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A SUMMER TRAINING REPORT ON

ONLINE TRADING AT SMC GLOBAL SERVICES PVT. LTD.

SUBMITTED IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF BACHELOR OF BUSINESS ADMINISTRATION (BBA), GURU JAMBHESHWAR UNIVERSITY OF SCIENCE & TECHNOLOGY, HISAR.

TRAINING SUPERVISOR :

SUBMITTED BY:

SESSION: 2008 – 2011 GURU JAMBHESHWAR UNIVERSITY OF SCIENCE & TECHNOLOGY HISAR 1

ACKNOWLEDGEMENT Completing a task is a never a one-man effort. It is often the result of valuable contribution of a number of individuals in a direct or indirect manner that helps on shaping and achieving an objective. The satisfaction and euphoria that accompany the successful completion of any task would be incomplete without mentioning the people who made it possible, whose consistent guidance and encouragement crowned the efforts with success.

I would consider it my privilege to express my gratitude and respect to Mr. B. SANJEEV KUMAR, Vertical Head, and Mr. R.K Singh, Vice-President, SMC Global Securities Limited, for having accorded me the opportunity to learn in their prestigious organization. I also thank Mr. Ajay Singh, Corporate Relationship Manager, SMC Global Securities, for his valuable guidance, inspiration, and encouragement. For creating an environment where I could let the creative juices flow at any hour of the day and have my ideas received by sympathetic ears. I cannot forget the contribution of Mr. Amit Singh, Relationship Manager and Mr. Gaurav Gupta, Asst. Relationship Manager, SMC Global Securities and appreciate the patience with which they resolved my doubts amidst their busy schedule; I express my sincere thanks to both of them. Finally I want to thank all the friends and fellow INTERNS at SMC for their constant co-operation, encouragement, help and support throughout the study without which this work would not have been possible.

Swati

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EXECUTIVE SUMMARY For management career, it is important to develop managerial skills. In order to achieve positive and concrete results, along with theoretical concepts, the exposure of real life situation existing in corporate world is very much needed. To fulfill this need, this practical training is required. As a part of course curriculum of my BBA program we are asked to undergo two months summer training in any organization so as to give us exposure to practical management & to get us familiar with various activities taking place in an organization. I have put my sincere efforts to accomplish my objectives within the stipulated time. Despite all the limitations, obstructs-hurdles, and hindrances, I have toiled and worked to my optimum potential to achieve the desired goal. Being neophytes in the highly competitive world of business. I come across some difficulties to make my objective a reality. Any how, with the kind help and genuine interest of one all formally supported by guidance of my guide. I am presenting this hand carved effort is colored. I tried my level best to conduct a research to gain a through knowledge about the project in the topic "ONLINE TRADING AT SMC GLOBAL SERVICES PVT. LTD.” I have put the best of my efforts and have also tried to be justice with the available. If anywhere something is found unacceptable or unnecessary to the theme you are welcomed with your valuable suggestions.

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TABLE OF CONTENTS

CONTENTS

PAGE NO.

CHAPTER-1 INTRODUCTION

1-16

1.1 INTRODUCTION 1.2 BSE 1.3 NSE 1.4 SECURITIES AND EXCHANGE BOARD OF INDIA 1.5 BROKERAGE HOUSE

CHAPTER-2 COMPANY PROFILE

17-28

SECURITIES LTD. 2.1 SMC- INTRODUCTION 2.2 PRODUCTS AND SERVICES 2.3 SMC AT GLANCE

CHAPTER-3 CONCEPTUAL DISCUSSION

CHAPTER-4 RESEARCH METHODOLOGY 4.1 RESEARCH OBJECTIVE

43

4.2 RESEARCH DESIGN

43

4.3 DATA SOURCE

44

4.4 QUESTIONNAIRE DESIGN / FORMULATION

45

4.5 SAMPLE DESIGN

45-46

4

4.6 LIMITATIONS OF THE RESEARCH

46-47

CHAPTER-5 DATA ANALYSIS AND INTERPRETATIONS

CHAPTER-6 FINDINGS

CHAPTER-7 RECOMMENDATIONS

ANNEXURE

BIBLIOGRAPHY

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INDUSTRY PROFILE 1.1 INTRODUCTION Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meagre and obscure. Share or stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market .Share market where dealing of securities is done is known as share market. There are two ways in which investors gets share from market: Primary market: markets in which new securities are issued are known as primary market. This is part of the financial market where enterprises issue their new shares and bonds. It is characterized by being the only moment when the enterprise received money in exchange for selling its financial assets. Secondary Market: Market in which existing securities are dealt is known as secondary market. The market where securities are traded after, they are initially offered in the primary market. Most trading is done in the secondary market. The Stock Market is an invisible market that trades in stocks of various companies belonging to both the public and private sectors. The Indian Stock Market is often referred to as the Share Market since it deals primarily with shares of various companies. A Stock Exchange is a place where the stocks are listed and traded. Such exchanges may be a corporation or mutual organization which specializes in the business of introducing the sellers with the buyers of stocks and securities. The Indian Stock Market in India comprises of two stock exchanges: ● Bombay Stock Exchange (BSE) ● National Stock Exchange (NSE) ● By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were

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only half a dozen brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased to 60. In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs. 87).At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found a place in a street (now appropriately called as Dalal Street) where they would conveniently assemble and transact business. In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association" (which is alternatively known as “The Stock Exchange "). In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated. A new phase in the Indian stock markets began in the 1970s, Foreign Exchange Regulation Act (FERA) that led to divestment of foreign equity by the multinational companies, which created a surge in retail investing.A new set of economic and financial sector reforms that began in the early 1990s gave further impetus to the growth of the stock markets in India. Towards this end, several measures were taken to streamline the processes and systems including setting up an efficient market infrastructure to enable Indian finance to grow and further mature. An INTERNET- based stock trading was still in its fancy in INDIA and had the potential to really benefit the, investor with its ability to offer greater speed and transparency, at a much lower cost. The traditional trading system is where investors have to contact their brokers for accessing the real time data. And that's the reason why common people were completely out of the picture in the traditional trading system. Now things have completely changed. Internet has changed the whole scenario - just click the mouse button and you are done. 7

1.2 BSE The Bombay Stock Exchange (BSE) was established in 1875.The BSE India Stock Exchange serves as the most important for companies to raise money. The chief function of the Stock Market of India is to help raise money as capital for the growth and expansion of various private and public sector enterprises. Besides, the Stock Market of India provides able assistance to the individual investors through daily updates on current position of the stocks of the respective companies that are enlisted in the Stock Index in which the movement of prices in a section of the market are captured in price indices. The popular acronym for Stock Index is Sensitive index or sensex. Moreover, the liquidity provided by the exchange enables the investors to sell securities owned by them easily and quickly. Hence a person, who is subjected to sudden dearth of funds, can immediately sell his shares for cash in India Stock Market. The BSE Sensex, also known as “BSE 30” is a widely used market index not only in India but across Asia. In terms of volume of transactions, it is ranked among the top five stock exchanges in the world.

1.3 NSE The National Stock Exchange of India Ltd. (NSE), set up in the year 1993, is today the largest stock exchange in India and a preferred exchange for trading in equity, debt

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and derivatives instruments by investors. NSE has set up a sophisticated electronic trading, clearing and settlement platform and its infrastructure serves as a role model for the securities industry. The standards set by NSE in terms of market practices; products and technology have become industry benchmarks and are being replicated by many other market participants. NSE provides a screen-based automated trading system with a high degree of transparency and equal access to investors irrespective of geographical location. The high level of information dissemination through the on-line system has helped in integrating retail investors across the nation. The exchange has a network in more than 350 cities and its trading members are connected to the central servers of the exchange in Mumbai through a sophisticated telecommunication network comprising of over 2500 VSATs. NSE has around 850 trading members and provides trading in equity shares and debt securities. Besides this, NSE provides trading in various derivative products such as index futures, index options, stock futures, stock options and interest rate futures. In addition to these organizations there are other organizations highlighting on the share trading in the Indian Stock Market are: ● Securities and Exchange Board of India (SEBI) ● NSDL ● CDSL The Nifty and the Sensex are the indicators which are the parameters denoting the prices of the stocks of the major companies of the NSE and the BSE respectively.

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1.3SECURITIES AND EXCHANGE BOARD OF INDIA SEBI is the regulator for the securities market in India. It was formed officially by the Government of India in 1992 with SEBI Act 1992 being passed by the Indian Parliament. Chaired by C B Bhave, SEBI is headquartered in the popular business district of Bandra-Kurla complex in Mumbai, and has Northern, Eastern, Southern and Western regional offices in New Delhi, Kolkata, Chennai and Ahmedabad. Chandrasekhar Bhaskar Bhave is the sixth chairman of the Securities Market Regulator. Prior to taking charge as Chairman SEBI, he had been the chairman of NSDL (National Securities Depository Limited) ushering in paperless securities. Prior to his stint at NSDL, he had served SEBI as a Senior Executive Director. He is a former Indian Administrative Service officer of the 1975 batch.

How SEBI came into picture The World Bank and the International Monetary Fund (IMF) have introduced a benchmark i.e., Financial Services Assessment Programme (FSAP) to strengthen the monitoring of financial systems in the context of the IMF’s bilateral surveillance and the World Bank’s financial sector development work. The FSAP is designed to help countries enhance their resilience to crisis and cross-border contagion, and to foster growth by promoting financial system soundness and financial sector diversity. The mission of SEBI is to make India as one of the best securities market of the world and SEBI as one of the most respected regulator in the world. SEBI endeavors to achieve the standards of IOSCO/FSAP. Amendments will be required to be made in the Securities Laws especially the SEBI Act, which will facilitate India and SEBI to achieve above objective.

Reasons for the establishment of SEBI The capital market, has witnessed a tremendous growth during 1980’s, characterized particularly by the increasing participation of the public. This ever expanding investor’s population and market capitalization led to a variety of malpractices on the part of companies, brokers, merchant bankers, investment consultant and others involved in the securities market. The glaring examples of these malpractices include

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existence of self-styled merchant bankers unofficial private placements, rigging of prices, unofficial premium on new issues, non-adherence of provisions of the Companies Act, violation of rules and regulations of stock exchanges and listing requirements, delay in delivery of shares etc. these malpractices and unfair trading practices have eroded investors confidence and multiplied investors grievances. The government and the stock exchanges were rather helpless in redressing the investor’s problem because of lack of proper penal provisions in the existing legislation. In the view of above, Government of India decided to setup a separate regulatory body known as Securities and Exchange Board of India.

Objectives of SEBI The overall objectives of SEBI is to protect the interest of investors and to promote the development of, and regulate the securities market. This may be elaborate as follows: 1. To regulate stock exchanges and the securities industry to promote their orderly functioning. 2. To protect the rights and interest of investors , particularly individual investors and to guide and educate them. 3. To prevent trading malpractices and achieve a balance between self regulation by the securities industry and its statutory regulation. 4. To regulate and develop a code of conduct and fair practices by intermediaries like brokers, merchant bamkersetc. , with a view to making them competitive and professional.

Functions and Responsibilities SEBI has to be responsive to the needs of three groups, which constitute the market: 

the issuers of securities



the investors



the market intermediaries.

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SEBI has three functions rolled into one body quasi-legislative, quasi-judicial and quasi-executive. It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders in its judicial capacity. Though this makes it very powerful, there is an appeals process to create accountability. There is a Securities Appellate Tribunal which is a three-member tribunal and is presently headed by a former Chief Justice of a High court - Mr. Justice NK Sodhi. A second appeal lies directly to the Supreme Court. SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively and successively (e.g. the quick movement towards making the markets electronic and paperless rolling settlement). SEBI has been active in setting up the regulations as required under law. SEBI has also been instrumental in taking quick and effective steps in light of the global meltdown and the Satyam fiasco. It had] increased the extent and quantity of disclosures to be made by Indian corporate promoters. More recently, in light of the global meltdown, it liberalised the takeover code to facilitate investments by removing regulatory strictures. Keeping in mind the emerging nature of the securities market in India, SEBI was entrusted with the twin task of both regulation and development of the securities market.

Regulatory Functions 1.

Regulation of stock bankers and portfolio exchanges, and merchant bankers.

2.

Registration of collective investment schemes and Mutual Funds.

3.

Registration of brokers and sub-brokers and other players in the market.

4.

Prohibition of fraudulent and unfair trade practices.

5.

Controlling insider trading and takeover bids and imposing penalties for such practices.

6.

Calling for information by undertaking inspection, conducting enquiries and audits of stock exchanges and intermediaries. 12

7.

Levying fee or other charges for carrying out the purposes of the Act.

8.

Performing and exercising such power under Securities Contracts (Regulation) Act 1956, as may be delegated by the government of India.

Development Functions 1. Investors education. 2. Training of intermediaries. 3. Promotion of fair practices and code of conduct of all SRO’s. 4. Conducting research and publishing information useful to all market participants.

Role of SEBI in Indian Capital Market SEBI is regulator to control Indian capital market. Since its establishment in 1992, it is doing hard work for protecting the interests of Indian investors. SEBI gets education from past cheating with naive investors of India. Now, SEBI is more strict with those who commit frauds in capital market. The role of security exchange board of India (SEBI) in regulating Indian capital market is very important because government of India can only open or take decision to open new stock exchange in India after getting advice from SEBI. If SEBI thinks that it will be against its rules and regulations, SEBI can ban on any stock exchange to trade in shares and stocks. Now, we explain role of SEBI in regulating Indian Capital Market more deeply with following points: 1.

Power to make rules for controlling stock exchange :SEBI has power to make new rules for controlling stock exchange in India. For example, SEBI fixed the time of trading 9 AM and 5 PM in stock market.

2.

To provide license to dealers and brokers:SEBI has power to provide license to dealers and brokers of capital market. If SEBI sees that any financial product is of capital nature, then SEBI can also control to that product and its

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dealers. \ SEBI has of opinion that it is just like mutual funds and all banks and financial and insurance companies who want to issue it, must take permission from SEBI. 3.

To stop fraud in Capital Market: SEBI has many powers for stopping fraud in capital market. a. It can ban on the trading of those brokers who are involved in fraudulent and unfair trade practices relating to stock market. b. It can impose the penalties on capital market intermediaries if they involve in insider trading.

4.

To Control the Merge, Acquisition and Takeover the companies: Many big companies in India want to create monopoly in capital market. So, these companies buy all other companies or deal of merging. SEBI sees whether this merge or acquisition is for development of business or to harm capital market.

5.

To audit the performance of stock market :SEBI uses his powers to audit the performance of different Indian stock exchange for bringing transparency in the working of stock exchanges.

6.

To make new rules on carry - forward transactions: a.

Share trading transactions carry forward can not exceed 25% of broker's total transactions.

b. 7.

90 day limit for carry forward.

To create relationship with ICAI: ICAI is the authority for making new auditors of companies. SEBI creates good relationship with ICAI for bringing more transparency in the auditing work of company accounts because audited financial statements are mirror to see the real face of company and after this investors can decide to invest or not to invest. Moreover, investors of India can easily trust on audited financial reports. After Satyam Scam, SEBI is investigating with ICAI, whether CAs are doing their duty by ethical way or not.

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8.

Introduction of derivative contracts on Volatility Index :For reducing the risk of investors, SEBI has now been decided to permit Stock Exchanges to introduce derivative contracts on Volatility Index, subject to the condition that; a.

The underlying Volatility Index has a track record of at least one year.

b.

The Exchange has in place the appropriate risk management framework for such derivative contracts.

Before introduction of such contracts, the Stock Exchanges shall submit the following: i.

Contract specifications

ii.

Position and exercise Limits

iii.

Margins

iv.

The economic purpose it is intended to serve

v.

Likely contribution to market development

vi.

The safeguards and the risk protection mechanism adopted by the exchange to ensure market integrity, protection of investors and smooth and orderly trading.

vii.

The infrastructure of the exchange and the surveillance system to effectively monitor trading in such contracts, and

viii.

Details of settlement procedures & systems

ix.

Details of back testing of the margin calculation for a period of one year considering a call and a put option on the underlying with a delta of 0.25 & -0.25 respectively and actual value of the underlying.

9.

To Require report of Portfolio Management Activities:SEBI has also power to require report of portfolio management to check the capital market performance. Recently, SEBI sent the letter to all Registered Portfolio Managers of India for demanding report.

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10.

To educate the investors:Time to time, SEBI arranges scheduled workshops to educate the investors. On 22 may 2010 SEBI imposed workshop.

The Organisation Structure of SEBI As SEBI is a statutory body there has been a considerable expansion in the range and scope of its activities .each of the activities of the SEBI now demands more careful, closer, co-ordinate and intensive attention to enable it to attain its objectives. Accordingly, SEBI has been restricted and rationalized in tune with its expanded scope. It has decided its activities into operational departments. Each department is headed by an executive director. Apart from its head office at Mumbai, SEBI has opened regional offices in Kolkata, Chennai, and Delhi to attend to investor complaints and liaise with issuers, intermediaries and stock exchanges in the concerned region. SEBI has formed two advisory committees. They are the Primary Market Advisory Committee and the Secondary Market Advisory Committee. These committees consist of the market players, the investors associations recognised by the SEBI and the eminent persons in the capital market. They provide important inputs to the SEBI’S policies. The objectives of the two Committees are as follows: 

To advise SEBI on matters relating to the regulation of intermediaries for ensuring investors protection in the primary market.



To advise SEBI on issues related to the development of primary market on India.



To advise for changes in legal framework to introduces simplification and transparency in the primary market.



To advice SEBI on disclosure requirement for companies.



To advice the board in matters relating to the development and regulation of the secondary market in the country.

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The committees are however non- statutory in nature and the SEBI is not bound by the advise of the committee. These committees are apart of SEBI’s constant endeavor to obtain a feedback from the market players on various issues relating to the regulations and development of the market.

1.5 BROKERAGE HOUSE A broker is a party that mediates between a buyer and a seller. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Distinguish agent: one who acts on behalf of a principal. A "brokerage" or a "brokerage firm" is a business that acts as a broker. A brokerage firm is a business that specializes in trading stocks. A sales person working for a securities or commodity brokerage firm is popularly (but incorrectly) called a "broker." A broker in that context is, strictly speaking, an exchange member who is actually executing the purchase or sales order in the 'pit', on the exchange, as a service to the client of the firm for which that salesman works. Broker services are usually provided on a commission basis. Commission amounts charged for the buying and selling of securities vary with each brokerage house. Often, the price per trade is indicative of the level of service the firm offers. For example, a brokerage house that charges fees on the lower end of the scale may not execute trades as quickly as one that charges higher fees. Likewise, a firm that charges higher commissions usually offers more personalized service. In addition to commissions, a brokerage firm may charge various other fees. These fees may include charges for transferring assets, closing an account, and wiring money. Additionally, a brokerage firm may require the payment of IRA custodian fees, as well as annual services charges and fees related to periods of account inactivity. Depending on the policies of the brokerage house, a client's account may also incur a fee for failing to meet a minimum required account balance. A brokerage house may offer a variety of investment products or specialize in just one or two. Typical choices include stocks, mutual funds, and options, as well as government and corporate bonds. Over-the-counter (OTC) bulletin board stocks may be offered as well.

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There are several different ways of executing trades. A brokerage house may choose to employ all or just some of them. For example, a firm may allow for trading over the phone or via the Internet, as well as other methods.

Duties of Stockbrokers to Their Customer  Fair Dealing: - A stockbroker has a fundamental responsibility for fair dealing. The rules and regulations of the securities industry require a stockbroker to treat his customer in a fair manner characterized by high standards of honesty and integrity. Besides being governed by securities laws and commercial regulations, stockbrokers are subject to the rules of self-regulatory organizations such as the National Association of Securities Dealers (NASD). The NASD Rules of Fair Practice impose the following standard upon members of the securities industry: "A member, in the conduct of his business, shall observe high standards of commercial honor and just and equitable principles of trade." This standard (along with other NASD rules) is enforceable as the standard to which public customers are entitled to depend.  Duty of Loyalty: - Since stockbrokers are compensated through commissions on the transactions which they execute, there is some inherent tension between the broker's interests and the interests of the customer. It is the broker's responsibility to always place the interests of the customer first. The broker's obligations and duty to the customer must be paramount, and for a broker conducting himself properly this will not present a conflict. Prime example of the broker's obligation to keep the customers interests first is the question of trading frequency in the account. The broker is obligated to recommend trades which meet the needs of the customer, not merely to generate commissions for himself. Excessive trading by a broker involving purchasing and selling securities for the purpose of increasing commissions is known as "churning", and it is prohibited.  Obligation of Disclosure: - A broker also has a duty to disclose all material information in connection with an investment recommendation. In general, the broker has an obligation to disclose all information which may be reasonably relevant to an investor to take into consideration in making an informed investment decision. In particular, a broker has an obligation to disclose the

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various risks and level of risk of an investment recommendation.Brokers have a duty to be truthful in all communications with customers. Brokers are held to a standard that their communications should provide a sound basis for evaluating any securities being recommended. In particular, exaggerated, false or misleading statements are prohibited in a stockbroker's communications with the public.  Authorization for Trading: - A broker may not execute trades in a customer's account unless the customer has approved and authorized the trade in advance, or has given the broker discretionary trading authority (the power for the broker to make trading decisions in the account). A broker may not engage in unauthorized trading. On the other handbroker has an obligation to carry out the instructions of the customer.  Requirement of

Suitable Recommendations: - Perhaps one of the most

important and least known obligations of a stockbroker is the requirement for all investment recommendations to be consistent with the customer's financial status, investment objectives, level of understanding and risk tolerance. According to this suitability rule and the requirement of the "know your customer" rule, a broker must have reasonable grounds for believing that the recommendation is suitable and appropriate for that particular customer based upon his individual financial situation, understanding and needs.It is the responsibility of the stockbroker to make reasonable efforts to obtain the relevant information regarding the customer and recommended investments. The "know your customer" rule requires that the broker obtain a customer profile so that the broker will be able to properly match the needs of the customer with appropriate investments. The broker is also required to use care in connection with knowing the investments which are recommended.  Special Situations:-Certain forms of investments pose particular problems, and therefore, brokers have additional duties in connection with such activity. For example, trading with money borrowed from the brokerage firm, known as trading on margin, is a carefully regulated activity. Brokers also have special responsibilities in connection with options trading and private placement limited partnerships among other forms of investments.

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 Supervisory Responsibility and Duty of Good Faith: - A brokerage firm has a responsibility to supervise the activities of its brokers. The firm must maintain a system to enforce compliance with rules and to prevent violations of securities laws and regulations. The responsibility of the brokerage firm to supervise its agents is especially important since many customers maintain their account with a particular firm and follow the advice of their broker based upon the name of the firm standing behind the broker. A brokerage firm has the responsibility to conduct themselves with good faith in their interaction with customers. Customers place their trust and reliance in the broker and brokerage firm to treat them in accordance with the high standards imposed upon the securities profession. The fact that many customers place their total faith and reliance in the broker viewing him as a trusted advisor and putting their financial affairs in his hands, certainly should heighten the broker's responsibilities and duty of good faith.

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COMPANY PROFILE 2.1 SMC : INTRODUCTION SMC: A ONE STOP INVESTMENT SHOP "SUCCESS HINGES ON A PASSION FOR EXCELLENCE" SMC Group, founded in 1990, is India’s leading share and stock broker, provides a wide range of financial services and investment solutions. A blend of extensive experience, diverse talent and client focus has made us the 4th largest broking house in India(Source: Dun and Bradstreet, 2008). Over the Years, SMC has expanded its domestic & international operations. Existing network includes regional offices at Mumbai, Kolkata, Chennai, Cochin, Ahmedabad, Jaipur, Hyderabad, Bangalore plus a growing network of 2100+ offices spread across 425 cities/towns in India. The company has expanded Internationally, and has established office in Dubai Gold and Commodities Exchange(DGCX).Its products and Services include Institutional and retail brokerage of equity, commodity, currency, derivatives, online trading , investment banking, depository services, clearing services, IPO’s and mutual funds distribution, Portfolio management, wealth advisory, insurance broking, equity and commodity research. SMC is one of the most active trading organization in India, averaging over 3,50,000 trades per day. Currently, SMC has a highly efficient workforce of over 4,000 employees & one of the largest retail network in India currently serving the financial needs of more than 4,50,000 satisfied investors. SMC has entered into a 50:50 joint venture with Sanlam Group, one of the largest listed financial services group in South Africa for setting up wealth Management and Asset Management business in India, Sanlam is operating in over 30 countries globally including UK, USA, Switzerland, Luxembourg, Dublin, Australia and others.

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CORPORATE ETHOS 1. Vision To be a global major in providing complete investment solutions, with

relentless

focus on investor care, through superior efficiency and complete transparency.

2.Core values 

Ethical deals: Honesty is the only policy.



Experience and trust: Over 20 years of experience has made SMC earn the trust of more than 5,75,000 investors.



Expertise: Know-how and skills to provide investors an edge



Personalised Solutions: Every investor is unique. Every solution is unique.

3. Approach 

Value for investor’s trust: SMC values the trust reposed in by the clients and is committed to uphold it at all cost.



Integrity and honesty: Integrity, honesty and transparency are the underlying principles in all our dealings.



Personalised attention: The most valued asset is our relationship with the clients, which has been built over years by giving personalized attention.



Network which works: SMC has a vast network extending to 425+cities and towns ensuring easy accessibility, convenience and hassle free trading experience.



Research based advisory services: SMC offers proactive and timely world class research based advice and guidance to its clients to enable them to take informed decisions

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FOUNDERS & PROMOTER

Mr. Mahesh Chand Gupta Mr. Subhash Chand Aggarwal

Mr. Subhash Chand Aggarwal, Chairman and Managing Director of SMC Global Securities Ltd. and Mr. Mahesh Chand Gupta, Chairman and Managing Director of SMC Comex (P) Ltd. are the founders and promoters of SMC. Both are chartered accountants. They are an embodiment of professional excellence. They are the visionaries who planted the sapling of the giant tree called SMC. With rock solid reserve and firm commitment, they have shaped their vision to reality. They have a rich experience of more than 20 years in the capital market. Their exceptional leadership skills and outstanding commitment has made SMC as one of the leading investment solutions and services provider. They both assign top priority to the principles of transparency, honesty and integrity in all our dealings. Both of them are professionals to the core. Their specialization in risk management and surveillance and their disciplined style of working is an inspiration to the workforce of SMC. Their experience of the securities as well as the commodity market and their leadership qualities has made SMC a force to reckon with.

SMC’s offerings SMC facilitates trading activities in all the major market segments including; equity, derivatives, commodities, interest derivatives and currency futures. It’s robust and

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user-friendly trading platform enables to execute trades simultaneously across all Segments. It also have whole bucket of other services like online trading, depository, IPO, mutual funds, insurance broking, institution broking, margin funding, NRI services, clearing services, investment banking, PMS, wealth advisory and research to provide you extra edge over others.

Memberships & Registrations 

Trading Member of NSE, BSE, NCDEX, MCX, DGCX, NMCE, ICEX, MCX-SX ,National Spot Exchange Ltd.(NSEL) & NCDEX Spot Exchange Ltd.( NSPOT).



Clearing Member in NSE (F&O, Currency), BSE (F&O, Currency), MCX (Commodities), NCDEX, MCX-SX, ICEX & DGCX



Depository Participant with CDSL & NSDL



Category 1 Merchant banker



Corporate

Insurance

Broker

for

Life

&

General

Insurance

(Registered with IRDA) 

Distributor of IPOs & Mutual Funds (Registered with AMFI)



Portfolio Management Services (PMS) registered with SEBI



Non Banking Financial Company (NBFC) registered with RBI



Association with London based ICON Capital, (Registered under FSA & NSA ,London)

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2.2 PRODUCTS & SERVICES “Every Investor Is Unique, Every Solution Is Unique”

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A. SERVICES OFFERED BY SMC a) Equity & Derivative Trading SMC Trading Platform offers online equity & derivative trading facilities for investors who are looking for the ease and convenience and hassle free trading experience. We provide ODIN Application, which is a high -end, integrated trading application for fast, efficient and reliable execution of trades. You can now trade in the NSE and BSE simultaneously from any destination at your convenience. You can access a multitude of resources like live quotes, charts, research, advice, and online assistance helps you to take informed decisions. You can also trade through our branch network by registering with us as our client. You can also trade through us on phone by calling our designated representatives in the branches where you are registered as a client.

b) Clearing Services Being a clearing member in NSE (F&O, Currency), BSE (F&O, Currency), MCX, MCX-SX, NCDEX, and DGCX. We are clearing massive volumes of trades of our trading members in this segment.

c) Commodity Trading SMC is a member of 3 major national level commodity exchanges, i.e. National Commodity and Derivative Exchange (NCDEX), Multi Commodity Exchange (MCX) and National Multi Commodity Exchange of India (NMCE) offers you trading platform of NCDEX, MCX and NMCE. You can get Real-Time streaming quotes, place orders and watch the confirmation, all on a single screen. We use technology using ODIN application to provide you with live Trading Terminals. In this segment, we have spread our wings globally by acquiring Membership of Dubai Gold and Commodities Exchange. We provide trading platform to trade in DGCX and also clear trades of trading members being a clearing member.

d) Wealth management Wealth Advisory & Arbitrage Management for HNIs and Corporate.

26

e) Distribution of Mutual Funds & IPO’s SMC offers distribution and collection services of various schemes of all Major Fund houses and IPO’s through its mammoth network of branches across India. We are registered with AMFI as an approved distributor of Mutual Funds. We assure you a hassle free and pleasant transaction experience when you invest in mutual funds and IPO’s through us. We are registered with all major Fund Houses including Fidelity, Franklyn Templeton etc. We have a distinction of being leading distributors of IPO’s. Shortly we will be providing the facility of online investment in Mutual Funds and IPO’s.

f) Online back office support To provide robust back office support backed by excellent accounting standards to our branches we have ensured connectivity through FTP and Dotnet based Application. To ensure easy accessibility to back office accounting reports to our clients, we have offered facilities to view various user friendly, easily comprehendible back office reports using the link My SMC Account

g) NRI AND Institutional Desk Dedicated team for NRI and Institutional Desk.

h) Investment Banking IPO’s, Follow on offers, M&A, Private equity, Debt syndication, ESOP, valuation, etc.

B.PRODUCTS OFFERED BY SMC 1.

SMC Select This

account

allows

its

customer

to

trade

through

SMC’s

website

www.smcindiaonline.com and is most suited to Retail investors who are not frequent traders. It is most economical and convenient product for online trading and does not require any software installation. SMC’s website also has a Call n’ Trade Service that enables its clients to buy and sell shares by calling their Trading Call Center. 27

SMC Exclusive

2.

This account is ideal for Active traders who transact frequently during day’s trading session to capitalize on intra-day price movements. In this product, real time streaming quotes facility is available on browser interface.

SMC Privilege

3.

This account is an application based privileged online trading product, which is meant for clients who are actively involved in the stock market and do the bulk trading. It offers comprehensive facilities on a single screen, similar to that of a broker’s terminal, thus providing greater ease and time advantage, to the investors.

2.3 SMC’S ONLINE FACILITIES Looking into the day-by-day increasing demand for Online Trading, SMC has successfully launched its state-of-the-art web based trading platform, through its website www.moneywisebewise.com and www.smcindiaonline.com It provides you the option of both Browsers based and Application (ODIN Diet) based trading experience through its state of the art products, SMC Exclusive and SMC Privilege respectively. These products integrates a whole lot of services to cater to all possible needs of a retail investor 

Trading terminal for NSE, BSE and NSE F&O on a single screen



Instant order execution and trade confirmation, real-time streaming quotes, back up to place trades on direct phone lines through our call-n-trade facility, 24x7 Relationship Managers are attached to understand and cater to your investment needs.

28

ONLINE TRADING SMC Online is a single gateway for all customer financial needs. Now, one can invest online in Equities, Commodities, IPOs, Mutual Fund Schemes and Currency Futures anywhere anytime. One can also access a multitude of resources like live quotes, charts, research, advice and online assistance to help its clients to take informed decisions. One can also access its account from anywhere using SMC’s Call-N-Trade services. So through this one get empowered and enrich their experience of online trading, which opens the door to a whole new world of possibilities to get convenient & hassle-free online stock trading experience. SMC Trading Platforms offer investors the ease and convenience of an uninterrupted trading experience. SMC offers seamless Online Trading experience with freedom to opt for a product that meets your needs: 

SMC SELECT - Easy to use simple web-based trading platform for beginners



SMC EXCLUSIVE - Advanced web-based trading platform with live streaming quotes



SMC PRIVILEGE - Software-based trading platform for active traders.

One can opt for above mentioned products, get facility to invest in IPOs & Mutual Fund schemes at no extra cost.

SMC’s offerings : 

Convenience of integrating the Bank, Trading and Demat accounts with attractive brokerage options.



Designed for better speed for instant order & trade confirmation.



Lifetime free AMC option.



User friendly platforms.



24 X 7 online back office access.



Pan-India presence.

29



Dedicated customer care.



Excellent research & advisory support.



A range of trading options.



State-of-the-art technology.

DISTINCT

FEATURES

OF

SMC’s

ONLINE

TRADING

PRODUCTS: 

Online transfer of funds through multiple banks.



Trade in NSE cash, NSE F&O and BSE on a single screen.



Real time streaming quotes.



Instant order/ trade confirmations on the same window.



Integrated DP, back office and trading account.



Trade online and over phone.



24X7 customer support center.



Benefit against selling of stock.



Access to ledger balances and account information over online back office.

3.4 SMC: AT A GALANCE •

2100 + offices spread across 425+cities , headquartered at Delhi with Regional offices at Mumbai, Kolkata , Chennai, Hyderabad, Cochin and Ahmadabad & Overseas Office at Dubai

•

6200 trading terminals

•

More than 4,50,000+ investors

•

Clearing member for 62 Trading Members MCX/DGCX/NSE/BSE

30

•

Dedicated Proprietary Arbitrage Desk with 300+ Arbitragers

•

Handles 3,50,000+ trades/day, achieved US$ 175+ Bn volume for the period Apr–Dec, ’07

•

IPO & MF Mobilization Amount (Jan.’07 to Dec.’ 07): Rs.6,060.69crores (i.e. US$ 1.55 Bn.)

•

In-house Weekly Research magazine “Wise Money”

•

Enterprise valued at Rs.3500crores (i.e. US$ 875 Mn. approx.)

SMC – Achievements •

ISO 9001:2000 certified DP for both shares and commodities

•

4th largest broking house of India in terms of trading terminals (Source: Dun and Bradstreet, 2008)

•

5th largest sub-broker network in the country (Source: Dun and Bradstreet, 2007)

•

2nd largest distributors of IPO in Retail. (Source: Prime Data Rankings)

•

Awarded the Fastest Growing Retail Distribution Network in Financial Services(Source: Business Sphere, 2008)

•

Received Major Volume Driver by BSE for 3 years consecutively.

•

Nominated among the top 3, in the CNBC Optimix Financial Services Award 2008 under the "National Level Retail Category".

•

One of the first financial firms in India to expand operations in the lucrative gulf market, by acquiring license for broking and clearing member with Dubai Gold and Commodities exchange (DGCX)

•

One of the largest proprietary desk for doing risk-free arbitrage in equities and commodities

•

Executed the First trade on DGCX for Silver Rebar , Crude Oil and RupeeDollar contract.

31

CONCEPTUAL DISCUSSION INTRODUCTION ON ONLINE TRADING: The actual definition of On-Line Trading is as explained below: “On-Line trading is service offered on the internet for purchase and sale of shares, in the real world an investor places orders to stock brokers. Either verbally or in a written form (fax)”. OFFLINE : Offline trading is benefit from discussing with financial advisor the benefits’ of trading online. A brief explanation about Internet:Internet is a world wide self governed network connecting several other smaller network and million of computers and persons to merge sources of information. This technology is vast distance accelerating the pace of business forms and revolutionizing the many companies are managed, it allow direct links to anyone anywhere and any time to build up interactive relationship. A combination of time and space called the internet promises to bring un precendented changed in our lives and business Internet or net is an inter connection of computer communication network spanning the entire globe crossing all geographical boundaries it has re defined the method of communication work study education, Business leisure health trade banking commerce and what not it is virtually changing everything and we are living in dot.com age. Net being an interactive two way medium through various websites enables participation by individually in business to business to consumer commerce visit to shopping arcades, games, etc., in cyber space even the information can be copying, down loaded and retransmitted. The use of internet has grown 2000 percent in last decade and is correctly growing 10 percent per month in India growth of internet is of recent times.

32

It is expected to bring changes in every functional area of business activity including marketing and financial services. It offers stock trading at a lower cost, internet can change the nature and capacity of stock broking business in India.

E- COMMERCE: Electronic Commerce is associated with buying and serving over computer communication networks, it helps conduct traditional commerce through new way of transferring and processing of information. Information is electronically transferred from computer to computer in an automated way.

E- Commerce refers to the paperless exchange to business

information using electronic dates interchange electronic technology, it is not only reduce manual process and paper transaction but also helps organization more to a fully electronic environment and change the way they operated PCs and networking attempts to introduce banks of the tools and technologies required for electronic commerce. The computers are either workstation of individual office work or serves where large database and information resides. Networks connects both categories of computer the various operating system are the most basis programmed with is a computer it manages the resources of the computer system in a fair and efficient manner. Now we can enter into the concept known as “On Line Trading”. In the past investor had no option but contact their broker to get real time access to market data, the net brings data to the investor On line and net broking enables him to trade on a click of mouse, Now information has because easily accessible to both retail as well as big investor.

33

TRADING SYSTEM: A trading system is simply a group of specific rules or parameters that determine entry and exit points for a given equity. These points known as signals are often marked on a chair in a real time and prompt the immediate execution of trade. Here some of the common technical analysis tools used to construct parameters of trading system. →

Moving Averages

→

Stochastic

→

Oscillators

→

Relative Strength

→

Bollinger Bonds.

There are numerous internet trade scans related to system trading but there also many legitimate successful systems perhaps the most famous example the over developed and implemented by Richard Dennis and Bill Eckharde, who are the original Turtle trader in 1983 these two had a dispute over whether a good trader is born or made. So they took some people on the street and trained then on their now famous Turtle Trading System, they gathered 13 traders and ended up making 80% annually.

34

TYPES OF TRADING NORMAL TRADING: Exposure of 4 times will be given to you for trading depending on various parameters, in case of Buy position you will have a pay the balance among on the same day, i.e., T day itself failing which, you will not be around to take further position next day, in case of sell position the same will be carried forward till T+1 evening we would request you to deliver the shares before T+1 evening else the shares will be auctioned. Delivered of shares must be done by issuing an instruction favoring investments and this transfer of shares should be done before T+1 day end. Alternatively you can give us a standing instruction to debit your Demat account. You will have to square off the sell position on or before T+1 marked closure by placing square off orders. MARGIN TRADING: In margin trading is like cash trading 100% funds are not blocked at the time of order placement, margin trading provides you with the capital to become a much more active investor, so you can achieve your wealth creation goals far earlier than ever though possible.

You will have access to a far greater of investment

opportunities because you are not limited to using your own capital. Margin trading which is also known as intra day trading if you place a buy order, you will have to place a sell order by the end of the day or vice versa, the transaction placed by you in margin either needs to be squared off or needs to be converted to delivery square of all your open position before 3.00pm or else our system will do auto square off for all. Such position you will have the position to take/give delivery of buy/sell respectively if sufficient cash/security is available. However the same will be allowed only up to 3.00 pm. CASH TRADING: For Cash trading is basically delivery based where in 100% funds/shares are blockend at the time of placement of the order. If you want to buy shares you should have the entire amount of funds in our cash limit and if you want to sell shares the 35

same should be available in your Demat account. For sell position your trading limits will be increased immediately with sell track value. This will enable you to take further position in the market.

Cash product will facilities buy today and sell

tomorrow concept. Buy position is carried forward till T+1 end of day. The same can be viewed in security projection. You can square off this position if required before T+1 marked closure. On square off, your profit and loss will be adjusted according in your trading limit. ON-LINE TRADING: On-Line Trading is a service offered on the internet for purchase and sale of shares, in the real work you place a order with your stock broker website through your internet enabled place order through your internet based trading engine. These orders are routed to the stock exchange without manual intervention executed their on in a matter of few seconds. NEED OF ON-LINE TRADING SYSTEM: 1)

DISCIPLINED ERROR FREE EXECUTION: This method of trading is free of human emotion the buy and sell operations

are all automotive hands free with no manual interventions. 2)

SPEED AND ACCURACY OF CALCUALTION AN EXECUTION: Strategy runners servers can rein millions of analysis operations a day decide

to buy and sell upon present conditions making the trading risks very minimum. 3)

HAND FREE EXECUTION: The client trades automatically even when the clients is busy working,

travelling, sleeping, vacationing – any time of day or night. 4)

NON CORRELATED: System seek to be profitable in both bull and bear market. In other words

profit or loss in trading system is not dependent on economic cycle on matter prices are rising or falling there for historically, trading system have had very little correlation to the stock and band market.

36

5)

RISK – RETURN: While there is no guarantee of positive performance in the trading system

components of portfolio the non-correlation statistics of the trading system and their ability to make profits in any economics environment provide the opportunity for reduced portfolio risk and the potential for enhanced portfolio returns. 6)

TRANSPARENCY: It allows client monitor there sys performance in real time in additional all

portfolio results are published throughout the trading sessions on participating brokers’ websites providing tick transparency of the daily performance. STEPS INVOLVED IN ON-LINE TRADING SYSTEM: Step-I :

Emerging Trends with In your Competitive Environment:

Trading organizations which do this we are positioned to be on-line trading market n the trade industries while organizations which do not rise being blind sided shifts in on-line trading demand which they did not anticipated and are not equipped to handle. Step-II:

How to bring On-Line Trading were demand by targeting most profitable Customer:

On Line trading is neither homogenous non uniform it is composed of distinct segment of customers who think feel and act in different ways about your trading product category. Organizations that understand this can ensure a royal customer trading franchise for years on end because they understand the on-line trading demand they have set to trade better than any else. Step-III:

How to draw a relevant differentiation and Insulation via On-Line Trading Strategic Choices:

An effective trading demand trade value proposition creates relevant and differentiated benefits the value trade equation for its target customer their by earning their trading loyalty and premiums for you to ensure continued profitability and competitive trade insulation.

37

Step-IV:

How to Increase pricing in elasticity with specific On-Line trading Strategies and On-Line trading business Systems:

This step aligns business trade system and trading capabilities (your On-line trading supply) with the trade demand you have chosen to purchase leveraging core capabilities to deliver new trading products and customer benefits quicking and continuously can generate significant on-line trading price premiums. Step-V:How to allocate On-Line trading resources according to the trade priorities established by the On-Line trading value propositions to your targeted trade demand: The trade resources human financial physical and organizational go towards creating or strengthening the On-Line trading Business strategies and trader systems developed in step in trader resources allocation must be conducted intelligently to match OnLine trading supply with target trade demand. Step: VI:

How to Plan implement and monitor a successful On-Line trading

Strategy: The importance of the step can hardly be over emphasized. A successful On-Line trading execution of On-Line trading strategy requires careful preparation structuring and on going trade observation. MECHANISM OF ON-LINE TRADING SYSTEM: The On-Line trading is simple as “dealing sacrifices on net” On-Line trading system from a singly location anywhere can service investors across the country. Those interesting in buying and selling a script share had a contact to jobbers brokers who would to the trading ring and make physical gestures, inviting buy/sell quotes is the trading session from 11.30 am to 3.30pm. On-line trading of the On-line screen based/ computerized trading known as “Hyderabad On-line securities trading (HOST)” sys to cope with growing volume of business ensure transparency in trading eliminate inherent flawed transaction for investors protection and fall the growing competition.

38

TECHNICAL CONFIGURATION: HOST (Hyderabad On-line Securities Trading) is built upon the proven reactor (versatile engine for centralized trading and On-Line reporting). ON-LINE TRADING ADVANTAGES: →

Trading On-Line has revolutionized the stock market.

→

The main benefit of trading on –Line in speed.

→

There is no need dial up your broker wait to speak some body and have him or her enter the order on their computer.

→

As you can imagine the convenience of On-Line trading attracts money investors.

→

You can enter trade orders day or night from anywhere in cyberspace.

→

The internet is full of advice free technical analysis tool and commentary.

→

You can formulate your own strategy and run investment yourself.

ON-LINE TRADING DISADVANTAGES: →

If you are going to trade On-Line you are obviously the on-line making all trading choices.

→

To make your trading decision you need to research your stocks and constantly pay attention to market news. This will require sometimes as you purchase your sources of market

information and use on line tools. BROKERS ADVANTAGES: →

Despite the popularity of On-line trading not every body uses the internet to tracks stocks.

→

A broker can do everything from making all your stock trading decision for to give you little advise on what to buy or sell.

39

→

If you want some investing helps or if you want some body else to deal with everything using a broken might be right for you.

→

Brokers are stock professionals they watch the market and deal with customers like you everyday.

→

Finally your broker may offer services other than just trading stocks if you want you can find a broken that will manage your taxes estate and business.

→

The personal attention available form broker who known your full financial situation is very calculated.

BROKERS DISADVANTAGES: →

Taking a percentage of your assets under management making stock tenders taking a flat fee.

→

However I must stress that the brokerage industry is highly regulated and most brokers act with integrity nonetheless it is best to best aware of the risks.

→

Get a feel for how much time broker spends marketing and how much attention your assets will receive.

→

If your broker gets a paid commission for trading keep in mind that there may be a conflict of internet.

→

Make sure your broker can consistently justify and stock trades.

→

Find out about your brokers back ground and interests to see if he or she is good match.

→

Finally live brokers are more expensive than On-Line brokers their presence and personal attention commanded a price.

IMPACT OF ON-LINE TRADING IN THE MARKET: On the Number of transaction: The number of transaction has increased considerably after introduction of the On-line trading system, the factor of influence could be:

40

1)

The case of the operations from the point of view of both the numbers and investors.

2)

Facilities better monitoring of the market by the market operations department.

3)

The daily that the best price is achieved in buying and selling.

VOLUME OF TRADING: From the fact that the number of transactions has increased dramatically it is almost apparent that the volume of trading of would have increased. Number of Members Participating: The introduction of On-line trading enables to do comfortable sitting in their respective offices and doing the trading, more members can participate in the trading owning to this which has been increased in a number of trades from 100 to 200. OTHERS: From the trader point of view the following are the benefits with the host. 1)

Transparency of the system.

2)

Desk work reduced to minimum.

3)

Free and perfect information is available to all the member and investors.

3)

Less number of people needs to do transaction.

41

RESEARCH METHODOLOGY 4.1 RESEARCH OBJECTIVES 1)

It is to analyze the change in trading after the exchange shifted from outcry to On-line trading system.

2)

To analyze conceptual frame work regarding On-line trading.

3)

To evaluate about the latest development in the stock exchange trading system.

4)

To analyze the investors awareness about On-line trading.

5)

To bring out the investors expectations regarding on-line trading to be simplified further.

6)

To offer suitable suggestions up on drawn conclusions.

4.2 SCOPE OF THE STUDY 

The present study is to know the details regarding the trading through On-line system.



The project also studies the impact of On-line trading system in the market and also trading of Government Securities in stock exchange.

4.3 RESEARCH DESIGN A research design is the arrangement of conditions for collections and analysis of data in a manner that aims to combine relevance to the research problem with economies in a procedure. I have used descriptive research design for my research.

Descriptive Research Descriptive research includes surveys and fact findings enquiries of different kinds. It basically gives a description of the state of affairs as it exists at present. A researcher

42

has no control over the variables so they can only report what has happened or what is happening. We can also use the survey method for this purpose.

4.4 DATA SOURCES A research design is one, which simplifies the framework of plan for the study and adds itself in the quick collection and analysis of the data. It is a blue print that has been filled in completing the study. Data sources are: The data collection methods include both Primary and Secondary collections methods: - Primary data collection Method. - Secondary data collection Method. PRIMARY METHOD: Primary method includes the data collected directly from the authorized members of SMC Global Securities. An appropriate questioner is served to the investing community for collection primary data. And also data collected from discussion with SMC Global Securities officially. SECONDARY METHOD: The secondary data collection method includes the lecturers delivered and material provide by SMC Global Securities Pvt. Ltd., the date collections from the magazines of the NSE, Economics time various books relating the investment, Capital Market and other related topics. The secondary data has been collected through various sources: 

Internet



Books



Newspaper



Magazines



Brochure

43



Journals



Websites

4.4 QUESTIONNAIRE DESIDN / FORMULATION Questionnaires: - A questionnaire consists of a set of questions presented to respondent for their answers. It can be Closed Ended of Open Ended. 

Open Ended: - Allows respondents to answer in their own words & are difficult to Interpret and Tabulate.



Close Ended: - Pre-specify all the possible answers & are easy to Interpret and Tabulate.

Types of question included: 

Dichotomous questions: - Which has only two answers “Yes” or “No”.



Multiple choice questions: - Where respondent is offered more than two choices.



Importance scale: - A scale that rates the importance of some attribute.



Rating scale:- A scale that rates some attribute from “highly satisfied ” to “highly unsatisfied “ and “very inefficient” to “very efficient

But in this project report, the questionnaire includes only closed type questions because it saves respondents time and helps them to understand easily.

4.5 SAMPLE DESIGN A sample design is a definite plan for obtaining a sample from given population. It refers to the techniques or procedures, the researcher would adopt in selecting items for the sample.

i.

Sample element /unit

The primary data was collected through survey that was systematically carried in north-east region of Delhi. The data was collected through questionnaire. The

44

responses of the respondents were recorded in the questionnaire prepared for them.

ii.

Extent

Extent refers to the area from the respondents belong. We have conducted the research mainly on the people of Delhi, that too specifically, north-east region.

iii.

Time frame

Time frame is the time spent on research. The time frame for our research is 8 weeks.

iv.

Sampling technique

Sampling technique refers to the technique or procedure the researcher would adopt in selecting items for the sample. We have used judgmental sampling for our research because gathering information from every individual is not possible.

v. Sample size Sample size refers to the number of respondents. To get a clear view we have conducted our research on 100 people.

4.6 LIMITATIONS OF THE RESEARCH •

The study is confined to On-line trading procedure On-line problem of listing are not covered due to time and to keep the study in manageable limits.

•

The study reflects the awareness of Delhi investors only.

•

The questionnaire might have been filled without much attention to the questions due to lack of time by the respondents.

45

DATA ANALYSIS AND INTERPRETATION 1)

Are you an Investor in stock market : YES

NO

79

16

TABLE 4.1

From the study it is clear that respondents are aware of investing options. 79% of respondents are aware of stock market and other financial investment and 16% of respondents are not aware of investing process in stock market but they are aware of the investments like real estate, mutual funds and bank deposits etc.,

46

2)

INVESTMENT OPTION YOU PREFERRED:

Method of Investing No. of Responses

Equity

Mutual fund

Bank

Real Estate

19

41

44

5

TABLE 4.2

From the study it is clear that investment option preferred is as follows. About 70% of respondents preferred the investment in mutual funds as well as bank deposits due to the safely and investment planning by AMC’s .A moderate number of respondent (about 22%) preferred to invest in stock market .Rest of 8% respondents preferred only real estate investment. This data reveals that the common investor is keenly looking at safely of principal in this volatile stock market.

47

3)

Do you have DEMAT Account. YES

NO

48

47 TABLE 4.3

This question reveals that the number of respondents opened DEMAT account so far of the total respondents spread of half are towards DEMAT account which means only 48 respondents are investing electronic form of share and remaining people are invested in other traditional investment options where there is no need of DEMAT account.

48

4)

For online trading what are the essential for an investor:

PAN Card 24

DEMAT A/c

Bank A/c

All options

24

23

24

TABLE 4.4

Only 24 respondents are aware of total requirements for stock trading and investment remaining 71 respondents does not have awareness on base requirement for stock market investment and they are not actively investing in stocks.

49

5)

Are you a Long term investor or short term investor Long term

Short term

43%

36% TABLE 4.5

From the study it is clear that long term investor or short term investor. →

43% of people preferred to invest in long term, which enables them to wealth

maximization. →

36% of people preferred to invest in short term, by which they want to earn

profit from the fluctuations and volatilizing of stock market remaining 21% of respondents are looking at their traditional investment avenues like bank deposits and real estate to have the liquidity as safely.

50

6)

How long you are trading on-line.

Method of Investing No. of respondents

1 year

1yr - 2 yrs

2yr – 5 yrs

Above 5 yrs

25

45

19

6

TABLE 4.6

From the study it is clear that the how long people trading online. 74% of the respondents are long term users of online trading mechanism. The period of their usage rates from 2 years to 5 years. Hence the data reveals that many of the investors are fully aware of online trading mechanism of various financial products.

51

7)

Is there any difference between On-line trading and Off-line trading.

No

Don’t know

If yes specify

19

36

40

TABLE 4.7

From the study it is clear that different between on-line trading & Off-line trading. 19 respondents (i.e, 20%) does not distinguish between online and offline trading about 38% of respondents are not aware of any differences of online and offline trading system And a major chance of respondents have clearly aware of the differences between online trading and offline trading mechanism.

52

8)

Are you aware of trading timings

Yes

No

Not respondents

46

39

10

TABLE 4.8

From the study it is clear that a ware of trading timings. About 52% of respondents are aware of trading timings of stock exchanges. About 37% of respondents who are not trading only thorough the brokers are not aware of trade timings at remaining 11% of respondents are not responded for this questioner. Hence it is concluded that only the investors executing transactions on their own computers are well aware of trading timings.

53

9)

The On-line trading started in the year of 1995

1999

2000

Don’t know

14

30

39

13

TABLE 4.9

On-line trading started in the year 1999. From the study shows that only 36% of respondents are aware of the actual year of commencement of online trading in the country and rest of 64% respondent are not aware of the fact.

54

10)

How do you access the On-line trading.

By own

By personally meets the broker for instruction

The phone instruction to Broker

36

34

25

TABLE 4.10

From the study it is clear that access the On-line trading. About 37% of respondents are aware of access online trading by their own. About 355 of respondents who are not aces online trading only through brokers for instructions and 25% of respondents are also not aware only thorough phone instruction to broker. Hence it is concluded that the only the investors executing transactions on their own computers so they are well aware of accessing the online trading.

55

11)

Who will regulate the On-line Trading SEBI

RBI

NSDL &CSDL

27

36

18

ALL OF ABOVE 34

TABLE 4.11

From the study it is clear that regulate the On-line trading. Only 27% of respondents are aware of total SEBI for stock trading and investment. Remaining 35% of respondents does not have awareness of rules for basic requirement for stock market.

56

12)

In cash received immediately after placement of order. Received immediately

T+2 days

Don’t know

23

55

17

TABLE 4.12

From the study it is clear that if cash received immediately after placement of order. About 57% of respondents are aware of trading T + 2 days in stock market. Remaining 17% of respondent does not have aware of T + 2 days.

57

13)

The transaction will execute in 1 day

3 days

Trading week

34

30

28

TABLE 4.13

From the study it is clear that transaction will execute in online trading. About 35% of respondents are aware of transactions in online trading only 1 day. About 31% respondents are also aware of transactions for requirement in online trading only 3 days about 28% of respondents are aware of trading week transactions will execute. Hence it is conclude that investors are well known to on executing the transactions only in one day to buy and sell the shares.

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14)

Is there any review system after placing the order:

Yes

No

Don’t know

36

30

24

TABLE 4.14

From the study it is clear that review system after placing order. About 37% of respondents aware of the review system after the placing orders in online trading. About 31% respondents does not aware of review system after the placing the order. About 25% of respondents are not aware of review system after the placing order. Hence it is concluded the investors are well known review the system after the transactions of the placing the order.

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15)

By which means you are getting confirmation of trading. By e-mail directly

By Post

By Broker Email

35

30

20

TABLE 4.15

From the study it is clear that confirmation of trade. About the 37% respondents are aware of confirmation of trading by e-mail directly. About 31% of respondents are aware of confirmation of trading by post. About 21% of respondents are aware of confirmation of trading by broker e-mail. Hence it is concluded that investors are well known that after placing the order they are getting confirmation of trading by e-mail directly.

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16)

Do you feel on – line trading is move convenient that out cry method. Good

Not Convenient

Can’t say

41

19

35

TABLE 4.16

From the study it is clear that On-line trading is convenient the outcry method. About 43% of respondents are well known online trading is more convenient than outcry method. About 20% of respondents are not convenient online trading. About 36% of respondents does not aware of online trading and outcry method. Hence it is concluded that investor are executing transactions through online trading only rather then outcry method.

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17)

Is there any limitation in quality of shares for placing a buying/ selling order.

No

Don’t know

If yes specify

20

25

49

TABLE 4.17

From the study it is clear that limitation in quality of shares for placing buying / selling order. About 21% respondent does not aware of limitations in quality of shares for placing buying/selling orders. About 26% of respondents are not aware of limitations of quality of shares for placing buying/selling order and major chance of respondents have clearly aware of the limitations in quality of shares for placing buying/selling order mechanism. 18)

Is there any difference between common investor and institutional investor.

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No

Can’t say

If yes, Specify

21

22

52

TABLE 4.18

From the study it is clear that different between common investor & institutional investor. About 22% of respondents does not aware of distinguished between common investor and institutional investor. About 23% of respondents are not aware of any difference between common investor & institutional investor and 54% of respondent’s majority have clearly aware of the difference between common investor & institutional investor.

FINDINGS FINDINGS OF THE RESEARCH 63



Lack of transparency in the manual trading system lead to the development of online trading SYSTEM.



It avoids procedural delay involves in the manual trading system and reduced cost.



Facilititates easy surveillance so that there is less scope for speculation.



Provides the investors with the best possible facilities services.



Bring transparency in the operation of the exchange.



Online trading is said to be dealing of securities on net, which forms a single location any where we can service investors across the country.



Online trading facilities easy survivalance so that there are possible facilities.



Trading on the Internet has opened opportunities for real investors, the information on securities is available directly to the investors through online.



Now it provides secure depository system with an extensive network in dematerialized format.

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RECOMMENDATIONS 

Even through the exchanges were mechanized, there are to accessible to rural areas and such the capital market should be made more rural friendly.



Investors lack the knowledge of online trading: SEBI should take steps to educate the investors in this area.

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QUESTIONNAIRE

1) Are you an Investor in stock market? a)Yes

b)

No

2) Investment option you preferred ? a)Method of Investing

b) Equity

c) Mutual fund

d) Bank

e)

Real Estate 3) Do you have Demat Account? a)Yes

b) No

4) For online trading what are the essential for an investor? a)PAN Card

b) DEMAT A/c

c) Bank A/c

d)

All options

5) Are you a Long term investor or short term investor? a)

Long term

b)

Short term

6) How long you are trading on-line? a)Method of Investing

b) 1 year

c) 1yr - 2 yrs d) 2yr – 5 yrs e) Above

5 yrs

7) Is there any difference between On-line trading and Off-line trading? a)No

b) Don’t know

c) If yes specify

8) Are you aware of trading timings? a)Yes

b) No

c) Not respondents

9) The On-line trading started in the year of a)1995

b) 1999

c) 2000

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d) Don’t know

10) How do you access the On-line trading? a)By own

b) By personally meets the broker for instruction

c) The

phone instruction to Broker 11) Who will regulate the On-line Trading? a)SEBI

b) RBI

c) NSDL &CSDL

d) ALL OF

ABOVE

12) Is cash received immediately after placement of order? a)Received immediately

b) T+2 days

c) Don’t know

13) The transaction will execute in? a)1 day

b) 3 days

c) Trading week

14) Is there any review system after placing the order? a)Yes

b) No

c) Don’t know

15) By which means you are getting confirmation of trading? a)By email directly

b) By Post

c) By Broker Email

16) Do you feel on – line trading is move convenient that outcry method. a)Good

b) Not Convenient

c) Can’t say

17) Is there any limitation in quality of shares for placing a buying/ selling order? a)No

b) Don’t know

c) If yes specify

18) Is there any difference between common investor and institutional investor? a) No

b) Can’t say

c) If yes, Specify

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BIBLIOGRAPHY Books & Magazines ● Kothari.C.R, Research Methodology Methods And Techniques, By New Age Publishers, Edition IV. ● Broachers and Pamphlets of SMC Global Securities Ltd.. • • •

Wise Money Money Wise Be Wise Morning Mantra

Websites •

www.bseindia.com

•

www.nseindia.com

•

www.smcindiaonline.com

•

www.google.com

•

www.icicidirect.com

•

www.indiabulls.com

•

www.reliancemoney.com

•

www.hdfcsec.com

•

www.kotaksecurities.com

•

www.wikipedia.org

•

http://www.woopidoo.com/business_quotes/stock-market-quotes.htm

•

www.ncfm.org

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[email protected]

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