A

PROJECT REPORT ON
Risk Management regarding working of a broking firm,
and its investors
FOR
MOTILAL OSWAL SECURITIES

Ltd.

BY
Omprakash Singh

UNDER THE GUIDANCE OF

Dr. Smita Sovani

SUBMITTED TO
UNIVERSITY OF PUNE
IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR
THE AWARD OF DEGREE OF MASTER OF BUSINESS
ADMINISTRATION (MBA)
Through
Vishwakarma Institute of Management
Pune-48

ACKNOWLEDGMENT
I am grateful to all those who helped and supported me in completing the project.
Firstly I would like to thank Mr. Raamdeo Agrawal, the CEO of the Motilal Oswal
Securities Ltd. for giving me opportunity to work with this organization.
I would sincerely like to thank Mr. Vaibhav Raj Verma, for his valuable guidance
and kind co-operation during the project.
I wish to express my gratitude to Dr. Smita Sovani (project guide), who gave proper
guidance throughout the project, without her guidance and feedback it would not have
been possible for me to undertake the research & utilize the research methodology
tools appropriately.
Last but not least, I am also thankful to all college staff and my friends for helping me
directly or indirectly in my project.

Certificate
This is to certify that Mr. Omprakash Singh has completed the Summer Project
Titled Risk management regarding working of a broking firm and its investors
to my satisfaction and as per the requirements of the two year full-time MBA
programme.

Project Guide
Dr. Smita Sovani
Date:

Director

TO WHOMSOEVER IT MAY CONCERN

This is to certify that Mr. Omprakash Singh Student of MBA-II from
Vishwakarma Institute of Management has cooperated with the Motilal Oswal
Securities Ltd. as Trainee in Finance Department from 2 nd June to 1st August
with project titled Risk Management regarding working of a broking

firm, and its investors.

.
It is worth mentioning that he has shown very good performance.
This certificate is issued upon him to be submitted to university of Pune, where he is
admitted for MBA course.

Guide
Vaibhav raj verma
Motilal Oswal Securities Ltd.,
Pune

Index
Sr. No.

Title

Page No.

Executive Summary

1-1

II

Company Profile

2-5

III

Objective Of the Study

6-6

IV

Research Methodology

7-7

Data Presentation

8-53

VI

Data Analysis

54-71

VII

Conclusion of the Study

72-72

VIII Recommendation & Suggestions 73-74

IX

Limitations

75-75

Bibliography

76-76

CHAPTER I: EXECUTIVE SUMMARY

A Capital Market deals in financial assets, excluding coins and currency. The financial
assets comprise of banking accounts, pension funds, provident fund, mutual fund,
insurance policy, shares, debentures, and other securities. The secondary market is the
market where scrips are traded. It is a market place, which provides liquidity to the
scrips issued in the primary market.

All investments are risky, whether in stock, capital market, banking, financial sector,
real estate, bullion, gold etc. The degree of risk however varies on the basis of the
features of the assets, investments instrument, the mode of investment, time frame or
the issuer of the security etc.

Risk can be defined as Possibility of suffering losses

The chance of something happening that will have an impact upon objectives. It is
measured in terms of consequences and likelihood.

Risk management in a Broking Industry is a new concept in India, since it

poses maximum risk in the financial market, managing it was felt most essential by
the regulatory bodies and exchanges.

CHAPTER II - COMPANY PROFILE

The story of Motilal Oswal Securities Ltd (MOSL) goes back many years, when Mr.
Motilal Oswal and Mr. Raamdeo Agrawal met each other as students in a Mumbai
suburban hostel in the early eighties. Both the young chartered accountants hailing
from a rural & an unpretentious background had a common dream viz 'to build a
professional organization with strong value systems, to provide reliable & honest
investment advice to investors'. Thus was born their first enterprise called "Prudential
Portfolio Services" in 1987.
Motilal Oswal gets incorporated as Motilal Oswal Securities Ltd. in the year
1995.The institutional business unit has relationships with several leading foreign
institutional investors in the US, UK, Hong Kong and Singapore.
Motilal Oswal Financial Services Ltd. (MOFSL) is a well-diversified, financial
services company focused on wealth creation for all its customers, such as
institutional and corporate clients, HNI and retail customers. Their services and
product offerings include equity broking, commodity broking, and distribution of
third party products, investment banking and venture capital management.
Mr. Motilal Oswal and Mr. Raamdeo Agrawal laid the foundation for MOFSL and
initially conducted business as a sub-broking firm. Thus, began the expedition of
building a professional organisation with strong value systems, to provide investment
advice to investors.
Today, Motilal Oswal Financial Services Ltd. is a well-established brand among retail
and institutional investors in India, with a presence in over 1430 business locations
across over 430 cities.
From a sub-broking firm, Motilal Oswal Financial Services Ltd. has today become a
solid financial services company straddling a spectrum of businesses in the financial

services space. These businesses include Wealth Management, Institutional Equities,

Investment Banking and Venture Capital Management.

Motilal Oswal Financial Services Limited is the holding company of the following
five subsidiaries:
(1) Motilal Oswal Investment Advisors Pvt. Ltd.
(2) Motilal Oswal Commodities Broker (P) Ltd.
(3) Motilal Oswal Venture Capital Advisors Private Limited
(4) Motilal Oswal Securities Ltd. (MOSL)
(5) Motilal Oswal capital market Ltd.

Mission and Vision

Motilal oswal core objective is to position ourselves as globally respected investment
bank by assisting our clients in value creation.
Motilal oswal are on the correct roadmap to pursue our mission with our Team
inculcating the following values with utmost sincerity.

Motilal Oswal Core Purpose

To be a well respected and preferred global financial services organization enabling
wealth creation for all our customers.
Today Motilal Oswal is well diversified financial services firm offering a range of
financial products and services such as

Wealth Management

Broking & Distribution

Commodity Broking

Portfolio Management Services

Institutional Equities

Private Equity

Investment Banking Services and

Principal Strategies

Motilal Oswal has a diversified client base that includes retail customers (including
High Net worth Individuals), mutual funds, foreign institutional investors, financial
institutions and corporate clients. Its headquarter in Mumbai and as of June 30, 2008,
had a network spread over 450 cities and towns comprising 1,496 Business Locations
operated by its Business Partners and them. As at June 30, 2008, Motilal Oswal had
486,648 registered customers.
As of end of financial year 2008, the group net worth was Rs.7 bn and market
capitalization as of March 31, 2008 was Rs.19 bn.
For year ended March 2008, the company showed a strong top line growth of 91% to
Rs.7 bn as compared to Rs.3.68 bn, last year. New businesses like investment
banking, asset management and fund based activities have contributed to this growth.
Rs. Crores FY 2007- 08 Growth (YoY)
Total Revenues
701
91%
EBIDTA
270
97%
PAT
156
100%

Awards and Accolades

Motilal Oswal Financial Services has received many accolades in the year gone by.
Some of them are:
-

Rated Best Overall Country Research for a Local Brokerage in the 2007 Asia
Money Brokers poll

Rated Indias top broking house in terms of total number of trading terminals
by the Dun & Bradstreet survey

Rated Outstanding Commodity Broking House-2007 by Globoil India

Rank second best for Customer Responsiveness in the Financial Sector at the
Avaya Global Connect Customer Responsiveness awards.

MAJOR PLAYERS IN THE INDUSTRY

INDIA BULLS
5PAISA.COM
ANGEL BROKING
ICICI DIRECT
IL&FS INVESTMENT
UTI SECURITIES
KARVY
KOTAK SECURITIES LIMITED
HDFC SECURITIES LTD
IDBI CAPITAL MARKET SERVICES LTD

CHAPTER III: OBJECTIVE OF THE PROJECT

Introduction to capital market.

To get familiar with the working of a broking firm.

To identify various risks involved in the broking firm.

To identify various risk for the investors of the broking firm.

To manage and reduce the identified risks.

CHAPTER IV: RESEARCH METHODLOGY

During my project, I collected data through various sources primary & secondary.
Primary source includes:1) Discussion with guide.
2) Discussion with experts.
3) Discussion with investors of the firm.
4) Live trading in the market.
Secondary source includes:1) Various books related to stock market.
2) Books related to Financial Management.
3) Web sites were used as the vital information source.
4) Books related to risk management.

CHAPTER V: DATA PRESENTATION

Introduction to Capital Markets

Financial System
The financial system of every economy consists of various constituents such as
1

Financial Institutions

Financial Companies

Financial Markets

Financial Instruments

Financial Services

Financial regulations

The financial market in India comprised of capital market and money market whereas
the financial system of the country comprised of institutions, which operate the
financial markets and the financial instruments with which the financial system is put
into operation.
Tax anomy of financial markets can be understood on functional, sectoral and
institutional basis. On a functional basis we can divide financial markets into
1

Money market (short term)

Capital market (long term)

Capital Market Scenario

The stock market in India dates back to the 18th century when the East India Company
was ruling the roost in the country and was perhaps the most dominant and powerful
institution and its securities were traded. The securities trading were done in an
unorganized form at Bombay and Calcutta in early 19th century.

The decade of 90s has witnessed several changes in reformation of capital market.
Automation, transparency, strict surveillance, depository system, on line trading,
investors protection, new rules and regulations, etc. are some of the activities which
only reflect the growth of Indian capital market. By any reckoning Indian corporate
sector has grown very significantly in the last couple of decades whether to look at it
in terms of public and private limited companies, their share capitalization, their sales
turnover or their contribution to capital formation with this came the legislation of
SEBI to act as a regulatory body to protect investors

Capital Market
A Capital Market deals in financial assets, excluding coins and currency. The financial
assets comprise of banking accounts, pension funds, provident fund, mutual fund,
insurance policy, shares, debentures, and other securities. If the stock exchanges are
well regulated and function smoothly, then it is an indication of healthy capital
market. Stock exchange provides a good leverage of the capital market and their
relationship is directly proportional. India has multi-stock exchange system with 24
stock exchanges functioning across the country. In our country, capital markets are
generally also known as security/stock market. The Indian capital market currently
provides excellent investment opportunities to domestic and foreign investors in both
equity and fixed income Segments.
The Indian Capital Markets can be broadly classified into three types of markets.
1

Money market

Primary market

Secondary market

Money market
The money market is part of overall financial system and securities or capital market.
It deals in short term financial assets whish can be readily converted into cash. Money
market is a place for trading in money and short tern financial assets that are as liquid
as money. It provides a platform for short term surplus funds of lenders or investors
and short term requirements of borrowers, the instruments can be traded at low cost
and are highly liquid.

Primary market
Primary market is generally referred to the market of issues or market for new
mobilization of resources by the companies and the government undertakings, for new
projects as also for expansion, modernization, addition, and diversification and up
gradation. Primary market operations include new issues of shares by new and
existing companies, further and right issues to existing share holders, public offers,
and issue of debt instruments such as debentures, bonds, etc. Raising money from
capital market is cheap for the company and involves a low servicing cost. The
investors benefit by way of dividend and or capital appreciation. The following are
the market intermediaries associated with the primary market
1

Merchant banker/book building lead manager

Registrar and transfer agent

Underwriter/broker to the issue

Advisor to the issue

Banker to the issue

Depository

Depository participant

Secondary Market
The secondary market is the market where scrips are traded. It is a market place,
which provides liquidity to the scrips issued in the primary market. Thus, the growth
of secondary market is dependent upon primary market. More the number of
companies entering the primary market, the greater are the volume at the secondary
market. Trading activities in the secondary market are done through recognized stock
exchanges, which are 24 in number including Over the Counter Exchange of India,
National Stock Exchange of India, and Inter-connected Stock Exchange of India.
Secondary market operations involves buying and selling of securities on the stock
exchange through its members. The following intermediaries are involved in the
secondary marker.
1

Broker/member of Stock Exchange- buyer broker and selling broker

Portfolio manager

Investment advisor

Share transfer agent

Depository

Depository participant

WORKING OF A BROKING FIRM

Stock BrokerAccording to SEBI Stock Broker is a member of a recognized stock exchange(s) and
is engaged in buying, selling and dealing in securities. In other words broker is an
intermediary who arranges to buy and sell securities on behalf of clients i.e. the buyer
and the seller. A broker can deal in securities only after getting registered with SEBI
through stock exchanges. The constitution of a broking firm may be a Proprietary
Concern, a Partnership firm or a Corporate.

COMPLIANCE DEPARTMENT
The functions carried out by Compliance Department are as follows

COMPLIANCE DEPARTMENT

Reg. of Sub-Broker

Reg. Of Client

Individual

Reg. Of Franchisee

Non Individual

Limited Company

Partnership

Sole Proprietorship

Registration of Client
Documentation required for individual client as per SEBIs guidelines are as follows
Individual
1

Client Registration Application Form.

Broker Client Agreement on stamp paper of value as applicable in the

respective state.

Identity Proof like

-

Copy of Passport

Copy of ration card

Copy of Driving Licenses

Copy of Voters Identity Card

Copy of Pan card

Letter from bank certifying account number

Letter of running account.

Non-Individual
Limited Company
1

Client Registration Application Form.

Broker client Agreement on stamp paper.

Certified copy of Memorandum and Articles of Association.

Certified copy of resolution authorizing the company to open account with

Motilal Oswal Securities and appointing persons authorized to operate upon
said account on behalf of company.

Proof of identity in respect of authorized director.

Letter from the bank certifying account number and period from which the
same is in operation.

Partnership Firm
1

Application Form

Broker client agreement on stamp paper.

Partnership Deed

Partnership letter signed by all the partners authorizing the firm to open
account with Motilal Oswal Securities and appoint one or more partners to
operate the said account on behalf of the firm.

Identity Proof

Bank Certifying Letter

Proprietorship Concern
1

Client Registration Application Form

Broker Client Agreement

Identity Proof

Bank Certifying Letter

REGISTRATION OF SUB-BROKER
SEBI rules for application for registration of Sub Broker
-

An application by a sub broker for the grant of a certificate shall be

made in Form B

The Application shall be accompanied by a recommendation letter

from a stock broker of a recognized stock exchange with whom he
is to affiliated along with two references including one from his
banker

The application form shall be submitted to the stock exchange of

which the stock broker with whom he is affiliated as a member.

The stock exchange on receipt of an application shall verify the

information contained and then shall also certify that the applicant
is eligible for registration.

The eligibility criteria is as follows

-

The applicant should not be less than 21 years of age

The applicant has not been convicted to any offence involving

fraud or dishonesty

The applicant should have at least passed 12th STD

The applicant should be fit and proper person

DEALING DEPARTMENT
Dealing department is a very important department in the broking firm as it carries out
most important activities of Buying and Selling of securities. The people doing
dealing are called as Dealers. He is the person dealing on behalf of the investor,
therefore when the investor wants to trade in some scrips he must inform the dealer

first and then the dealer deals in the market. The following are the activities carried
out in a dealing department.
DEALING DEPARTMENT

Buying

Selling

Securities

Securities

Entering

Order

Order

Order

Orders

Modification

Cancellation

Matching

Entering Order
The trading member can enter orders in the normal market and auction market. When
an order enters the trading system it is an active order, it tries to find out on the other
side of the books if it finds the match, trade is generated. If it does not find a match,
the order becomes a passive order and goes and sits in the order book.

Order Modification
All orders can be modified in the system till the time they do not get fully traded and
only during market hours. Once an order is modified, the branch order values limit for
the branch and get adjusted automatically.

Order Cancellation
Order cancellation functionality can be performed only for orders which have not
been fully or partially traded (for the untraded part of partially traded orders only) and
only during market hours.

Order Matching
The buy and sell orders are matched on book type, symbol, series, quantity and price.
The best sell order is the order with lowest price and best buy order is the order with
highest price. The unmatched orders are queued in the system by the following
priority.
1 By Price- the buy order with the higher price gets a higher priority and
similarly a sell order with a lower price gets a higher priority.
Ex. a) 100 shares @ Rs 35 @time 10.30 am
b) 500 shares @ Rs 35.05 @time 10.43 am
The second order price is greater than the first order price and therefore it is the best
buy order.
1

By Time- If there is one or more order at the same price the order entered
earlier gets a higher priority.

Ex. a) 200 shares @Rs 72.75 @time 11.30 am

b) 300 shares @ Rs 72.75 @time 11.33 am
Both orders have same price but they were entered in the system at different times, the
first order was entered before the second order and therefore it is the best sell order.

TRADE
Trade is the basic activity of dealing of which a buy and sell order match with each
other. This matching of two orders is done automatically in the system. Whenever the
trade takes place the system sends a confirmation message to each of the user
involved in the trade.

Trade Modification
The user can use trade modification facility to request for modifying trade to be done
during the day. The user can request the exchange to modify price and quantity. Since
trading is done on line the dealer makes the necessary changes on the request of the
client in his trading term.

Trade Cancellation
The user can use canceling facility for canceling the trades requested. When the
request for the trade cancellation is approved by the exchange, the party to trade
receives a system message confirming the trade cancellation at the workstation of the
dealer.

SETTLEMENT DEPARTMENT
This department performs the back office function i.e. settling of trades that takes
place every day. This settling is done under T+2 rolling settlement system.

NSE/BSE provides a platform for trading to its trading members; the National
Securities Clearing Corporation LTD (NSCCL) determines the funds/securities
obligation of the trading members and ensures that trading members meet their
obligations. The clearing banks and depositories provide the necessary interface
between the custodians and clearing members (who clear for the trading members or
their own transactions) for settlement of funds/securities obligation of trading
members. Their core processes

Placing Order

Decision to trade

Trade execution

Funds and securities

Clearing of trades

Settlement of trades

The main functions of this department are as follows:

SETTLEMENT DEPARTMENT

Pay in of

Pay out of

Pay in of

Pay out of

Securities

Securities

funds

funds

Pay in of Funds and Securities

The members bring in their funds/securities to the NSCCL; they make available
required securities in designated accounts with the depositories by the prescribed pay
in time. If they fail to do so the securities go for Auction.

Pay out of Funds and Securities

After due scrutiny, NSCCL sends electronic instructions to the depositories/clearing
banks to release pay out of securities/funds.

These securities/funds reach the members account respectively, if the member account
is showing a debit balance his shares are kept on hold until he clears them.
This settlement is based on rolling system

What is Rolling Settlement System?

Under Rolling settlement all the trades executed on a trading day are settled X days
later this is called T+X rolling settlement where T is the trade date and X is the
number of business days after trade date in which settlement takes place. The rolling
settlement has started in T+5 bases in India, now it is T+2.

Advantages
1

Under Rolling Settlement, the investors trading on the preceding or

succeeding day are treated differently. All of them wait for X days from the
trade date for settlement.

The gap between the trade date and the settlement is less under rolling
settlement making both securities and funds easily convertible

The account period settlement combines the features of cash as well as futures
market and hence distorts price discovery process. In contrast rolling
settlement segregates cash and futures market and thereby remove excessive
speculation that helps in better price discovery.

There is a scope for both inter-day and intra-day speculation under account
period settlement, which allow large outstanding positions and hence poses
greater settlement risks In contrast, since all open positions under rolling
settlement at the end of a date T are closed on the same day and necessarily

settled X working days later it limits the outstanding positions and reduces
settlement risks.
5

Till recently it was possible to shift position from one exchange to another
under account period as they follow different trading cycles. Rolling
Settlement took care of this making trading cycle uniform.

CENTRAL DEPOSITORY SERVICES LTD (CDSL) DEPARTMENT: The main activities of CDSL Department are as follows
CDSL

Account

Transmission

Dematerialization

Settlement

Opening

& Nomination

& Rematerialization

of

trade

Just as in a bank, opening an account is the first step that an investor has to do, here
an investor intends to hold scrips in D-mat form in a depository form in the
depository system. The Investor can open an account with any DP of NSDL, CDSL.
An investor can open an account with several DPs or he may open several accounts
with a single DP in different permutation and combination as per the holding.

Why Demat Account has become a necessity?

a) SEBI has made it compulsory for trades in almost all listed scrips to be settled
in a demat mode. Although trades up to 500 shares was allowed to be settled in
physical form for some time.
b) It is safe and convenient way to hold securities compared to holding them in
physical form.

c) No stamp duty is levied on transfer of securities held in demat form.

d) It eliminates thefts, deface, delays, and subsequent misuse of the certificates
e) Change of name, address, registration of power of attorney, deletion of
deceased name etc. can be effected across companies by one single instruction
to the DP.
f) Each share is a market lots for the purpose of transactions so no odd lot
problem.
g) Any number of securities can be transferred and delivered with one delivery
order. Therefore paperwork and signing of multiple transfer forms is done
away with.
h) It facilitates taking advances against securities on low margin and low interest.

Account Opening

Types of Accounts: The purpose for which a depository account is opened determines the nature of
operation of such account.
Three Types of Accounts
1

Beneficial owner account

Clearing member account

Intermediary account

Beneficial owner account

This is an account opened by investors to hold their securities in dematerialized form
with a depository and to settle the transactions of sale and purchase of such securities
in book entry form through the depository system. An account holder is legally
entitled for all rights and liabilities attached to the securities (i.e. Equity shares,
debentures, government securities etc) held in that account. Therefore the account is
called beneficial owner account. A beneficiary account can be in the name of an
individual/corporate or broker himself for the purpose of his personal investments in
demat form. The account is opened with the DP.

Clearing members account

The entities that are authorized to pay in and receive the pay out from a clearing
corporation/clearing house against trade done by them or on behalf of their clients are
known as clearing members (CMs). All pay in and pay out transactions are carried out
through their accounts
There are two types of clearing members
1

All members of stock exchanges popularly known as Brokers are clearing

members.

Custodians who are permitted by the stock exchange to act as a clearing

member.

Procedure
The clearing member has to first register itself with the depository and obtain a
business partner identification number (CM-BP-ID).

The steps undertaken to open the account are same as those of individuals
difference lays in the type of form the details to be filled in and documents to be
submitted.
Checklist for a clearing member account
1

Ensure that all compulsory fields in the account opening form have been

entered (except PAN/GIR no and nomination, all other details are compulsory)
2

Ensure that a copy of the board resolution for authorized signatories has been

enclosed in case of corporate.

3

Ensure that required letter from NSCCL giving CC-ID is enclosed. In case of

other stock exchanges this is not required.

4

Ensure CM is informed of standing instruction facility for receipts.

Ensure CM is informed that in case of delivery to CC instructions either of the

joint holders can sign the instructions.

6

If the forms are received at the branch of a DP, ensure that the account opening

form along with required references is dispatched to head office in the proper and
timely manner. If required retain the copy.
7

Ensure follow up with head office in case defined deadline in respect of

account opening is not met.

Intermediary account
As per SEBI regulations on stock lending and borrowing, only qualified
intermediary can lend and borrow stocks from clients. These intermediaries borrow
from lenders and lends to borrowers. Intermediaries registered with SEBI as approved
intermediary may open an intermediary account with a DP of its choice for executing
stock lending and borrowing transactions made through them. The intermediary

account may be opened only after obtaining registration from SEBI under an
approved stock lending scheme and getting the approval of the depository for opening
the account

Transmission and Nomination

Transmission
The Companies Act 1956 distinguishes Transmission of shares from transfer of
shares. Transfer of shares relates to a voluntary act of the shareholder while
Transmission is brought about by operation of law. The word Transmission means
devolution of title to shares example- devolution by death, succession, inheritance,
bankruptcy, and marriage etc. the persons on whom the shares devolve has to prove
his entitlement by submitting appropriate documents and seek transmission. If the
securities are held in the depository system, documents have to be submitted to the
DP. If the securities are held in physical form, the documents have to be sent to the
company for effective transmission.
Check list for DPs in case of Transmission:In case if securities held jointly
1. The surviving holder(s) to have a separate account with any DP.
2. Ensure all surviving holder(s) sign instruction form
3. Ensure that instruction form is accompanied with a copy of notarized death
certificate.
4. Verify Signature

In case of securities held singly

1

Ensure legal heir(s)/representative(s)have an account with any DP

Ensure all legal heir(s)/ representatives sign the instruction form

Ensure that instruction form is accompanied with the following documents

a. Copy of notarized death certificate

b. Copy of notarized succession certificate
c. Certificate or order of court where deceased has not left a will, Or
d. Copy of notarized probate or letter of administration

Nomination
The Companies (Amendment) Act 1999 has introduced provisions for nomination in
respect of shares, Debentures, Fixed Deposits etc. Under the provision, a Shareholder,
a Debenture holder, a Bondholder or a Deposit holder can nominate a person in whom
the shares, debentures, bonds or deposits would vest, in the event of original
investors death.
Individuals applying for holding shares/debt securities on their own behalf singly or
jointly with one or two persons can make nomination. If the shares are held jointly, all
the joint holders are required to sign the nomination form. A holder can even
nominate a minor, represented by one of the parents or guardian. Trusts, Societies,
Body Corporate, Partnership Firms, Karats of Hindu Undivided Family, or Power of
Attorney holder cannot be appointed as nominee.

Dematerialization and Rematerialization

Dematerialization
It is the process in which the physical form of holding securities is replaced with
electronic (book-entry) form of holding. The securities held in dematerialized form
are fungible. They do not bear any distinguishable features like distinctive number,
certificate number. Once the shares are dematerialized they lose their identification
feature in terms of share certificate distinctive number and folio numbers. Each
security is identified in the depository system by ISIN (International Securities
Identification number) this is a convenient method for preventing all the problems that
occur with physical securities through dematerialization.
Pre-requisites for dematerialization request
1

The registered holder of the securities should make the request

The request should be made in the prescribed dematerialization request

form

Securities to be dematerialized must be recognized by a Depository as

eligible. In other words only those securities whose ISIN has been
activated by a Depository, can be dematerialized.

The company/issuer should have established connectivity with any

Depository like NSDL, CDSL, Stock Holding Corporation ltd, only after
this connectivity is established that the securities of the company/issuer are
recognized to be available for dematerialization

The holder of securities should have a beneficiary account in the same

name as it appears on the security certificates to be dematerialized.

Procedure for dematerialization

INVESTOR

DP

R&T AGENT

DEPOSITORY

Client Investor submits the DRF (Demat request form) and physical
certificates to the DP. DP checks whether the securities are available for
Demat.

DP enters the demat request in his system to be sent to the relevant

Depository. DP dispatches the Physical certificates along with the DRF to
the R&T agent.

Depository records the details of the electronic request in the system and
forwards the request to the R&T agent.

R&T agent, on receiving the physical documents and the electronic request
verifies

and checks them. Once the R&T agent is satisfied,

dematerialization of the concerned securities is electronically confirmed to

the Depository.
5

Depository credits the dematerialized securities to the beneficiary account

of the investor and intimates the DP electronically. The DP issues a
statement of transaction to the client.

Rematerialization
It is exact reverse of dematerialization. It refers to the process of issuing physical
securities in place of the securities held electronically in book entry form with a
depository. Under this process the depository account of a beneficial owner is debited
for the securities sought to be rematerialized and physical certificates for the
equivalent number of securities is/are issued.

Pre requisite to a rematerialization request

1

The beneficial owner of the securities should make the request.

There should be sufficient balance of securities available in the beneficiary

account to honor the rematerialization request.

Procedure of rematerialization
1

The DP should provide rematerialization request forms (RRF) to the clients.

The client should complete RRF in all respects and submit it to the DP.

The DP should check RRF for validity, completeness and correctness. In

Particular following points should be checked
a. Sufficient balance of shares available in clients account or not
b. The name of the client on the RRF is exactly the same as that in the
client account
c. Details like security type, face value, issuers name and lock in
status are filled in correctly
d. The RRF is properly signed or not
e. If the RRF is not found in order the DP should return the RRF to
the client for rectification.

Settlement of trades
One of the basic services provided by the Depository is to facilitate transfer of
securities from one account to another on the instruction of the account holder.
Transfer of securities from one account to another may be done for any of the
following purposes: 1

Transfer due to a transaction done on a person-to-person basis (an offmarket trade).

Transfer arising out of transaction done on a stock exchange.

Transfer arising out of transmission and account closure.

There are four types of transactions, which a DP has to carry out

TRANSACTION

Off-Market

On-Market

Inter Depository

Intra Depository

Off-Market Transaction
Any trade that is clear and settled without the participation of a clearing corporation
and transfer from one beneficiary account to another due to a trade between them is
called Off- Market Trade.

DEPOSITORY

DP 1

DP 2

Seller

Buyer

On-Market Transaction
Any transaction for sale or purchase of securities through broker on a stock exchange
to be settled through clearing corporation/clearing house is generally termed as OnMarket Transaction.
The procedure is as follows
a.

The seller gives delivery instructions to his DP to move securities from

his account to his brokers account.

b.

Securities are transferred from brokers account to CC on the basis of

the delivery out instruction.

c.

On payout, securities are moved from CC to buying brokers account.

d.

Buying broker gives instructions and securities move to the buyers

account.

DEPOSITORY
DP

DP
CC

Broker
Seller

Broker
Buyer

Seller

Buyer

Inter Depository Transfer

Transfer of securities from an account in one depository to an account in another
depository is termed as an inter depository transfer.
Pre-requisites given by SEBI (Depository and Participants) regulations 1996
1

Both the depository must be interconnected to enable inter depository

transfers

Inter Depository Transfer can be done only for securities that are available
for dematerialization on both the depositories.

The account in Depository can be either a clearing account or a beneficiary

account.

For debiting the clearing account on the beneficiary account with

Depository the form for the inter depository delivery instruction is required
to be submitted by the clearing member/beneficial owner to DP.

RISK MANAGEMENT DEPARTMENT

The concept of Risk Department on a broking firm is a new concept in India. The
Risk Management Department is principally concerned with the management of
trading and non-trading risks. It seeks to ensure that all risks, which threaten the
business, are recognized, controlled, and reduced to their feasible economic minimum
and not just the risks that are capable of being insured. There have been experiments
with different risk containment measures in the recent past; following are some of the
measures which are taken by the broking firms.
RISK DEPARTMENT

Capital

On Line

Off-Line

Margin

Circuit

Adequacy
1

monitoring

monitoring

requirement

filters

Capital Adequacy Requirement

Every stock exchange has mentioned its own capital requirements, as compared
to the minimum statutory requirements as also those stipulated by other stock
exchanges; the Capital adequacy requirements stipulated by NSE are higher. Out
of total capital provided by a member, Base Minimum Capital (BMC) is utilized
towards taking exposure/turnover only and Additional Base Capital (ABC) is
utilized towards margin payment if not used up for taking exposure/turnover.

On-Line and Off-Line Exposure Monitoring

NSCCL has put in place an online monitoring and surveillance system whereby
exposure of the members is monitored on a real time basis.
Off-Line surveillance activity Consists of inspection and investigations as per
regulatory requirement a minimum of 10% of the active trading members are to
be inspected every year to verify the level of compliance with various rules, bye
laws and regulations of the exchange.

Margin Requirement
The daily margin in rolling settlement comprises of Mark to Market margin
(MTM) and Value at Risk based Margin (VaR). Margins are computed at client
level. A member entering an order needs to enter the client code. Based on this
information margin is computed at the client level which will be payable by the
trading member on T+1 basis.

Index based Circuit Filters

An index based market wide circuit breakers system applies at three stages of the
index movement either way at 10%, 15%, and 20%. These circuit breakers bring
about a coordinated trading halt in all equity derivatives market nationwide.

RISK
Whether it is driving, or just walking down the street, everyone exposes himself to
risk. It is equally true in the case of investments. Investors personality and lifestyle
play a big role on how much risk investors are comfortably able to take if investors
invest in stocks and have no trouble sleeping at nights because of their investments
they are probably taking too much of risk. All investments are risky, whether in stock,
capital market, banking, financial sector, real estate, bullion, gold etc. The degree of
risk however varies on the basis of the features of the assets, investments instrument,
the mode of investment, time frame or the issuer of the security etc.
Risk can be defined as Possibility of suffering losses
The chance of something happening that will have an impact upon objectives. It is
measured in terms of consequences and likelihood.
Investopedia has defined risk as The chance that an investments actual return will be
different than expected this includes the possibility of losing some or all of the
original investments.
When considering any security, the investor is always concerned with the return
expected on the investments and the risks of the investments, i.e. how likely it is that
the return expected will be achieved. There are two types of risks
1

Systematic Risks

Unsystematic Risks

Systematic Risks
The risks arising out of external and uncontrollable factors, arising out of the market,
nature of industry, the state of the economy and a host of other factors. This risk

influences a large number of assets. It is virtually impossible to protect investors

against this type of risk. Example- Market Risk, Interest rate risk, Purchasing power
risk etc.
Unsystematic Risk
The risk emerging out of known and controllable factors is internal to the issuer of the
securities or companies. This risk affects a very small number of assets. Sometimes it
referred to as specific risks. Example Business risk, financial risk, Insolvency risks
etc.
RISK CATEGORIES

Dynamic

Static

Pure

Speculative

Dynamic Associated with changes in the economy

Static With or without changes in the economy
Pure Chance of loss or no loss
Speculative Chance of loss or gain

Risk and Uncertainty

Risk and uncertainty go together. Risks suggest that the decision maker knows that
there is some possible consequence in an investment decision, but uncertainty
involves a situation, where the outcome is not known to the decision maker. But
basically, whether the outcome is known or not, the investments involve both risk and
uncertainty. For our decision, the word Risk is comprises of all elements of
variability of return, uncertainty of the outcome, etc.

The investors and some issuers of securities can control some risks by planning.
Others cannot control and they have to bear the consequence compulsorily.
What Causes the Risks?
These risks are caused by the following factors
1

Wrong decision of what to invest in.

Wrong time of investments.

Nature of investments.

Creditworthiness of the issuer.

Maturity period or the length of the instrument.

Method of investments, namely, secured by collateral or not.

Terms of lending such as periodicity of servicing, redemption period, etc.

Nature of industry in which the company is operating.

Amount of investment.

10 National and International factors, acts of God.

Ways to deal with Risks
Dealing Risks

Avoid it
1

Retain it

Reduce it

Transfer it

Share it

Avoid it
Investor should take those risks, which are bearable. Unnecessary and
excessive risks should be avoided.

Retain it
Every Investment posses some inherent risks which are unavoidable; in order
to earn certain returns investor has to retain certain risks.

Reduce it
Investor can reduce the risk by taking advice from a knowledgeable persons,
analysts etc before investing in any instruments.

Transfer it
Insurance policies are the best way to transfer any risk.

Share it
While investing an investor can approach his friends, relatives etc to invest
with him and the risk gets shared among different people.

Rules of risk to be remembered

1

Dont risk more than one can afford to lose

Consider the odds

Dont risk a lot for a little

Risk and Return

Every investor invests money to receive returns. The risk/return tradeoff could easily
be called the iron stomach test. Deciding what amount of risk investors can take on
while allowing them to get rest at night is an investors most important decision.
The risk/return tradeoff is the balance, an investor must decide on between the desires
for the lowest possible risk for the highest possible returns. Remember to keep in
mind that low levels of uncertainty (low risks) are associated with low potential return
and high levels of uncertainty (high risks) are associated with high potential returns.
Therefore risks and return go hand in hand.

RISK/ RETURN TRADEOFF

Low Risk

Higher Risk

Low Return

High Return

S.D (or Risk)

The Risk Return relationship between various Investments Instruments is as follows

R
E

* Equity
* Mutual Funds

* Debentures

* Fixed Deposits

* Post Office Certificates

D
S

* Bank Deposits
* Insurance Schemes
Risk Taken By Investors

INVESTORS RISKS
Smart investors know how much risk is appropriate for them, and they don't exceed
that level. They realize that risks come in many forms, and there is no way to totally
escape from them whatever measure or precautions they may take.
If investors can recognize risks, they can manage them with relatively simple
solutions. But too many investors underestimate the importance of doing this and it's
one of the most important tasks investors should do.
The following are some risks which the investors face.

Inflation risk
This is the risk that money investors save or earn will lose some of its purchasing
power. Even if their five-year certificate of deposit is guaranteed, the amount they get
back may not buy as much in five years as they bought when investors took them to
the bank.
It may make investors feel giddy to receive double-digit interest on their money
market fund, as some investors did in the early 1980s. But if inflation is also in double
digits, as it was back then, investors are more likely to fall behind economically than
get ahead.
From 1970 through 1999, the cost of living in the United States rose at a compound
rate of 5.1 percent a year. Many people believed they would be secured if they could
retire on a fixed income of $50,000 a year, which in many cases is adequate today.
But at the rate of 5.1 percent inflation, after 25 years they will need $173,400 to buy
what investors can get today for $50,000. Even if inflation is much more modest, say
3 percent, a person who retires on $50,000 today at age 55 will require $104,700 at
age 80 to buy what $50,000 buys today.

Stated another way, with inflation of 3 percent over 25 years, their $50,000 will be
worth only about $23,300 in today's dollars. At inflation of 5.1 percent, it will be
worth only $13,500.
Investors may think these numbers are far-fetched and have a hard time relating to
them. But it was amazing to learn that in King County, Washington, per-capita income
rose from $4,834 in 1969 to $40,904 in 1998.
To illustrate how money has lost its purchasing power during last 10 to 15 years, in
India a two wheeler which cost was Rs 5000 few years back is available today in the
range of Rs 35000 to 60000.Our most popular car Maruti which was priced Rs 50000
initially when it was introduced in the market today costs Rs 2.5 lakh.
The way to protect oneself against this risk is to own at least some equity assets. For
most investors, that means stock funds. Over the past 75 years, the annual inflationadjusted return of the Standard & Poor's 500 Index was 8 percent, for small-cap
stocks it was 9 percent, while it was only 0.7 percent for Treasury bills and 1.5
percent for government bonds.
Most investors ought to have at least 10 percent of their portfolios in assets that can
increase in value, such as stock funds. Studies show that even a 10 percent equity
stake can noticeably increase the returns while at the same time it actually reduces the
risk of an all-fixed-income portfolio.

Business risk
This is the risk that investors buy stock in a company that fails or has a major
unexpected deterioration in its business. The cure for this risk is basic and simple:
diversification. If investors own stock in one or a handful of companies, an

unexpected disaster hitting one of them can do serious damage to their portfolio. But
if they own 100 companies, a disaster in one will have little overall effect.

Credit risk
This is the variation of business risk that affects bond investors. Investors can buy a
bond issued by a company that can't pay the interest or the principal. It's called a
default. More commonly, the company that issued their bond has an unexpected
deterioration in its business, and its bonds are downgraded by rating services. When
this happens, the market value of the bond falls.
The cure for credit risk is mostly diversification. If investors own a single bond and it
winds up being insolvent, they may be in a heap of trouble. But if they own 20 bonds,
as is typical of some bond funds, one or two duds won't spoil their party.

Manager risk
Once investors determine the proper amount of their portfolio that should be in stocks,
they typically hire a manager to pick the right stock for them. Or investors buy a
mutual fund, which amounts to the same thing. Investors probably pick a manager
with a winning personality, persuasive marketing materials and a track record that's
impressive. Theres just one problem: Very, very few people have been able to
successfully pick market-beating stocks over long periods of time, and even the best
track records don't last forever. By now investor might be able to guess the
recommended way to overcome this risk: by practicing the most fundamental
investing technique of all, diversification.
Invest in index funds that in turn invest in hundreds or even thousands of stocks. If
investors prefer actively managed funds, split their investments among multiple

managers. If they are investing in an actively managed large-cap value fund, choose
two of them, run by different managers. Some mutual funds give investors a way to
do this in a single package. Birla Mutual Fund for example, has several funds, which
invest in different sectors of industry and are managed by carefully chosen managers
of proven record. It's a way to get the benefit of several fund managers and
diversification.

Market risk
This is the chance that the entire market, either bonds or stocks, goes way up when
investors want to buy-or way down when they want to sell. The market is the product
of nearly countless influences and forces, both economic and psychological, both
rational and irrational. In the very long term, it's a relatively safe bet that the market
will continue its upward climb. But nobody can consistently and accurately predict
what the market will do in a week, a month, a year or even a decade.

Tax risk
This is the risk, usually a certainty, that their investment gains will be diminished by
income taxes. Later this year, all mutual fund prospectuses will have to disclose more
fully the theoretical impact of taxes on their returns. This will make returns look
smaller, because the Securities & Exchange Board of India has ordered that
prospectuses and advertisements must mention the impact of tax clearly.
There are plenty of ways to protect investors against tax risk, but some of them come
at the expense of good investing principles. Many people bought limited partnerships
in the early 1980s, having been promised substantial tax write-offs from big expected
losses. Then something unexpected happened: Government changed the tax laws

subsequently. The investment losses came as expected, but the tax write-offs
disappeared, as the changed law did not allow this. Without tax breaks, many limited
partnerships didn't have well enough fundamentals to attract any new buyers hence
the investments became duds.
Here are a few of the ways investors can save taxes on their investments. Each of
them works, but each has drawbacks that investors should understand in advance.

Buy and hold. If they don't sell, they won't be hit with a capital gain.

Invest in mutual funds with tax benefits. There are many funds available in the
market, which allow this. The dividend earned on these investments is also
tax-free.

If they are in a high tax bracket, invest in RBI tax-free bonds instead of
taxable bond funds and taxable money-market funds.

If they have exhausted all other avenues and still need to reduce taxes,
consider variable annuities.

Expense risk
This is the risk that their investment returns will be eroded by paying needlessly high
expenses. Expenses are like anchors being dragged behind a sailboat. They may be
invisible, but they inevitably reduce the speed of the boat. High expenses take many
forms, including sales commissions (called loads in mutual funds) and ongoing
expense ratios.
Every investment manager expects and deserves to be paid. But some investment
companies and products charge investors too much.

The best way to control this risk is to inquire about expenses before investors invest.
Every investment product involves expenses; don't invest in one until investors
understand this element.
Here are a few specific suggestions:

When investors buy mutual funds, buy no-load funds. This will save investors
from one of the biggest one-time losses their investment can experience.

If investor is a buy-and-hold investor, invest in index funds for their ultra low
expenses.

If investors invest in stocks or bonds, choose a reputed brokerage house who

charges a reasonable brokerage. SEBI has these days made it mandatory for
brokers to issue split Contract Notes, which separately give the rate at which
the broker has bought the stock for investors and brokerage he has charged
them.

Event risk
This is the -risk that some unexpected event will topple the market, or part of it. This
may be an assassination, a natural disaster, a political upheaval or some man-made
crisis that causes investors to suddenly question the future. This risk also can be very
personal, affecting only investors and their family: a death, illness, layoff or a house
fire.
Unless investors keep all their money in government-guaranteed bank accounts, there
is no absolute protection against sudden events. Their best protection may be the right
attitude, that life is uncertain and the uncertainty is part of what makes it worth living,
backed up by an emergency fund that would let investors continue living if their
income were interrupted or if their expenses suddenly skyrocketed.

Liquidity risk
This is the risk that investors won't be able to get their money quickly when they need
it without taking a significant investment hit. If investors own a small business,
selling it for anything close to what they think its worth is usually difficult and time
consuming. If their wealth is tied up in raw land and they need to turn it into cash,
they may have to wait months or years to get the price they think they deserve. If
investors invest in limited partnerships and need to sell before they expire, they may
have to sell at a substantial loss.
They protect themselves against this risk in two ways: First, by making sure that most
of their investments are in liquid assets that can be sold quickly and inexpensively;
stocks, bonds and mutual funds, gold all qualify. Second, by having an emergency
fund that will let investors quickly get their hands on money when they need it,
without having to sell an investment they had planned to keep.

Fraud risk
This is the risk that investors will simply be defrauded in their investments. This is
different from making a dumb mistake. Fraud deliberately creates victims. To keep
investors from becoming one of them, deal with reputable investment professionals.
Don't make impulsive decisions about unfamiliar investments; instead, take the time
to have somebody thoroughly check out anything investors are considering to buy.
If investors are told they must make a decision immediately to take advantage of an
opportunity, there is only one right answer: "I'll pass." If investors are offered
something promising an unusually high return, remember that risks and returns
always go together. If investors can't identify the risks they are taking in order to seek
a high return, they should leave their checkbook in the drawer where it belongs.

Finally, follow one of the most basic of all investment rules: Don't invest in something
you don't understand.

Emotional risk
This is the risk that investors emotions will get out of hand and start dictating their
decisions. Greed and fear are the two biggest forces driving our Stock Markets, and
nobody is totally immune to them. Another form of emotional risk is grandiosity,
thinking investors know more than they really do and becoming overconfident in their
ability to see into the future.
Investors sometimes see emotional risk most clearly when investors who are on the
sidelines see others making big gains, and eventually they get so anxious to get some
of those gains for themselves that they just jump into whatever is "hot" in the market.
Investors call this the "I can't stand it any more" market timing system, and very often
it leads people to buy at close to the peak of a market cycle. One can see the converse
of this when investors get increasingly frustrated and exasperated- at-continuing
losses, and finally they "Can't stand it any more" and sell, often at close-of -the
bottom of a market cycle.
If investors could follow the old Stock Market saying, "Buy low and sell high," they
would make money. But in both instances, the "I can't stand it anymore" timing
system leads them to do the opposite.
To protect oneself from the risk of grandiosity, be brutally honest about the results of
the investments one has made. Keep a list, if necessary, of the decisions investor made
that went wrong. Next time investors are sure that they know better than the rest of
the market, pull out the list and study it.

The best protection against emotional risk is a disciplined plan for buying and selling.
Make sure investors assets are balanced so they can sleep at night no matter what the
market is doing. If investors use market timing, follow a strict discipline, preferably
having somebody else implement it for the investors - somebody without any
emotional charge on each trade. If one is a buy-and-hold investor, make sure one has
enough fixed income in the portfolio to moderate the volatility of equities; and make
sure investors have some equities in the portfolio so investors won't feel totally left
out during bull markets.

Finally, the biggest risk of all: One could run out of money before one run out of
life.
This is the biggest fear of many retirees that their resources won't last long enough to
support them for life.
There are several good ways to protect investors against this risk, but none is
foolproof. Investors must protect themselves against inflation, which is already
discussed briefly. Investors must keep their living costs within reasonable bounds.
Investors must start with enough assets before they stop working. Every year "early"
that investors retire can impact them financially in two ways: It gives them one less
year of savings and one more year of future life. Finally, investors must invest their
assets in a sensible way so their risks are limited and investors have some opportunity
for growth.

RISKS INVOLVED IN A BROKING FIRM i.e. FOR BROKER

The Exchange has been exposed to a large number of risks, which have been
inherently borne by the member brokers for all the times. These risks are as follows

BROKER

Operational

Financial

Market

Credit

Liquidity

Risks

Risks

Risks

Risks

Risks

Operational Risks
Operational risks are very common risks, which are found in every organization.
Operational risks can be defined as Risk of loss arising due to procedure errors,
omission or failure of internal control system. Every individual organization faces
the risks that their activities and processes may be disrupted unexpectedly or fails to
meet expected performance level. Strong risk management is an essential part of good
corporate governance and something that helps to protect the shareholders value.
There is also growing recognition of the need to ensure that an effective framework of
management controls and supervision is in place. This view is reflected in the
attention that is being placed on risk management by regulators and testing authorities
around the world.
Management at an operational level often forces on the smooth and efficient running
of an organization Attention is not always given to management of operational risks
within the context of an enterprise-wide view of risks. Therefore the organization has
to face the following risks:

Direct financial losses, which arise from failing to meet an obligation (ex
penalty interest payments or restitution loss).

Direct financial losses, attributable to an absence of income (ex, from loss

of sales, transaction fees, direct fees or commission)

Statutory or regulatory penalties resulting to revocation of licenses.

Opportunity costs, arising from adverse publicity, being unable to trade or

because of processing delays, backlogs, and poor customer service
delivery or poor product or service quality.

The errors and failures causing risks-

Risk category

Functional Responsibilities

Examples

PEOPLE

Business line

Human errors

Human recourses

Internal fraud

Security
TECHNOLOGY

REGULATORY

Staff shortage/sabotage

Business line technologies

Technology failure

Central infrastructure

Outmoded system

Data center maintenance

Poor data integrity

Compliance

Regulator disputes

Finance and accounting

Misstating account

Legal

Litigations

The operational risks found in a broking firm at various departments are as

follows
OPERATIONAL RISKS

Compliance dept

Dealing dept

Settlement dept

CDSL dept

COMPLAINCE DEPARTMENT RISKS

In compliance department risks is involved in absence of documents
1

Absence of application form

Absence of different agreements and signs on agreement

Absence of bank certification

Absence of identity proof

Absence of reference letter from chartered accountant

Absence of undertaking from sub broker that he/she has not been involved
in any criminal offence and no trail is pending against him/her.

Absence of authorization letter for maintaining account on running basis

Risk is involved if the client is not introduced by someone

EFFECTS
If the compliance department doesnt complete all the required documentation the
results could devastating. First of all in the absence of compliance the broker can
be suspended and penalized. This would result in bad publicity, loss of business
and credibility, because no one would like to be associated with a suspended
broker. Secondly when compliance is done the broker is insulated from a probable

risk, fraud, and cheating and financial loss at the entry level itself. Proper
introduction, reference from a chartered accountant, bank statement ensures that
the investor is genuine and has no malafide intentions. It wouldnt be out of place
that many brokers were cheated by some investors by giving false information and
third party cheque. Since the compliance department had not done their work
perfectly the brokers were on a very weak wicket when they sought legal redressal
of their problems. Similarly the information about the sub broker that he is not
involved in any criminal offence and no trial is pending against him saves the
broker from any future risk and liability.

DEALING DEPARTMENT RISKS

1

Placing of wrong order i.e. instead of buy order sell order is given.

Placing of wrong quantity.

Trading done from wrong account i.e. buying and selling for wrong clients
account.

Trading in wrong scrip instead of trading in reliance, trading is done in

Infosys.

Entry not made in trade book.

EFFECTS
In all the above-mentioned points the broker suffers financial loss. When instead of
buying the sell order is punched the broker is unable to give delivery of shares
resulting in Auction of the shares and loss to him. It is also observed that in some
volatile scrips if the investor misses an opportunity he pressurizes the broker to
compensate him. If this is repeated quite often the investor loses confidence and

prefers changing the broker. Thus long-term relationships are lost leading to financial
losses.

SETTLEMENT DEPARTMENT RISKS

1

Payout of shares to wrong account

Failure in deciding brokerage slab for a client

Pay in not done by the client

Wrong preparation of statement of funds

Failure in sending confirmation of account opening to the client.

Failure in sending contracts.

Failure in preparing bills.

Failures in preparing pay in and pay out of slips.

Frauds by the employees.

EFFECTS
Though no department is less important in a broking house, without hesitation it can
be said that the work of settlement department is of utmost responsibility. All the good
work done by different departments can be nullified by an incompetent or casual
settlement department. Wrong payout of shares, wrong payout of funds, failure in
preparing bills in time, failure in preparing pay in and pay out of slips can not only
create chaos in a broking firm, it can result in huge financial losses to the broker. It is
on the record that frauds by the employees have been responsible for many brokers to
go bankrupt and close their business.

RISK DEPARTMENT
1

Failure in giving limits.

Giving wrong limits to the client.

Failure in collecting margins.

Failure in sending daily reports to Franchisee and sub broker.

Failure in sending daily reports to management.

EFFECTS
Like settlement department the role of risk department is very important. This concept
is quite new in India and its needs were felt when during last two three years broking
houses suffered huge losses. However the risk department, which is supposed to be
managing risk, is managed by human beings and it faces many risks. If it does not
give enough limits where it is due and is required it can result in loss to investor or a
sub broker leading to dispute and financial loss. On the contrary giving wrong limits
have the same effect. Failure in collecting margins attracts two types of risks
regulatory and financial. If the margins are not collected according to SEBI guidelines
it can result in suspension, termination or financial penalty to a broking firm. And
insufficient collection of margins exposes a broker to financial loss in case of default.

CDSL DEPARTMENT RISKS

1

Time period for pay in of shares which is not followed

Punching error

Networking problem with the exchange.

Failure in maintaining records for D-mat and R-mat account

OTHER RISKS
Market Risk
The risk of loss arising from adverse market rate movements e.g. foreign
exchange (transaction, translation, or economic) interest rates, commodity and
equity prices are termed as market risk. Generally this risk occurs due to volatility
in scrips, which cant be controlled.

Credit risk
It is the risk that the counter party of financial transaction will fail to perform
according to the terms and conditions of the contract, thus causing the other party
to suffer a financial loss. Credit risk is often due to bankruptcy or insolvency of
the counter party.

Liquidity Risk
Market liquidity is the risk that a financial instrument cannot be sold quickly at a
price, which equates to their market value. Liquidity changes over time and rapid
changes occur in highly volatile conditions. Derivative instruments, which are
new, and the liquidity of the market have yet to be fully tested. It must be
recognized that many derivatives are OTC based and liquidity of these products
can disappear quickly.

Financial Risk
Financial risk means fear of loss of money, which is the biggest risk faced by a
broking firm. Financial risk in respect of broking firm can be of two types firstly
loss of income i.e. brokerage secondly loss of capital.

CHAPTER VI: DATA ANALYSIS

RISK MANAGEMENT
Risk is defined as possibility of suffering losses.
This risk in itself is not bad, risk is essential to progress, and failure is often key part
of learning, but investors must learn to balance the possible negative consequences of
risk against the potential benefits of its associated opportunities. This is risk
management.
Principles of Risk management are as follows
1

Global Perspective
-

Viewing development within the context of large level developments

Recognizing both the potential value of opportunity and the potential

impact of adverse effects

Forward looking view

-

Thinking towards tomorrow, identifying uncertainties, anticipating

potential outcomes

Managing

project

resources

and activities

while

anticipating

uncertainties
3

Open Communication
-

Encouraging free-flowing information at and between all project levels

Enabling formal, informal, and proper communication

Using processes that value the individual voice (bringing unique

knowledge and insight to identifying and managing risk)

Integrated management
-

Making risk management an integral and vital part of project

management

Adapting risk management methods and tools to a projects

infrastructure and culture

Continuous process
-

Sustaining constant vigilance

Identifying and managing risks routinely through all phases of the

Product lifecycle

Shared product vision

-

Mutual product vision based on common purpose, shared ownership,

and collective communication

Focusing on results

Teamwork
-

Working cooperatively to achieve common goal

Pooling talents, skills, and knowledge

Functions of Risk Management are as follows

i.

Identify - Search for and locate risks before they become

problems.

ii.

Analyze

- Transform risks

data

into decision-making

information. Evaluate impact, probability, and time frame, classify risks, and
prioritize them.
iii.

Plan - Translate risk information into decision and mitigating

actions (both present and future) and implement those actions.

iv.

Track - Monitor risk indicators and mitigation actions.

v.

Control - Correct for deviations from the risk mitigation plan.

vi.

Communicate - Provide information and feedback internal and

external to the project on the risk activities, current risks, and emerging risks.

RISK MANAGEMENT IN A BROKING FIRM

Risk management in a Broking Industry is a new concept in India, since it poses
maximum risk in the financial market, managing it was felt most essential by the
regulatory bodies and exchanges. Therefore; NSE introduced for the first time in
India, risk containment measures that were common internationally but were absent
from the Indian Securities Market. NSCCL has put in place a comprehensive risk
management system, which is constantly upgraded to pre-empt market failures. These
measures were taken to reduce the brokers risks. Whereas SEBI has given some
guidelines under Investors Protection to protect investors risk.
NSE has given the following risk management measures:Margins
NSE has specified Different margins for different instruments like stocks futures and
options etc. Margins depend upon the volatility and market conditions; it varies from
stock to stock and instrument to instrument
Categorization of stocks for imposition of margins
Daily margins payable by members consists of the following:
1. Value at Risk Margins
2. Mark to Market Margins

Daily margin, comprising of the sum of VaR margin and mark to market margin is
payable.

1. Value at Risk Margin

VaR margin is applicable for all securities in rolling settlement. All securities are
classified into three groups for the purpose of VaR margin.

The VaR based margin would be rounded off to the next higher integer (For E.g.: if
the VaR based Margin rate is 10. 0 1, it would be rounded off to 11. 00) and capped at
100%.

The VaR margin rate computed as mentioned above will be charged on the net
outstanding position (buy value-sell value) of the respective clients on the respective
securities across all open settlements. The net position at a client level for a member is
arrived at and thereafter, it is grossed across all the clients for a member to compute
gross exposure for margin calculation.

For example, in case of a member, if client A has a buy position of 1000 in a security
and client B has a sell position of 1000 in the same security, the net position of the
member in the security would be taken as 2000. The buy position of client A and sell
position of client B in the same security would not be netted. It would be summed up
to arrive at the member's exposure for the purpose of margin calculation.

2. Mark-to-Market Margin
Mark to market margin is computed on the basis of mark to market loss of a member.
Mark to market loss is the notional loss which the member would incur in case the
cumulative net outstanding position of the member in all securities, at the end of the
relevant day were closed out at the closing price of the securities as announced at the

end of the day by the NSE. Mark to market margin is calculated by marking each
transaction in scrip to the closing price of the scrip at the end of trading. In case the
security has not been traded on a particular day, the latest available closing price at the
NSE is considered as the closing price.

In the event of the net outstanding position of a member in any security being nil, the
difference between the buy and sell values would be considered as notional loss for
the purpose of calculating the mark to market margin payable.

MTM profit/loss across different securities within the same settlement is set off to
determine the MTM loss for a settlement. Such MTM losses for settlements are
computed at client level.

Upfront margins collection

Members are required to ensure collection of upfront margin from their clients at rates
mentioned below and deposit the same in a separate clients account, in respect of
trades in normal market in which would result in a margin of Rs 50,000 more, after
applying the margin percentages as given from 15%, 30%, 45%.

Failure to pay margins

Non-payment of either the whole or part of the margin amount due will be treated as a
violation of the Bye Laws of the Clearing Corporation and will attract penal charges
@ 0.09% per day of the amount not paid throughout the period of non-payment.
In case a member has a margin shortage of Rs. 10 lakh or above for more than 10
occasions in the past 4 weeks, the gross exposure multiple of the member will be

reduced to one level lower at the time of re-activation of their trading terminals as
given under:-

Slab

Multiple

Full Exposure

8.50 times

1st level

7.00 times

2nd level

5.00 times

3rd level

3.00 times

4th level

2.00 times

If there is no margin shortage for the next one week of Rs. 10 lakh or more, the
exposure limits shall be restored to the previous level.

In addition, NSCCL may, within such time as it may deem fit, advice the Exchange to
withdraw any or all of the membership rights of the member including the withdrawal
of 'trading facilities without any notice.
In the event of withdrawal of trading facilities, the outstanding positions of the
member may be closed out, to the extent possible, forthwith or any time thereafter by
NSCCL, at its discretion by placing at the Exchange, counter orders in respect of the
outstanding position of the member, without any notice to the member, and such
action shall be final and binding on the member.

Margins based on turnover & Exposure limits (Initial margins)

Intra-day turnover limit
Members are subject to intra-day trading limits. Gross turnover (buy +sell) intra-day
of the member should not exceed thirty three and one-third (33 1/3) times the base
capital (cash deposit and other deposits in the form of securities or bank guarantees
with NSCCL and NSE).
Members violating the intra-day gross turnover limit at any time on any trading day
are not being permitted to trade forthwith.
Members trading facility is restored from the next trading day with a reduced
intraday turnover limit of 20 times the base capital till deposits in the form of
additional deposits (additional base capital) is deposited with NSCCL.

Members are given a maximum of 15 days time from the date of the violation to bring
in the additional capital. Upon members failing to deposit the additional capital within
the stipulated time, the reduced turnover limit of 20 times the base capital would be
applicable for a period of one month from the last date for providing the margin
deposits.

Upon the member violating the reduced intra-day turnover limit, the above-mentioned
provisions apply and the intra-day turnover limit will be further reduced to 15 times.
Upon subsequent violations, the intra-day turnover limit will be further reduced from
15 times to 10 times and then from 10 times to 5 times the base capital. Members are
not permitted to trade if any subsequent violation occurs till the required Additional
deposit is brought in.

Gross Exposure Limits

Members are also subject to gross exposure limits. Gross exposure for a member,
across all securities in rolling settlements, is computed as absolute (buy value - sell
value), i.e. ignoring +ve and -ve signs, across all open settlements. Open settlements
would be all those settlements for which trading has commenced and for which
Settlement pay in is not yet completed. The total gross exposure for a member on any
given day would be the sum total of the gross exposure computed across all the
securities in which the member has an open position.
Gross exposure limit would be:
Total Base Capital - Gross Exposure Limit
Up to Rs. 1 crore - 8.5 times the total base capital
> Rs. 1 crore

- 8.5 crores + 10 times the total base capital in excess of Rs 1 crore

Or any such lower limits as applicable to the members.

The total base capital being the base minimum capital (cash deposit and security
deposit) and additional deposits, not used towards margins, in the nature of securities,
bank guarantee, FDI; or cash with NSCCL and NSE.

Security-wise Differential Exposure Limits

In case of securities that are traded in the Rolling settlement (Type 'N' and security
series 'EQ'), the GE multiple for each security are as under:
Groups (Securities Covered)
Group I

Covered Multiple
1 time

Group 11

2 times

Group111

5 times

All new securities to be traded on the Exchange shall be subject to exposure multiple
of 2 times.
It is clarified that while computing the gross exposure at any time for a particular
trading day, for the purpose of the above limits, members are required to add the net
outstanding positions of the previous settlement period to the cumulative net
outstanding positions as of that particular trading day until the securities pay-in day
for the previous settlement period.
Members exceeding the gross exposure limit are not permitted to trade with
immediate effect and are not permitted to do so until the cumulative gross exposure is
reduced to below the gross exposure limits (as defined above or any such lower limits
as applicable to the members) or they increase their limit by providing additional base
capital.
Members who desire to reduce their gross exposure may submit their order entry
requirements as per the prescribed format if members desire to increase their limits,
additional deposits by way of , bank guarantee or Fixed Deposit Receipt CEDR) have
to be submitted to NSCCL. Additional deposits by way of securities in electronic form
(demat securities) may be deposited as per procedures.
The additional deposits of the member are used first for adjustment against gross
exposure of the member. After such adjustments, the surplus additional deposits, if
any, excluding deposits in the form of securities is utilized for meeting margin
requirements.

Violation Charges
A penalty of Rs.5, 000/- is levied for each violation of gross exposure limit and Intra
Day Turnover limits, which shall be paid by next day. The penalty is debited to the

clearing account of the member. Non-payment of penalty in time will attract penal
interest of 15 basis points per day till the date of payment.
In respect of violation of stipulated limits on more than one occasion on the same day,
each violation would be treated as a separate instance for purpose of calculation of
penalty.
The penalty as indicated above would be charged to the members irrespective of
whether the member brings in additional capital subsequently.

Additional Base Capital

Members may provide additional margin/collateral deposit (additional base capital) to
NSCCL, over and above their minimum deposit requirements (base capital), towards
margins and/ or exposure / turnover limits.
Members may submit such deposits in any one form or combination of the following
forms:
I.

Cash

II.

Fixed Deposit Receipts (FDRs) issued by approved banks

and deposited with Approved Custodians or NSCCL

III.

Bank Guarantee In favor of NSCCL from approved banks

in the specified format.

Approved securities in demat form deposited with approved Custodians.

All Additional Base Capital (ABC) given in the form of cash / FDR (hereinafter
referred to as 'Cash Component) should be at least 30% of the total ABC and Cash
Margins in respect of every trading member. Incase where non - cash component is
more than 70 % of the total additional base capital, the excess non-cash component is

ignored for the purpose of exposure limits requirements and / or margins

requirements.

Exemption for institutional deals

While computing margins, institutional deals are excluded. Deals executed on behalf
of the following entities are considered as institutional deals:
1. Financial Institutions
2. SEBI registered FIIs
3. Banks
4. SEBI registered Mutual Funds

Deals are identified by the use of the participant code in the trades reported on the
NSE.
Deals entered into on behalf of custodial participants i.e. carrying custodial participant
code are considered as institutional deals unless not confirmed by the respective
custodians in which case the deals shall attract margins.

Non-Custodial Institutional Deals are identified by the use of the participant code
`NCIT'. The NCIT' deals will be exempted for margin purposes (However, VaR based
margin which is charged on institutional trades on the net outstanding sale position, in
securities shall be applicable in this case also) and the settlement obligation will
remain with TM clearing member. Non Custodial Institutional deals, which are not
marked as 'NCIT' at the time of order entry, will not be exempted.

All TM clearing members are required to provide details of the contract notes for all
Non-Custodial Institutional Trades through a file upload as per the procedure

Exemption upon delivery of securities

If members deliver securities prior to the securities pay-in day, then the margin
payable by the member will be recomputed after considering the above pay-in of
securities. The margin benefit on account of early pay-in (EPI) of securities shall be
given to the extent of the net delivery position across all clients of the member. The
EPI would be allocated to clients having net deliverable position, on a random basis,
till such time that the system is developed to provide the EPI benefit on a client basis.
However, members are required to ensure to pass on appropriate early pay-in benefit
of margin/exposure to the relevant client, until the above system is in place.

The value of the advance pay-in made is reduced from the cumulative net outstanding
sale position of the member for the purpose of gross exposure limits.

Members may note that early pay-in of securities only up to the working day prior to
the scheduled settlement pay-in day shall be considered for the purpose of early payin benefits. In case any member makes early pay-in on the scheduled day of pay-in for
the settlement, no benefit will accrue to the member. Such early pay-in shall not be
adjusted against the settlement pay-in obligation and it would be treated as short
delivery. Members are therefore alerted to ensure that no early pay-in is made on the
scheduled day of settlement pay-in

Pay-in of funds securities prior to scheduled pay-in day

The relevant authority may require members to pay-in funds and securities prior to the
scheduled pay-in day for funds and securities. The relevant authority would determine
from time to time, the members who would be required to pay-in funds and securities
prior to the pay-in day. The relevant authority would also determine securities and
funds which would be required to be paid in and the date by which such pay-in shall
be made by the respective member.

The value of such prior pay-in of funds and securities will not be reduced from the
cumulative net position of the member for the purpose of gross exposure reduction.
There will be no margin exemption available for such pay-in of funds and securities.

Some Risk management are also taken by BSE they are as follows

1. Know your client scheme

Under the procedure the member brokers of the exchange are compulsory required
to obtain detailed information of clients prior to commencement of any
transactions with new clients. A similar procedure is also to be followed for
existing clients. This information is to be made available to the exchange
authorities whenever called for. In case the member brokers fail to furnish the
same it is viewed seriously.
2. Verification of shares at members office
The exchange has outlined the process i.e. in case the transaction in a scrip with
one particular client in a settlement exceeds Rs 10 lakh then the member are to
send the photocopies of the transfer deeds and the share certificates to the

company/ registrar for verification of the material particulars. The basic idea
behind the introduction of this procedure is to prevent fake/forged/stolen shares
from being introduced in the market.
3. Inspection
The department is carrying out inspection of the member brokers records as
regarding compliance of the risk management procedures.
4. Insurance
The exchange presently has in place insurance policies to protect itself in the
event of losses on account of fire, damage to computer systems and a
comprehensive policy that covers risks faced by the exchange, its member brokers
and the clearinghouse.
The risks covered under the basic cover of the policy are detailed as below.
-

Loss to members on account of infidelity of employees

Loss of member on account of fake/forged/ stolen shares being

introduced by his clients

Direct financial losses suffered by the member broker on account of

physical loss, destruction, theft or damage to securities and cash.

Loss on account of securities lost in transit

Loss suffered on account of incomplete transaction

Loss sustained as final receiving member on exchange on account of

default of the introducing member

Loss on account of errors and omission

Directors and officials liability cover

Measures taken by SEBI for Investors protection are as follows

Government of India and SEBI have been stressing upon the need for regulating the
secondary market and bringing transparency in transactions on the floor of stock
exchanges
The steps taken by SEBI to regulate and control the business of stock exchanges and
reduce the risks of investors are as follows
1

Regulation on insider trading with the object to curb it completely and punish
the guilty

Uniform Trading hours at all the stock exchanges in the country to check
arbitrage.

Registration of market players- brokers, non member brokers, sub brokers,

registrars to issues, merchant bankers, portfolio managers, underwriters,
debenture trustees, custodians etc so as to have access/inspection of their
books, records and verification of transactions.

Compulsory audit of accounts of all member brokers and registered

intermediaries by practicing chartered accountants.

Inspection of Stock exchange operations.

Indirect supervision through stock exchanges in day-to-day business by fixing

margins, imposing curbs, penalties and fines.

Gradual automation to reduce paper work and ensure transparency in

transactions this is now almost complete and all stock exchanges have been
computerized.

Brokers contact notes to mention brokerage separately.

Nationwide paperless trading through over the counter exchange of India,

National Stock Exchange, BSE, DSE and other exchanges.

10 Transfers to be affected within two months as per companies act and within
one month as per listing agreement.
11 Brokers should notify all transaction to the stock exchanges including off the
floor trades.
12 Uniform good/bad delivery norms.
13 Capital adequacy norms prescribed for brokers.
14 Brokers to keep clients money in a separate bank account.
15 Forward trading being banned on stock exchanges
16 Stress upon shorter settlement period.
17 Dematerialization of securities permitted on a selective basis. By March 2001,
about 3500 companies will have compulsory trading in demat mode.
18 Stern action against erring brokers, stock exchanges, companies, merchant
bankers, etc.
19 Regulation for fraudulent trade practices
20 Total transparency and automation of stock exchanges.
21 Effective margin system for smooth settlement.
22 Circuit breaker system to check volatility on the exchanges
23 Introduction of modified carry forward system and automated lending
borrowing mechanism (ALBM).
24 Introduction of Internet trading.
25 Derivative trading in index based futures of 30, 60 and 90 days.
26 Practicing prudent governance norms.
27 Stock lending.
28 Abolition of no delivery period in demat scrips.

Recent Development steps taken by SEBI for Investor protection

1. Appointment of administrators to check bad deliveries
To get rid of bad deliveries, SEBI has decided to appoint administrator to
implement the signature guarantee and certificate authentication programs. The
administrators appointed by SEBI act on behalf regulator in resolving problems
arising out of signature mismatch
2. Streamlining Investor protection fund
The committee set up by SEBI to review the sources and utilization of investor
protection fund of stock exchanges has made following recommendations
-

Funds should be on trust structure and set upon under Indian Trust Act,
1882 with independent trustees

Regular contributions from active member brokers and stock

exchanges

Fund to be utilized only for investor claims and not broker claims.

Trustees to ensure that fund is not deployed in risky instruments or for

the benefit of any member but only in prescribed avenues.

Time schedule to be specified while setting investor claims.

3. Service centers for investors

SEBI has directed all stock exchanges to constitute service centers for investors to
enable the investors to have a form for recording and counseling of their
grievances as well as access financial and other information of companies on
government policies, rules, regulations, etc.
4. Compliance Officer
Each company is required to appoint compliance officer who would be able to
verify rumors and information floating in the market about the company to the

stock exchange. This will reduce motivated rumors about companies, which aids
in price manipulation.
5. Corporate Governance
SEBI has prescribed prudent corporate governance norms for all listed companies
to ensure transparency and better disclosure practices.
6. Investor Education
SEBI has taken steps to educate investors through various awareness programme
and publications.

CHAPTER VII: CONCLUSION OF THE STUDY

Working with a broking firm especially was really a great experience.

I found that the working of a broking firm is a very risky job because risk
is involved in each and every activity of the business.

The risk prevailing in the business is recognized therefore an efficient risk

management department is essential in every broking firm.

Capital Market is growing very fast, turnover wise as well as area of

operation wise. The activities have reached through lengths and breadth of
the country. All these necessitated in the introduction of latest technology
in the form of advanced software.

Efficient staff and technology is the base of broking industry.

Broking business is a client-based business. The recent trends of

voluminous increase in investors have also increased the risk involved in
it. There is need of continuous up gradation of internal control measures.

Staff in a broking firm is continuous busy and due to which they are
always under stress.

Investors are also facing various type of risk and it can be reduced by
proper management.

CHAPTER VIII: RECOMMENDATIONS & SUGGESTIONS

1

Every Organization should have a risk management policy that is approved

by the board of directors annually. The policy should outline:

Products Traded

Parameters for risk activities

Limit Structure

Over Limit approval Procedure

Frequency of review

An Organization should have a risk management function that is

independent of its trading staff i.e. personnel responsible for the risk
management function should be separate from trading floor personnel.

Ideally an institution should be able to identify the relevant risks and

should have measurement systems in place to conceptualize, Quantify and
control these risks on an institutional level using a common measurement
framework.

Senior management should regularly evaluate the risk management

procedure in place to ensure they are appropriate and sound.

Senior management should also foster and participate in active discussions

with the board of directors, sub brokers, franchisee, staff of risk
management function and investors regarding procedures for measuring
and managing risk.

Highly qualified staff not only in front office positions such as trading
desk, relationship officer and sales but also all back office functions
responsible for risk management and internal control.

An organization should have an integrated management system that

controls market risks and provide comprehensive reports.

Risk management or control function should be able to produce a risk

management report that highlights positions, limits and excess on a basis
commensurate with trading activity. This report should be sent to senior
management, reviewed, signed and returned to control staff.

A periodical compliance review should be conducted to ensure conformity

with the rules and regulations.

10

Auditors should perform a comprehensive review of risk management

annually, emphasizing segregation of duties and validation of data
integrity.

11

For avoiding market risk the organization should ensure that they
adequately measure, monitor and control the market risk in their trading
activities. The various methods like mark to mark and value at risk
approach can be used for trading operations. Some more measures which
can be used are alpha, beta etc

12

Every Organization should have Know Your Customer policy and this
should be understood and acknowledged by the trading and sales staff.

13

Every organization should check cash flow statement and balance sheet of
last two years of a client before starting business with him.

14

Taping of trader and dealer telephone lines will facilitate to resolve the
disputes and can be a valuable source of information to auditors, managers
and examiners.

15

The designated compliance officer should perform a review of trading

Practices annually.

CHAPTER IX: LIMITATIONS OF STUDY

To understand the overall working of share market, the period of 60 days is
not enough.
Moreover, very few investor and agents have a detail knowledge of the study.
The study was conducted in Pune only, which restricted the scope of the study
The data provided by the investor and the agents cant be held true as 100%
correct.
The study was conducted to understand with respect to Risk involved in
broking firm and investors, which is a part of the equity share market.
Sometimes Investors refused to disclose information to me.

CHAPTER X: BIBLIOGRAPHY

www.motilaloswal.com

www.bseindia.com

www.nseindia.com

www.google.co.in

www.investopedia.com

Dalal Street

Various books related to capital market & Risk Management.