Online Trading Mechanism

ONLINE TRADING MECHANISM
CHAPTER-1 INTRODUCTION
INTRODUCTION
Online trading symbolizes the perfect synergy between technology and the mind numbering intricacies of stock markets in bringing about a paradigm shift in the way financial markets operate in recent times. It facilitates faster and efficient transaction of stocks and share through the internet, while keeping the basic principles of share trading intact. In addition to replication the traditional stock trading business on the net, online trading has led to the mushrooming of a plethora of peripheral business units in the form of e-broking firms, web-advisors, e-consultants, etc. Across the globe, bulk of the trading is being done through the net, proving online trading to be an instant success among the investors and intermediaries. It also renders a harmonic integration of investors, e-broking firms, banks, stock exchanges and the depositories with the possibility of a single window system, in the near future. Such a system will enable the execution of trade att+o, rather then the existing T+2 time cycle. The emergence of high-tech mechanisms like straight. Through processing (STP), Continuous Linking System (CLS) and Direct Access Trading (DAT) platform is sure to make the dream of an investor, getting his orders executed with the click of a mouse in 20-30 seconds, a reality.
In the last decade, online trading has spread far and wide across the globe, with varying degrees of adoption in terms of percentage of trade carried out online, economic giants like the US and Japan where online trading had its origin, are yet to completely transform the stock business through the net, while, India and china, despise their inherent infrastructural limitations are fast progressing towards a scenario where a big chunk of the transactions would be online, though online trading has made cross border trading much easier, the tendency of the investors to trade in their own currencies and securities, limits the spread and success of it. However, European investors are best placed in cross border online trading given their historical and geographical associations with other nations, and also due to the single trading currency, the euro. The emergence and spiraling growth of online trading have thrown up a lot of challenges and opportunities for all major elements, viz, investors, brokers and internet portals, of the trading mechanism. In the current scenario, online trading portals are slowly replacing the physical presence of traditional brokers and sub brokers. The role of these brokers, henceforth, could be restricted to online counseling and web-advising to the investors. The online portals or the e-broking firms, as they are know, are connected to the stock exchanges 24 hours a day to execute the orders placed by the
ONLINE TRADING MECHANISM investors. They also provide the vital market information technical analysis and various other innovative services to woo the investors. It is learnt that, at present, the market of e-broking is little over-crowded and hence over-brokered, making it hugely difficult for the new entrants to negotiate the entry barriers. However, when the markets move in upward trends and trade volume increases, it is expected that these firms will get enough to share.
The presence of a wide array of e-broking firms has drastically cut down the brokerage cost for the investors. The cost effectiveness and the fascination of online trading are enticing millions of retail traders to the stock markets. These investors, armed with the variety of market information and intelligence provided by online portals and consultancies, directly involve in the trade just by sitting in any corner of the world. The introduction of futures and options trading in the recent past has made online trading more attractive. But this situation could be a double edged sword. All these market information and the easy trading opportunities have created an illusionary knowledge and over confidence among the investors, leaving them like a bunch of sitting ducks on the highway of market fluctuations and uncertainties.
Online trading has also given way to a new breed of investors known as Day Traders who gamble in the market, trying to make money out of the minute-by-minute fluctuations in share prices. To their dismay most of them end up bankrupt and simply disappear. These day traders are also responsible for most of the day to day price variations that are beyond the rational expectations prevailing in the market. Another important worrying factor of online trading is the safety and regulation issues of stock business. It is very difficult to have a foolproof system of trading, considering that the
ONLINE TRADING MECHANISM entire business is done on a seamless and a very fluid platform. It needs the evolution of a blend of well-tested technology and trading mechanism to make online trading universal and complete. All said and done, investors and people involved in stock trading should keep in mind that the stock market is not a Mexican casino to gamble, but a means of capital mobilization and equitable distribution in achieving the ends of economic growth.
NEED OF THE STUDY

In outcry 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. Basically the broker shouts while buying or selling the securities. The floor of the stock exchange is divided in to a number of market also post pit or wing based on particular securities dealt there. In the post pit or wing, the broker using open outcry method makes an offer or bid price. For making the necessary bargain, he codes his purchase or sales price, also known as offer or bid price. The dealer, to whom the price is quoted, quotes his own price quotation of the dealer suits the broker, he may lose the bargain. If he is not satisfied with the quote price he may turn to some other dealer .On the close of the bargain, the dealer sell as well as the broker makes a brief notes of the particulars of the deal. Such notes are made on some pad and on it the number of shares, the price agreed upon, the name of the party, what membership number etc., are noted. The disadvantages of outcry system are it lack transparency, the scope of manipulation, Inaudibility and also speculation and malpractice is more, in order to overcome the above problems, online trading came in to existence. Hence the need to
ONLINE TRADING MECHANISM study the advantages of online trading system and its importance in making the market operations and smooth while retaining the flexibility of conventional trading practices.
OBJECTIVES
1) To study about online trading procedure followed in Iti Financial Services ltd. 2) To study the advantages of online trading system over manual system. 3) To study how online trading system helps in improving market transparency. 4) To study how online trading system helps in smooth market operation while retaining the flexibility of conventional trading practices. 5) To compare the transaction changes of similar firms.
RESEARCH METHODOLOGY
Data source: - The data source utilized to under taker the project is both primary
and secondary data.
Primary data: - The data is collected by personal interaction with autherised

members of Iti Financial Services ltd.
Secondary data: - The secondary data is collected from various sources like the
brochures and material provided by Iti Financial Services ltd.
Scope of the study

The scope of the project is to study and know about Online Trading and Clearing & Settlements dealt in Iti Financial Services limited. By studying the Online Trading and Clearing & Settlements, a clear option of dealing in stock exchange is been understood. Unlike olden days the concept of trading manually is been replaced for fast interaction of shares of shareholder. By this we can access anywhere and know the present dealings in shares.
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LIMITATIONS OF THE STUDY

1) The study is confined to online trading procedure only. 2) Problems of listing are not covered due to limited time and to keep the study in manageable limits 3) The data is collected from the primary and secondary sources and thus is subject to slight variation than what the study includes in reality 4) The study was restricted in Hyderabad.
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CHAPTER-2
REVIEW OF LITERATURE
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REVIEW OF LITERATURE
Online trading marks a watershed in the application of technology in conducting trading business in stock markets. This book is divided into four sections. The first section deals with fundamentals and framework, the second section focuses on the implication of online trading the third section describes the implications for online investors. The fourth section is about the technology advancements in online trading. The first section on fundamentals and Framework deals with the evolution of online trading, basic concepts, background and trading mechanisms involved. The opening article, share trading: Moving to the Net, by Dr. T R Rajarajan traces the evolution of securities trading from traditional system to trading through the internet. It discusses the trading mechanism through the major components of online trading, viz, banking, depositories, technology and other infrastructure. Information technology has replaced the age-old share trading method with the faster and more accurate online stock trading. The second article. Online trading: Trading @ the speed of light, By Mayura jaiswal, deeepad vashist and Abhay Kumar, 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. In the next article, online
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ONLINE TRADING MECHANISM trading: Issues and concerns, by Anup Bagchi, the author suggests that online trading should balance a technology centric approach to transactions with the human factor for a successful transition from traditional to online trading. In his interview, jade smith (HSBC treasury and capital markets) discusses various aspects of online trading: the types of transactions conducted online, different value propositions in the online marketing and the future trends in e-trading. The process of payment and settlement is an issue of importance in online stock trading. The sixth article, payments in India: The journey so far and the road ahead, by Vinod Madhavan looks at how the multiple payment systems have developed in India and considers the need for technology and a legal framework to ensure that an electronically linked payments and clearing system, including cheque truncation, can be implemented in future. In the next article, clearing & settlement system at NSDL, the structure of a clearing account is described along with the process of settling trade in markets.
EVOLUTION OF ONLINE TRADING

Online trading had its origin in the US where the first E-trading of stocks began in 1983. Primarily used in the form of e-commerce to place and receive orders for commodities; slowly it entered the financial markets as an alternative to the traditional system. By the late 1990s, most of the stock exchanges had been automated, and the open outcry method of trading had been slowly done away with. Most stock exchanges began to use computers to replace the market makers or the floor traders who execute the trade on the floor. With the emergence and growth of the internet, the floor traders started taking computer orders from brokers and executed the trade. Subsequently, when the stock 14
ONLINE TRADING MECHANISM exchanges used software technology to interconnect brokers, depositories and banks, the internet order place by clients were firs route through the stock brokers computer systems where the matching of orders took place and the trade was executed. This gradual up scaling of technology has led to the rise in popularity and acceptance of online broking as a major way of stock trading.
With the book in software technology, the online trading platform became faster and faster with a lot of sophistication and increased security. Now the thrust is on making the entire trading process completely seamless and risk free.
TRADING MECHANISM
The mechanism in online trading Is the replication of trading of physical securities through the internet in a much faster and convenient way. Basic principles and logic of stock trading remain the same as before; only, the investors feel more empowered and are served with plenty of information. The diagram 1 and 2 depict both selling and buying of securities online. There are primarily 5 components in any online trading mechanism. 1. Investor 2. broker/ E-broking firm 3. DP Accounts 4. Bank Account 5. The Exchange
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The process of online trading is driven by a front-end software which the stock exchange employs through satellite (like V-SAT) connections. This software technology provides the necessary interface between the brokers, depositories and the banks. The investor is required to trade through any of the approved brokers, and brokers of trading members can only trade with the exchange. The investor places the order with the broker and the broker gets the order executed from the exchange. Each broker, who has to be a trading member, is connected to the exchange through sophisticated software. In the same way, each investor has to trade only through the broker and needs to have a demat account and a brokers account. Each investor will be given a login account and a password in the brokers site. Investors can log in and lace orders anytime that will be sent to exchange and will be compared with all the orders and executed as per the prices. In this linear chain of investor-broker-exchange channel, there are two more important players, viz, depositories and banks. Depositories (DP) handle the holding and selling of demat securities. All brokers are embers and account holders of DPs. The depositories function in liaison with the stock exchange and act as an online store for shares and stocks. The transaction of cash is taken care of by banks. The investors money is transferred to the account with the broker and used for transactions, and similarly, the credits for the investor can be directly to the investors bank account.
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The whole mechanism is interconnected and the speed of transaction depends on how well all these components operate in harmony with each other. The technology used for interlinking these components and the security issues play a major role in the speed of transactions. When these issues are addressed, the transactions can be executed in realtime (T+0), instead of the present T+2 days time period.
BUY TRANSACTION (TABLE-1)
CUSTOMER APPROACH THROUGH PHONE/INTERNET KIOSK Funds transferred Broker buys 100 xyz @ market rate Hold Rs.30, 000
Yes, hold DP server
Bank server
Order accepted and goes to exchange
Share transferred
NSE
Trade done
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CUSTOMER APPROACH THROUGH PHONE/INTERNET KIOSK
BROKER SELLS 100 XYZ @ Rs.300/Funds Transferred Hold100 xyz shares Yes, Hold Bank Server Orders accepted and goes to exchange
DP server
Trades done
NSE
Share transferred
SELL TRANSACTION (TABLE-2)
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SETTLEMENT SYSTEM
The schedule of setting the trade Is governed by the stock exchange rules. The following details are available in the depository software of the DP.The pay in time decided by the stock exchanges for each settlement is the NSDL deadline time. The significance of NSDL time is that securities can be moved from the client account to the clearing account (client to clearing member), or from clearing account to the stock exchange (clearing member to stock exchange0 or from one settlement to another (inter-settlement) only till the NSDL deadline of the relevant settlement. Securities cannot be transferred to a settlement after the NSDL deadline for that settlement is over.
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No. of days Day 1 Day 2
Transactions day T (if, Monday) T+1 (Tuesday)
Party with obligation Customer Customer Trading
Activity
Securities pay in to member broker
Day 2
T+1 (Tuesday
Customer
Funds pay in to member broker
Day 3
T+2(Wednesday)
Member broker
Securities pay in to the stock exchange Funds pay in to the stock exchange Payout of securities to
Day 3
T+2(Wednesday)
Member broker
Day 3
T+2(Wednesday)
Stock exchange
member broker Payout of monies to member broker Securities deposited into
Day 3
T+2(Wednesday)
Stock exchange
Day 4
T+3 (Thursday)
Member broker
demat account of customer
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ONLINE TRADING MECHANISM Day 4 T+3 (Thursday) Member broker Funds transferred into clients bank account.
MAJOR ADVANTAGES OF ONLINE TRADING

With the February 2003 announcement of Gilts trading available online, capital market reforms in India have outpaced all other sectors in the post-liberalization era. The options available for investments today are many. The mutual funds industry is doing well, IPO market is received and derivatives trading are catching on in India. If these investments can be made by the click of the mouse then the investment process will be the easiest. Investors can save time and make money. Online trading, which is the way the developed world is investing, is now the mantra of investment markets in India. To combine the speed of the internet and the intricacy of the trade and provide an interactive and integrated trading environment for all investments is the ultimate goal.
Online trading started in India in February 2000.

Online trading is of 2 categories: Discount online brokers and the other one is the full service online broker. Discount online brokers allow one to trade via the internet through the broker at reduced (less than offline brokerage charges) rates. Full service online brokerage is linked to existing brokerage directly through the internet. These
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ONLINE TRADING MECHANISM brokers allow their clients to place online orders with the option of chatting to brokers if advice is needed.
FOR THE INVESTORS

Online trading has created a new wave of changes among the investors because of its convenience and the sense of empowerment attached with executing the trade on their own If has also thrown in plenty of options to the investors in the form of various online broking firms which provide a whole lot of advisory and counseling services. The biggest advantages of online trading is the equitable treatment of investors, irrespective of small or big, In terms of offering the service, making the information available and the benefits of the stock trading were highly concentrated with a particular group of investors who could afford the technical and advisory services. The stock market used to be a black box, now it is open to all those who are willing and capable of investing because of the simple and user friendly ways of online trading. In a nutshell, The internet made the stock market operations transparent. Cost of execution of trade for small quantities can be done in proportionate fractions as that of big transactions. Data and information are their for everyone and available everywhere. Investors are empowered.
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FOR THE BROKERS

Brokers can gain on two accounts. Surge in the volume of transactions will increase the profit even though the cost per transaction is less in case of online trading. Marketing the investor accounts and transaction of demat securities has manifold conveniences compared to the traditional method of transactions in physical securities.
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ONLINE TRADING BENEFITS

Advent of online trading can shift the trading power from stock brokers to individual investors. The e-trading concept ensures that the investor, howsoever small, could be a more active participant in the decision rather than leaving his portfolio at the sole discretion of his broker. Online trading provides. BEST PRICE FOR INVESTORS: Online trade offers the best price for the buying and selling transactions of the investors, by ensuring proper matching of their orders within the communications network itself. Also due to the high level of transparency with regard to display of information the investors are able to get the best quote for the shares. BROKERAGE IS THE LOWEST: As the process of online trade is thoroughly automated the transaction costs are low, also with competition among the online service providers the brokerage charges are at their lowest in India. LIQUIDITY TO THE INVESTORS: When online trade and online banking are available, liquidity of the investments are very high as it is only a click away to disinvest and release the funds. Conversely, if the investor spots some opportunity to
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ONLINE TRADING MECHANISM invest, he could immediately allocate money from his savings account and make his transactions. TRANSPARENCY: Online trading gives greater transparency to the investors by providing them an audit trail. This involves a complete integrated electronic chain starting from order placement, to clearing and settlement and finally ending with a credit to the depository account of the investor. All these stages were subject to inspection, thus bringing in transparency into the system.
HASSLE FREE TRADING: Online trading integrates the bank, the brokerage firm and the stock accounts (demat account) which lead to easy and paperless trading for the client. QUICK TRADING: The investor is able to execute the entire trading transaction, right from logging on the brokers site, to the execution and settlement of his bank account, in a very short period of time. LEVEL PLAYING FIELD: Trading on the net, gives even the smallest retail investor access to information that earlier was available only to the big traders. This provides a level playing field for all investors In the securities market. REDUCES THE SETTLEMENT RISK: This method of trading reduces the settlement risk for the investor, as in this case no short sale is possible, i.e., the seller will not be able to sell the securities unless he has their actual possession. This reduces the settlement risk for the buyer. Who is assured of the delivery of the securities.
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OUTCRY SYSTEM
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. In the post pit or wing, the broker using open outcry method makes an offer or bid price. For making the necessary bargain, he quotes his purchase or sale price, also known as offer or bid price. The dealer, to whom the price is quoted, quotes his own price when the quotation of the dealer suits the broker, he may loose the bargain. If he is not satisfied with the quote price, he may turn to some other dealer. On the close of the bargain, the dealer as well as the broker makes a brief note of the particulars of the deal. Such notes are made on some pad and on it the number of shares, the price agreed upon, the name of the party, what membership number etc., are noted.
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DISADVANTAGES OF OUTCRY SYSTEM

It lacks transparency. The scope of manipulation, speculation and mal practice is more. 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. Due to the above disadvantages of the outcry system the ITI FINANCIAL SERVICES LTD has shifted from outcry system to online trading from February 29th 1997.
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MANUAL TRADING
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: 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. 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.
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ONLINE TRADING MECHANISM 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.
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 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. 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.
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DEMAT ACCOUNT
What is Demat account and wht is required?
Securities and Exchange Board of India (SEBI) is a board (corporate body) appointed by the Government of India in 1992 with its head office at Mumbai. Its one of the function is helping the business in stock exchanges and any other securities markets. Demat (short form of Dematerialization) is the process by which an investor can get stocks (also called as physical certificates) converted into electronic form maintained in an account with the Depository Participant (DP). DP could be organizations involved in the business of providing financial services like banks, brokers, financial institutions etc. DPs are like agents of Depository. Depository is an organization responsible to maintain investor's securities (securities can be stocks or any other form of investments) in the electronic form. In India there are two such organizations called NSDL (National Securities Depository Ltd.) and CDSL (Central Depository Services India Ltd.) Investors wishing to open Demat account has to go DP and open the account. Opening the Demat account is as simple as opening the bank account with any bank. As we need bank account to save our money, make cheque payments etc, likewise we need to open a Demat account if we want to buy or sell stocks. All stocks what we possess will show in
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ONLINE TRADING MECHANISM our Demat account. So we don't have to possess any physical certificates. They are all held electronically in our Demat account. As we buy and sell the stocks, accordingly our stocks will get adjusted in our account.
Is a Demat account must?

The market regulator, the Securities and Exchange Board of India (SEBI), has made it compulsory to open the Demat account if you want to buy and sell stocks. So a Demat account is a must for trading and investing
How to start to open a Demat account?

We have to approach a DP to open a Demat account. Most banks are DP participants so we may approach them. A broker and a DP are two different people. A broker is a member of the stock exchange, who buys and sells stocks on his behalf and also on behalf of his customers.
Following are the documents required to open Demat account.

When we approach any DP, we will be guided through the formalities of opening an account. The DP will ask to provide some documents as proof of our identity and address. Below is a list but we may not require all of them.PAN card, Voters ID, Passport, Ration card, Drivers License, Photo credit card, Employee ID, IT Returns, Electricity/ Landline Phone Bill etc.
Do we need any stocks to open a Demat account?
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ONLINE TRADING MECHANISM No. We need not need any stocks to open a Demat account. A Demat account can be opened with no balance of stocks. And there is no minimum balance to be maintained either. You can have a zero balance in your account.
How much it cost to open a Demat account?

The charges for account opening, annual account maintenance fees and transaction charges may vary between various DPs.
Finally After successfully opening the Demat account, the DP will allot
Beneficial Owner Identification Number, which will be needed to mention for all our future transactions. If we want to sell our stocks, we need to place an order with our broker and give a Delivery Instruction to your DP. The DP will debit our account with the number of stocks sold. We will receive the payment from our broker. If we want to buy stocks, inform our broker about our Depository Account Number, so that the stocks bought are credited into our account.
Points to remember while opening online account

Make multiple enquiries and try getting low brokerage trading and Demat account. Also discuss about the margin they provide for day trading. Discuss about fund transfer. The fund transfer should be reliable and easy. Fund transfer from our bank account to trading account and visa versa. Some online
share trading account has integrated savings account which makes easy for us to transfer funds from our saving account to trading account. Very important is about service they provide, the research calls, intraday or daily trading tips.
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ONLINE TRADING MECHANISM Also enquire about their services charges and any other hidden charges if any. And also see how reliable and easy is to contact them in case if any emergency.
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 scrips in the market including all the scrips of S&P CNX NIFTY and BSE SENSEX have already joined NSDL. This list is steadily increasing. Briefly, the process is as follows: after completion of transfer, the investor gets the option to dematerialize such shares. Investors willing to exercise this option sends a Demat request along with the option letter sent by the company to his DP. The company or its R&T agent would confirm the Demat request on its receipt from the DP to reduce risk of loss in transit.
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ONLINE TRADING MECHANISM 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.
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.
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PROCEDURE FOR DEMATERIALIZATION

1) To Materialize any physical security, one will have to open a demat account with a DP of ones Choice. 2) Thereafter, all one has to do is to full in a DRF (Demat Request Form) and submit the same with the shares/securities Certificates to the DP for Dematerialization. 3) DP defaces and sends these certificates to the Issuer/ Registrar who credits an equivalent number of securities in the demat account maintained with CDSL for each script, a separate DRF has to be used. 4) The investor shall fill up the following details in the DRF: Investors account number with the DP DP ID DP Name ISIN Name of the Issuer Type of the Security Total quantity to be maintained.
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ONLINE TRADING MECHANISM Name (s) of the holders (s) Certificate Details: Folio No., Distinctive Nos., Certificate Nos., and No. Of Securities. 2) Lock in Status
The registered holder (s) shall sign the DRF: As per the specimen Signature (s) recorded with the DP As per the specimen Signature (s) recorded with the Issuer/RTA.
3)
The Investor shall also surrender the physical certificate to be Dematerialized along with the duly filled DRF to the DP. Immediately on receipt of DRF along with the scraps the DP should give the counter acknowledgement to the BO.
4)
The DP shall verify the following: Whether the DRF is complete. Whether the Certificate details mentioned on the DRF and on the Certificates enclosed, tally. Whether the name (s) of the holders (s) and the order of the names of the holders under the BO Account maintained with CDSL. Whether all the holders have signed the DRF and the signatures of the account holders tally with those recorded by the DP. If there is any discrepancy in any of the details, the DP will get it rectified from the investor and the Error free DRFs will be taken up for further processing by the DP.
5)
The DP shall capture the details from the DRF & Certificate through the
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ONLINE TRADING MECHANISM Front end system provided by the CDSL and shall generate the DRN on the same day or latest by the next working day from the date of receipt of DRF. 6) In case the Securities are in Lock-in status the following details need to Be specified. Lock in Reason Lock in Release date.
10)
The DP shall then write down the DRN on the DRF and deface the
certificates by affixing a rubber stamp Surrendered for Dematerialization. The DP has to take proper care that the stamp should be affixed in such a manner that no material information such as distinctive numbers. Folio Nos., Certificate Nos., etc., on the Certificate is smudged or becomes illegal. 11) The DP shall then mutilate the Certificates, by punching two holes at the top
of the Certificates. 12) The DP shall then give a System Generated acknowledgement of the Demat request to the BO. This Acknowledgement will contain details such as BO A/c No. BO Names ISIN, Name of the Issuer & Type of security, Quantity, Distinctive/Certificate/Folio No., Date of request, DRN. The DP shall authorize this acknowledgement by putting his seal/rubber stamp & Signature of the authorized signatory (may be printed on the letterhead of the DP) 13) CDSL shall electronically send the DRF data to the issuer/RTA after the
DRN is generated. The Process is done automatically by the system.
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ONLINE TRADING MECHANISM 14) The DRF shall be authorized by the DP by Putting his seal & Signature. The
Certificates & the Original DRF shall be sent to the Issuer/RTA along with a covering letter printed on the DPs letterhead. This conversing letter content will be generated by the CDSL system. A copy of the DRF is to be maintained by the DP for its own reference and records.
15)
The DP then shall capture the dispatch details on the front-end system Such as the
dispatch reference no dispatch date, name of the courier, etc. The DP must dispatch the physical documents within a maximum of 2days from the date of DRN Generation.
16)
For items marked confirmed form the Issuer/RTA, CDSL activates the
Balances in the BO account and they will be treated as fully dematerialized securities.
17)
The DP will print the statement of holding for the BO account for which balances
have been activated by CDSL and mail/delivery the same to the BO.
18)
The dematerialized process must be completed within 15 days or as
Specified by the CDSL, from time to time.
19)
Incase of rejection of certificates unless there is a compelling reason, the
RTA/Issuer will print fresh certificates in lieu of the defaced certificates and return the same under the objection to the DP concerned, along with an appropriate rejection letter.
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NATIONAL SECURITIES DEPOSITORY LIMITED

NSDL was inaugurated in 1996, as the depository in the country to avoid the myriad problems in settlement. In depository system, Securities are held in securities (depository) accounts, which is more or less similar to holding funds in the bank accounts. Transfer of ownership is done through simple account transfer. This method does away with all the risks and hassles normally associated with paper work. Consequently, the cost of transaction in depository environment is considerably lower as compared to transaction in physical certificates. Trading in dematerialized Securities is quite similar to trading in physical Securities. The major difference is that at the time of settlement, instead of delivery/receipt of Securities in the physical form, the same is affected through account transfer. Currently dematerializes trading is available at NSE, BSE and CSE. Exclusive Demat segment follows rolling settlement (T+2) cycle and the unified (erstwhilephysical) segment follows account period settlement cycle.
39
ONLINE TRADING MECHANISM All investors, other than the institutional investors, can deliver Securities either in the physical or dematerialized form in the market. From January 4, 1999, all categories of investors can deliver only in Dematerialized form with respect to a select list of securities. However initially this was applicable only at those exchanges, which have joined the depository, but SEBI has also specified that this list is to be expanded in a phased manner. The settlement of trades in the stock exchanges is undertaken by the clearing corporation (CC)/clearing house (CH) of the corresponding stock exchanges. While settlement of Dematerialized Securities is effected through NSDL, the funds settlement is effected through the clearing banks. The physical Securities are settled by the clearing members directly with the CC/CH.
BENEFITS OF DEPOSITORY SYSTEM

In the depository system, the ownership and transfer of Securities takes place by means of electronic book entries. At the outset, this system rids the capital market of the danger related to handling of paper. NSDL provides numerous direct and indirect benefits, like: Elimination of bad deliveries-in the depository environment, once holding of an investor are
Dematerialized, the question of bad delivery does not arise i.e. they cannot be hold under objection. Elimination of all risks associated with physical certificates-dealing in physical Securities
have associates security risks of stocks, mutilation of certificates, loss of certificates during movements through and from the registrars, thus exposing the investor to the cost of obtaining duplicate certificates and advertisement, etc.., This problem does not arise in the depository environment. No stamps duty for transfer of any kind of Securities in the depository.
40
ONLINE TRADING MECHANISM Immediate transfer and registration of securities- in the depository environment, once the
securities are credited to the investors accounts on pay-out, he becomes the legal owner of the securities. There is no further need to send it to the companys registrar for registration. Faster settlement cycle-the exclusive Demat segment follow rolling settlement cycle of T+2
i.e. the settlement of trades will be on the 2nd working day from the trade day. This will enable faster turnover of stock and more liquidity with the investor. Reduction in brokerage by many brokers for trading in Dematerialized Securities-brokers
provide this benefit to investors as dealing in Dematerialized Securities reduced their back office cost of handling paper and eliminates the risk of being the introducing broker. Faster disbursement of non-cash corporate benefits like rights, bonus, etc..,
Reduction of problems related to change of address of investor, transmission, etc., in case of
change of address or transmission of Demat shares, investors are saved from undergoing the entire change procedure with each company or registrar. Investors have to only inform their DP with all relevant documents and the required changes are effected in the database of all the companies, where the investor is a registered holder of Securities. Elimination of problems related to selling Securities on behalf of a minor- a natural guardian is not required to take court approval Demat Securities on behalf of a minor. Ease in portfolio monitoring since statement of account gives a consolidated position of investment in all instructions.
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CHAPTER-3 INDUSTRY PROFILE

42
AND COMPANY PROFILE
INDUSTRY PROFILE
STOCK MARKETS 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
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ONLINE TRADING MECHANISM 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 1875 and Ahmedabad set up in 1894. These were organized as voluntary nonprofit-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
44
ONLINE TRADING MECHANISM committees recommendations and public discussion, the securities contract (regulation) act became law in 1956.
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 countrys 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,
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ONLINE TRADING MECHANISM diversification and modernization. By obtaining the listing and trading facilities, public investment is increased and companies were able to raise more funds. The quoted companies with wide public interest have enjoyed some benefits and assets valuation has become easier for tax and other purposes.
Various Stock Exchanges in India

At present there are 24 stock exchanges recognized under the securities contracts (regulation), Act, 1956. Those are: Ahmedabad Stock Exchange Association Ltd. Bangalore Stock Exchange Bhubaneshwar Stock Exchange Association Calcutta Stock Exchange Cochin Stock Exchange Ltd. Coimbatore Stock Exchange Delhi Stock Exchange Association 46
ONLINE TRADING MECHANISM Guwahati Stock Exchange Ltd Hyderabad Stock Exchange Ltd. Jaipur Stock Exchange Ltd Kanara Stock Exchange Ltd Ludhiana Stock Exchange Association Ltd Madras Stock Exchange Madhya Pradesh Stock Exchange Ltd. Magadh Stock Exchange Limited Meerut Stock Exchange Ltd. Mumbai Stock Exchange National Stock Exchange of India OTC Exchange of India Pune Stock Exchange
Uttar Pradesh Stock Exchange Association Vadodara Stock Exchange Ltd. United Stock Exchange.
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 (FIs) 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
47
ONLINE TRADING MECHANISM 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. 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 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in Asia, even
48
ONLINE TRADING MECHANISM older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary nonprofit 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
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ONLINE TRADING MECHANISM Board has powers as an Appellate Authority, matters regarding annulment of transactions, admission, continuance and suspension of member-brokers, declaration of a memberbroker 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.
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.
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ONLINE TRADING MECHANISM 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.
STOCK 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.
51
ONLINE TRADING MECHANISM 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. Prohibiting insider trading in securities. 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. 52
ONLINE TRADING MECHANISM 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.
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.
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
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ONLINE TRADING MECHANISM 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. In this physical trading form, once the broker gets the share certificate through the clearing houses he delivers the share certificate along with transfer deed to the investor. The investor has to fill the transfer deed and stamp it. The stamp duty is one of the percentage considerations, the investor should lodge the share certificate and transfer deed to the register or transfer agent of the company. If it is bought in the DEMAT form, the broker has to give a matching instruction to his depository participant to transfer shares bought to the investors account. The investor should be account holder in any of the depository participant. In the case of sale of shares on receiving payment from the purchasing broker, the broker effects the payment to the investor.
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.
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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. 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.
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ONLINE TRADING MECHANISM The exchanges/clearing house/ clearing corporation would process and download the obligation files to the brokers 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 am 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 payout 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.
COMPANY PROFILE
ITIFSL is emerging as one of the top most wealth management companies in India with a daily turnover of over 200 crores and 116 branches spread all over the country. ITIFSL originally promoted by the Investment Trust of India, is now a part of the Sharyans and Inga Group. The Sharyans Group has an impressive portfolio of businesses under its
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ONLINE TRADING MECHANISM fold which mainly fall under the real estate and financial services categories. The prominent subsidiaries of this Group are Prebone Yamane (Countrys largest debt broking company), Intime Spectrum (Indias largest Registry & Transfer Agents), and Collin Stewarts India Private Limited (Portfolio Management Services & Research along with institutional broking operations for Collin Stewarts which is the largest wealth management company in the UK). Under the guidance of the Sharyans and Inga Group, ITIFSL will soon touch the pinnacles of success in the financial services industry by being a dominant force in the broking as well as the distribution arena. With an unblemished and reputed track record, ITIFSL is all set become an imposing wealth management firm in the country by giving the best to its clients as well as stakeholders. ITI FSL has been set up to engage in Stock Broking Institutional Broking Derivatives Depository Services Distribution of Investment Products Distribution of Insurance Commodities Broking
Headquartered in Chennai, ITI FSL has a growing network of offices across several states to ensure easy accessibility to our clients wherever they are. ITIFSL has over 116 Branch Offices spread across the country to offer better reach and service to the investor. The company currently marks its presence in the following regions: Andhra Pradesh 57
ONLINE TRADING MECHANISM Delhi Karnataka Maharashtra Madhya Pradesh Tamil Nadu West Bengal
Mission: ITIFSL's mission is to deliver value with commitment. Emerging as one of the front-line Brokerage Houses and a dominant force in the Distribution arena, we are continuously engaged in the assessment of market conditions to balance risk and reward so as to optimize returns to our investors. Vision: "To be the most Preferred Financial Advisor, Creator, Wealth Manager and to deliver the Highest Standards of Service to customers and be Prominent in the horde of Finance Companies offering similar services".
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Why ITIFSL?
ITIFSLs services are offered under total confidentiality and integrity with the sole purpose of maximizing returns for their clients. Equity Broking - Corporate Member of the Stock Exchange, Mumbai (BSE) and National Stock Exchange of India Ltd. (NSE). Pan India reach - 380 terminals spread across 75 different locations, in semi urban, urban and metropolitan areas. More than 100,000 retail clients serviced from the above locations ITIFSL have heavily invested in technology (customized and ready to use software) involving front and back end operations offering seamless process and flawless execution and raising our service levels. ITIFSL operate on an alert and well-defined system in risk management and settlement mechanism.
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ADVANTAGES TO INVESTERS:
Why you need a financial planner?
The financial planner is someone who can help you invest across investment avenues based on your risk profile and investment objectives. Post-investment, he monitors your investments and ensures that you are on course to achieve your investment objectives. If necessary, he suggests changes to your financial plan so that you are able to achieve your investment objectives as planned. Given the critical inputs provided by the financial planner in helping you achieve your financial goals, it is important that you select the right financial planner. Here are the reasons why ITI is the right planner for you
Certification/Membership
More than anything else, this is a pre-requisite from the compliance point of view. Your financial planner should be certified and registered as a broker or mutual fund agent with NSE, BSE, AMFI etc. ITI FSL has Trading and Clearing Memberships with major Stock Exchanges in India to offer broking services across market segments at all of the Nationallevel Exchanges. ITI FSL is a Depository Participant with CDSL. We also have memberships with commodity exchanges. We have AMFI certified professionals to advice you on mutual funds.
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Competence
Gone are the days when financial planning simply required delivering application forms. The traditional "one-size fits all" approach is pass. With the increasing list of investment avenues on offer, selecting the one that suits you the best is becoming a challenge. To that end, competence and skill set are the basic criteria that investors should look for in an investment planner. With ITI fine staff of professionals, you can be sure that you will get the best advice and service to achieve your financial goals. Furthermore, the recommendations offered by ITI are backed by solid research.
Value-add services
In addition to financial planning, ITI provides related, value-add services that can assist you in the investment process. On-line tools and calculators are some of our more popular value-add services. These tools can help you keep track of your investments. These valueadd services form an integral part of our offering.
One-stop shop
Every individual has different needs and the same undergo a change over a period of time. The financial planner should be capable enough to understand these needs and offer suitable products to fulfill them. For this purpose, ITI provides you with the entire range of investment products from stocks, mutual funds, bonds to fixed deposits. In other words, we offer a "one-stop" solution for all your investment needs.
61
Accessibility
One of the common complaints from investors is that their financial planner is unavailable/inaccessible and therefore unable to provide adequate/prompt service. This is particularly common in a one-man setup where the financial planner's services begin and end with him, with little or no backup. If the financial planner is preoccupied with some important clients or if he re-locates, it leaves you in a soup because your financial plan is in limbo. It is best to go with a financial planning initiative that is run by teams (as opposed to one-man setups) to ensure continuity of your financial plan. ITI has a team of professionals who are ever ready to serve you at any point of time. We are spread across the country so that you can have access to us always.
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Data Analysis and Interpretation

Iti Financial Services Ltd
The company charges Rs.0.03% for Intraday and Rs.0.3 % for delivery based transactions
For Intraday based transactions

Transaction value Deduct Brokerage (0.03%) Service Tax (10.2% on brokerage) STT (security transaction tax) 0.125% on transaction value 125.00 --------------Rs.99841.9 --------------30.00 3.06 Rs.100000.00
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For Delivery based transactions

64
Share Khan Ltd

The company charges Rs.0.1% for Intraday and Rs.0.5% for delivery based transactions

65

Transaction value Deduct Brokerage (0.5%) Service Tax (10.2% on brokerage) STT (security transaction tax) 0.25% on transaction value 250.00 -----------------Rs.99199.00 -----------------500.00 51.00 Rs.100000.00
66
Motilal Oswal Ltd

The company charges Rs.0.15% for Intraday and Rs.0.4% for delivery based transactions

Transaction value Deduct Brokerage (0.15%) Service Tax (10.2% on brokerage) STT (security transaction tax) 0.125% on transaction value 125.00 ---------------Rs.99709.7 --------------150.00 15.3 Rs.100000.00
67

Transaction value Deduct Brokerage (0.4%) Service Tax (10.2% on brokerage) STT (security transaction tax) 0.25% on transaction value 250.00 -----------------Rs.99309.2 -----------------400.00 40.8 Rs.100000.00
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For Intraday
Particulars Transaction value Brokerage Service Tax STT Net Amount
Iti Financial Services 100000 30 3.6 125 99841.9
Share Khan Ltd 100000 100 10.2 125 99764.8
Motilal Oswal Ltd 100000 150 15.3 125 99709.7
Net Amount For Intra Day Transactions

99850 99800 99750 99700 99650 99600 Iti Financial Services Share khan Mothilal OswaL
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Interpretation
Though the transaction value is same for Iti Financial Services, Share Khan & Motilal Oswal, but the net amount benefited to the customer is obtained from Iti Financial Services. The reason, the brokerage charges are less. Also it is to be noted that the service tax is charged on brokerage amount.
For Delivery
Particulars Transaction value Brokerage Service Tax STT Net Amount Iti Financial Services 100000 300 30.6 250 99419.4 Share Khan Ltd 100000 500 51 250 99199 Motilal Oswal Ltd 100000 400 40.8 250 99309.2
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Net Amount for Delivery Transactions

99450 99400 99350 99300 99250 99200 99150 99100 99050 Iti Sharekhan Motilal Oswal
Interpretation
Though the transaction value is same for Iti Financial Services, Share Khan & Motilal Oswal, but the net amount benefited to the customer is obtained from Iti Financial Services . The reason, the brokerage charges are less. Also it is to be noted that the service tax is charged on brokerage amount.
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F1
Key is used for the buying of shares and to display the order entry table . For eg:Bse/Nse Company code Symbol Total quantity Price
F2
Key is used for selling the shares and to display order entry.
F3
Key is used to display the pending entry eg:- If we order for shares and it will not be traded by Nse/Bse. Then the shares are known as in pending.
F4
Key is used for market watch
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F5&F6
Key is used for market picture of a particular company if we enter some particular company name in the market picture. It will show the best five buyers of that particular and best five seller of that particular company. Always the five buyers /sellers will not be same they will change with in seconds.
Buyer No. of Orders Quantity of shares Price
Seller Price of shares Quantity orders No. of
And we can see . Opening/yesterday closing price of the shares. High /low rate of the shares. % of changes in particular company. Last traded quantity and rate will be shown.
Shift F7
To know the details of a particular company Eg:Reliance:-symbol, company code, dividend details
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F8 & F9
This keys are used to show all the executed order. Eg:-which are already traded in the market picture
F10
Key is used for message log At what time particular company shares were traded, particular trade, particular time.
F11
To add script to the screens
F12
Key is used for market movement for particular script or share.
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CHAPTER-4 SUMMARY AND CONCLUSIONS
75
SUMMARY AND CONCLUSIONS

The intraday net amount (99841.9) is highest for Iti Financial Services Ltd when
compared to Share Khan Ltd & Motilal Oswal Ltd. The net amount for delivery based transactions(99419.4) is highest for Iti
Financial Services Ltd, followed by Motilal Oswal Ltd & Share Khan Ltd It was found that most of the customers are willing to take Demat Account rather than commodity account. From the survey it is found that most of the customers satisfaction level is good with the advice given by their marketing executives and the information given in the broachers. Most of the customers prefer to invest in long term investments.
From the survey it is found that most of the customers are aware of trading process of Iti Financial Services Ltd. Most of the customers are interested to take part in the demo sessions of online trading in Iti Financial Services Ltd.
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ONLINE TRADING MECHANISM The competitors of Iti Financial Services Ltd Viz., Share Khan Ltd and Motilal Oswal should decrease the brokerage charges to attract the customers. Company should increase awareness about the companys products & service offered by them in the market. Company should maintain good relation with the customers and respond quickly to the queries asked by the customers The company should give demonstration to customers so that they can get complete knowledge about online trading. Company should try to minimize the rejections by taking care while filling the application form. The company should increase branch offices in Hyderabad & other areas in all over India.
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CONCLUSION
New ideas are to be implemented to catch the customers. The strategy of giving more benefits to the high end customers is very useful. All the positive points are used to get the business for the firm. But again if any one wants to take risk & earns a lot he can go for shares. Because stock market is a volatile market. Anything & everything can happen to this market. But then again if anyone study the market well he can earn a lot.
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ONLINE TRADING MECHANISM Again like every coin has its two sides, similarly every financial instrument has its own features, its advantage & disadvantage. So finally it is the investor himself/herself has to decide where to invest.
BIBLIOGRAPHY
Various broachers available in Iti Financial Services Ltd and in NSE and BSE. 79
Text Books:
WEBSITES: www.nse-india.com www.bseindia.com www.moneycontrol.com www.itifsl.co.in
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