Description
Singapore Exchange trades continuously from 9 am to 5 pm. From 1 August 2011, Singapore Exchange introduced continuous all-day trading for the securities market.[6] As a result, the lunch break, between 12:30 pm to 2.00 pm, was scrapped.
Shenton Way, # 19 --- 00 SGX, Centre 7, 068804, Singapore.
SGX is Asia-Pacific’s first demutualised and integrated securities and derivatives exchange. SGX was inaugurated on 1st December 1999, following the merger of two established and well respected financial institutions---the Stock Exchange of Singapore (SES) and the Singapore International Monetary Exchange (SIMEX). Stock of SGX is a component of benchmark indices like MCSI Singapore Free Index and the Straits Times Index. The SES (Stock Exchange of Singapore) was incorporated in May 1973 under Companies Act and licensed under the Securities Industry Act, administered by MAS (Monetary Authority of Singapore). At the end of December 1999, over 370 companies were listed on SES with total market capitalization of about S$434 billion. The total number of companies listed with the SGX are 501.
MISSION
As a leading market place, SGX strives to continually innovate and provide its customers with convenient access, quality products and the best price discovery at a competitive cost while seeking to create value for its shareholders.
CODE OF CORPORATE GOVERNANCE
It was issued by the ‘CGC’ Corporate Governance Committee on 21 st March 2001. The Code is divided into four main sections: Board matters. Remuneration matters.
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Accountability and audit. Communication with shareholders.
ORGANISATIONAL STRUCTURE
Corporate Communications
CEO President
Internal Audit
Human Resources
BOARD OF DIRECTORS
The Board Of Directors of SGX comprises of: Nominating Committee (6 members). Executive Committee (8members). Audit Committee (7 members). Appeals Committee (7 members). Compensation And Management Development Committee (6 members). Strategy Committee (9 members). Conflicts Committee (6 members).
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The SGX categorizes its SBU’s, that is its Strategic Business Units as shown below:
PRODUCTS (SECURITY PRODUCTS)
? Equity And Equity Options.
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Warrants And Covered Warrants. Bonds, Debentures And Loan Stock. Depository receipts. Exchange Traded Funds. Real Estate Investment Funds.
PRODUCTS (DERIVATIVES PRODUCTS)
Short-term interest rate futures and options on futures. Long-term interest rate futures and options on futures. Equity index futures and options on futures. Single stock futures.
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EASE OF TRADING
SGX’s continuous investment in state-of-the-art technology has enabled it to provide greater efficiency and convenience to its trading and settlement systems. SGX Access was introduced to generate greater access and liquidity into SGX’s market place. So, SGX’s member companies can customize their order routing system and also execute orders directly to SGX’s trading system from any global location. SGX Link also exists to facilitate efficient trading and settlement of foreign securities between exchanges. The first company trading established under it was with Australian Stock Exchange.
PROCESS FOR LISTING ON SGX SECURITIES TRADING
A company initiates the listing process by appointing a Singapore-based financial institution to be its sponsor and lead manager. The lead manager is usually a member company of SGX, a merchant bank or other similar institutions acceptable to SGX. The lead manager will: ? ? ? ? Assume an active role and prepare the company for listing. Manage the launch. Submit listing application on behalf of the company. Liaise with SGX on all matters arising from application for listing.
The company needs to appoint a lawyer to oversee legal aspects of listing. The appointed Certified Public Accountant will provide the company with an initial evaluation of its readiness to go public, assist in upgrading its management capabilities and in preparing the launch. Prior to and during the launch, the company will have to engage the service of an experienced public relations firm to help enhance its appeal and convey its corporate messages effectively to the investing public. The timeframe for a listing company varies for different companies, ranging two months to two years. On an average, the whole process should last about four to eight months.
Day 21
Day 0
Day 14
Day 21
Day 28
TIMEFRAME FOR LISTING A COMPANY ON THE SGX
The indicative timeline is as shown above. By Day 21: Consults SGX on issues to be resolved. By Day 0 : Submits listing application and prospects to SGX, SGX reviews it. By Day 14: Public Comment, lodging prospectus with MAs and simultaneous submission to SGX. By Day 21: Registration, launches offer, submits replacement or supplementary prospectus to SGX at the same time it lodged the document with MAs. By Day 28: Close to offer, registration extension, issuer makes prequotation disclosure (if any). SGX lists issuer’s securities and commences secondary trading.
A few of listing requirements are: Operating track record of at least three years. Continuity of management should be at least three years. Accounting Standards being followed by the applying company should be Singapore, US, or International Accounting Standards. However, companies do have waiver from having to comply with continuing listing obligations if listed on another recognized foreign stock exchange. SGX SESDAQ was established to aid smaller companies, foreign or local in raising funds from the stock market. No quantitative requirements exist for a listing on SGX SESDAQ. Business is simply expected to be viable and profitable, with good growth prospects. Even if the company doesn’t have a track record, it has to demonstrate that it requires funds to finance a project or develop a product, which must have been fully researched and costed. Waiver also is obtainable if company is also listed on another recognized foreign Stock exchange. Besides, the quantitative requirements for listing, applicants will also have to address issues relating to conflict of interests, quality and integrity of management amongst others.
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MEMBERSHIP
Market participants who choose to offer specialist equities execution-only services can opt to be a member with trading, but not clearing rights. Members with trading rights must be qualified by a member of CDP at all times. CDP stands for Central Depository (Pte) Limited. It provides depository clearing and settlement and computerized book-entry services for securities traded on SGX ST (Singapore Exchange Securities Trading Limited).
Membership Fees.
Admission Fee (S$)
Recurring Fee (S$)
Member of SGX Securities Trading (with trading rights). Annual Membership Fee.
1,50,000. -----
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25,000.
Approved Executive Director.
5,000 each. 4,000 each. 1,50,000. ---------
75 per month.
Trading Representative.
75 per month.
Member of CDP (with clearing rights).
Annual Membership Fee.
25,000.
Member of SGX Securities Trading and CDP (with both trading and clearing rights).
2,00,000.
----Annual Membership Fee.
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50,000
REGULATIONS
SGX’s regulatory functions are: Issuer Regulation.
Review listings applications, monitor ongoing compliance with listing needs and provide support on regulatory issues to listed companies. Member Supervision. Process membership applications and permits, monitors members’ compliance with SGX rules and provide support on regulatory issues to members’, and investigate compliance concerning members. Market Surveillance. Maintain surveillance of all trading activities. Enforcement. Investigate suspected infractions and complaints, and perform necessary disciplinary follow-up. Risk Management. Monitor and manage SGX’s counterparty risk exposure to clearing members for SGX trades.
REGULATION FOR MEMBERS
SGX conducts annual on-site inspections of our members to ensure that the rules and regulations relating to trading in securities and/or futures are complied with and that comprehensive internal controls are in place. SGX also monitors the financial health of members to ensure they have adequate capital for their operations. Members must file financial reports with SGX periodically. In addition, members are required to submit their annual audited accounts.
REGULATION FOR LISTED MEMBERS
Listed companies are required to observe the SGX ST listing rules, which are designed to promote a high standard of disclosure and coporate governance by listed companies. SGX monitors compliance with listing rules. These rules are reviewed periodically to ensure that they meet the changing needs of the market and reflect international best practice.
To ensure adequate and timely disclosure of information, SGX monitors news reports by the media and announces financial results and annual reports issued by listed companies. Other regulatory activities include reviewing new and additional listing applications to ensure compliance, reviewing prospectuses, offering memoranda and shareholder circulars for adequacy of disclosure providing guidance to prospective or listed companies, and dealing with other matters concerning listing rules.
REGULATION FOR MEMBERSHIP TO SGX
SGX reviews the admission and registration of derivatives members and securities members, their directors, and trading representatives. SGX ensures that members and trading representatives meet the admission or registration criteria before admitting or registering them. Part of our review also includes checks with local or overseas regulatory authorities or exchanges on the applicants. From time to time, SGX also reviews its policies and rules on membership to meet the changing needs of market place.
TRADING TRADING SYSTEMS
Open Outcry.
Electroni c Trading System (ETS).
TRADING SYSTEM ON THE SGX
SECURITIES
Trading sessions are held daily from Mondays to Fridays between 9:00am to 12:30pm and 2:00pm to 5:00pm. In addition, there is a Pre-Open Routine from 8:30am to 9:00am and Pre-Close Routine from 5:00pm to 5:06pm. There is no trading on Singapore public holidays and on weekends. When a holiday falls on Sunday, the following Monday will be a public holiday. On the eves of Christmas, New Year and Chinese New Year, the market normally opens for half a day (although they are still considered as one trading day).
DERIVATIVES
For derivatives trading, there exists a Trading Calendar for 2005 and beyond, besides the trading calendar of previous years. All-Or-One (AON) Trading Facility. AON orders are designed to allow transactions with a size at or above a pre-determined threshold to be executed in their entirety at a single price. SGX-DT (Derivatives Trading Division) has its roots in SIMEX. SGX-DT offers wide range of international derivatives in the Asia-Pacific. A number of instruments are futures and options on interest rates, stock indices, energy and commodities.
TRADING INFRASTRUCTURE
SGX Securities Trading provides a sound and efficient trading infrastructure that enables member companies’ easy and reliable access into its securities market. There are three channels to trade securities in SGX, namely via SGX Access, SESOPS and VTI. Orders are routed through one of these accesses to the central trade matching engine known as the Central Limit Order Book (CLOB) for matching of trades before such information is transmitted to the CDP clearing and settlement systems. SESOPS (Singapore Exchange Securities Order Processing System) is a proprietory trading terminal provided by SGX Securities Trading to member companies. It provides high performance basic trading, real time market information and credit limit control functionalities. CLOB (Central Limit Order Book) is a screen-based computerizes trading system. VTI (Virtual terminal Interface) provides an access point for SGX Securities Members’ internet trading systems to interface with the CLOB trade matching engine. Orders received from Members’ internet trading systems are routed via the VTI interface to the SESOPS controller through to CLOB.
TRADING SYSTEM
The SGX seems to be following the T+3 system of trading. If an investor does not have required shares in his account on the due date (the third market day following trade day), CDP (Central Depository Pte Limited) will buy-in shares on market to satisfy delivery obligations. Buying-in starts the day after due date and will start at 2 minimum bids above closing price of previous day, the current ;ast done price or current bid, whichever is highest. Investor pays the difference between selling price and buy-in price, including brokerage and other costs.
OPEN OUTCRY
Traders stand in designated areas, often octagonal, called ‘Trading Pits’ on the trading floor. Every trader in the pit is an auctioneer. Each one announces his own bids and offers, depending on whether he is buying or selling. Hands signals indicating buying or selling, price and quantity are used. Say, for example, if everyone is bidding at the same time, the seller will sell to whoever he hears first. All transactions including spreads must be done through open outcry and accompanied by the use of hand signals in the designated pit. There is a well established system underlying the apparent chaos that the open outcry system creates. Only the best bid and offer are allowed to surface in the market place.
OUTCRY TRADING PROCESS Customers place their orders through brokers. Brokers call customers to inform them of their filled orders.
Brokers relay orders to Floor Staff via phone or order routing system. Floor Staff relay details of trade to brokers.
Floor Staff signal orders to their traders in the pit.
Traders signal details of trade to Floor Staff.
Traders execute orders in the pit upon receiving them.
OPEN OUTCRY TRADING PROCESS ON THE SGX
SGX ETS (SGX ELECTRONIC TRADING SYSTEM)
SGX ETS is very connective, has enhanced trading capability, is secure and reliable and assures of nice market integrity. Also, it gives access and participation and facilitates a wide variety of order types.
BROKERAGE RATES
Brokerage rates are fully negotiable for all transactions on SGX Securities Trading.
CLEARING FEES
Clearing fee of 0.05% on the value of the contract, subject to a maximum of S$200 is payable. Goods and Services Tax (GST) of 4% on brokerage and clearing fees is payable. No foreign exchange controls or capital gains tax on trading of Securities by non-residents.
DERIVATIVES CLEARING PROCESS
Clearing is the process in which positions carried on Clearing Members’ books are margined and marked to the latest market prices. At the end of each day, all outstanding positions are marked to their respective daily closing prices. By this, exposure to Clearing Members’ losses arising from daily price changes is significantly reduced. Also, each and every Clearing Members’ margin requirement is recomputed using SPAN methodology. To do so, Clearing Members are required to report their open positions using Position Change Sheets (PCS) for each contract as at the end of each day.
At the end of each clearing cycle, credit/debit instructions are sent to SGX-DC’s settlement banks to instruct them to credit/debit Clearing Members’ accounts for mark-to-market profits/losses and margin calls. Then, each and every settlement bank is required to confirm to SGX-DC within a stipulated time via SWIFT that if they are able to carry out the instructions.
SECURITIES CLEARING PROCESS
A Clearing Fund is also applied in the event a clearing member is unable to discharge its money obligations to CDP or if CDP suffers any loss as a result of liquidating a Clearing Member’s position.
SETTLEMENT PRICES
The settlement prices are fixed on the third market day following trade day, that is, when the seller of shares sells the shares, his CDP Securities Account is debited on right of third market day. Broker pays net sales proceeds by market day after due date of contract. When the buyer of shares buys shares, he must pay for his purchase by the due date of contract, following which shares will be credited into his CDP Securities Account.
SECURITIES MEMBERS
SGX has the following members in its list members dealing in securities: ABN AMRO, BNPPARIBAS PEREGRINE CITIGROUP, CLSA, FRASER, MORGAN STANLEY and many other reputed names.
3rd QUARTER FY 2004 FINANCIAL RESULTS OF SGX
Operating Revenue. Net Profit After Tax.
S$245.0 m S$ 98.6 m
HALF YEAR FINANCIAL RESULTS FOR FY 2004
Operating Revenue. Net Profit After Tax.
S$163.5 m S$ 61.3 m
The summated financial results of SGX show that its performance has improved in between two quarters. Both, the Operating Revenue and the Net Profit After Tax have increased considerably. And such an increase has been in between two quarters, which is commendable. However, in 2001, the SGX saw a grim picture as the number of IPOs (Initial Public Offerings) reduced by more than half from 87 in 2000 to 37 in 2001. Market capitalization of stocks on SGX Main Board fell 14.9% and value of stocks on Sesdaq, SGX’s small cap board, declined 23.6%.
HOW TO BE AN INVESTOR ON THE SGX
As an investor, a trading account is needed with a broker when someone intends to buy or sell shares. Also, the intending party must have an account with CDP (Central Depository Pte Limited). Internet trading Account can also be opened. Or the intending party can buy or sell shares by Authorized Trading Centres located at selected bank branches. No capital gain tax is applicable on profits on share investments. However, dividends are taxable and are taxed at source at company tax rate. An investor can claim the difference between company tax paid at source and his personal tax rate in his Income Tax returns.
INDEX OF SGX
INDEX OF THE SGX
FIVE YEAR INDEX OF THE SGX
FIVE YEAR INDEX OF THE SGX
Index Value: Trade Time: Change: Prev Close: Open:
1,873.75
5:05AM ET 0.82 (0.04%) 1,874.57 1,870.27
Day's Range: 52wk Range:
1,864.75 - 1,877.05 1,489.46 - 1,912.93
17, PO --- AI ROAD, TAIPEI, TAIWAN.
The TSEC (Taiwan Stock Exchange Corporation) was established in 1961 by the government of the Republic of China. The TSEC, funded by various private and state-owned enterprises, began operation on February 9, 1962. It has been the sole centralized securities market in Taiwan. It has been awarded
ISO 9001 and 9002 Certificates in January and February 1998, respectively. TSEC is a private corporation.
MISSION
The mission of TSEC is: To provide innovative, efficient and superior services. To maintain a fair, open and safe trading market.
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ORGANIZATION
TSEC is a private corporation with the Shareholders Meeting as its highest policy making body, under which are three supervisors and a Board Of Directors composed of fifteen directors, whose major responsibility is to oversee the business operations. The President of TSEC is Fortune Ju. The TSEC now has fifteen departments /offices whose functions are as follows: Listing Department: To draft and execute the rules and regulations of securities listing. Trading Department: To draft and execute the rules and regulations of securities trading. Clearing Department: To draft and execute the rules and regulations of securities clearing and settlement. ? Market Surveillance Department: To draft and execute the rules and regulations of securities market surveillance. ? ? Auditing Department: To audit the financial and business operations of the securities firms. System Development Department: To administer the planning and research of computer projects and related procurement affairs; to develop, design and test application programs. ? Computer Operation Department: To administer the installation, maintenance and management of computer-related facilities and the execution, operation, service and audit of computer business. Besides, there are departments like market information department, international affairs department, public relations office, research and development department, finance department, administration department, secretarial office and internal auditing.
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SECURITIES TRADED
The securities traded on the TSEC include: Government Bonds. Convertible Bonds. Beneficiary Certificates. Covered Warrants. TDRS (Taiwan Depository Receipts).
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Foreign securities are welcome to be dually listed and traded on the TSEC.
LISTING OF SECURITIES
A company applying for listing has to meet certain criteria regarding its financial and operational conditions. The applying company will be scrutinized by the Screening Committee for Listing. Qualified Companies will be reviewed by the BOD for endorsement, and then to the Securities and Futures Commission (SFC) for final approval. After approved by the SFC, besides paying the listing fee, the listing company must submit to the TSEC its annual and semi ---- annual CPA---audited financial reports as well as the first, the third quarter financial reports and the financial forecast reports reviewed by a CPA. The TSEC not only supervises and regulates the listed companies’ financial and operational status on a routine basis and on contingent events, but verifies and discloses their material information.
TRADING OF SECURITIES
Initially, there was on open outcry system for trading securities. Then, in August 1985,it was gradually substituted by a computer-aided trading system (CATS), which was eventually upgraded to a fully automated securities trading (FAST)system in 1993. Trading session of the centralized market is 9:00 am to 1:30 pm, Monday to Friday. The off-hour trading session is 2:00 pm to 2:30 pm, Monday to Friday. Thirty minutes before the market opens, customers
orders can be keyed in by the personnel of the Securities firm on first-come-first-serve basis. Once the order is accepted by the TSEC computer, a confirmation of receipt will be sent to the securities firm. And after a transaction is executed, a trade report will be printed at the firm where the order originates. In special cases, listed stock may be traded through negotiation auction, tender or other means. Trading system of TSEC operates in a consolidated limit order book environment, where only limit orders are recorded. During regular trading sessions from 9:00 am to 1:30 am, buy and sell orders can interact to determine executed price subject to applicable auto matching rules. Orders can be entered half an hour before trading session starts at 9:00 am. Buy and sell orders are in standard unit or multiples of standard units. One trading unit is 1,000 shares as a uniform par value of NT $10 per share is applicable to all listed stocks. Orders below 1,000 shares are odd lot and orders not less than 5,00,000 shares are block trading. Off hour trading sessions orders are accepted from 2:00 pm to 2:30 pm and then buying and selling orders takes place at regular session’s closing prices.
TRADING SCHEDULE
The Trading Schedule of TSEC is as given:
Trading Sessions
Regular Off- hour Odd-lot Block
Trading Days
Monday to Friday Monday to Friday Monday to Friday Monday to Friday
Trading Hours
9:00 to 13:30 14:00 to 14:30 15:00 to 16:00 14:30 to 15:30
FAST TRADING SYSTEM (FULLY AUTOMATED SECURITIES TRADING)
The FAST trading at the TSEC takes place as described:
Investo rs Issue Orders
Broke rs Sequence Order tickets Key in on order Entry Terminal s
Quote Vendor s
FAS T
Trading match Stock orders based on Trading Rules
Order Confirm Trade Report
Quotation Board and MIS Screen
Market Data Distribution
Elect Display Devices Videotek terminal or PC or Cable TV
Process Market Data
FAST TRADING SYSTEM AT THE TSEC
CLEARING AND SETTLEMENT
Before 1989, securities transactions at the centralized market were settled by physical delivery of securities. Then, a TSCD (Taiwan Securities Central Depository Company) was formed to administer the centralized depository and book entry settlement system. The settlement of shares and payments between securities firms and the TSEC is proceeded on T+2. The Securities Lending System is also promulgated to cope with the settlement needs of securities and publishes them monthly. Moreover, on
June 5, 1997, the TSEC became a member of the Association of National Numbering Agencies (ANNA), which further paves the way for cross-border trading and settlement in future.
SECURITIES FIRMS AND INVESTORS
According to the Securities And Exchange Law, the establishment of a securities firm and its branch should have prior approval and obtain a special license from the Competent Authority. Each security firm must specify to the public whether it is only a brokerage firm or it involves in proprietary trading. Also, it must sign a contract with the Exchange and deposit a specified amount of guarantee for settlement. The securities firm is responsible for its employees both in sales representation and in dealing with the Exchange. TSEC regularly sends inspectors to check the securities brokers and dealers on-site to see whether the business operation and financial status meet all requirements. All securities dealers are required to set aside the monthly trading-loss reserve, and securities brokers, the defaulting-loss reserve. Securities firms shall publicize and send to the TSEC, the semi annual financial reports, monthly trial balance sheets and the ratio of Capital adequacy that will be delivered to the SFC. To trade on TSEC, an investor has to sign the Trustee Agreement with securities brokerage firm and authorize it to act on his/her behalf. To enhance the protection of investors the TSEC and other securities-related firms established the Securities Investors Protection Fund on January 1, 1994.
STOCK PRICE INDEX
The most frequently quoted stock indice is the TSEC Capitalization Weighted Price Index (TAIEX). Other weighted indices are: non-finance, non-electronics and 22 Sector Indices by industries. There are 2 arithmetic average price indices like the TSEC composite (of 30 companies) and the TSEC industrial (of 20 manufacturers).
MARKET INFORMATION
TSEC has the following facilities as part of gathering market information: Computer system for stock trading and matching.
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Electronic quotation display in board rooms of securities brokers so that investors can obtain real-time trading information. Special Press Sessions to disclose important and material information about listed companies. The Press meetings may be initiated by the companies’ management or by the TSEC to verify such information. Stock Market Observatory System which contains all financial, business and other material information of listed companies is available online. Regulations for the use of trading information. A daily sheet Securities Trading Information and a One-Minute-Internal Report about various indices which are published after market closes. Displays of prospectuses, share holders’ meeting minutes, announcements of significant events and quarterly financial reports of all listed companies by PR office. Investor Service Center and Dial-Up service so that investors can ask questions.
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HOW TO BE AN INVESTOR ON TSEC
For investing on TSEC, the intending party has to abide by list of qualified prescribed QFIIs (Qualified Foreign Institutional Investors). Overseas Chinese And Foreign nationals are free to invest upto 100 percent of total outstanding shares for such companies. Capital gain tax is exempted.
FIVE YEAR INDEX OF THE TSEC
FIVE YEAR INDEX OF THE TSEC
Index Value: Trade Time: Change: Prev Close: Open: Day's Range: 52wk Range:
5,727.78
2:00AM ET 5.79 (0.10%) 5,733.57 5,643.65 5,643.65 - 5,745.10 5,450.72 - 7,135.00
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400001. India.
India has 22 stock exchanges, of them; Mumbai’s Bombay Stock exchange is the largest, with over 6,000 stocks listed. Established in 1875, the exchange is the oldest in Asia. It had the privilege of getting permanent recognition ab-initio. 5,874 companies are listed on BSE. Its market capitalization is Rs. 5 trillion.
ORGANIZATION
The non-executive Chairman of BSE is Mr. S. Jambunathan. The executive director and CEO is Dr. Manoj Vaish. The Chief Operating Officer is Mr. Rajnikant Patel.
INSTRUMENTS TRADED
The instruments traded include: Treasury bills. Government Security. Bonds issued by public sector companies.
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MEMBERS
This Stock Exchange has 700 registered Broker --- Member --- brokers spread over 400 cities across the country.
BSE SENSEX
BSE SENSEX is a widely used market index for the BSE. It is a value-weighted index composed of 30 companies with the base April 1979=100. The set of companies in the index is essentially fixed.
LISTING OF SECURITIES ON BSE
BSE has a separate listing department to grant approval for listing of securities of companies in accordance with Securities Contracts (Regulation) Act, 1956, Securities Contracts (regulation) Rules, 1957, Companies Act 1956, Guidelines issued by SEBI and Rules, ye-Laws and Regulations of the Exchange. Initial Listing Fees are Rs. 20,000.
LISTING REQUIREMENTS FOR NEW COMPANIES
New companies can be listed on the Exchange if their issued and subscribed equity capital after public issue is Rs. 10 crores. In addition to this, the issuer company should have a post issue net worth (equity capital + free reserves excluding revaluation reserve) of Rs. 20 crores. For new companies in high technology a separate threshold limit applies with their post-issue paid-up equity capital should be Rs.5 crores.
TRADING
BSE earlier had an open outcry trading system till March 1995 where member brokers used to assemble in a trading ring for doing transactions in securities. Now, there is a BOLT System of trading where the member-brokers now enter orders for purchase or sale of securities from TWSs (Trader Work Stations) installed in their offices instead of assembling in trading ring. The trading in securities at the Exchange is conducted in an anonymous environment and the counterparty identity is not revealed. The memberbrokers can open trading terminals to locations outside Mumbai. Trading on the BOLT System is conducted from Monday to Friday between 9:55 am and 3:30 pm.
Classification of securities is as below. A Equity.
B1 Equity. B2 Equity. F G Z Fixed Income Securities. Government Securities. Equity (Companies who have failed to comply with the listing requirements of the Exchange and/or have failed to resolve investor complaints or have not made required arrangements with depositories).
TICK SIZE
Tick Size is the minimum difference in rates between two orders entered on the system for particular scrip. Trading in scrips listed on the Exchange is done with the tick size of 5 paise.
CLOSING PRICE
The closing price of scrips is computed by the Exchange on the basis of weighted average price of all trades executed during the last 15 minutes of the continuous trading session. If there is no trade recorded during last 15 minutes, then the last traded price of scrip in the continuous trading session is taken as the official closure price.
SETTLEMENT
The trades done by member-brokers in all securities in Compulsory Rolling Settlement are settled on the Exchange by payment of monies and delivery of securities on T+2 basis. A T+2 settlement cycle means that the final settlement of transactions done on T, that is, trade day by exchange of monies and securities between buyers and sellers respectively takes place on second business day (excluding Saturdays, Sundays, bank and Exchange trading holidays) after the trade day. All deliveries of securities are required to be routed through the Clearing House, except for certain offmarket transactions which, although are required to be reported to the Exchange, may be settles directly between concerned member brokers. The Clearing House of the Exchange has been awarded ISO 9001:2000 certification in October 2002. The Clearing House of the Exchange is an independent company called BOISL (BOI Shareholding Limited).
SURVEILLANCE AT BSE
The main objective of surveillance at BSE is to promote market integrity by monitoring price and volume movements, by detecting potential market abuses, by managing default risk.
SURVEILLANCE
Price Monitoring
Position Monitoring
SURVEILLANCE AT THE BSE
Price Monitoring is related to price movement or abnormal fluctuation in prices or volumes etc. It
comprises of: ? ? ? ? ? ? ? On-line Surveillance. Off-line Surveillance. Derivative Market Surveillance. Investigations. Surveillance Actions. Rumour Verification. Pro --- active measures.
Position Monitoring is related mainly to abnormal positions of members. It comprises of:
? ? ? ? Verification of Institutional Trades. Statement of Top 100 Purchasers or Sellers. Snap Investigation. Market intelligence.
DERIVATIVES ON BSE
BSE has created history by launching the first Exchange traded Financial derivatives product in India, the Sensex Futures.
OPERATORS IN DERIVATIVES MARKET Hedgers: Operators, who want to transfer a risk component of their portfolio. Speculators: Operators, who intentionally take the risk from hedgers in pursuit of profit. Arbitrageurs: Operators, who operate in the different markets, simultaneously in pursuit of profit and
eliminate mispricing.
NSE of India Limited, 5th Floor, Exchange Plaza, Bandra (E), Mumbai 400051.
NSE is National Stock Exchange Of India. NSE is India’s leading stock exchange covering 366 cities and towns across the country. It was set up by leading institutions to provide a modern, fully automated careen-based trading system with national reach. It is located in Bombay in 1993 and was opened for trading in mid-1994. It was recently accorded recognition as a Stock Exchange by the department Of Company Affairs.
THE ORGANIZATION
The NSE of India Limited has genesis in the report of the High Powered Study Group of establishment of New Stock Exchanges which recommended promotion of a NSE by financial institutions to provide access to investors from all across the country on an equal footing. Its Wholesale Debt Market was set up in June 1994, the Equity market in November 1994 and the Derivatives market in June 2000.
PROMOTERS
The promoters are; ? IDBI (Industrial Development Bank of India).
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IFCI Limited (Industrial Finance Corporation of India Limited). LIC (Life Insurance Corporation of India). SBI (State Bank of India). BOB (Bank of Baroda). GIC of India. (General Insurance Corporation of India).
LISTING
Listing means admission of securities of an issuer to trading privileges on a Stock Exchange through a formal agreement. The prime objective of listing is to provide liquidity and marketability to securities, as also to provide a mechanism for effective management of trading. Securities listed on the Exchange are required to fulfill the eligibility criteria for listing. Various types of securities of a company are traded under a unique symbol and different series.
LISTING PROCEDURE
The listing procedure goes according to certain steps: ? ? ? ? Initial Discussions. Approval of Memorandum Of Association and Articles Of Association. Approval of Draft Prospectus. Submission of application.
ELIGIBILITY CRITERIA FOR LISTING
For companies who wish to make an IPO; that is Initial Public Offering the below given points have to be kept in mind: 1. Paid-up Capital. The paid-up equity capital shall not be less than Rs. 70 crores and capitalization of the applicants’ equity shall not be less than Rs. 25 crores.
2. Conditions Precedent to listing. Issuer shall have adhered to conditions precedent to listing as emerging inter-alia from Securities Contracts (Regulations) Act, 1956, Securities And Exchange Board Of India Act, 1992, any rules and /or regulations framed under foregoing statutes, as also any circular, clarifications, guidelines issued by the appropriate authority under foregoing statutes. 3. At least, a three year track record of either: ---the applicant seeking the listing or ---the promoting company, incorporated in or outside India. For this purpose, the applicant or the promoting company shall submit audited Balance Sheet of three preceding financial years of the company to the NSE.
4. The Project/Activity Plan of the applicant must have been appraised by a financial institution U/S 4A of Companies Act, 1956 or a State Finance Corporation or a scheduled commercial bank with a paid-up capital exceeding Rs. 50 crores or a Category I Merchant Banker with a net worth of at least Rs. 50 crores.(Some provisions apply to this). 5. The applicant company should be free from legal offences.
LISTING FEES
Listing fees depend on paid-up share capital of a company. PARTICULARS Initial Listing Fees. Annual Listing Fees. Companies with paid-up share capital and/or debenture capital: Of Rs. 1 crore. Above Rs.1 crore and upto Rs. 5 crore. AMOUNT (Rs.)
7,500.
4,200.
8,400.
Above Rs.5 crore and upto Rs. 10 crore. 14,000.
Above Rs. 10 crore and upto Rs. 20 crore. 28,000. Above Rs. 20 crore and upto Rs. 50 crore. 42,000. Above Rs. 50 crore.
70,000.
Companies with paid-up capital of more than Rs. 50 crore will pay additional listing fees of Rs. 1,400 for every increase of Rs. 5 crore or part thereof in the paid up share or debenture capital.
TRADING
NSE introduced for the first time in India fully automated screen based trading. It uses a modern, fully computerized trading system designed to offer investors across the length and breadth of the country a safe and easy way to invest. NSE trading system called ‘National Exchange for Automated Trading’ (NEAT) is a fully automated screen based trading system, which adopts the principle of an order driven market.
MARKET TIMINGS
Trading on equities segment takes place on all days of the week (except Saturdays and Sundays and holidays declared by the Exchange in advance).Market timings of equities segment are: Normal Market Open: 9:55. Normal Market Close: 15:30. The Closing Session is held between 15:50 hours and 16:00 hours. Limited Physical Market Open: 9:55 hours. Limited Physical Market Close: 15:30 hours.
CLEARING AND SETTLEMENT (EQUITIES)
NSCL (National Securities Clearing Corporation Limited) carries out the clearing and settlement functions as per settlement cycles of different sub-segments in equities segment. Clearing function of clearing corporation is designed to: ---what counter parties owe. ---what counter parties are due to receive on settlement date.
Settlement is a two way process which involves legal transfer of title to funds and securities or other assets on the settlement date. NSCLL has also devised mechanism to handle various exceptional situations like security shortages, bad delivery, company objections, and auction settlement etc. Clearing is the process of determination of obligations, after which the obligations are discharged by settlement. NSCCL has two categories of clearing members: trading members and custodians. The trading members can pass on its obligation to the custodians if the custodian confirms the same to NSCCL. All the trades whose obligation the trading member proposes to pass on to the custodian are forwaded to the custodian by NSCCL for their confirmation. The custodian is required to confirm these trade on T+1 days basis. Once the above securities are completed, NSCCL starts its functions of Clearing. It uses the concept of multi-lateral netting for determining the obligations of counter parties. Accordingly, a clearing member would have either pay-in or pay-out obligations of counter parties. Accordingly, a clearing member would have either pay-in or pay-out obligations for funds and securities separately. Thus, members payin and pay-out obligations for funds and securities are determined latest by T+1 day and are forwaded to them so that they can settle their obligations on the settlement day (T+2). NSCCL has empanelled and clearing banks to provide banking services to trading members and has established connectivity with both the depositories for electronic settlement of securities. It also undertakes settlement of transactions on other Stock Exchanges like, the Over The Counter Exchange of India.
INDICES
India Index Services Limited (IISL) is a joint venture between NSE and CRISIL (Credit Rating Information Services of India Limited). IISL has a consulting and licensing agreement with S&P (Standard and Poors), the world’s leading provider of investible equity indices, for co-branding IISL’s equity indices. The main objectives of IISL are providing a variety of indices and index related services and products for the capital markets.
Averaging is done and the correct method is to take weighted average and give each stock a weight proportional to its market capitalization. For instance;
Stock A
Market capitalization. Weight.
Stock B
Rs. 1,000 crore. ¼.
Rs. 3,000 crore. ¾.
Most of the Stock Exchanges in the world are either demutualised or are moving towards demutualisation. Demutualisation is a process wherein ownership, management and trading rights would be segregated from each other and legislative changes, if required, would be proposed accordingly to give effect to demutualisation of Stock Exchanges. Finance Minister has stressed in his Budget Speech 2002-2003 and the process would be over during course of year. Every Stock Exchange mostly is similar to other Stock Exchanges, no matter if listing requirements are concerned or their manner of gathering market information or even if regulations are concerned. The difference lies in the level of automation with which each Stock Exchange carries out its activities. However, the major comparison parameters that can be used to differentiate these Stock Exchanges are:
COMPARATORS EXCHANGES
INTERNATIONAL MODELS
INDIAN STOCK
• • •
Legal Structure For profit /not for profit
Company. For profit.
Company. For profit.
Ownership Structure
Owned by shareholders.
Owned by sh hlders financial institutions which also have broking firms as subsidiaries. Not a listed company, no IPO made. Trading and ownership are segregated. Broking firms are not shareholders.
•
Listing
Several Stock Exchanges are listed on themselves after IPO. To be a member, not necessary to own a share in the company Members who own shares may sell off
•
Trading
trading rights and all shareholders are not necessarily members.
PREFACE
Such is the world today that we have to be abreast with all the equipments and weapons of knowledge and knowhow which can help us survive in the environment full of competition. In today’s era, for your betterment of present and to have a bright future, it is necessary that you have better qualification and thorough knowledge of your own field. As a move towards this, I have chosen MBA programme for my bright future. This will be helpful to me to get an edge over others while each of us strives to make it big in the corporate world. Along with securing an MBA degree, it is a must to possess concrete knowledge of the subject at hand and to establish a personality that reflects your qualification. As an MBA student, you must possess complete knowledge of the world outside. This summer training programme is indeed a very good opportunity for students to be in tune with the external environment and possess sound knowledge in practice, of what they learn in theory. It gives the student a chance to understand the organization, its organizational structure, students understand the functioning of the organization and come in contact with the overall organizational system. It is a matter of pleasure for me that I have got the opportunity to undertake my summer training in a well-reputed organization like Interface Financial Services Limited. I have got valuable input from knowledgeable personalities and am hereby furnishing my report.
ACKNOWLWEDGEMENT
It is a challenging job for a student to prepare a full-fledged report on a topic, without the help and guidance of an expert person. In the preparation of my report, I have received valuable input from every person of the organization, who could be of help to me. I am heartily thankful to the staff members of the organization who not only considered me able enough to be given a project, but also provided me with all the infrastructural facilities that aided me in my project. My sincere thanks to Mr. Vimal Shah, my trainer and guide for the project for providing me efficient guidelines and enlightening me with knowledge in the entire summer training programme. I am also thankful to the staff members of the organization for their kind support and co-operation. I am also thankful to all the faculty members of my institute, especially Mr. Neeraj Amarnani and Mr.Satish Nair for their valuable guidance and support.
EXECUTIVE SUMMARY
As a part of my summer training, I have compiled a report on INTERNATIONAL STOCK EXCHANGES of which my focus was on the SINGAPORE STOCK EXCHANGE and TAIWAN STOCK EXCHANGE respectively. Under this topic, we will see how these two Stock Exchanges work, their rules, regulations and their index movements. Also, I have made an attempt to compare them with the Indian Stock Exchanges, namely the Bombay Stock Exchange and the National Stock Exchange. The report gives a detailed insight of the intricacies of these exchanges and highlights the similarities and differences between them. The report can be helpful to those who are keen on investing in foreign Exchanges and are in search of information about them.
COMPANY PROFILE Brief History Of The Company
The company was incorporated on 1st January, 1992 as a private limited company under the Companies Act, 1956 as Inter Face Financial Services Private Limited. The company was converted into Public Limited Company vide resolution dated 26 th September, 1994 and a fresh Certificate of change of name was obtained on 26th October, 1994. The company has been jointly promoted by Interface Capital Market Private Limited, Mr. Gaurang H. Dalal, Mr. Himal K. Parikh, Mr. Hemendra Sanghvi, Mr. Varshesh Panchal and Choksi Financial and Leasing Private Limited.
Main Objective Of The Company
The objective of the company as set out by the Memorandum Of Association of the company interalia includes: 1. to provide consultancy and other services including financial, investment, management, technical and reports thereon and to manage investment portfolio of various individuals, firms, companies and other persons and to act as consultants for estates, properties and other assets to carry on promotion of business and in particular to form constitute, float, to finance, lend and advance moneys, prepare project and credit appraisal reports for and on behalf of any companies, associates, undertakings, firms, individuals and all other entities. 2. to subscribe, purchase, acquire, hold, sell, underwrite, invest, dispose off or otherwise deal for self on behalf of others in shares, stocks, debentures, bonds, units, mortgages, obligations and securities issued or guaranteed by company or any government, trust, municipal, local or other authority, firm, person, body and to invest and join in partnership firm by original subscription, syndicate participation, tender, purchase or otherwise out of the funds of the company obtained either by subscription or of capital or borrowing or by receipt of income from any trust which may be discretionary or otherwise or by gift of money received by the company from any person and to invest in and to advance money to acquire or purchase or erect or enlarge or repair or develop land and property like lands, buildings, houses, flats, shops, godowns on ownerships basis or otherwise, or to take a premise for any term, or land or building in India or else where, upon such terms and conditions as the company may deem fit. 3. to act as broker, dealer and carry on the business of share broking, money broking, exchange broking and bill broking, bill purchasing, bill discounting and to advise on portfolio management, investment of money, sales of properties and to act as Registers and Managers of the issue.
4. to acquire by purchase, lease, assignment or other lands, tenements, buildings, basements,
rights and advantages of any kind whatsoever and to resell, mortgage and let on lease the same. 5. to carry on the business of the company investment and to invest in and to acquire and hold and otherwise dealing shares, stocks, debentures, debenture stocks, bonds, obligations and securities issued or guaranteed by any company or Private Industrial Enterprise or Government and in diamonds, jewelry, pearls, gold ornaments, akiks, painting and antiques subject to provision of law applicable. 6. to carry on business as consultant in marketing and survey for whatsoever materials and projects for whomsoever. 7. to acquire membership of any stock exchange or any association of such nature and to act as share and stock brokers, as consultants on behalf of individuals, firms, companies and any other persons in relation to shares, stocks, bonds, securities, units, debentures, fixed and other deposits.
PRESENT BUSINESS
The company is presently engaged in the following activities: 1. Primary and Secondary Market Operations and Research: The investment and research division in the company under the guidance of the directors are continuously collecting and updating information in respect of each industry from various sources like capital market related volume/stock exchange data and companies’ Annual Reports etc. The division also prepares important data in respect of trends in industry, performance of previous issues from the particular group and promoters, performance of other companies in the particular industry and their previous issues etc. The company is actively involved in the capital market operations. These operations consist of trading in securities in the secondary market. Investment decisions are based on exhaustive research, risk assessment and promoters experience. It classifies its investments into long-term and short-term which keeps the risk of such investment under control. 2. Share Shoppe: To offer instant liquidity to its known regular clients, the company has introduced this scheme, whereby it makes spot down payments against delivery of shares after deducting service charge. As the company deals with only known and regular clients, it does not run into risk of defaults.
3. Leasing and Automobile Finance: The company has laid down distinct credit norms for leasing, by ensuring creditworthiness of the entities to whom money is being lent. The company also analyses the financial track record of its clients and regularly carries out the review and follow-up of all accounts of the clients. Leasing is mainly done for the purpose of tax planning. 4. Underwriting and Broking: The company has an agreement with Interface Capital Markets Private Limited, the flagship company of INTERFACE GROUP OF COMPANIES and as per the terms, the company sub-
underwrites all the underwriting business done by ICML at 75 percent of underwriting commission.
A PROJECT REPORT ON INTERNATIONAL STOCK EXCHANGES
Submitted To : Mr. Himal Parikh MD, Interface Financial Services Limited. Submitted By : Nilofer Shaikh N R Institute of Business Management. Submitted On : July 2004.
In partial fulfillment of the summer training requirement for MBA 1 course.
BIBLIOGRAPHY
The information has been compiled from the following sources: • • • • www.google.com www.yahoo.com www.financial info.com ‘Financial Management’ by I M Pandey
INDEX
SECTION 1
1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) Introduction Mission Code Of Corporate Governance Organization Board Of Directors Products Traded Trading Listing Process Membership Regulations Brokerage And Clearing Settlement Members Financial Results How To Be An investor On SGX
:
SINGAPORE STOCK
EXCHANGE
16)
Index Charts
SECTION 2
1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) Introduction Mission Organization Products Traded Listing Trading Clearing And Settlement
:
TAIWAN STOCK
EXCHANGE
Securities Firms And Investors Stock Price Index Market Information How To Be An Investor On TSEC Index Charts
SECTION 3
:
BOMBAY STOCK
EXCHANGE
1) 2) Introduction Organization
3) 4) 5) 6) 7) 8) 9) 10) 11) 12)
Products Traded Members SENSEX Listing Trading Tick Size Closing Settlement Surveillance Derivative Details
SECTION 4
1) Introduction 2) Organization 3) Promoters 4) Listing 5) Trading 6) Market Timings
:
National Stock Exchange
7) Clearing And Settlement 8) Indices
SECTION 5
:
BASIC COMPARISON
SECTION 6
:
BIBLIOGRAPHY
doc_488304484.doc
Singapore Exchange trades continuously from 9 am to 5 pm. From 1 August 2011, Singapore Exchange introduced continuous all-day trading for the securities market.[6] As a result, the lunch break, between 12:30 pm to 2.00 pm, was scrapped.
Shenton Way, # 19 --- 00 SGX, Centre 7, 068804, Singapore.
SGX is Asia-Pacific’s first demutualised and integrated securities and derivatives exchange. SGX was inaugurated on 1st December 1999, following the merger of two established and well respected financial institutions---the Stock Exchange of Singapore (SES) and the Singapore International Monetary Exchange (SIMEX). Stock of SGX is a component of benchmark indices like MCSI Singapore Free Index and the Straits Times Index. The SES (Stock Exchange of Singapore) was incorporated in May 1973 under Companies Act and licensed under the Securities Industry Act, administered by MAS (Monetary Authority of Singapore). At the end of December 1999, over 370 companies were listed on SES with total market capitalization of about S$434 billion. The total number of companies listed with the SGX are 501.
MISSION
As a leading market place, SGX strives to continually innovate and provide its customers with convenient access, quality products and the best price discovery at a competitive cost while seeking to create value for its shareholders.
CODE OF CORPORATE GOVERNANCE
It was issued by the ‘CGC’ Corporate Governance Committee on 21 st March 2001. The Code is divided into four main sections: Board matters. Remuneration matters.
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Accountability and audit. Communication with shareholders.
ORGANISATIONAL STRUCTURE
Corporate Communications
CEO President
Internal Audit
Human Resources
BOARD OF DIRECTORS
The Board Of Directors of SGX comprises of: Nominating Committee (6 members). Executive Committee (8members). Audit Committee (7 members). Appeals Committee (7 members). Compensation And Management Development Committee (6 members). Strategy Committee (9 members). Conflicts Committee (6 members).
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The SGX categorizes its SBU’s, that is its Strategic Business Units as shown below:
PRODUCTS (SECURITY PRODUCTS)
? Equity And Equity Options.
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Warrants And Covered Warrants. Bonds, Debentures And Loan Stock. Depository receipts. Exchange Traded Funds. Real Estate Investment Funds.
PRODUCTS (DERIVATIVES PRODUCTS)
Short-term interest rate futures and options on futures. Long-term interest rate futures and options on futures. Equity index futures and options on futures. Single stock futures.
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EASE OF TRADING
SGX’s continuous investment in state-of-the-art technology has enabled it to provide greater efficiency and convenience to its trading and settlement systems. SGX Access was introduced to generate greater access and liquidity into SGX’s market place. So, SGX’s member companies can customize their order routing system and also execute orders directly to SGX’s trading system from any global location. SGX Link also exists to facilitate efficient trading and settlement of foreign securities between exchanges. The first company trading established under it was with Australian Stock Exchange.
PROCESS FOR LISTING ON SGX SECURITIES TRADING
A company initiates the listing process by appointing a Singapore-based financial institution to be its sponsor and lead manager. The lead manager is usually a member company of SGX, a merchant bank or other similar institutions acceptable to SGX. The lead manager will: ? ? ? ? Assume an active role and prepare the company for listing. Manage the launch. Submit listing application on behalf of the company. Liaise with SGX on all matters arising from application for listing.
The company needs to appoint a lawyer to oversee legal aspects of listing. The appointed Certified Public Accountant will provide the company with an initial evaluation of its readiness to go public, assist in upgrading its management capabilities and in preparing the launch. Prior to and during the launch, the company will have to engage the service of an experienced public relations firm to help enhance its appeal and convey its corporate messages effectively to the investing public. The timeframe for a listing company varies for different companies, ranging two months to two years. On an average, the whole process should last about four to eight months.
Day 21
Day 0
Day 14
Day 21
Day 28
TIMEFRAME FOR LISTING A COMPANY ON THE SGX
The indicative timeline is as shown above. By Day 21: Consults SGX on issues to be resolved. By Day 0 : Submits listing application and prospects to SGX, SGX reviews it. By Day 14: Public Comment, lodging prospectus with MAs and simultaneous submission to SGX. By Day 21: Registration, launches offer, submits replacement or supplementary prospectus to SGX at the same time it lodged the document with MAs. By Day 28: Close to offer, registration extension, issuer makes prequotation disclosure (if any). SGX lists issuer’s securities and commences secondary trading.
A few of listing requirements are: Operating track record of at least three years. Continuity of management should be at least three years. Accounting Standards being followed by the applying company should be Singapore, US, or International Accounting Standards. However, companies do have waiver from having to comply with continuing listing obligations if listed on another recognized foreign stock exchange. SGX SESDAQ was established to aid smaller companies, foreign or local in raising funds from the stock market. No quantitative requirements exist for a listing on SGX SESDAQ. Business is simply expected to be viable and profitable, with good growth prospects. Even if the company doesn’t have a track record, it has to demonstrate that it requires funds to finance a project or develop a product, which must have been fully researched and costed. Waiver also is obtainable if company is also listed on another recognized foreign Stock exchange. Besides, the quantitative requirements for listing, applicants will also have to address issues relating to conflict of interests, quality and integrity of management amongst others.
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MEMBERSHIP
Market participants who choose to offer specialist equities execution-only services can opt to be a member with trading, but not clearing rights. Members with trading rights must be qualified by a member of CDP at all times. CDP stands for Central Depository (Pte) Limited. It provides depository clearing and settlement and computerized book-entry services for securities traded on SGX ST (Singapore Exchange Securities Trading Limited).
Membership Fees.
Admission Fee (S$)
Recurring Fee (S$)
Member of SGX Securities Trading (with trading rights). Annual Membership Fee.
1,50,000. -----
-----
25,000.
Approved Executive Director.
5,000 each. 4,000 each. 1,50,000. ---------
75 per month.
Trading Representative.
75 per month.
Member of CDP (with clearing rights).
Annual Membership Fee.
25,000.
Member of SGX Securities Trading and CDP (with both trading and clearing rights).
2,00,000.
----Annual Membership Fee.
-----
50,000
REGULATIONS
SGX’s regulatory functions are: Issuer Regulation.
Review listings applications, monitor ongoing compliance with listing needs and provide support on regulatory issues to listed companies. Member Supervision. Process membership applications and permits, monitors members’ compliance with SGX rules and provide support on regulatory issues to members’, and investigate compliance concerning members. Market Surveillance. Maintain surveillance of all trading activities. Enforcement. Investigate suspected infractions and complaints, and perform necessary disciplinary follow-up. Risk Management. Monitor and manage SGX’s counterparty risk exposure to clearing members for SGX trades.
REGULATION FOR MEMBERS
SGX conducts annual on-site inspections of our members to ensure that the rules and regulations relating to trading in securities and/or futures are complied with and that comprehensive internal controls are in place. SGX also monitors the financial health of members to ensure they have adequate capital for their operations. Members must file financial reports with SGX periodically. In addition, members are required to submit their annual audited accounts.
REGULATION FOR LISTED MEMBERS
Listed companies are required to observe the SGX ST listing rules, which are designed to promote a high standard of disclosure and coporate governance by listed companies. SGX monitors compliance with listing rules. These rules are reviewed periodically to ensure that they meet the changing needs of the market and reflect international best practice.
To ensure adequate and timely disclosure of information, SGX monitors news reports by the media and announces financial results and annual reports issued by listed companies. Other regulatory activities include reviewing new and additional listing applications to ensure compliance, reviewing prospectuses, offering memoranda and shareholder circulars for adequacy of disclosure providing guidance to prospective or listed companies, and dealing with other matters concerning listing rules.
REGULATION FOR MEMBERSHIP TO SGX
SGX reviews the admission and registration of derivatives members and securities members, their directors, and trading representatives. SGX ensures that members and trading representatives meet the admission or registration criteria before admitting or registering them. Part of our review also includes checks with local or overseas regulatory authorities or exchanges on the applicants. From time to time, SGX also reviews its policies and rules on membership to meet the changing needs of market place.
TRADING TRADING SYSTEMS
Open Outcry.
Electroni c Trading System (ETS).
TRADING SYSTEM ON THE SGX
SECURITIES
Trading sessions are held daily from Mondays to Fridays between 9:00am to 12:30pm and 2:00pm to 5:00pm. In addition, there is a Pre-Open Routine from 8:30am to 9:00am and Pre-Close Routine from 5:00pm to 5:06pm. There is no trading on Singapore public holidays and on weekends. When a holiday falls on Sunday, the following Monday will be a public holiday. On the eves of Christmas, New Year and Chinese New Year, the market normally opens for half a day (although they are still considered as one trading day).
DERIVATIVES
For derivatives trading, there exists a Trading Calendar for 2005 and beyond, besides the trading calendar of previous years. All-Or-One (AON) Trading Facility. AON orders are designed to allow transactions with a size at or above a pre-determined threshold to be executed in their entirety at a single price. SGX-DT (Derivatives Trading Division) has its roots in SIMEX. SGX-DT offers wide range of international derivatives in the Asia-Pacific. A number of instruments are futures and options on interest rates, stock indices, energy and commodities.
TRADING INFRASTRUCTURE
SGX Securities Trading provides a sound and efficient trading infrastructure that enables member companies’ easy and reliable access into its securities market. There are three channels to trade securities in SGX, namely via SGX Access, SESOPS and VTI. Orders are routed through one of these accesses to the central trade matching engine known as the Central Limit Order Book (CLOB) for matching of trades before such information is transmitted to the CDP clearing and settlement systems. SESOPS (Singapore Exchange Securities Order Processing System) is a proprietory trading terminal provided by SGX Securities Trading to member companies. It provides high performance basic trading, real time market information and credit limit control functionalities. CLOB (Central Limit Order Book) is a screen-based computerizes trading system. VTI (Virtual terminal Interface) provides an access point for SGX Securities Members’ internet trading systems to interface with the CLOB trade matching engine. Orders received from Members’ internet trading systems are routed via the VTI interface to the SESOPS controller through to CLOB.
TRADING SYSTEM
The SGX seems to be following the T+3 system of trading. If an investor does not have required shares in his account on the due date (the third market day following trade day), CDP (Central Depository Pte Limited) will buy-in shares on market to satisfy delivery obligations. Buying-in starts the day after due date and will start at 2 minimum bids above closing price of previous day, the current ;ast done price or current bid, whichever is highest. Investor pays the difference between selling price and buy-in price, including brokerage and other costs.
OPEN OUTCRY
Traders stand in designated areas, often octagonal, called ‘Trading Pits’ on the trading floor. Every trader in the pit is an auctioneer. Each one announces his own bids and offers, depending on whether he is buying or selling. Hands signals indicating buying or selling, price and quantity are used. Say, for example, if everyone is bidding at the same time, the seller will sell to whoever he hears first. All transactions including spreads must be done through open outcry and accompanied by the use of hand signals in the designated pit. There is a well established system underlying the apparent chaos that the open outcry system creates. Only the best bid and offer are allowed to surface in the market place.
OUTCRY TRADING PROCESS Customers place their orders through brokers. Brokers call customers to inform them of their filled orders.
Brokers relay orders to Floor Staff via phone or order routing system. Floor Staff relay details of trade to brokers.
Floor Staff signal orders to their traders in the pit.
Traders signal details of trade to Floor Staff.
Traders execute orders in the pit upon receiving them.
OPEN OUTCRY TRADING PROCESS ON THE SGX
SGX ETS (SGX ELECTRONIC TRADING SYSTEM)
SGX ETS is very connective, has enhanced trading capability, is secure and reliable and assures of nice market integrity. Also, it gives access and participation and facilitates a wide variety of order types.
BROKERAGE RATES
Brokerage rates are fully negotiable for all transactions on SGX Securities Trading.
CLEARING FEES
Clearing fee of 0.05% on the value of the contract, subject to a maximum of S$200 is payable. Goods and Services Tax (GST) of 4% on brokerage and clearing fees is payable. No foreign exchange controls or capital gains tax on trading of Securities by non-residents.
DERIVATIVES CLEARING PROCESS
Clearing is the process in which positions carried on Clearing Members’ books are margined and marked to the latest market prices. At the end of each day, all outstanding positions are marked to their respective daily closing prices. By this, exposure to Clearing Members’ losses arising from daily price changes is significantly reduced. Also, each and every Clearing Members’ margin requirement is recomputed using SPAN methodology. To do so, Clearing Members are required to report their open positions using Position Change Sheets (PCS) for each contract as at the end of each day.
At the end of each clearing cycle, credit/debit instructions are sent to SGX-DC’s settlement banks to instruct them to credit/debit Clearing Members’ accounts for mark-to-market profits/losses and margin calls. Then, each and every settlement bank is required to confirm to SGX-DC within a stipulated time via SWIFT that if they are able to carry out the instructions.
SECURITIES CLEARING PROCESS
A Clearing Fund is also applied in the event a clearing member is unable to discharge its money obligations to CDP or if CDP suffers any loss as a result of liquidating a Clearing Member’s position.
SETTLEMENT PRICES
The settlement prices are fixed on the third market day following trade day, that is, when the seller of shares sells the shares, his CDP Securities Account is debited on right of third market day. Broker pays net sales proceeds by market day after due date of contract. When the buyer of shares buys shares, he must pay for his purchase by the due date of contract, following which shares will be credited into his CDP Securities Account.
SECURITIES MEMBERS
SGX has the following members in its list members dealing in securities: ABN AMRO, BNPPARIBAS PEREGRINE CITIGROUP, CLSA, FRASER, MORGAN STANLEY and many other reputed names.
3rd QUARTER FY 2004 FINANCIAL RESULTS OF SGX
Operating Revenue. Net Profit After Tax.
S$245.0 m S$ 98.6 m
HALF YEAR FINANCIAL RESULTS FOR FY 2004
Operating Revenue. Net Profit After Tax.
S$163.5 m S$ 61.3 m
The summated financial results of SGX show that its performance has improved in between two quarters. Both, the Operating Revenue and the Net Profit After Tax have increased considerably. And such an increase has been in between two quarters, which is commendable. However, in 2001, the SGX saw a grim picture as the number of IPOs (Initial Public Offerings) reduced by more than half from 87 in 2000 to 37 in 2001. Market capitalization of stocks on SGX Main Board fell 14.9% and value of stocks on Sesdaq, SGX’s small cap board, declined 23.6%.
HOW TO BE AN INVESTOR ON THE SGX
As an investor, a trading account is needed with a broker when someone intends to buy or sell shares. Also, the intending party must have an account with CDP (Central Depository Pte Limited). Internet trading Account can also be opened. Or the intending party can buy or sell shares by Authorized Trading Centres located at selected bank branches. No capital gain tax is applicable on profits on share investments. However, dividends are taxable and are taxed at source at company tax rate. An investor can claim the difference between company tax paid at source and his personal tax rate in his Income Tax returns.
INDEX OF SGX
INDEX OF THE SGX
FIVE YEAR INDEX OF THE SGX
FIVE YEAR INDEX OF THE SGX
Index Value: Trade Time: Change: Prev Close: Open:
1,873.75
5:05AM ET 0.82 (0.04%) 1,874.57 1,870.27
Day's Range: 52wk Range:
1,864.75 - 1,877.05 1,489.46 - 1,912.93
17, PO --- AI ROAD, TAIPEI, TAIWAN.
The TSEC (Taiwan Stock Exchange Corporation) was established in 1961 by the government of the Republic of China. The TSEC, funded by various private and state-owned enterprises, began operation on February 9, 1962. It has been the sole centralized securities market in Taiwan. It has been awarded
ISO 9001 and 9002 Certificates in January and February 1998, respectively. TSEC is a private corporation.
MISSION
The mission of TSEC is: To provide innovative, efficient and superior services. To maintain a fair, open and safe trading market.
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ORGANIZATION
TSEC is a private corporation with the Shareholders Meeting as its highest policy making body, under which are three supervisors and a Board Of Directors composed of fifteen directors, whose major responsibility is to oversee the business operations. The President of TSEC is Fortune Ju. The TSEC now has fifteen departments /offices whose functions are as follows: Listing Department: To draft and execute the rules and regulations of securities listing. Trading Department: To draft and execute the rules and regulations of securities trading. Clearing Department: To draft and execute the rules and regulations of securities clearing and settlement. ? Market Surveillance Department: To draft and execute the rules and regulations of securities market surveillance. ? ? Auditing Department: To audit the financial and business operations of the securities firms. System Development Department: To administer the planning and research of computer projects and related procurement affairs; to develop, design and test application programs. ? Computer Operation Department: To administer the installation, maintenance and management of computer-related facilities and the execution, operation, service and audit of computer business. Besides, there are departments like market information department, international affairs department, public relations office, research and development department, finance department, administration department, secretarial office and internal auditing.
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SECURITIES TRADED
The securities traded on the TSEC include: Government Bonds. Convertible Bonds. Beneficiary Certificates. Covered Warrants. TDRS (Taiwan Depository Receipts).
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Foreign securities are welcome to be dually listed and traded on the TSEC.
LISTING OF SECURITIES
A company applying for listing has to meet certain criteria regarding its financial and operational conditions. The applying company will be scrutinized by the Screening Committee for Listing. Qualified Companies will be reviewed by the BOD for endorsement, and then to the Securities and Futures Commission (SFC) for final approval. After approved by the SFC, besides paying the listing fee, the listing company must submit to the TSEC its annual and semi ---- annual CPA---audited financial reports as well as the first, the third quarter financial reports and the financial forecast reports reviewed by a CPA. The TSEC not only supervises and regulates the listed companies’ financial and operational status on a routine basis and on contingent events, but verifies and discloses their material information.
TRADING OF SECURITIES
Initially, there was on open outcry system for trading securities. Then, in August 1985,it was gradually substituted by a computer-aided trading system (CATS), which was eventually upgraded to a fully automated securities trading (FAST)system in 1993. Trading session of the centralized market is 9:00 am to 1:30 pm, Monday to Friday. The off-hour trading session is 2:00 pm to 2:30 pm, Monday to Friday. Thirty minutes before the market opens, customers
orders can be keyed in by the personnel of the Securities firm on first-come-first-serve basis. Once the order is accepted by the TSEC computer, a confirmation of receipt will be sent to the securities firm. And after a transaction is executed, a trade report will be printed at the firm where the order originates. In special cases, listed stock may be traded through negotiation auction, tender or other means. Trading system of TSEC operates in a consolidated limit order book environment, where only limit orders are recorded. During regular trading sessions from 9:00 am to 1:30 am, buy and sell orders can interact to determine executed price subject to applicable auto matching rules. Orders can be entered half an hour before trading session starts at 9:00 am. Buy and sell orders are in standard unit or multiples of standard units. One trading unit is 1,000 shares as a uniform par value of NT $10 per share is applicable to all listed stocks. Orders below 1,000 shares are odd lot and orders not less than 5,00,000 shares are block trading. Off hour trading sessions orders are accepted from 2:00 pm to 2:30 pm and then buying and selling orders takes place at regular session’s closing prices.
TRADING SCHEDULE
The Trading Schedule of TSEC is as given:
Trading Sessions
Regular Off- hour Odd-lot Block
Trading Days
Monday to Friday Monday to Friday Monday to Friday Monday to Friday
Trading Hours
9:00 to 13:30 14:00 to 14:30 15:00 to 16:00 14:30 to 15:30
FAST TRADING SYSTEM (FULLY AUTOMATED SECURITIES TRADING)
The FAST trading at the TSEC takes place as described:
Investo rs Issue Orders
Broke rs Sequence Order tickets Key in on order Entry Terminal s
Quote Vendor s
FAS T
Trading match Stock orders based on Trading Rules
Order Confirm Trade Report
Quotation Board and MIS Screen
Market Data Distribution
Elect Display Devices Videotek terminal or PC or Cable TV
Process Market Data
FAST TRADING SYSTEM AT THE TSEC
CLEARING AND SETTLEMENT
Before 1989, securities transactions at the centralized market were settled by physical delivery of securities. Then, a TSCD (Taiwan Securities Central Depository Company) was formed to administer the centralized depository and book entry settlement system. The settlement of shares and payments between securities firms and the TSEC is proceeded on T+2. The Securities Lending System is also promulgated to cope with the settlement needs of securities and publishes them monthly. Moreover, on
June 5, 1997, the TSEC became a member of the Association of National Numbering Agencies (ANNA), which further paves the way for cross-border trading and settlement in future.
SECURITIES FIRMS AND INVESTORS
According to the Securities And Exchange Law, the establishment of a securities firm and its branch should have prior approval and obtain a special license from the Competent Authority. Each security firm must specify to the public whether it is only a brokerage firm or it involves in proprietary trading. Also, it must sign a contract with the Exchange and deposit a specified amount of guarantee for settlement. The securities firm is responsible for its employees both in sales representation and in dealing with the Exchange. TSEC regularly sends inspectors to check the securities brokers and dealers on-site to see whether the business operation and financial status meet all requirements. All securities dealers are required to set aside the monthly trading-loss reserve, and securities brokers, the defaulting-loss reserve. Securities firms shall publicize and send to the TSEC, the semi annual financial reports, monthly trial balance sheets and the ratio of Capital adequacy that will be delivered to the SFC. To trade on TSEC, an investor has to sign the Trustee Agreement with securities brokerage firm and authorize it to act on his/her behalf. To enhance the protection of investors the TSEC and other securities-related firms established the Securities Investors Protection Fund on January 1, 1994.
STOCK PRICE INDEX
The most frequently quoted stock indice is the TSEC Capitalization Weighted Price Index (TAIEX). Other weighted indices are: non-finance, non-electronics and 22 Sector Indices by industries. There are 2 arithmetic average price indices like the TSEC composite (of 30 companies) and the TSEC industrial (of 20 manufacturers).
MARKET INFORMATION
TSEC has the following facilities as part of gathering market information: Computer system for stock trading and matching.
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Electronic quotation display in board rooms of securities brokers so that investors can obtain real-time trading information. Special Press Sessions to disclose important and material information about listed companies. The Press meetings may be initiated by the companies’ management or by the TSEC to verify such information. Stock Market Observatory System which contains all financial, business and other material information of listed companies is available online. Regulations for the use of trading information. A daily sheet Securities Trading Information and a One-Minute-Internal Report about various indices which are published after market closes. Displays of prospectuses, share holders’ meeting minutes, announcements of significant events and quarterly financial reports of all listed companies by PR office. Investor Service Center and Dial-Up service so that investors can ask questions.
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HOW TO BE AN INVESTOR ON TSEC
For investing on TSEC, the intending party has to abide by list of qualified prescribed QFIIs (Qualified Foreign Institutional Investors). Overseas Chinese And Foreign nationals are free to invest upto 100 percent of total outstanding shares for such companies. Capital gain tax is exempted.
FIVE YEAR INDEX OF THE TSEC
FIVE YEAR INDEX OF THE TSEC
Index Value: Trade Time: Change: Prev Close: Open: Day's Range: 52wk Range:
5,727.78
2:00AM ET 5.79 (0.10%) 5,733.57 5,643.65 5,643.65 - 5,745.10 5,450.72 - 7,135.00
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400001. India.
India has 22 stock exchanges, of them; Mumbai’s Bombay Stock exchange is the largest, with over 6,000 stocks listed. Established in 1875, the exchange is the oldest in Asia. It had the privilege of getting permanent recognition ab-initio. 5,874 companies are listed on BSE. Its market capitalization is Rs. 5 trillion.
ORGANIZATION
The non-executive Chairman of BSE is Mr. S. Jambunathan. The executive director and CEO is Dr. Manoj Vaish. The Chief Operating Officer is Mr. Rajnikant Patel.
INSTRUMENTS TRADED
The instruments traded include: Treasury bills. Government Security. Bonds issued by public sector companies.
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MEMBERS
This Stock Exchange has 700 registered Broker --- Member --- brokers spread over 400 cities across the country.
BSE SENSEX
BSE SENSEX is a widely used market index for the BSE. It is a value-weighted index composed of 30 companies with the base April 1979=100. The set of companies in the index is essentially fixed.
LISTING OF SECURITIES ON BSE
BSE has a separate listing department to grant approval for listing of securities of companies in accordance with Securities Contracts (Regulation) Act, 1956, Securities Contracts (regulation) Rules, 1957, Companies Act 1956, Guidelines issued by SEBI and Rules, ye-Laws and Regulations of the Exchange. Initial Listing Fees are Rs. 20,000.
LISTING REQUIREMENTS FOR NEW COMPANIES
New companies can be listed on the Exchange if their issued and subscribed equity capital after public issue is Rs. 10 crores. In addition to this, the issuer company should have a post issue net worth (equity capital + free reserves excluding revaluation reserve) of Rs. 20 crores. For new companies in high technology a separate threshold limit applies with their post-issue paid-up equity capital should be Rs.5 crores.
TRADING
BSE earlier had an open outcry trading system till March 1995 where member brokers used to assemble in a trading ring for doing transactions in securities. Now, there is a BOLT System of trading where the member-brokers now enter orders for purchase or sale of securities from TWSs (Trader Work Stations) installed in their offices instead of assembling in trading ring. The trading in securities at the Exchange is conducted in an anonymous environment and the counterparty identity is not revealed. The memberbrokers can open trading terminals to locations outside Mumbai. Trading on the BOLT System is conducted from Monday to Friday between 9:55 am and 3:30 pm.
Classification of securities is as below. A Equity.
B1 Equity. B2 Equity. F G Z Fixed Income Securities. Government Securities. Equity (Companies who have failed to comply with the listing requirements of the Exchange and/or have failed to resolve investor complaints or have not made required arrangements with depositories).
TICK SIZE
Tick Size is the minimum difference in rates between two orders entered on the system for particular scrip. Trading in scrips listed on the Exchange is done with the tick size of 5 paise.
CLOSING PRICE
The closing price of scrips is computed by the Exchange on the basis of weighted average price of all trades executed during the last 15 minutes of the continuous trading session. If there is no trade recorded during last 15 minutes, then the last traded price of scrip in the continuous trading session is taken as the official closure price.
SETTLEMENT
The trades done by member-brokers in all securities in Compulsory Rolling Settlement are settled on the Exchange by payment of monies and delivery of securities on T+2 basis. A T+2 settlement cycle means that the final settlement of transactions done on T, that is, trade day by exchange of monies and securities between buyers and sellers respectively takes place on second business day (excluding Saturdays, Sundays, bank and Exchange trading holidays) after the trade day. All deliveries of securities are required to be routed through the Clearing House, except for certain offmarket transactions which, although are required to be reported to the Exchange, may be settles directly between concerned member brokers. The Clearing House of the Exchange has been awarded ISO 9001:2000 certification in October 2002. The Clearing House of the Exchange is an independent company called BOISL (BOI Shareholding Limited).
SURVEILLANCE AT BSE
The main objective of surveillance at BSE is to promote market integrity by monitoring price and volume movements, by detecting potential market abuses, by managing default risk.
SURVEILLANCE
Price Monitoring
Position Monitoring
SURVEILLANCE AT THE BSE
Price Monitoring is related to price movement or abnormal fluctuation in prices or volumes etc. It
comprises of: ? ? ? ? ? ? ? On-line Surveillance. Off-line Surveillance. Derivative Market Surveillance. Investigations. Surveillance Actions. Rumour Verification. Pro --- active measures.
Position Monitoring is related mainly to abnormal positions of members. It comprises of:
? ? ? ? Verification of Institutional Trades. Statement of Top 100 Purchasers or Sellers. Snap Investigation. Market intelligence.
DERIVATIVES ON BSE
BSE has created history by launching the first Exchange traded Financial derivatives product in India, the Sensex Futures.
OPERATORS IN DERIVATIVES MARKET Hedgers: Operators, who want to transfer a risk component of their portfolio. Speculators: Operators, who intentionally take the risk from hedgers in pursuit of profit. Arbitrageurs: Operators, who operate in the different markets, simultaneously in pursuit of profit and
eliminate mispricing.
NSE of India Limited, 5th Floor, Exchange Plaza, Bandra (E), Mumbai 400051.
NSE is National Stock Exchange Of India. NSE is India’s leading stock exchange covering 366 cities and towns across the country. It was set up by leading institutions to provide a modern, fully automated careen-based trading system with national reach. It is located in Bombay in 1993 and was opened for trading in mid-1994. It was recently accorded recognition as a Stock Exchange by the department Of Company Affairs.
THE ORGANIZATION
The NSE of India Limited has genesis in the report of the High Powered Study Group of establishment of New Stock Exchanges which recommended promotion of a NSE by financial institutions to provide access to investors from all across the country on an equal footing. Its Wholesale Debt Market was set up in June 1994, the Equity market in November 1994 and the Derivatives market in June 2000.
PROMOTERS
The promoters are; ? IDBI (Industrial Development Bank of India).
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IFCI Limited (Industrial Finance Corporation of India Limited). LIC (Life Insurance Corporation of India). SBI (State Bank of India). BOB (Bank of Baroda). GIC of India. (General Insurance Corporation of India).
LISTING
Listing means admission of securities of an issuer to trading privileges on a Stock Exchange through a formal agreement. The prime objective of listing is to provide liquidity and marketability to securities, as also to provide a mechanism for effective management of trading. Securities listed on the Exchange are required to fulfill the eligibility criteria for listing. Various types of securities of a company are traded under a unique symbol and different series.
LISTING PROCEDURE
The listing procedure goes according to certain steps: ? ? ? ? Initial Discussions. Approval of Memorandum Of Association and Articles Of Association. Approval of Draft Prospectus. Submission of application.
ELIGIBILITY CRITERIA FOR LISTING
For companies who wish to make an IPO; that is Initial Public Offering the below given points have to be kept in mind: 1. Paid-up Capital. The paid-up equity capital shall not be less than Rs. 70 crores and capitalization of the applicants’ equity shall not be less than Rs. 25 crores.
2. Conditions Precedent to listing. Issuer shall have adhered to conditions precedent to listing as emerging inter-alia from Securities Contracts (Regulations) Act, 1956, Securities And Exchange Board Of India Act, 1992, any rules and /or regulations framed under foregoing statutes, as also any circular, clarifications, guidelines issued by the appropriate authority under foregoing statutes. 3. At least, a three year track record of either: ---the applicant seeking the listing or ---the promoting company, incorporated in or outside India. For this purpose, the applicant or the promoting company shall submit audited Balance Sheet of three preceding financial years of the company to the NSE.
4. The Project/Activity Plan of the applicant must have been appraised by a financial institution U/S 4A of Companies Act, 1956 or a State Finance Corporation or a scheduled commercial bank with a paid-up capital exceeding Rs. 50 crores or a Category I Merchant Banker with a net worth of at least Rs. 50 crores.(Some provisions apply to this). 5. The applicant company should be free from legal offences.
LISTING FEES
Listing fees depend on paid-up share capital of a company. PARTICULARS Initial Listing Fees. Annual Listing Fees. Companies with paid-up share capital and/or debenture capital: Of Rs. 1 crore. Above Rs.1 crore and upto Rs. 5 crore. AMOUNT (Rs.)
7,500.
4,200.
8,400.
Above Rs.5 crore and upto Rs. 10 crore. 14,000.
Above Rs. 10 crore and upto Rs. 20 crore. 28,000. Above Rs. 20 crore and upto Rs. 50 crore. 42,000. Above Rs. 50 crore.
70,000.
Companies with paid-up capital of more than Rs. 50 crore will pay additional listing fees of Rs. 1,400 for every increase of Rs. 5 crore or part thereof in the paid up share or debenture capital.
TRADING
NSE introduced for the first time in India fully automated screen based trading. It uses a modern, fully computerized trading system designed to offer investors across the length and breadth of the country a safe and easy way to invest. NSE trading system called ‘National Exchange for Automated Trading’ (NEAT) is a fully automated screen based trading system, which adopts the principle of an order driven market.
MARKET TIMINGS
Trading on equities segment takes place on all days of the week (except Saturdays and Sundays and holidays declared by the Exchange in advance).Market timings of equities segment are: Normal Market Open: 9:55. Normal Market Close: 15:30. The Closing Session is held between 15:50 hours and 16:00 hours. Limited Physical Market Open: 9:55 hours. Limited Physical Market Close: 15:30 hours.
CLEARING AND SETTLEMENT (EQUITIES)
NSCL (National Securities Clearing Corporation Limited) carries out the clearing and settlement functions as per settlement cycles of different sub-segments in equities segment. Clearing function of clearing corporation is designed to: ---what counter parties owe. ---what counter parties are due to receive on settlement date.
Settlement is a two way process which involves legal transfer of title to funds and securities or other assets on the settlement date. NSCLL has also devised mechanism to handle various exceptional situations like security shortages, bad delivery, company objections, and auction settlement etc. Clearing is the process of determination of obligations, after which the obligations are discharged by settlement. NSCCL has two categories of clearing members: trading members and custodians. The trading members can pass on its obligation to the custodians if the custodian confirms the same to NSCCL. All the trades whose obligation the trading member proposes to pass on to the custodian are forwaded to the custodian by NSCCL for their confirmation. The custodian is required to confirm these trade on T+1 days basis. Once the above securities are completed, NSCCL starts its functions of Clearing. It uses the concept of multi-lateral netting for determining the obligations of counter parties. Accordingly, a clearing member would have either pay-in or pay-out obligations of counter parties. Accordingly, a clearing member would have either pay-in or pay-out obligations for funds and securities separately. Thus, members payin and pay-out obligations for funds and securities are determined latest by T+1 day and are forwaded to them so that they can settle their obligations on the settlement day (T+2). NSCCL has empanelled and clearing banks to provide banking services to trading members and has established connectivity with both the depositories for electronic settlement of securities. It also undertakes settlement of transactions on other Stock Exchanges like, the Over The Counter Exchange of India.
INDICES
India Index Services Limited (IISL) is a joint venture between NSE and CRISIL (Credit Rating Information Services of India Limited). IISL has a consulting and licensing agreement with S&P (Standard and Poors), the world’s leading provider of investible equity indices, for co-branding IISL’s equity indices. The main objectives of IISL are providing a variety of indices and index related services and products for the capital markets.
Averaging is done and the correct method is to take weighted average and give each stock a weight proportional to its market capitalization. For instance;
Stock A
Market capitalization. Weight.
Stock B
Rs. 1,000 crore. ¼.
Rs. 3,000 crore. ¾.
Most of the Stock Exchanges in the world are either demutualised or are moving towards demutualisation. Demutualisation is a process wherein ownership, management and trading rights would be segregated from each other and legislative changes, if required, would be proposed accordingly to give effect to demutualisation of Stock Exchanges. Finance Minister has stressed in his Budget Speech 2002-2003 and the process would be over during course of year. Every Stock Exchange mostly is similar to other Stock Exchanges, no matter if listing requirements are concerned or their manner of gathering market information or even if regulations are concerned. The difference lies in the level of automation with which each Stock Exchange carries out its activities. However, the major comparison parameters that can be used to differentiate these Stock Exchanges are:
COMPARATORS EXCHANGES
INTERNATIONAL MODELS
INDIAN STOCK
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Legal Structure For profit /not for profit
Company. For profit.
Company. For profit.
Ownership Structure
Owned by shareholders.
Owned by sh hlders financial institutions which also have broking firms as subsidiaries. Not a listed company, no IPO made. Trading and ownership are segregated. Broking firms are not shareholders.
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Listing
Several Stock Exchanges are listed on themselves after IPO. To be a member, not necessary to own a share in the company Members who own shares may sell off
•
Trading
trading rights and all shareholders are not necessarily members.
PREFACE
Such is the world today that we have to be abreast with all the equipments and weapons of knowledge and knowhow which can help us survive in the environment full of competition. In today’s era, for your betterment of present and to have a bright future, it is necessary that you have better qualification and thorough knowledge of your own field. As a move towards this, I have chosen MBA programme for my bright future. This will be helpful to me to get an edge over others while each of us strives to make it big in the corporate world. Along with securing an MBA degree, it is a must to possess concrete knowledge of the subject at hand and to establish a personality that reflects your qualification. As an MBA student, you must possess complete knowledge of the world outside. This summer training programme is indeed a very good opportunity for students to be in tune with the external environment and possess sound knowledge in practice, of what they learn in theory. It gives the student a chance to understand the organization, its organizational structure, students understand the functioning of the organization and come in contact with the overall organizational system. It is a matter of pleasure for me that I have got the opportunity to undertake my summer training in a well-reputed organization like Interface Financial Services Limited. I have got valuable input from knowledgeable personalities and am hereby furnishing my report.
ACKNOWLWEDGEMENT
It is a challenging job for a student to prepare a full-fledged report on a topic, without the help and guidance of an expert person. In the preparation of my report, I have received valuable input from every person of the organization, who could be of help to me. I am heartily thankful to the staff members of the organization who not only considered me able enough to be given a project, but also provided me with all the infrastructural facilities that aided me in my project. My sincere thanks to Mr. Vimal Shah, my trainer and guide for the project for providing me efficient guidelines and enlightening me with knowledge in the entire summer training programme. I am also thankful to the staff members of the organization for their kind support and co-operation. I am also thankful to all the faculty members of my institute, especially Mr. Neeraj Amarnani and Mr.Satish Nair for their valuable guidance and support.
EXECUTIVE SUMMARY
As a part of my summer training, I have compiled a report on INTERNATIONAL STOCK EXCHANGES of which my focus was on the SINGAPORE STOCK EXCHANGE and TAIWAN STOCK EXCHANGE respectively. Under this topic, we will see how these two Stock Exchanges work, their rules, regulations and their index movements. Also, I have made an attempt to compare them with the Indian Stock Exchanges, namely the Bombay Stock Exchange and the National Stock Exchange. The report gives a detailed insight of the intricacies of these exchanges and highlights the similarities and differences between them. The report can be helpful to those who are keen on investing in foreign Exchanges and are in search of information about them.
COMPANY PROFILE Brief History Of The Company
The company was incorporated on 1st January, 1992 as a private limited company under the Companies Act, 1956 as Inter Face Financial Services Private Limited. The company was converted into Public Limited Company vide resolution dated 26 th September, 1994 and a fresh Certificate of change of name was obtained on 26th October, 1994. The company has been jointly promoted by Interface Capital Market Private Limited, Mr. Gaurang H. Dalal, Mr. Himal K. Parikh, Mr. Hemendra Sanghvi, Mr. Varshesh Panchal and Choksi Financial and Leasing Private Limited.
Main Objective Of The Company
The objective of the company as set out by the Memorandum Of Association of the company interalia includes: 1. to provide consultancy and other services including financial, investment, management, technical and reports thereon and to manage investment portfolio of various individuals, firms, companies and other persons and to act as consultants for estates, properties and other assets to carry on promotion of business and in particular to form constitute, float, to finance, lend and advance moneys, prepare project and credit appraisal reports for and on behalf of any companies, associates, undertakings, firms, individuals and all other entities. 2. to subscribe, purchase, acquire, hold, sell, underwrite, invest, dispose off or otherwise deal for self on behalf of others in shares, stocks, debentures, bonds, units, mortgages, obligations and securities issued or guaranteed by company or any government, trust, municipal, local or other authority, firm, person, body and to invest and join in partnership firm by original subscription, syndicate participation, tender, purchase or otherwise out of the funds of the company obtained either by subscription or of capital or borrowing or by receipt of income from any trust which may be discretionary or otherwise or by gift of money received by the company from any person and to invest in and to advance money to acquire or purchase or erect or enlarge or repair or develop land and property like lands, buildings, houses, flats, shops, godowns on ownerships basis or otherwise, or to take a premise for any term, or land or building in India or else where, upon such terms and conditions as the company may deem fit. 3. to act as broker, dealer and carry on the business of share broking, money broking, exchange broking and bill broking, bill purchasing, bill discounting and to advise on portfolio management, investment of money, sales of properties and to act as Registers and Managers of the issue.
4. to acquire by purchase, lease, assignment or other lands, tenements, buildings, basements,
rights and advantages of any kind whatsoever and to resell, mortgage and let on lease the same. 5. to carry on the business of the company investment and to invest in and to acquire and hold and otherwise dealing shares, stocks, debentures, debenture stocks, bonds, obligations and securities issued or guaranteed by any company or Private Industrial Enterprise or Government and in diamonds, jewelry, pearls, gold ornaments, akiks, painting and antiques subject to provision of law applicable. 6. to carry on business as consultant in marketing and survey for whatsoever materials and projects for whomsoever. 7. to acquire membership of any stock exchange or any association of such nature and to act as share and stock brokers, as consultants on behalf of individuals, firms, companies and any other persons in relation to shares, stocks, bonds, securities, units, debentures, fixed and other deposits.
PRESENT BUSINESS
The company is presently engaged in the following activities: 1. Primary and Secondary Market Operations and Research: The investment and research division in the company under the guidance of the directors are continuously collecting and updating information in respect of each industry from various sources like capital market related volume/stock exchange data and companies’ Annual Reports etc. The division also prepares important data in respect of trends in industry, performance of previous issues from the particular group and promoters, performance of other companies in the particular industry and their previous issues etc. The company is actively involved in the capital market operations. These operations consist of trading in securities in the secondary market. Investment decisions are based on exhaustive research, risk assessment and promoters experience. It classifies its investments into long-term and short-term which keeps the risk of such investment under control. 2. Share Shoppe: To offer instant liquidity to its known regular clients, the company has introduced this scheme, whereby it makes spot down payments against delivery of shares after deducting service charge. As the company deals with only known and regular clients, it does not run into risk of defaults.
3. Leasing and Automobile Finance: The company has laid down distinct credit norms for leasing, by ensuring creditworthiness of the entities to whom money is being lent. The company also analyses the financial track record of its clients and regularly carries out the review and follow-up of all accounts of the clients. Leasing is mainly done for the purpose of tax planning. 4. Underwriting and Broking: The company has an agreement with Interface Capital Markets Private Limited, the flagship company of INTERFACE GROUP OF COMPANIES and as per the terms, the company sub-
underwrites all the underwriting business done by ICML at 75 percent of underwriting commission.
A PROJECT REPORT ON INTERNATIONAL STOCK EXCHANGES
Submitted To : Mr. Himal Parikh MD, Interface Financial Services Limited. Submitted By : Nilofer Shaikh N R Institute of Business Management. Submitted On : July 2004.
In partial fulfillment of the summer training requirement for MBA 1 course.
BIBLIOGRAPHY
The information has been compiled from the following sources: • • • • www.google.com www.yahoo.com www.financial info.com ‘Financial Management’ by I M Pandey
INDEX
SECTION 1
1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) Introduction Mission Code Of Corporate Governance Organization Board Of Directors Products Traded Trading Listing Process Membership Regulations Brokerage And Clearing Settlement Members Financial Results How To Be An investor On SGX
:
SINGAPORE STOCK
EXCHANGE
16)
Index Charts
SECTION 2
1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) Introduction Mission Organization Products Traded Listing Trading Clearing And Settlement
:
TAIWAN STOCK
EXCHANGE
Securities Firms And Investors Stock Price Index Market Information How To Be An Investor On TSEC Index Charts
SECTION 3
:
BOMBAY STOCK
EXCHANGE
1) 2) Introduction Organization
3) 4) 5) 6) 7) 8) 9) 10) 11) 12)
Products Traded Members SENSEX Listing Trading Tick Size Closing Settlement Surveillance Derivative Details
SECTION 4
1) Introduction 2) Organization 3) Promoters 4) Listing 5) Trading 6) Market Timings
:
National Stock Exchange
7) Clearing And Settlement 8) Indices
SECTION 5
:
BASIC COMPARISON
SECTION 6
:
BIBLIOGRAPHY
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