A STUDY ON SECONDARY MARKET OPERATIONS IN ANGEL BROKING LTD., CHENNAI.

PROJECT REPORT Submitted in partial fulfillment of the Requirement for the award of the degree of MASTER OF BUSINESS ADMINISTRATION

By Mr.A.GOPI NATH (250898014

Under the valuable guidance of Mr.B.RAJENDHIR, M.COM, DEPARTMENT OF MANAGEMENT STUDIES, SIMS. PUTTUR

BUILDS CAREER SESHACHALA INSTITUTE OF MANAGEMENT STUDIES (Affiliated to S.V.Uni e!"it#, Ti!$%ati& ('(()*(+&

ACKNOWLEDGEMENT

It is indeed a pleasant task to thank all the people who have contributed towards the successful completion of this project. I express my sincere gratitude to our project guide MR.K THIRUNEER SELVAM, REGIO !" #E!$ ! $ MR.K PRABU%&R!I ' for his able supervision during the course of the project. I also thank my PARENTS AND BROTHER, Prashnth for their support and encouragement throughout the project. I am grateful to my friends who made

contribution towards the successful completion of this project.

A.GOPI NATH!

DECLARATION

I ,e!e -# de.la!e t,at t,e %!o/e.t !e%o!t titled 0A SECONDOR1 MAR2ET OPERATIONS AT ANGEL 3RO2ING4. S$-5itted -# 5e to t,e de%a!t5ent of -$"ine"" 5ana6e5ent $nde! t,e 6$idan.e of. M!.T.RA7ENDHIRAN, M.COM, of Ma"te! of 3$"ine"" Ad5ini"t!ation -onafide 8o!9 $nde! ta9e" -# 5e and it i" not "$-5itted to an# ot,e! $ni e!"it# o! in"tit$tion fo! t,e a8a!d of an# de6!ee t,e di".i%line:.e!tifi.ate o! %$-li",ed an# ti5e -efo!e.

A.GOPI NATH!

CONTENTS
S!.NO ;. P"#$%&'!"#( CHAPTER < ; INTRODUCTION COMPAN1 PROFILE INDUSTR1 PROFILE CHAPTER < ' THEORTICAL 3AC2 GROUND CHAPTER < = O37ECTIVIES OF STUD1 REVIE> OF LITERATURE CHAPTER < ? DATE ANAL1SIS PAGE NO

'.

=.

?.

@.

CHAPTER < @ FINDINGS AND SUGGESTIONS CHAPTER < A CONCLUSION 3IL3IOGRAPH1

A.

INTRODUCTION

INTRODUCTION SECONDARY MARKET

Secondary market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange. Majority of the trading is done in the secondary market. Secondary market comprises of equity markets and the debt markets. The general in estor! the secondary market pro ides an efficient platform for trading of his securities. "or the alue$ of management of the company! Secondary equity markets ser e as a monitoring and control conduit#by facilitating enhancing information decisions. The primary market! securities are offered to public for subscription for the purpose of raising capital or fund. Secondary market is an equity trading enue in which already existing/pre$ issued securities are traded among in estors. Secondary market could be either auction or dealer market . >,ile "to.9 eC.,an6e i" control acti ities! enabling contracts! that incenti e$based management and implementation guides

aggregating management

% iaprice

disco ery&

t,e %a!t of an a$.tion 5a!9et, O e!*t,e*Co$nte! (OTC& i" a %a!t of t,e deale! 5a!9et

COMPANY PROFILES

ngel Broking's tryst with

excellence in customer relations began more than 20 years ago. Today, Angel has emerged as a premium Indian stock broking and wealth management house, with an absolute !ocus on retail business, and a commitment to pro"ide #$eal %alue !or &oney# to all its clients. The Angel 'roup is a member o! the Bombay (tock )xchange *B()+, ,ational (tock )xchange *,()+ and the two leading -ommodity )xchanges in the country i.e. ,-.)/ 0 &-/. 1e are also registered as a .epository 2articipant with -.(3.

Our Presence
Nation*8ide net8o!9 of ;+ Re6ional H$-"P!e"en.e in ;;( .itie". @(((D S$-*3!o9e!" E 3$"ine"" A""o.iate"?.F la9, Client"

Angel Group of Companies

Angel Broking 3td.

Me5-e! on t,e 3SE and De%o"ito!# Pa!ti.i%ant 8it, CDSL

Angel -apital 0 .ebt &arket 3td

Me5-e!",i% on t,e NSE Ca", and F$t$!e" E O%tion" Se65ent

Angel -ommodities Broking 3td.

Me5-e! on t,e NCDEG E MCG

Angel (ecurities 3td.

Me5-e! on t,e 3SE

ANGEL BOARD OF DIRECTORS

M#. D%)*(+ T+",,"#

H Chairman and Managing Director

M!. Dine", T,a99a! i" t,e fo$nde! C,ai!5an E Mana6in6 Di!e.to! of t,e An6el G!o$% of Co5%anie"

M#. L"!%$ T+",,"#- Director - Research A %a!t of t,e "enio! 5ana6e5ent tea5 "in.e t,e An6el G!o$%" in.e%tion, M!. Lalit T,a99a! i" t,e 5oti atin6 fo!.e -e,ind An6el" ,i6,l# a..lai5ed Re"ea!., tea5. M#. A.%$ M"/'.0"#
H

C,ief St!ate6# Offi.e!

M!. A5it Ma/$5da! i" de"i6nated a" t,e C,ief St!ate6# Offi.e! of t,e 6!o$%. M#. R"/%1 P+"0,*
Corporate Communications
H

Executive Director - Human Resources

M!. Ra/i P,ad9e 5ana6e" t,e t8o 9e# f$n.tion" of H$5an Re"o$!.e" E Co!%o!ate Co55$ni.ation" fo! t,e An6el G!o$%, and ,a" a.ti el# .ont!i-$ted to t,e G!o$%" 6!o8t, o e! t,e la"t fo$! #ea!".

M#. 2%)"3 A4#"5"!

H Executive Director ! E"uit# $ro%ing

M!. Vina# A6!a8al lead" t,e EI$it# 3!o9in6 -$"ine"" e!ti.al at An6el, 8,i., .o5%!i"e" of 3$"ine"" De elo%5ent, O%e!ation" and P!od$.t De elo%5ent. M#. N%,+%! D"6%)%
H Executive Director - &ales and Mar%eting

An M3A 8it, "%e.ialiJation in finan.e, M!. Ni9,il DaCini ,a" -een in"t!$5ental in int!od$.in6 t,e .on.e%t of %!ofe""ional 5a!9etin6 of -!o9in6 "e! i.e" at An6el. M#. H%$')4(+' D*7)"$+ Management A 5a!9etin6 %!ofe""ional and a 3!iti", C,e enin6 ".,ola! f!o5 t,e London S.,ool of E.ono5i.", M!. Hit$n6",$ De-nat, lead" t,e di"t!i-$tion and >ealt, Mana6e5ent -$"ine""e" at t,e An6el G!o$%, 8,i., in.l$de" t,e di"t!i-$tion of In"$!an.e, 5$t$al f$nd", IPO", %e!"onal loan" and ot,e! 8ealt, 5ana6e5ent %!od$.t".. M#. M'0%$ Anal#tics
H Executive Director - $usiness )ntelligence H Executive Director - Distri'ution

(ealth

M$dit ,ead" t,e ad an.e anal#ti." and "t!ate6i. -$"ine"" intelli6en.e initiati e" at An6el. A 5$ltidi".i%lina!# %!ofe""ional, 8it, -a.,elo!" in En6inee!in6 de6!ee E do.to!ate in E.ono5i."

M#. A0%! K"("0

H Executive Director

C*O

A to% !an9in6 FCA, FCS, AIC>A and LL3, M!. Adil 2a"ad ,ead" An6el G!o$%K" Finan.e f$n.tion and %la#" a %i otal !ole in Co!e St!ate6# Plannin6, 3$d6eta!# Cont!ol" and S#"te5" M#.S")$")' S3".
H Executive Director ! Operations

M!. S#a5 -!in6" 8it, ,i5 o e! ;F #ea!" of !i., 5iC eC%e!ien.e in all fa.et" of -an9in6L T!an"a.tion 3an9in6, >,ole"ale 3an9in6, T!ea"$!# 3an9in6, Con"$5e! 3an9in6 E C3S. M#. K*$") S+"+ +echnolog# A" Head of Te.,nolo6# fo! t,e An6el G!o$%, M!. 2etan S,a, i" in ol ed in t,e de"i6nin6 of IT %oli.ie" and St!ate6ie". IT i" not 5e!el# an ena-le! at An6elL it i" a "t!ate6i. f$n.tion. M(. P%),3 K8$+"#%
H Associate Director - &ales And Mar%eting

H Associate Director - )nformation

M". Pin9# 2ot,a!i i" !e"%on"i-le fo! de elo%5ent and eC%an"ion of t,e An6el G!o$%" -$"ine"" in So$t,e!n India. S,e "ta!ted ,e! .a!ee! at An6el a" a 3$"ine"" De elo%5ent ECe.$ti e.

A78'$ A)4*! B'(%)*((

Equity

Total eI$it# .a%ital of a .o5%an# i" di ided into eI$al $nit" of "5all deno5ination", ea., .alled a ",a!e. Fo! eCa5%le, in a .o5%an# t,e total eI$it# .a%ital of R".',((,((,((( i" di ided into '(,((,((( $nit" of R" ;( ea.,. Ea., "$., $nit of R".;( i" .alled a S,a!e. T,$", t,e .o5%an# t,en i" "aid to ,a e '(,((,((( eI$it# ",a!e" of R".;( ea.,. T,e ,olde!" of "$., ",a!e" a!e 5e5-e!" of t,e .o5%an# and ,a e otin6 !i6,t".
Commodity

FCRA Fo!8a!d Cont!a.t" (Re6$lation& A.t, ;+@' define" 06ood"4 a" 0e e!# 9ind of 5o a-le %!o%e!t# ot,e! t,an a.tiona-le .lai5", 5one# and "e.$!itie"4. F$t$!e"K t!adin6 i" o!6aniJed in "$., 6ood" o! .o55oditie" a" a!e %e!5itted -# t,e Cent!al Go e!n5ent. At %!e"ent, all 6ood" and %!od$.t" of a6!i.$lt$!al (in.l$din6 %lantation&, 5ine!al and fo""il o!i6in a!e allo8ed fo! f$t$!e" t!adin6 $nde! t,e a$"%i.e" of t,e .o55odit# eC.,an6e" !e.o6niJed $nde! t,e FCRA.
Portfolio

A Po!tfolio i" a .o5-ination of diffe!ent in e"t5ent a""et" 5iCed and 5at.,ed fo! t,e %$!%o"e of a.,ie in6 an in e"to!M" 6oal("&. Ite5" t,at a!e .on"ide!ed a %a!t of #o$! %o!tfolio .an in.l$de an# a""et #o$ o8n*f!o5 ",a!e", de-ent$!e", -ond", 5$t$al f$nd $nit" to ite5" "$., a" 6old, a!t and e en !eal e"tate et.. Ho8e e!, fo! 5o"t in e"to!" a %o!tfolio ,a" .o5e to "i6nif# an in e"t5ent in finan.ial in"t!$5ent" li9e ",a!e", de-ent$!e", fiCed de%o"it", 5$t$al f$nd $nit"

Mutual Funds

Se.$!itie" EC.,an6e 3oa!d of India (SE3I& i" t,e !e6$lato!# -od# fo! all t,e 5$t$al f$nd". All t,e 5$t$al f$nd" 5$"t 6et !e6i"te!ed 8it, SE3I.T,e!e a!e "e e!al -enefit" f!o5 in e"tin6 in a M$t$al F$ndH
Small investments' M$t$al f$nd" ,el% #o$ to !ea% t,e -enefit of

!et$!n" -# a %o!tfolio "%!ead a.!o"" a 8ide "%e.t!$5 of .o5%anie" 8it, "5all in e"t5ent".
Professional Fund Management P!ofe""ional" ,a in6

Con"ide!a-le eC%e!ti"e, eC%e!ien.e and !e"o$!.e" 5ana6e t,e %ool of Mone# .olle.ted -# a 5$t$al f$nd. T,e# t,o!o$6,l# anal#"e t,e Ma!9et" and e.ono5# to %i.9 6ood in e"t5ent o%%o!t$nitie".
Trans!aren"y M$t$al F$nd" !e6$la!l# %!o ide in e"to!" 8it,

Info!5ation on t,e al$e of t,ei! in e"t5ent". M$t$al F$nd" al"o P!o ide .o5%lete %o!tfolio di".lo"$!e of t,e in e"t5ent" 5ade -# a!io$" ".,e5e" and al"o t,e %!o%o!tion in e"ted in ea., a""et t#%e.
C#oi"e T,e la!6e a5o$nt of M$t$al F$nd" offe! t,e in e"to! a 8ide

Va!iet# to .,oo"e f!o5. An in e"to! .an %i.9 $% a ".,e5e de%endin6 U%on ,i" !i"9: !et$!n %!ofile.
Regulations All t,e 5$t$al f$nd" a!e !e6i"te!ed 8it, SE3I and

t,e# f$n.tion 8it,in t,e %!o i"ion" of "t!i.t !e6$lation de"i6ned to %!ote.t t,e inte!e"t" of t,e in e"to!.

Initial Pu$li" Offering %IPO&

IPO i" 8,en an $nli"ted .o5%an# 5a9e" eit,e! a f!e", i""$e of "e.$!itie" o! an offe! fo! "ale of it" eCi"tin6 "e.$!itie" o! -ot, fo! t,e fi!"t ti5e to t,e %$-li.. T,i" %a e" 8a# fo! li"tin6 and t!adin6 of t,e i""$e!K" "e.$!itie".
.epository

A de%o"ito!# i" an o!6ani"ation 8,i., ,old" "e.$!itie" of in e"to!" in ele.t!oni. fo!5 at t,e !eI$e"t of t,e in e"to!" t,!o$6, a !e6i"te!ed De%o"ito!# Pa!ti.i%ant. !elated to t!an"a.tion" in "e.$!itie".
Investment

It al"o %!o ide" "e! i.e"

T,e 5one# #o$ ea!n i" %a!tl# "%ent and t,e !e"t "a ed fo! 5eetin6 f$t$!e eC%en"e". In"tead of 9ee%in6 t,e "a in6" idle #o$ 5a# li9e to $"e "a in6" in o!de! to 6et !et$!n on it in t,e f$t$!e. T,i" i" .alled In e"t5ent.

MILESTONES

De.e5-e! ;++) * Incorporation o! Angel Broking 3td

,o"ember, 4556 3td. &arch, 2002 ,o"ember, 2002 April, 2009 April, 200: (eptember,200: 7ctober, 200; .ri"er> award !or 8?0; &arch, 200@ Buly, 200@ (eptember, 200@ business 7ctober, 200@ 8?0@ .ecember, 200@ Associates. &arch, 200C accounts. ,o"ember, 200C 8ebruary, 2006 accounts. $ecei"ed <&a=or %olume .ri"er> award !or 8?0C -rossed the :00,000 mark in uniAue trading -rossed the 200,000 mark in uniAue trading -rossed the 2,;00 mark in terms o! Business $ecei"ed <&a=or %olume .ri"er> award !or -rossed the 400,000 mark in uniAue trading accounts 8ormally launched the 2&( !unction -ommenced &utual 8und and I27 distribution 1eb enabled Back 7!!ice so!tware de"eloped 8irst e"er In"estor seminar o! Angel 'roup 2ublication o! 8irst $esearch $eport Incorporation o! -ommodities Broking .i"ision 3aunch o! 7nline Trading 2lat!orm $ecei"ed the prestigious <&a=or %olume Incorporation o! Angel -apital and .ebt &arket

INDUSTRY PROFILES

INDUSTR1 PROFILE

STOCK E9CHANGE
H%($8#3-

T,e onl# "to.9 eC.,an6e o%e!atin6 in t,e ;+t, .ent$!# 8ee t,o"e of 3o5-a# "et $% in ;F)@ and A,5eda-ad "et $% in ;F+?. T,e"e 8e!e o!6aniJed a" ol$nta!# non*%!ofit 5a9in6 a""o.iation of -!o9e!" to !e6$late and %!ote.t t,ei! inte!e"t". 3efo!e t,e .ont!ol on "e.$!itie" t!adin6 -e.a5e a .ent!al "$-/e.t $nde! t,e .on"tit$tion in ;+@(, it 8a" a "tate "$-/e.t and t,e 3o5-a# "e.$!itie" .ont!a.t" (.ont!ol& A.t if ;+'@ $"ed to !e6$late t!adin6 in "e.$!itie". Unde! t,i" A.t, T,e 3o5-a# "to.9 EC.,an6e 8a" !e.o6niJed in ;+') and A,5eda-ad in ;+=). D$!in6 t,e 8a! -oo5, a n$5-e! of "to.9 eC.,an6e" 8e!e o!6aniJed e en in 3o5-a#, A,5eda-ad and ot,e! .ente!", -$t t,e# 8e!e not !e.o6niJed. Soon afte! it -e.a5e a .ent!al "$-/e.t, .ent!al le6i"lation 8a" %!o%o"ed and .o55ittee ,eaded -# A.D. Go!8ala 8ent into t,e -ill fo! "e.$!itie" !e6$lation. On t,e -a"i" of t,e .o55itteeK" !e.o55endation" and %$-li. di".$""ion, t,e "e.$!itie" .ont!a.t" (!e6$lation& A.t -e.a5e la8 in ;+@A.

DEFINITION OF STOCK E9CHANGE-

0Sto.9 EC.,an6e 5ean" an# -od# o! indi id$al" 8,et,e! in.o!%o!ated o! not, .on"tit$ted fo! t,e %$!%o"e of a""i"tin6, !e6$latin6 o! .ont!ollin6 t,e -$"ine"" of -$#in6, "ellin6 o! dealin6 in "e.$!itie".4 It i" an a""o.iation of 5e5-e! -!o9e!" fo! t,e %$!%o"e of "elf*!e6$lation and %!ote.tion t,e inte!e"t" of it" 5e5-e!". It .an o%e!ate onl# if it !e.o6niJed -# t,e Go e!n5ent $nde! t,e "e.$!itie" .ont!a.t" (!e6$lation& A.t, ;+@A. T,e !e.o6nition i" 6!anted $nde! "e.tion = of t,e a.t -# t,e .ent!al 6o e!n5ent, 5ini"t!# of Finan.e.
BY LA:S-

3e"ide"

t,e

a-o$t

a.t,

t,e

"e.$!itie"

.ont!a.t

(!e6$lation& !$le" 8e!e al"o Made in ;+@) to !e6$late .e!tain 5atte!" of t!adin6 on t,e "to.9 eC.,an6e". T,e!e a!e al"o -#la8" of t,e eC.,an6e 8,i., a!e .on.e!ned 8it, t,e follo8in6 "$-/e.tH O%enin6:.lo"in6 of t,e "to.9 eC.,an6e", ti5in6 of t!adin6, !e6$lation of -lan9 t!an"fe!", !e6$lation of -adla o! .a!!#o e! -$"ine"", .ont!ol of t,e "ettle5ent and ot,e! a.ti itie" of t,e "to.9 eC.,an6e, fiCation of 5a!6in", fiCation of 5a!9et %!i.e" o! 5a!9etin6 $% %!i.e". Re6$lation of ta!a ani -$"ine"" (/o--in6&, et.., a!-it!ation and "ettle5ent of di"%$te", "ettle5ent and .lea!in6 of t,e t!adin6 et..
REGULATION OF STOCK E9CHANGE-

T,e "e.$!itie" .ont!a.t" (!e6$lation& a.t i" t,e -a"i" fo! o%e!ation" of t,e "to.9 eC.,an6e" in India. No eC.,an6e .an o%e!ate le6all# 8it,o$t t,e 6o e!n5ent %e!5i""ion o! !e.o6nition. Sto.9 eC.,an6e i" 6i en 5ono%ol# in .e!tain a!ea" $nde! "e.tion ;+ of t,e ano e A.t to en"$!e t,at t,e .ont!ol and !e6$lation a!e fa.ilitated. Re.o6nition .an -e 6!anted to a "to.9 eC.,an6e %!o ided .e!tain .ondition" a!e "ati"fied and t,e ne.e""a!# info!5ation i" "$%%lied to t,e 6o e!n5ent. Re.o6nition .an al"o -e 8it,d!a8n. If ne.e""a!# 8,e!e t,e!e i" no "to.9 eC.,an6e in it" a-"en.e.
SECURITIES AND E9CHANGE BOARD OF INDIA (SEBI

SE3I 8a" "et$% a" an a$tono5o$" !e6$lato!# a$t,o!it# -# t,e Go e!n5ent of India in ;++F to %!ote.t t,e inte!e"t" of in e"to!" in "e.$!itie" and to %!o5ote t,e de elo%5ent and to !e6$late t,e "e.$!itie" 5a!9et and fo! 5atte!" .onne.ted t,e!e 8idt, o! in.idental t,e!e to. It i" e5%o8e!ed -# t8o a.t" na5el# SE3I A.t, ;++' and "e.$!itie" .ont!a.t (!e6$lation& A.t, ;+@A to %e!fo!5 t,e f$n.tion of %!ote.tin6 in e"to!K" !i6,t" and !e6$latin6 t,e .a%ital 5a!9et". Se.$!itie" and eC.,an6e -oa!d of India (SE3I& i" a -oa!d (a$tono5o$" -od#& .!eated -# t,e 6o e!n5ent of India in ;+FF and 6i en "tat$to!# fo!5 in ;++' 8it, t,e SE3I a.t ;++' 8it, it" ,ead offi.e at M$5-ai. It ,a" offi.e" in .,ennai,

9ol9atta and Del,i. It i" t,e !e6$lato!# of "e.$!itie" 5a!9et in India. M!.M.Da5oda!an a !e"%e.ted t$!n a!o$nd .i il "e! ant .!editied 8it, t$!nin6 a!o$nd la!6e %$-li. "e.to! .o5%anie" f!o5 nea! deat, ".ena!io" in.l$din6 t,e fa5o$" $nit t!$"t of India .,ai!" it. T,e -oa!d .o5%!i"e" 8,ole ti5e 5e5-e!" and o$t"ide 5e5-e!" (!e%!e"entin6 t,e finan.e 5ini"t!#, R3I and eC%e!t"&. T,e %!e"ent 8,ole ti5e 5e5-e!" a!e M!. G Anant,a!a5an, D!, TC Nai! and M!. V2 C,o%!a. 3elo8 t,e 3oa!d, t,e "taff:offi.e!" of t,e o!6aniJation a!e led -# ECe.$ti e Di!e.to!". T,e %!e"ent Ed" a!e M!. R2 Nai! MS.Na!a#anan, M!.Sandee% %a!e9, (on .ont!a.t& and P.2.Na6%al.Al"o, M!.MS Ra#, a "enio! IRS offi.e! on de%$tation, i" an offi.e! on "%e.ial d$t# (eI$ilent to an ED&. T,e o!6aniJational "t!$.t$!e of SE3I 8e-"ite -# .li.9in6 on t,e RTI A.t '((@ at t,e to%. SE3I ,a" t,!ee f$n.tion" !olled into one -od#H I$a"i* le6i"lati e, I$a"i/$di.ial and I$a"i*eCe.$ti e. It d!aft" !$le" in it" le6i"lati e .a%a.it#, it .ond$.t" enI$i!e" and enfo!.e5ent a.tion in it" eCe.$ti e f$n.tion and it %a""e" !$lin6" and o!de!" in it" /$di.ial and .a%a.it#. T,o$6, t,i" 5a9e" it e!# %o8e!f$l, t,e!e i" an a%%eal" %!o.e"" to .!eate a..o$nta-ilit#. T,e!e i" a "e.$!it# A%%ellate T!i-$nal 8,i., i" a t,!ee

5e5-e!" t!i-$nal and i" %!e"entl# ,eaded -# a fo!5e! .,ief /$"ti.e of a Hi6, .o$!t*M!. /$"ti.e N2 Sod,i. A "e.ond a%%eal lie" di!e.tl# to t,e "$%!e5e .o$!t (8,e!e i5%o!tant I$e"tion" of la8 a!i"e&. SE3I ,a" ,ad a 5iCed ,i"to!# in te!5" of it" "$..e"" a" a !e6$lato!#. T,o$6, it ,a" %$",ed "#"te5i. !efo!5" a66!e""i el# and "$..e""i el# (e.6. t,e I$i.9 5o e5ent to8a!d" 5a9in6 t,e 5a!9et" ele.t!oni. and %a%e!le""&,it la.9ed t,e le6al eC%e!ti"e, till !e.entl#, needed to "$"tain %!o"e.$tion":enfo!.e5ent a.tion". It ,a" !e.entl# -een anno$n.ed t,at it i" 6oin6 to t,e la8 .a5%$"e" to t,e !e.!$it talent and ,a" fo$nd !ea"ona-le "$..e"" t,e!e.
BOMBAY STOCK E9CHANGE-

T,e "to.9 EC.,an6e, M$5-ai %o%$la!l# 9no8n a" 03SE4 8a" e"ta-li",ed in ;F)@ a" 0t,e nati e ",a!e and "to.9 -!o9e!" a""o.iation 0, a" a ol$nta!# non*%!ofit 5a9in6 a""o.iation. It ,a" e ol ed o e! t,e #ea!" in to it" %!e"ent "to.9 eC.,an6e in t,e .o$nt!#. It 5a# -e noted t,at t,e "to.9 eC.,an6e t,e olde"t one in A"ia, e en olde! t,en t,e To9#o "to.9 eC.,an6e, 8,i., 8a" fo$nded in ;F)F

T,e eC.,an6e, 8,ile %!o idin6 a" effi.ient and t!an"%a!ent 5a!9et fo! t!adin6 in "e.$!itie", $%,old" t,e inte!e"t" of t,e in e"to!" and en"$!e" !ed!e""ed of t,ei! 6!ie an.e", 8,et,e! a6ain"t t,e .o5%anie" o! it" o8n 5e5-e! -!o9e!". It al"o "t!i e" to ed$.ate and enli6,ten t,e in e"to!" -# 5a9in6 a aila-le ne.e""a!# info!5ati e in%$t" and .ond$.tin6 in e"to! ed$.ation %!o6!a55e!". A 6o e!nin6 -oa!d ,a in6 '( di!e.to!" i" t,e a%eC -od#, 8,i., de.ide" t,e %oli.e" and !e6$late" t,e affai!" of t,e eC.,an6e. T,e 6o e!nin6 -od# .on"i"t" of + di!e.to!",= SE3I no5inee", A %$-li. !e%!e"entati e" and an eCe.$ti e di!e.to! E C,ief ECe.$ti e Offi.e! and a C,ief O%e!atin6 Offi.e!.

T,e ECe.$ti e di!e.to! a" t,e .,ief eCe.$ti e offi.e! i" !e"%on"i-le fo! t,e da#*to*da# ad5ini"t!ation of t,e eC.,an6e. T,e a e!a6e dail# t$!no e! of t,e eC.,an6e d$!in6 t,e #ea! '(((*(;(A%!il*5a!.,& 8a" R".=+F?.;+C!" and a e!a6e n$5-e! of dail# t!ade" @.A+ la."

Ho8e e! t,e a e!a6e dail# t$!n o e! of t,e eC.,an6e d$!in6 t,e 1ea!'((;*(' ,a" de.lined to R".;'?F.;(.C!" and n$5-e! of a e!a6e dail# t!ade" d$!in6 t,e %e!iod to @.;) la.9". T,e a e!a6e dail# t$!n o e! of t,e eC.,an6e d$!in6 t,e #ea! '((('*(= ,a" de.lined and n$5-e! of a e!a6e dail# t!ade" d$!in6 t,e %e!iod i" al"o de.!ea"ed .
BSE INDICES-

In o!de! to ena-le t,e 5a!9et %a!ti.i%ant", anal#"t" et.., to t!a.9 t,e a!io$" $%" and do8n" in t,e Indian "to.9 5a!9et, t,e eC.,an6e ,a" int!od$.ed in ;+FA an eI$it# "to.9 indeC .alled 3SE*SENSEG t,at "$-"eI$entl# -e.a5e t,e -a!o5ete! of t,e 5o5ent" of t,e ",a!e %!i.e" in t,e Indian "to.9 5a!9et. It i" a 0Ma!9et .a%italiJation* 8ei6,ted4 indeC of =( .o5%onent "to.9" !e%!e"entin6 a "a5%le of la!6e, 8ell* e"ta-li",ed and leadin6 .o5%anie". T,e -a"e #ea! of Sen"eC i" ;+)F*)+.T,e Sen"eC i" 8idel# !e%o!ted in -ot, do5e"ti. and inte!national 5a!9et" t,!o$6, %!int a" 8ell a" ele.t!oni. 5edia.

In %!a.ti.e, t,e dail# .al.$lation of SENSEG i" done -# di idin6 t,e a66!e6ate 5a!9et al$e of t,e =( .o5%anie" in t,e IndeC -# a n$5-e! .alled t,e IndeC Di i"o!. T,e di i"o! 9ee%" t,e indeC .o5%a!a-le o e! a %e!iod of ti5e and if t,e !efe!en.e %oint fo! t,e enti!e indeC -# a .o5%a!a-le o e! a %e!iod of ti5e and if t,e !efe!en.e %oint fo! t,e enti!e IndeC 5aintenan.e ad/$"t5ent". SENSEG i" 8idel# $"ed to de".!i-e t,e 5ood in t,e Indian "to.9 5a!9et". 3a"e #ea! a e!a6e i" .,an6ed a" %e! t,e fo!5$laH Ne8 -a"e #ea! a e!a6e N old -a"e #ea! a e!a6eO(ne8 5a!9et al$e:old 5a!9et al$e&

NATIONAL STOCK E9CHANGE T+* 8#4")%;"$%8)T,e National "to.9 EC.,an6e of India li5ited ,a" 6ene"i" in t,e !e%o!t of t,e ,i6, %o8e!ed "t$d# 6!o$% on e"ta-li",5ent of ne8 "to.9 EC.,an6e", 8,i., !e.o55ended %!o5otion of a National "to.9 EC.,an6e -# finan.ial in"tit$tion" (Fi"& to %!o ide a..e"" to in e"to!" f!o5 all a.!o"" t,e .o$nt!# on an eI$al footin6. 3a"ed on t,e !e.o55endation", NSE 8a" %!o5oted -# leadin6 Finan.ial In"tit$tion" at t,e -e"t of t,e Go e!n5ent of India and 8a" in.o!%o!ated in No e5-e! ;++' a" a taC %a#in6 .o5%an# $nli9e ot,e! "to.9 EC.,an6e" in t,e .o$nt!#. On it" !e.o6nition a" a "to.9 eC.,an6e $nde! t,e "e.$!itie" .ont!a.t" (!e6$lation& A.t, ;+@A in A%!il ;++=, NSE .o55en.ed o%e!ation" in t,e 8,ole"ale de-t 5a!9et (>DM& "e65ent in 7$ne ;++?.T,e .a%ital 5a!9et (eI$itie"& "e65ent .o55en.ed o%e!ation" in No e5-e! ;++?and o%e!ation" in De!i ati e" "e65ent .o55en.ed in 7$ne '(((. T,e National Sto.9 EC.,an6e of India li5ited (NSE&, i" a M$5-aiP-a"ed "to.9 eC.,an6e. It I" t,e la!6e"t "to.9 eC.,an6e in India and t,e t,i!d la!6e"t in t,e 8o!ld in te!5" of ol$5e of t!an"a.tion" NSE i" 5$t$all#*o8ned -# a "et of leadin6 finan.ial in"tit$tion", -an9", in"$!an.e .o5%anie" and

ot,e! finan.ial inte!5edia!ie" in India -$t it" o8ne!",i% and 5ana6e5ent o%e!ate a" "e%a!ate entitie" A" of '((A, t,e NSE VSAT te!5inal",')++ in total, .o e! 5o!e t,an ;@((.itie" a.!o"" India In 7$l# '((), t,e NSE ,ad a total 5a!9et .a%italiJation of ?',)?,@(+ .!o!e INR 5a9in6 it t,e "e.ond* la!6e"t "to.9 5a!9et in "o$t, A"ia in te!5" of 5a!9et* .a%italiJation.

S$8&, *6&+")4* %) I)0%"At %!e"ent, t,e!e a!e '? Sto.9 eC.,an6e" !e.o6niJed $nde! t,e "e.$!itie" .ont!a.t (Re6$lation& A.t, ;+@A. T,e# a!eH*
NAME OF THE STOCK E9CHANGE YEAR

3o5-a# Sto.9 eC.,an6e A,5eda-ad ",a!e and Sto.9 -!o9e!" A""o.iation Cal.$tta Sto.9 EC.,an6e A""o.iation Ltd Del,i Sto.9 EC.,an6e A""o.iation Ltd Mad!a" Sto.9 EC.,an6e A""o.iation Ltd Indo!e Sto.9 EC.,an6e A""o.iation 3an 6alo!e Sto.9 EC.,an6e H#de!a-ad Sto.9 EC.,an6e Co.,in Sto.9 EC.,an6e P$ne Sto.9 EC.,an6e Ltd U.P Sto.9 EC.,an6e A""o.iation Ltd L$d,iana Sto.9 EC.,an6e A""o.iation Ltd 7ai%$! Sto.9 EC.,an6e Ltd

;F)@ ;+@) ;+@) ;+@) ;+@F ;+AF ;+?= ;+)F ;+F' ;+F' ;+F= ;+F=*F? ;+F? ;+F@ ;+FA ;+F+ ;+F+ ;++(

Ga$,at,i Sto.9 EC.,an6e Ltd Man6alo!e Sto.9 EC.,an6e Ltd Ma6,ad Sto.9 EC.,an6e Ltd, Patna 3,$-ane",8a! Sto.9 EC.,an6e A""o.iation Ltd O e! t,e .o$nte! eC.,an6e of India, 3o5-a# Sa$!a"t,!a 2$t., Sto.9 EC.,an6e Ltd V"doda!a Sto.9 EC.,an6e Ltd Coi5-ato!e Sto.9 EC.,an6e Ltd T,e Mee!$t Sto.9 EC.,an6e Ltd National Sto.9 EC.,an6e Ltd Inte6!ated Sto.9 EC.,an6e

;++; ;++; ;++; ;++; ;++; ;+++

THEORITICAL BACK GROUND

THEORTICAL BACK GROUND SECONDARY MARKET OPERATIONS

The Indian -apital &arket An 7"er"iew

T,e f$n.tion of t,e finan.ial 5a!9et i" to fa.ilitate t,e t!an"fe! of f$nd" f!o5 "$!%l$" "e.to!"(lende!"& to defi.it "e.to!" (-o!!o8e!"&. No!5all#, ,o$"e,old" ,a e in6e"ti-le f$nd" o! "a in6", 8,i., t,e# lend to -o!!o8e!" in t,e .o!%o!ate and %$-li. "e.to!" 8,o"e !eI$i!e5ent of f$nd" fa! eC.eed" t,ei! "a in6". A finan.ial 5a!9et .on"i"t" of in e"to!" o! -$#e!" of "e.$!itie", -o!!o8e!" o! "elle!" of "e.$!itie", inte!5edia!ie" and !e6$lato!# -odie". Finan.ial 5a!9et doe" not !efe! to a %,#"i.al lo.ation. Fo!5al t!adin6 !$le", !elation",i%" and .o55$ni.ation net8o!9" fo! o!i6inatin6 and t!adin6 finan.ial "e.$!itie" lin9 t,e %a!ti.i%ant" in t,e 5a!9et.
7rganiDed money marketE Indian finan.ial "#"te5 .on"i"t"

of 5one# 5a!9et and .a%ital 5a!9et. T,e 5one# 5a!9et ,a" t8o .o5%onent" * t,e o!6aniJed and t,e $no!6aniJed. T,e o!6aniJed 5a!9et i" do5inated -# .o55e!.ial -an9". T,e ot,e! 5a/o! %a!ti.i%ant" a!e t,e Re"e! e 3an9 of India, Life In"$!an.e Co!%o!ation, Gene!al In"$!an.e Co!%o!ation, Unit

T!$"t of India, Se.$!itie" T!adin6 Co!%o!ation of India Ltd., Di".o$nt and Finan.e Ho$"e of India, ot,e! %!i5a!# deale!", .o55e!.ial -an9" and 5$t$al f$nd". T,e .o!e of t,e 5one# 5a!9et i" t,e inte!*-an9 .all 5one# 5a!9et 8,e!e-# ",o!t*te!5 5one# -o!!o8in6:lendin6 i" effe.ted to 5ana6e te5%o!a!# liI$idit# 5i"5at.,e". T,e Re"e! e 3an9 of India o..$%ie" a "t!ate6i. %o"ition of 5ana6in6 5a!9et liI$idit# t,!o$6, o%en 5a!9et o%e!ation" of 6o e!n5ent "e.$!itie", a..e"" to it" a..o55odation, .o"t (inte!e"t !ate"&, a aila-ilit# of .!edit and ot,e! 5oneta!# 5ana6e5ent tool". No!5all#, 5oneta!# a""et" of ",o!t*te!5 nat$!e, 6ene!all# le"" t,an one #ea!, a!e dealt in t,i" 5a!9et.
Fn organiDed money marketE De"%ite !a%id eC%an"ion of t,e

o!6aniJed 5one# 5a!9et t,!o$6, a la!6e net8o!9 of -an9in6 in"tit$tion" t,at ,a e eCtended t,ei! !ea., e en to t,e !$!al a!ea", t,e!e i" "till an a.ti e $no!6aniJed 5a!9et. It .on"i"t" of indi6eno$" -an9e!" and 5one# lende!". In t,e $no!6aniJed 5a!9et, t,e!e i" no .lea! de5a!.ation -et8een ",o!t*te!5 andlon6*te!5 finan.e and e en -et8een t,e %$!%o"e" of finan.e. T,e $no!6ani"ed "e.to! .ontin$e" to%!o ide finan.e fo! t!ade a" 8ell a" %e!"onal .on"$5%tion. T,e ina-ilit# of t,e

%oo! to 5eet t,e Q.!edit8o!t,ine""Q !eI$i!e5ent" of t,e -an9in6 "e.to! 5a9e t,e5 ta9e !e.o$!"e to t,e in"tit$tion" t,at "till !e5ain o$t"ide t,e !e6$lato!# f!a5e8o!9 of -an9in6. 3$t t,i" 5a!9et i" ",!in9in6 T,e Ca%ital 5a!9etH T,e .a%ital 5a!9et .on"i"t" of %!i5a!# and "e.onda!# 5a!9et". T,e %!i5a!# 5a!9et deal" 8it, t,e i""$e of ne8 in"t!$5ent" -# t,e .o!%o!ate "e.to! "$., a" eI$it# ",a!e", %!efe!en.e ",a!e" and de-t in"t!$5ent". Cent!al and State 6o e!n5ent", a!io$" %$-li. "e.to! ind$"t!ial $nit" (PSU"&, "tat$to!# and ot,e! a$t,o!itie" "$., a" "tate ele.t!i.it# -oa!d" and %o!t t!$"t" al"o i""$e -ond":de-t in"t!$5ent". T+* I)0%") C"<%$"! M"#,*$ = A) O1*#1%*5 1 T,e %!i5a!# 5a!9et in 8,i., %$-li. i""$e of "e.$!itie" i" 5ade t,!o$6, a %!o"%e.t$" i" a !etail 5a!9et and t,e!e i" no %,#"i.al lo.ation. Offe! fo! "$-".!i%tion to "e.$!itie" i" 5ade to in e"tin6 .o55$nit#. T,e "e.onda!# 5a!9et o! "to.9 eC.,an6e i" a 5a!9et fo! t!adin6 and "ettle5ent of "e.$!itie" t,at ,a e al!ead# -een i""$ed. T,e in e"to!" ,oldin6 "e.$!itie" "ell "e.$!itie" t,!o$6,

Re6i"te!ed -!o9e!":"$-*-!o9e!" of t,e "to.9 eC.,an6e. In e"to!" 8,o a!e de"i!o$" of -$#in6 "e.$!itie" %$!.,a"e "e.$!itie" t,!o$6, !e6i"te!ed -!o9e!:"$-*-!o9e! of t,e "to.9 eC.,an6e. It 5a# ,a e a %,#"i.al lo.ation li9e a "to.9 eC.,an6e o! a t!adin6 floo!. Sin.e ;++@, t!adin6 in "e.$!itie" i" ".!een*-a"ed and Inte!net*-a"ed t!adin6 ,a" al"o 5ade an a%%ea!an.e in India. T,e "e.onda!# 5a!9et .on"i"t" of '' "to.9 eC.,an6e". T,e "e.onda!# 5a!9et %!o ide" a t!adin6 %la.e fo! t,e "e.$!itie" al!ead# i""$ed, to -e -o$6,t and "old. It al"o %!o ide" liI$idit# to t,e Initial -$#e!" in t,e %!i5a!# 5a!9et to !e*offe! t,e "e.$!itie" to an# inte!e"ted -$#e! at an# %!i.e, if 5$t$all# a..e%ted. An a.ti e "e.onda!# 5a!9et a.t$all# %!o5ote" t,e 6!o8t, of t,e %!i5a!# 5a!9et and .a%ital fo!5ation -e.a$"e in e"to!" in t,e %!i5a!# 5a!9et a!e a""$!ed of a .ontin$o$" 5a!9et and t,e# .an liI$idate t,ei! in e"t5ent".
-apital &arket 2articipantsE T,e!e a!e "e e!al 5a/o! %la#e!"

in t,e %!i5a!# 5a!9et. T,e"e in.l$de t,e 5e!.,ant -an9e!", 5$t$al f$nd", finan.ial in"tit$tion", fo!ei6n in"tit$tional in e"to!" (FII"& and indi id$al in e"to!". In t,e "e.onda!# 5a!9et, t,e!e a!e t,e "to.9 eC.,an6e", "to.9 -!o9e!" (8,o a!e 5e5-e!" of t,e "to.9 eC.,an6e"&, t,e 5$t$al f$nd", finan.ial

in"tit$tion",

fo!ei6n

in"tit$tional

in e"to!"

(FII"&,

and

indi id$al in e"to!". Re6i"t!a!" and T!an"fe! A6ent", C$"todian" and De%o"ito!ie" a!e .a%ital 5a!9et inte!5edia!ie" t,at %!o ide i5%o!tant inf!a"t!$.t$!e "e! i.e" fo! -ot, %!i5a!# and "e.onda!# 5a!9et".
&arket $egulationE It i" i5%o!tant to en"$!e "5oot, 8o!9in6

of .a%ital 5a!9et, a" it i" t,e a!ena fo! t,e %la#e!" a""o.iated 8it, t,e e.ono5i. 6!o8t, of t,e .o$nt!#. Va!io$" la8" ,a e -een %a""ed f!o5 ti5e to ti5e to 5eet t,i" o-/e.ti e. T,e finan.ial 5a!9et in India 8a" ,i6,l# "e65ented $ntil t,e initiation of !efo!5" in ;++'*+= on a..o$nt of a a!iet# of !e6$lation" and ad5ini"te!ed %!i.e" in.l$din6 -a!!ie!" to ent!#. T,e !efo!5 %!o.e"" 8a" initiated 8it, t,e e"ta-li",5ent of Se.$!itie" and EC.,an6e 3oa!d of India (SE3I&. T,e le6i"lati e f!a5e8o!9 -efo!e SE3I .a5e into -ein6 .on"i"ted of t,!ee 5a/o! A.t" 6o e!nin6 t,e .a%ital 5a!9et"H
The Indian -apital &arket G An 7"er"iew 2

;. T,e Ca%ital I""$e" Cont!ol A.t ;+?), 8,i., !e"t!i.ted a..e"" to t,e "e.$!itie" 5a!9et and .ont!olled t,e %!i.in6 of i""$e" .
'.

T,e Co5%anie" A.t, ;+@A, 8,i., "et" o$t t,e .ode of

.ond$.t fo! t,e .o!%o!ate "e.to! in !elation to i""$e, allot5ent

and t!an"fe! of "e.$!itie" and di".lo"$!e" to -e 5ade in %$-li. i""$e". =. T,e Se.$!itie" Cont!a.t" (Re6$lation& A.t, ;+@A, SC(R&A 8,i., !e6$late" t!an"a.tion" in "e.$!itie" t,!o$6, .ont!ol o e! "to.9 eC.,an6e". In addition, a n$5-e! of ot,e! A.t", e.6., T,e P$-li. De-t A.t, ;+?', t,e In.o5e TaC A.t, ;+A;, t,e 3an9in6 Re6$lation A.t, ;+?+, ,a e "$-"tantial -ea!in6 on t,e 8o!9in6 of t,e "e.$!itie" 5a!9et.
Capital Issues (Control) Act, 1947

T,e A.t ,ad it" o!i6in d$!in6 t,e Se.ond >o!ld >a! in ;+?= 8,en t,e o-/e.ti e of t,e Go e!n5ent 8a" to %!e*e5%t !e"o$!.e" to "$%%o!t t,e >a! effo!t. Co5%anie" 8e!e !eI$i!ed to ta9e t,e Go e!n5entM" a%%!o al fo! ta%%in6 ,o$"e,old "a in6". T,e A.t 8a" !etained 8it, "o5e 5odifi.ation" a" a 5ean" of .ont!ollin6 t,e !ai"in6 of .a%ital -# .o5%anie" and to en"$!e t,at national !e"o$!.e" 8e!e .,annelled into %!o%e! line", i.e., fo! de"i!a-le %$!%o"e" to "e! e 6oal" and %!io!itie" of t,e 6o e!n5ent and to %!ote.t t,e inte!e"t" of in e"to!". Unde! t,e A.t, an# fi!5 8i",in6 to i""$e "e.$!itie" ,ad to o-tain a%%!o al f!o5 t,e Cent!al Go e!n5ent, 8,i., al"o dete!5ined

t,e a5o$nt, t#%e and %!i.e of t,e i""$e. T,i" A.t 8a" !e%ealed and !e%la.ed -# SE3I A.t in ;++'.

Companies Act, 1956 Co5%anie" A.t, ;+@A i" a .o5%!e,en"i e le6i"lation .o e!in6 all a"%e.t" of .o5%an# fo!5 of -$"ine"" entit# f!o5 fo!5ation to 8indin6*$%. T,i" le6i"lation (a5on6"t ot,e! a"%e.t"& deal" 8it, i""$e, allot5ent and t!an"fe! of "e.$!itie" and a!io$" a"%e.t" !elatin6 to .o5%an# 5ana6e5ent. It %!o ide" fo! "tanda!d" of di".lo"$!e in %$-li. i""$e" of .a%ital, %a!ti.$la!l# in t,e field" of .o5%an# 5ana6e5ent and %!o/e.t", info!5ation a-o$t ot,e! li"ted .o5%anie" $nde! t,e "a5e 5ana6e5ent and 5ana6e5ent %e!.e%tion of !i"9 fa.to!". It al"o !e6$late" $nde!8!itin6, t,e $"e of %!e5i$5 and di".o$nt" on i""$e", !i6,t" and -on$" i""$e", "$-"tantial a.I$i"ition" of ",a!e", %a#5ent of inte!e"t and di idend", "$%%l# of ann$al !e%o!t and ot,e! info!5ation. T,i" le6al and !e6$lato!# f!a5e8o!9 .ontained 5an# 8ea9ne""e". 7$!i"di.tion o e! t,e "e.$!itie" 5a!9et 8a" "%lit a5on6 a!io$" a6en.ie" and t,e !ele ant %!o i"ion" 8e!e ".atte!ed in a n$5-e! of "tat$te". T,i" !e"$lted in .onf$"ion, not onl# in t,e

5ind" of t,e !e6$lated -$t al"o a5on6 !e6$lato!". It al"o .!eated ineffi.ien.# in t,e enfo!.e5ent of t,e !e6$lation". It 8a" t,e Cent!al Go e!n5ent !at,e! t,an t,e 5a!9et t,at allo.ated !e"o$!.e" f!o5 t,e "e.$!itie" 5a!9et to .o5%etin6 i""$e!" and dete!5ined t,e te!5" of allo.ation. T,e allo.ation 8a" not ne.e""a!il# -a"ed on e.ono5i. .!ite!ia, and a" a !e"$lt t,e 5a!9et 8a" not allo.atin6 t,e !e"o$!.e" to t,e -e"t %o""i-le in e"t5ent", leadin6 to a "$-*o%ti5al $"e of !e"o$!.e" and lo8 allo.ational
The Indian -apital &arket G An 7"er"iew 9

effi.ien.#. Info!5ational effi.ien.# 8a" al"o lo8 -e.a$"e t,e %!o i"ion" of t,e Co5%anie" A.t !e6a!din6 %!o"%e.t$" did not en"$!e t,e "$%%l# of ne.e""a!#, adeI$ate and a..$!ate info!5ation, "$ffi.ient to ena-le in e"to!" to 5a9e an info!5ed de.i"ion. T,e 5an# fo!5alitie" a""o.iated 8it, t,e i""$e %!o.e"" $nde! a!io$" !e6$lation" 9e%t t,e .o"t of i""$e I$ite ,i6,. Unde! t,e SC(R&A, t,e "e.onda!# 5a!9et 8a" f!a65ented !e6ionall#, 8it, ea., "to.9 eC.,an6e a "elf!e6$latin6 o!6ani"ation follo8in6 it" o8n %oli.# of li"tin6, t!adin6 and "ettle5ent. T,e li"tin6 a6!ee5ent did not ,a e t,e fo!.e of la8, "o i""$e!" .o$ld 6et a8a# 8it, iolation". T,e

inte!e"t" of t,e -!o9e!", 8,o 8e!e 5a!9et %la#e!" and do5inated t,e 6o e!nin6 -oa!d" of "to.9 eC.,an6e", too9 %!io!it# o e! t,e inte!e"tofin e"to!". T,e 5a!9et 8a" na!!o8 and in e"to!" did not ,a e an o%%o!t$nit# to ,a e -alan.ed %o!tfolio". T,e "ettle5ent of t!ade" too9 a lon6 ti5e, -e.a$"e it !eI$i!ed %,#"i.al 5o e5ent of "e.$!itie", and t,e t!an"fe!of"e.$!itie"8a" e!#.$5-e!"o5e $nde! t,e Co5%anie" A.t and SC(R&A A.t, t,$" de%!i in6 t,e in e"to! of liI$idit#. La8 eC%!e""l# fo!-ade o%tion" and f$t$!e". T,e"e 8ea9ne""e" 8e!e .o!!e.ted -# %a""in6 SE3I A.t and 6i in6 o e!all !e6$lato!# /$!i"di.tion on .a%ital 5a!9et to SE3I. SE3I f!a5ed !e6$lation" and 6$ideline" to i5%!o e effi.ien.# of t,e 5a!9et, en,an.e t!an"%a!en.#, .,e.9 $nfai! t!ade %!a.ti.e" and en"$!e inte!national "tanda!d" in 5a!9et %!a.ti.e" ne.e""itated -# t,e la!6e ent!# of fo!ei6n finan.ial in"tit$tion".
Securities Contracts (Regulation) Act, 1956

T,e %!e io$"l# "elf*!e6$lated "to.9 eC.,an6e" 8e!e -!o$6,t $nde! "tat$to!# !e6$lation t,!o$6, t,e %a""a6e of t,e SC(R&A, 8,i., %!o ide" fo! di!e.t and indi!e.t .ont!ol of i!t$all# all a"%e.t" of "e.$!itie" t!adin6 and t,e !$nnin6 of "to.9 eC.,an6e". T,i" 6i e" t,e Cent!al Go e!n5ent !e6$lato!#

/$!i"di.tion o e! (a& "to.9 eC.,an6e", t,!o$6, a %!o.e"" of !e.o6nition and .ontin$ed "$%e! i"ion, (-& .ont!a.t" in "e.$!itie", and (.& li"tin6 of "e.$!itie" on "to.9 eC.,an6e". A" a .ondition of !e.o6nition, a "to.9 eC.,an6e .o5%lie" 8it, .ondition" %!e".!i-ed -# Cent!al Go e!n5ent. O!6ani"ed t!adin6 a.ti it# in "e.$!itie" in an a!ea ta9e" %la.e on a "%e.ified !e.o6ni"ed "to.9 eC.,an6e. T,e "to.9 eC.,an6e" dete!5ine t,ei! o8n li"tin6 !e6$lation" 8,i., ,a e to .onfo!5 8it, t,e 5ini5$5 li"tin6 .!ite!ia "et o$t in t,e R$le". T,e !e6$lato!# /$!i"di.tion on "to.9 eC.,an6e" 8a" %a""ed o e! to SE3I on ena.t5ent of SE3I A.t in ;++' f!o5 Cent!al Go e!n5ent -# a5endin6 SC(R&A.t.

SECOND&R' M&R(ET &$out $y Se"ondary mar)et

Se.onda!# 5a!9et !efe!" to a 5a!9et 8,e!e "e.$!itie" a!e t!aded afte! -ein6 initiall# offe!ed to t,e %$-li. in t,e %!i5a!# 5a!9et and:o! li"ted on t,e Sto.9 EC.,an6e. Ma/o!it# of t,e t!adin6 i" done in t,e "e.onda!# 5a!9et. Se.onda!# 5a!9et .o5%!i"e" of eI$it# 5a!9et" and t,e de-t 5a!9et".
Produ"ts in t#e Se"ondary Mar)ets *#at are t#e !rodu"ts dealt in t#e Se"ondary Mar)ets+

Follo8in6 a!e t,e 5ain finan.ial %!od$.t":in"t!$5ent" dealt in t,e Se.onda!# 5a!9et t,at 5a# -e di ided -!oadl# into S,a!e" and 3ond"H
S#ares
Equity SharesH An eI$it# ",a!e, .o55onl# !efe!!ed to a"

o!dina!# ",a!e, !e%!e"ent" t,e fo!5 of f!a.tional o8ne!",i% in a -$"ine"" ent$!e.

Rights Issue/ Rights Shares'

T,e i""$e of ne8 "e.$!itie"

to eCi"tin6",a!e,olde!" at a !atio to t,o"e al!ead# ,eld, at a

%!i.e. Fo! e.6. a 'H= !i6,t" i""$e at R". ;'@, 8o$ld entitle a ",a!e,olde! to !e.ei e ' ",a!e" fo! e e!# = ",a!e" ,eld at a %!i.e of R". ;'@ %e! ",a!e.
Bonus SharesH S,a!e" i""$ed -# t,e .o5%anie" to t,ei!

",a!e,olde!" f!ee of .o"t -a"ed on t,e n$5-e! of ",a!e" t,e ",a!e,olde! o8n".
Preference shares'

O8ne!" of t,e"e 9ind of ",a!e" a!e entitled

to affiCed di idend o! di idend .al.$lated at a fiCed !ate to -e %aid Re6$la!l# -efo!e di idend .an -e %aid in !e"%e.t of eI$it# ",a!e. T,e# al"o en/o# %!io!it# o e! t,e eI$it# ",a!e,olde!" in %a#5ent of S$!%l$". 3$t in t,e e ent of liI$idation, t,ei! .lai5" !an9 -elo8 t,e Clai5" of t,e .o5%an#K" .!edito!", -ond,olde!":de-ent$!e ,olde!". C$5$lati e P!efe!en.e S,a!e"H A t#%e of %!efe!en.e ",a!e" on 8,i., di idend a..$5$late" if !e5ained $n%aid. All a!!ea!" of %!efe!en.e di idend ,a e to -e %aid o$t -efo!e %a#in6 di idend on eI$it# ",a!e".
Cumulative Convertible Preference Shares H

A t#%e of

%!efe!en.e ",a!e" 8,e!e t,e di idend %a#a-le on t,e "a5e a..$5$late", if not %aid. Afte! a "%e.ified date, t,e"e ",a!e" 8ill -e .on e!ted into eI$it# .a%ital of t,e .o5%an#.
,ond'

i" a ne6otia-le .e!tifi.ate e iden.in6 inde-tedne"". It i"

no!5all# $n"e.$!ed. A de-t "e.$!it# i" 6ene!all# i""$ed -# a

.o5%an#, 5$ni.i%alit# o! 6o e!n5ent a6en.#. A -ond in e"to! lend" 5one# to t,e i""$e! and in eC.,an6e, t,e i""$e! %!o5i"e" to !e%a# t,e loan a5o$nt on a "%e.ified 5at$!it# date. T,e i""$e! $"$all# %a#" t,e -ond ,olde! %e!iodi. inte!e"t %a#5ent" o e! t,e life of t,e loan. T,e a!io$" t#%e" of 3ond" a!e a" follo8"H
Zero Coupon Bond: 3ond i""$ed at a di".o$nt and !e%aid at a

fa.e al$e. No %e!iodi. inte!e"t i" %aid. T,e diffe!en.e -et8een t,e i""$e -$#e! of t,e"e -ond" !e.ei e" onl# one %a#5ent, at t,e 5at$!it# of t,e -ond.

A -ond 6i in6 t,e in e"to! t,e o%tion to .on e!t t,e -ond into eI$it# at a fiCed .on e!"ion %!i.e.
Convertible Bond'

T#*"('#3 B%!!(- S,o!t*te!5 ($% to one #ea!& -ea!e! di".o$nt

"e.$!it# i""$ed -# 6o e!n5ent a" a 5ean" of finan.in6 t,ei! .a", !eI$i!e5ent"

Role of t#e Se"ondary Mar)et and t#e role of Sto") E-"#ange in $uying and selling s#ares

Fo! t,e 6ene!al in e"to!, t,e "e.onda!# 5a!9et %!o ide" an effi.ient %latfo!5 fo! t!adin6 of ,i" "e.$!itie". Fo! t,e 5ana6e5ent of t,e .o5%an#, Se.onda!# eI$it# 5a!9et" "e! e a" a 5onito!in6 and .ont!ol .ond$itR-# fa.ilitatin6 in.enti e*-a"ed 5ana6e5ent .ont!a.t", and al$e* en,an.in6 .ont!ol a.ti itie", ena-lin6 i5%le5entation of a66!e6atin6

info!5ation ( ia %!i.e di".o e!#& t,at 6$ide" 5ana6e5ent de.i"ion". T,e "to.9 eC.,an6e" in India, $nde! t,e o e!all "$%e! i"ion of t,e !e6$lato!# a$t,o!it#, t,e Se.$!itie" and EC.,an6e 3oa!d of India (SE3I&, %!o ide a t!adin6 %latfo!5, 8,e!e -$#e!" and "elle!" .an 5eet to t!an"a.t in "e.$!itie". T,e t!adin6 %latfo!5 %!o ided -# NSE i" an ele.t!oni. one and t,e!e i" no need fo! -$#e!" and "elle!" to 5eet at a %,#"i.al lo.ation to t!ade. T,e# .an t!ade t,!o$6, t,e .o5%$te!iJed t!adin6 ".!een" a aila-le 8it, t,e NSE t!adin6 5e5-e!" o! t,e Inte!net -a"ed t!adin6 fa.ilit# %!o ided -# t,e t!adin6 5e5-e!" of NSE.
&$out S"reen ,ased Trading

T,e t!adin6 on "to.9 eC.,an6e" in India $"ed to ta9e %la.e t,!o$6, o%en o$t.!# 8it,o$t $"e of info!5ation te.,nolo6# fo! i55ediate 5at.,in6 o! !e.o!din6 of t!ade". T,i" 8a" ti5e .on"$5in6 and ineffi.ient. T,i" i5%o"ed li5it" on t!adin6 ol$5e" and effi.ien.#. In o!de! to %!o ide effi.ien.#, liI$idit# and t!an"%a!en.#, NSE int!od$.ed a nation8ide, on*line, f$ll# a$to5ated ".!een -a"ed t!adin6 "#"te5 (S3TS& 8,e!e a 5e5-e! .an %$n., into t,e .o5%$te!

t,e I$antitie" of a "e.$!it# and t,e %!i.e at 8,i., ,e 8o$ld li9e to t!an"a.t, and t,e t!an"a.tion i" eCe.$ted a" "oon a" a 5at.,in6 "ale o! -$# o!de! f!o5 a .o$nte! %a!t# i" fo$nd.
&$out NE&T

NSE i" t,e fi!"t eC.,an6e in t,e 8o!ld to $"e "atellite .o55$ni.ation te.,nolo6# fo! t!adin6. It" t!adin6 "#"te5, .alled National EC.,an6e fo! A$to5ated T!adin6 (NEAT&, i" a "tate of*t,e*a!t .lient "e! e! -a"ed a%%li.ation. At t,e "e! e! end all t!adin6 info!5ation i" "to!ed in an in 5e5o!# data-a"e to a.,ie e 5ini5$5 !e"%on"e ti5e and 5aCi5$5 "#"te5 a aila-ilit# fo! $"e!". It ,a" $%ti5e !e.o!d of ++.)S. Fo! all t!ade" ente!ed into NEAT "#"te5, t,e!e i" $nifo!5 !e"%on"e ti5e of le"" t,an one "e.ond.
!la"e an orders .it# t#e $ro)er

1o$ 5a# 6o to t,e -!o9e!K" offi.e o! %la.e an o!de! on t,e %,one:inte!net o! a" defined in t,e Model A6!ee5ent, 8,i., e e!# .lient need" to ente! into 8it, ,i" o! ,e! -!o9e!. T,e follo8in6 a!e t,e %!e*!eI$i"ite" to %la.e an o!de!H DEMAT A..o$nt 8it, 3!o9e! T!adin6 A..o$nt 8it, 3!o9e! Client 3an9 and PAN detail" 8it, 3!o9e!.

Investor/s &""essi$ility .it# internet $ased trading Fa"ility

T,e!e a!e 5an# -!o9e!" of t,e NSE 8,o %!o ide Inte!net -a"ed t!adin6 fa.ilit# to t,ei! .lient". Inte!net -a"ed t!adin6 ena-le" an in e"to! to -$#:"ell "e.$!itie" t,!o$6, Inte!net, 8,i., .an -e a..e""ed f!o5 a .o5%$te! at t,e in e"to!K" !e"iden.e o! an#8,e!e el"e 8,e!e t,e .lient .an a..e"" t,e Inte!net. In e"to!" need to 6et in to$., 8it, an NSE -!o9e! %!o idin6 t,i" "e! i.e to a ail of Inte!net -a"ed t!adin6 fa.ilit#. It i" al"o .alled a" e*t!adin6, online t!adin6 et.., T,e -!o9e! %!o ide"L U"e! Na5e Pa""8o!d T!adin6 %a""8o!d" to a..e"" t,e inte!net -a"ed t!adin6
&dvantages

T,e follo8in6 a!e t,e ad anta6e" of inte!net

t!adin6H Man$all# at an# %oint of ti5e 8e .an %la.e t,e o!de!" o$! "elf >e .an a-le to "ee t,e !eal ti5e ".ena!io in 5a!9et" >e .an 8at., t,e 5a!9et 5o e5ent

 >e .an a-le to "ee .,a!t" li9e 7a%ane"e .andle "ti.9", ,ead and ",o$lde!" %atte!n et.., >e .an a-le to 5odif# o! .an.el t,e o!de!" d$!in6 5a!9et ,o$!". >e .an a-le to ta9e deli e! t,e ".!i%" if f$nd" a!e a aila-le in o$! a..o$nt >e .an a-le to do online f$nd t!an"fe!" f!o5 o$! -an9 a..o$nt to o$! t!adin6 a..o$nt >e .an a-le a..e"" o$! de5at a..o$nt. >e .an a-le to "ee o$! t!ade .onfi!5ation" afte! 5a!9et ,o$!". >e .an a-le to a..e"" o$! -a.9 offi.e online.
&$out a Contra"t Note and t#e details are required to $e mentioned on t#e "ontra"t note issued $y t#e sto") $ro)er

Cont!a.t Note i" a .onfi!5ation of t!ade" done on a %a!ti.$la! da# on -e,alf of t,e .lient -# a t!adin6 5e5-e!. It i5%o"e" a le6all# enfo!.ea-le !elation",i% -et8een t,e .lient and t,e t!adin6 5e5-e! 8it, !e"%e.t to %$!.,a"e:"ale and "ettle5ent of t!ade". It al"o ,el%" to "ettle di"%$te":.lai5" -et8een t,e in e"to! and t,e t!adin6 5e5-e!. It i" a %!e!eI$i"ite fo! filin6 a .o5%laint o! a!-it!ation %!o.eedin6 a6ain"t t,e t!adin6 5e5-e! in .a"e of a di"%$te. A alid .ont!a.t note ",o$ld -e in t,e %!e".!i-ed fo!5, .ontain t,e detail" of t!ade", "ta5%ed 8it, !eI$i"ite al$e and d$l# "i6ned

-# t,e a$t,o!iJed "i6nato!#. Cont!a.t note" a!e 9e%t ind$%li.ate, t,e t!adin6 5e5-e! and t,e .lient ",o$ld 9ee% one .o%# ea.,. Afte! e!if#in6 t,e detail" .ontained t,e!ein, t,e .lient 9ee%" one .o%# and !et$!n" t,e "e.ond .o%# to t,e t!adin6 5e5-e! d$l# a.9no8led6ed -# ,i5. A -!o9e! ,a" to i""$e a .ont!a.t note to .lient" fo! all t!an"a.tion" in t,e fo!5 "%e.ified -# t,e "to.9 eC.,an6e. T,e .ont!a.t note inte!*alia ",o$ld ,a e follo8in6H Na5e, T add!e"" and SE3I Re6i"t!ation n$5-e! of t,e Me5-e! -!o9e!. Na5e T of %a!tne!:%!o%!ieto!:A$t,o!i"ed Si6nato!#. Dealin6 T Offi.e Add!e"":Tel. No.:FaC no., Code n$5-e! of t,e 5e5-e! 6i en -# t,e EC.,an6e. Cont!a.t T n$5-e!, date of i""$e of .ont!a.t note, "ettle5ent n$5-e! and ti5e %e!iod fo! "ettle5ent. Con"tit$ent T (Client& na5e:Code N$5-e!. O!de! T n$5-e! and o!de! ti5e .o!!e"%ondin6 to t,e t!ade". T!ade T n$5-e! and T!ade ti5e. U$antit# T and 9ind of Se.$!it# -o$6,t:"old -# t,e .lient. 3!o9e!a6e T and P$!.,a"e:Sale !ate.

Se! T i.e taC !ate", Se.$!itie" T!an"a.tion TaC and an# ot,e! .,a!6e" le ied -# t,e -!o9e!. A%%!o%!iate T "ta5%" ,a e to -e affiCed on t,e .ont!a.t note o! it i" 5entioned t,at t,e .on"olidated "ta5% d$t# i" %aid. Si6nat$!e T of t,e Sto.9 -!o9e!:A$t,o!iJed Si6nato!#.
ma-imum $ro)erage t#at a $ro)er "an "#arge $y a $ro)er

T,e 5aCi5$5 -!o9e!a6e t,at .an -e .,a!6ed -# a -!o9e! f!o5 ,i" .lient" a" .o55i""ion .annot -e 5o!e t,an '.@S of t,e al$e 5entioned in t,e !e"%e.ti e %$!.,a"e o! "ale note.
*#y s#ould one trade on a re"ogni0ed sto") e-"#ange only for $uying1selling s#ares

An in e"to! doe" not 6et an# %!ote.tion if ,e t!ade" o$t"ide a "to.9 eC.,an6e. T!adin6 at t,e eC.,an6e offe!" in e"to!" t,e -e"t %!i.e" P!e ailin6 at t,e ti5e in t,e 5a!9et, la.9 of an# .o$nte!*%a!t# !i"9, 8,i., i" a""$5ed -# t,e .lea!in6 .o!%o!ation, a..e"" to in e"to! 6!ie an.e and !ed!e""al 5e.,ani"5 of "to.9 eC.,an6e", %!ote.tion $% to a %!e".!i-ed li5it, f!o5 t,e In e"to! P!ote.tion F$nd et..

2o. to )no. if t#e $ro)er or su$ $ro)er is registered+

One .an .onfi!5 it -# e!if#in6 t,e !e6i"t!ation .e!tifi.ate i""$ed -# SE3I. A -!o9e!M" !e6i"t!ation n$5-e! -e6in" 8it, t,e lette!" BIN3K and t,at of a "$- -!o9e! 8it, t,e lette!" BINSK.
T#e follo.ing are t#e !re"autions must one ta)e $efore investing in t#e sto") mar)ets

He!e a!e "o5e $"ef$l %ointe!" to -ea! in 5ind -efo!e #o$ in e"t in t,e 5a!9et"H Ma9e T "$!e #o$! -!o9e! i" !e6i"te!ed 8it, SE3I and t,e eC.,an6e" and do not deal 8it, $n!e6i"te!ed inte!5edia!ie". En"$!e T t,at #o$ !e.ei e .ont!a.t note" fo! all #o$! t!an"a.tion" f!o5 #o$! -!o9e! 8it,in one 8o!9in6 da# of eCe.$tion of t,e t!ade". All T in e"t5ent" .a!!# !i"9 of "o5e 9ind. In e"to!" ",o$ld al8a#" 9no8 t,e !i"9 t,at t,e# a!e ta9in6 and in e"t in a 5anne! t,at 5at.,e" t,ei! !i"9 tole!an.e. Do T not -e 5i"led -# 5a!9et !$5o!", l$!in6 ad e!ti"e5ent o! B,ot ti%"K of t,e da#. Ta9e T info!5ed de.i"ion" -# "t$d#in6 t,e f$nda5ental" of t,e

.o5%an#. Find o$t t,e -$"ine"" t,e .o5%an# i" into, it" f$t$!e %!o"%e.t", I$alit# of 5ana6e5ent, %a"t t!a.9 !e.o!d et. So$!.e" of 9no8in6 a-o$t a .o5%an# a!e t,!o$6, ann$al !e%o!t", e.ono5i. 5a6aJine", data-a"e" a aila-le 8it, endo!" o! #o$! finan.ial ad i"o!. If T #o$! finan.ial ad i"o! o! -!o9e! ad i"e" #o$ to in e"t in a .o5%an# #o$ ,a e ne e! ,ea!d of, -e .a$tio$". S%end "o5e ti5e .,e.9in6 o$t a-o$t t,e .o5%an# -efo!e in e"tin6. Do T not -e att!a.ted -# anno$n.e5ent" of fanta"ti. !e"$lt":ne8" !e%o!t", a-o$t a .o5%an#. Do #o$! o8n !e"ea!., -efo!e in e"tin6 in an# "to.9. Do T not -e att!a.ted to "to.9" -a"ed on 8,at an inte!net 8e-"ite %!o5ote", $nle"" #o$ ,a e done adeI$ate "t$d# of t,e .o5%an#. In T e"tin6 in e!# lo8 %!i.ed "to.9" o! 8,at a!e 9no8n a" %enn# "to.9" doe" not 6$a!antee ,i6, !et$!n". 3e T .a$tio$" a-o$t "to.9" 8,i., ",o8 a "$dden "%$!t in %!i.e o! t!adin6 a.ti it#. An# T ad i"e o! ti% t,at .lai5" t,at t,e!e a!e ,$6e !et$!n" eC%e.ted, e"%e.iall# fo! a.tin6 I$i.9l#, 5a# -e !i"9# and 5a# to lead to lo"in6

*#at Do/s and Don/ts s#ould an investor $ear in mind .#en investing in t#e sto") mar)ets En"$!e t,at t,e inte!5edia!# (-!o9e!:"$-*-!o9e!& ,a" a

alid

SE3I !e6i"t!ation .e!tifi.ate. Ente! T into an a6!ee5ent 8it, #o$! -!o9e!:"$-*-!o9e! "ettin6 o$t te!5" and .ondition" .lea!l#. En"$!e T t,at #o$ 6i e all #o$! detail" in t,e B2no8 1o$! ClientK fo!5. En"$!e T t,at #o$ !ead .a!ef$ll# and $nde!"tand t,e .ontent" of t,e BRi"9 Di".lo"$!e Do.$5entK and t,en a.9no8led6e it. In"i"t T on a .ont!a.t note i""$ed -# #o$! -!o9e! onl#, fo! t!ade" done ea., da#. En"$!e T t,at #o$ !e.ei e t,e .ont!a.t note f!o5 #o$! -!o9e! 8it,in '? ,o$!" of t,e t!an"a.tion. En"$!e T t,at t,e .ont!a.t note .ontain" detail" "$., a" t,e -!o9e!K" na5e, t!ade ti5e and n$5-e!, t!an"a.tion %!i.e, -!o9e!a6e, "e! i.e taC, "e.$!itie" t!an"a.tion taC et.. and i" "i6ned -# t,e A$t,o!i"ed Si6nato!# of t,e -!o9e!. To T .!o"" .,e.9 6en$inene"" of t,e t!an"a.tion", lo6 in to t,e NSE

8e-"ite (888.n"eindia..o5& and 6o to t,e t!ade eIPt!d e!if#.,t5.

e!ifi.ation

fa.ilit# eCtended -# NSE at 888.n"eindia..o5:.ontent:eI$itie": I""$e T a..o$nt %a#ee .,eI$e":de5and d!aft" in t,e na5e of #o$! -!o9e! onl#, a" it a%%ea!" on t,e .ont!a.t note:SE3I !e6i"t!ation .e!tifi.ate of t,e -!o9e!.

>,ile T deli e!in6 ",a!e" to #o$! -!o9e! to 5eet #o$! o-li6ation", en"$!e t,at t,e deli e!# in"t!$.tion" a!e 5ade onl# to t,e de"i6nated a..o$nt of #o$! -!o9e! onl#. In"i"t T on %e!iodi.al "tate5ent of a..o$nt" of f$nd" and "e.$!itie" f!o5 #o$! -!o9e!. C!o"" .,e.9 and !e.on.ile #o$! a..o$nt" %!o5%tl# and in .a"e of an# di".!e%an.ie" -!in6 it to t,e attention of #o$! -!o9e! i55ediatel#. Plea"e T en"$!e t,at #o$ !e.ei e %a#5ent":deli e!ie" f!o5 #o$! -!o9e!, fo! t,e t!an"a.tion" ente!ed -# #o$, 8it,in one 8o!9in6 da# of t,e %a#o$t date. En"$!e T t,at #o$ do not $nde!ta9e deal" on -e,alf of ot,e!" o! t!ade on #o$! o8n na5e and t,en i""$e .,eI$e" f!o5 a fa5il# 5e5-e!" K: f!iend"K -an9 a..o$nt".

Si5ila!l#, T t,e De5at deli e!# in"t!$.tion "li% ",o$ld -e f!o5 #o$! o8n De5at a..o$nt, not f!o5 an# ot,e! fa5il# 5e5-e!"K:f!iend"K a..o$nt". Do T not "i6n -lan9 deli e!# in"t!$.tion "li%("& 8,ile 5eetin6 "e.$!it# %a#in o-li6ation. No T inte!5edia!# in t,e 5a!9et .an a..e%t de%o"it a""$!in6 fiCed !et$!n". Hen.e do not 6i e #o$! 5one# a" de%o"it a6ain"t a""$!an.e" of !et$!n".

TBPo!tfolio Mana6e5ent Se! i.e"K .o$ld -e offe!ed onl# -# inte!5edia!ie" ,a in6 "%e.ifi. a%%!o al of SE3I fo! PMS. Hen.e, do not %a!t #o$! f$nd" to $na$t,o!iJed %e!"on" fo! Po!tfolio Mana6e5ent. Deli T e!# In"t!$.tion Sli% i" a e!# al$a-le do.$5ent. Do not lea e "i6ned -lan9 deli e!# in"t!$.tion "li% 8it, an#one. >,ile 5eetin6 %a# in o-li6ation 5a9e "$!e t,at .o!!e.t ID of a$t,o!i"ed inte!5edia!# i" filled in t,e Deli e!# In"t!$.tion Fo!5. 3e T .a$tio$" 8,ile ta9in6 f$ndin6 fo!5 a$t,o!i"ed inte!5edia!ie" a" t,e"e t!an"a.tion" a!e not .o e!ed $nde! Settle5ent G$a!antee 5e.,ani"5" of t,e eC.,an6e.

In"i"t T on eCe.$tion of all o!de!" $nde! $niI$e .lient .ode allotted to #o$. Do not a..e%t t!ade" eCe.$ted $nde! "o5e ot,e! .lient .ode to #o$! a..o$nt. >,en T #o$ a!e a$t,o!i"in6 "o5eone t,!o$6, BPo8e! of Atto!ne#K fo! o%e!ation of #o$! DP a..o$nt, 5a9e "$!e t,atH #o$! T a$t,o!iJation i" in fa o$! of !e6i"te!ed inte!5edia!# onl#. a$t,o!i"ation T i" onl# fo! li5ited %$!%o"e of de-it" and .!edit" a!i"in6 o$t of alid t!an"a.tion" eCe.$ted t,!o$6, t,at inte!5edia!# onl#. #o$ T e!if# DP "tate5ent %e!iodi.all# "a# e e!# 5ont,: fo!tni6,t to en"$!e t,at no $na$t,o!i"ed t!an"a.tion" ,a e ta9en %la.e in #o$! a..o$nt. a$t,o!iJation T 6i en -# #o$ ,a" -een %!o%e!l# $"ed fo! t,e %$!%o"e fo! 8,i., a$t,o!iJation ,a" -een 6i en. in T .a"e #o$ find 8!on6 ent!ie" %lea"e !e%o!t in 8!itin6 to t,e a$t,o!iJed inte!5edia!#. DonKt T a..e%t $n"i6ned:d$%li.ate .ont!a.t note. DonKt T a..e%t .ont!a.t note "i6ned -# an# $na$t,o!i"ed %e!"on. DonKt T dela# %a#5ent:deli e!ie" of "e.$!itie" to -!o9e!. In T t,e e ent of an# di".!e%an.ie":di"%$te", %lea"e -!in6 t,e5 to t,e noti.e of t,e -!o9e! i55ediatel# in 8!itin6 (a.9no8led6ed -# t,e -!o9e!& and en"$!e t,ei! %!o5%t !e.tifi.ation.

In T .a"e of "$-*-!o9e! di"%$te", info!5 t,e 5ain -!o9e! in 8!itin6 a-o$t t,e di"%$te at t,e ea!lie"t and in an# .a"e not late! t,an A 5ont,". If T #o$! -!o9e!:"$-*-!o9e! doe" not !e"ol e #o$! .o5%laint" 8it,in a !ea"ona-le %e!iod ("a# 8it,in ;@ da#"&, %lea"e -!in6 it to t,e attention of t,e BIn e"to! G!ie an.e" CellK of t,e NSE. >,ile T lod6in6 a .o5%laint 8it, t,e BIn e"to! G!ie an.e" CellK of t,e NSE, it i" e!# i5%o!tant t,at #o$ "$-5it .o%ie" of all !ele ant do.$5ent" li9e .ont!a.t note", %!oof of %a#5ent":deli e!# of ",a!e" et.. alon68it, t,e .o5%laint. Re5e5-e!, in t,e a-"en.e of "$ffi.ient do.$5ent", !e"ol$tion of .o5%laint" -e.o5e" diffi.$lt. Fa5ilia!i"e T #o$!"elf 8it, t,e !$le", !e6$lation" and .i!.$la!" i""$ed -# "to.9 eC.,an6e":SE3I -efo!e .a!!#in6 o$t an# t!an"a.tion.
*#y s#ould one invest in equities in !arti"ular

>,en #o$ -$# a ",a!e of a .o5%an# #o$ -e.o5e a ",a!e,olde! in t,at .o5%an#. S,a!e" a!e al"o 9no8n a" EI$itie". EI$itie" ,a e t,e %otential to in.!ea"e in al$e o e! ti5e. It al"o %!o ide" #o$! %o!tfolio 8it, t,e 6!o8t, ne.e""a!# to !ea., #o$! lon6 te!5 in e"t5ent 6oal". Re"ea!., "t$die" ,a e %!o ed t,at t,e eI$itie" ,a e o$t%e!fo!5ed 5o"t ot,e! fo!5" of in e"t5ent" in t,e

lon6 te!5. T,i" 5a# -e ill$"t!ated 8it, t,e ,el% of follo8in6 eCa5%le"H a& O e! a ;@ #ea! %e!iod -et8een ;++( to '((@, Nift# ,a" 6i en an ann$aliJed !et$!n of ;)S. -& M!. Ra/$ in e"t" in Nift# on 7an$a!# ;, '((( (indeC al$e

;@+'.+(&. T,e Nift# al$e a" of end De.e5-e! '((@ 8a" 'F=A.@@. Holdin6 t,i" in e"t5ent o e! t,i" %e!iod 7an '((( to De. '((@ ,e 6et" a !et$!n of )F.()S. In e"t5ent in ",a!e" of ONGC Ltd fo! t,e "a5e %e!iod 6a e a !et$!n of ?A@.FAS, S3I =(;.;)S and Relian.e 'F;.?'S. T,e!efo!e, EI$itie" T a!e .on"ide!ed t,e 5o"t .,allen6in6 and t,e !e8a!din6, 8,en .o5%a!ed to ot,e! in e"t5ent o%tion". Re"ea!., T "t$die" ,a e %!o ed t,at in e"t5ent in "o5e ",a!e" 8it, a lon6e! ten$!e of in e"t5ent ,a e #ielded fa! "$%e!io! !et$!n" t,an an# ot,e! in e"t5ent. Ho8e e!, t,i" doe" not 5ean all eI$it# in e"t5ent" 8o$ld 6$a!antee "i5ila! ,i6, !et$!n". EI$itie" a!e ,i6,*!i"9 in e"t5ent". One need" to "t$d# t,e5 .a!ef$ll# -efo!e in e"tin6.
&verage return on Equities in India

Sin.e ;++( till date, Indian "to.9 5a!9et ,a" !et$!ned a-o$t ;)S to in e"to!" on an a e!a6e in te!5" of in.!ea"e in ",a!e %!i.e" o! .a%ital a%%!e.iation ann$all#. 3e"ide" t,at on a e!a6e "to.9" ,a e %aid ;.@S di idend ann$all#. Di idend i" a %e!.enta6e of t,e fa.e al$e of a ",a!e t,at a .o5%an# !et$!n" to it" ",a!e,olde!" f!o5 it" ann$al %!ofit". Co5%a!ed to 5o"t ot,e! fo!5" of in e"t5ent", in e"tin6 in eI$it# ",a!e" offe!" t,e ,i6,e"t !ate of !et$!n, if in e"ted o e! a lon6e! d$!ati

Fa"tors t#at influen"e t#e !ri"e of a sto")

3!oadl# t,e!e a!e t8o fa.to!"H (;& "to.9 "%e.ifi. and ('& 5a!9et "%e.ifi.. T,e "to.9*"%e.ifi. fa.to! i" !elated to %eo%leK" eC%e.tation" a-o$t t,e .o5%an#, it" f$t$!e ea!nin6" .a%a.it#, finan.ial ,ealt, and 5ana6e5ent, le el of te.,nolo6# and 5a!9etin6 "9ill". T,e 5a!9et "%e.ifi. fa.to! i" infl$en.ed -# t,e in e"to!K" "enti5ent to8a!d" t,e "to.9 5a!9et a" a 8,ole. T,i" fa.to!

de%end" on t,e en i!on5ent !at,e! t,an t,e %e!fo!5an.e of an# %a!ti.$la! .o5%an#. E ent" fa o!a-le to an e.ono5#, %oliti.al o! !e6$lato!# en i!on5ent li9e ,i6, e.ono5i. 6!o8t,, f!iendl# -$d6et, "ta-le 6o e!n5ent et.. .an f$el e$%,o!ia in t,e in e"to!", !e"$ltin6 in a -oo5 in t,e 5a!9et. On t,e ot,e! ,and, $nfa o!a-le e ent" li9e 8a!, e.ono5i. .!i"i", .o55$nal !iot", 5ino!it# 6o e!n5ent et.. de%!e"" t,e 5a!9et i!!e"%e.ti e of .e!tain .o5%anie" %e!fo!5in6 8ell. Ho8e e!, t,e effe.t of 5a!9et*"%e.ifi. fa.to! i" 6ene!all# ",o!t*te!5. De"%ite $%" and do8n", %!i.e of a "to.9 in t,e lon6 !$n 6et" "ta-iliJed -a"ed on t,e "to.9 "%e.ifi. fa.to!". T,e!efo!e, a %!$dent ad i.e to all in e"to!" i" to anal#"e and in e"t and not "%e.$late in ",a!e".
&$out 3ro.t# Sto") 1 4alue Sto") 3ro.t# Sto")s

In t,e in e"t5ent 8o!ld 8e .o5e a.!o"" te!5" "$., a" G!o8t, "to.9", Val$e "to.9" et.. Co5%anie" 8,o"e %otential fo! 6!o8t, in "ale" and ea!nin6" a!e eC.ellent, a!e 6!o8in6 fa"te! t,an ot,e! .o5%anie" in t,e 5a!9et o! ot,e! "to.9" in t,e "a5e ind$"t!# a!e .alled t,e G!o8t, Sto.9". T,e"e .o5%anie" $"$all# %a# little o! no di idend" and in"tead %!efe! to !ein e"t t,ei! %!ofit" in t,ei! -$"ine"" fo! f$!t,e! eC%an"ion".

4alue Sto")s

T,e ta"9 ,e!e i" to loo9 fo! "to.9" t,at ,a e -een o e!loo9ed -# ot,e! in e"to!" and 8,i., 5a# ,a e a B,idden al$eK. T,e"e .o5%anie" 5a# ,a e -een -eaten do8n in %!i.e -e.a$"e of "o5e -ad e ent, o! 5a# -e in an ind$"t!# t,atM" not fan.ied -# 5o"t in e"to!". Ho8e e!, e en a .o5%an# t,at ,a" "een it" "to.9 %!i.e de.line "till ,a" a""et" to it" na5e * -$ildin6", !eal e"tate, in ento!ie", "$-"idia!ie", and "o on. Man# of t,e"e a""et" "till ,a e al$e, #et t,at al$e 5a# not -e !efle.ted in t,e "to.9M" %!i.e. Val$e in e"to!" loo9 to -$# "to.9" t,at a!e $nde! al$ed, and t,en ,old t,o"e "to.9" $ntil t,e !e"t of t,e 5a!9et !ealiJe" t,e !eal al$e of t,e .o5%an#M" a""et". T,e al$e in e"to!" tend to %$!.,a"e a .o5%an#M" "to.9 $"$all# -a"ed on !elation",i%" -et8een t,e .$!!ent 5a!9et %!i.e of t,e .o5%an# and .e!tain -$"ine"" f$nda5ental". T,e# li9e P:E !atio -ein6 -elo8 a .e!tain a-"ol$te li5itL di idend #ield" a-o e a .e!tain a-"ol$te li5itL Total "ale" at a .e!tain le el !elati e to t,e .o5%an#M" 5a!9et .a%italiJation, o! 5a!9et al$e et..
2o. "an one a"quire equity s#ares

1o$ 5a# "$-".!i-e to i""$e" 5ade -# .o!%o!ate" in t,e %!i5a!# 5a!9et. In t,e %!i5a!# 5a!9et, !e"o$!.e" a!e 5o-ili"ed

-# t,e .o!%o!ate" t,!o$6, f!e", %$-li. i""$e" (IPO"& o! t,!o$6, %!i ate %la.e5ent". Alte!natel#, #o$ 5a# %$!.,a"e ",a!e" f!o5 t,e "e.onda!# 5a!9et. To -$# and "ell "e.$!itie" #o$ ",o$ld a%%!oa., a SE3I !e6i"te!ed t!adin6 5e5-e! (-!o9e!& of a !e.o6niJed "to.9 eC.,an6e.
&$out ,id and &s) !ri"e

T,e B3idK i" t,e -$#e!K" %!i.e. It i" t,i" %!i.e t,at #o$ need to 9no8 8,en #o$ ,a e to "ell a "to.9. 3id i" t,e !ate:%!i.e at 8,i., t,e!e i" a !ead# -$#e! fo! t,e "to.9, 8,i., #o$ intend to "ell. T,e BA"9K (o! offe!& i" 8,at #o$ need to 9no8 8,en #o$M!e -$#in6 i.e. t,i" i" t,e !ate: %!i.e at 8,i., t,e!e i" "elle! !ead# to "ell ,i" "to.9. T,e "elle! 8ill "ell ,i" "to.9 if ,e 6et" t,e I$oted 0A"9K %!i.e. If an in e"to! loo9" at a .o5%$te! ".!een fo! a I$ote on t,e "to.9 of "a# G1V Ltd, it 5i6,t loo9 "o5et,in6 li9e t,i"H
,id %,uy side5 &s) %Se ll side5 6666666666666666666666666666666666666666666 66666666666 7ty8 Pri"e %Rs85 7ty8 Pri"e %Rs85 (((((((((((((((((((((((((((((((((((((((((((((((( ((((((((((((( )*** +*.,+ +*.-+ ,*** +** +*.)* +*..* )***

++* +*.*+ +*.+* )+** ,+** +*.** +*.++ -*** )-** ./.0+ +*.1+ ).+* (((((((((((((((((((((((((((((((((((((((((((((((( ((((((((((((( Total 9:9; :<9; (((((((((((((((((((((((((((((((((((((((((((((((( (((((((((((((

He!e, on t,e left*,and "ide afte! t,e 3id I$antit# and %!i.e, 8,e!ea" on t,e !i6,t ,and "ide 8e find t,e A"9 I$antit# and %!i.e". T,e -e"t 3$# (3id& o!de! i" t,e o!de! 8it, t,e ,i6,e"t %!i.e and t,e!efo!e "it" on t,e fi!"t line of t,e 3id "ide (;((( ",a!e" W R". @(.'@&. T,e -e"t Sell (A"9& o!de! i" t,e o!de! 8it, t,e lo8e"t "ell %!i.e ('((( ",a!e" W R". @(.=@&. T,e diffe!en.e in t,e %!i.e of t,e -e"t -id and a"9 i" .alled a" t,e 3id*A"9 "%!ead and often i" an indi.ato! of liI$idit# in a "to.9. T,e na!!o8e! t,e diffe!en.e t,e 5o!e liI$id o! ,i6,l# t!aded i" t,e "to.9.

&$out Portfolio

A Po!tfolio i" a .o5-ination of diffe!ent in e"t5ent a""et" 5iCed and 5at.,ed fo! t,e %$!%o"e of a.,ie in6 an in e"to!M" 6oal("&. Ite5" t,at a!e .on"ide!ed a %a!t of #o$! %o!tfolio .an in.l$de an# a""et #o$ o8n*f!o5 ",a!e", de-ent$!e", -ond", 5$t$al f$nd $nit" to ite5" "$., a" 6old, a!t and e en !eal e"tate et.. Ho8e e!, fo! 5o"t in e"to!" a %o!tfolio ,a" .o5e to "i6nif# an in e"t5ent in finan.ial

in"t!$5ent" li9e ",a!e", de-ent$!e", fiCed de%o"it", 5$t$al f$nd $nit".

&$out Diversifi"ation

It i" a !i"9 5ana6e5ent te.,niI$e t,at 5iCe" a 8ide a!iet# of in e"t5ent" 8it,in a %o!tfolio. It i" de"i6ned to 5ini5iJe t,e i5%a.t of an# one "e.$!it# on o e!all %o!tfolio %e!fo!5an.e. Di e!"ifi.ation i" %o""i-l# t,e -e"t 8a# to !ed$.e t,e !i"9 in a %o!tfolio.
&dvantages of #aving a diversified !ortfolio

A 6ood in e"t5ent %o!tfolio i" a 5iC of a 8ide !an6e of a""et .la"". Diffe!ent "e.$!itie" %e!fo!5 diffe!entl# at an# %oint in ti5e, "o 8it, a 5iC of a""et t#%e", #o$! enti!e %o!tfolio doe" not "$ffe! t,e i5%a.t of a de.line of an# one "e.$!it#. >,en #o$! "to.9" 6o do8n, #o$ 5a# "till ,a e t,e "ta-ilit# of t,e -ond" in #o$! %o!tfolio. T,e!e ,a e -een all "o!t" of a.ade5i. "t$die" and fo!5$la" t,at de5on"t!ate 8,# di e!"ifi.ation i" i5%o!tant, -$t itM" !eall# /$"t t,e "i5%le %!a.ti.e of Qnot %$ttin6 all #o$! e66" in one -a"9et.Q If #o$ "%!ead #o$! in e"t5ent" a.!o"" a!io$" t#%e" of a""et" and 5a!9et", #o$Mll !ed$.e t,e !i"9 of #o$! enti!e %o!tfolio 6ettin6 affe.ted -# t,e ad e!"e !et$!n" of an# "in6le a""et .la"".

&$out =De$t instruments

Instrument/

and

features

of

de$t

De-t in"t!$5ent !e%!e"ent" a .ont!a.t 8,e!e-# one %a!t# lend" 5one# to anot,e! on %!e*dete!5ined te!5" 8it, !e6a!d" to !ate and %e!iodi.it# of inte!e"t, !e%a#5ent of %!in.i%al a5o$nt -# t,e -o!!o8e! to t,e lende!. In Indian "e.$!itie" 5a!9et", t,e te!5 B-ondK i" $"ed fo! de-t in"t!$5ent" i""$ed -# t,e Cent!al and State 6o e!n5ent" and %$-li. "e.to! o!6aniJation" and t,e te!5 Bde-ent$!eK i" $"ed fo! in"t!$5ent" i""$ed -# %!i ate .o!%o!ate "e.to!.
E"&+ 0*7$ %)($#'.*)$ +"( $+#** >*"$'#*(H Mat$!it#, .o$%on and %!in.i%al.

Maturity Maturity of a bond refers to the date! on

which the bond matures! 8,i., i" t,e date on 8,i., t,e

-o!!o8e! ,a" a6!eed to !e%a# t,e %!in.i%al. Te!5*to*Mat$!it# !efe!" to t,e n$5-e! of #ea!" Re5ainin6 fo! t,e -ond to 5at$!e. T,e Te!5*to*Mat$!it# .,an6e" e e!#da#, f!o5 date of i""$e of t,e -ond $ntil it" 5at$!it#. T,e te!5 to 5at$!it# of a -ond .an -e .al.$lated on

an# date, a" t,e di"tan.e -et8een "$., a date and t,e date of 5at$!it#. It i" al"o .alled t,e te!5 o! t,e ten$!e of t,e -ond. Coupon Co$%on !efe!" to t,e %e!iodi. inte!e"t %a#5ent" t,at a!e 5ade -# t,e -o!!o8e! (8,o i" al"o t,e i""$e! of t,e -ond& to t,e lende! (t,e "$-".!i-e! of t,e -ond&. Co$%on !ate i" t,e !ate at 8,i., inte!e"t i" %aid, and i" $"$all# !e%!e"ented a" a %e!.enta6e of t,e %a! al$e of a -ond. Principal P!in.i%al i" t,e a5o$nt t,at ,a" -een -o!!o8ed, and i" al"o .alled t,e %a! al$e o! fa.e al$e of t,e -ond. T,e .o$%on i" t,e %!od$.t of t,e %!in.i%al and t,e .o$%on !ate. T,e na5e of t,e -ond it"elf .on e#" t,e 9e# feat$!e" of a -ond. Fo! eCa5%le, a GS CG'((F ;;.?(S -ond !efe!" to a Cent!al Go e!n5ent -ond 5at$!in6 in t,e #ea! '((F and %a#in6 a .o$%on of ;;.?(S. Sin.e Cent!al Go e!n5ent -ond" ,a e a fa.e al$e of R".;(( and no!5all# %a# .o$%on "e5i*ann$all#, t,i" -ond 8ill %a# R". @.)( a" "iC* 5ont,l# .o$%on, $ntil 5at$!it#. &$out =Interest/ !aya$le $y a de$enture or a $ond+ Inte!e"t i" t,e a5o$nt %aid -# t,e -o!!o8e! (t,e .o5%an#& to t,e lende! (t,e de-ent$!e*,olde!& fo! -o!!o8in6 t,e a5o$nt fo! a "%e.ifi. %e!iod of ti5e. T,e inte!e"t 5a# -e

%aid ann$al, "e5i*ann$all#, I$a!te!l# o! 5ont,l# and i" %aid $"$all# on t,e fa.e .e!tifi.ate& of t,e -ond. Segments in t#e De$t Mar)et in India and t#e !layers in de$t mar)et T,e!e a!e t,!ee 5ain "e65ent" in t,e de-t 5a!9et" in India, iJ., ;. Go e!n5ent Se.$!itie"= '. P$-li. Se.to! Unit" (PSU& -ond" =. Co!%o!ate "e.$!itie" T,e 5a!9et fo! Go e!n5ent Se.$!itie" .o5%!i"e" t,e Cent!e, State and State*"%on"o!ed "e.$!itie". In t,e !e.ent %a"t, lo.al -odie" "$., a" 5$ni.i%alitie" ,a e al"o -e6$n to ta% t,e de-t 5a!9et" fo! f$nd". So5e of t,e PSU -ond" a!e taC f!ee, 8,ile 5o"t -ond" in.l$din6 6o e!n5ent "e.$!itie" a!e not taC*f!ee. Co!%o!ate -ond 5a!9et" .o5%!i"e of .o55e!.ial %a%e! and -ond". T,e"e -ond" t#%i.all# a!e "t!$.t$!ed to "$it t,e !eI$i!e5ent" of in e"to!" and t,e i""$in6 .o!%o!ate, and in.l$de a PlayersH a!iet# of tailo!* 5ade feat$!e" 8it, !e"%e.t to Gi en t,e la!6e "iJe of t,e t!ade", De-t inte!e"t %a#5ent" and !ede5%tion. 5a!9et i" %!edo5inantl# a 8,ole"ale 5a!9et, 8it, do5inant al$e (t,e al$e %!inted on t,e -ond

in"tit$tional in e"to! %a!ti.i%ation. T,e in e"to!" in t,e de-t 5a!9et" a!e 5ainl# -an9", finan.ial in"tit$tion", 5$t$al f$nd", %!o ident f$nd", in"$!an.e .o5%anie" and .o!%o!ate". &re $onds rated for t#eir "redit quality Mo"t 3ond:De-ent$!e i""$e" a!e !ated -# "%e.iali"ed .!edit !atin6 a6en.ie".C!edit !atin6 a6en.ie" in India a!e CRISIL, CARE, ICRA and Fit.,. T,e #ield on a -ond a!ie" in e!"el# 8it, it" .!edit ("afet#& !atin6. T,e "afe! t,e in"t!$5ent, t,e lo8e! i" t,e !ate of inte!e"t offe!ed.

2o. "an one a"quire se"urities in t#e de$t mar)et 1o$ 5a# "$-".!i-e to i""$e" 5ade -# t,e 6o e!n5ent:.o!%o!ate" in t,e %!i5a!# 5a!9et. Alte!nati el#, #o$ 5a# %$!.,a"e t,e "a5e f!o5 t,e "e.onda!# 5a!9et t,!o$6, t,e "to.9 eC.,an6e".

DEPOSITORY AND DEPOSITORY PARTICIPANTS ROLE IN SECONDARY MARKET Introduction o! .epository and .epository

2articipant H A de%o"ito!# i" an o!6ani"ation 8,i., ,old" "e.$!itie" of in e"to!" in ele.t!oni. fo!5 at t,e !eI$e"t of t,e in e"to!" t,!o$6, a !e6i"te!ed De%o"ito!# Pa!ti.i%ant. It al"o %!o ide" "e! i.e" !elated to t!an"a.tion" in "e.$!itie". A De%o"ito!# Pa!ti.i%ant (DP& i" an a6ent of t,e de%o"ito!# t,!o$6, 8,i., it inte!fa.e" 8it, t,e in e"to!. A DP .an offe! de%o"ito!# "e! i.e" onl# afte! it 6et" %!o%e! !e6i"t!ation f!o5 SE3I. 3an9in6 "e! i.e" .an -e a ailed t,!o$6, a -!an., 8,e!ea" de%o"ito!# "e! i.e" .an -e a ailed t,!o$6, a DP. .i!!erences between Bank and .epository E It .an -e .o5%a!ed 8it, a -an9, 8,i., ,old" t,e f$nd" fo! de%o"ito!". A 3an9 < De%o"ito!# Analo6# i" 6i en in t,e follo8in6 ta-leH $A,--DEPO&)+OR. ! A, A,A/OG.

BA,H

.)27(IT7$?

Hold" f$nd" in an a..o$nt T!an"fe!" f$nd"

Hold "e.$!itie" in an a..o$nt T!an"fe!" "e.$!itie"

-et8een a..o$nt" on t,e in"t!$.tion of t,e a..o$nt ,olde! Fa.ilitate" t!an"fe!

-et8een a..o$nt" on t,e in"t!$.tion of t,e a..o$nt ,olde! Fa.ilitate" t!an"fe! of o8ne!",i% ,a in6 "e.$!itie" to 8it,o$t ,andle

8it,o$t ,a in6 to ,andle 5one#

Fa.ilitate" "afe9ee%in6 5one# of

Fa.ilitate" "afe9ee%in6 of "e.$!itie"

Iow many .epositories and .epository 2articipants *.2+are registered with ()BI At %!e"ent t8o De%o"ito!ie" iJ. National Se.$!itie"

De%o"ito!# Li5ited (NSDL& and Cent!al De%o"ito!# Se! i.e" (I& Li5ited (CDSL& a!e !e6i"te!ed 8it, SE3I and t,e 5ini5$5

net 8o!t, of t,e De%o"ito!# a!e ;(( .!o!e". A" on =;:(=:'((A, total of @=F DP" a!e !e6i"te!ed 8it, SE3I. Is it compulsory !or e"ery in"estor to open a depository account to trade in the capital market and 1hat are the bene!its o! a"ailing depository ser"ices A" %e! t,e a aila-le "tati"ti." at 3SE and NSE, ++.+S "ettle5ent ta9e" %la.e in de5at 5ode onl#. T,e!efo!e, in ie8 of t,e .on enien.e in "ettle5ent t,!o$6, de5at 5ode, it i" ad i"a-le to ,a e a -enefi.ia!# o8ne! (3O& a..o$nt to t!ade at t,e eC.,an6e". T,e -enefit" a!e en$5e!ated -elo8H* A "afe and .on enient 8a# to ,old "e.$!itie"L i55ediate t!an"fe! of "e.$!itie"L No "ta5% d$t# on t!an"fe! of "e.$!itie"L Eli5ination of !i"9" a""o.iated 8it, %,#"i.al .e!tifi.ate" "$., a" -ad deli e!#, fa9e "e.$!itie", dela#", t,eft" et..L

Red$.tion in %a%e!8o!9 in ol ed in t!an"fe! of "e.$!itie"L

Red$.tion in t!an"a.tion .o"tL No odd lot %!o-le5, e en one ",a!e .an -e "oldL No5ination fa.ilit#L C,an6e in add!e"" !e.o!ded 8it, DP 6et" !e6i"te!ed 8it, all .o5%anie" in 8,i., in e"to! ,old" "e.$!itie" ele.t!oni.all# eli5inatin6 t,e need to .o!!e"%ond 8it, ea., of t,e5 "e%a!atel#L

T!an"5i""ion of "e.$!itie"

i" done -# DP

eli5inatin6

.o!!e"%onden.e 8it, .o5%anie"L

A$to5ati. .!edit into de5at a..o$nt of ",a!e", a!i"in6 o$t of -on$":"%lit:.on"olidation:5e!6e! et..

Holdin6 in e"t5ent" in eI$it# and de-t in"t!$5ent" in a "in6le a..o$nt

Iow can one open an account E Fi!"t an in e"to! ,a" to a%%!oa., a DP and fill $% an a..o$nt o%enin6 fo!5. T,e a..o$nt o%enin6 fo!5 5$"t -e "$%%o!ted

-# .o%ie" of an# one of t,e a%%!o ed do.$5ent" to "e! e a" %!oof of identit# (POI& and %!oof of add!e"" (POA& a" "%e.ified -# SE3I. 3e"ide", %!od$.tion of PAN .a!d in o!i6inal at t,e ti5e of o%enin6 of a..o$nt ,a" -een 5ade 5andato!# effe.ti e f!o5 A%!il (;, '((A. All a%%li.ant" ",o$ld .a!!# o!i6inal do.$5ent" fo! "i6nat$!e. F$!t,e!, t,e in e"to! ,a" to "i6n an a6!ee5ent 8it, DP in a de%o"ito!# %!e".!i-ed "tanda!d fo!5at, 8,i., detail" !i6,t" and d$tie" of in e"to! and DP. DP ",o$ld %!o ide t,e in e"to! 8it, a .o%# of t,e a6!ee5ent and ".,ed$le of .,a!6e" fo! t,ei! f$t$!e !efe!en.e. T,e DP 8ill o%en t,e a..o$nt in t,e "#"te5 and 6i e an a..o$nt n$5-e!, 8,i., i" al"o .alled 3O ID (3enefi.ia!# O8ne! Identifi.ation n$5-e!&. e!ifi.ation -# an a$t,o!iJed offi.ial of t,e de%o"ito!# %a!ti.i%ant, $nde! ,i"

T,e DP 5a# !e i"e t,e .,a!6e" -# 6i in6 =( da#" noti.e in ad an.e. SE3I ,a" !ationali"ed t,e .o"t "t!$.t$!e fo! de5ate!iali"ation -# !e5o in6 a..o$nt o%enin6 .,a!6e",

t!an"a.tion .,a!6e" fo! .!edit of "e.$!itie", and .$"tod# .,a!6e" ide .i!.$la! dated 7an$a!# 'F, '((@. F$!t,e!, SE3I ,a" ide .i!.$la! dated No e5-e! (+, '((@ ad i"ed t,at 8it, effe.t f!o5 7an$a!# (+, '((A, no .,a!6e" ",all -e le ied -# a de%o"ito!# on DP and .on"eI$entl#, -# a DP on a 3enefi.ia!# O8ne! (3O& 8,en a 3O t!an"fe!" all t,e "e.$!itie" l#in6 in ,i" a..o$nt to anot,e! -!an., of t,e "a5e DP o! to anot,e! DP of t,e "a5e de%o"ito!# o! anot,e! de%o"ito!#, %!o ided t,e 3O A..o$nt:" at t!an"fe!ee DP and at t!an"fe!o! DP a!e one and t,e "a5e, i.e. identi.al in all !e"%e.t". In .a"e t,e 3O A..o$nt at t!an"fe!o! DP i" a /oint a..o$nt, t,e 3O A..o$nt at t!an"fe!ee DP ",o$ld al"o -e a /oint a..o$nt in t,e "a5e "eI$en.e of o8ne!",i%.

About dematerialisation and how one can con"ert physical holding into electronic holding i.e how can one dematerialise securities De5ate!iali"ation i" t,e %!o.e"" -# 8,i., %,#"i.al .e!tifi.ate" of an in e"to! a!e .on e!ted to an eI$i alent

n$5-e! of "e.$!itie" in ele.t!oni. fo!5 and .!edited into t,e in e"to!M" a..o$nt 8it, ,i":,e! DP. In o!de! to de5ate!iali"e %,#"i.al "e.$!itie" one ,a" to fill in a DRF (De5at ReI$e"t Fo!5& 8,i., i" a aila-le 8it, t,e DP and "$-5it t,e "a5e alon6 8it, %,#"i.al .e!tifi.ate" one 8i",e" to de5ate!iali"e. Se%a!ate DRF ,a" to -e filled fo! ea., ISIN N$5-e!. T,e .o5%lete %!o.e"" of de5ate!iali"ation i" o$tlined -elo8H

S$!!ende! .e!tifi.ate" fo! de5ate!iali"ation to #o$! de%o"ito!# %a!ti.i%ant. De%o"ito!# %a!ti.i%ant inti5ate" De%o"ito!# of t,e !eI$e"t t,!o$6, t,e "#"te5. De%o"ito!# %a!ti.i%ant "$-5it" t,e .e!tifi.ate" to t,e !e6i"t!a! of t,e I""$e! Co5%an#.

Re6i"t!a! .onfi!5" t,e de5ate!iali"ation !eI$e"t f!o5 de%o"ito!#.

Afte! de5ate!iali"in6 t,e .e!tifi.ate", Re6i"t!a! $%date" a..o$nt" and info!5" de%o"ito!# of t,e .o5%letion of de5ate!iali"ation.

De%o"ito!# $%date" it" a..o$nt" and info!5" t,e de%o"ito!# %a!ti.i%ant. De%o"ito!# %a!ti.i%ant $%date" t,e de5at a..o$nt of t,e in e"to!.

0 -an electronic holdings be con"erted back into

2hysical -erti!icates E 1e". T,e %!o.e"" i" .alled !e5ate!iali"ation. If one 8i",e" to 6et -a.9 ,i" "e.$!itie" in t,e %,#"i.al fo!5 one ,a" to fill in t,e RRF (Re5at ReI$e"t Fo!5& and !eI$e"t ,i" DP fo! !e5ate!iali"ation of t,e -alan.e" in ,i" "e.$!itie" a..o$nt. T,e %!o.e"" of !e5ate!iali"ation i" o$tlined -elo8H X One 5a9e" a !eI$e"t fo! !e5ate!iali"ation. X De%o"ito!# %a!ti.i%ant inti5ate" de%o"ito!# of t,e !eI$e"t t,!o$6, t,e "#"te5. X De%o"ito!# .onfi!5" !e5ate!iali"ation !eI$e"t to t,e !e6i"t!a!. X Re6i"t!a! $%date" a..o$nt" and %!int" .e!tifi.ate". X De%o"ito!# $%date" a..o$nt" and do8nload" detail" to de%o"ito!# %a!ti.i%ant.

X Re6i"t!a! di"%at.,e" .e!tifi.ate" to in e"to!. Trading J (ettlement procedure !or selling dematerialised securities E T,e %!o.ed$!e fo! -$#in6 and "ellin6 de5ate!iali"ed "e.$!itie" i" "i5ila! to t,e %!o.ed$!e fo! -$#in6 and "ellin6 %,#"i.al "e.$!itie". T,e diffe!en.e lie" in t,e %!o.e"" of deli e!# (in .a"e of "ale& and !e.ei%t (in .a"e of %$!.,a"e& of "e.$!itie". In case o! purchase1 T,e -!o9e! 8ill !e.ei e t,e "e.$!itie" in ,i" a..o$nt on t,e %a#o$t da# T,e -!o9e! 8ill 6i e in"t!$.tion to it" DP to de-it ,i" a..o$nt and .!edit in e"to!M" a..o$nt In e"to! 8ill 6i e BRe.ei%t In"t!$.tion to DP fo! !e.ei in6 .!edit -# fillin6 a%%!o%!iate fo!5. Ho8e e! one .an 6i e "tandin6 in"t!$.tion fo! .!edit in to one" a..o$nt t,at 8ill o- iate t,e need of 6i in6 Re.ei%t In"t!$.tion e e!# ti5e.

In case o! sale1T,e in e"to! 8ill 6i e deli e!# in"t!$.tion to DP to de-it ,i" a..o$nt and .!edit t,e -!o9e!K" a..o$nt. S$., in"t!$.tion ",o$ld !ea., t,e DPK" offi.e at lea"t '? ,o$!" -efo!e t,e %a#*in a" ot,e! 8i"e DP 8ill a..e%t t,e in"t!$.tion onl# at t,e in e"to!K" !i"9. About .eli"ery instruction slip *.I(+K 1hat

precautions do one need to obser"e with respect to .eli"ery Instruction (lips To 6i e t,e deli e!# one ,a" to fill a fo!5 .alled Deli e!# In"t!$.tion Sli% (DIS&. DIS 5a# -e .o5%a!ed to .,eI$e -oo9 of a -an9 a..o$nt. T,e follo8in6 %!e.a$tion" a!e to -e ta9en in !e"%e.t of DISH*

En"$!e and in"i"t 8it, DP to i""$e DIS -oo9. En"$!e t,at DIS n$5-e!" a!e %!e*%!inted and DP ta9e" a.9no8led65ent fo! t,e DIS -oo9let i""$ed to in e"to!.

En"$!e t,at #o$! a..o$nt n$5-e! Y.lient idZ i" %!e* "ta5%ed.

If t,e a..o$nt i" a /oint a..o$nt, all t,e /oint ,olde!" ,a e to "i6n t,e in"t!$.tion "li%". In"t!$.tion .annot -e eCe.$ted if all /oint ,olde!" ,a e not "i6ned.

A oid $"in6 loo"e "li%" Do not lea e "i6ned -lan9 DIS 8it, an#one iJ., -!o9e!:"$-*-!o9e!.

$"e.

2ee% t,e DIS -oo9 $nde! lo.9 and 9e# 8,en not in

If onl# one ent!# i" 5ade in t,e DIS -oo9, "t!i9e o$t !e5ainin6 "%a.e to %!e ent 5i"$"e -# an# one.

In e"to! ",o$ld %e!"onall# fill in ta!6et a..o$nt *id and all detail" in t,e DIS.

2ledging -an one pledge dematerialised securities and what should one do to pledge electronic securities E

1e". In fa.t, %led6in6 de5ate!iali"ed "e.$!itie" i" ea"ie! and 5o!e ad anta6eo$" a" .o5%a!ed to %led6in6 %,#"i.al "e.$!itie" T,e %!o.ed$!e to %led6e ele.t!oni. "e.$!itie" i" a" follo8"H 3ot, in e"to! (%led6o!& a" 8ell a" t,e lende! (%led6ee& 5$"t ,a e de%o"ito!# a..o$nt" 8it, t,e "a5e de%o"ito!#L In e"to! ,a" to initiate t,e %led6e -# "$-5ittin6 to DP t,e detail" of t,e "e.$!itie" to -e %led6ed in a "tanda!d fo!5at L T,e %led6ee ,a" to .onfi!5 t,e !eI$e"t t,!o$6, ,i":,e! DPL On.e t,i" i" done, "e.$!itie" a!e %led6ed. All finan.ial t!an"a.tion" -et8een t,e %led6o! and t,e %led6ee a!e ,andled a" %e! $"$al %!a.ti.e o$t"ide t,e de%o"ito!# "#"te5. Iow can one close the pledge a!ter repayment o! loan E

Afte! one ,a" !e%aid t,e loan, one .an !eI$e"t fo! a .lo"$!e of %led6e -# in"t!$.tin6 t,e DP in a %!e".!i-ed fo!5at. T,e %led6ee on !e.ei in6 t,e !e%a#5ent 8ill in"t!$.t ,i" DP a..o!din6l# fo! t,e .lo"$!e of t,e %led6e.

RESEARCH METHODOLOGY
SCOPE OF THE STUDY -

T,e "t$d# at ,and 6i e" detail de".!i%tion of t,e follo8in6 a.ti itie". Online t!adin6 %!o.ed$!e De5ate a..o$nt %!o.ed$!e

DATA COLLECTION METHODS T,e data .olle.tion 5et,od" in.l$de -ot, t,e %!i5a!# and t,e "e.onda!# .olle.tion 5et,od". P#%."#3 .*$+80 - T,i" 5et,od in.l$de" t,e data .olle.tion f!o5 t,e %e!"onal inte!a.tion 8it, a$t,o!iJed 5e5-e!", eCe.$ti e" of t,e An6el 3!o9in6. S*&8)0"#3 .*$+80 - T,e "e.onda!# data .olle.tion 5et,od" in.l$de" , T,e le.t$!e!" deli e! -# t,e "$%e!intendent" of !e"%e.ti e de%a!t5ent". T,e data .olle.tion" f!o5 t,e NSC, E.ono5i. Ti5e" et.. T,e -!o.,$!e" and t,e 5ate!ial %!o ide -# t,e An6el 3!o9in6. Va!io$" -oo9" !elatin6 to in e"t5ent", .a%ital 5a!9et" and ot,e! !elated to%i.". NEED OF THE STUDY

Sto.9 eC.,an6e" a!e an inte6!al %a!t of t,e .a%ital 5a!9et. It i" t,e 5o"t %e!fe.t t#%e 5a!9et fo! "e.$!itie" 8,et,e! of 6o e!n5ent o! "e5i 6o e!n5ent. 3odie" o! ot,e! -odie" a" %e! ",a!e and de-ent$!e" i""$ed -# t,e /oint "to.9 ente!%!i"e".

Sto.9 eC.,an6e" %!o ide liI$idit# to t,e li"ted .o5%anie" H t,e 6i e I$otation" to t,e li"ted .o5%anie" and ,el% in t!adin6 and !i"in6 f$nd" f!o5 t,e 5a!9et. EC.,an6e %!o ide" !ead# 5a!9et fo! t,e ",a!e and %$!.,a"e of "e.$!itie". Sto.9 5a!9et in India i" 5o!e t,an .ent$!# old and ,a" -een f$n.tionin6 effe.ti el# t,!o$6, t,e 5edi$5 of !e.o6niJed "to.9 eC.,an6e" t,e "to.9 5a!9et 8,i., i" inte6!al of t,e .a%ital ,a" a 5a/o! i5%a.t on t,e f$n.tionin6 of t,e .o!%o!ate "e.to! in %a!ti.$la!. Sin.e t,e .a%ital 5a!9et i" %la#in6 a 5a/o! !ole in t,e Indian e.ono5i. f!o5 t,e %a"t "e e!al #ea!" t,e!e i" an e""ential need to "t$d# t,e o e!all f$n.tionin6 of "to.9 eC.,an6e".

OB?ECTI2ES OF THE STUDY 1. To 9no8 t,e o e!all "e.onda!# 5a!9et o%e!ation". 2. .To 9no8 t,e inte!e"t of %$-li. at in e"t5ent. @. To 9no8 t,e n$5-e! of de%o"ito!# %a!ti.i%ant". 4. To 9no8 t,e 6!o8t, of "to.9 -!o9in6 "e! i.e".

LIMITATIONS OF THE STUDY

T,e %!e"ent "t$d# -a"ed on ,i"to!i.al data , t,e# 8ill not t,e eCit indi.ato!" of f$t$!e" -e.a$"e, f$t$!e i" $n"ete!. SUGGESTIONS
T,e Indian !e6$lato!# "#"te5 and !ole of SE3I ",o$ld -e in.!ea"ed fo! "e.$!in6 inte!e"t and ot,e! %la#e!". T,e "to.9 eC.,an6e ",o$ld .ond$.t a8a!ne"" .a5%ai6n on "to.9 5a!9et o%e!ation" Min "e! i.e .,an6e", T,e T!adin6 "e! i.e" of 3an9", Finan.ial In"t$tation", Deale!" ",o$ld -e $tiliJed %!o5%tl#. T,e .!o!t ant,"itie" ",o$ld -e .ont!olled 5a!9et fl$.t!ation" ti5el#.

FINDINGS
;.De5at

A..o$nt"

a!o%ened

!ando5l#

in.!ea"ed

5anne!

;;(S,CCC,CCC,CCC, !e"%e.ti el#. '.T,e n$5-e! of de%o"ito!# %a!ti.i%ant" a!e $%8a!d t!end 5anne!

=.T,e n$5-e! of de%o"ito!# %a!ti.i%ant" "e! i.e .ente!" a!e in.!ea.ein6 !elati el#. ?.T,e de%o"ito!# %a!ti.i%ant" Geo6!%,i.al Co e!a6e CCCC, in ti5e". @.T,e De5at .$"tod# Ut# a!e in.!ea"ed -# t8o ti5e" 8,en .o5%a!e 8it, !a"t.
2345226 +otal ,o0 :59896: or Demat Accounts +oal ,o0 Of 753 DP=s +otal 5 Depositor#=s DP &ervice 876: Centres DP 65: Geogrphical Coverage Demat ;<3598 Custod# >t# ?mn0 &ecurities@ 234 5227 76;3<;9 8<9 5 983< 727 52;:32 9<5 <<3669 2345228 376:8;2 9;6 5 3693 2345229 55798:; 3;: 5 ;5:< ;63 7396:

DATA ANALYSIS AND INTERPRETATION

TOTAL NO.OF DEMAT ACCOUNTS

(?:1ea! (?:'((@ (?:'((A (?:'(() (?:'((F

De5at A..o$nt ''')@A+= ?)F+A=( )F=?;=@ +'@A@F+

Total ,o.7! .emat Account

59222222 52222222 .emats <9222222 <2222222 9222222 2 555798:; Apr-29 Apr 0; 222C;@59 Apr 0@ :C65@90 376:8;2 Apr-28 ?ears Apr 0C C69:49; 76;3<;9 Apr-27 Apr 06 52;@;65 :59896: Apr-26

I)>*#*)&*-

TOTAL NO.OF DPAS

(?:1ea! (?:'((@ (?:'((A (?:'(() (?:'((F

DPKS

?=+ @=F A;@ )'?

T7TA3 ,7. 78 .2'(

622 722 822 922 322 ;22 522 <22 2 Apr 06 C2: Apr 0@ ;96 Apr 0; :95 Apr 0C @4;

.2'(

3;: Apr-29

9;6 Apr-28 ?)A$(

8<9 Apr-27

753 Apr-26

I)>*#*)&*-

TOTAL NO. OF DEPOSITORYAS

(?:1ea! (?:'((@ (?:'((A (?:'(() (?:'((F

DEPOSITOR1KS

' ' ' '

T7TA3 ,7. 78 .)27(IT7$?'(

<22A :2A 62A 72A 82A 92A 32A ;2A 52A <2A 2A

.)27(IT7$?'(

Apr 0;

Apr 0@

Apr 0C

Apr 06

5229

5228 ?)A$(

5227

5226

I)>*#*)&*-

DP SER2ICE CENTRES

(?:1ea! (?:'((@ (?:'((A (?:'(() (?:'((F

DP SERVICE

='+; ?F@? @A?; A)F+

.2 ()$%I-) -),T$)

7222 8222 9222 .2 3222 ;222 5222 <222 2 5229 5228 ?)A$( 5227 5226 Apr 0; Apr 0@ Apr 0C Apr 06

I)>*#*)&*-

DP GEOGRAPHICAL CO2ERAGE

(?:1ea! (?:'((@ (?:'((A (?:'(() (?:'((F

DP GEOGRAPHICAL COVERAGE

=F? @;' )() F'+

.2 ')7'$A2II-A3 -7%)$A')
Apr 06 Apr 0C Apr 0@ Apr 0;

:22 622 722 .2 822 ')7'$A2II- 922 A3 322 -7%)$A') ;22 522 <22 2

5229

5228 ?)A$(

5227

5226

I)>*#*)&*-

DEMAT CUSTODY

(?:1ea! (?:'((@ (?:'((A (?:'(() (?:'((F

DEMAT CUSTOD1

)?@F+ ;;?FF@ '(=+?( =;?'@A

.)&AT -F(T7.?

322222 ;22222 .)&AT 522222 -F(T7.? <22222 2

Apr 0; 5229

Apr 0@ 5228 ?)A$(

Apr 0C 5227

Apr 06 &< 5226

I)>*#*)&*-

CONCLUSION- O e!all t,e %e!fo!5an.e of t,e .o5%an# i" 6ood it i" one of t,e leadin6 -!o9in6 .o5%an# in India .T,o$6, t,i" 5an# ne8 in e"to!" ea!ned 5o!e !et$!n"