Religare Securities Project

8/8/2019 Religare Securities Project

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1

A PROJECT REPORT

ON

³RISK MANAGEMENT REGARDING WORKING OF A

BROKING FIRM, AND ITS INVESTORS´

AT

RELIGARE SECURITIES LTD

SUBMITTED IN PARTIAL FULFILLMENT FOR

THE AWARD OF THE DEGREE OF

BACHELOR OF BUSINESS ADMINISTRATION

2008-11

PROJECT GUIDE: SUBMITTED BY:

MS. PRIYANKA GARG KARTIKEYA MITTAL

R.No ± 07661101709

BBA(Gen.) 3rd SEM

Maharaja Agrasen Institute of Management Studies

(Affiliated to Guru Gobind Singh Indraprastha University, Delhi

PSP Area, Plot No. 1, Sector 22, Rohini Delhi 110086)



2

STUDENT UNDERTAKING

This is to certify that I have completed the Project RISK

MANAGEMENT REGARDING WORKING OF A

BROKING FIRM, AND ITS INVESTORS in under the guidance

of Ms. Priyanka Garg in partial fulfillment of the requirement for the

award of degree of Bachelor of Business Administration at Maharaja

Agrasen Institute of Management Studies, Delhi. This is an original piece of

work & I have not submitted it earlier elsewhere.

Name of the Student

Kartikeya Mittal

BBA(Gen.) 3RD

SEM





4

INDEX

Sr No. Contents Page No.

Executive Summary I-III

1 INTRODUCTION

1.1 Basic Concepts of the Topic

1.2 Literature Review

1.3 Need for the Study

1.4 Statement of the Problem

1.5 Objectives of the Project

1.6 Research Hypothesis

1.7 Scope of the Study

1-15

2 PROFILE OF THE ORGANISATION

2.1 Name of the Organisation

2.2 Vision and Mission

2.3 History and Background

2.4 Group Structure

2.5 Services

2.6 Organisation Structure

2.7 Competitors of Religare Sec. Ltd.

2.8 About Religare Sec. Ltd.2.9 The Religare Edge

16-24

3 RESEARCH DESIGN & METHODOLOGY

3.1 Introduction to Research Methodology

3.2 Sampling Design

25-28



5

3.3 Sources of Data Collection

3.4 Limitations of Study

4 DATA PRESENTATION, ANALYSIS

INTERPRETATION

29-37

5 FINDINGS & SUGGESTIONS

5.1 Main Findings (Conclusions)

5.2 Policy Suggestions

5.3 Scope of Development

38-41

6 BIBLIOGRAPHY 42-43

7 ANNEXURE 44-46



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LIST OF TABLE

Table No. Title of the Table Page No.

5.1 Preference of Investment 30

5.2 Awareness of Online Share Trading 31

5.3 Awareness of Religare as a Brand 32

5.4 Awareness of Religare¶s Facilities 33

5.5 DEMAT Account Market 34

5.6 Satisfaction level of Customer 35

5.7 Frequency of Trading % of Earning Invested in

Trading

36



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LIST OF CHART

Chart No. Title of the Chart Page No.

5.1 Preference of Investment 30

5.2 Awareness of Online Share Trading 31

5.3 Awareness of Religare as a Brand 32

5.4 Awareness of Religare¶s Facilities 33

5.5 DEMAT Account Market 34

5.6 Satisfaction level of Customer 35

5.7 Frequency of Trading % of Earning Invested in

Trading

36



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EXECUTIVE

SUMMARY



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Project Title: - ³Risk Management Regarding Working of a Broking Firm and

Its Investors´

Name of the Organisation: - Religare Securities Ltd

Introduction: - All investments are risky, whether in stock, capital market,

banking, financial sector, real estate, bullion, gold etc. The degree of risk however

varies on the basis of the features of the assets, investments instrument, the mode

of investment, time frame or the issuer of the security etc.

Risk can be defined as ³Possibility of suffering losses´

³The chance of something happening that will have an impact upon objectives. It

is measured in terms of consequences and likelihood´.

Risk management in a Broking Industry is a new concept in India, since it

Posses¶ maximum risk in the financial market, managing it was felt most essential

by the regulatory bodies and exchanges.

Objectives of the Project:-

To get familiar with the working of a broking firm.

To understand various risks involved? in the broking firm.

To understand various risk for the? investors of the broking firm.

To manage and reduce the identified? risks.

Need of the Study:-

Create awareness among investors about the different risks involved in the

broking firms.

Understand the total transparency and automation of broking firm

Give basic knowledge to investors regarding risk in broking firm

Also understand the equity market and different way of trading

Research Hypothesis: - Capital Market is growing very fast, turnover wise as

well as area of operation wise. The activities have reached through lengths and



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breadth of the country. So there is increase in various broking firms. The working

of a broking firm is a very risky job because risk is involved in each and every

activity of the business.

Conclusions:-

The researcher found that the working of a broking firm is a very risky job

because risk is involved in each and every activity of the business.

The risk prevailing in the business is recognized therefore an efficient risk

management department is essential in every broking firm.

Broking business is a client-based business. The recent trend of

voluminous increase in investors has also increased the risk involved in it.

There is need of continuous up gradation of internal control measures

Staff in a broking firm is continuous busy and due to which they are always

under stress.

Suggestions:-

An Organization should have a risk management function that is

independent of its trading staff i.e. personnel responsible for the risk

management function should be separate from trading floor personnel.

A periodical compliance review should be conducted to ensure conformity

with the rules and regulations.

The designated compliance officer should perform a review of trading

Practices annually.

Limitations of Study:-

To understand the overall working of share market, the period of 60 days is

not enough.

Moreover, very few investor and agents have a detail knowledge of the

study.

The study was conducted in Ahmednagar only, which restricted the scope

of the study.



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CHAPTER I

INTRODUCTION



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1.1 Basic Concepts of the Topic

Introduction to Capital Markets

Financial System

The financial system of every economy consists of various constituents such as

1) Financial Institutions

2) Financial Companies

3) Financial Markets

4) Financial Instruments

5) Financial Services

6) Financial regulations

The financial market in India comprised of capital market and money market

whereas the financial system of the country comprised of institutions, which

operate the financial markets and the financial instruments with which the

financial system is put into operation.

Tax anomy of financial markets can be understood on functional, sectoral and

institutional basis. On a functional basis we can divide financial markets into

1. Capital market (long term)

2. Money market (short term)

What is Capital Market?

A Capital Market deals in financial assets, excluding coins and currency. The

financial assets comprise of banking accounts, pension funds, provident fund,

mutual fund, insurance policy, shares, debentures, and other securities. If the stock

exchanges are well regulated and function smoothly, then it is an indication of

healthy capital market. Stock exchange provide a good leverage of the capital

market and their relationship is directly proportional. India has multi-stock



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exchange system with more than 24 stock exchanges functioning across the

country. In our country, capital markets are generally also known as security/stock

market.

The Indian Capital Markets can be broadly classified into three types of markets.

1. Money market

2. Primary market

3. Secondary market

Money market

The money market is part of overall financial system and securities or capital

market. It deals in short term financial assets which can be readily converted into

cash. Money market is a place for trading in money and short tern financial assets

that are as liquid as money. It provides a platform for short term surplus funds of

lenders or investors and short term requirements of borrowers, the instruments can

be traded at low cost and are highly liquid.

Primary market

The primary market provides the channel for sale of new securities. Primary

market provides opportunity to issuers of securities; Government as well as

corporates, to raise resources to meet their requirements of investment and/or

discharge some obligation.

They may issue the securities at face value, or at a discount/premium and these

securities may take a variety of forms such as equity, debt etc. They may issue the

securities in domestic market and/or international market.



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Secondary Market

Secondary market refers to a market where securities are traded after being

initially offered to the public in the primary market and/or listed on the Stock

Exchange. Majority of the trading is done in the secondary market. Secondarymarket comprises of equity markets and the debt markets.

RISK MANAGEMENT

Risk is defined as ³possibility of suffering losses´

This risk in itself is not bad, risk is essential to progress, and failure is often key

part of learning, but we must learn to balance the possible negative consequences

of risk against the potential benefits of its associated opportunities. This is risk

management.

Principles of Risk management are as follows

1 Global Perspective

- Viewing development within the context of large level developments

- Recognizing both the potential value of opportunity and the potentialimpact of adverse effects

2 Forward looking view

- Thinking towards tomorrow, identifying uncertainties, anticipating

potential outcomes

- Managing project resources and activities while anticipating uncertainties

3 Open Communications

- Encouraging free-flowing information at and between all project levels

- Enabling formal, informal, and proper communication

- Using processes that value the individual voice (bringing unique

knowledge and insight to identifying and managing risk)



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4 Integrated management

- Making risk management an integral and vital part of project management

- Adapting risk management methods and tools to a projects infrastructure

and culture

5 Continuous processes

- Sustaining constant vigilance

- Identifying and managing risks routinely through all phases of the projects

lifecycle

6 Shared product vision

- Mutual product vision based on common purpose, shared ownership, and

collective communication

- Focusing on results

7 Team work

- W

orking cooperatively to achieve common goal- Pooling talents, skills, and knowledge

Functions of Risk Management are as follows

i. Identify - Search for and locate risks before they become problems

ii. Analyze - Transform risks data into decision-making information. Evaluate

impact, probability, and time frame, classify risks, and prioritize them

iii. Plan - Translate risk information into decision and mitigating actions (both

present and future) and implement those actions

iv. Track - Monitor risk indicators and mitigation actions

v. Control - Correct for deviations from the risk mitigation plan.

vi. Communicate - Provide information and feedback internal and external to

the project on the risk activities, current risks, and emerging risks.



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RISK MANAGEMENT IN A BROKING FIRM

Risk management in a Broking Industry is a new concept in India, since it poses

maximum risk in the financial market, managing it was felt most essential by the

regulatory bodies and exchanges. Therefore NSE introduced for the first time in

India, risk containment measures that were common internationally but were

absent from the Indian Securities Market. NSCCL has put in place a

comprehensive risk management system, which is constantly upgraded to pre-

empt market failures. These measures were taken to reduce the brokers¶ risks.

Whereas SEBI has given some guidelines under Investors Protection to protect

investors risks. NSE has given the following risk management measures

Margins

NSE has specified Different margins for different instruments like stocks futures

and options etc. Margins depend upon the volatility and market conditions, It vary

from stock to stock and instrument to instrument

Categorization of stocks for imposition of margins

Daily margins payable by members consists of the following:

1. Value at Risk Margins

2. Mark to Market Margins

Daily margin, comprising of the sum of VaR margin and mark to market margin

is payable.

Value at Risk Margin

VaR margin is applicable for all securities in rolling settlement. All securities are

classified into three groups for the purpose of VaR margin.



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The VaR based margin would be rounded off to the next higher integer (For E.g.:

if the VaR based Margin rate is 10. 0 1, it would be rounded off to

11. 00) and capped at 100%.

The VaR margin rate computed as mentioned above will be charged on the net

outstanding position (buy value-sell value) of the respective clients on the

respective securities across all open settlements. The net positions at a client level

for a member are arrived at and thereafter, it is grossed across all the clients for a

member to compute gross exposure for margin calculation.

For example, in case of a member, if client A has a buy position of 1000 in a

security and client B has a sell position of 1000 in the same security, the net

position of the member in the security would be taken as 2000. The buy position

of client A and sell position of client B in the same security would not be netted. It

would be summed up to arrive at the member's exposure for the purpose of

margin calculation. VaR margin rate & Security category

Mark-to-Market Margin

Mark to market margin is computed on the basis of mark to market loss of a

member. Mark to market loss is the notional loss which the member would incur

in case the cumulative net outstanding position of the member in all securities, at

the end of the relevant day were closed out at the closing price of the securities as

announced at the end of the day by the NSE. Mark to market margin is calculated

by marking each transaction in scrip to the closing price of the scrip at the end of

trading. In case the security has not been traded on a particular day, the latest

available closing price at the NSE is considered as the closing price.

In the event of the net outstanding position of a member in any security being nil,

the difference between the buy and sell values would be considered as notional

loss for the purpose of calculating the mark to market margin payable.



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Some Risk management are also taken by BSE they are as follows

1. Know your client scheme

Under the procedure the member brokers of the exchange are compulsory

required to obtain detailed information of clients prior to commencement

of any transactions with new clients. A similar procedure is also to be

followed for existing clients. This information is to be made available to

the exchange authorities whenever called for. In case the member broker

fails to furnish the same it is viewed seriously.

2. Verification of shares at members office

The exchange has outlined the process i.e. in case the transaction in a script

with one particular client in a settlement exceeds Rs 10 laks then the

member are to send the photocopies of the transfer deeds and the share

certificates to the company/ registrar for verification of the material

particulars. The basic idea behind the introduction of this procedure is to

prevent fake/forged/stolen shares from being introduced in the market.

3. Inspection

The department is carrying out inspection of the member brokers records

as regards compliance of the risk management procedures

4. Insurance

The exchange presently has in place insurance policies to protect itself in

the event of losses on account of fire, damage to computer systems and a

comprehensive policy that covers risks faced by the exchange, its member

brokers and the clearinghouse.

The risks covered under the basic cover of the policy are detailed as below.

- Loss to members on account of infidelity of employees



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- Loss of member on account of fake/forged/ stolen shares being introduced

by his clients

- Direct financial losses suffered by the member broker on account of

physical loss, destruction, theft or damage to securities and cash.

- Loss on account of securities lost in transit

- Loss suffered on account of incomplete transaction

- Loss sustained as final receiving member on exchange on account of

default of the introducing member

- Loss on account of errors and omission

- Directors and officials liability cover

Measures taken by SEBI for Investors protection are as follows

Government of India and SEBI have been stressing upon the need for regulating

the secondary market and bringing transparency in transactions on the floor of

stock exchanges

The steps taken by SEBI to regulate and control the business of stock exchanges

and reduce the risks of investors are as follows

1. Regulation on insider trading with the object to curb it completely and

punish the guilty

2. Uniform Trading hours at all the stock exchanges in the country to check

arbitrage.

3. Registration of market players- brokers, non member brokers, sub brokers,

registrars to issues, merchant bankers, portfolio managers, underwriters,

debenture trustees, custodians etc so as to have access/inspection of their

books, records and verification of transactions..

4. Indirect supervision through stock exchanges in day-to-day business by

fixing margins, imposing curbs, penalties and fines.



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5. Gradual automation to reduce paper work and ensure transparency in

transactions this is now almost complete and all stock exchanges have been

computerized.

6. Brokers contact notes to mention brokerage separately.

7. Nationwide paperless trading through over the counter exchange of India,

National Stock Exchange, BSE, DSE and other exchanges.

8. Brokers to keep clients money in a separate bank account.

9. Forward trading being banned on stock exchanges

10. Stress upon shorter settlement period.

11. Dematerialization of securities permitted on a selective basis. By March

2001, about 3500 companies will have compulsory trading in Demat mode.

12. Stern action against erring brokers, stock exchanges, companies, merchant

bankers, etc.

13. Regulation for fraudulent trade practices

14. Total transparency and automation of stock exchanges.

15. Effective margin system for smooth settlement.

16. Circuit breaker system to check volatility on the exchanges

17. Introduction of modified carry forward system and automated lending

borrowing mechanism (ALBM).18. Introduction of Internet trading.

19. Derivative trading in index based futures of 30, 60 and 90 days.

20. Practicing prudent governance norms.

Recent Development steps taken by SEBI for Investor protection

1. Appointment of administrators to check bad deliveries

To get rid of bad deliveries, SEBI has decided to appoint administrator to

implement the signature guarantee and certificate authentication programs.



21

The administrators appointed by SEBI act on behalf regulator in resolving

problems arising out of signature mismatch

2. Streamlining Investor protection fund

The committee set up by SEBI to review the sources and utilization of

investor protection fund of stock exchanges has made following

recommendations

- Funds should be on trust structure and set upon under Indian Trust

Act, 1882 with independent trustees

- Regular contributions from active member brokers and stock

exchanges

- Fund to be utilized only for investor claims and not broker claims.

- Trustees to ensure that fund is not deployed in risky instruments or

for the benefit of any member but only in prescribed avenues.

- Time schedule to be specified while setting investor claims.

3. Service centers for investors

SEBI has directed all stock exchanges to constitute service centers for investors to enable the investors to have a form for recording and

counseling of their grievances as well as access financial and other

information of companies on government policies, rules, regulations, etc.

4. Compliance Officer

Each company is required to appoint compliance officer who would be

able to verify rumors and information floating in the market about the

company to the stock exchange. This will reduce motivated rumors about

companies, which aids in price manipulation.



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5. Corporate Governance

SEBI has prescribed prudent corporate governance norms for all listed

companies to ensure transparency and better disclosure practices.

6. Investor Education

SEBI has taken steps to educate investors through various awareness

programmes and publications

1.2 Literature Review

No one has done work over there yet, on this topic.

In literature review I read various documents provided by the manager of

Religare Sec. In this I reffer the Demat form of the Religare Sec. And

Visiting various websites.

In this I also read the various modules of NCFM. And also read the

following books:

i) FINANCIAL SERVICES AND MARKETS

Author: - Dr. Gurusamy

ii)RESEARCH METHODOLOGY METOHDS & TECHNIQUES

Author: - C.R.Kothari

iii)PROJECT REPORT WRITING

Author: - M.K.Rampal & S.L. Gupta

1.3 Need for the Study

Create awareness among investors about the different risks involved in the

broking firms.

Understand the total transparency and automation of broking firm

Give basic knowledge to investors regarding risk in broking firm



23

Also understand the equity market and different way of trading

Convert our therotical knowledge in to practical knowledge

1.4 Statement of the Problem

There are several financial security companies playing their roles in

Indian equity market. But People don¶t have basic knowledge regarding

stock market. So they not understand there is various risk involved in the

working of broking firm. Due to none availability of the proper guidance

most of the person take stock market as gambling.

1.5 Objectives of the Project

?To get familiar with the working of a broking firm.

To understand various risks involved? in the broking firm.

To understand various risk for the? investors of the broking firm.

To manage and reduce the identified? risks.

1.6 Research Hypotheses

Capital Market is growing very fast, turnover wise as well as area of

operation wise. The activities have reached through lengths and breadth of

the country. So there is increase in various broking firms. The working of a

broking firm is a very risky job because risk is involved in each and every

activity of the business.



24

1.7 Scope of the Study

Company can take review from market through this project. Management

people can get overall idea about the risk management regarding working

of broking firms. They also understand what information provide to

investor for avoiding the risk.



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CHAPTER II

PROFILE OF THE

ORGANISATION



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2.1 NAME-

RELIGARE SECURITIES LTD.

Corporate Office:

19 Nehru Place, New Delhi ± 110019

Website : www.religare.in

Email : [email protected]

SMS : RELIGARE to 58888

PUNE:

Ground Floor, Amar Caliber,

BMCC Road, Shivajinagar,

Pune ± 411004

AHMEDNAGAR:

5&6, Himalaya Tower,

Opp. Deepak Hospital,

Savedi Road,

Ahmednagar - 414003

2.2 VISION & MISSION-

Company¶s Vision ±

³To build Religare as a globally trusted brand in the financial services domain and

present it as the µInvestment Gateway of India´.

Company¶s Mission ±

³Providing complete financial care driven by the core values of diligence and

transparency´.



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Brand Essence ±

³Core brand essence is Diligence and Religare is driven by ethical and dynamic

processes for wealth creation´.

2.3 History and background

RELIGARE Securities Ltd. (RSL) is a wholly owned subsidiary

of RELIGARE Financial Services Ltd. (RFSL), a Company promoted by the late

Dr.Parvinder Singh, Ex-CMD of Ranbaxy Laboratories Ltd.

The primary focus of Religare Securities Ltd. is to cater to services

in Capital Market Operations to Institutional Investors. The Company is a member

of the National Stock Exchange (NSE) and OTCEI. The growing list of financialinstitutions with whom RSL is empanelled as approved Broker is a reflection of

the high levels of services maintained by the Company.

REL operates from seven domestic regional offices, 43 sub-regional offices, and

has a presence in 498* cities and towns controlling 1,837* business locations all

over India.

To make a mark in the global arena, REL acquired UK-based Hichens, Harrison& Co. in 2008 which was subsequently re-named as Religare Hichens Harrison

PLC ("RHH"). Hichens, Harrison & Co. was incorporated in London in the year

1803 and is believed to be one of the oldest firms of stockbrokers in the City of

London. Pursuant to expansion of REL's business, the company has grown from

largely an equity trading company into a diversified financial services company.

With the addition of RHH the REL group now operates out of multiple global

locations, other than India, (the UK, the USA, Brazil, South Africa, Dubai and

Singapore).

RELIGARE was founded with the vision of providing integrated

financial care driven by the relationship of trust. The bouquet of services offered

by RELIGARE includes Broking (Stocks and Commodities), Depository



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Participant Service, Advisory on Mutual Fund Investments and Portfolio

Management Services.

RELIGARE is a pioneer in the concept of partnership to reach multiple locations

in order to effectively service its large base of individual clients. Besides the reach

of RELIGARE, the clients of the company greatly benefit by its strong research

capability, which encompasses fundamentals as well as technical knowledge.

RELIGARE GROUP:

RELIGARE in recent years has expanded its reach in health care and

financial services wherein it has multiple specialty hospital and labs which

provide health care services and multiple financial services such as secondary

market equity services, portfolio management services, depository services etc.

RELIGARE financial services group comprises of Religare Securities

Limited, RELIGARE Comdex Limited and RELIGARE Finvest Limited which

provide services in Equity, Commodity and Financial Services business &

Religare Insurance Advisory Ltd.

RELIGARE SECURITIES LIMITED

1. Member of National Stock Exchange of India and Bombay Stock Exchange

of India.

2. Depository Participant with National Securities Depository Limited (NSDL)

and Central Depository Services Limited (CDSL). A SEBI approved

Portfolio Manager.

RSL provides platform to all segments of the investor to leverage the immense

opportunity offered by equity investing in India either on their own or through

managed funds in Portfolio Management.

The ARN No. of the Religare Securities Ltd. is 33764. The ARN No. is

required by to be available with the broker who deals on behalf of investors or sell

the mutual funds of the different companies present in the market.



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2.4

Religare Enterprises Limited

Religare Securities Limited

Equity Broking

Online Investment Portal

Portfolio Management Services

Depository Services

Religare Commodities Limited

Commodity Broking

Religare Capital Markets Limited

Investment Banking

Proposed Institutional Broking

Religare Realty Limited

In house Real Estate

Management Company

Religare Hichens Harrison**

Corporate Broking

Institutional Broking

Religare Finvest Limited

Lending and Distribution business

Proposed Custodial business

Religare Insurance Broking Limited

Life Insurance

General Insurance

Reinsurance

Religare Arts Initiative Limited

Business of Art

Gallery launched - arts-i

Religare Venture Capital Limited

Private Equity and

Investment Manager

Religare Asset Management*

Derivatives Sales

Corporate finance



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2.5 SERVICES :-

Arts

Initiative

Investment

Banking

Wealth AdvisoryServices Personal

Credit

Insurance

Mutual

Fund

Commodit

y

Equity

REL



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2.6 Organization Structure:



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2.7 Competititors of Religare:-

There are several financial security companies playing their roles in Indian equity

market. But Religare faces competitions from these few companies.

ICICI Direct.com

Share Khan (SSKI)

Kotak Securities.com

India Bulls

HDFC Securities

5paisa.com

Motilal Oswal

IL&FS

Karvy



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2.8 About Religare Securities Limited (RSL)

One of the leading integrated financial services groups of India

Diverse range of offerings

Client base of more than 5000,000 and growing across the retail, wealth

and Institutional Spectrum.

Pan India and global footprint.

Width and depth of management leading a formidable employee base.

Best-in-class Research.

³Sweetly placed´ to spot new opportunities and power ahead.

2.9 The Religare Edge

Diverse offerings

Dynamic Management Team

State-of-the art technology

Vast Distribution and Reach

Robust Brand Recognition

Synergistic partnerships Innovative Initiatives



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CHAPTER III

RESEARCH DESIGN &METHODOLOGY



35

3.1Introduction to Research Methodology-

Research Methodology comprises defining and redefining the problem,

formulating hypothesis or suggesting solution, collecting, organizing and

evaluating the data, making deduction and reaching to conclusions and determines

whether the formulated hypothesis is right and wrong.

Research Methodology is a way to solve research in study and solving research

problems along with logic behind them are defined through research

methodology. Thus while talking about research methodologies we are not only

talking of research methods but also consider the logic behind the methods.

During my project, I collected data through various sources primary & secondary.

3.2Sampling Design ±

I have taken sample size of 50 respondents. Because the population is too large so

it is difficult to survey.

Any organization whether big or small, private or public need different types of

information are to know its popularity. I have gathered secondary data and

primary data and collected information from the combination of these two data.

3.3 Sources of Data Collection-

Primary source includes:-

1) Discussion with branch manager

2) Discussion with experts

3) Discussion with investors of the firm.



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4) Live trading in the market

5) Data collected from questionnaire.

Secondary source includes:-

1) Various books related to stock market

2) Books related to Financial Management

3) Web sites were used as the vital information source

4) References given by Relationship Manager

3.4 LIMITATIONS OF STUDY

To understand the overall working of share market, the period of 60 days is

not enough.

Moreover, very few investor and agents have a detail knowledge of the

study.

The study was conducted in Ahmednagar only, which restricted the scope

of the study

The data provided by the investor and the agents can¶t be held true as

100% correct.

The study was conducted to understand with respect to Risk involved in

broking firm and investors, which is a part of the equity share market.



37

CHAPTER IVDATA PRESENTATION,

ANALYSIS &

INTERPRETATION





39

2) Awareness of online Share trading :

YES NO

45 5

Source: Primary Data (Table No. 5.2)

Chart 5.2

Interpretation: With the increase in cyber education, the awareness towards

online share trading has increased by leaps and bounds. This awareness is

expected to increase further with the increase in Internet education.



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3) Awareness of Religare as a Brand.

YES NO

29 21


AWARENESS OF RELIGAREAS ABRAND

43%

57%

YES

NO

Chart 5.3

Interpretation: This pie chart shows that Religare has a reasonable amount of

Brand awareness in terms of a premier Retail stock broking company. The

company to increase its market share over its competitors should further leverage

this brand image.



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4) Awareness of the facilities provided by Religare :

YES NO

42 8


Chart 5.4

Interpretation: Although there is sufficiently low brand equity among the target

audience yet, it is to be noted that the customers are not aware of the facilities

provided by the company meaning thereby, that, the company should concentrate

more towards promotional tools and increase its focus on product awareness

rather than brand awareness.



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5) DEMAT Account Market :

BROKING FIRMS INVESTORS

Religare Securities 6

ICICI Direct 15

Kotak Securities 4

India Bulls 12

Others 13


Chart 5.5

Interpretation: This shows that even with sufficiently high Brand Equity,

Religare ranks only 3rd

amongst the Demat account providers. This is probably

because of two main reasons:

1. Lack of promotion and unfocussed approach towards Product awareness

2. Non ± transparent marketing policies of the company

Hence, the company should crystallize its products and should indulge in

aggressive marketing and promotion.



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6) Satisfaction level among Customers with current Broker :

YES NO

46 4

Source: Primary Data (Table No.5.6)

Satisfaction level among Customers with

current broker

Yes - 92% No - 8%

Chart 5.6

Interpretation: This pie chart accentuates the fact that Strategic marketing, today,

has gone beyond only meeting Sales targets and generating profit volumes. It

shows that all the competitors are striving hard not only to woo the customers but

also to make them Brand loyal by generating customer satisfaction.



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7) How often do you trade:

FREQUENCY OFTRADING

NO. OF INVESTORS

Daily 5

Weekly 13

Monthly 26

Yearly 6


Frequency of Trading

Daily- 9%

Weekly- 27%

Monthly-53%

Yearly-11%

Chart 5.7

Interpretation: In spite of the huge returns that the share market promises, we see

that there is still a dearth of active traders and investors. This is because of the non

± transparent structure of the Indian share market and the skepticism of the target

audience that is generated by the volatility of the stock market. It requires efficient

bureaucratic intervention on the part of the Government.





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CHAPTER V

FINDINGS & SUGGESTIONS



47

5.1 MAIN FINDINGS (CONCLUSION)

Working with a broking firm especially was really a great experience.

The researcher found that the working of a broking firm is a very risky job

because risk is involved in each and every activity of the business.

The risk prevailing in the business is recognized therefore an efficient risk

management department is essential in every broking firm.

Capital Market is growing very fast, turnover wise as well as area of

operation wise. The activities have reached through lengths and breadth of

the country. All these necessitated in the introduction of latest technology

in the form of advanced software¶s.

Broking business is a client-based business. The recent trend of

voluminous increase in investors has also increased the risk involved in it.

There is need of continuous up gradation of internal control measures

Staff in a broking firm is continuous busy and due to which they are always

under stress.



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5.2 POLICY SUGGESTIONS

An Organization should have a risk management function that is

independent of its trading staff i.e. personnel responsible for the risk

management function should be separate from trading floor personnel.

Senior management should regularly evaluate the risk management

procedure in place to ensure they are appropriate and sound.

Senior management should also foster and participate in active discussions

with the board of directors, sub brokers, franchisee, staff of risk

management function and investors regarding procedures for measuring

and managing risk.

Highly qualified staff not only in front office positions such as trading

desk, relationship officer and sales but also all back office functions

responsible for risk management and internal control.

Risk management or control function should be able to produce a risk

management report that highlights positions, limits and excess on a basis

commensurate with trading activity. This report should be sent to senior

management, reviewed, signed and returned to control staff.

Auditors should perform a comprehensive review of risk management

annually, emphasizing segregation of duties and validation of data

integrity.



49

The designated compliance officer should perform a review of trading

Practices annually.

5.3 SCOPE FOR DEVELOPMENT RELIGARE

SECURITIES)

RELIGARE SECURITIES have set themselves very stringent and high standards

of Risk Management. However I would like to make a few points, which would

help the organization in a big way.

Recording of trader and dealer telephone calls, which will facilitate toresolve the disputes at different levels.

Fast and frequent interaction between the risk managers, the sub brokers

and client will help in reducing the delay in giving limits.

Periodical visits to the sub brokers and franchisee by the RELIGARE

SECURITIES personnel for interaction and inspection will help in

minimizing the risk to great extent.

Regarding dealers risks, well-trained and less stressed dealers will help in

reducing the mistakes. It has been observed that most of the mistakes are

done when they are under stress. HRD must help in this matter.

In settlement department the persons have be appointed with utmost care

and their periodic check can be conducted to avoid any employee fraud.

Along with large client base, quality of clientele will help in balanced

growth of business and minimizing the risk.



50

CHAPTER VI

BIBLIOGRAPHY

&

WEBLIOGRAPHY



51

?www.religare.in

?www.bseindia.com

?www.nseindia.com

?www.google.co.in

?Dalal Street

?Various books of Equity Management.



52

ANNEXURE



53

QUESTIONNAIRE

Q1. In which of these Financial Instruments do you invest into?

Shares Mutual Funds Bonds Derivatives

Q2. Are you aware of online Share trading?

Yes No

Q3. Heard about Religare?

Yes No

Q4. Do you know about the facilities provided by Religare?Yes No

Q5. With which company do you have your DEMAT account?

Religare ICICI Direct Kotak Mahindra India Bulls

Others (please specify) __________

Q6. Are you currently satisfied with your Share trading company?

Yes No

Q7. How often do you trade?

Daily Weekly Monthly Yearly

Q8. What percentage of your earnings do you invest in share trading?

Up to 10% Up to 25% Up to 50% Above 50%

Q9. Is broking firms are always risk free?

Yes No



Q10.What more facilities do you think you require with your DEMAT

account?

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Name:

Age:

Phone No:

Occupation:

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