SEBI INVESTOR AWARENESS PROGRAMME - SECONDARY MARKET

Securities and Exchange Board of India

Topics to be covered

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Structure of Securities Market Participants in the Secondary Market Getting started Where to trade Trading a general understanding How to trade Post trade Charges by the stock broker Settlement Investor Protection Mechanism Investors Grievance Redressal
Securities and Exchange Board of India

Structure of Securities Market

The securities market in India can be divided into two segments

Primary Market Secondary Market

Securities and Exchange Board of India

Participants in the Secondary Market

Stock Exchange Clearing Corporation Depositories/ DP Trading Member (Stock Broker)/ Clearing Member Registrar to an Issue and Share Transfer Agent

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Securities and Exchange Board of India

Getting started

To start trading the following are required Trading account Member Client Agreement Risk Disclosure Document Demat account Bank account Permanent Account Number (PAN) Unique Client Code
Securities and Exchange Board of India

Where to trade

The secondary market is divided into two segments

Cash/ Equity segment Derivative segment

Equity Futures and Option (F & O) Index / Single Stock Currency Futures/ Option Interest Rate Futures
Securities and Exchange Board of India

How to trade

Trade through a SEBI registered Stock Broker, by Placing margins as required with the broker placing order over the phone email etc.

Internet Trading Wireless / Mobile Trading.

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Securities and Exchange Board of India

Post Trade

The stock broker is required to provide contract notes confirming the trades done within 24 hrs of executing the trade
The contract notes can either be in physical or electronic form

Securities and Exchange Board of India

Charges by the Stock Broker

Brokerage charged by member broker (maximum 2.5%) Service tax as stipulated Securities Transaction Tax Penalties arising on specific default on behalf of client (investor)

Securities and Exchange Board of India

Settlement

The settlement in the securities market is done on a T+2 Rolling Settlement Cycle (where T = Trading Day). FAILURE
T+2
SETTLEMENT Pay-in and Pay out (T2)

TRADE

TO PAY-IN
Auction (T3) Close out (T4)

Trading (T)

Option of Early Pay-in (T1)

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Securities and Exchange Board of India

Settlement - Auction

Incase there is a shortage in Pay-in of shares at the time of settlement on T+2, the Stock Exchange purchases the requisite quantity in the Auction Market and gives them to the buying trading member.

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Securities and Exchange Board of India

Settlement - Close Out

If the shares could not be bought in the auction i.e. if shares are not offered for sale in the auction, the transactions are closed out as per SEBI guidelines

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Securities and Exchange Board of India

Investor Protection Mechanism

Investor Protection Fund or Consumer Protection Fund (IPF/ CPF) is set up by the Stock Exchanges to meet the legitimate investment claims of the clients of the defaulting members that are not of speculative nature

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Securities and Exchange Board of India

Investor Grievance Redressal

Complaints can be filed with OIAE department of SEBI against companies for delay or non-receipt of shares, refund orders, etc., and with Stock Exchanges against brokers on certain trade disputes or non receipt of payment/securities.
Arbitration Court of Law
Securities and Exchange Board of India

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THANK YOU

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Securities and Exchange Board of India