Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
PREFACE
This report is the result of my weeks of summer training at Ludhiana stock
exchange. Summer training is an integral part of MBA course and efficient utilization of
material , time and resources which are very much important for successful completion of
any taste. In order to be competent all the students are required to take a real time project
work. This exposure to project work will help them to knew that how academic
knowledge is applied in actual business situations.
Keeping all this in view, this project report of Ludhiana stock exchange securities
Ltd is prepared the all rounded encouraging support by many persons towards this
report, this report has created confidence in me regarding the approval of subject matter.
Actually this report is a result of an assignment, to improve myself and again
confidence. In this I have done my best to make it a genuine body. But as well all knows a
maximum TO ERROR IS HUMAN. Therefore, there is a chance for some mistake.
Also a critical appraisal by anyone will be heartly welcomed.
For the accomplishment of any objective mgt of material, time financial resources
is very important. Above to this coordination determines degree of success. Keeping this
in view, repot of FUNCTIONING OF LUDHIANA STOCK EXCHANGE
is prepared by all the rounded encouraging support by many persons towards this report
has created in me the confidence regarding the approval of the subject matter.
The present report is well arranged in a coherent manner. In my project I have
made the study of all the depts and consulting heads staff members of various respective
depts.
Actually this report is an result of an assignment, to improve myself and gain confidence,
in this i have done my best to make it a genuine study but there is a chance of mistake.
ACKNOWLEDGEMENT
You cannot discover new oceans unless you have the courage to lose sight of the share
The world of capital market was far from us,but we got an opportunity to emission
the capital Market at Ludhiana stock exchange. We are indebted to our Teachers and
Gurus who molded at this junction of our career from where we can take off better in the
competitive scenario of todays world.
We would like to thanks Miss Pooja M Kohli (Executive Director), Ludhiana stock
exchange securities limited for giving us an opportunity to do our SUMMER TRAINING
in this esteemed organization.
Its my privilege to express the everlasting feeling of indebtness to Mr.kuber kansal
and Mr. Atul chikersal(coordinator)for their valuable suggestions constructive outcome
and untiring help during the summer training.
A feeling of elathim insists me on expressing my heartiest thanks, deep sense of
gratitude to all my major advisors for their judicious impeccable.
Meenu Sood
STUDENT DECLARATION
Place: Ludhiana
Meenu sood
Date
Signature
CERTIFICATE
This is to certify that the project report entitled LSE and its SUBSIDIARY
COMPANY submitted by Ms. Meenu Sood is a bona fide piece of work conducted
under my direct supervision and guidance. No part of this work has been submitted for
any other degree of any other university.
It may be considered for evaluation in partial fulfillment of the degree of Masters in
Business Administration.
Pooja M. Kohli
Signature
CONTENTS:-
History
Features
Functions
Profile
Achievements
Objectives
Operations
Features
Board of Directors
Operation Dept.
Margin section
Clearing section
Computer section.
=Service Deptt.
Legal section
Listing section
Accounts deptt.
Technical deptt.
Membership deptt.
Personnel deptt.
Depository deptt.
INTRODUCTION
TO
STOCK
EXCHANGE
YEAR
1.
18th century
2.
1850
3.
1860
4.
1875
5.
1894
6.
1908
7.
1939
8.
1940
9.
1956
10.
1988
11.
1992
12.
1993
13.
2000
14.
2002
15.
2003
S.NO
Year
establishment
1875
Voluntary
non-profit
2.
1897
organization
Voluntary
non-profit
3.
1908
organization
Public limited company
4.
1930
Voluntary
5.
1937
organization
Co. limited by guarantee
6.
1940
7.
1943
8.
1957
9.
1978
ltd. Company
Public limited company
10.
1982
11.
1982
12.
1983
13.
1983
14.
1984
15.
1985
16.
1986
17.
1989
18.
1990
Co.
1.
of Type of Organizations
ltd.
non-profit
By
guarantee,
19.
1990
unrecognised
Private limited company.
20.
1991
21.
1993
Pure demutulised
22.
1995
Pure demutulised
23.
1997
24.
1997
25.
Multi
26.
exchange(MCX)
NCDEX
commodity 2008
2009
From above Saurashtra, Magadh, Hyderabad,and Mangalore are unrecognized and rest
are recognized. BSE is in worlds 5th position in transaction.
MCX and NCDEX are the new exchanges which only deals in commodities.
INTRODUCTION
TO
LUDHIANA
STOCK
EXCHANGE
ACHIEVEMENTS OF LSE
by
subsidiary.
LSE also introduced a settlement guarantee fund (SGF). The SGF guarantees
settlement of transactions and the carryforward facility provides liquidity to
the market.
LSE became the first in India to start LSE Securities Ltd., a 100% owned
subsidiary of the exchange. The LSE Securities got the ticket as sub-broker of
the NSE. In 1998, the exchange also got permission to start derivative trading.
Beside them some more achievements are:1. LSE brand is popular among masses. The brand image of LSE can be capitalized.
2.LSE have requisite infrastructure for the Capital Market activities which includes a
multi-storeyed, centrally air conditioned building situated in the financial hub of the city
i.e. Feroze Gandhi Market.
3. LSE have well experienced staff handling operations of Stock Exchange.
4. LSE have competent Board and professional management.
5. LSE have much needed networking of sub brokers in the entire region, who are having
rich experience in Stock Market operations for the last 25 years.
6. LSE have more than 40,000 clients spread across Punjab, Himachal Pardesh, Jammu &
Kashmir and adjoining areas of Haryana and Rajasthan.
7. The turnover of LSE subsidiary is the highest amongst all subsidiaries of Regional
Stock Exchanges in India.
OBJECTIVES OF LSE
At NSE aInvestor grievances:- The major objective of LSE is the handling of investors
complaints and grievances. For this purpose it has established investors grievances cells
that receives complaints from investors.
LSE floated its subsidry company, LSESL, with objectives of obtaining trading right
on bigger stock exchanges.
The Ludhiana stock exchange is the technology savvy, forward looking and modern
regional stock exchange.
DATE OF ESTABLISHMENT
: April 29,1983.
6 members
3 members
1 member
3 members
At every Annual General Meeting, 1/3rd of the Elected directors retired by rotation,
Administration of the exchange is managed by the executive director who is assisted by
the company secretary and a team of executives, assistants, technicians and sub staffs.
The exchange has three statutory committees namely: Disciplinary Committee.
Arbitration committee.
Default committee.
In addition it has five advisory and standing committees including the investors
grievances committee, to assist the Administration.
THE LUDHIANA STOCK EXCHANGE WORKS AS FOLLOWING:It has following departments:1.Secretarial department
2.Membership department
3.Technical department
4.Legal department
5.IGC department
6.Accounts department
7.Listing department
8.Personnel department
9.Internal control department.
1. Secretarial department :-LSE is a public ltd. Company. the min. cap. Required is
5 lac .
Minimum member required is 7 members.
SEBI nominates the public relation director.
What this department does:
7 days before this meeting ,a notice about the place,date, time ,is sent to
board by this department.
1.STATUTORY COMMITTEE
2.NON STATUTORY COMMITTEE
Disciplinary committee
Default committee
Arbitrary committee
HRM committee
Computer committee
Audit committee
without which
working of entrepreneurs and members of any stock exchange is impossible .All the
members are required to comply with rules under SCRA,1956.
ELIGIBILITY OF MEMBER SHIP:The applicant should be citizen of India and must have completed 21 years of age.
REQUIREMENTS FOR INDIVIDUAL MEMBERS OF EXCHANGE:-
REQUIREMENT FOR CORPORATE MEMBER OF EXCHANGE:A. The company should be registered under section 322 of the companies Act.
B. Company should not be bankrupt.
C. Minimum paid up capital required is Rs. 25 lacs.
D. The copies of MOA and AOA
E. Qualification and proof of age.
In LSE 295 members are there out of which 156 are registered with NSE and 1321
are registered with BSE.and rest with both.
.
3.Technical department:-The head of this department is Mr. Navraj singh
This department holds all the technical problems in the techniques. This department
of LSE is regulating the activities related to the fields of electrical , mechanical
and civil engineering besides having other functions like that of security.
There are some of the important aspect:1.electrification of building.
2.Air conditioning plants.
3.Maintenance of the generator.
4.fire fighting system
5.Maintenance of the telephone exchange
6.Water supply
SECURITY:- These
is
an additional
charge
given
to
this
department. The
supervision of the security staff, maintenance of metal detector is also under this
previous.
4.legal department:-The head o f this department is Mr. Prashant saluja .it holds all the
legal formalities to be done on every department and on the stock exchange.
receives complaints with companies and memberBroker to ensure this satisfactorily redressal have been fully computerized. In
addition ,to 6this the exchange has an investor grievance committee. It is the committee
between members and brokers.
INVESTOR PROTECTION FUND:The exchange has set up an investor protection fund in the monthof January, 1990 for
providing compensation to individual investors in case of a member of the exchange. The
fund has a corpus of Rs.78.60 lacs as of February 28, 2005. In case nay member broker
default to meet his obligation towards investors in respect of deals that took place through
the trading system of the stock exchange, then the concerned investors are compensated
from the fund.
INVESTORS SERVICES CENTRE:The exchange has set up an investors service centre in its premises for providing
information regarding to the general public. The centre has a well- equipped library,
which subscribe to leading economic financial dailies and periodicals. It also stores the
annual reports of the company listed at the stock exchange.
To keep the record of all incoming and outgoing money and preparation
of financial matters at the end of the financial year.
7.Listing department:-The head of this department is Mr. Sudesh Kumar. It lists the
companies those who want to issue their holdings in the public.
Guidelines for Listing
Listing means admission of securities to dealings on a recognized stock stock exchange.
The securities may be of any public limited company, Central,tral or State Government,
quasi governmental and other financial institutions/corporations, municipalities, etc.
The objectives of listing department are mainly to :
protect
interest
of
investors
by
ensuring
full
disclosure.
BSE.
BSE has set various guidelines and forms that need to be adhered to and submitted
by the companies. These guidelines will help companies to expedite the
fulfillment of the various formalities and disclosure requirements that are required
at various stages of
Public Issues
Preferential Issues
Amalgamation
meetings are recorded. It helps in the drafting and compiling of the agenda of all
the meetings.
FINANCE:-Finance is the life blood of every organization. The head of this
department is Mr.Kuber Kansal.
This deptt. helps in arranging finance from various activities in the stock exchange.
It decides that from where the finance will come and where it will be utilized in
the best possible manner so that in future benefits can be availed from that
finance. It also see that the finance where is used is properly used or not.
The Internal control department controls
It puts effective control on the member brokers and other staff members and see
that they are working in a well behaved manner or not and if not than proper
control is put on them so that they can work properly in future. It helps the clients
in giving proper information so that they can work properly.
TRADING SYSTEM:Online screen based trading system commenced at LSE on November
18,1996
.however .w.e.f. 23rd jan.2002 there has been no trading at our exchange.
ONLINE TRADING THROUGH VSATS
With the objective to broad based business opportunities to the investors and members,
the change has set up 37 trading terminals at remote cities in the state of Punjab, Delhi,
and union territory of Chandigarh. Now from October 1999 ,trading through VSATs(Very
Small Apurture Terminal) is being smoothly conducted.
SETTLEMENT GUARANTEE FUND(SGF)
Ludhiana stock exchange implemented a settlement guarantee fund (SGF)w.e.f. April 6,
1998.It provides guarantee of all the genuine trades made through the screen based
trading system of the stock exchange. The SGF had a corpus of Rs. 13.34 crores and
membership of 176 brokers as on data available up to 2007.
DEPOSITORY SYSTEM
It is an instituition which deals in securities as a bank deals in funds.
Ludhiana stock exchange commenced trading in Demat shares from November 16,1998
by becoming a participants of NSDL and CDSL. The exchange has set up in house DP
services to facilitate trading and settlement in DEMAT securities.
CLEARING AND SETTLEMENT
There is weekly settlement cycle prevailing at the LSE. Which commences on Monday
and ends on Friday .at the end of each settlement, members are given scripwise delievery
notes.The members are required to depositthe scrips sold by them to the clearing houses
on the second working day following the day of transaction. Payments against delievery
are made
for trading,
settlement schedule.
ROLLING SETTLEMENT
The exchange introduced the rolling settlement in 10 srips w.e.f. January 10, 2000 and in
another 34 scrips w.e.f. march 21.2000 and in another 119 scrips w.e.f. May 8, 2000.
It is the trading system of the securities in the transaction that is buying and
selling of securities.
The transaction can be secured up by a counter transaction on the same day
only.initially settlement system was T+5 but was graduallu reduced to T+2 on 1 st April ,
2003.
TRADING ON BIGGER STOCK EXCHANGES
The exchange acquired the membership of NSE and
BSE
through its
subsidiary. The LES securities limited, with the objective of providing an enabling
mechanism
Securities limited.
Trading at BSE and NSE commenced through
September 2000 and December 2000, respectively, and the trading in F&O segment of
NSE commenced in February 2002.
The average daily trading volumes on BSE, NSE (capital market) and
NSE
(F&O) during the month of February 2005 has ben Rs.18 crores , Rs. 38 crores and Rs.
144 crores respectively.
its subsidiary
company, the LSE Securities Limited, with the objectives of obtaining trading rights
on bigger stock exchanges. It obtained
are
operating on
subsidiary route.
REVENUE STREAMS
The streams of corporate membership of NSE and BSE is a self financing project
and will generate
surplus
after meeting
operations
expenses
at
a very low
the region having On- line real time connectivity with NSDL. DP operation of
the company not only benefited the investors of the region , but also
to be a source of income for
the company.
proved
Ludhiana Stock Exchange has facilitated the capital generation for agro based industries
as Punjab is a agricultural led economy. It will continue to do so, once it gets approval for
a tie up with bigger Exchanges for commencing trading operations.
INTRODUCTION
TO
LUDHIANA STOCK EXCHANGE
&
SECURITIES LTD
The LSE Securities Ltd. commenced trading operations in Future and Options
Segment of NSE in February 2002. The Company became the first subsidiary of
any Regional Stock Exchange which commenced trading in F&O Segment of
NSE.
The LSE Securities Limited has provided facility to its sub-brokers for trading on
NSE and BSE through VSAT counters which are located outside Stock Exchange
Building
As a result of efficient services and competitive rates, the Company has been able
to increase its market share in the DP business at the cost of other DPs in the
To increase its presence in the region further, the company plans to open its
branches of Depository Services in the major cities of the region. To start with, it
has already opened its branches at Jalandhar Amritsar and Chandigarh.
such
as
general
administration,
Name
Mr.Ved Parkash Gaur
Mr.Joginder Kumar
Mr. Anurag Arora
Mr. Vishal Goomber
Mr. Jatinder Garg
Mr. Manjit Singh Sarna
Mr. Lalit Kishore
Designation
Date of Appointment
Chairman
18.02.2013
Chairman
19.08.2012
Chairman
26.09.2009
Vice-Chairman
27.09.2008
Member-Director
26.09.2009
Member-Director
27.09.2008
Member-Director
27.09.2008
Public
Representative
8.
DirectorDirector
Public
9.
DirectorDirector
Public
10.
DirectorDirector
Public
11.
DirectorDirector
Public
12.
13.
Director-
Independent12.03.2008
Representative
Independent12.03.2008
Representative
Independent14.02.2009
Representative
Independent19.07.2007
Representative
Independent27.08.2008
Director
LSE-Representative
Director
14.02.2009
INTRODUCTION
TO
DEPARTMENTS
OF
LUDHIANA
STOCK
EXCHANGE
many different
different functions
departments
are
performed , which
are
assigned
to those
Margin
Section
Clearing
House
Market
Surveillance
Computer
Section
Service Department:-
Legal Department
Secretarial
Department
Listing Section
Accounting Section
Technical Section
Membership
department
Personnel
Department
Depository
Department
All
connected
activities performed there. But before studying the inter dependence of section ,
here is the detail of all.
OPERATIONAL DEPARTMENT
MARGIN SECTION:It is necessary for every stock exchange to establish margin section margin has been
created for the safety purpose of the client so that he cant be defaulted and doesnt
suffer loss that much which he cant bear to pay out.
In case of forward trading margin is not there but if it is under stock exchange
margin is always kept for safety.
The basic function
ensures
any member buy or sell scrips in proportion to his net worth. To make these
has to deposit
BASE MINIMUM CAPITAL:Each broker is required to deposit with the stock exchange Rs. 50,000 in the
form of cash/FDR/Bank guarantee of the scip from the approved list.
For getting membership in NSE and BSE 2,50,000 is deposit for registration. Out
of this 100,000 shares are issued and balance 1.5 lac are given for trading. (1.5
lac is BMC)
1.5 *8 times is 12 lac. Upto this he can do trading.
If any person is not satisfied with 12 lac than he can give margin and that is
again multiplied
with 8. that is
MARGIN
CAPITAL(ABMC).
INTRA DAY GROSS EXPOSURE LIMIT
Each broker would have an intra day gross exposure limit is sum total value of
purchase and sale of each scrip would be equal to 25 times(in case of NSE and
BSE) of the sum total of permanent security deposited by him. It indicates the
aggregates of sale and purchase and calculated on daily bases.
NET EXPOSURE LIMIT
Each member would have a net position limit i.e. net volume of purchase and
sale of each scrip would be equal to 8.5 times in case of NSE and 6 times in case
of BSE of the subtotal of BMC and ABMC. So it indicates the difference between
sale and purchase are calculated on daily bases. Net position of each member at
the end of the day would be carried out on the next day.
PAYMENT OF MARGIN:Member brokers are required to make payment of margin by 10:30 am on the
T +1 basis.
TYPES OF MARGIN
1. Value at Risk margin(VAR):-This margin is developed by CHICAGO STOCK
EXCHANGE. This system comes of 100% of the market risk through the
use of different statistical formulae.VAR margin is calculated on daily basis.
2. Market To Market Loss(MTML):- It is calculated after the close of trading
cycle.in each settlement Market to Market loss is in a scrip would be netted
against mark to market profit in the other scrip. But such netted would be
allowed only on the scrip prescribed by SEBI. Thus , stock exchanges collects
on daily basis 100% notional loss from each broker for every scrip. It is
calculated as the difference between buying and selling price and current
value(closing price) of that scrip at the end of the day.
3. Exposure Margin:-Exposure margin is charged 5% -10%
purchase of shares.
CLEARING DEPARTMENT:This department takes care of pay in and pay out of securities. In LSE now adays,
the system i.e. prevalent for trading is T+2 that means settlement of transaction
should take place within 2days.SEBI decided the following activities schedule for
exchange for T+2 rolling settlement.
Sr.No.
1.
Day
T
Description of activity
Trade date
2.
T+1
Custodian
3.
T+2
day/deposit of margin
Pay in/ Pay out
T+3
T+4
securities/ funds
Auction day
Pay in/ Pay out of Auction/
4.
5.
closeout of
confirmation
of
shortages as
soon as possible.
PROCEDURE:1. when shares are being sold by the sub broker, he on the basis of
settlement schedule i.e.T+2 has to download all the information of shares
being sold to the broker, then the broker will further download this to the
delievery officeNSE and BSE.This process is called PAY IN SECURITIES.
2. After pay in sec. pay out takes place.In this step all the information about
the scrip would first be downloaded to the broker by
NSE, then it
by
conducting auction of pending securities and T+5 cycle will start.But in case if the
funds are not settled by the sub- broker then his terminal would be de- activated
and it would be activated only on the repayment of funds.
PENALTY:In case sub broker does not give all the information to the
In case the shares of particular scrips are not available on the date of auction
then it is the obligation of the solicitor (exchange) to give monitory benefits to
initiatori.e. buyer against the default of
defaulter of securities in this manner settlement cycle is completed.
MARKET SURVEILLANCE DEPARTMENT:The main task of this section is to see the market sanctity is maintained and the
investors are not cheated. So market surveillance entails scientifically in identifying
points ina stock price movement or trading volumes, which don,t match with
the co.,s fundamentals. So the price and volume trends in a stock exchange are
checked for abnormalities, scientifically.this department keeps a check on trading
and coordinates with the margin department and keeps a close watch on the
increase and release of limits. It helps in checking:1. Unusual price rigging.
2. Insider trading
3. False markets
4.
frauds
in few stocks
for modern
imposition
of the online
centre
of the
entire
tock exchange.This
section remains active all the time and is directly involve in all the activities, of
LSE.
This
section
is
PROCESSING.It prepares
also
known
as EDP
i.e.ELECTRONIC
DATE
1. Sub-brokers
wise
delievery
payment).
2. Downloading of delievery orders
3. downloading of receiving orders
4. sub- broker wise final settlement
bill
received
order(after
9:oo am
9:30 am to 15:30 pm
3:30 pm to 3:40 pm
3:40 pm to 4:00 pm
Back up session
4:00 pm to 5:00 pm
in generating reports
supplying daily
There are four servers of NSE , 1 back up survey NSDL server and CDSL
server, so computer department has to maintain all these servers properly.
All types of report, which is asked by SEBI, are sent by the computer
department.
computer
problem or any
They had
margin, account.
REPORTS MAINTAINED BY COMPUTER DEPARTMENT:1.Scrip wise summary statement:In this type of report all the detail about the scrips with the sub brokers has to
deal
with the qty. wise statement of the scrips purchase position, net position
is included. It
client and also its rates, it also includes information about the price at which he
purchased or sold his scrip.
3.Receive order statement:As the name indicates the particular statement includes the no. of shares
the
Contract note:It is sent to NSE , BSE and FAO in 24 hrs. it includes the name of registred office,
dealing office if any, address of a member, registration no., client address, settlement no..
SERVICE DEPARTMENT:Legal section:-
Whenever there is a dispute between two brokers, between client and brokers and move
to court, the legal dept. come in picture to fight for the cause of investers and against
defolting members. It plays an important role in working governance and keeps a Dog
Watch. On all the matters related to the stock exchange.
Functions:1. to settle the investors grievances and compliance(IGC).
2. to define stock exchange against any type of case.
3. To see that all the SEBI guidelines are followed.
4. to see all the govt. rules and regulations are followed.
5. to check that all the work which is going one is legal .
6. To suggest selective and correct measures when needed.
7. Monthly report to SEBI regarding case of total pending , total solved etc.
This dept. also deals with transfer of shares. In order to be a member of a stock exchange
a person has to hold at least one share. If the member wishes to sell his ticket, he has to
intimate the secretarial dept. in adance. A notice is given there after in newspaper for
objection with in ten days of such a notice, the clients can lodge there claims. A ten day
notice is also to be displayed in the notice board of stock exchange for objection to be
raised by members. This dept. covers>Personnel dept.
>Membership.
Investor Grievance Section:LSE has formed a separet investor grievance cell, which receives complaints from
investors against companies. And member broker to ensure there satisfactory redressal.
In 1959, MOF said that for every exchange it is mandatory to set up a committee to
handle the investor complaints. justice delay, justice deny,-- Gandhi ji.
Types of investor grievances:1. Against listed companies.
2. Against member brokers.
Procedure:i.
ii.
iii.
iv.
v.
vi.
Trading suspend.
vii.
viii.
SEBI imposes penalties of 1 lac per day from delay maximum to 1 crore or which
ever is less.
ix.
Secretarial Department:An LSE has personnel dept. in its orgainstional chart. Main duties. Responsibilities of
this dept is as follows.:
Maintenance of records of minutes like :Meeting of BOD.
meeting of vatious committees.
Meeting of members.
minutes of AGM.
Minutes of extraordinary general meeting.
Listing section:For doing in LSE the co. first have to be listed and the function of the listing of
the co. is done by listind dept. for getting listed the concerned co. has to pay a certain fee
and that fee would depend upon the authorized capital of the co..
Listing means admission of the securities of a co. to deal on a recognized stock
exchange
Listing
is
governed
under
the
following
act:-
Co. to do so in SCRact,1956
Main documents:
agent ,etc.
7000
10000
18000
10 to 20 crore
20 to 50 crore
50 to 75 crore
36000
54000
90000
After this every increase in the paid up cap. With 5 crore than fee will increase
2500rs.and will be added to this.
ACCOUNTS DEPARTMENT:It deals with the maintenance of records regarding income and expenditure of the
stock exchange . it also prepares annual accounts of the stock exchange.most of the
work in this department of LSE is done manually although
computer for making trial balance, income and expenditure statement and b/s.this
report is generally published in august every year.
FUNCTIONS:
To keep the record of all incoming and outgoing money and preparation
of financial matters at the end of the financial year.
Maintenance charges.
electrical , mechanical and civil engineering besides having other functions like
that of security.
There are some of the important aspect:1.electrification of building.
2.Air conditioning plants.
3.Maintenance of the generator.
4.fire fighting system
5.Maintenance of the telephone exchange
6.Water supply
SECURITY:- These
is
an additional
charge
given
to
this
department. The
supervision of the security staff, maintenance of metal detector is also under this
previous.
MEMBERSHIP DEPARTMENT:-
Individual
corporate
ELIGIBILITY OF MEMBER SHIP:The applicant should be citizen of India and must have completed 21 years of age.
4. Qualification:e. Matriculation.
f. He should at least have 3 yrs capital Market experience.
g. He should not be bankrupt.
h. Person should also be registered from SEBI.
REQUIREMENT FOR CORPORATE MEMBER OF EXCHANGE:F. The company should be registered under section 322 of the companies Act.
G. Company should not be bankrupt.
H. Minimum paid up capital required is Rs. 25 lacs.
I. The copies of MOA and AOA
J. Qualification and proof of age.
Through sale and transfer of membership:a. Member can sell or transfer there membership rights with all requirements to
obtain prior approval from SEBI.
Personnel department:. The dept carries out the activities as follows:1. Recruitment of the personnel, whenever and wherever a vacant arises.
2. Maintenance of attendance registers.
3. Appointment or removal of floor clerks or authorized representatives of brokers.
4. Maintain records of leaves and overtime of employees.
5. Promotion, demotion ,registration, conveyance and allowance ,etc.
Depositary Department:An institution which deals in securities as a bank deals in funds.
The depository Act 1996 defines a compsny formed and register under companies act
1956.and which has been granted a certificate of registration under sub section 1A of
section 12 of the SEBI act 1992.
The term depository means a palce where something is deposited for keeping in bank in
which other deposit funds or other depository securities.
Names of Depositories:a. NSDL(National Security Depository LTD.)
b. CDSL(Central Depository Service Ltd.)
NSDL is about 10 years old.
Depository System:It is concerned with conversion of physical security to electronic form, settlement of
trades in electronic transfer of ownership of shares and electronic custody of securities.
This electronic system is faster then the paper work.
COMMENCMENT OF BUSINESS:For commencement of business of depository one has to take certain following steps:A. Registration:As per the rules of SEBI act, a depository can deal
obtaining the certificate of registration from SEBI . On being satisfied with the
eligibility parameters of a company
certificate of registration
a certificate
of registration from
The depository has some rights and obligations under the depository act 1996.
Every depository must have adequate methods for reviewing,monitoring and properly
evaluating its methods and procedures.
For its smooth functioning it
STRUCTURE OF DP:For any client it is necessary for him to firstly open an account with the DP. There
are mainly 2 types account:a. Beneficiary account:- There are the accont of investor where their security
are held in electronic form.
b. clearing member account:- any trade done on the exchange in a particular
settlement has to be settled tgrough clearing member. For this purpose
there is a claring account of clearing member(broker).
He collect in this account all the securities sold by different client any deliver the same to
the exchange. In code of purchase he receives the securities from NSDL and distributes
same to the client.
Dematerialisation (De-mat):It is a process were physical form of shares is being converted into electronic mode. Such
acc. Is maintained in DP.
1. the client opens De-mat acc. With any DP.
2. upon De-mat, the certificates are destroyed and credit entry of exactly
equal no. of securities is created in DP in electronic mode.
3. The BO acc. Of holder is credited.
4. The securities loss there identity.
Securities that can be Dematerialised:1. Shares, bonds, debentures.
2. Units of mutual funds.
3.
certificate of deposits.
4. Unlisted securities.
DE-MAT CHART:1
DP
Investor
6
2
3
xR
& T agent
NSDL
DE-MAT PROCESS:1. The register holder of the securities will make the request.
2. Securities must be recognized by depository as eligible.
3. The company issuer should have established connectivity with the depository.
4. The holder to have a beneficiary account.
5. The A/C to be in the same name as appear on the securities certificates to
be de -materialized.
REMATERIALISATION:This process is the reverse of the dematerialization It is the process by which the
electronic holding of the shares is converted into physical form.
REMAT CHART:-
Depository
R&T agent
Depository
participant
Benefial
owner(Invest
or)
REMAT PROCESS:1. The beneficial owner of the securities to make the request to DP in DRF.
2. DP enter the remat request in DRM.
3. The DP forwards DRF to the issuer or to its R&T agent.
4. The request to be made with in 7 days of accepting it from the client.
5. The issuer or the R&T agent verifies the RRF & confirms to DP.
6. The DP on receiving confirmation of debits the client A/C& informs the
client.
7. The issuer /R&T agent prepares physical security certificates to be issued to
B.O.
8. The certificates are dispatched to the B.O.
9. No trading is possible on the securities sent for REMAT.
PLEDGE:Any member can take the loan against the securities.For this purpose the
depository pledge the securities of the client.The shares of the client would be
sealed.no one can take his shares out.The pledge so created can be closed on
either repayment of loan or can be invoked on default. The pledge shares can
not be leaded.
REGULATORY
FRAMEWORK
OF
LUDHIANA
STOCK
EXCHANGE
4. Depositories Act ,1996:An recent development in the securities market was electronic form of the
shares or securities and vanishing the certificate system and reduce the time of
the settlement of the delieveries and payments and also secure the delievery of
the securities for this two main depiository companies came into existence i.e.
CDSL and NSDL. The main objective of the depository act are:
Dematerialization of
the securities.
Table 8.Percentage distribution of sample according to from how many months you
are dealing with your brokerage house. ?
QUESTIONNAIRE
This survey is only done for educational purpose.
All information furnished will be kept confidential and will not be disclosed.
NAME:Age :Occupation :PHONE NUMBER:ADDRESS:EMAIL:Q 1 Do you invest in stock market ?
YES
NO
Demat
Trading
Derivatives
Mutual funds
Currency markets
Commodity markets
Divined income
Currency
Commodities
8500
8200
Other
Angel broking
Indiabulls
Motilal Oswal
Sharekhan
Other ____________________
< 6 months
6 to 9 months
9 to 12 months
> 12 months
Q 8 From how many months you are dealing with your brokerage house. ?
Q 9 What is the most appropriate reason for choosing this brokerage house ?
Brokerage.
Deposits
SMS tips
< 0.20
0.20 to 0.50
> 0.50
CONCLUSION:-
LSE is the one of the best regional stock exchange.even it is the first regional
exchange which
has
its
subsidiary
co. named
as
LUDHIANA
STOCK
EXCHANGE AND SECURITIES LTD.it has many sub centres in the different
cities Chandigarh,
Amritsar ,and Jallandhar .
It ensures that the funds of the investor are used properly.it
is governed by a good Legal Framework.Its subsidiary co. helps in obtaining
trading rights on the bigger stock exchanges and even it carries on the
business of custodian & depository.It has the renowned members in its BOD.
They work under the regulations of the SEBI,NSE and BSE.
So after working on this project
this company is safe for every investor as the trading is fully transferable and
there is very less chance of any complaint.
BIBLIOGRAPHY