SECURITIES INDUSTRY

The Securities Industry and Financial Markets Association (SIFMA) is a leading

securities industry trade group, representing securities firms, banks, and asset
management companies in the U.S. and Hong Kong. SIFMA was formed on November
1, 2006, from the merger of The Bond Market Association and the Securities Industry
Association.
In October 2008, SIFMA laid off over 25% of its staff in the United States due to the
"industry upheaval" which left its member firms in financial straits, and the loss of three
of it primary member firms—Lehman Brothers, Bear Stearns, and Merrill Lynch The
dismissals came at the same time as the United States Congress pledged to revamp the
country's financial regulatory structure. SIFMA announced in May 2009 that it would
also shed its London-based European operation. That operation will be merged into the
London Investment Banking Association (LIBA). The 350-member American
Securitization Forum (ASF) formerly operated as a forum of SIFMA. On January 14,
2010, ASF announced that it had chosen to terminate its affiliation with SIFMA as well.

OPERATION
SIFMA brings together the shared interests of more than 650 securities firms, banks, and
facilitate more open, competitive, and efficient global capital markets, champion investor
education, retirement preparedness, and savings, and ensure the public’s trust in the
securities industry and financial markets. SIFMA represents its members’ interests in the
U.S. and in Hong Kong. It has offices in New York and Washington, D.C., and its
associated firm, the Asia Securities Industry & Financial Markets Association
(ASIFMA), is based in Hong Kong.
In June 2009, SIFMA began a campaign to combat the “populist overreaction” against
Wall Street’s role in the global financial crisis. It hired two aides who had worked for
Henry Paulson when he was Treasury Secretary, to help cleanse Wall Street’s image in
the eyes of average Americans. The effort is aimed at policymakers and the media
worldwide, and designed to beat back public skepticism over Wall Street’s commitment
to change. SIFMA is paying $85,000 a month for polling, lobbying, and public relations

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to counter the "lynch mob", according to an internal SIFMA memo. In internal memos
about confidential meetings with top financial executives, SIFMA said that the securities
industry "must be perceived as part of the solution, which will allow it to better defend
against populist overreaction." In January 2010, SIFMA announced that it had hired the
law firm Sidley Austin to consider filing a lawsuit challenging the Obama
administration's banking levy. But an attorney familiar with the matter said: "I suspect
SIFMA got out ahead of its key members." One person with a large bank said SIFMA
had not consulted the bank about its position, and that it was "wildly premature" to
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pursue legal action. European Securitization Forum (ESF) promotes the efficient
growth and continued development of securitization throughout Europe. It advocates the
positions, represents the interests, and serves the needs of its members—European
securitization market participants.

GROUPS
SIFMA has three product and customer-based groups that focus on the U.S.: Capital
Markets, Private Client, and Asset Management. The Capital Markets Group focuses on
the primary and secondary markets for equity and fixed income securities. Its customer
focus is issuers, underwriters, traders, and institutional investors. The Private Client
Group focuses on investment products sold to private clients, as well as individual
investor education. The Asset Management Group focuses on investment products about
which asset managers provide investment advice or investment management services,
and on institutional investors and hedge funds.

SENIOR MANAGEMENT .
T.Timothy Ryan, Jr., is SIFMA's CEO & President. He took the position after pulling his
name from consideration for a Treasury Department international policy advisor position
in April 2007, after problems were noted concerning Ryan's financial portfolio, and he
refused to take certain steps demanded by the Treasury Department's ethic lawyers
SIFMA's other senior management consists of Kenneth E. Bentsen (EVP, Public Policy
and Advocacy), Ileane F. Rosenthal (EVP, Global Communications & Member
Engagement), Randy Snook (EVP), and Ira Hammerman (Senior Managing Director &

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General Counsel).In August 2008, SIFMA hired Michael Paese, former Deputy Staff
Director of the Committee on Financial Services of the House of Representatives, as
EVP, Global Advocacy; eight months later Paese left SIFMA to become director of
government affairs at Goldman Sachs. Scott DeFife, who had reported to Paese, left
SIFMA in December 2009.

BOARD OF DIRECTORS
SIFMA's Chairman of the Board is Blythe Masters (Head of Global Commodities,
JPMorgan Chase), and Vice Chair is Bernard Beal (CEO of M.R. Beal & Company).
Other directors include Samir Assaf (HSBC Bank plc), Shigesuki Kashiwagi (Nomura
Holdings America Inc.) and Sallie Krawcheck (former Chairman & CEO, Citi Global
Wealth Management), among others. Peter Madoff, brother of fraudster and "money
manager" Bernard L. Madoff, and chief compliance officer and senior managing director
of the Madoff investment advisor and broker dealer businesses, stepped down from the
SIFMA Board of Directors in December 2008. His resignation came amid growing
criticism of the Madoff firm’s links to Washington, and how those relationships may
have contributed to the $50 billion Madoff fraud. The Madoff family had long-standing
ties to SIFMA. Bernard Madoff sat on the board of directors of the Securities Industry
Association, which merged with the Bond Market Association in 2006 to form SIFMA.
Peter Madoff served two terms as a member of SIFMA’s Board of Directors. Over the
years 2000-08, the two Madoff brothers personally gave $56,000 to political action
committees controlled by SIFMA or its predecessor organizations in addition to dues paid
to SIFMA by their firm and tens of thousands of dollars more to sponsor SIFMA industry
meetings. In addition, Bernard Madoff's niece Shana Madoff, who served as a
compliance attorney at the Madoff firm, was active on the Executive Committee of
SIFMA's Compliance & Legal Division, but resigned her SIFMA position shortly after
her uncle's arrest.

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 DEPOSITORY
A depository is an entity where the securities of an investor are held in electronic form.
The person who holds a demat account is a beneficiary owner. In a case of a joint
account, the account holders will be beneficiary holders of that joint account.
Depositories help in the settlement of the dematerialized securities. Each
custodian/clearing member is required to maintain a clearing pool account with the
depositories. He is required to make available the required securities in the designated
account on settlement day. The depository runs an electronic file to transfer the securities
from the account of custodian/clearing member to that of NSCCL. As per the schedule
of allocation of securities determined by the NSCCL, the depositories transfer the
securities on the pay-out day from the account of the NSCCL to those of
member/custodian.

DEPOSITORY SYSTEM
A “Depository” is facility for holding securities ,which enables securities transactions to
be processed by book entry. To achieve this purpose , the depository may immobilize the
securities or dematerialize them (so that they exist only as electronic records). India has
chosen depository is an organization, which holds the beneficial owner’s securities in
electronic form, through a registered depository participant(DP). A depository functions
somewhat similar to a commercial bank, the investor has to open an account with it
through a registered DP.

HOW IS A DEPOSITORY SIMILAR TO A BANK?

A depository can be compared with a bank, which holds the funds for depositories. An
analogy between a bank and a depository may be drawn as follow:
Bank Depository
Holds funds in an account Hold securities in an account
Transfers funds between accounts on the Transfers securities between accounts on
instruction of the account holder the instruction of the account holder.
Facilitates transfers without having to Facilitates transfer of ownership without
handle money having to handle securities

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 Facilitates safekeeping of money Facilitates safekeeping of shares.

WHAT ARE THE BENEFITS OF PARTICIPATION IN A

DEPOSITORY?
The benefits of participation in a depository are:
• Immediate transfer of securities
• No stamp duty on transfer of securities
• Elimination of risks associated with physical certificates such as bad delivery, fake
securities, etc.
• Reduction in paperwork involved in transfer of securities
• Reduction in transaction cost
• Ease of nomination facility Change in address recorded with DP gets registered
electronically with all companies in which investor holds securities eliminating the
need to correspond with each of them separately.
• Transmission of securities is done directly by the DP eliminating correspondence
with companies
• Convenient method of consolidation of folios/accounts
• Holding investments in equity , debt instrument and government securities in a single
account; automatic credit into demat account ,of shares ,arising out of
split/consolidation/merger etc.

WHICH ARE THE DEPOSITORIES IN INDIA?

There are two depositories in India which provide dematerliastion of securities .The
National Securities Depository Limited (NSDL) And Central Depository Services (India)
Limited ( CDSL).

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NATIONAL SECURITIES DEPOSITORY LIMITED
(NSDL)
Although India had a vibrant capital market which is more than a century old, the paper-
based settlement of 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 NSDL, the first depository in India. This depository promoted
by institutions of national stature responsible for economic development of the country
has since established a national infrastructure of international standards that handles most
of the securities held and settled in dematerialised form In the Indian capital market.
Using innovative and flexible technology systems, NSDL works to support the investors
and brokers in the capital market of the country. NSDL aims at ensuring the safety and
soundness of Indian marketplaces by developing settlement solutions that increase
efficiency, minimize risk and reduce costs. At NSDL, we play a quiet but central role in
developing products and services that will continue to nurture the growing needs of the
financial services industry. In the depository system, securities are held in depository
accounts, which is more or less similar to holding funds in bank accounts. Transfer of
ownership of securities is done through simple account transfers. This method does away
with all the risks and hassles normally associated with paperwork. Consequently, the cost
of transacting in a depository environment is considerably lower as compared to
transacting in certificates.

PROMOTER AND SHAREHOLDER

NSDL is promoted by Industrial Development Bank of India Limited (IDBI) - the largest
development bank of India, Unit Trust of India (UTI) - the largest mutual fund in India
and National Stock Exchange of India Limited (NSE) - the largest stock exchange in
India. Some of the prominent banks in the country has taken a stake in NSDL.

PROMOTERS
• Industrial Development Bank of India Limited (Now, IDBI Bank Limited)

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• Unit Trust of India (Now, Adminstrator of the Specified Undertaking of the Unit
Trust of India)
• National Stock Exchange of India Limited

OTHER SHAREHOLDERS
• State Bank of India
• HDFC Bank Limited
• Deutsche Bank A.G.
• Axis Bank Limited
• Citibank N.A.
• Standard Chartered Bank
• The Hongkong and Shanghai Banking Corporation Limited
• Oriental Bank of Commerce
• Union Bank of India
• Dena Bank
• Canara Bank

LEGAL FRAMEWORK
As a part of its on-going market reforms, the Government of India promulgated the
Depositories Ordinance in September 1995. Based on this ordinance, Securities and
Exchange Board of India (SEBI) notified its Depositories and Participants Regulations in
May 1996. The enactment of the Depositories Act the following August paved the way
for the launch of National Securities Depository Ltd. (NSDL) in November 1996. The
Depositories Act has provided dematerialisation route to book entry based transfer of In
security and settlement of security trade.exercise of the rights conferred by the
Depositories Act, NSDL framed its ByeLaws and Business Rules. The ByeLaws are
approved by SEBI. While the ByeLaws define the scope of the functioning of NSDL and
its business partners; the Business Rules outline the operational procedures to be
followed by NSDL and its "Business Partners."

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BUSINESS PARTNERS
Aries out its activities through various functionaries called "Business Partners" who
include Depository Participants (DPs), Issuing companies and their Registrars and Share
Transfer Agents, Clearing corporations/ Clearing Houses of Stock Exchanges. NSDL is
electronically linked to each of these business partners via a satellite link through Very
Small Aperture Terminals (VSATs) or through Leased land lines. The entire integrated
system (including the electronic links and the software at NSDL and each business
partner's end) is called the "NEST" [National Electronic Settlement & Transfer] system.

DEPOSITORY PATICIPANT
The investor obtains Depository Services through a DP of NSDL. A DP can be a bank,
financial institution, a custodian, a broker, or any entity eligible as per SEBI
(Depositories and Participants) Regulations, 1996. The SEBI regulations and NSDL bye
law also lay down the criteria for these categories to became a DP. Just as one opens a
bank account in order to avail of the services of a bank, an investor opens a depository

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account with a DP in order to avail of depository facilities. Though NSDL commenced
operations with just three DPs, Depository Participant Services are now available in most
of the major cities and towns across the country.

ISSUING COMPANY/THEIR REGISTRAR & TRANSFER AGENTS:

Securities issued by issuers who have entered into an agreement with NSDL can be
dematerialised in the NSDL depository. As per this agreement, issuer agrees to verify the
certificates submitted for dematerialisation before they are dematerialised and to maintain
electronic connectivity with NSDL. Electronic connectivity facilitates dematerialisation,
rematerliazation, daily reconciliation corporate action.

CLEARING CORPORATION HOUSE:

The clearing corporations/houses of stock exchanges also have to be electronically linked
to the depository in order to facilitate the settlement of the trades done on the stock
exchanges for dematerialised shares. At present, all the major clearing corporation/houses
of stock exchange are electronically connected to NSDL. The following stock exchanges
have linked up with NSDL to facilitate trading and settlement of dematerialised
securities:
• Madras Stock Exchange Ltd. (MSE)
• National Stock Exchange of India Ltd. (NSE)
• Inter-connected Stock Exchange of India Ltd. (ISE)
• OTC Exchange of India (OTCEI)
• The Calcutta Stock Exchange Association Ltd. (CSE)
• The Delhi Stock Exchange Association Ltd. (DSE)
• The Stock Exchange, Mumbai (BSE)
• The Stock Exchange, Ahmadabad (ASE)
BENEFITS OF DEPOSITORY SYSTEM
In the depository system, the ownership and transfer of securities takes place by means of
electronic book entries. At the outset, this system rids the capital market of the dangers
related to handling of paper. NSDL provides numerous direct and indirect benefits like:

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• Elimination of bad deliveries In the depository environment, once holdings of an
investor are dematerialised, the question of bad delivery does not arise i.e. they cannot
be held "under objection". In the physical environment, buyer was required to take the
risk of transfer and face uncertainty of the quality of assets purchased. In a depository
environment good money certainly begets good quality of assets.
• Elimination of all risks associated with physical certificates- Dealing in physical
securities have associated security risks of theft of stocks, mutilation of certificates, loss
of certificates during movements through and from the registrars, thus exposing the
investor to the cost of obtaining duplicate certificates etc. This problem does not arise
in the depository environment.
• No stamp duty for transfer of any kind of securities in the depository. This waiver
extends to equity shares, debt instruments and units of mutual funds.
• Immediate transfer and registration of securities - In the depository environment,
once the securities are credited to the investors account on pay out, he becomes the
legal owner of the securities. There is no further need to send it to the company's
registrar for registration. Having purchased securities in the physical environment, the
investor has to send it to the company's registrar so that the change of ownership can be
registered. This process usually takes around three to four months and is rarely
completed within the statutory framework of two months thus exposing the investor to
opportunity cost of delay in transfer and to risk of loss in transit. To overcome this, the
normally accepted practice is to hold the securities in street names i.e. not to register the
change of ownership. However, if the investors miss a book closure the securities are
not good for delivery and the investor would also stand to loose his corporate
entitlements.
• Faster settlement cycle - The settlement cycle follow rolling settlement on T+2 basis
i.e. the settlement of trades will be on the 2nd working day from the trade day. This will
enable faster turnover of stock and more liquidity with the investor.
• Faster disbursement of non cash corporate benefits like rights, bonus, etc. -
NSDL provides for direct credit of non cash corporate entitlements to an investors
account, thereby ensuring faster disbursement and avoiding risk of loss of certificates in
transit.

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• Reduction in brokerage by many brokers for trading in dematerialised securities
Brokers provide this benefit to investors as dealing in dematerialised securities reduces
their back office cost of handling paper and also eliminates the risk of being the
introducing broker.
• Reduction in handling of huge volumes of paper
• periodic status reports to investors on their holdings and transactions, leading to
better controls.
• Elimination of problems related to change of address of investor - In case of
change of address, investors are saved from undergoing the entire change procedure
with each company or registrar. Investors have to only inform their DP with all relevant
documents and the required changes are effected in the database of all the companies,
where the investor is a registered holder of securities.
• Elimination of problems related to transmission of demat shares - In case of
dematerialised holdings, the process of transmission is more convenient as the
transmission formalities for all securities held in a demat account can be completed by
submitting documents to the DP whereas, in case of physical securities the surviving
joint holder(s)/legal heirs/nominee has to correspond independently with each company
in which shares are held.
• Elimination of problems related to selling securities on behalf of a minor - A
natural guardian is not required to take court approval for selling demat securities on
behalf of a minor.

FAVORABLE INDICATORS OF DEPOSITORIES

There are various checks and measures in the depository system to ensure safety of the
investor holdings. These include:
• A DP can be operational only after registration by SEBI, which is based on the
recommendation from NSDL and their own independent evaluation. SEBI has
prescribed criteria for becoming a DP in the regulations.
• DPs are allowed to effect any debit and credit to an account only on the basis of valid
instruction from the client.
• Every day, there is a system driven mandatory reconciliation between DP and NSDL.

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• All transactions are recorded at NSDL Central System and in the databases maintained
by business partners.
• There are periodic inspections into the activities of both DP and R&T agent by NSDL.
This also includes records based on which the debit/credit are effected.
• All investors have a right to receive their statement of accounts periodically from the
DP.
• Every month NSDL forwards statement of account to a random sample of investors as a
counter check.
• In the depository, the depository holds the investor accounts on trust. Therefore, if the
DP goes bankrupt the creditors of the DP will have no access to the holdings in the
name of the clients of the DP. These investors can transfer their holdings to an account
held with another DP.
• The data interchange between NSDL and its business partners is protected by
protection measures of international standards such as encryption hardware lock. The
protection measures adopted by NSDL are more than what is prescribed in the SEBI
Regulations.
• Freeze Facility: A depository account holder (beneficiary account) may freeze
securities lying in the account for as long as the account holder wants it. By freezing the
account, account holder can prevent unexpected debits or credits or both, creeping into
its account. The following types of freeze facility available in the NSDL system may be
availed of by submitting freeze instruction to the DP in the prescribed form.
• Freeze for debits only
• Freeze for debits as well as credits
• Freeze a particular ISIN in the account
• Freeze a specific number of securities held under an ISIN in an account
• Certification in Depository Operations : NSDL has introduced a Certification
Programme in Depository Operations (popularly known as NCFM certification), and it
has been made compulsory for all DPs to appoint a person qualified in this certification
in each of its branches. This way, NSDL wants to ensure that each branch of a DP that

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 services investors has atleast one person who has thorough knowledge about depository
system.
• Investor grievance: All grievances of the investors are to be resolved by the concerned
business partner. The investor relationship cell of NSDL would work towards
resolution of the grievance.
• Insurance Cover: NSDL has taken a comprehensive insurance policy to help DP to
indemnifying investors for the loss accrued to them due to errors, omissions,
commission or negligence of DP.
• Computer and communication infrastructure: NSDL and its business partners use
hardware, software and communication systems, which conform to industry standards.
Further, the systems are accepted by NSDL only after a rigorous testing procedure.
NSDL's central system comprises an IBM mainframe system with a back-up facility
and a remote disaster back-up site.
• Machine level back-up: The IBM mainframe in which the data is processed has
adequate redundancy built into its configuration. There is a standby central processing
unit (CPU) to which processing can be switched over to in case of main system CPU
failure. The disk has RAID implementation, which ensures that a failure of hard disk
will not lead to loss in data. System has spare disk configuration where data is
automatically copied from the main disk upon encountering the first failure.All network
components like router, communication controllers etc., have on-line redundancy and
thus a failure does not result in loss of transaction.
• Disaster back up site: A disaster back up site equipped with a computer identical to the
mainframe computer & computing resources has been set up at a distant location about
175 km away from Mumbai. The depository operations are often switched between the
computing resources at Mumbai office and disaster back up site to ensure that the
disaster site is always operational.
• Back-up in case of power failure: Continuity in power supply to the main systems is
assured by providing for;
• Dual uninterrupted power supply (UPS) for IBM-Mainframe and related components
wherein the two UPSs are connected in tandem. In case of failure of primary UPS, the

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 secondary UPS takes over instantaneously and thus, there is no interruption in
operation, and Back-up diesel generator sets.
• Periodic Review: The NSDL hardware, software and communication systems are
continuously reviewed in order to make them more secure and adequate for the size of
business. These reviews are a part of an ongoing exercise wherein security
considerations are given as much importance as operational efficiency.

BASIC SERVICES PROVIDED BY NSDL

ACCOUNT MAINTAINCE

To avail of the various services offered by NSDL an investor/ a broker/ an approved

intermediary (for lending & borrowing) has to open a NSDL depository account with any
of its DPs.

DEPOSITORY ACCOUNTS ARE OF THREE TYPES:

BENEFICIARY ACCOUNT: - An investor who wants to hold securities in

dematerialized (Demat) form and receive or deliver securities by inter-account transfers
must have a depository account called beneficiary account with a DP of his choice.

CLEARING MEMBER ACCOUNT: - Member brokers of those stock exchanges

which have established electronic connectivity with NSDL 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 popularly known as Settlement account or "Pool account". This account is
meant only to transfer securities to and receive securities from the clearing corporation/
house and hence, the member broker does not have any ownership (beneficiary) rights
over the shares held in such an account.
Further, clearing members of stock exchanges permitting Automatic Lending or
Borrowing Mechanism (ALBM) transactions can request for a "clearing member ALBM"
account to participate in ALBM transactions. These additional CM Accounts maintained
for the purpose of ALBM transactions will have to be necessarily opened with the

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clearing house of the concerned stock exchange e.g. a BSE clearing member's "normal
clearing member account" could be with a DP XYZ, but his "clearing member ALBM"
account will have to necessarily be with the clearing house of the BSE.

INTERMEDIARY ACCOUNT: - Any person choosing to act as an approved

'intermediary' for stock lending and borrowing needs to open an intermediary account
with any DP of his choice. An intermediary account may be opened with the DP only
after the intermediary has obtained registration from the Securities & Exchange Board of
India and with the prior approval of NSDL. This account is meant only to deposit the
securities received from the lender and lend them to the borrower under stock lending and
borrowing scheme. The intermediary does not have any ownership (beneficiary) rights
over the shares held in such an account.

VARIOUS SERVICES OFFERED BY DP WITH RESPECT TO

THESE ACCOUNT

STANDING INSTRUCTION FACILITY

DP enters the advice for the transfer of securities to or from a beneficial owner's account
only on receipt of instructions from the client. The clients need to give delivery
instruction to transfer securities from their account & receipt instruction to get credit into
their account. However, for ease of operation, a facility of standing instruction is
provided to the clients for receiving securities to the credit of their accounts without any
further instruction from them.

CHANGE IN ADDRESS: The client can change his address by submitting the changes
in writing to the DP along with proof of identity, proof of new address with original
document of new address for verification and latest transaction statement received from
the DP of the client. The changes conveyed to the DP will be automatically
communicated to the companies in which he is holding shares in dematerialized form.

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BANK ACCOUNT DETAILS: Details of bank account of the client, including the 9-
digit code number of the bank and branch appearing on the MICR cheques issued by the
bank have to given to the DP at the time of account opening. Companies use this
information for printing them on dividend/interest warrants to prevent its misuse. In case
the client wish to change this bank account details, he can do so by submitting the
changes in writing to the DP.

NOMINATION: A client can make a nomination of his account in favor of any person
by filing the nomination form with his DP. Such nomination is considered to be
conclusive evidence of the account holder'(s) disposition in respect of all the securities in
the account for which the nomination is made.

TRANSPOSITION CUM DEMAT: This is a facility whereby securities held jointly

can be dematerialized in an account of same joint holders but having different sequence
of names. e.g. securities held in joint names of X and Y can also be dematerialized in an
account opened in the names of Y and X by submitting an additional form called
Transposition Form along with Dematerialization Request Form (DRF) to the DP.

CONSOLIDATION OF ACCOUNTS: Some clients could have opened multiple

accounts to dematerialize their shares held in multiple combinations & sequence of
names. However, they may not need so many accounts after they have dematerialized
their securities and may want to bring all their shareholdings into one or fewer accounts.
Using off-market account transfer instruction such consolidation can be done.

CLOSURE OF ACCOUNT: A client can close a depository account by giving an

application in the prescribed form. In case there is any balance in the account sought to
be closed, the following steps are necessary. Re-materialization of all securities standing
to the credit of the account at the time of making the application for closure; or
Transferring the balance to the credit of another account opened by the same account
holder(s) either with the same participant or with a different participant.

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FREEZING OF ACCOUNTS: Account freezing means suspending any further
transaction from the depository account till the account is de-frozen. A depository
account maintained with a DP can be frozen if the DP receives a written instruction in
prescribed form from the client. A frozen account can be de-frozen or re-activated if the
client submits written instruction in prescribed form to the DP.

DEMATERIALISATION
Dematerialization is the process by which a client can get physical certificates converted
into electronic balances. An investor intending to dematerialize its securities needs to
have an account with a DP. The client has to deface and surrender the certificates
registered in its name to the DP. After intimating NSDL electronically, the DP sends the
securities to the concerned Issuer/ R&T agent. NSDL in turn informs the Issuer/ R&T
agent electronically, using NSDL Depository system, about the request for
dematerialisation. If the Issuer/ R&T agent finds the certificates in order, it registers
NSDL as the holder of the securities (the investor will be the beneficial owner) and
communicates to NSDL the confirmation of request electronically. On receiving such
confirmation, NSDL credits the securities in the depository account of the Investor with
the DP.

FEATURES:
• Holdings in only those securities that are admitted for dematerialisation by NSDL can
be dematerialized.
• Only those holdings that are registered in the name of the account holder can be
dematerialized.
• Names of the holders of the securities should match with the names given for the
Demat account.
• If the same set of joint holders held securities in different sequence of names, these
joint holders by using ' Transposition cum Demat facility' can dematerialize the
securities in the same account even though share certificates are in different sequence
of names. e.g., If there are two share certificates one in the name of X first and Y
second and another in the name of Y first and X second, then these shares can be

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 dematerialized in the depository account which is in any name combination of X and Y
i.e., either X first and Y second or Y first and X second. Separate accounts need not be
opened to demat each share certificate. If shares are in the name combinations of X and
Y, it cannot be dematerialized into the account of either X or Y alone.
• Check the Demat performance of the companies whose shares are to be given for
dematerialisation.
• Demat requests received from client (registered owner) with name not matching exactly
with the name appearing on the certificates merely on account of initials not being spelt
out fully or put after or prior to the surname, can be processed, provided the signature
of the client on the Dematerialisation Request Form (DRF) tallies with the specimen
signature available with the Issuers or its R & T agent.
• A client may, in the normal course, receive Demat confirmation in about 30 days from
the date of submission of Demat request to the DP. There are special processes for
Securities issued by Government of India and simultaneous transmission and Demat.

PROCEDURE:
The client (registered owner) will submit a request to the DP in the Dematerialisation
Request Form for dematerialisation, along with the certificates of securities to be
dematerialized. Before submission, the client has to deface the certificates by writing
"SURRENDERED FOR DEMATERIALISATION".
The DP will verify that the form is duly filled in and the number of certificates, number
of securities and the security type (equity, debenture etc.) are as given in the DRF. If the
form and security count is in order, the DP will issue an acknowledgement slip duly
signed and stamped, to the client.

THE DP WILL SCRUTINIZE THE FORM AND THE CERTIFICATES. THIS

SCRUTINY INVOLVES THE FOLLOWING
• Verification of Client's signature on the dematerialisation request with the specimen
signature (the signature on the account opening form). If the signature differs, the DP
should ensure the identity of the client.
• Compare the names on DRF and certificates with the client account.

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• Paid up status
• ISIN (International Securities Identification Number)
• Lock - in status
• Distinctive numbers

IN CASE THE SECURITIES ARE NOT IN ORDER THEY ARE RETURNED TO

THE CLIENT AND ACKNOWLEDGMENT IS OBTAINED. THE DP WILL
REJECT THE REQUEST AND RETURN THE DRF AND CERTIFICATES IN
CASE:
• A single DRF is used to dematerialize securities of more than one company.
• The certificates are mutilated, or they are defaced in such a way that the material
information is not readable. It may advise the client to send the certificates to the
Issuer/ R&T agent and get new securities issued in lieu thereof.
• Part of the certificates pertaining to a single DRF is partly paid-up; the DP will reject
the request and return the DRF along with the certificates. The DP may advise the
client to send separate requests for the fully paid-up and partly paid-up securities.
• Part of the certificates pertaining to a single DRF is locked-in; the DP will reject the
request and return the DRF along with the certificates to the client. The DP may advise
the client to send a separate request for the locked-in certificates. Also, certificates
locked-in for different reasons should not be submitted together with a single DRF
• In case the securities are in order, the details of the request as mentioned in the form are
entered in the DPM (and a Dematerialisation Request Number (DRN) will be generated
by the system.
• The DRN so generated is entered in the space provided for the purpose in the
dematerialisation request form.
• A person other than the person who entered the data is expected to verify details
recorded for the DRN. The request is then released by the DP which is forwarded
electronically to DM (DM - Depository Module, NSDL's software system) by DPM.
• The DM forwards the request to the Issuer/ R&T agent electronically.

19
• The DP will fill the relevant portion viz., the authorization portion of the Demat request
form.
• The DP will punch the certificates on the company name so that it does not destroy any
material information on the certificate.
• The DP will then dispatch the certificates along with the request form and a covering
letter to the Issuer/ R&T agent.
• The Issuer/ R&T agent confirms acceptance of the request for dematerialisation in his
system DPM (SHR) and the same will be forwarded to the DM, if the request is found
in order.
• The DM will electronically authorize the creation of appropriate credit balances in the
client's account.
• The DPM will credit the client's account automatically.
• The DP must inform the client of the changes in the client's account following the
confirmation of the request.
The issuer/ R&T may reject dematerialisation request in some cases. The issuer or its
R&T Agent will send an objection memo to the DP, with or without DRF and security
certificates depending upon the reason for rejection. The DP/Investor has to remove
reasons for objection within 15 days of receiving the objection memo. If the DP fails to
remove the objections within 15 days, the issuer or its R&T Agent may reject the request
and return DRF and accompanying certificates to the DP. The DP, if the client so
requires, may generate a new dematerialisation request and send the securities again to
the issuer or it’s R&T Agent. No fresh request can be generated for the same securities
until the issuer or its R&T Agent has rejected the earlier request and informed NSDL and
the DP about it.

REMATERIALISATION
Rematerialisation is the process by which a client can get his electronic holdings
converted into physical certificates. The client has to submit the Rematerialisation request
to the DP with whom he has an account. The DP enters the request in its system which
blocks the client's holdings to that extent automatically. The DP releases the request to
NSDL and sends the request form to the Issuer/ R&T agent. The Issuer/ R&T agent then

20
prints the certificates, dispatches the same to the client and simultaneously electronically
confirms the acceptance of the request to NSDL. Thereafter, the client's blocked balances
are debited.

PROCEDURE
• The client will submit a request to the DP for Rematerialisation of holdings in its
account.
• On receipt of the request form, the DP will verify that the form is duly filled in and
issue to the client, an acknowledgement slip, signed and stamped.
• The DP will verify the signature of the client as on the form with the specimen
available in its records.
• If the signatures are different the DP will ensure the identity of the client.
• If the form is in order the DP will enter the request details in its DPM (software
provided by NSDL to the DP). While entering the details, if it is found that the client's
account does not have enough balance, the DP will not entertain the request.
• The DP will intimate the client that the request cannot be entertained since the client
does not have sufficient balance.
• If there is sufficient balance in the client's account, the DP will enter the request in the
DPM and the DPM will generate a Rematerialisation Request Number (RRN).
• The RRN so generated is entered in the space provided for the purpose in the
Rematerialisation request form.
• Details recorded for the RRN should be verified by a person other than the person who
entered the data. The request is then released to the DM by the DP.
• The DM forwards the request to the Issuer/ R&T agent electronically.
• The DP will fill the authorization portion of the request form.
• The DP will then dispatch the request form to the Issuer/ R&T agent.
• While processing the request, the Issuer/ R&T agent may report some objections.
Depending on the nature of objection, the Issuer/ R&T agent may reject the request or
process it partially, seeking rectification for the remaining, and send an objection memo
to the DP.

21
• The Issuer/ R&T agent accepts the request for Rematerialisation prints and dispatches
the certificates to the client and sends electronic confirmation to the DM.
• The DM downloads this information to the DPM and the status of the Rematerialisation
request is updated in the DPM..
MARKET TRANSFER
Trading in dematerialized securities is quite similar to trading in physical securities. The
major difference is that at the time of settlement, instead of delivery/receipt of securities
in the physical form, the same is affected through account transfers.

FEATURES:
Delivery of securities to or from a clearing member is called "Market Trades" in the
depository system. A simple way of determining whether a trade is a market trade is that,
either source or target in a transfer instrument is a CM account; such a transfer is a
"Market Trade"

PROCEDURE IN CASE OF MARKET TRANSFER FOR RETAIL INVESTORS:

NSDL

DP1 DP2
CC / CH
1&3 4 5 7
Clearing member 1 A/C Clearing member 2 A/C

P R D R
D P
3 6

BUYING SELLING
CLIENT A/C CLIENT A/C

22
In the diagram, the selling client and clearing member1 have their respective accounts
with DP1 and the buying client and clearing member2 have their respective accounts with
DP2. DP1, DP2 and the Clearing Corporation/ Clearing House have on line electronic
connectivity with NSDL.
Step-1: - Seller gives delivery instruction to DP1 to debit his account and transfer
securities to "Clearing Member1 Pool A/c" with DP1. (Clearing Member1 gives
corresponding receipt instruction to DP1 to accept in his clearing account securities
transferred by seller through DP1 if he has not already given standing receipt instruction
for all credits into his clearing account).
Step-2: - Securities are transferred from "Selling Client A/c" to "Clearing Member1 Pool
A/c" with DP1.
Step-3: - Clearing Member1 gives delivery to CC instruction to DP1 to debit his
"Clearing Member1 Pool A/c" and credit his "Clearing Member1 Delivery A/c". The
transfer will take place on the "execution date" mentioned in the instruction. Delivery to
CC instruction to be given as per final/ net delivery obligation.
Step-4: - Securities lie in the "Clearing Member1 Delivery A/c" till settlement day. At
the time of pay-in, securities lying in "Clearing Member1 Delivery A/c" are automatically
flushed to the Clearing Corporation/ Clearing House. No debit instruction is needed for
this transfer. The deadline time for pay-in of securities to the Clearing Corporation/
Clearing House may vary from one exchange to another.
Step-5: - At the time of pay-out securities are transferred from the Clearing Corporation/
Clearing House to "Clearing Member2 Receipt A/c" with DP2. No credit instruction is
needed because this transfer is automatic.
Step-6: - Securities are transferred from "Clearing Member2 Receipt A/c" to "Clearing
Member 2 Pool A/c". Receipt account of clearing members is purely a transit account for
maintaining audit trail.
Step-7: - Clearing Member2 gives a delivery instruction to DP2 to debit his "Clearing
Member 2 Pool A/c" and credit "Buying Client A/c" with DP2. ([Buyer gives
corresponding receipt instruction to DP2 to accept in his account securities transferred

23
from "Clearing Member2 Pool A/c" through DP2 unless he has not given a standing
instruction to receive credits to his account.)

Step-8: - Securities are transferred to "Buying Client A/c" from "Clearing Member2 Pool
A/c" with DP2. Note: Until delivery instruction is given by the clearing member, the
securities will remain in his "Pool A/c". However, if they are not transferred to a
"Beneficial Owner A/c", the securities will not be eligible to any corporate benefits like
bonus, dividends, etc.

OFF MARKET TRANSFER

Trading in dematerialized securities is quite similar to trading in physical securities. The
major difference is that at the time of settlement, instead of delivery/receipt of securities
in the physical form, the same is affected through account transfers.

FEATURES:
Trades which are not settled through the Clearing Corporation/ Clearing House of an
exchange are classified as "Off Market Trades". Delivery of securities to or from sub
brokers, delivery for trade-for-trade transactions, by this definition are off-market trades.
Procedure in case of an Off-Market Transfer Involving Two Clients:

NSDL

DP2
DP1

BUYING SELLING
CLIENT CLIENT

24
• The selling client will have to give a delivery instruction to his DP to transfer securities
from his depository account to the buying client's depository account. To receive
securities
• from the selling client's depository account, the buying client must give a receipt
instruction if he has not already given a standing receipt instruction to his DP.
• The details in the "delivery" and "receipt" instructions must match else the transfer will
not take place. The transfer will take place on the "execution date" indicated in the
instructions. If the buying client has given a standing receipt instruction, this may be
ignored.
• The payment aspect is handled outside the NSDL environment between the selling and
buying clients.

INTER-DEPOSITORY TRANSFER
Transfer of securities from an account in one depository to an account in another
depository is termed as an inter-depository transfer. This facility is quite similar to the
account transfers within NSDL.
• It can be done only for securities that are available for dematerialisation on both the
depositories.
• The account in NSDL can be either a clearing account or a beneficiary account
• For debiting the clearing account or the beneficial account with NSDL, the form for
"Inter-depository delivery instruction" is required to be submitted by the clearing
member/beneficial owner to its DP.
• For crediting the clearing account or the beneficial account, the standing instruction
given for automatically crediting the account is applicable. In case the standing
instructions are not given, then the form for "Inter-Depository Receipt Instruction" is
required to be submitted by the clearing member/beneficial owner to its DP.
• As both the depositories are connected to each another, the batches to effect inter -
depository transfers are presently exchanged on each working day.

25
• Online transfer of inter depository instructions has commenced w.e.f December 14,
2002. In the online inter depository transfer (OLIDT) module, Inter Depository
Transfer instructions for the day will be exchanged online between the two
depositories. Thus, the instructions executed by DPs may get settled at shorter intervals.
• The deadline time for DPs to verify & release Inter Depository Transfer delivery/
receipt instructions is 6 p.m. on weekdays and 2.30 p.m. on Saturdays.
• The Issuer/Registrar & Transfer Agent is informed about the transfer by both the
depositories and it amends its records accordingly.
• Government securities cannot be transferred from one depository to another using this
facility.

26
CENTRAL DEPOSITORY SERVICES(INDIA)
LIMITED (CDSL)
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.
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.
CDSL was promoted by Bombay Stock Exchange Limited (BSE) jointly with leading
banks such as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank, Standard
Chartered Bank, and Union Bank of India and Centurion Bank.

PROMOTORS/SHAREHOLDERS
CDSL was promoted by Bombay Stock Exchange Limited (BSE) in association with
Bank of India, Bank of Baroda, and State Bank of India and HDFC Bank. BSE has been
involved with this venture right from the inception and has contributed overwhelmingly
to the fruition of the project. The initial capital of the company is Rs.104.50 crores. The
list of shareholders with effect from 11th December, 2008 is as under.
• Bombay Stock Exchange Limited
• Bank of India
• Bank of Baroda
• State Bank of India
• HDFC Bank Limited
• Standard Chartered Bank

27
 • Canara Bank
• Union Bank of India
• Bank of Maharashtra
• The Jammu and Kashmir Bank Limited
• The Calcutta Stock Exchange Association Limited

WHY CSDL
 CONVENIENCE:
WIDE DP NETWORK: CDSL has a wide network of DPs, operating from over 6000
sites, across the country, offering convenience for an investor to select a DP based on his
location.
ON-LINE DP SERVICES: The DPs are directly connected to CDSL thereby providing
on-line and efficient depository service to investors.
WIDE SPECTRUM OF SECURITIES AVAILABLE FOR DEMAT: The equity
shares of almost all A, B1 & B2 group companies are available for dematerialization on
CDSL, consisting of Public (listed & unlisted) Limited and Private Limited companies.
These securities include equities, bonds, units of mutual funds, Govt. securities,
Commercial papers, Certificate of deposits; etc. Thus, an investor can hold almost all his
securities in one account with CDSL. A BO can also hold warehouse receipts pertaining
to commodities, in a demat account. However, a separate account should be opened for
holding warehouse receipts.
COMPETITIVE FEES STRUCTURE: CDSL has kept its tariffs very competitive to
provide affordable depository services to investors.
INTERNET ACCESS: A DP, which registers itself with CDSL for Internet access, can
in turn provide demat account holders with access to their account on the Internet.

 DEPENDABILITY:

ON-LINE INFORMATION TO USERS: CDSL's system is built on a centralised

database architecture and thus enables DPs to provide on-line depository services with
the latest status of the investor's account.

28
CONVENIENT TO DPS: The entire database of investors is stored centrally at CDSL.
If there is any system-related issues at DPs end, the investor is not affected, as the entire
data is available at CDSL.
CONTINGENCY ARRANGEMENTS:CDSL has made provisions for contingency
terminals, which enables a DP to update transactions, in case of any system related
problems at the DP's office.
MEETING USER'S REQUIREMENTS: Continuous updation of procedures and
processes in tune with evolving market practices is another hallmark of CDSL's services.
AUDIT AND INSPECTION: CDSL conducts regular audit of its DPs to ensure
compliance of operational and regulatory requirements.
DORMANT ACCOUNT MONITORING: CDSL has in place a mechanism for
monitoring dormant accounts.
HELPDESK:: DPs and investors can obtain clarifications and guidance from CDSL's
prompt and courteous helpline facility.

 SECURITY:

COMPUTER SYSTEMS: All data held at CDSL and is automatically mirrored at the
Disaster Recovery site and is also backed up and stored in fireproof cabinets at the main
and disaster recovery site.
UNIQUE BO ACCOUNT NUMBER: Every BO in CDSL is allotted a unique account
number, which prevents any erroneous entry or transfer of securities. If the transferor's
account number is wrongly entered, the transaction will not go through the CDSL system,
unless corrected
DATA SECURITY: All data and communications between CDSL and its users is
encrypted to ensure its security and integrity.
CLAIMS ON DP: If any DP of CDSL goes into liquidation, the creditors of the DP will
have no access to the holdings of the BO.

29
ITERMEDIARIES

DEPOSITORY PARTICIPANTS
CDSL's demat services are extended through its agents called Depository Participants
(DP). The DP is the link between the investor and CDSL. An investor who opens a demat
account with a DP can utilize the services offered by CDSL. While the DP processes the
instructions of the investor , the account and records thereof is maintained with CDSL. A
DP is thus a "service centre" for the investor.
CDSL's system is based on centralised database architecture with on-line connectivity
with DPs. Because of this centralised architecture, the cost for setting up a DP outfit
under CDSL system is significantly lower. Similarly, the recurring costs to be incurred by
a CDSL-DP in terms of maintaining back-ups and the related data storage are minimal.
This enables a CDSL-DP to offer depository services to investors at an attractive price
and at the same time achieve break-even faster at much lower volumes. The centralised
architecture also allows CDSL-DP to make available to the investors a to-the-minute
status of their account and transactions.
ISSUER COMPANIES
Corporates / Companies which issue any kind of security are known as 'Issuer' in the
depository system. Only those securities, which are admitted into the CDSL system are
available for dematerialisation to the holders of such securities or can be allotted in
electronic record form by the issuer. Securities include shares, debentures, bonds,
commercial paper (C.P.), certificate of deposits (C.D.), pass through certificates (PTCs),
government securities and mutual fund units. Both listed and unlisted securities can be
admitted into the CDSL system. CDSL functions as the central accounting and record
keeping office in respect of the securities admitted by issuer companies.
It is mandatory for all listed companies to have their securities admitted for
dematerialisation with both the depositories viz CDSL & NSDL. It is however desirable
that all securities are admitted on both the depositories so that investors having account
with any of the depositories can acquire that security.
Before the admission of any security into the CDSL system, it is necessary for the issuer
to establish an electronic connectivity with CDSL either directly or through a registrar

30
and transfer agent (RTA), who has already established connectivity with CDSL. All
leading RTAs have already established electronic connectivity with CDSL. The
procedure and CDSL charges to obtain direct connectivity by an issuer are similar to that
as for a RTA. It may please be noted that SEBI, vide its circular dated 27-12-2002, has
advised issuers that "all the work related to share registry in terms of both physical and
electronic should be maintained at a single point i.e either in-house by the company or by
a SEBI registered R & T Agent".
At CDSL, data is centrally stored with state-of-the-art systems and having a 'Disaster
Recovery Site' facility as back up. The centralised database architecture of CDSL places
it in a unique position to provide issuers up-to-the-moment details of holdings of the
security.

RTA
In the depository system, companies who wish to admit their shares and securities into
the system should obtain electronic connectivity with CDSL or avail the services of a
registrar and transfer agents (RTA), for connectivity. CDSL functions as the central
accounting and record keeping office in respect of the securities admitted by these
companies CDSL's system is based on centralised database architecture with on-line
connectivity with RTAs. Because of this centralisation, the cost for setting up RTA
connectivity is significantly less without compromising in any manner on security and
safety of the system. RTAs also need not incur high recurring costs in terms of
maintaining back-ups and the related data storage. These advantages provide the
wherewithal to RTAs to offer services to issuer companies at a significantly lower cost.
The centralised architecture also allows the RTAs to provide the companies with a to-the-
minute status of the holdings of their shareholders. All leading RTAs are currently
connected to CDSL and are providing services to a number of companies across the
country. A company can also obtain direct in-house connectivity with CDSL, the
procedure and the cost for doing so is similar to that of a RTA.SEBI, vide its circular
dated 27-12-2002, has advised issuers that "all the work related to share registry in terms
of both physical and electronic should be maintained at a single point i.e either in-house
by the company or by a SEBI registered R & T Agent".

31
CLEARING MEMBER
Clearing Members (CMs) are the members of the Clearing Houses/Clearing Corporations
who facilitate settlement of trades done on stock exchanges. They could be a broker or
custodian registered with SEBI as such is an important intermediary in the capital market
and an essential link in the depository system. The various categories of CMs are:
• Trading Members
• Custodians
• Subsidiary companies formed by regional stock exchanges to facilitate their members
to trade on BSE/NSE.
While beneficial owners may have their demat accounts on any of both the depositories it
is mandatory on the part of CM to have a demat CM account with both the depositories in
terms of SEBI press release ref. no. PR 153/99 dated July9,1999. CM's main activity is to
facilitate pay-in/pay-out of securities to/from Stock Exchanges/Clearing House/Clearing
Corporations either on their own behalf or on behalf of their clients. The securities which
are due for delivery can be delivered directly from client's account (depending on
whether exchange provides this facility) or through CMs to the Stock
Exchanges/Clearing House/Clearing Corporations Account. Similarly, pay-out of
securities can be delivered directly to client's account on the basis of information given to
Clearing House by the CMs or to CMs A/c.
Compulsory settlement of trades in demat, introduction of 'T+2' rolling settlement, higher
volume of securities traded daily requires monitoring of CMs demat account on
continuous basis. In order to facilitate smooth functioning for CMs CDSL has introduced
a special Depository Participant Type i.e. CM DP. Members of the Stock Exchange,
Mumbai and Calcutta Stock Exchange who have participated in the equity of CDSL can
register as CM DP at concessional rate of deposit.

32
 RELIANCE MONEY
Reliance Securities Limited is a Reliance Capital company and part of the Reliance Anil
Dhirubhai Ambani Group. Reliance Securities is a permitted user of the brand "Reliance
Money" for promoting its various products and services. Reliance Securities endeavors to
change the way investors transact in equities markets and avails services. It provides
customers with access to Equity, Derivatives, Portfolio Management Services,
Investment Banking, Mutual Funds & IPOs. It also offers secured online share trading
platform and investment activities in secure, cost effective and convienent manner. To
enable wider participation, it also provides the convenience of trading offline through
variety of means, including Call & Trade, Branch dealing Desk and its network of
affiliates

THE VISION OF ONE MAN

OUR LEGENDRY FOUNDER
DHIRUBHAI HIRACHAND AMBANI
28 DECEMBER 1932 – FOREVER

33
BACKGROUND AND INCEPTION OF THE COMPANY

Reliance money is a comprehensive financial transaction platform that enables customers

to carry out trading and investment activities in a secure, cost effective and convenient
manner. Through the reliance money customer can invest in a wide range of asset classes
from equity, equity and commodity, derivatives, commodities, mutual funds insurance
product, IPOs ,Money transfer and money changing. To enable wider participation
reliance money also offers the convenience of offline and online transactions through a
variety of means including its portal, call and transact, transaction kiosks and at its
network of business partners.Reliance money is part of the reliance Dhirubhai Ambani
Group and is promoted by Reliance Capital, Reliance Money has presence in over 700
cities and towns across the country with over 3000 outlets. In the current financial year,
the reach is expected to cover more than 5000 cities and towns through 10000 plus
outlets.
Reliance Money is a group of Reliance capital; one of India’s leading and fastest growing
private sector financial service companies, ranking among the top 3 private sector
financial services and banking companies, in terms of net worth. Reliance capital is a part
of Reliance Anil Dhirubhai Ambani Group.Reliance Money which commenced
commercial operations in April 2007 has over 300,000 customers and 4300 outlets in
more than 3500 locations in India.Reliance money is a comprehensive electronic
transaction platform offering a wide range of asset classes. Its endeavor is to change the
way India transacts in financial market and avails financial services. Reliance Money is a
single window, enabling you to access, amongst others in Equity, Equities and
Commodities and Derivatives, Mutual Fund, IPO’s, Life and Genaral Insurance Products,
Offshore Investments, Money transfer, Money changing and Credit cards. Reliance
capital entered into online trading business through “Reliance Money”. Reliance Money
is offering highly competitive brokerage fees with the option for “fixed flat fee structure”.
Reliance Money, promoted by Anil Dhirubhai Ambani Group firm Reliance Capital,
would offer the brokerage services across 700 cities including Delhi and Mumbai through
3000 outlets. Reliance Money consumers can trade in equities, commodities and offshore
investments, IPOs, mutual funds, insurance and money transfer.

34
Reliance money offers a comprehensive platform, offering an investment avenue for a
wide range of asset classes. Its endeavor is to change the way India transacts in financial
markets and avails financial services. Reliance money offers a single window facility,
enabling you to access, amongst others Equity,

VISION:

‘ ”EMPOWERING EVERYONE TO LIVE THEIR DREAM”

MISSION:

“TO OFFER UNPARALLELED VALUE BY PROVIDING THE CUSTOMER

TRANSPARENT, CONVINIENT AND COST EFFECTIVE, ANYTIME-
ANYWHERE FINANCIAL TRANSACTION CAPABILITIES”

Reliance Money through its pan India presence with 6,233 outlets, has more than 3.5.
milliom customer. Reliance Capital is one of India's leading and fastest growing private
sector financial services companies, and ranks among the top 3 private sector financial
services and banking groups, in terms of net worth.

35
 RELIANCE MONEY’S PRODUCTS

EQIUTY

ANTI MONEY L
AUNDERING PR IPO
OCESS RELAINCE
MONEY’S
PRODUCTS

DERIVATIVES MUTUAL FUND

EQUITY : Equity is a share in the ownership of a company. It represents a claim on the

company''s assets and earnings.As you acquire more stock, your ownership stake in the
company increases. At any stage in the economy , there are different types of industries,
some start up companies some mature and grown, some expanding into growth industries
and some showing decline in their prosperity and popularity. Some industries are
seasonal, some in key or core sectors, some in export sector etc.
Similarly, in each industry there types of companies, some growing , some stagnant, and
some declining. There are thus different types of companies within the same industry and
different types of industries within the Economy. A genuine investor should try to
identify the potentialities of each of these groups and concentrate on growth
oriented industries or emerging Blue Chips and established Blue Chips. Within each
industry , there are some companies which are turn-around companies showing signs of
emerging into Blue Chip companies. Blue Chip companies are in simple language ,
growth oriented companies showing signs of expansion, diversification , modernization

36
of technology and reputation for consistent profitability and profit margins to sustain the
consistent dividend distribution, growing profits and expanding networth. The actual blue
chip companies like Colgate, Hindustan Lever, SPIC, L&T etc. have a consistent record
of dividend payouts, growth in dividends, expansion and bonus from time to time

DERIVATIVES : Derivative products have been around for a long, long time. In fact, as
early as the 1650s, dealings resembling present day derivative market transactions were
seen in rice markets in Osaka, Japan. Derivatives, as the name suggests, are financial
instruments that derive their value from an underlying security or asset. The underlying
could be equity shares or an index, a commodity, a currency or the exchange rate, bonds,
etc. Sounds complicated? In a way, it is. But once you are clear about how a derivative
product derives its value from an underlying asset and yet has a price and an identity of
its own, it will become just another financial product to you. Then again, derivative
products have more variants than any other financial products since they have been
created to meet a variety of niche needs. Dependent on other products, yet a life on their
own.
There are various derivative products, which derive their value from equity shares or an
index, a commodity, a currency or the exchange rate, bonds, etc. These derivative
products vary according to their structure and terms and conditions. The most popular
derivative products are Forwards, Futures, Options, Warrants and Swaps. Some of these
are short term in nature while others are long term. For example stock and index options
that can be traded on stock exchanges are short term in nature, while options like
warrants and rights have a longer term.

IPO : when an unlisted company makes either a fresh issue of securities or an offer for
sale of its existing securities or both for the first time to the public. In the Primary market
the new issues of shares are made for a new project of a new company and FOLLOW UP
PUBLIC OFFERINGS are made for expansion and diversification of an existing
company ; for cost over-runs of projects and for working capital purposes, of the issuer
company. In the public issue application form of depository eligible companies, there will
be a provision to indicate the manner in which securities should be alloted to the

37
applicant. All you have to do is to mention your client account number and the name and
identification number of your DP.Any allotment due to a person will be credited in his
account. If the application is alloted securities in dematerialized form , but the details
regarding the beneficiary account are incomplete/wrong, the person will get physical
delivery of alloted securities. If the securities are alloted in the dematerialiazed form ,
these would be credited to applicant’s account any day between allotment date and listing
date, at the discretion of the company.
The issuer company will forward the applicant the allotment advice giving the number of
shares alloted in dematerialized form . through this a person comes to that he has been
alloted shares.Partly paid up and fully paid up shares in the depository , will be given
separate ISINs (International Securities Identification Number ). These are also traded
separately at the stock exchange.The company issues call notices to the beneficial holders
of securities in the electronic form.
The details of such beneficial holders will be provided to the issuer/ their R&T agent by
NSDL. After call money realization, issuer/ their R&T agent will electronocally convert
the partly paid up shares to fully paid up shares.“ The recent swings in the equity market
rattled Purvankar Projects .The Bangalore based realty firm had wanted to raise Rs.1130
crore when its stock was valued in the 500-525 band. But as the stock market fell
Purvankara was forced to revise its offer price band to Rs. 400-450, which allowed it to
raise just Rs. 898 crore. Retail Investors gave the issue a wide berth leaving Institutional
buyers to subscribe to the company’s IPO.

MUTUAL FUND : What is it about investing that irks you most? Is it the fact that it is
time-consuming since it involves researching the market for investment products and
then proceeding with the paperwork involved. mutual fund is a form of collective
investments that pools money from many investors and invests their money in stocks,
bonds, short-term money market instruments, and/or other securities.

38
In a mutual fund, the fund
manager who is also known as
the portfolio manager,
trades the fund's underlying securities, realizing capital gains or losses, and collects the
dividend or interest income. The investment proceeds are then passed along to the
individual investors. The value of a share of the mutual fund, known as the net asset
value per share (NAV), is calculated daily based on the total value of the fund divided by
the number of shares currently issued and outstanding.

ANTI MONEY LAUNDERING PROCESS : Money Laundering involves disguising

financial assets so that they can be used without detection of the illegal activity that
produced them..

OUR OFFERINGS

ON LINE TRADING:
• Reliance Securities Limited as a SEBI registered Trading Member of NSE and BSE
offers Internet trading on the url.www.reliancemoney.com. To trade online the
customer is provided with an user id, password and also a security token which flashes
a dynamic password number. This security token displays a new 6 digit number every
36 seconds.
• To facilitate trading the following frontend screens have been made available:

39
• The trading system is totally secured and is SSL (Secure Socket Layer) enabled. All
interactions on the trading system are encrypted using industry standard encryption
algorithms.
•
OFF LINE TRADING: (CALL & TRADE)
• Apart from Internet trading, the customers are also provided with the option of trading
through the Call & Trade facility. When the customer calls the Call & Trade number to
transact, he needs to authenticate his identity by providing the user id, and the dynamic
password number from his security token. Password is not required for Call & Trade
transactions.
• The Call and Trade telephone number is: 022 39886000

TRADING
Reliance money has various types of trading facility .which are:

TRADES

INSTA TRADE FAST TRADE SUPER TRADE INSTA TRADE EASY TRADE

EASY TRADE: All the Reliance Money Trading customers can avail this facility.
Log in to the new & improved Easy Trade:
• Simple HTML Order Entry Form
• View Market Depth and your Limits statement on the same screen
• Place order in 3 easy steps
• Access your Investment portfolio
• Access Trading + Investment products such as IPO and Mutual Funds etc.
• Available to all Reliance Securities trading customers
• Common RMS (Risk Management System)
• Work efficiently with slow internet connectivity

40
INSTA TRADE: It’s a browser based software and requires Java application for
streaming data for scripts in market watch Features:-
• Create multiple market watch, with 30 scrips in each market watch
• Key Board shortcuts available - F1, F2, F6 (+), (-) "Insert" and "Delete".
• Add NSE, BSE, FONSE and ETFs on the same market watch.
• Trade data concurrency i.e. orders / trades placed from Easy trade, Insta trade,
franchisee, kiosk or call center can be viewed here.
• All trade reports and history reports available.

SYSTEM REQUIREMENT:
• Go to Start --> Settings --> Control Panel and disable your Windows firewall in the
control panel
• Uninstall Google, Ask and vase toolbar if installed
• Download the 16MB link and Sun JRE ver 1.5.0 will be installed in your system
• Change your browser in advanced options (Tools --> Internet Options --> Advanced -->
Java (Sun))
• Microsoft VM should be disabled.

41
FAST TRADE: Reliance Securities limited provide its online share trading clients
with a browser-based platform known as fast trade. The Online Trading platform requires
basic HTML technology to operate.
• Can create up to 5 market watches per client with 25 scrips in each of them.
• Add NSE, BSE, FONSE and ETFs on the same market watch.
• View prices place orders on the same screen.
• Key Board shortcuts available - F1, F2, F6 (+), (-).
• Look and Feel + Reports - same as in Insta Trade
• Manual Refresh is required • Refresh when you want price updates.
• No JVM required. No port opening required.
• Trade data concurrency i.e. orders / trades placed from easy trade, Insta trade,
franchisee, kiosk or call center can be viewed here.

42
SUPER TRADE : Dear Customer Super Trade is a power-packed solution for all
your stock trading needs. It has been meticulously designed to provide you with a
superior trading experience- fast, reliable and feature-rich. It’s Features:-
• Fully Customizable Display :- Manage your display screen the way you want with
multiple market watches and multiple charts
• Dynamic Charts with Indicators :- Get Dynamic Charting facility with host of
technical indicators that provide with real time assistance on technical analysis.
• EOD Charts :- Get EOD charts for long term analysis with all technical indicators.
Live order status with real time order tracking.
• Real time position updates :- All your positions are updated automatically and
instantly with real time profit/loss updates.
• Enhanced Market Watch :- User can create multiple market watch, with 200 scripts-
each. You can add NSE, BSE, FONSE and ETFs on the same market watch.
• Hot Keys :- Key Board shortcuts - E.g. F1, F2, F6 (+), (-) "Insert" and "Delete", etc are
available for faster order punching.
• Consolidated Trade-data View :- Trade data i.e. orders / trades placed from Easy
trade, Insta trade, Fast trade, Sub broker or call center can be viewed concurrently.

CUSTOMER SERVICE
We have a dedicated and highly trained team of dealers at our Call & Trade Desk to
execute orders in equity. Our dealers are available to accept orders till the respective
markets are open. You can call us and place an order to trade as follows:
EQUITY: 9 AM TO 4.30 PM (Our Call & Trade number is 39886000 .)
• We will be happy to assist you with any query/service related request you may have.
• You can also email us at customer.support@reliancemoney.co.in
• In case of any grievances please write to customer.grievance@reliancemoney.co.in
• To know about your rights as an investor click here
• To know about the BSE arbitration mechanism click here
• To know about the investor grievance redressal mechanism at BSE click here
NRI SERVICES: Any queries related to NRI trading, kindly write to us at
nrihelpdesk.reliancemoney@relianceada.com

43
BROKERAGE FEE STRUCTURE: Delivery trades – 0.03%,Non delivery
Trades- 0.003%
FIXED BROKERAGE FEE: Rs. 500 for delivery trades upto 10 lakh,Rs. 500 for
non-delivery trades up to 1 crore.,
PREPAID COUPON BROKERAGE CHARGES: Rs. 500 coupon is valid for
2 months.m Rs. 1300 coupon is valid for 6 months,Rs. 2500 coupon is valid for 1 year.

OWNERSHIP
Brian Kingham (Chairman)
Chairman, and founder of the Group. He has also successfully developed various other
service businesses and is a non-executive chairman of a private group with interests in
mechanical engineering and property management. He is a former member of the CBI
Council, a member of the Court of Brunel University and a trustee and director of Crime
Concern.

Jeremy Simon (Director and legal counsel)

He joined the Group in his current position in January 2002, having previously been
corporate services director and company secretary of Prism Rail PLC, the then largest
independent passenger rail franchise operator. Prior to that he practised in partnership for
many years with a major commercial law firm specialising in corporate finance and other
business-related fields. He is also the Company Secretary.

Anthony Lawrinson (Group finance director)

Anthony joined the group in January 2009, having previously spent six years as finance
director of O2 Airwave, the emergency and public safety mobile communications
provider, which was eventually sold by O2 to infrastructure funds. He is a chartered
accountant, having qualified with Price Waterhouse, and a Member of the Association of
Corporate Treasurers. He has a wealth of experience in a wide range of finance roles and
a significant exposure to the security, technology, PFI, outsourcing and criminal justice
sectors.

44
Nigel Stapleton (Non-executive director)
Appointed in March 2002 having previously held a number of senior executive positions
within Reed International plc culminating in the chairmanship of Reed Elsevier plc in
1999. He is also chairman of Postcomm, the independent regulator of the UK postal
services, and a non-executive director of the London Stock Exchange plc.

COMPETITORS INFORMATION:
SHCIL
ANAND RATHI
ANGEL BROKING
ALANKIT
HEM SECURITIES
KARVY
RELLIGARE
HDFC
INDIA INFOLINE
JM FINANCIAL

AWARDS AND ACHIEVEMENTS

• India's largest e-broking house and Best Equity House 2009 - Awarded by Dun and
Bradstreet 2009
• Reliance Money is rated no. 1 by Starcom Worldwide for online security and cost
effectiveness
• Reliance Money has been awarded Debutant Franchisor of the Year 2007 by
Franchise India Holdings Ltd.

FUTURE PROSPECT
Although a company may have performed well in the past, it is not necessary that it will
continue performing well in the future. All companies go through business cycles of ups
and downs. It is important that you form a view on the future trends of the business the

45
company is a player in. This can be done by reading views of experts in that
business/industry and forming your own view by reading and understanding economic
trends and the impact of these trends on the company’s business.

OUR BELIEF
We believe that the employees are the force behind the company. And with the growth of
the employees will come the drive that can take this company to higher and stronger
levels. Creating a huge wave of satisfaction, not only for our customers and us, but for
the career of the employee as well.
Why us?
Whatever your career goal, Reliance Securities Limited is a company big enough for your
dreams. We, along with the other businesses of Reliance Capital, enjoy a strong position
in the financial services category. And this may be the place where you can have the
career you always wanted. .We endeavor to be unique in creating an environment that
makes pitting your skills against the world a challenging, stimulating and energizing
experience. Here, we believe that bigger the challenges that we set for ourselves, the
higher they will take us. And finding resonance with this credo is our ever-increasing
workforce.
What do we offer?

WITH US YOU WILL EXPERIENCE AND BE A PART OF:

• Opportunities for lateral growth within the company performance management system
based on the balanced scorecard model exposure to extensive learning and
developmental initiatives(that includes a state of the art e- learning platform and
strategic partnerships with international leaders for special developmental programs
• Annual awards in recognition of exemplary performance

REVIEW OF LITERATURE

46
According to the Webster’s dictionary, literature is “the writings that pertain to a
particular branch of learning, and printed matter”. And review means “to examine again,
to study carefully”.
Therefore literature review is the printed matter which we study very carefully during our
work. This project is also a collection of insight into the different printed material.
Nioshka (2009),”Depository”, ”Oppaper.com”, 13.has been study that It is a system
whereby the transfer and settlement of shares take place not through the traditional
method of transfer means and physical delivery of shares but through the modern system
of effecting transfer of ownership of securities by means of book entry on the ledgers.
The new system, thus eliminates paper work, facilities automatic and transparent trading
in shares, shortens the settlement period and ultimately contributes to the liquidity of
investment in securities. there are essentially four players in this system.- depository , the
participant, the beneficial owner ,issuer. Depository is provider for holding and
transacting in electronic form. There are two depository in India –NSDL and CSDL.
Depository participant is an agent of the depository who is authorized to offer depository
services to investors. Issuer means any entity making an issue of securities. Beneficial
owner is a person in whose name a demat account is opened with CSDL or NSDL for the
purpose of holding securities I in the electronic form and whose name is recorded as such
with CSDL.
Kiser. k. k(2002), “depository”, ”Papers.ssrn.com” ,has been study that India has
adopted the Depository System for securities trading in which book entry is done
electronically and no paper is involved. The physical form of securities is extinguished
and shares or securities are held in an electronic form. Before the introduction of the
depository system through the Depository Act, 1996, the process of sale, purchase and
transfer of securities was a huge problem, and there was no safety at all.

RESEARCH METHODOLOGY
“Research is systematic efforts to gain new knowledge”

47
The following methodology has been followed to achieve the objectives of the project:

DEVELOPING A RIGHT RESEARCH DESIGN AND TIMELINE FOR THE

PROJECT.

COLLECTING SECONDARY DATA OF THE SECURITIES INDUSTRY

DESIGNING OF THE QUESTIONNAIRE

ANALYSIS OF SECONDARY DATA

PILOT STUDY

COLLECTION OF PRIMARY DATA-QUESTIONNAIRES

ANALYSIS OF PRIMARY DATA

INTERPRETATION OF THE RESULTS

PREPARATION OF THE FINAL REPORT

Steps In Methodology

NEEDS OF STUDY
The need of my study is to known about the depositories and to see which depositories
are in india. I also want to study the depository system which emerge in capital market.
what changes has been come by the emergence of this system and also want to analyze
the investor behavior about the capital market and changes which depositories has created
OBJECTIVE OF STUDY
• To Study the depository system.

48
• To Study the effect of Emergence of Depositories on the pattern of investment in the
stock market.
• To Study & analysis the investor ‘s behavior towards trading through dematerialization.

SCOPE OF STUDY
The aim of my study is to collect information about depository and it’s services . And
What changes comes in capital market after dematerialization. Customer behavior about
the trading . For this I did the survey by using the questionnaire method and that survey is
done in Amritsar city.

SOURCES OF DATA
In the data collection method, we have collected both primary and secondary data to
meet our objectives

PRIMARY DATA
The primary data was collected by a survey based on the questionnaire. It was formulated
on the basis of information carefully gathered by me about the various mindsets of the
people. This questionnaire was mainly formulated to target the common man to see his
perception about capital market and awareness about the services of depository . The
number of respondents targeted was around 100 and the survey was confined to Amritsar
city.

SECONDARY DATA
The secondary data was collected directly from the companies and their websites and
internet surveys. Also a lot of similar research studies and bookss have been referred to.

LIMTITATION OF STUDY

49
• The most important limitation is size of sample; sample size of 100 is very less to know
the preference and behavior of investor in Amritsar.
• Another limitation is time constraint, time period of 2 months is a short duration to reach
on any conclusion.
• Some investors are reluctant and their lack of interest may lead unauthentic responses.
• Limited time available for interviewing the investor. As a result of this it is not possible
to gather full information about the respondent.

DATA ANALYSIS & INTERPRETATION

1. TRANSACTION FREQUENCY OF RESPONDENTS IN EQUITY

50
 MARKET
TRANSACTION FREQUENCY (%AGE)

DAILY 40 40%

WEEKLY 14 14%

MONTHLY 24 24%

YEARLY 22 22%

TOTAL 100 100%

REPONDENTS

22%
40%

DAILY 40
WEEKLY 14
MONTHLY 24
OCCASIONALY

24%

14%

INTERPRETATION: - This figure shows that large no. of investor

transact daily in equity market i.e. 40% whereas only 22% transact
occasionally in equity market. 14% investor transacts weekly and 24%
transact monthly in equity market.
2. ANTICIPATED INVESTMENT TIME FRAME OF
RESPONDENTS

INVESTMENT TIME FRAME FREQUENCY PER(%)

51
 LONG TERM-MORE THAN 7 YEARS 26 26%

MEDUIM TERM 4 -7 YEARS 14 14%

SHORT/MEDIUM TERM 1-3 YEARS 22 22%

SHORT TERM LESS THAN 1 YEAR 38 38%

TOTAL 100 100%

INTERPRETATION: - This figure shows that large no. of investors

make short term investment i.e. less than 1 year or they prefer intraday
trading. Investors also preferred to long term investment but least no. of
investors preferred to make investment for short/medium term i.e. 1-3
years.

3. MAJOR INVESTMENT OBJECTIVE OF RESPONDENTS IS:

INVESTMENT OBJECTIVE FREQUENCY (%AGE)

INCOME 26 26%

LIQUIDITY 20 20%

52
 TAX BENEFIT 12 12%

CAPITAL APPRECIATION 24 24%

SAFETY 18 18%

TOTAL 100 100%

INCOME 26%

LIQUIDITY 20%

TAX
BENEFIT
12%

CAPITAL
APPRECIATION 24%

SAFETY 18%

INTERPRETATION: - Here this figure shows that large no. of

investor’s transact in equity market
capital whereas tax minimization
investors.
4. PREFERABLE INVESTMENT
ARE:
because of income and growth of
is least important objective of
AVENUES OF RESPONDENTS

MAJOR INVESTNMENT FREQUENCY (%AGE)

EQUITY 34 34%

BONDS 8 8%

MUTUAL FUNDS 17 17%

REAL ESTATE 12 12%

53
 GOVT. SECUTIRIES 11 11%

FIXED DEPOSITS 9 9%

TOTAL 100 100%

40%

35%

30%

25%

20%

15%

10%

5%

0%
EQUITY BONDS MUTUAL REAL GOVT. FIXED
FUNDS ESTATE SECURITIES DEPOSITS

INTERPRETATION: - This figure shows that large no. of investor’s

who transact in equity market also preferred to make major
investment in equity. bonds and fixed deposits are least preferred
investments. this means that investor is ready to take some risk if he is
getting more income.
5. MOST PREFERABLE DEPOSITORY PARTICIPANT OF
RESPONDENDS

CHOICE OF DEPOSITORY FREQUENCY PER(%)

PARTCIPANT FOR D-MAT A/C

RELAINCE MONEY 18 18%

CARVEY 9 9%

ANGLE BROKING 35 35%

54
 INDIA BULLS 27 27%

OTHERS 11 11%

TOTAL 100 100%

35% 35%

30%
27%
25%

20%
18%
15%

10% 11%
9%
5%

0%
RELIANCE INDIABULLS CARVEY
MONEY ANGLE OTHERS
BROKING

INTERPRETATION: - This figure shows that more investors have

their Demat A/c in Angle broking Securities and minimum investors in
Carvey.

6. PREFERABLE MEAN OF INVESTMENT ADVICE ARE:

MEAN OF INVESTMENT ADVICE FREQUENCY PER(%)

STOCK MESSAGE BOARD ON NET 4 4%

PROFESSIONAL F A 13 13%

FAMILY OR FRIENDS 17 17%

BOOKS INVESTMENT WEBSITE 8 8%

MAGAZINES OR NEWSPAPERS 27 27%

55
 TV/RADIO 31 31%

TOTAL 100 100%

INTERPRETATION: - This figure shows that large no. of investors gets

their investment advice from magazine or newspaper and TV/Radio
whereas professional financial advisors and stock message board on
internet are the least preferred source of investment advice.

7. RISK TOLERANCE LEVEL OF RESPONDENTS TOWARDS

EQUITY MARKET

DECISION FREQUENCY (%AGE)

LOW RISK 10 10%

MODERATE RISK 23 23%

HIGH RISK 67 67%

56
 TOTAL 100 100%

INTERPRETATION:This Figures Show That Most Of The Investors

Have The High Risk Tolerance Level.

8. FACTORS CONSIDERING WHILE SELECTING THE

DEPOSITORY PARTICIPNAT

DECISION FREQUENCY (%AGE)

BROKERAGE COST 53 53%

TRANSPERANCY 17 17%

ADVISORY SERVICE 11 11%

CONVENIENCE 19 19%

TOTAL 100 100%

57
 INTERPRETATION: - This figure shows that large no. of investor
considered the brokerage cost factor while the selection of depository
participant.

9. PREFERENCE OF STOCK BUYING IN RECESSION PERIOD

DECISION FREQUENCY PER(%)

YES 73 73%

NO 27 27%

TOTAL 100 100%

58
 YES, , 73%
80%

70%

60%

50%

40%
NO, , 27%
30%

20%

10%

0%

INTERPRETATION: - This figure shows that 73% investors believe

that down period is a buying opportunity, while others are not.

10.RESPONSES REGARDING THE EASINESS OF LOAN

FACILITY (PLEDGE OF DEMAT SECURITIES) BY
DEMATERIALZATION.

DECISION FREQUENCY PER(%)

YES 86 86%

NO 10 10%

NO ANSWER 4 4%

59
 TOTAL 100 100%

10%

4%

YES
NO
NO ANSWER

86%

INTERPRETATION: - This figure shows that 86% investors believes

that loan facility become easy, while some are not and others doesn’t
known about it.
11. PROBLEM FACED BY INVESTORS IN TRASMISSION OF
DEMAT SHARES

DECISION FREQUENCY PER(%)

YES 2 2%

NO 98 98%

TOTAL 100 100%

60
INTERPRETATION: - This figure shows that 98% investor didn’t face
any problem regarding transmission of equity shares.

FINDINGS

• Survey show that 96 % believe that after dematerialization brokerage cost reduced.
• Survey show that mostly all people doesn’t face any problem In transmission of demat
shares.
• 40 per cent investors in AMRITSAR transact daily in equity market which means that
more investors prefers intraday trading.
• Survey shows that income and growth of capital are major objectives of investors
which show that share trading is core driver of their earning.

61
• Investors trading in share market preferred to make major investment in equity rather
in bonds, govt. securities which shows that they are not risk averse.
• Survey shows that newspaper and TV are major source of investment advice to
investors.
• Most of the investors prefer to make short term investment as their main objective is

CONCLUSION

Here I conclude that the summer internship program, done in Reliance money , for partial
fulfillment of the requirement for the award of degree of MBA program in GLOBAL
Institute of management has been completed successfully. I did my research regarding
the depositories . In that study I came to known all the services that is provided by the
depositories through the depository participant. With the help of depositories customer
doesn’t face any problem regarding the transmission of shares and also the fraud or
misplacement of securities which was happened in the case of physical shares

62
transmission. Transaction cost are also reduced . By dematerialization brokerage cost
also reduced why because elimination of intermediaries. From the survey I came to
known people mostly prefer to make investment in equity market and do the daily
trading. Their motive behind that is income and capital appreciation. The risk tolerance
level of mostly investors are high .Investors Mostly have their Demat account in Angle
broking .The factor which the investors considered the most while selecting depository
participant is brokerage cost. From the survey, I also came to known that mostly people
prefer the buying of stock in recession period. Last but not the least I want to say that It
was really great experience that I had spent in my training period. By this I got a ample
amount of knowledge.

RECOMENDATIONS

• Formality for opening for opening demat account should be simple.

• Current regulations prohibit multiple bids or applications by a single person. But
investors open multiple demat accounts and make multiple applications to subscribe to
IPOs in the hope of getting allotment of shares.So it should be in control.
• Some listed companies had obtained duplicate shares after the originals were pledged
with banks and then sold the duplicates in the secondary market to make a profit. This
is major problem and that should be removed by taking action.

63
• Transfer of money by check is to be done within few days because 4-5 days it actually
take recently.
• There is an undue delay in the settlement of complaints by investors against depository
participants. This is because there is no single body that is in charge of ensuring full
compliance by these companies.
• Trading in securities may become uncontrolled in case of dematerialized securities.

LEARNING EXPERINECE

Summer internship at Reliance money was very wonderful and learning experience for
me. It was enjoyable and very interesting time period as I got various useful opportunities
to learn about various new things. I got various experience and new learning which will
help me in future endeavor.

Some of my learning’s are as follow:

• I learned about work culture of an organization

64
• I got practical exposure of share market
• As sitting on trading desk I learned how to attend many calls at a time during trading
time
• I learned, how to attend phone call and how to talk with an angry customer
• I sold LIC, Demat account, trading account etc. So I learned how to tackle a customer
and how to push a product toward customer and encourage him to by the product.
• I learned, how to talk with manager when target is not completed and how to tackle
with target pressure
• I get to know about actual market competition and how it can be tackled.
• I learned why punctuality is important at office
• I learned to have patience when things don’t go as your wish
• I learned the meaning of professionalism and how to be professional with your work
friends and relatives
• Survey done with interest of Depository has been conducted successfully and results
are discussed above.
• In these days I got the whole knowledge about depositories by reading books and from
internet and also with the help of my guide at reliance money.
• I also got knowledge about their products and services.
• I learned the whole process of trading system.
• I also learned some operational things like filling of demat account ‘s form and
checking of that forms.

REFERENCE

WEB SITES

https://nsdl.co.in/
https://nsdl.co.in/index.php#
https://nsdl.co.in/joining/index.php
https://nsdl.co.in/value/auto.php

65
https://nsdl.co.in/joining/depprocd.php
https://nsdl.co.in/value/div.php
https://nsdl.co.in/joining/investsrv.php
http://www.cdslindia.com/
http://www.cdslindia.com/abt_cdsl/introduction.htm
http://www.cdslindia.com/cds_assoc/dpintroduction.htm
http://www.cdslindia.com/cds_assoc/icintroduction.htm
http://www.cdslindia.com/cds_assoc/rtaintroduction.htm
http://www.cdslindia.com/cds_assoc/mem_intro.htm
http://www.cdslindia.com/investors/investors_care.htm
http://www.cdslindia.com/abt_cdsl/promo.htm
http://www.cdslindia.com/abt_cdsl/mngmt.htm
http://www.cdslindia.com/abt_cdsl/whycds.htm

http://nseindia.com/

http://oppaper.com/

http://sebi.org.in/

BOOKS

Central security depository limited, BSE

National security depository limited, BSE
Financial market: a beginners’ module work book ,NCFM
Capital market (dealers) module, NCFM
A SURVEY
ON INVESTOR BEHAVIOR IN AMRITSAR
Name : Age:
Occupation:
1.. How Frequently Do You Transact In Equity Market?
1 □ Daily □ Weekly
2 □ Monthly □ Occasionally

2.. Your anticipated investment time frame is:

1 □ Long term – more than 7 years □ Medium term – 4 to 7 years
2 □ Short / medium term – 1 to 3 years □ Short term – less than 1 year

66
3
3.. Your major objective for investment is(select only one):
1 □ Income □ Safety □ Growth of capital
2 □ Tax minimization □ Marketability/ liquidity

4.. You preferred to make major investment in:

4 □ Equity □ Bonds □ Mutual funds
5 □ Real estate □ Govt. securities □ Fixed deposits

5.. In which DP you have your D-MAT A/C (if more than one please mark them all) ?
1 □ Reliance money □ India Bulls
2 □ Carvey □ Angle Broking
3 □ Other(please specify)_______________

6.. You get investment advice from:

1 □ TV /Radio □ Books investment website □ Family or friends
2 □ Professional financial advisers □ Magazines or newspaper
3 □ Stock message board on the internet

7. Risk tolerance level of investors towards equity market?

□Low Risk □Moderate Risk □High Risk

48. Which Factor do you considered while selecting depository participant ?

5 □Brokerage cost □ Transparency
6 □ Advisory services □ Convenience
7
89. Is a down period in the stock market a buying opportunity?
9 □ Yes □ No
10
10. loan facility (Pledge of demat securities) become easy by dematerialzation?
□Yes □ No □ No Answer

11. With the existence of depository , do you face any problem regarding the
transmission of demat shares?
□Yes □ No

67