a project report completed 1222 (1)
TRANSCRIPT
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SUMMER TRAINING REPORT ON
PROCEDURE FOR TRADING IN LISTED SECUTRITIES IN STOCK EXCHANGE AND
COMPETETIVE POSITION OF ALANKIT ASSIGNMENT LTD , DELHI .
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DECLARATION
I Saurav Sood , a student of University Business School , Panjab University
Chandigarh of hereby declare that the project work, presented in this report
is my own and has been carried out under supervision of
This work has not been previously submitted to any other
university For any examination .
Date :-
Place:-
Signature: Saurav Sood
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ACKNOWLEDGEMENT
I hereby take this opportunity to thank M/sALANKIT ASSIGNMENT LTD ,
for providing me a corporate exposure through the course of my summer
internship.
I would like to express my sincere gratitude towards my company guide
for providing me great insights about mechanism of stock exchange, procedure for
listing of securities in stock exchange and other ventures , for guiding me allthroughout and for being a great support.
I would like to extend my gratitude to UBS Chandigarh, for providing me such a
platform.
Last but not the least all my friends and family for their support and co-operation.
Thanking You,
Saurav Sood
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EXECUTIVE SUMMARY
The market in which shares of publicly held companies are issued and traded
either through exchanges or over-the-counter markets. Also known as the equity
market, the stock market is one of the most vital components of a free-market
economy, as it provides companies with access to capital in exchange for giving
investors a slice of ownership in the company. The stock market makes it possible
to grow small initial sums of money into large ones, and to become wealthy
without taking the risk of starting a business or making the sacrifices that often a
company a high-paying career.
Thus this project is focused to study and analyze procedure for dealing in
securities in stock exchange. Researcher has also study some of the demand
drivers and supply factors that provide ALANKIT ASSIGNMENT LTD a
competitive edge over other players in the market.
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SL
NO.
CONTENTS PAGENO.
01 Declaration
02 Acknowledgement
03 Certificate
04 Executive summary
05 Review of Literature
a Objective of project
06 Company Overview
a Mission, Vision & Corporate Philosophy
b Product and Services
c Group Companies
d Milestones
07 Comparative analysis ofBroking Services of Alankit
Assignment Limited With other Broking Firms
08 SWOT analysis
09 Competitive Advantage OF Alankit AssignmentsLimited Brokerage Services
10 PESTEL analysis of Firm
11 Procedure for Trading Listed Securities in stock
exchange
a Introduction and Requirements For Listing of
Securities
b Compliances Under Listing Agreement
c Procedure For Trading of Securities in BSEd Procedure For Trading of Securities in NSE
12 Conclusions
13 Bibliography
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Review Of Literature
Al Ries and Jack Trout, in his work said differentiate or die, too many less
differentiated products creates a kind of information overload, and in this clutter
of too much information, products which are not properly differentiated or
advertised just end up becoming a me too product. To avoid it every marketer
needs to position his/ her products in a way that makes a specific image in the
minds of consumers.
Jack Miller, in his work published on June 03, 2010, talked about how investors
make investment decisions. He broke the process of decision making in pulling
the buy or sell trigger. According to him investors made the investment decisions
in the ways like simple screening, then lateral recommendation, followed by piggy
bank investing.
According to U.S. Securities and Exchange Commissions, one of the articles:
investors first evaluate their current financial roadmap, and then they evaluate
their comfort zone in taking on risk. Consider an appropriate mix of investments,
create and maintain an emergency fund, consider dollar averaging, consider
rebalancing portfolio occasionally, and in the process also try to avoid the
circumstances that can lead to fraud.
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Objectives of the study:
Study was conducted to find out the services provided by
ALANKIT ASSIGNMENT LTD In relation to :
1. Listing of securities of companies with designated Stock Exchanges in
India
2. Trading of securities in Stock exchange having nationwide
Terminals viz. National and Bombay Stock exchange on
Behalf of its clients
3. Competitive position of Alankit Assignments ltd In financial market
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COMPANY PROFILE
Alankit Assignments Ltd.,the flagship company was incorporated in 1991by
atalented visionary entrepreneur, Mr Alok K Agarwal. Under his able guidance
and management, the company has made unhindered steady progress since then.The Company has its headquarter in Delhi with 25 Regional Offices in Mumbai,
Kolkata, Chennai, Ahmadabad, Bangalore, Hyderabad, Jaipur, Lucknow,
Chandigarh, Indore, Bareilly, Kochi, Amritsar, Ludhiana, Patna, Bhubaneswar,
Guwahati, Pune, Ranchi, Visakhapatnam, Raipur, Mysore & Nagpur. Alankit
Assignments Ltd. has expanded its footprint in global arena with its overseas
offices in London, Singapore and Dubai.With a consistent expansion of Alankits
business, the Company has evolved from largely Financial & Share Broking
Company into a diversified Business House.
.Vision:
"To be a unique service provider in the sectors we serve
Mission:
To become a customer centric organization with focus on building trust by our
unmatched standards
CORE VALUES
Customer Centric
With our committed workforce we develop relationship that makes a positive
difference in our customers lives
Trustworthy
We uphold clients trust, commitment & privacy for all our actions
Quality
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We work together, and provide unsurpassed services to deliver premium value to
our customers
Stewardship
Think future oriented; act & invest to build a stronger firm for tomorrow.
Alankit Assignments ltd further commits itself to focus on the following as a part
of corporate social responsibilityinitiatives:
.
Quality in all its activities
Ethical and Moral conduct atall times and in all itsrelationships
Practicing socially andenvironmentally responsiblebehavior
Providing productive, healthyand safe work place for all itsemployees
Growth And Strategy
Covering India through Aadhar
Geographical expansion of business
Expand product portfolio
Strengthen research capabilities
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Product and Services
Financial Services
Equities
Derivatives
Currency derivatives
Arbitrage
Registrar Transfer Agent (RTA)
New pension scheme
Initial public offer
Depositary participant
Mutual funds
Insurance
Institutional equities
Wealth Management
Portfolio Management
Research services
Financial planning
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E-Governance
.Tin Facilitation Centre
-PAN
-TAN
-AIR
-E-TDS
-PAN Authorization
.E-Return
.CRA-Facilitation Centre
.Unique Identification Authority
.National insurancePolicy Repository (NIR)
Health Care
. Third Party Administration
. Rx Pharmacy
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Group Companies
Alankit Assignments Limited
Alankit Imaginations Limited
Alankit Health Care TPA Limited
Alankit Insurance Brokers Limited
Alankit Technologies Limited
Alankit Life Care Limited
Alankit Finsec Limited
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Milestone
1995 to 2000
Registrar & Share Transfer Agent (RTA)
Trading & Clearing Member - NSE, OTCEI, NSE- F&O
Depository Participant- NSDL & CDSL
2002
Member commodity Exchange
Third Party Administrator (TPA)
2003
Insurance Broker
2004
e-GovernanceTIN
2005
Member of: Dubai Gold & Commodity Exchange (DGCX)
Bombay Stock Exchange (BSE)
2007
Member of Indian Energy Exchange (IEX)
2008
Member of Currency Exchange
e-Governance- CRA
2009
Member of: Indian Commodity Exchange (ICEX)
Delhi Stock Exchange (DSE)
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2010
Appointed as POP-SP for New Pension System
Aggregator- NPS LITE
Enrollment Agency for UIDAI
2011
Launch of recordxpert.com
(Health record portal)
2012
Online issue of General Insurance
Policies of National Insurance Co. Ltd.
2013
AP of NIR
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Comparative Analysis of Broking Services of Alankit Assignment
Limited With other Broking Firms:
1. IIFL
The IIFL group, comprising the holding company, IIFL and its wholly-
owned subsidiaries, straddle the entire financial services space with offerings
ranging from equity research, equities and derivatives trading, commodities
trading, portfolio management services, mutual funds, life insurance, fixed deposits
and other small savings instruments to loan products and investment banking. IIFL
has a network of over 2100 business locations (branches and sub-brokers) spread
across more than 450 cities and towns. the group caters to approximately a million
customers. At present, IIFL is operating into USA, SINGAPORE and DUBAI.
Product & service:
o Equity trading
o Commodity trading
o Insurance solution
o Asset management
o Online investment portal
o Loans
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A/c opening charge 550Rs.
Annual Maintenance charges 300Rs.
Minimum Margin Required 10,000Rs.
Client wise exposureup to 4 times in delivery
up to 10 times in intraday
Upfront Subscription Plan Yes
Brokerage4 paise in delivery
.04 paise in intraday
DP selling charges Nil
Advisory servicesFree to clients
80 Rs. p.a. sub-broker
Software installation charges Free
Name of software Vconnect, Rapideal, Rapitrade
Table 2.1: Table showing Services and charges of IIFL
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.
Kotak Securities Limited
Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stockbroking and distribution arm of the Kotak Mahindra Group. One of the oldest
broking houses in India, its operations include stock broking and distribution of
various financial products. It is a corporate member of both the Bombay Stock
Exchange and the National Stock Exchange of India. Kotak Securities was founded
in 1994 and is headquartered in Mumbai, India.
Kotak Mahindra is one of India's leading banking and financial services
organizations, offering a wide range of financial services that encompass every
sphere of life. From commercial banking, to stock broking, to mutual funds, to life
insurance, to investment banking, the group caters to the diverse financial needs of
individuals and corporate sector.
Products & Services
o Equity
o Derivatives
o Currency Futures
o IPO
o Mutual Funds
o ETF
o Fixed Deposits
o Loans
o Tax Services,
o New Pension Systems and Insurance.
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Table 2.2: Table showing Services and charges of Kotak Securities
A/c opening charge 550Rs.
Annual Maintenance charges 300Rs.
Minimum Margin Required 10,000Rs.
Client wise exposureup to 4 times in delivery
up to 10 times in intraday
Prepaid scheme available Yes
Brokerage4 paise in delivery
.04 paise in intraday
DP selling charges Nil
Advisory services Free to clients
80 Rs. p.a. sub-broker
Software installation charges Free
Name of software Vconnect, Rapideal, Rapitrade
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3. Share Khan
Incorporated in February 2000, Sharekhan is India's 2nd largest stock
brokerproviding brokerage services through its online trading website
Sharekhan.com and 1950 Share shops which includes branches & Franchises in
more than 575 cities across India. Sharekhan has seen incredible growth over last
10+ years though it's very successful online trading platform and the chain of
franchises located in almost every part of India. Sharekhan has over 10 lakh
retail and institutional customers.
Sharekhan.com is the finest investment portal for India stock market. The well
designed website provides wide range on investment options, latest stock market
updates and many tools for investors. Sharekhan also offers 'Sharekhan Trade
Tiger', one of the most popular trading terminals, for retail investors.
Product & service:
o Equity trading
o Commodity trading
o Insurance solution
o Asset management
o Online investment portal
o Loans
o Wealth management spectrum
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Table 2.3: Table showing Services and charges of Sharekhan
A/c opening charge 550Rs.
Annual Maintenance charges 300Rs.
Minimum Margin Required 10,000Rs.
Client wise exposure up to 4 times in delivery
up to 10 times in intraday
Prepaid scheme available Yes
Brokerage 4 paise in delivery
.04 paise in intraday
DP selling charges Nil
Advisory services Free to clients
80 Rs. p.a. sub-broker
Software installation charges Free
Name of software Vconnect, Rapideal, Rapitrade
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SWOT analysis of Alankit Assignment Limited
StrengthsDiversified Services
Experienced Management
PAN India Presence
18 Years of Services
24 Services
8 Group Companies
25 Regional Offices
Online trading platform.
Diverse branches and networks provide a great opportunity to cater tapped and
untapped market as well.
Provides competitive brokerage and DP charges.
Equity analysis reports to support its clients.
Both online and offline trading facility.
Weakness
Position to answer the questions of the clients in their fields.
It does not provide indices on major world markets, ADR prices of Indian scripts.
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Lacks banking arm
Lack of awareness among customers because of non-aggressive promotional
strategies (Print media, newspapers etc.)
OPPORTUNITIES:
Can easily tap the retail investor s with small saving through promotional
channels like print media, electronic media, etc.
More & more small investors are entering into share market
Focuses more on HNIs than retail investors which results in meager market-
share as compared to close competitors.
ATM facility should be provided for easy withdrawals.
Tie-ups with third party companies for selling products.
High client base will help for cross sales of its products
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Threats
Companies like Sharekhan, ICICI Direct, Kotak Securities, and private brokers are
major threats.
Banks with demat facilities are jockeying for position.
Local brokers capable of charging lower brokerage.
Changes in SEBI guidelines and other tax implications.
Government regulations
Competitive Advantage Of Alankit Assignments Limited Brokerage
Services
One of the lowest brokerage charge in the industry (currently).
Best software in the industry.
Listed company and aggressive in brand promotion.
Mobile trading tie ups with Blackberry and other phones, where one can trade with
ease.
Both online and offline facilities are provided.
Competitive commissions and service support at fair price (value for money).
Relationship manager facility to assist customers as and when they need assistance
and guidance.
Easy access to customers of the snap shots of their account statement
and portfolio statements and to digital contract notes.
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PESTEL analysis of firm
Political and Legal
Heavy regulations and tough regulations by SEBI to avoid major scams like
Harshad Mehta and ketan Parekh.
Settlement period and Settlement Cycle
Know Your Customer Norms
Economic Environment
Limited FDI and Foreign Institutional Investor Inflows
Rigid RBI Guidelines and Foreign Exchange Management Provisions
Limited Trade and heavy regulations in currency trade
Social Environment
Apprehensiveness of investments in stocks and shares
Less Expertise and more dependence on speculation
Festivals
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Technological and Environmental
Techonological Advances , The stock exchanges , improved trading, hardware
and software and software enabling nearly 15 Millions trades per day.
Satellite communication techonologies
Online and Mobile Trading facilities
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Procedure for Trading Securities in stock exchange(National and Bombay stock
exchange)
As we know stock exchange provides a platform for sale and purchase of existing
securities of companies.
Only such securities can be traded on floor of stock exchange which are listed
with stock exchange. In order to ensure that securities of a public limited
company are listed in a stock exchange a company has to appoint a compliance
officer which will ensure that all clauses of listing agreement framed by stock
exchange are duly compiled.
Listing means permission from stock exchange for trading securities on trading
floor of stock exchange.
Following are main clauses of listing agreement and compliances
BOOK CLOSUREFOR DECLARATION OF DIVIDEND ETC.- Clause 16
Event
To closethe transfer booksfor declaration of dividend at the time of the AGM.Books will also be closed for issue of right/bonus shares or issue of shares for
conversion of debentures etc. in the same manner by giving notices.
The minimum timegap between the two closures and / or record dates would be
at least 30 days.
Time Limit
Advance Notice of at least 7 days. The exchange must be given the dates and
purpose of closing the transfer of books.
The company on whose stocks, derivatives are available or whose stocks form
part of an index on which derivatives are available, shall give a notice
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period of 7 daysto stock exchanges for corporate actions like merger, de-
mergers, splits and bonus shares.
Clause 19(a), (b) & (d)
Prior intimation to stock exchange for calling Board Meeting for some
specified Business
If the company is planning for
Proposal for buy back
Declaration of dividend
Right issue
Bonus Issue (in this case simultaneous notice to stock exchange has to be given on
the date when the proposal is communicated to Board of Directors as a part of
agenda papers.)
Issue of convertible debentures.
Passing over of dividend.
Then prior intimation to the Exchange is required before the Board considers thesame.
Time Limit
At least 2working days in advance of the date of the BoardMeeting
ISSUE OF SHARES OR SECURITIESClause 24
The company making a new issue has to agree
To obtain in principal approval for listing of the new securities
To make true, fair and adequate disclosure in the offer documents
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To get the offer documents vetted by SEBI
To submit to the exchange:
Copy of the acknowledgment card so vetted by SEBI and
Compliance certificate from merchant banker reporting positive compliance of
guidelines on disclosure and investor protection.
Company to submit any scheme/petition under sections391, 394 and 101
proposed to be submitted to the court or tribunal at least one month in
advancefor getting it approved from the stock exchange and shall also:
Submit an auditors certificate to the effect that the accounting treatment
contained in such scheme is in compliance with all the applicable Accounting
standards (requirement introduced w.e.f. 5th
April,2010.)
Assure to the stock exchange that the said scheme of
arrangement/amalgamation/merger etc does not in any way violate, override or
circumscribe the provisions of the securities laws or stock exchange
requirements.
Disclose the pre and post arrangement capital structure, shareholding pattern
and the fairness opinion obtained from independent merchant bankers on
valuation of assets / shares in the explanatory statement forwarded to the
shareholders u/s 393 or accompanying the resolution to be passed under section
100
Clause 23 (e).
Event
Time to be given to right issue shareholders to decide
Time Limit
Not less than 4 weeks, within which they will have to exercise their rights.
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Clause 23 (e)
Event
Time limit to issue letters of allotment or letters of rights
Time Limit
Within 6 weeks of the Record date / reopening of transfer books /
submission of letters of renunciation / applicable of new securities.
FORWARDING OF ANNUAL ACCOUNTS TO THE EXCHANGE, FILING OF
SHAREHILDING PATTERN clause 31
The company will forward to the Exchange promptly and without application: -
6 copies of the Annual report / periodical report / special report as soon as they
are issued to the shareholdersto all the recognized stock exchanges:
6 copies of all notices, resolutions and circulars relating to new issue of capital
prior to their dispatch to the shareholders:
3 Copies of all the notices, call letters or any other circulars including notices of
the meeting convened under section 391 or 394 at the same time as they are sent
to the shareholders or debenture holders or advertised in the Press:
Copy of the proceedings at all AGM / EGM of the company;
3 copies of all notices, circulars, etc, issued or advertised in the press regarding
any proposal to merge or amalgamate, re-construction, reduction of capital,
scheme or arrangement etc. and copies of the proceedings at all such meetings.
Time limit
Should be send when mailed to shareholders.
Should be send prior to dispatch to shareholders.
Should be send when sent to shareholders.
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Should be send after the Chairman of the meetings has signed the minutes.
Promptly.
ANNUAL REPORT- clause 32
Company to supply a copy of the complete B/S, P/L Account and the Directors
Report to each Shareholder.
Company may supply a single copy to all the shareholders having same unless
requested. However the company will supply abridged Balance sheet to all the
shareholders in the same household.
Company has to give cash flow statement prepared as perAS-3 along with
Consolidated Financial Statement (CFS) duly audited by the Statutory Auditors.
Filling of such CFS is mandatory.
It shall also disclose:
Related party transactions
Fact of delisting, together with reasons thereof in its Directors Report
In case the securities are suspended from trading, the reasons thereof
The name and address of each stock exchange at which the issuers securities are
listed and also a confirmation that the Annual Listings Fees has been paid to each
of the exchange.
If company changes its name suggesting new line of business after 1st
January,
1998 then company will have to disclose the turnover and income, etc. from such
new activities separately in the annual results for a period of 3 years from the
date of change in the name of the company.
SHARHOLDING PATTERNclause 35
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Shareholding pattern to be filled on a quarterly basis in the form that has been
prescribed in the agreement itself.
The reporting format of shareholding pattern as provided in clause 35 of the
Listing Agreement shall be indicated in 3 categories, viz., shares held by
promoters and promoter group, shares held by public and shares held by
custodians and against which Depository Receipts have been issued. Additional
details with respect to no. of shareholders no. of shares held in demat form etc.
will be given for all the 3 categories. Disclosure of shareholding of persons holding
more than 1% of the total number of shares and Depository Receipts will also be
required to be furnished.
The format of disclosure of shareholding pattern also includes details of shares
pledged by promoters and promoter group. Such pattern shall be disclosed for
each class of security separately and an additional format for disclosure of voting
rights pattern in the company has been prescribed.
Time limit
Within 21 days of end of the quarter
Clause 40 A
The company agrees to comply with the requirements specified in Rule 19(2) and
Rule 19A of the Securities Contracts (Regulation) Rules, 1957.
Where the company is required to achieve the minimum level of public
shareholding specified in Rule 19(2)(b) and/or Rule 19A of the Securities
Contracts (Regulation) Rules, 1957, it shall adopt any of the following
methods to raise the public shareholding to the required level:-
(a) issuance of shares to public through prospectus; or
(b) offer for sale of shares held by promoters to public through prospectus; or
(c) sale of shares held by promoters through the secondary market.
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Where in case board have a non executive chairman, then the board must
consist of 50% of independent directors.
Definition of independent director
independentdirector shall mean non-executive director of the company who
a. apart from receiving directors remuneration, does nothave any material
pecuniary relationships or transactions with the company, its promoters, its
senior management or its holding company, its subsidiaries and associated
companies;
b. is not related to promoters or management at the board level or at one level
below the board;
c. has not been an executive of the companyin the immediately preceding three
financial years;
d. is not a partner or an executive of the statutory audit firm or the internal
auditfirmthat is associated with the company, and has not been a partner or an
executive of any such firm for the last three years. This will also apply to legal
firm(s) and consulting firm(s) that have a material association with the entity.
e. is not a supplier, service provideror customer of the company. This should
include lessor-lessee type relationships also; and
f. is not a substantial shareholder of the company, i.e. owning two percent or
more of the block of voting shares.
Remuneration committee
All remuneration paid to non-executive directors, including independent
directors, shall be fixed by the Board of Directors and shall be agreed to by
shareholders in general meeting. Limits shall be set for the maximum number of
stock options that can be granted to non-executive directors, including
independent directors, in any financial year and in aggregate.
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Meeting of Audit Committee
The audit committee should meet at least four times in a year and not more than
four months shall elapse between two meetings. The quorum shall be either two
members or one third of the members of the audit committee whichever is
greater, but there should be a minimum of two independent members present.
Role of the audit committee
The role of the audit committee shall include the following:
Oversight of the companys financial reporting processand the disclosure of its
financial information to ensure that the financial statement is correct, sufficient
and credible.
Recommending the appointmentand removal of external auditor, fixation of
audit fee and also approval for payment for any other services.
Reviewingwith management the annual financial statementsbeforesubmission
to the board, focusing primarily on;
Any changes in accounting policies and practices.
Major accounting entries based on exercise of judgment by management.
Qualifications in draft audit report.
Significant adjustments arising out of audit.
The going concern assumption.
Compliance with stock exchange and legal requirements concerning financial
statements
Any related party transactions
Reviewing with the management, external and internal auditors, the adequacy of
internal control systems.
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Reviewing the adequacy of internal audit function, including the structure of the
internal audit department, staffing and seniority of the official heading the
department, reporting structure coverage and frequency of internal audit.
Discussion with internal auditors any significant findings and follow up there on.
Reviewing the findings of any internal investigations by the internal auditors into
matters where there is suspected fraud or irregularity or a failure of internal
control systems of a material nature and reporting the matter to the board.
Discussion with external auditors before the audit commences about nature and
scope of audit as well as post-audit discussion to ascertain any area of concern.
Reviewing the companys financial and risk management policies.
To look into the reasons for substantial defaults in the payment to the
depositors, debenture holders, shareholders (in case of non payment of declared
dividends) and creditors.
Whistle Blower Policy
The intention of this clause is that management establishes a mechanism foremployees to report concerns about unethical behavior, actual or suspected fraud
or violation of the companys code of conduct or ethics policy. The exact details of
such a mechanism should be left to each company, through its Board of Directors,
to decide but the existence and implementation must be reviewed by the audit
committee. The mechanism must have adequate provisions to ensure there is no
victimization of employees who avail of this procedure..
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TRADING MECHANISM IN BOMBAY STOCK EXCHANGE
Established in 1875, BSE Ltd , Earlier it was known as The Native Share and Stock
Brokers' Association").
BSE provides an efficient and transparent market for trading in equity, debt
instruments, derivatives, and mutual funds.
It also has a platform for trading in equities of small-and-medium enterprises
(SME).
Its main index Is SENSEX.
It is the one of the stock exchange who has firstly introduced Bombay Online
Trading System (BOLT) in india .
The scrips traded in Bse have been classified into various groups.
Bse has for guidance and benefit of the investor ,classified the scripsin the
equity segment into A,B, T, AND Z groups on Certainqualitative and quantitative parameters .
The Fgroup represents Fixed Income Securities.
The T represents Government Securities which are settled on trade to trade to
basis as a surveillance measure
Trading in government securities by the retail investor is done under the G
GROUP
The Z group was introduced by BSE in july 1991 and includes companies
which have failed to comply with listing agreementand failed to redress
investor grievancesand /or have notmade the required arrangements with
depository participants both CDSL and NSDL for dematerialization of shares.
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BSE also provides a facility to the market participants for online trading of odd
lot securities in physical form in A ,B, T , AND Z groups and in rights
renunciations in all groups of scrips in equity segment
The, Mumbai Exchange has initiated a number of measures aimed at providing
quality products and services and expanding its network using cutting edge
information technology. The BSE made its transition from an 'outcry' system of
trading to a completely electronic trading system.BSE has introduced electronic
trading system known as BOLT ( Bombay Online Trading System)
Trading system displays on a continuous basis scrip and market-related
information required supporting traders. (Information includes best five bids and
offers, last traded quantity and price, total buy and sell depth (irrespective of
rates), open, high, low and close price, total number of trades, volume and value,
and index movement. Other company-related information is also displayed)2.
As soon as an order is matched, the confirmation of the trade is generated on-
line.
The order matching logic is based on best price and time priority.
The BSE On line Trading Platform has a capacity of conducting 2 million trades
per day
The latest state of the art technology infrastructure with Trader Work Stations
located in more than 400 cities all over the country.
Trading on the BOLT system is conducted from Monday to Friday between 9: 30
a.m. and 3:30p.m.
Trading can also be conducted through the BSE Internet Trading System -
www.bsewebx.comthe first Exchange enabled Internet Trading System.8.
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BSE aims to provide trading any where and at anytime. With this endeavor in
mind, the exchange continuously upgrades the hardware, software and
networking systems so as to enable it to enhance the quality and standards of
service to its members and other market intermediaries
PRICE DISCOVERY MECHANISMS
During the pre-opening period (9.15a.m.-9.30a.m.),brokers input the bidsand
offersthey receive from investorsinto the system until they match.
The mechanism for which the price of equities is determined is as follows:
The best price (price priority): The transaction is executed for the best price.
Type of order: If an order is conditional, precedence of execution is given to
orders that are un-conditional. For example, if there are two orders with the same
price, the system will give precedence to the un-conditional order.3.
Source of order: The sources of order are given precedence of execution as
follows:
Priority 1 =>
clients order, foreign investors order, market controls order
Priority 2 =>
mutual funds order, the issuing companys order, specialists order
Priority 3 =>
insiders order
Time of order priority: In case the price and type are the same, precedence is
given to the orders entered into the system first.5.
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Cross priority: Cross priority is implemented if the one with the priority is on
the active side .Trading in cross priority takes precedence over other house, then
against the same house order.
Random factor priority: In case two orders are received in the same time,
precedence is given to the random factor.
CLEARING AND SETTLEMENT
The settlement of transactions was earlier done in the weekly settlement
environment, where the exchange had a carry forward facility. The exchangecommenced exchange of trades on rolling basis where the trades are settled on
T+ 2 basis. Undelivered quantities of securities in settlement is promptly
auctioned or closed out as per the well-laid procedure. Two depositories, namely
the Central Depository Services (India) Ltd. and National Securities Depository of
India Ltd. operate in the Indian Market place. The Clearing House of the exchange
has well- structured linkages with both the depositories. Direct transfer of
securitiesto and from the Beneficial Owner Accountsis facilitated at theClearinghouse level only, making for the seamless movement of securities in the
settlement system .The settlement of transactions in the depositoriesmode is
based on the ISIN codes of the securities. The exchange Rules, Bylaws and
regulations have clearly laid down the default handling procedure.
National Stock Exchange
National Stock Exchange (NSE) was established in the mid 1990s as a
demutualised electronic exchange. NSE provides a modern, fully automated
screen-based trading system, with over two lakh trading terminals . across the
country.
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The exchange was incorporated in 1992as a tax-paying company and was
recognized as a stock exchange in 1993 under theSecurities Contracts
(Regulation) Act, 1956.
NSE commenced operationsin the Wholesale Debt Market (WDM) segment in
June 1994. The Capital market (Equities) segmentof the NSE commenced
operations in November 1994, while operations in the Derivatives segment
commenced in June 2000.
The Objectives of the NSE are:
To establish a nation wide trading facility for equities, debt instruments and
Hybrids .
To ensure equal access to investorsall over the country throughan appropriate
Communication network.
To provide a fair, efficient and transparent securities marketto investors using
Electronic trading systems.
To enable shorter settlement cyclesand book entry settlement system.
To meet the current international standards of securities markets.
The trading system of the NSE, known as NEAT (National Exchange for
Automated Trading),is a fully automated screen based trading system that
enables members across the Country to trade simultaneously with enormous
ease and efficiency. In one stroke it has done away with the need for people to
congregate on the floor of an exchange to trade and done away with the need for
people to congregate on the floor of an exchange to trade and has instead taken
the exchange floor to the investors doorstep.
The telecommunications network is the backbone of any automated trading
system and the same is true for NSE also . Each Trading Member trades on the
http://en.wikipedia.org/w/index.php?title=Securities_Contracts_(Regulation)_Act,_1956&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Securities_Contracts_(Regulation)_Act,_1956&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Securities_Contracts_(Regulation)_Act,_1956&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Securities_Contracts_(Regulation)_Act,_1956&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Securities_Contracts_(Regulation)_Act,_1956&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Securities_Contracts_(Regulation)_Act,_1956&action=edit&redlink=1 -
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All Government securities and Treasury bills are automatically deemed to be
listed as and when they are issued. Other securities, either publicly issued or
privately placed could be listed if eligible as per exchange rules.
Procedure and Conditions for listing of securities on WDM segment:
1. All Listing are subject to compliance with Byelaws, Rules and other
requirements framed by the Exchange from time to time in addition to the SEBI
and other statutory requirements.
2. The Issuer of security proposed for listing has to forward an application in the
format prescribed in Annexure I of this booklet
along with application, such supporting documents/information as specified in
Annexure I of this booklet and as prescribed by the Exchange from time to time.
4. On getting an in-principle approval t of the exchange the issuer has to enter
into a listing agreement in the prescribed format under its common seal.
5. Upon listing, the Issuer has to comply with all requirements of law, any
guidelines/directions of Central Government, other Statutory or local authority
6. The Issuer shall also comply with the post listing compliance as laid out in the
listing agreement and shall also comply with the rules, bye-laws, regulations
and any other guidelines of the Exchange as amended from time to time.
7. Listing on WDM segment does not imply a listing on CM segment also or vice
versa.
8. . If the equity shares of an issuer are listed on other stock exchanges but not
listed on Capital Market segment of the Exchange, though eligible, then the
debt securities of the said issuer will not be permitted to be listed on the
WDM segment.
Clearing and Settlement
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Trades on the Wholesale Debt Market are settled gross on a trade for trade basis
i.e. each transaction is settled individually and cumulating or netting of
transactions is not allowed.
Each trade has a unique settlement date specified upfront at the time of orderentry and used as a matching parameter. It is mandatory for trades to be settled
on the predefined settlement date . The Exchange currently allows settlement
periods ranging from same day (T+0) settlement to a maximum of three (T+2)
days. Exchange also permits Repurchase (REPO) trades for a repo term upto 14
days for eligible securities and participants.
The Clearing Corporation of India Limited (CCIL), promoted by the banks and
financial institutions, was incorporated in April 2001 to support and facilitate
clearing and institutions, was incorporated in April 2001 to support and facilitate
clearing and settlement of trades in government securities (and also trades in
forex and money markets).
It facilitates settlement of transactions in government securities (both outright
and repo) on gross basis and settlement of funds on net basis simultaneousl
It acts as a central counterparty for clearing and settlement of government
securities transactions done on NDS.
It provides guaranteed settlement for transactions in government securities
including repos through improved risk management practices viz, daily mark to
market margin and Dealer/Mutual Fund or a Statutory Corporation or body
corporate which is a member of NDS and which has opened an SGL Account and
a Current Account with RBI can apply
NDS and which has opened an SGL Account and a Current Account with RBI can
apply for CCIL's membership for the Securities segment.In case of securities otherthan government securities, there is a bilateral settlement between the parties
to the trade. Settlements of transactions are closely monitored by the Exchange
through obtaining settlement details by trading members and participants. In
case of deferment of settlement or cancellation of trade, trading members and
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participants are required to seek prior or cancellation of trade, trading members
and participants are required to seek prior approval from the Exchange .
Conclusions And Findings
After working into a Alankit Assignment Ltd , Trainee has got a clear
understanding of procedure for trading of securities in stock exchange and major
compliance made by above said firm on behalf of its clients under Listing
agreement .
After analyzing the books of firm ,the trainee has find out the competitive
advantage available to firm against its competitors in the Market .
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Bibliography
WWW.Alankit.com
www.BSE.com
WWW.NSE.com
ISCI JOURNALS
ICSI Study Materials- Securities law and Compliances
WWW.kotak.com
WWW.Sharekhan.com
Alankit Assignment Ltd Prospectus
http://www.alankit.com/http://www.alankit.com/http://www.bse.com/http://www.bse.com/http://www.nse.com/http://www.nse.com/http://www.kotak/http://www.kotak/http://www.share/http://www.share/http://www.share/http://www.kotak/http://www.nse.com/http://www.bse.com/http://www.alankit.com/ -
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