A Project Report on Study of Online Trading at UNICON and Stock Broking

JAGAN INSTITUTE OF MANAGEMENT STUDIES Submitted in partial fulfillment of PGDM

Submitted By: Pooja Shandilya FB11091

CERTIFICATE

This is to certify that the project work done on A Study of Online Trading at UNICON and Stock Broking is an original work carried out by Ms. Pooja Shandilya under my supervision and guidance. The project report is submitted towards the partial fulfillment of two year, full time Post Graduate Diploma in Management. Her performance, during the project was Satisfactory / Good/ Excellent.

Name & Sign of Industry Guide: Ms. Pooja Jain

Date:

Name & Sign of Faculty: Pooja Jain

Students Name and Sign: Pooja Shandilya Roll No. : FB11091

ACKNOWLEDGEMENT

I would like to express my gratitude to all those who has given a valuable contribution for the successful completion of this project. I want to thank Mr. Gaurav Jain, AVP, UNICON for providing me an opportunity to undergo summer training at Unicon Investment Solutions. With the overwhelming sense of respect I would like to convey my gratitude to Miss Pooja Jain, Manager-Equity Advisory, UNICON for her inspiration, constructive suggestion and affectionate guidance in my work during the training period.

Pooja Shandilya

DECLARATION

I hereby declare that the work which is being presented in this project work entitled A Study of Online Trading at UNICON and Stock Broking in the partial fulfillment of two year, full time Post Graduate Diploma in Management at Jagan Institute of Management Studies, Rohini Sec-5 is an authentic record of work carried out by me.

Pooja Shandilya

PREFACE

Any kind of learning is incomplete until it is practically applied in the concerned field. For management career, it is important to develop managerial skill. In order to achieve positive and concrete results, the exposure of real life situation existing in corporate world is very much needed along with theoretical concepts. To fulfill this need, practical training is required. The summer training is essential for the fulfillment of MBA curriculum; it provides an opportunity to the student to understand the industry with special emphasis on the development of skills in analyzing interpreting practical problems through application of management. I underwent two months summer training at Unicon Investment Solutions located in Karol Bagh Delhi. It was my fortune to get training in a very healthy atmosphere. I got ample opportunity to view the overall working of stock exchange. This project report is result of my 8 weeks summer training at Unicon as part of my PGDM. Subject of my project is study of online trading and stock broking at Unicon.

INDEX
S.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Particulars Research Methodology Objectives Of The Study Introduction Of The Organization Product And Services Of Unicon Literature Review Securities Market In India: An Overview Concept Of Share Trading History Of Stock Market Online Trading: Overview Online Trading Products Of Unicon Sales Report Account Opening with Unicon Brokerage Structure Of Unicon Advanced Brokerage Plan Analysis And Interpretation Of Results Findings and Conclusion Suggestion and Recommendations Limitations Questionnaire Bibliography Page Number 7 7 9 12 21 23 28 31 34 39 55 57 60 61 63 74 75 76 77 79

RESEARCH METHODOLOGY

A research process consists of stages that guide the project from its conception through the final analysis, recommendations and ultimate action. The research process provides a systematic, planned approach to the research project.

RESEARCH DESIGN:
A research design is the overall framework of the plan used for collection and analysis of the data in the financial statement. Exploratory and descriptive research are used for the project.

OBJECTIVES OF THE STUDY:

To study & understand the concept of online trading. To analyze the changes in trading after the exchange shifted from outcry to online trading system. To know the online screen based trading system adopted by UNICON. To know about the competitors of Unicon preferred by ex-Unicon clients To know the reasons why clients left working with Unicon.

SAMPLING DESIGN:
Stratified Sampling followed by Random and Convenience Sampling is used for the project. Sample size is 100 and the research is done on the clients of Unicon, Karol Bagh whose accounts have been deactivated in accordance with SEBIs guidelines.

SOURCES OF DATA: The data collection methods include both the primary and secondary collection methods i. Primary Data: Data is collected from personal discussion with Manager-advisory and from clients by using questionnaire.

ii.

Secondary Data: Secondary data has been collected from the news, journals, magazines, company website, books and internet.

METHODS OF DATA COLLECTION:

In personal survey, Telephone survey and Personal interview were conducted to get the required information.

INTRODUCTION OF THE ORGANIZATION

UNICON is a financial services company which has emerged as a one-stop investment solutions provider. The company is headquartered in New Delhi, and has its corporate office in Mumbai with regional offices in Kolkata, Chennai, Hyderabad and Noida. UNICON is a professionally managed company led by a team with outstanding managerial acumen and cumulative experience of more than 400 man years in the financial markets The Company is supported by more than 2400 Uniconians and has an extensive network of over 323 business offices in 152 cities across India. With a customer base of over 200,000 the Unicon Group has an eye for the intricate financial needs of its clients and caters to both their short term and long term financial needs through a comprehensive bouquet of investment services.

Aim & Establishment of the Company

Unicon has been founded with the aim of providing world class investing experience to hitherto underserved investor community. The technology today has made it possible to reach out to the last person in the financial market and give him the same level of service which was available to only the selected few.

It was founded in 2004 by two visionary and hard working entrepreneurs, Mr. Gajendra Nagpal and Mr. Ram M. Gupta, who possess expertise in the field of Finance.

MANAGEMENT TEAM Founder & CEO: Mr. Gajender Nagpal Mr. Gajendra Nagpal is the founder and Chief Executive Officer of Unicon Investment Solutions, a financial services company which has emerged as a one-stop investment solutions provider. He founded Unicon in 2004. Mr. Nagpal brings with him over 16 years of experience in the stock market including a rich experience of building a retail broking network. Under the able leadership of Mr. Nagpal, Unicon Financial Intermediaries has grown manifold.

Prior to founding UNICON Mr. Nagpal has rich experience of building a retail broking network. He is well respected in the industry for his stock broking experience and has held senior positions at the regional and national level with Kotak Securities and Indiabulls. At Indiabulls, Mr. Nagpal was a member of the core management team. Co-Founder& President: Mr. Ram M Gupta He has 8 years of stock market experience behind him. Mr. Gupta has held senior level positions in Karvy stock broking and Indiabulls Securities. Mr. Gupta is supported by a team of over 850 relationship mangers spread over 89 locations across the country. Chief Operating Officer & Head Distribution: Mr. Sandeep Arora Director - Strategic Planning & Implementation: Mr. Subhash Nagpal Chief Technology Officer: Mr. Anurag Nayar Country Head - HR and Training: Ms. Divya Varma Kaur

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Group Companies

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Vision, Mission, Goals, Aims

Mission: Unicons mission is to protect and promote the wealth of all its stakeholders by providing trustworthy, best in class financial products and services.

Vision: To be India's financial services company of choice, recognized for its reliability, innovation, responsiveness to customers and exemplary citizenship.

Product and Services of UNICON

Unicon deals with a numbers of products & services: i. ii. iii. iv. v. vi. vii. viii. Equity Commodity Depository Privileged Client Group Properties Distribution NRI Services Back Office

i.

EQUITY

Unicon introduces you to the world of Empowered Investing! Our world-class secure technology offers you the facility of investing in financial markets from the convenience of your home/office, with complete peace of mind. Backed by Sequoia Capital, Subhkam Ventures and Nexus India (which have funded companies such as Apple, Google, YouTube, Komli, MapmyIndia etc), Unicon Investment Solutions has become one of Indias leading financial intermediaries within 6 years of inception.

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Unicon has presence across 152 cities in India with over 323 business offices. Founded by first generation entrepreneurs, Unicon is a professionally managed with cumulative experience of over 400 man years in the financial markets. Unicon offers its customers a wide range of financial services including trade execution on BSE, NSE, Derivatives, Depository Services, Expert advice from Unicons in-house research team, Commodity trading etc. Why Choose Unicon? Unicon Demat Account Makes You an Empowered Investor Superior tools to trade Brokerage that does not eat into your profits Online & Offline Trading facilities Luxury to call and trade when you are not online. Trust, that only a professional broking house can provide Expert investment advice based on research that is best in the industry Trade simply in both cash and derivatives market through our secure worldclass technology Online Integration for secure funds transfer with top nine banks (ICICI, HDFC, Oriental Bank of Commerce, Axis Bank, Bank of India, Corporation Bank, Karnataka Bank, South Indian Bank, Vijaya Bank, Yes Bank) Secure Call and Trade facility Complete transparency, No hidden charges

Unicon offers a unique feature of a single Screen Trading Platform of NSE, BSE & Derivatives. Unicon offers both Offline & Online trading platforms. You can Walk in or place your orders through telephone at any of our branch locations. ii. COMMODITY

With UNICON you not only get the expertise advice but a Unique Trading Platform, which gives you a Great Trading experience in Commodities market. With a Unicon Trading Account, you can trade in Commodity Futures from both MCX and NCDEX using a single screen. Unicon offers both Offline & Online trading platforms. You can Walk in or place your orders through telephone at any of our branch location or can do Online commodity internet trading. The Unicon Commodities Advantage: Live Market Watch for commodity market (NCDEX, MCX) in one screen

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Add any number of scrips in the Market Watch Tick by tick live updation of Intraday chart Greater exposure for trading on the margin available Common window for market watch and order execution Key board driven short cuts for punching orders quickly on Real time updation of exposure and portfolio Facility to customize any number of portfolios & watch lists. Market depth, i.e. Best 5 bids and offers, updated live for all scripts. Facility to cancel all pending orders with a single click. Instant trade confirmations. Stop-loss feature.

iii.

DEPOSITORY Unicon Depository Services offers dematerialization services as a participant in Central Depository Services Limited (CDSL), through its Depository operations. The company believes in efficient and cost-effective and integrated service support to its brokerage business. Unicon Securities Private Limited, as a depository participant, will offer depository accounts for individual investors as well as corporates which will enable them to transact in the dematerialized segment, without any hassles. Depository offers a safe, convenient way to hold securities as compared to holding securities in paper form. Our service provides an integrated single platform for all our clients ensuring a risk free, efficient and prompt depository process.

Facilities Offered by Unicon

De-materialization: You can submit your physical shares at the Unicon branch for dematerialization into electronic form. Re-materialization: You can also request for Re-materialization which enables you to convert the dematerialized shares into physical form. Transfer: Inter and intra depository services are available through which you can transfer shares.

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IPO: You can apply for IPO using your demat account details and on allotment the securities are transferred directly to your demat account. Corporate Actions: While holding your stock in demat account, in case you are eligible for any bonus and rights issues the allotment would be transferred to your demat account. Easi: You can view your demat account over the Internet and avail a host of services. This facility empowers our clients to view, download, and print updated holdings with respective valuations.

iv.

DISTRIBUTION Unicon is fast emerging as a leader in the Insurance and Mutual Funds distribution space. Unicon has over 100 branches and a huge number of Business Development Executives who help to source and service the customers throughout the country. Unicon is fast becoming the preferred Vendor Independent distribution houses because of providing efficient service like free pick-up of collection of cheques/DDs, Keeping track of the premiums etc to its customers. Unicon offers the following distribution products: IPO's Mutual Funds Insurance

v.

PROPERTIES At Unicon Investment Solutions, we assist our prestigious customers in investing in the best properties in India, by offering them the most lucrative real estate deals. We provide full fledged investment solutions for residential as well as commercial properties in India, which include services related to the purchase of properties, documentation, renting and leasing, investment advisory services, property valuation and assisting clients with home loans. Uniconproperty.com is the online portal for Unicon Investment Solutions'

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dedicated real estate consultant company, popularly known as Unicon Real Estates Pvt. Ltd. The website clearly lists all major upcoming residential and commercial projects in India, thus making it easy for users to browse properties without having to step out of their homes.

vi.

NRI SERVICES Unicon now offers a convenient and hassle-free way of Investing in the Indian Securities Market to NRIs who wish to participate in the Indian Growth story. Unicon guides the NRI clients at every step of their investment needs so that they have complete peace of mind about their investments in India. Its capability to analyze relevant information in market trends, relevant data and the best-in-class investment products plays an important role in assisting the NRI clients in making a right decision. Our rich experience of capital markets & retail financial services makes us a reliable NRI investment solutions company. Its products, services and technology help facilitate an excellent investment experience.

vii.

BACK OFFICE Unicon through its online back-office aims to increase the transparency and provides you the link to view the details of your account online anytime and anywhere. Here you have the advantage of viewing the following reports online: Sauda Details Financial Ledger Net position for the day Net position Detail (for the complete financial year) E-Contract Note

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viii.

FIXED INCOME Offerings: The Fixed income vertical of UNICON Group deals in Sovereign Paper and Money Market/Fixed Income Instruments Broadly, it undertakes following: Dealing in all types of money market instruments viz. Commercial paper (Origination & Placement), Certificate of Deposit and Treasury Bills both in Primary and Secondary market. Dealing in Government securities (including securities of Oil, Fertilizer & Food Bonds) and other PSU/ Corporate bonds with counterparties like Banks, Primary Dealers, Mutual Funds, Insurance Companies, Regional Rural Banks, Cooperative Banks, Central & State PSUs, Housing Finance Companies, NBFCs & Corporates. Retailing of Central, State Government Securities and Bonds to exempted PF Trusts, Charitable & Religious Trusts. Advisory, Training and Consultancy services to Regional Rural Banks, Cooperative Banks & P.F. Trusts.

ix.

INVESTMENT BANKING Investment Banking Services by Unicon Unicon Capital Services (The Investment Banking arm of the Unicon Group) is a SEBI registered Category I merchant banker providing a bouquet of corporate finance advisory and merchant banking services. Our wide experience and market knowledge as a leading securities firm ensures that clients requirements are met at optimum cost. By constantly improving our knowledge capital and remaining focused on client needs, we aim to create significant value for our clients by helping them execute the right capitalization strategy.

Unicons Offerings
Private Equity (PE) Syndication We specialize in the syndication of the private equity for the Indian companies in high-growth markets on their capitalization/re-capitalization strategies, which helps them achieve their growth targets. Our team of professionals ensures

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complete confidentiality, strong focus on implementation and quick turnaround time. Access to key decision makers at PE funds gives us an edge in optimal structuring and efficient closure of transactions. We service our clients through various stages of the PE deal namely collateral preparation, investor short listing, commercial term sheet, due diligence and final closure. Mergers & Acquisitions (M&A) Advisory We provide both buy-side and sell-side advisory services as part of our M&A advisory offering. We advise clients during the entire transaction process right from target identification to deal closure. We have an experienced and highly qualified team with more than 40+ man-years of experience which specializes in identification and short listing of potential targets, strategic planning of an acquisition and arranging capital for the transaction, if needed. Debt Syndication Project Finance / Term Loans for Expansion - Arranging Long-term loans for setting up new projects from Financial Institutions and Banks External Commercial Borrowings (ECBs) - Arranging LIBOR-linked loans Foreign Currency Convertible Bonds (FCCB)-Arranging FCCB Loans Working Capital Facilities - Arranging fund-based and non-fund based limits for clients from Banks at competitive rates Trade Finance - Arrangement of trade finance (Buyer's / Suppliers Credit) Inter-Corporate Deposits Borrowing and Placement

Initial Public Offerings (IPO) Leveraging on our market knowledge as a leading securities firm, we combine our capital markets experience and business knowledge to offer services with focus on value creation for all stakeholders. We believe in working with exciting companies and positioning them in the financial marketplace to attract the right profile of institutional and retail investors. Unicons deep retail distribution strength and strong relationships with key institutional investors enable our clients to get the best investor support during and post listing. Other Service Offerings Valuation Services

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 x.

Capital Restructuring Advisory ESOP Valuation Buybacks Delisting QIPs Divestitures & Spin-offs

CURRENCY DERIVATIVES Currency derivative is a contract between the seller and buyer, whose value is to be derived from the underlying asset, the currency amount. A derivative based on currency exchange rates is a future contract which stipulates the rate at which a given currency can be exchanged for another currency as at a future date. Add the Unicon Advantage to Forex Trading Facility to our existing offline as well as online customers to trade in Currency derivatives by filling up a simple form. There is no need to open a separate trading account to trade in Currency Derivatives. Your Cash margin with Unicon can be used for both Equity as well as Currency transactions Online & Offline trading facility on all the bourses. Facility to place buy/sell orders through branches, internet and over the phone. Receive education on the product through seminars/con-calls organized by Unicon. Exclusive daily commentary and research reports by a specialized Currency Analyst Team that helps you take informed decisions Regular updates on Dollar INR movement with calls to buy and sell Special consultancy to Exporters, Importers & Corporate for their Forex transactions

xi.

PORTFOLIO MANAGEMENT

The capital markets today have not only become far more complex in terms of compliances, methodologies, effects and analysis but also need a constant tracking mechanism. As is the case globally, the Indian investor has also realized the advantages of seeking professional advice in order to not only manage but also augment his portfolio.

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The Portfolio Management Schemes of the Company offer Discretionary Schemes (Unicon Optimizer & Unicon Growth) for Individuals, Corporate Bodies, Partnership firms, Proprietors, Non Resident Indians etc. The Company is registered with SEBI enabling it to undertake Portfolio Management activities under a specific license.

The Unicon PMS advantage For any market condition: Choose from our range of PMS products that are designed to perform in any market based on your investment objectives Professional Fund Management: The Schemes, duly approved by SEBI, are managed by a highly competent team comprising of portfolio managers and equity strategists, backed by a team of fundamental, technical and derivatives analysts Personalized Service: Proactive management of your funds by fund manager; backed by a Central Research team of Analysts and serviced by your dedicated Relationship Manager Timely Review & Reporting: Periodic review and rebalancing with timely performance reporting.

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LITERATURE REVIEW
Various papers have tried to study the impact of shifting to electronic trading on financial securities and their markets. A brief review of the literature on the impact of electronic trading on various markets is presented here. This study gives us an idea of the various factors that can be affected due to the shift to electronic trading. 1) Price movement: Madhavan (2000) has studied whether dealer intermediation (the presence of a broker) may exist due to the costs of placing a limit order. A limit order requires that the order execute only when a particular price is reached. This required constant monitoring in earlier days when bandwidth was a constraint with the exchanges. However, with the advances in technology and the improvement in exchange bandwidths, such constraints have been removed. Technology allows persons to place all kinds of orders on most exchanges. Vila and Sandman (1995) and Pirrong (1996) find that prices are less sensitive to volumes in automated than traditional markets. One of the reasons for this could be that the floor traders know when there are orders from clients and so they adjust their prices in response to demands.

2) Bid-ask spreads: Aitken et al (2004) study LIFFE, SFE and HKFE, which shifted to
electronic trading in 1999-2000. They show evidence of decrease in bid-ask spreads after shifting to electronic trading. However, like Martens (1998), they find that the performance of electronic trading systems deteriorates during periods of high volatility. Cheng, Fung and Tse (2005) study the impact of switching to electronic trading on the relative pricing efficiency between the Hang Sang Index futures and its options contracts traded on the Hong Kong exchange. They find that electronic trading leads to lower bid-ask spreads and less price clustering. Sarkar and Tozzi (1998), suggest that although open outcry systems were more effective to trade highly active contracts, electronic trading has the potential to enhance operational efficiency and reduce costs. Tse and Zabotina (2001) find that electronic trading systems reduce spreads while open outcry systems have higher market quality due to smaller variance of pricing error and higher information content. Information content is measured by studying the bid-ask spreads in response to trades. Sporleder (1984) was one of the early papers to look at the impact of electronic trading on agricultural markets. However, it was limited to a theoretical analysis due to the lack of data. His model shows that electronic trading could reduce buyer and seller concentration, information asymmetry and increase pricing efficiency. 3) Policy implications: The report by Committee on the Global Financial System (BIS) on The implications of electronic trading in financial markets (2001) looks at foreign exchange and fixed income markets where electronic trading was first

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introduced. They come to the conclusion that electronic trading is more cost efficient and offers the potential to make markets more transparent. Electronic trading raises a host of issues and potential problems. For example, if the exchange goes down or connection gets lost, users of the electronic trading systems could be at a disadvantage. Another aspect is the usage of exchange bandwidth. One user should not be allowed to monopolize the information flow, which requires imposition of bandwidth costs on users of electronic trading. However, the restriction on bandwidth may not be the same for all users. A firm with a billion dollars to invest should not be subject to the same bandwidth

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SECURITIES MARKET IN INDIA: AN OVERVIEW

The securities market has essentially three categories of participants The issuer of the securities, The investors in the securities, and The intermediaries.

The issuers are the borrowers or deficit savers, who issue securities to raise funds. The investors, who are surplus savers, deploy their savings by subscribing to these securities. The intermediaries are the agents who match the needs of the users and the suppliers of funds for a commission. Intermediaries function to help both the issuers and the investors to achieve their respective goals. There are a large variety and number of intermediaries providing various services in the Indian securities market. This process of mobilizing the resources is carried out under the supervision and overview of the regulators. The regulators develop fair market practices and regulate the conduct of the issuers of securities and the intermediaries. They are also in charge of protecting the interests of the investors. The regulator ensures a high service standard from the intermediaries, as well as the supply of quality securities and non-manipulated demand for them in the market.

MARKET SEGMENTS The securities market has two interdependent and inseparable segments, namely, the new issues (primary) market and the stock (secondary) market. The primary market provides the channel for the creation and sale of new securities, while the secondary market deals in the securities that were issued previously. The securities issued in the primary market are issued by public limited companies or by government agencies. The resources in this kind of market are mobilized either through a public issue or through a private placement route. If anybody can subscribe for the issue, it is a public issue; if the issue is made available only to a select group of people, it is known as private placement. There are two major types of issuers of securities Corporate entities, who issue mainly debt and equity instruments, and The government (central as well as state), which issues debt securities (dated securities and treasury bills). The secondary market enables participants who hold securities to adjust their holdings in response to changes in their assessment of risks and returns. Once new securities are issued in the primary market, they are traded in the stock (secondary) market.

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The secondary market operates through two mediums Over-the-counter (OTC) market and Exchange-traded market.

The OTC markets are informal markets where trades are negotiated. Most of the trades in government securities take place in the OTC market. All the spot trades where securities are traded for immediate delivery and payment occur in the OTC market. The other option is to trade using the infrastructure provided by the stock exchanges. The exchanges in India follow a systematic settlement period. All the trades taking place over a trading cycle (day = T) are settled together after a certain time (T + 2 day). The trades executed on exchanges are cleared and settled by a clearing corporation. The clearing corporation acts as a counterparty and guarantees settlement. A variant of the secondary market is the forward market, where securities are traded for future delivery and payment. A variant of the forward market is the Futures and Options market. Presently, only two exchanges in Indiathe National Stock Exchange of India Ltd. (NSE) and the Bombay Stock Exchange (BSE)provide trading in Futures and Options.

REGULATORS
The absence of conditions for perfect competition in the securities market makes the role of the regulator extremely important. The regulator ensures that the market participants behave in a certain manner so that the securities markets continue to be a major source of finance for the corporate sector and the government while protecting the interests of investors. In India, the responsibility for regulating the securities market is shared by the Department of Economic Affairs (DEA), the Ministry of Company Affairs (MCA), the Reserve Bank of India (RBI), and SEBI. The orders of SEBI under the securities laws are appealable before a Securities Appellate Tribunal (SAT). Most of the powers under the Securities Contracts (Regulation) Act, 1956 (SCRA) can be exercised by the DEA while a few others can be exercised by SEBI. The powers of the DEA under the SCRA are also concurrently exercised by SEBI. The powers in respect of the contracts for sale and purchase of securities, gold-related securities, money market securities and securities derived from these securities, and ready forward contracts in debt securities are exercised concurrently by the RBI. The SEBI Act and the Depositories Act are mostly administered by SEBI. The rules under the securities laws are framed by the government and the regulations by SEBI. All these rules are administered by SEBI. The powers under the Companies Act relating to the issue and

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transfer of securities and the non-payment of dividend are administered by SEBI in the case of listed public companies and public companies proposing to get their securities listed. The SROs ensure compliance with their own rules as well as with the rules relevant to them under the securities laws.

REGULATORY FRAMEWORK
At present, the five main Acts governing the securities markets are i. The SEBI Act, 1992; ii. The Companies Act, 1956, which sets the code of conduct for the corporate sector in relation to issuance, allotment, and transfer of securities, and disclosures to be made in public issues; iii. The Securities Contracts (Regulation) Act, 1956, which provides for the regulation of transactions in securities through control over stock exchanges; iv. The Depositories Act, 1996 which provides for electronic maintenance and transfer of ownership of demat (dematerialized) shares; and v. The Prevention of Money Laundering Act, 2002.

ROLE OF NSE IN INDIAN SECURITIES MARKET

The National Stock Exchange of India (NSE) was recognized as a stock exchange in April 1993. NSE was set up with the objectives of a) Establishing a nationwide trading facility for all types of securities; b) Ensuring equal access to all investors across the country through an appropriate communication network; c) Providing a fair, efficient, and transparent securities market using an electronic trading system, d) Enabling shorter settlement cycles and book entry settlements; and e) Meeting the international benchmarks and standards. The Exchange has played a leading role in transforming the Indian Capital Market to its present form. NSE has set up an infrastructure that serves as a role model for the securities industry in terms of trading systems, and clearing and settlement practices and procedures. It provides a screen-based automated trading system with a high degree of transparency and equal access to investors irrespective of geographical location. The high level of

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information dissemination through its online system has helped in integrating retail investors on a national basis. NSE has been playing the role of a catalytic agent in reforming the market in terms of microstructure and market practices. Right from its inception, the Exchange has adopted the purest form of a demtualized setup, whereby the ownership, management, and trading rights are in the hands of three different sets of people. This has completely eliminated any conflicts of interest and has helped NSE to aggressively pursue policies and practices within a public interest framework. It has helped in shifting the trading platform from the trading hall in the premises of the exchange to the computer terminals at the premises of the trading members located across the country, and subsequently, to the personal computers in the homes of investors. NSE provides a trading platform for of all types of securitiesequity, debt, and derivatives. Following its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, it commenced operations in the Wholesale Debt Market (WDM) segment in June 1994, in the Capital Market (CM) segment in November 1994, and in the Equity Derivatives segment in June 2000. The Exchange started providing trading in retail debt of government securities in January 2003, and trading in currency futures in August 2008. NSE started providing trading in currency option in October 2010 and launched futures & options contracts based on global indices S&P 500 and DJIA in August 2011. NSEs Capital Market segment offers a fully automated screen-based trading system, known as the National Exchange for Automated Trading (NEAT) system, which operates on a strict price/time priority. It enables members from across the country to trade simultaneously with enormous ease and efficiency. NSEs Equity Derivatives segment provides the trading of a wide range of derivatives such as Index Futures, Index Options, Stock Options, Stock Futures, and futures on global indices such as S&P 500 and DJIA. NSEs trading system, called the National Exchange for Automated Trading (NEAT), is a state-of-the-art client-server based application. At the server end, all trading information is stored in an in-memory database to achieve minimum response time and maximum system availability for users. It has an uptime record of 99.999 percent. For all trades entered into the NEAT system, there is a uniform response time in the range of milliseconds. NSE has been continuously undertaking capacity enhancement measures in order to effectively meet the requirements of the increasing number of users and the associated trading loads. NSEs Internet Based Information System (NIBIS) has also been put in place for online real-time dissemination of trading information over the Internet.

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BSE (BOMBAY STOCK EXCHANGE)

The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into demutualised and corporate entity. It has evolved over the years into its present status as the premier Stock Exchange in the country. It is the first Stock Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts (Regulation) Act 1956.The Exchange, while providing an efficient and transparent market for trading in securities, debt and derivatives upholds the interests of the investors and ensures redresses of their grievances whether against the companies or its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education programmers and making available to them necessary informative inputs.

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CONCEPT OF SHARE TRADING

Trading is the process of buying and selling securities. The procedure of trading consists of two processes, i.e. Delivery (when securities are sold) and Receipt (when securities are purchased). These two processes can be understood as follows: I. Process of Receipt

One can also give "Standing Instruction" to receive credits into the account directly without having to give the receipt instruction to the broker every time.

II.

Process of Delivery:

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This instruction should reach the DP's office at least 24 hours before the pay-in. Failure in doing so transfers the entire risk upon the investor.

FORMS OF TRADING Trading can be of following two types: Delivery Based Intra-day

Delivery Based: Delivery based trading involves buying shares on a market day and selling them only after receiving the delivery of those shares in demat account. Delivery can occur in option, forward, or futures contracts. Intraday: Intraday means "within the day". Intraday trading is done by short-term traders who want to make many trades over the course of a single trading session. Intraday Trading is trading for one day only; intraday traders do not maintain overnight positions.

COMPULSORY ROLLING SETTLEMENT: SEBI had introduced T+5 rolling settlement in equity market from July 2001 and subsequently shortened the settlement cycle to T+3 from April 2002. Under rolling settlements, the trades done on a particular day are settled after a given number of business days. A T+2 settlement cycle means that the final settlement of transactions done on T, i.e., trade day by exchange of monies and securities between the buyers and sellers respectively takes place on second business day (excluding Saturdays, Sundays, bank and Exchange trading holidays) after the trade day.

Trading Clearing Settlement

Activity Rolling Settlement Trading Custodial Confirmation Delivery Generation Securities and Funds pay in Securities and Funds pay out

Day T T+1 working days T+1 working days T+2 working days T+2 working days

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Valuation Debit Post Settlement Auction Auction settlement Bad delivery reporting Rectified bad delivery pay-in and pay-out Re-bad delivery reporting and pickup Close out of re-bad delivery and funds pay-in & pay-out

T+2 working days T+2 working days T+3 working days T+4 working days T+6 working days T+8 working days T+9 working days

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HISTORY OF STOCK MARKET

The idea of a stock markets originated in the seventeenth century mostly in England and Holland. The idea blossomed through to after world war one where the global stock market centered on New York Stock Exchange because of the free trade allowed in the United States (Boyer, 2001). The amount of stocks grew quickly because of the growth of companies that needed money to expand. The market originally was less regulated with very little government interference till 1934 the government passed the exchanges and security act which created the securities and exchange commission that regulates the American stock market. The stock exchange continued to grow around the world. The biggest stock exchange is the New York Stock Exchange That was founded in 1792 and now trades for over 2,900 companies (Boyer, New York Stock Exchange, 2001).

OUTCRY SYSTEM OF TRADING

Traditional System of Trading is called Open Outcry system. It is a system of trading in which traders used to make orders to each other by crying out aloud. When someone shouts an offer to buy, and someone else shouts an order to sell at the same price, a deal is struck, and the trade is recorded. Open outcry is one type of auction. To place an order you would have to call your broker. He would then call down to the floor to the clerk and the clerk would relay the order to the floor broker. Once the order was executed, the floor broker would relay it back to the clerk and the clerk would relay it back to your broker and then your broker would give you the confirmation. There are a lot of steps to the process, but it would take about a couple minutes for the whole process to complete. Some open outcry systems have developed special sign languages so they can make and fill orders without needing to be heard over the noise on the trading floor or pit. Floor hand signals are used to communicate buy and sell information in an open outcry trading environment. The system is used at securities exchanges such as the Chicago Mercantile Exchange. Traders usually flash the signals quickly across a room to make a sale or a purchase. Signals that occur with palms facing out and hands away from the body are an indication

31

the gesturer wishes to sell. When traders face their palms in and hold their hands up, they are gesturing to buy.

Disadvantages of Outcry System of trading:

The major problem with outcry system was it did not allow immediate matching of bids and recording of transactions. Lack of transparency also characterized the outcry system. It was time consuming and inefficient system. This imposed limits on trading volumes and efficiency. The scope of manipulation, speculation and mal practices was more. Some open outcry systems used special sign languages to make so signal were more important in the outcry system. Any member who could not interpret the buy/sell signal correctly often landed himself in disastrous situation. In-audibility was another disadvantage of the outcry system.

All exchanges were originally open outcry, but many have gradually shifted toward electronic trading. Historically, stock markets were physical locations where buyers and sellers met and negotiated. With the improvement in communications technology in the late 20th century, the need for a physical location became less important, as traders could transact from remote locations. One of the earliest examples of widespread electronic trading was on Globex, the CME Groups electronic trading platform that allows access to a variety of financial, foreign exchange and commodity markets. The Chicago Board Of Trade produced a rival system that was based on Oak Trading Systems Oak platform which facilitated E Open Outcry, an electronic trading platform that allowed for electronic trading to take place alongside the trading that took place in the CBOT pits. Electronic trading makes transactions easier to complete, monitor, clear, and settle. NASDAQ, set up in 1971, was the world's first electronic stock market, though it originally operated as an electronic bulletin board, rather than offering straight-through processing (STP). By early 2007, organizations like the Chicago Mercantile Exchange were creating electronic trading platforms to support the emerging interest in trading within the foreign exchange market. Today many investment firms on both the buy side and sell side are increasing their spending on technology for electronic trading.

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Electronic trading eliminates the need for physical trading floors. Brokers can trade from their offices, using fully automated screen-based processes. Their workstations are connected to a Stock Exchange's centralcomputer via satellite using Very Small Aperture Terminus (VSATs). The orders placed by brokers reach the Exchange's central computer and are matched electronically.

Exchanges are increasingly replacing the open outcry system by electronic trading. This involves traders entering their desired trades at a keyboard and a computer being used to match buyers and sellers. The open outcry system has its advocates, but, as time passes, it is becoming less and less common.

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ONLINE TRADING: OVERVIEW

Online trading is a process of placing buy/sell orders for financial securities or currencies by using an internet-based trading platform offered by the trading member viz., the broker. The use of online trading increased dramatically in the mid- to late-'90s with the introduction of affordable high-speed computers and internet connections. Stocks, bonds, options, futures and currencies can all be traded online. The use of online trades has increased the number of discount brokerages because internet trading allows many brokers to further cut costs and part of the savings can be passed on to customers in the form of lower commissions. The emergence of online exchanges has facilitated faster transactions by providing online trading portals and brokerage houses ease and flexibility. The Internet has indeed o pened up newopportunities for conducting the business. The worldwide stock exchanges have made a major shift from the traditional method of trading and now conduct a bulk of its business online through its brokers and partners. The trend took off slowly in India and the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) two of the largest exchanges in India have been conducting online trade successfully for some time. Exchange officials in both developed and emerging markets such as Germany, Italy and Pakistan have commonly cited cost reduction and investor protection as the main reasons cited for switching from floor to electronic trading.

ADVANTAGES OF ONLINE TRADING: Electronic trading systems significantly lowers investors trading costs (fees, brokerage, and commissions) It increases the amount of publicly available information about a stocks demand and supply. An investor cano o o o o Know the price of any stock he desires at any point time on the internet. Review the price history of any stock in chart format online. Follow in-depth the events happening in the market Conduct an extensive financial research of any company he desires He may also consult with other investors online present around the world.

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Some online stock broking companies provide real-time stock quotes, daily roundups of the stock market, expert commentary, and a deep community of fellow investors.

It provides control to Investors: When an investor wants to buy or sell stock, he does not need to call his broker on the phone thus helping in the execution of the order instantly on the internet. Electronic systems are capable of attracting new pools of liquidity by providing affordable remote access to investors and by retaining unexecuted orders in a consolidated order book for possible matching with future orders. On automated electronic trading systems, profit-seeking traders can closely monitor the market and become suppliers of liquidity even without their presence on the trading floor. This phenomenon is further facilitated by the manifestly higher speed of execution and settlement of trades on electronic systems. Electronic systems are also more transparent than trading floors in displaying detailed order flow information such as quotes, depths, and recent transactions from the limit order book to the market participants in real time. Higher transparency reduces the adverse selection problem. This information can also be archived more efficiently in electronic formats and then used ex-post by regulators in audit trails to penalize abusive practices such as insider trading and front running customers orders Online trading has made it possible for anyone to have easy and efficient access to more reports and charts than it was previously possible if one went to any broker office. Thus we have access to a lot more information. Online trading provides an integration of the bank account, trading account and demat accounts, which leads to easy and paperless trading for the client. Since traders in a computerized market can monitor conditions in real time and face no delay in submitting or withdrawing limit orders, computerization eliminates the time and space disadvantage of upstairs traders.

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DISADVANTAGES OF ONLINE TRADING 1) Technical Reliability: The greatest disadvantage of online trading is the inability of a network to be fail-safe. Computers in spite of the technological advances are by no means perfect. There are various things that could go wrong like failure to log on to the network, network blackout due to power failure, server crash resulting in site failure, traffic overload thus causing site freeze. Site freeze can happen on extremely demanding days with large amounts of orders going over the networks. 2) The investor is alone: Another disadvantage may be the penalty of a bad investment. The do it yourself attitude that empowers the investor over his own money, can give a sense of autonomy previously not experienced when dealing with traditional brokerages. But it can also spell investment failure. Stockbrokers could possibly give a bad recommendation; nevertheless they are professionals who would not just recommend a stock without doing their due diligence. That's why their services bear a premium in the form of higher commissions. A novice online investor with no sound financial basics is more likely to invest without proper analysis of the stocks fundamentals like the key financial ratios, etc. Online trading sites provide investors with vast amount of market information without any sort of personal advice. 3) Lack of set of standards for service, etc.: Investors' experience in online trading differs extensively. It can be from complete gratification to complete frustration. Sad but true, just like human brokers and financial advisors, online brokerages dont have a fixed set of minimum standards with which investors can benchmark these brokerages and choose the best suited to their liking. 4) Privacy is less due to hacking scandals. 5) No Time to Learn Online Programs: Online brokerage firms claim their software is easy, but this isn't always the case. Often, the software is complicated, with several different options and calculators, and no instructions on how to actually use them. People who don't learn software quickly may not master all the ins and outs of the program. Without complete knowledge of the program, investors may not make the right decisions because they won't know what all of their options are. Also, taking the time to learn the technology means spending money, which is often too high of a cost for many people. As a result, they will use only the sections of the site they feel comfortable with, another limitation.

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IMPACT OF ELECTRONIC TRADING

The increase of electronic trading has had some important implications: Reduced cost of transactions By automating as much of the process as possible (often referred to as "straight-through processing" or STP), costs are brought down. The goal is to reduce the incremental cost of trades as close to zero as possible, so that increased trading volumes don't lead to significantly increased costs. This has translated to lower costs for investors. Greater liquidity electronic systems make it easier to allow different companies to trade with one another, no matter where they are located. This leads to greater liquidity (i.e. there are more buyers and sellers) which increases the efficiency of the markets. Greater competition While electronic trading hasn't necessarily lowered the cost of entry to the financial services industry, it has removed barriers within the industry and had a globalisation-style competition effect. For example, a trader can trade futures on Eurex, Globex or LIFFE at the click of a button he or she doesn't need to go through a broker or pass orders to a trader on the exchange floor. Increased transparency Electronic trading has meant that the markets are less opaque. It's easier to find out the price of securities when that information is flowing around the world electronically. Tighter spreads The "spread" on an instrument is the difference between the best buying and selling prices being quoted; it represents the profit being made by the market makers. The increased liquidity, competition and transparency means that spreads have tightened, especially for commoditised, exchange-traded instruments. For retail investors, financial services on the web offer great benefits. The primary benefit is the reduced cost of transactions for all concerned as well as the ease and the convenience. Web-driven financial transactions bypass traditional hurdles such as logistics.

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Key Differences between Floor Trading and Electronic Trading

Institutional Feature

Floor

Electronic

Identity of Counter- The identity of the counterparty The identity of Party broker is known before the trade. counterparty is usually revealed post-trade although a few exchange display broker identity pre-trade. Ex-ante Transparency of Available Liquidity Usually only the best bid and offer Usually top 5 best buy and is known to traders best sell prices and sometimes the whole book displayed on traders screen

Speed of Matching Trades are matched manually Trades are matched trades or immediacy based on open outcry system and automatically by a can take 10 sec to 1 minute computer algorithm within a second Operating cost and Higher order processing costs Lower

Speed and cost of Settlement

Settlement is often paper based Usually faster and with a lag dematerialized settlement and lower costs

Order Book

Order book often does not exist and quotes are valid only as long as breath is warm

Order book matches ir accumulates customers limit order and quotes are valid until withdrawn

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ONLINE TRADING PRODUCTS OF UNICON

Unicon provides its investors with following terminals to trade online Unicon plus Unicon Swift

Unicon Plus: Browser based trading terminal that can be accessed by a unique ID and password. This facility is available to all our online customers the moment they get registered with us. Unicon Swift: Application based terminal for active traders. It provides better speed, greater analytical features & priority access to Relationship Managers. The following section presents a working of Unicon Swift (NEST Trader) software which is used by the active traders and brokers at unicon.

NEST TRADER

HOW TO LOGIN IN NEST TRADER Double Click on Shortcut to uniconSwift on Desktop. Enter the password in the respective fields provided. Make sure that Download option are selected Do not click on Quick Login. Do not select Clear and Download All Scrips This option is security files get corrupted OR you are not getting newly listed incremental download. login name and Confirm Scrip

required if your scrip even after

39

On first login attempt, it is mandatory to change the login password. The password should be alphanumerical and should be 6 to 12 characters in length. User cannot set the password same as last two passwords. You need to change the login password and transaction password after every 14 days. Once 14 days completed, the system mandates the change password option. During login NEST Trader will automatically download the scrip master on Incremental basis.

HOW TO CREATE NEW MARKET WATCH Go to Market Menu > Market Watch Group settings. In the dialog box that appears enter group name and click on add group button. Then from Security options, select any of the security across exchange segments and say add. After adding the scrip, you can save the group by clicking on Save Groups button.

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The trader has the options to add derivative symbols at one shot. The various options present are: All future securities for the selected expiry All option securities for the selected expiry (for selected scrip selected expiry) All option securities for the selection (for selected scrip across expiries) All underlying scrip for futures (Cash Underlying) All securities for selected market type (for NCDEX)

While adding future symbols using above mentioned options you have to select the proper expiry.

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HOW TO ADD SCRIP IN EXISTING MARKET WATCH Press CTRL + S, this will send the curser focus in scrip bar.

In scrip bar, select Series and Symbol and press enter. Once you type the company name the respective security symbol will be selected and you add it to market watch. After adding scrip in market watch > Go to market watch group settings -> Save Groups. OR Press CTRL+M to Save Market watch.

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HOW TO ADD ALERT FOR A SCRIPT: Right click on market watch and select set alert option it will open a set alert dialog box through this you can set alert for a scrip or index.

HOW TO SEE MARKET DEPTH The market depth dialog shows the best-five information and other trade statistics. To open market depth double click on scrip or press F6.

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HOW TO PLACE ORDER Order Entry is the screen from where you can place orders to the exchange. You can call this screen using F1/F2 or +/-, where F1/+ for Buy order entry and F2/- for Sell order entry.

HOW TO SEE ORDER BOOK, TRADE BOOK AND NET POSITION In order book you can view the orders information for the trading day. To open order book go to Orders and Trades menu and select Order Book or press F3. In NEST Trader you can filter in order book, trade book and net positions by calling CTRL+F. You can filter across the columns present in the dialog.

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Open orders window displays all pending orders and Completed orders window displays all orders except than pending orders.

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In Trade book you can view all traded orders information for the trading day. To open order book go to Orders and Trades menu and select Trade Book or press F8.

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HOW TO SEE HOLDINGS

The DP holdings can be viewed in View DP holdings options present under Surveillance -> Holdings or press Alt+F9. You have to select the respective account id and click on get holdings, to get holdings details.

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HOW TO SEE LIMITS The risk limits can be viewed from RMS view limits option present under Surveillance -> RMS Limits or press Ctrl+Shift+V. You can view the cash margin available / ledger balance, the exposure limits and the margin utilized.

HOW TO SAVE YOUR TRADE/ORDER REPORT The trade report can be generated from View report option present under Masters -> Report Generation. You have to select the exchange segment, client id and the respective report format. You have to mention the file location from Browse button and on clicking on Generate report; the trade report will be generated in the mentioned location. HOW TO SEE CHARTS There are two types of charts available in NEST Trader. Intraday Graph, which depicts the intraday chart for selected scrip from market. This can be called from Intraday Chart option on right click menu on market watch.

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OHLC Graph, also an intraday graph which depicts the charts based on VWAP (Volume Weighted Average Price) at any point of time.

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HOW TO SEE SCRIPT PROPERTY: You can view the scrip properties / information of the selected scrip in market watch by calling SHIFT+F7 or right click menu -> Tools -> Scrip Properties.

DESCRIPTION OF MESSAGE BAR In Message bar, there are different tabs. In Session tab, all the session messages such as login sequence, orders and trades log and other events information. In Orders / Trades tab, only the orders and trades log will be shown. The News tab updates the live news messages across exchanges. The messages tab displays all the messages received from ADMIN. The log messages display the messages in between the login session. If you re-login to the trader you will not get the previous orders and trades messages. You can retrieve the same from server using Get log messages option from file menu.

HOW TO TRANSFER & WITHDRAW FUND You can transfer funds online with 26 banks.

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To Transfer fund Go to > Web Links menu and select Cash Management it will open new window. From here you can transfer or withdraw fund.

Enter amount, select bank and then click on submit button it will redirect you to bank website. Enter net banking user id and password provided by bank. After successful transaction, go to Balances & Positions to check fund. In case of withdrawal enter amount, select bank and click on submit button, your request is accepted in our records and it will be processed according to given condition. Important: Funds can be transferred online from the above banks if you have the net banking facility enabled with the bank.

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As per SEBI Guidelines, the A/c No. from where the fund is being transferred for Trading must be registered with broker. To transfer funds from any other bank, please send a cheque for the margin amount to your branch or Contact your RM. To register account number or any assistance, please contact Unicon Helpdesk at +91-120-4515555 or 1800 103 3388 (Toll Free). *You can request a direct transfer of funds in your account in HDFC, ICICI and Axis Bank Only.

HOW TO USE FORGOT PASSWORD OPTION Double click on exe and click on Forgot Password option.

Click on Forgot Password option it will open given window. Enter your login id click on go.

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Enter pan no, email id that is registered with us and click on send button.

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Now check your mail id for new password. Important shortcut keys CONTROL + S -- go to security bar INSERT TO SPACE BETWEEN SCRIP CONTROL + m -- TO SAVE MKT WATCH F6 -- MARKET DEPTH, BEST FIVE F1, F2, +,- -- TO PLACE ORDER CONTROL + I -- FOR INDEX BAR F3- FOR ORDER BOOK CONTROL +1 -- COMPLETED CONTROL +2 -- PENDING CONTROL +3 -- COMPLETED + PENDING SHIFT F1-- CANCEL SHIFT - F2 -- MODIFY CONTROL = F -- TO FILTER DATA F11 -- ALL NET POSITION Shift + F7 SECURITY DETAILS CONTROL = B -- NORMAL BASKET

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SALES REPORT

At Unicon we used to login at 10am and we had to report to our respective managers. Our manager used to brief us about the markets, the shares to look for, the commodity markets, the mergers, takeovers as well as acquisitions. We were given a list of clients whose accounts have been dormant for more than 6 months and who have not done any business what so ever in these 6 months. We used to call them providing the daily market news and asking them about the reasons on why they have not done any transactions for these many months. Calling the customers and asking them about the reason for not trading was a way to ask them to invest in other markets as well. As soon as a customer used to receive a call we used to ask them about the reasons and tried to pitch them for other markets where they could invest. GOLD of the commodity market was one of the main areas where we were as the customers to Invest as it was a booming market. The customers who had been incurring losses were pitched by saying that GOLD (traded at 21000) is a booming market and by the end of December the prices of gold will be 31,000 so they should invest in commodities market. The customers were told that since it is a Bearish market (Falling Market) the price of equity are gradually falling so the customers were asked to invest in GOLD because since the EURO crises and due to depreciation of Rupees the market for Gold was becoming Bullish (Rising Market) so everyone was investing there money in gold.

Pitching Customer to Invest in Gold

Customer Interested in GOLD

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There are enough reasons why gold should be included in any investor's portfolio whether in physical or paper form. Investing in gold ETFs will give the investor all the advantages of investing in gold while eliminating drawbacks of physical gold Why should an investor invest in Gold ETF? Gold is considered as a Global Asset Class Gold is used as a Hedge against Inflation It is compared to equities It is held in Electronic Form It is extremely liquid

Why invest in physical gold? Top Reasons to Invest in Physical Gold: 1. Gold has always been, and will always be, the most legendary precious metal in the world. 2. Gold will always be in demand, and demand is increasing and its supply is almost constant with respect to its demand. 3. Gold is an inflation-proof investment. 4. Unlike paper currency, stocks and bonds, gold will never loses its intrinsic value. 5. The current Rupee and Euro crisis will continue to push gold prices up.

Last year, gold has given positive return of 32 %(appx), whereas SENSEX gave negative return of 18%(appx). Due to Euro crisis and depreciating rupee, Gold price is expected to be around 31,000 till December 2012.

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Gold chart and its progress

Account Opening With Unicon

To avail the services of a depository an investor is required to open an account with a depository participant of any depository.

PROCEDURE FOR OPENING AN ACCOUNT A demat account are opened on the same lines as that of a Bank Account. Prescribed Account opening forms are available with the DP, needs to be filled in. Standard Agreements are to be signed by the Client and the DP, which details the rights and obligations of both parties

57

The DP officials will make available the relevant account opening form (depending on whether the client is a retail investor or corporate client/clearing member) and specify the list of documents regarding references that should be submitted along with the form. It will also give a copy of the relevant agreement to be entered with the client, in duplicate. The client will submit the duly filled in account opening form and client has to visit personally for opening the account in DP. The DP officials have to do in person verification and affix the IN PERSON VERIFICATION stamp on the account opening form. It should also furnish such documents regarding references, as specified by the DP, along with the account opening form. After executing the agreement the client has to forward it to the DP. The DP officials will verify that the account opening form is duly filled in. It will also verify the enclosed documents, if any. Incomplete forms will be forwarded to the client for rectification. For Corporate Clients, the DP officials will verify if the board resolution for the authorized signatories is enclosed. In case the documents are not proper, the DP officials will reject the form and intimate the client of the same, stating the reasons for doing so. If the form is in order; the DP officials will accept the same and affix the stamp verified with original on each and every proof after seeing the original proofs. After completion of all documentation, the DP officials will verify the pan from income tax website. And affix the stamp PAN VERIFIED with date and sign on the stamp. The DP officials will enter the client details as mentioned in the account opening form in the DPM (software provided by NSDL & CDSL to the Participant) screen provided for the purpose. In case of NSDL A/c opening the SR. Assist will capture all the details in the DPM and record the clients signature (on the form) as specimen for authorizations in the future. After entering client details in the system, a client account number will be generated by the DPM. The DP officials will enter this in the account opening form. After that the officers will verify the details in the DPM captured by the SR. Assist. and activate the account. The DP officials are not allowed to give the demat a/c no to the clients until the a/c is activate, this is applicable for both NSDL & CDSL. When the demat a/c is activated the DP officials have to send the client master and the copy of agreement between DP and client at the clients address. The account holder is called 'beneficial owner' in a depository system and the account is known as 'beneficiary account'.

Documentation Required for Share Trading & Demat Account Opening Photocopy of Pan Card

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Residence proof Photocopy of Passport or Driving License or Ration card or Voter ID or MTNL/BSNL bill You will have to submit 2 coloured passport size photographs 6 months bank account statements/ Income Tax Return for the last financial year if you are interested in Derivatives Trading, but not if you are interested in Cash Trading only

REACTIVATION OF DE-ACTIVATED ACCOUNT

According to the guidelines of SEBI, if any investor does not trade for more than 6 months, then his account is deactivated. To start trading through that account, investor needs to activate that account first. For reactivations, client has to sign a reactivation kit. This is free of cost, no money is charged for reactivation. If any investor wants, he can give cheque of some amount; this amount is used for trading purpose by client.

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BROKERAGE STRUCTURE OF UNICON

In India, capital markets have been playing an increasingly important role, determining the pace and pattern of economic growth and the stock exchanges are a vital institution of the capital markets. As an important intermediary in the capital market, a stock exchange provides an organized marketplace for transparent price discovery, where trading members (brokers) use a trading platform, typically an electronic one, to trade in securities such as equities or bonds either on behalf of their clients or on their own account. When a party trades with another on a stock exchange, he not only pays or receives the price (at the time of trading) of the securities he buys or sells, but also incurs certain additional costs. These additional costs are called costs of trading. Costs of trading in an exchange have an important bearing on the efficiency of the capital market and hence all of the brokerage companies try to attract the customers by their brokerage plans. Unicon has recently introduced new brokerage plans that are listed below.

General Brokerage Charges: Unicon delivery brokerage: 0.40% Intraday trading= 0.04% means 4 paisa for 100 Rs trading Futures trading 0.05% Unicon Investment Solutions brokerage charges options Rs 100 per lot

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ADVANCED BROKERAGE PLAN:

Sr Product No. Plan Name Subscrip tion Fee (exe. Service tax) Subscrip tion Cheque amount Validity (months ) Brokerage Delivery Brokerag e Futures Brokerage Brokerage Options(in Currency Rs. Per lot)

Equity

ComTrade Unlimited Plan

3K 6K 12K 24K 48K 96K 35K 1L 10K

3000 6000 12000 24000 48000 96000 35000 100000 10000 15000 25000 50000 100000

3371 6742 13483 26967 53933 107866 39326

12
12 12 12 12 12 1

112360 12 11236 6 16854 12 28090 12 56180 36 112360 120

PPO(Pay Per Order)

15K 25K 50K 1L

30p 25p 20p 18p 15p 10p 35 crore 35 crore 30 crore 25 crore 20 crore 15 crore 05 crore

3.5p 3p 2.5p 2p 1.5p 1p per NA per NA per NA per NA per NA per NA per NA

70 per lot 70 per lot 65 per lot 40 per lot 30 per lot 25 per lot NA NA NA NA NA NA NA

20 per lot 18 per lot 15 per lot 12 per lot 10 per lot 8 per lot NA NA NA NA NA NA NA

1) Equity Advantage Plan: Under this plan, six different plans are available to client to choose from namely, 3K, 6K, 12K, 24K, 48K, and 96K. Let the client has subscribed for 6K plan. This plan is valid for 12 months. For these 12 months the client will be charged 30 paisa on delivery and 3.5 paisa on futures. For options client will be paying only Rs. 70 per lot instead of Rs. 100 per lot. Let any client 100 shares of ABC Company of market price Rs. 790 on 9th July. Then the total amount of transaction will be 100*790 = Rs. 79,000. Let he sells 80 of these share at a price of Rs. 800 on 12th July. Total amount of this transaction will be 80*800 = Rs. 64,000. The amount of brokerage for this transaction will be 64000*0.40/100 = Rs. 256

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If client is under advanced brokerage plan of 6K, brokerage amount charged will be 64000*0.30/100 = Rs. 192 2) ComTrade Unlimited Plan: This plan is meant for clients who deal in commodity. Under this plan client has two options. 35K plan and 1L plan. 35K plan is valid for one month. The subscription amount after service tax is Rs.39326. During this 1 month, the client will be charged 35 per crore instead of 1000 per crore. Same is applicable for 1L plan. Only difference is that 1L plan is valid for 6 months. The subscription amount after service tax is Rs. 112360. 3) PPO (Pay Per Order): This plan has been introduced for online clients. Under this plan customer can choose from 10K, 14K, 25K, 50K and 1L plans. Brokerage under these plans are fixed; Rs 30 per lot, Rs 25 per lot, Rs 20 per lot, Rs 15 per lot, Rs 5 per lot. The quantity of the transaction does not affect the amount of brokerage charged. This is applicable for options, futures, intraday and delivery. Under all of these plans the customer gets following additional benefits

Free account opening: to open a new account with UNICON client needs to
pay account opening charges Rs.150, which is one time payable charges but under these plans no amount is charged to client.

Free trading software: For online trading client is given a free software
amounting Rs.500.

Lower brokerage amount is charged to the client depending on the plan for
which the client has opted.

Example: If any customer buys/sells 10 lots (500 options) of Nifty, brokerage charged to him will be 50*10= Rs.500, if he is not under advanced brokerage plan. But if client is under 15K plan, the brokerage charged will be fixed Rs 25, which is 20 times less than the previous case. If client buys/ sells 1000 lots of Nifty then also the brokerage charged will be Rs. 25.

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ANALYSIS AND INTERPRETATION OF RESULTS

Ques 1: Are you currently investing in any financial instrument?

Options Yes No Total Number of respondents 80 20 100.0 Percent 80.0 20.0 100.0

20%
Yes

80%

No

Interpretation: 80% of the respondents who were trading with Unicon are still trading while
20% of the respondents do not trade currently.

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Ques 2: If yes, a) In which financial instrument are you investing?

Options

Number of respondents 65 20 37 19 45 20

Percent 30 14 17 9 21 9

Equity Commodity

Mutual Funds Insurance Debt Others

70 60 50 40 30 20 10 0

65

Number

31

37 19

45 20

Financial Instruments

Interpretation: Equity: Equity investors are those investors who like to take Risk or who want to save their tax in the form of dividends. Equities are of volatile nature and the risk of incurring loss is the highest. 30% of respondents are currently investing in Equities. Mutual Funds: 17% of respondents are currently investing in Mutual Funds. An investor would like to invest in Mutual fund because it reduces the risk of the customer. These 17% of the investors do not like to take risk as in case of the equity investers

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Debt (FDs, Bonds etc): 21% of respondents are currently investing in Debt funds. These investors are highly risk averse. Reason for choosing this option could be a) More Liquidity b) Diversified Portfolio c) Better Post tax return

Commodity: 14% of respondents have invested in the commodity. Since inflation can hurt other investments like stocks and bonds, some investors put a small piece of their holdings in commodities. It saves them from risk of inflation and the Euro crisis. Insurance: A lot of people are not aware that having a well funded insurance is truly an investment. You might not see its importance unless you have a personal experience on how difficult it is to deal if member of your family or even somebody you know that supposed to be mitigated or save if they only have an insurance policy. Therefore, 9% are concerned about their family and their childrens future so they have put their money in savings. Others (Real estate etc): 9% of the respondents have opted for different options to invest in. An investor will invest in real estate when he wants his money to be locked for a long period of time. These are the people who like to play long like to wait for the time to come and benefit.

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b) With which brokerage firm/(s) are you working currently?

Options

Number of respondents 22 20 12 3 6 7 10 80

Percent 27 25 15 4 7 9 13 100

Sharekhaan ICICI Securities IndiaBulls Securities Religare Reliance Money Kotak Securities Others Total

13% 9% 7% 4% 15%

Sharekhaan

27%

ICICI Securities IndiaBulls Securities Religare

25%

Reliance Money Kotak Securities Others

Interpretation: Out of 80 respondents who switched over to other brokerage firms, 27% of them preferred to work with Sharekhan, 25% to ICICI securities and 15% to Indiabulls Securities. This data shows that top three competitors of Unicon are Sharekhan, ICICI Securities and Indiabulls Securities.

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c) Are you satisfied with your brokerage firms services?

Options Number of respondents 19 23 20 13 5 80

Percent 24 29 25 16 6 100

Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total

6% 16%

24%
Highly Satisfied Satisfied Neutral Dissatisfied

25%

Highly Dissatisfied

29%

Interpretation: There are 16% of the respondents who are not Dissatisfied and 6% are Highly Dissatisfied with their current brokerage houses. Hence there is a scope for the company to get these clients back to it.

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d) For how long you have not worked with Unicon?

Options

Number of respondents 13 23 35 9 80

Percent 16 29 44 11 100

Less than 1 year Up to 2 years 2-3 Years More than 3 Years Total

11%

16%
Less than 1 year Up to 2 years 2-3 Years

29% 44%

More than 3 Years

Interpretation: From above data it can be seen that number of clients leaving Unicon has decreased from 44% to 16% in last 2-3 years. But 16% still a very high number, so company need to take some action soon to decrease this %age by significant number.

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e) What are the reason/(s) for leaving trading with Unicon?

Options

Number of respondents 5 20 18 37 80

Percent 6 25 23 46 100

High brokerage charges Lack of service support Shifting of Branch Others Total

6% High brokerage charges 25% 46% Lack of service support Shifting of branch Others 23%

Interpretation: According to the above data, company needs to improve on its services most, because 25% of clients left Unicon because of lack of service support. 23% of clients left Unicon because branch was shifted from Rohini to Karol Bagh. Clients were facing problem in payment of cheques, receiving and sending other documents.

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Ques 3: If No, a) What are the reason/(s) for leaving trading?

Options

Number of respondents 11 3 5 1 20

Percent 55 15 25 5 100

Incurred losses in past Financial problem Downfall in market Unaware of Market Total

5%

25%

Incurred losses in past Financial problem

55% 15%

Downfall in market Unaware of Market

Interpretation: According to above data, 55% of investors left investing because they faced losses in past and do not want to face any loses further. 25% of investors left because there was a downfall in market because of Euro crisis etc. So there a probability that when market will improve, these investors will start investing again. 5% of investors are not investing because they are unaware of market, company can help these investors by providing coaching classes to them as to in which sector they should invest, how to minimize the risk etc.

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b) Would you like to invest in stock market again in near future (within next 2-3 months)?

Options

Number of respondents 11 9 20

Percent 55 45 100

Yes No Total

45% 55%
Yes No

Interpretation: 55% of the respondents who are not investing anywhere are ready to invest in near future While 45% are not. Unicon should find out the sector in which these clients would like to invest and provide those clients with the best of their services so that these clients get their account reactivated again.

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c) If Yes, I. In which types of products would you like to invest in?

Options

Number of respondents 5 3 7 2 3 20

Percent 25 15 35 10 15 100

Wealth Management Equities & Derivatives Commodities Real Estate Others Total

Products
8 7 6 5 4 3 2 1 0

Products

Interpretation: 25% of the respondents want to invest in commodity market. Reason could be the high return. But only 10% of the investors want to invest in real estate that shows that investors do not want to lock their money for long to get benefitted. Just 15% of the respondents want to invest in equities and derivative, possibly they do not want to take high risk for high gain.

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II.

What is the preferable time to contact you?

Options

Number of respondents 9 7 4 20

Percent 45 35 20 100

Morning Afternoon Evening Total

Interpretation: 45% of the respondents want to be contacted in morning, 35 % in afternoon while rest in evening time.

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FINDINGS AND OBSERVATIONS

1. Almost every person contacted or interviewed said that he/she has invested in some financial product for at least 6 months. 2. From analysis we found out that most of the people left investing in stock market because of the losses they incurred in past. 3. Most of the respondents who lost a large sum of money were new to market. 4. More than 95% of the clients to whom I contacted were online clients. 5. Around 45% of the respondents open their accounts in name of his wife or any other family member to save tax. 6. Brokerage structure, research on market, brokers advice on stocks (to buy or sell), integration of bank account and D-mat account are the things that clients look for in any brokerage firm. 7. Due to increment in price of Gold, investors were more interested in buying Gold than the equity market which was going down. 8. Most of the respondents found the Unicons online trading software convenient and easy to use while few of them were concerned about the security of the online transactions.

CONCLUSION

It is not wrong to acknowledge the fact that online investing has opened avenues for investors that didnt exist before. Trade is not necessarily restricted to limited times 24hour trading becomes possible. The other advantage is that those directly trading exchange no longer need to be physically present on the exchange floor: they can be anywhere in the world. One major disadvantage of the electronic trading system is that there are few opportunities for locals. Locals depend to a large extent on their ability to interpret what they hear and see around them and on their relations with others in the trading ring. A computer-based system makes involvement in trading less attractive to locals.

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SUGGESTIONS AND RECOMMENDATIONS

Many of the people who dealt in share market are not aware of all UNICONS services. So company should advertise its services, so that people can be aware of all of its services. As the software for online trading is updated recently, some of the clients do not have updated version of the software. Company should install the software to client side also train them in using the new updated software. As the data shows, company lacks in services. Due to poor service and guidance to clients, clients left the company in last 2-3 yrs. So it is recommended to the company to improve on its services. There are some investors who work online but they are not sure of security issues related to online transactions, the company should educate them so that such doubts of clients are faded away. Special attention should be given to the clients who are new to market due to which they incur losses and later on leave trading or get negative image about the company.

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LIMITATIONS OF THE RESEARCH STUDY

Due to the lack of time, it was not possible for the researcher to approach all the people. The respondents were asked to indicate their true responses to the questions being asked, but rather than giving the response, they might have been in a form of expert comments which might have based the result of the study. The results of the study may not be universally applicable due to regional constraints. Personal biasness may be included in the research work.

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QUESTIONNAIRE
Name: Age: Occupation: Ques 1: Are you currently investing in any financial instrument? Yes Ques 2: If yes, a) In which financial instrument are you investing? Equity Mutual Funds Debt (FDs, Bonds etc) Commodity Insurance Others (Real estate etc) No

b) With which brokerage firm/(s) are you working currently? Sharekhaan IndiaBulls Securities Reliance Money Others c) Are you satisfied with your brokerage firms services? ICICI Securities Religare Kotak Securities

Highly Satisfied

Satisfied

Neutral

Dissatisfied Highly Dissatisfied

d) For how long you have not worked with Unicon? Less than 1 yr 2yrs-3 yrs Up to 2 Yrs More than 3 yrs

e) What are the reason/(s) for leaving trading with Unicon? High brokerage charges

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Lack of service support (broker assistance, no intelligent research report etc) Shifting of branch Others (Please Specify) __________________________________________________ Ques 3: If No, a) What are the reason/(s) for leaving trading? Incurred losses in past Downfall in market Others (Please Specify) __________________________________________________ Financial problem Unaware of market

b) Would you like to invest in stock market again in near future (within next 2-3 months)? Yes No

c) If Yes, I. In which types of products would you like to invest in? Wealth Management (Equity Products, Life insurance, Bonds/Company FDs, Gold and Silver, Mutual funds etc) Equities & Derivatives Commodities Real Estate

Others_______________________________________________ II. What is the preferable time to contact you? Morning Afternoon Evening

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BIBLIOGRAPHY
Books: Financial Services, By Siddaiah Thummuluri Page 23

Magazine & Journals/ Newspaper Hill, B. (2001): Why should I invest online? Retrieved on 2002, March 9. Pankaj Jain(2005): "Financial market design and the equity premium: Electronic vs. floor trading , Page Number 28

Internet:

http://www.unicon.in/
http://www.appuonline.com/appu/investment/trading/index.html http://en.wikipedia.org/wiki/Electronic_trading#Impact .html http://unctad.org/en/docs/pocomd15r2.en.pdf http://cbse.nic.in/fmm-12/NEAT_chapter_1.pdf markets/article3602665.ece?homepage=true&ref=wl_home

http://www.thehindubusinessline.in/iw/2003/01/05/stories/2003010501331200

http://www.thehindubusinessline.com/markets/stock-

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