Summer internship report

CREATION OF NEW FRANCHISE & IT’S PROCESS (BUSINESS DEVELOPMENT) 1
SUMMER INTERNSHIP REPORT ON
CREATION OF NEW FRANCHISEE & ITS PROCESS
(BUSINESS DEVELOPMENT)
AT
SMC GLOBAL SECURITIES LTD.
SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT
OF
MASTERS OF BUSINESS ADMINISTRATION (MBA 2016-18)
At
CAREER POINT UNIVERSITY
KOTA (RAJASTHAN)
SUBMITTED TO SUBMITTED BY
School of Commerce & Management Ashim Roy
(K13226)

ACKNOWLEDGEMENT
I would like to thank SMC Global Securities Ltd. and CAREER POINT
UNIVERSITY for giving me an opportunity to learn and pursue my Summer
Internship.
I would like to thank and express my sincere gratitude to Mr. MOHIT SHYNGLE
(Senior Vice President). His constant encouragement, valuable insights and attention to
detail had made this exercise, a great learning experience.
I am also thankful to Mr. AMIT KOHLI (Sr. Manager Business Development) who
contributed his valuable time and gave valuable insights during the development of the
project.
I am also thankful to our HOD Mr. ASHISH SURI (CAREER POINT
UNIVERSITY) and my institution, for giving me an opportunity to undergo this
learning experience. Last but not the least; I take pride in thanking my family and
friends for their much valued support.

ABSTRACT
The Indian stock market is considered to be one of the earliest in Asia, which is
in operation since 1875. However, it remained largely outside the global integration
process until 1991. A number of developing countries in association with the
International Finance Corporation and the World Bank took steps to establish and
revitalize their stock markets as an effective way of mobilizing and allocation of funds.
In line with the global trend, reform of the Indian stock market also started with the
establishment of Securities and Exchange Board of India (SEBI), although it became
more effective after the stock market scam in 1991. With the establishment of SEBI and
technological advancement Indian stock market has now reached the global standard.
The major indicators of stock market development show that significant development
has taken in the Indian stock market during the post-reform period.
This paper seeks to examine in this context whether reform in the Indian stock
market has led to integration with the developed stock markets in the world. The study
finds that contrary to general belief, Indian stock market is not co-integrated with the
developed market as yet. Of course, some short-term impact does exist, although it is
found to be unidirectional for obvious reasons. That is to say, the developed stock
markets, viz. USA, UK and Hong Kong stock markets Granger cause the India stock
market but not vice versa. However, the study does not find any causality between the
Japanese stock market and Indian stock market. It is derived from the study that
although some positive steps have been taken up, which are responsible for the
substantial improvement of the Indian stock market, these are perhaps not sufficient
enough to become a matured one and hence not integrated with the developed stock
markets so far.

TABLE OF CONTENT
CHAPTER - 1 INTRODUCTION TO STOCK MARKET INDUSTRY 06
1.1 THE STOCK MARKET INDUSTRY 07
CHAPTER - 2 COMPANY PROFILE 12
2.1 SMC GLOBAL SECURITIES LTD 13
2.2 KEY DIRECTORS 15
2.3 PRODUCT OFFERINGS TO THE AP / SUB BROKER BY SMC 19
2.4 BROKING VERTICALS 20
2.5 DISRTIBUTION 22
2.6 INVESTMENT BANKING 23
2.7 WEALTH MANAGEMENT 23
2.8 FINANCING & LOAN SYNDICATION 24
2.9 INSURANCE BROKING 25
2.10 NRI & FPI SERVICES 26
2.11 DEPOSITORY SERVICES 27
2.12 REAL ESTATE ADVISORY 27
2.13 RESEARCH 27
2.14 MEMBERSHIPS & REGISTRATIONS 28
2.15 SMC ACHIEVEMENTS 29
CHAPTER - 3 INDUSTRY PROFILE 30
3.1 OVERVIEW OF INDUSTRY AS A FINANCIAL INSTRUMENT 31
3.2 LIST OF TOP STOCK BROKING COMPANIES IN INDIA 33
CHAPTER - 4 LEARNING FROM THE INTERNSHIP 35
4.1 BASIC REQUIREMENTS TO BECOME AN AUTHORISED PERSON 36
4.2 INFRASTRUCTURE & TECHNOLOGY 40
4.3 FORMATION OF NEW FRANCHISE 41
4.4 IDENTIFICATION OF THE PROSPECTS 42
4.5 PROCESS OF FORMATION OF NEW FRANCHISE 43
4.6 DOCUMENTATION REQUIRED FOR REGISTRATION PROCESS 49
4.7 AP REGISTRATION / RENEWAL / CANCELLATION 51
4.8 REGISTRATION CHARGES 53
4.9 NISM REGISTRATION AND RENEWAL 55
4.10 CONCLUSION 59
4.11 SUGGESTION & LIMITATION 59
4.12 BIBLIOGRAPHY 59

LIST OF TABLES PG. NO.
TABLE – 4.1 BROKRAGE SHARING STRUCTURE 36
TABLE – 4.2 ACCOUNT OPENING TARIFF SHEET 37
TABLE – 4.3 DEMAT TARIFF SHEET 37
TABLE – 4.4 DP TRANSECTION CHARGES 38
TABLE – 4.5 REGISTRATION FEE 39
TABLE – 4.6 BASIC REGISTRATION CHARGES 53
TABLE – 4.7 ALL STATUTORY CHARGES OTHER THAN BROKRAGE 54
LIST OF FIGURES PG. NO.
FIGURE – 3.1 SMC ACHIEVEMENTS 29
FIGURE – 4.1 FORMATION OF NEW FRANCHISE 41
FIGURE – 4.2 AP REGISTRATION / RENEVAL / CANCELLATION 51
FIGURE – 4.3 FLOW CHART OF NISM CERTIFICATION 57
List of Symbols, Abbreviations & Nomenclature
AP Authorized Person
SE Stock Exchange
Na Not Applicable
DP Depository Participant
RMS Risk Management & Surveillance
SEBI Securities Exchange Board of India
IRDA Insurance and Regulatory Development Authority
AMC Annual Maintenance Charges
RM Relationship Manager
NCDEX National Commodity & Derivatives Exchange
MCX Multi Commodity Exchange

Chapter – 1
Introduction to Stock Market of
India

1.1 THE STOCK MARKET INDUSTRY
Mark Twain (an American writer) once divided the world into two kinds of people: those who
have seen the famous Indian monument, the Taj Mahal, and those who haven't. The same could be said
about investors. There are two kinds of investors: those who know about the investment opportunities
in India and those who don't. India may look like a small dot to someone in the U.S., but upon closer
inspection, you will find the same things you would expect from any promising market. Here we'll
provide an overview of the Indian stock market and how interested investors can gain exposure.
 The BSE and NSE
Most of the trading in the Indian stock market takes place on its two stock exchanges: the Bombay
Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE has been in existence since
1875. The NSE, on the other hand, was founded in 1992 and started trading in 1994. However, both
exchanges follow the same trading mechanism, trading hours, settlement process, etc. At the last
count, the BSE had about 5,500 listed firms, whereas the rival NSE had about 1,600. Out of all the
listed firms on the BSE, only about 500 firms constitute more than 90% of its market capitalization;
the rest of the crowd consists of highly illiquid shares.
Almost all the significant firms of India are listed on both the exchanges. NSE enjoys a dominant
share in spot trading, with about 70% of the market share, as of 2009, and almost a complete
monopoly in derivatives trading, with about a 98% share in this market, also as of 2009. Both
exchanges compete for the order flow that leads to reduced costs, market efficiency and innovation.
The presence of arbitrageurs keeps the prices on the two stock exchanges within a very tight range.

 Settlement Cycle and Trading Hours
Equity spot markets follow a T+2 rolling settlement. This means that any trade taking place on
Monday gets settled by Wednesday. All trading on stock exchanges takes place between 9:55 am and
3:30 pm, Indian Standard Time (+ 5.5 hours GMT), Monday through Friday. Delivery of shares must
be made in dematerialized form, and each exchange has its own clearing house, which assumes all
settlement risk, by serving as a central counterparty.
 Trading Mechanism
Trading at both the exchanges takes place through an open electronic limit order book, in which
order matching is done by the trading computer. There are no market makers or specialists and the
entire process is order-driven, which means that market orders placed by investors are automatically
matched with the best limit orders. As a result, buyers and sellers remain anonymous. The advantage
of an order driven market is that it brings more transparency, by displaying all buy and sell orders in
the trading system. However, in the absence of market makers, there is no guarantee that orders will be
executed.
All orders in the trading system need to be placed through brokers, many of which provide online
trading facility to retail customers. Institutional investors can also take advantage of the direct market
access (DMA) option, in which they use trading terminals provided by brokers for placing orders
directly into the stock market trading system.
 Market Indexes
The two prominent Indian market indexes are Sensex and Nifty. Sensex is the oldest market index
for equities; it includes shares of 30 firms listed on the BSE, which represent about 45% of the index's
free-float market capitalization. It was created in 1986 and provides time series data from April 1979,
onward. Another index is the S&P CNX Nifty; it includes 50 shares listed on the NSE, which represent
about 62% of its free-float market capitalization. It was created in 1996 and provides time series data
from July 1990, onward.

 Market Regulation
The overall responsibility of development, regulation and supervision of the stock market rests
with the Securities & Exchange Board of India (SEBI), which was formed in 1992 as an independent
authority. Since then, SEBI has consistently tried to lay down market rules in line with the best market
practices. It enjoys vast powers of imposing penalties on market participants, in case of a breach.
 Who Can Invest In India?
India started permitting outside investments only in the 1990s. Foreign investments are classified
into two categories: foreign direct investment (FDI) and foreign portfolio investment (FPI). All
investments, in which an investor takes part in the day-to-day management and operations of the
company, are treated as FDI, whereas investments in shares without any control over management and
operations are treated as FPI.
For making portfolio investment in India, one should be registered either as a foreign institutional
investor (FII) or as one of the sub-accounts of one of the registered FIIs. Both registrations are granted
by the market regulator, SEBI. Foreign institutional investors mainly consist of mutual funds, pension
funds, endowments, sovereign wealth funds, insurance companies, banks, asset management
companies etc. At present, India does not allow foreign individuals to invest directly into its stock
market. However, high-net-worth individuals (those with a net worth of at least $US50 million) can be
registered as sub-accounts of an FII.
Foreign institutional investors and their sub accounts can invest directly into any of the stocks
listed on any of the stock exchanges. Most portfolio investments consist of investment in securities in
the primary and secondary markets, including shares, debentures and warrants of companies listed or
to be listed on a recognized stock exchange in India. FIIs can also invest in unlisted securities outside
stock exchanges, subject to approval of the price by the Reserve Bank of India. Finally, they can invest
in units of mutual funds and derivatives traded on any stock exchange.

An FII registered as a debt-only FII can invest 100% of its investment into debt instruments. Other
FIIs must invest a minimum of 70% of their investments in equity. The balance of 30% can be
invested in debt. FIIs must use special non-resident rupee bank accounts, in order to move money in
and out of India. The balances held in such an account can be fully repatriated.
 Restrictions/Investment Ceilings
The government of India prescribes the FDI limit and different ceilings have been prescribed for
different sectors. Over a period of time, the government has been progressively increasing the ceilings.
FDI ceilings mostly fall in the range of 26-100%.
By default, the maximum limit for portfolio investment in a particular listed firm is decided by the
FDI limit prescribed for the sector to which the firm belongs. However, there are two additional
restrictions on portfolio investment. First, the aggregate limit of investment by all FIIs, inclusive of
their sub-accounts in any particular firm, has been fixed at 24% of the paid-up capital. However, the
same can be raised up to the sector cap, with the approval of the company's boards and shareholders.
Secondly, investment by any single FII in any particular firm should not exceed 10% of the paid-
up capital of the company. Regulations permit a separate 10% ceiling on investment for each of the
sub-accounts of an FII, in any particular firm. However, in case of foreign corporations or individuals
investing as a sub-account, the same ceiling is only 5%. Regulations also impose limits for investment
in equity-based derivatives trading on stock exchanges.

 Investment Opportunities for Retail Foreign Investors
Foreign entities and individuals can gain exposure to Indian stocks through institutional investors.
Many India-focused mutual funds are becoming popular among retail investors. Investments could
also be made through some of the offshore instruments, like participatory notes (PNs) and depositary
receipts, such as American depositary receipts (ADRs), global depositary receipts (GDRs), and
exchange traded funds (ETFs) and exchange-traded notes (ETNs). As per Indian regulations,
participatory notes representing underlying Indian stocks can be issued offshore by FIIs, only to
regulated entities. However, even small investors can invest in American depositary receipts
representing the underlying stocks of some of the well-known Indian firms, listed on the New York
Stock Exchange and NASDAQ. ADRs are denominated in dollars and subject to the regulations of the
U.S. Securities and Exchange Commission (SEC). Likewise, global depositary receipts are listed on
European stock exchanges. However, many promising Indian firms are not yet using ADRs or GDRs
to access offshore investors.
Retail investors also have the option of investing in ETFs and ETNs, based on Indian stocks. India
ETFs mostly make investments in indexes made up of Indian stocks. Most of the stocks included in the
index are the ones already listed on NYSE and NASDAQ. As of 2009, the two most prominent ETFs
based on Indian stocks are the Wisdom-Tree India Earnings Fund (NYSE: EPI) and the Power Shares
India Portfolio Fund (NYSE:PIN). The most prominent ETN is the MSCI India Index Exchange
Traded Note (NYSE:INP). Both ETFs and ETNs provide good investment opportunity for outside
investors.
Emerging markets like India are fast becoming engines for future growth. Currently, only a very
low percentage of the household savings of Indians are invested in the domestic stock market, but with
GDP growing at 7-8% annually and a stable financial market, we might see more money joining the
race. Maybe it's the right time for outside investors to seriously think about joining the India
bandwagon.

Chapter – 2
Company Profile

2.1 SMC GLOBAL SECURITIES LTD.
SMC was established in 1990 by Subhash C. Aggarwal and Mahesh C. Gupta. In recent years
SMC was awarded as India's Best Equity Broking House in Equity, Derivatives & Commodity
segment with largest Distribution network from 2012 to 2016. SMC Global is one of the largest and
most reputed Investment Solutions Company that provides a wide range of services to its substantial
and diversified client base. The company is having its corporate office in New Delhi with regional
offices in Mumbai, Kolkata, Chennai, Ahmedabad, Cochin, Hyderabad, Jaipur plus a growing network
of more than 1250 offices across over 500 cities/towns in India and overseas office in Dubai.
On the advisory front, SMC Real Estate Advisors Pvt. Ltd. (Real Estate arm of SMC Group) was
rated as India's Best Real Estate Broker of the Year along with Best Property Consultant of the Year –
(Residential) in 2015. SMC is a well-diversified financial services company in India offering services
such as:
 Brokerage
 Equities (Cash & Derivatives)
 Commodities
 Currency
 Investment Banking
 Wealth Management
 Distribution of Third Party Financial Products
 Research
 Financing
 Depository Services
 Insurance Broking (Life & Non- Life)
 Clearing Services
 Mortgage Advisory
 Alternate Investment Fund (AIF)
 Real Estate Advisory Services to Corporate Institutional

SMC has workforce of 3000+ employees and presence in 500+ cities with 98 branches &
around 2400+ sub-brokers with overseas offices in Dubai, New York, Atlanta & Orlando. SMC
has over 13,000+ independent distributors for third party product distribution with total customer
base of 16 lakh + across India. 2400+ Sub - brokers Overseas Offices in Dubai, New York and
Orlando.

2.2 KEY DIRECTORS
Mr. S C Aggarwal
(Chairman & Managing Director, SMC Group)
Mr. S C Aggarwal is the Co-Founder of SMC Group, has diverse experience in the
financial services industry in India and has been instrumental in building SMC into
one of the leading diversified financial services companies. His vision, skills and outstanding
commitment has made the company, Best Equity Brokerage and Largest Distribution House of India.
He has over 26 years of experience in securities market and financial services and has been the key
architect of SMC’s growth. He is a fellow member of the institute of Chartered Accountants of India
(ICAI). Mr. Aggarwal is also the Chairman of India-EU Business Promotion Council and Co-
Chairman of the National Council on Commodity Markets of Associated Chamber of Commerce and
Industry (ASSOCHAM).
Mr. Mahesh C Gupta
(Vice Chairman & Managing Director, SMC Group)
Mr. Mahesh C Gupta is the Vice Chairman & Managing Director of SMC Global
Securities Limited. Mr. Gupta is a fellow member of ICAI (The Institute of
Chartered Accountants of India). He did his bachelor’s in Commerce from Delhi University. He is Co-
Founder and promoter of SMC Group. With his vast experience, in depth knowledge and strong
analytical skill, he efficiently assures flawless operations of the group. Being in the securities market
business for more than 26 years, he has seen all the phases of Stock market and handled all the matters
efficiently. His exceptional leadership skills and outstanding commitment has made this group one of
the leading brokerage and distribution houses of the country. He looks after the policy, vision and
major part of the operational activities of the group.

Mr. D K Aggarwal
(Chairman & Managing Director - SMC Investments & Advisors Ltd;
Chairman & Managing Director - SMC Capitals Limited; Chairman – SMC
Comtrade Limited ; Chairman-SMC Real Estate Advisors Pvt. Ltd; Director-
SMC Comex International DMCC)
Mr. DK Aggarwal is a promoter and one of the key architects of success of the SMC Group. He has
recently been conferred upon with “The Distinguished Entrepreneurship Award”- by one of the apex
business chambers of India “PHD Chamber of Commerce”. Innovation in offerings, Branding,
Research and Arbitrage are his forte. He has more than 25 years of experience Equity, Commodity,
Debt, Forex, Real Estate, Fund Management and Risk Management. He is an eminent speaker and
regularly presents his views and expertise on various market related issues through print and television
media. He is also a fellow member of the Institute of Chartered Accountants of India (ICAI). He is the
Past President of Commodity Participants Association of India.
Mr. Ajay Garg
(Whole Time Director – SMC Global Securities Limited)
Mr. Ajay Garg is a fellow member of the Institute of Chartered Accountants of
India (ICAI) having wide and rich experience of more than 18 years in securities
and commodities market. His key roles & responsibilities include business development, risk
management, technological up-gradation & development and administration of day to day activities at
SMC Group. He monitors the trading operations, surveillance and the risk related thereto. He played
vital role in the development of SMC’s state-of-art web portal & internet based trading platform. He
takes care of the brand building and marketing activities of the entire group. Mr. Garg has been
awarded with “Entrepreneur of the Year” during 4th Entrepreneur India Awards, 2014 organized by
Franchise India.
Mr Anurag Bansal
(Whole Time Director – SMC Global Securities Limited)
Mr. Anurag Bansal is the member of the Institute of Chartered Accountants of India
and the Institute of Cost Accountants of India. He has over 18 years of experience in securities market
and financial services. He actively participates in business promotions and compliance functions of
SMC Group.

Ms. Shweta Aggarwal
(Director- SMC Capitals Limited)
Ms. Shweta Aggarwal is a member of the Institute of Chartered Accountants of
India and she has cleared all levels of Chartered Financial Analyst (CFA) Program from U.S.A. She
has also done her Master of Business Administration (MBA) from London Business School (LBS).
She has successfully handled multiple critical assignments since joining the SMC Group. Her efforts in
the identification of a new global partner to the creation of SMC’s joint venture with SANLAM
Investments of South Africa are laudable.
Mr. Pravin Agarwal
(Whole Time Director - SMC Insurance Brokers Pvt. Ltd.)
Mr. Pravin Agarwal is currently acting as a whole time director of SMC Insurance
Brokers Private Limited. Our subsidiary company is actively involved in the development of our
insurance broking business. With more than a decade of work experience in Insurance and Financial
Industry, his key strength lies in meticulous and strategic planning and implementation of radical
concepts for the overall development and diversification of Insurance Broking Prior to joining our
company, he was associated with A& M Insurance Brokers Private Limited as a Director.
Mrs. Reema Garg
(CFO & Director – Moneywise Financial Services Pvt. Ltd.)
Mrs. Reema Garg has done B.Sc. (Computer Sc.) from Delhi University and
Masters in Computer Application (MCA). She possesses excellent communication
and interpersonal skills and plays a key and active role in strategic planning & brand building for the
Organization. She is self-motivated woman having a professional approach emphasizing on the core
values of the organization. She innovates, develops and effectively implements new ideas for the
growth and progress of the human resources, customer care and quality management functions of the
organization.

Mr Himanshu Gupta
(Director - Indunia Realtech Ltd., CFO – SMC Comtrade Ltd.)
Himanshu Gupta is a member of the Institute of Chartered Accountants of India and also a graduate
in B.Com (Hons.) from Delhi University. Mr.Gupta is a young, dynamic and versatile personality and
he plays a key and active role in core strategic business decisions of SMC Group. He began his career
with SMC in 2011 as Senior Vice President (Operations) and he administers overall operations of the
company including Finance, Accounts & Taxation, risk management, surveillance and other back
office operations. He leads the expansion of the group’s financing business (Through its NBFC arm,
Moneywise Financial Services Pvt. Ltd) and development of Bullion and Fixed Income Securities
business.

2.3 PRODUCT OFFERINGS TO THE AP / SUB BROKER BY SMC:
BROKING: Trading and Clearing member on NSE and BSE in Cash and F&O
segment, Commodity Broking on MCX and DGCX & Currency Trading.
WEALTH MANAGEMENT: Providing Client Specific Portfolio & Wealth
Management Services.
DISTRIBUTION: Distribution of IPOs & Mutual Funds, Fund Mobilization
through distribution of Debt Instruments & Corporate Fixed Deposits.
INSURANCE BROKING: Insurance Broking for both Life & non- life Insurance
Products.
FINANCING AND LOAN SYNDICATION: Providing Loans against Securities &
Loan against Properties.
INVESTMENT BANKING: Providing Investment Banking Services for Private
Equity, M&A, Corporate Advisory, Debt Syndication, FCCB, IPO and FPO &
Rights Issue.
NRI & FPI SERVICES: Providing Trading facilities in Equity & Derivatives and
Investments in IPOs & Mutual Funds to NRIs & FPIs.
DEPOSITORY SERVICES: Providing Depository Services for both Equities and
Commodities.

2.4 BROKING VERTICALS
Broking is a process or work of Trading of Equity, Currency and Commodity done by Brokers.
SMC is a brokerage firm and is a financial institution that facilitates the buying and selling of financial
securities between a buyers and sellers. It helps investors who trade public stock and other securities,
usually through the firm’s agent stockbrokers. SMC deals in:-
 EQUITY:
An equity derivative is a class of derivatives; whose value is atleast partially derived from one
or more underlying equity securities. Option, Intraday, Delivery & Future are by far the most
common equity derivatives. SMC recommends trading on future and option, hedging with nifty
and other products and opportunities near risk free arbitrage between various segments.
 CURRENCY:
There are three major exchanges offering currently future trading:
a) NSE (National Stock Exchange)
b) BSE (Bombay Stock Exchange)
c) MSEI (Metropolitan Stock Exchange of India)
SMC Comex International DMCC (part of SMC Group) is one of the clearing and broking
members of Dubai Gold and Commodities Exchange (DGCX).
It offers trading in various contracts such as:-
 FOREX:
 INR – Indian Rupee
 EUR – Euro
 GBP – Great Britain Pound
 CHF – Swiss Franc
 CNH / CNY – China Yuan
Renminbi
 AUD – Australian Dollar
 CAD – Canada Dollar
 JPY – Japan Yen
 RUB – Russia Rubble
 KPW – Korean Won
 ZAR – South African Rand

 COMMODITY:
 SMC Group of Companies came into existence at the very start of Commodity Exchanges
in India. Commodity market is a place where trading in commodities takes place. These are
the markets where raw and primary products are exchanged.
 These raw commodities are traded on regulated commodity exchanges, in which they are
bought and sold in standardized contracts. It is similar to an equity market, but instead of
buying or selling shares one buys or sells commodities.
It enables the retails and corporate investors to diversity their portfolio and enjoy the
benefits of commodity trading in:-
 MCX
 NCDEX
SMC deals in:-
 METALS – COPPER, NICKEL & ALUMINIUM
 OIL – WTI AND BRENT
 AGRICULTURE – RICE, WHEAT & CATTLES
 BULLION – GOLD, SILVER

2.5 DISRTIBUTION
SMC offers distribution services of IPO, Mutual Funds, Public Issues, Company Fixed
Deposits, Bonds, through its network of branches across India. SMC also provides retail application
financing in IPO’s, FPO's & Bonds. We assure you a hassle free transaction experience through us.
Our focus is to offer integrated solutions for your investment needs.
 Mutual funds: The range of products includes liquid, gilt, debt, equity and balanced funds.
Moreover, the setup of a legal structure safeguards investors’ interests & ensures that they are
not cheated out of their hard-earned money. Click here to access complete information on
Mutual Funds.
 Public issues: is the first sale of a company's common shares to public investors. This paves
the way for listing and trading of their securities on the stock exchange. With expert analysis
and timely advice, it can prove to be a highly profitable investment. Click here to know more
about public issues.
 Fixed deposits: Company Fixed Deposit is an attractive option for regular income with option
to receive monthly, quarterly, half yearly & annual interest income. Fixed Deposits in
companies earn a fixed rate of return for specified time period. Deposits mobilised are
governed by the Companies Act under Section 58A. It may be noted that deposits are
unsecured, and hence in of any default by of company, the investor cannot sell the documents
to recover his capital, thus making it a risky investment option. Click here to access complete
details of Company Fixed Deposits
 Bonds: We also deal in Capital Gain Bond Issues which facilitates tax exemption against long
term capital gain as per Sec 54EC of Income Tax Act. Besides this we all deal in GOI 8%
Bonds and Bonds issued by Companies from time to time. Click here to access currently
available schemes.

2.6 INVESTMENT BANKING
SMC Capitals Limited is the Investment Banking arm of SMC group and is a SEBI registered
Category I Merchant Banker with strong management team and execution team to help corporate
clients achieve their financial and strategic goals. SMC Capitals offers a wide spectrum of services
covering:
 Corporate Advisory
 Merger & Acquisition Advisory
 Capital Restructuring
 Private Equity and Debt Syndication
 Public Issue Management
 Capital Restructuring
 Debt Syndication
 Buybacks
 Delisting
 QIPs
 FCCBs
 Valuation Services
2.7 WEALTH MANAGEMENT
At SMC Investments & Advisors Ltd., we bring together a comprehensive knowledge base with over
two decades of experience to design customized solutions. Our dedicated Wealth Managers develop
personalized wealth management strategies for our clients by listening to them and understanding their
financial needs and goals. Our investment solutions cater to the financial needs of high net-worth
individuals, retail clients, corporate houses and financial institutions.

2.8 FINANCING & LOAN SYNDICATION
Moneywise Financial Services Private Limited which is a registered Non-Banking Financial
Company (NBFC) with the Reserve Bank of India (RBI) and a wholly owned subsidiary of SMC
Global Securities Limited is scaling up the NBFC business through promotion / marketing of NBFC
products. Moneywise Financial Services Private Limited has introduced wide spectrum of financial
products and services with variety of loan products for the Retail / HNI / Institutions, Corporate clients
and Capital / Commodity market clients.
It is our continuous endeavour to provide the best-in-class opportunities, services and
experience to our esteemed clients, be it external or internal. We are also in the process of empaneling
the interested partners to enrol with us as DSA/ DMA/ franchisee of Moneywise Financial Services
Private Limited for promotion / marketing of NBFC products.
PRODUCT OFFERINGS:
CAPITAL / COMMODITY
MARKET CLIENTS:
 Loan against property
 Loan against shares
 Loan against commodity
 Loan against mutual funds
 Margin funding
 IPO / NCD financing
 Pay-out discounting
 Bonds / Debt financing
 Debtors financing
 Structured finance
BUSINESSMAN CORPORATES:
 Business loans
 Promoter funding
 Structured finance
 Lease rental discounting
 Doctor loan

2.9 INSURANCE BROKING
 One of the largest and professional direct insurance Broking House in India accredited by
Insurance Regulatory and Development Authority of India (IRDAI).
 We provide wide choice of insurance products of all life and general insurance companies in
India.
 We represent clients, are totally independent of insurance companies and render impartial
advice to protect client’s interests.
 Major non-captive insurance broker in India dealing with annual premium of > Rs. 1075 Cr.
 Own 4-storey building in Delhi dedicated to insurance.
 Serving Customer base of over 700000 annually.
SALARIED:
 Personal loan
 ESOP financing
 Doctor loan
 Lease rental discounting
 Application funding
SELF-EMPLOYED:
 Business loan
 Doctor loan
 Ease rental discounting
 Structured financing
 Education loan

2.10 NRI & FPI SERVICES
Non Resident Indians (NRI):
Non Resident Indian’s can invest under repatriation or non-repatriation basis in Indian stock markets
through the Portfolio Investment Scheme of the RBI. The products in which an NRI can transact are
Shares, Convertible Debentures and Equity based derivatives.
Other products in which an NRI can invest in are:-
 Mutual Funds
 Insurance
 Real Estate
 Bonds
 IPOs
 ETFs
 Alternate Investment Funds
Foreign Portfolio Investors (FPI):
According the new regime to foreign investors comprising FIIs, Sub Accounts and QFIs can
now access Indian stock markets under a unified and simplified route called Foreign Portfolio
Investors or FPI. Banks, Government agencies, Individuals, Companies, Trusts, Associations, Fund
Houses, Regulated Funds, Mutual Funds, University Funds, Pension Funds and Broad Based funds can
now invest in India under any of the THREE categories, depending upon their risk profiles. The FPI
can simply get registered with a Designated Depository Participant (DDP), get the Bank and trading
accounts opened and start investing. Products in which an FPI can invest in are:-
 Equity- Shares, Warrants, Indian Depository Receipts on the stock exchanges
 Derivatives - Equity, Currency and Interest Rate.
 Mutual Funds
 Alternate Investment Funds, Real Estate Investment Trusts and Infrastructure Investment
Trusts.

2.11 DEPOSITORY SERVICES
Depository Participants (DP) offers a safe & convenient way to hold securities in electronic
form as compared to paper form. It offers freedom from delays, forgeries, settlement risk and paper
work. SMC provides an integrated single platform for our clients ensuring a quick, risk free and
efficient process. We are participants of Central Depository Services Limited (CDSL), National
Securities Depository Limited (NSDL) and Comtrack. SMC, as a Depository Participant, offers
depository accounts to individual investors as well as to corporate houses, which enables them to trade
in the dematerialized environment. We are one of the few Depository Participants offering depository
facilities for commodities also and we are empanelled with all the commodity exchanges viz. NCDEX
& MCX.
2.12 REAL ESTATE ADVISORY
SMC Real Estate Advisors Pvt. Ltd. is a professionally managed & dedicated real estate services
provider in the industry. We help clients make informed decisions in real estate with our insights,
experience and research. We are empanelled with various renowned developers and real estate service
providers with an objective to provide diverse real estate solutions on PAN India basis to our valued
client’s best suited to their needs and requirement.
2.13 RESEARCH
SMC Research is a SEBI registered & Certified Research. The SMC Research offers timely
advice across Equity, Derivatives, Commodity, Currency and Mutual Funds with best accuracy. SMC
provides an excellent balance of fundamental and technical research, which facilitates clients to grow
their wealth in short term as well as long term. All our Equity Analysis, IPO Research, Mutual Fund
Research, Commodity research & other research reports, estimates and enhanced analytics are
available on our website www.smctradeonline.com/research.aspx. Investor gain is our top priority.

2.14 MEMBERSHIPS & REGISTRATIONS
 Trading Member of NSE (Cash, F&O, and Currency), BSE (Cash, F&O), MCX-SX (Cash, F&O,
and Currency), MCX, NCDEX, NMCE, and NCDEX SPOT & DGCX.
 Clearing Member in
 NSE (F&O, Currency), BSE (F&O), MCX-SX (F&O, Currency), MCX, NCDEX, NMCE,
ICEX, ACE, UCX, USE, NCDEX SPOT & DGCX.
 Depository Participant with CDSL, NSDL & Comtrack (SEBI approved Qualified Depository
Participant (QDP)).
 Category 1 Merchant banker, Registered with SEBI.
 Corporate Insurance Broker for Life & General Insurance, Registered with IRDA.
 Distributor of IPOs & Mutual Funds, Registered with AMFI.
 Portfolio Management Services (PMS), Registered with SEBI.
.
 Non-Banking Financial Company (NBFC), Registered with RBI.

2.15 SMC ACHIEVEMENTS (FIG – 3.1)
2016
Best Broker with In-house
Research (Bullion)
Achieving market
leadership (order of merit)
Best in NBFC of the year
(Northern Region)
2015
Best Financial Service
Provider
Property Consultent of
the Year
Best Real Estate Broker
of the Year
Best Broking house for
SMEs
2014
Best Equity Broking house -
Derivative Segment
Best Commodity Broker
India's Biggest Market
Analyst (Commodity
Fundamentals)
Best Merchant Banker
2013
Fastes Growing Equity
Broking House ( Large
Firm)
Emerging SME Investment
Banker
2012
Best Equity Broking
House
Best Currency Broker

Chapter – 3
Industry Profile

3.1 OVERVIEW OF INDUSTRY AS A FINANCIAL INSTRUMENT
Indian stock markets have been a very good role during the past five years. Still general public
prefers putting it money in bank, rather than putting it in stock. Within Indian economy doing so well,
return from stock market have been far higher than return from any other investment.
Most of people are reluctant to put their money in shares, because of uncertainty of the return. At
times stock market is so volatile that it becomes very difficult for investors to decide whether to
purchase some more stocks or sell them, whether to enter the market or book profit. With so much
uncertainty prevailing, the case of investing in stock market is totally different from the case of
investing in some other places.
 3.1.1 MARKET SEGMENT:
The financial market has two interdependent segments:
 The primary
 The secondary market
The primary market is the channel for creation of new securities. These securities are issued by
public limited companies or by government agencies. In the primary market the resources are
mobilized either through the public issue or through private placement route. It is a public issue if
anybody and everybody can subscribe for it, whereas if the issue is made available to a selected group
of persons it is termed as private placement. There are two major types of issuers of securities:
 The corporate entities who issue mainly debt
 Equity instruments
 The government (central as well as state)
These new securities issued in the primary market are traded in the secondary market. The
secondary market enables participants who hold securities to adjust their holdings in response to
changes in their assessment of risks and returns. The secondary market operates through two mediums,
namely, the over-the-counter (OTC) market and the exchange-traded market. OTC markets are

informal markets where trades are negotiated. Most of the trades in the government securities are in
the OTC market. All the spot trades where securities are traded for immediate delivery and payment
take place in the OTC market. The other option is to trade using the infrastructure provided by the
stock exchanges.
There are 23 exchanges in India and all of them follow a systematic settlement period. All the
trades taking place over a trading cycle (day=T) are settled together after a certain time (T+2 day). The
trades executed on the National Stock Exchange (NSE) are cleared and settled by a clearing
corporation. The clearing corporation acts as a counterparty and guarantees settlement.
NSE provides a formal trading platform for trading of a wide range of debt securities, including
government securities. A variant of the secondary market is the forward market, where securities are
traded for future delivery and payment. A variant of the forward market is Futures and options market.
Presently only two exchanges viz., NSE and Stock Exchange, Mumbai (BSE) provides trading in the
derivatives of securities.
 Dependence on Securities Market
 Corporate Sector
 Government
 Households

3.2 LIST OF TOP STOCK BROKING COMPANIES IN INDIA
 ANGEL BROKING PVT LTD
The Indian stock broking firm Angel Broking Pvt Ltd was established in the year 1987. The
leading stock broking company is headquartered in Mumbai, India. Angel Broking Pvt Ltd is
providing a range of services including Equity Trading, Portfolio Management, Mutual Funds, IPO,
Depository Services and Investment Advisory etc. Its subsidiaries are Angel Commodities Broking Pvt
Ltd, Angel Fincap Pvt Ltd, Angel Financial Advisors Pvt Ltd, Angel Securities Ltd.
 BSE LTD
BSE Ltd is one of the top stock broking companies in India. It is located at Dalal Street, Kala
Ghoda, Mumbai (formerly Bombay), Maharashtra, India. Bombay Stock Exchange was established in
the year 1875. Bombay Stock Exchange founded by one of the most influential businessmen of the
19th century, Premchand Roychand. The Bombay Stock Exchange is the oldest exchange in Asia.
 EDELWEISS FINANCIAL SERVICES PVT LTD
Edelweiss Financial Services Pvt Ltd is one of the leading stock broking companies in India. The
company is headquartered in Mumbai, Maharashtra. The company is majorly involved in following
types of business including asset management, life insurance, capital marketing, credit card,
commodities etc. The company mainly focuses on especially mortgages for housing, loans for
agriculture and credit. Edelweiss was founded in November 1995 by Rashesh Shah and Venkat
Ramaswamy. Its operations started from February 1996. It was a small office with 3 employees
located near Akbarally’s in the Fountain area of Mumbai.
 HDFC SECURITIES LTD
HDFC Securities Ltd was founded in the year 2000. The leading stock broking company is
headquartered in Mumbai, Maharashtra. It is one of the top stock broking companies in India. HDFC
Securities Ltd has branches all Indian major cities and towns.
 ZERODHA
Zerodha, the leading stock broking company in India was founded in the year 2010. It is
headquartered in Bangalore, Karnataka India. It is offering a wide array of services including equity,
derivatives, currency and commodity trading.

 KARVY STOCK BROKING LTD
Karvy Stock Broking Ltd was founded in the year 1982. The leading stock broking company is
headquartered in Hyderabad, Telangana, India by 5 young men worked for the renowned chartered
accountancy firm. The company offices are located all across India. The top stock broking company
has started the business of commodity trading in the year 2000. It is also into the business of forex
trading. In September 2008, the group launched an online trading and investment portal offering an
extensive range of financial products and solutions across different classes.
 KOTAK SECURITIES LTD
Kotak Securities Ltd was founded in the year 1994. It is headquartered in Mumbai,
Maharashtra. It is one of the top stock broking and financial services company in India. It is the
subsidiary of Kotak Mahindra Group and corporate member of National Stock Exchange of India and
Bombay Stock Exchange.
 MOTILAL OSWAL SECURITIES LTD
Motilal Oswal Securities Ltd is one of the top stock broking firms in India. It is one of the best
performing equity brokers in India. The leading stock broking company has won various awards
because of performance.
 National Stock Exchange of India Ltd
National Stock Exchange of India Ltd was founded in the year 1992, located in Mumbai,
India. NSE was the first exchange in the country to provide a modern, fully automated screen-based
electronic trading system. The company is offering to trade into following segments-
Equities- Equities, Indices, Mutual Funds, Exchange Traded Funds, Initial Public Offerings, Security
Lending and Borrowing Scheme
Derivatives- Equity Derivatives, Currency Derivatives, Interest Rate Futures
 SHAREKHAN LTD
Sharekhan Ltd is one of the top stock broking companies in India. The company is headquartered in
Mumbai. It is providing a range of services including investments, online trading, and stock broking etc.

Chapter – 4
Learning from the Internship

4.1 BASIC REQUIREMENTS TO BECOME AN AUTHORISED
PERSON
An entity (Individual, Company or Partnership Firm) with good track record & reputation in financial services /
other business / social circle with good client base with a view of Nominal Investment, Basic Infrastructure &
Connectivity (Minimum 2 Systems & Telephone lines & Voice Logger).
 4.1.1 ATTRACTIVE REVENUE SHARING:
Out of the entire brokerage earned by SMC Global Securities Ltd. / SMC Comtrade Ltd, on all trade
executed by clients registered by the Authorised Person, a fixed percentage or a slab will be paid to the
Authorised Person as “service charges”. All calculations will be done on MEMBER’S records and
settlements will be on monthly basis as per the sharing terms agreed between the Authorised Person
and SMC.
TABLE – 4.1
Brokerage Share Structure Fixed Term Sharing Term
%age Minimum Ratio
Equity Cash Segment
Intraday 0.0075% 01 Paisa
60 : 40
( Associate :
SMC)*
Delivery 0.0750% 02 Paisa
Equity Derivative
Segment
Future 0.0075% NA
Option 0.1750% Rs. 25 per lot
Commodity Segment
Derivative 0.0060% NA
Delivery 0.30% NA
Currency Segment Derivative 0.0060% NA
Note: *Authorised Person can offer minimum 0.02% (Intraday & Derivatives) and 0.20% (Delivery)
to their respective clients. (Taxes viz. stamp duty, Transaction charges, Service tax, Security
transaction tax, Commodity Transaction Tax will be levied extra).

 4.1.2 ACCOUNT OPENING CHARGES:
TABLE – 4.2
ACCOUNT OPENING
TARIFF SHEET
Exclusive (Browser Based) Privilege (Application Based)
Scope of Account
Individual / HUF
/ Firm
Corporate
Individual /
HUF / Firm
Corporate
Equity 500 1500 999 1999
Commodity 100 100 600 600
Currency 100 100 600 600
AMC Lifetime
AMC Lifetime Equity
Scheme I #
999 NA 1499 NA
AMC Lifetime
Combo [Eq. + Com.
+ Cur]#
1199 NA 1699 NA
# If there is no transaction in capital market in a Calendar Quarter, Account will be treated as Non-
active and Rs 75+ GST will be charged as idling charges for that quarter, in this said account.
TABLE – 4.3
DEMAT TARIFF SHEET (AMC Schemes)
DP Scheme
General Schemes (Plus
GST)
Scheme-1 (One Time
AMC) (Plus GST)
Scheme-2 (NO
AMC) Refundable
Individual (POA) 300 1000 3000
Individual (Non-POA) 350 1300 3000
Corporate 1000 NA NA

TABLE – 4.4
DP Transaction Charges
Scheme Charges (Plus GST)
Maximum
Transaction limit
Validity
Normal (POA Client) 15 Per Instruction NA
Normal (Non-POA
Client)
20 Per Instruction NA
Prepaid Transaction
Charges Scheme 750
750 100 1 year
Prepaid Transaction
Charges Scheme
1250
1250 200 1 year
Prepaid Transaction
Charges Scheme
2500
2500 500 1 year
Note: 1.) Mobile Trading / Browsing Trading / Tab Trading are Non – chargeable.
2.) Free Web Based Back Office Support for clients.

 SECURITY DEPOSIT & REGISTRATION FEES:
TABLE – 4.5
Particulars
Equity Currency Commodity
Cash Derivative Derivative Derivative
NSE BSE MSEI NSE BSE MSEI NSE BSE MSEI MSEI NCDEX
Security
Deposit
(Refundable)
50,000 50,000
A/P
Registration
Charges
(Exclusive
GST)
2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 1,000 1,000
ODIN Charges
(Per month)in
ID / Per
month
300 300 300 300 300 300 300 300 300 300 300
NISM
Certificate
Required
No No No Yes Yes Yes Yes Yes Yes No No
NOW
Software
Charges
(Exclusive
GST)
Free 150 NA Free 150 NA Free 150 NA NA NA
Note: 1.) We can also accept 50% of security deposit as collaterals & 50% as cash.
2.) Cost of broadband & internet will be bear by Authorised Person.

4.2 INFRASTRUCTURE & TECHNOLOGY
 Connectivity options:
(1) VSAT : Earthing should be below 2 volts,
(Online UPS is mandatory) : (i) V-Sat-300 V.A.
(ii) For PC’s/TFT- 300 V.A. per PC/TFT
(2) Broadband / Lease Line : 2 MB
 Separate Broad band connection for Back office reports.
 Min of 500 sq. ft. of office space, well-furnished and equipped
 The Outlook & feel of the sub-broker’s office premises should be in accordance with the
policies laid down by SMC.
 At least 2 certified and trained dealers to start with and at least 5 sales executive.
 Configuration of computer should be (Minimum 2 Systems):
Operating System : Windows XP (Service Pack 2)
CPU : P IV, Quadra Duo.
HDD : 80 GB
RAM : 512 MB or 1 GB
Networking : (a) D-Link CAT 6 Cable,
(b) D-Link 8 Port Switch,
(c) Sky Edge V-sat

4.3 FORMATION OF NEW FRANCHISE (FIG – 4.1)
LEAD CAPTURE
(CAPTURING OF LEADS)
AP REGISTRATION
(REGISTRATION / RENEWABLE /
CANCELLATION)
NISM CERTIFICATION
ASSISTANCE TO
FRANCHISE
DATABASE UPDATION
(FOR FRANCHISEE REGISTRATION)
)
ACTION ON VERIFIED
LEADS
 Leads captured from
open market
 Tele Calling
 Client References
 Cold calling
 Approach the client
 In person meeting
 Deciding terms and
conditions
 Collect the documents
 Collecting the Physical
Documents
 Filing of the required
information
 Verification of entries
filled by Executive
 Debiting of fees and
Upload of Documents
 Allotment of
Registration Number
 Creation of Trading ID
 Checking the
Registration
 Registration form
 Conditions for
registration of Dealer
 Cheque punching
 Back Office related
assistance
 Updation of franchisee
information

4.4 IDENTIFICATION OF THE PROSPECTS
 A person / group of person with good track record & reputation in financial services / other
business / social circles with a good client base.
 1-2 years’ experience in dealings of financial products as a Main broker (of any segment) /
Sub-broker / Remissor / MF Distributor / Insurance Advisor / Financial Planner or an
employee of existing broker / sub-broker / CA / CS / Property Dealers.
 Should be financially sound to invest a minimum of Rs. 3 -5 lacs initially and have ability
to invest further in infrastructure & man power.
 Should be well educated (minimum requirements is 10+2), preference is given to
professionals.
 Appointment of sub-broker does not provide exclusive territorial rights to the Sub-broker.
The decision of expansion in terms of Branch / sub-franchisee rest with SMC.

4.5 PROCESS OF FORMATION OF NEW FRANCHISE
 4.5.1 LEADS CAPTURE:
There are two ways of Capturing a Lead:
1. LMS verified leads assigned to BDM sales
2. Self-generated leads by following ways:
 Leads captured from open market
 Tele Calling
 AMFI Data calling
 Calls to - CA,CS, Property Dealers, Insurance agent, small SME players
 Conducting seminars, campaigns
 Client References
 Other Sub-broker/AP calling
 Corporate activities
 Cold calling – in person meeting
 Raw Data Calling
 4.5.2 COLD CALLING:
 This method is also a popular method though success rate is very low
 Data can be captured from various sources
o Telephone Directory
o Yellow Pages
o Newspaper Classifieds
o Various trader associations & social bodies
o Other such publications which are available with common man

 4.5.3 REFERENCES FROM EXISTING CONTACTS:
 This is the most common source of Lead generation.
 References to be taken from existing contacts.
 Such references can be sought only if the person from whom the reference is asked holds
positive opinion about the capabilities of the sales person.
 The turnout through such medium is quite high as the persons rely on the word of mouth
publicity.
 4.5.4 ACTION ON VERIFIED LEADS:
 The BDM- sales will approach the prospective client within a TAT of maximum 24 hours
and update the status of call or meeting on Talisma.
 Arrange in person meeting for suggesting suitable product and deciding terms and
conditions.
 Collect the documents for opening account as per KYC/AP registration requirement.
 4.5.5 TALISMA: Talisma is the lead management software of SMC which helps in
maintaining the records like Leads, Meeting and Opportunities by the Team Leaders, Zonal
Managers and Sr. Managers. The following heads comes under the Talisma software:

 4.5.6 TALISMA DETAILS:
 TOTAL LEAD:
o Lead Name
o Scheme Pitched
o Lead Product
o Email
o Source
o Lead Mobile
o Lead Owner
o Team
o Created City
o Last Updated
o Days Since Lead Updated
o Month Since Lead Created
o Last Communication Date
with Contact
o Lead Assign Date
 TOTAL MEETINGS:
o Name
o Location
o Start Date
o End Date
o Type
o Reminder
o Remind Using: Email / SMS
o Summary
o Comment
o Meeting Status
 TOTAL OPPORTUNITY:
o Opportunity ID
o Opportunity Name
o Owner
o Mobile
o Email
o Open Date
o Last Updated
o Source
o Address
o City / State
o Opportunity Status
o Call Status
o Verified Source
o Opportunity
Transition
o Follow-up Ageing

 4.5.7 COLLECTION OF ALL THE DOCUMENTS FROM ZONAL
MANAGERS/TEAM LEADERS:
Executive collects the physical documents from the concerned marketing person. Documents of
all the applicants are received at Head Office except Regional Offices and it should be self-attested
and verified. Checklist of Documents received- in case of Individual Franchisee:
 PAN Card
 Term Sheet
 Address Proof
 AP Registration Fee
 Bank Proof
 Education Proof
 Cheque
 Bank Statement
 Guarantee Letter
 Voice Logger Declaration
 Office Picture
An applicant may be of any category i.e. Individual, Partnership/Proprietorship Firm and
Company.

 4.5.8 DATABASE UPDATION FOR FRANCHISEE REGISTRATION:
 Collecting the Physical Documents.
 Filing of the required & specified information into software (AXEL).
 Verification of entries filled by Executive.
 Approval of the Franchise.
o Level 1 (Sr. Manager)
o Level 2 (AVP / Zonal Manager)
o Level 3 (Vice President)
 4.5.9 FILLING THE DETAILS IN AXEL:
 General Details of Applicant.
 Filling up the required segment such as NSE, BSE, MCX, NCDEX etc.
 The amount of Initial Margin is entered to which the applicant has agreed to.
 Actual amount received from applicant is entered along with details such as number of
instalments or payment.
 BDM’s (Business Development Manager’s: Name and Employee code of BDM who shall
assist the applicant.
 Details of the key persons to be communicated.
 Details of Bank are entered such as account type, account no, MICR code, IFSC code etc.
 Documents such as voice logger declaration, PAN card etc are attached.
 Details of office (owned/ on rent).
 Details of services agreed to be provided to the applicant.
 Codes of IPO, Life Insurance & General Insurance are entered.

 4.5.10 VERIFICATION OF DOCUMENTS BY CONCERNED OFFICIAL:
After the details are entered by Sr. Executive, concerned official (Sr. Manager/AVP) verifies
the details.
 4.5.11 APPROVAL OF FRANCHISEE:
Vice President ensures that the brokerage slab given to franchisee is as per the company brokerage
policy.
 4.5.12 AFTER APPROVAL FILE IS TRANSFERRED TO GROUP CREATION
DEPARTMENT:
After the file is approved by AVP/ VP, the same is sent to Group Creation team in CRF
Department wherein the franchisee is added to the group of franchisees.
 4.5.13 ASSIGNMENT OF FRANCHISEE CODE:
CRF Department assigns a unique franchisee Code and accordingly provides information about the
software and other policies of the company to the client.
 4.5.14 CREATION OF TRADING MULTI-ID:
Trading Multi ID is created after AP Registration Department approves the documentation to be
sent to exchange is complete. In case there is any pendency on the part of applicant, then Trading ID
may be blocked and is re-activated in future.

4.6 DOCUMENTATION REQUIRED FOR REGISTRATION PROCESS
 4.6.1 PROPRIETORSHIP FIRM:
1. PAN card of Proprietor.
2. Latest photograph of Proprietor signed across.
3. Address Proof of Proprietor.
4. Education Proof (Minimum 10th
Certificate / Mark sheet).
5. Photocopy of latest Income Tax return filled by the Proprietor.
6. Proprietorship firm stamp affixed whenever the proprietor signs.
7. Declaration by Proprietor on letterhead of firm as per format.
8. Verification from the bank stating that the account is in the name of proprietorship on the bank
letterhead.
9. Firm’s bank account detail proof.
 4.6.2 PARTNERSHIP FIRM:
1. Copy of registered partnership deed along with registration certificate (copy should be attested
by all partners).
2. List of partners with their address proof, PAN card & colour photograph of all partners.
3. Education Proof of all partners (Minimum 10th
4. Partnership Firm’s bank account detail proof.
5. Partners Bank Account details proof along with cancelled cheque.
6. Authority Letter in favour of Partner’s.
7. Copy of balance sheet of last two financial years.

 CORPORATE BODY:
1. Certified true copy of board resolutions naming person(s) authorised by board of directors to
act as authorised signatory (ies). The resolution should specify the manner of operation of the
account (singly or jointly) and authority given to the authorised signatories to open and operate
the account.
2. Copy of Memorandum of Article of Association.
3. Latest passport size coloured photographs, PAN and address proof of whole time directors /
two directors in charge of day to day operations.
4. Latest passport size coloured photographs, PAN and address proof of all authorised signatories.
5. Copy of correspondence and registered address proof of the company.
6. Copy of PAN card of the company.
7. Companies bank account detail proof.
8. List of all directors on the letterhead of the company and copy of form - 32 along with proof of
filling with ROC.
9. Copy of balance sheet for last two financial years.
10. Latest shareholding patterns including list of all those holding more than 5% in the share
capital of the company.
11. Net worth Certificate of the company duly certified by chartered accountant.
 4.6.3 INDIVIDUAL:
1. One latest coloured Photograph, signed across.
2. Copy of PAN card.
3. Address Proof for both correspondence and permanent residential address.
4. Education Proof (Minimum 10th
5. Bank account detail proof.

4.7 AP REGISTRATION / RENEWAL / CANCELLATION
AP Stands for Authorized Person, In order to pursue trading as a franchisee, an associate needs to
get registered at the exchange / SEBI. This includes registration of franchisee as AP / Sub-broker,
Renewal of sub-broker, cancellation of AP / Sub-broker.
FIG – 4.2
 4.7.1 Registration as AP / Sub – Broker:
 Pre-defined Exchange Documents are sent to approved Franchisee
 Follow-Up from Franchisee
 Checking the Documents
 Debiting of fees and Upload of Documents
 Allotment of Registration Number
 Creation of Trading ID
Note: In some cases, Trading ID is issued while AP registration is in process and if registration is
not done, Trading ID is closed after debiting the charges.
AP PROCESS OVERVIEW
CANCELLATION OF
REGISTRATION OF AP
/ SUB -BROKER
RENEWAL OF SUB -
BROKER
REGISTRATION as AP /
SUB - BROKER

 4.7.2 RENEWABLE PROCESS:
Renewal process is only applicable only in case of sub-broker in NSE & BSE Commodity segment. A
sub-broker needs to renew its registration after a period of 5 years.
 Receipt of List of Sub brokers for renewal
 Intimation to Sub-Brokers
 Assent of Sub-Broker
 RENEWAL:
If the associate wishes to continue as a sub-broker, then his registration certificate is renewed by
debiting reversal code for registration charges.
 CONVERSION:
If the associate opts for conversion, then firstly Sub-Broker registration is cancelled in the concerned
exchange as well as new AP registration is applied simultaneously.
 SURRENDER:
Associates who neither opt for conversion nor renewal, their Sub-broker Registration is surrendered
before cut-off date by signing surrender documents along with Sub-broker certificate.
 4.7.3 CANCELLATION OF REGISTRATION:
 Mail from customer care
 Debiting the charges and mailing of documents to franchisee
 Receiving filled closing documents from franchisee
 Approval or Rejection by exchange
Note: The entire process from receipt of franchisee documents to AP registration application has
the TAT of 72 hours/3 working days. AP registration revert is received from exchange maximum
within 25 days.

4.8 REGISTRATION CHARGES
 4.8.1 BASIC REGISTRATION CHARGES:
TABLE – 4. 6
Exchange SB/AP New Registration Closure
NSE CM AP 2000/- + GST 1000/- + GST
NSE FO AP 2000/- + GST 1000/- + GST
NSE Currency AP 2000/- + GST 1000/- + GST
BSE CM AP 2000/- + GST 1000/- + GST
BSE FO AP 2000/- + GST Nil
BSE Currency AP 2000/- + GST Nil
MCX CM AP 2000/- + GST 1000/- + GST
MCX FO AP 2000/- + GST 1000/- + GST
MCX Currency AP 2000/- + GST 1000/- + GST
MCX AP 1000/- + GST 500/- + GST
NCDEX AP 1000/- + GST Nil
UCX AP No Charges No Charges
NSE CM SB
20000 + 2300
(Exchange Processing Fees)
5000/-
BSE CM SB
20000 + 2300
5000/-
MCX CM SB
20000 + 2300
5000/-
NSE CM
(Change in Affiliation)
SB 1000/- + GST 5000/-
BSE CM
(Change in Affiliation)
SB 1000/- + GST 5000/-

 4.8.2 TRANSACTION CHARGES FOR TRADING IN CASH SEGMENT OF BSE, NSE,
MCX-SX:
TABLE – 4. 7
ALL STATUTORY CHAGRES OTHER THAN BROKRAGE
CASH SEGMENT. (NSE,BSE & MCX-SX)
Sl. No. Taxes Rate Charged. On
1 STT
Dly. 0.10% (Both Side) Turnover
Squ. 0.025% (Only Sale) Turnover
2 GST 14%
(Brokerage + Trns. Chrg. +
Demat Chrg.)
3 CESS 3% GST
4 Txn. Chrg.
NSE :- Rs. 0.00345% Turnover
BSE :- Rs. 0.00295%
(W.E.F - 01.09.2014)
Turnover
MCX-SX :- Rs.
0.00220%
Turnover
5 OTHER CHRG.
INTERDAY :- Rs.
0.0020%
Turnover
DLY :- Rs. 0.0100% Turnover
TRANSACTION CHARGES FOR TRADING IN F&O SEGMENT OF BSE, NSE, MCX-SX
F&O SEGMENT. (NSE,BSE & MCX-SX )
Sl. No. Taxes Rate Charged. On
1 STT
Only Sale : 0.01%
(w.e.f - 01.06.2013) Turnover
((Exec. Prise + premium )*qty)
EXEC : 0.125%
ASSIGN : NO STT
2 GST 15% (Brokerage + Trns. Chrg.)
3 CESS 3% GST
4
Txn. Chrg. (NSE F&O)
F&O :- Rs. 0.00210% Turnover
OPT :- Rs. 0.05020% Premium
Txn. Chrg. (BSE F&O)
Txn. Chrg. (MCX-SX F&O)
5
OTHER CHRG. F&O :- Rs. 0.0020% Turnover
(NSE & BSE) OPT :- Rs. 0.0020% Premium

4.9 NISM REGISTRATION AND RENEWAL
The National Institute of Securities Markets (NISM) is a public trust established in 2006 by the
Securities and Exchange Board of India (SEBI), the regulator of the securities markets in India. The
institute carries out a wide range of capacity building activities at various levels aimed at enhancing
the quality standards of and increase the participation in the securities markets. The institute’s six
schools of excellence and the National Centre for Financial Education works in synergy towards
professionalized securities markets.
 4.9.1 The Six Schools of Excellence:
1. School for Certification of Intermediaries (SCI)
2. School for Corporate Governance (SCG)
3. School for Investor Education and Financial Literacy (SIEFL)
4. School for Regulatory Studies and Supervision (SRSS)
5. School for Securities Education (SSE)
6. School for Securities Information and Research (SSIR)
The National Strategy of Financial Education is being incubated at NISM through the ‘National
Centre for Financial Education’ (NCFE). NISM certification can be applied at
https://certifications.nism.ac.in/nismaol/. NISM Registration is mandatory for franchisee to trade in
F&O derivatives, Currency Derivatives. Following is the detailed process for NISM Registration:
 Checking the Registration
 Registration form
 Conditions for registration of Dealer

Every franchisee/sub broker / Authorised person / Remiser who wants to initiate trading has to
qualify the following examination series:
 For cash dealing- No certificate required at franchisee level.
 For F & O Trading - NISM Examination Series- VIII
 For Currency trading- NISM Examination Series- I
 For Interest Rate derivates- NISM Examination Series IV
 Another examination series “Common Derivatives certification examination” is also held
online and has due importance that all the above 3 examination series will need not to be
passed if anyone qualify this series.
 Another examination SORM -Securities Operation Risk Module-NISM examination Series-
VII is also required for cash trading at certain levels.

 4.9.2 FLOW CHART OF NISM CIRTIFICATION: (FIG – 4.3)
Whether exam series
passed by Franchisee /
Broker
Do not register that
Franchisee
Register the Franchisee on Stock Exchange
Whether
certification
has expired
after 3 years
Update the status on relevant stock
exchange portal
Intimation via mail given to Franchisee one
month before the expiry of certification.
Terminate the platform for that particular
segment for which certification expired.
NO
YES
NO
YES

 4.9.3 ASSISTANCE TO FRANCHISEES:
After creation of Trading ID, Marketing team forwards the ID to the Franchisee and handles the
following queries:
 Enhancement of Limit
 Cheque punching
 Back Office related assistance
 Updation of franchisee information
 Revision of Brokerage terms.
 Receive couriers from franchisees and sending to concerned departments
 Dealer ID
 Auto Tender ID

4.10 CONCLUSION
Success of stock-broking franchisee model depends up on the certain ingredients, which are
controllable or uncontrollable.
Uncontrollable Factors includes PESTLE i.e., Political, Economical, Society Culture,
Technological, Legal, and Environmental.
Controllable factors like quality service, competitive offerings, securing brand image, strong
investor relations are the controllable factors which should be monitored continuously, so that in
growing stock market industry, you should also grow without losing your brand.
4.11 SUGGESTION & LIMITATION
 This type of Internships should be done regularly in the Company.
 The internships in the Head Offices of the company lead to vast learning.
 The students should be practised in different fields of the company.
 The term of 45 days for internship is very less as to gain knowledge about the company.
4.12 BIBLIOGRAPHY
WWW.GOOGLE.COM
WWW.INVESTOPEDIA.COM
WWW.SMCTRADEONLINE.COM
WWW.SMCINDIAONLINE.COM
WWW.WIKIPEDIA.ORG
WWW.CHITTORGARH.COM/STOCKBROKER

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