vimya.doc

7/27/2019 vimya.doc

1/57

THE ROLE OF BACK OFFICE FUNCTIONS IN STOCK

EXCHANGE WITH RESPECT TO SUGAL & DAMANI SHARE

BROKERS LTD.,

INTRODUCTION OF STOCK EXCHANGE:

In India, stock exchanges were almost self regulatory till 1988, supervised by Ministry of

Finance under the Securities Contracts Regulation Act (SCRA). However, the stock

exchanges were not discharging their self-regulatory role as well .As a result of which

malpractices crept into trading, adversely affecting investors interests. SEBI has been

setup to ensure that the stock exchanges discharge their self-regulatory role properly.

Ever since SEBI began to monitor brokers, stock broking is emerging as a professional

advisory service, in tune with the requirements of a mature, sophisticated, screen based,

ring-less, automated stock exchanges in the country in sharp

Contrast to traditional, closed character as inherited family business. So we will discuss,

the Indian Stock Broking system here. The stock broking activity consists of various

intermediaries.

1.1 INTRODUCTION OF BACK OFFICE FUNCTION:

The Back office function acts as a back bone of any share broking firm as the work which

the personnel in back office has to perform is very crucial and important for the client as

well as the firm. Any mistake from the personnel might become a liability for the firm,

for e.g. if there is short delivery or pay in of clients share then for those shares auction

takes place for which they have to pay the price for the same. Hence the back office

function calls for the full concentration level of the personnel while doing his or her

work. If the back office section detects any error it should draw the attention of the higher

authority for the corrective action. Basically the back office function includes

responsibilities like transaction processing, settlement and other administration functions.

7/27/2019 vimya.doc

2/57

WHAT IS STOCK BROKING?

The process of investing in the share market, either individually or through a broker is

known as stock broking, in simple terms. This is primarily done by opening a Demat

account. If done through a broker, he opens an account, helping you to operate through

online stock broking facility. Going ahead the broker suggests investment ideas and

strategies suiting individual requirements and based on his objective of investment.

Tenure of investment, the selected financial instruments and their respective companies,

the schemes, the risk taking ability, the sum available for investment, all are considered

while forming investment choices. After the amount is invested, the broker tracks and

monitors the investments, changes or reinvests depending on the performance and

generates reports for them. This entire process is known as stock broking.

Working of stock exchange:

7/27/2019 vimya.doc

3/57

Stock Brokers

Stock broker or a Trading Member is a member of a recognized stock exchange who is an

intermediary between the investors and the secondary market. To become a stockbroker,

registration with SEBI is mandatory. SEBI is empowered to impose terms and conditions

while granting the certificate.

The amount of your initial deposit varies from broker to broker. Some brokers have a

minimum of Rs.10,000; others let you open an account for as little as Rs. 500.

7/27/2019 vimya.doc

4/57

1.2 Objectives

To understand the investors capacity to invest

To create awareness among the public about the secondary market

Various ways and means by which efficiency in back offices can be improved

Importance of back office functions

SEBI regulations related to stock broking activity.

1.3 Scope of the study:

Stock Brokers are the professionals who are involved in buying and selling of

securities for individual investors or institutional investors in stock markets. As

there is ample scope in this field, individuals can hope for a better future.

Today's progressive brokers deal in billions rather than in millions. Brokers now

have all their operations computerized and employ qualified industry specialists to

advice on buying and selling of stocks.

Stock markets in India have gone through tremendous improvements in recent

time with the introduction of various norms. These norms are for greater

transparency in operations and the international trading and investment process.

Indian stock exchanges, today, are dealing with multifarious company's share

which attracts large number of investors in the secondary market. The capital

market is undergoing drastic transformation.

The National Stock Exchange or NSE provides nationwide facilities with access

to investors through their intermediaries, all over the country. The automated,

screen-based trading system using state-of-the-art technology makes marketoperations transparent.

The Securities and Exchange Board of India (SEBI) has been empowered by an

Act of Parliament to protect the rights of investors and ensure the promotion and

7/27/2019 vimya.doc

5/57

regulation of the capital markets. It is the regulatory body in charge of the

country's capital markets.

1.4 NEED FOR THE STUDY:

Stock Market is fast-paced and ever changing, Stock brokers need to be competitive

in the market to attract large number of clientele.

Stockbrokers doing trading (buying & selling) of different company's stock on behalf

of the investors and also advice the investors about the market trend.

Stockbrokers work with different kind of investors and they need to know the mind

set of the investors taking in to account of the economic trend in the world market andin Indian markets.

Stockbrokers should have a strong investment portfolio of their own so that clients

will have a trust on the company performance.

7/27/2019 vimya.doc

6/57

SUGAL & DAMANI SHARE BROKERS LIMITED,

(Formerly known as Sugal & Damani Finlease Limited)

BOARD OF DIRECTORS: P. J. Sreedharan, Chairman

S.Vinodh Kumar Jain,

R.N. Damani

Mahesh B. Chandak,

COMPANY SECRETARY: Parthasarathy

BANKERS: Axis Bank Ltd.

HDFCBank Ltd.

Karur Vysya Bank Ltd.

Bank of Baroda

CORPORATE LAW ADVISOR: M/s. Mundhara &Co.

Company Secretaries, Chennai

AUDITORS: M/s. Mugunthan

CharteredAccountants, Chennai

REGISTRARS & SHARE : Cameo Corporate Services LimitedTRANSFER AGENTS 'Subramanian Building' (Vth Floor)

No. 1, Club House Road

Chennai 600 002

REGISTERED OFFICE: City Centre Plaza (I Floor)

7/27/2019 vimya.doc

7/57

No. 7, Anna Salai

Chennai 600 002.

2.1 INTRODUCTION:

Sugal & Damani Share Brokers Ltd. (SDSBL) was incorporated on March 15, 1995 as a

public limited company and obtained a Certificate of Commencement of Business on

April 18, 1995.

The company is a trading member of both NSE and BSE in both cash and derivative

segments. Share broking being its main activity. Sugal Commodity Brokers Private Ltd-a

subsidiary of SDSBL is also a registered member of the Multi Commodity Exchange of

India and NCDEX.

SDSBL today offers under one roof, facilities for purchase / sale of securities and also

offers demat facilities through CDSL.

Online internet based trading is also offered to clients. SDSBL is also member of the

Currency Futures segment.

The company has well equipped and most modern infrastructure for offline and online

trading. The company is totally client oriented and committed. It has clear focus on

providing long term value addition to clients. Research driven inputs are provided to

clients. The company is known for its highest standards of professionalism and ethics.

SDSBL is taking rapid strides Powered by Trust and Driven by Commitment. It has

embarked on branch expansion programme. The company has been merged with the

group company-Sugal Finlease Ltd, which is a listed company. This paves the way for

further growth.

The company is also engaged in the distribution of mutual fund products and mobilizing

funds for IPOs.

7/27/2019 vimya.doc

8/57

The company is a Board-managed Company. The day-to-day affairs are looked after by

S.Vinodh Kumar Jain & Mahesh B. Chandak, who are the Executive Directors. Shri S.

Prasan Chand Jain has been inducted on the companys Board. The Board is ably assisted

by a team of professionals.Sugal & Damani share & Stock Brokers Pvt Ltd., along with

other two companies has merged with sugal & damani finlease ltd., and the new name of

the company is Sugal & Damani share brokers ltd., with effect from 23rd Dec 2008.

Sugal & Damani Finlease Ltd., incorporated as a public limited company in May 1993

in Delhi. Sugal & Damani Finlease was promoted by G N Damani, Sugalchand Jain and

Pravin B Chheda. Subsequently, the registered office of the company was shifted to

Tamilnadu. The company has a full-fledged branch at Delhi and franchises at Mumbai,

Banaras and Ludhiana. As non-banking financial company, Sugal & Damani offers fund-based financial services including hire-purchase and leasing. The company mainly

finances purchase of Maruti cars under the hire-purchase scheme. The company's FD has

been assigned BBB (Triple B) by CARE in 1995-96. The company start financing for

public issue applications and also increase its financing activities on shares purchased

from secondary market through another group Company -- Sugal & Damani Share &

Stock Brokers Pvt Ltd.,

Sugal & Damani Finlease Limited (SDFL) was incorporated on 7th may 1993 in

Delhi as a Public Limited Company and obtained certificate of commencement of

business on 17.05.93. Subsequently the Registered Office of the company has been

shifted to the state of Tamil Nadu. The order of the Company Law Board of this purpose

is registered with Registrar of Companies, Tamil nadu at Madras on 01.08.94.

The Company is having a fullfledged branch at Delhi and franchise Offices at Mumbai,

Banaras and Ludhiana.The Company is presently offering fund based financial services

which include Hire-purchase and Leasing. The disbursement of the Company upto

31.3.94 under hire purchase is Rs.147.19 lakhs and under leasing is Rs.7.76 lakhs.

7/27/2019 vimya.doc

9/57

The Company is also accepting fixed deposits from the public subject to the provision of

section 58A of the Companies Act, 1956. The Company has obtained classification under

Non-Banking Financial Companies (Reserve Bank) Directions 1977 from Reserve Bank

of India, Department of Financial Companies, Bangalore, vide their letter DFC (BG) No.

1847/BG/TNLC (S) 799 dated 26.10.1994. The Company has its administrative office at

700, Anna Salai, Madras - 600 006 with office space of approximately 650 square feet

taken on rental basis. The Company also has office space of about 1,000 square feet

readily available at the Registered Office at 170, Triplicane High Road, Madras - 600 005

to meet the requirements of expanded activity.

The Company has adequate communication facilities such as telephone and tax systems,

and also a computer system. The day-to-day affairs are looked after by SRI S. TEJRAJ

ACHHA, who is a qualified Chartered Accountant under the supervision and guidance of

Sri N. Sugal Chand Jain, Managing Director of the Company. The Company has

appointed a qualified full time Company Secretary, who shall be assistant SRI S. TEJRAJ

ACHHA, in secretarial and finance matters. The Company has an Office Manager, two

recovery executives and marketing executive. The Company shall be recruiting additional

Managerial Personnel, as and when needed.

7/27/2019 vimya.doc

10/57

COMPLIANCE INTRODUCTION:

Compliance has acquired a lot of importance these days and for this purpose, SEBI has

framed guidelines for SEBI Brokers & Sub- Brokers Rules and it is mandatory that every

trading member who is registered with the Stock Exchanges has to appoint a Compliance

officer on behalf of SEBI who has got powers to directly report to exchange or SEBI in

case of violation of any rules and regulations framed by them. Compliance Officer will

be responsible for the activities of the trading member and all correspondences will be

communicated to the compliance officer.

The chief compliance officer (CCO) of a company is the officer primarily responsible for

overseeing and managing compliance issues within an organization. The CCO typically

reports to the Chief Executive Officer or Chief Operations Officer.

The Compliance Officer (CO) of a company is the officer primarily responsible for

overseeing and managing compliance issues within an organization. Generally, a CO is in

charge of overseeing and managing compliance issues within an organization, ensuring,

for example, that a company is complying with regulatory requirements, and that the

company and its employees are complying with internal policies and procedures.

The various roles that a CO has to perform are mentioned below.

Develops, initiates, maintains, and revises policies and procedures for the general

operation of the Compliance Program and its related activities to prevent illegal,

unethical, or improper conduct. Manages day-to-day operation of the Program.

Develops and periodically reviews and updates Standards of Conduct to ensure

continuing currency and relevance in providing guidance to management and employees.Collaborates with other departments (e.g., Risk Management, Internal Audit, Employee

Services, etc.) to direct compliance issues to appropriate existing channels for

investigation and resolution. Consults with the corporate attorney as needed to resolve

difficult legal compliance issues.
http://en.wikipedia.org/wiki/Compliance_(regulation)http://en.wikipedia.org/wiki/Compliance_(regulation)

7/27/2019 vimya.doc

11/57

Responds to alleged violations of rules, regulations, policies, procedures, and Standards

of Conduct by evaluating or recommending the initiation of investigative procedures.

Develops and oversees a system for uniform handling of such violations.

Acts as an independent review and evaluation body to ensure that compliance

Issues/concerns within the organization are being appropriately evaluated, investigated

and resolved Monitors, and as necessary, coordinates compliance activities of other

departments to remain abreast of the status of all compliance activities and to identify

trends.Identifies potential areas of compliance vulnerability and risk;

develops/implements corrective action plans for resolution of problematic issues, and

provides general guidance on how to avoid or deal with similar situations in the future.

Provides reports on a regular basis, and as directed or requested, to keep the Corporate

Compliance Committee of the Board and senior management informed of the operation

and progress of compliance efforts. Ensures proper reporting of violations or potential

violations to duly authorized enforcement agencies as appropriate and/or required.

Establishes and provides direction and management of the compliance Hotline.

Institutes and maintains an effective compliance communication program for the

organization, including promoting (a) use of the Compliance Hotline; (b) heightened

awareness of Standards of Conduct, and (c) understanding of new and existing

compliance issues and related policies and procedures.

Works with the Human Resources Department and others as appropriate to develop an

effective compliance training program, including appropriate introductory training for

new employees as well as ongoing training for all employees and managers.

Monitors the performance of the Compliance Program and relates activities on a

continuing basis, taking appropriate steps to improve its effectiveness.

7/27/2019 vimya.doc

12/57

MANAGINGDIRECTOR

EXECUTIVEDIRECTOR

COMPLAINCE

OFFICER

ACCOUNTS

MANAGER

TRADING ADMINSTRATIVE

MANAGER

DPFUNDS

FUNDS ACCOUNTS

DEALERS SUPPORT

SYSTEM

BACK

OFFICE

COMPANY STRUCTURE

7/27/2019 vimya.doc

13/57

Company Infrastructure:

Front Office / Dealing operations are fully computerized including Order Placement,

Surveillance, Order Routing, Confirmation, Provision of Settlement Obligation on Daily

and End of Settlement basis. Greatest attention has been paid to transparency and speed

with least scope for human intervention, execution and confirmation. The Company have

separate trading terminals for those clients who trade on the telephone with trained

telephone-handlers called as dealers

COMPANY BANKERS:

HDFC Bank

The company has tied-up with HDFC BANK, who provide customers the privilege of

opening the account very fast with a nominal amount of Rs.2500/- instead of Rs.5000/-.

By opening this account funds pay in and pay out will be very easy and convenient.

Their other bankers are

KARUR VYSYA BANK

AXIS BANK

BANK OF BARODA

SERVICES:

Depository services:

In India there are two depositories, they are : CDSL & NSDL

CDSL: Central Depository Services Ltd

NSDL: National Securities Depository Ltd.

7/27/2019 vimya.doc

14/57

2.2 SEBI Certification

In 1998 the Securities & Exchange Board of India (SEBI) specified certifications that

every capital market employee, broker, executive, manager commerce and management

student, professionals and all those intending to work in the Derivatives Future & Options

segment of the Indian capital markets has to take. The certifying authority is the National

Stock exchange which conducts online tests called NSE Certification in Financial

Markets(NCFM). The test is of the objective type. Success rate is reported to be 50 %.

The scores are valid for 3 years after which the test has to be passed again to remain in

the profession. There is no eligibility criteria laid down for the test. Preparation can be

made with assistance from accredited test centres.

The NCFM test is an online certification that evaluates the financial understanding of an

individual. The assessment is a cumulative test of the practical knowledge and analytical

reasoning needed for the changing financial markets.The test can be taken at centres

designated by the NSE after registering for the same.

SEBI - Introduction

In 1988 the Securities and Exchange Board of India (SEBI) was established bythe Government of India through an executive resolution, and was subsequently upgraded

as a fully autonomous body (a statutory Board) in the year 1992 with the passing of the

Securities and Exchange Board of India Act (SEBI Act) on 30th January 1992. In place

of Government Control, a statutory and autonomous regulatory board with defined

responsibilities, to cover both development & regulation of the market, and independent

powers have been set up. Paradoxically this is a positive outcome of the Securities Scam

of 1990-91.

7/27/2019 vimya.doc

15/57

The basic objectives of the Board were identified as:

to protect the interests of investors in securities;

to promote the development of Securities Market;

to regulate the securities market and

for matters connected therewith or incidental thereto.

Since its inception SEBI has been working targetting the securities and is attending to

the fulfillment of its objectives with commendable zeal and dexterity. The improvements

in the securities markets like capitalization requirements, margining, establishment of

clearing corporations etc. reduced the risk of credit and also reduced the market.

SEBI has introduced the comprehensive regulatory measures, prescribed registration

norms, the eligibility criteria, the code of obligations and the code of conduct for different

intermediaries like, bankers to issue, merchant bankers, brokers and sub-brokers,

registrars, portfolio managers, credit rating agencies, underwriters and others. It has

framed bye-laws, risk identification and risk management systems for Clearing houses of

stock exchanges, surveillance system etc. which has made dealing in securities both safe

and transparent to the end investor

Exchanges:

A Stock Exchange is a place where investors go to buy/sell their shares

once a company's public offering is complete, it gets listed in a stock exchange. After

listing it would be available for trading to all investors in the stock exchanges where they

are listed. In India we have two major stock exchanges. They are:

1. The National Stock Exchange (NSE) &

2. The Bombay Stock Exchanges (BSE)

7/27/2019 vimya.doc

16/57

NationalStockExchange:

The NSE is India's largest and the worlds third largest stock exchange in terms of

Transaction volumes & amounts. The NSE is based at Mumbai The NSE has set up its

trading platform as a nation-wide, fully automated screen based system. This enables

anyone in any part of the country to trade on shares listed in the NSE.

NSEIndexor NIFTY:

The NSE Index or the Nifty Index as it is popularly known, is the index of the

performance of the 50 largest & most profitable, popular companies listed in the index.

Each company that is part of the index has its own weightage in the value of the Index.

The value of the Nifty Index is the weighted average of the prices of these 50 companies.

Bombay Stock Exchange:

The BSE is the oldest stock exchange in Asia. It is situated in Dalal Street in Mumbai. It

is the third largest stock exchange in south Asia and the tenth largest in the world. BSE

has over 5000 companies that are listed in it. The objectives of the BSE are similar to that

of the NSE. BSE also uses the latest technologies in the IT field to provide a single place

where traders from across the world can buy/sell shares in the Indian share market.

The BSE Index or the Sensex as it is popularly known, is the index of the performance of

the 30 largest & most profitable, popular companies listed in the index. Each company

that is part of the index has its own weightage in the value of the Index. Since the number

of companies is lesser, the index variations are higher when compared to the Nifty index.

Products Traded:

7/27/2019 vimya.doc

17/57

Derivative:

Derivative is a product whose value is derived from the value of an underlying

asset in a contractual manner. The underlying asset can be equity, for ex, commodity or

any other asset.

Securities Contracts (Regulation) Act, 1956 (SC(R) A) defines derivative to include

1. A security derived from a debt instrument, share, loan whether secured or unsecured,

risk instrument or contract for differences or any other form of security.

2. A contract which derives its value from the prices, or index of prices, of underlying

securities

Types of derivatives:

7/27/2019 vimya.doc

18/57

The following are the various types of derivative products. However at present in

India only few of them are exchange

Equity Segment : Cash

The market in which shares are issued and traded, either through exchanges or over-the-

counter markets. Also known as the stock market, it is one of the most vital areas of a

market economy because it gives companies access to capital and investors a slice of

7/27/2019 vimya.doc

19/57

ownership in a company with the potential to realize gains based on its future

performance.

This market can be split into two main sectors: the Primary and Secondary market. The

primary market is where new issues are first offered. Any subsequent trading takes place

in the secondary market.

Primary market:

The primary market is where new issues are first offered. In primary market securities are

solo to the public for the first time. It is known as IPO (initial public offer).companies can

obtain funds through this issue (MAIN MARKET).

Secondary market :( Additional market)

In secondary market previously issued securities will be traded (bought & sold) Transfer

of shares from one to another a/c can easily done. Any subsequent trading takes place in

the secondary market.

F&O Market

Futures are contracts guaranteeing delivery of specified financial instruments on a future

date at a predetermined price. The financial instruments traded in the U.S. futures

markets consist of foreign currencies and debt securities e.g., TREASURY BILLS, long-

term U.S. Treasury BONDS, COMMERCIAL PAPER, etc. The futures contracts on debt

securities are commonly known as interest-rate futures. They offer companies, banks and

institutions a means to insulate themselves from adverse interest rate movements through

HEDGING. The objective behind hedging is to establish in advance, a certain rate of

interest for a given time period. That apart, financial futures offer considerable profit

potential which attracts speculators and individual investors too.Options are contract that gives the holder the right to buy (Call Option) or sell (Put

Option) a certain number of shares of a company at a specified price known as the

Striking Price or Exercise Price. American options may be exercised during a certain

time period, which extends up to what is known as the Expiration Date. Exchange-

traded options in the U.S. are in denominations of 100 shares. The attraction of buying

7/27/2019 vimya.doc

20/57

options is a potentially large profit on a relatively small investment. The maximum

possible loss is the price paid for the option, known as the Premium. The premium is

paid by the option buyer to the option writer (seller) who keeps the money, whether the

option is exercised or not. The buyer is under no obligation to exercise his right and may

simply let the option expire. However, by selling a call or a put, the writer obligates

himself to deliver or buy shares if the option is exercised. Importantly though, the buyer

or the writer may independently

Terminate their outstanding positions before the expiration date, by executing

offsetting transactions. The value of an option comprises a time value and an INTRINSIC

VALUE, the latter resulting from the price of the underlying stock. As the expiration date

approaches, the time value converges to zero.

Option Markets

Options are among the most important inventions of contemporary finance. Whereas a

futures contract commits one party to deliver, and another to pay for, a particular good at

a particular future date, an option contract gives the holder the right, but not the

obligation, to buy or sell. Options are attractive to hedgers because they protect against

loss in value but do not require the hedger to sacrifice potential gains. Most exchanges

that trade futures also trade options on futures.

There are other types of options as well. In 1973 the Chicago Board of Trade established

the Chicago Board Options Exchange to trade options on stocks

BACK OFFICE FUNCTIONS

This report is about the study undertaken by me during a period of four

Months for my summer project in Chennai sugal and damani share broker ltd. The Back

office function acts as a back bone of any share broking firm as the work which the

personnel in back office has to perform is very crucial and important for the client as well as

7/27/2019 vimya.doc

21/57

the firm. Any mistake from the personnel might become a liability for the firm, for e.g. if

there is short delivery or pay in of clients share then for those shares auction takes place for

which they have to pay the price for the same.

Hence the back office function calls for the full concentration level of the personnel while

doing his or her work. If the back office section detects any error it should draw the

attention of the higher authority for the corrective action. Basically the back office function

includes responsibilities like transaction processing, settlement and other administration

functions.

So the key result activity in a share broking firm is the back office function which operates

through different department like forms department, dp department,fund department,

Accounts Department, Compliance department etc.

1.FORMS DEPARTMENTS:

Trading and Demat:

Resident Indian:

Two recent passport size photographs

Proof of Bank Account: Any one of the following may be submitted

Copy of Bank Statement

Copy of first page of the Bank Pass Book.

A cancelled cheque (only if the account holder's name is printed on

it)

Copy of Client Master towards proof of an existing Demat Account

Proof of Identity: Any one of the following may be submitted

Passport Copy

Voter Id card copy

Driving license copy

Copy of Pan card (with photograph) (compulsory)

7/27/2019 vimya.doc

22/57

Copy of Mapin card

Proof of Address: Any one of the following may be submitted

o Passport copy

o Voter ID card copy

o Driving license copy

o Bank Pass book copy

Verified copies of Electricity bill or telephone bill in the

customers name (not more than two months old)

Leave and license agreement/agreement for sale.

Copy of Ration Card.

TRADING ACCOUNT:

Trading Account is given to the Investor while registering with broker or sub

broker. Trading Account is provided with a Trading ID which is to be used for all the

transactions later on.

Here this Trading account is used to buy and sell the shares. For buying the

shares we need to deposit money in to trading account. After that we can use this moneyto buy shares. And the same account is used to sell the shares. When shares sold money

will automatically be credited to the Trading Account.

Demat Account

Demat refers to a dematerialized account. Now what is dematerialization? When you buy

shares you get share certificate. This means you own xxx No. of shares of a particular

company. The process of converting the physical form of shares into electronic form is

called dematerialization or in short DEMAT

2.DP DEPARTMENTS:

What is a Depository:

7/27/2019 vimya.doc

23/57

The Depositories Act defines a depository to mean "a company formed and registered

under the Companies Act, 1956 and which has been granted a certificate of registration

under subsection (IA) of section 12 of the Securities and Exchange Board of India Act,

1992." The principal function of a depository is to provide a facility for investors to hold

and transfer securities in dematerialised form and in book-entry form. The securities are

transferred by debiting the transferors depository account and crediting the transferees

depository account.

As per The Bank for International Settlements (BIS), depository is a facility for

holding securities which enables securities transactions to be processed by book entry.

Physical securities may be immobilized by the depository or securities may be

dematerialized (so that they exist only as electronic records). In simple terms depository

is an organization where securities of an investor are held and transferred in electronic

form.

Who is a Depository Participant:

A Depository Participant (DP) is described as an agent of the depository. They are the

intermediaries between the depository and the investors. The relationship between the

DPs and the depository is governed by an agreement made between the two under the

Depositories Act, 1996, SEBI [Depositories and Participants] Regulations, 1996 and theBye laws of the Depository. In a strictly legal sense, a DP is an entity who is registered as

such with SEBI under the provisions of the SEBI Act. As per the provisions of this Act, a

DP can offer depository related services only after obtaining a certificate of registration

from SEBI.

Clearing Corporation / Clearing House (CC / CH)

Clearing Corporation/House is an entity responsible for clearing and settlement of trades

done by clearing members on a recognised stock exchange. A Clearing Corporation /

7/27/2019 vimya.doc

24/57

Clearing House of a stock exchange is admitted to the depository system for clearing and

settlement of

securities traded on their respective stock exchanges. For electronic settlement of

securities in demat form, the concerned CC/CH of the stock exchange needs to have

electronic connectivity with the depository.

Trading & Demat A/c opening procedures

Documents Required for Registration:

You need to submit the documents mentioned below while opening an Online Trading

and Demat account. It helps in faster registration. Trading account is opened in single

name while demat account may be opened in joint name with a maximum of 3 holders. It

is however essential that the customer maintains a demat account with Sugal & Damani

Share Brokers Ltd for availing the online Trading facility. In case the permanent address

is different from the correspondence address then the proof of address has to be submitted

for separately for each of them from the list given below.

Trading and Demat:

Resident Indian:

Two recent passport size photograph




A cancelled cheque (only if the account holder's name is printed on it)

Copy of Client Master towards proof of an existing Demat Account

Proof of Identity: Any one of the following may be submitted

Passport Copy

Voter Id card copy

7/27/2019 vimya.doc

25/57


Copy of Pan card (with photograph) (compulsory)

Copy of Mapin card

Proof of Address: Any one of the following may be submitted

Passport copy

Voter Id card copy


Bank Pass book copy

Verified copies of

Electricity bill or telephone bill in the customers name (not

more than two months old)

Leave and license agreement/agreement for sale.

Copy of Ration Card

Non-Resident Indian:

In addition to all of the documents stated for Resident Individuals, for an NRI, the

following additional documents are required:

Copy of PIS account opened with a designated bank

Proof of his foreign address

Copy of valid visa

Approval letter of RBI

7/27/2019 vimya.doc

26/57

Corporate:

Memorandum / Articles of Association

Board resolution to open a demat / Trading account

List of Authorized signatories as per resolution with their signatures and

photographs

Certified copy of income tax returns or bank statement.

Board of Directors (Duly certified with photographs of minimum 2 directors)

Copy of annual report duly certified


Certified copy of Bank Statement

Certified copy of first page of the Bank Pass Book.


Pan number of the corporate

Copy of Registration Certificate

Copy of shareholding pattern

Latest attested audited balance sheet & P& L A/C

HUF:

Bank account should be in the name of HUF

Photograph of Karta

Proof of identity (same as stated for Individuals)

Proof of address of the Karta (same as stated for Individuals)

Pan number in HUF's name


7/27/2019 vimya.doc

27/57




List of co-parceners in the HUF, along with an authorization given to the Karta by

the said co-parceners to open and operate the DP and Trading accounts

Partnership Firm (Demat account cannot be opened in the Firms name) :

A certified true copy of the partnership deed

Copy of last Income Tax Returns filed





Pan number

Authorization from all the partners to open a demat / Trading account

List of personnel authorized to operate and maintain, duly authorized by the

partners

Checklist:

Name, address, phone number and date of birth have been state correctly.

Pan number is mandatory for executing transactions in CASH & F&o segment.

Occupation, financial and bank details have been written.

Signature on Know Your Client form, NSE & BSE agreements (on all the pages

of the agreement), Risk Disclosure document, Power of Attorney, etc. Signature

across the photographs.

Introducer's full details have been mentioned along with signature an seal Name

7/27/2019 vimya.doc

28/57

and signature of witnesses is present

CLEARING MEMBER

Once the trade is done on the stock exchange, client/sub broker gets reports of their net

obligation. A clearing member (CM) has to open a clearing and settlement of trades with

a DP. On opening of such account, the depositories allots a number identified as CM-

Business

Partner- Id. The DP opens an account and the CM is allotted a number (Client ID). The

delivery account consists of three parts pool a/c; delivery a/c; receipt a/c, to facilitate easy

book keeping. The role of the pool account in clearing of securities is two fold- a.) the

selling client of the CM transfers securities from his client account to the pool a/c of the

CM before pay in and b.) After payout, the CM transfers securities(to the extent of his

obligation to the clearing operation) from the pool a/c to the delivery a/c , before pay in.

On pay in day the depository flushes out the securities in the delivery a/c and transfers the

same to CC automatically. On pay out day, the CC transfers securities to the pool a/c (to

extent of the net receipt) through the receipt a/c. This account can be used to trace the

details of settlement-wise receipt into the clearing. On off market trades, these include

trades where the seller and buyer deal directly with each other, without any intervention

of the CC. The seller would give his DP a delivery instruction slip instructing him to

debit his account with the transacted securities and the buyer would give his DP a receipt

instruction slip to credit his account. Both the instructions would have the same execution

date. The transaction would match at the depository, and credit and debit would be given

by the DPs to their respective Client account.

In India, a Depository Participant (DP) is described as an agent of the depository. They

are the intermediaries between the depository and the investors. The relationship betweenthe DPs and the depository is governed by an agreement made between the two under the

Depositories Act. In a strictly legal sense, a DP is an entity who is registered as such with

SEBI under the subsection 1A of Section 12 of the SEBI Act. As per the provisions of

this Act, a DP can offer depository-related services only after obtaining a certificate of

registration from SEBI.
http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Agenhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Agen

7/27/2019 vimya.doc

29/57

SEBI (D&P) Regulations, 1996 prescribe a minimum net worth of Rs. 50 lakh for

stockbrokers, R&T agents and non-banking finance companies (NBFC), for granting

them a certificate of registration to act as DPs. If a stockbroker seeks to act as a DP in

more than one depository, he should comply with the specified net worth criterion

separately for each such depository. No minimum net worth criterion has been prescribed

for other categories of DPs; however, depositories can fix a higher net worth criterion for

their DPs.

Depository participant is the agent of the depositories who holds the shares on behalf of

the client.

DELIVERY INSTRUCTION SLIP

If a client does not give the POA to the trading member, he should provide a deliveryinstructionslip every time when he makes a transaction of trading

SEBI EXCHANGE

NSE

BSE

NSCCL (National securities clearing corporation ltd)

In India there are only 2 depositories they are:

NSDL (National securities depository ltd)

CDSL (Central depository services ltd)

Responsibilities of DPs

Pay in & pay out.

Dematerialization (changing certificate to electronic mode)

Steps involved in demoralization are:

Depositories (NSDL&CDSL)

Register & transfer agents (RTA)

7/27/2019 vimya.doc

30/57

Depository participant (DPS)

Operation of demat accounts based on Power of Attorney:

A demat account can also be operated by a Power of Attorney holder. In this regard, it

may be noted that

(i) A Power of Attorney executed prior to the promulgation of The Depositories Act is

valid and

Enforceable.

(ii) It is the responsibility of the DP to verify whether the Power of Attorney is adequate

and sufficiently authorizing the holder of the Power of Attorney i.e., the done to operate

the account of the beneficial owner.

(iii) A sample clause is given hereunder which if it forms a part of the Power of Attorney

could suffice:

"To sell or otherwise deal with or dispose of and to purchase, subscribe or otherwise

acquire in any manner from the market or under public or rights issues or otherwise and

accept the transfers of any stocks, funds, shares, debentures, Government and other

promissory notes, securities, bonds, debentures, annuities or other mercantile negotiable

instruments which shall

or may at any time belong to me or which hereafter be transferred to me, whether solely

or bjointly and whether in my own right or having any other interest of whatsoever nature

and however arising and in any capacity whatsoever including those belonging to others

with my name and for such purposes to sign, execute or endorse all instruments of

transfer and other

Documents for any purpose what so ever by the virtue of these present."

7/27/2019 vimya.doc

31/57

Procedure to Open a Clearing Member Account:

The steps undertaken to open the CM account are same as those of individuals. The

difference lies in the type of form and details to be filled in and documents to besubmitted. The major difference is that the clearing member has to first register itself

with the clearing corporation

and obtain a clearing corporation clearing member identification number (CCCM-ID).

The clearing account is identified by the combination of CC-CM-ID given by the clearing

corporation, CM-BP-ID given by the depository and the Client-ID given by the DP.

Before opening a clearing account, the DP should send to the depository the clearing

member's

Account opening form. The Depository then allots the CM-BP-ID. Based on the CM-BP-

ID so allotted, the account gets activated. The DP then generates Client-ID and

communicates the date of opening of the account in depository participant system to the

depository. However,

CDSL, clearing member accounts can be opened by a DP just like any other demat

account after the formalities as mentioned in the CDSL DP Operating instructions are

fulfilled.

Functions of Depository Participant-Transmission and Nomination:

The word "transmission" means devolution of title to shares, for example, devolution by

death, lunancy, bankruptcy, winding-up (in case of corporate) etc. The person on whom

the shares devolve has to prove his entitlement by submitting appropriate documents and

seek transmission. If the securities are held in the depository system, documents have to

be submitted to the DP.

7/27/2019 vimya.doc

32/57

NOMINATION:

The Companies (Amendment) Act, 1999 has introduced provisions for nomination in

respect of shares, debentures, fixed deposits, etc. Under the provisions, a shareholder, adebentureholder,

A bondholder or a deposit holder can nominate a person, in whom the shares or

debentures or bond or deposits would vest, in the event of original investor's death. The

facility can be availed of by any person whether resident Indian or a non-resident Indian

Investor. Investors holding securities in dematerialised form have the option of

nominating a person who would be entitled to receive securities outstanding in his/her

name in the event of their death. Nomination facility can be availed at the time of

opening the depository account itself

Or subsequently. There is a separate prescribed form for nomination under depository

segment. Nomination can also be changed at will by resubmitting the nomination details

in the prescribed form. The DP has to enter and update the nominee details submitted by

the account holder. If the account holder is dead, the securities lying to the credit of the

account

Holder may be transmitted to the nominee's account after the DP verifies the identity of

the nominee. Nomination can be made only by individuals holding beneficiary owner

accounts on their own behalf singly or jointly. In a demat account which is held jointly,

all the holders should sign the nomination form. Non-individuals including society, trust,

body corporate, karta of Hindu Undivided Family (HUF), holder of power of attorney

cannot nominate. If the account is held jointly all joint holders will be required to sign the

nomination form.

7/27/2019 vimya.doc

33/57

Register is two types:

They will do only the process of registration

Transfer agents:

They will do both register and transfer of shares process. They will also do process like

maintaining records of books of shares. Transfer of shares from one a/c to another a/c.

Issuing bonus, dividends to share holders on behalf of company.

Rematralisation(change electronic shares to physical)

Demat account opening.

Dematerialization Process:

A holder of eligible securities in the depository system may get his physical holdings

converted into electronic form by making a request through the DP with whom he holds a

beneficiary account.

Prerequisites for Dematerialization Request:

The registered holder of the securities should make the request.

Securities to be dematerialized must be recognized by the depository, as

eligible securities. In other words, only those securities whos ISIN has

been activated by the depository, can be dematerialized in the depository

system.

The company should have established connectivity with the depository

with the depository. Only after such connectivity is established, the

securities of the company are recognized to be available for

dematerialization in the depository system.

The holder of securities should have a beneficiary account in the same

name as it appears on the security certificates to be dematerialized.

The request should be made in the prescribed dematerialization

requesform.

7/27/2019 vimya.doc

34/57

Rematralisation Process:

Rematerialisation is the exact reverse of dematerialization. It refers to the process of

issuing physical securities in place of the securities held electronically in book-entry form

with a depository. Under this process, the depository account of a beneficial owner is

debited for the securities sought to be rematerialized and physical certificates for the

equivalent number.

A beneficial owner holding securities with a depository has a right to get his electronic

holding converted into physical holding at any time. The beneficial owner desiring to

receive physical securities certificates in place of the electronic holding should make a

request to the depository through the DP system. On receipt of RRF, the DP checks

whether sufficient free/lock in balance of the securities sought to be rematerialized is

available in the account of the client. If sufficient balance is available, the DP accepts the

1RRF and communicates the request to the depository through the DP system.

Demat a/c opening

Requirement for demat a/c opening:

1. PAN card

2. Address proof

Bank proof

Photo

Once the a/c opened separate client id will be given. CDSL DP client id will be starts

numeric. NSDL DP id will be starts by alpha& numeric.

For example:

CDSL: (12039700 00012345) Totally 16 digits.

NSDL: (IN300095 11235362) Totally 6 digits IN will not be consider as numeric.

7/27/2019 vimya.doc

35/57

Settlement of market trades:

Pay in :( selling position)

Transfer of securities shares from client a/c to clearing member a/c. If a client sold shares

the shares will be delivered to the exchange. CMBP (clearing member business partner)

id will be given for the settlement purpose for every brokers. ISIN (international

securities identification number) will be allotted to every company shares Seperately.

Pay out :( buying position)

Transfer of securities shares from clearing member a/c to client a/c. If a client purchase

shares exchange will be deliver the shares to the client. Normal period taken for settle the

shares. (From exchange (or) to exchange). T+2 days that means trade date + 2 days.

Purchase short:

If client buy 100 shares from one company means the selling party forget to deliver the

shares then buying party will be go for shot. If selling party delivers the shares then only

the purchase client will be receive the shares. From the trade day the purchase share will

be given to the clients in T+2 days.

Sales short:

Just opposite to the purchase short is a sale short. If the clients sell the shares the delivery

of the shares will be given in T+2 days. If the client fails to deliver the shares at specified

time the client will face the auction trade.

Auction:

If any client fails to deliver the shares to exchange on the particular settlement date the

exchange will conduct the auction trade on that party. Basically 20% square of difference

posted on that auction party.

7/27/2019 vimya.doc

36/57

Types of accounts:

There are three types of demat account which can be opened with a depository

participants viz.,

Beneficiary account

Clearing member a/c

Intermediary a/c

1. Beneficiary a/c:

A Ben owners account is an ownership account. The holder of securities in this type of

account owns the securities. For ex: Mr. ram who is a retail investor trades in the

securities market. The securities which he buys or sells will be kept in his beneficial

owner account which he would have to open with a DP.

2. Clearing member a/c:

This account is opened by a broker or a clearing member for the purpose of settlement of

trades.

3. Intermediary account:

An intermediary account can be opened by a SEBI registered intermediary for the

purpose of stock lending and borrowing. The clearing member account and the

intermediary account are transitory accounts. The securities in these accounts are held for

a commercial purpose only.

Freezing of accounts:

Account freezing means suspending any further transaction from a depository account till

the account is unfrozen. ISIN specific number of securities in a demat may be frozen in

certain cases.

If a written instruction is received from the client by the DP, requesting freezing

of account; or

7/27/2019 vimya.doc

37/57

If an electronic request is made by a client to his DP or to the depository, in the

form and manner as may be prescribed by the depository. However, this is not

necessarily followed by both the depositories.

If orders are received by the DP or the depository from the central or stategovernment, SEBI, or any order by the court, tribunal, or any statutory authority.

If a request is received by the depository from a DP or client.

If orders are passed by disciplinary action committee (DAC) or if DP becomes

insolvent, bankrupt or if a corporate DP is being wound up, Depository can freeze

accounts and/or ISIN and/or specific number of securities held in DPs name.

By freezing an account for debits only (preventing transfer of securities out of the

account), the client can receive securities in his account. An account can also be frozen

for debits as well as credits. No transaction can take place in such an account until it is

reactivated. A frozen account may be unfrozen or reactivated, by taking the reverse step.

This would be done on:

The valid written request of the account holder where he had requested freezing,

Directions of depository made in pursuance of the order of the appropriate

authority.

The DP should immediately inform the client about change in status of the account from

active to suspended and vice versa.

Pledge:

Pledging of securities:

The creation of pledge and hypothecation against securities which are held in demat

mode is permitted under section 12 of the depository act, 1996. Securities held in a

depository account can be pledged against a loan, credit, or such other facility availed by

the beneficial owner of such securities. For this purpose, both the parties to the

agreement, i.e., the pledgor and the pledge must have a beneficial account with the same

7/27/2019 vimya.doc

38/57

Depository account with the same DP. The nature of control on the securities offered as

collateral determines whether the transaction is a pledge or hypothecation. If the lender

has unilateral right to appropriate the securities to his account and if the borrower defaults

or otherwise, the transaction is called a pledge. If the lender needs concurrence of the

borrower for transaction is called a pledge. If the lender needs concurrence of the

borrower for appropriating securities to his account, the transaction is called

hypothecation.

Closure of Account

Closure on Clients Request:

DP can close a depository account on receipt of an application in the prescribed format.

The application should be made by the account holder or by all the joint holders. An

account can be closed only when there is no balance in the account. In case there is any

balance in the

account which needs to be closed, the following steps are followed:

60

(a) Rematerialisation5 of all securities standing to the credit of the account at the time

ofmaking the application for closure; or

(b) Transferring the balance to the credit of another account opened by the same account

Holder either with the same participant or with a different participant.

Closure by DP:The DP may also initiate closure of a client's account if the client has defaulted in

performing

Its obligations laid out in the client-participant agreement. The participant should give

sufficient notice to the client before initiating closure of his account. The notice should

7/27/2019 vimya.doc

39/57

clearly state the reasons for closure of account. The process of closing account in such a

case is the same as that of client-initiated closure.

3.Funds Department:

Cash/ funds is the lifeblood of any organization so management of cash and

Transfer of funds form a very important aspect of the accounts Department. This includes

constant check and reconciliation of The bank account of the sub broker. This department

taking care of clients funds transaction and bank transaction. Daily funds give the details

of pay in and pay out of funds and also show whether it was normal or auction. This

report has to be checked by the accountant and find whether there is any short delivery, if

yes then get the short delivery report from the delivery department. Undertake the work

of recovery as well. The job of recovery is very is very difficult and this is one of the

important functions of the accounts personnel for this he has to be very shrewd person

and see that the job is done.

Introduction to settlement of funds :

Under rolling settlement, all trades executed on a trading day are settled x days later.

This is called T+X rolling settlement, where T is the trade date and X is the number

of business days after trade date on which settlement takes place.

The rolling settlement prevailing in India is T+2, implying that the outstanding positions

at the end of the day T are compulsorily settled 2 days after the trade date.

Clearing activities :( t+1 day)

Clearing is a process of determination of obligations after lied the obligations are

discharged by settlement. (Trades done during the alive day are accounted together for

netting & obligation. The NSCCL sets the informations from the NSE about the tradesexecuted during the day which helps the CC (Clearing Corporation) to determine the

obligations of each member in terms of Funds & Securities.

This is the next working day after the trading day. On this day by (11:00am) the NSCCL

gives the confirmation of all trades. Once the netting of obligations is done, then by (1:30

7/27/2019 vimya.doc

40/57

pm), on the same day all the files are being processed and downloaded so, that the

member knows as to what he has to Pay-in and receive .

Pay in of funds :

Transfer of money by Broker to exchange towards settlement dues for that particular day.

Payout of funds:

Transfer of money from exchange to Broker towards settlement dues for that particular

day.

Steps in payin & payout of funds :

Pay in

The process of the Broker/Funds dp, submitting the Fund from the client account towards

the securities purchased by their clients to the settlement a/c of a stock exchange is called

Pay in.

Broker/Funds Dept are expected to complete the paying before the deadline time

prescribed by the stock exchange.

Pay- out

The process of a settlement a/c/exchange, transferring the Funds from the settlement a/c

to client a/c for the quantity of securities sold by their clients is known as Payout.

Payout time is also pre-determined by the settlement process / stock exchange.

Broker/Funds dept credits the amount to their clients immediately on payout.

Broker/Funds dept will transfer the fund from his settlement a/c to the account of the

seller.

Clearing account :

Clearing members are required to open a clearing account with any one of the bank for

the purpose of settlement of their transactions for Debiting, Crediting, reporting the

balances and other informations.

7/27/2019 vimya.doc

41/57

Clearing a/c are used exclusively for clearing and settlement of transactions i.e. for

settling funds & other obligations to/from the NSCCL including payments of margins and

penal charges.

Funds shortages :

Members require ensuring that adequate funds are available in the clearing account

towards all obligations on the scheduled date and time.

In all cases of funds shortages, NSCCL may initiate various actions including

withdrawing the trading facility of the member, withholding the securities pay-out due to

the member, reduction in exposure limits, so the member are required to make advance

pay-in etc.

Other services & information :

Funds dept deals the fund transactions mainly with HDFC Bank & with other

specific banks in,

Canara Bank

ICICI Bank

UTI Bank

Clients can deposit their cheque (apart from HDFC) from other places in other

two Banks of their own choice in Karur Vysya Bank & UTI Bank.

RTGS / NEFT facility are also provided to clients for the process of the payment.

Clients are advised to present their cheques only in their name of a/c which

registered with the trading account. Third party cheques are not accepted by the

Funds Dept.

Analyze on ageing report (analyzing on Debit and followed in Client a/cs).

Payment of funds are done on the request from the client on immediate effect.

Mailing the details of the Client Financial information to their clients separately

on daily basis.

7/27/2019 vimya.doc

42/57

Depository participant

4.ACCOUNTS DEPARTMENT

This department deals with internal accounts only (accounts related to the

company).It deals with BRS (Bank reconciliation statement)

it is used to match the difference between book balance and the bank balance.

BRS concept:

Balance as per our book

ADD:

Payments not cleared

LESS:

Receipts not cleared

ADD:Direct bank deposits

LESS:

Bank receipts

7/27/2019 vimya.doc

43/57

3.RESEARCH METHODOLOGY

Research can be defined as a scientific and systematic search for pertinent

information on a specific topic. Research is a careful investigation of inquiry especially

through search for new facts in any branch of knowledge. In simple terms, research refers

to search for knowledge .Research comprises defining and redefining problems.

formulating hypothesis or suggested solutions collecting, organizing and evaluating data,

making deductions and researching conclusions and at last carefully testing the

conclusions to determine whether they fit the formulating hypothesis.

Research methodology is away to systematically solve the research problem. It may

understand as a science of studying how research is done scientifically. In it,we study the

Various steps that are generally adopted by the researcher in study of his research

problem along with logic behind them.

A Research design is a framework or blueprint for conducting for the research of a

project. It details the procedures necessary for obtain the information needed. A research

design lays the foundation for conducting the project.

TYPES OF RESEARCH DESIGN:

Historical Research Design: The purpose is to collect, verify, synthesize evidence to

establish facts that defend or refute your hypothesis. It uses primary sources, secondary

sources,and lots of qualitative data sources such as logs,diaries,officials

records,reports,etc.The limitation is that the sources must be both authentic and valid.

Case and field Research Design: Also called ethnographic research,it uses direct

observation to give complete snapshot of a case that is being studied. It is useful when

not much is known about a phenomenon.Uses few subjects.

7/27/2019 vimya.doc

44/57

Descriptive or survey Research Design: It attempts to describe and explain conditions

of the present by using many subjects and questionnaires to fully describe a phenomenon.

Survey research design/survey methodology is one of the most popular for dissertation

research.There are many advandages.

Correlational or prospective Research Design:It attempts to explore relationships to

make predictions.It uses one set of subject with two or more variable for each.

Causal comparative or Ex post facto Research Design:This research design attempts

to explore cause and affect relationship where causes already exist and cannot be

manipulated.It uses what already exists and looks backward to explain why.

Developmental or Time series Research Design:Data are collected at certain points in

time going forward. There is an emphasis on time patterns and longitudinal growth or

change.

Experimental research Design:This design is most appropriate in controlled setting

such as laboratories.The design assumes random asasignment of subject and random

assignment to groups.It attempts to explore cause and affect relationships where causes

can be manipulated to produse different kinds of effects.Because of the requirements of

random assignment.this design can be difficult to execute in the real world setting.

Quasi Experimental Research Design: This research design approximates the

experimental design but does not have a control group.There is more error possible in the

results.

7/27/2019 vimya.doc

45/57

3.1RESEARCH DESIGN:

The design chosen for this project was DESCRIPTIVE RESEARCH DESIGN as

well as EXPLORATORY in nature,which is used when the purpose of research is:

To describe the characteristics of certain groups:

To estimate the prediction of people in a specified population who behave in a

certain way.

To make specific prediction.

The approaches to data collection are as follows:

Primary Data:

These data are collected first time as original data. The data is recorded as

observed or encountered. Essentially they are raw materials. They may be combined.

Totaled but they have not extensively been statistically processed.

3.2 Sources of primary data:

In this project primary data was collected through

1. Direct Observation

2. Personal interview

3. Questionnaire

Secondary data:

This is also known as published data, which are not originally collected but rather

obtained from published source and statistically processed are known as secondary data.

7/27/2019 vimya.doc

46/57

Sources of secondary data:

1.Different manuals and documents

2.Magazines

3.Website

DEMAT ACCOUNT OPENING FOR CORPORATE

S.NO SUB-STATUS

CORPARATE

2010 to 2011 2011 to 2012 2012 to 2013

1 Corporate body-

domestic

2 6 2

2 Corporate body-

domestic PMS

3 -- --

3 Corporate clearing

member client

-- -- 1

INTERPRETATION:

From the above table it is intered that the during 2011-12 the corparate a/c was 6,in

2010-11 the corparate domestic pms a/c opened was 3,in 2012-13 the corparate

Cm/Tm;client Benificiary a/c opened was 1,and in 2010-11 the corparate limited liability

a/c opened was 1.

7/27/2019 vimya.doc

47/57

CLIENT ACCOUNT OPENING FOR TRUST

S.NO SUB STATUS-TRUST 2010 TO 2011 2011 TO 2012 2012 TO 2013

1 TRUST 15 - -

INTERPRETATION:

From the above table it is intered that the during 2010-11 the Trust a/c opened was

15.

7/27/2019 vimya.doc

48/57

NON RESIDENT OF INDIA

S.NO SUB STATUS- NRI 2010 TO2011

2011 TO2012

2012 TO2013

1 NRI-Non Repatriable 1 - 1

2 NRI-Non-Repatriable negative

nomination

- - 2

3 NRI-Repatriable negative

nomination

- - 1

INTERPRETATION:

From the above table it is intered that the during 2012-13 the NRI-Non

repatriate negative nomination a/c opened was 2,in 2010-11 the NRI Non Repatriate a/c

7/27/2019 vimya.doc

49/57

opened was 1,in 2012-13 the NRI Non Repatriatea/c opened was 1,and in 2012-13 the

NRI Repatriate negative nomination a/c opened was 1.

DEMAT ACCOUNT OPENING FOR INDIVIDUAL

S.NO SUB STATUS-INDIVIDUAL 2010 TO

2011

2011 TO

2012

2012 TO

2013

1 Individual-HUF 45 20 42

2 Individual-Resident 864 394 265

3 Resident Individual-minor 6 4 -

4 Individual Resident negative

nomination

4 7 1

INTERPRETATION:

From the above table it is intered that the during 2010-11 the Individual Resident a/c was

864,in 2010-11 the Individual HUF a/c opened was 45,in 2010-11 the Resident Individual

7/27/2019 vimya.doc

50/57

minor a/c opened was 6,and in 2011-12 the Individual Resident Negative nomination a/c

opened was 7.

DEMAT ACCOUNT OPENING FOR CLERING MEMBER ACCOUNT

S.NO SUB STATUS

-CM

2010 TO 2011 2011 TO 2012 2012 TO 2013

1 MCX-SX

Clearing

member account

- - 1

INTERPRETATION:

From the above table it is intered that the during 2012-13 the MCX-SX clearing

member a/c opened was 1.

7/27/2019 vimya.doc

51/57

STATISTICAL TOOLS APPLICATION

Demat Account No demat A/c Total

Interested 20 30 50

Not Interested 35 15 50

55 45 100

Null Hypothesis:

Statistically,there is no significant difference between Sugal and damani

Brokerage firm and othe stock broking regarding their service provided.

7/27/2019 vimya.doc

52/57

Alternative Hypothesis:

Yes,there is the significant difference between Sugal and damani

brokerage firm and other stock broking firm regarding their service provided.

Degree of freedom( ) = (r-1) (c-1)

=>( ) = 1

Expectation of C11 = 50 *55/100 = 27.5(approx 28)

So,expected frequency shall be:

Demat Account No demat A/c TotalInterested 28 22 50

Not Interested 22 28 50

50 50 100

By applying Chi-square Test,we find that

Frequencies (O) Frequencies (E) (O-E)2 (O-E)2/E20 28 64 2.28

35 22 169 7.68

30 22 64 2.90

15 28 169 6.035

18.895

For = 1,x2 =0.05 = 3.84

The calculated value of chi square is much more than the table value.Thehypothesis

is rejected.

So,we can say that ther is a significant differences between the services provided by

Sugal and damani brokerage and other firms. By applying chi square test,we find that the

value of chi-square test is 18.895 which is higherthan the table value which is 3.84. So, it

inticates that the hypothesis is rejected and we can say that the services provided by

7/27/2019 vimya.doc

53/57

Sugal and damani share Broking Ltd is significantly different from the Share broking

leading companies.

FINDINGS

After conducting research through applying questionnaire and personal interview

I reached at a particular points. The major findings about related information of

Sugal and damani are described as below:

People think that share trading is the best way to invest money in the share

market to increase profit margin within a short period They are aware of the fact

and realizing its importance.The company should try to expant and build up its

infrastructure because there is a large potential for share trading in India as

guidelines provided by SEBI

In a single roof,we found that Sugal and damani share Broking Ltd.is not only

facilitating shre broking services to their customer but also different other

financial services are being provided to the customer such as mutual fund

Insurance,Commodities,DP,Merchant&Inv.Banking ,PMSetc.

7/27/2019 vimya.doc

54/57

The financial product of Sugal and Damani share broker Ltd has good

credibility as compared to its competitors in the Chennai city. The objective of

the company is not only to facilitate better services to the customers but also to

built-up long term mutual relationship with them.

The entrance of private players will increase the competition and it would be a

tough task to secure a good position in the market.In this tough period,it is

necessary for the company to adopt the best market strategy in order to capture

the large market share as well as potencial customers against their rivals firm.

The most of the was corparate a/c opened was 6 during the year 2011-2012.

.The most of the was Trust a/c opened was 15 during the year 2010-2011.

.The most of the was NRI-Non Repatriable negative nomination a/c opened was

2 during the year 2012-2013.

The most of the was Individual Resident a/c opened was 864 during the year

2010-2011.

.The most of the was MCX-SX clearing member a/c opened was 1 during the

year 2012-2013

With the help of applying chi-square test (x2),we are able to understand that Sugal

and Damani share broking Ltd provide specific services as compared to its

competitors.

7/27/2019 vimya.doc

55/57

RECOMMENDATION

Some of my recommendation are summarized below as follows:

It was observed that the most vital problem spotted is of ignorances. Investors

should be made aware of the benefits. Nobody will invest until and unless he is

fully convinced. Investors should be made to realize that ignorance is no longer

bliss and what they are losing by not investing.

It is necessary for a growing company like Sugal and damani to adopt some

promotional tools to make it present before the willing investors of the country.

Many people who are interested to invest in the sharte market but cannot rely

upon Sugal and damani because of its less popularity among the general public.

Infrastructure of a company plays a vital role for attracting customer from the

market,From this side also,the Sugal has to more in order to be caught up in the

eye of the customers.

For better services providing Sugal and damani should have to increase the

number of terminal so that maximum no. of transaction can be executed in a short

span of time and thus it would help in increasing the customers satisfaction.

7/27/2019 vimya.doc

56/57

Due to higher AMC charges and demat account opening charges,most of the

customers are allowed to choose another companies rather than Sugal and damani.

So, it is necessary for the company to evaluate market condition and based on

that,take appropriate steps in order to attract the potential customers through

providing low charges for opening of demat account.

As I have noticed in the Chennai Head office of Sugal and damani,the work load

upon the employees is much than it should have to be.So, in order to facilitate the

work in a convenient and easier way more number of employees should have to

be appointed at that head office.

CONCLUSIONS

While doing my 4 months project program I came to a conclusion that this

training has helped me much in getting the through knowledge about some of the

share broking companies.how these companies are competing against each other for

getting the more market shre,how they are applying different marketing strategies to

attract customers and making them satisfied.

I came to know about the demat account,its benefits,how does it provides

services to the customers of which I was totally ignorant when Istarted my project.

I gathered much more knowledge about Sugal and damani share broking

Ltd,its services,its strategies and how every employees of it work hard to achieve the

organizational goal i.e.,achieve the maximum market share through customer

satisfaction

One thing that I noticed during my field work that many people of

Chennai are not much more award about the variuos financial products and

services of Sugal and damani which had to be there.They are ignorant about

demat account and lack of knowledge and information about it scared it them

of investing money in share market. So to generate awareness among them

7/27/2019 vimya.doc

57/57

advertising campaign can result in fruitful result. Only a limited percentage of

people are enjoying investing money in share market in Chennai.

Lastly and not the least as a coin has two sides, Chennai has favorable

and unfavorable aspects.The favorable aspect is that it provides lot of benefits

to its customers which some of its competitors fail to provide and again less

awareness about it among people is its negative side which hinders them to

invest their fund confidently.

BIBLIOGRAPHY

www.nseindia.com

www.en.wikipedia.com

www.sugalshare.com
http://www.nseindia.com/http://www.sugalshare.com/http://www.nseindia.com/http://www.sugalshare.com/