The Working of Stock Exchange in India

7/27/2019 The Working of Stock Exchange in India

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ACKNOWLEDGEMENTS

Presenting A Final Project is an arduous task, demanding a lot of time. I cannot in full measure

reciprocate the kindness shown and contribution made by various people in this endeavor. I will

remember all of them with gratitude.

I would like to express my deep and sincere gratitude to Ms. Monisha Gupta (Lecturer, HIM). I

would especially like to thank her for guidance and support provided for completing this project. It was

due to her helpful attitude that I was able to come over all the hurdles that came in the way while

making this project.

I am thankful to the staff members of our institute for their constant encouragement & the valuable

inputs from time to time throughout the course of my studies.

Signature of candidate

RAVIKANT


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DECLARATION

I Ravi Kant ,Roll No.37,Class M.B.A. IV Semester of Hindu Institute of Management hereby

declare that the Final Report entitled Working of Stock Exchanges in India is an original work &

the same has not been submitted to any other institute for the award of any degree.

Signature of Supervisor Signature of candidate

(Ravikant)

.

Countersigned

(Director/Principal of Institute)


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The working of stock exchange in India

The Capital Market

The Capital Market is the long-term end for financial market. It is made up of market and institutions,which facilitate the issuance and secondary trading of long-term financial instruments. Unlike theMoney Market, which functions basically to provide short term funds, the Capital Market providesfunds to industries and governments to meet their long-term capital requirements, such as financing forfixed investments - buildings, plants, bridges, etc.

Instruments Employed At The Capital Market

The major instrument used to raise fund at the Nigerian Capital Market includes:

Equities - Ordinary Shares and Preference shares

Debt - Government Bonds (Federal, States, And Local Governments)

Industrial Loans/Debenture Stocks and Bonds

Capital Market Instruments

The capital market is characterized by a large variety of financial instruments. While equity andpreference shares, fully convertible debentures (FCDs), non-convertible debentures (NCDs) and partlyconvertible debentures (PCDs) currently dominate, new instruments are being introduced. Theseinclude debentures bundled with warrants, participating preference shares, zero-coupon bonds, securedpremium notes, etc. Equity based instruments are the most popular means of raising finance. In 1993-94, nearly three-fourths of the total resources raised from the public by the corporate sector were in theform of equity shares. Of the balance, 6% was of debt and 24% was convertible into equity.

Primary market

Households which are in financial surplus , exchange their saving for shares , debenture and securitiesof the financial deficit sectors such as the companies and governments . it is the primary market. themarket consist of investors or buyers ,sellers, dealers and brokers and does not reflect a physicallocation . in the primary market, new issue of and debt are arranged in the from of a new flotationeither publicly or privately or in the form of a rights offers , to existing shareholder.


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Stock market

Capital market apart form the primary market also includes markers where securities which have beenIssued in the past are traded . These secondary markets are called stock markets or stock exchange The stock market predominantly deal in stock investors to continuously rearrange their assist if they so

desire by divesting themselves of such assets white other can use their surplus funds to acquire them.

Symbiotic relationship between primary and secondary market

The primary and secondary markets have an symbiotic relationship. while the primary market createsLong term securities ,the secondary market provides liquidity through marketability of thoseinstruments. Actually new issue actively in the primary market adds depth to the secondary market byenlarging the supply of instruments for trading and investment in the secondary market.


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Objective of the study

(1) What are the objectives of the stock exchanges?

(2) What are the economic functions of stock exchange?

(3) How formation is made of stock exchange.

(4) To know recent trend of stock exchanges.

(5) To know what are the procedures of listing in stock exchanges.

(6) To know what are the procedures of trading in stock exchanges.

(7) To know what are the procedures of settlement and clearing.

(8) To know about the reason of up and down sensex in the stock exchanges.

(9) Risk return analysis.

(10) To study various relative topic to the stock exchanges.


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Significance of study

The significance of choosing this project is to understand why companies are listed in stock exchange.Stock market capital is generally considered as a synonym of high risk capital. (Secondary market) stock exchanplays a strategic role in financing for the listed companies. Stock exchange has potential to become an importansource for financing of large-scale enterprises.

The stock exchange provides a market place for purchase and sale of securities. It ensures the free transferabilitsecurities, which is the essential basis of corporate system. The private corporate system cannot function efficiewithout the presence of stock exchange in an economy. The stock market assures the owner of corporate securitsell their holding at any time and thereby provides liquidity.


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RESEARCH METHODOLOGY

Research simply means, search for knowledge Accounting to Roman and More, research is

systematized effort to again new knowledge. Some people consider research, as movements fromknow to unknown; it is actually a voyage of discovery.

RESEARCH METHODOLOGY is a way to systematically solve the research problem. In it, step-by-step methods are followed to solve a particular problem. It refers to a search for knowledge. It can alsobe define as a scientific and systematic search for pertinent information on a specific topic in factresearch is an art of scientific investigation.

REAEARCH DESIGN

Research Design is the way in which the research is carried out. It works as a blue print. ResearchDesign is the arrangement of condition for the collection and analysis of data in a manner that aims tocombine relevance to the research purpose with economy in procedure.

Descriptive & Diagnostic Research Design

In Descriptive Research Design those studies are taken which are concerned with describing thecharacteristics of particular individual or a group.In diagnostic Research Design, those frequency are determined with which something occur or its

association with something else.


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Method of Data Collection

The data collection for the project was done by the was of questionnaire method. A non-disguisedquestionnaire was used as the method of data collection. For the preparation of the questionnaire the

views of various experts in the field were utilization to finalize the product and service relatedattributes.

Primary Data:

A structure non-disguised questionnaire was prepared the questionnaire was filled by themedium of personal interview. The reason for conducting personal interviews with the respondent was

to get reliable information, which was not possible through method such as telephone interview ormails.

Secondary Data:

Secondary data collection from various project available with the company, website of Liberty Shoeslimited and was used in the project to find out various product and service attribute suffered by LibertyShoes Limited to its customers as well as the systems and process in place to address the complaintredressed mechanism.

DATA COLLECTION

PRIMA PRIMARY SECONDRY DATA


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History of Stock Exchange

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage. Popularly knownas "BSE", it was established as "The Native Share & Stock Brokers Association" in 1875. It is the first stockexchange in the country to obtain permanent recognition in 1956 from the Government of India under theSecurities Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role in the developmentof the Indian capital market is widely recognized and its index, SENSEX, is tracked worldwide. Earlier anAssociation of Persons (AOP), the Exchange is now a demutualised and corporative entity incorporatedunder the provisions of the Companies Act, 1956.

`Introduction of stock exchange

The stock market is regarded ad the economic barometer of a country indicating the nature if the economicenvironment at any point of time. It is the market place where the corporate and the government securitiesare traded and exchanged. It regulatory provides sufficient marketability and price continuity to the listedscrips .Further, it is the only market which can extend reasonable safety, fair and equitable dealing in the buyingand selling of securities and enhancing the investment opportunities available to the investor at large.

Meaning of stock exchange

The stock exchange has been defined under Section 2(3)of the Securities Contract (Regulation) Act, 1956As(any body of individual whether incorporated or not, buying ,selling or dealing in securities.)

Under the said Act, the following securities can be traded at the stock exchange :(a)Share, scrips , stocks, bonds, debentures, debenture stocks or other marketable securities of a like naturein or of any incorporated company or other body corporate.

(b) Government securities ;and(c) Right or interests in securities.


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Objective of stock exchange

(1) The main objective of the stock exchanges are to provide ready marketability, liquidity ,Negotiability control of dealing and protection of interest to investors.

(2) The another objective of stock exchange are to provides a nation wide trading facility forequities, debt instruments and hybrids

(3) . To ensure equal access to investors all over the country through an appropriatecommunication net works.

(4) To provide a fair, efficient and transparent securities market to investors using electronic

trading systems.

(5) To enable shorter settlement cycles and book entry settlements systems and to attain currentinternational standards of securities markets.

(6) Two additional market segments exclusively for institutions.

(7) The institutional lot segment and trade for trade segment are set up to encourage aninstitutional market where large volume trade take place for settlement in jumbo lots.


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Economic function of stock exchanges :

A few important function rendered by a stock exchange in an economy are sated below:

(1) Adequate liquidity and Marketability:One of the important functions of the stock exchange is to provide opportunity to the investor toconvert their liquid funds (money) into securities and securities into money quickly with littlevariation current market price. The stock market provides liquidity and price continuity only listedsecurities listed securities are those, which have been allowed to be traded on a particular stockexchange.

(2) Safety to Investor:The major function of a stock exchange is to provide adequate safety to the genuine investor fromfraud and manipulation caused due to speculator, members, brokers, etc. The central Governmenthas wide powers to regulate and controlled the activities of the members and stock exchange.Beside the above stated provision , the securities and Exchange Board of India (SEBI) hasinstructed all the stock exchange in India to set up special cells to deals with complaints bothagainst listed companies and their members.

(3) Evaluation of securities:Another important function of the stock exchange is to provide an opportunity to determine areasonable and fair of the fair price of the various scrips traded on lts floor. In other words, thestockExchange works as a mechanism to fix the price of a scrips through the market force of demandand supply.

(4) Mobilization of saving

The stock exchanges perform another important function in a economy, i.e. mobilization of publicsaving and canalization of the same for productive purpose. In other words, the stock marketprovides an ample opportunity to all the investors both individuals and institution to invest theirsurplus funds. In this way, stock market assist in capital formation process in the economy..

(5) Widening share ownership base

Another impotent function of stock exchange is to widen the share ownership base specially indeveloping countries. It is noticed that the people at large in such countries are not well educated

and familiar about the investment market and avenues available. Further they do any adequate inthis regards. The stock exchange can play a significant role in educating the masses throughvarious Communication media.


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(6) Continuous marketThe basic function of a stock market is the creation of a continuous market where securities arebought and sold in volume with little variation in current market prince as trades succeed

(7) Frequency of salesThe primary criterion for a good market is whether investor can sell their portfolio holdings

quickly with minimal price fluctuation at the time of sale.

(8) Fair price determinationThe prices in the stock market are determined by the interplay of forces of supply and demand. Inthe stock way auction trading taken place.

Development of Indian stock market

Organization of stock Exchange

S.No. Name of Exchange Year of

Establishment

Type of

Association

Recognition

Original Date

Period

1 Bombay 1875 Voluntary makingassociation ofpersons.

31-08-1957

2 Calcutta 1908 Incorporated

Public limitedcompany in 1923

10-10-1957

3 Madras 1937 Recognized i.e.Limited company29-4-1957

15-10-19575 year @

4 Ahmedabad 1894 Voluntary non-profit makingassociation ofpersons

16-10-19575 year @

5 Delhi 1942 Public Limitedcompany

9-12-1919575 year @

6 Hyderabad 1943 Company Limitedby Guarantee 29-09-19585 year @

7 M.P.(Indore) 1930 Voluntary non-profit makingassociation ofpersons

24-12-19585 year @

8 Bangalore 1957 Incorporated as aPvt.Ltd. Company

19635 year @


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& converted into apub. Ltd. Co. on3-4-1962

9 Cochin 1978 Public Ltd.company

10-15-19795 year $

10 U.P.(Kanpur) 1982 Public Ltd.

company

03-06-1982

5 year @11 Pune 1982 Public Ltd.

company.Sept-19825 year @

12 Ludhiana 1983 Public Ltd.company.

29-04-19835 year @

13 Gauhati 1984 Public Ltd.company.

01-05-19845 year @

14 Kanada(Mangalore) 1985 Public Ltd.company.

09-09-19851year @

15 Patna 1986 Public Ltd.company.

11-12-19865 year @

16 Jaipur 1983-84 Public Ltd.company.

09-01-19891year @

17 Bhubaneshwar 1989 Company Limitedby Guarantee

05-06-19895 year @

18 Saurashtra Kuch 1989 Company Limitedby Guarantee

10-07-19893year @

19 Vadodara 1990 N.A. 05-01-19915 year @

20 Coimbatore 1991 N.A. 18-09-19905 year @

21 Meerut 1991 N.A. 18-09-1991

5 year @

22 OTC ExchangeBombay

1989 N.A. Aug.19895 year @

23 Nation Stock Exchange Bombay

@ Renewed after every 5 years till grant of permanent recognition.$ Renewed for further 5 year from 8-5-1989


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Formation of organization of Indian stock Exchanges

In India, stock exchange are free to establish themselves in any of organization, viz., public limitedcompany, company limited by guarantee, an association of individuals, non-profit organization,etc.

The securities Contract (Regulation) Act usually encourages a stock exchange to constitute in alimited company form and discourage to choose, association of persons as a of organization.

The recognized stock exchanges in India have been constituted in different forms of organiasation.For example, Bombay stock exchange, Ahmedabad Stock Exchange and indore stock Exchange areformed as a voluntary non-profit making assocation, the Mangalore and Jaipur as public limitedcompanies and the exchange in Hyderabad, Magadh, Pune, Bhubaneshwar and Saurashtra are inthe form of limited by guarantee.

Regulation of stock Exchange in India

Till 1956, all stock exchanges were subject to self-regulation from their own management bodiesI.e. Board of Governors. However, after that it is changed to three- tier regulation. CentralGovernment via-Ministry of Finance, (Stock Exchange Division) regulates the stock exchangeprimarily through the securities Contract (Regulation) Act, 1956 (SCRA) Further, the Securitiesand Exchange Board of India (SEBI) also regulates the stock exchange in order to protect theinterest of invertors and to promote the development of security markets in India.

This body acquires a wide power under the SEBI Act, 1992. Since then, has issued various rules

regulation and guidelines for promoting developing, stabilizing and strengthening the securitymarket in India. A few important among these are:

1. SEBI (Portfolio Managers) Rules and Regulation, 1992.

2. SEBI (Stock Broker and Sub broker) Rules and Regulation, 1992.


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3. SEBI (Insider Trading) Rules and Regulation, 1992.

4. SEBI (Merchant Banker) Rules and Regulation, 1992.

5. SEBI (Mutual Fund) Regulation, 1993.

6. SEBI (Underwriters) Rules and reguation, 1993.

7. SEBI (Registrars to Issue and Share Transfer Agents) Rules and Regulation, 1993.

8. SEBI (Debenture Trustee) Rules and Regulation, 1993.

9. SEBI (Bankers to an Issue) Rules and Regulation, 1993.

The SEBI has also issued guidelines for:

1. Free pricing of share.

2. Disclosures and investors protection.

3. Registered of foreign institutional investors (FII).

4. Allotment of shares.

5. New financial instrument.

6. Credit rating of fixed return bearing securities.

SEBI POWER IN RELATION TO STOCK EXCHANGE

The SEBI ordinance has given it the following powers:

1. It may call periodical returns form stock exchanges.

2. It has the power to prescribe maintenance of certain documents by the stock exchange.

3. SEBI may call upon the exchange or any member of finish explanation of information relating

to the affairs of the stock exchange or any member.

4. It has the power to approve buy-law of the stock exchange for regulation and control of the

contracts.

5. It can amend buy-law of stock exchange.


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6. In certain Ares it can license the dealers in securities.

Organizational structure of stock Exchange in India

Like any management unit, the Organizational setup of any stock exchange is also guided by itsobjective, which is:

1. Arrangement for listing of companies.

2. Control of trading in securities, settlement and clearance.3. Regulation of members activates concerning the disputes among member, members and clientand other and4.other services to members and investors.

On the basis of the above objective a common Organizational structures of a stock exchange hasbeen shown in Fig. The number of departments and levels of management depends upon the sizeand volume and companies listed on the respective stock exchange.


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Management of stock exchange

The stock exchange is managed by a Governing body which consist of a president, a Vice- President,Executive Director, elected Directors public representatives and nominees of the Government

Governing Board President, Vice-Presid

Secretary Treasurer

Executive Director

Secretary Monitoring Department PRO and

Library

ListingDepartment

OperationDepartme

Computer InspectionAudit

Administratio

Settlement

Clearance

EDP &

M.I.S.

Investors

Arbitration

and

Complaints

Directory Work and Research

Publication


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Recent Development in the Indian stock markets

The structure of stock market in India has gone under a vast change due to the liberalization processinitiated by the Government , specifically after 1991.

(1)Trade guarantee fund (TGF) established with a corpus of Rs.172.5 cr. Which will guaranteesettlement of bonafide.

(2)BSE bank for stockbrokers.

(3)SLS (Stock Lending System)

(4) Depositories and Custodial services.

(5) Corporatisation of broking firms; Foreign membership allowed.

(6)About 700 FII registered with SEBI.

(7)Screen based trading.

(8)Corporate tax and Capital gains tax rates reduced.

(9) Free pricing of share and premium /price based system.

(10) NRI/FII permitted to invest till 30% in equities of Indian cos.(Except Plantation and Agriculture .

(11) Capital adequacy norms for brokers

(12) NVS (Non-voting shares) unto 25% of share capital.

(13) Integration of money and capital market through free flow of funds from banks ,LIC, MFs, Trustsetc. to capital market.

(14) Buy back allowed.


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(15) Stock invest scheme introduced.

(16) Over-the Counter market system (OTC)-: The primary objective of this market was to enable thesmall start up companies or companies in green field ventures to obtain their capital requirements atthe minimum cost. As a result, steps uses taken by the Government to establish OTC market in thecountry.

Major stock Exchanges in India

The total market capitalization of the 22 stock exchange amounted to Rs.3000000cr.At the end of March 2005. On accounted of multiple listing it is difficult to determine the proportionaccounted by difficult stock exchange in total market capitalization. The four exchanges the NationaStock Exchange, the Bombay Stock Exchange, Calcutta Stock Exchange and Delhi Exchange togetheraccount for 88.7 per cent of the market for stock trading. The 18 stock exchanges are fighting for 11.3percent of the total market. Although OTCEI has a very small capitalization of Rs.3065 cr. At the end

the March 2005.

Introduction Bombay stock Exchange(BSE)

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage. Popularly know"BSE", it was established as "The Native Share & Stock Brokers Association" in 1875. It is the first exchange in the country to obtain permanent recognition in 1956 from the Government of India undeSecurities Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role in the developmthe Indian capital market is widely recognized and its index, SENSEX, is tracked worldwide. EarliAssociation of Persons (AOP), the Exchange is now a demutualised and corporative entity incorporated undprovisions of the Companies Act, 1956, pursuant to the BSE(Corporatisation and Demutualisation) Scheme,notified by the Securities and Exchange Board of India (SEBI).

With demutualisation, the trading rights and ownership rights have been de-linked effectively addressing conregarding perceived and real conflicts of interest. The Exchange is professionally managed under the ovdirection of the Board of Directors. The Board comprises eminent professionals, representatives of TrMembers and the Managing Director of the Exchange. The Board is inclusive and is designed to benefit froparticipation of market intermediaries.

In terms of organization structure, the Board formulates larger policy issues and exercises over-all control

committees constituted by the Board are broad-based. The Managing Director and a management teaprofessionals manage the day-to-day operations of the Exchange.

The Exchange has a nation-wide reach with a presence in 417 cities and towns of India. The systemprocesses of the Exchange are designed to safeguard market integrity and enhance transparency in operaDuring the year 2004-2005, the trading volumes on the Exchange showed robust growth.

The Exchange provides an efficient and transparent market for trading in equity, debt instruments and deriva


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The BSE's On Line Trading System (BOLT) is a proprietary system of the Exchange and is BS 7799-2-certified. The surveillance and clearing & settlement functions of the Exchange are ISO 9001:2000 certified.

Vision

"Emerge as the premier Indian stock exchange by establishing global benchmarks"

Board Of Directors

Non-Executive Directors Mr. Jagdish Capoor

Chairman, HDFC Bank

MD & CEO Mr. Rajnikant Patel

Directors

Mr. P. K. Banerji

IAS (Retd.)

Mr.S.Jambunathan

Ex-Chairman-cum-Managing DirectorExport Credit and Gurantee Corporation,

Govt. of India)

Mr. Jitesh Khosla

Joint Secretary, Dept. of CompanyAffairs, Govt. of India

Mr. Jitesh Khosla

Joint Secretary, Dept. of CompanyAffairs, Govt. of India

Prof. N. Ravichandran

Professor, IIM Ahmedabad

Mr. Pradip P. Shah

Chairman, IndAsia Fund AdvisorsPrivate Limited

Mr. P. P. Vora

Ex-Chairman, Industrial Development


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Bank of India and National StockExchange of India Limited

Trading member Representative

Mr. Prakash R. Kacholia

Mr. Balkishan Mohta

Mr. Siddharth J. Shah

Non-Executiverman Non-Executive Chairman

Logo

The Stock Exchange, Mumbai, is now Bombay Stock Exchange Limited. The Exchange has a newname, and an entirely new perspective. A perspective born out of corporatisation and demutualisation.

Bombay Stock Exchange Limited is Asias oldest stock exchange. It carries within itself the depth ofknowledge of capital markets acquired since its inception in 1875. Located in Mumbai, the financiacapital of India, it has been the backbone of the countrys capital markets.

As a corporate entity, our new identity reflects our new perspective. Smoother, seamless, and efficient.Whichever way you look at it.

The National Stock Exchange (NSE)

About Us

The National Stock Exchange (NSE) is India's leading stock exchange covering various cities andtowns across the country. NSE was set up by leading institutions to provide a modern, fully automated
http://www.nseindia.com/content/equities/eq_vsats.htmhttp://www.nseindia.com/content/equities/eq_vsats.htmhttp://www.nseindia.com/content/equities/eq_vsats.htmhttp://www.nseindia.com/content/equities/eq_vsats.htm


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screen-based trading system with national reach. The Exchange has brought about unparalleledtransparency, speed & efficiency, safety and market integrity. It has set up facilities that serve as amodel for the securities industry in terms of systems, practices and procedures.

NSE has played a catalytic role in reforming the Indian securities market in terms of microstructuremarket practices and trading volumes. The market today uses state-of-art information technology to

provide an efficient and transparent trading, clearing and settlement mechanism, and has witnessedseveral innovations in products & services viz. demutualisation of stock exchange governance, screenbased trading, compression of settlement cycles, dematerialization and electronic transfer of securitiessecurities lending and borrowing, professionalisation of trading members, fine-tuned risk managementsystems, emergence of clearing corporations to assume counter party risks, market of debt andderivative instruments and intensive use of information technology

The Organisation

The National Stock Exchange of India Limited has genesis in the report of the High Powered StudyGroup 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 anequal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions atthe behest of the Government of India and was incorporated in November 1992 as a tax-payingcompany unlike other stock exchanges in the country.

On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. TheCapital Market (Equities) segment commenced operations in November 1994 and operations inDerivatives segment commenced in June 2000.

Our Mission

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

establishing a nation-wide trading facility for equities, debt instruments and hybrids,

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 has become industrybenchmarks and are being emulated by other market participants. NSE is more than a mere marketfacilitator. It's that force which is guiding the industry towards new horizons and greater opportunities.

Corporate Structure


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NSE is one of the first de-modularized stock exchanges in the country, where the ownership andmanagement of the Exchange is completely divorced from the right to trade on it. Though the impetusfor its establishment came from policy makers in the country, it has been set up as a public limitedcompany, owned by the leading institutional investors in the country

From day one, NSE has adopted the form of a demutualised exchange - the ownership, management

and trading is in the hands of three different sets of people. NSE is owned by a set ofleading financiainstitutions, banks, insurance companies and other financial intermediaries and is managed byprofessionals, who do not directly or indirectly trade on the Exchange. This has completely eliminatedany conflict of interest and helped NSE in aggressively pursuing policies and practices within a publicinterest framework

The NSE model however, does not preclude, but in fact accommodates involvement, support andcontribution of trading members in a variety of ways. Its Board comprises of senior executives frompromoter institutions, eminent professionals in the fields of law, economics, accountancy, financetaxation, etc, public representatives, nominees of SEBI and one full time executive of the Exchange

While the Board deals with broad policy issues, decisions relating to market operations are delegatedby the Board to various committeesconstituted by it. Such committees includes representatives fromtrading members, professionals, the public and the management. The day-to-day management of theExchange is delegated to the Managing Director who is supported by a team of professional staff.

Board of Directors

1 Mr. S. B. Mathur Administrator of the Specified Undertaking ofUnit Trust of India

Chairman

2 Mr. Ravi NarainNational Stock Exchange of India Ltd. Managing Director

3 Ms. Chitra RamkrishnaNational Stock Exchange of India Ltd.

Deputy Managing Director

4 Mr. S. P. ChhajedPartnerM/s. Chhajed & DoshiChartered Accountants

Director

5 Mr. R. P. Chitale

Managing PartnerM/s. M.P.Chitale & Co.Chartered Accountants

Director

6 Mr. Indrajit GuptaManaging Director & CEOSBI Capital Markets Ltd.

Director

7 Mr. S. H. Khan Director
http://www.nseindia.com/content/us/us_promoters.htmhttp://www.nseindia.com/content/us/us_promoters.htmhttp://www.nseindia.com/content/us/us_board.htmhttp://www.nseindia.com/content/us/us_committees.htmhttp://www.nseindia.com/content/us/us_committees.htmhttp://www.nseindia.com/content/us/us_promoters.htmhttp://www.nseindia.com/content/us/us_promoters.htmhttp://www.nseindia.com/content/us/us_board.htmhttp://www.nseindia.com/content/us/us_committees.htm


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ChairmanFeedback First Urban InfrastructureDevelopment Comp. Ltd.

8 Mr. A. P. KurianChairman

Association of Mutual Funds in India

Director

9 Mr. Anand G. MahindraVice Chairman & Managing DirectorMahindra & Mahindra Ltd.

Director

10 Mr. Y. H. MalegamChairman Emeritus,M/s. S.B. Billimoria & Co.Chartered Accountants

Director

11 Prof. (Dr.) K.R.S.MurthyProfessor and Former DirectorIndian Institute of Management, Bangalore

Director

12 Ms. Vishakha MulyeChief Financial Officer & Treasurer,ICICI Bank Limited

Director

13 Mr. Ravi ParthasarathyChairman & Managing DirectorInfrastructure Leasing & Financial Services Ltd.

Director

14 Dr. R. H. PatilChairmanThe Clearing Corporation of India Ltd.

Director

15 Mr. Justice M.L. Pendse (Retd.)Former Chief Justice of Karnataka High Courtand Judge of Bombay High Court

Director

16 Mr. M. RaghavendraEx-General ManagerGeneral Insurance Corporation of India

Director

17 Mr. A.K.ShuklaChariman

Life Insurance Corporation of India

Director

18 Mr. S. VenkiteswaranSr. Advocate

Director

Promoters


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NSE has been promoted by leading financial institutions, banks, insurance companies and otherfinancial intermediaries:

Industrial Development Bank of India Limited

Industrial Finance Corporation of India Limited


State Bank of India ICICI Bank Limited

IL & FS Trust Company Limited

Stock Holding Corporation of India Limited

SBI Capital Markets Limited

The Administrator of the Specified Undertaking of Unit Trust of India

Bank of Baroda

Canara Bank

General Insurance Corporation of India

National Insurance Company Limited

The New India Assurance Company Limited

The Oriental Insurance Company Limited United India Insurance Company Limited

Punjab National Bank

Oriental Bank of Commerce

Corporation Bank

Indian Bank

Union Bank of India

Our Logo

The logo of the NSE symbolizes a single nationwide securities trading facility ensuring equal and fairaccess to investors, trading members and issuers all over the country. The initials of the Exchange viz.,N, S and E have been etched on the logo and are distinctly visible. The logo symbolizes use of state ofthe art information technology and satellite connectivity to bring about the change within the securitiesindustry. The logo symbolizes vibrancy and unleashing of creative energy to constantly bring aboutchange through innovation.

Careers with Us

The National Stock Exchange of India Ltd. is the largest stock exchange of the country. NSE is settingthe agenda for change in the securities markets in India. The last 5 years have seen us play a major rolein bringing investors from 363 cities and towns online, ensuring complete transparency, introducingfinancial guarantee of settlements, ensuring scientifically designed and professionally managed indicesand by nurturing the dematerialization effort across the country


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NSE is a complete capital market prime mover. Its wholly-owned subsidiaries, National SecuritiesClearing Corporation Ltd. (NSCCL) provides clearing and settlement of securities, India IndexServices and Products Ltd. (IISL) provides indices and index services with a consulting and licensingagreement with Standard & Poor's (S&P), and NSE.IT Ltd. forms the technology strength that NSEworks on

Today, we are one of the largest exchanges in the world and still forging ahead. At NSE, we areconstantly working towards creating a more transparent, vibrant & innovative capital market. Thisinvariably implies that our need for competent people is continuous. As the leading stock exchange andfiscal entity in the country, we believe in recruiting the finest of talent in the industry

Calcutta Stock Exchange(CSE)

The inception ofCalcutta Stock Exchange emerges from a get together under a "Neem Tree" wayback in the 1830s, and from then the Calcutta Stock broking fraternity has come a long way. Thoughthe once famous shelter for Calcutta Stock brokers no longer exists, the roots laid in the last centuryhave dug themselves deep into the city and the region. The North-Eastern region, today plays a crucialrole in the countrys capital market, while the Calcutta Stock Exchange has emerged as the secondlargest bourse in the country. The investors from the Eastern Zone are also at the forefront today.

The origin of stock broking in India goes back to a time, when shares, debentures and bondsrepresenting titles to property were first issued on the condition of transfer from one person to anotherThe earliest record of dealings in securities in India is the East India Companys loan securities.

The building at 7, Lyons Range, Calcutta which was constructed in 1928 and has been the office of theStock Exchange for the last 70 years.

At the time of incorporation in 1908, the Stock Exchange had 150 members. Today the totalmembership has risen to more than 900, which contains several corporate and institutional members.The number of companies listed on the Exchange is more than 3,500. The Annual turnover of theExchange in 1997-98 was to the tune of Rs, 1,78,779 crores. The Calcutta Stock Exchange has beengranted permanent recognition by the Central Government with effect from April 14, 1980 under therelevant provisions of the Securities Contracts (Regulation) Act, 1956, with a view to render usefulservice to investors.

Genesis and Growth of the Calcutta Stock Exchange

From a get together under a "Neem Tree" way back in the 1830s, the Calcutta Stock broking fraternityhas come a long way. Though the once famous shelter for Calcutta Stock brokers no longer exists, theroots laid in the last century have dug themselves deep into the city and the region. The North-Easternregion, today plays a crucial role in the countrys capital market, while the Calcutta Stock Exchange


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has emerged as the second largest bourse in the country. The investors from the Eastern Zone are alsoat the forefront today.

The origin of stock broking in India goes back to a time, when shares, debentures and bondsrepresenting titles to property were first issued on the condition of transfer from one person to anotherThe earliest record of dealings in securities in India is the East India Companys loan securities.

By 1830 there was a perceptible increase in the volume of business in Calcutta and we find in theEnglishman of 1836, the then widely circulated newspaper from Calcutta quotations of 4%, 5% and6% loans of the East India company as well as shares of the Bank of Bengal being quoted at aconsiderable high premium over the par value of Rs. 100/-. Three years later, in 1839, quotations werealso found in newspapers published from Calcutta, of shares of the Union Bank, the Agra Bank andcertain other commercial undertakings like Bengal Bonded Warehouse Docking Company and SteamTug Company.

The advent of the Companies Act 1850 and subsequent introduction of the principle of limited liabilitymade investments in stocks and shares popular.

Though Stock Broking was practiced in Calcutta as early as 1836, the members of the brokingprofession had neither any code of conduct for their guidance, nor any permanent place forcongregation. The center of their activity was near a name tree, where at present, stands the offices ofthe Chartered Bank (now known as Standard Chartered) on Entail Subhas Road, Calcutta. In 1905Chartered Bank began to construct their own building, which led brokers to shift the arena of theiroperation, to the neighborhood of the recent Allahabad Bank.

The brokers had no shelter and business was carried on in the open place. The inconvenience of suchtrading, prompted brokers to organized themselves and in May 1908, an association was formed underthe name and style of the Calcutta Stock Exchange Association at 2, China Bazaar Street.

On June 7, 1923 the Association was registered as a limited liability concern, with an authorizedcapital of Rs. 3 lakes divided into 300 shares of Rs. 1,000/- each. The shares were subdivided into 4shares of Rs. 250/- each in 1959. The Golden Jubilee of the Association was celebrated in 1938. TheDiamond Jubilee in 1968 and The Platinum Jubilee in 1983.

The building at 7, Lyons Range, Calcutta which was constructed in 1928 and has been the office of theStock Exchange for the last 70 years, has become absolutely insufficient for accommodating theenormous increase, not only in the number of members of the Exchange but also the phenomenalgrowth in the volume of business being handled by the members of the Exchange. The authorities ofthe Stock Exchange have already initiated measures for obtaining larger premises, so that the hardshipfaced by members due to acute shortage of space is mitigated. The Stock Exchange has alreadyobtained possession of land at the eastern Metropolitan Bye-Pass, Calcutta for construction of amodern stock exchange complex which will house apart from members offices, the office of capitalmarket intermediaries like clearing house, financial institutions, banks, registrars, etc.

At the time of incorporation in 1908, the Stock Exchange had 150 members. Today the totalmembership has risen to more than 900, which contains several corporate and institutional members.The number of companies listed on the Exchange is more than 3,500. The Annual turnover of the


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Exchange in 1997-98 was to the tune of Rs, 1,78,779 crores. The Calcutta Stock Exchange has beengranted permanent recognition by the Central Government with effect from April 14, 1980 under therelevant provisions of the Securities Contracts (Regulation) Act, 1956, with a view to render usefulservice to investors.

COPORATE BODY

Committee

Public Nominee

SEBI Nominee

Senior Executives

COMMITTEE

The committee of The Calcutta Stock Exchange Association Limited is superseded by SEBI and SrTusher Kanti Das (IAS Retd.) is appointed as an Administrator.

PUBLIC NOMINEE

Shri V.P.Ramachandran, IAS(Retd.)

Shri Biswajit ChoudhuriShri Tallen Kumar, IAS

Shri D.Chakraborty, IRS(Retd.)

Shri Abhirup Sarkar

Shri D.Paul, WBHJS(Retd.)

Shri D.Basu, WBHJS(Retd.)

Shri B.P.Dasgupta, WBHJS(Retd.)

SEBI NomineePresently there is no SEBI Nominee.

SENIOR EXECUTIVE
http://cse-india.com/cse_members/index.htmhttp://cse-india.com/public_repre.htmhttp://cse-india.com/sebi_nominee.htmhttp://cse-india.com/sr_executives.htmhttp://cse-india.com/cse_members/index.htmhttp://cse-india.com/public_repre.htmhttp://cse-india.com/sebi_nominee.htmhttp://cse-india.com/sr_executives.htm


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Introduction of OTCEI

OTCEI was incorporated in 1990 as a Section 25 company under the Companies Act 1956 andis recognized as a stock exchange under Section 4 of the Securities Contracts Regulation Act,1956. The Exchange was set up to aid enterprising promoters in raising finance for newprojects in a cost effective manner and to provide investors with a transparent & efficient modeof trading.

Modeled along the lines of the NASDAQ market of USA, OTCEI introduced many novelconcepts to the Indian capital markets such as screen-based nationwide trading, sponsorship ofcompanies, market making and scrip less trading. As a measure of success of these efforts, the

Exchange today has 115 listings and has assisted in providing capital for enterprises that havegone on to build successful brands for themselves like VIP Advantage, Sonora Tiles & Brilliantmineral water, etc.

Why OTCEI

Intrinsic Benefits

A successful market for technology & growth companies has to :

Demonstrate an understanding for new technology and concepts provide capital formationopportunities for young companies without a track record .be national in order to reach andservice entrepreneurs and investors. enable access to a wide spectrum of financialintermediaries be cost effective for issuers provide an exit route to venture capital & privateequity funds for their investments adopt state of art trading systems and practices in tune withinternational norms be well regulated to promote transparent and fair market practices

OTCEI, by virtue of its unique position, is well suited to service the requirements of these

Sri P. K. Ray Secretary Ph: 2220-6977

Sri G. Bhattacharyya General Manager-Information Technology Ph: 2220-3335

Sri P.Kumar Manager-Account & Administration Ph: 2220-7209

Sri D. Biswas Manager-Securities Ph: 2220-8636

Sri K.Mukhopadhyay Deputy Secretary Ph: 2220-3741

Sri M.A.V Raju Manager-Market Operation Ph: 2210-2219

Sri P. S. Mohapatra Manager-Information Technology Ph: 2210-2207

Sri D. Chakraborty Manager-Market Surveillance & Inspection Ph: 2220-1488


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companies, making it the natural choice for the emerging technology and growth stocks. Infact, consumer favorites like VIP Advantaged, Sonora tiles and Brilliant Mineral Water aremade by high growth companies that have benefited by listing on OTCEI

Promoter of OTCEI

OTC Exchange of India has been co-promoted by the leading financial institutionsof the country:

Unit Trust of India

ICICI

Industrial Development Bank of India

SBI Capital Markets Limited

Industrial Finance Corporation of India


Can bank Financial Services Limited

General Insurance Corporation of India & its subsidiaries

TECHNOLOGY

Securities are traded on OTCEI through the 'OTCEI Automated Securities Integrated

System' (OASIS), a state-of-art screen based trading system. OASIS combines theprinciples of order driven and quote driven markets and enables trading members toaccess a transparent & efficient market directly through a nationwidetelecommunication network.

The first Indian stock exchange to introduce nationwide computerized screen-based trading.

State-of-the-art, STRATUS fault tolerant computer server .

Trading software modeled on TCAM software

Connectivity through combination of satellite (VSAT) & terrestrial (lease

line/dialup) modes.

Excellent infrastructure/software support from CMC/TCS/HCL Com.NET.

Network of Members / Dealers spread over more than 50 cities


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BORAD OF DIRACTOR

NameDesignation

Shri S.C.Bhargava(UTI Nominee [Former ED,LIC chairman

Shri A V RammurtyIndustrial Development Bank of India

Limited.

Director

Shri D.G. Chaudhury.( Industrial Finance Corporation

of India Ltd.)

Director

Shri M.Raghvendra.(General Manager[Investments] General

Insurance Corporation of India.)

Director

Shri S B Mainak Director

Smt.Renu Challu Director

(SBI Capital Markets Limited) Director

Shri V. A Vijayan Menon. (SND)(Registrar of Companies, Office of theRegistrar of Companies Maharashtra

Director

Shri Girish Dave. (PRD)(Advocate)

Director

Shri P B Nimbalkar. (PRD)(Former Chairman-SIDBI)

Director

Shri Viraf Rustom Mehta. (PRD)(Chartered Accountant in Public Practice)

Director

Prof Pushpa Trivedi. (PRD)(Prof of Economics,IIT)

Director

Shri A Manickavelu Officiating ManagingDirector

Director

Shri A Manickavelu (Officiating ManagingDirector)

Director

Pune Stock Exchange Ltd


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Pune Stock Exchange Ltd. is a company limited by guarantee. The Exchange was established on 2ndSept. 1982 to cater to the needs of the growing investor community in the city.

Starting small, with 35 members and a few lac rupees business initially, the exchange has growntremendously to over 185 members and about 15-20 corers of business daily. Much of the work iscomputerized with a smooth settlement system. Over 310 companies are listed with the Stock

Exchange.

The Exchange, while providing an efficient market also upholds investors interests and ensuresredressed of their grievances. Pune Stock Exchange opted for the on-line screen based trading in 1995.The Exchange has been successfully using a screen based Trading System, based on VECTOR(Versatile Engine for Centralized Trading and On-line Reporting) and developed and implemented byCMC Ltd,for more than three years now. The present operations cover 183 broker members and 9workstations for administration, Market Operations and Surveillance activities of PSE.

Pune Stock Exchange has been looking into the possibilities of widening its activities to different partsof Pune city and to other cities like Satara, Sangli, Solapur, Kolhapur, Ahmednagar, Aurangabad,

Nashik and Mumbai.

PSE ranks 7th in the country & here are the Highlights for this year:

The income of the Stock Exchange from Listing Fees, Interest and Dividend decreased marginally,compared to last year due to the overall drop in the interest rates of the Bank deposits and bonds. Wecould achieve a target whereby we have invested almost 90 to 95% of our invisible amount in the long-term form. Efforts are being made to prepare the quarterly financial results of the Exchange from thecoming year.

The Exchange took several steps to reduce the expenditure wherever it was possible, by implementing

the proverb of "A penny saved is a penny earned". During the year under review, we arrived at arevised salary agreement with our staff union where we have agreed to give a 25% rise while seeking acommitment for 3 years. A new Panel of Auditors has been formed for a period of three years. It willcarry out quarterly inspection of accounts books of members / brokers. Our Stock Exchange hasundertaken a time bound programmed to get ourselves prepared to face 'Y2K' problems of computers.

The Exchange had planned to organize various Training Programmers for the investors,

The Exchange recorded a turnover of Rs. 4,824.06 corers this year as compared to the last year'sturnover of Rs. 8,624.47 corers. The Exchange Completed all the 51 settlements exactly as per thesettlement calendar. The Exchange has received an in-principle approval from SEBI for the Trade

Guarantee Fund. The initial corpus of the fund is about Rs. 4.80 crores.The Exchange has shifted theadministrative office to Shivleela Chambers, Sadashiv Peth, Kumthekar Marg, Pune.

Board Of Directors

Mr.S.L.Joshi - Public Representative

(Chairman of the Board) Mr. S.M.Suratwala - Public Representative


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Mr. Hari Athavale - Public Representative

Mr. Mahendra Singhvi - Public Representative

Mr. Rajiv Joshi - Public Representative

Mr. Ashok Oswal - Elected Director

Mr. Surendra Bedmutha - Elected Director

Mr. Pramod Shah - Elected Director

Mr. Manish Rangari - Whole time Director and PSE Nominee

THE UP STOCK EXCHANGE ASSN. LTD

BRIEF HISTORY


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The U.P.Stock Exchange Association Ltd., Kanpur occupies a veryprominent place among the existing Stock Exchanges in India. TheExchange was inaugurated on 27th August, 1982 by the then FinanceMinister Shri Pranab Mukherjee. Right from its inception it has beenplaying a very prominent role in the development of capital market of

Northern India.UPSE is the only Stock Exchange in whole of Uttar Pradeshand the membership of this Stock Exchange is not restricted to theterritories of Uttar Pradesh only. Initially it had 350 members which wasnow increased to 540 members belonging to almost all important cities ofthe country. Members living outside Kanpur has contributed a lot bycreating the equity cult in whole of the Uttar Pradesh. Not only this themembers are highly qualified and professional and devoted to the cause ofcapital formation in the country.

Founder: Dr

G.H.Singhania

The Exchange was initially started in the rentedbuilding but with the efforts of our members, a

new complex was constructed and wasinaugurated by His Excellency Shri RVenkataraman the then President of India on 8thFebruary, 1989.

At present we have 843 companies listed with thetotal capitalization of Rs.81184 Crores. Theannual turnover of this Exchange for the last threeyears are : 1998-99 : 18429 Crores, 1999-2000 23876 Crores and 2000-01 : 25112 Crores. Thusevery year we have increased our turnove

creating more and more awareness among thepeople of Northern India.


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This Stock Exchange is wedded to the investors protection and investors education as we havefirm conviction that any investor protection cannot be achieved without proper awareness andeducation of investors. Thus the Exchange has a very active investor service Cell and also a veryequipped Research and Development Wing is functioning. We have also a very effective systemof readdressing the investors complaints.

The Exchange has one of the best developed Exchanges of the country so far its infrastructure isconcerned. The Ex-Finance Minister Dr. Manmohan Singh, Ex-Commerce Minister Shri PranabMukherjee, other Central Ministers and Chief Ministers Uttar Pradesh have visited thisExchange and appreciated its efforts in maintaining the transparency and the integrity of themarket. To keep pace of changing technology the Exchange has embarked upon the Project ofScreen Based Trading. The On-line Trading based on VECTOR Software supplied by CMC hascommenced on UPSE from 11th November 1997.

To increase the further business and to facilitate the On-line trading facility to about 22 membersat Lucknow an additional trading floor has been established at Lucknow. At present at theAdditional Trading Floor at Lucknow 22 Lucknow based members have been allotted Computer

Terminals which have been connected with UPSE main Server via VSAT.

As per recent decision of SEBI for the revival of the smaller Stock Exchanges in the country,they can obtain the membership of big Stock Exchanges like, BSE, NSE, CSE etc. throughforming a subsidiary company of the Exchange and in turn the members of the Exchange cantrade through the said subsidiary as sub-broker(s). Accordingly we have incorporated a whollyowned subsidiary namely UPSE Securities Ltd. and obtained the membership of BSE to enablethe members of UPSE on BOLT.

BOARDS OF DIRECTIOR

ADMINISTRATOR

MR. MAHENDRA NATH SABHARWAL, I.P.S.

APPOINTED BY SEBI VIDE ITS ORDER DATED

UNDER SECTION 11 OF SCRA.

EXECUTIVE DIRECTOR MR. K. C. PANDEY (Suspended w.e.f.26.08.2005

GENERAL MANAGER (OFFTG)MR. B.P. GUPTA


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Coimbatore Stock exchage

Coimbatore Stock Exchange Limited (CSX) is housed in its own building at Trichy Road, Coimbatorewith about 2 lakh sq.ft. of built up area. A landmark in Coimbatore. An imposing work of art and aremarkable structure with an aesthetic look. Totally its a distinguished building.

Its trading hall consists of 19000 sq.ft area. The Exchange has successfully implemented Screen BasedTrading (SBT) system and commenced its operations with effect from 9th October, 1996. The systemis capable of handling 25,000 trades per day. All the members of the Exchange are connected in aLocal Area Network (LAN). The system can be expanded to handle upto 400 members. The SBTsystem has been interfaced with the existing settlement system. The margins are monitored online onthe SBT system. Each member is given a computer terminal, telephone connections which areaccommodated in a cubicle. The communication facilities include the terminalsof Reuters and KnightRidder constantly updating economic and capital market related news.

Management Council:

Shri G Kannappan, PresidentShri V Arunachalam, Vice-President

Dr. K Sabapathy, Treasurer

Shri D Balasundaram, Member

Shri K G Lakshmipathi, Member

Shri K Annamalai, Member

Shri P Sri Sai Ram, Enquiry & Adjudicating Officer, SEBI. SEBI Representative

Shri V Selvaraj, Registrar of Companies,Tamilnadu. SEBI Representative

Shri Rajendra Kumar I.A.S, Commisioner, Coimbatore Corporation., SEBI Representative

Justice (Retd.) Sengottuvelan, Public Representative

Dr. S Subramaniam, Public Representative

Shri M J Vijayaraghavan, Public RepresentativeShri V Devaraju, Executive Director


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Analysis and Interpertation

Procedure of Listingo The company is required to submit its memorandum & articles of Association and DraftProspectus to the exchange for its perusal along with a initial listing application and D.D. of Rs.10,000/- towards initial listing fees.

o The Draft prospectus is vetted by the Exchange. Suggestions thereon are informed to the

company and it is ensured that these suggestions are incorporated in the Prospectus as well asMemorandum & Articles of Association.

o The company has to ensure that free quota of stationery like Prospectus & Application Forms

are reached to the members before 21 days of the opening of the issue.

o The company is require to keep 1% deposit of total amount of the public issue with PSE before

opening of the issue.

o The company is to release an advertisement on opening date of the issue in a local as well as in

a nationwide published newspaper.

o The certificate of Auditors in respect of the promoters contribution which is to be brought in

before opening of the subscription list, is to be furnish to the exchange.

o At PSE, the post issue paid up capital of a company should be minimum of Rs. 3.00 crores outof which minimum 25% should be offered to the public. The company has to appoint MarketMaker if the post issue paid up capital is between Rs. 3 crores to Rs. 5.00 crores. Companieswhich have paid up capital of more than Rs. 50crores will pay additional listing fees Rs. 1900/-for every increase of Rs. 5 Crore or part thereof in the paid up share and / or debenture capital.In case, of annual Listing fee, they will be reduced by 50% for the companies which are non-regional for the Exchange.


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Schedule of Listing Fees

(A) Initial Listing Fees Rs.10,000/-

(B) Annual Listing Fees

1) Companies With paid Up Share or debenture Capital of Rs. 1 Crore Rs. 5,600/-

2) Above Rs. 1 Crore and upto Rs. 5 Crores Rs. 11,200/-




BROKERS

The Exchange has three types of intermediaries called Members, Dealers and Sponsors, whocontribute to the Exchange's activities by trading and enabling listing of companies on theExchange. Members and Dealers may carry out the activities of trading, underwriting, marketmaking and participation in bought out deals, but Dealers cannot sponsor an issue for listing.Sponsors can perform the function of sponsorship of issues, but are not permitted to participatein secondary market activities.

Key Information

Base Minimum Capital deposited with the Exchange

The Base Minimum Capital is taken as security for due performance and fulfillment by themember of his operations and obligations towards the Exchange. The minimum base capital isRs. 4 lakhs. All members have to comply with the Base Minimum Capital requirements beforetheir activation. The members may opt for Base Minimum Capital by way of Cash, FDRs,Bank Guarantee or Securities.

Cash to be deposited with the Exchange- minimum 25 % i.e. Rs. 1 lakh

Deposit of Fixed Deposit Receipts (FDRs)- (25 %) issued by approved banks

Deposit /lodgement of Securities- (maximum 50 %) with approved custodian(HDFC Bank Ltd.) with 20% margin. OR

Irrevocable Bank guarantees (in lieu of securities - maximum 50 %) from approvedbanks.


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Members can also deposit additional base capital with the Exchange. The cashcomponent of the additional base capital to be deposited should be a minimum 30%.

Intra-day Limits :

Turnover Limit : Members are subject to intra-day trading limits. Gross Turnover

(buy+sell) for the day shall not exceed twenty five times (25) the base capital depositedby the members.

Members desirous of increasing their limits will have to submit additional deposits byway of cash, bank guarantees, fixed deposit receipts and securities.

Trading Members violating the intra-day gross turnover limit at any time on any

trading day shall not be permitted to trade forthwith.

Gross Exposure Limit :

Members are subject to gross exposure limits. Gross exposure, being the aggregate ofthe cumulative net outstanding positions (purchase or sales) in each security shall notexceed eight and half times (8.5) the base capital deposited by the members. GrossExposure at any point of time shall also include net outstanding positions of theprevious settlement till the securities pay-in for the previous settlement.

Members desirous of increasing their limits will have to submit additional deposits byway of cash, bank guarantees, fixed deposit receipts and securities.

Margins :

All margins imposed by the Exchange are payable on T+1 day. The Exchange collectsthe following margins from brokers depending on their positions/ exposures and marketvolatility, in line with SEBI requirements:

a) Daily Margin

Daily margin payable by the member consists of value at Risk Margin and Markto Mark Margin.

b) Mark to Market Margin

Mark to market margin is computed on the basis of mark to market loss of amember. Mark to market loss is potential loss, in case the cumulative netoutstanding position of the member in all securities at the end of day is closedout. Mark to Market margin is calculated by marking each transaction in a scripto the closing price of the scrip at the end of trading. MTM Profit/loss acrossdifferent securities within the same settlement is set off to determine the MTM


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loss for a settlement. Such MTM losses for settlements are computed at clientlevel.

c) Value at Risk Margin

Value at Risk Margin is computed for all securities in the rolling settlement. All

securities are classified into three groups for purpose of var margin:

FEE STRUCTER

1. Membership

Admission Fees 24,00,000 * (Inclusive of Permitted &Technology Fees)

Annual Fees 5,000

2. Dealership

Admission Fees 10,00,000 *(Inclusive of Permitted &Technology Fees)

Annual Fees 5,000

Note : Both the above fees for Membership & Dealership and Annual Fee are NonRefundable ,Non Adjustable & Interest Free.

3. Applicable to Members & Dealers

A) Fees payable for Upgradation of Dealer to Member/Change in constitution of entity

10000

B) Base Minimum Capital 400000

C) Fees Payable for Transfer of Membership/Dealership 10000


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+ Processing Charges 2000

ELIGIBILITY CRITERIA

Norms

Entities eligible - Corporate entities only, individuals not entitled forMembership.

Net worth Requirements - Rs. 1 crore comprising of the minimum paid upcapital (Rs 30 lakhs) plus free reserves (excluding revaluation reserves, capitalreserves & specified reserves, and value of membership/dealership/deposit withOTCEI/other stock exchange) less accumulated losses, if any. Minimum fundscommitted for OTC operations should be Rs.1 crore.

Minimum Educational Qualifications -

Corporate- Graduate (applicable to 2 whole time Directors)

Citizenship - Corporate - Company should be incorporated under CompaniesAct,1956

Experience - Minimum of 2 Directors should possess a minimum of 2 yearsexperience in capital market / stock broking / portfolio management / investmentconsultancy

Trading Infrastructure

1. Office space of atleast 200 sq.ft. (own/long term lease of at least 5 years).

2. Two direct telephones.

3. Telex/Fax at the designated OTC counter.

The entity should not be engaged in any fund based activity.

Selection Procedure

Prospective Members to submit an application in prescribed form. Selection willbe at the sole discretion of the Board of OTCEI.

Functions of Members


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Appraisal and evaluation of proposal .Valuation of shares for companiesappraised .Participation in bought-out deals. Offer of shares to the public (leadmanaged by other entities or by itself)

Stock broking activities

Market making

Investor services

Note: Members & Dealers can commence trading only after being registeredwith SEBI as a stockbroker.

Rules for listing of securities

Documents to be attached

(1) Copies of memorandum and articles of association. Prospects or statement in lieu of prospectsDirectors, reports, balance sheets and agreement with underwriter etc.

(2) Specimen copies of shares and debenture certificates, letter of allotment, acceptancerenunciation etc.

(3) Particulars regarding its capital structure(4) A statement showing the distribution of shares.(5) Particulars of dividends and cash bonuses during last ten years.(6) Particulars of shares or debentures for which permission to deal is applied for.(7) A brief history of the company activities since its incorporation.

Advantages of listing an stock exchange.

(1) Detailed information about the company is available .(2) Information increases the activity of purchase and sale of the security of that organization.(3) Continuous dealing raises the value of security.(4) Convenience of sale of security, lending liquidity to the shares.(5) There is safety in dealing.(6) It ensures creditworthiness.(7) Creates a favorable impression on the investor(8) Listing give collateral value in market loans and advances from banks who prefer quoted

securities.(9) Widens the marker of the security.

INVESTER GUIDE LINE(SEBI)

ISSUED BY SECURITIES AND EXCHANGE BOARD OF INDIA


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Dear Investor,

Now that you have become a stakeholder in a listed company, we welcome you to the securitiesmarket. Securities and Exchange Board of India, a statutory body constituted by the Government ofIndia, stands committed to the assigned objective of protecting investors in the securities market.

Ensuring disclosure of full, fair and adequate information has been the hallmark of our regulatoryprinciple. In continuation of our efforts in that direction, we thought it fit and timely to write to youmaking you aware of

the rights that you have as a stakeholder in a company,

the responsibilities that are cast on you,

the risks that you have assumed,

the procedures relating to trading and transfer of the securities and

the remedies for problems that you may encounter.

We hope that this material will give you appropriate guidance, though in brief, whenever you have aquestion in your mind. For detailed guidance, you may approach your broker, the investor servicecentres of the stock exchanges, and of course, the Investor Guidance Division of the Securities andExchange Board of India.

Securities and Exchange Board of India

Risk Revisited

When you invested, you did so with certain expectations about the performance of the company, theprospects of income from and/or the capital growth of the securities that you now hold, the corporatebenefits that may accrue to you etc.

While making that investment decision, you should have, obviously, taken note of and duly evaluatedthe attendant risks that go with such expectations.

You would remember that one such risk is that your expectations on income and/or growth may notmaterialize.

You would also recall that if you are an investor in the debt instruments, you can have recourse against

the company, besides the market, for redeeming them. But, as an equity holder of a company, in orderto realized the value of such investment, you have recourse only to the market.

And you would recollect that the dis-investment may result in capital losses also. Further, you wouldhave also noted that apart from the above mentioned investment risks, you also face the risk of runninginto problems with the trading and transfer of the securities.

Your Rights


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As a shareholder in a company, you enjoy certain rights, which are as follows:

to receive the share certificates, on allotment or transfer as the case may be, in due time.

to receive copies of the abridged Annual Report, the Balance sheet and the P&L A/c and theAuditors Report.

to participate and vote in General Meetings either personally or through proxies.

to receive Dividends in due time once approved in General Meetings.

To receive corporate benefits like rights, bonus etc. once approved.

to apply to Company Law Board(CLB) to call or direct the Annual General Meeting.

to inspect the minute books of the General Meetings and to receive copies thereof.

to proceed against the company by way of civil or criminal proceedings.

to apply for the winding-up of the Company.

to receive the residual proceeds

Besides the above rights which you enjoy as an individual shareholder, you also enjoy the

following rights as a group

to requisition an Extra-ordinary General Meeting.

to demand a poll on any resolution.

to apply to CLB to investigate the affairs of the company.

to apply to CLB for relief in cases of oppression and/or mismanagement.

As a debenture-holder, you have the right

to receive interest/ redemption in due time.

to receive a copy of the trust deed on request.

to apply for winding up of the company if the company fails to pay its debt.

to approach the Debenture trustee with your grievance.

You may note that the above mentioned rights may not necessarily be absolute. For example, the rightto transfer securities is subject to the companys right to refuse transfer as per statutory provisions.

Your Responsibilities


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While you may be happy to note that you have so many rights as a stakeholder in the company, thatshould not lead you to complacency ; because you have also certain responsibilities to discharge. To bespecific,

to remain informed

to be vigilant

to participate and vote in general meetings.

to exercise your rights on your own or as a group

Trading of securities

You have the right to sell the securities that you hold at a price and time that you may choose. You cando so personally with another person or through a recognized stock exchange. Similarly you have theright to buy securities from anyone or through a recognized stock exchange at a mutually acceptableprice and time.

Whether it is a sale or purchase of securities, effected directly by you or through an exchange, alltrades should be executed by a valid, duly completed and stamped transfer deed.

Transfer of securities

Transfer of securities mean that the company has recorded in its books, a change in the title ofownership of the securities effected either privately or through an exchange transaction.

To effect a transfer, the securities should be sent to the company along with a valid, duly executed andstamped transfer deed duly signed by or on behalf of the transferor (seller) and transferee (buyer). It

would be a good idea to retain photo-copies of the securities and the transfer deed when they are sentto the company for transfer. It is essential that you send them by registered post with acknowledgementdue and watch out for the receipt of the acknowledgement card. If you do not receive the confirmationof receipt within a reasonable period, you should immediately approach the postal authorities forconfirmation.

Depository and dematerialization

Shares are traditionally held in physical or paper form. This method has its own inherent weaknesseslike loss/theft of certificates, forged/fake certificates, cumbersome and time consuming procedure fortransfer of shares etc. Therefore, to eliminate these weaknesses, a new system called Depository

System has been established.

A depository is a system which holds your shares in the form of electronic accounts in the same way abank holds your money in a savings account.

Depository System provides the following advantages to an investor.

Your shares cannot be lost or stolen or mutilated.


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You never need to doubt the genuineness of your shares i.e., whether they are forged or fake.

Share transactions like transfer, transmission etc. can be effected immediately.

Transaction costs are usually lower than on the physical segment.

There is no risk of bad delivery.

Bonus /Rights shares allotted to you will be immediately credited to your account.

You will receive the statement of accounts of your transactions/ holdings periodically.

Grievance Redressed

There will be occasions when you have a grievance against the company in which you are a stake-holder. It may be that you have not received the share certificates on Allotment or on transfer; itmay be that you did not receive the dividend/interest warrant or refund order; perhaps you did not

receive the Annual accounts etc. while you would first approach the company in that regard, youmay not be satisfied with the companys response there to. You would like to know whom youshould turn to get your grievance redressed. The following table would provide you the guidancein this regard.

Nature of grievance Can be taken up with

In case of any Public Issue, non-receipt of Refund order

Interest on delayed refund.

Allotment advice

Share certificates

Duplicates for all of the above

Re-validations.

- SEBI- Dept. Of Company Affairs- Dept. Of Company Affairs- Stock Exchange- Registrars to the issue- Registrars to the issue

In case of a listed security, non-receipt ofthe certificates after:

transfer

transmission

conversion

endorsement consolidation

splitting

duplicates of securities

- SEBI- SEBI- SEBI- Dept. of Company Affairs- Stock Exchange- Stock Exchange- Stock Exchange

Regarding listed Debentures, non-receiptof


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interest due

redemption proceeds

interest on delayed payment

- SEBI- Dept. of Company Affairs- The Debenture Trustees- Stock Exchange

Regarding bad delivery of shares Bad delivery cell of the stockexchange.

Regarding shares or debentures in unlistedcompanies

Dept. of Company Affairs

Deposits in collective investment schemeslike plantations etc.

SEBI

Units of Mutual Funds SEBI

Fixed Deposits in Banks and Finance

Companies

Reserve Bank OF India

Fixed Deposits in manufacturingcompanies

Dept. of Company Affairs

Investor Information Centers have been set up in every recognized stock exchange which in addition tothe complaints to the securities traded/listed with them, will take up all other complaints regarding thetrades effected in the exchange and the relevant member of the exchange. Moreover two other avenuesare always available to the investors to seek redressed of their complaints which are through

Complaints with Consumers Disputes Redressal Forums Suits in the Court of Law.

Offices of SEBI

SEBI Offices JurisdictionFor the companies having their Registered

Offices in

Head Office :Mittal Court, B Wing, 1st Floor,224 Nariman Point, MUMBAI - 400021

Northern Regional office:

Block No.1, Rajendra Bhawan,Rajendra Place, Dist. Centre,NEW DELHI-110 008

Gujarat, Maharashtra, Madhya Pradesh, Goa,Daman Diu, Dadra and Nagar Haveli.

Haryana, Himachal Pradesh, Jammu andKasmir, Punjab, Rajasthan, Uttar Pradesh,Delhi and Chandigarh.


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Eastern Regional Office:

FMC Fortuna, 5th Floor, 234/3AAJC Bose Road, CALCUTTA- 700020

Southern Regional Office:

3rd Floor, DMonte Bldg. No.32,DMonte Colony, TTK Road,Alwarpet, CHENNAI-600 018

Assam, Bihar, Manipur, Meghalaya,Nagaland, Orissa, West Bengal, Sikkim,Arunachal Pradesh, Mizoram, Tripura,

Andaman and Nicobar Islands

Andhra Pradesh, Karnataka, Kerala,Tamilnadu, Pondicherry, Lakshadweep andMinicoy

KEY TERMS

Arbitration :

Settlement of claims differences or disputes between one member and another and between a memberand his clients, authorised clerks, sub-brokers, etc., through appointed arbitrators. It is a quasi-judicialprocess that is faster and is an inexpensive way of resolving a dispute. The Exchange facilitates theprocess of arbitration between the members and their clients. The disputes between the parties areresolved through an arbitration in accordance with the bye-laws of the exchange.

Auction :

An auction is a mechanism utilized by the Exchange to fulfill its obligation to a counter party memberwhen a member fails to deliver good securities or make the payment. Through auction, the Exchangearranges to buy good securities and deliver them to the buying broker or arranges to realize the cashand pay it to the selling broker.

Bad delivery cell :

When a delivery of shares turns out to be bad because of company objection etc., the investor canapproach the bad delivery cell of the stock exchange through his broker for correction or replacementwith good delivery.

Bid and offer :

Bid is the price of a share a prospective buyer is prepared to pay for a particular scrip. Offer is the priceat which a share is offered for sale.

Brokerage :


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Brokerage is the commission charged by the broker for purchase/sale transaction through him. Themaximum brokerage chargeable, as stipulated by SEBI, is at present 2.5% of the trade value.

Carry forward trading :

Carry forward trading has evolved in response to local needs in India and it refers to the trading in

which the settlement is postponed to the next account period on payment of continuo charges (knownas vyaj badla) in which the buyer pays interest on borrowed funds or the backwardation charges(known as undha badla) in which the short seller pays a charge for borrowing securities.

Circuit breakers :

It is a mechanism by which Exchanges temporarily suspend the trading in a security when its prices arevolatile and tend to breach the price band.

Clearing :

Clearing refers to the process by which all transactions between members is settled throughmultilateral netting.

Company objection :

An investor sends the certificate along with the transfer deed to the company for transfer. In certaincases the registration is rejected because of signature difference, or if the shares are fake, forged orstolen etc;. In such cases the company returns the shares along with a letter which is termed as acompany objection.

Cum-bonus :

The share is described as cum-bonus when a purchaser is entitled to receive the current bonus.

Cum-rights :

The share is described as cum-rights when a purchaser is entitled to receive the current rights.

Day order :

A day order, as the name suggests, is an order which is valid for the day on which it is entered. If theorder is not matched during the day, at the end of the trading day the order gets cancelledautomatically.

Dematerialisation:

Dematerialisation is the process by which shares in the physical/paper form are cancelled and credit inthe form of electronic balances are maintained on highly secure systems at the depository.


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Ex-bonus :

The share is described as ex-bonus when a purchaser is not entitled to receive the current bonus, theright to which remains with the seller.

Ex-rights :

The share is described as ex-rights when a purchaser is not entitled to receive the current rights, theright of which remains with the seller.

Forward trading :

Forward trading refers to trading where contracts traded today are settled at some future date at pricesdecided today.

Good-bad delivery :

A share certificate together with its transfer form which meet all the requirements of title transfer fromseller to buyer is called good delivery in the market.

Delivery of a share certificate, together with a deed of transfer, which does not meet requirements oftitle transfer from seller to buyer is called a bad delivery in the market.

Insider trading :

Trading in a Companys shares by a connected person having non-public, price sensitive information,such as expansion plans, financial results, takeover bids, etc., by virtue of his association with thatCompany, is called insider trading. Jumbo certificate : A jumbo share certificate is a single composite

share certificate formed by consolidating/aggregating a large number of market lots.

Market lot :

Market lot is the minimum number of shares of a particular security that must be transacted on theExchange. Multiples of the market lot may also be transacted.

No-delivery period :

Whenever a book closure or record date is announced by a company, the Exchange sets a no-deliveryperiod for that security. During this period, trading is permitted in that security. However, these trades

are settled only after the no-delivery period is over. This is done to ensure that investors entitlementfor corporate benefits is clearly determined.

Odd lot :

A number of shares that are less than the market lot are known as odd lots. Under the scrip baseddelivery system, these shares are normally traded at a discount to the prevailing price for themarketable lot.


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Order driven trading :

It is a trading initiated by buy/sell orders from investors/brokers.

Over the counter trading :

Trading in those stocks which are not listed on a stock exchange.

Pay-in :

Pay-in day is the designated day on which the securities or funds are paid in by the members to theclearing house of the Exchange.

Pay-out :

Pay-out is the designated day on which securities and funds are paid out to the members by theclearing house of the Exchange.

Price band :

The daily/weekly price limits within which price of a security is allowed to rise or fall.

Price rigging :

When a person or person acting in concert with each other collude to artificially increase or decreasethe prices of a security, that process is called price rigging.

Quote driven trading :

Trading where brokers/market makers give buy/sell quote for a scrip simultaneously.

Record date :

Record date is the date on which the beneficial ownership of an investor is entered into the register ofmembers. Such a member is entitled to get all the corporate benefits.

Rematerialisation of shares :

It is the process through which shares held in electronic form in a depository are converted intophysical form.

Screen based trading :

When buying/selling of securities is done using computers and matching of trades is done by a stockexchange computer.


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Settlement :

It refers to the scrip-wise netting of trades by a broker after the trading period is over.

Settlement guarantee :

Settlement guarantee is the guarantee provided by the clearing corporation for settlement of all tradeseven if a party defaults to deliver securities or pay cash.

Splitting/Consolidation :

The process of splitting shares that have a high face value into shares of a lower face value is known assplitting. The reverse process of combining shares that have a low face value into one share of highervalue is known as consolidation.

Spot trading :

Trading by delivery of shares and payment for the same on the date of purchase or on the next day.

Stop transfer :

The instruction given by a registered holder of shares to the company to stop the transfer of shares as aresult of theft, loss etc,.

Trade guarantee :

Trade guarantee is the guarantee provided by the clearing corporation for all trades that are executedon the Exchange. In contrast the settlement guarantee guarantees the settlement of trade after

multilateral netting.

Trading for delivery :

Trading conducted with an intention to deliver shares as opposed to a position that is squared offwithin the settlement.

Transfer deed :

A transfer deed is a form that is used for effecting transfer of shares or debentures and is valid for aspecified per