Trading Membership

Trading Membership
/ p / / p
•Individuals / Partnerships / Institutions / Corporate
•Should not be Bankrupt
•Should not have been convicted for fraud (provides wrong    
audited accounts)
•Should not have been expelled / declared a defaulter by any         
other Stock Exchange (showing misleading returns Market 
other Stock Exchange (showing misleading returns,  Market
manipulation)
•Should not have been debarred by SEBI, RBI etc.(disobedience 
of rules and regulations of SEBI)
•Should be graduates.
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•Should have experience of at least 2 yrs in Stock broking sector.
 Market Segments
Market Segments
• Capital Market
Capital Market
• Wholesale Debt Market (WDM)
• Derivatives (F&O)
Derivatives (F&O)
Eligibility Criteria
Eligibility Criteria
 Additional Base Capital
Additional Base Capital
• Cash
Cash 
• Bank Guarantee
• FD Receipts
FD Receipts
 Broker – Client Relations
Broker  Client Relations
• KYC
KYC (Know Your Client)
(Know Your Client)
• Unique Client Code (PAN Compulsory)
• Contract Note (issued within 24 hours) to be signed 
Contract Note (issued within 24 hours) to be signed
by Authorised Signatory
• CN to have Reg. Office address and Dealing office 
CN to have Reg. Office address and Dealing office
address
• ECN
• Brokerage (max. 2.5% of traded value)
• Sub
Sub‐broker
broker (max. 1.5% of traded value)
(max. 1.5% of traded value)
Contract note
 Dispute, Arbitration
Dispute, Arbitration
• Investor Grievance Cell
Investor Grievance Cell
• Arbitration (Mumbai, Delhi, Chennai, Calcutta)
• Within Six months of Dispute
Within Six months of Dispute
• 1 Arbitrator if claim amount < Rs. 25 lacs
• 3 Arbitrators if claim amount > Rs 25 lacs
3 Arbitrators if claim amount > Rs. 25 lacs
• If claim amount < Rs. 25,000, no need to hold 
meeting
 Benefits of Trading Membership
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1 Access
1. Access to nation wide trading facility for equities , derivatives 
to nation wide trading facility for equities derivatives
and    debt.
2. Ability  to provide  a fair, efficient and  transparent 
securities mkt. to investors.
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3. Use of state‐of –the‐art trading systems and technology.
4. Dealing with an organization which follows strict standards 
for trading and settlement.
5. A demutualised exchange which is managed by experienced 
and independent professionals
and independent professionals
6. Dealing with an organization which is constantly  striving to 
move towards a global mkt.
 Questions
• If a client buys shares worth Rs. 1,25,000 and sells shares worth Rs.75,000 
through a sub‐broker, then the maximum brokerage payable to him is [ 2 Marks ] 
or [ 3 Marks ]

Solution: [125000 + 75000 ] * 1.5% = 3000

Traded Value

• If a client buys shares worth Rs. 90,000 and sells shares worth Rs. 1,10,000 
through a stock‐broker, then the maximum brokerage payable is. [ 2 Marks ] or  
[ 3 Marks ]

Solution: [ 90000 + 110000 ] * 2.5%

2 5% = 5000

Traded Value
•If a client buys 1000 shares at the price of 90 per share through a
sub-broker, then the maximum brokerage payable
to him is [ 2 Marks ] or [ 3 Marks ]

Solution: [1000 *90 ] * 1.5% = 1350

Traded Value