0INTRODUCTION

Flagged off at the initiative of the Government of India, SHCILenjoys an enviable parentage that
includes leading Indian financial institutions and insurance majors like IDBI, UTI, ICICI, LIC GIC and
its subsidiaries, IFCI and IIBI. Their original focus was to manage the entire array of post trade
activities of Financial Institutions and Foreign Institutional Investors with dedicated client relationship
teams and state-of-the-art reporting systems.
It has been an eventful journey rewarding them with a 50% market share and the biggest
investing bodies of the country for clients.
From their inception to achieving and retaining the mantle of the largest Depository Participant
in the country, it is their dream and vision that has helped them. Where they have made the difference
is at understanding ideas, managing them, at arranging their organizational strengths and translating
these new exposures into service and business activities.
Their technological support not only holds enormous databases together, but makes sense and
searvice out of it too. The State-of-the-art Information Technology tools deployed by SHCIL is a
laureate of lthe computerworld Honors Program. SHCIL has also received National IT award from the
Computer Society of India.
Their adaptability to the changing requirement of the market is one of their main strengths. The
biggest changeover in the SHCIL story has been expansion and diversification. Year 1996 marked a
fundamental shift for the Indian capital markets. The Depository Act changed the way the capital
market, specifically the stock exchanges, investors and related organization would function. Securities
Exchange Board of India with its guiding Hand, set up a framework for changing over capital market
investing and trading from paper to electronic mode. The depository culture has accelerated since then,
probably unmatched by any other country.
Accordingly, from servicing financial institutions, they have timed their move into the extensive
individual investro populace. They have enriched their organisatinal strengths and fine-tuned the front-
end interfaces to cater to the distinct needs of the individual investor. A specially trained pool of over
1500 professionals provides personalised service to their client investors. To enable easy reach, they
have accelerated their distribution network from four offices in 1997 to over 100 offices across the
country. Dedicated leaseline network links across these offices, independent systems setups and off-
site backups provide the platform for traditional servicing as also for new e-commerce applications.
The results are definite. Four years back, they signed in their first individual investor client. Today,
SHCIL serves a satisfied clientele of around seven lakh accounts.
They ensure that their financial product offerings are related closely, not just disjointed services added
on. Alongside expansion, the thinking has been at diversifying further into areas of financial products
and services. Their new products are an echo of market requirements, customer feedback and needs.
Rather than coming out with products which would suit their organisational needs, the accent is on

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channeling technology to make convenience products for financial markets. They formulate new
products that give quantum benefits to linvestors, corporatins and brokers and also fit into the mosaic
of their product mix.
Glolbalisation of the market has led to a manifold increase in investment. New markets have been
opened new instruments have been developed and new services have been launched. Besides, a number
of opportunities and challenges have also been thrown open. Stock Holding Corporation of India
Ltd.,(SHCIL), the premier custodian of Indian capital market providing services of international
standards, is gearing up to reposition itself in the changed scenario. With world acclaimed automation
and a team of committed professionals, SHCILis confident of scalilng new heights.

INTRODUCTION TO THE COMPANY

Stock Holding Corporation of India Ltd. (SHCIL) was incorporated under the Companies act 1956 at
the initiative of the Government of India. It is promoted by the all India financial and investment
institutions and insurance companies viz., IDBI, UTI, ICICI, IFCI, IBI, LIC, GIC, and its subsidiaries.
SHCIL commenced operations in August 1988 and has been providing custodial and related
services of international standards for nearly a decade to the promoter and other institution, Foreign
Instiutional Investors (Flls), Commercial Banks and Mutual Funds. Being a premier custodian of the
country. SHCIL today holds more than Rs. 80,000 crores worth of clients assets. The turnover of the
corporation exceeds Rs.10,000 crores per annum. SHCIL has been earning profit and declaring
dividend right from the inception. SHCIL already has securities worth Rs.26000 crores in electronic
form.
SHCIL is the first depository participant to be registered with the National Securities Depository
Ltd.(NSDL). SHCIL offers the facility of operating beneficiary account for individuals and corporates
as well as clearing account for brokers.
This manual has been prepared exclusively for their account holder. It gives the overview of
the depository system and explains in details, various operation relating to individual accounts. The
aim is to impart to their account holders, knowledge about the working of depository system and
facilitate a smooth transition from physical to electronic tradings.

BRANCHES:
SHCIL has a network of more than 120 branches spread across the country providing services at
doorstep to their client with Head Office at Mumbai. In Karnataka there are 12 branches spread over
the entire region.

MISSION
To spread quality services through the innovative use of technology

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OBJECTIVES OF THE SHCIL

1. To eliminate paperwork and bring in front of electronic stock market (E-Stock

Market) on India
2. To ensure satisfaction through teamwork and professional management.
3. To extend effective guidance to brokers, to clearing house Corporation, companies and
investor in E-Stock Trading
4. To provide good quality of services on a continuous basis to the satisfaction of clients
5. To encourage every one in the organization to upgrade and enhance there skills and
knowledge in computerized environment.
6. To attain specified level of performance every year and ensure compliance with
statutory requirements.

PRODUCTS AND SERVICES

SERVICES:

CUSTODIAL SERVICES
Since its commencement in 1988 as the premier Custodian in the country, SHCIL has been
providing Custodial Services of international standards to Financial Institutions, Foreign Institutional
Investors and Domestic Mutual Funds.
With almost 70% of the Institutional business to its credit, SHCIL has graduated to providing
specialised services to large investing institutions.
A dedicated pool of trained professionals working in interconnected offices across the country, linked
to client institutions, Stock Exchanges, Depositories and brokers through state-of-the-art
telecommunication channels, is at the helm of SHCIL's Custodial services

Lodgements and Custodial Services

SHCIL has specialized sections catering to all activities (lodgment, objections handling, follow-ups,
client reporting etc.) associated with the Lodgment of securities with the respective company and
ensuring their quick transfer to the purchaser.
On receipt of the transferred securities, securities are held in state-of-the-art, high-security vaults on
behalf of the clients. A pioneer in introducing the bar-coding system to track certificates, SHCIL ensures
the availability of each and every share certificate at a moments notice

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Corporate Actions
The Corporate Actions cell ensures timely collection of monetary and non-monetary benefits on behalf
of the client. It covers all activities relating to Corporate Actions like calculation of entitlements, receipt
of monetary Corporate Actions and transfer of the same to clients. Customized reporting to clients on
the status of Corporate Actions is done periodically.

The Primary Markets cell takes care of applications on behalf of clients for primary market issues,
calculates the entitlements, follows up for allotment or refunds and sends customised reports to clients.

Data Bank Services

To serve clients, the Corporation requires a large amount of information from the Stock Exchanges,
Depositories, SEBI, Companies and other entities of the capital market. The Databank department
collects, compiles and maintains information that is required by the Corporation for carrying out market
obligations. Databank maintains information of approximately 12,500 instruments, 8500 companies,
2500 Registrars, two Depositories and six Stock Exchanges namely BSE, NSE, OTCEI, DSE, CSE and
MSE.

Databank also maintains the following data :

a. Information regarding various scrips ( listed and unlisted) in which our clients have
holdings.

b. Information pertaining to book closures / record dates for corporate events, ex-dates
and no delivery schedules for various Stock Exchanges.
c. Details of monetary and non-monetary benefits.
d. In the electronic segment, information such as ISIN data, the Registrars handling demat for a
company, the scrips under compulsory demat trades as declared by SEBI, scrips included in
compulsory rolling segment etc. are also maintained.
e. NAV information of all Mutual Fund schemes

Reporting - Custodial Services

The Client Interface Cell is a single point contact for all Client Issues.
Detailed, reconciled statements and customized reports are made available to clients periodically or as
and when desired by the clients.

Street Name Securities

This is a special service offered to clients who wish to turn around their portfolio in a speedy manner.
The securities purchased by the clients are not sent for registration, but are stored in the safe deposit

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vaults of the Corporation. Adequate measures are taken to ensure no benefit losses due to corporate
events or any document expirations.

DEPOSITORY PARTICIPANT SERVICES

Introduction:
Their Depository Participant services addresses individual investment needs. With a parentage of
leading financial institutions and insurance majors and a proven track record in the Custodian business,
they have reiterated their past success by establishing themselves as the first ever and largest Depository
Participant in India
From a tentative foray in 1998 into the individual investor arena to servicing around seven lakh
accounts, the have endeavored to constantly add and innovate to make business a pleasure for their
client.
Over 100 of our networked branches ensure they are available where their client look out.
Across the country, fourteen Depository Participant Machines (DPMs) connected to NSDL and seven
connected to CDSL ensure fast and direct processing of clients instructions.
Their customer-centric account schemes have been designed keeping in mind the investment psyche of
their clients. A DP account with SHCIL takes care of clients Depository needs like dematerialisation,
rematerialisation and pledging of shares.
.
At SHCIL, they place a very high premium on client reporting. Periodic statements sent to client keep
them informed of their account status. Dedicated Customer Care lines manned by trained staff answer
clients queries on demat / trades / holdings. The latest in client response at SHCIL is Interactive Voice
Response (IVR) system for round the clock information on their account. Registration on theirr website,
SHCIL Interactive, enables them to check their account-related information, stock market reports and
statistics, Corporate benefits declared by companies, realtime quotes of scrips on BSE and NSE and so
much more online.

Demat
Dematerialisation is the process of conversion of shares from physical form to the electronic mode.
Their dedicated demat team enable the client to convert their physical holdings into electronic mode in
a quick and hassle-free manner.
As per SEBI, scrips can be divided as :
Scrips eligible for demat.
These scrips can be traded either in physical or electronic form
Scrips falling under compulsory demat.
Scrips can be traded only in electronic form.

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 Scrips falling under transfer cum demat.
In this category, the shares purchased by the client in the physical form can be sent to the
Registrar / Company for transfer and dematerialisation at the same time.

Process for Dematerialization / Rematerialization

Once demat account of client is opened with SHCIL and have received their client identity number,
they can start dematerialising their shares. They can submit the shares over the counter at any of their
branches.
When the company gives credit, those shares will reflect under "free" column in the Client ID. Now
client can sell these shares. In case the company is not satisfied with the details furnished, it will reject
the shares
If the company has rejected Clients shares, SHCIL will forward the shares to Client on receiving them
from the company.

CLEARING- MEMBERS SERVICES

Introduction
SHCIL's long-standing association with Clearing Members has enabled it to develop services based on
an understanding of their working and their requirement for timely and accurate information

SHCIL accept deposits of base capital and Additional base capital requirements stipulated by NSE for
clearing members trading on its capital market segment. Besides, their new products with a broker
empanelment clause ensure a mutually beneficial tie-up. Clearing members stand to earn a steady
income from their product transactions and this adds to their client-base, while they
capitalize on their rapport with the market

SHCIL currently offer Depository services to more than 680 clearing members of various exchanges
connected with NSDL and CDSL.

Custodial Services for CM

Custodial services for Base Capital / Additional Capital requirements
They accept deposits of Base Minimum Capital (Base Capital) and Additional Base Capital as stipulated
by NSE for clearing members to be able to trade on its capital market segment.
The securities being deposited shall be subject to legal and beneficial ownership of:
TM clearing member / spouse in case of individuals.

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 Any of the partners / their spouses in case of partnership
Any of the directors in case of corporate TM clearing member.

NRI SERVICES
Over the years, SHCIL has grown to become a major player in the capital market. With a network of
more than 120 offices operating across the country and franchisees operating abroad, SHCIL provides
Depository Participant and related services close to 0.7 million satisfied investors out of which over
6000 are NRI Clientele.
SHCIL has a full-fledged NRI cell operating specifically to cater needs pertaining to Depository
account opening and maintenance. NRI cell co-ordinates with prospective NRI customers, collects
and assists in obtaining the relevant documents and ensures the Depository Account is opened hassle
free.
NRI Cell collects physical certificates to be sent for demat and ensures that the certificates are in order
and can be sent for dematerialization under the existing guidelines issued by the depositories.
Instructions for trade are accepted by fax on request by NRI Cell to ensure timely settlement of trades.
In this case later on the client needs to regularize by sending the original trade delivery instruction.
NRI Cell addresses any tariff and billing related query.
In short NRI Cell is a single point contact for any matter relating to NRI Depository operations.

PRODUCTS:

ADD Shares

This is a product by which SHCIL arranges loans against demat shares for its clients at the competitive
interest rates. They can use the shares in their free account as a collateral and take a loan from any
of their empanelled banks. SHCIL complete documentation and processing and give the cheques
within 48 hours of application to their clients.

Features
Loan against demat shares held in the DP account with SHCIL
SHCIL processes the entire paperwork required with the bank.
The service is available at any of over 100 branches of SHCIL.

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CASH ON-PAYOUT

Usually client need to follow-up with their broker for the funds after they have sold their securities.
When they sell through Cash-on-Payout, they give client a cheque on the next day of payout.
Cash-on Payout is a variant of Sell-n-Cash and it comes in handy when you don't need immediate
payment but at the same time are looking for an timely payment without delays.
Cash on Payout has a very competitive service charge which may actually be lesser than what client is
currently paying your broker.

FUND INVEST
Fund Invest is a basket of financial products, ranging from fixed income securities like Fixed deposits,
Infrastructure bonds and Capital Gain Bonds to variable income securities like Initial Public Offers
(IPOs) of Equities and Mutual Funds. This is a financial product that caters to the various investment
needs of their clients. SHCIL is an AMFI Registered Mutual Fund Advisor (ARMFA).

Features
At present, they are distributing more than 25 schemes of different Mutual Funds
Capital Gains Bonds come under 54 EC Capital Gains Bonds, where investors get exemption
from Capital Gain tax. These are 'on -tap ' issues. At present, SHCIL is distributing Capital
Gain Bonds of Rural Electrification Corporation, National Housing Bank, Small Industries
Development Bank of India and National Highway Authority of India. Infrastructure Bonds are
issued by ICICI Bank and IDBI, with Section 88 as the main feature.
Private Placements: Stock Holding distributes Debt papers issued for Private Placement with
Structural Obligations by the State and Central Government, typically targeted for Trusts and
Provident Funds.
Fixed Deposits: SHCIL distribute fixed Deposits with high investment rating and issued by
blue- chip corporate. These papers generally offer 50 to 100 basis points more than bank fixed
deposits of comparable period. At present, SHCIL are distributing IDBI Suvidha Fixed
Deposits and HDFC Fixed Deposits.
Initial Public Offer: IPOs offered from blue chip corporate can be subscribed from Stock
Holding. Issues recently distributed by SHCIL are NDTV, Maruti Udyog, Datamatics
Solutions, ONGC etc..

GOI BONDS
RBI on behalf of Government of India issues Savings Bonds in two different series.
6.5% tax free bonds

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 8.0% taxable bonds

These Bonds are held in electronic form in an account called Bond Ledger Account (BLA). Bond
Ledger Accounts can be opened and operated with RBI designated receiving Offices. RBI has
designated SHCIL as one of the Receiving Offices for this purpose. Savings Bonds being sovereign
in nature are absolutely safe and an attractive investment option in the current volatile market
situation.

STOCK DIRECT
STOCK direct - India's first online trading platform was launched in 1999. Today STOCK direct is
the most secure online trading platform which combines encryption technology / digital signature as
well as Smart Card security features.
Client can trade from home on the Internet with a floppy containing the STOCK direct software.
For people who are not inclined to trading on the net, SHCIL has Request Transmitting Machines
(RTMs) placed at specified SHCIL centers. This is an electronic touch screen kiosk where you can
insert your smart card and trade effortlessly.

STOCK LENDING
SHCIL has been granted the approval to act as Approved Intermediary by SEBI in April,
1998. If client is the lender, client retain all the benefits of ownership other than voting rights. Through
Stock lending, your holdings that SHCIL manage, can be temporarily transferred to a third party to
earn a fixed income for client.

As a borrower, a person can utilize borrowed securities the way he want provided he return the
securities along with the accrued benefits at the end of the loan period. Securities deposited with
SHCIL by the investors for lending will not be treated as sale and hence will not attract any capital
gains tax. The interest income received will be taxed like any other income. Flexible period of
borrowing is available from 4 days to 84 days. Securities deposited with SHCIL for lending will not
attract any custody charges during the period the securities are lent.
But this year the lending license of SHCIL is not renewed by the SEBI.