REPORT ON SUMMER INTERNSHIP PROGRAM UNDERGONE AT Vadodara Stock Exchange Ltd.

Submitted in partial fulfillment of the requirements of Annamalai University for the award of the Degree of MASTER OF BUSINESS ADMINISTRATION By RUTIK DILIPBHAI SHAH Enrolment No.: 4741100011

Under the guidance of Ms. Palak Shah

NIS ACADEMY 50, Sampatrao Colony, Opp. Circuit House, Alkapuri, R.C. Dutt Road, Vadodara 390007

MBA 2011 13

NIS ACADEMY 50, Sampatrao Colony, Opp. Circuit House, Alkapuri, R.C. Dutt Road, Vadodara 390007

CERTIFICATE FROM THE INSTITUTION

Certified that this summer internship report at VADODARA STOCK EXCHANGE Ltd. is based on the summer internship program undergone by RUTIK DILIPBHAI SHAH of MBA 1st year student under the guidance of Ms. Meenaxi Nair

This summer internship program is based on the training undergone by the student as a of their curriculum and do not form the basis for the award of any other degree/diploma awarded by Annamalai University or any other University.

The information and/ or data presented herein are of only academic interest and have no commercial value.

Ms. Meenaxi Nair Executive T & D

Mr. Deepak Vaishnav Centre Head

PREFACE
Master of Business Administration (MBA) consists of summer internship projects which introduces students to learn the basics of administration and Management of organization. It offers a unique opportunity to explore the complex and vast field of corporate world.

The objective of practical training at MBA level is to bring awareness in the students Regarding corporate and industrial environment, general trade practices, and management policies and to develop a practical knowledge in them as supplement to the theoretical study of management.

Training for me was a good tool to explore the various facts about Companys policies, administration, work atmosphere, etc. The knowledge I gained from it is definitely going to help support and guide me in future. Moreover the knowledge is power- the more I get the more I gain. I have undergone Training at Vadodara Stock Exchange Ltd. in which I have covered my training in all Department, My specialization is finance, and I have prepared a project on Functioning of Stock Exchange

ACKNOWLEDGMENT
I am glad to present this report and hope that it will be appreciated. It was indeed a memorial experience for me to undergo training in this firm.

I was assigned the project to get the experience of current scenario of the corporate world. By this experience I have learnt many important things that will definitely help me in future. I would like to thank all the people who are involved in this summer training.

First of all I would like to thank my college NIS ACADEMY affiliated to Annamalai University, which gave me such a golden chance to get valuable experience in the corporate world today.

I would also like to thank all the officers, staff and those who helped me in Some or other way to complete my report successfully . I thank Mr Manish Dalal for giving me opportunity to work at, Vadodara Stock Exchange Ltd. as a FINANCE TRAINEE.

I am thankful to Mr.Dipak Vaishnav (Centre Head of NIS ) and Ms. Meenaxi Nair for their encouragement and able guidance at every stage of my training work.

I express my deepest sense of gratitude to Vadodara Stock Exchange Ltd.or giving me an opportunity to carry out this project and provide me insight throughout the project.

Table of Content
Sr No.
1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 2 2.1 3 3.1 3.2 4 4.1 4.2 4.3 5 5.1 5.2 5.3 5.4 6 7 7.1 8

Subject
Company Profile Brief History & Back Ground of VSE Objective of Vadodara Stock Exchange History & Back Ground Of VSSL Services Provided by VSSL Concept of Stock Exchange Evolution of Indian Stock Exchange Market Access Functions of Stock Exchange Organization Structure Structure of Vadodara Stock Exchange Functional Areas Departments of Vadodara Stock Exchange Stock Exchange Works Like Human Body SWOT Analysis SWOT Analysis of VSE Awards of Vadodara Stock Exchange Ltd. Milestone of VSSL Special Task Introduction of the Study Objective & limitation of the Study Sampling Method Analysis & Interpretation Suggestion Annexure Questioner Bibliography

Pg .No.
07 11 13 14 15 16 22 25 28 32 35 47 52 57 58 60 61 62 64 66 70 75

Company Profile

Company Profile

Vadodara Stock Exchange Limited (VSEL) received recognition as Stock Exchange from the Government of India on 5th January 1990 and became Countrys 19th recognized Stock Exchange. In the beginning it had 150 members and now the strength is 289. In order to revive the Regional Stock Exchanges, SEBI came out with a Circular whereby RSEs floated its subsidiary company which acquired membership rights of BSE/NSE to facilitate trading terminals to the members of RSE. Accordingly, Vadodara Stock Exchange Limited floated its 100% subsidiary named as VSE Stock Services Limited (VSSL). As on 31Dec-2009 there are about 98 active sub-brokers in VSSL and its current average daily turnover is Rs.80 crores in the cash segments of BSE and NSE.

Recognizing and appreciating the necessity of introducing Screen Based Trading at Vadodara, an accomodacious premises was acquired in 1995 at Fortune Tower, admeasuring approximately 1,56,238 Sq. ft. of area. VSEL, as and per Vadodara Stock Exchange 2005 Limited (the

(Corporatization

Demutualization)

Scheme,

Demutualization Scheme), notified by Securities and Exchange Board of India (SEBI) in the Official Gazette on 15th September, 2005, and in terms of Securities Contract (Regulation) (Manner of increasing and

maintaining Public Shareholding in Stock Exchanges) Regulations, 2006, is required to reduce the shareholding of its Trading members up to 49% of its equity share capital i.e. minimum 51% holding is required to be owned by non-trading members, subject to the prior approval of SEBI, Accordingly the Exchange got demutualised and a Notification to this effect vide No. SEBI/MRD/DSA/105441/2007 was published on 9th October, 2007 in PartIII - Section-4 of the Gazette of India, notifying that VSEL has ensured compliance with the requirements of SCRA on 13.09.2007 and that VSEL has completed corporatization and demutualization by this date. For the Depository operations, VSEL has branches in Surat, Bharuch & Anand and plans to expand its Depository participant business immediately after demutualization in all towns of Gujarat and later on all over India. It has plans to tie up with banks to provide DP services from their branch premises, which shall be beneficial for all the parties. Trading Members VSEL currently has 289 Trading Members out of which 54 are corporate Trading Members. Since, presently there is no turnover on the Exchange the Trading Members are routing their business through the subsidiary of the Exchange and presently, 100 members are trading through subsidiary

The services provided by VSSL are as under:

o o o o o o

Trading at BSE & NSE Cash Segment Strong Risk Management Features Electronic Contract Notes Direct Billing of Clients Efficient Pay Out of Securities and Funds Auto Pay In for VSSL clients having Demat Accounts in VSE CDSL DP

Vadodara Stock Exchange (VSE) is the third stock exchange of Gujarat and was established in 1990. It was constructed after Ahmedabad and Rajkot stock exchanges. The stock exchange of Vadodara is situated at Fortune Towers in Sayajigunj and occupies an area of 1,56,238 square feet.

Vadodara Stock Exchange Limited is the 19th recognized stock exchange in India. It was recognized by the Government of India as a Stock Exchange on 5th January, 1990. During its inception, the stock exchange of Vadodara contained about 150 members.

Presently, it possesses about 290 members and about 90 subbrokers. The average turnover of the stock exchange is about Rs. 60 crores. Presently, about 484 companies are listed with the stock exchange of Vadodara.

It is noteworthy that VSE floated its subsidiaries as VSE Stock Services Limited, owing to the circular of Securities and Exchange Board of India (SEBI). Among the services provided by VSSL are:

Efficient Pay Out of Funds and Securities Direct Billing of Clients Auto Pay In for VSE Stock Services Limited clients having Demat Accounts in VSE CDSL DP Strong Risk Management Features Electronic Contract Notes All Demat related Services Trading at BSE and NSE Cash Segment

Furthermore, Vadodora Stock Exchange has many branches in Bharuch, Anand and Surat for the depository operations. Besides, the stock exchange at Vadodara has about 290 trading members. Out of the 290 members, the exchange has 54 corporate trading members.

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Brief History & Background of VSEL

VSEL is one of the several Regional Stock Exchanges in India. Earlier, all the Stock Exchanges functioned under the framework of Bombay Securities Contracts Act, 1925. The Securities Contracts (Regulations)Act, 1956 was enacted thereafter and all the stock exchanges within India were required to get recognition from the Ministry of Finance. Accordingly, VSEL received the recognition as Stock Exchange from the Government of India on 5th January1990.

Originally incorporated in 1990 as a company limited by guarantee, VSEL was later converted into a company limited by shares and a fresh certificate of incorporation was issued on 2nd September, 2005.VSEL went live on 17th July, 1996, marking a memorable event in its history and joining the stream of Indian Stock Exchanges having gone LIVE for electronic trading.CMC Ltd. had facilitated implementation of fully automated stock trading,

settlement and clearing system.

The Exchange installed VECTOR(Versatile Engine for Centralized Trading and On-line Reporting),built around the Central Trading System (CTS). All the brokers interacted with CTS through Brokers Work Station (BWS). The Market operations and surveillance were connected to the CTS through their work stations Operations Work Station (OWS) and Surveillance Work Station (SWS) respectively.

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In November 1999, SEBI issued a circular permitting the regional stock exchanges to acquire membership of NSE and BSE for facilitating stock broking activities and incorporation of a

subsidiary company for this purpose. This lead to the birth of VSE Stock ServicesLtd. (VSSL) (formerly VSE Securities Limited) as a subsidiary of VSEL. In July 2000, VSEL also commenced providing online, real-time Depository Participant (DP) services, of Central Depository Services Ltd. (CDSL), under the name VSE Clearing House.

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OBJECTIVE OF VSE
Following are the main objective of Vadodara Stock Exchange Ltd.

To Facilitate, assist, regulate and Business in Securities .

control the trade of

Effectively Serve the interest of the general public & Investors.

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VSE STOCK SERVICES Ltd.

(VSSL) Brief History & Background
VSSL, a subsidiary of VSEL, was incorporated in May 2000. It has acquired the Membership rights of Cash Market (CM) segment of The Bombay Stock Exchange Ltd. and the CM Segment of The National Stock Exchange Ltd. It provides Trading platforms of these larger Stock Exchanges to the investors of the region, through a vast network of sub-brokers servicing such investors. VSSL commenced its operations on BSE in May 2000 and on the NSE in February 2005.VSSL was initially incorporated as a wholly owned subsidiary of VSEL.

However, currently, VSEL is in the process of transferring 49% stake in VSSL to the Members of VSEL, after the completion of which, VSELs holding in VSSL will be 51%.The Issued,

Subscribed and Paid-Up Share Capital of VSSL as on 31stMarch 2007 amounted to Rs. 400 lacs comprising of 40,000 equity shares of Rs.1,000/- each. However, currently, VSSL is in the process of sub-dividing the equity share capital of VSSL into equity shares of face value of Rs. 10/-each, consequent to which its share capital will comprise of 40,00,000 equity shares of Rs. 10/- each

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Services Provided by VSSL

Trading at BSE (CM segment ),NSE (Cash & F&O Segment).

Providing Auto pay in & other DP related Services through VSELs CDSL DP

Participation in IPO s by acting as syndicate Member With BRLMs

Efficiency pay in / pay out of funds & Securities.

Client Pay out Cheque directly by Axis Bank in the name of client.

Client can view ECN in their mail box as well as on website

Client can view their Holding , DP Holding , Ledger etc on website.

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Concept of Stock Exchange

The Securities Contracts (Regulation) Act, 1956, has defined Stock Exchange as an "association, organization or body of individuals, whether incorporated or not, established for the purpose of assisting, regulating and controlling business of buying, selling and dealing in Securities". Stock exchange as an organized security market provides marketability and price continuity for shares and helps in a fair evaluation of securities in terms of their intrinsic worth. Thus it helps orderly flow and distribution of savings between different types of investments. This institution performs an important part in the economic life of a country, acting as a free market for securities where prices are determined by the forces of supply and demand. Apart from the above basic function it also assists in mobilizing funds for the Government and the Industry and to supply a channel for the investment of savings in the performance of its functions. The Stock Exchanges in India as elsewhere have a vital role to play in the development of the country in general and industrial growth of companies in the private sector in particular and helps the Government to raise internal resources for the implementation of various development programmes in the public sector. As a segment of the capital market it performs an important function in mobilizing and channelizing resources which remain otherwise scattered. Thus the Stock Exchanges tap the new resources and stimulate a broad based investment in the capital structure of industries.

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A well developed and healthy stock exchange can be and should be an important institution in building up a property base along with a socialist in India with broader distribution of wealth and income. Thus Stock Exchange is a vital organ in a modern society. Without a stock exchange a modern democratic economy cannot exist. The system of joint stock companies financed through the public investment as emerged has put the vast means of finances almost to entrepreneurs' needs. Finance from external sources mainly from the investing public can become possible only when an institute like Stock Exchange provides opportunities for the conversion of scattered savings into profitable investments with the promises of a reasonable yield and minimum element of risk. Such a mechanism as provided by Stock Exchanges is not merely a source of capital but also a conduit which channelizes the savings into investment along with a free movement of capital. With the probable exception of a totalitarian state no Government will be able to mobilize resources from the public if the money market in the form of stock exchange does not exist. The Stock Exchange benefits the entire community in a variety of way. It enables the producers to raise capital which directly and indirectly gives gainful employment to millions of people on the one hand and helps consumers to get ;the variety of goods needed by them on the other. It provides opportunities to savers to store the value either as temporary abode of purchasing power or as a permanent abode of purchasing power in the form of financial assets. It also helps the segments of the savers who put their savings in commercial firms and non-banking financial intermediaries because these institutions avail themselves of the services of Stock Exchange to invest the money thus collected.

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The Stock Exchange comes close enough to a perfectly competitive market allowing the forces of demand and supply a reasonable degree of freedom to operate as compared to other markets specially the commodity markets. This segment of the factor market can be considered as a perfect or a nearly perfect

market. Apart from providing a mechanism for transacting business in stock and shares it generates genuine potential for a new entrepreneur to take up initiative in the private sector enterprises and allows the expansion of investing community by offering gainful development of their otherwise sluggish or shy capital. The Stock Exchange must assume the responsibility of protecting the rights of investors specially the small investors in the Joint Stock Companies.

What is Stock Exchange ? Generally we are taking synonyms of both the terms like Stock Market and Stock Exchange. But both the terms are different from each other. Stock Market means Stock Market is a market where the trading of company stock, both listed securities and unlisted takes place. It is different from stock exchange because it includes all the national stock exchanges of the country. For example, we use the term, "the stock market was up today" or "the stock market bubble."

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Stock Exchange Means Stock Exchanges are an organized marketplace, either corporation or mutual organization, where members of the organization gather to trade company stocks or other securities. The members may act either as agents for their customers, or as principals for their own accounts. Stock exchanges also other financial The record

facilitates for the issue and redemption of securities and

instruments including the payment of income and dividends.

keeping is central but trade is linked to such physical place because modern markets are computerized. The trade on an exchange is only Stock Exchange Means A market in which securities are bought and sold: "the company was floated on the Stock Exchange". A stock exchange is simply a market that is designed for the sale and purchase of securities of corporations and municipalities. This means that a stock exchange sells and buys stocks, shares, and other such securities. In addition, the stock exchange sometimes buys and sells certificates representing commodities of trade. At first, stock exchanges were completely open. Anyone who wished to buy or sell could do so at a stock exchange. However, to make stock exchange more effective, membership became limited to those in clubs and other associations. Today, professionals who have a seat at the exchange are the people who trade at the exchange.

Stock markets affect the entire economy and encourage investment.

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Stock Exchange Means

S Securities Provided for Investor T - Tax Benefits planning and exemption.

O - Optimum Return on Investment

C - Cautious Approach.

K - Knowledge of Market.

Ex - Exchange of Securities Transacted.

C - Cyclopedia of Listed Companies.

H - High Yield.

A -

Authentic Information

N -

New Entrepreneur encouraged

- Guidance of Investor & Company.

E -

Equity

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How Does Stock Exchange Works?

The buying and selling of stocks at the exchange is done on an area which is called the floor. All over the floor are positions which are called posts. Each post has the names of the stocks traded at that specific post. If a broker wants to buy shares of a specific company they will go to the section of the post that has that stock. If the broker sees at the price of the stock is not quite what the broker is authorized to pay, a professional called the specialist may receive an order. The specialist will often act as a go-between between the seller and buyer. What the specialist does is to enter the information from the broker into a book. If the stock reaches the required price, the specialist will sell or buy the stock according to the orders given to them by the broker. The transaction is then reported to the investor. If a broker approaches a post and sees that the price of the stock is what they are authorized to pay, the broker can complete the transaction themselves. As soon as a transaction occurs, the broker makes a memorandum and reports it to the brokerage office by telephone instantly. At the post, an exchange employee jots down on a special card the details of the transaction including the stock symbol, the number of shares, and the price of the stocks. The employee then puts the card into an optical reader. The reader puts this information into a computer and transmits the information of the buy or sell of the stock to the market. This means that information about the transaction is added to the stock market and the transaction is counted on the many stock market tickers and information display devices that investors rely on all over the world. Today, markets are instantly linked by the Internet, allowing for faster exchange.

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Evolution & History of Indian Stock Exchange

Indian stock market marks to be one of the oldest stock market in Asia. It dates back to the close of 18th century when the East India Company used to transact loan securities. In the 1830s, trading on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading was broad but the brokers were hardly half dozen during 1840 and 1850. An informal group of 22 stockbrokers began trading under a banyan tree opposite the Town Hall of Bombay from the mid-1850s, each investing a (then) princely amount of Rupee 1. This banyan tree still stands in the Horniman Circle Park, Mumbai. In 1860, the exchange flourished with 60 brokers. In fact the 'Share Mania' in India began with the American Civil War broke and the cotton supply from the US to Europe stopped. Further the brokers increased to 250. The informal group of stockbrokers organized themselves as the The Native Share and Stockbrokers Association which, in 1875, was formally

organized as the Bombay Stock Exchange (BSE). BSE was shifted to an old building near the Town Hall. In 1928, the plot of land on which the BSE building now stands (at the intersection of Dalal Street, Bombay Samachar Marg and Hammam Street in downtown Mumbai) was acquired, and a building was constructed and occupied in 1930. Premchand Roychand was a leading stockbroker of that time, and he assisted in setting out traditions, conventions, and procedures for the trading of stocks at Bombay Stock Exchange and they are still being followed. Several stock broking firms in Mumbai were family run enterprises, and were named after the heads of the family.

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The following is the list of some of the initial members of the exchange, and who are still running their respective business: D.S. Prabhudas & Company (now known as DSP, and a joint venture partner with Merrill Lynch) Jamnadas Morarjee (now known as JM)

Champaklal Devidas (now called Cifco Finance) Brijmohan Laxminarayann 1956, the Government of India recognized the Bombay Stock Exchange as the first stock exchange in the country under the Securities Contracts (Regulation) Act.

The most decisive period in the history of the BSE took place after 1992. In the aftermath of a major scandal with market manipulation involving a BSE member named Harshad Mehta, BSE responded to calls for reform with intransigence. The foot-dragging by the BSE helped radicalise the position of the government, which encouraged the creation of the National Stock Exchange (NSE), which created an electronic marketplace. NSE started trading on 4 November 1994. Within less than a year, NSE turnover exceeded the BSE. BSE rapidly automated, but it never caught up with NSE spot market turnover. The second strategic failure at BSE came in the following two years. NSE embarked

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on the launch of equity derivatives trading. BSE responded by political effort, with a friendly SEBI chairman (D. R. Mehta) aimed at blocking equity derivatives trading. The BSE and D. R. Mehta succeeded in delaying the onset of equity derivatives trading by roughly five years.

But this trading, and the accompanying shift of the spot market to rolling settlement, did come along in 2000 and 2001 - helped by another major scandal at BSE involving the then President Mr. Anand Rathi. NSE scored nearly 100% market share in the runaway success of equity derivatives trading, thus consigning BSE into clearly second place. Today, NSE has roughly 66% of equity spot turnover and roughly 100% of equity derivatives turnover. Stock Exchange provides a trading platform, where buyers and sellers can meet to transact in securities

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Market Access
Trading Session The market would have following session 1. Logon session: 8.45a.m. To 9.55 a.m. Trading members can Log On during this session and can download various trading related information. Can prepare batch of orders for speedy submission at the start of the trading session. During this session the trading members are not allowed to enter orders in the BOLT system .Trading members can do the batch upload of orders during this session .However the batch session of these orders can be done only in the continuous trading session . Trading members/ traders can also download the BRK of the previous 5 settlements and auction files can be downloaded for the previous 25 settlements. 2. Continuous Trading Session : 9.55a.m. to 3:30 p.m. During this session ,all types of orders are allowed to be entered into the system and the traders can carry on all their trading activities . The traders receives confirmation of the orders entered as well as trades executed by him and can also view the net position on both scrip wise and client wise. The ticker facility in the BOLT system provides market sensitive information as and when receive the source . The BSE SENSEX is calculated at every 15 second and is Broadcasted on TWS as well as to the Derivatives system of the exchange. The Rate of the scrip is determined by the market forces based on the demand and supply .
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3. Closing Session: 3:30 p.m. to 3.40 p.m.

In this session the trading members will not allowed to enter any orders . the closing price of scrips is computed during this session as per the computation logic . at he end of the session the computed closing price of all the scrips traded on BOLT system in the continuous trading session is displayed on the touchline window of TWS and it is also displayed in the market view screen .

The closing price of all the traded scrips will be calculated based on

a. The weighted average price of all the trades in last N minutes for that scrip. The current N value in the BOLT system is 30 minutes or b. If there are no trades in the last N minutes in that scrip then the last traded price would be taken as the official closing price. c. If the scrip is not traded on that day the previous days closing price of the scrip shall be treated as the closing price.

4. Post closing session :3.40 p.m. to 4.00 p.m.

This session is held after the closing session. The trading members can enter only Limit orders at closing prices would not be accepted . the traders has to
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selected Retention flag as EOSSESS for orders . all the unmatched orders are return at the end of the session .

5. Members Query Session : 4.00 p.m. to 5.25 p.m.

In this session the system generates members wise trader level reports. In this session trading members are allowed to download the breakup of trade wise position. members query window is a function provided in the main menu . This window display the trades of all the traders executed during the day . Members can download the TRD & BRK files .TRD files containing the trades executed from that particular TWS(Trader Work session) can be downloaded by trades if allowed by the admin terminal only trader 1 is authorized to download the BRK file during members query session . this can be done by clicking on the on the BRK icon

When all the trades are download a check is initiated to detect any error in download trades . A warning messages is displayed in case on an error and query message is displayed indicating the file in which the data has been stored .

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Functions of stock exchange

Following are main Functions of Stock Exchange. These Functions are same . it is worldwide same.

1. Continuous and ready market for securities

Stock exchange provides a ready and continuous market for purchase and sale of securities. It provides ready outlet for buying and selling of securities. Stock exchange also acts as an outlet/counter for the sale of listed securities.

2. Facilitates evaluation of securities

Stock exchange is useful for the evaluation of industrial securities. This enables investors to know the true worth of their holdings at any time. Comparison of companies in the same industry is possible through stock exchange quotations (i.e price list).

3. Encourages capital formation

Stock exchange accelerates the process of capital formation. It creates the habit of saving, investing and risk taking among the investing class and converts their savings into profitable investment. It acts as an instrument of capital formation. In addition, it also acts as a channel for right (safe and profitable) investment.

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4. Provides safety and security in dealings

Stock exchange provides safety, security and equity (justice) in dealings as transactions are conducted as per well defined rules and regulations. The managing body of the exchange keeps control on the members. Fraudulent practices are also checked effectively. Due to various rules and regulations, stock exchange functions as the custodian of funds of genuine investors.

5. Regulates company management

Listed companies have to comply with rules and regulations of concerned stock exchange and work under the vigilance (i.e supervision) of stock exchange authorities.

6. Facilitates public borrowing

Stock exchange serves as a platform for marketing Government securities. It enables government to raise public debt easily and quickly.

7. Provides clearing house facility

Stock exchange provides a clearing house facility to members. It settles the transactions among the members quickly and with ease. The members have to pay or receive only the net dues (balance amounts) because of the clearing house facility.

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8. Facilitates healthy speculation

Healthy speculation, keeps the exchange active. Normal speculation is not dangerous but provides more business to the exchange. However, excessive speculation is undesirable as it is dangerous to investors & the growth of corporate sector.

9. Serves as Economic Barometer

Stock exchange indicates the state of health of companies and the national economy. It acts as a barometer of the economic situation / conditions.

10. Facilitates Bank Lending

Banks easily know the prices of quoted securities. They offer loans to customers against corporate securities. This gives convenience to the owners of securities.

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Organization Structure

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STRUCTURE OF VSE
BSE / NSE

Member Broker of BSE

VSEL

VSSL

Vadodara Stock Exchange Services Limited subsidiary of

VSEL have 94 subbroker is also member of VSEL

BROKERS

CLIENTS

40000 Clients Dealing Under 94 Sub Broker

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Above is the Structure of Vadodara Stock Exchange Limited. Vadodara Stock Exchange Limited is works under Bombay Stock Exchange and National Stock Exchange. It is the subsidiary of BSE and NSE. Vadodara Stock Exchange Limited has 2% part in BSE. There are number of Brokers works in Vadodara Stock Exchange Limited (VSEL).

Vadodara Stock Exchange Limited is the main body. VSEL has one sister company called Vadodara Stock Exchange Services Limited. Vadodara Stock Exchange Services Limited is the subsidiary company of VSEL. It works under VSEL. Then comes Brokers .Brokers is one type of customer of VSEL. They are works under Vadodara Stock Exchange Services Limited. Vadodara Stock Exchange Services Limited has 300 cards. Means there are only 300 Brokers are works under Vadodara Stock Exchange Services Limited. But now a Day there are only 103 brokers are Active Broker. These Brokers have also Sub- Brokers . They are works under Broker of Vadodara Stock Exchange Services Limited. They have to follow the instructions of Brokers. These Sub-Brokers have clients. Sub-Broker may also have Broker. It is called as Sub sub Broker. there are 40000 clients works under Broker.

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Functional Areas

34

Departments of Vadodara Stock Exchange Ltd.

Vadodara Stock Exchange Limited. Has Various Departments. There are Nine Departments of Vadodara stock Exchange. Following are various Departments of VSEL.

Settlement Department Margin Department Surveillance Department Listing Department Account Department Automation Department Personal Department Membership Departed Central Depository (VSE Clearing House)

1. Settlement Department ;
Settlement department mainly deals with those transactions, which have taken place during the course of the day and by member brokers. The transaction of securities of companies which have made arrangements for dematerialization of their securities are settled only in Dematerialized mode on T+2 on net basis, i.e. buy and sell position of a member broker in the same scrip are netted and the net quantity and value is required to be settled.

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Day Activity

T= trading on BOLT and daily downloading of statements showing details of transaction and margins at the end of each day. Downloading of provisional securities and fund obligation statements by member-broker 6A/7A entry by the member broker/confirmation by the custodians.

T+1= confirmation of 6A/7A data by the custodian up to 11:00 am. Downloading of final securities and funds obligations statement by member brokers.

T+2= pay-in of funds and securities by 11:00 am and pay-out of funds and securities by 1:30 pm The member brokers are required to submit the pay-in instructions for funds and securities to banks and depositories respectively at 11:00am T+3= auction on BOLT at 11:00am T+4= auction pay-in and pay-out of funds and securities by 12:00 noon And 1:30 pm Respectively The delivery order/receive order provides information like the script and quantity of securities to be delivered/received by the member broker through clearing house. The money statement provides script wise/item wise details of payment/receipts of monies by the member brokers in the settlement. The securities, as per the delivery orders issued by the exchange, are required to be delivered by the member broker to the Clearing House on the day designated for securities pay-in i.e. T+2 day.

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Demat Pay- in

As regard to CDSL, the member broker gives pay-in instruction to their respective DPs. the securities are transferred by the DPs to Clearing Member (CM) Principal Account. The member brokers are required to give confirmation to their DPs, so that securities are processed towards pay-in obligation.

Funds pay-in

After the reconciliation of securities completed, the bank account of member broker maintained with 9 clearing banks are directly debited through computerized posting for their fund settlement obligation. Once the pay-in of securities and funds is completed, the Clearing Member arranges for the payout of securities and funds.

Securities pay out Securities are credited by Clearing house in the pool account of member Broker. The exchange also provides facility to directly to the clients BO Account. Inter depository settlement takes place if transfer is there from One depository to another. In case of physicals securities, the receiving Members are required to collect the same from clearing house on Pay-out day.

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Funds pay Out

The bank account of member brokers having pay out of funds are credited by the Clearing House with the clearing bank on the same day. This process is called as funds pay-out. if a member fails to deliver the securities, then the value of shares delivered short is recovered from him at standing/closing price of script on trading day.

Auction An auction tender is issued by the exchange to the member broker informing them about the names of the script short or not delivered, quantity slated for auction and date and time of the auction session on the BOLT/the auction for the undelivered quantity is conducted on T+3 day between 11:00am and 12:00 noon for all the scripts under CRS except those in Z group and on trade to trade basis which are directly closed.

In auction, the highest offer price is allowed up to close out rate of scrip and the lowest offer price be 20% below the closing price of the scrip on a day prior to day of auction i.e. pay-in day.

2. Margin Department

VSE act as broker of Mumbai Stock Exchange. Margin trading is trading with borrowed funds/ securities. It is essentially a leveraging mechanism which enables investors to take exposure in the

market over and above what is possible with their own resources. Corporate brokers with net worth of at least Rs 3 crores are eligible for providing margin-trading facility to their clients subject to their
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entering into an agreement to that effect. Before providing margintrading facility to client, the member and

the client have been mandated to sign an agreement for this purpose in the format specified by SEBI. The facility of margin trading is available for Group 1 and those securities, which are offered in the initial public offers and meet the conditions for inclusion in the derivatives segment of the stock exchanges. For providing

the margin trading facility, a broker may use his own funds or borrow from scheduled commercial banks

or NBFCs regulated bythe RBI. The total exposure of the broker towards the margin trading facility should not exceed the borrowed funds and 50% of his net worth. While providing the margin

trading facility, the broker has to ensure that the exposure to a single client does not exceed 10% of the total exposure of the broker. Initial margin has been prescribed as 50 margin % and the maintenance

has been prescribed as 40%. In addition, a broker as to

disclose to the stock exchange details on gross exposure including name of the client, unique number under the SEBI (central database of market participants) regulations ,2003, and name of the scrip. If the broker has borrowed funds for the purpose of

providing margin-trading facility, the name of the lender and amount. Borrowed should be disclosed latest by the next day. The stock exchange, in turn, has to disclose the scrip-wise gross outstanding in margin accounts withal brokers to the market. Such disclosure regarding margin trading done on any day shall be made available after the trading hours on the following day.

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3. Surveillance Department :

One of the objectives of the Exchange is to promote and inculcate honorable and just practices of trade in securities transactions and to discourage malpractices. The Securites and Exchange Board of India (SEBI) had directed the stock exchange in August 1995 to set up a separate Surveillance Department with staff exclusively assigned to surveillance functions. The exchange has set up a separate SB to keep a close watch on price movement of scrips, detect market manipulations like price rigging, etc., monitor the member-brokers position to ensure that defaults do not occur. The SB monitors exposure of the members on a daily basis. It also scrutinizes the prices and volumes of the scrips on a daily basis.

As per the guidelines issued by SEBI, the exchanges are required to apply a daily Circuit Filter of 20% on all the scripts except on the scripts on which derivative products are available or are included in the indices on which derivative products are available. On these scripts exchange has imposed dummy circuit filters to avoid punching error by members, if any.

The imposition of circuit filters on scripts ensures that the price of the scrip cannot move upward or downward beyond the limit set for a day.

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The large variation in the prices as well as the volumes of the scripts are scrutinized and appropriate actions are taken. The scripts, which reach new high or new low and companies, which have high turnover, are watched. The prices and volumes in the newly listed scripts are monitored.

In case certain abnormalities are notices, then circuit filters are reduced to make it difficult for the price manipulators to increase or push down the prices of a script within a short period of time. The exchange imposes special margin in the scripts where it is suspected that there is an attempt to ramp up the prices by creating artificial volumes. The exchange imposes special margin in the scripts where it is suspected that there is an attempt to ramp up the prices by creating artificial volumes. The exchange also transfers the scripts for trading and settlement if a trade-to-trade basis would result into giving/taking delivery of shares on a gross level and no intraday/settlement netting off/squaring off facility would be permitted. In cases where the abnormal movements continue despite the aforesaid measures, trading in the scrip is suspended.

The exchange has developed an Online Real Time (OLRT) Surveillance System, which has been commissioned from July15, 1999.

Under this system, alerts are generated by the system online, in real time, based on certain preset parameters like the price and volume variation in scripts, members taking unduly large positions not commensurate with their financial positions or having concentrated

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positions in one or a few scripts etc. This system includes databases.

such as company profile, members profile and historical database of turnover and price movement in scripts, members turnover, their pay-ion obligations, etc. the system generates alerts on the basis of pre-set parameters during the trading hours and corrective action based on further investigations is taken in such cases.

4. Listing Department
Listing department of VSE lists the securities of corporate bodies at the Exchange by making an agreement with the companies, which fulfills the terms and conditions as required by VSE. This agreement is prepared in order to secure the rights of investors and to control/guide the risk of investor to some extent.

According to this agreement it is the duty of each company to inform VSE about any major decision which can affect the functioning of the company so that VSE can inform its member broker and in turn they can inform their respective clients who are investors in the company. Thus, the investors can decide upon whether to invest in the company or not and in this manner VSE controls/guides the risks of investors by informing them about the decision of the company in which they are investing.
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5. Accounts Department :
Accounts department at VSE does not have a wide scope. But in general its main activity is of handling monetary effects in cash and cheque for all companies i.e. Vadodara Stock Services Exchange Limited-Listing fee VSE Stock Services Limited-BOLT((Membership card of Mumbai Stock Exchange Collection of maintenance charges from members.

Collection of cheque for pay-in and pay-out bills from members and depositing the same. Pay-in and pay-out summary of rolling/regular and auction and settlement is inserted in PC and cheques of members are entered in pay- in slip. Thereafter it is deposited in bank and debit/credit take place in account of member as per the transaction. Depositing cheque of listing fee, which is collected for membership card of VSE Ltd. Billing of any material purchased for these 3 companies Calculating of monthly rent of BOLT terminals allotted to members Collection of maintenance charges from members.

6. Automation Department :
VSE Stock Exchange Ltd. Has around 90 sub- Broker their connectivity of Terminals with Mumbai Stock Exchange is Checked by Automation Department. it has to check the file of transaction sent to them by Mumbai Stock Exchange Every day .Thus this the work of Automation Department.

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7. Personnel Department

Personnel Department keep all the information of the employees. Following are the functions played by personnel Department. Man Power Planning Recruitment Promotion & Transfer Training Performance Appraisal

Exchange continues to focus on training needs of the employees. Efforts are directed toward upgrading the knowledge, skills and attitude of employee by deputing them to various workshops, seminars. Most of the staff members have been trained for depository operations and are holding DP System Certification.

8. Membership Department
As we have seen that the Listing Department lists the securities of corporate bodies at VSE. Whereas the Membership Department of VSE registers

individual persons as members of VSE and issues them a membership card. The main activity of this dept. is of record and registration of the members, Collecting turnover fee, Collecting audit reports and working as a middleman between SEBI and members of VSE. At present there are 290 members at VSE

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Minimum 3 years working as a member in a stock exchange is compulsory for multiple memberships. A person can become member of all recognized stock exchanges in India but only after providing the NOC of other stock exchange. If any of these members sell their membership card to other person then this dept. registers the name of other person at SEBI and transfers their name on the card after checking that whether he falls in the criteria for a member of VSE and no interview is conducted for him. In case if that person does not fall in the criteria to become a member of VSE than his membership card gets automatically canceled. SEBI has the right to cancel the membership card of any member due to any reason which SEBI feels satisfying.

VSE has stopped issuing more membership cards and making more members because at present these 307 members are also not functioning properly as market has slow down. To fasten the business of the members of VSE, VSE Securities Ltd. has become a member of The Mumbai Stock Exchange and so the members of VSE are becoming sub-brokers of The Mumbai Stock Exchange so that they can have a wide scope for their business. Until now 80 such members of VSE has become the sub-broker of The Mumbai Stock Exchange to get some business even from Mumbai

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9. Clearing House
VSE has its own Clearing House known as VSE Clearing House. As the depositories are important intermediaries in the securities market that is scripless or moving towards such a state. The principle function of depository is to dematerialize securities and enable their transactions in book-entry form.

Dematerialization of securities occurs when securities issued in physical form is destroyed and an equivalent number of securities are credited into the beneficiary owners account. All the players have to be conversant with the rules and regulations as well as with the technology for processing. The intermediaries in this system have to play strictly by the rules. A depository established under the Depositories Act can provide any services connected with recording of allotment of securities in the record of a depository. A depository cannot directly open accounts and provide services to clients. Any person willing to avail of the services of the depository can do so by entering into an agreement with the depository through any of its Depository Participants.

Depository Participant (DP)

A Depository Participant is describing as an agent of the depository. They are the intermediaries between the depository and the investors. The relationship between the DPs and the depository is governed by an agreement under the Depository Act, 1996. In a strictly legal sense, a DP is an entity who is registered as such with SEBI under the provisions of SEBI Act. As per this Act, a DP can offer depository related services only after getting certificate of registration from SEBI.

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Stock Exchange Works Like Human Body

Brain Function Automation Department Heart Function Account Department Veins & Vessels Banks

Right Hand NSE

Left Hand BSE

Kidney Function Right Leg NSDL Left leg CDSL Margin

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Brain Function

Automation Department

The human brain is the sources of the conscious, cognitive mind. The mind is the set of cognitive process related to perception, interpretation, imagination, memories, and crucially language of which a person may or may not be aware. The brain regulates autonomic processes related to essential body functions such as respiration and heart beat, especially through the autonomic nervous system.

Likewise automation department regulates the automatic process from brokers to exchange / exchange to brokers. Without automation stock exchange cannot exist, because all transaction take place through computerize network system. Automation work as intermediary of sub brokers to member-brokers(VSE) member-brokers to the BSE/NSE.

Heart function

Account Department

The heart is a specialized muscle that contracts regularly and continuously, pumping blood to the various parts of the body and the lungs. The pumping action is caused by a flow of electricity through the heart that repeats itself in a cycle.

Likewise account department works as a heart and pumps fund from brokers to BSE/NSE and BSE/NSE to brokers. Money is working like blood in human body. Account department works as a collection of cheques for pay in and get issue the cheques for pay-out to the client or sub-brokers
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Kidney function

Margin Department

Two kidneys are vital organs that perform many functions to keep blood clean and chemically. They are located near the middle of our back. Kidneys are sophisticated reprocessing machine. Every day our kidney process about 200 quarts of blood to sift out about 2 quarts of west product and extra water.

Likewise margin departments function is like kidney. The main function of margin department is to collect a margin for NSE/BSE pay-ins. Without margin no account physibility is possible. Margin department collects margin from various brokers for pay-ins to BSE/NSE. Few out of all brokers do fail to pay margin so their limit is decrease and in long-run of defaultment, there terminals also kept close for some time up to the settlement of margin.

Veins & Vessels

Banks

Veins are flexible and acted its activities in extreme condition. The vein valves are necessary to keep blood flowing towards the heart, but they are also necessary to allow blood to flow against the force of gravity. The vein valves provide footholds for the blood as it climbs its way up. Blood vessels are hollow tubes that circulate our blood.

Likewise banks also a perform the job of transferring funds from one place to another 24*7 for the easy settlement of the funds on both the ends (viz BSE/NSE & brokers).

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Two hands

BSE and NSE

Our two hands are same but some task being assigned to them is different, still they work like competitor. Same as in the stock market BSE and NSE is same but competitor company work as two hands in mechanism of stock market. Each and every broker has terminals of NSE & BSE and they works on both

Two legs

CDSL and NSDL

A man cannot stand or walk without their legs. Likewise stock market can Not stand or walk without CDSL / NSDL. Two autonomous bodies inter dependent for transferring securities, and holding securities of each other. This depositories are able to provide various services to the investors and clearing member.

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SWOT Analysis

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SWOT Analysis of VSE

Meaning of SWOT Analysis

A SWOT analysis is a method for describing the business in terms of those factors that have the most impact. Essentially the co. nominate the Strengths and Weaknesses of the business (its internal resources and capabilities), then it identify the Opportunities and Threats it faces (factors external to the organization). Strengths and weaknesses are often internal to your organization. Opportunities and threats often relate to external factors. For this reason the SWOT Analysis is sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix Analysis Tool

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Strength
Strength Means Positive things of Company. Strength is help to achieve market share. Strengths means what advantages do you have? What do you do better than anyone else? Following are the strength of Vadodara Stock Exchange Ltd.

Vadodara Stock Exchange Ltd. is directly Worked under Bombay Stock Exchange.

Vadodara Stock Exchange is SEBI Registered Company

Broker of Vadodara Stock Exchange are also SEBI Registered

Performance of Vadodara Stock Exchange is better then other stock Exchange of Gujarat.

It has more turnover then Rajkot Stock Exchange and Ahmedabad Stock Exchange.

There is 2 % Turnover in Bombay Stock Exchange.

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It is good Sign of Performance.

Vadodara Stock Exchange Ltd. arrange Investment Awareness Programmers time to time Thus Above are the strength of the vadodara Stock Exchange Ltd. Which it make differs from other stock exchanges and other Stock Broking companies.

Weaknesses
Weaknesses mean what could you improve? Weaknesses mean what Should you avoid? Following are the weaknesses of Vadodara Stock Exchange ltd.

Main Weakness of Vadodara Stock Exchange Ltd. is its turnover. The turnover of Vadodara Stock Exchange Ltd. is not enough according to the Security Exchange Board of Indias instruction.

Vadodara Stock Exchange ltd. is dealt only in Bombay Stock Exchange and National Stock Exchange. Vadodara Stock Exchange Ltd. is not Dealt in Mutual Fund, Gold, Systematic Investment Planning (SIP) and so on.

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Thus this weaknesses affect the performance of Vadodara Stock Exchange Ltd.

Opportunities
Opportunities means perceived opportunities in career that are not within it control but it can take advantage of such things.

Following are the such opportunities for Vadodara Stock Exchange Ltd.

Vadodara Stock Exchange ltd. has Great opportunity to Work at state level. Vadodara Stock Exchange merge with other Stock Exchange Like Ahmedabad Stock Exchange And Rajkot Stock Exchange. Opportunity to work under one name say Gujarat Stock Exchange ltd.

Thus Above are the opportunity of Vadodara Stock Exchange.

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Threats
Threats Means What obstacles are face the company. what are competitors of company doing that company should worried about?

Following are the threats of Vadodara Stock Exchange Ltd.

The main threat of Vadodara Stock Exchange Ltd. is market.

People are withdraw there funds from capital market and kept in safe place say banks , posts, Government Bond and so on.

The share market is volatile there fore people have no trust on market

Therefore there is reduction in number of people who traded in share market.

Thus these are the threats of Vadodara Stock Exchange Ltd.

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AWARD Milestone of Vadodara Stock Exchange

Year 1990 1996 2000

2000

2005 2009 2009

Achievements of VSE Vadodara Stock Exchange was accorded recognition by the Government of India as a Stock Exchange. Gone For Live Electronic Trading. Incorporation of wholly owned subsidiary VSE stock services Ltd. (VSSL) And Acquired Membership of NSE & BSE . Commencement of online , Real Time Depository participants Services CDSL. Commencement of Trading on NSE cash segment in VSSL. Commencement of Trading in Derivative(F&O)Segment of NSE Membership of MCX SX currency Derivative Segment.

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Milestone of Vadodara Stock Services Ltd.

Year May 2000 February 2005 May 2009 March 2009

Achievement Commenced operation in CM segment of BSE Ltd. Commenced operation in CM segment of NSE Commenced operation in Derivatives Membership of MCX SX for Trading in currency Derivatives.

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Special Task

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Introduction to the study

My project is based on the title of Functioning of Stock Exchange. It means how the stock Exchange works. Stock Exchange is works Like Human Body. There are mainly eight functions which are played by the Vadodara Stock Exchange Ltd. Main function of Vadodara Stock Exchange Ltd. is Brain Function .Brain Function means Automation Department. Automation Department is Works like Human Brain. Without Brain no one is live same as without automation Department no stock Exchange is exists. Other important function of Stock Exchange is Heart Function . No person can exists without Heart same as without Account Department no one stock Exchange is exists. Heart Function is compared with Account Department. Veins and Vessels are compared with Banks .Like wise Right hand od Vadodara Stock Exchange is National Stock Exchange. Left hand of VSE is Bombay Stock Exchange. Kidney Function of stock Exchange is Margin Department. Left leg of Vadodara Stock Exchange Ltd. is CDSL. And Right leg of VSE is National Stock Services Limited. Thus above are the function of stock Exchange

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Objective of the Study

Main objective of this study is to know about stock Exchange. How Stock Exchange works. How stock Exchange Functioning. Also know about how investors invest in share market.

Limitation of the Problem

Main Limitation of the study is Response. No one personnel has enough time to help in this study. Every personnel is busy. So there is less response of person of the organization. People are reluctant towards the survey and take it as a waste of time. Cold callings were not entertained everywhere and thus we were not able to meet all the classification of customers. Investor has also not time to give my answer of the questions properly. Thus this is the Limitation occur during this Study.

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Sampling Method
Sampling methods are used to select a sample from within a general population. Proper sampling methods are important for eliminating bias in the selection process. They can also allow for the reduction of cost or effort in gathering samples. Common methods of sampling include simple random sampling (completely random selection from the population), systematic sampling (ordering the population and selecting at regular intervals), stratified sampling (splitting the population into categories and randomly selecting from within each category), matched random sampling (population is divided into pairs based on a criterion and then randomly assigned to groups), and panel sampling (applying the same test over time to randomly selected groups).

There are two types of collection of Data

A. Primary Data

B. Secondary Data

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A. Primary Data
Primary Data means Data Collected directly from person. Primary Source of my data collection is personnel who worked in the Vadodara stock Exchange Ltd. Most of the data are collected from the HR Manager of Vadodara Stock Exchange Ltd. Other Data are collected from various Department of Vadodara Stock Exchange . like Settlement Department ,Margin Department ,Surveillance Department Account Department Automation Department, HR Department Membership Departed.

B. Secondary Data
Secondary Data means Data Which are collected not from directly .it is collected indirectly. Generally it is collected from Internet or Reference Books

Collection of my Secondary Data is from internet. It is collected from various Sites. like www.vseindia.com , www.bseindia.com and so on. I had also collect the secondary data from the annual Report of Vadodara Stock Exchange Ltd.

For practical knowledge primary Data is better than secondary Data.

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Analysis & interpretation

Stock Exchange means an organized marketplace, either corporation or mutual organization, where members of the organization gather to trade company stocks or other securities. The members may act either as agents for their customers, or as principals for their own accounts. Stock exchanges also other financial The record

facilitates for the issue and redemption of securities and

instruments including the payment of income and dividends.

keeping is central but trade is linked to such physical place because modern markets are computerized. The trade on an exchange is only. The performance of Vadodara Stock Exchange Ltd. is better then other Stock Exchange of Gujarat. There are three stock Exchange in Gujarat Like Rajkot Stock Exchange, Ahmedabad Stock Exchange and Vadodara Stock Exchange. But Out of three the performance of Vadodara Stock Exchange ltd. is better then other. Turnover of Vadodara Stock Exchange is more then other Stock Exchanges. Vadodara Stock Exchange has 3% share in Bombay Stock Exchange. Vadodara Stock Exchange is Worked under Bombay Stock Exchange. Bombay Stock Exchange is also called as Sensex. Sensex is the barometer of india. It Shows the condition, position of india. Stock Exchange of the country shows the Growth of the country. Stock Exchange is the Mirror of any country.

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The performance of Stock Exchange is not only Depend on Buying and Selling of Shares. It is Depend on lots of things. Indias stock Exchange is Called Sensex Which Means Sensitivity Index. It is Globally connected . Sensex

Shows the Economic Condition of the country. it is worldwide connected for example if the Euro zone crisis it will affect the Sensex. Policy of Indian Government also affects the Indian Stock Exchange. Credit Rating Agency also affect the Indian Stock Exchange. If American Credit rating Agency S&P Downgrade the Indian Economy it will defiantly affect the Sensex.

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Suggestions
Strong Point of Promotion

Vadodara Stock Exchange should promote their strong points to compete with other broking firms.

VSE has its own clearing house. They provide services through other brokers in three places apart from VSE like Anand, Bharuch, Surat. It has huge 63000 plus DP accounts but brokers for all of these is not VSE brokers. So VSE should target those accounts who have their accounts with other brokers.

VSE has very low charges of DP services of VSE Clearing house compared to other DP service providers. So they should undertake marketing activities to promote such low charges.

Many VSE brokers have DP accounts with other firms. So VSE should promote its DP services among VSE brokers.

VSE should try to provide DP services to broking firms. Thus this can be a major source or revenue if efforts are made in this direction. As the charges are already less the distribution network of broking firms can be used to increase the account base.

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Setup a Marketing Team

VSE should set up a marketing team for promotion of their strong points which we discussed above. Calcutta Stock Exchange already have a marketing team, so VSE should take cue from it and set up a marketing team.

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Steps To Be taken to Continue to Exit as BSE

Demutualised stock exchanges have usually listed on the stock exchange itself and regulatory conflicts have been addressed through specific provisions in the listing agreement. This will lead to better corporate governance.

Due to the access to the national trading platform through the subsidiary route has reduced the incentive of VSE to trade in its own cash segment. So VSE should make efforts to re-commence trading in the shares which are exclusively listed on the exchange by joining with some other RSE and forming an alternative trading platform.

After recommencing trading in its cash segment VSE should also diversify in the derivatives & commodities. Only being in equity isnt going to work in the long run. In order to survive in the competitive market VSE should provide an electronic equities exchange for the shares listed on the exchange. It can also create a platform for book building for initial public offerings (IPOs). The exchange can try to create its own distinct identity once trading starts in its cash segment. For instance, Nasdaq in US is renowned for technology companies. Similarly, AIM at London attracts SMEs from all over the world. Thus they can study the pattern of transactions happening to create their own niche.

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Annexure

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Questioner
1. Name : 2. Age :

3. Mo. No.: ___________________________

4. Email id: _____________________________________ 5. Profession: Home- maker Student Job Business

6. Approx. Annual Income: Up to Rs. 1 Lac Rs. 1 Lac to Rs. 3 Lac Rs. 3 Lac to Rs. 5 Lac Rs. 5 Lac and above

7. From your total income approx. how much do you save annually? 0% to 20% 21% to 40% 41% to 60% 60% and above

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8. How much risk would you bear in your investment returns?

High Moderate Low

9. How do allocate your savings? Please specify by Percentage:

FD Savings A/c Gold/ Silver Real Estate PPF Insurance Mutual funds Post Stock Investment

Shares Debentures Bonds

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10. How frequently do you trade? Intraday Settlement basis- 5 days a week Weekly Monthly 6 monthly Yearly/ Occasionally Based on share price fluctuations

11. How frequently do you review/ modify your total investment portfolio? Monthly Bimonthly Monthly Yearly Rarely

12. When do you invest in stock market? When market is bearish When market is bullish Any other please specify, like SIP

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13. How do you go about investing in shares of a company?

Brokers advice Through the Market tips Advice of surrounding people TV business channels Self study fundamental analysis of a company

13. In stock market, in which financial instruments do you invest? Equity shares Debt/ bonds Listed Companys FDR Mutual Fund 14. How do you select a broker? From family/ friend Registered broker with SEBI Experience in stock market Knowledge in stock market Reference group advice Low brokerage Company

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15.From which source do you get inspired to invest in stock market? Reference groups Market tips Electronic media: TV news Business channels Internet Print media: News papers Company bulletins Advertisements of a company Reports of a company Expert advice Self- study

16. What efforts do you put for gaining knowledge about stock market?

Analyze market fluctuations own self regularly Attend investor awareness programs conducted by VSE and other organizations Attend training conducted by such organizations Take expert advices Qualify through various exams conducted by BSE/ NSE

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Bibliography
Reference Sites
www.vseindia.com www.bseindia.com http://www.sebi.gov.in/corpo/vadodaraorder.html http://www.munothfinancial.com/stock_faq.php http://pareesinvestments.blogspot.in/2011/09/role-of-stockexchange-in-development.html http://www.mapsofindia.com/vadodra/trade-and-industry/stockexchange.html

Reference Books
BSEs Certificate on Securities Working of Bombay Stock exchange Annual report of Vadodara Stock Exchange

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