Presented By:

Hursh Anandwala -04

Nirmit Chandgothia -07
Samay Khandelwal -26
Sahil Khanna -27
Darshit Morjaria -36
Porush Sharaf -49
According to Husband and Dockerary, ´Stock
Exchanges are privately organised market which are
used to facilitate trading in securites.µ

The Securities Contract (Regulation) Act of 1956

defines stock exchange as ´an association,
organization or body of individuals, whether
incorporated or not, established for the purpose of
assisting, regulating and controlling business, selling
and dealing in securities.
 ndia has 23 small and 2 big stock
exchanges

 The 2 big stock exchanges (NSE And BSE)

account for upto 90 percent of trading

 Over 7000 listed companies on the stock

exchanges ² The larget in the world!
 OTCE formed under section 12 of
Companies Act, 1956

 NSE formed with a profit motive

 All exchanges except NSE had a ¶non

profit motive·
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 BSE was established as ´The Native Share
and Stock Brokers· Association

 BSE is Worlds Number One exchange in

terms of number of listed companies and
Fifth largest in transaction numbers

 BSE ndex , SENSEX is an index of 30

stocks representing 12 major sectors
 Provides an efficient and transparent
market for trading
 Nation-wide presence in more than 450
cities
 At par with international standards
 Online trading followed - BOLT
Ë A depository can be compared to a bank. A depository holds
securities like shares, debentures, bonds etc. of investors in electric
form. Besides this, A depository also provides services related to
transactions in securities.

Ë A depository interfaces with its investors through its agents called

Depository Participants. f an investor who is known as a Beneficial
Owner wants to avail the services offered by the depository, the
investor has to open an account with the DP. This is similar to
opening an account with any branch of a bank in order to utilize the
bank·s services.
 Dematerialization
 Account transfer
 Transfer and Registration
 Corporate actions
 Pledge and Hypothecation
 Linkage with clearing systems
 According to SEB guidelines, financial institutions, banks, custodians,
stockbrokers, etc can act as DP.

 National Securities Depository Ltd. (NSDL) is promoted by ndustrial

Development Bank of ndia (DB) ² the largest development bank of
ndia, Unit Trust of ndia (UT) ² the largest mutual fund in ndia, and
National Stock Exchange of ndia (NSE) ² the largest stock exchange
in ndia. Some of the prominent banks have taken a stake in NSDL.

 Central Depository Services (ndia) Ltd. (CDSL) was promoted by

Bombay Stock Exchange Ltd (BSE) in association with State Bank of
ndia, Bank of ndia, Bank of Baroda and HDFC bank.
 Dematerialization
 Rematerialization
 Facilitating Purchase / redemption of units of mutual funds
 Electronic settlement of trades in stock exchange connected to
NSDL
 Pledging/hypothecation of dematerialized securities against loan
 Nomination facility for demat accounts
 Services related to change of address
The benefits of participating in a depository are:
 mmediate transfer of securities
 No stamp duty on transfer of securities
 Elimination of risks associated with physical certificates such as bad delivery,
fake securities, etc.
 Reduction in paperwork involved in transfer of securities
 Reduction in transfer costs
 Nomination facility
 Change in address recorded with DP gets registered electronically with all
companies in which investor holds securities eliminating the need to
correspond with each of them separately
 Transmission of securities is done by DP eliminating correspondence with
DP
 Convenient method of consolidation of folios/accounts.
 A Broker is a member of a recognized stock exchange,
who is permitted to o trades on the screen- based
trading system of different stock exchanges. He is
enrolled as a member with the concerned exchange and
is registered with SEB.

 A sub broker is a person who is registered with SEB as

such and is affiliated to a member of a recognized stock
exchange.
 As per the BSE & NSE Bye Laws, a broker cannot
charge more than 2.5% brokerage is inclusive of the
brokerage charged by the sub- broker.

 Further, SEB Regulations, 1992 stipulates that sub

broker cannot charge from his clients, a commission
which is more than 1.5% of the value mentioned in the
respective purchase or sale note.
 The trading member can charge :
1. Brokerage charged by member broker.
2. Penalties arising on specific default on
behalf of client.(investor).
3. Service tax as stipulated.
4. Securities Transactions tax (STT)as
applicable.
The brokerage service tax and STT are
indicated separately in the contract note.
 Exchange

Customer
Broker
Trading terminal
Place orders
Enters orders
Order confirm
Clearing corporations
Depositary
Trade details
Obligation reports
Clearing banks
Funds availability
Security availability
DP
Security transfer to clearing pool member a/c
Security transfer to Clearing corporations a/c
   
  



 


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1. n rolling settlement trades which are executed during the day
are settled based on the net obligations for the day. Presently
the trades pertaining to rolling settlement are settled on a t+2
day basis where t stands for the trade day. Hence the trades
executed on Monday are typically settled on the following
Wednesday ( considering 2 working days from the trade day. )

R Pay in day is the day when the brokers shall payments or

delivery of securities to the exchange.

3 Pay out day is when the exchange makes the payment or

delivery of securities to the broker.
 The settlement cycle is on T+2 rolling settlement
basis w.e.f. April 1st 2003

 The exchanges have to ensure that the pay out

funds and securities to the clients is done by the
broker within 24 hours of the pay out day.