Beruflich Dokumente
Kultur Dokumente
html)
General
Q1. What is a Bull?
Ans. A Bull is an investor who buys a security in the hope of selling it at a higher
price . He sells the shares and squares up the transaction at a profit, whenever the
prices rise. This process is called a Long Purchase. A Bull market is a rising market.
Q2. What is a Bear?
Ans. A Bear is an investor who believes a stock, sector or the market will go down in
value. His intention is to buy those shares at a later date, when the prices decline
and then square up the transaction at profit. This activity is generally referred to as
selling Short. A bear market is a falling market.
Q3. What is a Stag?
Ans. One who applies for a new issue in the hope of being able to sell the shares
allotted to him/her at a profit as soon as dealing starts, is known as a Stag.
Q4. What is stock exchange?
Ans. Generally speaking the stock exchange is a marketplace where shares can be
bought and sold.
Legal definition: 'Stock Exchange' means any body of individuals, whether
incorporated or not, constituted for the purpose of assisting, regulating or controlling
the business of buying and selling in the securities.
Q5. What is carry forward?
Ans. A person buys or sells shares with the intention that the price movement will be
to his advantage by the end of the trading cycle. However, when this does not
happen, he has the option of holding his hunch by doing a carryover of his
transaction to next trading cycle. This activity is known as Carry Forward.Carry
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version
forward trading has evolved in response to local needs in India and it refers to the
trading in which the settlement is postponed to the next account period on payment
of contango charge(Known as 'vyaj badla') in which the buyer is interest on
borrowed funds or the backwardation charge(Known as' undha badla') in which the
short seller pays a charge for borrowing securities.
Q6. What is Badla?
Ans. Carrying forward of transaction from one settlement period to the next without
effecting delivery or payment is called 'badla'.
Backwardation is also known as 'undha badla' in Indian stock exchanges. When the
bear sells in anticipation of a fall in prices in the immediate future (so that he can
pick up the shares later for delivery and make a profit), but the fall doesn't happen
within the trading cycle, he has the option to buy the shares from the market for
delivery, or have his sales carried over to the next trading cycle on payment of
'undha badla' or backwardation charges to the buyer. The 'Badliwala' finances him.
Contango is also known as 'seedha badla' in Indian stock exchanges. When a bull
buys in anticipation of an immediate rise in price, but finds at the end of the trading
cycle that the price has not risen, he may either pay for the shares and take
delivery, or he may carry over his transaction to the next trading cycle by paying
over charges or "seedha badla' to the seller. 'Badliwala' finances the badla.
Q7. What are Foreign Institutional Investors (FIIs)?
Ans. The rapidly growing Indian economy needs large investments for development.
The government has removed many cobwebs of rules to encourage Direct Foreign
Investment
Foreign
Portfolio
Investment.
However,
only
recognized
foreign
institutions such as pension funds, mutual funds, etc. can have portfolio investment
after taking permission from the Reserve Bank of India and SEBI. Registered FIIs are
allowed to operate freely in the primary and secondary markets, subject to certain
prudential guidelines.
Q8. What are Global Depository Receipts (GDRs)?
Ans. Since April 1992, Indian companies with good track record are permitted to
raise funds from the international market by way of Global Depository Receipts
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version
(GDRs). GDRs are issue in the name of a foreign bank and normally listed on
Luxembourg or London Stock Exchange. This provides opportunities to international
investors to participate in the Indian capital Market without going through the
hassles of paper-based settlement system. Underlying company shares of GDR are
held by a custodian bank in India.
Q9. What are Specified Shares and Non-Specified Securities?
Ans. All the listed securities on the stock exchange are classified as either
(i)'specified shares'-'A' Group shares or (ii) 'non-specified securities'-'B' Group
securities. The Stock Exchange authorities notify from time to time the shares, which
should be included in the specified list. The main difference between specified shares
and non specified securities is in the process of settlement of transactions. Only
equity shares are included in the specified list . The considerations for an equity
share to be included in the specified list are generally the size of the company, the
number of shareholders, dividend record, growth prospects and average volume of
business.
Q10. What are Blue Chips?
Ans. Blue Chips are shares of large, well established and financially sound companies
with an impressive record of earnings and dividends. Generally, Blue Chip shares
provide low to moderate current yield and moderate to high capital gains yield.
Q11. What is ClearingHouse?
Ans. Each exchange maintains a ClearingHouse to act as a central agency for
effecting delivery and settlement of contracts between all members. The days on
which the members pay or receive the amounts due are called pay-in or pay-out
days respectively.
Q12. What is Auction of Shares?
Ans. An Auction is a mechanism utilized by the exchange to fulfill its obligation to a
counter party member when a member fails to deliver good securities or make the
payment. Through Auction, the exchange arranges to buy good securities and deliver
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version
them to the buying broker or arranges to realize the cash and pay it to the selling
broker.
Q13. What is Demat trading?
Ans. The Indian Capital market has witnessed unprecedented growth in the
technology in the past few years, which has made it possible by modernization in
trading and settlement systems. Automation of the trading mechanism has given us
a trading system comparable with the best in the world. Establishment of a
settlement guarantees mechanism removed the counter party risk in stock
exchanges. Though the advent of automated trading brought with it several
associated benefits such as transparency in trading and equal opportunity for market
players all over the country; the problems related to the settlement of trades such as
high instances of bad deliveries and long settlement cycles have continued. As an
answer to these myriad settlement problems, The national securities Depository
limited (NSDL) was inaugurated in Nov 1996 as the first depository in the country.
The latest major development, which helped hasten the awakening of the capital
market, was that from Jan 4Th 1999, all category of investor can deliver only in
Dematerialized form with respect to a select list of securities. The NSDL was set up
as the major agency to give this concept, The painless scrip less nation-wide trading,
a kick-start. The NSE and the NSCC are two other active agencies indispensable to
the mechanism. Other recent developments also have suddenly thrust the NSDL, The
concept of Demat trading and the over 70 DP's approved so far into the national
glare. The developments make a closer look at Demat trading necessary.
Q14.
What
are
the
advantages
of
NSDL
for
Domestic
Retail
Investors?
Ans. The rapidly growing Indian economy needs large investment for development.
The Govt. has removed many cobwebs of rules to encourage direct foreign
investment and Foreign Portfolio investment. However, only recognized foreign
institutions such as pension funds, Mutual Funds etc. can have portfolio investment
after taking permission from the RBI. And SEBI. Registered FII's are allowed to
operate freely in the primary and secondary markets, subject to certain prudential
guidelines.
Q15. What is Arbitrage?
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version
Q19. What is the procedure for holding shares and settling trades in scrip less form?
Ans. The procedure is very simple and similar to operating a bank account. A dep.
Agency reaches the investors through DP's. Banks, custodians of securities and stock
brokers are some of the entities who are DP's. One can start by opening an account
with depository agency through a DP. On completion of account opening procedure,
he will be allotted an account no. He is then ready to acquire and sell shares in the
scrip less form and to demat share certificates, which he already holds.
Q20. Who are eligible to participate in Internet Trading?
Ans. All Indian Residents/Corporates, Non Indian residents, overseas corporate
bodies and FII's are eligible.
Q21. What is a Non Parri Passu (NPP) share?
Ans. In case of company issues new shares during the financial year, these shares,
unless specified otherwise, are entitled only for pro-rata dividend in respect of
financial year in which these were issued. These shares are known as NPP shares,
which like the ordinary shares are eligible for only a part of dividend.
Q22. How does one ascertain that the dividend received/ Paid on scrip is correct?
Ans. The exchange publishes a list of shares that are eligible to receive prorata
dividend per settlement. The list contains the details pertaining to distinctive
numbers and the rate of dividend payable.
Q23. What is Neat-iXS?
Ans. Neat-iXS is a web based order routing, real time market info display, and
portfolio mgmt and client info display system. Neat-iXS in the current version routes
orders to and displays real time market info of NSE. Client registered with the
brokerage house of NSE and who have hosted Neat-iXS can trade directly at NSE
after appropriate risk management by the brokerage house.
Q24. What are the basic Knowledge of Neat-iXS I need to start trading?
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version
Ans. Clients are required to know at least the following to start effective trading
using Neat-iXS.
1. You have to maintain your password and PIN security.
2. View market Info.
3. Place, modify and cancel orders.
4. View own info.
Q25. What is Portfolio Management?
Ans. PM is the facility provided for the clients to maintain their stock holding and
update themselves about the status of their portfolio. You can maintain multiple
portfolios.
Q26. Whom should I approach for buying /selling shares on NSE?
Ans. To buy and sell securities you could approach either:
Q27. Why should I deal only with a trading member of NSE/SEBI registered subbroker of NSE trading member?
Ans. The exchange can ensure settlement and handle disputes/claims arising out of
only those trades, which are executed, on NSE through registered trading
members/registered sub-brokers. Hence for all trades done on NSE through an entity
who is not registered, the investor has no recourse through the exchange in case of
non settlement or a claim/dispute arising out of the same.
Q28. How do I verify whether the entity is a NSE trading member/SEBI-registered
sub-broker?
Ans. You may ask the person to furnish documents such as SEBI registration
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version
certificate, Registration with NSE, etc to verify the antecedents of the person. You
can also approach the exchange to counter check whether the person holds the valid
registration.
Ans. An investor should register himself with registered trading members/subbrokers by:
Check whether your name and the name of the trading member are clearly
mentioned in the agreement
Ensure that you and the trading member have signed on all the pages of the
agreement. Also check that the witness has signed and put their name
against their signature.
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version
Q32. State in which dealing office of the trading member is located where trade was
executed Complaint to be addressed to
Ans. Maharashtra, Gujarat, Goa, Daman, Diu, Dadara and Nagar Haveli, MP- NSE of
India Ltd. 1st floor, trade World, Sena pati Bapat Marg, Lower Parel, Mumbai-400013
Tel: 4972950;4914269 Fax:4972996
Delhi, Haryana, UP, HP, J &K, Punjab, Chandigarh, Rajasthan- NSE of India Ltd.
Thapar house,Western Wing124, Janpath,Janpath Lane, Connaught Place New delhi110001
West Bengal, Bihar, Orissa, Assam, Arunanchal Pradesh, Mizoram, Manipur, Sikkim,
Meghalaya, Nagaland, Tripura- NSE of India Ltd. Ideal Plaza 11\1, Sarat Bose Road,
Calcutta-700020
Andhra Pradesh , Karnataka, Kerala, Tamil Nadu, Andaman & Nicobar, Lakshwadeep,
Pondicherry- NSE of India Ltd., Lakshmineela Ritechoice Chamber 5, Bazullah Road,
T. Nagar, Chennai-600017
Q32. In case of complaint against company traded on NSE, whom should I address
the complaint form?
Ans. All complaints in respect of companies should be addressed to:
Investor Grievance Cell
NSE of India Ltd
1st floor, Trade World,Senapati Bapat Marg,
Lower Parel Mumbai-400013
Tel: 4972950; 4914269
Fax: 4972996
e-mail-ignse@nse.co.in
Q33. What are the steps taken by investor grievance Cell to ensure speedy redressal
of the complaints by the trading members/sub-brokers and companies?
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version
In case the TM/registered sub-broker disputes the claim of the investor, the
response of the team is forwarded to the investor. If required, both the parties are
called for s joint meeting. Most of the complaints are resolved in this manner. In
cases where the disputes remain resolved in Investor Grievance Cell, the parties may
refer the manner to arbitration if they so desire.
Complaints against Companies/Shares Transfer agents & Registrars (STAs)
Complaints received from investors are forwarded to the respective companies/STAs
for necessary action at their end. In case no response is received from the
company/STAs within 21 days, a follow up by way of letter, telephone calls and
personal meetings is undertaken to expedite their replies.
Q34. What steps do I take if my shares are lost/misplaced/stolen?
Ans. You should immediately write to the company reporting the loss of shares and
instruct company to Stop Transfer the shares. You should comply with the formalities
intimated by the company for stop transfer or issue of duplicate share certificates.
Simultaneously you should lodge a police complaint/Fir reporting the loss or
misplacement.
Q35.
What
is
investor
protection
Fund
(IPF)
and
when
is
it
used?
Ans. The IPF is maintained by the exchange to take care of investor's claim, which
may arise out of non settlement of obligation by the TM for trades executed on the
exchange. The IPF is used to settle claims of such investors whose trading member
has been declared as defaulter.
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version
The maximum amount of claim payable from IPF to the investor (where the TM
through whom the investor has dealt, is declared defaulter) is Rs. 5 Lacs
Q36. What is bad delivery cell?
Ans. When delivery of shares turns out to be bad because of company objection
etc.the investor can approach the bad delivery cell of the stock exchange through his
broker for correction or replacement with good delivery.
Q37. What is bid and offer?
Ans. Bid is the price of share a prospective buyer is prepared to pay for particular
scrip. Offer is the price at which a share is offered to sale.
Q38. What are circuit breakers?
Ans. It is a mechanism by which Exchange temporarily suspends the trading in
security when its price are volatile and tend to breach the price band.
Q39. What is cum-bonus?
Ans. The shares are described as cum-bonus when potential purchaser is entitled to
receive the current rights.
Q40.What is cum-rights?
Ans. The shares are described as cum-rights when a potential purchaser is entitled to
receive the current rights.
Q41.What is Day order?
Ans. A day orders, the name suggest, is an order, which is valid for the day on which
it is entered. If the order is not matched during the day, at the end of the trading
day of the order get canceled automatically.
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version
Ans. A number of shares that are less than the market lot are known as odd lots.
These shares are illiquid in nature, as they cannot be transacted in the exchange.
Q49. What is order driven trading?
Ans. It is trading initiated by buy or sell orders from investors or brokers.
Q50. What is over the counter trading?
Ans. Trading in those stocks, which are not listed on a stock exchange.
Q51. What is price rigging?
Ans. When a person or persons acting in concert with each other collude to artificially
increase or decrease the price of the security, that process is called price rigging.
Q52. What is Quote driven trading?
Ans. Trading where brokers/market makers give buy/sell quote for a scrip
simultaneously.
Q53. What is screen based trading?
Ans. When buying/selling of securities is done using computers and matching of
trades is done by a stock exchange computer.
Q54. What is settlement guarantee?
Ans. Settlement guarantee is the guarantee provided by the clearing corporation for
settlement of all trades even if a party defaults to deliver securities or pay cash.
Q55. What is spot trading?
Ans. Trading by delivery of shares and payment for the same on the date of
purchase for or on the next day.
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version
PDF Creator: PDF4U Pro DEMO Version. If you want to remove this line, please purchase the full version