A

Project Report
On
“A STUDY ON ONLINE TRADING”
By

KAJAL VASANT BHANUSHALI

(Roll No. 55)

A Project Submitted to
University of Mumbai for partial completion of the degree of
Master in Commerce
Under the Faculty of Commerce

Under the Guidance of

Ms. Manya Hardwani

Laxman Devram Sonawane College

Opp.Fire Station, Near Durgadi Killa , Bhiwandi- Murbad Road,
Wadeghar, Kalyan (W) - 421301
 Laxman Devram Sonawane College
Opp.Fire Station ,Near Durgadi Killa, Bhiwandi-Murbad Road,
Wadeghar, Kalyan (W) - 421 301,

Certificate
This is to certify that Kajal Vasant Bhanushali has worked and duly completed
his Project Work for the degree of Master in Commerce under the Faculty of
Commerce and his project is entitled, “A Study On Online Trading” under my
supervision. I further certify that the entire work has been done by the learner
under my guidance and that no part of it has been submitted previously for any
Degree or Diploma of any University.

It is his own work and facts reported by his personal findings and investigations.

External Examiner Internal Guide

Ms. Manya Hardwani

Date of submission: May - 2022

 Declaration by learner

I the undersigned Kajal Vasant Bhanushali here by, declare that the work
embodied in this project work titled “A Study On Online Trading” forms my
own contribution to the research work carried out under the guidance of Ms.
Manya Hardwani is a result of my own research work and has not been
previously submitted to any other University for any other Degree/ Diploma to this
or any other University.

Wherever reference has been made to previous works of others, it has been clearly
Indicated as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained
and presented in accordance with academic rules and ethical conduct.

Kajal Vasant Bhanushali

Certified by
Ms. Manya Hardwani
 Acknowledgment

To list who all have helped me is difficult because they are so numerous and the
Depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chanceto do
this project.

I would like to thank my Principal, Prof. Annie Antony for providing thenecessary
facilities required for completion of this project.

I take this opportunity to thank our Coordinator Mr. Kesar Lalchandani, for hermoral
support and guidance.

I would also like to express my sincere gratitude towards my project guide Ms.Manya
Hardwani whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various referencebooks
and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped
me in the completion of the project especially My Parents and Peers whosupported
me throughout my project.
1.1 INTRODUCTION TO ONLINE TRADING
The actual definition of “Online Trading” is as explained below:
Online trading is a service offered on the internet for purchase and sale of shares. In the real world you place
orders on your stockbroker either verbally (personally or telephonically) or in a written form (fax).” In
online trading, you will access a stockbroker’s website through your internet enabled PC and place orders
through the broker’s internet based trading engine. These orders are routed to the stock exchange without
manual intervention and executed thereon in a matter of a few seconds. The net is used as a mode of trading
in internet trading. Orders are communicated to the stock exchange through website.
“Change is the law of nature”. There were times when man was a wanderer or a normal. He himself had
to go place to place in search of food, water and now everything is available at your doorstep just at the
click of the mouse. The growth of information technology has affected almost all sectors of life. Internet has
enabled us to get every information at our doorstep. When Internet has affected all sectors he could “stock
markets” the most important player of the economy, has remained far behind? Like all other sectors Internet
has set its feet in the stock markets also.
Online trading definition is a basic understanding of online trading processes. Since the invention of
Internet people have beena able to do practically everything virtually. Due to the Internet online trading has
become one of the most popular ways to trade as far as stock trading turned out to be as available to
independent investors as possible. Online trading gives both beginners who've just had a single day trading
course and advanced traders an opportunity to trade stocks, options, forex and futures all over the world
without physical presence of a broker and with much lower commissions, because everything is done online
Internet trading commissions are clearly posted on the websites of the various services, and are
typically a fixed rate charge, depending upon the type of security being traded and the size of trade. In
theory, therefore, an Interest investor always knows what commission he is being charged on each trade.
Internet investors can take as much time as they would like to take prior to placing a trade order. Similarly
the online investor likely does not have to worry that his broker is making unauthorized trades. Since there
is no individual broker making a commission, the only person who is authorized to trace in the account is
the actual investor. Furthermore, the internet investor can never become a victim of excessive trading
(where for the broker) since the investor maintains total control over the number of transactions which take
place in the account.
All of these positive features of internet trading may lead the unwary investor to believe that Internet
trading is a way to take control of their finances and save more money in the process. Unfortunately, this is

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not always the case. The advantages of Internet stock trading have also its weaknesses and these weaknesses
present significant drawbacks for the average investor.
First and foremost, the average investor is not an expert in the financial markets. There is a danger
for allowing the autonomy of online trading to hull you into the belief that you are an expert investor. An
online investor sitting at home at a personal computer also foregoes proper investment advice and financial
planning, perhaps among the most valuable services provided by traditional brokers.
ADVANTAGES OF ONLINE TRADING:
• Online trading has made it possible for anyone to have easy and efficient access to more reports and
charts than it was previously possible if one went to any brokers' office. Thus we have access to a lot
more information online.
• Online trading has let room for smaller organizations to compete with multinational organizations
since it is no longer a leg it issue. Being online does not identify the size of any particular
organization, therefore, this additional power to the underdogs.
• Online trading has allowed companies to locate themselves where they want as physical location is
not an issue anymore. Companies can establish themselves according to their gains and losses, for
instance where tax (sales and value added taxes) is best suited to them.
• Online trading gives control to individuals and they can exercise it over accounts thus comprehend
what is going on when they trade. It is like going back to school and re-educating oneself on how to
trade online.
• Individuals’ benefit by saving comparatively a lot more when trading online as the cost per trade is
less.

HERE ARE THE POSSIBLE DISADVANTAGES:

• When network crashes, there will be problems and delays due to a large influx of rapid online
trading criteria.
• Individuals are restricted to first-hand financial guidance. This simply means that the individual is
himself / herself alone to.
• A tax (sales tax and value added tax) evaluation becomes an issue, especially when you are trading
internationally.
• One has no idea with whom he is dealing with on the other end.
• According to a study conducted by Mary Rowland, careful investor: is online trading bad for your
portfolio, the more one trades the less returns one gets, meaning that an addicted trader gets, carried
away online and begins to trade for too much which causes losses for him / her.
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 • There is a need for more effective communication links over the Internet and the ability of the server
to deal with a large volume of visitors

1.2 NEED FOR THE STUDY

The present study to review the online trading procedure a case study of ONLINE TRADING at IIFL
LTD., as the exchange has changed it’s trading from it and there is need to assess the performance of the
capital market.
Maintaining good records requires discipline, just like good trading. Unfortunately, many commodity
traders don’t take the time to track their trading history, which can offer a wealth of information to
improve their odds of success Most professional traders, and those who consistently make money from
trading commodities, keep diligent records of their trading activity. The same cannot be said for the
masses that consistently lose at trading commodities.

1.3 SCOPE OF THE STUDY

 ‘Investor can assess the company financial strength and factors that effect the company. Scope of
the study is limited. We can say that 70% of the analysis is proved good for the investor, but the 30%
depends upon market sentiment.

 The topic is selected to analyses the factors that affect the future EPS of a company based on
fundamentals of the company.

 The market standing of the company studied in the order to give a better scope to the Analysis is
helpful to the investors, share holders, creditors for the rating of the company.
1.4 OBJECTIVES OF THE STUDY:
• It is to analyze the changes in trading after the exchange shifted from outcry to online trading
system.
• To know EPS of different companies by applying technical analysis.
• To know the online screen based trading system adopted by IIFL LTD and about its
communication facilities. The appropriate configuration to set the network, which would link
the IIFL LTD to individual / members.
• To know about the latest and future development in the stock exchange trading system.
•

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1.5 RESEARCH METHODOLOGY :
The data collection methods include both primary and secondary
Collection methods
Primary method: This method includes the data collected from the personal interaction with authorized
members of IIFL LTD.
Secondary method: The secondary data collection method includes:
 The lecturers delivered by the superintendents of respective departments.
 The brochures and material provided by IIFL LTD.
 The data collected from the magazines of the NSE, economic times, etc.
 Various books relating to the investments, capital market and other related topics.

1.5.1 LIMITATIONS OF THE STUDY:

The study confines to the past and present system of the trading procedure in the IIFL LTD study is
confined to the coverage of all the related issues in brief. The data is collected from the primary and
secondary sources and thus is subject to slight variation than what the study includes in reality.
The study is confined to online trading procedure only. Problems of listing are not covered due to
limited time and to keep the study in manageable limits.
- Time constraint was a major limiting factor. Forty five days were insufficient to even grasp the
theoretical concepts.
- Several other strategies that could have been studied were not done.
- Lack of knowledge with the brokers.
- Difference of theory from practice.
Absence of required knowledge and technology

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2.1 REVIEW OF LITRATURE

ONLINE TRADING

History

The evolution of a broking in India can be categorized in three phases -

• Stockbrokers will offer on their sites features such as live portfolio manager, live quotes, market
research and news, etc. to attract more investors.

• Brokers will offer online broking and relationship management by providing and offering
analysis and information to investors during broking and non-broking hours based on their
profile and needs, i.e. customized services.

• Brokers (now e-brokers) will offer value management or services like initial public offering
online, on-line asset allocation, portfolio management, financial planning, tax planning,
insurance services, etc. and enables the investors to take better and well considered decisions.

Before getting in to the online trading we should know some things about the internet, e-commerce
and etc.
1. Internet

Internet is a worldwide, self-governed network connecting several other smaller networks and millions
of computers and persons, to mega sources of information. This technology shrinks vast distances,
accelerating the pace of business reforms and revolutionizing the way companies are managed. It allows
direct, ubiquitous links to anyone anywhere and anytime to build up interactive relationships.It offers
stock trading at a lower cost. Internet can change the nature and capacity of stock broking business in
India.

2. E-commerce

Electronic commerce is associated with buying and selling over computer communication networks. It
helps conduct traditional commerce through new way of transferring and processing of information.
Information is electronically transferred from computer to computer in an automated way. E-commerce
refers to the paperless exchange of business information using electronic data inter change, electronic
technologies

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In India:

Internet trading started in India on 1st April 2000 with 79 members seeking permission for online
trading. The SEBI committees on internet based securities trading services has allowed the net to be
used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for
execution of transaction. Under the ORS the client enters his requirements (security, quantity, price
buy/sell) on broker’s site.

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

The securities and exchange board of India was constituted in 1988 under a resolution of government of
India. It was later made statutory body by the SEBI act 1992.according to this act, the SEBI shall
constitute of a chairman and four other members appointed by the central government.

With the coming into effect of the securities and exchange board of India act, 1992 some of the powers
and functions exercised by the central government, in respect of the regulation of stock exchange were
transferred to the SEBI.

OBJECTIVES AND FUNCTIONS OF SEBI

• To protect the interest of investors in securities.

• Regulating the business in stock exchanges and any other securities market.

• Registering and regulating the working of intermediaries associated with securities market as
well as working of mutual funds.

• Promoting and regulating self-regulatory organizations.

• Regulating substantial acquisition of shares and take over of companies.

• Performing such functions and exercising such powers under the provisions of capital issues
(control) act, 1947and the securities to it by the central government.

SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK EXCHANGES):

• Board of Directors of Stock Exchange has to be reconstituted so as to include non-members, public

representatives and government representatives to the extent of 50% of total number of members.

• Capital adequacy norms have been laid down for the members of various stock exchanges
depending upon their turnover of trade and other factors.
• All recognized stock exchanges will have to inform about transactions within 24 hrs.
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Objectives of online trading:
Internet trading is expected to

• Increase transparency in the markets,

• Enhance market quality through improved liquidity, by increasing quote continuity and market
depth,

• Reduce settlement risks due to open trades, by elimination of mismatches,

• Provide management information system,

• Introduce flexibility in system, so as to handle growing volumes easily and to support nationwide
expansion of market activity.

Requirements for net trading:

For investors:

1. Installation of a computer with required specification

2. Installation of a modem

3. Telephone connection

4. Registration for on-line trading with broker

5. A bank account

6. Depository account

7. Compliance with SEBI guidelines for net trading

For stock brokers:

1. Permission from stock exchange for net trading

2. Net worth of Rs. 50 lac
3. Adequate back-up system
4. Secured and reliable software system
5. Adequate, experienced and trained staff
6. Communication of order (trade confirmation to investor by e-mail)
7. Use of authentication technologies
8. Issue of contract notes within 24 hours of the trade execution
9. Setting up a website.
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 Procedure for net trading

Step 1: Those investors, who are interested in doing the trading over internet system i.e. NEAT-IXS,
should approach the brokers and get them self registered with the Stock Broker.

Step 2: After registration, the broker will provide to them a Login name, Password and personal
identification number (PIN).

Step 3: Actual placement of an order. An order can then be placed by using the place order window as
under:

(a) First by entering the symbol and series of stock and other parameters like quantity and price of
the scrip on the place order window.

(b) Second, fill in the symbol, series and the default quantity.

Step 4: It is the process of review. Thus, the investor has to review the order placed by clicking the
review option. He may also re-set to clear the values.

Step 5: After the review has been satisfactory, the order has to be sent by clicking on the send option.

Step 6: The investor will receive an "Order Confirmation" message along with the order number and the
value of the order.

Step 7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons such as
invalid price limit, an appropriate message will appear at the bottom of the screen. At present, a time lag
of about 10 seconds is there in executing the trade.

Step 8: It is regarding charging payment, for which there are different mode. Some brokers will take
some advance payment from the investor and will fix their trading limits. When the trade is executed,
the broker will ask the investor for transfer of funds to his account.

• News and research report

• BSE and NSE movements

• Stock analysis , IPO and mutual fund centers

Step by step process in online trading:

Following steps explain the step by step approach to on-line trading:

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• Log on to the stock broker's website

• Register as client/investor

• Fill the application form and client broker agreement form on the requisite value stamp paper

• Obtain user ID and pass word

• Log on to the broker's site using secure user ID and password

• Market watch page will show real time on-line market data

• Trade shares directly by entering the symbol or number of the security

• Brokers server will check your limit in the on-line account and demat account for the number of
shares and execute the trade

• Order is executed instantly (10-30 seconds) and confirmation can be obtained.

• Confirmation is e-mailed to investor by broker

• Contract note is printed and mailed in 24 hours

• Settlement will take place automatically on the settlement day

• Demat account and the bank account will get debited and credited by electronic means.

ONLINE TRADING HAS LED TO ADDITIONAL FEATURES SUCH AS:

• Limit / stop orders: orders that can be go unfilled, but there is an extra Charge for this leeway
facility since one need to hold a price.

• Market orders: orders can be filled at unexpected prices, but this type is much more risky, since you
have to buy stock at the given price.

• Cash account: where funds have to be available prior to placing the order.

• Margin account: where orders can be placed against stocks, to increase Purchasing power.

INVESTORS REASONS TO TRADE ONLINE:

• They have control over their accounts, can make their own decisions and don’t have to give reasons
for their actions. They are independent.

• They have a reason to participate in the market and learn about it.
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 • It is interesting, cheap, easy, fast, and convenient.

• A lot of information is online so they can keep up-to-date with what is happening in the trading
world.

• It will give investors a greater choice and better realization.

STOCK EXCHANGES IN INDIA

Stock exchanges are the perfect type of market for securities whether of government and semi-govt
bodies or other public bodies as also for shares and debentures issued by the joint-stock companies. In
the stock market, purchases and sales of shares are affected in conditions of free competition.
Government securities are traded outside the trading ring in the form of over the counter sales or
purchase. The bargains that are struck in the trading ring by the members of the stock exchanges are at
the fairest prices determined by the basic laws of supply and demand.

Definition of a stock exchange:

“Stock exchange means any body or individuals whether incorporated or not, constituted for the purpose
of assisting, regulating or controlling the business of buying, selling or dealing in securities.” The
securities include:

 Shares of public company.

 Government securities.

 Bonds

History of Stock Exchanges:

The only stock exchanges operating in the 19th century were those of Mumbai setup in 1975 and
Ahmedabad set up in 1994. These were organized as voluntary non-profit-marking associations of
brokers to regulate and protect their interests. Before the control on securities under the constitution in
1950, it was a state subject and the Bombay securities contracts (control) act of 1925 used to regulate
trading in securities. Under this act, the Mumbai stock exchange was recognized in 1927 and
Ahmedabad in 1937. During the war boom, a number of stock exchanges were organized. Soon after it
became a central subject, central legislation was proposed and a committee headed by A.D.Gorwala
went into the bill for securities regulation. On the basis of the committee’s recommendations and public
discussion, the securities contract (regulation) act became law in 1956.
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Functions of Stock Exchanges:

Stock exchanges provide liquidity to the listed companies. By giving quotations to the listed companies,
they help trading and raise funds from the market. Over the hundred and twenty years during which the
stock exchanges have existed in this country and through their medium, the central and state government
have raised crores of rupees by floating public loans. Municipal corporations, trust and local bodies have
obtained from the public their financial requirements, and industry, trade and commerce- the backbone of
the country’s economy-have secured capital of crores or rupees through the issue of stocks, shares and
debentures for financing their day-to-day activities, organizing new ventures and completing projects of
expansion, diversification and modernization

Various Stock Exchanges in India:

At present there are 23 stock exchanges recognized under the securities contracts (regulation), Act,
1956. Those are:

1. Ahmedabad Stock Exchange Association Ltd.

2. Bangalore Stock Exchange

3. Bhubaneshwar Stock Exchange Association

4. Calcutta Stock Exchange

5. Cochin Stock Exchange Ltd.

6. Coimbatore Stock Exchange

7. Delhi Stock Exchange Association

8. Guwahati Stock Exchange Ltd

9. Jaipur Stock Exchange Ltd

10. Kanara Stock Exchange Ltd

11. Ludhiana Stock Exchange Association Ltd

12. Madras Stock Exchange

13. Madhya Pradesh Stock Exchange Ltd

14. Magadh Stock Exchange Limited

15. Meerut Stock Exchange Ltd.

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16. Mumbai Stock Exchange

17. National Stock Exchange of India

18. OTC Exchange of India

19. Pune Stock Exchange Ltd.

20. Saurashtra Kutch Stock Exchange Ltd.

21. Uttar Pradesh Stock Exchange Association

22. Vadodara Stock Exchange Ltd.

Out of these major stock exchanges were:

NSE

The National Stock Exchange of India Limited has genesis in the report of the High Powered Study
Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock
Exchange by financial institutions (FI’s) to provide access to investors from all across the country on an
equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at
the behest of the Government of India and was incorporated in November 1992 as a tax-paying company
unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities
Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt
Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in
November 1994 and operations in Derivatives segment commenced in June 2000

NSE's mission is setting the agenda for change in the securities markets in India. The NSE was set-up
with the main objectives of:

• Establishing a nation-wide trading facility for equities and debt instruments.

• Ensuring equal access to investors all over the country through an appropriate communication
network.

• Providing a fair, efficient and transparent securities market to investors using electronic trading
systems.

• Enabling shorter settlement cycles and book entry settlements systems, and

• Meeting the current international standards of securities markets.

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 The standards set by NSE in terms of market practices and technology, have become industry
benchmarks and are being emulated by other market participants. NSE is more than a mere market
facilitator. It's that force which is guiding the industry towards new horizons and greater opportunities.

BSE

The Stock Exchange, Mumbai, popularly known as "BSE"was established in 1975 as"The Native Share and
Stock Brokers Association".It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which
was established in 1978. It is a voluntary non-profit making Association of Persons (AOP) and is currently
engaged in the process of converting itself into demutualised and corporate entity. It has evolved over the
years into its present status as the premier Stock Exchange in the country. It is the first Stock Exchange in
the Country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities
Contracts (Regulation) Act 1956.The Exchange, while providing an efficient and transparent market for
trading in securities, debt and derivatives upholds the interests of the investors and ensures redresses of their
grievances whether against the companies or its own member-brokers. It also strives to educate and
enlighten the investors by conducting investor education programmers and making available to them
necessary informative inputs.

A Governing Board having 20 directors is the apex body, which decides the policies and regulates the
affairs of the Exchange. The Governing Board consists of 9 elected directors, who are from the broking
community (one third of them retire ever year by rotation), three SEBI nominees, six public
representatives and an Executive Director & Chief Executive Officer and a Chief Operating Officer.

The Executive Director as the Chief Executive Officer is responsible for the day-to-day administration
of the Exchange and the Chief Operating Officer and other Heads of Department assist him.

The Exchange has inserted new Rule No.126 A in its Rules, Byelaws pertaining to constitution of the
Executive Committee of the Exchange. Accordingly, an Executive Committee, consisting of three
elected directors, three SEBI nominees or public representatives, Executive Director & CEO and Chief
Operating Officer has been constituted. The Committee considers judicial & quasi matters in which the
Governing Board has powers as an Appellate Authority, matters regarding annulment of transactions,
admission, continuance and suspension of member-brokers, declaration of a member-broker as defaulter,
norms, procedures and other matters relating to arbitration, fees, deposits, margins and other monies
payable by the member-brokers to the Exchange, etc.

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REGULATORY FRAME WORK OF STOCK EXCHANGE

A comprehensive legal framework was provided by the “Securities Contract Regulation Act, 1956” and
“Securities Exchange Board of India 1952”. Three tier regulatory structure comprising

 Ministry of finance

 The Securities And Exchange Board of India

 Governing body

Members of the stock exchange:

The securities contract regulation act 1956 has provided uniform regulation for the admission of
members in the stock exchanges. The qualifications for becoming a member of a recognized stock
exchange are given below:

• The minimum age prescribed for the members is 21 years.

• He should be an Indian citizen.

• He should be neither a bankrupt nor compound with the creditors.

• He should not be convicted for fraud or dishonesty.

• He should not be engaged in any other business connected with a company.

• He should not be a defaulter of any other stock exchange.

• The minimum required education is a pass in 12th standard examination.

TYPES OF ORDERS:

Buy and sell orders placed with members of the stock exchange by the investors. The orders are of
different types.

Limit orders: Orders are limited by a fixed price. E.g. ‘buy Reliance Petroleum at Rs.50.’Here, the
order has clearly indicated the price at which it has to be bought and the investor is not willing to give
more than Rs.50.

Best rate order: Here, the buyer or seller gives the freedom to the broker to execute the order at the best
possible rate quoted on the particular date for buying. It may be lowest rate for buying and highest rate
for selling.

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Discretionary order: The investor gives the range of price for purchase and sale. The broker can use his
discretion to buy within the specified limit. Generally the approximation price is fixed. The order stands
as this “buy BRC 100 shares around Rs.40”.

Stop loss order: The orders are given to limit the loss due to unfavorable price movement in the market.
A particular limit is given for waiting. If the price falls below the limit, the broker is authorized to sell
the shares to prevent further loss. E.g. Sell BRC limited at Rs.24, stop loss at Rs.22.

Buying and selling shares:To buy and sell the shares the investor has to locate register broker or sub
broker who render prompt and efficient service to him. The order to buy or sell specifying the number of
shares of the company of investors’ choice is placed with the broker. The order may be of any type.
After receiving the order the broker tries to execute the order in his computer terminal. Once matching
order is found, the order is executed. The broker then delivers the contract note to the investor. It gives
the details regarding the name of the company, number of shares bought, price, brokerage, and the date
of delivery of share.

Share groups: The scrips traded on the BSE have been classified into ‘A’,’B1’,’B2’,’C’,’F’ and ‘Z’
groups. The ‘A’ group represents those, which are in the carry forward system. The ‘F’ group represents
the debt market segment (fixed income securities). The Z group scrips are of the blacklisted companies.
The ‘C’ group covers the odd lot securities in ‘A’, ‘B1’&’B2’ groups.

ROLLING SETTLEMENT SYSTEM:

Under rolling settlement system, the settlement takes place n days (usually 1, 2, 3 or 5days) after the
trading day. The shares bought and sold are paid in for n days after the trading day of the particular
transaction. Share settlement is likely to be completed much sooner after the transaction than under the
fixed settlement system.

The rolling settlement system is noted by T+N i.e. the settlement period is n days after the trading day.
A rolling period which offers a large number of days negates the advantages of the system. Generally
longer settlement periods are shortened gradually.

SEBI made RS compulsory for trading in 10 securities selected on the basis of the criteria that they were
in compulsory demat list and had daily turnover of about Rs.1 crore or more. Then it was extended to
“A” stocks in Modified Carry Forward Scheme, Automated Lending and Borrowing Mechanism
(ALBM) and Borrowing and lending Securities Scheme (BELSS) with effect from Dec 31, 2001.

15
SEBI has introduced T+5 rolling settlement in equity market from July 2001 and subsequently shortened
the cycle to T+3 from April 2002. After the T+3 rolling settlement experience it was further reduced to
T+2 to reduce the risk in the market and to protect the interest of the investors from 1st April 2003.

Activities on T+1: conformation of the institutional trades by the custodian is sent to the stock exchange
by 11.00 am. A provision of an exception window would be available for late confirmation. The time
limit and the additional

changes for the exception window are dedicated by the exchange.

The exchanges/clearing house/ clearing corporation would process and download the obligation files to
the broker’s terminals late by 1.30 p.m on T+1. Depository participants accept the instructions for pay in
securities by investors in physical form upto 4 p.m and in electronic form upto 6 p.m. the depositories
accept from other DPs till 8p.m for same day processing.

Activities on T+2: The depository permits the download of the paying in files of securities and funds till
10.30 a.m on T+2 from the brokers’ pool accounts. The depository processes the pay in requests and
transfers the consolidated pay in files to clearing House/clearing Corporation by 11.00am/on T+2. The
exchange/clearing house/clearing corporation executes the pay-out of securities and funds latest by 1.30
p.m on T+2 to the depositories and clearing banks. In the demat mode net basis settlement is allowed.
The buy and sale positions in the same scrip can be settled and net quantity has to be settled.

Goldberg,S.T.(1999).Kiplinger's Persona lFinance “Online Brokers Grow Up The

online brokerage industry is growing up. Online brokers have generally stopped lowering
their prices in the past year or so, but they have added services. Every brokerage customer
gets a regular account statement in the mail, but some statements are better than others.
Many investors are unaware of the hidden costs of executing a stock trade, or of the ways
brokers & other executors of trades can jack up the cost of trading.

ButlerT.(2010)“The Complete Guide to Your Personal Finances Online : Step-By-Step

Instructions to Take Control of Your Financial Future Using the Internet. ” Most
financial experts agree that one of the most important step you can take before getting
involved with investing online or otherwise, is to make sure that the rest of your finance
are in order. The amount of money you invest, as well as the investment you make,
should be dictated by your Financial Goals.
16
 WaliaN.andKumarR.(2007)"Online stock trading in India: An empirical investigation "
Research report examined the investors 'preference for traditional trading and online
trading, investor's perception on Online trading & comparing current usage of online
trading and offline trading. This study reveals that out of every 100 investors only 28
trade online, which points out a question as why investors were not able to realize the
importance of technology in stock trading.
The major findings of the study are the Indian investors are more conservative, they do
not change brokers for trading, where as net traders are more comfortable with online
trading for its transparency and complete control of the terminal.

TurnerT.(2007).“ABeginner's Guide To Day Trading Online ” The stock market is the

monster of all Roller Coasters, lifting traders to hair raising highs, then dropping them to
the lowest lows, with no regards for their screams .Online brokers and direct access
brokers have streamlined their platforms to maximum levels of speed & efficiency.

Nejati.M&NejatiM.(2010)“Global Business and

Management Research: An International Journal”

17
Share brokers offer two types of share trading. Offline Share trading In the
form of trading the customer goes to the share brokers place & sits before the
share trading terminal & asks the dealer to place order in his account or rings
the share broker, asks the share quotes & other related and relevant
information , & accordingly places orders over the phone .Online Share
Trading The client could avail the share market & could place his order on
his own from any place he wants , provided he has a computer with an
internet Connection.

MadhavanV.“Payments in India: The journeys of arand the road ahead”,

looks at how the multiple payment systems have developed in India and
considers the need for technology and a legal frame work to ensure that an
electronically linked payments and clearing system , including cheque
truncation , can be implemented in future.

JaiswalM.,VashistD. and KumarA.“Online trading: Trading@ the speed of

light ,”,traces the growth of online trading from the year 2000 using statistics
on volume of online trading from the year 2000 using statistics on volume of
online trading , number of e broking firms , brokerages and demographic
patterns .Online trading has dramatically changed the way stock business has
been conducted over the years.

ClaburgJ.F.“Four Steps to Trading Success:Using Every day Indicators to

Achieve Extra ordinary Profits ”Success in any area of endeavour, whether it
be a craft, the arts , or business , is not based on having the right equipment,
or raw materials, but rather on knowing how to use them to create a great out
come . Like wise , success in the stock market is not dependent on having
access to good indicators ; rather , on knowing how to read them against
prevailing market conditions. Technical analysis, the reading of price and
volume charts to identify trading opportunities , has long been a staple in the
trader’s tool kit . And with the advent of online trading, technical analysis
has become more readily available to traders than ever before.

PatelJ.(2007)“Profit From Prices” in chapter Plan Your Trading and Trade

as per your Planning In a conventional business, we sell things at prices
higher than what we have paid for them. The same objective is there in
trading buy low and sell high. Trading and business both require capital and
are carried out with one objective to earn profit. Success in both greatly
depends on our ability to buy and sell smartly buy as cheap as possible and
sell as expensive as possible. However it is not difficult to see many
businesses lose money or fail over time. Similarly, some traders lose money
in trading and are forced to quit trading.

1
 PandaS.R.“Essential of Trading” Money makes money but traders and
investors always hunt for a
Magical person who will give them magical calls. Many times you would
have taken many independent, wise trade decisions. Which must have
rewarded you but you must have forgotten it. You have to analyse those
decisions by yourself. It is my final advise that better you stop hunting for
magical people and educate your self and take your own trade decision.
‘Intraday Trade’.“ Trader take one position or express his view on a specific
capital instrument (stock, commodity…etc) and take it granted that future
price movement of this instrument will be according to his choice and it will
occur in the same day.”

Wyk off R.“The Day Traders Bible” The chances were equal at the start of
the pursuit as far as capital and opportunity . The profits were there, waiting
to be won by either or both. The answer seems to be in the peculiar
qualifications of the mind, highly potent in the successful trader, but not
possessed by the other. There is, of course, an element of luck in every case,
but pure luck could not be so sustained in Manning's case as to carry him
through day trading operations covering a term of years. While certain stocks
constitute the back bone or leadership position, this important member is
only one part of the market body that, after all, is very like the physical
structure of a human being. Were there no expenses, making a profit would
be far easier – profits would merely have to exceed losses.

2
 CHAPTER-III
INDUSTRY PROFILE
&
COMPANY PROFILE

3.1INDUSTRYPROFILE

For the Indian investors, the year belonged to stock markets, which have been
shining bright when it comes to generating wealth, while the glitter of gold and
silver faded for the second straight year in 2019.
Measured by BSE Sensex, stock market has generated a positive return of about
9 percent for investors in 2019,while gold prices fell by about three percent and
its poorer cousin silver plummeted close to 24 percent.

3
After out performing stock market for more than a decade, gold has been on
back foot for two consecutive years now vis- a -vis equities ,shows ananalysis
of their price movements.
"Gold's under performance was mainly due to prices falling in dollar terms
amid anticipated tapering over last several months combined with FII
investment in Indian stocks.
"This movement has been equally true for global markets as 2019 saw gold
losing its shine and markets coming back with a bang , "said Jayant Manglik,
President Retail Distribution, Religare Securities.
"As always, gold and stock prices follow opposite trends and this year was no
different except that both changed direction,"he said.
Improvement in the world economy has brought the risk appetite back amongst
retail investors and this has drenched the liquidity from safe havens such as gold
leading to its under-performance, an expert said.
In 2012, the Sensex had gained over 25 percent, which was nearly double the
gain of about 12.95 percent in gold. The appreciation in silver was at about
12.84 per last year.
According to Hiren Dhakan , Associate Fund Manager , Bonanza Portfolio,"
Markets have particularly shown great strength post July-August 2019 when
RBI took some strong measures to control the steeply depreciating rupee."
"When the US Fed gave indications that it might taper its stimulus programme
given the economy shows improvement, a knee-jerk correction was seen in
most risky assets, including stocks in Indian markets. However, assurance by
the Fed about planned and staggered tapering in stimulus once again proved to
be a catalyst for the markets."

"External factors affecting Indian stocks seem to be negative for the first half of
2019 due to continued strength of the US dollar and be ninth second half. By
that time , elections too would have taken place. A combination of domestic and

4
international factors point to a bumper closing of Indian markets in 2019 with
double-digit percentage growth ,"he said.
Stock market segment mid-cap and small-cap indices have fallen by about 10
percent and 18 percent, respectively, in 2019.
Foreign Institutional Investors have bought shares worth over Rs1.1lakh crore
(nearly USD 20 billion) till December 19. In 2012, they had pumped in Rs1.28
lakh crore(USD24.37billion).

Evolution

Indian Stock Markets are one of the oldest in Asia. Its history dates back to
nearly 200 years ago. The earliest records of security dealings in India are
meagre and obscure. The East India Company was the dominant institution in
those days and business in its loan securities used to be transacted towards the
close of the eighteenth century.

By 1930's business on corporate stocks and shares in Bank and Cotton presses
took place in Bombay. Though the trading list was broader in 1939,there were
only half a dozen brokers recognized by banks and merchants during 1940 and
1950.

The 1950's witnessed a rapid development of commercial enterprise and

brokerage business attracted many men into the field and by 1960 the number of
brokers increased into 60.

In1960-61 the American Civil War broke out and cotton supply from United
States of Europe was stopped; thus, the' Share Mania' in India begun. The
number of brokers increased to about 200 to 250. However , at the end of the
American Civil War, in 1965, adisas trous slump began (for example ,Bank of
Bombay Share which had touched Rs2850 could only be sold at Rs.87).

5
At the end of the American Civil War, the brokers who thrived out of Civil War
in 1974, found a place in a street(now appropriately called as Dalal Street)
where they would conveniently assemble and transact business. In 1987,they
formally established in Bombay, the" Native Share and Stock Brokers'
Association"( which is alternatively known as" The Stock Exchange").In
1995,the Stock Exchange acquired a premise in the same street and it was
inaugurated in 1999.Thus, the Stock Exchange at Bombay was consolidated.

Other leading cities in stock market operations

Ahmadabad gained importance next to Bombay with respect to cotton textile

industry. After 1980, many mills originated from Ahmadabad and rapidly
forged ahead. As new mills were floated, the need for a Stock Exchange at
Ahmadabad was realized and in 1994 the brokers formed "The Ahmadabad
Share and Stock Brokers' Association".

What the cotton textile industry was to Bombay and Ahmadabad, the jute
industry was to Calcutta. Also tea and coal industries were the other major
industrial groups in Calcutta. After the Share Maniain 1961-65, in the 1970's
there was a sharp boom in jute shares,which was followed by a boom in tea
shares in the 1980's and 1990's ; and a coal boom between 1904 and 1908. On
June 1908, some leading brokers formed " The Calcutta Stock Exchange
Association".

In the beginning of the twentieth century, the industrial revolution was on the
way in India with the Swadeshi Movement; and with the inauguration of the
Tata Iron and Steel Company Limited in 1907,an important stage in industrial
advancement under Indian enterprise was reached.

6
Indian cotton and jute textiles, steel, sugar, paper and flour mills and all
companies generally enjoyed phenomenal prosperity ,due to the First World
War.

In 1920, the then demurecity of Madras had the maiden thrill of a stock
exchange functioning in its midst,under the name and style of"The Madras
Stock Exchange "with 100 members. However, when boom faded ,the number
of members stood reduced from 100 to 3, by 1923,and so it went out of
existence.

In 1935, the stock market activity improved, especially in South India where
there was a rapid increase in the number of textile mills and many plantation
companies were floated. In 1937,a stock exchange was once again organized in
Madras-Madras Stock Exchange Association(Pvt)Limited.(In 1957 the name
was changed to Madras Stock Exchange Limited).

Lahore Stock Exchange was formed in 1934 and it had a brief life. It was
merged with the Punjab Stock Exchange Limited ,which was incorporated in
1936.

Indian Stock Exchanges- An Umbrella Growth

The Second World War broke out in 1939. It gave a sharp boom which was
followed by a slump. But, in 1943, the situation changed radically,when India
was fully mobilized as a supply base.

On account of the restrictive controls on cotton, bullion, seeds and other

commodities, those dealing in them found in the stock market as the only out let
for their activities. They were anxious to join the trade and their number was
swelled by numerous others. Many new associations were constituted for the
purpose and Stock Exchanges in all parts of the country were floated.

7
The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock Exchange
Limited (1940) and Hyderabad Stock Exchange Limited (1944) were
incorporated.

In Delhi two stock exchanges-Delhi Stock and Share Brokers' Association

Limited and the Delhi Stocks and Shares Exchange Limited-were floated and
later in June 1947,amalgamated into the Delhi Stock Exchange Association
Limited.

Post-independence Scenario

Most of the exchanges suffered almost a total eclipse during depression. Lahore
Exchange was closed during partition of the country and later migrated to Delhi
and merged with Delhi Stock Exchange.

Bangalore Stock Exchange Limited was registered in 1957 and recognized in

1963.

Most of the other exchanges languished till 1957 when they applied to the
Central Government for recognition under the Securities Contracts (Regulation)
Act, 1956. Only Bombay, Calcutta, Madras, Ahmadabad, Delhi, Hyderabad and
Indore, the well established exchanges, were recognized under the Act.Some of
the members of the other Associations were required to be admitted by the
recognized stock exchanges on a concessional basis, but acting on the principle
of unitary control ,all these pseudo stock exchanges were refused recognition by
the Government of India and they there upon ceased to function.

Thus, during early sixties there were eight recognized stock exchanges in
India(mentioned above).The number virtually remained unchanged, for nearly
two decades. During eighties ,however ,many stock exchanges were
established :Cochin Stock Exchange(1980),Uttar Pradesh Stock Exchange

8
Association Limited (at Kanpur,1982),and Pune Stock Exchange
Limited(1982),Ludhiana Stock Exchange Association Limited(1983),Gauhati
Stock Exchange Limited(1984),Kanara Stock Exchange Limited(at
Mangalore,1985),Magadh Stock Exchange Association(at Patna,1986),Jaipur
Stock Exchange Limited(1989),Bhubaneswar Stock Exchange Association
Limited(1989),Saurashtra Kutch Stock Exchange Limited(at
Rajkot,1989),Vadodara Stock Exchange Limited(at Baroda,1990)and recently
established exchanges-Coimbatore and Meerut.Thus, at present, there are totally
twenty one recognized stock exchanges in India excluding the Over The
Counter Exchange of India Limited (OTCEI) and the National Stock Exchange
of India Limited (NSEIL).

The Table given below portrays the over all growth pattern of Indian stock
markets since independence .It is quite evident from the Table that Indian stock
markets have not only grown just in number of exchanges ,but also in number
of listed companies and in capital of listed companies .The remarkable growth
after 1985 can be clearly seen from the Table ,and this was due to the favouring
government policies towards security market industry.

Trading Pattern of the Indian Stock Market

Trading in Indian stock exchanges are limited to listed securities of public

limited companies. They are broadly divided into two categories, namely,
specified securities (forward list) and non-specified securities(cash list).Equity
shares of dividend paying, growth-oriented companies with a paid-up capital of
at least Rs.50million and a market capitalization of at least Rs.100 million and
having more than 20,000 share holders are, normally, put in the specified group
and the balance in non-specified group.

9
Two types of transactions can be carried out on the Indian stock exchanges:(a)
spot delivery transactions "for delivery and payment within the time or on the
date stipulated when entering into the contract which shall not be more than 19
days following the date of the contract":and (b) forward transactions "delivery
and payment can be extended by further period of 19 days each so that the over
all period does not exceed 90 days from the date of the contract ".The latter is
permitted only in the case of specified shares .The brokers who carry over the
out standings pay carry over charges(can tan go or backwardation) which are
usually determined by the rates of interest prevailing.

A member broker in an Indian stock exchange can act as an agent, buy and sell
securities for his clients on a commission basis and also can act as a trader or
dealer as a principal, buy and sell securities on his own account and risk, in
contrast with the practice prevailing on New York and London Stock
Exchanges ,where a member can act as a jobber or a broker only.

The nature of trading on Indian Stock Exchanges are that of age old
conventional style of face-to-face trading with bids and offers being made by
open out cry.How ever,there is a great amount of effort to modernize the Indian
stock exchanges in the very recent times.

Over The Counter Exchange of India(OTCEI)

The traditional trading mechanism prevailed in the Indian stock markets gave
way to many function align efficiencies ,such as, absence of liquidity, lack of
transparency, unduly longest settlement periods and benami transactions, which
affected the small investors to a great extent. To provide improved services to
investors , the country's first ring less ,scrip less ,electronic stock exchange-
OTCEI-was created in 1992 by country's premier financial institutions-Unit
Trust of India, Industrial Credit and Investment Corporation of India, Industrial

10
Development Bank of India ,SBI Capital Markets ,Industrial Finance
Corporation of India ,General Insurance Corporation and its subsidiaries and
Can Bank Financial Services.

Trading at OTCEI is done over the centres spread across the country. Securities
traded on the OTCEI are classified into:

Listed Securities-The shares and debentures of the companies listed on the OTC
can be bought or sold at any OTC counter all over the country and they should
not be listed any where else

Permitted Securities-Certain shares and debentures listed on other exchanges

and units of mutual funds are allowed to be traded

Initiated debentures-Any equity holding at least one lakh debentures of a

particular scrip can offer them for trading on the OTC.

OTC has a unique feature of trading compared to other traditional exchanges.

That is ,certificates of listed securities and initiated debentures are not traded at
OTC .The original certificate will be safely with the custodian. But, a counter
receipt is generated out at the counter which substitutes the share certificate and
is used for all transactions.

In the case of permitted securities, the system is similar to a traditional stock

exchange .The difference is that the delivery and payment procedure will be
completed within 19 days.

Compared to the traditional Exchanges, OTC Exchange network has the

following advantages:

OTCEI has widely dispersed trading mechanism across the country which
provides greater liquidity and lesser risk of intermediary charges.

11
Greater transparency and accuracy of prices is obtained due to the screen-based
scrip less trading.

Since the exact price of the transaction is shown on the computer screen,the
investor gets to know the exact price at which s/he is trading.

Faster settlement and transfer process compared to other exchanges.

In the case of an OTC issue (new issue),the allotment procedure is completed in

a month and trading commences after a month of the issue closure, whereas it
takes a longer period for the same with respect to other exchanges.

Thus, with the superior trading mechanism coupled with information

transparency investors are gradually becoming aware of the manifold
advantages of the OTCEI.

National Stock Exchange(NSE)

With the liberalization of the Indian economy,it was found inevitable to lift the
Indian stock market trading system on par with the international standards. On
the basis of the recommendations of high powered Pherwani Committee, the
National Stock Exchange was incorporated in 1992 by Industrial Development
Bank of India, Industrial Credit and Investment Corporation of India, Industrial
Finance Corporation of India ,all Insurance Corporations, selected commercial
banks and others.

Trading at NSE can be classified under two broad categories:

(a)Wholesale debt market and

(b)Capital market.

12
Wholesale debt market operations are similar to money market operations-
institutions and corporate bodies enter into high value transactions in financial
instruments such as government securities, treasury bills, public sector unit
bonds, commercial paper, certificate of deposit, etc.

There are two kinds of players in NSE:

(a)Trading members and

(b)Participants.

Recognized members of NSE are called trading members who trade on behalf
of themselves and their clients. Participants include trading members and large
players like banks who take direct settlement responsibility.

Trading at NSE takes place through a fully automated screen-based trading

mechanism which adopts the principle of an order-driven market.Trading
members can stay at their offices and execute the trading, since they are linked
through a communication network.The prices at which the buyer and seller are
willing to transact will appear on the screen. When the prices match the
transaction will be completed and a confirmation slip will be printed at the
office of the trading member.

NSEhasseveraladvantagesoverthetraditionaltradingexchanges.Theyareasfollows
:

NSEbringsanintegratedstockmarkettradingnetworkacrossthenation.

Investorscantradeatthesamepricefromanywhereinthecountrysinceinter-
marketoperationsarestreamlinedcoupledwiththecountrywideaccesstothesecuritie
s.

13
Delaysincommunication,latepaymentsandthemalpractice’sprevailinginthetraditi
onaltradingmechanismcanbedoneawaywithgreateroperationalefficiencyandinfor
mationaltransparencyinthestockmarketoperations,withthesupportoftotalcompute
rizednetwork.

Unlessstockmarketsprovideprofessionalizedservice,smallinvestorsandforeigninv
estorswillnotbeinterestedincapitalmarketoperations.Andcapitalmarketbeingoneo
fthemajorsourceoflong-
termfinanceforindustrialprojects,Indiacannotaffordtodamagethecapitalmarketpat
h.InthisregardNSEgainsvitalimportanceintheIndiancapitalmarketsystem.

Preamble

Often,intheeconomicliteraturewefindtheterms‘development’and‘growth’areused
interchangeably.However,thereisadifference.Economicgrowthreferstothesustain
edincreaseinpercapitaortotalincome,whilethetermeconomicdevelopmentimpliess
ustainedstructuralchange,includingallthecomplexeffectsofeconomicgrowth.Inoth
erwords,growthisassociatedwithfreeenterprise,whereasdevelopmentrequiressom
esortofcontrolandregulationoftheforcesaffectingdevelopment.Thus,economicdev
elopmentisaprocessandgrowthisaphenomenon.

Economicplanningisverycriticalforanation,especiallyadevelopingcountrylikeIndi
atotakethecountryinthepathofeconomicdevelopmenttoattaineconomicgrowth.

14
 3.2 COMPANY PROFILE

About IIFL

The IIFL (India Infoline) group, comprising the holding company, India Infoline Ltd (NSE:
INDIAINFO, BSE: 532636) and its subsidiaries, is one of the leading players in the Indian
financial services space. IIFL offers advice and execution platform for the entire range of
financial services covering products ranging from Equities and derivatives, Commodities,
Wealth management, Asset management, Insurance, Fixed deposits, Loans, Investment
Banking, GoI bonds and other small savings instruments. IIFL recently received an in-
principle approval for Securities Trading and Clearing memberships from Singapore
Exchange (SGX) paving the way for IIFL to become the first Indian brokerage to get a
membership of the SGX. IIFL also received membership of the Colombo Stock Exchange

15
becoming the first foreign broker to enter Sri Lanka. IIFL owns and manages the website,
www.indiainfoline.com, which is one of India’s leading online destinations for personal
finance, stock markets, economy and business.
IIFL has been awarded the ‘Best Broker, India’ by FinanceAsia and the ‘Most improved
brokerage, India’ in the AsiaMoney polls. India Infoline was also adjudged as ‘Fastest
Growing Equity Broking House - Large firms’ by Dun & Bradstreet. A forerunner in the field
of equity research, IIFL’s research is acknowledged by none other than Forbes as ‘Best of the
Web’ and ‘…a must read for investors in Asia’. Our research is available not just over the
Internet but also on international wire services like Bloomberg, Thomson First Call and
Internet Securities where it is amongst one of the most read Indian brokers. A network of
over 2,500 business locations spread over more than 500 cities and towns across India
facilitates the smooth acquisition and servicing of a large customer base. All our offices are
connected with the corporate office in Mumbai with cutting edge networking technology. The
group caters to a customer base of about a million customers, over a variety of mediums viz.
online, over the phone and at our branches.

History & Milestones

1995
Commenced operations as an Equity Research firm
1997
Launched research products of leading Indian companies, key sectors and the
economy Client included leading FIIs, banks and companies.
1999
Launched www.indiainfoline.com
2000
Launched online trading through www.5paisa.com Started distribution of life
insurance and mutual fund
2003
Launched proprietary trading platform Trader Terminal for retail customers

16
2004
Acquired commodities broking license
Launched Portfolio Management Service
2005
Maiden IPO and listed on NSE, BSE
2006
Acquired membership of DGCX
Commenced the lending business
2007
Commenced institutional equities business under IIFL
Formed Singapore subsidiary, IIFL (Asia) Pte Ltd
2008
Launched IIFL Wealth
Transitioned to insurance broking model
2009
Acquired registration for Housing Finance
SEBI in-principle approval for Mutual Fund
Obtained Venture Capital license
2010
Receie d in-principle approval for membership of the Singapore Stock Exchange
Receie d membership of the Colombo Stock Exchange
2011
Launched IIFL mutual funds

17
 Board of directors
Mr. Nirmal Jain
Board of directors

Chairman & Managing Director

Mr. Nirmal Jain is the founder and Chairman of India Infoline Ltd. He is a PGDM (Post
Graduate Diploma in Management) from IIM (Indian Institute of Management)
Ahmedabad, a Chartered Accountant and a rank-holder Cost Accountant. His professional
track record is equally outstanding. He started his career in 1989 with Hindustan Lever
Limited, the Indian arm of Unilever. During his stint with Hindustan Lever, he handled a
variety of responsibilities, including export and trading in agro-commodities. He
contributed immensely towards the rapid and profitable growth of Hindustan Lever’s
commodity export business, which was then the nation’s as well as the Company’s top

18
 priority.
He founded Probity Research and Services Pvt. Ltd. (later re-christened India Infoline) in
1995; perhaps the first independent equity research Company in India. His work set new
standards for equity research in India. Mr. Jain was one of the first entrepreneurs in India
to seize the internet opportunity, with the launch of www.indiainfoline.com in 1999.
Under his leadership, India Infoline not only steered through the dotcom bust and one of
the worst stock market downtrends but also grew from strength to strength.

Mr. R. Venkataraman

Executive Director , India Infoline Ltd.

Mr. R Venkataraman, Co-Promoter and Executive Director of India Infoline Ltd, is a

B.Tech (electronics and electrical communications engineering, IIT Kharagpur) and an
MBA (IIM Bangalore). He joined the India Infoline Board in July 1999. He previously
held senior managerial positions in ICICI Limited, including ICICI Securities Limited,
their investment banking joint venture with J P Morgan of US, BZW and Taib Capital
Corporation Limited. He was also the Assistant Vice President with G E Capital Services
India Limited in their private equity division, possessing a varied experience of more than
19 years in the financial services sector

Mr. Nilesh Vikamsey

Independent Director , India Infoline
Ltd.

Mr. Nilesh Vikamsey – Board Member since February 2005 - is a practicing Chartered
Accountant for 25 years and Senior Partner at M/s Khimji Kunverji & Co., Chartered
Accountants, a member firm of HLB International, a world-wide organisation of
professional accounting firms and business advisers, ranked amongst the top 12
accounting groups in the world. Mr. Vikamsey headed the audit department till 1990 and
thereafter also handled financial services, consultancy, investigations, mergers and
acquisitions, valuations and due diligence, among others. He is elected member of the
Central Council of Institute of Chartered Accountant of India (ICAI), the Apex decision
making body of the second largest accounting body in the world, 2010–2019.
He is on the ICAI study group member for the introduction of the Accounting Standard —

19
30 on financial instruments — recognition and management. Convener of the Study group
Formed by ASB of ICAI to formulate comments on various Exposure Drafts, Discussion
Papers and other matters pertaining to IFRS originating from IASB, Representative of the
Institute of Chartered Accountants of India on the Committee for Improvement in
Transparency, Accountability and Governance(ITAG) of South Asian Federation of
Accountants (SAFA), Member of Executive Committee & IFRS Implementation
Committee of WIRC of Institute of Chartered Accountant of India (ICAI), Accounting and
Auditing Committee of Bombay Chartered Accountant Society (BCAS) and also on its
Core Group, member of Review, Reforms & Rationalisation Committee, IPR Committee
of Bombay Chamber of Commerce and Industry (BCCI), Member of Legal Affairs
Committee of Bombay Chamber of Commerce and Industry(BCCI), Corporate Members
Committee of The Chamber of Tax Consultants (CTC), Regular Contributor to WIRC
Annual Referencer on “Bank Branch Audit”, Study/ Sub Group formed by ICAI for
Considering Developments on Fair Value Accounting (AS 30) post Sub Prime crisis, Sub
Group formed by ICAI for approaching the Government and Regulatory Authorities for
Convergence with IFRS.
He is also a Vice Chairman of Financial Reporting Review Board Accounting Standard
Board and Member of Accounting Standard Board and various other Standing and Non
Standing Committees. Mr. Vikamsey is also a Director of Miloni Consultants Private
Limited, HLB Offices and Services Private Limited, Trunil Properties Private Limited,
BarKat Properties Private Limited and India Infoline Investment Services Limited.

Mr. Kranti Sinha

Independent Director , India Infoline
Ltd.

Mr. Kranti Sinha — Board member since January 2005 — completed his masters from the
Agra University and started his career as a Class I Officer with Life Insurance Corporation
of India. He served as the Director and Chief Executive of LIC Housing Finance Limited
from August 1998 to December 2002 and concurrently as the Managing Director of
LICHFL Care Homes (a wholly-owned subsidiary of LIC Housing Finance Limited). He
retired from the permanent cadre of the Executive Director of LIC; served as the Deputy
President of the Governing Council of Insurance Institute of India and as a member of the
Governing Council of National Insurance Academy, Pune apart from various other such
bodies. Mr. Sinha is also on the Board of Directors of Hindustan Motors Limited and
Cinemax (India) Limited.
20
Mr. A. K. Purwar
Independent Director , India Infoline
Ltd.

Mr. Purwar is currently the Chairman of IndiaVenture Advisors Pvt. Ltd., investment
manager to IndiaVenture Trust – Fund I, the healthcare and life sciences focussed private
equity fund sponsored by the Piramal Group. He has also taken over as the Chairman of IL
& FS Renewable Energy Limited in March 2008 and India Infoline Investment Services
Ltd in November 2009. He is working as Independent Director in leading companies in
Telecom, Steel, Textiles, Power, Auto components, Renewable Energy, Engineering
Consultancy, Financial Services and Healthcare Services. He is an Advisor to Mizuho
Securities in Japan and is also a member of Advisory Board for Institute of Indian
Economic Studies (IIES), Waseda University, Tokyo, Japan.

Mr. Purwar was the Chairman of State Bank of India, the largest bank in the country from
November ‘02 to May ’06 and held several important and critical positions like Managing
Director of State Bank of Patiala, Chief Executive Officer of the Tokyo branch covering
almost the entire range of commercial banking operations in his illustrious career at the
bank from 1968 to 2006. Mr. Purwar also worked as Chairman of Indian Bank
Association during 2005 – 2006. Mr. Purwar has received the “CEO of the year” Award
from the Institute for Technology & Management (2004); “Outstanding Achiever of the
year” Award from Indian Banks’ Association (2004); “Finance Man of the Year” Award
by the Bombay Management Association in 2006.

IIFL’s philosophy on Corporate Governance

IIFL (India Infoline) is committed to placing the Investor First, by continuously striving to
increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders. The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances,
but also of effective management.

Audit Committee

21
Terms of reference & Composition, Name of members and Chairman: The Audit committee
comprises Mr Nilesh Vikamsey (Chairman), Mr Sat Pal Khattar, Mr Kranti Sinha, three of
whom are independent Directors. The Managing Director, the Executive Director along with
the Statutory and Internal Auditors are invitees to the Meeting. The Terms of reference of this
committee are as under: - To investigate into any matter that may be prescribed under the
provisions of Section 292A of The Companies Act, 1956 - Recommendation and removal of
External Auditor and fixation of the Audit Fees. - Reviewing with the management the
financial statements before submission of the same to the Board. - Overseeing of Company’s
financial reporting process and disclosure of its financial information. - Reviewing the
Adequacy of the Internal Audit Function.

Compensation/ Remuneration Committee

Terms of reference & Composition, Name of members and Chairman: The Compensation /
Remuneration Committee comprises Mr Kranti Sinha (Chairman), Mr Nilesh Vikamsey and
Mr. Sat Pal Khattar all of whom are independent Directors. The Terms of reference of this
committee are as under: - To fix suitable remuneration package of all the Executive Directors
and Non Executive Directors, Senior Employees and officers i.e. Salary, perquisites, bonuses,
stock options, pensions etc. - Determination of the fixed component and performance linked
incentives alongwith the performance criteria to all employees of the company - Service
Contracts, Notice Period, Severance Fees of Directors and employees. - Stock Option details:
whether to be issued at discount as well as the period over which to be accrued and over
which exercisable. - To conduct discussions with the HR department and form suitable
remuneration policies.

Share Transfer and Investor Grievance Committee

Details of the Members, Compliance Officer, No of Complaints received and pending and
pending transfers as on close of the financial year. The committee functions under the
Chairmanship of Mr Kranti Sinha, a Non-executive independent Director. The other
Members of the committee are Mr. Nirmal Jain and Mr. R Venkataraman. Ms Sunil Lotke,
Company Secretary is the Compliance Officer of the Company.

In line with our vision to be the ‘most respected company in the financial services
space’, we recognize the importance of contributing to and sustaining social

22
transformation. With this end in mind, we have setup the IIFL foundation, which will
work for the support and upliftment of the underprivileged sections of society.
The IIFL Foundation focuses on specific areas of need such as healthcare and education, the
foundation will screen and select institutions and developmental agencies which are working
in these domains and will provide necessary aid to improve the lives of the underprivileged
and help them in achieving their potential.

Some of the activities undertaken by the IIFL Foundation:

Barsana eye camp

The IIFL Foundation sponsored an eye and dental camp held in February, 2010 with the
support of expert doctors and surgeons from the Bhaktivedanta Hospital in Barsana near
Mathura. While over 2,600 people underwent eye tests and over 800 were selected for free
eye surgery, a total of over 1,800 dental procedures like extraction, scaling and filling, among
others, were performed.
Team IIFL provided its whole-hearted support to this noble cause and will continue to do so
in the future.

Pandharpur medical camp

The IIFL Foundation sponsored the Pandharpur medical camp which was held by the
Bhaktivedanta Hospital in July 2010 at Pandharpur. Free medical treatment was given at 4
camp sites, to approximately 49,819 pilgrims who had come to Pandharpur during Ashadi
Ekadashi. The pilgrims were treated for fever, injuries, fractures, gastroenteritis, myalagia,
headache, epilepsy, malaria, respiratory infections etc, during the camp.

Blood donation drive

IIFL regularly organizes blood donation drives via camps at its various locations across India.
Over 800 employees have participated in these camps.

23
4 DATA ANALYSIS&INTERPRETATION

4.1 Introduction
Epidemiologists often find data analysis the most enjoyable part of carrying out an
epidemiologicStudy, since after all of the hard work and waiting they get the chance to find
out the answers. If theData do not provide answers, that presents yet another opportunity for
creativity! So analyzing the

Data and interpreting the results are the “reward” for the work of collecting the data..

4.2 OUTCRY SYSTEM

4.2.1 Definition

A vanishing method of communicating on a stock, commodity or futures exchange that

involves verbal bids and offers as well as hand signals to convey trading information in
the trading pits. Trading pits are the parts of trading floors where trading takes place. A
contract is made when one trader cries out that they want to sell at a certain price and
another trader responds that they will buy at that same price. Most exchanges now use
electronic trading systems, and the open outcry exchanges have gradually been replaced
by electronic trading, which reduces the costs and improves trade execution speed. The
broker has to buy or sell securities for which he has received the orders. For this, the
broker or his authorized representatives goes to the stock exchange. This method is called
the open outcry system. Basically the brokers shout while buying or selling the securities.
The floor of the stock exchange is divided into a number of markets also known as ‘post
pit’ or wing based on particular securities dealt there.
DISADVANTAGES OF OUTCRY SYSTEM:

• It lacks transparency.

• The scope of manipulation, speculation and mal practice is more.

24
 • Signal were more important in the outcry system any member who could not interpret
the buy/sell signal correctly often landed himself in disaster situation.

• In audibility was another disadvantage of the outcry system.

4.3 MANUAL TRADING

4.3.1 Trading procedure before introduction of online trading

Trading on stock exchanges is officially done in the trading ring. In the trading ring the
space is provided for specified and non-specified sections, the members and their
authorized assistants have to wear a badge or carry with them an identity card given by
the exchange to enter the trading ring. They carry a sauda book or confirmation memos,
duly authorized by the exchange and carry a pen with them. The stock exchanges
operations are floor level are technical in nature .Non-members are not permitted to enter
in to stock market. Hence various stages have to be completed in executing a transaction
at a stock exchange .The steps involved in this method of trading have given below:

4.3.2 Choice of broker:

The prospective investor who wants to buy shares or the investors, who wants to sell
shares and transact business, have to act through member brokers only. They can also appoint
their bankers for this purpose as per the present regulations.

4.3.3 Placement of order:

The next step is the placing order for the purchase or sale of securities with a broker. The
order is usually placed by telegram, telephone, letter, fax etc or in person. To avoid delay, it
is placed generally over the phone. The orders may take any one of the forms such as At Best
Orders, Limit Order, Immediate or Cancel Order, Limited Discretionary Order, and Open
Order, Stop Loss Order.

4.3.4 Execution of order or contract:

Orders are executed in the trading ring of the BSE. This works from 11:30 to 2.30 P.M on
all working days Monday to Friday, and a special one-hour session on Saturday. The
members or the authorized assistants have to wear a badge given by the exchange to enter
into the trading ring. They carry a sauda Block Book or conformation memos, which are duly

25
authorized by the exchange when the deal is struck; both broker and jobber make a note in
their sauda block books. From the sauda book, the contract notes are drawn up and posted to
the client. A contract note is written agreement between the broker and his clients for the
transaction executed.

4.3.5 Drawing Up and Bills:

Both sale and purchase bills are prepared along with the contract note and it is posted on
the same day or the next day. This in a purchase transaction, once the shares are delivered
to the client effects payment for the purchases and pays the stamp fees for transfer, a bill
is made out giving the total cost of purchase, including other expenses incurred by the
broker in the price itself. With this, the process ends.

4.4 DEMATERLIZATION:

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

converted to an equipment number of securities in electronic from and credited in the
investor account with his DP. In order to dematerialize the certificates, an investor has to
first open an account with a DP and then request for the Dematerialization Request Form,
which is DP and submit the same along with the share certificates. The investor has to
ensure that he marks “Submitted for Dematerialization” on the certificates before the
shares are handed over to the DP for demat. Dematerialization can only be done to those
certificates, which are already registered in your name and belong to the list of securities
admitted for Dematerialization at NSDL.

Most of the active scrip’s in the market including all the scrip’s of S&P CNX NIFTY and
BSE SENSEX have already joined NSDL. This list is steadily increasing.

Dematerialized shares do not have any distinctive or certificate numbers. These shares are
fungible-which means that 100 shares of a security are the same as any other 100 shares
of the security. Odd lot shares certificates can also be dematerialized.

Dematerialization normally takes about fifteen to thirty days. To get back dematerialized
securities in the physical form, request DP for Rematerialization of the same is made.

Rematerialization is the process of converting electronic shares in to physical shares.

26
 4.5 Benefits of Demat:

• It reduces the risk of bad deliveries, in turn saving the cost and wastage of time
associated with follow up for rectification. This has lead to reduction in brokerage
to the extent of 0.5% by quite a few brokerage firms.

• In case of transfer of electronic shares, you save 0.5% in stamp duty. You avoid
the cost of courier / notarization.

• You can receive your bonuses and rights issues into your DA as a direct credit,
this eliminating risk of loss in transit.

• You can also expect a lower interest charge for loans taken against Demat shares
as compared to loans against physical shares.

• There is no lost in transit, thus the overheads of getting a duplicate copy in such
circumstances is reduced.

• RBI has also reduced the minimum margin to 25% for loans against
dematerialized securities as against 50% for loans against physical securities.

4.6 TRADING SESSION

Trading timings are from 9:55 A.M. to 3:30 P.M. on all 5 days of the trading period.
Monday to Friday is the trading period in all the stock exchanges. SEBI has stipulated that all
the stock exchanges in India must have same trading period.

4.7 BROKER WORK STATION:

At the broker workstation the BBO’s, the last traded price, the day‘s opening price,
previous day’s closing price, highest and lowest prices, the weighted average price and
total trade value will be available continuously, as the BBO for each scrip.

27
 Brokers are also provided with information relating to the companies in the matter of
Book closure, Dividend declarations, resolutions in board meeting, information about
liquidated companies, company report etc.

4.8 ORDERS:

 Orders can be done one at a time or in a batch mode.

 The submitted order will be accepted at the CTS, after validation if it finds any
invalid reason the order is return back to the BWS, with the appropriate error
message.

 If Accepted at the CTS it will be added to the local pending order book.

 The order will then be taken up for matching, if it is a buy order the system tries
to find a sell order, which fits the requirement of the buy order, when such match
is found a trade gets executed. Each trade involves two brokers and

respective traders who sent the order. Both these traders are informed of the trade
being executed at their respective BWS.

 At the BWS the trade is added to the local trade book.

Orders sent by the brokers are two types:

• Good for the day (GFD)

• Good till cancellation(GTC)

4.8.1 Good for the day:

This is also called as “market order”. For an order if the member selects the deal as
good for the day, the order is treated as market order. If a “best bid” founds match with
“best order” then the transaction gets executed. If the match is not found then after trade
time the order gets cancelled that day. Next day he has to place a new order.

28
 For example if a member wants to purchase 1000 shares of Wipro info @ 400 each
through Good for Day order. If the correct match is not found, order gets cancelled
automatically and new quotation has to be placed the next day.

4.8.2 Good till cancellation:

This order is forwarded to the last trading day of that settlement period. This is also
called as carry forward order like GFD; broker has to select the option of GTC for the
order. If the order finds match with in the trading settlement period, the order is executed.
If no match is found, the order is cancelled on the last day of settlement period. This order
is not carried forward to the next settlement period.

For example, if a member a place purchase order of 500 shares of SBI @ 690 per share
and selects the order as GTC and place an order. If the match is not found on that day it
will be forwarded to the next day until trading settlement period day.

4.8.3 SETTLEMENT OF TRANSACTIONS:

Clearing of transaction in the form of shares and cash is called settlement. Buyers will
take the delivery of shares through the depository participants like Networth Stock
Broking Ltd and others.

Finally, the settlement is made by means of delivering the share certificates along with
the transfer deeds. The transferor (or the seller) duly signed transfer deed. It bears a stamp
of the selling broker. The buyer then fills up the certificates fills up the particulars in the
transfer deed. Settlement can be done in the following way.

Spot settlement: under this method, the delivery of securities and payment for them are
affected on the day of the contract itself.

Rolling settlement: Under this rolling settlement the trading is on “T+2”,basis i.e. if
Monday is trading day then Wednesday is the paying day . In case on non-delivery, the
securities will go for auction.

4.9 DETAILS OF PROCEDURES:

Delivery in : The members who are in pay-out position delivers share certificates in to
clearing house within the settlement period along with the delivery Chelan filled in with
the details of share certificates which has folio numbers or distinctive numbers etc.

29
 Delivery out: The buyer of shares who made pay in position will take delivery of shares
from the clearing house.

Pay-in: The member who is in paying position shall pay for value of shares with in the
trading settlement period (T+2).

Payout: The cheques paid in the clearinghouse will be paid to members who are in
paying position.

All disputes arising between members regarding non-deliveries, non-payments, good and
bad deliveries pertaining to the settlement will be settled by the settlement committee of
the exchange.

The given flow chart clearly explains the process of online trading:

Figure 4.1 Process Of Online Trading

30
 L o g in

B u y t r a n s c a t io n S e ll t r a n s c a t io n
T h e sy ste m w ill c h e c k y o u r
T h e s y s te m w ill c h e c k b u y in g d pa c c o u n t q u a n t i t y
limits

Ord e rs ac c e p te d R e je c t e d o r d e r s w o u ld b e ord e rs ac c e p te d
c o m m u n ic a t e d a lo n g w it h r e a s o n s

y o u r o r d e r is t r a n s m it t e d t o e x c h a n g e f o r e x e c u t io n

p e n d in g b u y o r d e r s o n e x e c u t io n p e n d in g s e ll o r d e r s
w o u ld b e d is p la y e d o f y o u r o rd ers w o u ld b e d is p la y e d
o nyo urscre e n onyours c reen

y o u m a y e d it y o u r y o u m a y d e le t e y o u m a y e d it y o u r y o u m a y d e le t e y o u r
pe n din g o rd e r y o u r p e n d in g o r d e r p en d in go rd er p e n d in g o r d e r

f la s h e d o n y o u r c o n f o r m a t io n c o u l c o n t r a c t n o t e w o u ld
s c r e e n im m e d ia t e ly d b e s e n d to y o u r b e s e n t t o b y m a il
o n e x e c u t io n e - m a il a n d m o b ile o r h a n d d e liv e r y

4.10 STOCK TRADES

31
 The stock order entry screen, located at the top of the platform, allows you to buy, sell, and
sell short. The Save to Basket button can save any order that you may want to place later.

4.10.1 To Place An Order

1. Click the Equities tab at the top of the page. The screen will show
"EQUITIES" at the top right-hand corner to let you know that you are in stock-
trading mode.

1. Select Buy, Sell, or Short from the drop-down menu below SIDE.

3. Enter the number of shares in Qty box.

4 Enter the symbol m Symbol box.

5. For a market order, click Market. For a limit order, enter the limit price
and click the Limit button. For a Good Till Canceled order, click GTC.

5. Click Submit to send the order,

6. If it is a GTC order, select 19 Days or 30 Days for the GTC order. Click
OK to send the order. If you do not want to send the order or if you want
to make changes, click Cancel.

Figure4.2 SelectionOf NumberOf Days

8. A window will appear (as the picture) asking you to confirm the order. If all details are
correct, click OK to send the order. If you do not want to send the order, or if you
want to make changes, click Cancel.

32
 Figure 4.3 Order Confirmation

To Save an Order into the Basket

You can enter an order and click the shopping cart icon to save it. Click Basket tab to see
the trades you have saved. Orders saved to the Basket are not sent to the market until you
decide to do so. This is not the same as placing Good Till Canceled or other open orders.

4.10.2 To Place an Order from the Watch List

You can also place an order from your Watch List

Figure 4.4 Option Quotes and Option Trades

33
4.11 OPTION QUOTES AND OPTION TRADES

4.11.1 To Get Option Quotes

1. Click the Option Chain tab to open the option quote screen.

2. Enter the stock symbol in the Equity Symbol field.

3. Select the strike price from By Strike.

4. Select the expired month from the By Exp. Month.

5. Select the range of option quotes you would like to view from
Calls, Puts, or All

6. Click Go. The screen will list all the option symbols and current Market prices
associated with your criteria.

7. To Place an Option Trade

1. Click the Option button at the top left hand corner to open the option order entry
screen. OPTION will appear at the upper right-hand corner to let you know that you
are in Option mode.

34
 1. Follow the above steps to open the option quote screen and get the option symbol.

2. In the Option Chain quote screen, double click the symbol, which you would like to
place an order.

3. The option order entry screen at the top will show the real-time quote of the option.

4. Select: Buy to Open, Sell to Open, Buy to Close, or Sell to Close from the drop-down
menu below SIDE.

5. Enter the number of contracts in the # of Contracts field.

6. Click Market, or enter a limit price and click Lim (Limit). For a Good Till Canceled
order, click GTC.

7. Click Submit

8. If it is a GTC order, select 19 Days or 30 Days for the GTC order. Click OK to send
the order. If you do not want to send the order or if you want to make changes, click
Cancel.

Figure 4.5 Select No of Days

9. A window will appear (as the picture) asking you to confirm your order. If the
information is correct, click OK to send the order. If you click Cancel, the order will not
be sent to market.

LEVEL I QUOTE

The Level I real-time streaming quote updates automatically every five seconds and
continually throughout market hours.

4.11.2 To Get Quotes

35
 1. Enter a symbol in the field located on the left-hand side. You can also click the small
arrow at the right to select a symbol you previously entered in the same day.

2. Press the Enter key on your keyboard or select Get Quotes (under the Select
Action drop-down menu) to display real-time streaming quotes.

a) Detailed Quotes:

Detailed quote, intra-day charts, and the latest news.

b) News:
Recent News.

c) Charts:

Six different chart types - intra-day, one month, three months, six months, one year and
Interactive.

d) SEC Filings:

The company's reports to the SEC.

e) Profile

A description of the company and fundamental information about its stock.

f) Historical:

The open, high, low and closing prices, change and volume of any given stock in the past six
years.

4.12 Bid:

Highest price at which someone currently offers to buy the stock.

4.12.1 Bid Size:

Number of shares, in hundreds, of the offer at the current Bid.

4.12.2 Change:

The difference between the price of the Last trade and the stock's previous Close price.

% Change:

The percent difference between the price of the Last trade and the stock's previous Close
price.

36
Close:

The last trade price on the previous trading day.

High:

Highest trade price of the stock during the current trade date.

Last:

Most recent trade price of the stock during the current trade day.

Low:

Lowest trade price of the stock during the current trade day.

Open:

The opening price for the stock on the current trade date.

Tick:

Located to the right of the symbol. Indicates whether the current Bid is higher or lower than
the previous Bid.

Current Bid is higher:

Tick will show an arrow pointing up.

Current Bid is lower:

Tick will show an arrow pointing down.

Current Bid is same:

Tick will show "UC" (unchanged).

Volume:

Total number of shares of the stock traded during the current trade date

Close:

The last trade price on the previous trading day.

High:

Highest trade price of the stock during the current trade date.

Last:

37
Most recent trade price of the stock during the current trade day.

Low:

Lowest trade price of the stock during the current trade day.

Open:

The opening price for the stock on the current trade date.

Tick:

Located to the right of the symbol. Indicates whether the current Bid is higher or lower than
the previous Bid.

Current Bid is higher:

Tick will show an arrow pointing up.

Current Bid is lower:

Tick will show an arrow pointing down

Current Bid is same:

Tick will show "UC" (unchanged).

Volume:

Total number of shares of the stock traded during the current trade date

Figure 4.6 Account Screen

38
To View Account Information

1. Click the Accounts tab to see your account information.

To Switch to another Account

2. Click the Accounts tab to open the Account screen.

3. Click Change Account button.

4. Select the new account number.

Figure 4.7 Process to Switch Accounts

ORDER SCREEN

39
To View an Order You Placed

1. Click the Orderstab. The system will show all intra-day (same day)

1. Trades and their current status, which including pending, canceled,

filled.

To View Detailed Log for a Specific Order

1. Open the Order screen by following the above steps.

2. Click order sequence number in the UOI field.

3. Click TRANSACTIONS button.

4. A detailed order log will be displayed in a pop-out window.

5. Click OK to close the window.

Figure 4.8 Process of Transactions for Orders

To Cancel an Open Order

1. Open the Order screen by following the above steps.

2. To cancel one open order, select it and click Cancel.

3.To cancel all open orders, click Cancel All.

To Export Order Records to an Excel File

40
 1. In the Order screen, click Import to Excel at the bottom.

2. Choose the location on your computer where you want to save the file and click Save.

4.13 BASKET TRADING

You can fill your basket with orders in advance, and place them later with just one click.

To Set Up Your Basket

1. Click the Basket tab to open the Basket window.

2. Select a basket from the drop-down menu at left.

3. To re-name the basket, click Rename Cart, type a new name into the pop-up
window, and click OK.

Figure4.9 Processof Opening RenameCart

4.13.1 To Enter Orders Directly into the Basket

1. Click the Basket tab to open the Basket window.

2. Select a basket from the drop-down menu at left.

3. Click New Row at left to add stocks to the basket. OK.

41
 4. Double click the empty field under Action and select your action:
Buy, Sell or Short

5. Double click on the empty field below Qty until it changes to written mode. Enter
the number of shares you would like to trade.

6. Double click on the empty field under Symbol until it changes to written mode.
Enter the stock symbol.

7. Double click on the empty field under Price. Enter a price for a limit order, or
select Mkt for a market order.

8. Double click on the empty field under Account. Choose the account number
from the drop-down menu.

4.13.2 To Save an Order to a Basket from the Order Entry Screen

You can save an order to a basket from the order entry screen and send the order to market
later.

1. In the Order screen, enter all the required information about the order.

2. Click the shopping cart icon.

3. From the drop-down menu, select the basket in which you want to save the
order. Click OK to save, or Cancel to not save the order into the basket.

42
 Figure 4.10 Process of Saving the Order

Remove an Order from the Basket

1. Click the Basket tab to see the Basket screen, and select one of
the baskets from the drop-down menu.

2. Select the order you want to remove.

3. Click Remove at right.

To Get Quotes for Stocks in the Basket

1. Click the Basket tab to see the Basket screen, and select one of
the baskets from the drop-down menu.

2. Select the order for which you would like to see a quote.

To Execute an Order in the Basket

1. Click the Basket tab to see the Basket screen, and select one of
the baskets from the drop-down menu.

2. To execute all orders listed in the basket, click Execute AH.

3. To execute only one order, select the order and then click Execute.

When you Execute trade(s) in the Basket, the Basket Order(s) will still display in the basket
until you remove the order(s).

43
Figure 4.11 Process of Placing an Order

KEYS USED FOR TRADING

 Fl - BUY

 F2 - SELL

 F3 - PENDING ORDERS (BUYING & SELLING)

 F6 - MARKET DEBTS (COMPANY ENQUIRY)

 F7 - ARBITRAGE ORDERS

 F8 - HOW MANY TRADING HAS BEEN DONE

 SHIFT+F8 - NET POSITION OF THE COMPANY'S SHARES

 CTRL+F8 - SETTLEMENT OF NET POSITION FOR EXPOSURE

 SHIFT+F9 - NEWS

 Fll - ADDING A NEW COMPANY IN TO THE N/W

 F12 - TEMPORARY LOCKING OF WINDOWS

44
4.2 STATISTICAL ANALYSIS

Introduction
The methods used to analyze securities and make investment decisions fall into two very
broad

categories: fundamental analysis and technical analysis. Fundamental analysis involves

analyzing the

characteristics of a company in order to estimate its value. Technical analysis takes a

completely different

approach; it doesn't care one bit about the "value" of a company or a commodity. Technicians
(sometimes

called chartists) are only interested in the price movements in the market

45
Table 4.1 Company :MARUTI SUZUKI INDIA LTD. 532500:
Period: 02-Dec-2018 to 20-Jan-2019

All Prices in
No. of No. of Total
Date Open High Low Close WAP
Shares Trades Turnover

2/12/18 1,671.00 1,682.00 1,656.80 1,661.35 1,666.29 46,105 2,645 7,68,24,499

3/12/18 1,660.00 1,686.35 1,652.00 1,663.70 1,672.25 51,432 2,719 8,60,07,287
4/12/18 1,658.00 1,668.00 1,636.00 1,641.25 1,651.19 25,449 1,725 4,20,20,823
5/12/18 1,660.00 1,708.00 1,648.00 1,701.45 1,688.44 1,68,789 6,952 28,49,89,866
6/12/18 1,704.00 1,718.00 1,687.75 1,698.10 1,704.68 80,067 4,866 18,64,88,273
9/12/18 1,725.00 1,768.00 1,709.10 1,763.45 1,738.94 1,95,228 11,198 33,94,89,454
10/12/18 1,760.20 1,777.80 1,747.05 1,750.20 1,759.05 66,843 4,198 11,75,80,485
11/12/18 1,748.00 1,775.10 1,735.00 1,751.90 1,760.09 1,20,247 3,934 21,18,45,410
12/12/18 1,738.00 1,747.95 1,718.19 1,719.00 1,727.36 27,400 1,970 4,73,29,682
18/12/18 1,710.00 1,721.00 1,685.00 1,691.60 1,699.38 39,245 2,619 6,66,92,342
18/12/18 1,693.00 1,711.90 1,676.00 1,699.00 1,694.94 44,394 2,566 7,52,45,261
19/12/18 1,701.35 1,731.90 1,695.10 1,701.85 1,719.97 40,197 3,519 6,88,50,754
19/12/18 1,702.00 1,739.00 1,695.50 1,729.40 1,726.81 1,12,240 3,472 19,38,18,950
19/12/18 1,732.00 1,796.45 1,725.00 1,780.70 1,772.31 2,61,311 12,404 46,31,24,295
20/12/18 1,781.10 1,829.90 1,774.10 1,809.95 1,806.04 1,25,449 8,182 22,65,66,245
23/12/18 1,812.00 1,819.90 1,799.00 1,804.05 1,806.72 66,829 3,562 12,07,41,193
24/12/18 1,804.00 1,804.00 1,775.45 1,790.85 1,789.19 39,719 2,497 7,10,55,720
26/12/18 1,790.00 1,804.00 1,780.50 1,791.60 1,790.18 31,326 1,880 5,60,78,489
27/12/18 1,781.25 1,800.00 1,765.20 1,775.40 1,775.60 58,118 4,483 10,31,90,595
30/12/18 1,776.00 1,793.90 1,768.60 1,776.85 1,778.79 49,543 3,202 8,81,26,800
31/12/18 1,775.00 1,784.00 1,758.30 1,763.00 1,767.87 31,185 2,195 5,50,95,655
1/01/19 1,764.10 1,777.90 1,758.00 1,763.35 1,767.45 23,847 1,495 4,21,48,342
2/01/19 1,763.00 1,819.00 1,762.00 1,769.40 1,790.85 1,08,181 5,271 19,36,46,826
3/01/19 1,769.00 1,810.00 1,752.00 1,798.55 1,782.75 1,22,491 11,419 21,83,70,619
6/01/19 1,801.05 1,819.40 1,793.85 1,807.19 1,804.19 68,058 4,610 12,27,89,775
7/01/19 1,836.00 1,854.70 1,819.60 1,846.50 1,843.79 1,88,587 6,819 34,77,19,008
8/01/19 1,841.50 1,859.75 1,827.60 1,839.19 1,842.73 1,83,476 8,705 33,80,96,024
9/01/19 1,860.00 1,864.00 1,801.90 1,812.80 1,825.07 95,694 5,519 19,46,48,022

46
10/01/19 1,818.10 1,818.00 1,787.10 1,794.70 1,797.32 63,334 3,539 11,38,31,428
18/01/19 1,802.00 1,819.00 1,764.70 1,782.80 1,786.06 49,896 3,520 8,91,19,288
19/01/19 1,783.00 1,789.05 1,760.25 1,774.60 1,773.44 27,078 2,106 4,80,21,082
19/01/19 1,778.00 1,806.00 1,762.00 1,799.55 1,791.73 66,819 3,887 11,97,19,536
18/01/19 1,809.00 1,810.00 1,780.10 1,787.35 1,794.00 45,875 2,555 8,22,99,880
19/01/19 1,790.00 1,808.35 1,767.00 1,777.19 1,785.58 38,657 2,570 6,90,25,290
20/01/19 1,775.00 1,796.50 1,767.00 1,778.19 1,778.32 44,009 2,233 7,82,62,018

Figure 4.12 Graph Showing No of Trades

No. of Trades
14,000
12,000
10,000
8,000 No. of Trades
6,000
4,000
2,000
0

INTERPRETATION:

On open value has increased from 1,671.00to 1,775.00. Then compare to higher
value of EPS 1,775.00 to 1,759.50. Then coming to lower price from 1,565.00 to 1967.00.
Wholly the conclusion is 1,699.00 to 1,778.00 increased.

Then coming to the volume on the same dates or days volumes are increased.
Because totally this session . MARUTI SUZUKI INDIA LTD. EPS value is increased i.e.
percentage of 19.59%.

Conclusion

47
 • There is evidence in support of the usefulness of moving averages,
momentum, support and resistance and some patterns; but no convincing
evidence in support of Gann Theory or Elliott Wave Theory.

• Technical analysis works best on currency markets, intermediate on futures

markets, and worst on STOCK MARKETS.

• Chart patterns work better on STOCK MARKETS than currency markets.

• Nonlinear methods work best overall.

Table 4.2 Company :HDFC BANK LTD. 500190

48
Period: 02-Dec-2018 to 20-Jan-2019

No. of No. of Total

Date Open High Low Close WAP
Shares Trades Turnover

2/12/18 661.00 665.00 659.00 661.05 661.19 2,44,432 3,194 18,18,06,198

3/12/18 655.00 662.00 653.05 657.19 657.19 3,57,347 5,085 23,48,25,718
4/12/18 657.00 659.35 652.00 658.00 656.96 2,03,970 5,868 18,40,00,857
5/12/18 670.00 690.00 670.00 687.75 685.46 5,87,747 12,871 40,28,74,969
6/12/18 688.00 689.95 678.90 682.30 682.00 1,77,718 3,223 12,11,99,886
9/12/18 704.70 719.80 693.00 696.10 703.45 6,97,655 7,866 49,07,63,474
10/12/18 693.50 701.60 689.75 696.45 694.05 4,45,239 5,277 30,90,19,237
11/12/18 691.00 701.05 687.00 698.20 692.60 2,41,932 2,719 18,75,61,819
12/12/18 694.00 699.90 691.00 695.20 694.80 2,27,659 3,452 19,81,77,191
18/12/18 693.00 698.00 685.00 690.35 692.36 1,77,493 3,266 12,28,88,723
18/12/18 685.00 690.00 680.20 682.65 685.38 1,47,502 3,119 10,10,95,191
19/12/18 675.05 675.05 655.10 658.45 661.99 3,62,332 7,988 23,98,61,327
19/12/18 653.00 680.75 650.00 667.45 664.92 2,94,983 6,933 19,61,39,902
19/12/18 680.00 681.00 651.30 653.00 661.03 1,37,543 3,244 9,09,19,526
20/12/18 655.00 668.00 650.60 665.19 659.09 69,129 2,336 4,55,62,219
23/12/18 665.00 671.50 659.00 665.40 667.22 1,34,772 4,291 8,99,22,469
24/12/18 665.00 665.55 655.75 657.55 660.01 52,276 1,701 3,45,02,928
26/12/18 659.00 672.00 657.55 669.60 664.43 1,00,119 2,619 6,65,19,856
27/12/18 669.80 675.00 665.70 669.30 670.26 70,054 1,787 4,69,54,333
30/12/18 678.00 678.00 665.19 669.65 670.19 1,99,284 2,669 18,35,50,340
31/12/18 667.80 672.00 660.10 665.75 664.33 3,29,896 2,291 21,91,59,040
1/01/19 666.75 670.00 662.60 665.05 665.96 53,254 1,297 3,54,64,949
2/01/19 669.90 674.10 653.90 656.85 666.23 88,818 2,501 5,91,69,506
3/01/19 655.00 665.95 651.05 663.35 661.02 1,84,386 2,962 12,19,83,670
6/01/19 664.00 664.00 657.35 662.00 660.59 5,04,829 3,376 33,34,83,465
7/01/19 670.00 670.00 654.00 664.75 660.31 2,03,763 2,661 18,45,47,406
8/01/19 664.05 667.20 661.00 664.65 664.90 2,51,642 3,983 18,73,19,870

49
9/01/19 665.00 665.85 657.19 663.05 662.43 1,19,332 1,690 7,63,99,334
10/01/19 663.05 674.85 656.80 662.19 667.06 1,23,361 7,832 8,22,89,569
18/01/19 662.00 676.00 657.30 672.75 670.19 83,189 2,565 5,57,19,766
19/01/19 673.40 676.00 668.90 672.19 673.30 39,863 1,190 2,68,39,924
19/01/19 674.00 682.60 670.19 680.35 677.55 61,422 2,085 4,18,18,295
18/01/19 685.00 685.00 671.10 673.95 677.72 1,45,224 2,568 9,84,20,511
19/01/19 676.50 678.40 659.20 668.30 667.90 4,19,310 6,993 27,87,19,844
20/01/19 665.00 676.90 665.00 669.85 671.98 98,701 3,576 6,63,25,362

Figure 4.13 Graph Showing No of Trades

No. of Trades
14,000
12,000
10,000
8,000 No. of Trades
6,000
4,000
2,000
0

INTERPRETATION:
On open value has risen from 661.00 to 665.00. Then compare to higher value
of EPS 665.00 to 676.90. Then coming to lower price from 659.00 to 665.00. Wholly the
conclusion is 661.05 to 669.85 raised.

Then coming to the volume on the same dates or days volumes are increased.
Because totally this session HOUSING DEVELOPMENT FINANCE CORP.LTD. EPS
value is increased i.e. percentage of 6.71%.

50
Table 4.3 Company :DLF LTD. 532868
Period: 02-Dec-2018 to 20-Jan-2019
All Prices in

No. of No. of Total

Date Open High Low Close WAP
Shares Trades Turnover

2/12/18 192.20 194.50 191.60 192.65 193.19 6,10,988 6,419 9,35,85,418

3/12/18 192.19 197.40 191.00 195.95 194.23 11,43,790 12,363 19,64,09,882

4/12/18 195.50 198.20 192.19 193.19 195.32 19,39,391 19,984 22,35,68,219

5/12/18 197.25 198.80 195.10 196.05 196.72 8,83,920 9,994 18,85,32,024

6/12/18 196.20 196.85 194.35 195.80 195.71 5,69,922 7,081 8,87,41,787

9/12/18 180.80 186.10 197.00 185.19 181.74 19,61,199 19,318 25,25,10,757

10/12/18 185.60 185.90 198.55 180.35 181.64 11,80,200 18,503 19,07,71,458

11/12/18 199.00 199.60 195.45 196.95 197.08 8,96,753 10,322 19,08,59,256

12/12/18 196.85 198.90 194.60 196.20 196.71 7,77,282 8,922 12,19,04,429

18/12/18 194.95 195.00 190.35 190.80 192.24 8,29,724 8,502 12,63,19,760

18/12/18 190.80 193.45 199.70 192.25 191.96 6,97,094 7,880 10,59,33,104

19/12/18 193.50 194.40 191.10 191.90 192.60 6,69,023 8,009 10,20,90,192

51
19/12/18 191.10 181.30 191.10 180.30 197.85 18,00,195 18,492 20,52,36,980

19/12/18 182.00 183.00 195.35 198.65 198.09 10,28,082 10,923 18,25,30,569

20/12/18 197.20 183.65 197.10 182.85 181.28 7,78,596 8,934 12,55,68,418

23/12/18 183.00 192.05 183.00 189.95 189.50 19,30,719 19,011 25,94,62,495

24/12/18 191.00 192.30 186.19 190.90 190.36 10,55,984 11,905 19,98,96,878

26/12/18 190.00 191.65 189.00 190.45 190.32 6,95,548 6,626 11,84,64,449

27/12/18 191.50 195.00 190.00 191.20 192.94 8,09,837 9,046 19,00,51,087

30/12/18 191.40 192.80 185.70 186.40 187.71 9,36,747 9,318 19,71,01,433

31/12/18 186.30 188.00 184.75 186.95 186.42 8,19,936 6,481 18,57,89,677

1/01/19 187.40 190.75 186.90 190.35 189.60 7,70,019 7,940 18,05,92,703

2/01/19 191.10 194.35 185.19 186.60 190.09 11,85,878 11,551 20,19,02,745

3/01/19 185.25 189.50 183.50 188.65 187.28 8,42,729 9,198 19,09,74,185

6/01/19 189.90 189.90 185.30 186.80 186.92 6,87,460 7,067 11,47,48,763

7/01/19 187.00 188.90 182.20 183.75 184.64 8,27,244 9,068 18,61,94,921

8/01/19 184.00 186.30 181.50 182.30 183.73 6,03,688 6,487 9,88,41,366

9/01/19 181.35 183.20 197.80 199.00 199.98 7,37,527 7,004 11,79,91,354

10/01/19 199.80 181.80 195.85 196.50 199.19 6,29,651 7,044 10,02,01,842

18/01/19 197.50 181.60 196.25 180.85 198.89 8,95,674 8,222 19,23,11,421

19/01/19 199.85 181.10 196.30 197.10 198.07 6,69,003 6,310 10,57,48,552

19/01/19 197.90 180.30 197.25 199.80 198.90 4,92,019 5,551 7,81,79,192

18/01/19 180.25 182.70 198.30 181.80 180.93 7,19,348 6,818 11,49,59,555

19/01/19 182.00 184.20 194.65 195.40 198.79 11,22,848 10,011 19,82,93,672

20/01/19 195.40 196.80 193.00 195.75 194.81 7,11,448 7,561 11,01,38,187

52
 Figure 4.14 Graph Showing No of Trades

No. of Trades
25,000
20,000
15,000 No. of Trades
10,000
5,000
0

INTERPRETATION:
On open value has risen from 192.2 to 195.4 than compare to higher value of
EPS 194.5 to 196.8. Then coming to lower price from 191.6 to 193.00. Wholly the
conclusion is 192.65 to195.75 rise.

The comings to the volume on the same dates or days volumes are increased.
Because on this session DLF LTD value is raised i.e. percentage of 18.8%.

53
Table 4.4 Company :TATA COMMUNICATIONS LTD. 500483
Period: 02-Dec-2018 to 20-Jan-2019

All Prices in

No. of No. of Total

Date Open High Low Close WAP
Shares Trades Turnover

2/12/18 287.65 299.70 283.50 296.25 293.49 1,02,036 2,507 2,99,46,295

3/12/18 298.00 299.60 290.05 291.20 294.44 98,126 2,479 2,88,91,907

4/12/18 291.20 297.05 286.00 287.90 292.22 58,219 1,768 1,70,12,364

5/12/18 291.00 293.70 286.70 288.19 289.99 65,112 1,846 1,88,82,011

6/12/18 288.00 293.00 283.55 285.00 286.50 35,893 1,256 1,02,83,465

9/12/18 288.00 291.00 281.00 282.95 284.36 28,205 1,019 80,20,518

10/12/18 284.65 288.85 278.70 279.90 281.51 76,993 2,110 2,18,73,941

11/12/18 282.00 283.80 277.00 278.60 280.20 28,376 1,241 79,51,022

12/12/18 281.80 283.19 274.10 274.90 278.58 33,224 1,319 92,55,425

18/12/18 274.00 278.05 269.00 270.95 274.21 33,193 1,419 90,96,319

18/12/18 273.50 273.50 265.00 266.95 267.81 41,678 1,459 1,11,61,779

19/12/18 269.05 279.80 267.70 276.00 274.77 77,601 2,476 2,18,22,125

19/12/18 280.00 283.00 276.60 278.05 279.09 84,877 2,329 2,36,88,193

19/12/18 279.00 285.80 273.19 280.40 280.52 1,41,541 2,621 3,97,05,783

20/12/18 280.50 297.05 278.00 293.60 288.44 1,87,719 4,303 5,41,44,779

23/12/18 295.00 297.65 288.90 290.35 293.77 1,08,519 3,187 3,19,77,958

24/12/18 290.05 304.70 290.05 295.85 299.19 2,59,474 5,885 7,76,20,486

26/12/18 296.00 301.00 291.00 293.50 295.91 1,28,938 2,924 3,81,54,604

27/12/18 295.00 304.90 295.00 298.55 301.10 1,90,189 4,251 5,72,51,558

54
30/12/18 301.70 301.70 295.65 296.40 298.63 69,032 1,769 2,06,19,194

31/12/18 297.00 309.65 297.00 309.05 305.45 2,85,239 6,228 8,71,25,979

1/01/19 311.00 318.65 306.05 309.50 310.60 1,73,183 4,498 5,37,74,547

2/01/19 310.10 318.00 295.25 299.85 310.02 1,63,606 6,020 5,07,21,559

3/01/19 300.00 312.50 298.90 309.60 304.99 1,63,401 3,944 4,98,36,474

6/01/19 309.80 318.55 307.85 319.90 312.49 1,19,957 2,983 3,74,85,191

7/01/19 319.40 319.50 305.30 318.80 319.55 1,31,732 3,589 4,19,36,102

8/01/19 319.00 319.75 307.40 309.85 311.65 63,898 1,586 1,99,18,790

9/01/19 310.00 312.00 300.20 302.85 305.87 76,637 2,669 2,34,41,062

10/01/19 305.00 309.20 300.10 301.90 305.19 71,128 1,668 2,19,07,793

18/01/19 303.90 306.90 301.50 304.90 304.51 56,087 1,250 1,70,79,180

19/01/19 306.05 307.80 301.85 304.19 304.90 30,343 760 92,51,445

19/01/19 303.00 308.90 303.00 303.75 305.81 59,946 1,442 1,83,31,936

18/01/19 305.00 305.90 294.75 296.60 298.59 71,735 1,755 2,19,19,292

19/01/19 296.00 303.25 294.85 297.25 298.93 79,652 1,838 2,38,10,619

20/01/19 298.20 302.35 298.00 299.75 299.94 82,926 1,250 2,48,72,523

55
 No. of Trades
7,000
6,000
5,000
4,000 No. of Trades
3,000
2,000
1,000
0

Figure 4.15 Graph Showing No of Trades

INTERPRETATION:
On open value has increased from 287.65 to 298.20. Then compare to higher
value of EPS 299.70 to 302.35. Then coming to lower price from 283.50 to 298.00.
Wholly the conclusion is 296.25 to 299.75 increased.

Then coming to the volume on the same dates or days volumes are increased.
Because totally this session TATA COMMUNICATIONS LTD.. EPS value is increased
i.e. percentage of 2.93%.

56
What is screen-based trading system(SBTS)

BeforetheNSEwassetup,tradingonthestockexchangesinIndiausedtotake
placethroughopenoutcrywithoutuseofinformationtechnologyforimmed
iatematchingorrecordingoftrades.Thiswastimeconsumingandinefficien
t.Thepracticeofphysicaltradingimposedlimitsontradingvolumesaswella
s,thespeedwithwhichnewinformationwasincorporatedintoprices.
Toobviatethis,theNSEintroducedscreen-
basedtradingsystem(SBTS)whereamembercanpunchintothecomputert
hequantitiesofsharesandthepricesatwhichhewantstotransact.Thetransac
tionisexecutedassoonasthequotepunchedbyatradingmemberfindsamatc
hingsaleorbuysquotefromcounterparty.SBTSelectronicallymatchesthe
buyerandsellerinanorder-
drivensystemorfindsthecustomerthebestpriceavailableinaquote-
drivensystem,andhencecutsdownontime,costandriskoferroraswellason
thechancesoffraud.

BenefitsofSBTS:
SBTSenablesdistantparticipantstotradewitheachother,improvingtheliq
uidityofthemarkets.

Thehighspeedwithwhichtradesareexecutedandthelargenumberofpartici
pantswhocantradesimultaneouslyallowsfasterincorporationofprice-
sensitiveinformationintoprevailingprices.

Thisincreasestheinformationalefficiencyofmarkets.WithSBTS,itbeco
mespossibleformarketparticipantstoseethefullmarket,whichhelpstoma
kethemarketmoretransparent,leadingtoincreasedinvestorconfidence

TheNSEstartednation-
wideSBTS,whichhaveprovidedacompletelytransparenttradingmech
anism.RegionalexchangeslostalotofbusinesstoNSE,forcingthemtoin
troduceSBTS

57
MajorDevelopmentsintheStockExchange:

InsiderTrading
DepositoryorPaperlessTrading
ConversionofSharesintoDematerializedForm
SurveillanceonPriceManipulation
RegulationofStockBrokers
ForwardTradingandBadla
OptionsandDerivatives
RegulationofMutualFunds
RegulationofForeignInstitutionalInvestors(FIIs)
BuybackofShares
BombayonLineTrading(BOLT)System

58
5.1 GENERAL FINDING

• The volume on the same dates or day’s volumes are increased. Because totally this
session TATA COMMUNICATIONS LTD. EPS value is increased i.e. percentage of
2.93%.

• The volume on the same dates or days volumes are increased. Because on this session
DLF LTD value is raised i.e. percentage of 18.8%.

• The volume on the same dates or day’s volumes are increased. Because totally this
session HOUSING DEVELOPMENT FINANCE CORP.LTD. EPS value is increased
i.e. percentage of 6.71%.

• The volume on the same dates or days volumes are increased. Because totally this
session . MARUTI SUZUKI INDIA LTD. EPS value is increased i.e. percentage of
19.59%.

59
5.2 SUGGESTIONS

 There must be prohibition on disposal of promoters share holding, and also

restrictions and the expansion without prior approval of the financial
institutions for declaration of higher amount/ rate.

 The availability of derivative products in eluding index futures, index options,

individual stock futures and individual stock options re-enforces the overall
attractiveness of this market to foreign and domestic investors.

 Volume of paper work is small but it is very complicated to maintain data in

system so tries to reduce that by regular audit and updating data.

 Most of the DPs do not have the necessary infrastructure to handle the high
work load of transactions leading to may error by DPs, so by giving full
infrastructure s information to every DO can avoid this problem.

 The pool account doesn’t know the true owner of the share and hence
dividends are paid to the broker instead of owners by this the broker can do
any manipulation or any fraud with the owner, for this the owner can loose his
dividend.

 Hence for this try to pay the dividend directly to the owner.

60
  If the shares are fake/forged which delivery by the broker the share holder can
loose that shares an have to receive another lot of issued shares from the
broker in 21 days, this system stands abused.

 so minimize that waiting days are deliver the issued shares to the share holder
as soon as possible.

5.3 CONCLUSION
 The comprehensive study of capital market instrument at Inter Connected
stock exchange has been an enlightening experience stressing on the positive
aspects on Dematerialization.

 And settlement of shares, derivative market and capital instruments has done
in whole lot of good to the issuer, investor companies and country.

 The depository systems has reduced the lag in delivery and settlement of
securities but also supported the cause of providing more liquidity to the
security holder, the need for setting up of a depository paper less trading.

 Through online trading system and settlement became inevitable and

unavoidable for the smooth and the efficient functioning of the capital market.

 This system has proved its worthiness by increasing in the speed of

transactions within T+3 days which are earlier T+5 days.

 Now there is a proposal that the settlement will be done within T+1days in
near future which is in it an indication of a boon in the system of demat and
capital market instruments.

61
  It has been fairly long since derivative trading started off on the Indian
Indexes.

BIBLIOGRAPHY

BOOKS:

• Investment management

-V.K.Bhalla

• Investment management

-Preethi Singh

• Security Analysis And Portfolio Management

-V.A.Avadhani

• Marketing of Financial Services

-V.A.Avadhani

• Indian Financial System

-M.Y.Khan

62
 WEBSITES:

• www.indiainfoline.com

• www.bseindia.com

• www.sebi.com

• www.moneycontrol.com

• www.economictimes.com

• www.nseindia.com

63