SYNOPSIS

STUDENTS NAME MENTOR GUIDE

BANKHRAWNAM MAWLONG ABHINAV SARMA

PROJECT REORT AT STOCK HOLDING CORPORATION INDIA LTD

CONTENTS

1. Title of the Project:

2. Organization/Company

3. Introduction of the Topic:

4. Objectives & Scope.

5. Research Methodology:

6. Expected Outcome: Briefly discuss the expected outcome of the project

7. Bibliography: Source for your synopsis

 EXECUTIVE SUMMARY
The study is about describing the different services
and products offered at SHCIL. Project mainly deals
with how the resources of the organization are used
in their day to-day activities. Stock holding has
various financial Products and Services to be
offered to the clients but problem lies in the low
promotional activities undertaken by it, due to which
though it has the services not offered by other DPs
it fails in captivating customers. The past few years
have seen a phenomenal growth in the capital
market leading to an explosion in transaction
holding despite the transparency offered by NSE
and BSE, the primitive settlement and transfer
process kept the biggest chunk of the market risk-
bad delivery, delayed transfer, fake certificates, loss
and theft etc, unresolved. The Depositories is the
answer to such risk and problems .Along with it a
brief introduction to India’s largest financial
intermediary, SHCIL has been given and it is shown
that what are demat a/c, mutual funds and life
insurance and how they work. The main objective of
this project is concerned with studying the
Depository system the services provided by the
depositories to the customers and what are procedures for
opening the various types of accounts like Demat a/c etc.
 1. Title of the Project: “Perception Of Customers Towards Stock
Holding Corporation of India Ltd. (SHCIL)
And Its Products In Shillong Market”

2. Company Name: Stock Holding Corporation of India Ltd.

(SHCIL)
Company Profile

Stock Holding Corporation of India Ltd.

Introduction To Stock Holding Corporation of India Ltd :

Stock Holding Corporation of India ltd. (SHCIL) was incorporated at the special
initiative of the government of India as a public ltd. Company in 1986.

It has been jointly promoted and owned by the all India banks and financial
institutions, viz., LIC, GIC and its subsidiaries, ICICI bank, UTI, IDBI, IFCI and
IIBI, all leaders in their fields of business. SHCIL began by offering custodial
and post trading services adding depository services and other services to its
portfolio over a period of time.

SHCIL has established itself in India as a one-stop solution provider in the

financial services domain.

Vision of the Company: “To become one stop shop for all financial
services”.

This vision of the company is slowly being achieved with the foray of the
company into new financial services and products into its portfolio the
latest to be the Insurance product, which would be soon distributed.

Mission of the Company: “To spread Quality Service through the innovative
use of technology”.

Objectives of the Company:

1. To retain the No. 1 position in the DP industry by being ahead of all
other DP service providers with the innovative use of technology would
be soon distributed.
2. To provide justified service to every rupee the client pays.
3. To ensure security and convenience of transaction to its clients at
reasonable price.
 4. To channel technology to make convenient products for financial market
that give quantum benefits to investors, corporate houses and brokers.
5. To evolve a new strategy to emerge as a broad based financial
powerhouse in the years to come.
6. To find ways to make information and reporting system more effective
for the institutional clients.

SHCIL VALUES

.Safety and efficiency of operations is a hallmark of SHCIL

.Professionalism and integrity.

.Customer first.

.Relationship building.

.Commitment to quality irrespective of asset size

STOCK HOLDING CORPORATION OF INDIA LIMITED

PRODUCTS AND SERVICES OFFER

STOCK HOLDING CORPORATION OF INDIA LIMITED PRODUCTS PROFILE

1. ADD SHARES

2. FUNDINVEST

3. GOI BONDS

4. INSURANCE

5. PENSION FUNDS

6. DEMAT ACCOUNT & TRADING ACCOUNT

1. ADD SHARES: SHCIL arranges loan against DEMAT shares.

1· Tie-up with reputed banks which offer us the most competitive interest rates
in the market.

2· We can use the shares in our free account as collateral and take a loan from
any of our empanelled banks.

3· SHCIL completes your documentation and processing and gives you a

cheque within 48 hours of application. Their tie ups with banks give you a
wider range of banks to choose from. This leads to a wider range of specified
and non-specified shares to get loan against. The add shares team helps you
with the paper formalities precedent to a loan.

2.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 (IPO‟s) of
Equities and Mutual Funds. It is an attempt to offer financial products that
cater to the various investment needs of our esteemed clients. An effort to
guide the investor to a product portfolio that best suits his risk- return
profile. Applications for investments can be source from any of the SHCIL
offices. Apart from guiding our investor to pick up the right combination of
investment instruments, we help them after-sales service, by acting as an
inter locator between the investor and the issuer of the securities.

3. Government Of India Bonds(GOI): GOI BONDS Savings Bonds are issued

by RBI on behalf of Government of India in the following.

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. SHCIL has been designated as one of the
Receiving Offices by RBI for this purpose. Subscriptions for Savings Bonds
can be submitted at any of our branches.

The following categories can subscribe to Savings Bonds:

Category of Investor 8.0% (Taxable)

1. Individual His or her individual capacity.

Individual capacity on joint basis. Individual capacity on anyone or
survivor basis. On behalf of a minor as father/mother/legal guardian.
2. HUF (Hindu Undivided Family)
3. Charitable Institution: Charitable Institution to mean a Company
registered under Section 25 of the Indian Companies Act 1956An
Institution which has obtained a Certificate of Registration as a
Charitable Institution in accordance with a law in force.

4. INSURANCE: SHCIL, a company promoted by Insurance majors & Financial

Institutions, is a Corporate Agent of LIC for Life Insurance products and NIA
for General Insurance products.

SHCIL has a dedicated team of IRDA Certified Insurance Advisors to provide

all services relating to Insurance. We also provide Free Professional advice to
clients on need base insurance. SHCIL has 200 plus odd Branches all over
India to take care of all your Insurance related queries and needs.
5.PENSIPON FUNDS: Pension plans provide financial security and stability
during old age. Retirement plan ensures that people live with pride and without
compromising on their standard of living during advancing years. The National
Pension System (NPS) is a defined- contribution pension system operated by
the Government of India in 2004 All citizens of India between 18 to 60 years of
age are eligible for investing in NPS.

. Objectives : To Provide old age income . Safe and reasonable market based
returns over the long term . Extending old age security coverage to all citizens.
To reach out to and provide social security to vulnerable sections of society,
particularly those living below the poverty line.

. Key Points: National Pension System (NPS), regulated by Pension Fund

Regulatory and Development Authority (PFRDA) .

There are two types of pension accounts-

▫ Tier - I pension account: You will contribute your savings for retirement into
this non withdrawal account.

▫ Tier - II savings account: This is an add-on account, which is simply a

voluntary savings facility. You are free to withdraw your savings from this
account whenever you wish.

6. DEMAT ACCOUNT &TRADING ACCOUNT

INTRODUCTION:

The trading on stock exchanges in India used to take place through open
outcry without use of information technology for immediate matching or
recording of trades. This was time consuming and inefficient. This imposed
limits on trading volumes and efficiency. In order to provide efficiency,
liquidity and transparency, NSE introduced a nation-wide on-line fully
automated screen based trading system where a member can punch into the
computer quantities of securities and the prices at which he likes to transact
and the transaction is executed as soon as it finds a matching sale or buy
order from a counter party. Screen based electronic system electronically
matches orders on a strict price/time priority and hence cuts down on time,
cost and risk of error, as well as on fraud resulting in improved operational
efficiency. It allows faster incorporation of price sensitive information into
prevailing prices, thus increasing the informational efficiency of markets. It
enables market participants, irrespective of their geographical locations, to
trade with one another simultaneous, improving the depth and liquidity of the
market. It provides full anonymity by accepting orders, big or small, from
members without revealing their identity, thus providing equal access to
everybody. It also provides a perfect audit trial, which helps to resolve
disputes by logging in the trade execution process entirety. NSE became the
leading stock exchange in the country. Today India can boast that almost
100% trading take place through electronic order matching.

Now dematerialisation of shares is introduced “a new concept” which

converts paper based physical trading into electronic trading. It is a safe and
convenient way to hold securities. Screen based trading system helps in faster
transfer of securities and no stamp duty is required on transfer of securities.
The trading system operates on a strict price time priority. All orders received
on the system are sorted with the best priced order getting the first priority for
matching i.e. the best buy order match with the best sell order. Orders are
matched automatically by the computer keeping the system transparent,
objective and fair. The trading system provides tremendous flexibility to the
users in terms of kinds of orders that can be placed on the system. The trading
system also provides market information online.

DEMAT ACCOUNT

A Question Arise WHAT IS DEMAT In India?

A Demat Account, the abbreviation for dematerialised account, is a type of

banking account which dematerializes paper-based physical stock shares.
Conversion of Securities from Physical (Paper) Mode into Electronic Mode is
Called Dematerialisation. The Client opens Demat Account with any
DP(DEPOSITORY PARTICIPANT). The dematerialised account is used to avoid
holding physical shares: the shares are bought and sold through a stock
broker. This account is popular in India. The market regulator, securities and
exchange board of India (SEBI) mandates a demat account for share trading
above 500 shares.

Dematerialisation is the process by which physical certificates of an investor

are converted to an equivalent number of securities in electronic form and
credited in the investors account with its DP. In order to dematerialize
certificates; an investor will have to first open an account with a DP and then
request for the dematerialisation of certificates by filling up a dematerialisation
request form [DRF], which is available with the DP and submitting the same
along with the physical certificates. The investor has to ensure that before the
certificates are handed over to the DP for demat, they are defaced by marking
"Surrendered for Dematerialisation" on the face of the certificates.
STOCK HOLDING CORPORATION OF INDIA LIMITED SERVICES PROFILE

(1). CUSTODIAL SERVICES

INTRODUCTION

SHCIL provides first-rate custodial services to India’s leading Financial

Institutions, Insurance Companies, Mutual Funds, Foreign Institutional
Investors (FII’s), Banks, Indian and Foreign Venture Capital Companies, Funds,
PF Trusts & Corporate. SHCIL,s core competence in custodial business spans
18 years ,with a dedicated pool of trained and experienced professionals
working literally round the clock using state-of-the-art computer systems and
world class technology. SHCIL maintains dedicated communication channels,
well connected to client institutions, stock exchanges, clearing houses and
depositories, thus maintaining process and quality leadership. As a custodian
entrusted with sizable assets, SHCIL is continuously leveraging its scale and
capabilities to help its clients mitigate risk and optimize efficiencies with
greater control.

CLEARING AND SETTLEMENT SERVICES

POST TRADING SERVICES

SHCIL has specially trained personnel handling thousands of trade

instructions involving large values on sophisticated systems using digital
signature on STP (straight through processing) systems, ensuring smooth
trade confirmations to stock exchanges. SHCIL provides the choice of multiple
STP service provides enabling competitive advantage of efficient settlements.
SHCIL seamlessly monitors trades and ensures failed trade management with
reporting and resolution of mismatches, etc. At SHCIL, a client has the
flexibility of settlement of funds through a wide panel of banks having RTGS
facility.

SETTLEMENT SERVICES

Most of the institutional trades are settled through the clearinghouse of the
stock exchanges. As a custodian, SHCIL facilitates timely settlement of funds
and securities. Funds are collected/deposited from/to client and settled with
the clearing houses

Most of the institutional trades are settled in the depository mode. For the
institutional segment alone, SHCIL has a unique clearing code on the two
principal stock exchanges and separate DP units on both NSDL and CDSL.
This ensures smooth settlement of transactions on both
exchanges/depositories, based on the deliverables and receivables received
by them for each settlement. Daily verification of settlements
(auction/normal)facilitates smooth reconciliation of settlements of client’s
trades and mitigates systemic risk. For debt market deals SHCIL ensures
timely movement of securities and funds. For the occasional delivery and
receipt of securities in the physical mode, SHCIL ensures prompt scrutiny,
processing and lodgement of securities with the respective company/ registrar
and transfer agent, with the objective of final transfer to the purchaser, with
objections handling if needed. SHCIL also ensures that delivery of physical
securities to exchanges is handled strictly as per exchange regulations.

PHYSICAL CUSTODY (VAULT) SERVICES

SHCIL has extensive vault capacity with state-of-the-art technology. This

includes tracking with bar-coding techniques. Certificates are held in
customized, fire resistant ‘modular sliding storage units’, with automated
location tracking and logs with tight security. There are comprehensive
document tracking and storage systems in place to hold investments in
physical and electronic form. SHCIL tracks each and every security in the
custody with absolute ease and tracks the status of investments at any point
of time. Other security features include circuit TV, smoke detectors and fire
extinguishers which are installed in the premises. SHCIL relies on audit trials
and physical reconciliation continuously tore confirm validity of systemic data.
SHCIL also periodically seeks reconfirmations from internal and statutory
audit firms for adherence to the established best practices.

INSTITUTIONAL DP SERVICES

SHCIL has installed dedicated DPMs (depository participant modules) on both

the depositories, viz. NSDL and CDSL.A dedicated institutional DP team at
SHCIL addresses your need for all core DP services like account opening and
maintenance, conversion of physical holdings into electronic form, settlement
of trade instructions, re-materialization, repurchase and pledge instructions,
providing of holding and transaction statements and daily reconciliation of
clients holdings. SHCIL also provides special services like electronic credit
and corporate action follow up, reporting of saleable holding positions
required by many fund managers, monitoring of CP redemptions, prepayments
and providing customized reports like put/call forecasts, logical holdings and
non- equity holding reports.

CLIENT RELATIONSHIP MANAGEMENT

Every institutional client is assigned to an experienced client relationship

manager who assists in resolving special issues relating to the client. Over
and above the services offered we have a premium offering called ADVAIT, an
integrated, web based, online reporting system which provides a single
window access to institutional reports with enhanced security features.

(2). DEPOSITORY PARTICIPANT SERVICES

INTRODUCTION

Our depository participant services address your individual investment needs.

With a parentage of leading financial institutions and insurance majors and a
proven track record in the custodian business, we have reiterated our past
success by establishing ourselves as the first ever and largest depository
participant in India. Our networked branches ensure we are available where
you lookout for us. Fourteen depository participant machines (DPMs)
connected to NSDL and seven connected to CDSL ensure fast and direct
processing of your instructions. Our customer-centric account schemes have
been designed keeping in mind the investment psyche of our clients. Your DP
account with us takes care of your depository needs like dematerialization, re-
materialization and pledging of shares. Matching of your scanned signature on
every debit instruction with a digitally scanned original in our system makes
all your trading transactions absolutely secure. A proactive backup of tour
instructions prior to execution in the depository makes us oblivious to system
crashes.

At SHCIL we place a very high premium on client reporting. Periodic

statements sent to you keep you informed of your current account status.
Dedicated customer care lines manned by trained staff answer your queries on
DEMAT/trades/holdings. The latest in client response at SHCIL is Interactive
Voice Response (IVR) system for round the system for round the clock
information on your account. Registration on our website, SHCIL interactive,
enables you to check your account – related information, stock market reports
and statistics, corporate benefits declared by companies, real-time quotes of
scrips on BSE and NSE and so much more online.
3. Introduction Of The Topic: ’’ An analysis of demat
account and online trading”

DEPOSITORY SYSTEM IN INDIA

The Indian capital market witnessed an explosive growth between mid -

Eighties and mid Nineties. The total number of companies listed in the stock
exchanges had grown by 72.3%from 2729 in 4702 in 1995. The market
capitalization of the companies listed with stock exchanges had gone up from
Rs.21, 000 crores in 1985 to more than Rs.4, 50,000 crores in1995.The
secondary market trading activity also gathered momentum. There has been
tremendous growth in secondary market trading at BSE and NSE. Other
regional exchanges like Calcutta, New Delhi have also become active players
in the market. This sudden growth had exposed the limitations of the system.
The system used was not able to withstand the strain caused by the
tremendous growth in the securities market. The entire securities market
started experiencing a gridlock, posing obstacles in its growth. Moreover,
this sudden growth has also magnified the risks that have always been
plaguing the Indian system, viz., credit risk and systematic risk. International
institutional investors wanting to invest in India had become apprehensive
about the reliability of the trade settlement mechanisms used in the country,
which did not match international standards. Besides affecting the inflow of
foreign capital, the lack of efficient settlement systems had affected all those
operating in the stock market, be it institutional investors, individual investors
or brokers. They suffered due to lost trading days (liquidity), lost scripts
improperly paid dividends, mistaken registration, unnecessary financing
cost, inappropriate risk like failure of counter party and fraud.

Era of Scriptless and Paperless trading:

To sort out the above mentioned problems and to restore the investors
confidence in the stock market the depository system was set up. It was
against this background that the Government of India enacted the
Depositories Act in 1996, which an era of scrip less trading and settlement,
efficient market infrastructure, investor protection, reduced risks and
transparency of transaction in the securities market. Depository Act, 1996:
The concept of Depository is known to the world since 1949 when the first
depository was setup in Germany. There were 112 depositories in operation
by the year 2001. Every depository operates under a country‘s specific law
and regulation in order to ensure safety, liquidity, rights and liabilities to the
security holders.

Depository: A depository is an organization where the securities of an

investor are held in electronic form. A depository can be compared to a bank.
To avail of the services of a depository, an investor has to open an account
with the depository through a depository participant, just as he opens an
account with the bank. Holding shares in the account is a kin to holding
money in the bank At present, India has only two depositories-National
Securities Depository Ltd. (NSDL) and Central Depository Services Ltd
(CDSL).NSDL is the first depository in the county, which is promoted by three
major financial institutions - Unit Trust of India, Industrial development Bank
of India and National Stock Exchange of India Limited. The second depository
of the country (CSDL) is set up in 1999by the Bombay Stock Exchange and
Bank of India However, most of the services offered by both these
depositories are similar. Today almost all the companies listed in
dematerialized from with NSDL are available with CDSL.BANK DEPOSITORY
Holds funds in accounts Holds securities in accounts Transfers funds
between accounts Transfers without handling securities Safekeeping of
Money Safekeeping of securities.

Depository participant: A depository participant is an agent appointed by the

depository and is authorized to offer depository services to all investors. An
investor cannot directly open a Demat account with the depository. An
investor has to open his account through a DP only. The DP in turn opens the
account with the depository. The DP in turn takes up the responsibility of
maintaining the account and updating them as per the instructions given by
the investor from time to time. The DP generates and provides the holdings
statement from time to time as required by the investor. Thus, the DP is
basically the interface between the investor and the depository. The person
who holds a Demat account is a beneficiary owner. In case of a joint account,
the account holders will be beneficiary holders of that joint account. The
Demat account numberof the beneficiary holder(s) is known as the BO Id. A
DP id is the number of the depository participant allotted by the depository.

Functions of Depository: In the depository system, securities are held in

depository accounts, which is more or less similar to holding funds in bank
account. Transfer of ownership of securities is done through simple account
transfers. This method does away with all the risks and hassles normally
associated with paperwork. Consequently, the cost of transacting in a
depository environment is considerably lower as compared to transacting in
certificates. The depository system also allows distribution of dividends
through the RBI‘s ECS system, whenever the participating company has
agreed to such services. Other entitlements such as bonuses, split-ups are
also directly affected by the depository into the investor‘s account.

The following can be held in the depository (electronic) form:

Shares (listed or unlisted) ,Stocks ,Bonds ,Debentures ,RBI Relief Bonds
,Government Securities (through a primary Dealer) ,Units of Mutual Funds
,Commercial Paper ,Money Market Instruments etc

OPENING A DEMATERIALIZATION ACCOUNT (DEMAT A/C)

Demat refers to a dematerialized account. Just as we have to open an

account with a bank if we want to save your money, make cheque payments
etc, we need to open a demat account if we want to buy or sell stocks. So it is
just like a bank account where actual money is replaced by shares. We have
to approach the DPs (remember, they are like bank branches), to open our
demat account. Demat account allows you to buy, sell and transact shares
without the endless paperwork and delays. It is also safe, secure and
convenient. Let’s say our portfolio has 100 of Satyam, 50of Suzlon, 20 of ICICI
BANK, 50 of Tech Mahindra and 100 of TCS shares. All these will show in our
demat account. So we don’t have to possess any physical certificates
showing that us own these shares. They are all held electronically in our
account. As we buy and sell the shares, they are adjusted in our account.
Just like a bank passbook or statement, the DP will provide you with periodic
statements of holdings and transactions. Individuals, companies, Trusts,
Partnership firms, NRIs, HUF, Banks and Institutions are allowed to open a
depository account with any depository through a depository participant. The
investor would need to execute a standard form giving all his details, bank
details, instruction details, nomination details and off-course photograph and
signature. Along with this form, the investor would also have sign an
agreement with the depository participant which usually forms a standard
part of the account opening process. The details on the form have to be
matched with a photocopy of the investor‘s passport, driving license etc. to
certify the mentioned details. If the investor is an NRI, then the client will have
to provide overseas address, provide copy of RBI Approval, if any. The RBI
Approval is not mandatory for opening of a DP. Account but is required to
receive shares into the account purchased through the secondary market
when.
(A): Procedure for purchasing dematerialized securities:

The procedure for purchasing dematerialized securities is also similar to the

procedure for buying physical securities.

1. Investor instructs DP to receive credits into his account in the Prescribed

form. There may be one time standing instruction or Separate instruction
each time to receive credits.

2. Investor purchases securities in any of the stock exchanges linked to

Depository through a broker.

3. Broker receives payment from investor and arranges payment to Clearing

corporations.

4. Broker gives instructions to DP to debit clearing account and credit

Client’s account. Investor receives shares into his account by way of book
entry.

(B): Procedure of selling dematerialized securities:

The procedure for selling dematerialized securities in stock exchanges is

similar as selling physical securities. The only major difference is that instead
of delivering physical securities to the broker, the investor instructs his DP to
debit his demat account with the number of securities sold by him and credit
the brokers clearing account. The procedure for selling dematerialized
securities is given below:

1. Investor sells securities in any of the stock exchange linked to depository

through a broker.

2. Investor instructs his DP to debit his demat account with the number of
securities sold and credit the broker’s clearingaccount.

3. Before the pay-in-day, broker of the investor transfers the securities to

clearing corporation.

4. The broker receives payment from the stock exchange.5. The investor
receives payment from the broker for sale of securities in the same manner
as received in case of sale of physical securities.

BENEFITS OF DEMATERIALIZATION ACCOUNT

Primary benefits:

1- Safety: If we are holding our shares, bonds etc in physical (paper)

form, there are chances of its theft, mutilation, and loss. Moreover, we
are also exposed to the risks of fake papers, bad-delivery or delays at
the time of transfer of physical securities. However, in DEMAT
accounts; we can preserve our long-term investments safely and
securely.
2- Convenience: When we want to sell our dematerialized shares or
redeem our debentures in DEMAT account; there are no hassles of
filling up transfer forms, sending redemption requests or any other
messy, costly and time-consuming paper work. We can conveniently
transfer our securities through electronic transfers or just by signing
one ‘Delivery Instruction Slip’, which is nothing but our chequebook for
DEMAT Accounts.
3- Other Benefits: Apart from the safety and convenience, there are lot
more advantages of opening DEMATaccounts. Here are few of the most
necessary reasons for having a DEMAT account.
We can park most of our investments including shares, bonds,
debentures, Gold Units, NSC and bonds in our DEMAT account. We
might not immediately realize the benefits of having all the investments
in DEMAT form.
For instance, if we change our residence, we just have to write to the
DP (Depository Participant), which automatically gets our new address
registered with all the companies where we have invested our money.
We do not have to remember the due dates of maturity of bonds, NSC
and debentures, as the redemption proceeds are automatically
credited to our bank account, which is linked with our DEMAT account.

. We receive all the dividends and interests directly in our linked bank
account.

. In case of bonus, rights, split, merger or any other corporate action,

everything takes place automatically. We do not have to do anything except
to file the physical intimation letters sent by the Registrar and Transfer
Agents.

. Nowadays with the advent of online trading, we can perform online all the
activities associated with buy, sell and transfer of shares.

. With a single nomination in your DEMAT account, we are nominating our

legal heirs to all the investments held by us.

. For many public issues of bonds and debentures of reputed and

trustworthy companies, it is necessary to have a DEMAT Account, as the
companies do not allot securities in paper form.
 . Since most of the process of buying and selling dematerialized securities
is electronic, there are no chances of signature mismatch.

. Elimination of problems related to selling securities on behalf of a minor.

. Elimination of problems related to change of address of investor,

transmission etc. Reduction in handling of huge volumes of paper periodic
status reports. So with Dematerialized Securities, the entire process of
transferring shares, bonds and other financial assets has become smooth
and swift.

DEMAT Accounts offer numerous advantages and hence it makes sense for
the retail investors to open DEMAT Accounts as early as possible.

ONLINE TRADING

The growth of information technology has affected almost all sectors of life.

Like all other sectors Internet has set its feet in the stock markets also. The
Stock Market system provides single, nation wide securities. It enables LAN
investors in one part of the country to trade at the best quotes with an
investor located in any other part of the country through the members of the
stock exchange and subsequently clears and settle the trade in an efficient
and cost effective manner. The primary objective of the Stock Market is to
provide clear opportunity to the investors throughout the country to trade any
security irrespective of the size of the order or the broker through whom the
order is routed. This provides the facility to execute the buy order at the
lowest price in the stock market located anywhere in the country without any
extra cost to the investors. There will be no trading floor in the exchange.

This mode of trading is known as "OnlineTrading"

Introduction of online trading in India

Online trading started in India in February 2000 when a couple of brokers

started offering an online trading platform for their customers.

Online trading by NSE & BSE:

The central computer located at the Exchange is connected to the

workstations of the Brokers through satellite using Very Small Aperture
Terminals (VSATs). Orders placed at based on price and time priority. Both
the exchanges have switched over from the open outcry trading system to a
fully automated computerized mode of trading known as BOLT(BSE On Line
Trading) and NEAT (National Exchange Automated Trading) System. It
facilitates more efficient processing, automatic order matching, faster
execution of trades and transparency.

Objectives of Present Trading System:

Reduce and eliminate operational inefficiencies inherent in manual system

Increased trading capacity in Stock Market Improve market transparency

Eliminate unmatched trades and delayed reporting Provide for on-line and
off-line monitoring control and surveillance of the market.

Promote fairness and speedy matching Smooth market operations using

technology while retaining the flexibility of conventional treading practices

Set up various limits, rules and controls centrally. Consolidate the trades
data on electronic media to interface will the broker‘s back office system

Provide public information on scrip prices, indices for all users of the
system

Provide analytical data for use of Stock Market.

Features Of Online Trading

The Online Trading is having many features which make it most suitable for
the investors to go for.

Some of these features are as follows:

Freedom of Information:

The Internet can provide a new sense of control over your financial future.
The amount of investment information available online is truly astounding.

For the first time in history, any individual with an Internet connection can:

Know the price of any stock at any time

Review the price history of any stock in chart format

Follow market events in-depth

Receive a wealth of free commentary and analysis about stock markets

and the global economy

Conduct extensive financial research on any company Control our money.

One of the great appeals of using an online trading account is the fact that the
account belongs to you, and is under your direct control.

When you want to buy or sell stock, you no longer need to call your broker on
the phone; hope that he is in the office to place your order; possibly argue
with the broker about the order; and hope that the transaction is executed
instantly.

Access to the market: At the most basic level, an online trading account gives
you more agility in buying and selling stocks. This is through sophisticated
information streams, dedicated trading platforms and sophisticated tools for
accessing the markets.

Offers greater transparency: Online trading offers you greater transparency

by providing you with an audit trail.

This involves a complete integrated electronic chain starting from order

placement, to clearing and settlement and finally ending with a credit into
your depository account. All these stages are subject to inspection, thus
bringing in transparency into the system.

BENEFITS OF ONLINE TRADING

1) Less Costly: The most significant advantage of the Online broking is the
cost reduction in the brokerage. Due to the power of the Internet one has the
privilege of becoming the clients of really large brokerages with the benefits
of enjoying the low charges before enjoyed only by the big players. As the DP
account has got linked to the trading account most players do not charge a
minimum transaction cost thus truly allowing one to buy a single share and
achieve meaningful rupee price averaging whatever be your buying power.

2) Peace of Mind: One can never have complete peace of mind but online
investing does away with the hassles of filling up instruction slips, visits to the
broker for handing over these slips and consequent costs.

3) Keeping Records: The site one trades on keeps a record of all transactions
down to unexecuted orders and cancelled orders thus keeping one abreast of
all your transactions 24 hours a day. No paperwork means more time at one’s
disposal for research and analysis.

4.) Ease of trade: It is the ease of doing the trade through net, with a click of
mouse; one can buy or sell any share that is dematerialized. Other than the
above-mentioned advantages, Internet trading provides some additional
advantages to the investors, brokers and also helps the nation to Channelize
the resources. Net trading would increase competition in the market hence
increase in the bargaining power of the investors. The entire communication
between the investor, broker and exchange would take place within
milliseconds.

4. Objectives & Scope

Purpose:

The past few years have seen a phenomenal growth in the capital
market leading to an explosion in transaction holding despite the
transparency offered by NSE and BSE, the primitive settlement and
transfer process kept the biggest chunk of the market risk- bad
delivery, delayed transfer, fake certificates, loss and theft etc,
unresolved. The Depositories is the answer to such risk and
problems. Introduction of the depositories has paved the way for
instituting an infrastructure for eliminating these risks and
increasing the efficiency of the system. The purpose of this study is
to provide information to both the organization and
theinvestors/savers, providing to the former present state and future
prospect and to the later differences among the services provided
by the various depository participants.

Objectives:
The main objectives of the project undertaken are:

1. To understand the attitude and perception of investors/savers

towards the Depositary Participant‟s

2. To ascertain SHCIL‟s position in the competitive market.

3. To develop and analyze strategies of SHCIL

4. To help improve its market share.

5. To offer suggestions based upon the findings

5. Research Methodology:
(Unavailabe for now as
questionnaire are in the
peocess of making)

6. Expected Outcome:
Stock Holding Corporate India Limited has been able to maintain a lead
position in a highly competitive environment which is no small achievement
by any standards. To further augment its client base and maintain the lead
SHCIL has decided to leverage on the strength to identify new products which
would enable it to achieve the desired objectives. Being an important
constituent of the capital market the future of SHCIL is extricable intertwined
with the fortunes of the capital market in general and the stock market in
particular.

SHCIL is aware of the need to utilize the existing infrastructure and exploit its
strength to the maximum. It has already introduced several innovative
products like sell-n-cash, cash-on-payout, loans against Demat shares, fund
invest,mutual fund distribution, Equibuy, etc.

The objective is to provide the investors different investment options and

financial products all under the same roof – a one stop shop for all financial
products and services.

7. Bibliography:
Journals and Reports
•SHCIL Journal Report
Websites
:
•
www.onlinestockholding.com
•
www.sebiindia.com
•
www.nsdl.com
•
www.moneycontrol.com
•
www.sharekhan.com
•
www.investopedia.com