PROJECT REPORT ON

WORKING OF STOCK
EXCHANGE & DEPOSITORIES
Sachin Kumar Awasthi
This project gives the brief analysis and study &
working of Stock Exchange of India with reference to
UP Stock Exchange & its different department.

Institute of Business
Management
CSJM University
Kanpur
Date
 PREFRENCE

Practical study is very essential for any professional curriculum

otherwise it will merely be a leap is darkness. Apart from four
walled study it is very necessary to deal
with the day to day working of origination. To fulfill the above
objective every Individual who is doing management studies has
to undergo this phase of practical study.

Before he/she can consider himself/ herself fully qualified

potential manager. During the course of my training I learned
that undertaking is one thing and action is another.

I got opportunity of undergoing training at Uttar Pradesh stock

exchange Kanpur from 24 June to 5 august. Duration of my
training is 6 weeks.

This practical training of 6 weeks was very helpful to me. As I

deal with various financial activities. This study also help me to
judge the difference between classroom study of management
and the way the organization are managed practically.

DATE 31-08-2010
PLACE KANPUR SACHIN KUMAR AWASTHI
CONTENT
1. Introduction
2. Stock exchange in India – background
3. Importance of stock exchange
4. Function of stock exchange
5. Working of U.P.S.E
6. Departmental analysis
 Membership
 Clearing houses
 Listing
 Surveillance
 Grievance, compliance & arbitration
 Legal
 Audit & inspection
 R & D investor service cell & library
 Accounts & finance
 U.P.S.E securities ltd
7. Margin department
8. Depositories & CDSL
9. Conclusion
10. Bibliography
 INTRODUCTION

In common parlance, stock exchange means, a place where

stocks are traded The word stock means Bond/ equity shares /
preference shares / debentures etc and
Exchange means trading / transaction. Stock exchange
provides liquidity for the stock And securities. It is market
that provides a platform to owners of securities/ stock to sell
their holding at reasonable price and also provides an
opportunity to the prospective buyers to purchase the same.
The capital market can be bifurcated into two categories:
 PRIMARY MARKET: new issues of equity/ debt/ mutual
fund, issued directly to Investors either in the form of initial
public offer (IPO) or right to shares or bonus shares.
 SECONDARY MARKET: The market where the securities
that’s have already been in primary market traded. These
secondary markets are called STOCK MARKET. Thus
stock markets are secondary market, which enable the
owners of shares / securities to sell their holdings &
provide an opportunity for prospective buyers to purchase
the same.
The Indian stock market is now being considered at par with the
international stockMarket. he constitution of SEBI to regulate
the stock market was the first step in the Direction. The
introduction of demat trading & very recently, the futures
trading in Index at BSE & NSE shows that we are slowly
moving to international practice and
Standard.
The leading stock exchanges in India are:-
1. National stock exchange
2. Bombay stock exchange
3. Kanpur stock exchange
4. Over the counter of India.
5. Bangalore stock exchange

STOCK EXCHANGE IN INDIA –

BACKGROUND
The stock exchange is more than 100 years old for the economy
of India. The Bombay stock exchange was formed in 1875,
while the stock exchange of Calcutta and
Madras were formed in 1908 and the Delhi stock exchange was
formed in year in which we got independence from British rule
i.e. in the year 1947. At present there are 24 stock exchange only
two stocks financial market in India. At the same time the
introduction of securities or say paperless trading system in
1996 and the futures trading in index exchange viz., national
stock exchange and the OTCEI have been established by all
India financial institution and all others stock exchange are
operating as associations
 Meaning of stock exchange
“A BODY OF INDIVIDUAL WHETHER
INCORPORATED OR NOT CONTITUTED FOR THE
PURPOSE OF ASSISTING OR CONTROLING THE
 BUSINESS OF BUYING, SELLING OR DEALING OF
SECCURITIES”
‘According to securities contract (regulation act) 1956

 Self regulation by stock exchange and supervision by SEBI

The objective of a stable market is to be achieved by two
agencies at two Levels. First at the exchange levels, the board
of directors, and the national level The securities and
exchange board of India.
The board of directors of the stock exchange regulates the
activities of the stockbrokers. Stock exchanges are designed
to be self- regulatory. At the national level is the SEBI
exercising a supervisory role over the functioning of the
capital market and the stock exchange.

Purpose and aims of SEBI

 Regulating the activities of the stock exchange and other

securities market.
 Registering and regulating the working among others of
stock brokers and share transfer agents.
 Banning insider trading in securities.
 Restricting the transaction pertaining to of shares and
takeover of companies.

SEBI‘s role is to set down a set of prudential and guideline,

which would be aimed at investor protection and would be
 rigorously enforced while allowing for considerable
autonomy and operational flexibility.

The securities exchange board of India (SEBI) uses four

tier system to keep control over the working of stock
exchange and their members for the growth
And development of primary market in India and at the
same time to inculcate
Confidence among the investors both domestic as well as
foreign ones.
 Imposition of requirement of Base Minimum Capital on the
members of stock Exchange.

IMPORTANCE OF STOCKEXCHANGE
The importance of stock exchange has gained momentum
especially since the last decades. They provide a
readymade marketability and liquidity to the
securities.With the spirit, such market also helps in channel
sing the funds to the most profitable and growth venture by
their price mechanism. it can rightly be said to ascertain the
health of any economy, analyzing the currents trends at
stock exchange would be the lucrative indicator.
Stock exchange facilitates the industrial growth. It has
changed the traditional perspective of public form
investment in real estate, to investment in the securities of
the companies. It facilitates the corporate in raising funds to
be diverted in various multiple channels, thus ensuring
rapid industrial growth.
 Such markets are vital to the externa financing of a firm
and as a whole to large diversified investors and economy
at large.

 Importance to the economy

Stock exchange has been described as the heartbeat of the

economy. In real terms, it has been regarded as a mirror of
economic situation of the country. The importance of such
markets can be assessed by means of following noteworthy
benefits it owes to the economy of any country across the
globe.

 It accelerates the economic development of the country.

 Aids in expansion and modernization of capital business
enterprise.
 Rapid development of securities market.
 Influx of foreign capital base, through NRI, s , FII,s , OCB,s
participation into the country. (However now OCB, s are no
more eligible to participate in the capital market in India.
 Promotes industrial development.

 Importance to the corporate houses / sectors

It has resulted in great value to the business enterprise. As
such the listed companies enjoy the following benefits:
 Higher credit rating/ goodwill and creditworthiness in
national and international markets, since the listed securities
are trade profitability and command higher value in the
capital markets.
 Diversified market operation as a securities are regularly
quoted and traded in the market across the country, within
the ease to the large investors by means of making the most
fair deal through interest based online trading of securities in
such markets.
 It facilitates minimized fluctuation and avoided the
excessive bullish and bearish tendencies as the result
protecting the situation of speculation; insider trading also
prevents the securities prices rampant fluctuation by means
of marinating a price band limits.

 Importance of the investors:

The real benefit of such market is reaped by the investors
whether large or small:

 Liquidity of investments: The investors are free to buy and

sell securities in these markets during the trading days.
Thus , commanding liquidity of investments.
 Safe and fair dealing: in such markets is proposed only in
presence of the statuary/ rules, regulation , bye laws of the
respective stock exchange, and also in conformity with the
SEBI Rules, Regulation ,circulars, as prescribed from time
to time.
 Securities to investors: By means of SEBI guidelines of
investors protection is a ready for the stock exchange so as
 to ensure the securities to the diversified investors (both
domestic and foreign).
 Investor education and awareness: stock exchange maintain
a separate cell for the purpose of expanding the interest of
investors with respect to the latest trends of secondary
markets profitability trades scripts , measures to protect the
interest ,etc.

With reference to the stock market players, it can be stated that

in India, the following
Types of players are commonly acting namely:-

 Traders
 Investors
 Small investors

FUNCTION OF A STOCK EXCHANGE

Following are the function of a stocks exchange:-

1 The secondary market allows investors to sell to others

investors the securities they buy In the primary market. This
provides the liquidity that allows investors to purchase
Securities without having to hold them indefinitely or until the
maturity

2 It aids the listed companies to price the securities they are

going to sell in primary Market.
3 The price of a firm,s securities in the secondary markets has a
direct impact on the Wealth of the shareholders. Although the
market price is influenced by many variables,
The firms, ability to generate the shareholders returns depends a
lot on the market price Of the share, which varies in response to
firms profitability.

4 A continuous market: The basic function of the stock market

is te creation of a Continuous markets where securities are
bought and sold in volume with little
Variation in current market price as trade succeed one another.
The main indicatiors Of a continuous market are:

 frequency of sales.
 Narrow spread between bids and offer.
 Prompt execution of order.
 Minimum price change between the transaction as they
appear
5 Aid to financing industries: listed companies find it easy to
sell further issues of their Shares in the primary markets price of
the share reflecting the past performance and
Prospect renders the task of raising funds through further issues
(right issues) easier In fact , by creating a continuous market for
the rights, stock exchange enable A company to market further
issues successfully.

6 Others function: besides , the aforesaid function , the

following are also noteworthy to To be taken into view

 Acts as an open market for the appraisal of te securities

 Facilitates smooth inflow and outflow of funds.
 Provides healthy speculation.
 Furnishing detail account of ndex of the progress in the
market trading.
 It eases the task of valuation of securities.
 Enhance the degree of mobilization of saving potential of a
country .
 Prospers the distribution process of new security issues .
 Maintaining higher quality standard of corporate sector.
 Directing free flow of capital into the profitable avenues of
business

 Maintaining rate of profits.

 Provides a base for subsequent trading of primary issues.
 Investors, education and protection
 Acts as an economic barometer for growth and survival of
the economy of any nation .
 It aids in proper regulation of company management.
WO
RKI
NG
OF
THE
UTT
AR
PRA
DES
U.P SOCK EXCHANGE

H
STO
CK
EXC
HAN
 (Mr.G.H Singhania)
THE PROFILE

Recognition date : 03/06/1982

Established By : Mr G.H. Singhania

Inaugurated By : Mr Ramaswami
venketraman
(The President of India on
08/02/1989)

No. of listed companies :

743
No of delisted companies : 1(trevani glass ltd
)

No. of members : 542(active member

97)

No of employees : 73

Monthly turnover (june , 04-05 ) Rs. 708.38 crores.

MAIN OBJECT
1 To regulate the business of the exchange of stocks and
shares, debentures stocks, Government securities, bonds and
equities of any description and with a view thereto To
established function of stock exchange in Kanpur and / or
elsewhere.

2 To acquire the membership of ay others recognized stock

exchange in India and and Abroad including membership of
OTCEI to broad base the operation of the stock exchange for
the benefit of the general public and investors at large
through its member brokers provided no trading will be made
by the exchange on its owns behalf.
3 To promote one or more subsidiary companies whether party
or wholly owned , with the object to promote the trade in
share and stock, debentures, bonds and other
securities of any description issued by companies , statutory
corporation , state government Financial institution and the like
and all others kind of securities directly or through Its members
and to acquire the membership of one or more recognized stock
Exchange in India or abroad.

TRADING AT THE STOCKS EXCHANGE

To purchase or sell securities on a stock exchange the following

Procedure has to be followed:
# A non- member is not allowed to transact business at the
stock exchange, it can only be done through a member of the
stock exchange.
# After the client selects a broker, he has to give an order to
purchase/ sell his particular security .

The order may be placed in any of below mentioned forms;

1. Fixed price order: The client specifies the price at which

the broker is to execute the order. ex:- “buy 100 reliance at
240”.
2. Limit order: client specifies the upper and lower limit of the
price. Ex. Buy 100 reliance under 240 or sell 100 reliance
at 240 or more
 3. At best or market price: order must be executed at the best
possible price prevailing in the market . Ex: Buy 100
Reliance at best.
4. Immediate or cancel order: The instruction of the client are
required to be executed immediately. Such an instruction is
given when the price of securities fluctuate violently.
5. Open order: client does not specify any time limit within
which the order must be executed.
6. Stop loss order: Such an order is placed to safeguard
against the heavy fluctuation
In the price of securities.
7. Discretionary order: Where the broker is given liberty to
buy or sell a particular
Securities at his discretion.

# After receiving the order the broker will contact other

broker / member of the stock
Exchange.
# Contract note will be prepared after the days,
Business is over. The contract note
Mainly includes :-

1 Number and price of securities purchased or sold.

2 Names of the parties.
3 Total amount to be paid by / to the client.

# The contract note is signed by broker and is sent to the

Client.

# The last step of trading procedure is settlement. Its

Modes depends upon the nature of the contract.
 Ready delivery contract – such contract are settled on
the same day or within the
Time fixed by the stock
Exchange authorities.

 Forward delivery contract – forward delivery

Transaction are settled on the day Fixed by the stock
exchange authorities. Such Contract is made without the
intention of taking or Giving delivery of the securities . The
object is to
Make profit by taking - Advantage of price
Movement in future.

LIST OF EXISTING DEPARTMENT AT

U.P.S.E

A Internal departments of UPSE UNDER their departments

heads
1 Trade operation deparment.
2 Margin department.
3 Clearing houses department.
4 Listing department.
5 Surveillance department.
6 Membership , grievances, complains and arbitration
department.
7 Legal department.
8 Research and development department.
 9 Secret office
10 Account and finance(established) department.
11 Secretorial department

B U.P.S.E. securities ltd. (a wholly owned subsidiary of UPSE)

MEM
BERS
HIP
DEPMEMBERSHIP
DEPARTMEN
ART T
MEN
T
The department mainly deals with members / membership
admission / transfer Conversion / resignation / surrender of
certificate of registration of SEBI . Admission to Membership of
exchange is governed by the eligibility criteria as specified in
article 19 Of the articles of the exchange which states:-

An individual apply for membership of exchange:

1. Be not less than 21 years of age.

2. Have qualification of matriculation or equivalent
examination (SEBI requires minimum intermediates).
3. Be a citizen of India
4. Possess a minimum of two years experience:
a) In dealing in securities or
 b) As portfolio manager or
c) As investment consultant.
d) Have minimum net worth / capital of rupees 10.00 lacs
. as certified by C.A
5. Submit an undertaking to the effect that:-
a) He/ She is not associated with any defaulting members
of any exchange.
b) He / She has introduced any fake / forged / stolen
hares in the market .
c) No investigation / enquiry is pending against him / her
in any exchange .
d) Pay all exchange / SEBI dues and comply to all rules /
regulation of the
Exchange / SEBI in force from time to time.

BODY CORPORATE

Minimum net worth requirement for corporate seeking

admission to Membership of the exchange is Rs. 20.00 in case
of direct corporate , and Rs . 10.00 Laces in case of conversion
cases i.e. from individual to corporate.
Two designated directors to remain on the board of
company,Eligibility criteria for designated directors to be the
same as in case of individual.
For any change in status & constitution of member (in terms of
SEBI Cir. NO. 30 dated 9.07.3003) member is required to seek
prior approval of exchange as well as SEBI . At the same time ,
for effecting any change , member must ensure that al SEBI and
exchange have been paid.

SECRETARIAL
GOVERING BOARD
The governing board of UPSE association limited of 13
members classified as under;
 Six elected under the provision of the articles of association
of exchange
 2 government nominees appointed by SEBI
 4 public nominees (A list of 12 person is sent by UPSE
association limited out of which 4 are selected and
approved by SEBI).
 One member is the executive director who is appointed by
the UPSE association ltd board with approval of SEBI.
 At every annual general meeting of the exchange 1/3 of the
members elected on the governing board retire by
rotation; provided that where a person has been a
Member, elected for two consecutive terms on the
governing board, he shall not be eligible for re election for
a further period of two years.
As per existing article, there is provision for election of a
President of the exchange out of the non- elected members
on the governing board. He will hold the office of president
for the period of one year.
However. W.e.f 12 july 2002 SEBI has superseded the
governing board of the exchange and appointed
 administrator and all the powers And function of the
governing board are with the administrator, under section
11 of the securities contract (regulation) act 1956

STATUTORY COMMITTEES
In addition to the committees of the board of directors. If
any , referred to in the above article, the board of directors,
every years as early as convenient after every General
meeting , appoint the following committee namely-
 Arbitration committee
 Defaults committee
 Disciplinary committee

These committees are consist of 60% non members and

40% members in a 8 members committees and the
president generally presides over each of meeting of such
committees.
Besides the above three committees the following
committees are also Constituted by the governing board of
exchange every year.
 Computer breakdown committee
 Ethics committee
 Screening committee
 Compulsory delisting committee
 Investors service committee
Besides handling the correspondence work with SEBI /
ministry / income tax the following marks are also handled in
this section ( secretarial)
  Compilation and forwarding the monthly development
report to SEBI.
 Co- ordination with other department of the exchange for
implementation of
Various SEBI circulars.

 Compilation and forwarding the pre- inspection report

 Compilation and and forwarding the compliance report
( conducted
Every year)
All statutory requirement under companies act are also
required to be done by This section viz…

 Filling of annual return after every AGM .

 Filling of balance sheet .
 Filling of form no. 23 , 29 , 32 etc
 Preparation of board meetings notice, agenda, minutes.
 Preparation of notice calling AGM & EGM and minutes.

Similar work relating of UPSE securities ltd . (a wholly

subsidiaries of UPSE) are also Handled from section.
CLE
ARIN
G
HOU
SES
Pay in and pay out of money and securities for the settlement of
the transaction transacted on the on- line trading system of the
exchange as per norms provided by the SEBI as well as
exchange from time to time.

Presently rolling settlement T+2 is applicable in the exchange.

  Activity Day
Trading Rolling Settlement Trading T

Clearing Custodial Confirmation T+1 working days

  Delivery Generation T+1 working days
Settlement Securities and Funds pay in T+2 working days
  Securities and Funds pay out   T+2 working
days 
  Valuation Debit T+2 working days
Post Auction T+3 working days
Settlement  
  Bad Delivery Reporting T+4 working days
  Auction settlement T+5 working days
  Rectified bad delivery pay-in and pay-out T+6 working days
  Re-bad delivery reporting and pickup T+8 working days
  Close out of re-bad delivery and funds pay-in & pay- T+9 working days
out

A brief note on auction and close out carried out at exchange

If securities are not available in the online section on T+2 day

with in the prescribed price limit ( i. e 25% of the current market
rate ) then transaction is closed out as per the standardized
procedure specified by the SEBI.
The close out price will be highest price recorded in that script
on the exchange in the settlement in which the concerned
contract was entered into up to the date of auction / close out.
OR
20% above the official closing price on the exchange on the day
on which auction offer are called for (and in the event of there
being no such closing price on that day .
Then the official closing price on the immediately proceeding
trading day on which there
Was an official closing price ).

Which ever is higher

As per SEBI letter no: SMD/ policy / CIR – 08/ 2002 date 16th
april 2002 that in cases of close out to the extent of short
delivery if the shares can not be acquired in the auction on come
basis then the mark up price would be 10% instead of 20%.
As per SEBI circular no SMD/ PPOLICY/ CIR – 21/ 02 dated
04 / 9 / 2002
That in the case of close out for script which have been in
definitely suspended / delisted the reference price would be 26
weeks average traded price while the close out mark up Would
be20%

Deactivation of trading terminal and

Imposition of penality

In case of any default by a member regarding timely pay in of

the fund trading terminal of the concerned member is being
deactivated and penalty is also being imposed upon the
concerned member as prescribed by the exchange from time to
time. On receipt of complete amount of pay in and penalty
imposed by th trading terminal by the concerned member , is
reprieved

LISTI
NG
Listing means the admission of the securities of a public limited
company for trading on Stock exchange. The principle objective of
listing are to provide liquidity and free negotiability to securities;
ensure proper supervision and control of dealing there in and protect
the interest of the shareholder and of general investing public. While
there in no statutory obligation that every public limited company
should get it securities listed on recognized stock exchange. It
becomes so under section 73 of the companies act once a declaration
is made in prospectus of the intent to apply for listing .
All the companies who fulfill the listing requirement of the exchange
are granted permission of the exchange for the listing.
The company, which is not listed on stock exchange, should adopt a
request letter of application from within 10 days of the filling of the
prospectus with the registrar of companies

Along with certain documents i.e the memorandum and articles of

association, debentures trust deed. Prospectus underwriting
agreement , service and selling agency agreement, collaboration and
technical agreement, particular of dividend and cash business, if any ,
paid during the last ten years , a short history of companies with
details of its activities, specimens of share certificates, debentures
certificates, transfer, split and consolidation receipt. The application
forms consist of

Details information under the various head such as the title of the
company, date and place of incorporation, address or registered and
the principal place of business, present capitalization and past history
of capital structure, terms and condition of any option , dividend
record , particulars of any recognition , reconstruction , amalgamation
, absorption etc, The company desirous of listing has to execute with
the stock exchange a detailed agreement , in the prescribed form. The
list companies which needs further issues does applies on other
prescribed letter of application and supporting documents.

STEP IN LISTING
There are five step in the procedure, namely ;

1. Application company communicates to the stock exchange.

2. Preparation and printing of a formal application.
3. Investigation by a committee of the board of directors.
4. Approval by the board of directors.
 5. A new company should have a post issues capital of Rs 3
Crores. An existing company opting for the additional list
should also have apost issues capital of 3 Crore.
6. The company intending to list at the stock exchange have to
pay two types of fees;
1 Initial listing fees
2 Annual listing fees

This the main source of revenue of the stock

Exchange.
1 Initial listing fees Rs 10,500
2 Annual listing fees
Co. with paid up share capital of Rs. 1 crores Rs 6000
Above Rs 1 crores and upto Rs 5 crores Rs 9000
Above Rs 5 crores and upto Rs 10 crores Rs14,000
Above Rs 10 Crores and upto Rs 20 crores Rs 28,000
Over and above 20 crores for every increase of Rs 1 lacs Rs 600

Delisting of companies
With the repeal of controller of capital issues Act. Listing was
badly needed by many companies consequent to which every
company whether with or without proper financial standing got
enlisted . The result was that prices of share of these companies
dropped and were hardly traded . Thus , as a result many
companies got delisted from UPSE and they fall into category of
the defunct companies.
GRIVEANCE &
COMPLIANCE
Grievances & complaints department was set up in exchange in
may 1985 under guideline issued by the ministry of finance ,
department of economic affair , stock exchange division .
Department is attending to the claim/ complains by investors /
members on various issues against:-
(1) member of the exchange
(2) companies
Claims against member
Whenever a claim has lodged by an investor, against member
related to share transaction , the same has taken up by the
department . claim letter is forward to the concerned
Member, replies, rejoinders and documents are exchanged between
the parties and, on dates fixed for hearing, the investors, s service
committee, after through security of the documents, makes all effort
to get settled the claim amicably and ultimately, pronounces its
decision.

Complaints against companies

Investors / members complaints against companies are also handled

by the department. Complaint against the companies may of varied
nature e.g

(1)Non receipt of allotment advice / refund order

(2)Non receipt of dividend
(3)Non receipt of share certificates after transfer.
(4)Non- receipt of annual report.

Such complaints forward by department to the concerned companies.

Arbitration
The arbitration department as per the byelaws of the exchange
handles cases between client And members.

Default
In case of non payment outstanding dues of exchange and failures to
fulfill his monetary Liabilities and/ or Obligation relating to share
transaction in exchange, a member is declared
Defaulter. Works related to defaulters and the department. As per
byelaws of exchange, also looks after SGF.

Committee meetings
Besides above , the department is also responsible for convening/
conducting meetings of Various committee viz arbitration, default,
disciplinary, screening and investor services.
 LEGAL
DEPARTMENT
The legal department of exchange give advice to various department
on legal matter Whenever they seek it from the department.
Whenever there is a proposed change in the
Byelaws of the exchange, legal deparment takes proper steps for
incorporation of such change into byelaws. The department deals
with various cases filled by the exchange against member, broker,
service providers etc or any case filled by these parties and their
client & sub brokers against the exchange.
 Cases filled against the members for bad deliveries.
 Cases filled against the company for non transferring the shares.
 Cases filled as an appeal in the lower court/ high court/
consumer fourm.
 Cases filled by member and non- members against the
arbitration award and against Any order passed by exchange.
 AUDIT &
INSPECTION
DEPARTMENT

Maintaining records of audited balance sheet

(b/s) of Members
Every year, all active are required to submit their audited balance
sheet and net worth certificate. In the exchange. The department is
responsible for collection of the audited balance sheet to be submitted
by all active member and imposing penalties in case of late
submission of B/S beyond
The stipulated time.

Inspection of books of accounts of members1

As per SEBI guideline, exchange is required to conduct inspection of
20% of active member In such financial year. Accordingly, the
department select the names of the members to be inspected
(finalized by the executive directors) on the bassis of turnover, in the
manner that a cross section of all member is covered . few names are
selected from the members against whom Complaints department by
investors . few others name are taken from the members against
whom surveillance action has been initiated. The work of inspection
of brokers is assigned to independent chartered accountants.
Inspection are conducted by the C.A.s as there by seeking replies.
Inspection files are placed before the disciplinary committee for
consideration and further action.

SEBI registration fees – to be paid by the members

As per the SEBI stock brokers regulation, 1992. every broker
registered with SEBI, is required to pay SEBI fees based on his
turnover trough the exchange. The deparment also handles this work.
Member are advised to submit a CA certified annexure ,A, showing
their turnover different heads i.e jobbing off market trades etc in the
prescribed format in the exchange within the prescribed time limits.
A certification i.e annexure ,c, based on annuxure A submitted by
member and corresponding exchange records is to be sent by
exchange to SEBI for the purpose of calculation of fees payble to
SEBI.

SEBI registration fees / SEBI turnover fees / SEBI

fees
Schedule III of the SEBI ( stock broker and sub broker) regulation
1992 specifies the fees to be paid by the stock brokers. Every
member is required to be paid registration fees in manner set out
below;
(a) Where the annual turnover does not exceed Rs 1.00
Crore during any financial year .
(b) Where the annual turnover does not exceed Rs 1.00
During any financial year a sum of 5000 plus 100 of 1%
of the turn over in excess of Rs 1.00 crore for each
financial year
(c) After the expiry of five financial year from the date of
initial registration to pay a sum of Rs 5000/- for every
block of five financial year after the date of grant of initial
registration .

Every year detail of varius components of the total turnover are to be

furnished each & every active member in the exchange in the
prescribed time limit in annuxre ,A, auditors,s certificates
Turnover shall be computed as aggregrate of sales and purchase done
by the member in his own account and in the account of his clients
In case of jobbing transaction which have been squared off during
the same day and such transaction have not been taken by the boker
on the behalf of client , fee at a concessional rate
Of .005% is payble on sale transactions i.e Rs 5000/- on every Rs 1
crore no fees payble on purchase transaction comes to Rs 250/- per
Rs 1.00 crore.
In case the member fails to submit the transaction detail in
annexure ,A, then fees at a flat rate of .01% on the total turnover is
payble by the member i.e Rs 1000/- on every Rs 1 crore of turnover.
 R&
D
INVE
STO
R
SERV
ICE
DEP
ART
MEN
T
The investor service cell as the name suggest basically deals
with the investors and gives assistance to them as required by
them. Function of investor service cell can be divided in three
parts.
 Providing services to investors.
 Library
 Provision of stationary

Providing services to investor

This department resolve quires of the investors and assist them
in technical matter relating to securities. As assistance to the
investor the department organize investor awerness program at
various places in U.P & Uttranchal . The investor awerness
program are are conducted to make investor aware of their rights
and duties What precaution they should take before investing.
Queries rose by investor are solved
SEBI has continued UPSE to conduct INVESTA in 170 places
in U.P & Uttranchal.

Records to be maintained for Investa

Schedule for monthly program to be approved by the
administrator
 Attendance register for INVESTA
 Monthly statement of program conducted has to be sent to
SEBI and it is reported to the administrator.
Others services
 UPSE has set up BSE & UPSE view for investor to enable
them to Know about the quote of various scrips listed with
them.
 Information regarding change of name of the companies &
merger is made available address of company can be taken
from here.
 IPO forms of various securities are made available.
 A television set has also been provided. On which invetor
can constantly watch
CNBC,INDIA, T.V and other business news channe.
 If the investor has any query regarding any member then he
can contact the
Investors service committee formed for this purpose and
give his application.
Library and stationary

Department maintains a library where various where

books , magazine & news papers like times of India
business standard , dainik jag ran, dalal street, capital
market BSE quotation regarding books closure , dividend
etc. and annual report of companies listed with exchange
are kept. At present department has subscribed 13
Newspaper & magazines. These books are made available
to the investors as and when required by them.
Department also deals with stationary sale. Share transfer
deeds, challans receipt books etc are sold here at no profit
no loss U.P & Uttaranchal investor can purchase transfer
deed from here.
U.P SECURITIES
LTD
This department maintains the accounts i.e records of income &
expenditure and financial records of the exchange. The main
function of this department is to control monitor the income &
the expenditures. The main source of revenue of the exchange
Are:
 Listing fees
 Annual charges
 Transaction fees (subject to minimum Rs 10000/- per year)
 Interest on FDR
 Mainainance charge (as decided by management )

The main heads of expenditure of the exchange are:

 Administrative expenses like staff related expenses
 Legal and professional expenditure.
 Maintainace expenditure
 Depreciation
 Operational expenditure

 Electricity and maintenance

 Data processing
 Printing, stationary , postage & telephone.

The other function handled by this department is related with

office administration like staff salaries, their incentives ,
promotion , leaves, carrying out
 Their performance appraisal , inter department , etc in totally
the establishment department carries out the HR- function.

SEBI with a view to ensure the existence and survival of

regional stock exchange
Proposed a revival scheme wherein the regional stock exchange
were allowed to
Float subsidiaries membership of bg exchange like BSE , NSE,
and CSE etc to allow its member to trade as sub- brokers of the
subsidiaries, like other stock exchange. The uttar Pradesh stock
exchange association ltd formed a subsidiary in the name of the
UPSE securities ltd.

Incorporation of UPSE securities

Originally 158 member of the UPSE association ltd contributed
toward the formation of the subsidiary & same was transferred
for obtaining the membership of BSE & Calcutta stock
exchange and the company accordingly allotted 100% shares
to UPSE association ltd UPSE association ltd UPSE
securities ltd was incorporated on 19th april 2000
with the authorized capital of Rs 1,80,43,700/-

The company is wholly own subsidiary is the member of BSE

and member whos had contributed the required sum of Rs
1.02.000 towards the floating of the subsidiary and allowed to
trade through the compay as a sub- broker. Although the
purchase and sales are made in the company , to reflect the
actual state of affairs , only
FDR, s interest and at brokerage of 0.000% + minimum 1 paise /
shares is the income of the company.

Composition of board of directors

The board directors of UPSE securities comprises of 9 directors
who are appointed to represent following people:
 Chief executive officer.
 UPSE member members non- sub brokers
 UPSE representative directors
 Public representative directors appointed by SEBI.

Membership
For availing the membership of UPSE securities a minimum
deposit of Rs 1,50,000
( which in Rs 1,00,000/- is towards the base minimum capital
and Rs 50,000/- towards advance margin) has to be deposited.
At present there are 100 members with SEBI out of which 62
members are actively trading.

Trading limit for members

Total credit limit of rs 18 lacs are given to a member out of
which Rs 9 lac is for purchase and Rs 9 lac is for sale.
CONCLUSION
In India the stock exchange are still far from
providing liquidity and continues market in
securities, therefore Indian stock exchange have to
make from tailoring out a suitable mechanism to
insure price continuity and easy liquidity to script on
the promise of which
Investor can enter the market in large numbers.
Investor are also not much aware of the concept of
the risk management ,
Which may help them a in their trading. There
should be various program to be conducted by the
stock exchange for the investor to know about the
concept of risk management
BIBLIOGRAPHY

1 Working of stock exchange : By Mahiraju.

2 Futures- Option
&
The investor : By Dr C.K.
Narayan
& Parag Shah

3 Futures & Option : By N.D. Vohra

& B.R. Bagri.

4 Magazines : Dalal street

: - Business world

5 Newspapers : - Economic time

- Business line
- Business standard

6 Internet site : upse- india .com

upsc.com
cdslindia.com
 ACKNOWLEDGEMENT

I take this opportunity to express my gratitude high regards and Sincere

thanks to our respected Director Dr. S.K.Srivastava for providing
excellent infrastructure.

I thank Mr. R.K.Katiyar Dean of IBM for his constant help and
support.

I express my sincere thanks to our committed faculty Dr. Sudhanshu

Pandiya for his support and guidance.

I have great regard for all the well-wishers whose help is beyond
acknowledgement.

Dr. S.K.Srivastava Sachin Kumar Awasthi

DIRECTOR (MBA Finance & Control)
 DEPOSITRIES
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, offers depository 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 to open 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 the details 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 offers an efficient
and instantaneous transfer of securities.
TYPES OF DEPOSITORIES
NSDL (National Securities Depository Ltd.)
The enactment of 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 the country has since
established a national infrastructure of international standards
that handles most of the securities held and settled in
dematerialised form in the India capital market.

Using innovative and flexible technology systems, NSDL works

to support the investors and brokers in the capital market of the
country. NSDL aims at ensuring the safety and soundness of
Indian marketplaces by developing settlement solutions that
increase efficiency, minimise risk and reduce costs.
Promoters:

 Industrial Development Bank of India Limited

 Unit Trust of India
 National Stock Exchange of India Limited
Other Shareholders:

 State Bank of India

 Oriental Bank of Commerce
 Citibank NA
 Standard Chartered Bank
 HDFC Bank Limited
 The Hongkong and Shanghai Banking Corporation Limited
 Deutsche Bank
 Dena Bank
  Canara Bank
 Union Bank of India

CDSL (Central Depository Services Limited)

CDSL was promoted by Bombay Stock Exchange Limited
(BSE) jointly with leading banks such as State Bank of India,
Bank of India, Bank of Baroda, HDFC Bank, Standard
Chartered Bank, Union Bank of India and Centurion Bank.
CDSL was set up with the objective of providing convenient,
dependable and secure depository services at affordable 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 Stock Exchange, 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 and shareholders:

 Bombay Stock Exchange Limited

 Bank of India
 Bank of Baroda
 State Bank of India
 HDFC Bank Limited
 Standard Chartered Bank
 Canara Bank
 Union Bank of India
 Bank of Maharashtra
 The Jammu and Kashmir Bank Limited
 The Calcutta Stock Exchange Association Limited

CDSL was promoted by Bombay Stock Exchange Limited

(BSE) jointly with leading banks such as State Bank of India,
Bank of India, Bank of Baroda, HDFC Bank, Standard
Chartered Bank, Union Bank of India and Centurion Bank.

CDSL was set up with the objective of providing convenient,

dependable and secure depository services at affordable 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 Stock Exchange, 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
 CDSL was promoted by Bombay Stock Exchange Limited
(BSE) in association with Bank of India, Bank of Baroda,
State Bank of India and HDFC Bank. BSE has been involved
with this venture right from the inception and has
contributed overwhelmingly to the fruition of the project.
The initial capital of the company is Rs.104.50 crores. The
list of shareholders with effect from 5th July, 2010 is as
under.

Sr. Name of Value of %

No. shareholders holding terms
(in to
Rupees total
Lacs) equity
1 Bombay Stock 5,663.46 54.20
Exchange Limited
2 Bank of India 582.00 5.57
3 Bank of Baroda 530.00 5.07
4 State Bank of India 1,000.00 9.57
5 HDFC Bank Limited 750.00 7.18
6 Standard Chartered 750.00 7.18
Bank
7 Canara Bank 674.46 6.45
8 Union Bank of India 200.00 1.91
 9 Bank of Maharashtra 200.00 1.91
10 The Calcutta Stock 100.00 0.96
Exchange Limited

Board of Directors
Mr. N. Chairman
Rangachary
Mr. T. S. Independent
Narayanasam Director
i
Mr. Madhu Sponsor Director –
Kannan Bombay Stock
Exchange Limited
Mr. Sponsor Director –
Ashishkumar Bombay Stock
Chauhan Exchange Limited
Mr. James E. Sponsor Director –
 Shapiro Bombay Stock
Exchange Limited
Mr. Anjan Sponsor Director -
Barua State Bank of India
Mr. A. D. M. Sponsor Director -
Chavali Bank of Baroda
Mr. P. S. Executive Director
Reddy

Management Team
Mr. P. S. Executive Director
Reddy
Mr. Chief Technology Officer
Pramod
Deshpand
e
Mr. Cyrus Sr.Vice President.
Khambata Business Development(Currently on deputation to
CDSL Ventures Ltd. as CEO with effect from 7-
12-2006)
Mr. Vice President.
Jitendra Information Technology
Chad
Ms. Vice President.
Nayana Audit, Inspection & Compliance
Ovalekar
Mr. Vice President.
Bharat Accounts & Administration
Sheth
Mr. Sunil Vice President.
Alvares Business Development
Mr. Vice President.
Ramkuma Operations
r K.
Mr. Vice President.
Jignesh New Projects
Gandhi
Mr. Satish Vice President.
Budhakar Legal & Company Secretary

WHY A DEMAT ACCOUNT WITH CDSL?

Convenience:
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 efficient depository service to
investors.
Wide Spectrum of Securities Available for Demat:The equity
shares of almost all A, B1 & B2 group companies are available
for dematerialisation on CDSL, consisting of Public (listed &
unlisted) Limited and 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 his securities in one account with
CDSL. A BO can also hold warehouse receipts pertaining to
commodities, in a 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 depository services 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.

Dependability:
On-line Information to Users: CDSL's system is built on a
centralised database architecture and thus enables DPs to
provide on-line depository services with the latest status of the
investor's account.
Convenient to DPs: The entire database of investors is stored
centrally at CDSL. If there is any system-related issues at DPs
end, the investor is not affected, as the entire data is available at
CDSL.
Contingency Arrangements:CDSL has made provisions for
contingency terminals, which enables a DP to update
transactions, in case of any system related problems at the DP's
office.
Meeting User's Requirements: Continuous updation of
procedures and processes in tune with evolving market
practices is another hallmark of CDSL's services.

Audit and Inspection: CDSL conducts regular audit of its DPs

to ensure compliance of operational and regulatory
requirements.
Dormant Account Monitoring: CDSL has in place a
mechanism for monitoring dormant accounts.
Helpdesk:: DPs and investors can obtain clarifications and
guidance from CDSL's prompt and courteous helpline facility.

Security:
Computer Systems: All data held at CDSL and is
automatically mirrored at the Disaster Recovery site and is
also backed up and stored in fireproof cabinets at the main and
disaster recovery site.
Unique BO Account Number:: Every BO in CDSL is allotted
a unique account number, which prevents any erroneous entry
or transfer of securities. If the transferor's account number is
wrongly entered, the transaction will not go through the
CDSL system, unless corrected.
Data Security: All data and communications between CDSL
and its users is encrypted to ensure its security and integrity.
Claims on DP: If any DP of CDSL goes into liquidation, the
creditors of the DP will have no access to the holdings of the
BO.
Insurance Cover: CDSL has an insurance cover in the unlikely
event of loss to a BO due to the negligence of CDSL or its
DPs.

Compar
ison
between
During 05
BSEJuly&2010 –
25 August
NIFTY 2010
DEPOSITORIES
&
CDSL