Description
Stock exchange is an organized market place where securities are traded. These securities are issued by the government, semi-government bodies, public sector undertakings and companies for borrowing funds and raising resources.
A STUDY ON
ONLINE TRADING SYSTEM
AT
INTER-CONNECED STOCK EXCHANGE OF
INDIA LIMITED
Project report su!"tte# "$
P%rt"%& 'u&(&&!e$t 'or t)e %*%r# o'
MASTER OF +USINESS ADMINISTRATION
DECLARATION
I )ere , #ec&%re t)%t t)e project t"t&e# - O$&"$e
Tr%#"$. S,ste!- #o$e %t I$ter-Co$$ecte# Stoc/
E0c)%$.e o' I$#"% L"!"te# su!"tte# , !e %s p%rt
o' p%rt"%& 'u&(&&!e$t 'or t)e %*%r# o' t)e M%sters o'
+us"$ess A#!"$"str%t"o$1 %t XXXXX1 XXXX
U$"2ers"t,1 XXX "s % recor# o' o$%(#e *or/ #o$e
, !e3
I %&so #ec&%re t)%t t)"s report )%s to !, /$o*&e#.e
"s !, o*$ %$# "s $e"t)er su!"tte# to %$, ot)er
u$"2ers"t, $or pu&"s)e# %$, t"!e e'ore3
XXXX
ACKNOWLEDGEMENT
I *ou&# &"/e to e0press !, .r%t"tu#e 'or %&& t)e
peop&e1 *)o e0te$#e# u$e$#"$. support %t %&&
st%.es o' t)e project3
T)"s report "s % pro#uct o' $ot o$&, !, s"$cere
e4orts ut %&so t)e .u"#%$ce %$# !or%&e support
."2e$ , t)e !%$%.e!e$t o' I$ter-Co$$ecte# Stoc/
E0c)%$.e o' I$#"% Lt#31 XXXX3
I e0press !, s"$cere .r%t"tu#e to !, .u"#e XXXX1
I$c)%r.e Tr%"$"$.1 I$ter-Co$$ecte# Stoc/ E0c)%$.e
o' I$#"% Lt#31 XXXX 'or sp%r"$. )"s 2%&u%&e t"!e "$
."2"$. t)e 2%&u%&e "$'or!%t"o$ %$# su..est"o$s %&&
t)rou.)1 'or t)e success'u& co!p&et"o$ o' t)e
project3
I *"s) to e0press !, s"$cere t)%$/s to XXXX1
D"rector 5 XXXX1 Gu"#e %$# %&so t)e !%$%.e!e$t
%$# st%4 o' !, co&&e.e 'or pro2"#"$. t)e .u"#%$ce
%$# support3
I *ou&# &"/e to %c/$o*&e#.e1 !, s"$cere t)%$/s to
%&& t)e e0ecut"2es %t I$ter-Co$$ecte# Stoc/
E0c)%$.e o' I$#"% Lt#31 XXXX *)o )%2e e0te$#e#
)e&p"$. )%$# "$ ."2"$. t)e "$'or!%t"o$ %$# e"$. %
p%rt o' t)e stu#,3
L%st ut $ot &e%st1 I e0press !, s"$cere .r%t"tu#e
to %&& t)e e!p&o,ees %t I$ter-Co$$ecte# Stoc/
E0c)%$.e o' I$#"% Lt#31 XXXX1 *)o )%2e #"rect&, or
"$#"rect&, co$tr"ute# to t)e success'u& co!p&et"o$
o' t)e project3
XXXX
CONTENTS
INTRODUCTION OF STUDY
? A STUDY ON STOCK EXCHANGE
? HISTORY OF STOCK EXCHANGE
? SECURITIES EXCHANGE BOARD OF INDIA
? NATIONAL STOCK EXCHANGE
COMPANY PROFILE
? INTRODUCTION OF ISE
? OBJECTIVES OF ISE
? OBJECTIVES OF THE STUDY
? SALIENT FEATURES OF ISE
ONLINE TRADING SYSTEM
? TRADING PROCEDURE BEFORE ONLINE
? INTRODUCTION TO ONLINE TRADING
? OBJECTIVES OF ONLINE TRADING
? ADVANTAGES & DISADVANTAGES OF ONLINE
TRADING
CLEARING AND SETTLEMENT
MECHANISM
? TRADING CYCLE
? SETTLEMENT PROCESS
? TRADING SYSTEM IN ISE
? DEMATRALISATION
? NSDL
OBSERVATIONS
CONCLUSIONS
SUGGETIONS
BIBLIOGRAPHY
INTRODUCTION TO THE STUDY
Stock exchange is an organized market place where securities
are traded. These securities are issued by the government, semi-
government bodies, public sector undertakings and companies for
borrowing funds and raising resources. Securities are defined as any
monetary claims (promissory notes or .!."# and also include shares,
debentures, bonds and etc., if these securities are marketable as in the case
of the government stock, they are transferable by endorsement and alike
movable property. They are tradable on the stock exchange. So are the
case shares of companies.
"nder the Securities $ontract %egulation &ct of '()*, securities+
trading is regulated by the $entral ,overnment and such trading can take
place only in stock exchanges recognized by the government under this
&ct. &s referred to earlier there are at present -. such recognized stock
exchanges in ndia. !f these, ma/or stock exchanges, like 0ombay Stock
1xchange 2ational Stock 1xchange, nter-$onnected Stock 1xchange,
3olkata, 4elhi, $hennai, 5yderabad and 0angalore etc. are permanently
recognized while a few are temporarily recognized. The above act has also
laid down that trading in approved contract should be done through
registered members of the exchange. &s per the rules made under the
above act, trading in securities permitted to be traded would be in the
normal trading hours ('6 &.7 to ...6 8.7# on working days in the trading
ring, as specified for trading purpose. $ontracts approved to be traded are
the following9
&. Spot delivery deals are for deliveries of shares on the same day or
the next day as the payment is made.
0. 5and deliveries deals for delivering shares within a period of : to '; days
from the date of contract.
$. 4elivery through clearing for delivering shares with in a period of two
months from the date of the contract, which is now reduce to ') days.
(%educed to - days in demat trading#
4. Special 4elivery deals for delivering of shares for specified longer periods
as may be approved by the governing board of the stock exchange.
1xcept in those deals meant for delivery on spot basis, all
the rest are to be put through by the registered brokers of a stock
exchange. The securities contracts (%egulation# rules of '(): laid down
the condition for such trading, the trading hours, rules of trading,
settlement of disputes, etc. as between the members and of the members
with reference to their clients.
HISTORY OF STOCK EXCHANGES IN INDIA
The origin of the Stock 1xchanges in ndia can be traced back to the later
half of '(th century. &fter the &merican $ivil The 2ative Stock and Share 0rokers &ssociation in '=
?.later
evolved as 0ombay stock exchange.
ncreased activity in trade and commerce during the
@irst 0uy '666 LMO Btd. P%s..6 market? would mean
that the client is willing to pay %s..6 plus brokerage for each security of
LMO Btd.
CLEARING HOUSE
The exchange has a clearing house as a part of its 7arket
!perations 4epartment to collect the securities from all members and
distribute to each member, all the securities that are due to him in respect
of every settlement. The whole of the operations of the clearing house are
computerized. $5 is like are bank where all the members of S1 maintain
their accounts. $5 acts as a member between the buyer and seller. t gets a
record of all the transactions (buying and selling# done by a particular
week and process these transactions and directs the members to deliver the
shares or make payment on the pay-in day.
!n the payout day, the $5 gives the delivery and the payment to
the members according to their respective positions. There are ) counters
in the S1s, $5 where bad deliveries, auction, odd-lot shares transaction,
spot transaction etc.., are dealt in respect of all the transactions done from
7onday to @riday all the shares will have to be delivered through the S1s
$5 as per the settlement program field, which is generally, a Saturday on
next.
NORMAL TRANSACTION$
n case of regular transaction, shares are deposited in clearing
house on Tuesday and
Stock exchange is an organized market place where securities are traded. These securities are issued by the government, semi-government bodies, public sector undertakings and companies for borrowing funds and raising resources.
A STUDY ON
ONLINE TRADING SYSTEM
AT
INTER-CONNECED STOCK EXCHANGE OF
INDIA LIMITED
Project report su!"tte# "$
P%rt"%& 'u&(&&!e$t 'or t)e %*%r# o'
MASTER OF +USINESS ADMINISTRATION
DECLARATION
I )ere , #ec&%re t)%t t)e project t"t&e# - O$&"$e
Tr%#"$. S,ste!- #o$e %t I$ter-Co$$ecte# Stoc/
E0c)%$.e o' I$#"% L"!"te# su!"tte# , !e %s p%rt
o' p%rt"%& 'u&(&&!e$t 'or t)e %*%r# o' t)e M%sters o'
+us"$ess A#!"$"str%t"o$1 %t XXXXX1 XXXX
U$"2ers"t,1 XXX "s % recor# o' o$%(#e *or/ #o$e
, !e3
I %&so #ec&%re t)%t t)"s report )%s to !, /$o*&e#.e
"s !, o*$ %$# "s $e"t)er su!"tte# to %$, ot)er
u$"2ers"t, $or pu&"s)e# %$, t"!e e'ore3
XXXX
ACKNOWLEDGEMENT
I *ou&# &"/e to e0press !, .r%t"tu#e 'or %&& t)e
peop&e1 *)o e0te$#e# u$e$#"$. support %t %&&
st%.es o' t)e project3
T)"s report "s % pro#uct o' $ot o$&, !, s"$cere
e4orts ut %&so t)e .u"#%$ce %$# !or%&e support
."2e$ , t)e !%$%.e!e$t o' I$ter-Co$$ecte# Stoc/
E0c)%$.e o' I$#"% Lt#31 XXXX3
I e0press !, s"$cere .r%t"tu#e to !, .u"#e XXXX1
I$c)%r.e Tr%"$"$.1 I$ter-Co$$ecte# Stoc/ E0c)%$.e
o' I$#"% Lt#31 XXXX 'or sp%r"$. )"s 2%&u%&e t"!e "$
."2"$. t)e 2%&u%&e "$'or!%t"o$ %$# su..est"o$s %&&
t)rou.)1 'or t)e success'u& co!p&et"o$ o' t)e
project3
I *"s) to e0press !, s"$cere t)%$/s to XXXX1
D"rector 5 XXXX1 Gu"#e %$# %&so t)e !%$%.e!e$t
%$# st%4 o' !, co&&e.e 'or pro2"#"$. t)e .u"#%$ce
%$# support3
I *ou&# &"/e to %c/$o*&e#.e1 !, s"$cere t)%$/s to
%&& t)e e0ecut"2es %t I$ter-Co$$ecte# Stoc/
E0c)%$.e o' I$#"% Lt#31 XXXX *)o )%2e e0te$#e#
)e&p"$. )%$# "$ ."2"$. t)e "$'or!%t"o$ %$# e"$. %
p%rt o' t)e stu#,3
L%st ut $ot &e%st1 I e0press !, s"$cere .r%t"tu#e
to %&& t)e e!p&o,ees %t I$ter-Co$$ecte# Stoc/
E0c)%$.e o' I$#"% Lt#31 XXXX1 *)o )%2e #"rect&, or
"$#"rect&, co$tr"ute# to t)e success'u& co!p&et"o$
o' t)e project3
XXXX
CONTENTS
INTRODUCTION OF STUDY
? A STUDY ON STOCK EXCHANGE
? HISTORY OF STOCK EXCHANGE
? SECURITIES EXCHANGE BOARD OF INDIA
? NATIONAL STOCK EXCHANGE
COMPANY PROFILE
? INTRODUCTION OF ISE
? OBJECTIVES OF ISE
? OBJECTIVES OF THE STUDY
? SALIENT FEATURES OF ISE
ONLINE TRADING SYSTEM
? TRADING PROCEDURE BEFORE ONLINE
? INTRODUCTION TO ONLINE TRADING
? OBJECTIVES OF ONLINE TRADING
? ADVANTAGES & DISADVANTAGES OF ONLINE
TRADING
CLEARING AND SETTLEMENT
MECHANISM
? TRADING CYCLE
? SETTLEMENT PROCESS
? TRADING SYSTEM IN ISE
? DEMATRALISATION
? NSDL
OBSERVATIONS
CONCLUSIONS
SUGGETIONS
BIBLIOGRAPHY
INTRODUCTION TO THE STUDY
Stock exchange is an organized market place where securities
are traded. These securities are issued by the government, semi-
government bodies, public sector undertakings and companies for
borrowing funds and raising resources. Securities are defined as any
monetary claims (promissory notes or .!."# and also include shares,
debentures, bonds and etc., if these securities are marketable as in the case
of the government stock, they are transferable by endorsement and alike
movable property. They are tradable on the stock exchange. So are the
case shares of companies.
"nder the Securities $ontract %egulation &ct of '()*, securities+
trading is regulated by the $entral ,overnment and such trading can take
place only in stock exchanges recognized by the government under this
&ct. &s referred to earlier there are at present -. such recognized stock
exchanges in ndia. !f these, ma/or stock exchanges, like 0ombay Stock
1xchange 2ational Stock 1xchange, nter-$onnected Stock 1xchange,
3olkata, 4elhi, $hennai, 5yderabad and 0angalore etc. are permanently
recognized while a few are temporarily recognized. The above act has also
laid down that trading in approved contract should be done through
registered members of the exchange. &s per the rules made under the
above act, trading in securities permitted to be traded would be in the
normal trading hours ('6 &.7 to ...6 8.7# on working days in the trading
ring, as specified for trading purpose. $ontracts approved to be traded are
the following9
&. Spot delivery deals are for deliveries of shares on the same day or
the next day as the payment is made.
0. 5and deliveries deals for delivering shares within a period of : to '; days
from the date of contract.
$. 4elivery through clearing for delivering shares with in a period of two
months from the date of the contract, which is now reduce to ') days.
(%educed to - days in demat trading#
4. Special 4elivery deals for delivering of shares for specified longer periods
as may be approved by the governing board of the stock exchange.
1xcept in those deals meant for delivery on spot basis, all
the rest are to be put through by the registered brokers of a stock
exchange. The securities contracts (%egulation# rules of '(): laid down
the condition for such trading, the trading hours, rules of trading,
settlement of disputes, etc. as between the members and of the members
with reference to their clients.
HISTORY OF STOCK EXCHANGES IN INDIA
The origin of the Stock 1xchanges in ndia can be traced back to the later
half of '(th century. &fter the &merican $ivil The 2ative Stock and Share 0rokers &ssociation in '=
?.laterevolved as 0ombay stock exchange.
ncreased activity in trade and commerce during the
@irst 0uy '666 LMO Btd. P%s..6 market? would mean
that the client is willing to pay %s..6 plus brokerage for each security of
LMO Btd.
CLEARING HOUSE
The exchange has a clearing house as a part of its 7arket
!perations 4epartment to collect the securities from all members and
distribute to each member, all the securities that are due to him in respect
of every settlement. The whole of the operations of the clearing house are
computerized. $5 is like are bank where all the members of S1 maintain
their accounts. $5 acts as a member between the buyer and seller. t gets a
record of all the transactions (buying and selling# done by a particular
week and process these transactions and directs the members to deliver the
shares or make payment on the pay-in day.
!n the payout day, the $5 gives the delivery and the payment to
the members according to their respective positions. There are ) counters
in the S1s, $5 where bad deliveries, auction, odd-lot shares transaction,
spot transaction etc.., are dealt in respect of all the transactions done from
7onday to @riday all the shares will have to be delivered through the S1s
$5 as per the settlement program field, which is generally, a Saturday on
next.
NORMAL TRANSACTION$
n case of regular transaction, shares are deposited in clearing
house on Tuesday and