CHAPTER-1

INTRODUCTION ABOUT THE TOPIC

In most industrialized countries, a substantial part of financial wealth is not managed directly by
savers, but through a financial intermediary, which implies the existence of an agency contract
between the investor (the principal) and a broker or portfolio manager (the agent). Therefore,
delegated brokerage management is arguably one of the most important agency relationships
intervening in the economy, with a possible impact on financial market and economic
developments at a macro level. In most of the metros, people like to put their money in stock
options instead of dumping it in the bank-lockers. Now, this trend pick pace in small but fast
developing cities like Gomati nagar, narhi, hazratganj etc. My research is based on the residents
of its nearby areas. As the per-capita-income of the city is on the higher side, so it is quite
obvious that they want to invest their money in profitable ventures. On the other hand, a number
of brokerage houses make sure the hassle-free investment in stocks. Asset management firms
allow investors to estimate both the expected risks and returns, as measured statistically. There
are mainly two types of Portfolio management strategies.

Share/Stock Market - An Overview

An organization in order to raise money divides its entire capital into small units of equal value.
Each unit is called a share. A share is nothing but an indivisible unit of a company’s capital to be
sold among individuals to increase profit of the organization.

Shareholder
An individual owning one or more than one share of an organization is called a shareholder. In
simpler words, an individual purchasing one or more than one share from any private or public
organization is called a shareholder.

A shareholder can sell his shares anytime depending on the current value of the share.

He/she can purchase any new share issued by any other or same organization.

A shareholder has the right to declared dividend.

Why do people invest in shares?

An organization pays the shareholders for investing in their company’s shares. The income
earned by an individual by investing in an organization’s share (private or public) is called as
dividend.

What is Retained Earnings?

The profit earned by an organization is put into use in the following two ways:

It is paid to the shareholders as dividend.

The profit earned by the organization is not distributed amongst the shareholders but is retained
and reinvested in the organization. This portion of the income is called retained earnings.

What is a Share Certificate?

When an individual purchases shares from any organization, he/she is issued a certificate as a
proof of his investment. Such a certificate issued by an organization to the shareholders is called
a share certificate.

Types of Shares

Equity Shares

Equity shares also called as ordinary shares are the shares where the payment of dividend is
directly proportional to the profits earned by the organization. Higher the profits earned, higher
the dividend, lower the profits, and lower the dividend. In an equity share, dividends are paid at a
fluctuating/floating rate.

Preference Shares

Shares which enjoy preference over payment of dividends are called preference shares.
Shareholders enjoy fixed rate of dividends in case of preference shares.
Founder Shares

Shares held by the management or founders of the organization are called as founder shares.

Bonus Shares

Bonus shares are often issued to the shareholders when the organization earns surplus profits.
The company officials may decide to pay the extra profits to the shareholders either as cash
(dividend) or issue a bonus share to them.

Bonus shares are often issued by organizations to the shareholders free of charge as a gift in
proportion to their existing shares with the organization.

How to buy shares?

Find a good broker for yourself. Make sure he has good knowledge about the share market and
can guide you properly.

To invest in shares one needs to open a DEMAT Account for online trading. A DEMAT
Account is mandatory for sale and purchase of shares anytime and anywhere.

An individual needs to have his PAN Card, a bank account, other necessary Identity proofs,
address proofs and so on.
 OBJECTIVE OF THE STUDY

 To understand the marketing strategies of online trading in Indian stock markets.

 To know about Demat account opened of potential customers in Indian stock markets.
 To discuss about the market trends of stock market investment.
 CHAPTER-2

Company profile

Cosmo Info Solutions Ph.: +91-8948048111/+91+9696506593

Office: 0522-4953819
Email: cis@cosmoinfosolutions.com
Website: www.cosmoinfosolutions.com
About Company

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Why Cosmo Info Solution?

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 About us

GOODWILL WEALTH MANAGEMENT PRIVATE LIMITED is a financial services company

based out of NO 9, 2nd FLOOR, MASHA ALLAH BUILDING, BHEEMA SENA GARDEN
STREET, MYLAPORE, CHENNAI, Tamil Nadu, India.
Website

http://goodwillwealthmanagement.in

Email ID: sambath.s@gwcindia.in

Industries

Financial Services

Headquarters

CHENNAI, Tamil Nadu

Locations

 NO 9, 2nd FLOOR, MASHA ALLAH BUILDING, BHEEMA SENA GARDEN STREET,

MYLAPORE
CHENNAI, Tamil Nadu 600004, Ingest directions

OVERVIEW

Goodwill Wealth Management Private Limited is an unlisted private company. The company
provides financial intermediation related services

Products & Services:

Goodwill Wealth Management was incorporated on 21 November, 2012. The company has 3
directors and no reported key management personnel. The registered office of the company is at
NO 9, 2nd FLOOR, MASHA ALLAH BUILDING, BHEEMA SENA GARDEN STREET,
MYLAPORE, CHENNAI, Chennai, Tamil Nadu.

The total paid-up capital is INR 5.24 cr. The last reported AGM (Annual General Meeting) of the
company, per our records, was held on 29 September, 2018. Also, as per our records, its last
balance sheet was prepared for the period ending on 31 March, 2018.

Investing has never been so easy

Introducinga Mobile App, a breakthrough

trading app providing solutions in Equity, Commodity,
Currency market trend and much more.
About Mobile App
GIGA brings the stock exchange where stock brokers and traders can buy and sell shares of stock
to your mobile phone through this easy-to-use app, with lots of interesting add-ons and
convenient features that you’ll absolutely love.

* Get real-time stock quotes and solid industry tips

* Trade and track in equity, commodity, currency and F&O

Transfer funds online

GIGA is a unique online trading platform, You can educate yourself on your investment options,
place orders to buy and sell which offers stock broking services at flat rates with the added
benefits of expert research and analysis.
Flat pricing offers you great savings over the traditional percentage model.
This app brings all the benefits of GIGA to your mobile phone.
Understanding the stock market is hard. We’re changing that by being partner for Leading Stock
and Commodity Broker in India. Goodwill is a 1000+ people strong organization whose value
lies in providing single stop solutions for all the financial market needs.The Mobile App has
hassle free login facility for both GUEST and AUTHORIZED Users. The dashboard of the app
offers the user a quick glance of important features such as Market trend, World Indices,
Announcements and much more.
Feature

 Users can access the indices view from anywhere of the app
 You can add different segment scraps in one profile where client can add and delete the
scraps
 Users can add scraps from anywhere of the app
 You can change the theme of the app without logging off
 You can get to know the best touch lines before placing the order and choose the price
from the market depth
 Can get to know the current market trend like Bulk/ Block Deals and FII/DII/MF
Activity
 Price of order can be chosen from the market depth
 Enhanced Screeners and Scanners
 Enhanced Chart Tool
 can able to swap the market segment of the scrip by doing single click
 Online fund transfer is available
 Dynamic shortcut menu has provided which will work based on the page where the
client is
 Multiple indices and scrip’s comprises under it can be viewed in the app
 Funds and Stock view of the client can be viewed
 We also have an option to subscribe our owned SIP Scheme G-SIP in the app
 You can also call our trading desk and Customer support from the app
 Stock market Updates

Indices Country Date Current N

NASDQ United States 28-Sep-2019 7939.63 -9

DJIA United States 28-Sep-2019 26820.25 -7

S&P 500 United States 28-Sep-2019 2961.79 -1

HANG SENG Hong Kong 30-Sep-2019 26092.27 13

NIKKEI 225 Japan 30-Sep-2019 21755.84 -1

Straits Times Singapore 30-Sep-2019 3119.99 -5

FTSE 100 United Kingdom 27-Sep-2019 7426.21 75

KLSE Composite Malaysia 30-Sep-2019 1583.91 -0

Jakarta Composite Indonesia 30-Sep-2019 6169.10 -2

Indices Country Date Current N

BSE Sensex India 30-Sep-2019 38667.33 -1

Giga Goodwill services

OPEN AN ACCOUNT

REGISTER AND GET BEST TRADING SOFTWARE AND RESEARCH

GOODWILL PROVIDES SPECIAL-FREE TRADING & DEMAT ACCOUNT

LOWEST BROKERAGE IN THE INDUSTRY, NO HIDDEN CHARGES

 Trading Terminal at free of cost(ODIN, NEST, Web Trading, Mobile Trading)

 Zero Deposit for Account Opening
 Online Fund Transfer and Payment on the same day
 Free Application Form
 Free Training Program
 Free Online Trading Software
 Free 24*7 Back office Support
 Free Intraday Tips on Mobile Phone
 Free Live Calls and Follow Ups
 Low Brokerage and High Exposure
 No Hidden Fees, No AMC and No Hidden Charges
ADVANTAGES

 Online / NEFT Transfer for withdrawals and deposit

 Withdrawals will be credited on Same Day.
 Lowest Brokerage to Earn Maximum Benefits
 Electronic Contract note by Email
 Free Personalized Technical Desk
 Weekly Free Training Programs
 Call & Trade for Offline Clients
 Special Offer for HNI Clients
 Payout on Same day

Important Links

 National stock exchange (NSE)

 Bombay stock exchange (BSE)
 Security & exchange board of India (SEBI)

Disclosure of proprietary Account trading by members to clients proprietary trading disclosure in

terms of provisions of the rules, bye- laws and business rules of the exchange and with reference
to circular MCX/T&S/147/2016 dated May 17,2016 regarding disclosure of proprietary Account
trading by broker to client ,pursuant to SEBI circular number SEBY/MRD /SEC/Cir-42/2003
dated November 19,2003 & SEBI/HO/CDMRD/DMC CIR/P/2016/49 dated April 25,2016
GOODWILL WEALTH MANAGEMENT PVT.LTD. Discloses to its clients about its policies
on proprietary trades. Goodwill does proprietary trading in the derivatives at MCX respectively.
GOODWILL-SEBI Reg No.INZ000049087
Established in 1875, BSE (formerly known as Bombay Stock Exchange Ltd.), is Asia's first &
the Fastest Stock Exchange in world with the speed of 6 micro seconds and one of India's leading
exchange groups. Over the past 143 years, BSE has facilitated the growth of the Indian corporate
sector by providing it an efficient capital-raising platform. Popularly known as BSE, the bourse
was established as ‘The Native Share & Stock Brokers' Association’ in 1875. In 2017 BSE
become the 1st listed stock exchange of India.

Today BSE provides an efficient and transparent market for trading in equity, currencies, debt
instruments, derivatives, mutual funds. BSE SME is India’s largest SME platform which has
listed over 250 companies and continues to grow at a steady pace. BSE Star MF is India’s largest
online mutual fund platform which process over 27 lakh transactions per month and adds almost
2 lakh new SIPs ever month. BSE Bond, the transparent and efficient electronic book mechanism
process for private placement of debt securities, is the market leader with more than Rs 2.09 lakh
crore of fund raising from 530 issuances. (F.Y. 2017-2018).
Keeping in line with the vision of Shri Narendra Modi, Honea Prime Minister of India, BSE has
launched India INX, India's 1st international exchange, located at GIFT CITY IFSC in
Ahmedabad.
Indian Clearing Corporation Limited, a wholly owned subsidiary of BSE, acts as the central
counterparty to all trades executed on the BSE trading platform and provides full novation,
guaranteeing the settlement of all bonafide trades executed.
BSE Institute Ltd, another fully owned subsidiary of BSE runs one of the most respected capital
market educational institutes in the country.

BSE has also launched BSE Sammaan, the CSR exchange, is a 1st of its kind initiative which
aims to connect corporate with verified NGOs BSE's popular equity index - the S&P BSE
SENSEX - is India's most widely tracked stock market benchmark index. It is traded
internationally on the EUREX as well as leading exchanges of the BRCS nations (Brazil, Russia,
China and South Africa)

GOODWILL WEALTH MANAGEMENT PVT LTD Consumer Complaints

Complaint against GOODWILL WEALTH MANAGEMENT PVT LTD Broker

Contact GOODWILL WEALTH MANAGEMENT PVT LTD - Request Call

Back

Name: Phone

Email City

State

Are you a day trader?

GOODWILL WEALTH MANAGEMENT PVT LTD brokerage complaints report provide detail
about the number of complaints received by the stock exchanges from the GOODWILL
WEALTH MANAGEMENT PVT LTD customers. The GOODWILL WEALTH
MANAGEMENT PVT LTD consumer complaints report analyzes the GOODWILL WEALTH
MANAGEMENT PVT LTD online complaint data provided by BSE and NSE. This report
shows the health of the broker.These complaints are serious grievances against GOODWILL
WEALTH MANAGEMENT PVT LTD broker which the broker and customer failed to resolve.
The customer then filed these legal complaints with the stock exchange.

The GOODWILL WEALTH MANAGEMENT PVT LTD complaint no. report also provides
GOODWILL WEALTH MANAGEMENT PVT LTD’s number of active clients. This shows the
growth of the broker year on year.
Securities Exchange Board of India (SEBI)
The Securities and Exchange Board of India (SEBI) is the regulator for the securities market
in India. It was established in 1988 and given statutory powers on 12 April 1992 through
the SEBI Act, 1992.it is passed by the Indian parliament.

Overview of SEBI

 Securities Exchange Board of India (SEBI) was established in 1988 to regulate the
functions of securities market.
 SEBI promotes orderly development in the stock market.
 SEBI was set up with the main idea to keep a check on malpractices and protect the
interest of investors.

Securities and Exchange Board of India

History

Securities and exchange Board of India (SEBI) was first established in 12 April 1992 as a non-
statutory body for regulating the securities market. It became an autonomous body by
The Government of India on 12 May 1992 and given statutory powers in 1992 with SEBI Act
1992 being passed by the Indian Parliament. SEBI has its headquarters at the business district
of Bandar Karla Complex in Mumbai, and has Northern, Eastern, Southern and Western
Regional Offices in New Delhi, Kolkata, Chennai and Ahmedabad respectively. It has opened
local offices at Jaipur and Bangalore and is planning to open offices
at Guwahati, Bhubaneswar, Patna, Kochi and Chandigarh in Financial Year 2013 - 2014.

Controller of Capital Issues was the regulatory authority before SEBI came into existence; it
derived authority from the Capital Issues (Control) Act, 1947.
Initially SEBI was a non-statutory body without any statutory power. However, in 1992, the
SEBI was given additional statutory power by the Government of India through an amendment
to the Securities and Exchange Board of India Act, 1992. In April 1988 the SEBI was
constituted as the regulator of capital markets in India under a resolution of the Government of
India.

The SEBI is managed by its members, which consists of following:

 The chairman who is nominated by the Union Government of India.

 Two members, i.e., Officers from Union Finance Ministry.
 One member from the Reserve Bank of India.
 The remaining five members are nominated by the Union Government of India, out of them
at least three shall be whole-time members.

After the amendment of 1999, collective investment schemes were brought under SEBI
except nidhis, chit funds and cooperatives.

Organization structure

Ajay Tyagi was appointed chairman on 10 February 2017, replacing U K Sinha, and took charge
of the chairman office on 1 March 2017.

Responsibilities

The Preamble of the Securities and Exchange Board of India describes the basic functions of the
Securities and Exchange Board of India as "...to protect the interests of investors in securities and
to promote the development of, and to regulate the securities market and for matters connected
there with or incidental there to".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 appeal process to
create accountability. There is a Securities Appellate Tribunal which is a three-member tribunal
and is currently headed by Justice Tarun Agarwala, former Chief Justice of the Meghalaya High
Court.[6] A second appeal lies directly to the Supreme Court. SEBI has taken a very proactive
role in streamlining disclosure requirements to international standards.

Reasons for Establishment of SEBI

At the end of the 1970s and during 1980s, capital markets were emerging as the new sensation
among the individuals of India. Many malpractices started taking place such as unofficial self-
styled merchant bankers, unofficial private placements, rigging of prices, non-adherence of
provisions of the Companies Act, violation of rules and regulations of stock exchanges, delay in
delivery of shares, price rigging, etc. Due to these malpractices, people started losing confidence
in the stock market. The government felt a sudden need to set up an authority to regulate the
working and reduce these malpractices. As a result, the Government came up with the
establishment of SEBI.

Purpose and Role of SEBI

SEBI acts as a watchdog for all the capital market participants and its main
purpose is to provide such an environment for the financial market enthusiasts that
facilitate efficient and smooth working of the securities market.

To make this happen, it ensures that the three main participants of the financial
market are taken care of, i.e. issuers of securities, investor, and financial
intermediaries.

Issuers of securities

These are entities in the corporate field that raise funds from various sources in the
market. SEBI makes sure that they get a healthy and transparent environment for
their needs.

Investor
Investors are the ones who keep the markets active. SEBI is responsible for
maintaining an environment that is free from malpractices to restore the confidence
of general public who invest their hard earned money in the markets.

Financial Intermediaries

These are the people who act as middlemen between the issuers and investors.
They make the financial transactions smooth and safe.

Functions of SEBI

SEBI primarily has three functions-

1. Protective Function
2. Regulatory Function
3. Development Function

Protective Functions
As the name suggests, these functions are performed by SEBI to protect the
interest of investors and other financial participants.

It includes-

 Checking price rigging

 Prevent insider trading
 Promote fair practices
 Create awareness among investors
 Prohibit fraudulent and unfair trade practices

Regulatory Functions

These functions are basically performed to keep a check on the functioning of the
business in the financial markets.

These functions include-

 Designing guidelines and code of conduct for the proper functioning of

financial intermediaries and corporate.
 Regulation of takeover of companies
 Conducting inquiries and audit of exchanges
 Registration of brokers, sub-brokers, merchant bankers etc.
 Levying of fees
 Performing and exercising powers
 Register and regulate credit rating agency
Development Functions

SEBI performs certain development functions also that include but they are not
limited to-

 Imparting training to intermediaries

 Promotion of fair trading and reduction of malpractices
 Carry out research work
 Encouraging self-regulating organizations
 Buy-sell mutual funds directly from AMC through a broker

Objectives of SEBI

SEBI has following objectives-

1. Protection to the investors

The primary objective of SEBI is to protect the interest of people in the stock
market and provide a healthy environment for them.

2. Prevention of malpractices

This was the reason why SEBI was formed. Among the main objectives,
preventing malpractices is one of them.

3. Fair and proper functioning

SEBI is responsible for the orderly functioning of the capital markets and keeps a
close check over the activities of the financial intermediaries such as brokers, sub-
brokers, etc.
Powers

 For the discharge of its functions efficiently, SEBI has been vested with the
following powers:

 To approve by−laws of securities exchanges.

 To require the securities exchange to amend their by−laws.
 Inspect the books of accounts and call for periodical returns from recognized
securities exchanges.
 Inspect the books of accounts of financial intermediaries.
 Compel certain companies to list their shares in one or more securities
exchanges.
 registration of Brokers and sub-brokers

There are two types of brokers:

 Discount brokers
 Merchant brokers

SEBI committees

Technical Advisory Committee

 Committee for review of structure of infrastructure institutions

 Advisory Committee for the SEBI Investor Protection and Education Fund
 Takeover Regulations Advisory Committee
 Primary Market Advisory Committee (PMAC)
 Secondary Market Advisory Committee (SMAC)
 Mutual Fund Advisory Committee
 Corporate Bonds & Securitization Advisory Committee

Eliminate mal practices in security market

Major achievements

SEBI has enjoyed success as a regulator by pushing systematic reforms

aggressively and successively. SEBI is credited for quick movement towards
making the markets electronic and paperless by introducing T+5 rolling cycle from
July 2001 and T+3 in April 2002 and further to T+2 in April 2003. The rolling
cycle of T+2[8] means, Settlement is done in 2 days after Trade date.[9] SEBI has
been active in setting up the regulations as required under law. SEBI did away with
physical certificates that were prone to postal delays, theft and forgery, apart from
making the settlement process slow and cumbersome by passing Depositories Act,
1996.[10]

SEBI has also been instrumental in taking quick and effective steps in light of the
global meltdown and the Satyam fiasco.[citation needed] In October 2011, it increased
the extent and quantity of disclosures to be made by Indian corporate
promoters.[11] In light of the global meltdown, it liberalized the takeover code to
facilitate investments by removing regulatory structures. In one such move, SEBI
has increased the application limit for retail investors to ₹ 2 lakh, from ₹ 1 lakh at
present.[12]

Controversies

Supreme Court of India heard a Public Interest Litigation (PIL) filed by India
Rejuvenation Initiative that had challenged the procedure for key appointments
adopted by Government of India. The petition alleged that, "The constitution of the
search-cum-selection committee for recommending the name of chairman and
every whole-time members of SEBI for appointment has been altered, which
directly impacted its balance and could compromise the role of the SEBI as a
watchdog. On 21 November 2011, the court allowed petitioners to withdraw the
petition and file a fresh petition pointing out constitutional issues regarding
appointments of regulators and their independence. The Chief Justice of
India refused the finance ministry's request to dismiss the PIL and said that the
court was well aware of what was going on in SEBI. Hearing a similar petition
filed by Bengaluru-based advocate Anil Kumar Agarwal, a two judge Supreme
Court bench of Justice SS Nijjar and Justice HL Gokhale issued a notice to the
Government of India, SEBI chief UK Sinha and Omita Paul, Secretary to the
President of India.

Further, it came into light that Dr KM Abraham (the then whole time member of
SEBI Board) had written to the Prime Minister about malaise in SEBI. He said,
"The regulatory institution is under duress and under severe attack from powerful
corporate interests operating concertedly to undermine SEBI". He specifically said
that Finance Minister's office, and especially his advisor Omit Paul, were trying to
influence many cases before SEBI, including those relating to Sahara Group,
Reliance, Bank of Rajasthan and MCX.

SEBI and Regional Securities Exchanges

SEBI in its circular dated May 30, 2012 gave exit - guidelines for Securities
exchanges. This was mainly due to illiquid nature of trade on many of 20+ regional
Securities exchanges. It had asked many of these exchanges to either meet the
required criteria or take a graceful exit. SEBI's new norms for Securities exchanges
mandates that it should have minimum net-worth of Rs.100 core and an annual
trading of Rs.1,000 core. The Indian Securities market regulator SEBI had given
the recognized Securities exchanges two years to comply or exit the business.

Process of de-recognition and exit

Following is an excerpt from the circular:

1. Exchanges may seek exit through voluntary surrender of recognition.

2. Securities where the annual trading turnover on its own platform is less than Rs
1000 Core can apply to SEBI for voluntary surrender of recognition and exit, at
any time before the expiry of two years from the date of issuance of this Circular.

3. If the Securities exchange is not able to achieve the prescribed turnover of Rs.
1000 Cores on continuous basis or does not apply for voluntary surrender of
recognition and exit before the expiry of two years from the date of this Circular,
SEBI shall proceed with compulsory de-recognition and exit of such Securities
exchanges, in terms of the conditions as may be specified by SEBI.

4. Securities Exchanges which are already de-recognized as on date shall make an

application for exit within two months from the date of this circular. Upon failure
to do so, the de-recognized exchange shall be subject to compulsory exit process.

SEBI departments

SEBI regulates Indian financial market through its 20 departments.

 Commodity Derivatives Market Regulation Department (CDMRD)

 Corporation Finance Department (CFD)
 Department of Economic and Policy Analysis (DEPA)
 Department of Debt and Hybrid Securit
 CHAPTER -3

To study about the Indian stock market

What is a stock market?

Stock market is an arrangement where equity shares of companies are bought and sold by the
participants. The participants can be investors and traders. The investors mainly have a long-term
horizon in mind and benefit from capital appreciation over the given period. Traders, however,
earn profits by tapping into small price changes in equity shares which mostly last for a few
minutes to the whole trading session.

A stock exchange facilitates stock brokers to trade company stocks and other securities. A stock
may be bought or sold only if it is listed on an exchange. Thus, it is the meeting place of the
stock buyers and sellers. India's premier stock exchanges are the Bombay Stock Exchange and
the National Stock Exchange.

In India, the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) are the
major platforms where most of the stock trading happens. Here, the buyers and sellers place
orders through brokers who use online trading services. The settlement cycle follows the T+2
format. In this, the trades are executed on Day 1 and the participants receive their shares/sales
proceeds after two working days from Day 1.

Definition of 'Stock Market'

Definition: It is a place where shares of pubic listed companies are traded. The primary market
is where companies float shares to the general public in an initial public offering (IPO) to raise
capital.
Description: Once new securities have been sold in the primary market, they are traded in the
secondary market—where one investor buys shares from another investor at the prevailing
market price or at whatever price both the buyer and seller agree upon. The secondary market or
the stock exchanges are regulated by the regulatory authority. In India, the secondary and
primary markets are governed by the Security and Exchange Board of India (SEBI).

History

Early history

In 12th-century France, the courtiers 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 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 Bourse, and in
1409 they became the "Bruges Beurre", institutionalizing what had been, until then, an informal
meeting, but actually, the family Van der bourse had a building in Antwerp where those
gatherings occurred;[19] the Van der bourse had Antwerp, as most of the merchants of that period,
as their primary place for trading. The idea quickly spread around Flanders and neigh bring
countries and "Bergen" soon opened in Ghent and Rotterdam.

In the middle of the 13th century, Venetian bankers began to trade in government securities. In
1351 the Venetian government outlawed spreading rumours 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. Italian companies
were also the first to issue shares. Companies in England and the Low Countries followed in the
16th century.

Birth of formal stock markets

“ The stock market — the daytime adventure serial of the well-to-do —

would not be the stock market if it did not have its ups and downs. (...) And
it has many other distinctive characteristics. Apart from the economic
advantages and disadvantages of stock exchanges — the advantage that
they provide a free flow of capital to finance industrial expansion, for
instance, and the disadvantage that they provide an all too convenient way
for the unlucky, the imprudent, and the gullible to lose their money — their
development has created a whole pattern of social behaviour, complete
with customs, language, and predictable responses to given events. What is
truly extraordinary is the speed with which this pattern emerged full blown
following the establishment, in 1611, of the world's first important stock ”
exchange — a roofless courtyard in Amsterdam — and the degree to which
it persists (with variations, it is true) on the New York Stock Exchange in
the nineteen-sixties. Present-day stock trading in the United States — a
bewilderingly vast enterprise, involving millions of miles of private
telegraph wires, computers that can read and copy the Manhattan
Telephone Directory in three minutes, and over twenty million stockholder
participants — would seem to be a far cry from a handful of seventeenth-
century Dutchmen haggling in the rain. But the field marks are much the
same. The first stock exchange was, inadvertently, a laboratory in which
new human reactions were revealed. By the same token, the New York
Stock Exchange is also a sociological test tube, forever contributing to the
human species' self-understanding. The behaviour of the pioneering Dutch
stock traders is ably documented in a book entitled “Confusion of
Confusions,” written by a plunger on the Amsterdam market named Joseph
de la Vega; originally published in 1688,

John Brooks, in “Business Adventures” (1968)

Business ventures with multiple shareholders became popular with

commend a contracts in medieval Italy (Greif 2006, 286), and Millender
(2009) provides evidence that shareholder companies date back to ancient
Rome. Yet the title of the world's first stock market deservedly goes to that
of seventeenth-century Amsterdam, where an active secondary market in
company shares emerged. The two major companies were the Dutch East
India Company and the Dutch West India Company, founded in 1602 and
1621. Other companies existed, but they were not as large and constituted a
small portion of the stock market.

Edward P. Stringham & Nicholas A. Curette, in "The Oxford Handbook of

Austrian Economics" [On the Origins of Stock Markets] (2015)

In the 17th and 18th centuries, the Dutch pioneered several financial
innovations that helped lay the foundations of the modern financial system.
While the Italian city-states produced the first transferable government
bonds, they did not develop the other ingredient necessary to produce a
fully-fledged capital market: the stock market.[37] In the early 1600s the
Dutch East India Company (VOC) became the first company in history to
issue bonds and shares of stock to the general public.[38] As Edward
Stringham (2015) notes, "companies with transferable shares date back to
classical Rome, but these were usually not enduring endeavour’s and no
considerable secondary market existed (Neal, 1997, p. 61)."[39] The Dutch
East India Company (founded in the year of 1602) was also the first joint-
stock company to get a fixed capital stock and as a result, continuous trade
in company stock occurred on the Amsterdam Exchange. Soon thereafter, a
lively trade in various derivatives, among which options and repos,
emerged on the Amsterdam market. Dutch traders also pioneered short
selling – a practice which was banned by the Dutch authorities as early as
1610.[40] Amsterdam-based businessman Joseph de la Vega's Confusion de
Confusion’s (1688)[41] was the earliest known book about stock trading and
first book on the inner workings of the stock market (including the stock
exchange).

. Why should you know about stock market terminology?

Stock market terminology relates to industry-specific jargons which are
used in the stock markets regularly. Even the experts and amateurs use
these terms frequently to explain trading strategies, indices, stock market
patterns and other components of the stock trading industry. As an equity
enthusiast, you need to know these terms really well in order to make
money out of the stock markets. Moreover, it will also enhance your
understanding of the relationship between stock markets and events
happening in the economy.

Basic Stock Market Terms you should know

Whether you are a budding or seasoned investor, knowledge of the basic

terms used in the stock market is necessary. You will end up becoming not
only a better investor but also a successful trader as your vocabulary on
stock market grows. Here is a glossary of basic terms that you need to
know as an investor:

 Agent:

An agent is a brokerage firm which does buying/selling of shares on behalf

of the investor in the stock market.

 Ask/Offer:

It refers to the lowest price at which the owner of the equity shares is ready
to sell the shares in the stock market.
 At the money:

Under this scenario, the strike price of an option is equal to the price
of the underlying asset which it represents.

 Broker

A person who purchases or sells an investment on behalf of the

investor/trader in return for a commission.

 Bear Market:

It refers to a period in which the prices of equity shares fall

consistently. You may look at it like beginning of a downward trend
in the stock market.

 Bull Market:

An opposite of bear market, a bull market situation in which the prices of the
stocks are increasing over a prolonged period of time. A single stock and a
sector can be bullish at one time and bearish at another time.

 Beta:

It measures the association between price of one equity share and the
overall movement of stock market. Beta of the market is assumed to
be 1. A stock’s beta of more than 1 shows a higher risk than the
market. A beta of less than 1 shows that stock is less riskier than the
market.
 Bid:

It is the highest price that the buyer of a stock is ready to pay for a
particular stock.

 Blue Chip Stock:

These are equity shares of companies which are well-established and

financially stable. These generally have a relatively huge market
capitalization.

 Board Lot:

Each exchange board defines a standard trading unit which relies on

the per share price. Some of the popular board lot sizes are 50, 100,
500, 1000 units.

 Bonds:

A bond is a fixed income investment which is issued by the

government or a company to its buyers. It shows a specified amount
which an investor lends to the issuer of the bond for a specified
period of time at a variable or fixed interest rate.

 Book:

It relates to an electronic record which is used to organise all the buy

and sell orders of particular stocks which have remained pending.
  Call Option:

In this, the buyer of the option gets a right not an obligation to purchase the
underlying asset at a specified price and time.

 Close Price:

It is the final price on a specific trading day at which the equity shares of a
company is sold or traded.

 Convertible Securities:

It is a security like preferred stocks, bonds, debentures which are

issued by an issuer capable of being converted into other securities
of that issuer.

 Debentures:

It is a form of fixed-income instrument which is not backed by

security of any physical assets or collateral of the issuer.

 Defensive Stock:

During the tenure of recession or an economic downturn, investors

holding defensive stocks like these receive a constant rate of
dividends.

 Delta:

A delta relates to the ratio of change in the price of a derivative in

 response to change in the price of the underlying asset. A higher
delta suggests higher sensitivity of the delta to the price changes in
the underlying asset.

 Face value:

It relates to the amount of money or the value in cash that the holder
of a security will obtain from the issuer of the security when the
security matures at the specific date.

 Moving Average

It refers to the average price per unit of an equity share with respect
to a specific period of time. Some popular time frames used to study
the moving average of a stock include 50- and 200-day moving
averages.

 One-sided Market:

It refers to a situation wherein a market only contains potential

sellers/ buyers instead of both being present simultaneously. Market
makers show only the bid price or an offer price indicating that
market is heading in one direction.

 Spread

It refers to the difference between the bid and the ask prices of an
equity share. You may perceive it as the difference between the
amount at which you would like to buy and the amount at which you
 would like to sell a stock.

 Volatility

It refers to the fluctuations in the price of an equity share. Highly

volatile stocks witness severe ups and downs during trading
sessions. These are highly risky bets which can bring large amount
of profits for the skilled intra-day trader.

 Volume

It shows the average number of shares of stock which are traded

during a particular time period usually the daily trading volume. It
can also convey the number of shares which you are allowed to
purchase of a given stock.

 Yield

You may use the yield to calculate the return on an investment which
you get after receiving dividend on a share. You can find the yield
by dividing the annual amount of dividend by the price paid for the
stock.

How to Invest in Equities?

Many a time investing in equity becomes complex. In case you don’t

possess enough financial knowledge and are finding it difficult to
understand, then just go for Clear Tax Invest. Here, instead of
directly investing in equities, you can try investing in Equity Funds.
 You can choose hand-picked equity funds in a hassle-free and
paperless manner.

Objective of stock market are:

1. RAISING MONEY FOR BUSINESS: Stock exchanges around the

world enable companies around the world to raise money.
Nowadays, they're mostly electronic markets where licensed stock
brokerages, and the traders representing them, buy and sell shares.
Through exchanges, private companies sell stock in the form of
publicly traded shares. Those wishing to invest in stock place buy or
sell orders through regulated brokerage firms.
2. CAPITAL FORMATION: The primary function of a stock
exchange is to help companies raise money. To accomplish this task,
ownership in a private corporation is sold to the public in the form of
shares of stock. Funds received from the sale of stock contribute to
the firm's capital formation. Companies plan to use the newly-raised
funds to invest in productive business assets and grow revenues and
profits. This positive business expansion then may be reflected in a
higher stock trading price.
3. SECURITY AND TRANSPARENCY: The legitimate sale of
stock on any exchange requires reliable and accurate information. By
requiring a high level of transparency from all trading companies,
the stock exchange creates a more secure environment for investors,
which helps them to determine the risks of investing.
4. TRADING OF STOCKS: An organized and regulated stock
exchange facilitates the efficient trading of stock and other
 investment vehicles. Without this highly controlled and coordinated
stock exchange, the global trading of stock would not be possible.
Through the stock exchange, any individual or company may buy or
sell shares in another company. In fact at any one time, there are
thousands of company shares being traded through millions of
individual transactions.

BOMBAY STOCK EXCHANGES: -

BOMBAY STOCK EXCHANGE (BSE)

 Started on 01january, 1986

 Value-weighted index.
 Consists of the 30 largest & most actively traded
stock

The Bombay Stock Exchange (BSE) is Asia's oldest stock exchange. Based
in Mumbai, India, BSE was established in 1875 as the Native Share &
Stock Brokers' Association. Prior to that brokers and traders would gather
under banyan trees to conduct transactions.

BSE functions as the first-level regulator in the securities market,

providing monitoring and surveillance mechanisms that are able to detect
irregularities and manipulations in stock prices. The Exchange also
provides counter-party risk management in all transactions that take place
on its trading platform through its clearing and settlement services. Shares
of more than 5,000 companies are traded on BSE. In addition to equity and
debt, the Exchange allows for trading of mutual fund units and derivatives.
Bombay Stock Exchange was recognized as an exchange under the
Securities Contracts (Regulation) Act in 1957. Its benchmark index, the
Sensitive Index (Sensex) was launched in 1986. In 1995, the BSE launched
its fully automated trading platform called BSE On-Line Trading system
(BOLT) which fully replaced the open outcry system. In 2005, the
Exchange changed from being simply an association of brokers to become
a corporate entity. The administrative structure of the Exchange is headed
by a board of directors, below which is a governing council and
management that presides over its day-to-day functioning.
 NATIONAL STOCK EXCHANGES: -

The NSE was incorporated is now 1992 with an equity capital of Rs 25

crores. The international securities consultancy (ISC) of Hong Kong has
helped in setting up NSE.

The National Stock Exchange of India Limited (NSE) is the

leading stock exchange of India, located in Mumbai. The NSE was
established in 1992 as the first demutualized electronic exchange in the
country. NSE was the first exchange in the country to provide a modern,
fully automated screen-based electronic trading system which offered easy
trading facility to the investors spread across the length and breadth of the
country. Vikram Limaye is Managing Director & Chief Executive Officer
of NSE .National Stock Exchange has a total market capitalization of more
than US$2.27 trillion, making it the world's 11th-largest stock exchange as
of April 2018.[1] NSE's flagship index, the NIFTY 50, the 50 stock index is
used extensively by investors in India and around the world as a barometer
of the Indian capital markets. Nifty 50 indexes were launched in 1996 by
the NSE.[2] However, Vaidyanathan (2016) estimates that only about 4% of
the Indian economy / GDP is actually derived from the stock exchanges in
India. Unlike countries like the United States where nearly 70% of
the GDP is derived from larger companies and the corporate sector, the
corporate sector in India accounts for only 12-14% of the national GDP (as
of October 2016). Of these only 7,800 companies are listed of which only
4000 trade on the stock exchanges at BSE and NSE. Hence the stocks
trading at the BSE and NSE account for only around 4% of the Indian
economy, which derives most of its income related activity from the so-
called unorganized sector and households.

Economic Times estimated that as of April 2018, 60 million (6 crore) retail

investors had invested their savings in stocks in India, either through direct
purchases of equities or through mutual funds.[4] Earlier, the Bimal Jalan
Committee report estimated that barely 1.3% of India's population invested
in the stock market, as compared to 27% in USA and 10% in China

NSE has prepared the details business plans and installation of hardware
and software system. The promotion for NSE were financial institutions,
insurances companies, banks and SEBI capital markets Ltd, infrastructure
leasing and financial services Ltd and stock holding corporation Ltd. It has
been set up to strengthen the move towards professionalization of the
capital market as well as provide nationwide securities trading facilities to
investors. NSE is not an exchange in the traditional sense where broker
own and manage the exchanges. A two-tier administrative set up involving
a company board and a governing aboard of the exchanges is envisaged.
NSE is a national market for shares PSU bonds, debentures and
government securities since infrastructure and trading facilities are
provided.

Functions of NSE

The NSE was set-up with an express objective to fulfil the following
functions:

 establishing a nation-wide trading facility for equities, debt and other

hybrid instruments
 ensuring equal access to investors across the nation through an
appropriate communication network
 providing a fair, efficient and transparent securities market to
investors using electronic trading systems
 enabling shorter settlement cycles and book entry settlements
systems, and
 meeting the current international standards of securities markets

NSE successfully fulfilled these functions by establishing the first

electronic stock market of the nation. NSE was instrumental in creating
National Securities Depository Limited (NSDL), the first depository in
India, allowing investors to hold and trade securities electronically. This
not only made investing simple, but also provided increased transparency.
The price information that was earlier available only to a handful of traders
present at the exchange was now widely broadcasted and available to
everyone at their own remote location.

Before the system introduced by NSE, an investor who wanted to trade a

security not listed on the nearest exchange had to route orders through a
series of correspondent brokers to the appropriate exchange. This resulted
in increased uncertainty and high transaction costs. NSE made it possible
for an investor to access the same market and order book, irrespective of
location and at the same cost as every other investor. NSE trading
terminals are now present in 363 cities and towns across India and can be
accessed through brokers from anywhere on the globe.

Features of National Stock Exchange

NSE, like every other leading stock exchange today, runs an order-driven
market as opposed to quote-driven market. The fully automated screen-
based trading system that it runs is called National Exchange for
Automated Trading (NEAT).

The order management system under NEAT gives a unique number to

each order received and if a match is not found immediately, it is added to
an order book where the sequence of orders to be matched are determined
based on price-time priority. That is, if two orders are entered into the
system, the order having the best price gets the higher priority and within
 the orders of the same price priority is given to the older order.

Order matching is done by comparing the best buy order, the buy order
with the highest price, with the best sell order, the sell order with the
lowest price. This is because a seller would like to sell to the buyer offering
the highest price and vice versa. While orders can be partially matched till
the complete order can be completed, the matches are always made based
on the passive price of the order and not the active price at which the match
is made

Primary market

Definition of 'Primary market'

A primary market is a market where buyers and sellers negotiate and transact
directly without any intermediaries or resellers.

The primary market is the part of the capital market that deals with the issuance and sale of
equity-backed securities to investors directly by the issuer. Investor buy securities that were
never traded before. Primary markets create long term instruments through which corporate
entities raise funds from the capital market.[1] It is also known as the New Issue Market (NIM).
Concept

In a primary market, companies, governments or public sector institutions can raise funds
through bond issues and corporations can raise capital through the sale of new stock through
an initial public offering (IPO). This is often done through an investment bank or finance
syndicate of securities dealers. The process of selling new shares to investors is
called underwriting. Dealers earn a commission that is built into the price of the security
offering, though it can be found in the prospectus.

Instead of going through underwriters, corporations can make a primary issue or right issue of its
debt or stock, which involves the issue by a corporation of its own debt or new stock directly to
institutional investors or the public or it can seek additional capital from existing shareholders.[3]

Since the securities are issued directly by the company to its investors, the company receives the
money and issues new security certificates to the investors. The primary market plays the crucial
function of facilitating the capital formation within the economy. The securities issued at the
primary market can be issued in face value, premium value, and at par value.

Once issued, the securities typically trade on a secondary market such as a stock exchange, bond
market or derivatives exchange.

Role of Primary Market

Capital formation - It provides attractive issue to the potential investors and with this
company can raise capital at lower costs.

Liquidity - As the securities issued in primary market can be immediately sold in

secondary market the rate of liquidity is higher.

Diversification - Many financial intermediaries invest in primary market; therefore there

is less risk if there is failure in investment as the company does not depend on a single
investor. The diversification of investment reduces the overall risk.
 Reduction in cost - Prospectus containing all details about the securities are given to
the investors hence reducing the cost is searching and assessing the individual
securities.

Features of Primary Market

 It is the new issue market for the new long term capital.
 Here the securities are issued by company directly to the investors and not through any
intermediaries.
 On receiving the money from the new issues, the company will issue the security
certificates to the investors.
 The amount obtained by the company after the new issues are utilized for expansion of
the present business or for setting up new ventures.
 External finance for longer term such as loans from financial institutions is not included
in primary market. There is an option called ‘going public’ in which the borrowers in new
issue market raise capital for converting private capital into public capital.

Prerequisites for Investor to Participate in Primary market Activities:

 PAN Number
 Bank Account
 Demat Account

Types of issues
Public issues can be classified into 5 types:

 Initial Public Offering (IPO) – Fresh issue of shares or selling existing

securities by an unlisted company for the first time is known as IPO. Listing and
trading of securities of a company takes place in IPO.
  Offer for Sale:- Under this method, firstly the new securities are
offered to an intermediary (generally firms of stock brokers) at a
fixed price. They further resell the same to the general public.
The advantage of doing this is that the issuing company feels free
from the tedious work of making a public issue.
Private Placement:

Under this method, the company sells securities to the institutional

investors or brokers instead of selling them to the general public.
They, in turn, sell these securities to the selected clients at a higher
price. This method is preferred as it is a cheaper method of raising
funds as compared to a public issue.

Preferential Issue – It is the fresh issue of securities and shares by listed company. It
is called as preferential as the shareholders with preferential shares get the preference
when it comes to dividend disbursement.

Qualified Institutional Placement (QIP)

A private placement of securities by a listed company to a set of institutional investors

termed as qualified institutional buyers is a QIP.

Rights Issue –
Rights issue is when the listed company issues new securities and provides special
rights to its existing shareholders for buying the securities before issuing it to public. The
rights are issued on particular ratio based on the number of securities currently held by
the share holder.

Advantages of primary market or the new issue market

 1. It provides opportunity for new investors to start new enterprises: Persons
with technical know-how may resort to promote new ventures which are profit-oriented. The
new issue market gives them an opportunity to materialize their ideas.

2. Existing companies will be in a position to expand their activities: When the

existing companies find their products obsolete, they would like to venture into new areas of
production for which they require additional capital. The new issue market helps them raise the
required funds.

3. Promotion of partnership firm into Public Limited companies or merger of

companies or facilitates buy-back of shares: When new ventures are started, a
management may wish to have a control on the ownership and for this purpose, they would like
to enter into a buy-back arrangement. By this arrangement, the shares will be issued to a group of
persons (NRIs) for a specific period after which they will be bought back from out of the profits.
This ensures the retention of ownership and prevents any change in management.

Disadvantages

 The shares are allotted proportionately if there is over subscription which means, the small
investors may not get any allotment.

 Money is locked in for longer time, as it is a long term investment.

 The shares allotment for the investor takes few days in primary market compared to secondary
market where it takes only 3 days to allot the shares.

Classification of securities in Primary Market

Securities dealt in the new issue market or primary market are classified as

1. Equity Shares.
 2. Preference Shares.
3. Debentures.

1. Equity shares: These are shares issued by companies for raising capital. The owners of
these shares are shareholders. Normally, the face value of the shares may be Rs.10 or Rs.100. A
group of fully paid shares are called stock and these can be transferred. The shareholders are
entitled for profit, which are distributed to them in the form of dividend. The share capital will be
refunded to them only during the winding up of the company, provided the company has
sufficient assets.

2. Preference shares: Preference shares are similar to equity shares but are given on a
preference basis to certain shareholders like promoters, auditors, etc. There are cumulative, non-
cumulative, participating, redeemable, irredeemable, convertible and non-convertible preference
shares. Preference shareholders will get the first preference in the distribution of dividend over
equity shareholders. The same condition applies in the repayment of capital at the time of
winding up.

3. Debentures: It is a loan obtained by the company from the public for a fixed interest rate
for a fixed period. Those investors who do not want to take any risks will prefer debentures as
they have less risk on the repayment compared to shares. There are debentures which have
mortgage charge on the assets of the company and these debenture holders are assured of the
repayment.

Secondary Market

What Is a Secondary Market?

The secondary market is where investors buy and sell securities they already own. It is what
most people typically think of as the "stock market," though

stocks are also sold on the primary market when they are first issued. The national exchanges,
such as the New York Stock Exchange (NYSE) and the NASDAQ, are secondary markets
Definition of 'Secondary Market'
Definition: This is the market wherein the trading of securities is done. Secondary market
consists of both equity as well as debt markets.

Types of Secondary Markets

There are two types of secondary markets:

Exchanges

It is a marketplace, wherein there is no direct contact between the buyer and the seller, like
NYSE or NASDAQ. There is no counterparty risk as an exchange is a guarantor. Also, heavy
regulations make it a safe place for investors to trade securities. However, investors face a
comparatively higher transaction cost due to exchange fees and commission.

Over-The-Counter (OTC) Markets

It is a decentralized place, where the market is made up of members trading among themselves.
Foreign exchange market (FOREX) is one such type of market. There is more competition
among the participants to get higher volume, so prices of security may vary from seller to seller.
Also, OTC markets suffer from counterparty risk as parties deal with each other directly.

Features of Secondary Market

 Gives liquidity to all investors. Any seller in need of cash can easily sell the security due
to the presence of a large number of buyers.

 Very little time lag between any new news or information on the company and the stock
price reflecting that news. The secondary market quickly adjusts the price to any new
development in the security.
  Lower transaction costs due to the high volume of transactions.
 Demand and supply economics in the market assist in price discovery.
 An alternative to saving.
 Secondary markets face heavy regulations from the government as they are a vital source
of capital formation and liquidity for the companies and the investors. High regulations
ensure the safety of the investor’s money.

Importance of Secondary Markets

 It is a good indicator of a country’s economic condition. A rise or drop in the stock

market suggests a boom or recession in an economy.
 It helps in valuing a company as economic forces of supply and demand determine the
prices.
 Ensures liquidity for the investors as one can easily buy or sell the securities.
 It gives investors a chance to use their idle money to earn some returns.
 It helps the company to monitor and control public perceptions.

Difference between Primary Market & Secondary Market

Stock market refers to a collection of markets and exchanges where the issuing and trading of
equities or stocks of publicly held companies, bonds, and other classes of securities take place.
This trade is either through formal exchanges or over-the-counter (OTC) marketplaces.

The financial market is a world where new securities are issued to the public regularly of varied
financial products and services, tailored to the need of every individual from all income brackets.
These financial products are bought and sold in the capital market, which is divided into the
Primary Market vs Secondary Market. This is both distinct terms. The primary market refers to
the market where securities are created, while the secondary market is one in which they are
traded among investors.

 The primary market is where securities are created. It’s in this market that firms float new
stocks and bonds to the public for the first time. An initial public offering, or IPO, is an
example of a primary market. An IPO occurs when a private company issues stock to the
 public for the first time. Various types of issues made by the corporation are a Public
issue, Offer for Sale, Right Issue, Bonus Issue, Issue of IDR, etc. The company who
brings the IPO is known as the issuer, and the process is regarded as a public issue. The
process includes many investment banks and underwriters through which the shares,
debentures, and bonds can directly be sold to the investors.

For example, company XYZ Inc. hires four underwriting firms to determine the financial details
of its IPO. The underwriter’s detail that the issue price of the stock will be $20. Investors can
then buy the IPO at this price directly from the issuing company. This is the first opportunity that
investors have to contribute capital to a company through the purchase of its stock. A company’s
equity capital is comprised of the funds generated by the sale of stock on the primary market.

 The secondary market is commonly referred to as the stock market. The securities are
firstly offered in the primary market to the general public for the subscription where a
company receives money from the investors and the investors get the securities;
thereafter they are listed on the stock exchange for the purpose of trading. This includes
the New York Stock Exchange (NYSE), NASDAQ and all major exchanges around the
world. The defining characteristic of the secondary market is that investors trade among
themselves. In this market existing shares, debentures, bonds, options, commercial
papers, treasury bills, etc. of the corporates are traded amongst investors. The secondary
market can either be an auction market where trading of securities is done through the
stock exchange or a dealer market, popularly known as Over the Counter where trading is
done without using the platform of the stock exchange
 For example, if you go to buy Amazon (AMZN) stock, you are dealing only with another
investor who owns shares in Amazon. Amazon is not directly involved with the
transaction.
 While primary market offers avenues for selling new securities to the investors, the
secondary market is the market dealing in securities that are already issued by the
company. Before investing your money in financial assets like shares, debenture,
commodities, etc, one should know the difference between the Primary Market and
Secondary Market, to better utilize savings.
What is Demat account?

Demat Account or dematerialized account provides facility of holding shares and securities in
electronic format. During online trading, shares are bought and held in a Demat account, thus
facilitating easy trade for the users. A Demat Account holds all the investments an individual
makes in shares, government securities, exchange-traded funds, bonds and mutual funds in one
place.

DEMAT SERVICES

A Tata security is a registered member (Depository participant) of CDSL. In this system,

physical security holding is converted into electronic (or in other words, dematerialized)
holdings.

Why Giga Goodwill Demit Account?

1. Demat A/C free open.

2. Demat access through internet and phone.

3. Portfolio valuation on the account statements.

4. Online execution of transactions at branches.

5. Special rates for stock market intermediaries and sub brokers

6. Transaction update from back-office four times a day.

Transfer of shares and settlements ------------

Transfer and settlements have never been easy as it under the depository system.
All that is required is an instruction slip from you. If you are selling securities then
it has to be a delivery instruction slip. If you are purchasing securities it has to be
a receipt instruction slip or standing instruction for credit.

Even securities establishment like bonus and right can be credit to your Demat
account electronically. All you have to do is choose the right option in the share
application from. Crash benefits like dividend and interest will, however be
forward to you directly and not through the depository.

Holding & Transaction Statements

We provide statements of holding cum transaction every month at Zero cost.

Dematerialization of shares

At you request we arrange to convert your physical holding into electronic from.
To do this

Would require opening an account with CDSL through us called ―Beneficiary

Account‖ in the Name and style in which the shares are held and lodge the share
certificates with us accompanied by a dematerialized request from, separate for
each scrip. You are required to only make sure that CDSL has admitted that scrip
for dematerialization. An up to date list will be provided to you who will be
constantly updated.

Dematerialization

You have the option to convert your electronic shares back to physical shares.

Pledge-Hypothecation You can also avail against your electronic shares. This
process is also much faster than in the case of physical shares

WHY CHOOSE US? CLIENT FOCUS

1. Client relationship from the core of our business. We value each client, no
matter what size, as a long-term relationship. And we seek to provide
unmatched services to each client and place him as a partner at the centre
of everything we do.
2. From the very beginning of the relationship, we work closely with every
client to identify his financial goals and risk tolerance levels and leverage
our strength of the product offering, research and financial strength to help
achieve his goals. In the process, we become a professional partner,
creating opportunity, and adding value and transform vision into reality.
3. In addition to traditional broking services, we are also equipped to handle
commodity trading facility as well as currency derivatives and have access
to a wide range of financial services like IPOs, mutual funds and insurance.
4. In an increasingly competitive environment, clients today require
personalized solution and greater flexibility and responsiveness than ever
before. Our professionals are always on call ‘. We provide them services
throughout the year and not just at the end of the year. We believe such
service is essentials for delivering solution and constructive relationship.

5. We have developed a strong and enduring team by recruiting from leading

graduate and post graduate universities and promoting from within. Our
team work together to provide superior results to our client. At the same
time, each of our clients is assigned a specific team member who owner
‘the relationship, providing continuity, responsiveness and a point of easy
access to the firm. Culture

6. We strive to maintain standards at all times and lay emphasis on honesty,

integrity and confidentiality. We speak and act to ensure transparency at all
levels and in everything we do. Financial strength

7. The strength of our balance sheet is such that it gives greater confidence to
all our retail and institutional clients in detail with us. The financial strength
of the group helps in future building the network and infrastructure to
cater to the larger market.
Back office:

For back office operations, we use the lidha Didha system of Apex Soft cell Pvt.
Ltd. This is one of the top most back office software in the industry. It has the
capacity to process over one lakh traders in a five-minute frame. Our operation
teams have an easy-to-navigate client login system, which is used to generate
activity reports, short-terms and long-term tax reports, holding and portfolio
valuation reports as well as trading to delivery activity reports. We also have the
requisite infrastructure needed to handles STP, upload and download and
download information to or from exchanges, bank and depositories, support units
to ensure delivery notes, bills and ledgers of trading accounts and cash
management services for efficient and effective fund management within the
group.

Client interface:

We have trading terminal (both direct and indirect), online monitoring, control
terminal (administration terminals) and back office support terminal (settlement
terminal) across all location and centres. We have India’s best single screen Multi
Exchanges Trading Software platform. Our entire centre across the country are
connected through our own network, leased ISDN lines and LAN network, MPLS
and internet.

The high-end IBM serves with sophisticated security features that we use caters
to trading points across the country. This also gives u rte advantage of scalability
in terms of location and size of our planned operations. We provide telephonic
and chat support for technical and functional issues of branches, franchises and
all our clients.

Our websites www.Tata securities. comics comprehensive and provides online

feeds, net trading and provides online feed, net trading portfolio tracking tool.
Investors also have access to a wide range of financial news, information and
various research reports facilitating quick decision-making.

Our online trading portal at www.Tata securities.com is equipped with facilities

like all segment broadcasts, multi-features graphs, online payment gateways and
automatic password mailer utility for better security. It user-friendly navigation
allows easy viewing of trading accounts, depository accounts and research
reports, which are linked to the trading platform.

The website also has a provision for creating portfolios and monitoring them on a
regular basis. Our wealth trackers ‘module helps investors in getting ready
updates their investment so that they can know the changing trends of the
markets and the impact of the same on their portfolio.

Customer Focus:

Despite a rapidly expanding client base and a dizzying increase in transaction

volumes, each client at Tata securities is special. We specialize in building long
term relationship with our customers by providing them with the four things they
desire most, viz., speed, convenience, reliability and personalized services.

Our continuous strive to provide best services to our clients, results in receipt of
not a single Arbitration Award against the company since its inception.