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Vishnuraj C.R
&
Anjana K.S
Secondary Market InstrumentS &
How to Buy Secondary Market Instruments
INVESTMENT MANAGEMENT
TABLE OF CONTENTS
1. History of Stock Exchange in India
2. Secondary Market
3. Difference between Primary & Secondary market
4. Stock trading
Screen Based Trading System (SBTS)
National Exchange for Automated Trading (NEAT)
5. Instruments of Secondary Market
Share
Bonds
6. Process of Buying Secondary Market Instrument
History of Stock Exchange in India
➢ In India BSE is the oldest stock exchange. (1861)
➢ Trading in shares & stocks took place under banyan tree at the place where
the BSE is now situated.
➢ BSE in the year 1875 namely ‘Native Share and Stock Brokers Association’
➢ In 1991,the Indian Secondary market acquired a three tier form which
consists of ;
1861 2017
• Regional Stock Exchange
• National Stock Exchange (NSE)
• Over the Counter Exchange of India (OTCEI)
Secondary Market
The secondary market, also called the aftermarket, is the financial market in
which previously issued financial instruments such as stock, bonds, options, and
futures are bought and sold. After the initial issuance, investors can purchase
from other investors in the secondary market.
Difference between primary &
secondary market
Primary market Secondary market
• Securities are offered to
public for subscription.
• Purpose of raising capital
or fund.
• Already existing
securities are traded.
• Purpose of capital
appreciation.
Stock trading
➢ Screen Based Trading System (SBTS)
Introduced by NSE
Where a member can punch quantities & price of security in computer
Transactions is executed as soon as a matching sale or buy order from a
counter party is found
SBTS
➢ National Exchange for Automated Trading (NEAT)
• A satellite communication technology for trading.
• It’s a state of the art client server based application.
• Has a uptime record of 99.7%
• Uniform response time of less than one second.
InstrumentS of Secondary Market
Secondary
market
Shares Bonds
Equity
shares
Cumulative
convertible
preference
share
Cumulative
preference
share
Right
shares
Bonus
shares
Preference
shares
Zero
coupon
bonds
Treasury
bills
Convertible
bonds
The financial products/instruments which are dealt in the secondary market are:
share
Shares are units of ownership interest in a corporation or financial asset that
provide for an equal distribution in any profits, if any are declared, in the form
of dividends.
BOND
• Negotiable certificate evidencing indebtedness.
• Normally unsecured.
• Issued by a company, municipality or government agency.
Process of Buying Secondary
Market Instrument
The first step in trading shares is select a broker for transacting on behalf of the
investor.
➢ Make sure that broker is registered with SEBI and the Exchanges.
➢ Broker registration number begins with the letter ‘INB’
➢ A sub broker with the letter ‘INS’
1. Finding a broker
There are three types of account to its clients:
2. Opening an Account
Trading Account Demat Account Commodity Account
Procedures for opening an Account
Step 1: To open a demat account, you have to approach a depository participant
(DP), an agent of depository, and fill up an account opening form.
Step 2: Along with the account opening form, you must enclose photocopies of some
documents for proof of identity and proof of address.
Step 3: You will have to sign an agreement with DP in the depository prescribed
standard format.
Step 4: The DP will then open an account and give you the demat account number.
You can have multiple demat accounts if you so wish. You can choose your DP as
per your convenience and there is no compulsion to open DP account with your stock
broker.
Depository service
Depository
Depository
Participants
National
Securities
Depository
Limited(NSDL)
Central
Securities
Depository
Limited(CSDL)
You – the
customer
ICICI Direct
Sharekhan
Tradejini,
IL&FS
HDFC Sec
3. Best priced order matched
• Priority
• Precedence
• Parity
4. Executing the Order
As per the Instructions of the investor, the broker executes the order i.e. he
buys or sells the securities.
5. Trade confirmation
6. Settlement.
SHARE APPLICATION FORM
Secondary market instrument, Invesment Management

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Secondary market instrument, Invesment Management

  • 1. Vishnuraj C.R & Anjana K.S Secondary Market InstrumentS & How to Buy Secondary Market Instruments INVESTMENT MANAGEMENT
  • 2. TABLE OF CONTENTS 1. History of Stock Exchange in India 2. Secondary Market 3. Difference between Primary & Secondary market 4. Stock trading Screen Based Trading System (SBTS) National Exchange for Automated Trading (NEAT) 5. Instruments of Secondary Market Share Bonds 6. Process of Buying Secondary Market Instrument
  • 3. History of Stock Exchange in India ➢ In India BSE is the oldest stock exchange. (1861) ➢ Trading in shares & stocks took place under banyan tree at the place where the BSE is now situated. ➢ BSE in the year 1875 namely ‘Native Share and Stock Brokers Association’ ➢ In 1991,the Indian Secondary market acquired a three tier form which consists of ; 1861 2017 • Regional Stock Exchange • National Stock Exchange (NSE) • Over the Counter Exchange of India (OTCEI)
  • 4. Secondary Market The secondary market, also called the aftermarket, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold. After the initial issuance, investors can purchase from other investors in the secondary market.
  • 5. Difference between primary & secondary market Primary market Secondary market • Securities are offered to public for subscription. • Purpose of raising capital or fund. • Already existing securities are traded. • Purpose of capital appreciation.
  • 6. Stock trading ➢ Screen Based Trading System (SBTS) Introduced by NSE Where a member can punch quantities & price of security in computer Transactions is executed as soon as a matching sale or buy order from a counter party is found SBTS
  • 7. ➢ National Exchange for Automated Trading (NEAT) • A satellite communication technology for trading. • It’s a state of the art client server based application. • Has a uptime record of 99.7% • Uniform response time of less than one second.
  • 8. InstrumentS of Secondary Market Secondary market Shares Bonds Equity shares Cumulative convertible preference share Cumulative preference share Right shares Bonus shares Preference shares Zero coupon bonds Treasury bills Convertible bonds The financial products/instruments which are dealt in the secondary market are:
  • 9. share Shares are units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.
  • 10. BOND • Negotiable certificate evidencing indebtedness. • Normally unsecured. • Issued by a company, municipality or government agency.
  • 11. Process of Buying Secondary Market Instrument The first step in trading shares is select a broker for transacting on behalf of the investor. ➢ Make sure that broker is registered with SEBI and the Exchanges. ➢ Broker registration number begins with the letter ‘INB’ ➢ A sub broker with the letter ‘INS’ 1. Finding a broker
  • 12. There are three types of account to its clients: 2. Opening an Account Trading Account Demat Account Commodity Account
  • 13. Procedures for opening an Account Step 1: To open a demat account, you have to approach a depository participant (DP), an agent of depository, and fill up an account opening form. Step 2: Along with the account opening form, you must enclose photocopies of some documents for proof of identity and proof of address. Step 3: You will have to sign an agreement with DP in the depository prescribed standard format. Step 4: The DP will then open an account and give you the demat account number. You can have multiple demat accounts if you so wish. You can choose your DP as per your convenience and there is no compulsion to open DP account with your stock broker.
  • 15. 3. Best priced order matched • Priority • Precedence • Parity 4. Executing the Order As per the Instructions of the investor, the broker executes the order i.e. he buys or sells the securities. 5. Trade confirmation 6. Settlement.