7 to 10 times
 Company always take care that they receive the slip of demated
stock which are sold .It should be received late by late by the next day
so that to save the stock to get auction as there is term of T + 2 (trading
day +two days). Where broker has to give all the sold stocks to the
exchanges it was sold.
 Same way company should receive the cheque(company deals
trough cheque only) on the very next day so that they can pay that to
exchanges here also there is tearm of T +2 . here company can have
problem as cheque of other banks may take 5 to 6 days to clear then
company cannot pay the amount on the next day to the exchange.
Company has found the solution by having tie up with the HDFC
bank, which gives them credit on the same day. And of the cheque
bounce back bank debit that much amount from the account of the
company.
 Company restricts all transaction of the client who has its ledger
account debit.

EXCHANGE SIDE
 As exchanges just shut down the terminal of the broker as its
limit cross the exposure given by the exchanges so company has to
be very care full regarding this as and when they feel that limit needed
to extend it increase its deposit in exchange and get more exposure
on it. this is many time done during market hours.
 Exchange don’t treat internet based and traders terminal
differently so company have to be very carefully sets the limit at
different level different limits are been always set and it could be
changed by only admins.
 Hierarchy is followed in this way
Exchange level
admin at H.O.
Internet admin Terminal adimin
at H.O.
ClientsClients
Terminal admin at
branches
Terminal admin at
branches
Subbrokers
terminals
Subbrokers
terminals
Dealers’
terminals
Dealers’
terminals

BACK OFFICE DEPARTMENT
 There are two main process in back office payin and payout which is
done in the company online through its own back office software.
Payin :the client delivery of shares to broker and same way broker
delivery of share to exchanges is known as payin.
Payout: is the exchanges delivery of shares or cheque to broker and
broker delivery of share or cheque to clients is known as payout
The terms of payin and payout is T+2
 All kind of billing for clients or even for subbrokers are done through
backoffice. Which is centrally managed and Administrated from
head office.
 Company has kept all previous data online so whenever needed or in
times of conflict it could be very easily recovered.
 Company provided this facility to its client to check their current
status online. 24/7 a week.
 This software gives complete details clients vise that who have debit
that also how much and which client have credit and how much
with compared to its trade in different exchange and client which
ladger credit &debit are been differentiated
 It also give detail of whose pay in and pay out is left and when to
recover and when to deliver.
 NO Third party transaction is allowed according to SEBI’S
guidelines.
RECOMMENDATION
 As there should be immediately changes made in the script name as
name changes in different exchanges.

DEPOSITORY PARTICIPANT & DEMAT (D.P.)
Depository participant
A Depository facilitates holding of securities in the electronic form and
enables securities transactions to be processed by book entry by a Depository
Participant (DP), who as an agent of the depository, offers depository services
to investors. According to SEBI guidelines, financial institutions, banks,
custodians, stockbrokers, etc. are eligible to act as DPs. The investor who is
known as beneficial owner (BO) has to open a demat account through any DP
for dematerialisation of his holdings and transferring securities.
The balances in the investors account recorded and maintained can be
obtained through the DP. The DP is required to provide the investor, at regular
intervals, a statement of account, which gives the details of the securities
holdings and transactions. The depository system has effectively eliminated
paper-based certificates, which were prone to be fake, forged, counterfeit
resulting in bad deliveries. D.P. offers an efficient and instantaneous transfer
of securities.
There are two different kind share depository.
NSDL National Securities Depository Limited
CDSL Central Depository Securities Limited
Angel has got the license of CDSL.
CDSL was set up with the objective of providing convenient, dependable and
secure depository services at affordable cost to all market participants.

INFORMATION TECHNOLOGY DEPARTMENT
CONNECTIVITY LAYOUT FOR ANGEL BROKING LTD.,
AHMEDABAD BRANCH
Server Connection with exchange:
 VSAT: Connecting to NSE and BSE with VSAT through EICON
server, which works as protocol convertor that gives 64 kbps
connectivity.
 Lease line: Through direct Lease line to NSE office in Ahmedabad and
then onwards, fiber optic connectivity to NSE, Lease line gives 64 kbps
connectivity with high speed modem at both ends.
Server Connection with client Terminals and admin terminal:
 LAN connectivity: specially for the clients in the premises and the
admins terminal, LAN connectivity with 10/100 MBPS speed gives
highest speed performance to client terminals but within the same
premises.
 WAN connectivity
o Telephone line: With RRAS (Routing and Remote Acces Server)
a client terminal can connect to the server with a simple
telephone line and a modem with 56kbps (ideally) connectivity.
o ISDN line: As digital line the transfer of data is more secure and
reliable in ISDN (Integrated service Digital Network) line than
telephone line with one channel of 128 KBPS can accept 2*64
kbps data.
o VPN (Virtual Private Network) Connection: A Virtual Private
Network provided by IQARA broadband, each VPN connection
is provided with 64 kbps bandwidth.
o Internet connectivity (for ODIN DIET software only): A
specially designed ODIN DIET Client that directly log on to
server through any Internet connectivity.

To facilitate client with more database, analysis software named FALCON3
is also provided to the corporate clients that gives graphical analysis of the
rates.
Addition to above server connectivity, the NSE and BSE exchange
provided software that connects to the exchange directly without
any converter software or hardware.

CONCLUSION
As and according to Indian’s mentality they believe that stock market is the
one of the most complex financial market to invest where there is very high
change of loosing money. But in reality its not such as if one do a bit study of
stock market and invest wisely then this is the market, which gives the best
returns.
Secondly person should invest on the base of the fundamentals and technical
analysis not by the advice or the humor in the market.
And investor should love his stock but should not marry it. Means he should
not be greedy or else he will loose every thing.
Trader should not trade more then his capacityto bare loss .he should not
trade without keeping stoploss.
COMPLIENCES
Applicants recommended for admission will be required to pay the following
fee and deposits
(All figures in Rs.lakhs)
Sr.
No.
Particulars
CM and
Trading
Membership of
F&O Segment
Additional
requirements for
Clearing
Membership of
NSCCL (F&O
Segment)
Total for CM and
Trading &
Clearing
Membership of
F&O Segment
1
Interest Free Cash
Security Deposit
with NSEIL
110 110
2
Interest Free Cash
Security Deposit
with NSCCL
15 25 40
3
Total Interest Free
Cash Security
Deposit (1+2)
125 25 150
4 Collateral Security 25 25 50

Deposit with
NSCCL
5
Annual
Subscription
Charges
1 1
6
Advance
Minimum
Transaction
Charges for
Futures & Options
Segment
1 1
7
Networth
Requirement
100
300
(100 for self-
clearing members
in F&O)
300
(100 for self-
clearing members
in F&O)
Deposit for setting up VSAT terminals and operating cost for the VSAT
network will be levied separately as per the policy prevailing from time to
time.
It is pertinent to note that for the Futures & Options Segment, though the
clearing members will not be required to bring in any additional interest-free
cash deposit or maintain collateral security with NSCCL for clearing and
settling their trades in the segment; they are required to bring in additional
security as specified below only in respect of other trading members whose
trades they undertake to settle in the Futures & Options Segment.
· Interest Free Security Deposit with NSCCL (Cash): Rs.2 lakhs per trading
member.
· Collateral Security Deposit with NSCCL (By way of cash or bank guarantees
or fixed deposits or select demat securities with appropriate hair cuts): Rs.8
lakhs per trading member.
An applicant must be in a position to pay the membership and other fees,
deposits etc, as applicable at the time of admission within three months of
intimation to him of admission as a Trading Member or as per the time
schedule specified by the Exchange. The security deposit will be included in

determining the net worth of the Trading Member, however, the annual
subscription fee / other periodical charges would be excluded for this purpose.
COMPUTATION OF NETWORTH OF TRADING MEMBERS
All trading members of the Exchange are required to submit their networth
statements on a half yearly basis as on 31st March and 30th September every
year. Trading members have the flexibility of calculating their networth as per
any of the methods given below:
Once a trading member chooses one of the below given methods, he will have
to continue to compute his networth using the same method unless a change of
method is specifically approved by the Exchange.
Method 1:
As per circular No. 44 dated January 22, 1997, which prescribes the treatment
of each and every component of the balance sheet as per the book value or the
books of accounts of the trading member.

Annexure
Items Treatment for Net Worth computation
Fixed Assets :
Goodwill Not to be considered for Net Worth
computation.
Intangible assets Not to be considered for Net Worth
computation
Land To be considered at book value per
statement of Assets & Liabilities / Balance
Sheet
Buildings To be considered at book value per
Sheet
Leasehold To be considered at book value per
Sheet
Plant and Machinery To be considered at book value per
Sheet
Furniture and Fittings To be considered at book value per
Sheet
Development of Property To be considered at book value per
Sheet
Patents, Trademarks and
designs
Not to be considered for Net Worth
computation
Vehicles To be considered at book value per
Sheet
Computers etc.( Hardware and
Software )
To be considered at book value per
Sheet
Value of other stock exchange
card
computation.
Investments : Valuation as per AS 13.
Deposit with other stock
exchange
computation.
Value of other stock exchange
card
computation.
Govt. / Trust Securities To be considered at book value per
Sheet

Debentures or Bonds To be considered at book value per
Sheet
Shares (Fully paid-up and partly
paid-up)
Sheet
Shares/Debentures and Bonds
of Subsidiary companies
Sheet
Immovable properties To be considered at book value per
Sheet
Investments in capital of
partnership firms
Sheet
Debit Balance in P&L A/c Not to be considered for Net Worth
computation.
Current Assets:
NSE Security Deposit To be considered at book value per
Sheet
NSE VSAT & UPS Deposit To be considered at book value per
Sheet
Stock - in - trade To be considered at book value per
Sheet
Sundry Debtors
-more than six months
-others
Sheet
Less: Provision for bad debts To be considered at book value per
Sheet
Cash on hand To be considered at book value per
Sheet
Fixed deposit with bank To be considered at book value per
Sheet
Bank balances To be considered at book value per
Sheet
Deposit with MTNL To be considered at book value per
Sheet

Or
Method 2:
By valuation of their assets on the following basis:
A. Listed (Quoted) investments in the name of the applicant (at market
value) (Detailed list to be enclosed)
B. Margin of 30% on market value of listed (quoted) Investments
C. Net value of listed Investments (A) – (B)
D. Investments in unlisted (unquoted) companies (as per Note No. 3)
E. Margin of 50% on (D)
F. Net value of unlisted Investments (D) – (E)
G. Other Investments (at cost) like PPF, NSC at current value, Statutory
deposits with the Exchange, Deposits with registered NBFCs, Bank FDs
H. Total Net Investments (C) + (F) + (G)
I. Market Value of Land & Building component of the Fixed Assets (Full
details of such assets like survey number, location, address, extent of land &
building to be furnished)
J. Margin on I at 50%
K. Net value of such fixed assets (I – J).
L. Debtors not exceeding 3 months + Cash & Bank balance
M. Current Liabilities
N. Long term liabilities
O. Networth (H + K + L) – (M + N)
Notes: -
1. For computation of loans and advances as a component of current
assets, all advances / loans other than those arising out of securities
dealing have to be excluded. Only such loans and advances arising due
to the securities dealings are to be included as current assets for the
purpose of networth computation.
2. Valuation of fixed assets for the consideration of networth would have
to be certified by government approved valuers and the value would hold
good for 3 years unless a fresh valuation is submitted. Only those items
of land & building that are in the name of the trading member as well as
in the possession of the trading member shall be included under the head
(I) - Land & Building component of the Fixed Assets. Those properties
that are leased out by the trading member or taken on lease shall not be
included for computation of networth. Fixed Assets other than Land &

Building shall not be included for the purpose of computation of
networth.
3. Valuation of unlisted investments would be at “fair value” of the said
investment, i.e. the average of the “earning value” and the “break up
value”. For this purpose: -
a) The “break up value” means the equity capital and reserves as reduced by
intangible assets and revaluation reserves, divided by the number of
equity shares of the investee company.
b) The “earning value” means the value of an equity share computed by
taking the average of profits after tax as reduced by the preference
dividend and adjusted for extra-ordinary and non-recurring items, for the
immediately preceding three years and further divided by the number of
equity shares of the investee company and capitalised at the following
rate: -
 In case of predominantly manufacturing company, eight percent;
 In case of predominantly trading company, ten percent; and
 In case of any other company, including an NBFC, twelve
percent;
 If, an investee company is a loss making company, the earning
value will be taken at zero.
(For e.g. EV for an NBFC with capitalisation rate of 12%, is earning per
share multiplied by 100/12)
4. Details of items comprising investments, current assets, current liabilities
and long term liabilities should be given separately.
5. Current assets should exclude loans to related entities, bad and doubtful
debts and debts outstanding for more than 3 months, advance against
capital assets, pledged securities / assets, prepaid expenses, bad deliveries
and also intangible assets.
6. Debtors should be distinguished as debtors arising from securities
operations and others.
7. Value of membership card / Deposits with any other Stock Exchange is
to be excluded for the purpose of computation of networth.
8. Advance / Investment with or debts due from persons notified under
Special Court (Trial of Offences Relating to Transactions in securities) Act,
1992 are to be excluded for the purpose of computation of networth.

Computation of Networth of Clearing Members of Futures & Options
Segment as part of Membership Requirements
The method of computation of Networth as prescribed by Dr. L.C. Gupta
Committee on Derivatives for clearing members is as follows
Capital + Frees Reserves
Less Non-allowable assets viz.,
(a) Fixed Assets
(b) Pledged Securities
(c) Member's card
(d) Non-allowable securities (unlisted securities),
(e) Bad deliveries
(f) Doubtful Debts and Advances*
(g) Prepaid expenses, losses
(h) Intangible Assets
(i) 30% of Marketable securities
*Explanation:
Includes debts/advances overdue for more than three months or given

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