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CERTIFICATE

This is to certified that the project report on Equity Share Trading is submitted by, Himanshu T. Shah Roll No.22 of T.Y.BBA, to the Naran lala College of commerce & management, Navsari. This project report is partial fulfillment of the requirement of south Gujarat University Surat.

Place: Date: -----------------------------------Miss. Hetal Tandel Lecturer, NLCCM Director, NLCCM

Dr.R.C.Gandhi

DECLARATION
My self, Mr. Himanshu T. Shah hereby declare that I have done this project work on equity share trading at Shree Shantilal ishwarlal kantilal securities pvt.ltd. (SHARE KHAN) and submitted only to the Naran lala college and South Gujarat University for the academic purpose and not to submit any other university for any other purpose.
Date: / /2007

HIMANSHU SHAH Place: - Navsari T.Y.BBA,NLCCM.

ACKNOWLEDGEMENTS

I would like to thank Mr. Amit keshwani, Branch head of share khan for allowing me to do training in such a reputed company and provide such facility to ease my training. I also like to thank all employees working over there who spare their precious time to help me one or other way during my training programmed. I specially like to thank Mr. Vinod kumbharwadiya & Ms. Varsha Gondliya who is my training head during my training programmed. Last but not the least, I would like to thank Dr. R.C.Gandhi, The Director of the NLCCM & Ms. Hetal Tandel under whose guidance I
complete my project work in such wonderful experience.

Data collection method

To complete my project report I have used two type of data which are as follows:-

PRIMARY DATA:o The primary data are the data which are generated or

gathered by any person for his own study. These types of data are generated for the first time. For the completion of this project work I have collected primary data in two ways:
A. Observation method: I had observed day to day

trading done by Dealers on BOLT & NEAT SCREEN; during market time (9:55 to 3:30).
B. Personal interview method: During observation if

any question arises I ask my training head after the trading session & clear my doubt. Even I have a talk with the investors and get their view regarding their investment decision.

SECONDARY DATA :o The data which are already generated or gathered by some

one else in the past for his own purpose or study and if such data are collected or used by us for our study or our purpose then those data are called SECONDARY DATA.
o I collect secondary data from the books provided by my

training head and through internet search. For this I visited www.nseindia.com & www.bseindia.com .

Objective of study:
Objective of the studies is to know about the working of stock exchange and how securities are traded in the stock exchange through brokers and sub-broker and how they charge their brokerage and other charges to the investors.

Benefit of study:
The study provides information about capital market function and how shares trading take place. It is also helpful, in getting knowledge about the depository services. Another benefit is getting a chance to meet people and know their view on which bases they do trading. s

LIMITATION OF STUDY

INDUSTRY PROFILE
The capital market consists of primary and secondary markets. The primary market deals with the issue of new instruments by the corporate sector such as equity shares, preference shares and debt instruments. Central and state governments, various public sector industrial units (PSUs), statutory and other authorities such as state electricity boards and port trust also issue bond/debt instruments. The secondary market or stock market is a market for trading and settlement of securities that have already been issued. The investors holding securities sell securities through registered brokers/sub-brokers of the stock exchange like Sharekhan, Growth avenues etc. The secondary 0markets consist of 23 stock exchange s including the national stock exchange, over the counter exchange of India (OTCI) and inter connected stock exchange of India ltd

List of Stock Exchanges In India


Bombay Stock Exchange National Stock Exchange Regional Stock Exchanges o Ahmedabad Stock Exchange o Bangalore Stock Exchange o Bhubaneshwar Stock Exchange o Calcutta Stock Exchange o Cochin Stock Exchange o Coimbatore Stock Exchange o Delhi Stock Exchange o Guwahati Stock Exchange o Hyderabad Stock Exchange

o o o o o o o o o o o

Ludhiana Stock Exchange Madhya Pradesh Stock Exchange Madras Stock Exchange Magadh Stock Exchange Mangalore Stock Exchange Meerut Stock Exchange OTC Exchange Of India Pune Stock Exchange Saurashtra Kutch Stock Exchange Uttar Pradesh Stock Exchange Vadodara Stock Exchange

History of Stock Exchanges In India: In 1860, the exchange flourished with 60 brokers. In fact the 'Share Mania' in India began with the American Civil War broke and the cotton supply from the US to Europe stopped. Further the brokers increased to 250. At the end of the war in 1874, the market found a place in a street (now called Dalal Street). In 1887, "Native Share and Stock Brokers' Association" was established. In 1895, the exchange acquired a premise in the street which was inaugurated in 1899. National Stock Exchange (NSE) The National Stock Exchange of India (NSE) was incorporated in November 1992 as a tax-paying company. It is recognised under Securities Contracts (Regulation) Act, 1956 in 1993 as a stock exchange. In June 1994, it commenced operations in the Wholesale Debt Market (WDM). In November, the same year, the Capital Market (Equities) segment commenced operations and the Derivatives segment in June 2000. The Bombay Stock Exchange Limited (formerly, The Stock Exchange, Mumbai; popularly called The Bombay Stock Exchange, or BSE) is the oldest stock exchange in Asia. It is located at Dalal Street, Mumbai, India. Bombay Stock Exchange was established in 1875. There are around 3,500 Indian companies listed with the stock exchange, and has a

significant trading volume. As of October2006, the market capitalization of the BSE was about Rs. 33.4 trillion (US $ 730 billion). The BSE SENSEX (SENSitive indEX), also called the BSE 30, is a widely used market index in India and Asia. As of 2005, it is among the 5 biggest stock exchanges in the world in terms of transactions volume. The Indian government has setting up an apex body to develop and regulate the stock market in India. So, the securities and exchange board of India (SEBI) was set up on April 12, 1998. The primary objective of SEBI is to promote healthy and orderly growth of the securities and secure investor protection. Other functions of SEBI are regulation of stock exchange and self regulatory organization, registration and regulation of intermediaries, prohibition of fraudulent and unfair trade practices relating to security market, prohibit insider trading, regulating substantial acquisitions of shares and takeovers of companies, promote investors education, training of intermediaries, etc.

FUNCTIONS OF STOCK EXCHANGES The stock market occupies a pivotal position in the financial system. it performs several economic functions and renders invaluable services to the investors, companies, and to the economy as a whole. They may be summarized as follow: 1) Liquidity and Marketability of securities: Stock exchanges provide liquidity to securities since securities can be converted into cash at any time according to the discretion can be converted into cash at any time according to the discretion of the investor by selling them at the listed prices. They facilitate buying and selling of securities at listed prices. They facilitate buying and selling of securities at listed prices by providing continuous marketability to the investors in respect of securities they hold or intend to hold. Thus, they create already outlet for dealing in securities. 2) Safety of funds Stock exchanges ensure safety of funds invested because they have to function under strict rules and regulations and the bye-laws are meant to ensure safety of investible funds. Over- trading, illegitimate speculation etc. are prevented through carefully designed set of rules. This would strengthen the investors confidence and promote larger investment. 3) Supply of long term funds: The securities traded in the stock market are negotiable and transferable in character and as such they can be transferred with minimum of formalities from one hand to another. So, when a security is transacted, one investor is substituted by another, but the company is assured of long term availability of funds. 4) Flow of Capital to Profitable Ventures The profitability and popularity of companies are reflected in stock prices. The prices quoted indicated the relative profitability and performance of companies. Funds tend to be attracted towards securities of profitable companies and this facilitates the flow of capital into profitable channels. in the words of Husband adhockery stock exchanges function like a traffic signal, indicating a green light when certain fields offer the necessary inducement to attract capital and blazing a red light when the outlook for new investment ids not attractive.

5) Promotion of investment Stock exchanges mobilize the savings of the public and promote investment through capital formation. But for these stock exchanges, surplus funds available with individuals and institutions would not have gone for productive and remunerative ventures. 6) Reflection of Business Cycle The changing business conditions in the economy are immediately reflected on the stock exchanges. Booms and depressions can be identified through the dealings on the stock exchanges and suitable stock market portrays the prevailing economic situation instantly to all concerned so that suitable action can be taken. 7) Marketing of new issues If the new issues are listed, they are readily acceptable to the public, since, listing presupposes their evaluation by concerned stock exchange authorities. Costs of underwriting such issues would be less. Public responses to such new issues would be relatively high. Thus, a stock market helps in the marketing of new issues also.

Regd. Office:
SSKI INVESTER SERVICES LTD. A-206, PHOENIX HOUSE, 2nd FLOOR, SENAPATI BAPAT MARG, LOWER PAREL, MUMBAI-400 013. TEL.: 24982000

Navsari Branch:
SSKI INVESTER SERVICES LTD. 1st FLOOR, NIRMAL COMPLEX, SAYAJI ROAD, NAVSARI-396445. TEL.: 02637-243000

Promoters and Directors of the company and their back ground: Promoters:
The share holders of SSKI Investor services Pvt. Ltd. are Mr. Shripal Morakhiya, Mr. Shreyas Morakhia, Foreign Private Equity Funds and key employees of the company. The key promoter of the Company is Mr. Shripal Morakhiya Who as on March 31, 2005 along with his family owns 55.47% of the paid up capital of the Company.

Directors and their background:


Name 1. Mr.Shripal S Morakhia Background He is the promoter director of portfolio manager. He has been associated with the capital market since 1980. He is the promoter director of portfolio manager. He has been associated with the capital market since 1988. He is the CEO of the portfolio manager. He has vast experience in broking business & has been associated with the capital market and SSKI group for over 18 years. He is commerce graduate and C.A. He has been associated with SSKI group for over 15 years. He has been associated with the Portfolio manager since 2000 and he primarily looks after technology and online business. He is a managing director of the Carlyle, India, responsible for leading venture and growth capital investment in India. He is appointed on 11th October 2005.

2. Mr. Shreyas S Morakhia

3. Mr. Tarun P Shah

4. Mr. Shankar Vailiya 5. Mr. Jaideep Arora

6. Mr. Sankar Narayanan

HISTORY
SSKI founded in 1922- one of Indias oldest brokerage house. Sharekhan is an equities focused organization tracing its lineage to SSKI, a veteran equities Solutions Company with over 8 decades of experience in the Indian stock markets. Share khan limited was promoted by Mr. Shripal Morkhiya and Mr. Shreyas Morkhiya. It is currently amongst Indias largest broking house. It is the member of the stock exchange, Mumbai. It is depositary participant of the national securities depositary limited and central depositary services (India) limited. Its business includes stock broking, depositary services, portfolio management and derivatives. The companys core specialty lies in its retail distribution with a large network of branches and sub- brokers/ authorized persons. Its strength lays in its investment research capabilities. Its research revision has several analysts continuously monitoring global national and regional political, economic& social situation so as to access their impact on the economy in general, thus sector and the companies they research which help them if offering quality research and advice to clients.

Share khan Outlet offers the following services: Online BSE and NSE executions ( through BOLT and NEAT terminals) Depositary services: Demat and Remat Transactions Derivatives trading ( futures and Options) Besides these basic services share khan also provide following services: Free access to investment advice from Sharekhans research team Sharekhan Valuline (a fortnightly publication with reviews of recommendations, stocks to watch out for, etc. Daily research reports and market review Daily trading calls based on technical analyses Personalized advice Live market information

Online trading:
With a Sharekhan online trading account investor can buy and sell shares in an instant. At anytime they like, from anywhere they like. There are three products in online trading classic, fast & speed trade. If investor opened speed trade account then they have to pay 1000Rs and fast and classic trade will be opened with speed trade otherwise they have to pay 750Rs for fast and classic trade account. In online trading normally 0.20 % (0.10%for buy & 0.10%for sell) brokerage charged for intraday transaction and 1% (0.50%+0.50%) for delivery but under AMC scheme brokerage reduce to certain level as per the scheme. Other charges like service tax, turnover tax, stamp duty tax etc. are charged 12.42% cumulatively. 2. Speed trade: It is a new generation online trading product that brings the power of brokers terminal to investors PC. It is ideal for active traders who transact frequently during days trading session to capitalize on intraday price movements. Speed trade is an internet-based application available on a CD, which provides everything a trader needs on one screen, thereby, reducing the time required to execute a trade. 3. Fast trade: In fast trade we can add 25 scrip names at a time.

Offline trading: With offline trading account you can trade through BOLT or NEAT operator in BSE and NSE. For off line account investors have to pay 160Rs for trading and 500Rs

for Demat account. To trade in offline, investors have to deposit 5000Rs for initial margin and Sharekhan give four times exposure to investor. Brokerage & other charges: For intraday: 0.15% brokerage charged for buy & sell. For delivery: 0.75% brokerage charged for buy and 0.75% for sell. Other charges like service tax, stamp duty tax, turnover tax etc. are charged 12.42% cumulatively.

TRADING:
Trading on the BOLT System is conducted from Monday to Friday between 9:55 a.m. and 3:30 p.m. The scrips traded on the Exchange have been classified into 'A', 'B1', 'B2','T', S', TS' F,'G' and 'Z' groups. The Exchange , for the guidance and benefit of the investors have classified the scrips in the Equity Segment into 'A', 'B1', 'B2','T', S', TS' and 'Z' groups on certain qualitative and quantitative parameters which include number of trades, value traded, etc. The F Group represents the Fixed Income Securities. The T Group represents scrips which are settled on a trade to trade basis as a surveillance measure. The S Group represents scrips forming part of the BSE-Indonext segment. The TS Group consists of scrips in the BSE-Indonext segments which are settled on a trade to trade basis as a surveillance measure. Trading in Govt. Securities for retail investors is done under "G" group. The 'Z' group was introduced by the Exchange in July 1999 and includes the companies which have failed to comply with the listing requirements of the Exchange and/or have failed to resolve investor complaints or have not made the required arrangements with both the Depositories, viz., Central Depository Services (I) Ltd. (CDSL) and National Securities Depository Ltd. (NSDL) for dematerialization of their securities. The Exchange also provides a facility to the market participants for on-line trading of odd-lot securities in physical form in 'A', 'B1', 'B2' T','S', TS' and 'Z' groups and Rights renunciations in all the groups of scrips in the Equity Segment. With effect from December 31, 2001, trading in all securities listed in equity segment of the Exchange takes place in one market segment, viz., Compulsory Rolling Settlement Segment (CRS). The scrips of the companies which are in demat can be traded in market lot of one but the securities of companies which are still in the physical form are traded on the Exchange in the market lot of

generally either 50 or 100. However, the investors having quantities of securities less than the market lot are required to sell them as "Odd Lots". The facility of trading in odd lots of securities not only offers an exit route to investors to dispose of their odd lots of securities but also provides them an opportunity to consolidate their securities into market lots. This facility of selling physical shares in compulsory demat scrips is called an Exit Route Scheme. This facility can also be used by small investors for selling upto 500 shares in physical form in respect of scrips of companies where trades are required to be compulsorily settled by all investors in demat mode. Listed Securities: The securities of companies which have signed Listing Agreement with the Exchange are traded at the Exchange as "Listed Securities". Baring a few scrips, all scrips traded in the Equity Segment at the Exchange fall in this category.

Permitted Securities: To facilitate the market participants to trade in securities of the companies which are actively traded at other Regional Stock Exchanges but are not listed on the Exchange, the Exchange has in April 2002 decided to permit trading in such securities as Permitted Securities" provided they meet the relevant norms specified by the Exchange.

Tick Size: Tick size is the minimum difference in rates between two orders on the same side i.e., buys or sells, entered on the system for particular scrip. Trading in scrips listed on the Exchange is done with the tick size of 5 paise. However, in order to increase the liquidity and enable the market participants to put orders at finer rates, the Exchange has reduced the tick size from 5 paise to 1 paise in case of units of mutual

funds, securities traded in "F" group and equity shares having closing price upto Rs. 15/- on the last trading day of the calendar month. Accordingly, the tick size in various scrips quoting up to Rs.15/- is revised to 1 paisa on the first trading day of month. The tick size so revised on the first trading day of month remains unchanged during the month even if the prices of scrips undergo change. Computation of closing price of scrips in the Cash Segment: The closing price of scrips is computed by the Exchange on the basis of weighted average price of all trades executed during the last 30 minutes of the continuous trading session. However, if there is no trade recorded during the last 30 minutes, then the last traded price of a scrip in the continuous trading session is taken as the official closing price. Compulsory Rolling Settlement (CRS) Segment: As per the directive by SEBI, all transactions in all groups of securities in the Equity Segment and Fixed Income securities listed on the Exchange are required to be settled on T+2 basis w.e.f. from April 1, 2003. The settlement calendar, which indicates the dates of the various settlement related activities, is drawn by the Exchange in advance and is circulated among the market participants. Under rolling settlements, the trades done on a particular day are settled after a given number of business days. A T+2 settlement cycle means that the final settlement of transactions done on T, i.e., trade day by exchange of monies and securities between the buyers and sellers respectively takes place on second business day (excluding Saturdays, Sundays, bank and Exchange trading holidays) after the trade day. The transactions in securities of companies which have made arrangements for dematerialization of their securities are settled only in demat mode on T+2 on net basis, i.e., buy and sell positions of a member-broker in the same scrip are netted and the net quantity and value is required to be settled. However, transactions in securities of companies, which are in "Z" group or have been placed under "trade to trade" by the Exchange as a

surveillance measure (T and TS group) , are settled only on a gross basis and the facility of netting of buy and sell transactions in such scrips is not available. The Exchange has introduced a new segment named BSE Indonext w.e.f. January 7, 2005. S group consists of scrips from B1 & B2 group on BSE and companies exclusively listed on regional stock exchanges having capital of 3 crores to 30 crores. All trades in this segment are done through BOLT system under S group. The transactions in 'F' group securities representing "Fixed Income Securities" and " G" group representing Govt. Securities for retail investors are also settled at the Exchange on T+2 basis. In case of Rolling Settlements, pay-in and pay-out of both funds and securities is completed on the same day. The members are required to make payment for securities sold and/ or deliver securities purchased to their clients within one working day (excluding Saturday, Sunday, bank & Exchange trading holidays) after the pay-out of the funds and securities for the concerned settlement is completed by the Exchange. This is the timeframe permitted to the members of the Exchange to settle their funds/ securities obligations with their clients as per the Byelaws of the Exchange.

Settlement Pay-in and Pay-out for 'A', 'B1', 'B2', T, S, TS, 'C', "F", "G" & 'Z' group of securities The trades done on BOLT/Exchange by the members in all the securities in CRS are now settled on the Exchange by payment of monies and delivery of securities on T+2 basis. All deliveries of securities are required to be routed through the Clearing House, The Pay-in /Pay-out of funds based on the money statement and that of securities based on Delivery Order/ Receive Order issued by the Exchange are settled on T+2 day.

AUCTION An Auction Tender Notice is issued by the Exchange to the members informing them about the names of the scrips short or not delivered, quantity slated for auction and the date and time of the auction session on the BOLT. The auction for the undelivered quantities is conducted on T+3 day between 11:00 a.m. and 12 noon for all the scrips under Compulsory Rolling Settlements except those in "Z" group and scrips on "trade to trade" basis which are directly closed-out. A member-broker who has failed to deliver the securities of a particular company on the pay-in day is not allowed to offer the same in auction. The members, who participate in the auction session, can download the Delivery Orders in respect of the auction obligations on the same day, if their offers are accepted. The members are required to deliver the shares in the Clearing House on the auction Pay-in day, i.e, T+4. Pay-out of auction shares and funds is also done on the same dai.e. T+4.

Self- Auction As has been discussed in the earlier paragraphs, the Delivery and Receive Orders are issued by the Exchange to the members after netting off their purchase and sell transactions in scrips where netting of purchase and sell positions is permitted. It is likely in some cases, a selling client has failed to deliver the shares sold in a settlement to a member-broker. However, this did not result in failure of the member-broker to deliver the shares to the Clearing House as there was a purchase transaction of his some other buying client in the same scrip and the same was netted off for the purpose of settlement. However, in such a case, the memberbroker would require shares so that he can deliver the same to his buying client, which otherwise would have taken place from the delivery of shares by his selling client. To provide shares to the members, in such cases, so that they are in a position to deliver them to their buying clients, they have been given an option to submit the details of such internal shortages on floppies on pay-in

day for conducting self-auction (i.e., as if they have defaulted in delivery of shares to the Clearing House). These shortages are clubbed with the normal shortages in a settlement arrived at by the Clearing House and the auction is conducted by the Clearing House for the combined shortages. CLOSE-OUT Close out is affected for cases when no offer for particular scrip is received in an auction or when members who offer the scrips in auction, fail to deliver the same or shortages pertaining to those groups of securities for which auctions are not conducted. The close-out rates for different segments are as under A, B1, B2, S and F group The close-out rate is higher of the following rates: a) The highest rate of the scrip from the trading day to the day prior to the day on which the auction is conducted for the respective settlement. b) 20% above the closing rate as on the day prior to the day of auction/close out of the respective settlement. Odd Lot , T, TS and Z group and patawat objections The close-out rate is higher of the following rates : a) The highest rate of the scrip from the day of trading to the day prior to the day of auction of the respective settlements; b) 10% above the closing rate as on the day prior to the day of auction/ close out of the respective settlement.

The close out amounts are debited to the bank accounts of those members who have failed to deliver the securities against their sale obligations and credited to the bank accounts of members who had bought the securities but have not received the same.

Trading Procedure

Open an account:
If the prospective investors want to do trading in stock exchange they have to act through member broker only. Here, being a member of the stock exchange Sharekhan provide this facility to investor. For this first of all investors have to open the trading and DP account in the Sharekhan and for this they have to submit following document: Two passport size photograph Pan card copy Bank statement Two check of 500Rs & 160Rs for offline account. 750Rs check for online trading account.

Placement of order:

Now, Clients who have accounts can place their orders with the stock broking companies. The order is usually placed by telephone, fax or through person on ATS (automated trade system). ATS is the software, hardware, communication and network system, which are used to carry out exchange transaction.

When orders are placed by investor, upon receipt of orders, the time of receipt of the orders is immediately recorded by the ATS operators together with other particulars of the orders. The orders are entered by ATS operators in the ATS through their trading terminals (for BSE BOLT and for NSE NEAT screen).which are then transmitted directly to the ATS for validation, execution and processing.

All orders input by ATS operators are validated at the order entry level. Once the order is accepted by the ATS, it is automatically time stamped and an order ID is allocated which is used for all future references to the order. If the order fails validation, it is rejected with the appropriate comment. order entry instructions include: Security code Client securities account Buy or sell indicator Volume Price Type of order Order attributes The price input is the unit price of a security.

Orders input into the ATS are anonymously displayed to the market. Orders put by investor are differentiate in following way

At the best order:

It is an order which does not specify any specific price. It must be executed immediately at the best possible price. The client may also fix a time frame within which the order has to be executed. e.g. Buy 100 ABC Share at best. Limit order:

It is an order for the purchase or sale of securities at a fixed price specified by the client. E.g. sell 100ABC share @ 76. Immediate or cancel order:

It is an order for the purchase or sale of securities immediately at the quoted prices. If the order could not be executed at the quoted prices immediately, it should be treated as cancelled. e.g. Buy 100 DCM@ 76 immediate Discretionary order:

It is an order to buy or sell shares at whatever prices the broker thinks reasonable. This is possible only when the client has complete faith on the broker. Limited Discretionary Order: It is an order for buy and sell securities within a specified price range and within the given time period as per the best judgment of the broker. Open Order:

It is an order to buy or sell without fixing any time limit or price limit on the execution of the order; it is similar to discretionary order. Stop Loss Order: It is an order to sell as soon as the price falls up to a particular level or to buy when the price rises up to a particular level or to buy when the prices rises up to a specified level. This is mainly to protect the price rise up to a specified level. This is mainly to protect the client against a heavy fall or rise in prices so that they may not suffer more than the pr-specified amount.

Execution of order:
When an ATS operator inputs an order through its trading terminal, the order is forwarded to the ATS. Within the ATS, the state of the order is tracked allowing the current status to be determined and the transaction history from the initial submission to be viewed. Orders will be queued according to price and time priority and are available for modification or cancellation prior to execution.

Preparation of contract note: Usually, the authorized clerks enter the particulars of the business transected during a particular day in the kacha sauda book from the rough note books at the close of that working day. From Kacha sauda books, they are transferred to Pacca soada books which are maintained. Then the broker clerks prepare a contract note. A contract note is a written agreement between the broker & his client for the transaction executed. It contains the purchase or sale of securities in case of selling, the brokerage chargeable, name of the company no. of shatres, rate and date of purchase or sale etc. It is prepared in a prescribed form & a copy of it is sent to the client.

Settlement of transactions:

Finally, the settlement is made by means of delivering the share certificates along with the transfer deed. The transfer deed is duly signed by the transferor i.e. the seller. It bears the stamp of the selling broker. The buyer then fills up the transfer deed. At present, the settlement can be made by any one of the following methods:

a) Spot delivery settlement:


Under this method, the delivery of securities and payment for them are affected on the date of the contract itself or on the next day.

b) Hand delivery settlement:


Under this method, the delivery of securities and payment are affected within the stipulated in the agreement or within 14 days from the date of the contract whichever is earlier. Most of the transactions are conducted on this basis.

c) Clearing settlement
Under this method, the transactions are cleared and settled through the clearing house. Usually those securities which are frequently traded and are usually in demand are cleared through the clearing house. These transactions are also referred to as the transaction for the account.

d) Special delivery settlement


Under this method, delivery of securities and payment may take place at any time exceeding 14 days following the date of the contract as specified in the contract and permitted by the governing board.

e) Lodging for transfer and return of certificates


Finally, the shares have to be registered in the name of the buyer. For this purpose, the share certificate along with the duly filled transfer deed must be sent to the company. The transfer deed should bear adequate share transfer stamp. After verifying the bonafide of the transfer, the company has to transfer the shares in the name of the buyer and send them back within 2 months. The share certificate should bear a new ledger folio number, transfer number, buyers name etc. on the reverse side of it. This completes the legal formality for transfer of shares from the seller to the buyer.