1

SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

I , M r. B h a v i k T. S u r a n i a s t u d e n t o f M . B . A - SE M . I V h er e b y
d e c l a r e t h a t t h e p r o j e c t w o r k p r e s e n t e d i n t h i s r e p o r t i s my
contribution and has been carried out under the supervision of
M r.A L P E S H S H A H o f

SHREE H.N.SHUKLA COLLEGE OF

M G T. S T U D I E S , R A J K O T.

The

objective of training undertaken is to get specialized

knowledge in specialized field, which further sharpen the skill

and practically in the specialization.

Date:

Signature

Place: Rajkot

S U R A N I B H AVI K TAP U L A L

2
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

I t i s a g r e a t p l e a s u r e f o r me t o g e t g o l d e n o p p o r t u n i t y t o h a v e
s u m me r t r a i n i n g i n f i n a n c i a l s e c t o r l i k e A n g e l B roki n g L t d .
I n c o mp l e t i n g t h i s p r o j e c t ma n y p e o p l e a r e i n v o l v e d d i r e c t l y a n d
i n d i r e c t l y. Th e y g u i d e u s a n d h e l p i n p r e p a r i n g p r o j e c t a n d i n
i n d i r e c t l y. Th e y g u i d e u s a n d h e l p i n p r e p a r i n g p r o j e c t a n d i n
r e c e i v i n g p r a c t i c a l k n o w l e d g e . Amo n g a l l I a m v e r y t h a n k - f u l l t o
b r a n c h m a n a g e r M r. Vij a y Po p a t , M r. S a me e r J u n e j a ( B u s i n e s s
D e v e l o p e r ) a n d a l s o I t h a n k f u l t o a l l s t a ff m e m b e r s o f A n g e l
B rok i n g L t d . F or h e l p i n g a n d g u i d i n g m e i n my p r o j e c t .

F i n a l l y I t h a n k t o a l l my g u i d e s a n d my f r i e n d s w h o h e l p s me i n
my p r o j e c t d i r e c t l y or i n d i r e c t l y.

Date:

S u r a n i B h a v i k Tap u l a l

Place:Rajkot

MBA-IVth sem

3
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

A s a p a r t o f 4 t h S E M . S y l l a b u s o f M B A . I w a s vi s i t e d A n g e l
B rok i n g L t d . C o m p a n y f o r pr a c t i c a l t r a i n i n g a n d a l s o s t u d i e d o n
t h e w o r ki n g o f i t s d i ffe r e n t s e r v i c e s a n d p r e p a r e r e p o r t o n
particular topic. I felt that this unit is being run superbly by
e x c e l l e n t m a n a g e me n t t e a m, R e s e a r c h t e a m a n d e mp l o y e e s c o operation.
It is universal truth that every work has two aspects.In education,
w e c a n a p p l y t h i s a p p r o a c h . I n e q u a t i o n ar e t h i n g i s t h e o r e t i c a l
aspects.

Management

student

must

have

pr a c t i c a l

aspects.

M a n a g e me n t s t u d e n t s h a v e a s o m e p r a c t i c a l k n o w l e d g e a b o u t
b u s i n e s s . O u r pr a c t i c a l k n o w l e d g e h e l p s u s t o f a c e a pr o b l e m n o t
theoretical
I t i s my p l e a s u r e t o p r e s e n t w o r k a f t e r I h a d f i n i s h e d my
t r a i n i n g a t A n g e l B rok i n g L t d . R aj ko t . Th i s t r a i n i n g h a s
e x p a n d e d my h or i z o n o f k n o w l e d g e i n p r a c t i c a l a s w e l l a s
t h e o r e t i c a l w h i c h a r e v i t a l f o r a ny s t u d e n t i n m a n a g e me n t l e v e l
s t u d i e s . Af t e r c o mp l e t i o n o f t h i s t r a i n i n g I c o me t o k n o w t h a t
w h e n w e s t u dy t h e o r y b u t p r a c t i c e i t i s v e r y d i ffi c u l t t o
understand.
4
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

INDEX
(A) INDIAN FINANCIAL SYSTEM
o Indian Financial Market
o Financial Market
o Capital Market
o Developm ent Of Stock Market In India
o Financial Instrument In India
o BSE
o NSE
(B) ANGEL AS A DEPOSITORY PARTICIPANT
o History
o Branches
o Mission Visions Statem ent
o Goals And Objective
o Core-Com petence
o Business Philosophy
o Problem And Opportunity
o Market Summery
o Birds Eye View Of Different Department
o Product Of The Angel
5
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

(C) RESEARCH METHODOLOGY

(D) DATA ANALYSIS
(E) TESTING THE HYPOTHESIS
(F) FINDING AND SUGGESTIONS
(G) BIBLIOGRAPHY

WHY INVEST

I f y o u w er e t o o p e n a b o o k o n e c o n o m i c s a n d l o o k u p t h e
wordinvesting,chances are that you would find the following d
efinition:Investing is building up to meet future consumption
d e ma n d s w i t h t h e i n t e n t i o n o f ma k i n g s u r p l u s e s or p r o f i t s , a s
they are popularly known.
W h i l e t h e l i f e e x p e c t a n cy o f t h e a v e r a g e h u ma n b e i n g h a s
i n c r e a s e d , w e a r e pr o d u c t i v e o n l y b e t w e e n t h e a g e s o f 3 0 t o 6 0
y e ar s . H e n c e t h e s h o r t t i me s p a n t h a t w e a r e a b l e t o e a r n m o n e y
needs to provide for our future when we may not be capable of
earning.
E v e r y t hi n g b e i n g t h e s a me , We c o u l d k e e p a w ay a p a r t o f o ur
e a r n i n g s e v e r y y e a r t h a t w i l l c o me i n h a n d w h e n w e w i l l n o t b e
a b l e t o e a r n . H o w e v e r i n f l a t i o n d e s t r oy s t h e v a l u e o f w h a t w e
s a v e . A s u m o f 1 0 , 0 0 0 s a v e d t h i s y e ar w i l l n o t h a v e t h e s a me
p u r c h a s i n g p o w er 1 0 y r s . d o w n t h e l i n e . H e n c e w e n e e d t o
p r e s e r v e t h e p ur c h a s i n g p o w e r o f w h a t w e s a v e .
6
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

The

only

way

to

hedge

inflation

is

to

invest

in

shares,

d e b e n t u r e s , b o n d s , g o l d or r e a l e s t a t e , t o e a r n r e t u r n s f r o m t h e s e
a s s e t s t h a t c o mp e n s a t e f o r t h e d e c l i n e i n o u r p ur c h a s i n g p o w e r.

7
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

WHAT IS SHARE?
S h a r e o r E q u i t y r e pr e s e n t s p ar t of an o wn e r s h i p o f a
b u s i n e s s . S o a s a s h ar e h o l d er yo u o wn a p i e c e of t h e
a c t i o n t h a t h a p p e n s i n t ha t b u s i n e s s . W h y wo u l d yo u wa n t a
piece of the action?
F o r t h e r e wa r d s o f c o ur s e . As a sh a r eh o l d e r yo u h av e a
r i g h t o v e r t h e p r o f i t s g e n er a t e d b y yo u r b u s i n e s s . You r
c o m p a n y m i g h t p a y o u t t h e p r o f i t s g e n er a t e d ev er y ye a r a s
d i v i d e n d s o r i t m a y r e t a i n t h e pr o f i t s t o f u r t he r gr o w t h e m .
T h e r e s a n o t h e r wa y yo u a s a s ha r e h o ld e r c an m a k e m o n e y.
I f yo u r c o m p a n y d o e s we l l , t h e n i t s s ha r e s l i s t ed o n t h e
s t o c k m a r k e t b e c o m e m o r e v a lu a b l e a nd t h e s t o c k pr i c e
a p p r e c i a t e s . O n t h e o t h er ha n d , t h e c o m p a n y m i g h t pe r f or m
b a d l y. Th e n n o t o n l y d o yo u n o t g e t d iv i d en d s bu t t h e s t o c k
p r i c e al s o d e c l i n e s . He n c e i nv e s t i ng i n s h ar e s i s a r i s k y
proposition.
W h e n yo u in v e s t i n s h a r e s , yo u c a n e x pe c t c e r t a i n r e t u r n s
b a s e d o n t h e f u n d a m e n t a l s o f a b u s i n e s s . H o we v e r yo u
h a v e n o c o n t r o l o v e r i t . W h at yo u h av e c o n t r o l ov er i s
m a n a g i n g r i s k s a s s o c i a t e d wi t h i t .

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

INDUSTRY OVERVIEW

INTRODUCTION
S t o c k e x c h a n g e s t o s o m e e x t e n t pl a y a n i mp o r t a n t r o l e a s
i n d i c a t o r s , r e f l e c t i n g t h e p e r f o r m a n c e o f t h e c o u n t r y s e c o n o mi c
s t a t e o f h e a l t h . S t o c k ma r k e t i s a pl a c e w h e r e s e c u r i t i e s a r e
bought and sold. It is exposed to a high degree of volatility;
p r i c e s f l u c t u a t e w i t h i n m i n u t e s a n d a r e d e t e r mi n e d by t h e
d e ma n d a n d s u p p l y o f s t o c k s a t a g i v e n t i me . S t o c k b r o k er s a r e
t h e o n e s w h o b uy a n d s e l l s e c u r i t i e s o n b e h a l f o f i n d i v i d u a l s a n d
i n s t i t u t i o n s f o r s o me c o m mi s s i o n .
T h e S e c ur i t i e s a n d E x c h a n g e B o a r d o f I n d i a ( SE B I ) i s t h e
authorized

b o dy,

which

r e g ul a t e s

the

operations

of

stock

e x c h a n g e s , b a n k s a n d o t h e r f i n a n c i a l i n s t i t u t i o n s . Th e p a s t
p e r f o r ma n c e s i n t h e c a p i t a l m a r k e t s e s p e c i a l l y t h e s e c u r i t i e s
scam by Hasrshad Mehta has led to tightening of the operations
b y S E B I . I n a d d i t i o n t h e i n t er n a t i o n a l t r a d i n g a n d i n v e s t m e n t
e x p o s u r e h a s m a d e i t i mp e r a t i v e t o b e t t e r o p e r a t i o n a l e ffi c i e n c y.
Wit h

the

view

to

i mp r o v e ,

discipline

and

bring

greater

t r a n s p a r e n c y i n t h i s s e c t o r, c o n s t a n t e ffo r t s a r e b e i n g m a d e a n d
t o a c e r t a i n e x t e n t i mp r o v e m e n t s h a v e b e e n m a d e .

9
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

HISTORY OF THE BROKING

I n d i a n S t o c k M a r k e t s ar e o n e o f t h e ol d e s t i n As i a . I t s h i s t o r y
d a t e s b a c k t o n e a r l y 2 0 0 y e ar s a g o . Th e e a r l i e s t r e c o r d s o f
s e c u r i t y d e a l i n g s i n I n d i a a r e me a g e r a n d o b s c u r e .
B y 1 8 3 0 ' s b u s i n e s s o n c o r p or a t e s t o c k s a n d s h a r e s i n B a n k a n d
C o t t o n pr e s s e s t o o k p l a c e i n B o mb a y. Th o u g h t h e t r a d i n g l i s t
w a s br o a d e r i n 1 8 3 9 , t h e r e w e r e o n l y h a l f a d o z e n br o k e r s
r e c o g n i z e d b y b a n k s a n d m e r c h a n t s d ur i n g 1 8 4 0 a n d 1 8 5 0 . Th e
1 8 5 0 ' s w i t n e s s e d a r a p i d d e v e l o p me n t o f c o mm e r c i a l e n t e r pr i s e
a n d b r o k e r a g e b u s i n e s s a t t r a c t e d ma n y me n i n t o t h e f i e l d a n d by
1 8 6 0 t h e n u mb e r o f br o k e r s i n c r e a s e d i n t o 6 0 .
I n 1 8 6 0- 6 1 t h e Ame r i c a n C i v i l War br o k e o u t a n d c o t t o n s u p p l y
from United States of Europe was stopped; thus, the 'Share
M a n i a ' i n I n d i a b e g u n . Th e n u mb e r o f b r o k er s i n c r e a s e d t o a b o u t
2 0 0 t o 2 5 0 . H o w e v e r, a t t h e e n d o f t h e Ame r i c a n C i v i l War, i n
1 8 6 5 , a d i s a s t r o u s s l u mp b e g a n ( f o r e x a mp l e , B a n k o f B o mb a y
Share which had touched Rs 2850 could only be sold at Rs. 87).
A t t h e e n d o f t h e Am e r i c a n C i v i l War, t h e br o k e r s w h o t h r i v e d
o u t o f C i v i l War i n 1 8 7 4 , f o u n d a p l a c e i n a s t r e e t ( n o w
appropriately

called

as

Dalal

Street)

where

they

would

conveniently assemble and transact business.

10
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

I n 1 8 8 7 , t h ey f o r ma l l y e s t a b l i s h e d i n B o mb a y, t h e " N a t i v e S h ar e
a n d S t o c k B r o k e r s ' As s o c i a t i o n " ( w h i c h i s a l t er n a t i v e l y k n o w n
a s " T h e S t o c k E x c h a n g e " ) . I n 1 8 9 5 , t h e St o c k E x c h a n g e a c q u i r e d
a p r e mi s e i n t h e s a m e s t r e e t a n d i t w a s i n a u g u r a t e d i n 1 8 9 9 .
T h u s , t h e S t o c k E x c h a n g e a t B o mb a y w a s c o n s o l i d a t e d .
T h u s i n t h e s a me w a y, g r a d u a l l y w i t h t h e p a s s a g e o f t i me
n u mb e r o f e x c h a n g e s w e r e i n cr e a s e d a n d a t c u r r e n t l y i t r e a c h e d
to the figure of 24 stock exchanges.

ORGANIZATION
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

11

HISTORY:I n a s h o r t s p a n o f 1 8 y e ar s s i n c e i n c e p t i o n , Th e An g e l Gr o u p h a s
e me r ge d a o n e o f t h e t o p 5 r et a i l s t o c k b r o k i n g h o u s e s i n I n d i a ,
having

memberships

on

BSE,

N SE

and

the

two

leading

c o mm o d i t y e x c h a n g e s i n t h e c o u n t r y i . e . N C D E X a n d M C X .
A n g e l B r o k i n g L t d i s a l s o r e gi s t e r e d a s a d e p o s i t o r y p a r t i c i p a n t
w i t h C D S L . I t i s t h e o nl y 1 0 0 % r e t a i l s t o c k br o k i n g h o u s e
o ffe r i n g

a gamut of

retail

centric services

like Research,

I n v e s t m e n t A d v i s o r y, a n d Wea l t h M a n a g e me n t S e r v i c e s - B r o k i n g
& C o mm o d i t i e s t o i n d i v i d u a l i n v e s t o r.
T h e g r o u p i s p r o mo t e d by M r. D i n e s h T h a k k a r w h o

started

t hi s

b u s i n e s s a s a s u b - br o k e r i n 1 9 8 7 w i t h a t e a m o f 3 . a n d t o d a y
p r o f e s s i o n a l l y ma n a g e d b y a t e a m o f 1 8 7 1 + d i r e c t e mp l o y e e s . I t
h a s a n a t i o n w i d e n e t w o r k c o mp r i s i n g 1 2 R e g i o n a l C e n t e r s , 6 0
b r a n c h e s , 2 4 0 8 + r e gi s t e r e d s u b b r o k e r s a n d b u s i n e s s a s s o c i a t e s a n d
6 2 2 7 + a c t i v e t r a d i n g t e r mi n a l s w h i c h c a t e r t o t h e r e q u i r e me n t s o f
205610+ retail clients.
A t An g e l , I t h a b i t u a l l y g e n e r a t e v a l u e a d d e d f e a t u r e s w i t h o u t t h e
c o s t b ur d e n b e i n g p a s s e d o n t o t h e c l i e n t s a s w e s t r o n gl y b e l i e v e
t h a t b e t t e r u n d e r s t a n d i n g o f c l i e n t s n e e d s a n d w a n t s i s o u r t o p
p r i or i t y. O u r e - br o k i n g f a c i l i t y i s o n e s u c h e ffo r t , w h i c h g i v e s y ou
a p l a t f o r m t o a c c e s s s t a t e o f t h e ar t t r a d i n g f a c i l i t y a t t h e c l i c k o f
a button.

BRANCHES
12
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

Andheri (west)
Borivali(west)
Fort
Goregaon(west)
Malad(west, east)
Santacruz(west)
Ahemdabad
Baroda
Hyderabad
Pune
Surat

Bandra(west)
Chembur
Ghatkoper(east)
Kalbadevi
Mulund(west)
Vilen parle(west)
Ankleshwar
Delhi
Indore
Rajkot

GOALS & OBJECTIVES

Five-year goals
State specific measurable objectives
State market share objectives
State revenue/profitability objectives

Financial Plan
High-level financial plan that defines financial model, pricing assumptions,
and reviews yearly expected sales and profits for the next three years.
Use several slides to cover this material appropriately

13
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

Resource Requirements
Technology requirements
Personnel requirements
Resource requirements
Financial, distribution, promotion, etc
External requirements
Products/services/technology required to be purchased outside company

MISSION STATEMENT
The main mission statement of angel broking ltd is to be on top in and around
Rajkot and Saurashtra peninsula with the help of retail, bulk and past business
within three years.
For FY 06-07 focus will be on Bulk business from existing sub-brokers of
competitors by giving those competitive pricing, better connectivity and Post
trading Back-up software in post centralized and direct billing era.

VISION STATEMENT
To provide best value for money to investors through innovative products trading
investments strategies state of the art technology and personalized service

BUSINESS PHILOSPHY
This firm is working with philosophy that ethical values and transparency should
be followed and customers interest should be given preference and deliver it what
angel had promise to provide with effective cost management.

14
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

CORE COMPETENCE
Top quality research & portfolio advisory services for equities
Retail focused research products
Robust internet trading facility
Commodities research & broking services
Depository services through CDSL
Web based 24 x 7 back office software
Good understanding of the sub-broker and retail customer needs
Professional work culture with a personal touch
Cost- effective processes
State-of-the-art technology
Streaming quotes & real time charts for bse /nse [cash / derivatives]
Single connectivity and speedy execution of trades.
Private v-sat network for remote areas.
Online technical support & help desk.

UNIQUENESS OF ANGEL
100% retail focus
BSE / NSE cash, F&O & commodities on a single screen
flexible margins/ exposure limits
Personalized services through centralized help desk and 25 branches.
cost effective technology
15
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

MARKET SUMMARY
Major players are Angel, SSKI, MOST, Karvi, Anagram, India Bull, Kotak in
retail segment.
Marwadi and Ajay Natwarlal in sub-broker networking segment.
Market: Retail _SSKI and MOST are considered successful among rest
mainly because of good research, aggressive pricing, Margin Funding and
spacious and well ambient office.

16
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

BIRDS EYE VIEW OF DIFFERENT DEPARTMENTS

TRADING DEPARTMENT

27

PRE-TRADING

28

ACCOUNT OPENING FORM

DEPOSITS
COMPLIENTS
TRADING

32

DEALING ROOM
SAUDA PUNCHING
CONFORMATION
POST TRADING

45

CONTRACTS
BILLS
PAYIN AND PAYOUT PROCESS
BACK OFFICE DEPARTMENT

48

DP DEPARTMENT

49

DEMAT ACCOUNT
ACCOUNT OPENING
DEMATERIALISATION
REMATERIALISATION
PLEDGE /HYPOTHECATION

17
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

BIRDS EYE VIEW OF DIFFERENT DEPARTMENT

Introduction
Same as all the firms angel broking ltd has different department. It had mainly
three departments which are as follows:
Trading department
Back office department
DP department

TRADING DEPARTMENT
Introduction
Angel is one of the broker who is acting as wholesalers and as a broker it is the
duty of it to provide service of collecting funds and securities from the investors
and send it to clearing house respectively for this an account is to be opened ie
trading account. According to SEBI investor has to open trading account, he can
open an account in any depository but investor should not be partnership firm or
proprietorship firm.
Trading department is again divided into three parts
Pre-trading
Trading
Post-trading

18
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

Pre-trading
Any person who wants to open an trading accounts first of all pre-trading activity
is done which include:
Account opening
Deposits
Complients
ACCOUNT OPENING PROCEDURE

19
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

I. First client will ask for opening trading account

II. The Angel will give proof details and client will have to fill up form and
submit to Angel with documents required
III. Collection of form from the client
IV. Cheking of the form
V. Scanning of the form
VI. Then this form will be dispatch to H.O
VII. Angel branch will have Collection of code by email or manually
20
SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

VIII. Now inform client or sub broker through phone or email about internet Id
IX. Now client will be able to trade

Closing procedure
I. First client will give written request for closing an account
II. Then this request is forwarded to H.O
III. At last H.O will inform branch that account has been closed whole
procedure about closing will be done at H.O
IV. Angel will inform client about closing of account

Deposits
Retail client:
Cash market
Intra-day
Delivery

Minimum Rs 5000
Rs 10000
Rs 5000 (rare case)

Sub broker:
For one segment
For all five segments

100000 cash or share (flexible)

350000 if client wants Vast 150000
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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

which
include
installation
,transportation charges etc

Complients
Part-A Demat-(photo proof)
Pan card
Driving license
Election card
Bank attestation
Part-B (Residence proof)
Bank passbook
Ration card
Electric Bill
Telephone Bill
LIC policy
Blank Cancelled cheque without signature

Trading Account proof

Following are the proof required for opening trading account.

Client master copy (DP proof)

Pan card for photo proof/form-60
Any one from Part-A
Any one from Part-B

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

TRADING
After pre-trading next comes trading which include:
Dealing room
Sauda punching
Conformation

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

Dealing room

Dealing room is the rooms where dealing of different securities are done which
include:
NSE Cash
BSE Cash
NSE Derivatives

TRADING IN NSE, BSE AND DERIVATIVES

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

TREADING

BSE

CASH
MARKET

NSE

CASH
MARKET

DERIVATIVE
MARKET

TRADING IN NSE

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

15 july, 2006

NSE NEAT Market

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 1.5 seconds. NSE has been continuously undertaking capacity enhancement
measures so as to effectively meet the requirements of increased users and
associated

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

trading loads. With recent up gradation of trading hardware, NSE can handle up
to 6 million trades per day. NSE has also put in place NIBIS (NSE's Internet
Based Information System) for on-line real-time dissemination of trading
information over the Internet.
As part of its business continuity plan, NSE has established a disaster back-up
site at Chennai along with its entire infrastructure, including the satellite earth
station and the high-speed optical fibre link with its main site at Mumbai. This
site at Chennai is a replica of the production environment at Mumbai. The
transaction data is backed up on near real time basis from the main site to the
disaster back-up site through the 2 mbps high-speed link to keep both the sites all
the time synchronized with each other.

Trading in BSE
The transaction of BSE is done in bolt software. The BSE On-Line Trading
system (BOLT) is designed and developed by CMC Ltd. . . . It is a simple to use,
screen-based computer trading system. You can trade on the all scripts using this
system. This is a primary guide on how to use the BOLT system.
The BOLT system aims at converting the Open Outcry system of trading to a
screen-based system. You, as a trader on the BOLT system can input orders.

WHAT IS BOLT?

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

BOLT is CMC's implementation of the screen-based on-line trading system for

Bombay Stock Exchange? Trading Rules on the BOLT system are based on the
Business Requirements Specification (BRS) provided by the BSE.

NSE DERIVATIVES

Introduction
The derivatives markets has existed for centuries as a result of the need for both
users and producers of natural resources to hedge against price fluctuations in the
underlying commodities. Although trading in

agricultural and other commodities has been the driving force behind the
development of derivatives exchanges, the demand for products based on
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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

financial instrumentssuch as bond, currencies, stocks and stock indiceshave

now far outstripped that for the commodities contracts.
India has been trading derivatives contracts in silver, gold, spices, coffee, cotton
and oil etc for decades in the gray market. Trading derivatives contracts in
organized market was legal before Morarji Desais government banned forward
contracts.
Derivatives on stocks were traded in the form of Teji and Mandi in unorganized
markets. Recently futures contract in various commodities were allowed to trade
on exchanges. For example, now cotton and oil futures trade in Mumbai, soybean
futures trade in Bhopal, pepper futures in Kochi, coffee futures in Bangalore etc.

UNDERSTANDING OF DERIVATIVES
Derivatives are financial contracts whose value/price is dependent on the
behavior of the price of one or more basic underlying assets (often simply known
as the underlying). These contracts are legally binding agreements, made on the
trading screen of stock exchanges, to buy or sell an asset in future. The asset can
be a share, index, interest rate, bond, rupee dollar exchange rate, sugar; crude oil,
soybean, cotton, coffee and what have you.

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

DERIVATIVE
MARKETS

COMMIDITY
DERIVATIVE

ORGANISED
MARKET

OTC
MARKET

FINANCIAL
DERIVATIVE

ORGANISED
MARKET

OTC
MARKET

SOME EXAMPLE OF DERIVATIVES: A very simple example of derivatives is curd, which is derivative of milk.
The price of curd depends upon the price of milk which in turn depends
upon the demand and supply of milk.
Derivatives are not so new to us. Nifty options and futures, Reliance
futures and options, Satyam futures and options etc are all examples of
derivatives. Futures and options are the most common and popular forms
of derivatives.

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

COMPONENTS OF DERIVATIVES
Forwards
A forward contract is a customized contract between the buyer and the seller
where settlement takes place on a specific date in future at a price agreed today.
The rupee-dollar exchange rates is a big forward contract market in India with
banks, financial institutions, corporate and exporters being the market
participants.

The main features of a forward contract

The main features of a forward contract are:
It is a negotiated contract between two parties and hence exposed to
counter party risk.
Eg: Trade takes place between A&B@ 100 to buy & sell x commodity
.After 1 month it is trading at Rs.120. If A was he buyer he would gain Rs.
20 & B Loose Rs.20. In case B defaults you are exposed to counter party
Risk i.e.you will now entitled to your gains. In case of Future, the
exchange gives a counter guarantee even if the counter party defaults you
will receive Rs.20/- as a gain.
Each contract is custom designed and hence unique in terms of contract
size, expiration date, asset type, asset quality etc.
A contract has to be settled in delivery or cash on expiration date.
In case one of the two parties wishes to reverse a contract, he has to
compulsorily go to the other party. The counter party being in a monopoly
situation can command the price he wants.

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

Futures
Futures are exchange-traded contracts to buy or sell an asset in future at a price
agreed upon today. The asset can be share, index, interest rate, bond, rupee-dollar
exchange rate, sugar, crude oil, soybean, cotton, coffee etc.
Standard terms in a futures contract
The standard terms in any futures contract are:
Quality of the underlying asset (not required in case of financial futures)
Expiration date
The unit of price quotation (not the price)
Minimum fluctuation in price (tick size)
Settlement style

For example: when you are dealing in March 2002 Satyam futures contract, you
know that the market lot, ie the minimum quantity you can buy or sell, is 1,200
shares of Satyam, the contract would expiry on March 28, 2002, the price is
quoted per share, the tick size is 5 paise per share or (1200*0.05) = Rs60 per
contract/market lot, the contract would be settled in cash and the closing price in
the cash market on expiry day would be the settlement price.

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

Theoretical way of pricing futures

The theoretical price of a futures contract is spot price of the underlying plus the
cost of carry. Please note that futures are not about predicting future prices of the
underlying assets. In general, Futures Price = Spot Price + Cost of Carry
The Cost of Carry is the sum of all costs incurred if a similar position is taken in
cash market and carried to expiry of the futures contract less any revenue that
may arise out of holding the asset. The cost typically includes interest cost in case
of financial futures (insurance and storage costs are also considered in case of
Commodity futures). Revenue may be in the form of dividend. Though one can
calculate the theoretical price, the actual price may vary depending upon the
demand and supply of the underlying asset.
Few examples how futures are priced
Suppose Reliance shares are quoting at Rs300 in the cash market. The interest
rate is about 12% per annum. The cost of carry for one month would be about
Rs3. As such a Reliance future contract with one-month maturity should quote at
nearly Rs303. Similarly Nifty level in the cash market is about 1100. One Month
Nifty future should quote at about 1111. However it has been observed on several
occasions that futures quote at a discount or premium to their theoretical price,
meaning below or above the theoretical price. This is due to demand-supply
pressures. Every time a Stock Future trades over and above its cost of carry i.e.
above Rs. The Arbitragers would step in and reduce the extra premium
commanded by the future due to demand. Eg: would buy in the cash market and
sell the equal amount in the future. Hence creating a risk free arbitrage, viceversa for the discount.

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

Options
Options are contracts that give the buyers the right (but not the obligation) to buy
or sell a specified quantity of certain underlying asset at a specified price on or
before a specified date. On the other hand, the seller is under obligation to
perform the contract (buy or sell the underlying). The underlying asset can be
share, index, interest rate, bond, rupee-dollar exchange rate, sugar, crude oil,
soybean, cotton, coffee etc.

The options that give their buyer the right to buy are called Call Options and
those which give their buyer the right to sell are called Put Options.
Call option on a stock with an example
Suppose you have a right to buy 1,000 shares of Hindustan Lever at Rs250 per
share on or before March 28, 2002. In other words you are a buyer of a call
option on Hindustan Lever. The option gives you the right to buy 1,000 shares.
You have the right to buy Hindustan Lever shares at Rs250 per share.
The seller of this call option who has given you the right to buy from him is
under obligation to sell 1,000 shares of Hindustan Lever at Rs250 per share on or
before March 28, 2002 whenever asked.

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

Put option on a stock with an example

Suppose you have the right to sell 1,600 shares of Bharat Heavy
Electricals at Rs140 per share on or before March 28, 2002. In other words you
are a buyer of a put option on Bharat Heavy Electricals. The option gives you the
right to sell 1,600 shares. You have the right to sell Bharat Heavy Electricals
shares at Rs140 per share. The seller of this put option who has given you the
right to sell to him is under obligation to buy 1,600 shares of Bharat Heavy
Electricals at Rs140 per share on or before March 28, 2002 whenever asked.
Types of options
American style options
Ideally the buyer should find a seller in the market to square up his
Long position, as he would get a better value for his option. However if a seller is
not available, he can exercise his option at the end of the trading session. To
exercise an option, call your broker before the exercise timings specified by the
exchange .To find the exercise timings; refer to the options contract
specifications. I will be glad to provide such information to you.
Option contracts which can be exercised on or before the expiry are called
American options. All stock option contracts are American style.

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

European style options

The options on Nifty and Sensex are European style optionsmeaning that buyer
of these options can exercise his options only on the expiry day. He cannot
exercise them before expiry of the contract as is the case with options on stocks.
As such the buyer of index options needs to square up his position to get out of
the market.

Process of Trading
The trading system provides tremendous facilities to the users in terms of
orders that can be placed on the system.
It provides complete online market system.
The market screen at any point of time provide complete information on
total order depth, five best buyers & sellers available in the market, the
quantity traded during the day in that security, the high - low, the last
traded price etc
Immediately after the trading limit has been placed in order book investor
can know the fate of the orders.
Limit orders are orders to buy & sell shares at a stated quantity & stated
price.
If price quantity condition doesnt match; the limit order will not be
executed.

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

POST-TRADING
After trading Angel has to prepare
Contracts
bills and
pay in and pay out process
Introduction
After completion of trading the further process is done through this department.
Mainly it handles two processes which are known as pay in and pay out process.
Further description is given below.

Payout Process
When transaction is done between the two members of same DP then it is called
internal payout process, but it can be known only after 4 oclock when trading
gets over. It can be known that whether the transaction is done internally or not.
Otherwise all the transactions are done thorough exchange only. Now if the
situation arises in which one of the member of DP has sold a definite quantity of
shares, but against which no one has purchased the same amount of quantity of
shares belonging to same company then the whole lot will go to the exchange. On
the other hand if one of the parties has bought comparatively less quantity than
sold by another party then it is called shortfall of shares. Now let us understand
the above concept with the help of a practical example. Suppose, one of the
members of Angel in RAJKOT has sold 800 shares of Reliance LTD., but against
which member of Angel at Mumbai branch has purchased
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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

only 300 shares of the same company then it is called SHORTFALL. Now, after
the closing of trading activity (i.e. after 4 oclock). Exchange will prepare a
shortfall report & this will be directly sent to H.O. Now, department will prepare
a summary from the report. After that if DP has access then dealing will be done
internally otherwise auction will be done by exchange in which exchange will
purchase or sell shortfall of shares from the market. Payout process mainly
indicates access amount to be paid by DP i.e. when purchase of share is
comparatively higher then selling.
PAY IN PROCESS:Now if we look from the other side the same concept, then it is called PAY IN
PROCESS. In this process if selling is done comparatively higher then purchase,
then DP will earn i.e. DP will get relatively more amount against which it has to
pay less amount. In both the transaction i.e. in paying & payout the payment will
be done thorough checks only.
CONTRACT NOTE:Contract note is a confirmation of trades done on a particular day for and on
behalf of a client. Angel shall issue a contract note to his client for trades
(purchase/sale of securities) executed with all relevant details as required therein
to be filled in (refer to SEBI circular no. SMD/SED/CIR/23321 dated June 8,
2005). A contract note shall be issued to a client within 24 hours of the execution
of the contract duly signed by the TM or his authorized signatory or client
attorney.
BILLS:-

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

In the same way Angel H.O will prepare bill of clients name and this will be
sended to respective branches to different places and now branches would be
dispatching to their respective clients.

BACK OFFICE DEPARTMENT (account department)

Here back office department is nothing but maintain ledger and other accounts
Each and every expense is mentioned under specific head only. As far as books of
account are concerned mainly two statements are prepared i.e. receipt and
payment account and bank reconciliation statement. Under receipt and payment
statement smallest expense is being mentioned and relevant proof as been
attached. Bank recosilation statement is prepared and accordingly shortfalls are
fulfill every firm uses some of the software for maintaining all the accounting
work and here Angel use Pradnya software where client are also given username
and password so they can know their balance and ledger.
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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

DP DEPARTMENT
Depository- An Organization
A depository is an organization where the securities of investors are held in
electronic form. Investors open an account in the depository system through a
Depository Participant (DEPOSITORY PARTICIPANTS) and hold securities in
that account. There are two depositories in India which are National Securities
Depository Ltd (NSDL) and Central Depository Service Ltd (CDSL).
Depository system is quite similar to a banking system. If an investor wants to
utilize the service offered by a depository, he/she has to open an account with the
depository through a DEPOSITORY PARTICIPANTS. This can be compare to
the opening of an account with any of the branches of a bank in order to utilize
the services of the bank. Holding securities in Depository is now a normal
practice across the world. All depositories operate under countrys specific rules
and regulations to assure safety, liquidity and right/ liability.
A depository may be defined as facilities of holding securities in electronic form
that means without holding any certificates in physical form and which
subsequently enable securities transaction to be process by electronic book entry
system, without movement of papers.

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

A Depository facilitates holding of securities in the electronic form and enables

securities transactions to be processed by book entry by a Depository Participant
(DP), who as an agent of the depository, offers depository services to investors.
According to SEBI guidelines, financial institutions, banks, custodians,
stockbrokers, etc. are eligible to act as DPs. The investor who is known as
Beneficial owner (BO) has to open a Demat account through any DP for
dematerialization of his holdings and transferring securities. Angel is having DP
of cdsl where the balances in the investors account recorded and maintained with
CDSL can be obtained through the DP. The DP is required to provide the
investor, at regular intervals, a statement of account which gives the details of the
securities holdings and transactions. The depository system has effectively
eliminated paper-based certificates which were prone to be fake, forged,
counterfeit resulting in bad deliveries. CDSL offers an efficient and instantaneous
transfer of securities.
BRIEF HISTORY OF DEPOSITORY PARTICIPANT IN INDIA
Although India had a vibrant capital market which is more than a century old.
The paper based settlement or trades caused substantial problems like bad
delivery and delayed transfer of title till recently. The enactment of depositories
act in august 1996 paved the way for establishment of NATIONAL SECURITIES
DEPOSITORY LIMITED, The first depository in India. This depository
promoted by institution of national stature responsible for economic development
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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

of the country has since established a national infrastructure of international

standards that handle most of the trading and settlement in dematerialized form in
India capital market.
NATIONAL SECURITIES DEPOSITORY LIMITED was promoted by UTI,
IDBI and NSE. It started providing depository services in November 1996.
Afterwards, CENTRAL DEPOSITORY SERVICE LIMITED flagged of its
operation in July 1999. The CENTRAL DEPOSITORY SERVICE LIMITED was
promoted by BSE jointly with leading banks such as SBI, BOI, BOB, HDFC,
Standard Chartered, Union Bank of India & Centurion Bank.
Trading in dematerialization share commenced on NSE in December 1996 on
BSE in December 1997. In January 1998 compulsory Demat trading for retail
investor started for selected scrips. Thus scrips in compulsory demat trading
included the once with highest market capitaliasation and most traded scrips. This
step led to phenomenon growth of the depository environment in Indian capital
market.
Until CENTRAL DEPOSITORY SERVICE LIMITED commenced its operations
it was a one man show handled by DEPOSITORY PARTICIPANTS of
NATIONAL

SECURITIES

DEPOSITORY

LIMITED.

NATIONAL

SECURITIES DEPOSITORY LIMITED had there fore cover a large chunk of

market before CENTRAL DEPOSITORY SERVICE LIMITED came into picture
and it has remained the largest depository till date.
Investors were opening the account in NATIONAL SECURITIES DEPOSITORY
LIMITED and dematerializing there shares in the first phase. That was a
booming period for the depository industry. Thus, in the initial years of the
industry there was only one depository and the competition was between
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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

DEPOSITORY PARTICIPANTS only. The service was newly launch and SEBI
was increasing the scope and compulsion by way of introducing more and more
scrip in the least of compulsory demats trading.

ROLE OF DP
A Depository is an organization firm to provide electronic depository
facilities for securities traded. Securities are then held in the electronic
form through the medium of DP. The NSDL is the first depository in India.
The functions of NSDL are regulated by the Securities and Exchange
Board of India (SEBI).
The Depository is not just another custodian. The Depository can legally
transfer beneficial ownership, which a custodian can not. The chief
objective of a depository is to reduce settlement risk by minimizing the
paperwork involved in trading, settling and transferring securities.
To utilize the services offered by a depository, you must open an account
with the depository through a DP. The DPs are the link between the
shareholders and the company and NSDL.
Banks, financial institutions, custodians and stock brokers can become DPs

subject to their meeting certain requirements prescribe

SEBI. NSDL publishes the list of DPs registered

by NSDL and

with them from time to

time.
The DP will provide you with a passbook or statement of account
periodically to inform you on your holdings.
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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

 You can even have a zero balance in your account.

BENEFITS OF OPENING AN ACCOUNT WITH CDSL SYSTEM

The unique centralized database of CDSL enables DPs in Debit/Credit
securities instantaneously to the Beneficial Owners account, thereby
avoiding any transit position.
CDSLs unique client ID number ensures debit/credit of securities only to
the intended account as the system does not accept a transaction, where
account number is keyed in incorrectly.
CDSL offers facilities to the Clearing House. Clearing Corporation under
which securities sold/purchased by any BO on BSF can be directly
delivered from/ received in the BO account, without routing them through
the brokers pool account.
CDSL does not collect any custody fees from DPs, thus, BOs can expect a
lower charge in respect of securities held in CDSL accounts. The
transaction cost for settlement of securities through CDSL as lower in most
cases.
ACCOUNT OPENING

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

To avail the various services offered by CDSL an investor or a broker or an

approved intermediary has to open a CDSL depository account.

Depository accounts are of three types:

BENEFICIARY ACCOUNT:
An investor or a broker who wants to hold shares on
dematerialized form and undertake scrips less trading must have depository
account called Beneficiary Owner account (BO) with a DP of his choice.
CLEARING MEMBER ACCOUNT:
Member brokers of the stock exchange which have
established electronic connectivity with CDSL need to open a clearing
member account with a DP of his choice to clear and settle trades in the demat
form. This account is meant only to transfer shares and receives shares for the
clearing corporation/house and hence, the member broker does not have any
ownership rights over the shares running held in such an account.
INTERMIDEARY ACCOUNT:
Any person desiring to act as an approved intermediary
account with any DP office choice. An intermediary account may be open
with the DP only after the intermediary has obtained registration from the
securities and Exchange board of India. And with the prior approval of the
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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

CDSL. This account is meant only to deposit the securities receive from the
lender and lend them to the borrower under stock landing and borrowing
scheme. The intermediary does not have any ownership rights over the shares
held in such account

PROCEDURE FOR OPENING AN ACCOUNT

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

An investor who wants to hold securities in the electronic form in a depository

system should open an account with a participant with following procedure

The participant will make available the relevant account opening form
(depending on whether the client is a retailer investor or corporate client or
clearing member) and specify the relevant list of
Documents regarding references that should be submitted along with the form.
It will also give a copy of the relevant agreement, to be entered with the client,
in duplicate.

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

 The client will submit the duly filled in account opening form. It should
also furnish such documents regarding references, as specified electronic
form in by the participant, along with the account opening form.
The Angel will verify that the account opening form is duly filled in. it will
also verify the enclosed documents, if any. Incomplete forms will be
forwarded to the client for rectification.
The authorized signatories are enclosed.
In case the documents are not proper, the form will rejected and intimate
the client of the same, stating the reasons for doing so. The copy of the
agreement submitted by the client is destroyed.
If the form is in order, the Angel will accept the same and give an
acknowledgment slip duly signed and stamped, to the client. The Angel
will execute the agreement and give a copy of it to the client.
After completion of all documentation, the Angel will send to H.O then
enter the client details as mentioned in the account opening form in the
DPM screen provided for the purpose. After entering client details in the
system, a client account number will be generated by the DPM. H.O will
send to Angel
The Angel will give a copy of the report listing the client details captured
in the DPM database to the client. The report will be generated by the
DPM.
Finally Angel dispatch, Demat account kit to the client by courier.

DEMET REQUISITION FORM (DRF)

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

Now we know that all the transaction are done through electronic form for this
investors has to convert all the physical certificates into electronic form for this
process is to be made for dematerialization of the certificates.
DEMATERIALIZATION OF SECURITY
According to the Depositories Act 1996, an investor has the option to hold shares
either in physical or electronic form. Now ever, SEBI has notified that settlement
of trade in almost all listed securities should the Demat mode. Although, trades
up to 500 shares can settled in physical form, physical settlement is virtually not
taking place for

apprehension of bad delivery on account of mismatch of

signatures, forgery of signature, fake certificate, etc.

Before you start trading of your security using Demat account you
dematerialize the certificate. Dematerialize means converting security in
electronic form from physical form.
Only those security can be Dematerialized whose owner company has registered
itself for CDSL service. Shareholder can request its owned company to register
itself with CDSL if it is not registered only after that security can be
dematerialized

Procedure for dematerialization

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT

 If client is having physical certificate and wants to convert then request is

to give to angel for dematerialization
Then this request is send to H.O
H.O will stamp this request and send this request to related R&T agent
R&T Agent will on receiving the physical documents and the electronic
request verifies and checks them
The DP issues a statement of transaction to the client
Then angel will inform to client

PLEDGING
Major benefit of the Demat account and holding security in Demat form is that
you can put this certificate on pledge and you will get loan on it.
If you have an demat account with RNSB bank then you will get loan either form
this bank or you will get it form some other institutes. The person who applied
for the loan is called ledger and one need to have Demat account with CDSL.
Pledge puts once security under the pledge it can not use for other purpose. This
securities pledged are moved from Free Balance to Pledged Balance account.

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SHREE H.N.SHUKLA COLLEGE OF MGT. STUDIES, RAJKOT