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SUB-BROKER10. PAY IN PAY OUT NORMAL SETTLEMENT11. AUCTION Uploaded for www.projectsparadise.comProjects, Thesis, Dissertation www.projectsparadise.com1. INTRODUCTION TO INDIAN MARKETSTHERE ARE TWO TYPES OF MARKETS IN INDIAMONEY MARKETMoney market is a market for debt securities that pay off in the short term usually lessthan one year, for example the market for 90-days treasury bills. This marketencompasses the trading and issuance of short term non equity debt instrumentsincluding treasury bills, commercial papers, bankers acceptance, certificates ofdeposits, etc.In other word we can also say that the Money Market is basically concerned with theissue and trading of securities with short term maturities or quasi-money instruments.The Instruments traded in the money-market are Treasury Bills, Certificates ofDeposits (CDs), Commercial Paper (CPs), Bills of Exchange and other suchinstruments of short-term maturities (i.e. not exceeding 1 year with regard to theoriginal maturity)CAPITAL MARKETCapital market is a market for long-term debt and equity shares. In this market, thecapital funds comprising of both equity and debt are issued and traded. This alsoincludes private placement sources of debt and equity as well as organized marketslike stock exchanges.Capital market can be divided into Primary and Secondary Markets.PRIMARY MARKETIn the primary market, securities are offered to public for subscription for the purposeof raising capital or fund. Secondary market is an equity trading avenue in whichalready existing/pre- issued securities are traded amongst investors. Secondarymarket could be either auction or dealer market. While stock exchange is the part ofan auction market, Over-the-Counter (OTC) is a part of the dealer market.In addition to the traditional sources of capital from family and friends, startup firms arecreated and nurtured by Venture Capital Funds and Private Equity Funds. Accordingto the Indian Venture Capital Association Yearbook (2003), investments of $881million were injected into 80 companies in 2002, and investments of $470 million wereinjected into 56 companies in 2003. The firms which received these investments weredrawn from a wide range of industries, including finance, consumer goods and health. Uploaded for www.projectsparadise.comProjects, Thesis, Dissertation - www.projectsparadise.comThe growth of the venture capital and private equity mechanisms in India is criticallylinked to their track record for successful exits. Investments by these funds onlycommenced in recent years, and we are seeing a rapid buildup in a full range ofchannels for exit, with a mix of profitable and unprofitable outcomes. This success withexit suggests that investors will allocate increased resources to venture funds andprivate equity funds operating in India, who will (in turn) be able to fund the creation ofnew firms.SECONDARY MARKETSecondary Market refers to a market where securities are traded after being initiallyoffered to the public in the primary market and/or listed on the Stock Exchange.Majority of the trading is done in the secondary market. Secondary market comprisesof equity markets and the debt markets.For the general investor, the secondary market provides an efficient platform fortrading of his securities. For the management of the company, Secondary equitymarkets serve as a monitoring and control conduitby facilitating value-enhancingcontrol activities, enabling implementation of incentive-based management contracts,and aggregating information (via price discovery) that guides management decisions. Difference between the primary market and the secondary marketIn the primary market, securities are offered to public for subscription for thepurpose of raising capital or fund. Secondary market is an equity trading avenue inwhich already existing/pre- issued securities are traded amongst investors. Secondarymarket could be either auction or dealer market. While stock exchange

is the part ofan auction market, Over-the-Counter (OTC) is a part of the dealer market.Main financial products/instruments dealt in the secondary market Equity:The ownership interest in a company of holders of its common andpreferred stock. The various kinds of equity shares are as follows Equity Shares:An equity share, commonly referred to as ordinary share also represents theform of fractional ownership in which a shareholder, as a fractional owner,undertakes the maximum entrepreneurial risk associated with a businessventure. The holders of such shares are members of the company and havevoting rights. A company may issue such shares with differential rights as tovoting, payment of dividend, etc. Rights Issue/ Rights Shares:The issue of new securities to existingshareholders at a ratio to those already held. Uploaded for www.projectsparadise.comProjects, Thesis, Dissertation www.projectsparadise.com Bonus Shares: Shares issued by the companies to their shareholders free ofcost by capitalization of accumulated reserves from the profits earned in theearlier years. Preferred Stock/ Preference shares: Owners of these kind of shares areentitled to a fixed dividend or dividend calculated at a fixed rate to be paidregularly before dividend can be paid in respect of equity share. They also enjoypriority over the equity shareholders in payment of surplus. But in the event ofliquidation, their claims rank below the claims of the companys creditors,bondholders / debenture holders. Cumulative Preference Shares:A type of preference shares on which dividendaccumulates if remains unpaid. All arrears of preference dividend have to bepaid out before paying dividend on equity shares. Cumulative Convertible Preference Shares:A type of preference shareswhere the dividend payable on the same accumulates, if not paid. After aspecified date, these shares will be converted into equity capital of the company. Participating Preference Share:The right of certain preference shareholders toparticipate in profits after a specified fixed dividend contracted for is paid.Participation right is linked with the quantum of dividend paid on the equityshares over and above a particular specified level. Security Receipts:Security receipt means a receipt or other security, issued bya securitisation company or reconstruction company to any qualified institutionalbuyer pursuant to a scheme, evidencing the purchase or acquisition by theholder thereof, of an undivided right, title or interest in the financial asset involvedin securitisation. Government securities (G-Secs):These are sovereign (credit risk-free) couponbearing instruments which are issued by the Reserve Bank of India on behalf ofGovernment of India, in lieu of the Central Government s market borrowingprogramme. These securities have a fixed coupon that is paid on specific dateson half-yearly basis. These securities are available in wide range of maturitydates, from short dated (less than one year) to long dated (upto twenty years). Debentures:Bonds issued by a company bearing a fixed rate of interest usuallypayable half yearly on specific dates and principal amount repayable onparticular date on redemption of the debentures. Debentures are normallysecured/ charged against the asset of the company in favour of debentureholder. Bond:A negotiable certificate evidencing indebtedness. It is normally unsecured.A debt security is generally issued by a company, municipality or governmentagency. A bond investor lends money to the issuer and in exchange, the issuer Uploaded for www.projectsparadise.comProjects, Thesis, Dissertation www.projectsparadise.compromises to repay the loan amount on a specified maturity date. The issuerusually pays the bond holder periodic interest payments over the life of the loan.The various types of Bonds are as follows- Zero Coupon Bond:Bond issued at a discount and repaid at a face value. Noperiodic interest is paid. The difference between the issue price and redemptionprice represents the return to the holder. The buyer of these bonds receives onlyone payment, at the maturity of the bond. Convertible Bond:A bond giving the investor the option to convert the bond intoequity at a fixed conversion price.

Commercial Paper:A short term promise to repay a fixed amount that is placedon the market either directly or through a specialized intermediary. It is usuallyissued by companies with a high credit standing in the form of a promissory noteredeemable at par to the holder on maturity and therefore, doesnt require anyguarantee. Commercial paper is a money market instrument issued normally fora tenure of 90 days. Treasury Bills:Short-term (up to 91 days) bearer discount security issued by theGovernment as a means of financing its cash requirements.2. SEBISECURITY AND EXCHANGE BOARD OF INDIASEBI AND ITS ROLE IN THE SECONDARY MARKETThe SEBI is the regulatory authority established under Section 3 of SEBI Act 1992 toprotect the interests of the investors in securities and to promote the development of,and to regulate, the securities market and for matters connected therewith andincidental thereto. Uploaded for www.projectsparadise.comProjects, Thesis, Dissertation www.projectsparadise.comSecurities and Exchange Board of India constituted under the Resolution of theGovernment of India in the Department of Economic Affairs No.1 (44)SE/86, dated the12th day of April, 1988;The Board shall consist of the following members, namely:-1. A Chairman2. Two members from amongst the officials of the Ministry of the CentralGovernment dealing with Finance (and administration of the Companies Act,1956;) 2 of 19343. One member from amongst the officials of [the Reserve Bank4. Five other members of whom at least three shall be the whole-time membersDepartments of SEBI regulating trading in the secondary market(1) Market Intermediaries Registration and Supervision department (MIRSD)Registration, supervision, compliance monitoring and inspections of all marketintermediaries in respect of all segments of the markets viz. equity, equity derivatives,debt and debt related derivatives.(2) Market Regulation Department (MRD)Formulating new policies and supervising the functioning and operations (exceptrelating to derivatives) of securities exchanges, their subsidiaries, and marketinstitutions such as Clearing and settlement organizations and Depositories(Collectively referred to as Market SROs).(3)Derivatives and New Products Departments (DNPD)Supervising trading at derivatives segments of stock exchanges, introducing newproducts to be traded, and consequent policy changes.POWERS & FUNCTIONS1. Regulating the business in stock exchanges and any other securities markets.2. Registering and regulating the working of stock brokers, sub-brokers, sharetransfer agents, bankers to an issue, trustees of trust deeds, registrars to anissue, merchant bankers, underwriters, portfolio managers, investment advisersand such other intermediaries who may be associated with securities marketsin any manner.3. Registering and regulating the working of the depositories, participantscustodians of securities, foreign institutional investors, credit rating agencies Uploaded for www.projectsparadise.comProjects, Thesis, Dissertation www.projectsparadise.comand such other intermediaries as the board may, by notification, specify in thisbehalf.4. Registering and regulating the working of (venture capital funds and collectiveinvestment schemes) including mutual funds.5. Promoting and regulating self-regulatory organizations.6. Prohibiting fraudulent and unfair trade practices relating to securities markets.7. Promoting investors education and training of intermediaries of securitiesmarkets.8. Prohibiting insider trading in securities.9. Regulating substantial acquisition of shares and take-over of companies.10. Calling for information from, undertaking inspection, conducting inquiries andaudits of the stock exchanges, (mutual funds) and other persons associatedwith the securities market and intermediaries and self- regulatory organizationsin the securities market.11. Performing such functions and exercising such powers under the provisions ofsecurities contracts (regulation) act, 1956, as may be delegated to it by thecentral government.12. Levying fees or other charges for carrying out the purpose of this section.13. Conducting research for the above purposes.BOMBAY STOCK EXCHANGE OF INDIA LIMITEDBombay Stock Exchange Limited is

the oldest stock exchangein Asia with a rich heritage. Popularly known as "BSE", it wasestablished as "The Native Share & Stock Brokers Association"in 1875. It is the first stock exchange in the country to obtain permanent recognition in1956 from the Government of India under the Securities Contracts (Regulation) Act,1956. Uploaded for www.projectsparadise.comProjects, Thesis, Dissertation www.projectsparadise.comThe Exchange s pivotal and pre-eminent role in the development of the Indian capitalmarket is widely recognized and its index,SENSEX , is tracked worldwide. Earlier anAssociation of Persons (AOP), the Exchange is now a demutualised and corporativeentity incorporated under the provisions of the Companies Act, 1956, pursuant to theBSE (Corporatization and Demutualization) Scheme, 2005 notified by the Securitiesand Exchange Board of India (SEBI).With demutualization, the trading rights and ownership rights have been de-linkedeffectively addressing concerns regarding perceived and real conflicts of interest. TheExchange is professionally managed under the overall direction of the Board ofDirectors.The Board comprises eminent professionals, representatives of Trading Members andthe Managing Director of the Exchange. The Board is inclusive and is designed tobenefit from the participation of market intermediaries.In terms of organization structure, the Board formulates larger policy issues andexercises over-all control. The committees constituted by the Board are broad-based.The day-to-day operations of the Exchange are managed by the Managing Directorand a management team of professionals.The Exchange has a nation-wide reach with a presence in 417 cities and towns ofIndia. The systems and processes of the Exchange are designed to safeguard marketintegrity and enhance transparency in operations. During the year 2004-2005, thetrading volumes on the Exchange showed robust growth.The Exchange provides an efficient and transparent market for trading in equity, debtinstruments and derivatives. The BSE s On Line Trading System (BOLT) is aproprietary system of the Exchange and is BS 7799-2-2002 certified. The surveillanceand clearing & settlement functions of the Exchange are ISO 9001:2000 certified.Bombay Stock Exchange Limited (BSE) which was founded in 1875 with six brokershas now grown into a giant institution with over 874 registered Broker-Membersspread over 380 cities across the country. Today, BSE s Wide Area Network (WAN)connecting over 8000 BSE Online Trading (BOLT) System Trader Work Stations(TWS) is one of the largest of its kind in the country.With a view to provide efficient and integrated services to the investing public throughthe members and their associates in the operations pertaining to the Exchange,Bombay Stock Exchange Limited (BSE) has set up a unique Member Services andDevelopment to attend to the problems of the Broker-Members.Member Services and Development Department is the single point interface forinteracting with the Exchange Administration to address to Members

issues. TheDepartment takes care of various problems and constraints faced by the Members invarious products such as Cash, Derivatives, Internet Trading, and Processes such as Uploaded for www.projectsparadise.comProjects, Thesis, Dissertation www.projectsparadise.comTrading, Technology, Clearing and Settlement, Surveillance and Inspection,Membership, Training, Corporate Information, etc.PERSONALIZED SERVICE PROVIDERMember Services and Development has put in place the concept of RelationshipManagers whereby an Officer is responsible for providing comprehensive services toa group/ set of Members alloted to him/her. The Relationship Managers maintain acomprehensive database on the members and their associates.A distinct feature of the functioning of the Relationship Manager is attending to thediverse problems of the Members at one stop by co-ordinating with variousdepartments thus saving valuable time and energy for the Members. This synergeticeffort will benefit both the Exchange and

its members in consolidating the businessand exploiting the opportunities.VISION OF BSEEmerge as the premier Indian stock exchange byestablishing global benchmarks"COMMODITY EXCHANGESThere are three categories: NCDEX MCX NMCEA brief description of commodity exchanges are those which trade inparticular commodities, neglecting the trade of securities, stock indexfutures and options etc.In the middle of 19th century in the United States, businessmen beganorganizing market forums to make the buying and selling of commodities Uploaded for www.projectsparadise.comProjects, Thesis, Dissertation www.projectsparadise.comeasier. These central marketplaces provided a place for buyers andsellers to meet, set quality and quantity standards, and establish rules ofbusiness.Agricultural commodities were mostly traded but as long as there arebuyers and sellers, any commodity can be traded. In 1872, a group ofManhattan dairy merchants got together to bring chaotic condition in NewYork market to a system in terms of storage, pricing, and transfer ofagricultural products.In 1933, during the Great Depression, the Commodity Exchange, Inc.,was established in New York through the merger of four small exchan ges the National Metal Exchange, the Rubber Exchange of New York, theNational Raw Silk Exchange, and the New York Hide Exchange.The major commodity markets are in the United Kingdom and in the USA.In india there are 25 recognized future exchanges, of which there arethree national level multi-commodity exchanges. After a gap of almostthree decades, Government of India has allowed forward transactions incommodities through Online Commodity Exchanges, a modification oftraditional business known as Adhat and Vayda Vyapar to facilitate betterrisk coverage and delivery of commodities.The three exchanges are:1.National Commodity & Derivatives Exchange Limited (NCDEX)2.Multi Commodity Exchange of India Limited (MCX)3.National Multi-Commodity Exchange of India Limited (NMCEIL)All the exchanges have been set up under overall control of ForwardMarket Commission (FMC) of Government of India.National Commodity & Derivatives Exchange Limited (NCDEX)National Commodity & Derivatives Exchange Limited (NCDEX) located in Mumbai is apublic limited company incorporated on April 23, 2003 under the Companies Act, 1956and had commenced its operations on December 15, 2003.This is the only commodityexchange in the country promoted by national level institutions. A Project Report on NSE Download this Document for FreePrintMobileCollectionsReport DocumentReport this document?Please tell us reason(s) for reporting this document Spam or junk Porn adult content Hateful or offensiveIf you are the copyright owner of this document and want to report it, please follow these directions to submit a copyright infringement notice.Report Cancel This is a private document. Info and Rating Reads:4,065Uploaded:09/23/2009Category:Uncategorized.Rated:Copyright:Attribution Non-commercial raghavhindiShare & Embed Related Documents PreviousNext p. p. p. p. p. p. p.

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