Vasu Final Report Part2

8/3/2019 Vasu Final Report Part2

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INTRODUCTION


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GENERAL

INTRODUCTION ABOUT

THE SECTOR


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DEFINITION (SECURITIES)


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1.1 a. DEFINITION OF SECURITIES:

Securities as per the securities contracts Regulation Act (SCRA) 1956, includes

instruments such as shares, bonds, scripts, stocks or other marketable securities of similar

nature in or of any incorporate company or body corporate, government securities,

derivatives of securities units of collective investment scheme, interest and rights in

securities, security receipt or any other instruments so declared by the central

government.

FUNCTIONS OF SECURITIES MARKET:

It is a place where buyers and sellers of securities can enter into transactions to

purchase and sell shares, bonds, debentures etc. Further, it performs an important role of

enabling corporate, entrepreneurs to raise resources for their companies and business

ventures through public issues. Transfer of resources from those having idle resources

(investors) to others who have a need for them (corporate) is most efficiently achieved

through the securities market. Stated formally, securities markets provide channels for

reallocation savings to investments and entrepreneurship. Savings are linked to

investments by a variety of intermediaries, through a range of financial products, called

Securities.

ONE CAN INVEST IN:

y Sharesy Government securitiesy Derivative productsy Units of Mutual funds etc. are some of the securities investors in the

securities market can invest in.


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SECURITIES MARKETS NEED REGULATORS:

The absence of conditions of perfect competition in the securities market makes

the role of the regulator extremely important. The regulator ensures that the market

participants behave in a desired manner so that securities market continues to be a major

source of finance for corporate and government and the interest of investors are

protected.

REGULATION OF SECURITIES MARKET:

The responsibility for regulating the securities market is shared by

y Department of Economic Affairs (DEA)y Department of Company Affairs (DCA)y Reserve Bank of India (RBI)y Securities and Exchange Board of India (SEBI)

SEBI AND ITS ROLE:

The Securities and Exchange Board of India (SEBI) is the regulatory authority in

India established under section 3 of SEBI Act, 1992. SEBI Act, 1992 provides for

establishment with statutory powers for

a) Protecting the interests of investors in securitiesb) Promoting the development of the securities market andc) Regulating the securities market.

Its regulatory jurisdiction extends over corporate in the issuance of capital and

transfer of securities, in addition to all intermediaries and persons associated with

securities market. SEBI has been obligated to perform the aforesaid functions by such

measures as it thinks fit. in particular, it has powers for:


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PRIMARY MARKET


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1.1 b. PRIMARY MARKET:

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

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

raise resources to meet their requirements of investment and/or discharge someobligation. They may issue the securities at face value, or at a discount/premium and

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

securities in domestic market and/or international market.

FACE VALUE OF SHARES/DEBENTURES:

The nominal or stated amount (in Rs.) assigned to a security by the issuer .For

shares, it is the original cost of the stock shown on the certificate; for bonds, it is the

amount paid to the holder at maturity. Also, known as par value or simply par.

For an equity share, the face value is usually a very small amount (Rs. 5, Rs. 10)

and does not have much bearing on the price of the share, which may quote higher in the

market, at Rs. 100 or Rs. 1000 or any other price.

For a debt security, face value is the amount repaid to the investor when the bond

matures (usually, Government securities and corporate bonds have a face value of Rs.

100).The price at which the Security trades depend on the fluctuations in the interest rates

in the economy.

PURPOSE OF ISSUING SHARES TO PUBLIC:

Most companies are usually started privately by their promoter(s). However, the

promoters capital and the borrowings from banks and financial institutions may not be

sufficient for setting up or running the business over a long term. So companies invite the

public to contribute towards the equity and issue shares to individual investors. The way

to invite share capital from the public is through a Public Issue. Simply stated, a public

issue is an offer to the public to subscribe to the share capital of a company.

TYPES OF ISSSUES:

Primarily, issues can be classified as a Public, Rights orPreferential issues (also

known as private placements). While public and rights issues involve a detailed


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procedure, private placements or preferential issues are relatively simpler. The

classification of issues is illustrated below:

Initial Public Offering (IPO) is when an unlisted company makes either a fresh issue of

securities or an offer for sale of its existing securities or both for the first time to the

public. This paves way for listing and trading of the issuers securities.

A follow on public offering (Further Issue) is when an already listed company makes

either a fresh issue of securities to the public or an offer for sale to the public, through an

offer document.

Rights Issue is when a listed company which proposes to issue fresh securities to its

existing shareholders as on a record date. The rights are normally offered in a particular

ratio to the number of securities held prior to the issue. This route is best suited for

companies who would like to raise capital without diluting stake of its existing

shareholders.

A Preferential issue is an issue of shares or of convertible securities by listed companies

to a select group of persons under Section 81 of the Companies Act, 1956 which is

neither a rights issue nor a public issue. This is a faster way for a company to raise equity

capital. The issuer company has to comply with the Companies Act and the requirements

contained in 19th Chapter pertaining to preferential allotment in SEBI guidelines which

include pricing, disclosures in notice etc.

ISSUE PRICE:

The price at which a company's shares are offered initially in the primary market

is called as the Issue price. When they begin to be traded, the market price may be above

or below the issue price.

MARKET CAPITALIZATION:

The market value of a quoted company, which is calculated by multiplying

its current share price (market price) by the number of shares in issue is called as market

capitalization. E.g. Company A has 120 million shares in issue. The current market price

is Rs. 100. The market capitalization of company A is Rs. 12000 million.


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DIFFERENCE BETWEEN PUBLIC ISSUE AND PRIVATE PLACEMENT:

When an issue is not made to only a select set of people but is open to the general

public and any other investor at large, it is a public issue. But if the issue is made to a

select set of people, it is called private placement. As per Companies Act, 1956, an issue

becomes public if it results in allotment to 50 persons or more. This means an issue can

be privately placed where an allotment is made to less than 50 persons.

INITIAL PUBLIC OFFER (IPO):

An Initial Public Offer (IPO) is the selling of securities to the public in the

primary market. It is when an unlisted company makes either a fresh issue of securities or

an offer for sale of its existing securities or both for the first time to the public. This

paves way for listing and trading of the issuers securities. The sale of securities can be

either through book building or through normal public issue.

DIFFERENCE BETWEEN OFFER OF SHARES THROUGH BOOK BUILDING

AND OFFER OF SHARED THROUGH NORMAL PUBLIC SERVICE:

Price at which securities will be allotted is not known in case of offer of shares

through Book Building while in case of offer of shares through normal public issue, price

is known in advance to investor. Under Book Building, investors bid for shares at the

floor price or above and after the closure of the book building process the price is

determined for allotment of shares. In case of Book Building, the demand can be known

everyday as the book is being built. But in case of the public issue the demand is known

at the close of the issue.

CUT-OFF PRICE:

In a Book building issue, the issuer is required to indicate either the price band or

a floor price in the prospectus. The actual discovered issue price can be any price in the

price band or any price above the floor price. This issue price is called Cut-OffPrice.

The issuer and lead manager decides this after considering the book and the investors

appetite for the stock.


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WHO DECIDES PRICE BAND?

It may be understood that the regulatory mechanism does not play a role in setting

the pric e for issues. It is up to the company to decide on the price or the price band, in

consultation with Merchant Bankers.

WHAT IS THE MINIMUM NUMBER OF DAYS FOR WHICH THE BID

SHOULD REMAIN OPEN DURING BOOK BUILDING?

The Book should remain open for a minimum of 3 days.

CAN OPEN OUTCRY SYSTEM BE USED FOR BOOK BUILDING?

No. As per SEBI, only electronically linked transparent facility is allowed to

be used in case of book building.

HOW DOES ONE KNOW IF SHARES ARE ALLOTED IN AN IPO/OFFER FOR

SALE? WHAT IS THE TIME FRAME FOR GETTING REFUND IF SHARES

NOT ALLOTED?

As per SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009

the Basis of Allotment should be completed with 8 days from the issue close date. As

soon as the basis of allotment is completed, within 2 working days the details of credit to

demat account / allotment advice and dispatch of refund order needs to be completed. So

an investor should know in about 11 days time from the closure of issue, whether shares

are allotted to him or not.

HOW LONG DOES IT TAKES TO GET SHARES LISTED AFTER ISSUE?

It takes 12 working days after the closure of the book built issue.

ROLE OF REGISTRAR TO AN ISSUE:

The Registrar finalizes the list of eligible allot tees after deleting the invalid

Applications and ensures that the corporate action for crediting of shares to the demat

accounts of the applicants is done and the dispatch of refund orders to those applicable

are sent.


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LIST OF SECURITIES:

Listing means admission of securities of an issuer to trading privileges (dealings)

on a stock exchange through a formal agreement. The prime objective of admission to

dealings on the exchange is to provide liquidity and marketability to securities, as also to

provide a mechanism for effective control and supervision of trading.

LISTING AGREEMENT:

At the time of listing securities of a company on a stock exchange, the company is

required to enter into a listing agreement with the exchange. The listing agreement

specifies the terms and conditions of listing and the disclosures that shall be made by a

company on a continuous basis to the exchange.

DELISTING OF SECURITIES:

The term Delisting of securities means permanent removal of securities of a

listed company from a stock exchange. As a consequence of delisting, the securities of

that company would no longer be traded at that stock exchange.

SEBIS ROLE IN AN ISSUE:

Any company making a public issue or a listed company making a rights issue of

value of more than Rs 50 lakh is required to file a draft offer document with SEBI for its

observations. The company can proceed further on the issue only after getting

observations from SEBI. The validity period of SEBIs observation letter is three months

only i.e. the company has to open its issue within three months period.

CAN COMPANIES IN INDIA RAISE FOREIGN CURRENCY RESOURCES?

Yes. Indian companies are permitted to raise foreign currency resources through

two main sources: a) issue of foreign currency convertible bonds more commonly known

as Euro issues and b) issue of ordinary shares through depository receipts namely

GlobalDepository Receipts (GDRs)/AmericanDepository Receipts (ADRs) to foreign

investors i.e. to the institutional investors or individual investors.


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AMERICAN DEPOSITARY RECEIPT:

An American Depositary Receipt ("ADR") is a physical certificate evidencing

ownership of American Depositary Shares ("ADSs"). The term is often used to refer to

the ADSs themselves.

ADS:

An American Depositary Share ("ADS") is a U.S. dollar denominated form of

equity ownership in a non-U.S. company. It represents the foreign shares of the company

held on deposit by a custodian bank in the company's home country and carries the

corporate and economic rights of the foreign shares, subject to the terms specified on the

ADR certificate. One or several ADSs can be represented by a physical ADR certificate.

The terms ADR and ADS are often used interchangeably. ADSs provide U.S. investors

with a convenient way to invest in overseas securities and to trade non-U.S. securities in

the U.S. ADSs are issued by a depository bank, such as JPMorgan Chase Bank. They are

traded in the same manner as shares in U.S. companies, on the New York Stock

Exchange (NYSE) and the American Stock Exchange (AMEX) or quoted on NASDAQ

and the over-the-counter (OTC) market. Although ADSs are U.S. dollar denominated

securities and pay dividends in U.S. dollars, they do not eliminate the currency risk

associated with an investment in a non-U.S. company.

GLOBAL DEPOSITARY RECEIPT:

GlobalDepository Receipts (GDRs) may be defined as a global finance vehicle

that allows an issuer to raise capital simultaneously in two or markets through a global

offering. GDRs may be used in public or private markets inside or outside US. GDR, a

negotiable certificate usually represents companys traded equity/debt. The underlying

shares correspond to the GDRs in a fixed ratio say 1 GDR=10 shares.


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SECONDARY MARKET


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1.1 c.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 ofequity markets and the debt markets.

ROLE OF SECONDARY MARKET:

For the general investor, the secondary market provides an efficient platform for

trading of his securities. For the management of the company, Secondary equity markets

serve as a monitoring and control conduitby facilitating value-enhancing control

activities, enabling implementation of incentive-based management contracts, and

aggregating information (via price discovery) that guides management decisions.

DIFFERENCE BETWEEN PRIMARY AND SECONDARY MARKET:

In the primary market, securities are offered to public for subscription for the

purpose of raising capital or fund. Secondary market is an equity trading venue in which

already existing/pre-issued securities are traded among investors. Secondary market

could be either auction or dealer market. While stock exchange is the part of an auction

market, Over-the-Counter (OTC) is a part of the dealer market.

ROLE OF STOCK EXCHANGE IN BUYING AND SELLING SHARES:

The stock exchanges in India, under the overall supervision of the regulatory

authority, the Securities and Exchange Board of India (SEBI), provide a trading platform,

where buyers and sellers can meet to transact in securities. The trading platform provided

by NSE is an electronic one and there is no need for buyers and sellers to meet at a

physical location to trade. They can trade through the computerized trading screens

available with the NSE trading members or the internet based trading facility provided by

the trading members of NSE.


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DEMUTUALIZATON OF STOCK EXCHANGE:

Demutualization refers to the legal structure of an exchange whereby the

ownership, the management and the trading rights at the exchange are segregated from

one another.

HOW IS DEMUTUALIZED EXCHANGE DIFFERENT FROM A MUTUAL

EXCHANGE?

In a mutual exchange, the three functions of ownership, management and trading

are concentrated into a single Group. Here, the broker members of the exchange are both

the owners and the traders on the exchange and they further manage the exchange as

well. This at times can lead to conflicts of interest in decision making. A demutualised

exchange, on the other hand, has all these three functions clearly segregated, i.e. the

ownership, management and trading are in separate hands.

SCREEN BASED TRADING:

The trading on stock exchanges in India used to take place through open outcry

without use of information technology for immediate matching or recording of trades.

This was time consuming and inefficient. This imposed limits on trading volumes and

efficiency. In order to provide efficiency, liquidity and transparency, NSE introduced a

nationwide, on-line, fully automated screen based trading system (SBTS) where a

member can punch into the computer the quantities of a security and the price at which he

would like to transact, and the transaction is executed as soon as a matching sale or buy

order from a counter party is found.

WHAT IS NEAT?

NSE is the first exchange in the world to use satellite communication technology

for trading. Its trading system, called National Exchange for Automated Trading (NEAT),

is a state of-the-art client server based application. At the server end all trading

information is stored in an in memory database to achieve minimum response time and

maximum system availability for users. It has uptime record of 99.7%. For all trades

entered into NEAT system, there is uniform response time of less than one second.


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HOW TO PLACE ORDERS WITH THE BROKER?

You may go to the brokers office or place an order on the phone/internet or as

defined in the Model Agreement, which every client needs to enter into with his or her

broker.

HOW DOES AN INVESTOR GET ACCESS TO INTERNET BASED TRADING

FACILITY?

There are many brokers of the NSE who provide internet based trading facility to

their clients. Internet based trading enables an investor to buy/sell securities through

internet which can be accessed from a computer at the investors residence or anywhere

else where the client can access the internet. Investors need to get in touch with an NSE

broker providing this service to avail of internet based trading facility.

CONTRACT NOTE:

Contract Note is a confirmation of trades done on a particular day on behalf of the

client by a trading member. It imposes a legally enforceable relationship between the

client and the trading member with respect to purchase/sale and settlement of trades. It

also helps to settle disputes/claims between the investor and the trading member. It is a

prerequisite for filing a complaint or arbitration proceeding against the trading member in

case of a dispute. A valid contract note should be in the prescribed form, contain the

details of trades, stamped with requisite value and duly signed by the authorized

signatory. Contract notes are kept in duplicate, the trading member and the client should

keep one copy each. After verifying the details contained therein, the client keeps one

copy and returns the second copy to the trading member duly acknowledged by him.

WHAT DETAILS ARE REQUIRED TO BE MENTIONED ON THE CONTRACT

NOTE ISSUED BY THE STOCK BROKER?

A broker has to issue a contract note to clients for all transactions in the form

specified by the stock exchange. The contract note inter-alia should have following:

y Name, address and SEBI Registration number of the Member broker.y Name of partner/proprietor/Authorized Signatory.


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y Dealing Office Address/Tel. No./Fax no., Code number of the memberGiven bythe Exchange.

y Contract number, date of issue of contract note, settlement number and timeperiod for settlement.

y Constituent (Client) name/Code Number.y Order number and order time corresponding to the trades.y Trade number and Trade time.y Quantity and kind of Security bought/sold by the client.y Brokerage and Purchase/Sale rate.y Service tax rates, Securities Transaction Tax and any other charges Levied by the

broker.

y Appropriate stamps have to be affixed on the contract note or it is mentioned thatthe consolidated stamp duty is paid.

y Signature of the Stock broker/Authorized Signatory.

MAXIMUM BROKERAGE THAT A BROKER CAN CHARGE:

The maximum brokerage that can be charged by a broker from his clients as

commission cannot be more than 2.5% of the value mentioned in the respective purchase

or sale note.

NEED TO TRADE ON A RECOGNIZED STOCK EXCHANGE:

An investor does not get any protection if he trades outside a stock exchange.

Trading at the exchange offers investors the best prices prevailing at the time in the

market, lack of any counter-party risk which is assumed by the clearing corporation,

access to investor grievance and redressal mechanism of stock exchanges, protection up

to a prescribed limit, from the InvestorProtection Fund etc.

HOW TO KNOW IF BROKER/SUB BROKER IS REGISTERED?

One can confirm it by verifying the registration certificate issued by SEBI. A

broker's registration number begins with the letters INB and that of a sub broker with

the letters INS.


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PRECAUTIONS TO BE TAKEN BEFORE INVESTING IN STOCK MARKETS:

Here are some useful pointers to bear in mind before you invest in the markets:

y Make sure your broker is registered with SEBI and the exchanges and do not dealwith unregistered intermediaries.

y Ensure that you receive contract notes for all your transactions from your brokerwithin one working day of execution of the trades.

y All investments carry risk of some kind. Investors should always know the riskthat they are taking and invest in a manner that matches their risk tolerance. Do

not be misled by market rumours, luring advertisement or hot tips of the day.

y Take informed decisions by studying the fundamentals of the company. Find outthe business the company is into, its future prospects, quality of management,

past track record etc Sources of knowing about a company are through annual

reports, economic magazines, databases available with vendors or your financial

advisor.

y If your financial advisor or broker advises you to invest in a company you havenever heard of, be cautious. Spend some time checking out about the company

before investing.

y Do not be attracted by announcements of fantastic results/news reports, about acompany. Do your own research before investing in any stock.

y Do not be attracted to stocks based on what an internet website promotes, unlessyou have done adequate study of the company.

y Investing in very low priced stocks or what are known as penny stocks does notguarantee high returns.

y Be cautious about stocks which show a sudden spurt in price or trading activity.y Any advice or tip that claims that there are huge returns expected, especially for

acting quickly, may be risky and may to lead to losing some, most, or all of yourmoney.


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DOS AND DONTS FOR INVESTOR WHILE INVESTING IN STOCK

MARKETS:

y Ensure that the intermediary (broker/sub-broker) has a valid SEBI registrationcertificate.

y Enter into an agreement with your broker/sub-broker setting out terms andconditions clearly.

y Ensure that you give all your details in the Know Your Client form.y Ensure that you read carefully and understand the contents of the Risk

Disclosure Document and then acknowledge it.

y Insist on a contract note issued by your broker only, for trades done each day.y Ensure that you receive the contract note from your broker within 24 hours of

the transaction.

y Ensure that the contract note contains details such as the brokers name, tradetime and number, transaction price, brokerage, service tax, securities transaction

tax etc. and is signed by the Authorized Signatory of the broker.

y To cross check genuineness of the transactions, log in to the NSE website(www.nseindia.com) and go to the trade verification facility extended by NSE.

Issue account payee cheques/demand drafts in the name of your broker only, as it

appears on the contract note/SEBI registration certificate of the broker.

y While delivering shares to your broker to meet your obligations ensure that thedelivery instructions are made only to the designated account of your broker

only.

y Insist on periodical statement of accounts of funds and securities from yourbroker. Cross check and reconcile your accounts promptly and in case of any

discrepancies bring it to the attention of your broker immediately.

yPlease ensure that you receive payments/deliveries from your broker, for the

transactions entered by you, within one working day of the payout date.

y Ensure that you do not undertake deals on behalf of others or trade on your ownname and then issue cheques from a family members/ friends bank accounts.

y Similarly, the Demat delivery instruction slip should be from your own Demataccount, not from any other family members/friends accounts.


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y Do not sign blank delivery instruction slip(s) while meeting security pay inobligation.

y No intermediary in the market can accept deposit assuring fixed returns. Hencedo not give your money as deposit against assurances of returns.

y Portfolio Management Services could be offered only by intermediaries havingspecific approval of SEBI forPMS. Hence, do not part your funds to

unauthorized persons forPortfolio Management.

y Delivery Instruction Slip is a very valuable document. Do not leave signed blankdelivery instruction slip with anyone. While meeting pay in obligation make sure

that correct ID of authorized intermediary is filled in the Delivery Instruction

Form.

y Be cautious while taking funding form authorized intermediaries as thesetransactions are not covered under Settlement Guarantee mechanisms of the

exchange.

y Insist on execution of all orders under unique client code allotted to you. Do notaccept trades executed under some other client code to your account.

y When you are authorizing someone through Power of Attorney for operation ofyourDP account, make sure that:

1. Your authorization is in favor of registered intermediary only.

2. Authorisation is only for limited purpose of debits and credits

arising out of valid transactions executed through that intermediary only.

3. You verify DP statement periodically say every month/ fortnight

to ensure that no unauthorized transactions have taken place in your

account.

4. Authorization given by you has been properly used for the

purpose for which authorization has been given.

5. In case you find wrong entries please report in writing to the

authorized intermediary.

y Dont accept unsigned/duplicate contract note.y Dont accept contract note signed by any unauthorized person.y Dont delay payment/deliveries of securities to broker.


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y In the event of any discrepancies/disputes, please bring them to the notice of thebroker immediately in writing (acknowledged by the broker) and ensure their

prompt rectification.

y In case of sub-broker disputes, inform the main broker in writing about thedispute at the earliest. If your broker/sub-broker does not resolve your complaints

within a reasonable period please bring it to the attention of the Investor

Services Cell of the NSE.

y While lodging a complaint with the InvestorGrievances Cell of the NSE, it isvery important that you submit copies of all relevant documents like contract

notes, proof of payments/delivery of shares etc. along with the complaint.

Remember, in the absence of sufficient documents, resolution of complaints

becomes difficult.

y Familiarize yourself with the rules, regulations and circulars issued by stockexchanges/SEBI before carrying out any transaction.

PRODUCTS IN SECONDARY MARKETS:

Following are the main financial products/instruments dealt in the Secondary

market which may be divided broadly into Shares and Bonds:

SHARES:

Equity Shares: An equity share, commonly referred to as ordinary share, represents the

form of fractional ownership in a business venture.

Rights Issue/ Rights Shares: The issue of new securities to existing shareholders at a ratio

to those already held, at a price. For e.g. a 2:3 rights issue at Rs. 125, would entitle a

shareholder to receive 2 shares for every 3 shares held at a price of Rs. 125 per share.

Bonus Shares: Shares issued by the companies to their shareholders free of cost based on

the number of shares the shareholder owns.

Preference shares: Owners of these kind of shares are entitled to a fixed dividend or

dividend calculated at a fixed rate to be paid regularly before dividend can be paid in

respect of equity share. They also enjoy priority over the equity shareholders in payment


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of surplus. But in the event of liquidation, their claims rank below the claims of the

companys creditors, bondholders/debenture holders.

Cumulative Preference Shares: A type of preference shares on which dividend

accumulates if remained unpaid. All arrears of preference dividend have to be paid out

before paying dividend on equity shares.

Cumulative Convertible Preference Shares: A type of preference shares where the

dividend payable on the same accumulates, if not paid. After a specified date, these

shares will be converted into equity capital of the company.

Bond: is a negotiable certificate evidencing indebtedness. It is normally unsecured. A

debt security is generally issued by a company, municipality or government agency. A

bond investor lends money to the issuer and in exchange, the issuer promises to repay the

loan amount on a specified maturity date. The issuer usually pays the bond holder

periodic interest payments over the life of the loan. The various types of Bonds are as

follows:

Zero Coupon Bond: Bond issued at a discount and repaid at a face value. No periodic

interest is paid. The difference between the issue price and redemption price represents

the return to the holder. The buyer of these bonds receives only one payment, at the

maturity of the bond.

Convertible Bond: A bond giving the investor the option to convert the bond into equity

at a fixed conversion price.

Treasury Bills: Short-term (up to one year) bearer discount security issued by

government as a means of financing their cash requirements.

EQUITY INVESTMENT:

If we take the Nifty index returns for the past fifteen years, Indian stock market

has returned about 16% to investors on an average in terms of increase in share prices or

capital appreciation annually. Besides that on average stocks have paid 1.5% dividend

annually. Dividendis a percentage of the face value of a share that a company returns to

its shareholders from its annual profits. Compared to most other forms of investments,


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investing in equity shares offers the highest rate of return, if invested over a longer

duration.

FACTORS INFLUENCING PRICE OF A STOCK:

Broadly there are two factors: (1) stock specific and (2) market specific.

The stock-specific factor is related to peoples expectations about the company,

its future earnings capacity, financial health and management, level of technology and

marketing skills.

The market specific factor is influenced by the investors sentiment towards the

stock market as a whole. This factor depends on the environment rather Than the

performance of any particular company. Events favorable to an Economy, political or

regulatory environment like high economic growth, Friendly budget, stable government

etc. can fuel euphoria in the investors.

PORTFOLIO:

A Portfolio is a combination of different investment assets mixed and matched for

the purpose of achieving an investor's goal(s). Items that are considered a part of your

portfolio can include any asset you own-from shares, debentures, bonds, mutual fund

units to items such as gold, art and even real estate etc. However, for most investors a

portfolio has come to signify an investment in financial instruments like shares,

debentures, fixed deposits, mutual fund units.

DIVERSIFICATION:

It is a risk management technique that mixes a wide variety of investments within

a portfolio. It is designed to minimize the impact of any one security on overall portfolio

performance. Diversification is possibly the best way to reduce the risk in a portfolio.

ADVANTAGES OF DIVERSIFIED PORTFOLIO:

A good investment portfolio is a mix of a wide range of asset class. Different

securities perform differently at any point in time, so with a mix of asset types, your

entire portfolio does not suffer the impact of a decline of any one security. When your


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stocks go down, you may still have the stability of the bonds in your portfolio. There

have been all sorts of academic studies and formulas that demonstrate why diversification

is important, but it's really just the simple practice of "not putting all your eggs in one

basket."

DEBT INSTRUMENT:

Debt instrument represents a contract whereby one party lends money to another

on pre-determined terms with regards to rate and periodicity of interest, repayment of

principal amount by the borrower to the lender. In Indian securities markets, the term

bond is used for debt instruments issued by the Central and State governments and

public sector organizations and the term debenture is used for instruments issued by

private corporate sector.

FEATURES OF DEBT INSTRUMENTS:

Each debt instrument has three features: Maturity, coupon and principal.

Maturity: Maturity of a bond refers to the date, on which the bond matures, which

is the date on which the borrower has agreed to repay the principal.

Term-to-Maturity refers to the number of years remaining for the bond to mature.

The Term-to-Maturity changes everyday, from date of issue of the bond until its maturity.

The term to maturity of a bond can be calculated on any date, as the distance between

such a date and the date of maturity. It is also called the term or the tenure of the bond.

Coupon: Coupon refers to the periodic interest payments that are made by the

borrower (who is also the issuer of the bond) to the lender (the subscriber of the bond).

Coupon rate is the rate at which interest is paid, and is usually represented as a

percentage of the par value of a bond.


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DERIVATIVES


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1.1 d. DERIVATIVES:

TYPES OF DERIVATIVES:

Forwards: A forward contract is a customized contract between two entities, where

settlement takes place on a specific date in the future at todays pre-agreed price.

Futures: A futures contract is an agreement between two parties to buy or sell an asset at

a certain time in the future at a certain price. Futures contracts are special types of

forward contracts in the sense that the former are standardized exchange-traded contracts,

such as futures of the Nifty index.

Options: An Option is a contract which gives the right, but not an obligation, to buy or

sell the underlying at a stated date and at a stated price. While a buyer of an option pays

the premium and buys the right to exercise his option, the writer of an option is the one

who receives the option premium and therefore obliged to sell/buy the asset if the buyer

exercises it on him. Options are of two types - Calls and Puts options:

Callsgive the buyer the right but not the obligations to buy a given quantity of the

underlying asset, at a given price on or before a given future date.

Puts give the buyer the right, but not the obligation to sell a given quantity of

underlying asset at a given price on or before a given future date. Presently, at NSE

futures and options are traded on the Nifty, CNX IT, BANK Nifty and 116 single stocks.

Warrants: Options generally have lives of up to one year. The majority of options traded

on exchanges have maximum maturity of nine months. Longer dated options are called

Warrants and are generally traded over-the counter.


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COMMODITY:

FCRA Forward Contracts (Regulation) Act, 1952 defines goods as every kind

of movable property other than actionable claims, money and securities. Futures trading

is organized in such goods or commodities as are permitted by the Central Government.

At present, all goods and products of agricultural (including plantation), mineral and

fossil origin are allowed for futures trading under the auspices of the commodity

exchanges recognized under the FCRA.

COMMODITY DERIVATIVES MARKET:

Commodity derivatives market trade contracts for which the underlying asset is

commodity. It can be an agricultural commodity like wheat, soybeans, rapeseed, cotton,

etc or precious metals like gold, silver, etc.

DIFFERENCE IN COMMODITY AND FINANCIAL DERIVATIVES:

The basic concept of a derivative contract remains the same whether the

underlying happens to be a commodity or a financial asset. However there are some

features which are very peculiar to commodity derivative markets. In the case of financial

derivatives, most of these contracts are cash settled. Even in the case of physical

settlement, financial assets are not bulky and do not need special facility for storage. Due

to the bulky nature of the underlying assets, physical settlement in commodity derivatives

creates the need for warehousing. Similarly, the concept of varying quality of asset does

not really exist as far as financial underlying are concerned. However in the case of

commodities, the quality of the asset underlying a contract can vary at times.


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DEPOSITORY


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1.1 e. DEPOSITORY:

HOW IS DEPOSITORY SIMILAR TO A BANK?

A Depository can be compared with a bank, which holds the funds for depositors.

An analogy between a bank and a depository may be drawn as follows:

DEPOSITORIES IN INDIA:

There are two depositories in India which provide dematerialization of securities.

The National Securities Depository Limited (NSDL) and CentralDepository Services

(India) Limited (CDSL).

BENEFITS OF PARTICIPATING IN A DEPOSITORY:

The benefits of participation in a depository are:

y Immediate transfer of securitiesy No stamp duty on transfer of securities

BANK DEPOSITORY

Holds funds in an account Hold securities in an account

Transfers funds between

accounts on the instruction of

the account holder

Transfers securities between

accounts on the instruction of the

account holder.

Facilitates transfers without

having to handle money

Facilitates transfers of ownership

without having to handle securities.

Facilitates safekeeping of

money

Facilitates safekeeping of shares.


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y Elimination of risks associated with physical certificates such as bad delivery,fake securities, etc.

y Reduction in paperwork involved in transfer of securitiesy Reduction in transaction costy Ease of nomination facilityy Change in address recorded withDP gets registered electronically with all

companies in which investor holds securities eliminating the need to correspond

with each of them separately.

y Transmission of securities is done directly by the DP eliminating correspondencewith companies.

y Convenient method of consolidation of folios/accounts.y Holding investments in equity, debt instruments and Government securities in a

single account; automatic credit into demat account, of shares, arising out of

split/consolidation/merger etc.

WHAT IS AN ISIN?

ISIN (International Securities Identification Number) is a unique identification

number for a security.


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INDUSTRY PROFILE


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ORIGIN AND DEVELOPMENT

OF THE INDUSTRY


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1.2 a. ORIGIN AND DEVELOPMENT OF THE INDUSTRY

The origin of the stock market in India goes back to the end of the eighteenth

century when long-term negotiable securities were first issued. However, for all practical

purposes, the real beginning occurred in the middle of the nineteenth century after the

enactment of the companies Act in 1850, which introduced the features of limited

liability and generated investor interest in corporate securities.

An important early event in the development of the stock market in India was the

formation of the native share and stock brokers 'Association at Bombay in 1875, the

precursor of the present day Bombay Stock Exchange. This was followed by the

formation of associations/exchanges in Ahmadabad (1894), Calcutta (1908), and Madras

(1937). In addition, a large number of ephemeral exchanges emerged mainly in buoyant

periods to recede into oblivion during depressing times subsequently.

Stock exchanges are intricacy inter-woven in the fabric of a nation's economic

life. Without a stock exchange, the saving of the community- the sinews of economic

progress and productive efficiency- would remain underutilized. The task of mobilization

and allocation of savings could be attempted in the old days by a much less specialized

institution than the stock exchanges. But as business and industry expanded and the

economy assumed more complex nature, the need for 'permanent finance' arose.

Entrepreneurs needed money for long term whereas investors demanded liquidity the

facility to convert their investment into cash at any given time. The answer was a ready

market for investments and this was how the stock exchange came into being.

Stock exchange means any body of individuals, whether incorporated or not,

constituted for the purpose of regulating or controlling the business of buying, selling or

dealing in securities. These securities include:

(i) Shares, scrip, stocks, bonds, debentures stock or other marketable securities of a like


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nature in or of any incorporated company or other body corporate;

(ii) Government securities; and

(iii) Rights or interest in securities.

The Bombay Stock Exchange (BSE) and the National Stock Exchange of India

Ltd (NSE) are the two primary exchanges in India. In addition, there are 22 Regional

Stock Exchanges. However, the BSE and NSE have established themselves as the two

leading exchanges and account for about 80 per cent of the equity volume traded in India.

The NSE and BSE are equal in size in terms of daily traded volume. The average daily

turnover at the exchanges has increased from Rs 851 crore in 1997-98 to Rs 1,284 crore

in 1998-99 and further to Rs 2,273 crore in 1999-2000 (April - August 1999). NSE has

around 1500 shares listed with a total market capitalization of around Rs 9, 21,500 crore.

The BSE has over 6000 stocks listed and has a market capitalization of around

Rs 9, 68,000 crore. Most key stocks are traded on both the exchanges and hence the

investor could buy them on either exchange. Both exchanges have a different settlement

cycle, which allows investors to shift their positions on the bourses. The primary index of

BSE is BSE Sensex comprising 30 stocks. NSE has the S&P NSE 50 Index (Nifty) which

consists of fifty stocks. The BSE Sensex is the older and more widely followed index.

Both these indices are calculated on the basis of market capitalization and contain

the heavily traded shares from key sectors. The markets are closed onSaturdays and

Sundays. Both the exchanges have switched over from the open outcry trading system to

a fully automated computerized mode of trading known as BOLT (BSE on Line Trading)

and NEAT (National Exchange Automated Trading) System.

The stock exchange facilitates more efficient processing, automatic order

matching, faster execution of trades and transparency; the scrip's traded on the BSE have

been classified into 'A', 'B1', 'B2', 'C', 'F' and 'Z' groups. The 'A' group shares represent

those, which are in the carry forward system (Badla). The 'F' group represents the debt

market (fixed income securities) segment. The 'Z' group scrip's are the blacklisted

companies. The 'C' group covers the odd lot securities in 'A', 'B1' & 'B2' groups and


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Rights renunciations. The key regulator governing Stock Exchanges, Brokers,

Depositories, Depository participants, Mutual Funds, FIIs and other participants in Indian

secondary and primary market is the Securities and Exchange Board of India (SEBI) Ltd.

The securities markets in India have witnessed several policy initiatives, which

has refined the market micro-structure, modernized operations and broadened investment

choices for the investors. The irregularities in the securities transactions in the last quarter

of 2000-01, hastened the introduction and implementation of several reforms. While a

Joint Parliamentary Committee was constituted to go into the irregularities and

manipulations in all their ramifications in all transactions relating to securities, decisions

were taken to complete the process of demutualization and corporatization of stock

exchanges to separate ownership, management and trading rights on stock exchanges andto effect legislative changes for investor protection, and to enhance the effectiveness of

SEBI as the capital market regulator. Rolling settlement on T+5 basis was introduced in

respect of most active 251 securities from July 2, 2001 and in respect of balance

securities from 31stDecember 2001. Rolling settlement on T+3 basis commenced for all

listed securities from April 1, 2002 and subsequently on T+2 basis from April 1, 2003.

The derivatives trading on the NSE commenced with the S&P CNX Nifty Index

Futures on June 12, 2000. The trading in index options commenced on June 4, 2001 and

trading in options on individual securities commenced on July 2, 2001. Single stock

futures were launched on November 9, 2001. Due to rapid changes in volatility in the

securities market from time to time, there was a need felt for a measure of market

volatility in the form of an index that would help the market participants. NSE launched

the India VIX, a volatility index based on the S&P CNX Nifty Index Option prices.

Volatility Index is a measure of markets expectation of volatility over the near

term. The Indian stock market regulator, Securities & Exchange Board of India (SEBI)

allowed the direct market access (DMA) facility to investors in India on April 3, 2008.

To begin with, DMA was extended to the institutional investors. In addition to the DMA

facility, SEBI also decided to permit all classes of investors to short sell and the facility

for securities lending and borrowing scheme was operationalised on April 21, 2008.


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The Debt markets in India have also witnessed a series of reforms, beginning in

the year 2001-02 which was quite eventful for debt markets in India, with implementation

of several important decisions like setting up of a clearing corporation for government

securities, a negotiated dealing system to facilitate transparent electronic bidding in

auctions and secondary market transactions on a real time basis and dematerialization of

debt instruments. Further, there was adoption of modified Delivery-versus-Payment

mode of settlement (DvP III in March 2004). The settlement system for transaction in

government securities was standardized to 12 T+1 cycle on May 11, 2005. To provide

banks and other institutions with a more advanced and more efficient trading platform, an

anonymous order matching trading platform (NDSOM) was introduced in August 2005.

Short sale was permitted in G-secs in 2006 to provide an opportunity to marketparticipants to manage their interest rate risk more effectively and to improve liquidity in

the market. When issued (WI) trading in Central Government Securities was introduced

in 2006. As a result of the gradual reform process undertaken over the years, the Indian

G-Sec market has become increasingly broad-based and characterized by an efficient

auction process, an active secondary market, electronic trading and settlement technology

that ensure safe settlement with Straight through Processing (STP). This chapter,

however, takes a review of the stock market developments since 1990. These

developments in the securities market, which support corporate initiatives, finance the

exploitation of new ideas and facilitate management of financial risks, hold out necessary

impetus for growth, development and strength of the emerging market economy of India.


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GROWTH AND PRESENT

STATUS OF THE INDUSTRY


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1.2 b. GROWTH AND PRESENT STATUS OF THE

INDUSTRY

The main concern for the emerging market economies (including India) may notbe the direct exposure to global financial institutions, but more about access to credit and

the slowdown it is causing in America and other European economies.

Economists point out that the extent of the effect will be decided by the nature of

the US recession. If it is shallow (and the US comes out of it quickly), India may not

suffer much of an impact. But if it is long and deep, Indias exports will be hit.

The Indian stock market is definitely not in one direction, and building positionson both buy or short sides is not a fairly good idea to make money in such a tight market.

Analysts believe that the market is definitely going to see some action as soon some

breaking news come out, but the effect of such news on the Indian stock market would

not be lasting long, and there could be a major pull back leading the market to touch the

13000 levels.

Having said that, economists believe that the inflation would inch down to 10% in

the coming quarter that would become visible in retail and consumer durable products

soon, which would in turn boost consumer confidence. This would definitely push the

markets to bounce back from the 13000 levels, and we might see some fresh buying, and

both sensex and nifty might witness some rally.

These levels could be of great importance for those domestic as well as NRI

clients who did not get a chance to make investments into top Indian mutual funds when

the market was trading at 18000 levels. A prudent idea would be to invest 25% of your

savings at these levels, and when the market drops down 20% from here, another 40% of

the savings can be invested.

Current market conditions are as such that its very hard to predict the direction of

the market, thus it is vital important for both resident as well as non resident investors to


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act wisely and invest with a proper game plan. The whole idea is to do investing wisely

and with common sense, and not forcing one self into rush and landing into unnecessarily

diversification of funds into some unwanted financial instruments. For more ideas as to

how to go about drafting a portfolio, one should consult a good investment adviser and

leave the job of asset allocation to professionals.


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FUTURE OF THE INDUSTRY


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1.2 c. FUTURE OF THE INDUSTRY

India just keeps getting better and better. The economy is growing rapidly

surpassing some of Asias biggest economies. India is now becoming the third largest

country in Asia economically. It has grown so much and is expected to continue to grow

like this for a long time. The Indian Government is doing everything it can do to propel

the growth rates in the Indian Industry, primarily in: India Stock Market, Indian

Companies, Indias manufacturing index, India Business Sector, Indias Company sector

and other India investment industries.

The yearly salaries are rising and the command to buy is under the command to

spend. The Investment GDP ratio is at a high. It is now over 30 percent and between the

years 1990 and 2004 the average was only 25 percent. It has been said that, once it

reaches 30 percent, it is going to take off rapidly. So India is expected to move rapidly.

The down side to Indias big movement is that there is a limit to how high it can

go. India has grown so much, making the costs of everything go up so frequently. It can

turn into the most expensive country in the world. The companies are now working above

their finest ability.

A lot of people try to People undervalue Indias accomplishment in growth. The

growth rates are very good and it wouldnt be wrong for people to overvalue it. India has

created the best growth story that happen over a long time. Although India is growing,

there can still be corrections in the market. No matter how well a country is doing, there

is always something that can be fixed. Some say that they would like to wait until the

market is fixed to invest.

It is said that the Reserve Bank of India come up with a way that the domestic

credit cycle can last for an extensive time. This credit cycle and the investment cycle, of

course, will keep India in the bull market for a long time. They stopped/slowed the

growth of the bank credit. The bank is taking control of the credit and loans very well so

that India stays on the right track.


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The Indian share market has been in a bull run since April 2011 and thus

corrections are part and parcel for any market. The share markets will see ups and downs

but there will be steady growth. There is a good atmosphere for investments in India and

the share markets will thrive under the circumstances. Firms which deal with securities

will make good business as more and more people will enter the share markets to make

investments. In the long run all securities firms have a bright future.


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PROFILE OF THE

ORGANISATION


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ORIGIN OF THE

ORGANIZATION


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2.1 ORIGIN OF THE ORGANIZATION:

STANDARD CHARTERED SECURITIES (INDIA) LIMITED:

Standard Chartered Securities (India) Limited is a leading broking company that

helps retail and institutional investors with their capital market investment requirements.

At Standard Chartered Securities, the aim is to offer simplified investment

solutions that provide long-term value to the customers. For institutional clients, they

offer products such as equity capital markets, equity and derivative broking. Retail

division caters to online as well as offline customers, offering products such as equity and

derivative broking, depository services, mutual funds, fixed income instruments and

company fixed deposits.

They have a dedicated team of research analysts who work independently to

provide investment and trading recommendation to our institutional and retail customers.

A network of relationship managers and customer care executives offer efficient

execution backed by in depth research and expertise to customers across the country.

SCSI has a large network with pan India presence in 112 locations through 34 branches

and 97 authorized centers.

Standard Chartered Securities is registered as a trading and clearing member with

Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited

(NSE) and MCX Stock Exchange Limited (MCX). The Company is also registered as

Depository Participant with CentralDepository Services (India) Limited (CDSL) as well

as National Securities Depository Limited (NSDL).

Standard Chartered Securities is part of the Standard Chartered Group, an

international financial services group that offers a variety of financial services including

Consumer Banking, Wholesale Banking, Corporate Advisory, Capital Market Services,

SME Banking, and Private Banking. Standard Chartered PLC, listed on the London,

Hong Kong and Mumbai stock exchanges, ranks among the top 20 companies in the

FTSE-100 by market capitalization. The London-headquartered Group has operated for


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over 150 years in some of the world's most dynamic markets, leading the way in Asia,

Africa and the Middle East.

The Standard Chartered Group in India is also represented by Standard Chartered

Bank, India's largest international Bank with 94 branches across 37 cities. To know more

about Standard Chartered Bank, India, click on www.standardchartered.co.in. To know

about Standard Chartered plc, click on www.standardchartered.com

History of Standard Chartered Securities (India) Limited:

Standard Chartered Securities (India) Limited is a wholly-owned subsidiary of

Standard Chartered Bank (Mauritius) Limited (SCBM), which acquired the company

from Securities Trading Corporation of India (STCI) over 2008-2010. Prior to the

acquisition, Standard Chartered Securities was known as UTI Securities Limited

(UTISEL).

On August 23, 2007, SCBM agreed to acquire UTISEL from STCI in three

tranches. As a part of first branch, SCBM acquired 49% stake in UTISEL on January 11,

2008, after which, the name of the Company was changed from UTISEL to Standard

Chartered-STCI Capital Markets Limited w.e.f. January 17, 2008.

SCBM acquired further 25.9% stake in the Company on December 12, 2008, as a

part of second leg of the transaction and increase its total stake from 49% to 74.9% in the

Company.

As a last part of the acquisition, SCBM increased its stake to 100% in the

Company by acquiring the residual stake of 25.1% from STCI on October 08, 2010.

Consequently the Company became the wholly owned subsidiary of SCBM and was re-

named Standard Chartered Securities (India) Limited.


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REGISTERED OFFICE / CORPORATE OFFICE

Standard Chartered Towers,

1st Floor, 201 B/1,

Western Express Highway,

Goregaon East,

Mumbai-400063

Telephone No: 022 67515999

Fax No: 022 67559607

BRANCHES IN CHENNAI:

Standard Chartered Securities (India) Limited.,

Jamals Santhini, 1/1,

II nd Main Road,

Seethammal Colony, Alwarpet,

Chennai - 600018.

TEL : 044-24328944/ 9759.

Standard Chartered Securities (India) Limited.,

W-123, 1st floor,

3rd Avenue, Anna Nagar,

Chennai - 600040.

TEL : 044-26264500/ 4300.


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GROWTH AND

DEVELOPMENT OF THE

ORGANIZATION


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2.2 GROWTH AND DEVELOPMENT OF THE

ORGANIZATION:

Standard Chartered Bank in India is the countrys largest international bank with

90 branches in 33 cities and India is one of the Groups key markets worldwide.

Employing about 19,000 people, Standard Chartered Bank has played a significant role in

the history of the banking industry in India since opening its first branch in Kolkata, 150

years ago, on 12 April 1858.

Standard Chartered Bank considers India to be one of the prime economic

opportunities of the 21st century and is proud to be so strongly positioned here. SCSI

have ambitious plans to transform business in the country and to further expand our

operations in India.

On 11 January 2008, Standard Chartered Bank (Mauritius) Limited acquired 49%

stake of erstwhile UTI Securities Limited from Securities Trading Corporation of India

(STCI). Accordingly, the name of the Company was changed from UTI Securities

Limited to Standard Chartered STCI Capital Markets Limited with effect from 17

January 17 2008. Subsequently, on 12 December 2008, SCBM acquired further 25.9%

stake in Standard Chartered STCI Capital Markets Limited to increase its total stake in

Standard Chartered STCI Capital Markets Limited from 49% to 74.9%.

The institutional division of Standard Chartered Securities (India) Limited has

been catering to the ever growing needs of the institution and corporate customers for

over 15 years by providing a wide range of financial intermediation services.

SCSI has provided consistent service has made them the financial intermediary of

choice to over 800 institutional clients which bear testimony to our continuous effort of

reaching out to customers requirements.

Pan India presence ensures tailor made services for customers at their point of

presence ensuring seamless execution of their requirements. Further, parentage with


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Standard Chartered Bank helps them to provide global transactional capability, to our

customers.

SERVICES OFFERED BY STANDARD CHARTERED SECURITIES (INDIA)

LIMITED:

1. EQUITY CAPITAL MARKETS:

The Equity Capital Markets division at Standard Chartered Securities (India)

Limited aims to offer entrepreneurs, companies and investors, independent financial

advice and transaction execution of the highest standard. The endeavor is to provide

value to growing and mature companies by helping them in the creation and execution of

the best possible capitalization strategy.

Capital Markets

The experienced professionals of Standard Chartered Securities (India) Limited

offer a wide range of services such as:

y Initial public offer (IPO)y Rights issuey Follow on offerings (FPO)y Qualified Institutions placement (QIP) / preferential allotmentsy Open offers

1.Equity Capital Markets 2.Institutional Equities 3.Fixed Income Group

Creation and execution of

capitalization strategy

Consistent, quality services,

with utmost confidentiality

and competitive edge

Complete solution in the

debt segment


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y Equity buyback programsy Private equity placements in listed companies (PIPE)

Private Equity

SCSI provides advisory solutions to companies on their capitalization/ re-capitalization

strategies. The services provided include

y Advice on business plany Advice on optimum capital structurey Due diligence and preparation of information memorandumy Identifying and screening of investorsy Assistance in valuation and most effective financial structurey Negotiating the terms of the deal with investors and assisting in drafting of

necessary legal documentation for closure

y Post closure servicing for company and fund

2. INSTITUTIONAL EQUITIES:

y The institutional equities division at Standard Chartered Securities (India) Limitedcaters to the investment needs of corporate and institutional clients. Our endeavor

is to provide consistent quality services, enabling our clients to derive maximum

benefits out of the markets.

y Innovative approach, incisive research, responsive sales teams, and intensiveexecution method have enabled SCSI to uncompromisingly service our clients in

unique and different ways.

y SCS have a strong sales team, comprising of top equity professional, whichtranslates the research findings into actionable advice for clients, based on their

specific needs. The team services more than 110 institutional clients which

include leading domestic mutual funds, insurance companies, domestic financial

institutions, banks and FIIs.


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3. RETAIL:

y Standard Chartered Securities (India) Limited are a leading broking company with15 years of experience catering to the financial needs of our ever increasing

customer base. The aim is to help investors achieve their financial goals by

providing high quality investment services, in a simple, direct and cost-effective

manner.

y SCSI has a large retail network with pan India presence in 112 locations through34 branches and over 97 authorized centers caters to both online and offline

customers.

y The experienced team of retail research analysts backed by in depth research,knowledge and expertise guides customers with appropriate solutions

y In addition to offline trading through the branches and authorized centers, theyalso offer comprehensive trading solutions through our online trading portal

which is fully equipped to cater to your multiple trading needs.

y Standard Chartered Securities (India) Limited 3-in-1 account facility providesseamless integration of bank, demat and trading accounts.


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PRESENT STATUS OF

THE ORGANISATION


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2.3 PRESENT STATUS OF THE ORGANIZATION:

Standard Chartered Securities (India) Limited is a wholly-owned subsidiary of

Standard Chartered Bank (Mauritius) Limited (SCBM), which acquired the company

from Securities Trading Corporation of India (STCI) over 2008-2010. Prior to the

acquisition, Standard Chartered Securities was known as UTI Securities Limited

(UTISEL).

On August 23, 2007, SCBM agreed to acquire UTISEL from STCI in three

tranches. As a part of first branch, SCBM acquired 49% stake in UTISEL on January 11,

2008, after which, the name of the Company was changed from UTISEL to Standard

Chartered-STCI Capital Markets Limited w.e.f. January 17, 2008.

SCBM acquired further 25.9% stake in the Company on December 12, 2008, as a

part of second leg of the transaction and increase its total stake from 49% to 74.9% in the

Company.

As a last part of the acquisition, SCBM increased its stake to 100% in the

Company by acquiring the residual stake of 25.1% from STCI on October 08, 2010.

Consequently the Company became the wholly owned subsidiary of SCBM and was re-

named Standard Chartered Securities (India) Limited.

Standard Chartered Bank has completed the acquisition of an additional 25.9 per

cent stake in Standard Chartered-STCI Capital Markets Limited (formerlyUTI Securities

Limited) to take its total holding in the company to 74.9 per cent. The company currently

offers its services under the brand Standard Chartered Wealth Managers.

Standard Chartered bought 49 per cent ofUTI Securities Limited from Securities

Trading Corporation of India Limited (STCI) in January 2008 following, receipt of

regulatory approvals for the transaction.

This move by Standard Chartered to increase its existing stake is in line with its

original intent reflected in the contract, under which both parties provided for the stake to


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be increased in stages to 100 per cent by 2010. Regulatory approvals have been received

for the additional stake and change in the controlling interest in Standard Chartered-STCI

Capital Markets Limited.

Neeraj Swaroop, Regional CEO India and South Asia, Standard Chartered

Bank, said: This strategic initiative is a reflection of our long term commitment to the

Indian market, despite the current economic slowdown. I am delighted that we have been

successful in combining the strengths of Standard Chartered with UTI Securities, a

recognized leader in the financial services spectrum.

He further commented, We are extremely confident that with this partnership,

we will continue to offer our customers both competitive investment avenues and remain

a provider of choice in this challenging environment.

Somasundaram PR, Managing Director, Standard Chartered Capital Markets also

said, This has been a challenging year for the business but the acquisition of an

additional stake at this time reflects the underlying confidence of Standard Chartered

Bank in the Indian economy as a whole and in the Indian equity capital markets

specifically. We have tested our plans in both the institutional and retail segments of this

business in the last year and we are convinced we have a significant opportunity here anda global strategic fit. The company currently offers its services under a global brand

Standard Chartered Wealth Managers. Standard Chartered will also invest additional

capital ofUS $4.5 million in line with the FDI guidelines with the increase in stake.

Standard securities have a good standing in the market and the sale of securities

and trading is on the upswing. The future securities as an industry are good and have a

bright future.


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FUNCTIONAL

DEPARTMENTS OF THE

ORGANIZATION


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2.4 FUNCTIONAL DEPARTMENTS OF THE

ORGANIZATION:

1.Online Broking 2.Offline Broking 3.Distribution of financial

products

Online trading portal is asingle gateway for your

multiple investment needs.

Investing in equities withSCSI truly empowers you to

meet your financial needs

Wide range of services tomeet ever increasing

financial objectives

1. ONLINE BROKING:

Customer convenience is our top-most priority. Keeping this in mind, Standard

Chartered Securities (India) Limited brings The power of 3 at the convenience of 1'.With the 3in-1 account, SCSI offers seamless integration of bank, trading and demat

accounts. The bank account offered is Standard Chartered Bank account while the

broking and demat accounts will be with Standard Chartered Securities (India) Limited.

The easy to use features of 3in1 account include:

y Single login facilitythis feature enables direct access to details of all 3 accounts with a single log-in -

no need to remember multiple user names and passwords.

y Hassle-free and convenient tradingNo need to write cheques or issue TIFD (DIS) slips.

Instant update on status of purchase/sale orders.


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Automated pay-in of shares and pay-out of funds/shares to and from your

DP/bank account.

y Access to multiple productsInvest/trade online in multiple products - equity and derivatives trading, IPO, GOI

bonds and mutual funds.

You can place orders online or through the Phone-2-Trade facility.

TRADING PLATFORM:

EASY TRADE:

Easy Trade

Customers can trade on website that is easy to navigate with advanced stock trading

features. They can manage your account and trade on exchanges.

Benefits of EASY Trade:

y Trading on NSE & BSEy Integrated Bank, Demat and Trading Accounty Get Current Order Status


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y Monitor your ordersy Updated buying powery Any where accessy Access to back end reports

ADVANCE TRADE:

Customers can trade on website with live streaming quotes. They can create

multiple watch lists to track market movements.

Benefits of ADVANCED Trade:

y Streaming quotesy Market Depth Windowy Trading on NSE & BSEy Create Multiple Watch listsy Equity and Derivatives orders in single windowy Hot Key Navigationy Access to back end reports

Super Trade

Customers can trade from their desktop with live streaming quotes and advanced

technical tools.

Benefits of SUPER Trade

y Personalized StockQuote Listsy Fully Customizable displayy Streaming Intraday, Daily and Weekly Chartsy Streaming Quotes


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y Alert capabilitiesy Track your orders real timey Real time position updatesy Lock terminal option

2. OFFLINE BROKING

Standard Chartered Securities (India) Limited, offers the convenience of trading

in equity, derivatives and currency derivatives through our network of 34 branches and

over 97 authorized centers.

Equity

Investing in equities with Standard Chartered Securities (India) Limited truly

empowers customers to meet your financial needs. Different investors foray into equities

for different reasons. SCSI understands the expectations of customers and accordingly

offers a wide range of products and services.

To serve the varied customers, SCSI offer both delivery and intra-day trading.

The extensive network of dealers provides prompt and efficient service, helping

customers to take quick and right decisions, to maximize your gains. SCSI provides both

market and limit orders, offering customers a choice to take time-based or price-based

decisions as they deem fit. SCSI are member of Bombay Stock Exchange Limited (BSE)

and National Stock Exchange (NSE).

Derivatives

If customers are looking at hedging your investments, or wish to gain through

your estimates about the movement of the Index or stocks, SCSI offers derivatives

trading on Future and Options segment of the NSE (National Stock Exchange).


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Currency Derivatives

A new investment opportunity from Standard Chartered Securities (India) Limited

for all Resident Indians. Currency Derivatives are standardized foreign exchange

contracts traded on an exchange to buy or sell one currency against another on a specified

future date. The contracts will be traded online through the order-driven market

mechanism, quite similar to equity derivatives.

3. DISTRIBUTION OF FINANCIAL PRODUCTS:

The financial products that are being offered in the markets today provide an

opportunity to the investor to participate in the stock market with a small investment size.

Standard Chartered Securities (India) Limited has a large retail network with pan

India presence in 112 locations through 34 branches, saver 97 business associates caters

to the investment needs of both offline and online clients. SCSI representatives who have

been trained and facilitated with the best tools, enables them to offer customers with the

best services and deals.

SCSI brings a wide array of products such as IPOs, fixed income bonds and

different schemes from leading mutual funds to help you diversify investments.

IPO

Initial Public Offer (IPO) offers an excellent opportunity to be part of a

companys growth story right from its foray into markets. All that is required is the

Buying Power and we take care of the rest for you.

Mutual fund

Mutual funds are today an integral part of an investors portfolio. SCSI offers a

wide variety of Mutual Funds schemes ranging from plain vanilla funds to exchange

traded funds. SCSI network offers customers with products from leading asset

management companies (AMCs) operating in the market. With online platform, mutual

fund investment is just at the click of a button.


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ORGANIZATION

STRUCTURE


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2.5 ORGANIZATION STRUCTURE:


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PRODUCT AND

SERVICE PROFILE OF

ORGANIZATION

COMPETITORS


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2.5 PRODUCT AND SERVICE PROFILE OF ORGANIZATION

COMPETITORS:

HDFC SECURITIES LIMITED:

HDFC securities Ltd, a trusted financial services intermediary is a subsidiary of

India's respected private sector Bank - HDFC Bank. A leading stock broking company

having completed 10 years in operation serves a diverse customer base of retail and

institutional investors.

Discerning investors experience a robust platform to trade in Equities, derivatives,

currency futures and mutual funds through both NSE & BSE and other investment

options like IPO's, bonds, corporate fixed deposits, insurance etc. Investors are also

provided with niche - Equity Investment advice and execution platform with superior

technology aid and unbiased research across sectors, economy and scripts.

Web portal is designed to meet the requirements of everyone from a beginner to a

savvy and well-informed trader with highest service standards, convenience and hassle-

free trading tools. The Web portal aims to provide a one stop window for all financial

needs with seamlessness and customer centric services

CONVENIENCE

y Clients could adopt to trade with us either online, or on the phone, or relationshipmanagers from the convenience of their home or office.

y The 4-in-1 Advantage account enables clients to seamlessly move funds and securitiesacross your bank demat and trading account.

y Clients get to enjoy limits across exchanges to tradey No need to issue cheques or delivery instructions.y Place IPO / NCD applications via few clicks using the trading account or by the phone.

No standing in queues or filling application forms.

y ASBA application facility.y Customer care centre to address all queries and grievances.


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REACH

HDFC securities has a strong unified call centre catering to clients across India

and overseas aiding clients who wish to have their orders placed by a tele-agent. 7

Regional language call centre facility is available for clients. Over 128 exclusive

branches across India also service clients locally by dedicated relationship managers.

TRANSPARENCY

With trusted pedigree, a client can be assured of best services in a transparent

manner and is in total control of their funds and stocks.

EXPERTISE

With a decade of experience and a rating of A1+1, HDFC securities has a admired

lineage of providing financial services to customers in a transparent and trusted manner.

They have a dedicated, motivated and experienced team of professionals to provide

customers with top class service.

TIMELY AND RELEVANT INFORMATION

HDFC Securities realize the importance of making information available to

clients as it happens. Empowered with the latest news, developments and unbiased

research, enables a client to take informed decisions.

HDFC SECURITIES OFFERS ONE STOP SHOP, FOR ALL INVESTMENT

NEEDS OF CUSTOMERS:

y Equity and Derivativesy IPO / PMSy Mutual Fundy Fixed Depositsy Non Convertible Debenturesy General Insurancey Life Insurancey Bonds / Currency Derivatives


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REGISTERED OFFICE / CORPORATE OFFICE

HDFC Securities Limited

Office Floor 8, "I THINK" Bldg,

Jolly Board Campus,

Kanjurmarg (East),

Mumbai - 400042. India.

Tel : 022 - 30753400

Fax : 022 -30753435

EQUITY

HDFC Securities provides a seamless online real-time platform to trade in stocks.

You can buy or sell shares on both the NSE and BSE. Trading in equities involves more

than stock trading. Equity trading in the stock markets can involve many different

securities, requiring diverse strategies and trading skills. Equities may be traded for short-

term and long-term profits. HDFC Securities are a one-stop financial services shop, most

respected for quality of its advice, personalized service and cutting-edge technology.

Products Offering:

y Cash-n-Carryy Marginy Buy Today Sell Tomorrowy Exchange Traded Fundsy Off Market Ordersy Do It Yourself SIP (Equity SIP)

MUTUAL FUND:

HDFC Securities introduces online platform for investments in Mutual Funds.

Customers can now subscribe & redeem mutual fund units in the electronic format. They

will be able to view the units bought in yourDemat a/c.


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BENEFITS OF ONLINE MUTUAL FUND INVESTMENTS:

y Registration: One time signing of BSE & NSE agreement for online Mutual Fundtrading through Demat A/c.

y Paperless work: No physical application forms, cheques, a/c's statements.y Delivery time: Demat account holders benefit from shorter delivery times than

Physical account holders as Demat obviates significant amount of paper movement.

y Order confirmation: By way of e-mail and a physical copy.y Faster Execution: Allotment by way of Demat credit. Investors get units in

dematerialized format. Redemption by way of Electronic Clearing System.

y SIP: Investors get various options of SIP Schemes and SIP investment dates.y Convenience: Existing investors can invest through the same channel that they use to

purchase stocks. Investors can view their Mutual Fund investments, along with other

investments such as Direct Equity, ETF's, Bonds & NCD's in same Demat A/c.

DERIVATIVES:

For the mature investor, who is aware of risks in the market, Derivatives could be

a great way to trade, and HDFC Securities offer a robust platform to trade Derivatives.

Derivatives let customers trade in a large number of stocks and also in Index for a small

margin. For example, if customers had only Rs 2 lakh instead of Rs 10 lakh to buy a

stock, by paying margin of Rs. 2 Lakh they can create position in Derivatives Futures for

higher value. HDFC Securities delivers crisp information on Futures and Options,

contract specifications, and calculators on Option pricing and cost of carry.

IPO:

Participating in Initial Public Offerings (IPOs) can be a financially rewarding

exercise. By investing early in a strong company, customers stand a good chance to reap

benefits over the long term. There are gains to be made in many IPOs, for both short term

as well as long term investor.


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NRI OFFERINGS:

COMPREHENSIVE

y Delivery based trading on both NSE & BSE.y PIS (Portfolio Investment Scheme) transactions online.y Invest through Repatriable as well as Non-repatriable funds.y Apply for IPO online through NRE/NRO account.y Daily Investment Calls to all NRIs.y Dedicated customer care.

HASSLE- FREE

y Simplified account opening process.y Open 2 different sets of account (i.e. NRE&NRO Bank, PIS, Demat & Trading

account) at once.

y No need to send transaction details to RBI.SEAMLESS

y No need to write cheques or TIFD.y Funds/shares directly credited to linked HDFC Bank/DP account.y Direct pay-out of funds on the same day as that of exchange.

SECURE

y Secured Socket Layer with 128 bit encryption.y Detailed audit trail of transaction with stamp on all orders.y Funds/ Securities with HDFC Bank are remitted directly into Clients accounts.

INSURANCE:


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MOTOR INSURANCE

HDFC ERGO Motor Insurance can be trusted to protect customers vehicle, your

most prized possession. It ensures you to get back in the driver's seat quickly, no matter

what happens to

Vasu Final Report Part2

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