Copy (3) of Snehil_project

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Summer training project titleon

FUTURE PROSPECTS OF BROKING FIRM

A report submitted to RELIGARE SECURITIES LIMITED, Varanai, as a partialfulfillment of full time Post graduate diploma in management.

Submitted To: Submitted By:Mr. Sharad Vij SnehilSrivastavaSales Manager, Summer TraineeReligare Securities LimitedVaranasi

RELIGARE SECURITIES LIMITED

3rd floor, Kuber Complex, Rathyatra, Varanasi

Website: www.religareenterprises.com

www.religareonline.com

PREFACE

1
http://www.religareenterprises.com/http://www.religareenterprises.com/


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All students learn theoretical subjects in their classroom, but as we are the management

students, apart from theoret ical s tudies we need to get a deeper insight into the practical

aspects of those theories by working as a part of organization during our summer training.

Training is a period in which a student can apply his theoret ical knowledge in pract ical

f ie ld . Bas ical ly p ract ica l knowledge and theoret ical knowledge have a very b road

difference.

So thi s t ra in ing has h igh impor tance as to know how both the aspec ts a re app li ed

together.

The study of management acquires most crucial posi t ion in the business administrat ion.

In o rder to be success fu l, i t i s necessa ry to g ive p rior ity to the management in an

organ izat ion . But i t cant be den ied tha t the s tudy o f management would be more

educational, materialistic and even more interesting, if i t is to be paired with the work in

organization as an employee.

The training session helps to get details about the working process in the organization. It

has helped me to know about the organizational management and discipline, which has its

own importance. The training is going to be a lifelong experience.

Management in Ind ia i s heading towards a bet te r p ro fess ion as compared to o ther

professions. The demand for professional managers is increasing day by day. To achieve

profess ion competence , manager ought to be fu lly occupied wi th theory and pract ica l

exposure of management. A comprehensive understanding of the principle wil l increases

the ir dec is ion-making abi li ty and sha rpens the ir too ls for thi s purpose . Dur ing the

curriculum of management programmers a student has to attain a practical exposure of an

organization on live project in addition to theory he/she studies.

This report is about the practical training done at Religare Securities Limited (Varanasi)

d ur in g t he c ur ri cu lu m o f P GD M ( Bu si ne ss M an ag em en t) f ro m I sh an I ns ti tu te o f

Management and Technology, Greater Noida.

CERTIFICATE2


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This is to cert i fy that the project work done on FUTURE PROSPECTS OF BROKING

FIRM submitted to Ishan Inst i tu te of Management &Technology, Greater Noida by

Snehil Srivastava, Enr-15061, in part ial fulf i l lment of the requirement for the award of

degree of Post Graduate diploma in Business Management, is a bonafide work carried out

by her under my supervision and guidance. This work has not been submitted anywhere

else for any other degree/diploma.

Date: Seal/Stamp of the Guide Name of the Guide

Mr. Sharad Vij

(Sales Manager)

Adress:3 r dfloor,

KuberMarket

Rathyatra, Varanasi.

ACKNOWLEDGMENT

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Here I take the opportunity to express my grat i tude to al l of them, who in some or the

other way helped me to accomplish this Project . The project s tudy cannot be completed

without their guidance, assistance, inspiration and co-operation.

For success fu lly accompl ishment o f t ask apart f rom hard work the mos t impor tant

requisi te is the r ight direct ion and guidance. And for a student these become the major

part for the s tudy . In Religare Secur it ies L imi ted (varanas i) th is r ight d i rec tion and

guidance was provided by my guide and a l l the execut ives of the branch, in form of

necessary information and exhibits that give me a great help in completing my work.

First of al l I would l ike to thanks Religare Securi t ies Limited for giving me such a great

oppor tuni ty o f s tudying such a vas t top ic as wel l a s cha ll enging top ic i .e . Fu ture

Prospects of Broking Firm .

A special thanks to Mr. Sharad Vij (Sales Manager) under whom I conducted this study,

for his able guidance in get t ing my project completed. And I also thanks to Mr. Rajesh

Jaiswal & Mr. Deepak Jaiswal (sales off icer) & special thanks to our AVP-Mr. Gaurav

Kumar and all other employees who helped me to understand practically my topic time to

time in making project report. Only because of these people I learned so many things and

with their supports I finished my project successfully.

L as t ly I express my gra t i tude to my paren t s and who have been a mora l suppor t to

t hr ou gh ou t m y l i fe . I n a dd it io n I w ou ld l ik e t o t ha nk s t o t he I sh an I ns ti tu te o f

Management and Technology to give me permission for training so that I will get practical

knowledge in my particular topic, i .e, Future Prospects Of Broking Firms.

Snehil Srivastava

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DECLARATION

The summer training project Future Prospects Of Broking Firm . has been completed

by Snehil Srivastava, Ishan Institute of Management and Technology, Greater Noida

under the guidance of Mr. Sharad Vi j (Sales Manager) in Rel igare Secur i t ies L td .

(Varanasi). It is the original project and have followed the guidance provided by the

ins t i tu t ion. This repor t has never been submit ted anywhere e lse for award of any

degree or diploma.

The compilat ion of al l information and data are accurate. If i t is found that anything is

wrong and false, the institute can take any penal action against me.

Submitted by:

Snehil Srivastava

EXECUTIVE SUMMARY

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Being a PGDM (BUSINESS MANAGEMENT) student it was the great pleasure for me that

I was assigned the most relevant t i t le, as regards Summer Training project , i .e . Future

Prospects Of Broking Firm.

To execute the assigned task, I had to first learn about the workingof the share market & the process of online trading . I have to gain the knowledge of that

practical world is more tough and different as it seen in theories.

Fur ther , i n p ro ject I l ea rned about the beg inning o f t rading

process, the stock market origin, the working on terminals for doing online trading. I also

g ai ne d k no wl ed ge a bo ut t he I nd ia n e co no my , t he g ro wt h o f b ro ki ng f ir ms & t he

competition existing between the firms.

Further , I also gained the pract ical knowledge in the company

so cal led Religare Securi t ies Limited, about i ts working process, deal ings with cl ients ,

back office work & found that the process is successfully carried out with the involvement

of each & every employee. I got to learn how the process of online trading is carr ied out

& how shares are bought & sold through a computer terminal.

While deal ing wi th c l ients , thei r problems, querries I learnt a lo t about the working

process & the hinderences which a company has to face.

Religare Securi ties Limited is one of the leading broking f irms which is s tanding strong

despi te a tough competi t ion f rom the competi tors . I t has i t s unique qual i ties which

dist inguishes i ts image from other broking f irms. The working environment in rel igare

was very good though at t imes we had to face pressure of work, which was also a good

experience & gave me an idea of the environment of the corporate world.

LITERATURE REVIEW

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India , a t present has become a g iant corpora te game reserve . So Indian companies are

sprucing up their acts like never before to face up to the realities of fiercely competitive

pos t- libe ra li za tion e ra . Gone a re the days o f monopol ies and w ith the adven t o f

consumerism more and more business corporat ions are beginning to real ize that the

ultimate cutting edge of any business over its rival will be provided, by its people.

Provision of providing broking service is a very crucial activity. It has a lot of

legal compl ica t ions & var ious norms, ru les n regula t ions have to be fo l lowed. I have

real ized th is fac t af ter complet ion of my summer t ra in ing projec t . Despi te of var ious

difficulties and limitations faced during my summer training project on the topic Future

Prospects Of Broking F i rm, I have t r ied my level bes t to f ind out the most re levant

information from the organization to complete the assignment that was given to me. After

complet ion of my summer t ra in ing projec t I ga ined lo t of exper iences in the f ie ld of

securities market. I got the opportunity to deal with various people. This summer training

project has given me the opportunity to have first experience in the corporate world.

Theoretical knowledge of a person remains dormant until i t is used and tested in

the practical life. Through training I got an opportunity to apply my theoretical knowledge

that I have acquired in my classroom to the real business world. In spite of few limitations

and hindrances in the summer t ra in ing projec t I found that even though the work waschallenging but was frui tful in many ways. I t gives enough knowledge about the online

trading process undertaken by the company. I t provided the pract ical knowledge of the

working process of Religare Securi t ies Limited . Also this summer training project has

enhanced my capabil i ty in order to manage business ef fec tively and in my career in

future.

Moreover it was the first experience to mould the theoretical knowledge into

practicality. In our course material whatever we read about stock market, research work,

growth pattern of the Indian f inancia l market, the emergence of broking f i rms e tc, a l l

were seems to be factual and I tried to apply those classrooms learning into my corporate

life. So through this training I got the realization that although our organizational working

style was quite pract ical but i t was ei ther an exaggerate form of our bookish theory or

completely based upon the very fact of our bookish theory.

TABLE OF CONTENTS7


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S.No Topics Page No.1 Stock market

1.1- History of trading in share market- paper form of trading

1.2- Emergence of online trading- benefits

1.3- Role of SEBI

9-17

2 Depository system

2.1- NSDL ( National securities depository limited)

2.2- CDSL ( Central depository services( india) limited )

18-23

3

Depository participants & role of broking firms.

24-25

4 Position of broking firms in consecutive decade

4.1- In 80s

4.2- In 90s4.3- In 2000s

26-33

5 Effect of other sources of investments on theamount invested in share market

34-35

6 About Religare Securities Limited.

6.1- Company profile

6.2- Organisational structure

6.3- Products & services

6.4- Promotional strategies & competition with other broking firms

36-54

7 SWOT Analysis of Religare Securities Limited 55-57

8 Effect of changes in world economy on the future prospects of brokingfirms in india9.1- The american economic downfall9.2- The present european crisis

58-64

9 The Darker side- Scams done by broking firms & brokers 65-68

10 Findings

Suggestions

Llimitations

69-71

11 Conclusion

Bibliography

72-73

CHAPTER-1

STOCK MARKET

A stock market orequity market is a public market (a loose network of economic transactions, not aphysical facility or discrete entity) for the trading of company stock and derivatives at an agreed price; these

are securities listed on a stock exchange as well as those only traded privately.

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The stocks are listed and traded on stock exchanges which are entities of a corporation or mutual

organization specialized in the business of bringing buyers and sellers of the organizations to a listing of

stocks and securities together. The largest stock market in the United States, by market capitalisation is the

New York Stock Exchange, NYSE, while in Canada, it is the Toronto Stock Exchange. Major European

examples of stock exchanges include the London Stock Exchange, Paris Bourse, and the Deutsche Brse.

Asian examples include the Tokyo Stock Exchange, the Hong Kong Stock Exchange, the Shanghai Stock

Exchange, and the Bombay Stock Exchange.

The importance and reach of stock markets and exchanges is as broad as it is extensive. The major areas

global stock markets deal with are listed company stocks, as well as securities and derivatives. Company

stocks are included in the list of the stock exchanges, and are freely traded in stock markets around the

world.

Around the world, business organizations, small to large investors, financial organizations, and governments

of different nations are all major participants in stock market trading activities.

For the business enterprises, corporations, and governments, the world stock markets constitute one of the

major sources of funding as well as being an openly visible indicator to investors with regards to the

financial health

Business entities that take part in stock market activities issue securities that may then be sold to the public.

Capital is collected in this way, and these funds are primarily used for the expansion of a companys

business operations. The volume of transactions in any stock market depends on the liquidity of that

particularmarket.

Together, the performance of all the worlds stock markets is directly responsible for a significant amount of

the worlds economic condition whether it be healthy, ailing, or trending sideways. In general, stock

market growth is a leading indicator that the state of an economy is flourishing, while declining trends

indicate of economic slowdown. Commentators suggest that stock markets often predict what will happen in

the economy of that country around six months later.

The stock market is one of the most important sources for companies to raise money. This allows

businesses to be publicly traded, or raise additional capital for expansion by selling shares of ownership of

the company in a public market. The liquidity that an exchange provides affords investors the ability to

quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less

liquid investments such as real estate.

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http://opt/scribd/conversion/tmp/scratch27049//E:/project/World%20Stock%20Markets%20and%20Exchanges.htmhttp://www.economywatch.com/stock-markets-in-world/http://opt/scribd/conversion/tmp/scratch27049//E:/project/World%20Stock%20Markets%20and%20Exchanges.htmhttp://www.economywatch.com/stock-markets-in-world/


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History has shown that the price of shares and other assets is an important part of the dynamics of economic

activity, and can influence or be an indicator of social mood. An economy where the stock market is on the

rise is considered to be an up-and-coming economy. In fact, the stock market is often considered the primary

indicator of a country's economic strength and development. Rising share prices, for instance, tend to be

associated with increased business investment and vice versa. Share prices also affect the wealth ofhouseholds and their consumption. Therefore, central banks tend to keep an eye on the control and behavior

of the stock market and, in general, on the smooth operation of financial system functions.

1.1-HISTORY OF TRADING IN SHARE MARKET

In 12th century France the courratiers de change were concerned with managing and regulating the debts of

agricultural communities on behalf of the banks. Because these men also traded with debts, they could be

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called the first brokers. A common misbelief is that in late 13th century Bruges commodity traders gathered

inside the house of a man called Van der Beurze, and in 1309 they became the "Brugse Beurse",

institutionalizing what had been, until then, an informal meeting, but actually, the family Van der Beurze

had a building in Antwerp where those gatherings occurred; the Van der Beurze had Antwerp, as most of the

merchants of that period, as their primary place for trading. The idea quickly spread around Flanders andneighboring counties and "Beurzen" soon opened in Ghent and Amsterdam.

In the middle of the 13th century, Venetian bankers began to trade in government securities. In 1351 the

Venetian government outlawed spreading rumors intended to lower the price of government funds. Bankers

in Pisa, Verona, Genoa and Florence also began trading in government securities during the 14th century.

This was only possible because these were independent city states not ruled by a duke but a council of

influential citizens. The Dutch later started joint stock companies, which let shareholders invest in business

ventures and get a share of their profits - or losses. In 1602, the Dutch East India Company issued the first

share on the Amsterdam Stock Exchange. It was the first company to issue stocks and bonds.

The Amsterdam Stock Exchange (or Amsterdam Beurs) is also said to have been the first stock

exchange to introduce continuous trade in the early 17th century. The Dutch "pioneered short

selling, option trading, debt-equity swaps, merchant banking, unit trusts and other speculative instruments,

much as we know them". There are now stock markets in virtually every developed and most developing

economies, with the world's biggest markets being in theUnited

Kingdom, Japan, India, China, Canada, Germany, France, South Korea and the Netherlands.

In India:- One of the oldest stock markets in Asia, the Indian Stock Markets have a 200 years oldhistory .

18th

Century

East India Company was the dominant institution and by end of the century, business in its

loan securities gained full momentum.

1830's Business on corporate stocks and shares in Bank and Cotton presses started in Bombay.

Trading list by the end of 1839 got broader

1840's Recognition from banks and merchants to about half a dozen brokers

1850's Rapid development of commercial enterprise saw brokerage business attracting morepeople into the business

1860's The number of brokers increased to 60

1860-61 The American Civil War broke out which caused a stoppage of cotton supply from United

States of America; marking the beginning of the "Share Mania" in India

1862-63 The number of brokers increased to about 200 to 250

1865 A disastrous slump began at the end of the American Civil War (as an example, Bank of

Bombay Share which had touched Rs. 2850 could only be sold at Rs. 87)

Pre-Independance Scenario - Establishment of Different Stock Exchanges

1874 With the rapidly developing share trading business, brokers used to gather at a street (now

well known as "Dalal Street") for the purpose of transacting business.

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1875 "The Native Share and Stock Brokers' Association" (also known as "The Bombay Stock

Exchange") was established in Bombay

1880's Development of cotton mills industry and set up of many others

1894 Establishment of "The Ahmedabad Share and Stock Brokers' Association"

1880 - 90's Sharp increase in share prices of jute industries in 1870's was followed by a boom in teastocks and coal

1908 "The Calcutta Stock Exchange Association" was formed

1920 Madras witnessed boom and business at "The Madras Stock Exchange" was transacted with

100 brokers.

1923 When recession followed, number of brokers came down to 3 and the Exchange was closed

down

1934 Establishment of the Lahore Stock Exchange

1936 Merger of the Lahore Stock Exchange with the Punjab Stock Exchange

1937 Re-organisation and set up of the Madras Stock Exchange Limited (Pvt.) Limited led byimprovement in stock market activities in South India with establishment of new textile

mills and plantation companies

1940 Uttar Pradesh Stock Exchange Limited and Nagpur Stock Exchange Limited was

established

1944 Establishment of "The Hyderabad Stock Exchange Limited"

1947 "Delhi Stock and Share Brokers' Association Limited" and "The Delhi Stocks and Shares

Exchange Limited" were established and later on merged into "The Delhi Stock Exchange

Association Limited".

Post Independance Scenario

The depression witnessed after the Independance led to closure of a lot of exchanges in the country. Lahore

Estock Exchange was closed down after the partition of India, and later on merged with the Delhi Stock

Exchange. Bangalore Stock Exchange Limited was registered in 1957 and got recognition only by 1963.

Most of the other Exchanges were in a miserable state till 1957 when they applied for recognition under

Securities Contracts (Regulations) Act, 1956. The Exchanges that were recognized under the Act were:

Many more stock exchanges were established during 1980's, namely:

Cochin Stock Exchange (1980)

Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982)

Pune Stock Exchange Limited (1982)

Ludhiana Stock Exchange Association Limited (1983)

Gauhati Stock Exchange Limited (1984)

Kanara Stock Exchange Limited (at Mangalore, 1985)

Magadh Stock Exchange Association (at Patna, 1986)

Jaipur Stock Exchange Limited (1989)

Bhubaneswar Stock Exchange Association Limited (1989)

Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989) Vadodara Stock Exchange Limited (at Baroda, 1990)

Coimbatore Stock Exchange

Meerut Stock Exchange

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1. Bombay

2. Calcutta

3. Madras

4. Ahmedabad

5. Delhi

6. Hyderabad

7. Bangalore

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At present, there are twenty one recognized stock exchanges in India which does not include the Over TheCounter Exchange of India Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL).

Government policies during 1980's also played a vital role in the development of the Indian Stock Markets.There was a sharp increase in number of Exchanges, listed companies as well as their capital, which isvisible from the following table:

S

.

N

o

.

As on 31st December

1

9

4

6

1

9

6

1

1

9

7

1

1

9

7

5

1

9

8

0

1

9

8

5

19

91

19

95

1 No. of Stock Exchanges 7 7 8 8 91

420 22

2 No. of Listed Cos.

1

1

2

5

1

2

0

3

1

5

9

9

1

5

5

2

2

2

6

5

4

3

4

4

62

29

85

93

3 No. of Stock Issues of Listed Cos.

1

5

06

2

1

11

2

8

38

3

2

30

3

6

97

6

1

74

89

67

11

78

4

4 Capital of Listed Cos. (Cr. Rs.)

2

7

0

7

5

3

1

8

1

2

2

6

1

4

3

9

7

3

9

7

2

3

32

04

1

59

58

3

5Market value of Capital of Listed Cos.

(Cr. Rs.)

9

7

1

1

2

9

2

2

6

7

5

3

2

7

3

6

7

5

0

2

5

3

0

2

11

02

79

47

81

21

6Capital per Listed Cos. (4/2) (Lakh

Rs.)

2

4

6

3

1

1

3

1

6

8

1

7

5

2

2

4

51

4

69

3

7Market Value of Capital per Listed

Cos. (Lakh Rs.) (5/2)

8

6

1

0

7

1

6

7

2

1

1

2

9

8

5

8

2

17

70

55

64

8Appreciated value of Capital per

Listed Cos. (Lakh Rs.)

3

5

8

1

7

0

1

4

8

1

2

6

1

7

0

2

6

0

34

4

80

3

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1.2 EMERGENCE OF ONLINE TRADING

Online trading in India is the internet based investment activity that involves no direct involvement of thebroker. There are many leading online trading portals in India along with the online trading platforms of thebiggest stock houses like the National stock exchange and the Bombay stock exchange. The total portion ofonline share trading India has been found to have grown from just 3 per cent of the total turnover in 2003-04to 16 per cent in 2006-07.

Online trading is the service offered on the internet for purchase and sales of shares. In the real world you

place orders on your stock broker either verbally or in a written form. In online trading you will access a

stock brokers website through your internet enabled PC and place orders through the brokers internet based

trading engine. These orders are routed to the stock exchange without manual intervention and executed

their own in the matter of a few seconds. From the past two years the volume of the internet trading has increased largely.Traditionally stock trading is done through stock brokers, personally or through telephones. As number ofpeople trading in stock market increase enormously in last few years, some issues like location constrains,busy phone lines, miss communication etc start growing in stock broker offices. Information technology

(Stock Market Software) helps stock brokers in solving these problems with Online Stock Trading.

Online Stock Market Trading is an internet based stock trading facility. Investor can trade shares through awebsite without any manual intervention from Stock Broker.

In this case these Online Stock Trading companies are stock broker for the investor . They are registeredwith one or more Stock Exchanges. Mostly Online Trading Websites in India trades in BSE and NSE.

There are two different type of trading environments available for online equity trading.

1. Installable software based Stock Trading Terminals

These trading environment requires software to be installed on investors computer. These softwareare provided by the stock broker. These softwares require high speed internet connection. This kindof trading terminals are used by high volume intra day equity traders.

Advantages:

o Orders directly send to stock exchanges rather then stock broker. This makes order execution

very fast.o It provides almost each and every information which is required to a trader on a single screen

including stock market charts, live data, alerts, stock market news etc.

Disadvantages:

o Location constrain - You cannot trade if you are not on the computer where you have

installed trading terminal software.

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o It requires high speed internet connection.

o These trading terminals are not easily available for low volumn share traders.

2. Web (Internet) based trading application

These kind of trading environment doesn't require any additional software installation. They are likeother internet websites which investor can access from around the world through normal internetconnection.

Below are few advantages and disadvantages of Online Stock Market Trading :-

Advantages of Online Stock Trading :

o Real time stock trading without calling or visiting broker's office.

o Display real time market watch, historical datas, graphs etc.

o Investment in IPOs, Mutual Funds and Bonds.o Check the trading history; demat account balance and bank account balance at any time.

o Provide online tools like market watch, graphs and recommendations to do analysis of stocks.

o Place offline orders for buying or selling stocks.

o Set alert to inform you certain activity on the stock through email or sms.

o Customer service through Email or Chat.

o Secure transactions.

Disadvantages of Online Stock Trading :

o

Website performance - sometime the website is too slow or not enough user friendly.o Little long learning curve especially for people who don't know much about computer and

internet.o Brokerages are little high.

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1.3-ROLE OF SEBI

On April 12, 1988, the Securities and Exchange Board of India (SEBI) was established with a dual objectiveof protecting the rights of small investors and regulating and developing the stock markets in India

Need Of Establishment Of SEBI: In 1992, the Bombay Stock Exchange (BSE),the leading stockexchange in India, witnessed the first major scam masterminded by Harshad Mehta. Analysts unanimouslyfelt that if more powers had been given to SEBI, the scam would not have happened.

As a result, the Government of India (GoI) brought in a separate legislation by the name of 'SEBI Act 1992'and conferred statutory powers to it. Since then, SEBI had introduced several stock market reforms. Thesereforms significantly transformed the face of Indian stock markets. SEBI introduced on-line trading anddemat of shares which did away with the age-old paper-based trading, thus bringing more transparency intothe trading system.

Analysts and experts appreciated SEBI for these reforms. One stock market analyst said, "I'm surethat most of us would agree that SEBI has handled the challenges exceptionally well." In spite of SEBI'scapital market reforms and increasing regulatory powers over the years, analysts felt that it had failed

miserably in stopping stock market scams. In the ten years after the Mehta scam, several scams came tolight, casting doubt on the efficiency of SEBI as a regulatory body.However, a few analysts felt there was a need to confer more powers to SEBI to stop these scams. Oneanalyst commented, "It's rather daunting task of putting in place a regulatory framework for the marketagainst all odds."

Between 1987 and 1991, 12% of household savings were invested in equity and corporate debenturesas compared to only 7% between 1982 and 1985, signifying the increasing number of retail investors in thestock market. With the increasing interest of retail investors, many dubious companies that did not have anyreal plans to do business raised money by issuing shares, only to vanish at a later date. These malpractisestook on significant proportions & grievances of retail investors increased alarmingly. The investors turned to

govt. of india for redressal. However GOI was rather helpless in solving the retail investors grievances insuch large volumes because of lack of proper penal provisions. The government, therefore, constituted SEBIas a supervisory body to regulate and promote security markets...

Mission of SEBI:-Securities & Exchange Board of India (SEBI) formed under the SEBI Act, 1992 withthe prime objective of

Protecting the interests of investors in securities,

Promoting the development of, and

Regulating, the securities market and for matters connected therewith or incidental thereto.

Role Of SEBI:-

A). review of the market operations, organizational structure and administrative control ofthe exchange

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All stock exchanges are required to be Body Corporates

The exchange provides a fair, equitable and growing market to investors.

The exchanges organisat ion, systems and pract ices are in accordance withthe Securities Contracts (Regulation) Act (SC(R) Act), 1956.

B) Reg is tr at ion And Regulat ion Of T he Working Of Intermediar i es l ike merchan tbankers ,under writers, portfolio managers, stock brokers, etc.

Regulates the working of the deposi tories [part icipants] , custodians of securi t ies,foreign institutional investors, credit rating agencies and such other intermediaries

C) Regis tra tion And Regulat ion Of Mutual Funds , Venture Capi ta l Funds &Collective Investment Schemes

-AMFI-Self Regulatory Organizat ion- 'promoting and protect ing the interest of mutual funds and thei r unit -holders , increas ing publ ic awareness of mutual

funds , and serving the inves tors' in teres t by defin ing and maintaining highethical and professional standards in the mutual funds industry ' .

-Every mutual fund must be registered with SEBI and registration is granted onlywhere SEBI is satisfied with the background of the fund.

SEBI has the author i ty to inspect the books of accounts , records and documents of amutual fund, its trustees, AMC and custodian where it deems it necessary.D) Prohibiting Fraudulent And Unfair Trade Practices In the Securities Market

SEBI is vested with powers to take act ion against these pract ices relat ing to securi t ies

market manipulation and misleading statements to induce sale/purchase of securities.

E) Inspection And Inquiries

F) Regulating Substantial Acquisition Of Shares And Take-overs.

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CHAPTER-2

DEPOSITORY SYSTEM

"Depository" means a company formed and registered under the Companies Act, 1956 and whichhas been granted a certificate of registration under sub-section (1A) of section 12 of the Securitiesand Exchange Board of India Act, 1992. Its a bank or company which holds funds or securitiesdeposited by others & where exchange of these securities takes place.

A Depository facilitates holding of securities in the electronic form and enables securitiestransactions to be processed by book entry by a Depository Participant (DP), who as an agent of thedepository, offers depository services to investors. According to SEBI guidelines, financialinstitutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs. The investor who isknown as beneficial owner (BO) has to open a demat account through any DP for dematerialisationof his holdings and transferring securities.

Depository is an institution or a kind of organization which holds securities with it, in which tradingis done among shares, debentures, mutual funds, derivatives, F&O and commodities. Theintermediatories perform its actions in various kinds of securities at Depository on the behalf of itsclients. These intermediatories are called Dipositories Participants. There are basically two kinds ofdepositories in India. One is the National Securities Depository Limited (NSDL) and the other isthe Central Depository Service Limited(CDSL). Every Depository Participant(DP) needs to beregistered under this Depository before starting operation or trade in the market.

How do depository works:-

Depository interacts with its clients / investors through its agents, called Depository

Participants normally known as DPs.

For any investor / client, to avail the services provided by the Depository, has to open depository

account, known as Demat A/c, with any of the DPs.

Demat Account Opening

A demat account is opened on the same lines as that of a Bank Account. Prescribed account opening

forms are available with the DP, needs to be filled in. Standard agreements are to be signed by the

Client and the DP, which details the rights and obligations of both parties. Along with the form the

client requires to attach Photographs of Account holder, Attested copies of proof of residence and

proof of identity needs to be submitted along with the account opening form.

In case of Corporate clients, additional attachments required are - true copy of the resolution for Demat a/c

opening along with signatories to operate the account and true copy of the Memorandum and Articles of

Association is to be attached.

Services provided by Depositories:-

Dematerialisation (usually known as demat) is converting physical certificates to electronic form

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Rematerialisation, known as remat, is reverse of demat, i.e. getting physical certificates from the

electronic securities

Transfer of securities, change of beneficial ownership

Settlement of trades done on exchange connected to the Depository.

Benefits of Depository System

In the depository system, the ownership and transfer of securities takes place by means of electronicbook entries.

Bad deliveries could be eliminated since shares are registered in the electronic form that can not bemutilated easily.

Elimination of all risks associated with physical certificates

Dealing in physical securities has associated security risks of theft of stocks, mutilation ofcertificates, and loss of certificates during movements through and from the registrars etc. Such

problems do not arise in the depository environment. No stamp duty for transfer of any kind of securities in the depository.

This waiver extends to equity shares, debt instruments and units of mutual funds etc in thedepository. Thus, cost can be reduced.

Immediate transfer and registration of securities In the depository environment, once the securitiesare credited to the investors account on pay out, he becomes the legal owner of the securities. Thereis no further need to send it to the company's registrar for registration. Having purchased securities inthe physical environment, the investor has to send it to the company's registrar so that the change ofownership can be registered and this usually takes many months. So long as the shares are with thecompany or its agent for transfer, the investor could not sell it in the market even the price is veryattractive and this increases his opportunity cost. To overcome this problem, investors used to keep

shares without effecting ownership transfer but this is risky because they will not get theirentitlements for dividend, bonus, rights etc, if any, and the share in question will become baddelivery if one book closure is missed.

Faster settlement cycle: The exclusive demat segments follow rolling settlement cycle of T+2 i.e. thesettlement of trades will be on the 5th working day from the trade day. This will enable fasterturnover of stock and more liquidity with the investor.

Faster disbursement of non cash corporate benefits: NSDL provides for direct credit of non cashcorporate entitlements like rights, bonus etc to an investor's account, thereby ensuring fasterdisbursement and avoiding risk of loss of certificates in transit.

Low brokerage for trading in dematerialised securities Brokers provide this benefit to investors as

dealing in dematerialised securities reduces their back office cost of handling paper and also Eliminates the risk of being the introducing broker: Elimination of problems related to address

Change, Transmission etc In case of change of address or transmission of demat shares, investors are saved from undergoing

the entire change procedure with each company or registrar. Investors have to only inform their DPwith all relevant documents and the required changes are effected in the database of all thecompanies, where the investor is a registered holder of securities.

Elimination of problems related to selling securities on behalf of a minor. A natural guardian is notrequired to take court approval for selling demat securities on behalf of a minor.

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2.1- NSDL (National Securities Depository Limited)

About NSDL

Although India had a vibrant capital market which is more than a century old, the paper-based settlement oftrades caused substantial problems like bad delivery and delayed transfer of title till recently. The enactmentof Depositories Act in August 1996 paved the way for establishment of NSDL, the first depository in India.This depository promoted by institutions of national stature responsible for economic development of thecountry has since established a national infrastructure of international standards that handles most of thesecurities held and settled in dematerialised form in the Indian capital market.

Using innovative and flexible technology systems, NSDL works to support the investors and brokers in thecapital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces bydeveloping settlement solutions that increase efficiency, minimise risk and reduce costs. At NSDL, we playa quiet but central role in developing products and services that will continue to nurture the growing needs ofthe financial services industry.

In the depository system, securities are held in depository accounts, which is more or less similar to holdingfunds in bank accounts. Transfer of ownership of securities is done through simple account transfers. Thismethod does away with all the risks and hassles normally associated with paperwork. Consequently, the costof transacting in a depository environment is considerably lower as compared to transacting in certificates.

Basic Services

Under the provisions of the Depositories Act, NSDL provides various services to investors and otherparticipants in the capital market like, clearing members, stock exchanges, banks and issuers of securities.These include basic facilities like account maintenance, dematerialisation, rematerialisation, settlement oftrades through market transfers, off market transfers & inter-depository transfers, distribution of non-cashcorporate actions and nomination/ transmission

The depository system, which links the issuers, depository participants (DPs), NSDL and clearingcorporation/ clearing house of stock exchanges, facilitates holding of securities in dematerialised form andeffects transfers by means of account transfers. This system which facilitates scripless trading offers variousdirect and indirect services to the market participants.

Account Maintenance

To avail of the various services offered by NSDL an investor/ a broker/ an approved intermediary (forlending & borrowing) has to open a NSDL depository account with any of its DPs.

Depository accounts are of three types:

Beneficiary account: An investor who wants to hold securities in dematerialised (demat) form andreceive or deliver securities by inter-account transfers must have a depository account called

beneficiary account with a DP of his choice.

Clearing member account: Member brokers of those stock exchanges which have established electronicconnectivity with NSDL need to open a clearing member account, with a DP of his choice, to clear and settletrades in the demat form. This account is popularly known as Settlement account or "Pool account". This

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account is meant only to transfer securities to and receive securities from the clearing corporation/ house andhence, the member broker does not have any ownership (beneficiary) rights over the shares held in such anaccount.

Further, clearing members of stock exchanges permitting Automatic Lending or Borrowing Mechanism(ALBM) transactions can request for a "clearing member ALBM" account to participate in ALBM

transactions. These additional CM Accounts maintained for the purpose of ALBM transactions will have tobe necessarily opened with the clearing house of the concerned stock exchange e.g. a BSE clearing member's"normal clearing member account" could be with a DP XYZ, but his "clearing member ALBM" account willhave to necessarily be with the clearing house of the BSE.

Promoters / Shareholders

NSDL is promoted by Industrial Development Bank of India Limited (IDBI) - the largest development bankof India, Unit Trust of India (UTI) - the largest mutual fund in India and National Stock Exchange of IndiaLimited (NSE) - the largest stock exchange in India. Some of the prominent banks in the country have taken

a stake in NSDL.

Promoters-

Industrial Development Bank of India Limited (Now, IDBI Bank Limited)

Unit Trust of India (Now, Adminstrator of the Specified Undertaking of the Unit Trust of India)

National Stock Exchange of India Limited

Other Shareholders-

State Bank of India

HDFC Bank Limited

Deutsche Bank A.G.

Axis Bank Limited

Citibank N.A.

Standard Chartered Bank

The Hongkong and Shanghai Banking Corporation Limited

Oriental Bank of Commerce

Union Bank of India

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2.2- CDSL ( Central Depository Services (India) Limited )A Depository facilitates holding of securities in the electronic form and enables securities transactions to be

processed by book entry by a Depository Participant (DP), who as an agent of the depository, offersdepository services to investors. According to SEBI guidelines, financial institutions, banks, custodians,stockbrokers, etc. are eligible to act as DPs. The investor who is known as beneficial owner (BO) has toopen a demat account through any DP for dematerialisation of his holdings and transferring securities.

The balances in the investors account recorded and maintained with CDSL can be obtained through the DP.The DP is required to provide the investor, at regular intervals, a statement of account which gives thedetails of the securities holdings and transactions. The depository system has effectively eliminated paper-

based certificates which were prone to be fake, forged, counterfeit resulting in bad deliveries. CDSL offersan efficient and instantaneous transfer of securities.

CDSL was set up with the objective of providing convenient, dependable and secure depository services ataffordable cost to all market participants. Some of the important milestones of CDSL system are:

CDSL received the certificate of commencement of business from SEBI in February, 1999.Honourable Union Finance Minister, Shri Yashwant Sinha flagged off the operations of CDSL on July 15,1999.Settlement of trades in the demat mode through BOI Shareholding Limited, the clearing house of BSE,started in July 1999.All leading stock exchanges like the National Stock Exchange, Calcutta Stock Exchange, Delhi StockExchange, The Stock Exchange, Ahmedabad, etc have established connectivity with CDSL.As at the end of Dec 2007, over 5000 issuers have admitted their securities (equities, bonds, debentures,commercial papers), units of mutual funds, certificate of deposits etc. into the CDSL system.

Promoters:- Here is the list of the promoters of CDSL.

Sr.No.

38.521Value of holding (in Rupees Lacs)% terms to total equity

9.5732Bombay Stock Exchange Limited4,025.46

Bank of India1,000.00Bank of Baroda1,000.009.574State Bank of India1,000.009.575HDFC BankLimited1,500.0014.366Standard Chartered Bank750.007.187Canara Bank674.466.458Union Bank ofIndia200.001.919Bank of Maharashtra200.001.9110The Calcutta Stock Exchange Association

Religare Finvest Limited

Lending and Distribution business

Religare Insurance Broking Limited

Life Insurance Broking Business Non-Life Insurance Broking Business

Religare Arts Initiative Limited

Business of Art Art Gallery Art Advisory

Religare Venture Capital Limited

Private Equity and Investment Manager

Vistaar Religare Capital Advisors Ltd.

JV with Vistaar Entertainment Venturesfor film fund

India's first ever film fund

Religare - Milestone

JV with Milestone Capital to manage a

healthcare and education fund

Religare Finance Ltd.

Capital Market Financing

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Limited100.000.9611Others0.08-- TOTAL10,450.00100.00

Wide DP Network : CDSL has a wide network of DPs, operating from over 6000 sites, across the country,offering convenience for an investor to select a DP based on his location.

On-line DP Services :The DPs are directly connected to CDSL thereby providing on-line and efficientdepository service to investors.

Wide Spectrum of Securities Available for Demat :The equity shares of almost all A, B1 & B2 groupcompanies are available for dematerialisation on CDSL, consisting of Public (listed & unlisted) Limitedand Private Limited companies. These securities include equities, bonds, units of mutual funds, Govt.securities, Commercial papers, Certificate of deposits; etc. Thus, an investor can hold almost all hissecurities in one account with CDSL. A BO can also hold warehouse receipts pertaining to commodities, ina demat account. However, a separate account should be opened for holding warehouse receipts.

Competitive Fees Structure: CDSL has kept its tariffs very competitive to provide affordable depositoryservices to investors.

Internet Access:A DP, which registers itself with CDSL for Internet access, can in turn provide demat

account holders with access to their account on the Internet

CDSLs demat services are extended through its agents called depository participants (DP). The DP is thelink between the investor and CDSL. An investor who opens a demat account with a DP can utilise theservices offered by CDSL. While the DP processes the instructions of the investor , the account and recordsthereof is maintained with CDSL. A DP is thus a "service centre" for the investor.

CDSL's system is based on centralised database architecture with on-line connectivity with DPs. Becauseof this centralised architecture, the cost for setting up a DP outfit under CDSL system is significantly lower.Similarly, the recurring costs to be incurred by a CDSL-DP in terms of maintaining back-ups and therelated data storage are minimal. This enables a CDSL-DP to offer depository services to investors at anattractive price and at the same time achieve break-even faster at much lower volumes. The centralisedarchitecture also allows CDSL-DP to make available to the investors a to-the-minute status of their accountand transactions.

CDSL-DPs can also set up branches with direct electronic connectivity with CDSL.

CHAPTE

R-3

DEPOSITORY PARTICIPANTS

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& ROLE OF BROKING FIRMS

A Depository Participant (DP) is described as

an agent of the depository. They are the intermediaries

between the depository and the investors. Therelationship between the DPs and the depository is

governed by an agreement made between the two under

the Depositories Act. In a strictly legal sense, a DP is an

entity who is registered as such with SEBI under the

provisions of the SEBI Act. As per the provisions of

this Act, a DP can offer depository-related services only

after obtaining a certificate of registration from SEBI.

SEBI (D&P) Regulations, 1996 prescribe a minimumnet worth of Rs. 50 lakh for stockbrokers, R&T agents

and non-banking finance companies (NBFC), for

granting them a certificate of registration to act as DPs.

If a stockbroker seeks to act as a DP in more than one

depository, he should comply with the specified net

worth criterion separately for each such depository. No

minimum net worth criterion has been prescribed for

other categories of DPs; however, depositories can fix ahigher net worth criterion for their DPs.

In most markets a broker is a market intermediary whohelps investors to buy and sell securities, usually

broadly defined as investment contracts. In India abroker is an exchange member who helps investorstransact through exchanges. The rest of the non-exchange securities market isunregulated and all evidence suggests that for the retailinvestor the non-exchange market is bigger.

At its core, the role of the stock broker and brokerage

firm is to execute the demands of their client. At most, a

full-service brokerage will offer analysis and participate

in shaping a financial plan. After the profession took on

a negative image in the 1980s and '90s, stock brokers

have come to prefer calling themselves "investment

counselors" or "financial advisers," but the job isessentially the same.

Function

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Only registered brokers can initiate transactions on thefloors of the major stock exchanges and other financialmarkets. Thus, the primary function of the broker is to

provide access to the investor. The full-servicebrokerages of the past have not disappeared, but theadvent of electronic trading has allowed the vastmajority of retail investors to route their orders, throughthe platform of their discount broker, directly to theexchange. Because of their experience and expertise,stock brokers are still in a position to give investmentadvice to those who are paying for the full-serviceexperience, and some may even be given permission bytheir clients to act on their behalf at the broker's owndiscretion.

Features

Individual stock brokers develop their own clients andcontacts, even if they work as part of larger or smallerbrokerage firms. Familiarity with a client's portfolio,goals and risk tolerance allows for a smoothrelationship. Of course, the fees for this prioritytreatment are much higher than many people are willingto pay. Thus, discount brokerage firms have filled theniche of low-commission, execution-only brokers thatwas created by the explosion of the Internet andelectronic trading.

BenefitsWhether an investor chooses to make her owninvestment decisions and execute them through adiscount broker, or prefers to capitalize on the expertiseof a reputable firm in designing a financial strategy tomeet her needs, the ability to participate in financialmarkets is the single greatest benefit provided by stock

brokers. Along the way, brokers, as financialintermediaries, will conduct and oversee eachtransaction--from placement and execution toclearance--advise on potential violations of SEC

regulations and provide liquidity to investors throughmargin accounts.

Considerations

Many small- to medium-sized investors increasinglychoose to manage their own money and forgo the costof full-service brokerage--but this decision should be

balanced by a working knowledge of markets and abalanced temperament throughout the potentially high-stress rigors of money management. If a full-service

broker is used, the personal relationship between theparties is crucial. Not only should a client consider thebroker's track record and the recommendations of otherclients, but he must also be explicit about his goals andexpectations and the authority he grants the broker.

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Potential

As commerce increasingly goes global and theinterconnectedness of the world's financial systems isrepeatedly demonstrated, one of the most important

functions of the broker will be to provide access toemerging markets, analysis of potential investmentopportunities and knowledge of the appropriateregulations. All of this information is less likely to befamiliar or available to individual retail investors, sorelying on the broker to help develop these prospects islikely to remain a crucial element of the client-brokerrelationship.

CHAPTER-4

POSITION OF BROKING FIRMS

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6.3- PRODUCTS & SERVICES

Retail Spectrum- To cater to a large number of retail clients by offering all products

under one roof through the Branch Network and Online mode

Equity and Commodity Trading

Personal Finance Services

Mutual Funds

Insurance

Saving Products

Personal Credit

Personal Loans

Loans against Shares

Online Investment Portal

Institutional Spectrum- To Forge & build strong relationships with Corporate and Institutions

Institutional Equity Broking

Investment Banking

Merchant Banking

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Transaction Advisory

Corporate Finance

Wealth Spectrum - To provide customized wealth advisory services to High Net worthIndividuals

Wealth Advisory Services

Portfolio Management Services

International Advisory Fund Management Services

Priority Equity Client Services

Arts Initiative

New Initiatives:

Religare is on a fast and ambitious growth trajectory with some interesting plans in the pipeline

AEGON Religare Life Insurance - Life Insurance Company, a Joint Venture with Aegon one of the largest

insurance and pension companies, globally Religare AEGON AMC - Asset Management Company, a JointVenture with Aegon.

Religare Finance - Personal Loans / Credit Cards / Loan against Property / Mortgage & Reverse Mortgage.

Online Trading - Agreement with IndusInd Bank to offer online trading services.

Religare Macquarie Wealth ManagementLtd Wealth Management Company , a Joint Venture withMacquarie.

Wealth Management Services - with WallStreet Electronica,Inc., a U.S. broker - dealer to give ourIndian clients access to U.Smarkets.Religare Securities Ltd - Agreement with Vijay Co-operative Bank Ltd. And Tamilnadu Mercantile BankLtd. to offer offline trading service.

RSL (religare securities limited) provides depository services to investors as a Depository Participant withNSDL and CDSL.

The Depository system in India links issuers, Depository Participants, Depositories National SecuritiesDepository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and clearing houses /clearing Corporation of Stock Exchanges. These facilitate holding of securities in dematerialized form andsecurities transactions are processed by means of account transfers.

Religares customer centric account schemes have been designed keeping in mind the investmentpsychology. With a competent team of skilled professionals and managing over 5,00,000 accounts it has a

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dedicated customer care centre, exclusively trained to handle queries from our customers. With the countrywide network of branches, no one is far from Religare depository services.

Religares depository service offers a secure, convenient, paperless and cost effective way to keep track ofcustomers investment in shares and other instruments over a period of time, without the hassle of handling

physical documents. The DP account with religare takes care of all depository needs like dematerialization,

rematerialisation, transfer and pledging of shares, stock lending and borrowing.

Equity and Trading

Race and Rally are the two products offered by Religare Securities ltd which come under equity and

derivatives. While Rally deals with offline facilities, Race provides for complete online package and facility.

There is difference between both offline and online modes of trading. The difference lies on account of its

schemes, platforms and facilities provided. Initially the clients used to go for offline modes of trading, but

now with increasing use of internet online mode has become the preference.

R-ACE Lite (Advanced)

It's the advanced account option for the investor with Religare. This trading account provides the entire

feature of R-ACE (Basic) account. In addition it also provides real-time streaming stock quotes and alerts.

This trading platform is also browser based and no software installation is needed.

R-ACE Pro (Professional)

As the name indicates this account is for high volume traders. Along with the features from above 2

accounts, this account also comes with a Trading Terminal, software which needs to install on your

computer. This terminal directly connects the investor to stock market and having all industry standardTreading terminal features including technical charting (intra-day and EOD), multiple watch list, advanced

hot-key functions for faster trading, derivative chains, futures & options calculator. As in basic and advance

account, trading is available online through internet and offline through phone.

SCHEMES AND PLANS-

1.CLASSIC ACCOUNT-

Trade Type Monthly Turnover#

Less than 1 cr. 1 cr. to 5 cr. More than 5 cr.

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Intraday 0.05% 0.04% 0.03%

Delivery 0.50% 0.40% 0.30%

Futures 0.05% 0.04% 0.03%

2.CLASSIC PLUS-

Trade Type Monthly Turnover#

Less than 1 cr. 1 cr. to 5 cr. More than 5 cr.

Intraday 0.05% 0.04% 0.03%

Delivery 0.50% 0.40% 0.30%

Futures 0.05% 0.04% 0.03%

3.FREEDOM ACCOUNT-

gment NSE cash NSE

Futures

NSE

T2T

BSE Cash BSE

T2T

Total

e Intraday/Derivativelumes

1,00,000 1,00,000 N.A. 1,00,000 N.A. 3,00,000

e Delivery Volumes 10,000 N.A. 10,000 10,000 10,000 40,000

Intraday / Derivative

Volume (in Rs) Brokerage Rate

Upto 1 Lakh 0%

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1 Lakh - 10 lakh 0.03%

10 Lakh - 1 Cr 0.02%

1 Cr - 3 Cr 0.015%

Above 3 Cr 0.01%

Delivery

Volume (in Rs) Brokerage Rate

Upto 10,000 0%

10,000 - 1 Lakh 0.30%

1 Lakh - 10 Lakh 0.20%

10 Lakh - 30 Lakh 0.15%

Above 30 Lakh 0.10%

4.TRUMP ACCOUNT-

Particulars Trump

Super Star

Trump Star Trump

Super

Trump Plus

Brokerage on Delivery Trades 0.10% 0.10% 0.15% 0.25%

Brokerage on Intraday Trades 0.005% 0.01% 0.015% 0.025%

Brokerage on Futures Trades 0.005% 0.008% 0.015% 0.025%

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Brokerage on option trade Rs. 25/- per lot

Rs. 50/- perlot

1% of GrossPremium

Amount orRs. 50/- per

lot whicheveris higher

1% of GrossPremium

Amount or Rs.50/- per lot

whichever ishigher

Charges for Call N Trade /advisory desk or any other offlinetrade facility

Rs. 10/- pertrade

CNT servicecharges

applicable

CNT servicecharges

applicable

CNT servicecharges

applicable

6.4- PROMOTIONAL STRATEGIES & COMPETITION WITH OTHER

BROKING FIRMS

Religare securities has a no. of promoter groups who aid in the companies expansion plans

& growth. They are-

Fortis healthcare limited

Super religare laboratories limited

Religare wellness limited

Religare technova limited (formely Fortis Financial services limited)

Ranbaxy

Religares promotional strategies include t ie-ups with banks & inst i tut ions which are a

source of promotion as well as getting business. In return the banks or institutions which

provide business do get a share or percentage of the brokerage earned by the company.

Religare securities has tie-ups with Indusind Bank, Union Bank, Bank of Maharashtra,

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Corporation Bank & other inst i tutes l ike-its corporate promoter Ranbaxy, international

company Aegon , etc.

COMPETITORS:

The existing major players in the stock broking industry besides Religare Securities ltd. are:

1. ICICI Direct

2.India Bulls

3. Share Khan

4.Angel broking

ICICI DIRECT.COM

ICICI Direct (or ICICIDirect.com) is stock trading company of ICICI Bank. Along with stock trading

and trading in derivatives in BSE and NSE, it also provides facility to invest in IPOs, Mutual Funds and

Bonds. Trading is available in BSE and NSE.Trade In: BSE and NSE

Type of AccountICICIDirect offers 3 different online trading platforms to its customers:

1.Share Trading Account-Share Trading Account by ICICIDirect is primarily for buying and selling stocks in NSE and BSE. Thisaccount allows Cash Trading, Margin Trading, Margin PLUS Trading, Spot Trading, Buy Today SellTomorrow and Call and Trade on phone.

ICICIDirect.com website is the primary trading platform for this trading account. They also provide

installable application terminal based application for high volume trader

.

2.Wise Investment Account-Along with stock trading and IPO investing in BSE and NSE, WiseInvestment account also provide options

to invest in Mutual Funds andBonds online.

Online Mutual funds investment allows investor to invest on-line inaround 19 Mutual Fund companies.

ICICI Direct offers various options while investing in Mutual Funds like Purchase Mutual Fund,

Redemption and switch between different schemes, Systematic Investment plans, Systematic withdrawal

plan and transferring existing Mutual Funds in to electronic mode. This account also provides facility to

invest in Government of India Bonds and ICICI Bank Tax Saving Bonds. ICICIDirect.com website is the

primary tool to invest in Mutual Funds, IPOs, Bonds and stock trading.

3.Active Trader Account-

Active Trader account gives more personalized investment options to theinvestors. It allows investor to use

online and offline stock trading. Italso provides with independent market expertise and support through a

dedicated Relationship Manager from ICICI. Active Trader alsoprovides commodity trading.

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Brokerage and fees

1.Account opening fees: Rs 750/- (One time non-refundable)

2.Brokerage: ICICI Direct.com brokerages varies on volume of trade and inclusive of demat transactioncharges, service taxes and courier charges for contract notes. It ranges from 0.1% to 0.15% for margintrades, 0.2% to 0.425% for squared off trades and 0.4% to 0.85% on delivery based trades.

Advantages of ICICI Direct.Com:-

1. 3-in-1 account integrates your banking, broking and demat accounts. All accounts are from ICICI and very

well integrated. This feature makes ICICI the most interesting player in online trading facility. There is

absolutely no manual interfere require. This is truly online trading environment.

2. Unlike most of the online trading companies in India which require transferring money to the broker's pool or

towards deposits, at ICICIDirect you can manage your own demat and bank accounts through

ICICIdirect.com. Money from selling stock is available in ICICI bank account as soon as the ICICIDirect

receive it.

3. Investment online in IPOs, Mutual Funds, GOI Bonds, and Postal Savings Schemes all from one website.

General Insurance is also available from ICICI Lombard.4. Trading is available in both BSE and NSE.

Disadvantages of ICICI Direct.Com

1.Getting access to ICICIDirect.com website during market session can be frustrating.

2.ICICIDirect brokerage is high and not negotiable.

3.Not all stocks are available under Margin Plus.

INDIABULLS

Indiabulls is India's leading Financial Services and Real Estate Company having presence over 414 locationsin more than 124 cities. Indiabulls Financial Services Ltd is listed on the National Stock Exchange, Bombay

Stock Exchange, Luxembourg Stock Exchange and London Stock Exchange.

Type of Account

Indiabulls Equity Trading Account-

Indiabulls Equity Trading Account is standard Online trading account from India bulls and along with online

trading it also provides priority telephone access that gives you direct access to your Relationship Manager

and full access to 'Indiabulls Equity Analysis'.

Application Trading Terminal (Need Installation)Power Indiabulls-

Power Indiabulls trading terminal is the most advanced new generation trading platform with great speed.

This trading terminal is built in JAVA.

Power Indiabulls is extremely reach in features including Live Streaming Quotes, Fast Order Entry and

execution, Tic by Tic LiveCharts, Technical Analysis, Live News and Alerts, Extensive Reports for Real-

time Accounting.

Brokerage and fees :

1.Account opening fees : Rs 1200/- (One time non-refundable) asbelow:

250/- Equity Trading Account opening charge

200/- Demat Account opening charge

750/- Software changes

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Advantages of Indiabulls Equity Trading Account

Brokerage is less compare to other online trading companies. Provide trading terminal 'power bulls', a java based software. It's very fast in terms of speed and

execution.

SHAREKHAN SECURITIESSharekhan's equity related services include trade execution on BSE, NSE, Derivatives, commodities,depository services, online trading and investment advice. Trading is available in BSE andNSE. Along withSharekhan.com website, ShareKhan has around 510 offices (share shops) in170 cities around the country.

Share khan has one of the best state of art webportal providing fundamental and statistical information

across equity, mutual funds and IPOs. You can surf across 5,500 companies for in-depth information,

details about more than 1,500 mutual fund schemes and IPO data. You can also access other market related

details such as board meetings, result announcements, FII transactions, buying/selling by mutual funds and

much more.Tr ad e In : BSE and NSE

Type of Account

1.ShareKhan Classic account-

Allow investor to buy and sell stocks online along with the following features like multiple watch lists,

Integrated Banking, demat and digital contracts, Real-time portfolio tracking with price alerts and Instant

credit & transfer.a.Online trading account for investing in Equities and Derivatives

b.Free trading through Phone (Dial-n-Trade)

I.Two dedicated numbers for placing your orders with your cell phone or landline.

II.Automatic funds transfer with phone banking (for Citibankand HDFC bank customers)

III.Simple and Secure Interactive Voice Response based systemfor authentication

IV.get the trusted, professional advice of our telebrokers

V.After hours order placement facility between 8.00 am and 9.30 am

c.Integration of: Online trading + Bank + Demat account

d.Instant cash transfer facility against purchase & sale of shares

e. IPO investments

f.Instant order and trade confirmations by e-mail

g.Single screen interface for cash and derivatives

2.ShareKhan SpeedTrade account-

This accounts for active traders who trade frequently during the day'strading session. Following are fewpopular features of Speed Trade account.a.Single screen interface for cash and derivatives

b.Real-time streaming quotes with Instant order Execution & Confirmationc.Hot keys similar to a traditional broker terminal

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d.Alerts and reminderse.Back-up facility to place trades on Direct Phone lines

Brokerage:

Some stock trading companies charge direct percentage while otherscharge a fixed amount per Rs 100.

Sharekhan charges 0.5% for inter dayshares and 0.1% for intra day or you could say Sharekhan charges

50paise per Rs 100.

Advantages of Sharekhan:

A. Online trading is very user friendly and one doesn't need anysoftware to access.

B. They provides good quality of services like daily SMS alerts, mailalerts, stock recommendations etc.

C. Sharekhan has ability to transfer funds from most banks. Unlike ICICI Direct, HDFC Sec, etc.,

investor not really needs to open an account with a particular bank as it can establish link with most modern

banks.

Disadvantages of ShareKhan

A. They charge minimum brokerage of 10 paisa per stock would not let you trade stocks below 20 rs. (If

you trade, you will loose majority of your money in brokerage).B. Lots of hidden rules and charges.C. They do not provide facility to book limit order trades during after-hours.D. Classic account holders cannot trade commodities.E. Cannot purchase mutual funds online.

ANGEL BROKING

Ebroking Investment Advisory Portfolio Management Services Wealth Management Services Commodities Trading

Trade In: BSE and NSE

Trading Platforms:

Angel Trade provides 4 trading platforms, 2 are browser based & 2 are application based.

1. Angel investor

It is a browser based trading platform. The rates are updated on clicking the refresh button. Thisfacility ensures it is not blocked by firewall. Thus it is useful for investor who needs to accessinformation from places where firewall blocks such data.

2. Angel Trade

It is a browser based trading platform. The rates are updated automatically. This platform is usefulfor investors & traders to access market from different terminals.

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3. Angel Diet

It is an application based trading platform where rates are updated automatically. All segments areavailable on a single screen. This is ideal platform for the daily traders.

4. Angel Anywhere

It is an application based trading platform where rates are updated automatically. This is ideal forinvestors & traders who are inclined towards trading based on charts & technical tools.

Brokerage and fees:

1. Account opening fees:Stock trading account - Rs 575/-Demat account - Rs 200/-Commodity trading - Rs 625/-

2. Brokerage:For trade up to the range of Rs 1 - 3 Crore:Cash Based: 0.50%Day trading: 0.05%Derivatives: 0.05%

For trade more than Rs 3 Crore, brokerage is about 0.03%.

Advantages of Angel Trade

1. User friendly browser-based / application based online trading platform.

2. The auto square off time is at 3:15 and an investor can buy up to 4 times the value in his account.3. Trading account can be linked with popular private banks like HDFC Bank, ICICI Bank, UTI bank

etc.4. Trading is available in both BSE and NSE.

Disadvantages of Angel Trade

1. Online money transfer from trading account to bank account is not available:

Trading account can be linked with popular private banks like HDFC Bank, ICICI Bank, UTI banketc. A trader can transfer money from his bank to the trading account online. But the reversetransactions are not yet available online.

This means money, a trader gets after selling shares doesnt get credited in his bank account directly.The trader has to call Angel Trade and request for the deposit. This takes couple of working days.

This way angel trade is kind of behind with ICICIDirect where 3 accounts (Bank account, tradingaccount and demat account) are connected so seamlessly that no manual interfere requires. InICICIDirect, a trader gets the money back into his ICICI Bank account as soon as the trader settledown.

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CHAPTER 7

SWOT ANALYSIS OF RELIGARE SECURITIES LIMITED

ICRA has assigned an A1+ (pronounced A one plus) rating to the Rs 7 billion short term debt programme of

Religare Securities Limited (RSL). This is the highest credit quality rating assigned to short term debtinstruments. Instruments rated in this category carry lowest credit risk in the short term.

Credit Strengths

Strong parentage and demonstrated support from parent in form of equity infusions; RSL is a 100%subsidiary of Religare Enterprises Limited (consolidated net worth of Rs. 25.58 billion as on March31, 2009),

Strong presence in retail broking business

Diversified income streams at the group level

Adequate capitalisation levels.

Adequate risk management and operational systems employed by the company.

Credit Challenges

To maintain and upgrade risk management while growing the business volumes.

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To maintain profitable operations when equity markets under-perform or face downturn.

To establish the institutional equity broking business .

Strong presence in Retail Broking; RSLs equity broking market share increased from 3.58% for 2008-09

to 3.85% for H1 2009-10 on the back of enhanced retail network. On the retail front, RSL expanded its

branch count (including franchisee outlets) to 1961 catering to 0.62 million customers as on September 2009

as against a branch count of 1464 and a client base of 0.41 million as on March 2008. Retail clients

constituted 97% of the total broking volumes in H1-2009-10. The share of institutional broking though small

has increased from 1.02% of RSLs total broking volumes in 2007-08 to 2.33% in 2008-09 and further to

2.97% in H1-200910 because of increase in institutional broking clients from 78 as on March 31, 2008 to

107 as on March 31, 2009 and further to 132 as on September 30, 2009.

Chart : Broking Volumes and Market Share of RSL

Decline in business volumes and higher overhead expenses impact RSLs profitability in 2008-09however, improves in H1FY10...

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Inline with the downturn in capital market in 2008-09, RSLs net brokerage income declined 33% from Rs

2.86 billion in 2007-08 to Rs 1.91 billion in 2008-09. Employee expenses for RSL increased significantly

because of increase in company owned branch network from 423 branches as on March 31, 2008 to 625

branches as onMarch 31, 2009. The company has done some branch rationalization in the current financial

year and the loss making branches have been closed. The company owned branch network has subsequently

come down to 599 branches as on September 30, 2009. On the other hand, the franchisee network has been

increasing taking the overall network to 1961 as on September 30, 2009. The decline in broking volumes

coupled with rise in expenses resulted in a net loss of Rs. 0.19 billion in 2008-09 for RSL as compared to a

profit of Rs. 0.77 billion in 2007-08. Revival in capital markets in current financial year and some cost

rationalization has helped the company to report profit after tax of Rs. 0.46 billion during H1-2009-10.

Robust risk management systems deployed RSL has deployed robust risk management system which is

expected to mitigate the credit risk, market risk and the operational risks associated with the equity broking

business. Centralised real-time monitoring systems to monitor the clients credit exposure, auto-square off

policy and stricter policy-based margin requirements have helped RSL maintain low bad debts on the equity

broking business.

SWOT ANALYSIS:

STRENGTH

Strong corporate relationship with its promoter Ranbaxy

C ol la bo ra ti on s w it h h ig hl y r ep ut ed i nt er na ti on al c om pa ni es l ik e A eg on &

Macquerie.

Provides transperacy to clients.

Highly qualified research team.

Strong network throughout India & globe.

Lowest brokerage rate & interest on unutilised cash along with trade rewards.

WEAKNESS

No satisfactory brand awareness

No feed back or client redressal system.

Not enough advertising.

OPPORTUNITIES

Good growth potential as many new IPOs are coming in the market.

The growing intereat of people in stock market.

Indian stock market story going strong.

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THREATS

Competition from other broking firms.

Downfall in stock market.

CHAPTER 8

EFFECTS OF CHANGES IN WORLD ECONOMY ON THE

FUTURE PROSPECTS OF BROKING FIRMS IN INDIA

None o f the count ri es have ever been l ef t unaffec ted by changes going on in o ther

countr ies. So when the American economy downfall s tar ted, there also began an era of

chaos in other countries. Since America is a developed country & many countries depend

on i t for many things ,so the economic downfall s tar ted effect ing the economies of other

countr ies also & there arose a period of recession. India was also not lef t unaffected but

the intensity was low as compared to other countries.

THE AMERICAN ECONOMIC DOWNFALL-

The fear of a recession looms over the United States. And as the clich goes, whenever the US sneezes, theworld catches a cold. This is evident from the way the Indian markets crashed taking a cue from a probablerecession in the US and a global economic slowdown.

Weakening of the American economy is bad news, not just for India, but for the rest of the world too.

A recession is a decline in a country's gross domestic product (GDP) growth for two or more consecutivequarters of a year. A recession is also preceded by several quarters of slowing down.

What causes it?

An economy which grows over a period of time tends to slow down the growth as a part of the normaleconomic cycle. An economy typically expands for 6-10 years and tends to go into a recession for about sixmonths to 2 years.

A recession normally takes place when consumers lose confidence in the growth of the economy and spendless.

This leads to a decreased demand for goods and services, which in turn leads to a decrease in production,lay-offs and a sharp rise in unemployment.

Investors spend less as they fear stocks values will fall and thus stock markets fall on negative sentiment.

Stock markets & recession

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The economy and the stock market are closely related. The stock markets reflect the buoyancy of theeconomy. In the US, a recession is yet to be declared by the Bureau of Economic Analysis, but investors area worried lot. The Indian stock markets also crashed due to a slowdown in the US economy.

The Sensex crashed by nearly 13 per cent in just two trading sessions in January. The markets bounced backafter the US Fed cut interest rates. However, stock prices are now at a low ebb in India with little cheer

coming to investors.

Crisis in the US

The defaults on sub-prime mortgages (homeloan defaults) have led to a major crisis in the US. Sub-prime isa high risk debt offered to people with poor credit worthiness or unstable incomes. Major banks have landedin trouble after people could not pay back loans.

The housing market soared on the back of easy availability of loans. The realty sector boomed but could notsustain the momentum for long, and it collapsed under the gargantuan weight of crippling loan defaults.Foreclosures spread like wildfire putting the US economy on shaky ground. This, coupled with rising oil

prices at $100 a barrel, slowed down the growth of the economy.

Past recessions

The US economy has suffered 10 recessions since the end of World War II. The Great Depression in theUnited was an economic slowdown, from 1930 to 1939. It was a decade of high unemployment, low profits,low prices of goods, and high poverty.

The trade market was brought to a standstill, which consequently affected the world markets in the 1930s.Industries that suffered the most included agriculture, mining, and logging.

In 1937, the American economy unexpectedly fell, lasting through most of 1938. Production declinedsharply, as did profits and employment. Unemployment jumped from 14.3 per cent in 1937 to 19.0 per centin 1938.

The US saw a recession during 1982-83 due to a tight monetary policy to control inflation and sharpcorrection to overproduction of the previous decade. This was followed by Black Monday in October 1987,when a stock market collapse saw the Dow Jones Industrial Average plunge by 22.6 per cent affecting thelives of millions of Americans.

The early 1990s saw a collapse of junk bonds and a financial crisis.

The US saw one of its biggest recessions in 2001, ending ten years of growth, the longest expansion onrecord.

From March to November 2001, employment dropped by almost 1.7 million. In the 1990-91 recession, theGDP fell 1.5 percent from its peak in the second quarter of 1990. The 2001 recession saw a 0.6 per centdecline from thepeak in the fourth quarter of 2000.

The dot-com burst hit the US economy and many developing countries as well. The economy also sufferedafter the 9/11 attacks. In 2001, investors' wealth dwindled as technology stock prices crashed.

Impact of American Recession on India

Indian companies have major outsourcing deals from the US. India's exports to the US have also grownsubstantially over the years. The India economy is likely to lose between 1 to 2 percentage points in GDP

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growth in the next fiscal year. Indian companies with big tickets deals in the US would see their profitmargins shrinking.

The worries for exporters will grow as rupee strengthens further against the dollar. But experts note thatthe long-term prospects for India are stable. A weak dollar could bring more foreign money to Indian

markets. Oil may get cheaper brining down inflation. A recession could bring down oil prices to $70.

The whole of Asia would be hit by a recession as it depends on the US economy. Even though domesticdemand and diversification of trade in the Asian region will partly counter any drop in the

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