“Evolution of DEMAT SCHEME AND ITS

EFFECTIVENESS”

A report submitted to IIMT, Greater Noida as a partial fulfillment of full time

Postgraduate Diploma in Business Management.

SUBMITTED TO SUBMITTED BY
Dr. D. K. Garg PREETI KUMARI SHARMA
Chairman ENR NO.HRR 3008
IIMT,Gr.Noida Batch 15th- PGDHR

ISHAN INSTITUTE OF MANAGEMENT & TECHNOLOGY

2, Knowledge Park-1, Greater Noida, Dist.-G.B.Nagar (U. P.)
Website: www.ishanfamily.com
E-Mail: student@ishanfamily.com

1
 PREFACE

The PGDHR (Post Graduate Diploma in Human Resource Management) is well

structured and integrated course of business studies. The main objective of “Training
cum Job” at “Angel Broking Ltd.” is to develop skill in student by supplementing the
theoretical study of the “Business Management as well as people’s perception on
Demat Account” in general. Human resources in an effective manner to utilize the
resources at optimal level to get the desired output and thereby to reach the
organization’s goal.

Training is an integral part of PGDHRM and each and every student has to undergo
the training for at least 2 months in a company and then prepare a project report on
the same after the completion of training.

During professional courses, training is a prominent factor. It is the practical exposure

of the subject which we have theoretically learned in college. It is only the summer
job through which I came to know that what an industry is and how it works. We can
learn about various departmental operations, marketing strategies and customer
relationship management within the organization, which would, in return, help us in
the future when we will enter in the practical field completely.

All students learn theoretical subjects in their classroom, but as I am the management
student and apart from theoretical studies I need to get a deeper inside view of the
practical aspects of those theories by working as a part of organization during my
summer job. Job is a period in which a student can apply their theoretical knowledge
practically. Basically practical knowledge and theoretical knowledge have a very
broad difference.

Industrial job helps us to gain real life knowledge about the industrial environment
and business practices ethical and unethical. The Management program provides
student with a fundamental knowledge of business and organizational functions and
activities as well as an exposure to strategic thinking towards the management.

2
 ACKNOWLEDGEMENT

It has been an enriching experience for us to undergo our summer “Training cum
Job” at “Angel Broking Ltd.” Delhi. It is our immense pleasure to offer our
acknowledgements to those persons who have been a constant source of help and
encouragement in carrying out this project. We are deeply indebted to them for their
inspiration, encouragement, help and advice without which it would not have been
possible for us to complete this project.

As student of PGDHRM, I would like to express my sincere thanks to all those who
helped me during my practical training program. Words are insufficient to express my
gratitude to MR.NIWAS GUPTA (HR Manager of Angel Broking Ltd.)

As we know Documentation research work needs hard work, keen insight and long
patience with scholarly vision based on content operation; hence it becomes a humble
duty to express our sincere gratitude to MR. ZAMEER AHMED( Branch Manager).

At last but not least our grateful thanks is also extended to our college chairman sir
DR. D.K.GARG and all our faculty members for their proper guidance and assistance.

However, we accept the sole responsibility for any possible error of omission and
would be extremely grateful to the readers of this project report if they bring such
mistakes to our notice.

3
 DECLARATION
The summer training project on “evolution of demat scheme and its effectiveness”
under the guidance of “MR. Raman Tyagi ” is the original work done by me. This is
the property of the institute and use of this report without prior permission of the
institute will be considered illegal and actionable.

Date:-22/07/2010 Signature:

Preeti Kumari Sharma

Enr.No: HRR 3008

4
 TABLE OF CONTENT

CHAPTERS TOPIC PAGE NO

Chapter 1 Trading in shares and other securities in India. 10-45

How shares and securities are sold and

purchased,delivery system

a) Before demat b) After demat

Chapter 2 Problems emerged before evolution of demat account 46-54

system.

Advantages of demat system against traditional delivery

and settlement system.

Chapter 3 Procedure of demat account. 55-82

Chapter 4 RBI guidelines 83-107

SEBI guidelines

Chapter 5 Organisation giving demat facility. 108-123

Chapter 6 Problems in demat account 124-126

Chapter 7 People’s perception in demat. 127-134

Investment consultants views on demat account.

CA’s views on demat account.

Chapter 8 Findings 135-139

Learnings

Conclusion

Suggestion

Bibliography

5
 EXECUTIVE SUMMARY

ANGEL BROKING LIMITED is an investment advisory firm and provides

investment facilitation services to retail investors, corporate and institutions. The
range of products on offer includes Equity & Derivatives, Fixed income Securities, a
Mutual Funds, Life Insurance & Tax Planning Investments Needs.

At ANGEL BROKING LIMITED it is taken into consideration client’s source of

income, wealth generation, future objectives and investment strategy, which can bring
you, quick benefits and returns. Thus ANGEL’s personal financial services are
inclined towards client’s wealth generation and most importantly, wealth protection.
Planning for the long term growth and conservation of client’s wealth requires well
planned and clearly laid-down strategies.

Angel broking limited offerings

 Drawing up an investment plan for short term, medium term and long term
goals

 Avail Tax Planning and Retirement Planning

 Seek expert advice on a wide range of investment products

 Facilitate Equity and Derivative trading on the NSE, BSE and Commodity
Trading in MCX & NCDEX

 Make investments in IPO’s of companies, Mutual Funds and Government of

India / Infrastructure Bonds

ANGEL BROKING LIMITED ADVANTAGES:

 Personalized Investment Solutions: All the customers receive individual

Customized Plan according to their investment objectives.

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 Full Choice of Investments: Mutual Funds, Life Insurance, Debt Instruments,
Equity and Derivatives & Commodities

 Online terminal and totally hassle free work

 Research Updates: Get expert feedback on the performance of various

Investment Products

 Processing Support: At ANGEL it takes care of all paper work and provide
service at customer’s doorstep

 Continuous Monitoring: The designated Advisor’s continuously monitor

investor portfolio

ANGEL’S PRESENCE

1) Nation- wide network of 21 Regional Hubs

2)Presence in 155 cities

3)Over 8,370 Sub- Brokers and Business Associates

4) More than 8.6 Lakh Clients.

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 OBJECTIVE OF THE PROJECT

Every professional study requires some practical training besides theoretical study.
The project titled- “Evolution of demat scheme and its effectiveness” at Angel
Broking Limited has been carried out under the guidance of Mr. Zameer Ahmed

The major objective of this project

1. How to identify weakness and strength as well as opportunities for

improvement and skill development for creating awareness towards
investment in Share Market.

2. Measuring the efficiency and effectiveness of multitune of people.

3. To help in the rapid economic growth by investing the money in Share Market
and helping the country to create necessary infrastructure for economic
development.

4. To earn return on investment and thus generate resources for own as well as
conntry’s development.

5. To create different investment opportunities accordingly.

6. To promote balanced regional growth.

7. To assist the development of Sound (medium), Lower as well as Have’s.

8. Enhance people’s knowledge and competences for individual and country’s

growth.

9. Impart need based training as well as knowledge of investment strategy.

10. Nurture and provide continuous learning environment.

11. Enhance performance of ownself through various HR interventions.

Information gained in the process of training has been valuable for me. It will be
worthwhile to mention here that the report covers the historical background of the

8
company, performance appraisal system. It enabled me to learn the various aspects of
appraisal systems.

In this dissertation paper I have tried my level best to correlate theoretical knowledge
gained on the topic with practice. I will be amply rewarded if this report is helpful for
the readers.

9
 CHAPTER-1

TRADING IN SHARES AND OTHER SECURITIES IN INDIA

Investment: Investment is a term with several closely-related meanings in finance

and economics. It refers to the accumulation of some kind of asset in hopes of getting
a future return from it. Assets such as equity shares or bonds held for their financial
return (interest, dividends or capital appreciation), rather than for their use in the
organization’s operations.

Return on Investment: The money you earn or lose on your investment, expressed
as a percentage of your original investment. In Simple words, it is the amount
received as a result of investing in particular ventures.

Collective Investments Schemes

Funds which manage money for a number of investors and pool it together. This
enables investors to benefit from a larger number of individual investments and cost
efficiencies.

Short-Term Investments
Short-Term Investments are generally investments with maturities of less than one
year.

Capital Investments
Investments into the fixed capital (capital assets), including costs for the new
construction, expansion, reconstruction and technical re equipment of the operating
enterprises, purchase of machinery, equipment, tools, accessories, project and
investigation works and other costs and expenditures.

Money has to be invested wisely- If you are a novice at investing, terms such as
stocks, bonds, futures, options, Open interest, yield, P/E ratio may sound Greek and

10
Latin. Relax. It takes years to understand the art of investing. You're not alone in the
quest to crack the jargon. To start with, take your investment decisions with as many

facts as you can assimilate. But, understand that you can never know everything.
Learning to live with the anxiety of the unknown is part of investing. Being
enthusiastic about getting started is the first step, though daunting at the first instance.
That's why my investment course begins with a dose of encouragement: With enough
time and a little discipline, you are all but guaranteed to make the right moves in the
market. Patience and the willingness to invest your savings across a portfolio of
securities tailored to suit your age and risk profile will propel your revenues and
cushion you against any major losses. Investing is not about putting all your money
into the "Next big thing," hoping to make a killing. Investing isn't gambling or
speculation; it's about taking reasonable risks to reap steady rewards.

Investing is a method of purchasing assets in order to gain profit in the form of

reasonably predictable income (dividends, interest, or rentals) and appreciation over
the long term.

Why should one invest?

Simply put, you should invest so that your money grows and shields you against
rising inflation. The rate of return on investments should be greater than the rate of
inflation, leaving you with a nice surplus over a period of time. Whether your money
is invested in stocks, bonds, mutual funds or certificates of deposit (CD), the end
result is to create wealth for retirement, marriage, college fees, vacations, better
standard of living or to just pass on the money to the next generation or maybe have
some fun in your life and do things you had always dreamed of doing with a little
extra cash in your pocket. Also, it's exciting to review your investment returns and to
see how they are accumulating at a faster rate than your salary.

When to Invest?

The sooner the better. By investing into the market right away you allow your
investments more time to grow, whereby the concept of compounding interest swells
your income by accumulating your earnings and dividends. Considering the
unpredictability of the markets, research and history indicates these three golden rules
for all investors.

11
1. Invest early

2. Invest regularly

3. Invest for long term and not short term

While it’s tempting to wait for the “best time” to invest, especially in a rising market,
remember that the risk of waiting may be much greater than the potential rewards of
participating. Trust in the power of compounding. Compounding is growth via
reinvestment of returns earned on your savings. Compounding has a snowballing
effect because you earn income not only on the original investment but also on the
reinvestment of dividend/interest accumulated over the years. The power of
compounding is one of the most compelling reasons for investing as soon as possible.
The earlier you start investing and continue to do so consistently the more money you
will make. The longer you leave your money invested and the higher the interest rates,
the faster your money will grow. That's why stocks are the best long-term investment
tool. The general upward momentum of the economy mitigates the stock market
volatility and the risk of losses. That’s the reasoning behind investing for long term
rather than short term.

How much to invest

There is no statutory amount that an investor needs to invest in order to generate

adequate returns from his savings. The amount that you invest will eventually depend
on factors such as:

1. Your risk profile

2. Your Time horizon

3. Savings made

Remember that no amount is too small to make a beginning. Whatever amount of

money you can spare to begin with is good enough. You can keep increasing the
amount you invest over a period of time as you keep growing in confidence and
understanding of the investment options available and So instead of just dreaming
about those wads of money do something concrete about it and start investing soon as
you can with whatever amount of money you can spare.

These days, no one can retire without using the returns from investments. You can't
count on your social security checks to cover your expenses when you retire. It's

12
barely enough for people who are receiving it now to have food, shelter and utilities.
That doesn't account for any care you may need or in the even that you need to take

advantage of such funds much earlier in life. It is important to have your own
financial plan. There are many kinds of investments you can make that will make
your life much easier down the road.

The following are brief descriptions for beginning investors to familiarize themselves
with different kinds of investment options:

401 K plan:

The easiest and most popular kind of investment is a 401K plan. This is due to the fact
that most jobs offer this savings program where the money can be automatically
deducted from your payroll check and you never realize it is missing.

Life Insurance:

Life Insurance policies are another kind of investment that is fairly popular. It is a
way to ensure income for your family when you die. It allows you a sense of security
and provides a valuable tax deduction.

Stocks:
Stocks are a unique kind of investment because they allow you to take partial
ownership in a company. Because of this, the returns are potentially bigger and they
have a history of being a wise way to invest your money.

Bonds:
A bond is basically a promise note from the government or a private company. You
agree to give them a set amount of money as a loan and they keep it for a set number
of years with a predetermined amount of interest. This is typically a safe bet and one
that is a good investment for a first time investor because there is little risk of losing
your money.

Mutual Funds:
Mutual funds are a kind of investment that are based on the gains and losses of a

13
shareholder. Basically one person manages the money of several or many investors
and invests in a list of various stocks to lessen the effect of any losses that may occur.

Money Market Funds:

A good short-term investment is a Money Market Fund. With this kind of investment
you can earn interest as an independent shareholder.

Annuities:

If you are interested in tax-deferred income, then annuities may be the right kind of
investment for you. This is an agreement between you and the insurer. It works to
produce income for you and protect your earning potential.

Brokered Certificates of Deposit (CDs):

CDs are a kind of investment where you deposit money for a set amount of time. The
good thing about CDs is that you can take the money out at any time without paying a
penalty fee. We all know life isn't predictable, so this is a nice feature to have in your
option.

Real Estate:

Real Estate is a tangible kind of investment. It includes your land and anything
permanently attached to your piece of property. This may include your home, rental
properties, your company or empty pieces of land. Real estate is typically a smart and
can make you a lot of money over time.

1. Before Demat System

Shares

The stock of a business is divided into shares, the total of which must be stated at the
time of business formation. Given the total amount of money invested in the business,
a share has a certain declared face value, commonly known as the par value of a
share. The par value is the de minimis (minimum) amount of money that a business
may issue and sell shares for in many jurisdictions and it is the value represented as
capital in the accounting of the business. In other jurisdictions, however, shares may

14
not have an associated par value at all. Such stock is often called non-par stock.
Shares represent a fraction of ownership in a business. A business may declare
different types (classes) of shares, each having distinctive ownership rules, privileges,
or share values.

Ownership of shares is documented by issuance of a stock certificate. A stock

certificate is a legal document that specifies the amount of shares owned by the
shareholder, and other specifics of the shares, such as the par value, if any, or the class
of the shares.

Usage

Used in the plural, stocks is often used as a synonym for shares.[1] Traditionalist
demands that the plural stocks be used only when referring to stocks of more than one
company are rarely heard nowadays.

In the United Kingdom, South Africa, and Australia, stock can also refer to
completely different financial instruments such as government bonds or, less
commonly, to all kinds of marketable securities.[2]

Types of stock

Stock typically takes the form of shares of either common stock or preferred stock. As
a unit of ownership, common stock typically carries voting rights that can be
exercised in corporate decisions. Preferred stock differs from common stock in that it
typically does not carry voting rights but is legally entitled to receive a certain level of
dividend payments before any dividends can be issued to other shareholders. [3][4]
Convertible preferred stock is preferred stock that includes an option for the holder to
convert the preferred shares into a fixed number of common shares, usually anytime
after a predetermined date. Shares of such stock are called "convertible preferred
shares" (or "convertible preference shares" in the UK)

New equity issues may have specific legal clauses attached that differentiate them
from previous issues of the issuer. Some shares of common stock may be issued
without the typical voting rights, for instance, or some shares may have special rights
unique to them and issued only to certain parties. Often, new issues that have not been

15
registered with a securities governing body may be restricted from resale for certain
periods of time.

Preferred stock may be hybrid by having the qualities of bonds of fixed returns and
common stock voting rights. They also have preference in the payment of dividends
over common stock and also have been given preference at the time of liquidation
over common stock. They have other features of accumulation in dividend.

Stock derivatives

A stock derivative is any financial instrument which has a value that is dependent on
the price of the underlying stock. Futures and options are the main types of
derivatives on stocks. The underlying security may be a stock index or an individual
firm's stock, e.g. single-stock futures.

Stock futures are contracts where the buyer is long, i.e., takes on the obligation to buy
on the contract maturity date, and the seller is short, i.e., takes on the obligation to
sell. Stock index futures are generally not delivered in the usual manner, but by cash
settlement.

A stock option is a class of option. Specifically, a call option is the right (not
obligation) to buy stock in the future at a fixed price and a put option is the right (not
obligation) to sell stock in the future at a fixed price. Thus, the value of a stock option
changes in reaction to the underlying stock of which it is a derivative. The most
popular method of valuing stock options is the Black Scholes model.[5] Apart from
call options granted to employees, most stock options are transferable.

History:

During Roman times, the empire contracted out many of its services to private
groups called publicani. Shares in publicani were called "socii" (for large
cooperatives) and "particulae" which were analogous to today's Over-The-Counter
shares of small companies. Though the records available for this time are incomplete,
Edward Chancellor states in his book Devil Take the Hindmost that there is some
evidence that a speculation in these shares became increasingly widespread and that
perhaps the first ever speculative bubble in "stocks" occurred.

The first company to issue shares of stock after the Middle Ages was the Dutch East
India Company in 1606. The innovation of joint ownership made a great deal of

16
Europe's economic growth possible following the Middle Ages. The technique of
pooling capital to finance the building of ships, for example, made the Netherlands a
maritime superpower. Before adoption of the joint-stock corporation, an expensive
venture such as the building of a merchant ship could be undertaken only by
governments or by very wealthy individuals or families.

Economic historians find the Dutch stock market of the 1600s particularly interesting:
there is clear documentation of the use of stock futures, stock options, short selling,
the use of credit to purchase shares, a speculative bubble that crashed in 1695, and a
change in fashion that unfolded and reverted in time with the market (in this case it
was headdresses instead of hemlines). Dr. Edward Stringham also noted that the uses
of practices such as short selling continued to occur during this time despite the
government passing laws against it. This is unusual because it shows individual
parties fulfilling contracts that were not legally enforceable and where the parties
involved could incur a loss. Stringham argues that this shows that contracts can be
created and enforced without state sanction or, in this case, in spite of laws to the
contrary.

17
Stock certificate for ten shares of the Baltimore and Ohio Railroad Company.

18
Shareholder

A shareholder (or stockholder) is an individual or company (including a corporation)

that legally owns one or more shares of stock in a joint stock company. Both private
and public traded companies have shareholders. Companies listed at the stock market
are expected to strive to enhance shareholder value.

Shareholders are granted special privileges depending on the class of stock, including
the right to vote on matters such as elections to the board of directors, the right to
share in distributions of the company's income, the right to purchase new shares
issued by the company, and the right to a company's assets during a liquidation of the
company. However, shareholder's rights to a company's assets are subordinate to the
rights of the company's creditors.

Shareholders are considered by some to be a partial subset of stakeholders, which may

include anyone who has a direct or indirect equity interest in the business entity or
someone with even a non-pecuniary interest in a non-profit organization. Thus it
might be common to call volunteer contributors to an association stakeholders, even
though they are not shareholders.

Although directors and officers of a company are bound by fiduciary duties to act in
the best interest of the shareholders, the shareholders themselves normally do not
have such duties towards each other.

However, in a few unusual cases, some courts have been willing to imply such a duty
between shareholders. For example, in California, USA, majority shareholders of
closely held corporations have a duty to not destroy the value of the shares held by
minority shareholders

The largest shareholders (in terms of percentages of companies owned) are often
mutual funds, and, especially, passively managed exchange-traded funds.

Application

The owners of a company may want additional capital to invest in new projects within
the company. They may also simply wish to reduce their holding, freeing up capital
for their own private use.

19
By selling shares they can sell part or all of the company to many part-owners. The
purchase of one share entitles the owner of that share to literally share in the
ownership of the company, a fraction of the decision-making power, and potentially a
fraction of the profits, which the company may issue as dividends.

In the common case of a publicly traded corporation, where there may be thousands
of shareholders, it is impractical to have all of them making the daily decisions
required to run a company. Thus, the shareholders will use their shares as votes in the
election of members of the board of directors of the company.

In a typical case, each share constitutes one vote. Corporations may, however, issue
different classes of shares, which may have different voting rights. Owning the
majority of the shares allows other shareholders to be out-voted - effective control

rests with the majority shareholder (or shareholders acting in concert). In this way the
original owners of the company often still have control of the company.

Shareholder rights

Although ownership of 50% of shares does result in 50% ownership of a company, it

does not give the shareholder the right to use a company's building, equipment,
materials, or other property. This is because the company is considered a legal person,
thus it owns all its assets itself. This is important in areas such as insurance, which
must be in the name of the company and not the main shareholder.

In most countries, boards of directors and company managers have a fiduciary

responsibility to run the company in the interests of its stockholders. Nonetheless, as
Martin Whitman writes:

“it can safely be stated that there does not exist any publicly traded company where
management works exclusively in the best interests of OPMI [Outside Passive
Minority Investor] stockholders. Instead, there are both "communities of interest" and
"conflicts of interest" between stockholders (principal) and management (agent). This
conflict is referred to as the principal/agent problem. It would be naive to think that
any management would forgo management compensation, and management
entrenchment, just because some of these management privileges might be perceived
as giving rise to a conflict of interest with OPMIs “

20
Even though the board of directors runs the company, the shareholder has some
impact on the company's policy, as the shareholders elect the board of directors. Each
shareholder typically has a percentage of votes equal to the percentage of shares he or
she owns. So as long as the shareholders agree that the management (agent) are
performing poorly they can elect a new board of directors which can then hire a new
management team. In practice, however, genuinely contested board elections are rare.
Board candidates are usually nominated by insiders or by the board of the directors
themselves, and a considerable amount of stock is held or voted by insiders.

Owning shares does not mean responsibility for liabilities. If a company goes broke
and has to default on loans, the shareholders are not liable in any way. However, all
money obtained by converting assets into cash will be used to repay loans and other

debts first, so that shareholders cannot receive any money unless and until creditors
have been paid (often the shareholders end up with nothing).[11]

Means of financing

Financing a company through the sale of stock in a company is known as equity

financing. Alternatively, debt financing (for example issuing bonds) can be done to
avoid giving up shares of ownership of the company. Unofficial financing known as
trade financing usually provides the major part of a company's working capital (day-
to-day operational needs).

Trading

The shares of a company may in general be transferred from shareholders to other

parties by sale or other mechanisms, unless prohibited. Most jurisdictions have
established laws and regulations governing such transfers, particularly if the issuer is
a publicly-traded entity.

The desire of stockholders to trade their shares has led to the establishment of stock
exchanges. A stock exchange is an organization that provides a marketplace for
trading shares and other derivatives and financial products. Today, investors are
usually represented by stock brokers who buy and sell shares of a wide range of
companies on the exchanges. A company may list its shares on an exchange by
meeting and maintaining the listing requirements of a particular stock exchange. In

21
the United States, through the inter-market quotation system, stocks listed on one
exchange can also be traded on other participating exchanges, including the Electronic
Communication Networks (ECNs), such as Archipelago or Instinet.

Many large non-U.S companies choose to list on a U.S. exchange as well as an

exchange in their home country in order to broaden their investor base. These
companies must maintain a block of shares at a bank in the US, typically a certain
percentage of their capital. On this basis, the holding bank establishes American
Depositary Shares and issues an American Depository Receipt (ADR) for each share a
trader acquires. Likewise, many large U.S. companies list their shares at foreign
exchanges to raise capital abroad.

Small companies that do not qualify and cannot meet the listing requirements of the
major exchanges may be traded over the counter (OTC) by an off-exchange
mechanism in which trading occurs directly between parties. The major OTC markets
in the United States are the electronic quotation systems OTC Bulletin Board
(OTCBB) and the Pink OTC Markets (Pink Sheets) where individual retail investors
are also represented by a brokerage firm and the quotation service's requirements for a
company to be listed are minimal. Shares of companies in bankruptcy proceeding are
usually listed by these quotation services after the stock is delisted from an exchange.

Buying

There are various methods of buying and financing stocks. The most common means
is through a stock broker. Whether they are a full service or discount broker, they
arrange the transfer of stock from a seller to a buyer. Most trades are actually done
through brokers listed with a stock exchange.

There are many different stock brokers from which to choose, such as full service
brokers or discount brokers. The full service brokers usually charge more per trade,
but give investment advice or more personal service; the discount brokers offer little
or no investment advice but charge less for trades. Another type of broker would be a
bank or credit union that may have a deal set up with either a full service or discount
broker.

22
There are other ways of buying stock besides through a broker. One way is directly
from the company itself. If at least one share is owned, most companies will allow the
purchase of shares directly from the company through their investor relations
departments. However, the initial share of stock in the company will have to be
obtained through a regular stock broker. Another way to buy stock in companies is
through Direct Public Offerings which are usually sold by the company itself. A direct
public offering is an initial public offering in which the stock is purchased directly
from the company, usually without the aid of brokers.

When it comes to financing a purchase of stocks there are two ways: purchasing stock
with money that is currently in the buyer's ownership, or by buying stock on margin.
Buying stock on margin means buying stock with money borrowed against the stocks
in the same account. These stocks, or collateral, guarantee that the buyer can repay the

loan; otherwise, the stockbroker has the right to sell the stock (collateral) to repay the
borrowed money. He can sell if the share price drops below the margin requirement,
at least 50% of the value of the stocks in the account. Buying on margin works the
same way as borrowing money to buy a car or a house, using a car or house as
collateral. Moreover, borrowing is not free; the broker usually charges 8-10% interest.

Selling

Selling stock is procedurally similar to buying stock. Generally, the investor wants to
buy low and sell high, if not in that order (short selling); although a number of reasons
may induce an investor to sell at a loss, e.g., to avoid further loss.

As with buying a stock, there is a transaction fee for the broker's efforts in arranging
the transfer of stock from a seller to a buyer. This fee can be high or low depending
on which type of brokerage, full service or discount, handles the transaction.

After the transaction has been made, the seller is then entitled to all of the money. An
important part of selling is keeping track of the earnings. Importantly, on selling the
stock, in jurisdictions that have them, capital gains taxes will have to be paid on the
additional proceeds, if any, that are in excess of the cost basis.

23
Stock price fluctuations

The price of a stock fluctuates fundamentally due to the theory of supply and demand.
Like all commodities in the market, the price of a stock is sensitive to demand.
However, there are many factors that influence the demand for a particular stock. The
field of fundamental analysis and technical analysis attempt to understand market
conditions that lead to price changes, or even predict future price levels. A recent
study shows that customer satisfaction, as measured by the American Customer
Satisfaction Index (ACSI), is significantly correlated to the market value of a stock.
Stock price may be influenced by analyst's business forecast for the company and
outlooks for the company's general market segment.

Share price determination

At any given moment, an equity's price is strictly a result of supply and demand. The
supply is the number of shares offered for sale at any one moment. The demand is the

number of shares investors wish to buy at exactly that same time. The price of the
stock moves in order to achieve and maintain equilibrium.

When prospective buyers outnumber sellers, the price rises. Eventually, sellers
attracted to the high selling price enter the market and/or buyers leave, achieving
equilibrium between buyers and sellers. When sellers outnumber buyers, the price
falls. Eventually buyers enter and/or sellers leave, again achieving equilibrium.

Thus, the value of a share of a company at any given moment is determined by all
investors voting with their money. If more investors want a stock and are willing to
pay more, the price will go up. If more investors are selling a stock and there aren't
enough buyers, the price will go down.

• Note: "For Nasdaq-listed stocks, the price quote includes information on the
bid and ask prices for the stock."

Of course, that does not explain how people decide the maximum price at which they
are willing to buy or the minimum at which they are willing to sell. In professional
investment circles the efficient market hypothesis (EMH) continues to be popular,
although this theory is widely discredited in academic and professional circles.

24
Briefly, EMH says that investing is overall (weighted by a Stdev) rational; that the
price of a stock at any given moment represents a rational evaluation of the known
information that might bear on the future value of the company; and that share prices
of equities are priced efficiently, which is to say that they represent accurately the
expected value of the stock, as best it can be known at a given moment. In other
words, prices are the result of discounting expected future cash flows.

The EMH model, if true, has at least two interesting consequences. First, because
financial risk is presumed to require at least a small premium on expected value, the
return on equity can be expected to be slightly greater than that available from non-
equity investments: if not, the same rational calculations would lead equity investors
to shift to these safer non-equity investments that could be expected to give the same
or better return at lower risk. Second, because the price of a share at every given
moment is an "efficient" reflection of expected value, then—relative to the curve of
expected return—prices will tend to follow a random walk, determined by the
emergence of information (randomly) over time. Professional equity investors

therefore immerse themselves in the flow of fundamental information, seeking to gain

an advantage over their competitors (mainly other professional investors) by more
intelligently interpreting the emerging flow of information (news).

The EMH model does not seem to give a complete description of the process of
equity price determination. For example, stock markets are more volatile than EMH
would imply. In recent years it has come to be accepted that the share markets are not
perfectly efficient, perhaps especially in emerging markets or other markets that are
not dominated by well-informed professional investors.

Another theory of share price determination comes from the field of Behavioral
Finance. According to Behavioral Finance, humans often make irrational decisions—
particularly, related to the buying and selling of securities—based upon fears and
misperceptions of outcomes. The irrational trading of securities can often create
securities prices which vary from rational, fundamental price valuations. For instance,
during the technology bubble of the late 1990s (which was followed by the dot-com
bust of 2000-2002), technology companies were often bid beyond any rational
fundamental value because of what is commonly known as the "greater fool theory".

25
The "greater fool theory" holds that, because the predominant method of realizing
returns in equity is from the sale to another investor, one should select securities that
they believe that someone else will value at a higher level at some point in the future,
without regard to the basis for that other party's willingness to pay a higher price.
Thus, even a rational investor may bank on others' irrationality.

Arbitrage trading

When companies raise capital by offering stock on more than one exchange, the
potential exists for discrepancies in the valuation of shares on different exchanges. A
keen investor with access to information about such discrepancies may invest in
expectation of their eventual convergence, known as arbitrage trading. Electronic
trading has resulted in extensive price transparency (efficient market hypothesis) and
these discrepancies, if they exist, are short-lived and quickly equilibrated.

In finance a share is a unit of account for various financial instruments including

stocks, mutual funds, limited partnerships, and REIT's. In British English, the usage

of the word share alone to refer solely to stocks is so common that it almost replaces
the word stock itself.

In simple Words, a share or stock is a document issued by a company, which entitles

its holder to be one of the owners of the company. A share is issued by a company or
can be purchased from the stock market. By owning a share you can earn a portion
and selling shares you get capital gain. So, your return is the dividend plus the capital
gain. However, you also run a risk of making a capital loss if you have sold the share
at a price below your buying price.

A company's stock price reflects what investors think about the stock, not necessarily
what the company is "worth." For example, companies that are growing quickly often
trade at a higher price than the company might currently be "worth." Stock prices are
also affected by all forms of company and market news. Publicly traded companies
are required to report quarterly on their financial status and earnings. Market forces
and general investor opinions can also affect share price.

Quick Facts on Stocks and Shares:

26
1) Owning a stock or a share means you are a partial owner of the company, and you
get voting rights in certain company issues.

2) Over the long run, stocks have historically averaged about 10% annual returns.
However, stocks offer no guarantee of any returns and can lose value, even in the long
run.

3) Investments in stocks can generate returns through dividends, even if the price is
high.

How does one trade in shares :

Every transaction in the stock exchange is carried out through licensed members
called brokers. To trade in shares, one has to approach a broker. However, since most
stock exchange brokers deal in very high volumes, they generally do not entertain
small investors. These brokers have a network of sub-brokers who provide them with
orders.

The general investors should identify a sub-broker for regular trading in shares and
place his order for purchase and sale through the sub-broker. The sub-broker will
transmit the order to his broker who will then execute it.

What are active Shares

Shares in which there are frequent and day-to-day dealings, as distinguished from
partly active shares in which dealings are not so frequent. Most shares of leading
companies would be active, particularly those which are sensitive to economic and
political events and are, therefore, subject to sudden price movements. Some market
analysts would define active shares as those which are bought and sold at least three
times a week. Easy to buy or sell. Savings provide funds for emergencies and for
making specific purchases in the relatively near future (generally within two years).
The primary goal is to store funds and keep them safe. This is why savings are
generally placed in interest-bearing accounts that are safe (such as those insured or
guaranteed by the federal government) and liquid (those in the form of cash or easily
changed into cash on short notice with minimal or no loss). However, these generally
have low yields. Because of the opportunities for earning a higher return with a
relatively small pool of funds, some financial experts suggest that savers consider
slightly higher risk (but liquid) alternatives for at least part of their savings.

27
Saved money is insurance. It is insurance against risk, against losing your job, against
having a major unexpected repair bill or medical expense in the family. It is the
backbone of you and your family’s financial well-being. Saved money grants you
financial security and the more you save, the more financial secure and independent
you will be. The goal of investing is generally to increase net worth and work toward
long-term goals. Investing involves risk. Risk of your stocks losing money, or even
going bankrupt (Enron, MCI, the airlines, etc. etc.). Risk of interest rates rising, and
bond prices falling. Risks of your broker swindled you, or coerced you though his
sales pitch to buy speculative investments. Risks of the economy. Risks of a particular
industry. Risk of losing your principal. Risk of losing it all, and then some (such as
with margin calls)

Understanding The Stock Market:

Many people look to the stock market to enhance their hard-earned money more and
more each year. Some people are not even aware of their investments, because they

can come in the form of pensions with their place of employment. The company
invests this money in efforts to increase your retirement funds. In order to fully
understand what is happening with your money, you should understand how the
investments work. The stock market is an avenue for investors who want to sell or
buy stocks, shares or other things like government bonds. Within the United
Kingdom, the major stock market in this area is LSE (London Stock Exchange. Every
day a list is produced that includes indexes or companies and how they are performing
on the market. An index will be compromised of a special list of certain companies,
for example, within the UK; the FTSE 100 is the most popular index. The Financial
Times Stock Exchange dictates the average overall performance of 100 of the largest
companies with in the UK that are listed on the stock market.

A share is a small portion of a PIC (public limited company), owning one of these
shares will give you many rights. For example, you will gain a portion of the profits
and growth that the company experiences, additionally you will obtain occasional
accounts and reports from the chosen company. Another exciting feature of owning a
share of a company is the fact that you are given the right to vote in various aspects of
what happens with the company.

28
Once you purchase a share of a company you will receive something called a share
certificate, this will be your proof of ownership. This certificate will contain the total
value of the share, this will likely not be the price that is listed upon the exchange and
is specifically for reasons of a legal matter. This will not affect the current value the
share currently holds on the market. Typically, as a shareholder, you will receive your
profit in the form of a dividend; these are paid on a twice per year basis. The way this
works is if the company makes a profit, you will as well and on the opposite end of
this spectrum if they do not make a profit, neither will you. If a company does
extremely well their value increases, which means the value of the share you own will
as well. If you should decide to sell your share, you will only benefit from it, if the
company has experienced growth.

Indian capital market has seen unprecedented boom in its activity in the last 15 years
in terms of number of stock exchanges, listed companies, trade volumes, market
intermediaries, investor population, etc. However, this surge in activity has brought
with it numerous problems that threaten the very survival of the capital markets in the

long run, most of which are due to the large volume of paper work involved and paper
based trading, clearing and settlement.

Until the late eighties, the common man kept away from capital market and thus the
quantum of funds mobilized through the market was meager. A major problem,
however, continued to plague the market. The Indian markets were drowned in shares
in the form of paper and hence it was problematic to handle them. Fake and stolen
shares, fake signatures and signature mismatch, duplication and mutilation of shares,
transfer problems, etc. The investors were scared and were under compensated for the
risk borne by them. The century old system of trading and settlement requires
handling of huge volumes of paper work. This has made the investors, both retail and
institutional, wary of entering the capital market. However, lack of modernization
become a hindrance to growth and resulted in creation of cumbersome procedures and
paper work.

However, the real growth and change occurred from mid-eighties in the wake of
liberalization initiatives of the Government. The reforms in the financial sector were
envisaged in the banking sector, capital market, securities market regulation, mutual

29
funds, foreign investments and Government control. These institutions and stock
exchanges experienced that the certificates are the main cause of investors` disputes
and arbitration cases. Since the paper work was not matching the rapid growth so
there was a need for a better system to ensure removal of these impediments.

Government of India decided to set up a fully automated and high technology based
model exchange that could offer screen-based trading and depositories as the ultimate
answer to all such reforms and eliminate various bottlenecks in the capital market,
particularly, the clearing and settlement system in stock exchanges.[1] A depository in
very simple terms is a pool of pre-verified shares held in electronic mode which offers
settlement of transactions in an efficient and effective way.

How stock market works:

In order to understand what stocks are and how stock markets work, we need to dive
into history--specifically, the history of what has come to be known as the
corporation, or sometimes the limited liability company (LLC). Corporations in one

form or another have been around ever since one guy convinced a few others to pool
their resources for mutual benefit.

The first corporate charters were created in Britain as early as the sixteenth century,
but these were generally what we might think of today as a public corporation owned
by the government, like the postal service.

Privately owned corporations came into being gradually during the early 19th century
in the United States, United Kingdom and western Europe as the governments of
those countries started allowing anyone to create corporations.

In order for a corporation to do business, it needs to get money from somewhere.

Typically, one or more people contribute an initial investment to get the company off
the ground. These entrepreneurs may commit some of their own money, but if they
don't have enough, they will need to persuade other people, such as venture capital
investors or banks, to invest in their business.

They can do this in two ways: by issuing bonds, which are basically a way of selling
debt (or taking out a loan, depending on your perspective), or by issuing stock, that is,
shares in the ownership of the company.

30
Long ago stock owners realized that it would be convenient if there were a central
place they could go to trade stock with one another, and the public stock exchange
was born. Eventually, today's stock markets grew out of these public places.

Stocks

A corporation is generally entitled to create as many shares as it pleases. Each share is

a small piece of ownership. The more shares you own, the more of the company you
own, and the more control you have over the company's operations. Companies
sometimes issue different classes of shares, which have different privileges associated
with them.

So a corporation creates some shares, and sells them to an investor for an agreed upon
price, the corporation now has money. In return, the investor has a degree of
ownership in the corporation, and can exercise some control over it. The corporation
can continue to issue new shares, as long as it can persuade people to buy them. If the

company makes a profit, it may decide to plow the money back into the business or
use some of it to pay dividends on the shares.

Public Markets

How each stock market works is dependent on its internal organization and
government regulation. The NYSE (New York Stock Exchange) is a non-profit
corporation, while the NASDAQ (National Association of Securities Dealers
Automated Quotation) and the TSE (Toronto Stock Exchange) are for-profit
businesses, earning money by providing trading services.

Most companies that go public have been around for at least a little while. Going
public gives the company an opportunity for a potentially huge capital infusion, since
millions of investors can now easily purchase shares. It also exposes the corporation
to stricter regulatory control by government regulators.

When a corporation decides to go public, after filing the necessary paperwork with the
government and with the exchange it has chosen, it makes an initial public offering
(IPO). The company will decide how many shares to issue on the public market and

31
the price it wants to sell them for. When all the shares in the IPO are sold, the
company can use the proceeds to invest in the business.

Type of markets

There are two ways for investors to get shares from the primary and secondary
markets. In primary markets, securities are bought by way of public issue directly
from the company. In secondary market share are traded between two investors.

Primary market:

Market for new issues of securities, as distinguished from the Secondary Market,
where previously issued securities are bought and sold.
A market is primary if the proceeds of sales go to the issuer of the securities sold.

This is part of the financial market where enterprises issue their new shares and
bonds. It is characterised by being the only moment when the enterprise receives
money in exchange for selling its financial assets.

Secondary market:

The market where securities are traded after they are initially offered in the primary
market. Most trading is done in the secondary market. To explain further, it is trading
in previously issued financial instruments. An organized market for used securities.
Examples are the New York Stock Exchange (NYSE), Bombay Stock Exchange
(BSE),National Stock Exchange NSE, bond markets, over-the-counter markets,
residential mortgage loans, governmental guaranteed loans etc.

2) After demat system

Indian Share Market started functioning from 1875. The name of the first share
trading association in India was Native Share and Stock Broker's Association which
later came to be known as Bombay Stock Exchange (BSE). This association began
with 318 members.

Indian Share Market mainly consists of two main stock exchanges :-

 Bombay Stock Exchange (BSE)

32
  National Stock Exchange (NSE)

Bombay Stock Exchange (BSE)

Bombay Stock Exchange is the oldest stock exchange not only in India but in entire
Asia. Its history is synonymous with that of the Indian Share Market history. BSE
started functioning with the name, The Native Share and Stock Broker's Association
in 1875. It got Government of India's recognition as a stock exchange in 1956 under
Securities Contracts (Regulation) Act, 1956. At the time of its origin it was an
Association of Persons but now it has been transformed to a corporate and de-
mutualized entity.

The total number of companies listed in BSE is around 3500. Bombay Stock In BSE,
the trades that takes place are :-

 Equity or Shares

 Derivatives (Futures and Options)

 Debt Instruments

The main index of BSE is called BSE SENSEX or simply SENSEX. It is composed
of 30 financially sound company stocks which are liable to be reviewed and modified
from time-to-time. The index calculation is done on the methodology of "Free-float
Market Capitalization" method. This method is also followed by the leading
exchanges like Dow-Jones. During early 1990s it was at 1000 mark, 5000 in 1999,
and 8000 in September 2000.

It reached a high of 21000 during Jan 2008 and subsequently fell to less than 10000
after the economic crisis. Currently it is hovering around the 15000 mark.

National Stock Exchange (NSE)

National Stock Exchange (NSE) is the leading stock exchange in India in terms of
total volume traded. It is based in Mumbai but has its presence in over 1500 towns
and cities. In terms of market capitalization, NSE is the second largest bourse in Asia.

33
National Stock Exchange got its recognition as a stock exchange in July 1993 under
Securities Contracts (Regulation) Act, 1956. The products that can be traded in NSE
are:

 Equity or Share

 Futures (both index and stock)

 Options (Call and Put)

 Wholesale Debt Market

 Retail Debt Market

NSE's leading index is Nifty 50 or popularly Nifty and is composed of 50 diversified
benchmark Indian company stocks. Nifty is constructed on the basis of weighted
average market capitalization method.

Dematerialized securities (‘Demat’ in short) are securities that are not on paper and a
certificate to that effect do not exist. They exist in the form of entries in the book of
depositories. Essentially, unlike the traditional method of possessing a share
certificate to the effect of ownership of shares, in the demat system, the shares are
held in a dematerialized form. This system works through a depository who is
registered with the Securities and Exchange Board of India (SEBI) to perform the
functions of a depository as regulated by SEBI. Under Section 68 B of the Companies

Act, inserted by the Companies (Amendment) Act, 2000, it is mandated that every
Initial Public Offer (IPO) made by a listed company in the excess of Rs. 10 Crores has
to be issued in dematerialized form by complying with the requisite provisions of the
Depositories Act, 1996.

Background

Indian capital market has seen unprecedented boom in its activity in the last 15 years
in terms of number of stock exchanges, listed companies, trade volumes, market
intermediaries, investor population, etc. However, this surge in activity has brought
with it numerous problems that threaten the very survival of the capital markets in the
long run, most of which are due to the large volume of paper work involved and paper
based trading, clearing and settlement.

34
Until the late eighties, the common man kept away from capital market and thus the
quantum of funds mobilized through the market was meager. A major problem,
however, continued to plague the market. The Indian markets were drowned in shares
in the form of paper and hence it was problematic to handle them. Fake and stolen
shares, fake signatures and signature mismatch, duplication and mutilation of shares,
transfer problems, etc. The investors were scared and were under compensated for the
risk borne by them. The century old system of trading as handling of huge volumes of
paper work. This has made the investors, both retail and institutional, wary of
entering the capital market. However, lack of modernization become a hindrance to
growth and resulted in creation of cumbersome procedures and paper work.

However, the real growth and change occurred from mid-eighties in the wake of
liberalization initiatives of the Government. The reforms in the financial sector were
envisaged in the banking sector, capital market, securities market regulation, mutual
funds, foreign investments and Government control. These institutions and stock
exchanges experienced that the certificates are the main cause of investors` disputes
and arbitration cases. Since the paper work was not matching the rapid growth so
there was a need for a better system to ensure removal of these impediments.

Government of India decided to set up a fully automated and high technology based
model exchange that could offer screen-based trading and depositories as the ultimate
answer to all such reforms and eliminate various bottlenecks in the capital market,

particularly, the clearing and settlement system in stock exchanges. A depository in

very simple terms is a pool of pre-verified shares held in electronic mode which offers
settlement of transactions in an efficient and effective way.

Meaning of Dematerialization

Dematerialization is a process by which physical certificates of an investor are

converted into electronic form and credited to the account of the depository
participant. Dematted securities do not have any certificate numbers or distinctive
numbers and are dealt only in quantity, i.e., the securities are replaceable.

Investors can dematerialize only those certificates that are already registered in their
names and are in the list of securities admitted for dematerialization. These are:

35
shares, scrips, stocks, bonds, debentures, stock or other marketable securities of a like
nature in or of any incorporated company or other body corporate, units of mutual
funds, rights under collective investment schemes and venture capital funds,
commercial paper, certificate of deposit, securities debt, money market instruments
and unlisted securities, underlying sharing of American Depository Receipts and
Global Depository Receipts issued to non-resident holders.[2] Dematerialization is the
process of converting physical holdings into electronic form with the depository
wherein the share certificates are shredded and corresponding entry of the number of
shares is done in the opened with the depository.

The securities held in dematerialized form are fungible; that is, they do not bear any
notable feature like distinctive number, folio number or certificate number. Once
shares get dematerialized, they lose their identity in terms of share certificate
distinctive numbers and folio numbers.

Following requisites are necessary for dematerialization of securities:

1. Investors should have a depository account.
2. Securities should be from the eligible list of securities issued by the depository.
3. Securities must be in the name of the account holders and owned by him.
4. Separate demat requisition form is required for each issuer company.
5. DRF[4] should be signed by all the holders so as to match specimen signature.

Object of Demat System

India has adopted this system in which book entry is done electronically. It is the
system where no paper is involved. Physical form is extinguished and shares or
securities are held in electronic mode. Before the introduction of the depository
system by the Depository Act, 1996, the process of sale, purchase and transfer of
shares was a huge problem and the safety perspective was zero.

Demat has the following advantages:

1) Demat system not only provides smooth and hassle-free way of dealing in shares, it
also does away with all the associated tensions.
2) Bad deliveries are minimized
36
3)Postal delays and loss of shares in transit is prevented
4)Immediate transfer of shares
5)No stamp duty on transfer
6)Less paper work (reduction in huge volumes).
7)Faster settlement cycles and payouts.
The demat system totally avoids the associated heartburns arising from theft of shares,
mutilation, forgery, counterfeit shares and loss of shares during a natural calamity.

The Depository system has the following benefits to different groups:

Benefit to the Country:

1) The depository system helps the capital market to be more liquid, attracting more
foreign investors and is in compliance with international standards, as it creates
efficient and risk-free trading environment.
2) It minimises the settlement risks and frauds in carrying out transactions in capital
markets and thus can restore faith of investors in capital markets.
3) It helps to reduce delay in trading practices creating investor friendly atmosphere in
the capital markets.

Benefit to the Company:

1) The depository system helps in reducing the cost of new issues due to less printing
and distribution cost.
2) It increases the efficiency of the registrars and transfer agents and the Secretarial
Department of the company.
3) It provides better facilities for communication and timely services with
shareholders, investor etc.

Benefit to the Investor

1) The depository system reduces risks involved in holding physical certificated, e.g.,
loss, theft, mutilation, forgery, etc.
2) It ensures transfer settlements and reduces delay in registration of shares.

37
3) It ensures faster communication to investors.
4) It helps avoid bad delivery problem due to signature differences, etc.
5) It ensures faster payment on sale of shares.
6) No stamp duty is paid on transfer of shares.
7) It provides more acceptability and liquidity of securities.

Benefit to Brokers
1) The depository system reduces risk of delayed settlement.
2) It ensures greater profit due to increase in volume of trading.
3) It eliminates chances of forgery – bad delivery.
4) It increases overall of trading and profitability.
5) It increases confidence in investors.

Agency in Depositories
India has chosen the concept of multi-depositories.[5] Presently, there are two
depositories registered with SEBI;
1) National Securities Depository Limited (NSDL)
2) Central Depository Service (India) Limited (CDSL)

1) National Securities Depository Limited (NSDL)

Both agencies are linked with each other. NSDL is a public limited company
incorporated under the Companies Act, 1956. Four renowned institutions participate
in it. Unit Trust of India (UTI), Industrial Development Bank of India (IDBI),
National Stock Exchange of India (NSE), State Bank of India (SBI).UTI is the largest

mutual fund of India and IDBI is the largest development bank, NSE is the largest
stock exchange of India and SBI is the largest commercial bank of India having
clearing facility. HDFC and Citibank also share in this system.[6] NSDL is managed
by Board of directors headed by a managing director. It is governed by its bye-laws
and its business operations are regulated by business rules. NSDL interfaces with the
investors through players or business partners. Constituents of depository compromise
of clearing corporation, brokers, clearing member, registrar and transfer agents,
company or issuer, stock exchange, bank depository participant and investors. All are
electronically linked to the main depository for the settlement of trades and to perform
a daily reconciliation of all accounts held with NSDL.

38
Central Depository Service (India) Limited (CDSL)

Second agency is CDSL - Central Depository Service (India) Limited. Main

functions of this agency are centralized database and accounting. Major participant in
CDSL[7] are LIC, GIC and BSE. This agency is set up with the object to keep in
mind to accelerate growth of scripless trading, with major thrust of individual
participation and creating competitive environment, responsible to the users interests
and demands to enhance liquidity. CDSL aims to retain the entire data of the investors
in the central database of CDSL. It has opted for it with the following objectives:

Within time information is available to issuers/registrar’s and share transfer

agents.Companies can monitor critical holdings, e.g., holding of FIIs and FIs,
investment companies, etc., by using up the parameters through their front-end
terminals. There is no other database in the system to reconcile.

No additional security or storage cost of data or critical database residing at the front-
end terminals with the issuers/registrars. Recover only the annual maintenance
charges.

CDSL signed a memorandum of understanding with NSDL for inter-depository

connectivity. Presently, more than half the business of depositories is handled by this
agency. Role of both these agencies has become very vital after SEBI’s declaration
that there would be no deals in physical form and only dealing to happen in market
through demat accounts.

Depository Participant

Similar to the brokers who trade on your behalf in and outside the Stock Exchange; a
Depository Participant (DP) is the representative (agent) in the depository system
providing the link between the Company and the investor through the Depository.
Depository Participant maintains investor’s securities account balances and intimates
him the status of your holding from time to time. According to SEBI guidelines,
Financial Institutions like banks, custodians, stockbrokers etc. can become
participants in the depository. A DP is one with whom you need to open an account to
deal in electronic form. While the Depository can be compared to a Bank, DP is like a
branch of bank with whom one can have an account.

Process of Demating Shares

39
The process of opening an account with a Depository Participant is similar to the
opening of a bank account.

One has to open an account with a Depository Participant (DP) by filling up an

Account Opening Form and signing a “Participant-Client Agreement”. Then a unique
client ID number will be given, which must be quoted in all correspondence with the
DP. Thereafter, one has to fill up and submit a Dematerialization Request Form
(DRF) provided by the DP duly signed by all the holders and surrender the physical
shares intended to be dematted to the DP.

The DP upon receipt of the shares and the DRF will issue an acknowledgement and
will send an electronic request to the Company/ Registrars and Transfer Agents of the
Company through the Depository for confirmation of demat. The DP will
simultaneously surrender the DRF and the shares to the Company / Registrars and
Transfer Agents of the Company with a covering letter requesting the Company to
confirm demat.The Registrars and Transfer Agents of the Company, after necessary
verification of the documents received from the DP, will cancel the physical shares
and confirm demat to the Depository. This confirmation will be passed on by the
Depository to the DP which holds investor’s account. After receiving this
confirmation from the Depository, the DP will credit investor account with the
number of shares dematerialized. The DP will hold the shares in the dematerialized

form thereafter on behalf of the investor. And hence one becomes the beneficial
owner of these dematerialized shares.

When the beneficial owner submits the shares for dematerialization, his DP will
deface the share certificates with the stamp “SURRENDERED FOR
DEMATERIALISATION”. This ensures that shares are not lost in transit or misused
till credit is received in demat account.

SEBI Guidelines

SEBI has taken various policy initiatives to popularize the demat concept. One of
them is delivery of demat shares compulsorily for institutional investors and OCBs.
However, these investors have been allowed to buy shares in physical form, get them

40
transferred in their names and thereupon get them dematerialized. The
implementation of the guidelines is subject to the condition that the company shall get
a certificate of practice that the company has followed the procedure mentioned in the
scheme and to affect that:The company has followed the necessary procedures for
effecting the original transfer.The register of members of the company was,
accordingly, amended and the shares were transferred in favour of the transferee;
The company has adequate procedures and has satisfied itself that the transferee and
the entity requesting dematerialization are one and the same and before confirming
the dematerialization request; company has further amended its register of members
to indicate the transfer from the transferee to any agency;
The company has defaced and cancelled/mutilated all the certificates.
The company has adequate system to ensure that the investor does not lose his
corporate benefits on account of the transfer entries in favour of the agency.

Re-materialization

Rematerialisation is a process, by which a client can get his electronic holdings

converted back into the physical holdings, i.e., he can get back the physical form of
share certificates. To get the certificate back, he has to fill up a remat request form
and submit it to its depository with whom he has an account. The new certificates may
not necessarily bear the same folio or distinctive numbers as previously existed. The
facility to rematerialise again is offered to all those scrips which are eligible for demat
in the depositories` list of securities available for dematerialisation.The whole process

of rematerialisation is completed within 30 days from the receipt of request. This

shows how speedy the electronic system works – that being the essence of today’s
business where the prices of scrips change many times a day.

Disadvantages of Demat

The disadvantages of dematerialization of securities can be summarised as follows:

1) Trading in securities may become uncontrolled in case of dematerialized securities.

It is incumbent upon the capital market regulator to keep a close watch on the trading
in dematerialized securities and see to it that trading does not act as a detriment to
investors. The role of key market players in case of dematerialized securities, such as

41
stock-brokers, needs to be supervised as they have the capability of manipulating the
market.

2) Multiple regulatory frameworks have to be confirmed to, including the

Depositories Act, Regulations and the various Bye Laws of various depositories.
Additionally, agreements are entered at various levels in the process of
dematerialization. These may cause anxiety to the investor desirous of simplicity in
terms of transactions in dematerialized securities.

However, the advantages of dematerialization outweigh its disadvantages and the

changes ushered in by SEBI and the Central Government in terms of compulsory
dematerialization of securities is important for developing the securities market to a
degree of advancement. Freely traded securities are an essential component of such an
advanced market and dematerialization addresses such issues and is a step towards the
advancement of the market.

Short Selling:

First, let's describe what short selling means when you purchase shares of stock. In
purchasing stocks, you buy a piece of ownership in the company. The buying and
selling of stocks can occur with a stock broker or directly from the company. Brokers
are most commonly used. They serve as an intermediary between the investor and the
seller and often charge a fee for their services.
When using a broker, you will need to set up an account. The account that's set up is
either a cash account or a margin account. A cash account requires that you pay for

your stock when you make the purchase, but with a margin account the broker lends
you a portion of the funds at the time of purchase and the security acts as collateral.

When an investor goes long on an investment, it means that he or she has bought a
stock believing its price will rise in the future. Conversely, when an investor goes
short, he or she is anticipating a decrease in share price.

Short selling is the selling of a stock that the seller doesn't own. More specifically, a
short sale is the sale of a security that isn't owned by the seller, but that is promised to
be delivered. That may sound confusing, but it's actually a simple concept. When you

42
short sell a stock, your broker will lend it to you. The stock will come from the
brokerage's own inventory, from another one of the firm's customers, or from another
brokerage firm. The shares are sold and the proceeds are credited to your account.
Sooner or later, you must "close" the short by buying back the same number of shares
(called covering) and returning them to your broker. If the price drops, you can buy
back the stock at the lower price and make a profit on the difference. If the price of
the stock rises, you have to buy it back at the higher price, and you lose money.

Most of the time, you can hold a short for as long as you want, although interest is
charged on margin accounts, so keeping a short sale open for a long time will cost
more However, you can be forced to cover if the lender wants the stock you borrowed
back. Brokerages can't sell what they don't have, so yours will either have to come up
with new shares to borrow, or you'll have to cover. This is known as being called
away. It doesn't happen often, but is possible if many investors are short selling a
particular security.

Because you don't own the stock you're short selling (you borrowed and then sold it),
you must pay the lender of the stock any dividends or rights declared during the
course of the loan. If the stock splits during the course of your short, you'll owe twice
the number of shares at half the price.

Speculate:

When you speculate, you are watching for fluctuations in the market in order to
quickly make a big profit off of a high-risk investment. Speculation has been
perceived negatively because it has been likened to gambling. However, speculation
involves a calculated assessment of the markets and taking risks where the odds
appear to be in your favor. Speculating differs from hedging because speculators
deliberately assume risk, whereas hedgers seek to mitigate or reduce it.
Speculators can assume a high loss if they use the wrong strategies at the wrong time,
but they can also see high rewards. Probably the most famous example of this was
when George Soros "broke the Bank of England" in 1992. He risked $10 billion that
the British pound would fall and he was right. The following night, Soros made $1

43
billion from the trade. His profit eventually reached almost $2 billion.
Speculators can benefit the market because they increase trading volume, assume risk
and add market liquidity. However, high amounts of speculative purchases can
contribute to an economic bubble and/or a stock market crash.

Hedge

For reasons we'll discuss later, very few sophisticated money managers short as an
active investing strategy (unlike Soros). The majority of investors use shorts to hedge.
This means they are protecting other long positions with offsetting short positions.
Hedging can be a benefit because you're insuring your stock against risk, but it can
also be expensive and a basis risk can occur.

Restrictions

Many restrictions have been placed on the size, price and types of stocks traders are
able to short sell. For example, penny stocks cannot be sold short, and most short
sales need to be done in round lots. The Securities Exchange Commission (SEC) has
these restrictions in place to prevent the manipulation of stock prices.

As of January 2005, short sellers were also required to comply with the rules set in
place by "Regulation SHO", which modernized the rules overseeing short selling and
aimed to provide safeguards against "naked short selling." For instance, sellers had
needed to show that they could locate and get the securities they intended to short.
The regulation also created a list of securities showing a high level of persistent sales

todeliver.

In July of 2007, the SEC eliminated the uptick, or zero plus tick, rule. This rule
required that every short sale transaction be entered at a higher price than that of the
previous trade and kept short sellers from adding to the downward momentum of an
asset when it was already experiencing sharp declines. The rule has been around since
the creation of the SEC in 1934. One of the reasons it was put in place was to slow
rapid and sudden declines in share prices that can occur as a result of short selling.

44
In July of 2008, the SEC used its emergency powers to put an end to market
manipulations, such as spreading negative rumors about a company's performance and
sharp price declines. The markets had been volatile as a result of the off mortgage and
credit crisis, and the SEC wanted to establish a renewed confidence. For a month, it
didn't allow naked short selling on the stocks of 19 major investment and commercial
banks, which included the mortgage finance companies Fannie Mae and Freddie Mac.

The SEC took further measures in September of 2008, once again using its emergency
authority to issue six orders to minimize abuses. This included a move to halt short
selling in shares of 799 companies in cooperation with the United Kingdom's
Financial Service Authority. 170 companies were later included in the ban, which
ended after the passage of the $700 billion U.S. bailout plan in October 2008. Another
order required short sellers get a sale and immediately close it by making sure the
shares were delivered. It later became a rule.

Who Shorts

Some insiders indicate that it takes a certain type of person to short stocks.
Many short sellers have been depicted as pessimists who are rooting for a company's
failure, but they've also been described as disciplined and confident in their judgment.

Sellers are typically:

1)wealthy sophisticated investors
2) hedge funds

3) large institutions
4) day traders Short selling isn't for everyone. It involves a great amount of time and
dedication. Short sellers need to be informed, skilled and experienced investors in
order to succeed.

45
 CHAPTER-2
PROBLEMS EMERGED BEFORE EVOLUTION OF DMAT
ACCOUNT SYSTEM

Trading in securities may become uncontrolled in case of dematerialized securities. It

is incumbent upon the capital market regulator to keep a close watch on the trading in
dematerialized securities and see to it that trading does not act as a detriment to
investors. The role of key market players in case of dematerialized securities, such as

46
stock-brokers, needs to be supervised as they have the capability of manipulating the
market.

Multiple regulatory frameworks have to be confirmed to, including the Depositories

Act, Regulations and the various Bye Laws of various depositories. Additionally,
agreements are entered at various levels in the process of dematerialization. These
may cause anxiety to the investor desirous of simplicity in terms of transactions in
dematerialized securities.

However, the advantages of dematerialization outweigh its disadvantages and the

changes ushered in by SEBI and the Central Government in terms of compulsory
dematerialization of securities is important for developing the securities market to a
degree of advancement. Freely traded securities are an essential component of such an
advanced market and dematerialization addresses such issues and is a step towards the
advancement of the market

ADVANTAGES OF DMAT SYSTEM AGAINST TRADITIONAL

DELIVERY/SETTLEMENT SYSTEM

Advantages of Demat
The demat account reduces brokerage charges, makes pledging/hypothecation of
shares easier, enables quick ownership of securities on settlement resulting in
increased liquidity, avoids confusion in the ownership title of securities, and provides
easy receipt of public issue allotments.

47
It also helps you avoid bad deliveries caused by signature mismatch, postal delays and
loss of certificates in transit. Further, it eliminates risks associated with forgery,
counterfeiting and loss due to fire, theft or mutilation. Demat account holders can also
avoid stamp duty (as against 0.5 per cent payable on physical shares), avoid filling up
of transfer deeds, and obtain quick receipt of such benefits as stock splits and bonuses.

Demat Benefits

The benefits are enumerated as follows:

• Its a safe and convenient way to hold securities

• Immediate transfer of securities is there

• There is no stamp duty on transfer of securities

• Elimination of risks associated with physical certificates such as bad delivery,

fake securities, delays, thefts etc

• There is a major reduction in paperwork involved in transfer of

securities,reduction in transaction cost etc

• No odd lot problem, even one share can be sold thus there is an advantage

• Change in address recorded with DP gets registered with all companies in

which investor holds securities electronically eliminating the need to
correspond with each of them separately;

• Transmission of securities is done by DP eliminating correspondence with

companies;

• Automatic credit into demat account of shares, arising out of

bonus/split/consolidation/merger etc.

• Holding investments in equity and debt instruments in a single account.

Benefit to the Company

The depository system helps in reducing the cost of new issues due to less printing
and distribution cost. It increases the efficiency of the registrars and transfer agents

48
and the Secretarial Department of the company. It provides better facilities for
communication and timely services with shareholders, investor etc.

Benefit to the Investor The depository system reduces risks involved in holding
physical certificated, e.g., loss, theft, mutilation, forgery, etc.It ensures transfer
settlements and reduces delay in registration of shares. It ensures faster
communication to investors. It helps avoid bad delivery problem due to signature
differences, etc.It ensures faster payment on sale of shares. No stamp duty is paid on
transfer of shares. It provides more acceptability and liquidity of securities.

Benefit to Brokers The depository system reduces risk of delayed settlement. It

ensures greater profit due to increase in volume of trading. It eliminates chances of
forgery – bad delivery. It increases overall of trading and profitability.It increases
confidence in investors.

Demat conversion

Converting physical holding into electronic holding (dematerialising securities) In

order to dematerialise physical securities one has to fill in a DRF (Demat Request
Form) which is available with the DP and submit the same along with physical
certificates one wishes to dematerialise. Separate DRF has to be filled for each ISIN
Number. The complete process of dematerialisation is outlined below:

•Surrender certificates for dematerialisation to your depository participant.

•Depository participant intimates Depository of the request through the system.
•Depository participant submits the certificates to the registrar of the Issuer Company.
•Registrar confirms the dematerialisation request from depository.

•After dematerialising the certificates, Registrar updates accounts and informs

depository of the completion of dematerialisation.

•Depository updates its accounts and informs the depository participant.

•Depository participant updates the demat account of the investor.

Demat Options

49
Banks score over others Around 200 “depository participants” (DPs) offer the demat
account facility. A comparison of the fees charged by different DPs is detailed below.
But there are three distinct advantages of having a demat account with a bank —
quick processing, accessibility and online transaction. Generally, banks credit your
demat account with shares in case of purchase, or credit your savings accounts with
the proceeds of a sale on the third day. Banks are also advantageous because of the
number of branches they have. Some banks give the option of opening a demat
account in any branch, while others restrict themselves to a select set of branches.
Some private banks also provide online access to the demat account. So, you can
check on your holdings, transactions and status of requests through the net banking
facility. A broker who acts as a DP may not be able to provide these services.

Fees Involved

There are four major charges usually levied on a demat account: Account opening fee,
annual maintenance fee, custodian fee and transaction fee. All the charges vary from
DP to DP.

Account-opening fee

Depending on the DP, there may or may not be an opening account fee. Private banks,
such as HDFC Bank and UTI Bank, do not have one. However, players such as ICICI
Bank,Globe Capital, Karvy Consultants and the State Bank of India to do so. But
most players levy this when you re-open a demat account, though the Stock Holding
Corporation offers a lifetime account opening fee, which allows you to hold on to
your demat account over a long period. This fee is refundable.

Annual maintenance fee

This is also known as folio maintenance charges, and is generally levied in advance.

Custodian fee

This fee is charged monthly and depends on the number of securities (international
securities identification numbers — ISIN) held in the account. It generally ranges
between Rs 0.5 to Rs 1 per ISIN per month. DPs will not charge custody fee for ISIN
on which the companies have paid one-time custody charges to the depository.

50
Transaction fee

The transaction fee is charged for crediting/debiting securities to and from the account
on a monthly basis. While some DPs, such as SBI, charge a flat fee per transaction,
HDFC Bank and ICICI Bank peg the fee to the transaction value, subject to a
minimum amount. The fee also differs based on the kind of transaction (buying or
selling). Some DPs charge only for debiting the securities while others charge for
both. The DPs also charge if your instruction to buy/sell fails or is rejected. In
addition, service tax is also charged by the DPs.

In addition to the other fees, the DP also charges a fee for converting the shares from
the physical to the electronic form or vice-versa. This fee varies for both demat and
remat requests. For demat, some DPs charge a flat fee per request in addition to the
variable fee per certificate, while others charge only the variable fee.

For instance, Stock Holding Corporation charges Rs 25 as the request fee and Rs 3 per
certificate as the variable fee. However, SBI charges only the variable fee, which is
Rs 3 per certificate. Remat requests also have charges akin to that of demat. However,
variable charges for remat are generally higher than demat. Some of the additional
features (usually offered by banks) are as follows.Some DPs offer a frequent trader
account, where they charge frequent traders at lower rates than the standard
charges.Demat account holders are generally required to pay the DP an advance fee
for each account which will be adjusted against the various service charges. The
account holder needs to raise the balance when it falls below a certain amount
prescribed by the DP. However, if you also hold a savings account with the DP you
can provide a debit authorisation to the DP for paying this charge.Finally, once you
choose your DP, it will be prudent to keep all your accounts with that DP, so that

tracking your capital gains liability is easier. This is because, for calculating capital
gains tax, the period of holding will be determined by the DP and different DPs
follow different methods. For instance, ICICI Bank uses the first in first out (FIFO)
method to compute the period of holding. The proof of the cost of acquisition will be
the contract note. The computation of capital gains is done account-wise.

Opening an account

51
Steps involved in opening a demat account First an investor has to approach a DP and
fill up an account opening form. The account opening form must be supported by
copies of any one of the approved documents to serve as proof of identity (POI) and
proof of address (POA) as specified by SEBI. Besides, production of PAN card in
original at the time of opening of account has been made mandatory effective from
April 1, 2006.

All applicants should carry original documents for verification by an authorized

official of the depository participant, under his signature. Further, the investor has to
sign an agreement with DP in a depository prescribed standard format, which details
rights and duties of investor and DP. DP should provide the investor with a copy of
the agreement and schedule of charges for their future reference. The DP will open
the account in the system and give an account number, which is also called BO ID
(Beneficiary Owner Identification number). The DP may revise the charges by giving
30 days notice in advance. SEBI has rationalised the cost structure for
dematerialisation by removing account opening charges, transaction charges for credit
of securities, and custody charges vide circular dated January 28, 2005. Further, SEBI
has vide circular dated November 9, 2005 advised that with effect from January 9,
2006, no charges shall be levied by a depository on DP and consequently, by a DP on
a Beneficiary Owner (BO) when a BO transfers all the securities lying in his account
to another branch of the same DP or to another DP of the same depository or another
depository, provided the BO Account/s at transferee DP and at transferor DP are one
and the same, i.e. identical in all respects. In case the BO Account at transferor DP is
a joint account, the BO Account at transferee DP should also be a joint account in the
same sequence of ownership.

Transfer of Shares between DPs

To transfer shares, we need to fill the Depository Instruction Slip Book (DIS). Firstly
we need to check, whether both Demat account's Depository Participant is same or
not(CDSL or NSDL) If both of them are different, then we need an INTER
Depository Slip (Inter DIS). If they are same, then we need INTRA Depository Slip
(Intra DIS).

52
For example: If we have one Demat account with CDSL and other Demat account
with NSDL, then we need an Inter DIS.

Generally, brokers issue Intra DIS, so do check with broker.

Once we identify the correct DIS, fill the relevant information like

1) scrip name

2) INE number

3) quantity in words and figures and submit that DIS for the transfer to the broker
with signatures. The transferor broker shall accept that DIS in duplicate and
acknowledge receipt of DIS on duplicate copy.

Do try to submit that DIS when market is on. Accordingly, date of submission of DIS
and date of execution of DIS can be same or a difference of one day is also
acceptable.

For transfer, you shall also pay the broker some charges.

Remember: DIS is almost like a cheque book. Accordingly, it can be misused if

issued blank. So deposit only a completely filled in Slip to broker. Do cut out unfilled
rows so that none can fill them later on.

Benefits of opening DEMAT ACCOUNT for investors

A Demat account has become a necessity for all categories of investors for the
following:

a) SEBI has made it compulsory for trades in all listed scrips to be settled in Demat
mode. Although, trades upto 500 shares can be settled in physical form, physical

settlement is virtually not taking place for the apprehension of bad delivery on
account of mismatch of signatures, forgery of signatures, fake certificates etc.

b) It is a safe and convenient way to hold securities compared to holding securities in

physical form.

c. No stamp duty is levied on transfer of securities held in demat form.

53
d) Instantaneous transfer of securities enhances liquidity.
e) It eliminates delays, thefts, interceptions and subsequent misuse of certificates.
f) Change of address, registration of Power of Attorney – can be effected across
companies by one single instruction to the DP.

g) Each share is a market lot for the purpose of transactions - so no odd lot problem.
h) Any number of securities can be transferred / delivered with one delivery
instruction. Therefore, paperwork and signing of multiple transfer forms is done away
with.

i) It facilitates taking loans / advances against securities.

j) Immediate credits in case of any allotment in bonus, rights issues and IPOs.

Benefits of opening a Demat account with CDSL

a) The unique centralized database of CDSL enables DPs to debit/credit securities

instantaneously to the BO’s account.

b) CDSL allots a unique demat account number to each investor, which ensures
debit/credit of securities only to the intended account. Thus, if an account number is
keyed in incorrectly, CDSL system will not effect the transaction.

c) CDSL offers a settlement facility to its BO’s under which securities sold or
purchased by them, through any broker on BSE/NSE, can be directly debited/credited
in their BO account without routing it, through the broker’s pool account.

d) The cost for settlement of securities through CDSL is lower in most cases. Thus,
BOs can expect a lower charge in respect of securities held in CDSL accounts.

e) Investors can monitor and access their holding and the status of their transactions in
their accounts through CDSL’s internet based facility ‘easi’. Further, using CDSL’s
internet based facility ‘easiest’ BOs can also submit settlement instructions through
the internet.

54
A Demat account can not be opened directly with CDSL. The Demat account has to
be opened only though a DP of CDSL.The investor has a choice to open another
Demat account with any CDSL DP.

SEBI has directed that no investor should pay account opening charges, besides the
statutory charges. Any number of securities admitted with CDSL can be
dematerialized and held in one Demat account.

The process of opening a demat account through a DP of CDSL is very simple and
easy. It is similar to the opening of a bank account.

• Investor has to first choose a DP based on his convenience and the DP’s charges.

• The investor has to submit a completely filled, signed account opening form in the
prescribed format along with following documents such as Photocopy of the PAN
card, Proof of Identity, Proof of address. List of documents which are acceptable as
proof of identity / address can be obtained from the DP.

• Before opening the demat account, the investor will have to execute an agreement
on a stamp paper to be provided by the DP, which defines the rights and obligations
of both, the investor and the DP.

• On opening a demat account, a unique BO ID (Beneficial Owner Identification)

Number is allotted, which should be quoted in all future transactions.

SEBI has made it mandatory for all existing and new account holders to submit a
copy of their PAN card, along with the original for verification. This requirement is a
security measure. The Dividend / interest warrants issued by the Companies will have
your name printed on it, so that the warrants can not be misused by other person.

CHAPTER-3

PROCEDURE OF DEMAT ACCOUNT

55
Opening an account

Steps involved in opening a demat account First an investor has to approach a DP and
fill up an account opening form. The account opening form must be supported by
copies of any one of the approved documents to serve as proof of identity (POI) and
proof of address (POA) as specified by SEBI. Besides, production of PAN card in
original at the time of opening of account has been made mandatory effective from
April 1, 2006.

All applicants should carry original documents for verification by an authorized

official of the depository participant, under his signature. Further, the investor has to
sign an agreement with DP in a depository prescribed standard format, which details
rights and duties of investor and DP. DP should provide the investor with a copy of
the agreement and schedule of charges for their future reference. The DP will open
the account in the system and give an account number, which is also called BO ID
(Beneficiary Owner Identification number). The DP may revise the charges by giving
30 days notice in advance. SEBI has rationalised the cost structure for
dematerialisation by removing account opening charges, transaction charges for credit
of securities, and custody charges vide circular dated January 28, 2005. Further, SEBI
has vide circular dated November 9, 2005 advised that with effect from January 9,
2006, no charges shall be levied by a depository on DP and consequently, by a DP on
a Beneficiary Owner (BO) when a BO transfers all the securities lying in his account
to another branch of the same DP or to another DP of the same depository or another
depository, provided the BO Account/s at transferee DP and at transferor DP are one
and the same, i.e. identical in all respects. In case the BO Account at transferor DP is
a joint account, the BO Account at transferee DP should also be a joint account in the
same sequence of own.

Trading in the Indian stock market needs a Demat account, and the money to trade.
Demat account is the short form of Dematerialized account. Demat account keeps the

electronic list of one’s shares in the stock market. It is the sole thing needed to buy
and sell stocks and shares. If one is wondering as how to open Demat account
following are the given procedure of opening a Demat account:

56
• Demat account can be opened with any registered DP or depository participant.
• One who is wondering how to open Demat account should get a list of registered
DPs in the websites of National Securities Depository Limited and Central Depository
Service Limited.
•The willing person should fill an account opening form.
• The customer should submit attested photocopies of his/her details. The documents
needed are:

1) Identity proof – Photocopies of passport or pan card or driving license.¬

2) Residence proof – Photocopies of the above mentioned documents.¬
3) Account details given by the bank.
4) Photocopy of work permit

• The customer should choose either Standard Rate Card or Frequent Trader Rate
Card according to his/her trading volume.
• If the customer is willing to hold bonds in Demat form he/she can opt for Bonus
Rate Card.
• When the customer is getting through as how to open Demat account he/she should
the proper mode of investment suited, like PINS or Non PINS.
• A particular charge is to be paid for opening and maintaining the Demat account
which varies according to DPs.
• The DP will allocate the customer with Beneficial Owner Identification which is
also known as BO ID. This is needed to quote while making transactions.

Demat Account Opening Form

(For Individuals only)

Sole / First Holder.s Details

Name (Mr./Ms.)…………………………………

Name of Father / Husband………………………

Local / Permanent Address……………………...

Pin Code…………………………………………

Correspondence Address……………………….

Pin Code………………………………………...

57
Telephone No./ Mobile No……………………..

Fax No. SMS Facility Yes No………………….

E-mail ID……………………………………….

Occupation MAPIN ID…………………………

CRN ID…………………………………………

Branch………………………………………….

I/We request you to open a depository account in my/our name as per the following
details:

(Please fill all the details in CAPITAL LETTERS only)

Other Holder Details : Second Holders Details

Name (Mr./Ms.)………………………………..

Name of Father / Husband……………………..

Address…………………………………………

Pin Code………………………………………...

Telephone No./ Mobile No……………………..

Fax No. SMS Facility Yes No………………….

E-mail ID……………………………………….

Occupation MAPIN ID…………………………

CRN ID…………………………………………

Kotak Mahindra Bank

Type of Account

Ordinary Resident NRI-Repatriable NRI-Non-Repatriable Others (Please specify)

HUF

Third Holder.s Details

Name (Mr./Ms.)……………………………….

Name of Father / Husband………………………

58
Address………………………………………….

Pin Code…………………………………………

Telephone No. Mobile No………………………

.
Fax No. SMS Facility Yes No…………………..

E-mail ID………………………………………..

Occupation MAPIN ID…………………………

CRN ID…………………………………………

KMBL/AOF-DMAT-I/K/04-06………………..

Vinay Bhavya Complex, C.S.T. Road, Kalina, Santacruz (East), Mumbai-400 098.

DP ID IN 302814 Serial No.

Date Client ID………………………………….

(To be filled by Participant)

D D MM Y Y Y Y……………………………..

Address for communication / Corporate Benefits (Default option is Local Address)

Local / Permanent Address Correspondence / Foreign Address

Financial Details……………………………….

Sole/First Holder……………………………….

P.A.N. / G.I.R. No. IT Circle / Ward / District No…………

Second Holder
P.A.N. / G.I.R. No. IT Circle / Ward / District No…………..

Third Holder………..
P.A.N. / G.I.R. No. IT Circle / Ward / District No……………

Guardian (In case of minor)…………………………………..

P.A.N. / G.I.R. No. IT Circle / Ward / District No……………

Standing Instructions

I/We authorise you to receive credits automatically into my/our account Yes No

(Default is Yes for resident accounts and No for non-resident accounts)

59
Account to be operated through Power of Attorny (PoA) Yes No

Photographs

Please attach recent passport size photographs in the space provided below:

Sole/First Holder Second Holder Third Holder…………………

Signature…………………

Across

Photograph

Signature…………………..

Across

Photograph

Signature…………………..

Across

Photograph

In case of NRIs

Foreign Address……………..

RBI Reference No…………...

RBI Approval Date D D M M Y Y Y Y……………….

Bank Details……………………………………………

Bank Sub-type Saving Account Current Account……...

Bank Account No……………………………………….

Bank Name………………………………………………

Branch Address………………………………………….

9) Digit Number of Bank & Branch appearing on MICR cheque issued by Bank

Pin Code…………………………………………………

Guardian Details (In case the Sole Holder is a minor)

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Name………………………………………………………

Relationship (if any)………………………………………

Address……………………………………………………

Date of Birth (if minor) D D M M Y Y Y Y……………..

Pin Code………………………………………………….

KMBL/AOF-DMAT-I/K/04-06…………………………

Declaration……………………………………………….

The rules and regulations of the Depository and Depository Participants pertaining to
an account which are in force now have been read by me/us and I/we have understood
the same and I/we agree to abide by and to be bound by the rules as are in force from
time to time for such accounts. I/We also declare that the particulars given by me/us
are true to the best of my/our knowledge as on the date of making such application.
I/We further agree that any false / misleading information given by me or
suppressionof any material fact will render my account liable for termination and
further action.I/We have read and understood the Terms and Conditions the opening
of an account with Kotak Mahindra Bank Ltd. I/We accept and agree to be bound by
the said Terms andConditions including those excluding/limiting the Banks
liability.I/We consent to make available view and/or enquiry rights on Net Banking
and Phone Banking available to all the account holders.

For Bank Use Only

Branch CPC…………………

Account Sourcing Date Checked by

Source Code Authorized by

Lead Generator Code Activation by

Lead Convertor Code…………

RM Code……………………..

Checked by Debit Authorisation

I/We authorise you to debit my/our current/savings account number towards the
service charges for this demat account.

61
Signature(s)…………………

First Account Holder, Second Account Holder, Third Account Holder

Name(s) of holder(s) Signature(s)………………

Sole/First Holder………………………………..

(Mr./Ms.)……………………………………….

Second Holder………………………………….

(Mr./Ms.)……………………………………….

Third Holder|……………………………………

(Mr./Ms.)………………………………………..

Guardian (in case of minor)…………………….

(Mr./Ms.)………………………………………..

Nomination Form

I/We wish to make a nomination and do hereby nominate the following person in
whom all rights and / or amount payable in respect of securities held in the Depository
by me / us in the said beneficiary owner account shall vest in the event of my / our
death.

Name of the Nominee (Mr./Mrs.)…………………..

Relationship with Applicant, if any

Address of Nominee………………………………..

Date of Birth (in case of minor)…………………….

Name of Guardian (Mr./Mrs.) (in case nominee is a minor)

Address of Guardian………………………………..

D D M M Y Y Y Y…………………………………

Pin Code…………………………………………….

62
Pin Code…………………………………………….

Photograph of the Nominee………………………….

Signature of Guardian………………………………..

Photograph of the Guardian (in case of minor)

Name and Address Signature with date……………..

1. Name………………………………………………

2. Address……………………………………………

Signature(s)…………………………………………..

(Sole/First Holder) (Second Holder) (Third Holder)…

Signature of Nominee………………………………..

Signature of two Witnesses………………………….

(To be signed by the applicant only in case of nomination)

Notes :…………………………………………………

1) All communication shall be sent at the address of the Sole/First holder only.

2) Thumb impressions and signatures other than English or Hindi or any of the other
language not contained in the 8th Schedule of the Constitution of India must be
attested by a Magistrate or a Notary Public or a Special Executive Magistrate.

3) As per NSDL Circular No. NSDL/PI/2004/1622 dated September 7, 2004 pursuant

to SEBI Circular No. MRD/DoP/Dep/Cir-29/2004 dated August 24, 2004 a copy of
any one of the following documents may be accepted as proof of identity / proof of
address (loc al/correspondence/foreign address as the case may be):

Proof of Identity: Passport, Voter ID Card, Driving license, PAN card with
photograph, MAPIN card, Identity card/document with applicant.s Photo, issued by a)

63
Central/State Government and its Departments, b) Statutory/Regulatory Authorities,
c) Public Sector

Undertakings, d) Scheduled Commercial Banks, e) Public Financial Institutions, f)

Colleges affiliated to Universities, g) Professional Bodies such as ICAI, ICWAI,

ICSI, Bar Council etc., to their Members; and h) Credit cards/Debit cards issued by
Banks.

Proof of Address: Ration card, Passport, Voter ID Card, Driving license, Bank
passbook, verified copies of Electricity bills (not more than two months old)/
Residence Telephone bills (not more than two months old)/ Leave and License
agreement / Agreement for sale, Self-declaration by High Court & Supreme Court
judges, giving the new address in respect of their own accounts, Identity
card/document with address, issued by a) Central/State Government and its
Departments, b) Statutory/Regulatory Authorities, c) Public Sector Undertakings, d)
Scheduled Commercial Banks, e) Public Financial Institutions, f) Colleges affiliated
to universities; and g) Professional Bodies such as ICAI, ICWAI, Bar Council etc., to
their Members. Participants must verify the copy of the document with the original.

Instructions related to nomination, are as below:

I. The nomination can be made only by individuals holding beneficiary owner

accounts on their own behalf singly or jointly. Nonindividuals including society, trust,
body corporate, partnership firm, karta of Hindu Undivided Family, holder of power
of attorney cannot nominate. If the account is held jointly all joint holders will sign
the nomination form.

II. A minor can be nominated. In that event, the name and address of the Guardian of
the minor nominee shall be provided by the beneficial owner.

III. The Nominee shall not be a trust, society, body corporate, partnership firm, karta
of Hindu Undivided Family or a power of Attorney holder. A non-resident Indian can
be a Nominee, subject to the exchange controls in force, from time to time.

64
IV. Nomination in respect of the beneficiary owner account stands rescinded upon
closure of the beneficiary owner account. Similarly,the nomination in respect of the
securities shall stand terminated upon transfer of the securities.

V. Transfer of securities in favour of a Nominee shall be valid discharge by the

depository against the legal heir.

VI. The cancellation of nomination can be made by individuals only holding

beneficiary owner accounts on their own behalf singly or jointly by the same persons
who made the original nomination. Non- individuals including society, trust, body
corporate, partnership firm, karta of Hindu Undivided Family, holder of power of
attorney cannot cancel the nomination. If the beneficiary owner account is held
jointly, all joint holders will sign the cancellation form.

VII. On cancellation of the nomination, the nomination shall stand rescinded and the
depository shall not be under any obligation to transfer the securities in favour of the
Nominee.

2) Strike off whichever is not applicable.

Acknowledgement

Participant Name, Address & DP Id

Received the application from Mr. / Ms. as the sole/first holder along with and as the
second and third holders respectively for opening of a depository account. Your
Client Id will be intimated to you shortly. Please quote the DP Id & Client Id allotted
to you in all your future correspondence.

Date :
Participant Stamp & Signature

General Tariff

SERVICES AMOUNT MINIMUM (where applicable)

Account Opening * FREE (Stamp duty as applicable)

Account Maintenance Charges Rs. 400 /- annum

STATEMENTS

On request statement at the branch Rs. 25 each request

65
On request statement by post Rs. 500 each request (address outside India)

Transactions:

Dematerialisation Rs. 3 per Certificate, plus Rs. 25 per request

Rematerialisation Rs.10 per certificate Rs. 10 per certificate

Market Sell transactions 0.04% of transaction value Rs. 25 per scrip

Off Market Sell Transaction 0.04% of transaction value Rs. 25 per scrip

Late Instruction Fees ** 0.05% of transaction value Rs. 35 per instruction

Inter-Depository Sell Transaction 0.04% of transaction value Rs. 25 per transaction

PLEDGE
Pledge Creation / Closure / Invocation 0.02 % of transaction value Rs. 50 per
transaction

OTHERS
Service Tax (subject to change, as prescribed by Currently 12.24 %
Tax Authorities from time to time)
Account Holder(s) having Banking relationships with Kotak Mahindra Bank Ltd. will
provide a debit authorisation for the recovery of Demat service charges. Account
Holder(s) having a Demat relationship only will be required to pay an advance fee of
Rs. 2500/- for each Demat Account which will be used to adjust the Demat service
charges. The account holder(s) will further undertake to maintain a minimum balance
of Rs.1000/- at all times.

All market instructions for transfer must be received latest by 4.00 p.m. on the
previous working day prior to the pay in day as per SEBI Guidelines. All off market
instructions for transfer must be received at least 1 day before the execution date. Late
instructions would be accepted at the account holder.s sole risk and responsibility and
will invite additional charges as specified in the table above.

Account Maintenance charge are non refundable and payable in advance.The Bank
reserves the right to freeze Demat Account for debit transactions, in case account

66
holder(s) fail to pay service charges by due date mentioned in bills or do not maintain
adequate balance in Savings/Current Account for the same, as the case may be.

Bills for Demat services will be raised monthly. Charges quoted above are for the
services listed. Any service not listed above will be charged separately as per Bank.s
policy charges are subject to revision at the Banks sole discretion by giving 30 days
notice and intimated by ordinary post.

Signature(s) with stamp of the Organisation First /Sole Holder Second Holder Third
Holder

Agreement between the Depository Participant and the person seeking to open an
Account with the Depository Participant (Schedule A).This agreement made and
entered into this day of between situated at (hereinafter called .the Client.) and
KOTAK MAHINDRA BANK LIMITED situated at Vinay Bhavya Complex, C.S.T.
Road, Kalina, Santacruz (East), Mumbai-400 098. (hereinafter called .the Depository
Participant.) whereas the Client.s has/have furnished to the Depository Participant the
duly filled in application form requesting therein to open an account with the
Depository Participant. now therefore in consideration of the Depository Participant
having agreed to open an account for the Client.s, both the parties to the agreement
hereby convenient and agree as follows:-

1) The Client/s shall pay the charges to the Depository Participant for the purpose of
opening and maintaining his account, for carrying out the instructions of the Client/s
and for rendering such other services as may be agreed to from time to time between
the Depository Participant and the Client/s as set out in Schedule A. The Depository
Participant shall reserve the right to revise the charges by giving not less than thirty
days notice in writing to the Client/s.

2) The Client/s shall have the right to get the securities which have been admitted on
the Depository dematerialised in the form and manner laid down under the Bye Laws
and Business Rules. The Depository Participant further undertakes that it shall not
create or permit to subsist any mortgage, charge or other encumbrance over all or any
of such securities submitted for dematerialisation except on the instructions of the
Clients.

67
3) The Depository Participant hereby undertakes that it shall maintain a separate
account of its own securities held in dematerialised form with the Depository and
shall not commingle the same with the securities submitted for dematerialisation form
on behalf of the Client/s.

4)The Depository Participant undertakes that a transfer to and from the accounts of
the Client/s shall be made only on the basis of an order, instructions, direction or
mandate duly authorised by the Client/s that the Depository Participant shall maintain
adequate audit trail of such situation.

5) The Depository Participant agrees that the Client/smay give standing instructions
with regard to the crediting of securities in his account and the Depository Participant
shall act according to such instructions.

6) The Depository Participant undertakes to provide a transaction statement including

statement of accounts, if any, to the Client/s at monthly interval unless the Depository
Participant and the Client/s have agreed for provision of such a statement at shorter
intervals. However, if there is no transaction in the account, then the Depository
Participant shall provide such a statement to the Client at least once a quarter.

7) The Depository Participant shall have the right to terminate this agreement, for any
reason whatsoever, provided the Depository Participant has given a notice in writing
of not less than thirty days to the Client as well as to the Depository. Similarly, the
Client/s shall have the right to terminate this agreement and close his account held
with the Depository Participant, provided no charges are payable by him to the
Depository Participant. In such an event, the client shall specify whether the balances
in its account should be transferred to another account of the Client held with another
Depository Participant or to rematerialised the security balances held. Based on the
instructions of the Clients the Depository Participant initiate the procedure for
transferring such security balances or rematerialising such security balances within a
period of thirty days, as per the procedure laid down in the Bye Laws and Business
Rules. Provided further, termination of the agreement shall not affect the rights,
liabilities and obligations of either party and shall continue to bind the parties to their
satisfactory completion.

68
8) On failure of the Client/s to pay the charges as laid out in clause (1) of this
agreement within a period of thirty days from the date of demand Depository
Participant may terminate this agreement and close the account of the Client by
requiring it to specify whether the balance in its account be transferred to the account
of the Client/s held with another participant or be rematerialised in the manner
specified in the Bye.

9) The Clients further agrees that in the event of the Clients committing a default in
the payment of any of the amounts provided in clause within a period of thirty days
from the date of demand, without prejudice to the right to the Depository Participant
to close the account of the Client, the Depository Participant may charge interest @
not more than 24% p.a. or such other rate as may be specified by the Executive
Committee from time to time for the period of such default. In case the client has
failed to make the payment of any of the amounts as provided in clause of this
agreement, the Depository Participant shall have the right to discontinue the
depository services till such time he makes the payment along with interest, if any,
after giving two days notice to the Client.

10) The Depository Participant shall have a right to provide such information related
to the Client/s account as may be requested by National Securities Depository Limited
from time to time.

11) The Client shall have the right to create a pledge of the securities held in the
dematerialized form with the Depository Participant only in accordance with the
procedure and subject to the restrictions laid down under the Bye Laws and Business
Rules.

12) The Depository shall not be liable to the Client/s in any manner towards losses,
liabilities and expenses arising from the claims of third parties and from taxes and
other government charges in respect of securities credited to the Client/s account.

13) The Client/s may exercise the right to freeze his account maintained with the
Depository Participant so as to lock the securities held with the Depository Participant
in accordance with the procedures prescribed in the Bye Laws and Business Rules.

14) The Client/s may exercise the right to defreeze his account maintained with the
Depository Participant in accordance with the procedures and subject to the
restrictions laid down under the Bye Laws and Business Rules.

69
15) The Client/s shall notify the Depository Participant, within seven days, of any
change in the details set out in the application form submitted to the Depository
Participant at the time of opening the account or furnished to the Depository
Participant from time to time.

16. The Depository Participant undertakes to resolve all legitimate grievances of

Client/s against the Depository Participant within a period of thirty days.

17. The Depository Participant and the Client/s shall abide by the arbitration and
conciliation procedure prescribed under the Bye Laws of National Securities
Depository Limited and that such procedure shall be applicable to any disputed
between the Depository Participant and the Client/s.

18. The Depository Participant and the Client/s further agree that all claims,
differences and disputes, arising out of or in relation to dealings on the Depository
including any transactions made subject to the Bye Laws or Business Rules of the
Depository or with reference to anything incidental thereto or in pursuance thereof or
relating to their validity, construction, interpretation, fulfillment or the rights,
obligations and liabilities of the parties thereto and including any questions of whether
such dealings, transactions have been entered into or not, shall be subject to the
exclusive jurisdiction of the courts at Mumbai only.

In witness whereof the Clients and the Depository Participant has caused these
presents to be executed as of the day and year first above written.

Signed and delivered by

1st Applicant/Signatory 2nd Applicant/Signatory 3rd Applicant/Signatory

(For and on behalf of the Client)

Witness

(Signed and delivered by)

Name…………………..

Address……………….

(For & on behalf of KOTAK MAHINDRA BANK LIMITED)

70
Witness……………….

Name………………….

Address……………….

Angel Broking Limited…..

Personally visited the following address and recorded the presence of

:
Name of Account Holder1…….

Local/Permanent Address……

City State Pin………………...

Correspondence Address……..

City State Pin…………………

Name of Account Holder 2…...

Address……………………….

City State Pin…………………

Name of Account Holder 3…...

Address……………………….

City State Pin…………………

Verify the above address(es) and Identity on (date and time)

Verified By…………………..

Name Employee Code……….

Signature of Employee………

Instructions for completing the Registration Form

1. Personal Details

• Please provide your correct address of contact so that Exchange could get in
touch with if more information is required.

• Please furnish the details of your beneficiary account (i.e. client id, DP id, DP
name)

71
2. Company Details

• Before filling the complaint forms please check whether the securities of the
company are listed on the Exchange.

• Please fill the correct details of name of company and Registrar & Transfer
Agent (RTA) of the company. In case the RTA details are not available please
leave it blank.

3. Nature of Complaints:

Corporate Actions: Complaint regarding non-receipt of…

a. Dividend

• Mention whether it is interim / final / special dividend.

• Please mention the year(s) for which you have not received the dividend from
the company.

• Enclose the copy of the documents in support of your holding of shares.

• Incase you are holding physical shares, please provide us folio no. and
distinctive no.

b. Interest on Debentures, Bonds or other Debt Instruments

• Mention the type of the instrument whether it is debenture / bond and whether
it is convertible / non-convertible.

• Please mention the year(s) and period for which you have not received the
interest from the company.

• Enclose copy of documents in support of your holding of security.

c. Redemption Amount

• Mention the type of instrument whether it is debenture / bonds / units /

preference shares and whether it is convertible / non-convertible.

• Please mention the date of the maturity.

72
 • Enclose copy of documents in support of your holding of security.

d. Securities on account of a Bonus / De-merger / Merger / Stock Split

• Specify the type of issue / offer as bonus / merger / de-merger / stock split and
type of security held by you as debenture / bonds / units / equity / preference
shares / others.

• Mention number of securities held by you before the relevant record date /
book closure date for corporate action.

Public / Further offerings: Complaint regarding non-receipt of…

a. Allotment Advice

Please specify the type of the issue/offer as Initial Public Offer / Follow on Public
Offer / Rights Offer / Preference offer and type of the security as units / equity /
preference shares / convertible or Non- convertible debt instruments.

• Please mention the application number/ Composite Application Number,

details of amount paid, number of securities applied.

b. Securities purchased through an Initial Public Offer

Mention the type of security as debenture/bonds/units/equity / preference shares held

by you.

Mention the number of securities applied and details of amount paid for these
securities and no. of securities claimed.

c. Refund Order

• Please specify the type of the issue/offer as Initial Public Offer / Follow on
Public Offer / Rights Offer / Preference offer and type of the security as
debentures / units / equity / preference.

• Please mention the application number/ Composite Application Number,

number of securities applied and allotted, details of amount paid and refund
amount to be received.

d. Interest on delay Redemption / Refund Amount.

73
 • Please specify the type of the issue/offer as Initial Public Offer / Follow on
Public Offer / Rights Offer / Preference offer and type of the security as units /
equity / preference shares / convertible or Non- convertible debt instruments.

• Please mention the application number, number of securities applied and

allotted, details of amount paid, refund/ principal amount not received, date of
receipt of refund amount and interest amount claimed by you.

e. Sale Proceeds of Fractional Entitlement

• Specify the type of corporate action as bonus / merger / de-merger / stock

split.

• Please mention number of securities held by you in the company before the
corporate action. Also, mention the fractional entitlement claimed by you.

f. Composite Application Form (CAF) for Rights Offer

• Please specify the type of security as debentures / equity / preference shares

held by you.

• Please mention number of securities held by you, before the relevant record
date / book closure date for corporate action.

g. Securities purchased through a Rights Offer

• Please the type of security as debentures/equity/preference/warrant/other held

by you.

• Please mention Composite Application Number, number of securities held by

you, ratio of right offer, your entitlement, details of amount paid by you to the
company.

• Number of securities claimed as not received.

h. Letter of offer for Buyback

• Please specify the type of security as debentures / equity / preference shares

held by you

74
 • Please mention number of securities held by you, number of securities offered
to you, price per security and total amount.

C) Transfer of Securities: Complaint regarding non-receipt of…

a. Securities after Dematerialization /

b. Securities after Transfer/Transmission /

c. Duplicate Certificate relating to Securities /

• Please specify the type of security as debentures / equity / preference shares /

tradable warrant /sent for dematerialization / transfer / transmission / issue of
duplicate certificate.

• Please provide details of correspondence and copies submitted to company.

D) Miscellaneous:

a. Complaint regarding non-receipt of copy of the Annual Reports

Please mention the year for which you have not received the annual report from the
company.

b. Other complaints

• Please describe your complaint with details of your claim along with
documentary support in proof of your claim.

4. Value of Claim

• Please mention your claim in financial terms by specifically stating the value
of your claim.

• If your claim is partially for receipt of funds and partially for receipt of
securities, for the purpose of ascertaining value please consider the value of
securities as basis of your calculations.

• Please attach a statement giving details of how claim value has been arrived at.

5. List of Documents Attached

• Please take care to attach copyof the documents in support of your claim,

• Please list out the documents that you have attached with the claim form,

75
 • Also list out the documents that you have not produced along with reasons
thereof,

List of documents that can be attached to substantiate your complaint:

• Statement of holding as on record date/ book closure date,

• Counter part of application form/ composite application form,

• Copy of bank statement / passbook,

• Acknowledgement by syndicate member/ bank,

• Copy of allotment advice, share / debenture / bond certificate, letter of

entitlement,

• Copy of acknowledgement given by DP,

• Copy of Letter issued by DP/ company/ RTA / transfer deed,

• Copy of acknowledgement given by company, indemnity bond, FIR filed with

police, etc.

6. Details of Complaints taken up with the Company

• If the complaint has already been taken up with the company, please provide
the copies of complaint lodged with company and copies of response received
from company along with the documents received.

7. Additional Information

• Please describe your complaint in a precise manner and mention additional

facts which are not already covered that you would like Exchange to know.

8. General Instructions

• Please fill the complaint form in legible manner,

• Complaints relating to following issues which cannot be taken up by ISC

(Investor Services Centre)

• Complaints pertaining to securities not listed on the Exchange,

• Complaints for refund of postal charges, telephone expenses and

miscellaneous charges,

76
 • Compensation for mental agony, harassment,

• Notional loss due to delay in receipt of shares sent for transfer or after IPO,

• Complaints which fall outside the purview of the listing agreement and not
related to the Exchange,

• Pledge and assignment of shares,

• Inability of complainant to establish ownership of security complaint against.

SMS Alert facility for NSDL Demat account holders

Introduction

NSDL has launched SMS Alert facility for demat account holders whereby investors

can receive alerts for debits (transfers) to their demat accounts, credits for IPO and

offer for sale allotment, sub-division and bonus. Alerts are also sent in case the

instructions given by investors for debiting their demat accounts fail or pay-in related

instructions remain pending for execution due to insufficient balance. These alerts are

sent to those account holders who have provided their mobile numbers to their

Depository Participants (DPs). Alerts for debits are sent, if the debits (transfers) are

up to five ISINs in a day. In case debits (transfers) are for more than five ISINs, alerts

are sent with a message that debits for more than five ISINs have taken place and that

the investor can check the details with the DP or on IDeAS website, if the investor is

an IDeAS subscriber.

Benefits

1. Investors will get to know about debits and credits for IPO and offer for sale

allotment, sub-division, bonus and failed debit instructions & pay-in related

instructions remaining pending for execution due to insufficient balance without

having to call-up their DPs.

77
 2. Investors need not wait for receiving Transaction Statements from DPs to

know about such debits and credits.

3. In case of any discrepancy, the investor can approach its DP for clarification

sooner.

Charges
No charge is levied by NSDL on DPs for providing this facility to investors.
Registration

This facility is available to investors who request for such a facility and provide their

mobile numbers to the DPs. In case mobile numbers already given have changed,

investors need to inform their DPs about the new numbers by way of written requests.

Investors who have not yet provided their mobile numbers to their DPs can also avail

this facility by intimating their mobile numbers to their DPs and submit a written

request for this facility. This facility is not available to investors who have registered

mobile numbers originating outside India.

Thus, this facility will be available to the investors provided they have given their

mobile numbers to their DPs and the DPs have captured the numbers in the computer

system and have also enabled (ticked) the SMS flag in their system.

Contact

The investors may contact their respective DPs in case they do not receive SMS alert

inspite of registering for this facility. Those investors who have provided their mobile

numbers to their DPs but do not wish to avail this facility may also inform their DPs.

For further details / information investors may contact at:

Investor Relationship Cell

National Securities Depository Limited

78
4th Floor, A Wing, Trade World, Kamala Mills Compound
Senapati Bapat Marg, Lower Parel, Mumbai – 400 013.
Tel.: (022) 2499 4200 / 4090 4200 Fax: (022) 2497 6351
Email: relations@nsdl.co.in
Terms and Conditions

Definition

In these Terms and Conditions, the following terms shall have the following
meanings:

“Alerts” or “Facility” means the customized messages with respect to specific

events/transactions relating to an Investor’s Account sent as Short Messaging Service

(“SMS”) over mobile phone to the Investor; “Investor” means the person who holds
an Account;

“Account” means the demat account of the Investor with NSDL maintained through
its Depository Participant;

“ISIN” means an International Securities Identification Number assigned to a

security;

“CSP” means the cellular service provider through whom the Investor or NSDL
receives the mobile services.

Availability

NSDL at its sole discretion may discontinue the Facility at any time by providing a
prior intimation through its website or any other medium of communication. NSDL
may at its discretion extend the Facility to investors who register mobile phones
originating outside The Alerts would be generated by NSDL and will be sent to the
investors on the mobile number provided by the investor and the delivery of the Alert
would be entirely based on the service availability of the service provider and
connectivity with other cellular circles of the CSPs or in circles forming part of the
roaming GSM network agreement between such CSPs. The Alerts are dependent on

79
various factors including connectivity and, therefore, NSDL cannot assure final and
timely delivery of the Alerts.

The investor will be responsible for the security and confidentiality of his/her Mobile
Phone and mobile phone number to be used for this Facility.

Process

This Facility provides Alerts to investors over mobile phones for the debits
(transfers), credits for IPO and offer for sale allotment, sub-division and bonus that
have taken place in their accounts. Alerts are also sent in case the instructions given
by investors for debiting their demat accounts fail or pay-in related instructions
remain pending for execution due to insufficient balance. These Alerts will be sent to
those investors who have requested for such a Facility and have provided their mobile
numbers to their Depository Participants. Alerts will be sent for debits, if the debits
(transfers) are up to five ISINs in a day. In case debits (transfers) are for more than
five ISINs, Alerts will be sent with a message that debits for more than five ISINs
have taken place and that the investor can check the details with the Depository
Participant or on IDeAS website, if the investor is an IDeAS subscriber. Investors
who have provided their mobile numbers to Depository Participants but do not wish
to avail of this Facility may do so by informing their Depository Participants
accordingly.

The investor is duty bound to acquaint himself/herself with the detailed process for
using the Facility and interpreting the Alerts for which NSDL is not responsible for
any error/omissions by the investor.

The investor acknowledges that the Alerts will be implemented in a phased manner
and NSDL may at a later stage; as and when feasible, add more Alerts. NSDL may, at
its discretion, from time to time change the features of any Alert. The investor will be
solely responsible for keeping himself/herself updated of the available Alerts, which
shall, on best-effort basis, be notified by NSDL through its website or any other
medium of communication.

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Receiving Alerts

The investor is solely responsible for intimating in writing to his/her Depository

Participant any change in his/her mobile phone number and NSDL will not be liable
for sending Alerts or other information over his/her mobile phone number recorded
with NSDL.

The investor acknowledges that to receive Alerts, his/her mobile phone must be in an
‘on’ mode. If his/her mobile is kept ‘off’ for a specified period from the time of
delivery of an Alert message by NSDL, that particular message may not be received
by the investor.

The investor acknowledges that the Facility is dependent on the infrastructure,

connectivity and services provided by the CSPs within India. The investor accepts
that timeliness, accuracy and readability of Alerts sent by NSDL will depend on
factors affecting the CSPs and other service providers. NSDL shall not be liable for
non-delivery or delayed delivery of Alerts, error, loss or distortion in transmission of
Alerts to the investor.

NSDL will endeavor to provide the Facility on a best effort basis and the investor
shall not hold NSDL responsible/liable for non-availability of the Facility or non
performance by any CSPs or other service providers or any loss or damage caused to
the investor as a result of use of the Facility (including relying on the Alerts for
his/her investment or business or any other purposes) for causes which are attributable
to /and are beyond the control of NSDL. NSDL shall not be held liable in any manner
to the investor in connection with the use of the Facility.

The investor accepts that each Alert may contain certain account information relating
to the investor. The investor authorizes NSDL to send any other account related
information, though not specifically requested, if NSDL deems that the same is
relevant.

Withdrawal or Termination

NSDL may, in its discretion, withdraw temporarily or terminate the Facility, either
wholly or in part, at any time. NSDL may suspend temporarily the Facility at any time

81
during which any maintenance work or repair is required to be carried out or incase of
any emergency or for security reasons, which require the temporary suspension of the
Facility.

Not withstanding the terms laid down in clause 1.5.1 above, either the investor or
NSDL may, for any reason whatsoever, terminate this Facility at any time. In case the
investor wishes to terminate this Facility, he/she will have to intimate his/her
Depository Participant accordingly.

Fees

At present, NSDL is levying no charge for this Facility on the Depository

Participants. The investor shall be liable for payment of airtime or other charges,
which may be levied by the CSPs in connection with the receiving of the Alerts, as
per the terms and conditions between the CSPs and investors, and NSDL is in no way
concerned with the same.

Disclaimer

This Facility is only an Alert mechanism for the investors and is not in lieu of the
Transaction Statements required to be provided by the Depository Participant to its
clients.

NSDL shall not be concerned with any dispute that may arise between the investor
and his/her CSP and makes no representation or gives no warranty with respect to the
quality of the service provided by the CSP or guarantee for timely delivery or
accuracy of the contents of each Alert.

The investor shall verify the transactions and the balances in his/her account from
his/her Depository Participant and not rely solely on Alerts for any purpose.

NSDL will not be liable for any delay or inability of NSDL to send the Alert or for
loss of any information in the Alerts in transmission.

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Liability

NSDL shall not be liable for any losses, claims and damages arising from negligence,
fraud, collusion or violation of the terms herein on the part of the investor and/ or a
third party.

Return maintenance charge if Demat closed before expiry: SEBI

Market regulator SEBI asked depository participants (DP) to refund the balance
account maintenance charge (AMC) in case an investor closes or shifts his demat
account prior to expiry of the term paid for. "It has been decided that in the event of
closing or shifting of the Demat account from one DP to another, the AMC collected
upfront on annual or half yearly basis by the DP shall be refunded by the DP to the
beneficial owner (BO) for the balance of the quarter/s," the regulator said in a
notification.

SEBI observed that in cases where the AMC is collected on an annual upfront basis,
on closure or shifting of demat accounts, the AMC for the balance period, for which
no service has been provided by the DP, is not refunded to the BO. DPs have a system
of collecting account maintenance charges from BOs towards maintenance of demat
accounts. These are charged on a monthly, quarterly, half yearly or annual basis.

So, from now on, if an annual AMC has been paid by the BO and if the BO closes or
shifts his account in the first quarter, he will be refunded the amount of the balance 3
quarters, which would be 3/4th of the AMC. SEBI said for the purpose of calculation
of the remaining AMC period, the year will begin from the date of opening of the
account.

The Securities and Exchange Board of India (SEBI) asked the depositories to make
amendments to the relevant bye-laws, rules and regulations for implementation of the
decision immediately.

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 CHAPTER-4

RBI GUIDELINES:

Draft revised guidelines on classification and valuation of investments

1) Classification

(i) The global investment portfolio of banks (including SLR securities and non-SLR
securities) should be classified under three categories viz. ‘Held to Maturity’(HTM),
‘Held for Trading’ (HFT) and ‘Available for Sale’(AFS). However, in the balance
sheet, the investments will continue to be disclosed as per the existing six
classifications viz. a) Government securities, b) Other approved securities, c)Shares,
d) Debentures & Bonds, e) Subsidiaries/ joint ventures and f) Others (CP, Mutual
Fund Units, etc.).

(ii) Banks should decide the category of investment at the time of acquisition and the
decision should be recorded on the investment proposals.

(iii) Held to Maturity Securities with fixed or determinable payments and fixed
maturity that a bank has positive intention and ability to hold to maturity may be
classified as Held to Maturity. For example, investment in equity shares (including
banks’ investment in the equity shares of their subsidiaries/ joint ventures), perpetual
preference shares, units of open ended mutual fund schemes and securities with put
option would not qualify for inclusion in HTM category.

A bank does not have a positive intention to hold to maturity an investment in a

financial asset with a fixed maturity if:

a) it intends to hold the financial asset for an undefined period;

b) it stands ready to sell the financial asset (other than if a situation arises that is non-
recurring and could not have been reasonably anticipated by the bank) in response to
changes in market interest rates or risks, liquidity needs, changes in the availability of
and the yield on alternative investments, changes in financing sources and terms or
changes in foreign currency risk; or

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c) The issuer has a right to settle the financial asset at an amount significantly below
its amortized cost. Banks should weed out ineligible securities held in HTM category
and shift these securities to AFS category any time during the first calendar quarter in
which these guidelines become effective. Such shifting should be done at market
value. On such reclassification, the difference between their book value and market
value shall be accounted for in ‘Unrealized gains/ losses on AFS portfolio’.
Consequently, the market value of the individual security on the date of shifting
would become the book value of the security in the AFS portfolio.

Banks’ Boards shall fix internal limits for holdings in HTM category, which shall be
followed on a consistent basis at least for a period of 3 to 5 financial years, without
any change.

(iv) Held for Trading

Trading generally reflects active and frequent buying and selling. The securities
acquired principally for the purpose of selling in the near term with the objective of
generating profit from short term fluctuations in price/ interest rates may be classified
as Held for Trading. These securities are to be sold within 90 days.

(v) Available for Sale

Available for sale securities are those securities that are designated as available for
sale or are not classified under HTM or HFT categories. Banks shall include their
investments in the equity shares of their subsidiaries/ associates/ joint ventures in AFS
category.

Initial recognition

All transactions of sale/ purchase of securities should be reflected in the books as per
trade date accounting method. The trade date is the date that an entity commits itself
to purchase or sell an asset. Trade date accounting refers to :

(a) the recognition of an asset to be received and the liability to pay for it on the
trade date, and derecognizing of an asset that is sold, recognition of any gain
or loss on disposal and the recognition of a receivable from the buyer for
payment on the trade date. Generally, interest does not start to accrue on the
asset and corresponding

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 (b) liability until the settlement date when title passes. An illustration of trade date
accounting is furnished in Appendix I.

Initial measurement

1) Held to Maturity

When securities are recognized initially in HTM category, banks shall measure them
at their market value plus transactions costs that are directly attributable to the
acquisition of the securities; i.e., at the time of initial recognition, transaction costs are
reckoned as a part of book value of the security and included in the calculation of the
amortized cost using the effective interest rate method. Interest accrued up to the date
of acquisition of securities (i.e., broken period interest) is excluded from the
acquisition cost and recognised as interest expense.

2) Held for Trading

When securities are recognised initially in HFT, banks shall measure them at their
market value ignoring the transaction costs. The costs directly attributable to
acquisitions shall be accounted as under:

(a) Brokerage / commission received on subscription may be treated as income.

(b) Brokerage, commission and stamp duty paid in connection with acquisition of
securities may be treated as expenditure.

(c) Interest accrued up to the date of acquisition of securities (i.e., broken period
interest) is excluded from the acquisition cost and recognised as interest expense.

3) Available for Sale

When securities are recognised initially in AFS category, banks may measure them at
their market value plus transactions costs that are directly attributable to the
acquisition of the securities. While determining costs directly attributable to
acquisitions, interest accrued up to the date of acquisition of securities (i.e., broken
period interest) is excluded from the acquisition cost and recognised as interest
expense.

Transaction costs include:

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 • Fees and commissions paid to agents, advisers, brokers and dealers;

• Levies by regulatory agencies and securities exchanges; and

• Transfer taxes and duties.

• Transaction costs do not include:

• Debt premium or discount financing costs;

• Allocations of internal administrative or holding costs;

1. Subsequent measurement

a) Held to Maturity

Investments classified under Held to Maturity category need not be marked to market
and may be measured at amortised cost using the effective interest method.The book
value of the individual securities would change after each subsequent measurement.

Amortised cost

The amortised cost of securities is the amount at which securities are measured at
initial recognition:

(i) plus or minus the cumulative amortisation using the effective interest method of
any difference between that initial amount and the maturity amount, and

(ii) minus any reduction (directly or through the use of an allowance account) for
impairment or uncollectibility.

Effective interest method

Effective interest method is a method of calculating the amortised cost of a financial

asset (or group of financial assets) and of allocating the interest income over the
relevant period. The effective interest rate is the rate at the time of initial recognition,
that exactly discounts estimated future cash or receipts through the expected life of
the financial instrument or, when appropriate, a shorter period to the net carrying
amount of the financial asset. When calculating the effective interest rate, an entity
shall estimate cash flows considering all contractual terms of the financial instrument

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(for example, prepayment, call and similar options) but shall not consider future credit
losses. The calculation includes all amounts paid or received between parties to the
contract that are an integral part of the effective interest rate, transaction costs, and all
other premiums or discounts. There is a presumption that the cash flows and the
expected life of a group of similar financial instruments can be estimated reliably.
However, in those rare cases when it is not possible to estimate reliably the cash flows
or the expected life of a financial instrument (or group of financial instruments), the
entity shall use the contractual cash flows over the full contractual term of the
financial instrument (or group of financial instruments).

For floating rate securities, the effective interest rate is based on discounting cash
flows through the next market based repricing date; ie. the effective interest rate is to
be recomputed based on the latest floating rate. Illustration on calculation of
amortised cost is furnished in Appendix II .

b) Held for Trading

Investments included under HFT category should be measured at market value (which
is to be determined as indicated in Appendix III) at the end of each day. The book
value of the individual securities would change after each of the subsequent
measurements. Both gains and losses on revaluation shall be taken to Profit & Loss
account.

c) Available for Sale

Investments included under AFS category should be measured at market value at

consistent monthly or more frequent intervals. For this purpose, banks will compare
the amortised cost of the investments with fixed and determinable payments and
which have a definite life, with its market value (which is to be determined as
indicated in Appendix III). The book value of the individual securities would change
after each subsequent measurement. An illustration of the method to be adopted at the
time of subsequent measurement is furnished in Appendix IV .In case bank’s
investment in equity shares (including their investments in equityshares of their
subsidiaries/ associates/ joint ventures,) included under AFS, do not have a market
value, the same shall be measured at cost, but subjected to the test for impairment.

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As transaction costs are added to the cost of securities in AFS category at the time of
initial recognition, they are effectively recognised in ‘Unrealised gain/ loss on AFS
portfolio’ as part of a change in market value at the time of first re-measurement.
Further, as they are factored in while calculating effective interest rate, they get
amortised to Profit & loss account, over the life of the asset. There is no need to
account for/ amortise transaction costs separately in respect of securities in AFS
category. If an available-for-sale financial asset does not have fixed or determinable
payments and has an indefinite life, the transaction costs are recognised in profit or
loss when the asset is sold or becomes impaired.

2. Gains or losses

(i) Held to Maturity

A gain or loss on subsequent measurement through amortisation process and on sale

of HTM securities shall be recognised in the Profit and Loss account.

(ii) Held for Trading

A gain or loss on subsequent measurement and on sale of HFT securities shall be

reflected in the Profit and loss account.

(iii) Available for Sale

A gain or loss on subsequent measurement of Available for Sale securities shall be

reflected in ‘Unrealised gain/ loss on AFS portfolio’. On sale, the cumulative gain or
loss previously recognised in ‘Unrealised gain/loss on AFS portfolio’ shall be
recognised in the Profit or Loss account.

Credit balance in ‘Unrealised gain/loss on AFS portfolio’ should be included as a

separate item under Schedule 5 : ‘Other Liabilities and Provisions’. Credit balances in
‘Unrealised gain/loss on AFS portfolio’ (a) may not be reckoned as an ‘outside
liability’ while computing DTL for the purposes of maintaining CRR/ SLR and (b)
shall not be an eligible item of capital funds for capital adequacy purposes. Debit
balance in ‘Unrealised gain/loss on AFS portfolio’ should be included as a separate
item under Schedule 11: ‘Other Assets’. Since a debit balance in ‘Unrealised gain/loss

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on AFS portfolio’ is in the nature of intangible assets, it shall be deducted from Tier I
capital for capital adequacy purposes.

3. Reclassifications

(i) Held to Maturity

If, as a result of a change in intention or ability, it is no longer appropriate to classify

an investment as Held to Maturity, it shall be reclassified as Available for Sale and re-
measured at market value, and the difference between its book value and market value
shall be accounted for in ‘Unrealised gain/loss on AFS portfolio’. The book value of
individual securities would undergo change. The above method should also be
adopted while shifting ineligible securities from HTM to AFS in compliance with
paragraph 1(iii) above.

Limit on reclassification A bank should not classify any security as HTM, if the bank
has, during the current financial year, sold or reclassified before maturity, more than 5
per cent of HTM investments at the end of the previous financial year. For computing
the 5 per cent limit on HTM investments, the following would be excluded:

(i) securities sold/ reclassified, where the residual period to maturity/ call date is not
more than 90 days, since changes in market rate of interest would not have a
significant effect on the security’s market value, or

(ii) where the sale/ reclassification occurs after the enterprise has collected at least 90
per cent of the security’s original principal through scheduled payments or
prepayments; or

(iii) where the sale / reclassification is attributable to an isolated event that is beyond
the bank’s control, is non recurring and could not have been reasonably anticipated by
the bank.

Whenever sale or reclassification of HTM securities exceed the specified limit of 5

per cent of HTM investments, all remaining HTM investments should be reclassified
as AFS on that day. On such reclassification, the difference between their carrying
amount and market value shall be accounted for in ‘Unrealised gain/loss on AFS
portfolio’. The book value of the individual securities would undergo change.

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Further, the bank shall not classify/ hold any securities in HTM category during the
remaining part of the financial year and for two subsequent financial years. This limit
shall become applicable from financial year commencing on April 1, 2008.

(ii) Held for Trading

Banks should not reclassify securities into or out of the Held for Trading category
while it is held. However, shifting of investments from HFT category to AFS category
will be permitted under exceptional circumstances like not being able to sell the
security within 90 days due to tight liquidity conditions, or extreme volatility, or
market becoming unidirectional. Such transfer is permitted only with the approval of
the Board of Directors/ ALCO/ Investment Committee.Transfer of scrips from HFT to
AFS category should be done at the acquisition cost/ book value/ market value on the
date of transfer, whichever is the least. The book value of the individual securities
would undergo change with a corresponding debit to the Profit & Loss account.

(iii) Available for Sale

Banks should not reclassify securities out of the AFS category, while it is held.

RBI's Responsibilities

It's mandatory to quote your bank account number in the demat account opening
form. Therefore, each of over 50,000 fictitious demat accounts is associated to a
fictitious bank account. Your IPO investing experience is dependent on RBI's pulling
up errant banks and plugging the loopholes that allowed opening of these fictitious
accounts.

With big names like ICICI Bank, HDFC Bank and IDBI Bank involved, how can the
investor be assured of safety? The RBI was unresponsive when we asked about its
actions in relation to the involvement of various banks. Says Kirit Somaiya, president,
Investors Grievances Forum: "At least Sebi has shown some courage to hunt down
culprits. The RBI is unnecessarily avoiding action and continuously covering up for
the banking system."

RBI has also been inconsistent in the action it has taken against banks. That's because
RBI has also taken into account the banks' involvement in IPO financing and the lack

91
of due diligence in monitoring end-use of loans. The Banking Regulation Act
empowers RBI to impose a maximum penalty of Rs 500,000. Hence, banks like
Bharat Overseas Bank and Vijaya Bank have escaped with light fines despite
significant contributions to the IPO scam.

In conclusion, the only real power that you possess as an investor is to avoid investing
in IPOs if you feel the regulator will not protect your interests. Instead you can focus
on the secondary market - of course you'll need to ensure your demat account is
operative. Our survivors' guide tells you how to do this.

Operational Guidelines

While the FIs should continue to follow the guidelines, as amended from time to
time, contained in the Circular DBOD.FSC.BC.143A /24.48.001/91-92 dated June 20,
1992, forwarded to them vide our DO No. FIC. 984-994/01.02.00/9-92 dated June 23,
1992, the FIs are advised to ensure compliance with the following guidelines:

a. The FIs should obtain specific approval from their Board of Directors to
enable them to trade in the Government securities on the stock exchanges;

b. The FIs should put in place enabling IT infrastructure, adequate risk

management systems and appropriate internal control systems for the trading /
settlement of government securities on stock exchanges. The back office
arrangements should ensure that the trading on the NDS/OTC market and on
the stock exchanges can be readily tracked for settlement / reconciliation
purposes.

c. The trades done through any single broker will continue to be subject to the
extant guidelines on dealings through brokers.

d. All trades should be settled either directly with clearing corporation / clearing
house (in case they are clearing members) or else through clearing member
custodians. Brokers / trading members shall not be involved in the settlement
process.

e. At the time of trade, securities must be available with the FIs either in their
SGL account with the RBI or in the demat account with the depositories. Any

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 f. sale on (T+3) basis on the Stock Exchanges cannot be covered by a purchase
on the NDS/OTC market [even on (T+0) basis] and subsequent transfer from
SGL account to their demat account for effecting deliveries. Similarly, no sale
is permitted on NDS/OTC on (T+0) basis against pay-in of securities expected
on (T+0) on the Stock Exchanges.

g. The purchase transactions by the FIs should similarly be subject to availability

of clear funds in their settlement accounts at the time of pay-in.

h. All pay-out of funds should invariably be out of clear funds, i.e. the pay-out
must not be contingent upon the outcome of any clearing to be conducted on
that day.

Any settlement failure on account of non-delivery of securities/ non-availability of

clear funds will be treated as SGL bouncing and the current penalties in respect of
SGL bouncing will be applicable. Stock Exchanges will report such failures to the
respective Public Debt Offices.

The FIs should regularly report to their Audit Committee of the Board, the details of
transaction in Government securities, on aggregate basis, undertaken on the Stock
Exchanges and particulars of any "closed-out" transactions on the exchanges.

We also enclose a copy of the RBI Circular IDMC. 2769 /08.01.02/2001-02 dated
December 7, 2001 relating to the Scheme for non-competitive bidding facility to retail
investors in the primary auctions of Government securities for your information. It
may please, however, be noted that since May 2003, the maximum value limit of a
single bid by a non-competitive bidder has been enhanced from Rs. 1.00 crore (face
value) to Rs. 2.00 crore (face value) in the auctions of Government of India dated
securities.

SEBI GUIDELINES:
SECURITIES AND EXCHANGE BOARD OF INDIA

(DELISTING OF SECURITIES) GUIDELINES - 2003

1. These guidelines shall be called “Securities and Exchange Board of India

(Delisting of Securities) Guidelines 2003”.

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2. These guidelines are being issued under section 11(1) of SEBI Act, 1992, read with
sub-section (2) of Section 11A of SEBI Act, with the objective to protect theinterest
of investors in the securities market.

3. DEFINITIONS

3.1 In these Guidelines, unless the context otherwise requires:-

(a) Act’ means the Securities and Exchange Board of India Act, 1992;

(b) Authority’ means the Central Listing Authority established under the Securities
and Exchange Board of India (Central Listing Authority) Regulations, 2003.

(c) ‘Board’ means the Securities and Exchange Board of India established under
section 3 of the Act;

(d) ‘Compulsory delisting’ means delisting of the securities of a company by an

exchange.

(e) ‘Delisting exchange’ means the exchange from which the securities of the
company are proposed to be delisted in accordance with these Guidelines;

(f) ‘Exchange’ means any stock exchange which has been granted recognition under
section 4 of the Securities Contracts (Regulation) Act, 1956;

(g) ‘Promoter’ means a promoter as defined in clause (h) of sub-regulation (1) of

Regulation 2 of the Securities and Exchange Board of India (Substantial Acquisition
of shares and Takeovers) Regulation, 1997 and includes a person who is desirous of
getting the securities of the company delisted under these Guidelines;

(h) ‘Public shareholding’ means the shareholding in a company held by persons other
than the promoter, the acquirer or the persons acting in concert with him as defined in
regulation 2(1)(j) of the Securities and Exchange Board of India (Substantial
Acquisition of shares and Takeovers) Regulation, 1997 and the term ‘public holders
of securities’ shall be construed accordingly;

(i) ‘Schedule’ means a schedule appended to these Guidelines.

(j) ‘Voluntary delisting’ means delisting of securities of a body corporate voluntarily

by a promoter or an acquirer or any other person other than the stock exchange(s).

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3.2 Words and expressions not defined in these Guidelines shall have the same
meaning as have been assigned to them under the Act or the Securities Contracts
(Regulation) Act, 1956 or the Companies Act, 1956, or any statutory modification or
re-enactment thereof, as the case may be.

4. APPLICABILITY

4.1 These guidelines shall be applicable to delisting of securities of companies and

specifically shall apply to:

(a) Voluntary delisting being sought by the promoters of a company

(b) any acquisition of shares of the company (either by a promoter or by any other
person) or scheme or arrangement, by whatever name referred to, consequent to
which the public shareholding falls below the minimum limit specified in the listing
conditions or listing agreement that may result in delisting of securities;

(c) Promoters of the companies who voluntarily seek to delist their securities from all
or some of the stock exchanges;.

(d) Cases where a person in control of the management is seeking to consolidate his
holdings in a company, in a manner which would result in the public shareholding in
the company falling below the limit specified in the listing conditions or in the listing
agreement that may have the effect of company being delisted;

(e) companies which may be compulsorily delisted by the stock exchanges;

4.2 Provided that company shall not be permitted to use the buy-back provision to
delist its securities.

5. DELISTING OF SECURITIES (VOLUNTARY) OF A LISTED COMPANY

5.1 A company may delist from stock exchange where its securities are listed.
Provided that the securities of the company have been listed for a minimum period of
3 years on any stock exchange. Provided further that an exit opportunity has been
given to the investors for the purpose of which an exit price shall be determined in
accordance with the “book building process” described in clauses 7-10 and 13 and 14
of these guidelines.

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5.2 An exit opportunity need not be given in cases where securities continue to be
listed in a stock exchange having nation wide trading terminals. Explanation: For the
purposes of these guidelines, stock exchange having nationwide trading terminals
means the Stock Exchange, Mumbai, the National Stock Exchange and any other
stock exchange, which may be specified by the Board.

6. PROCEDURE FOR VOLUNTARY DELISTING

6.1 Any promoter or acquirer desirous of delisting securities of the company under the
provisions of these guidelines shall : -

(a) obtain the prior approval of shareholders of the company by a special resolution
passed at its general meeting;

(b) make a public announcement in the manner provided in these Guidelines.

(c) make an application to the delisting exchange in the form specified by the
exchange, annexing therewith a copy of the special resolution passed under sub-clause
(a); and;

(d) comply with such other additional conditions as may be specified by the
concerned stock exchanges from where securities are to be delisted.

7. PUBLIC ANNOUNCEMENT FOR VOLUNTARY DELISTING

7.1 Before making application for delisting, the promoters or the acquirers of the
ompany shall make a public announcement.

7.2 The public announcement shall contain inter-alia information specified in

Schedule I.

7.3 Before making the public announcement, the promoter shall appoint a merchant
banker registered with the Board, who is not an associate of the promoter.

8. EXIT PRICE FOR VOLUNTARY DELISTING OF SECURITIES

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8.1 Any promoter of a company which desires to delist from the stock exchange shall
determine an exit price for delisting of securities in accordance with the book building
process described in Schedule II of these guidelines.

8.2 The offer price shall have a floor price, which will be the average of 26 weeks
traded price quoted on the stock exchange where the shares of the company are most
frequently traded preceding 26 week from the date of the public announcement and
without any ceiling of maximum price.

8.3 In the case of infrequently traded securities the offer price shall be as per
regulation 20(5) of the SEBI (Substantial Acquisition and Takeover) Regulations, and
the infrequently traded securities shall be determined in the manner explained under
regulation 20(5) of the SEBI (Substantial Acquisition and Takeover) Regulations.

8.4 The stock exchange(s) shall provide the infrastructure facility for display of
theprice at the terminals of the trading members to enable the investors to access the
price on the screen to bring transparency to the delisting process.

8.5 In the event of securities being delisted, the acquirer shall allow a further period of
6 months for any of the remaining shareholders to tender securities at the same price;

8.6 The stock exchanges shall monitor the possibility of price manipulation and keep
under special watch the securities for which announcement for delisting has been
made.

8.7 To ascertain the genuineness of physical securities if tendered and to avoid the
bad delivery, Registrar and Transfer Agent shall co-operate with the Clearing House /
Clearing Corporation to determine the quality of the papers upfront.

8.8 If the quantity eligible for acquiring securities at the final price offered does not
result in public shareholding falling below required level of public holding for
continuous listing, the company shall remain listed.

8.9 The paid up share capital shall not be extinguished as in the case of buyback of
securities;

8.10 In case of partly paid-up securities, the price determined by the book building
process shall be applicable to the extent the call has been made and paid.

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8.11 The amount of consideration for the tendered and acceped securities shall be
settled in cash;

9. RIGHT OF PROMOTER

9.1 The promoter may not accept the securities at the offer price determined by the
book building process.

9.2 Where the promoter decides not to accept the offer price so determined:

(a) he shall not make an application to the exchange for delisting of the securities; and

(b) the promoter shall ensure that the public shareholding is brought up to the
minimum limits specified under the listing conditions within a period of 6 months
from the date of such decision, by any of the modes specified in sub-clause 9.3.

9.3 For the purposes of sub-clause 9.2(b), the public shareholding may be increased
by any of the following means:

(a) by issue of new shares by the company in compliance with the provisions of the
Companies Act, 1956 and the Securities and Exchange Board of India (Disclosure and
Investor Protection) Guidelines, 2000;

(b) by the promoter making an offer for sale of his holdings in compliance with the
provisions of the Companies Act, 1956 and the Securities and Exchange Board of
India (Disclosure and Investor Protection) Guidelines, 2000;

(c ) by the promoter making sale of his holdings through the secondary market in a
transparent manner;

9.4 In the event of the promoter not being able to raise the public shareholding in
accordance with sub-clause 9.3 within six months, he shall offer for sale to the public
such portion of his holdings as would bring up the public shareholding to the
minimum limits specified in the listing agreement or the listing conditions at the price
determined by the Central Listing Authority.

10. PUBLIC ANNOUNCEMENT OF FINAL PRICE

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10.1 On determination of the final price pursuant to the book building, the promoter
or the acquirer shall within a period of two working days from such determination:

(a) make a public announcement in the newspapers of the final price as discovered by
the book building process and whether or not the promoter or the acquirer has
accepted the price; and,

(b) communicate to, exchange or exchanges from which delisting is sought to be

made, the final price discovered and whether the promoter has accepted the price.

11. DELISTING FROM ONE OR MORE STOCK EXCHANGES

11.1 When a company which is listed on any stock exchange or stock exchanges other
than the stock exchanges having nationwide trading terminals, seeks delisting, an exit
offer shall be made to the shareholders in accordance with these guidelines.

11.2 There shall not be any compulsion for the existing company to remain listed on
any stock exchange merely because it is a regional stock exchange.

12. MINIMUM NUMBER OF SHARES TO BE ACQUIRED

12.1 Where the offer for delisting results in acceptance of a fewer number of shares
than the total shares outstanding and as a consequence the public shareholding does
not fall below the minimum limit specified by the listing conditions or the listing
agreement, the offer shall be considered to have failed and no securities shall be
acquired pursuant to such offer.

13. PAYMENT OF CONSIDERATION

13.1 The payment of consideration for delisting of securities shall be paid in cash by
the promoter or acquirer.

14. DELISTING OF ONE OR ALL CLASS OF SECURITIES

14.1 A company may delist one or all of its class of securities subject to the
provisions of this clause.

14.2 If the equity shares of a company are delisted, the fixed income securities may
continue to remain listed on the stock exchange.

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14.3 A company which has a convertible instrument outstanding, it shall not be
permitted to delist its equity shares till the exercise of the conversion options.

15. COMPULSORY DELISTING OF COMPANIES BY STOCK

EXCHANGES

15.1 The Stock Exchanges may delist companies which have been suspended for a
minimum period of six months for non-compliance with the Listing Agreement.

15.2 The Stock Exchanges may also delist companies as per the norms provided in
Schedule III.

15.3 The Stock Exchange shall give adequate and wide public notice through news
papers ( including one English national daily of wide circulation) and through display
of the notice on the notice board/ website/ trading systems of the Exchange.

15.4 The stock exchange shall give a show cause notice to a company or adopt
procedure provided under Part B of Schedule III for delisting under sub-clause 15.1
and 15.2.

15.5 The exchange shall provide a time period of 15 days within which representation
may be made to the exchange by any person who may be aggrieved by the proposed
delisting.

115.6 The stock exchange may, after consideration of the representations received
from aggrieved persons, delist the securities of such companies.

15.6 A Where the stock exchange delists the securities of a company, it shall ensure
that adequate and wide public notice of the fact of delisting is given through
newspapers and on the notice boards/trading systems of the stock exchange and shall
ensure disclosure in all such notices of the fair value of such securities determined in
accordance with the Explanation to clause 16.1

15.7 The stock exchange shall display the name of such company on its website.

16. RIGHTS OF SECURITIES HOLDERS IN CASE OF COMPULSORY

DELISTING

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16.1 Where the securities of the company are delisted by an exchange, the promoter
of the company shall be liable to compensate the security-holders of the company by-

1) Substituted by amendment vide circular dated January 31, 2006. The earlier clause
read as – 15.6 The stock exchange shall ensure that adequate and wide public notice is
given through newspapers and on the notice boards/trading systems of the stock
exchanges after the period of show cause is over. paying them the fair value of the
securities held by them and acquiring their securities, subject to their option to remain
security-holders with the company.

2) Explanation: For the purposes of this sub-clause, fair value of securities shall be
determined by persons appointed by the stock exchange out of a panel of experts,
whichshall also be selected by the stock exchange, having regard to the factors
mentioned in regulation 20 of the Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997 316.2 – deleted

17. DELISTING PURSUANT TO RIGHTS ISSUE

17.1 In case of rights issue, allotment to the promoters or the persons in control of the
management shall be allowed even if they subscribe to unsubscribed portion which
may result in public shareholding falling below the permissible minimum level.
Provided that the adequate disclosures have been made in the offer document to that
effect. Provided further that they agree to buy out the remaining holders at the price of
rights issue or make an offer for sale to bring the public shareholding at the level
specified in the listing conditions or listing agreement to remain listed.

17.2 In case the rights issue is not fully subscribed, which may result in the public
shareholding falling below the permissible minimum level as specified in the listing
condition or listing agreement, the promoter(s) of the company shall be required to
delist by providing an exit opportunity in the manner specified in clause 17.1 of these
guidelines or may be required to make offer for sale of theirholdings so that the public
shareholding is raised to the minimum level specified in the listing agreement or in
the listing conditions within a period of 3 months.

2 Substituted by amendment vide circular dated January 31, 2006. The earlier clause
read as –

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Explanation: For the purposes of this sub-clause fair value shall be determined by the
arbitrator having regard to the factors mentioned in Regulation 20 of the Securities
and Exchange Board of India (Substantial Acquisition of shares and Takeovers)
Regulations, 1997 .

3 Deleted by amendment vide circular dated January 31, 2006. The deleted clause
read as –

16.2 The security holders may enforce their claim to compensation/fair value under
this clause through the arbitration mechanism of the exchange in the manner laid
down in its byelaws.

18. REINSTATEMENT OF DELISTED SECURITIES

18.1 Reinstatement of delisted securities should be permitted by the stock exchanges

with a cooling period of 2 years. In other words, relisting of securities should be
allowed only after 2 years of delisting of the securities. It would be based on the
respective norms/criteria for listing at the time of making the application for listing
and the application will be initially scrutinized by the Central Listing Authority.

CONTENTS OF THE PUBLIC ANNOUNCEMENT

1. The floor price and how it was reached

2. The dates of opening and closing of the bidding

3. The name of the exchange or exchanges from which the securities are sought to

be delisted.

4. The names and addresses of the trading members as well as the bidding terminals

and centres through which bids can be placed.

5. Description of the methodology to be adopted for determination of acceptable

price

6. Period for which the offer shall be valid

7. The necessity and the object of the delisting

8. A full and complete disclosure of all material facts.

9. The proposed time table from opening of the offer till the settlement of the
transfers.

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10. Details of the escrow account and the amount deposited therein.

11. Listing details and stock market data:

(a) high, low and average market prices of the securities of the company during the
preceding three years;

(b) monthly high and low prices for the six months preceding the date of the public
announcement; and,

(c) the volume of securities traded in each month during the six months preceding the
date of public announcement.

12. Present capital structure and shareholding pattern.

13. The likely post-delisting capital structure.

14. The aggregate shareholding of the promoter group and of the directors of the

promoters, where the promoter is a company and of persons who are in control of

the company.

15. Name of compliance officer of the company.

16. It should be signed and dated by the promoter.

SCHEDULE II

[See Guideline 8.1]

THE BOOK BUILDING PROCESS

1. The book building process shall be made through an electronically linked

transparent facility.

2. The number of bidding centres shall not be less than thirty, including all stock

exchange centres and there shall be at least one electronically linked computer

terminal at all bidding centres.

3. The promoter shall deposit in an escrow account, 100 per cent of the estimated

amount of consideration calculated on the basis of the floor price indicated and the

number of securities required to be acquired. The provisions of clause 10 of the

Securities and Exchange Board of India (Buyback of Securities) Regulations,1998

shall be applicable mutatis mutandis to such escrow account.

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4. The offer to buy shall remain open to the security holders for a minimum period of

three days. The security holders shall have a right to revise their bids before the

closing of the bidding.

5. The promoter or acquirer shall appoint ‘trading members’ for placing bids on the
online

electronic system.

6. Investors may approach trading members for placing offers on the on-line
electronic

system. The format of the offer form and the details that it must contain shall be

specified.

7. The security holders desirous of availing the exit opportunity shall deposit the
shares

offered with the trading members prior to placement of orders. Alternately they may

mark a pledge for the same to the trading member. The trading members in turn may

place these securities as margin with the exchanges/clearing corporations.

8. The offers placed in the system shall have an audit trail in the form of
confirmations

which gives broker ID details with time stamp and unique order number

9. The final offer price shall be determined as the price at which the maximum
number

of shares has been offered. The acquirer shall have the choice to accept the price. If

the price is accepted then the acquirer shall be required to accept all offers upto and

including the final price but may not have to accept higher priced offers, subject to

clause 15. An illustration is given below:

Offer Quantity Offer Price Remarks

50 120 Floor price

82 125

108 130 Final price (as qty offered is max)

27 135

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5 140

10 If final price is accepted the acquirer shall have to accept offers up to and including

the final price i.e. 240 shares at the final price of Rs. 130/-.

11 At the end of the book build period the merchant banker to the book building
exercise

shall announce in the press and to the concerned exchanges the final price and the

acceptance (or not) of the price by the acquirer.

12 The acquirer shall make the requisite funds available with the exchange/clearing

corporation on the final settlement day (which shall be three days from the end of the

book build period). The trading members shall correspondingly make the shares

available. On the settlement day the funds and securities shall be paid out in a process

akin to secondary market settlements.

13 The entire exercise shall only be available for demat shares. For holders of
physical

certificates the acquirer shall keep the offer open for a period of 15 days from the

final settlement day for the shareholders to lodge the certificates with custodian(s)

specified by the merchant banker.

SCHEDULE III

(GUIDELINE 17.1]

NORMS AND PROCEDURE FOR DELISTING OF SECURITIES

BY THE STOCK EXCHANGES

A NORMS

1. The percentage of equity capital (floating stock) in the hands of public investors.

This may be seen with reference to ---

• Existing paid-up equity capital

• Market lot

• Share price – very high, medium, low

• Market Capitalisation

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• SEBIs Takeover Regulations-Regulation 21(3)

• Clause 40A of the Listing Agreement

2. The minimum trading level of shares of a company on the exchanges. There should

be some liquidity in every trading cycle. There should be some volume of trading for

price discovery on the market. The Company should appoint market makers. Criteria

of no-trading may be considered.

3. Financial aspect/Business aspects

a) The company should generate reasonable revenue/income/profits. It should be

operational/working. It must demonstrate earning power through its financial

results, profits, reserves, dividend payout for last 2/3 years.

b) If there is hardly any public interest in the securities the company then it is for

consideration whether its “listed company” label needs to be retained any

more.

c) The company should have some tangible asset. It is for consideration as to

what value of assets the company should own in order to be listed

continuously listed.

4. Track records of compliance of the Listing Agreement requirements for the past
three

years.

� Submission of audited/unaudited results, annual report, other

documents required to be furnished to the Exchange,

� Book closure Record date with due notice

� Payment of listing fee

� Service to investors especially with regard to timely return of

shares duly transferred, timely payment of dividend,

communication of price sensitive information, etc.

� Failure to observe good accounting practises in reporting earnings

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and financial position

� Publishing half yearly unaudited/audited results

� Frequent changes in – Accounting year, Share transfer agent,

Registered office, Name.

5. Promoters’ Directors’ track record especially with regard to insider trading,

manipulation of share prices, unfair market practises (e.g. returning of share transfer

documents under objection on frivolous grounds with a view to creating scarcity of

floating stock, in the market causing unjust aberrations in the share prices, auctions,

close-out, etc. (Depending upon the trading position of directors or the firms).

6. If whereabouts of the company, its promoters directors are not available and even
the

letters sent by the Exchange return undelivered and the company fails top remain in

touch with the Exchange.

7. The company has become sick and unable to meet current debt obligations or to

adequately finance operations, or has not paid interest on debentures for the last 2- 3

years, or has become defunct,or there are no employees, or liquidator appointed, etc.

8. On the basis of the above norms and other relevant information available about the

company, its promoters/directors, project, litigations, etc., a profile of the company

should be prepared and then a decision on delisting should be taken by an Exchange.

B PROCEDURE

1. The decision on delisting should be taken by a panel to be constituted by the

Exchange comprising the following :

a. Two directors/officers of the Exchange (one director to be a public

representative)

b. One representative of the investors

c. One representative from the Central Government (Department of

Company Affairs)/ Regional Director / Registrar of Companies

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d. Executive Director / Secretary of the Exchange

2. Due notice of delisting and intimation to the company as well as other Stock

Exchanges where the company’s securities are listed to be given.

3. Notice of termination of the Listing Agreement to be given.

4. An appeal against the order of compulsory delisting may be made to the SEBI.

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 CHAPTER-5
ORGANIZATIONS GIVING DEMAT FACILITY

Today number of private as well as public sector banks and broking houses of
different companies are offering DEMAT ACCOUNT facility to the customers. Here
are list of different organizations providing DEMAT facility.

Name of the broking houses:

ANGEL BROKING LTD

Service truly personalized

BONANZA

Make money not mistakes

SMC

Money wise be wise

INDIA INFOLINE

ELITE

CARVY

UNICON

INDIA BULLS

SHAREKHAN

RELIGARE

Banks giving DEMAT facility

SBI

PNB

INDIAN BANK

ICICI BANK

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KOTAK BANK

HDFC

AXIS BANK

These different organizations provide the facility of DEMAT account opening online
also. All these are companies having different charges for it.

Angel Trade Stock Trading / Angel Trade Demat / Angel Trade Brokerage

Angel Group has emerged as one of the top 3 retail broking houses in India.
Incorporated in 1987, it has memberships on BSE, NSE and the two leading
commodity exchanges in India i.e. NCDEX & MCX. Angel is also registered as a
depository participant with CDSL.

Angel's retail stock broking house offering a gamut of retail centric services.

Ebroking

Investment Advisory

Portfolio Management Services

Wealth Management Services

Commodities Trading

Trade In: BSE and NSE

Trading Platforms:

Angel Trade provides 4 trading platforms, 2 are browser based & 2 are application
based.

Angel investor

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It is a browser based trading platform. The rates are updated on clicking the refresh
button. This facility ensures it is not blocked by firewall. Thus it is useful for investor
who needs to access information from places where firewall blocks such data.

Angel Trade

It is a browser based trading platform. The rates are updated automatically. This
platform is useful for investors & traders to access market from different terminals.

Angel Diet

It is an application based trading platform where rates are updated automatically. All
segments are available on a single screen. This is ideal platform for the daily traders.

Angel Anywhere

It is an application based trading platform where rates are updated automatically. This
is ideal for investors & traders who are inclined towards trading based on charts &
technical tools.

Brokerage and fees:

1)Account opening fees:

Stock trading account - Rs 575/-
Demat account - Rs 200/-
Commodity trading - Rs 625/-

2)Brokerage:
For trade up to the range of Rs 1 - 3 Crore:
Cash Based: 0.50%
Day trading: 0.05%
Derivatives: 0.05%
For trade more than Rs 3 Crore, brokerage is about 0.03%.

How to open account with Angel Trade?

There are 3 simple ways to open an account with Angel Trade.
Call at one of the below number and ask to open an account with them.
Phone No: (022) 4000 3633 / 35

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Visit one of their nearest branch and you will find representative to help you out.

Visit www.angeltrade.com and fill the contact us form. One of the representative
contacts you shortly.

In all there cases Angel Trade representative contact you in 24 to 48 hours and tell
you about the procedure to open an account.

Advantages of Angel Trade

1. User friendly browser-based / application based online trading platform.

2. The auto square off time is at 3:15 and an investor can buy up to 4 times the
value in his account.

3. Trading account can be linked with popular private banks like HDFC Bank,
ICICI Bank, UTI bank etc.

4. Trading is available in both BSE and NSE.

Disadvantages of Angel Trade

1. Online money transfer from trading account to bank account is not available:
Trading account can be linked with popular private banks like HDFC Bank,
ICICI Bank, UTI bank etc. A trader can transfer money from his bank to the
trading account online. But the reverse transactions are not yet available
online.
This means money, a trader gets after selling shares doesn’t get credited in his
bank account directly. The trader has to call Angel Trade and request for the
deposit.This takes couple of working days.

This way angel trade is kind of behind with ICICIDirect where 3 accounts
(Bank account, trading account and demat account) are connected so
seamlessly that no manual interfere requires. In ICICIDirect, a trader gets the
money back into his ICICI Bank account as soon as the trader settle down.

Useful links about Angel Trade

Website: http://www.angeltrade.com

Website: http://www.angelmf.com

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Religare Stock Trading / Religare Demat / Religare Brokerage

Religare Enterprises Limited is Ranbaxy Laboratories Limited promoted financial

product and service provider company.

Religare provide its service in three different segments including Retail, Wealth
management and the Institutional spectrum. Company offers wide range of services
including equities, commodities, insurance broking, wealth advisory, portfolio
management services, personal finance services, Investment banking and institutional
broking services. Religare retail network has more than 900 locations in 300 cities and
towns in India.

Religare provides the online gateway to their investors so investor can trade online in
Equities, Commodities, apply for IPOs, invest in Mutual Funds, and buy Insurance.

Religare Securities Limited (RSL) is a subsidiary company of Religare Enterprises

Ltd and involve in equity related services include online trading at BSE and NSE,
Derivatives, commodities, IPO, Mutual fund, Investment banking and institutional
broking services.

People who wonder where Religare word came from, it's a Latin word meaning 'to
bind together'.

Type of Account

Religare offers its wide range of financial services though a sophisticated and
customized trading platform - R-ACE (Religare Advanced Client Engine). Below are
3 flavors of R-ACE accounts available to the investors.

1) R-ACE (Basic)

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R-ACE (Religare Advanced Client Engine) the basic online trading account provided
by Religare. Investor can trade and access their account information online and over
the phone as well. This account comes with a browser based online trading platform
and no additional software installation needed.

2) R-ACE Lite (Advanced)

R-ACE Lite is the advanced trading platform for the investor of Religare. This trading
account provides the entire feature of R-ACE (Basic) account. In addition it also
provides real-time streaming stock quotes and alerts. This trading platform is also
browser based and no software installation is needed.

3) R-ACE Pro (Professional)

As the name indicates this account is for high volume traders. Along with the features
from above 2 accounts, this account also comes with Trading Terminal software
which needs to install on your computer. This terminal directly connects the investor
to stock market and having all industry standard Treading terminal features including
technical charting (intra-day and EOD), multiple watch list, advanced hot-key
functions for faster trading, derivative chains, futures & options calculator etc.

As in basic and advance account, trading is available online through internet and
offline though phone.

Brokerage and Account opening fees:

Religare offers three kinds of accounts as above. Below are detail about fees and
activation charges for each account:

1. R-ACE
Account activation charges Rs.299/-.
Minimum margin of Rs.5000/- required.

2. R-ACE Lite
Account activation charges Rs.499/-.
Minimum margin of Rs.5000/- required.

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3. R-ACE Pro
Account activation charges Rs.999/-.
Minimum margin of Rs.10,000/- required.

Brokerage at Religare

On the basis of volume and frequency of trading, Religare provide different options
for brokerages. On the broader way they divided into three categories:

Classic Account

Intraday brokerage varies from 0.03% to 0.05%.

Delivery brokerage varies from 0.30% to 0.50%.
Derivatives brokerage varies from 0.3% to 0.5%.

Classic Plus

Fees: Rs 600
Validity Period 6 Months
Intraday brokerage varies from 0.03% to 0.05%.
Delivery brokerage varies from 0.30% to 0.50%.

Freedom Account

In this payment plan, investor has to pay a fix amount in advance for Monthly (Rs
500), Quarterly (Rs.1400), Half-yearly (Rs 2500) or Annual Subscription (Rs 4000).
This one time payment enable account holder to trade for Rs. 3,00,000 intraday &
derivative trading and Rs. 40,000 of delivery based trading for zero brokerage.

Trump Account

Trump account has four payment options, Trump Plus, Trump Super, Trump Star and
Trump Super Star plan.

Trump Plus has annual subscription fees of Rs 2,500, Brokerage on Delivery Trades
is 0.25% and Brokerage on Intraday Trades & F&O Trades is 0.025%.

Trump Super has annual subscription fees of Rs. 15,000, Brokerage on Delivery
Trades is 0.15% and Brokerage on Intraday Trades & F&O Trades is 0.015%.

Trump Star has annual subscription fees of Rs. 50,000, Brokerage on Delivery Trades
is 0.10%, Brokerage on Intraday Trades is 0.01% and Brokerage on Future Trades is
0.008%.

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Trump Super Star has annual subscription fees of Rs. 1,00,000, Brokerage on
Delivery Trades is 0.10% and Brokerage on Intraday Trades & F&O Trades is
0.005%.

Check current brokerage rate offered by Religare

http://www.religareonline.com/to_fees.asp.

How to open account with Religare?

For online trading with Religare, investor has to open an account. Following are the
ways to open an account with Religare:

There are 3 simple ways to open an account with Religare.:

Call at one of the below number and ask to open an account with them.
Phone Numbers: 1800-11-44-88, 011-44312345

Visit one of their branches. Visit Religare Branch Locater at

http://www.religareonline.com/branches.asp

Fill Online Account Application Form.

http://www.religareonline.com/applyonline.asp

SMS"REWARD"" and send it to 58888. Customer representative from Religare will

call you with in 24 hours.

Advantages of Religare

Religare gives interest on unutilized cash when investor is waiting to make next trade
or online investment.

They provide intraday reports and historical charting.

Varity of fee structure to fulfill need of different types of investors.

Useful links about Religare / Contact Religare at:

Website: www.religareonline.com

Email: race@religareonline.com

FAQs: https://nat.religaresecurities.com/stsb/presentationlayer/FAQ.pdf

Phone: 011-44312345

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Toll Free: 1800-11-44-88

For Local Customer Care: http://www.religareonline.com/CustomerCare.asp

Motilal Oswal Securities Stock Trading / Motilal Oswal Securities Demat /

Motilal Oswal Securities Brokerage

Incorporated in 1987, Motilal Oswal Securities Ltd is a well diversified financial

services firm offering a range of financial products and services such as Wealth
Management, Broking & Distribution, Commodity Broking, Portfolio Management
Services, Institutional Equities, Private Equity, Investment Banking Services and
Principal Strategies.

Company have a diversified client base that includes retail customers (including High
Net worth Individuals), mutual funds, foreign institutional investors, financial
institutions and corporate clients. They are headquartered in Mumbai and as of
September 30th, 2009, had a network spread over 576 cities and towns comprising
1,257 Business Locations operated by them. As at September 30th, 2009, company
had 5,80,667 registered customers.

Type of Account

1) MOSt E-Broking

MOSt E-Broking is complete online stock trading solution for Indiaian stock market.
Following are the features of MOSt E-Broking account:

• Easy single screen trader with instant trade confirmation similar to exchange
based trading terminals.

• Access to various online reports like margin report, Demat A/c details, trades
executed, turnover report, net position report with mark to market profit/loss
and realized profit.

• Online transfer funds through HDFC Bank.

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How to open account with Motilal Oswal Securities Ltd?

For online trading with Motilal Oswal, investor has to open an account. Following are
the ways to open an account with Motilal Oswal Securities Ltd:

• Call them at phone number provided below and ask that you want to open an
account with them.

• Visit their website and fill a form. Representative from Motilal Oswal will
contact you.

• Visit one of their branches. Click on the below link and find out your nearest
branch. Just select the place near you and you'll find a manager to assist you
there.
http://www.motilaloswal.com/MOSL/Online_Trading/Contact_Us/

• From the mobile phone type "MOSL_EBRO" and send it to 57573.

Representative from Motilal Oswal Securities will contact you shortly for
fulfilling all account opening formalities.

• Contact Motilal Oswal by sending email at mybroker@motilaloswal.com

List of documents required to open an acount

1) Proof of Identity – Copy of PAN Card

2) Proof of Address – Copy of any one of the following (Self Attested)

• Passport

• Ration card

• Voter’s ID

• Driving license

• Electricity bill (not more than 2 months old)

• Landline Telephone Bill (not more than 2 months old)

• Bank Pass Book

3) Bank Proof – Copy of Bank Pass Book or Personalized Cheque leaf (For Existing
Bank Account Holders Only)

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4) 3 Photographs

Awards

• 2005, Asiamoney Brokers ranked MOSt the best Indian brokerage firm in
India.

• March 2006, AQ Research declared MOSt the best research house for Indian
stocks.

Useful links about Motilal Oswal Securities Ltd

Website: http://www.motilaloswal.com

Faq's: http://onlinetrade.motilaloswal.com/links/faq.htm

Corporate Office: Palm Spring Centre, 2nd flr, Palm Court Complex,
New Link Rd, Malad (West), Mumbai - 400064.

Email: query@motilaloswal.com

Phone: 022 - 30896680

Fax: 022 – 22885038

Sharekhan Stock Trading / Sharekhan Demat / Sharekhan Brokerage

Sharekhan is online stock trading company of SSKI Group, provider of India-based

investment banking and corporate finance service. ShareKhan is one of the largest
stock broking houses in the country. S.S. Kantilal Ishwarlal Securities Limited (SSKI)
has been among India’s leading broking houses for more than a century.

Sharekhan's equity related services include trade execution on BSE, NSE,

Derivatives, commodities, depository services, online trading and investment advice.
Trading is available in BSE and NSE. Along with Sharekhan.com website, ShareKhan
has around 510 offices (share shops) in 170 cities around the country.

Share khan has one of the best state of art web portal providing fundamental and
statistical information across equity, mutual funds and IPOs. You can surf across

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5,500 companies for in-depth information, details about more than 1,500 mutual fund
schemes and IPO data. You can also access other market related details such as board
meetings, result announcements, FII transactions, buying/selling by mutual funds and
much more.

Trade In: BSE and NSE

Type of Account

Classic Account Trading Terminal

1) ShareKhan Classic account

Allow investor to buy and sell stocks online along

with the following features like multiple watch lists,
Integrated Banking, demat and digital contracts,
Real-time portfolio tracking with price alerts and
Instant credit & transfer.

a) Online trading account for investing in Equities and Derivatives

b) Free trading through Phone (Dial-n-Trade)

• Two dedicated numbers for placing your orders with your cellphone or
landline.

• Automtic funds tranfer with phone banking (for Citibank and HDFC
bank customers)

• Simple and Secure Interactive Voice Response based system for

authentication

• get the trusted, professional advice of our telebrokers

• After hours order placement facility between 8.00 am and 9.30 am

c) Integration of: Online trading + Bank + Demat account

d) Instant cash transfer facility against purchase & sale of shares

e) IPO investments

f) Instant order and trade confirmations by e-mail

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g) Single screen interface for cash and derivatives

2) ShareKhan Speed Trade account

This accounts for active traders who trade frequently during the day's trading session.
Following are few popular features of Speed Trade account.

a) Single screen interface for cash and derivatives

b) Real-time streaming quotes with Instant order Execution & Confirmation

c) Hot keys similar to a traditional broker terminal

d) Alerts and reminders

e) Back-up facility to place trades on Direct Phone lines

Brokerage:

Some stock trading companies charge direct percentage while others charge a fixed
amount per Rs 100. Sharekhan charges 0.5% for inter day shares and 0.1% for intra
day or you could say Sharekhan charges 50 paise per Rs 100.

How to open account with Sharekhan?

For online trading with Sharekhan, investor has to open an account. Following are the
ways to open an account with Sharekhan:

• Call them at phone number provided below and ask that you want to open an
account with them.

a) Call on Toll free number: 1-800-22-7500 to speak to a Customer

Service executive

b) If you are in Mumbai call on 022-66621111

• Visit one of their branches. Sharekhan has a huge network all over India. Click
on http://sharekhan.com/Locateus.aspx this link to find out your nearest

• branch. Just select the place near you and you'll find a manager to assist you
there.

• You can send them an Email on info@sharekhan.com to know about their

products and services.

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 • If you wish to chat with customer service representative, you can join the chat
sesssion.

Advantages of Sharekhan:

1) Online trading is very user friendly and one doesn't need any software to
access.

2) They provides good quality of services like daily SMS alerts, mail alerts, stock
recommendations etc.

3) Sharekhan has ability to transfer funds from most banks. Unlike ICICI Direct,
HDFC Sec, etc., so investor not really needs to open an account with a
particular bank as it can establish link with most modern banks.

Disadvantages of Sharekhan:

1) They charge minimum brokerage of 10 paisa per stock would not let you trade
stocks below 20 rs. (If you trade, you will loose majority of your money in
brokerage).

2) Lots of hidden rules and charges.

3) They do not provide facility to book limit order trades during after-hours.

4) Classic account holders cannot trade commodities.

5) Cannot purchase mutual funds online.

Useful links about ShareKhan/Contact Sharekhan at:

• ShareKhan Website: http://www.ShareKhan.com

• Product Demo - SpeedTrade:

http://www.sharekhan.com/Demos/speedtrade/index.html

• Product Demo - Classic: http://www.sharekhan.com/Demos/classic/index.html

• Email: info@sharekhan.com

• FAQs: http://sharekhan.com/KnowledgeCentre/Sharekhan_FAQ.aspx

• Phone: 022-66621111

• Toll Free: 1-800-22-7500

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Indiabulls Stock Trading / Indiabulls Demat / Indiabulls Brokerage

Indiabulls is India's leading Financial Services and Real Estate Company having presence
over 414 locations in more than 124 cities. Indiabulls Financial Services Ltd is listed on the
National Stock Exchange, Bombay Stock Exchange, Luxembourg Stock Exchange and
London Stock Exchange.

Type of Account

1) Indiabulls Equity Trading Account

Indiabulls Equity Trading Account is standard Online trading account from India
bulls and along with online trading it also provides priority telephone access that
gives you direct access to your Relationship Manager and full access to 'Indiabulls
Equity Analysis'.

Application Trading Terminal(Need Installation)

1) Power Indiabulls

Power Indiabulls trading terminal is the most advanced new generation trading
platform with great speed. This trading terminal is built in JAVA.

Power Indiabulls is extremely reach in features including Live Streaming Quotes, Fast
Order Entry and execution, Tic by Tic Live Charts, Technical Analysis, Live News
and Alerts, Extensive Reports for Real-time Accounting.

Document Required to open Equity Trading Account with Indiabulls

1) One passport size photograph.

2) Proof of bank account

3) Copy of PAN card.

4) Identity proof - copy of passport or PAN card or voter ID or driving license or

ration card.

5) Address proof - copy of driving license or passport or ration card or voter card
or telephone bill or electricity bill or bank statement.

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Brokerage and fees :

1) Account opening fees : Rs 1200/- (One time non-refundable) as below:

250/- Equity Trading Account opening charge
200/- Demat Account opening charge
750/- Software changes

Advantages of Indiabulls Equity Trading Account

1) Brokerage is less compare to other online trading companies.

2) Provide trading terminal 'powerbulls', a java based software. It's very fast in
terms of speed and execution.

Useful links & info about Indiabulls

• Indiabulls Website: http://www.indiabulls.com

• E-mail: helpdesk@indiabulls.com

• Contact No.: 1800-111-130, 0124-4572444

CHAPTER-6
PROBLEMS IN DEMAT ACCOUNT
Disadvantages of Demat

• The disadvantages of dematerialization of securities can be summarised as

follows:

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 • Trading in securities may become uncontrolled in case of dematerialized
securities.

• It is incumbent upon the capital market regulator to keep a close watch on the
trading in dematerialized securities and see to it that trading does not act as a
detriment to investors.

• The role of key market players in case of dematerialized securities, such as

stock-brokers, needs to be supervised as they have the capability of
manipulating the market.

• Multiple regulatory frameworks have to be confirmed to, including the

Depositories Act, Regulations and the various By-Laws of various
depositories.

• Additionally, agreements are entered at various levels in the process of

dematerialization. These may cause anxiety to the investor desirous of
simplicity in terms of transactions in dematerialized securities.

• However, the advantages of dematerialization outweigh its disadvantages and

the changes ushered in by SEBI and the Central Government in terms of
compulsory dematerialization of securities is important for developing the
securities market to a degree of advancement. Freely traded securities are an
essential component of such an advanced market and dematerialization
addresses such issues and is a step towards the advancement of the market.

Transfer of Shares between DPs

To transfer shares, we need to fill the Depository Instruction Slip Book (DIS). Firstly
we need to check, whether both Demat account's Depository Participant is same or
not(CDSL or NSDL) If both of them are different, then we need an INTER
Depository Slip (Inter DIS). If they are same, then we need INTRA Depository Slip
(Intra DIS).

For example: If we have one Demat account with CDSL and other Demat account
with NSDL, then we need an Inter DIS. Generally, brokers issue Intra DIS, so do
check with broker. Once we identify the correct DIS, fill the relevant information like
scrip name, INE number, quantity in words and figures and submit that DIS for the

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transfer to the broker with signatures. The transferor broker shall accept that DIS in
duplicate and acknowledge receipt of DIS on duplicate copy.

Do try to submit that DIS when market is on. Accordingly, date of submission of DIS
and date of execution of DIS can be same or a difference of one day is also
acceptable.

For transfer, you shall also pay the broker some charges.

Remember: DIS is almost like a cheque book. Accordingly, it can be misused if

issued blank. So deposit only a completely filled in Slip to broker. Do cut out unfilled
rows so that none can fill them later on.

The disadvantages of dematerialization of securities can be summarised as

follows:

Trading in securities may become uncontrolled in case of dematerialized securities. It

is incumbent upon the capital market regulator to keep a close watch on the trading in
dematerialized securities and see to it that trading does not act as a detriment to
investors. The role of key market players in case of dematerialized securities, such as
stock-brokers, needs to be supervised as they have the capability of manipulating the
market.

Multiple regulatory frameworks have to be confirmed to, including the Depositories

Act, Regulations and the various Bye Laws of various depositories. Additionally,
agreements are entered at various levels in the process of dematerialization. These
may cause anxiety to the investor desirous of simplicity in terms of transactions in
dematerialized securities.

However, the advantages of dematerialization outweigh its disadvantages and the

changes ushered in by SEBI and the Central Government in terms of compulsory
dematerialization of securities is important for developing the securities market to a
degree of advancement. Freely traded securities are an essential component of such an
advanced market and dematerialization addresses such issues and is a step towards the
advancement of the market.

Conclusion:

Over the last decade, the Indian capital market has been growing by leaps and bounds.
India has the largest number of listed companies in the world today. It also boasts of a

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large number of shareholders, about 32 million. Paradoxically, the problems
associated with transactions, clearing and settlement were also on the rise.
Simultaneously, they expose the investors to greater risks.

Indian market thus required a new system that would eliminate all problems of
investors and would give them healthy environment, and would strengthen their faith
in the capital market, which was very low due to scams. Inordinate delay in
investigation of these scams and escape of wrongdoers from law – created doubts in
the minds of investors. The position has substantially improved after the introduction
of the depository system.

CHAPTER-7
PEOPLE’S PERCEPTION IN DEMAT ACCOUNT
Perception regarding DEMAT account of people depends on the requirement as well
the resources available. Other factors like financial background, family background,
savings.

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The loss and profit involved entirely rests on the judgment of the investor. Share
brokers inform investors about market movements, etc. at the same time suggest the
latter to buy shares. There are marked differences between stock brokers functioning
online and those attending over the phone or in person. Online stock brokers can
easily be contacted if you visit online brokerage platforms like Nirmal Bang. Such
platforms in addition to offering facilities to open free trading account, also offer
services of stock brokers, provide tips on share market investing and a lot of related
information. The vast stock market scenario including performance of BSE, NSE,
share prices, stock quotes, active stocks, share market news, etc. can be viewed here
at this single window destination tendering services beyond brokerage solutions.
There are three criteria of services of stock brokers, as enlisted below. Investors can
choose any of the criteria while contacting share brokers.
Share brokers provide advisory services in addition to handling the trading account. In
this case, investors take the advice of share brokers and accordingly buy and sell
shares; but the final decisions rest on the investors themselves.

Stock brokers enjoy flexibility in dealing; in this case, the investors' investment
objectives are taken into account and then the stock brokers execute the trading
process, themselves taking investment decisions on the investors' behalf.

A free demat account and free trading account is same – different terms with the same
meaning. To be an investor in the share market, you should hold a trading account. If
you are directly in touch with the broker in person and not online, paper work is
required to sign the agreement. Submission of a few documents like PAN card, a
cancelled cheque, identification proof, address proof and photograph completes the
process. Your trading account will then be linked to your bank account so that you
can transfer the required funds from the latter to the former to facilitate trading. In
case of opening an online demat account, though you may or may not be asked to

submit all documents, PAN card is mandatory. You are not allowed to handle the
responsibility of taking care of your own demat account. The depository participant
(DP) takes care of your account, trading and transactions. Share brokers or stock
brokers, R&T agents, and brokerage firms, registered under the SEBI act as DPs
facilitating your trading in the stock market.

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Getting Started in Share Market Trading. Things you should know

It is very interesting to invest in shares, though most of the people would like to start
with small money.

First of all, you need to know a little bit in detail about the stock market, then about
the shares and the mode of their trading. What are the risks involved and how to be
smart in dealing with shares?

• Stock Market – It is the place where the shares of listed companies are bought
and sold. In India, you have BSE and NSE as two big stock exchanges.

• Shares are bought and sold by you and me only through approved brokers.

• Approved brokers are mostly banks like the ICICI, HDFC, IDBI, UTI Bank,
SHCI, are to name a few.

• First you need to open an account with a bank, that has the Demat account
facility.

• Go to the respective bank and open a Savings account with deposit of around
Rs. 10,000.

• Tell the bank that you want to deal in shares and ask them to open a Demat
account. It will be done automatically after signing a few forms.

• A Demat account is nothing, but the account where the shares bought by you
will be kept separately.

• Only you could operate that account online, through Internet.

• You could open the online facility offered by the ICICI, HDFC or ShareKhan
or others and buy shares you wish and decide the quantity and the price.

• Here the bank will act as a broker. You online order for purchase would be
carried out by the bank. They charge broker commission, much less compared
to private brokers.

• It is very important for you to have enough balance to your credit in your
savings account.

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 • As and when you buy on line, your Demat account will be credited with those
shares. The money for the purchase will be automatically deducted from your
account by the bank.

• You also have to keep looking for opportunities to sell the shares that you
have already bought and kept in your Demat account.

• For buying and selling, it is necessary to familiarize which shares to be bought

at what prices and sell them at what price.

• As and when you decide to sell (depending on the price quoted in the market)
you could sell them through online trading system.

• The moment you sell your Demat account will be debited with the number of
shares sold by you.

• Your account will be credited with the amount for which you have sold.

• Depending on the amount of profit earned, tax will also be deducted by the
bank (TDS). The bank will give you a TDS certificate by the year end, i.e.,
March 31, of that year which you could attach with the return to justify the tax
payment.

When the shares could be bought or sold?

Always sell the shares when the price is up and buy when the price is down. Every
body had to adapt to this formula.

What profit should it give you?

You buy a share for a particular price. Take the amount as investment. Any bank will
lend you at ten per cent interest. It will give you 24 per cent return if the share price
rises in such a way. Do not wait for the market to crash and start searching for buyers
for the price you quote.

After selling, never look back and repent for what profit you have earned, had you
delayed the sale. Be happy that it did not happen otherwise. This is the best way, to
sell.

• If you want to buy, look for 52 week low, look for the peer companies, their
price and compare it with the company you want to buy.

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 • Look for the prospectus, future plans and the profit the company ought to
make in the next year. Take the perception or a change and buy.

• You cannot take profit in the buys. Losses do occur as long as you are at
decent surplus for which you have no reason to be unhappy.

Views of some people:

By: Anjali Shukla

Demat or the dematerialised account is essential for Indian individuals to trade in

listed stocks or debentures. According to the Securities Exchange Board of India
(SEBI) guidelines one is required to maintain a Demat account where shares and
securities are held in electronic form. A Demat Account is opened by the investor
while registering with an investment broker (or sub broker). In short it is a simpler
and hassle free way of trading online.

Online Stock Trading in India has been on a rise thanks to the growing users of the
internet and the involvement of young, urban population in the Indian Stock Markets.
With few clicks of the mouse, an individual can control his/ her investments & can
easily view the complete portfolio. The new-found awareness of the online share
trading has attracted a large number of ordinary investors to venture into the share
markets. .

By: Sonia

With the advent of advanced technologies and the World Wide Web, the very
meaning of business has changed in this cut throat competitive world. In today's era
the web proffers immense opportunities to business corporations of all sizes to

develop and expand their existing facilities to mammoth dimension. Investors

worldwide can engage themselves in online share trading from any nook and corner
of the globe via internet.

By: Balajee Kannan

Online stock trading is actually a very basic procedure. However, the steps are
different across countries. For India, there are three important things to have before
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you can start trading, which are a Demat account, a trading account and of course, a
bank account.
A Demat account operates on the same mechanism as a bank account in india, but
instead of placing money into the account, a Demat account contains shares. Once an
individual invest in a stock for the profit.

By: Pankaj KS

The concept of Stock market is a complex thing this is what the common man
believes. This is an altogether wrong notion harboring in many a mind at this very
moment. This article puts light on this matter and highlights how online stock broker
firms can help. Stock market is largely like a market place nearer to your home the
only difference is that instead of commodities shares and stocks of various top notch
companies are bought and sold here.

By: Nirmal Kumar

Today, the share market trading sector in India stands at par with world economies,
inviting foreign investors as well. Pouring in of foreign funds in crores during the last
few months well validates the fact. The two major stock exchanges of India the
National Stock Exchange for NSE trading and the Bombay Stock Exchange for BSE
trading have facilitated both listed companies and investors to make their mark in the
Indian stock market. All cautious investors know that the best way to make money is
to involve in stock market investing and buy Indian mutual funds. Probably they are
right because you need no big investment and it is only knowledge that acts as your
guiding tool in steering you towards taking the right investing decisions. And if you
can well decipher which equity shares are potential and which are not and then invest

accordingly it wont take time for you to make your mark in the share market in India.
The wise and experienced trader can predict whether he will gain or not out of his
investment by studying the up-to-the-minute trends, i.e. by watching the live stock
market including BSE live besides considering other factors. And he can stay up with
the volatility because of his knowledge and trading experience. Not all investors are
gifted with the same. Had this been there, losses would never have kissed the investor
doorsteps!

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The share market of India is dominated by online trading and investors constitute all
class of people, the young and the old alike. It is only market knowledge, a computer
and the Internet that makes investing possible at a click of the mouse. And with an
online trading account facilitating your shares trading, you need not physically visit
your broker. You will be guided in your buying decisions by your broker online.
Getting registered at brokerage platforms further makes the process easy.

By: Angela

Demat account is the stepping stone to stock trading in India Demat stands for
dematerialized account and it is imperative to have a demat account in order to trade
in the stock market in India. A depository participant is the right entity who is
authorized to open a demat account, most of the stock brokerage company act as a
depository participant and facilitate in opening of a demat account.

Roti Kapada aur Makaan We have all heard about these basic necessities of life since
our childhood. House has symbolized security, stability and progress for the erstwhile
nomadic human race... in investment markets, this is recognized as an asset class.
Real Estate refers to something related to land, permanent fixtures or building
attached to it. In simple language one can term real estate as an immovable property.
The government and banks managed your money for you until now. You could put
money in PPF, NSC etc or bank deposits. These deposit schemes are floated by banks
and government agencies, which invested in industrial projects on your behalf. These
industrial projects are now able to borrow at much cheaper rates of interest from
abroad or the stock markets since restrictions on foreign borrowings have weakened.
Companies are also performing better and are able to get money at competitive rates.

How open are we to taking risks? A simple experiment would suffice to yield
revealing answers. If we were to ask same-sex twins the same question -- If you had
to decide between a sure win of Rs 30, a 20 per cent chance of winning Rs 500 or a 50
per cent chance of winning Rs 100, what would you choose? their answers could be
very different. Any two peoples approach to risk-taking is different even if they
happened to be sibli

INVESTMENT CONSULTANT ON DEMAT ACCOUNT

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Bullriders.in

Bullriders.in Is an investment advisory firm which provides recommendation for

Stocks & Futures Trading In Nse & Bse. With a team of experienced analysist,
success rate of 85-90% have been achieved in stock recommendation we make Sure
that you are always prepared to take your own investment decision when the
opportunity arises. We bring you intensive research reports & stock tips that tell you
exactly when and where to invest. So whenever there is an exciting investment
opportunity, you are in the know and always ready to invest.

QTI solution

We at qti solutions provide textile inspection ,textile consultancy & training for
retailers,trader,exporters around the globe. Final shipment inspection, factroy audit,
social audit,gots consultant, law label registration services,oeko tex certification
consultant,oe certification,quality training,wrap,bsci,eti audit consultant

. NOBLE PRECISION CASTING PVT. LTD.

Excutive search, manpower consultant, recruiter, headhunter, job provider, ........ the
best investment a company can make is in their human resources. After all the success
of an organization ultimately depends upon it. This good intention must be put into
action without hesitation v hr professional is a professionally driven organization that
acts like a bridge between candidates seeking new challenges and organizations
looking for dynamic and ambitious professionals services we do a few things and we
do them well. You have no doubt heard of search firms that do it all.

Senior search. junior search. assessment. development. thought leadership.

governance. And who knows what else. we do this: we find the best people in the
consumer, media, entertainment, technology and not for profit sectors. We make it our
business to understand your business, and then we get down to work. We are focused,
diligent and we will not stop till we find just the right person. We do it at the top of
your organization and for middle management as well. We will even help you with
succession planning and coaching - determining how to get the right people from the
middle of your organization to stay and take on even more responsibility.

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CA’S VIEWS ON DEMAT ACCOUNT

Please go through the threads in the forum on the brokers and demat section. You
know about several good and bad features of all the brokers.
If u trade rarely and small, keep track of the following,

1)Your brokers reputation about the safety of the shares in the Demat a/c. always look
for freezing facility as provided by the NSDL and CSDL

2) Well brokerage is always important. Its an expense which if is less you are
profitable at the cost .look for a broker who charges reasonable. The standard in the
Induatry is 0.05%(intrday) and 0.5%(delivery) or lesser than these.

3) Thirdly at times of panic you might feel like selling a stock in your a/c. Well if u
ask the RM he would definitely say "OF COURSE IT WORKS".
But reality is that at times to pressure many sites go bust. look for reviews in this
Section about this.

4) Always look for simple and comfortable plus accessable from any place kind of
terminal if you are in the market.

CHAPTER-8
FINDINGS

Summer Training is a project study which always helped me to have a sound

knowledge and interaction with the organizations employees as well people whom I
was approaching for opening of DEMAT account. I came to know how the fresher’s
in any organization is being trained and how are they asked to work for the

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organizations. Facility what the company were offering to the common one as well as
to the good trader or investors. I also came to know that how in any organization
senior official works, role of HR in the company, how employees are motivated to
give their best work and sometimes it is compulsion also.

As my role was to get DEMAT account opened of every class of people. I

communicated with different people in different manner. I did cold calling which is
also known as door to door calling, by telephone, by meetings. Making everybody
satisfied with this concept of getting a DEMAT account opened was not so easy. Use
of very good communication skills, maintaining patience, clearing the doubts of
people, answering their questions all made it a tough task though I completed it in a
successful manner. Support of seniors in overcoming all the difficulties during my
work was really appreciable.

LEARNINGS

Learning is an important aspect of every work. It brings the experience in oneself to

develop the confidence in himself or herself. I learnt a lot of things during my job at
ANGEL BROKING LTD. I came to know for the first time that how the interviews
for selection is carried in any organizations. After selection the training part carried
out by the company for four days was an exciting event for me. Sessions by HR of the

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company during training was very much helpful for me. Compulsion for maintain the
discipline in the organization as well as in the behavior was an appreciating object.
After completion of training the job responsibility and the treatment by seniors made
me to learn a lot of things.

I was interacting with company’s employees, my colleagues, my senior who were

having a great experience of working in this field helped me a lot to work efficiently
at my work place. I was also interacting with different people to get their DEMAT
account opened in our company by proving them that dealing with our company
would be beneficial for them. I let them know about the facility and the services were
provided by the company. Different people were having different opinion regarding
this facility and investment in this sector. All group of ages were contacted. It was not
so easy to convince anyone for investing in share market as few considered it as a
gamble, few had lost money already in share market, few were not ready to take risk
as they were happy from what they were earning and etc… but thanks to the almighty
god, my senior who helped me to complete my job responsibility.

CONCLUSION

During this project work I came through the different aspects of the working environment in
an organization. How the pressure of work influences the performance of an employee,
motivation, compulsion of achieving the target within stipulated time, fear of job loss,
appraisal system of the company for best performer in the organization. Management system
of the company for employees as well as the resources. Interaction with different classes of

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people viz. sound, lower class, high profile people and their perception towards it taught me
how these things affect the life of anyone as well as country’s economy.

After doing my summer project I knew many things about the Demat account and other
securities. I knew about how the demat account is effective for the people’s economy so in
my opinion opening the demat account is very essentials. A Demat account is nothing, but
the account where the shares bought by you will be kept separately. Here the bank
will act as a broker. You online order for purchase would be carried out by the bank.
They charge broker commission, much less compared to private brokers.

SUGGESTIONS

Effectiveness of evolution of DEMAT scheme depends to a great degree on how well

the vices and virtues of this scheme has been described and how well it is utilized
since the aim of a well designed platform of earning through it is described. People’s

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perception towards it is either positively or negatively. Some suggestions which have
been generated out of the survey are following:

1. There are different classes present in the society who are having different
requirements as per their expenses. Meeting all these expenses through it is
absolutely not possible unless one has not got its other way of income for their
livelihood.

2. Securitization of all the aspects of trading in equity, commodity, F & O

segments for minting money is necessary which strictly involves the selection
of the organization which is going to provide this trading facility. Services
provided by them and how they guide anyone during their trading.

3. Above all these things from my experience I would like to suggest whosoever
is trading should check their financial status, risk they can afford and not
playing blindly. A sound knowledge of this DEMAT scheme may doom you
in no time.

4. Reading the business news, knowledge about what is going on in the market,
listening to news, and considering the experts view before trading will help a
lot in making money as well as expanding one’s knowledge in this field.

BIBLIOGRAPHY
Books:

1) NCFM( National Certificate In Finance Market)

Internet:

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1) http://www.angeltrade.com

2) http://www.wiki.answers.com

3) http://www.nseindia.com

4) http://www.indiabulls.com

5) http://www.sharekhan.com

6) http://www.moneyreddish.com

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