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Indian financial market

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  1. Introduction.
  2. Capital market.
  3. Secondary market.
  4. Capital market intermediaries.
    1. Other intermediaries.
  5. Instruments.
  6. Capital market processes.
  7. Need for the study.
  8. Trading methodology.
  9. Significance of the study.
  10. Scope of the study.
  11. Data collection methods.
    1. Primary method.
    2. Secondary method.
  12. Importance of online trading.
  13. Objectives.
  14. Disadvantages of the manual system.
  15. Hyderabad Stock Exchange.
    1. Origin.
    2. Objectives.
    3. Growth.
    4. Governing board.
    5. SEBI nominee directors.
    6. Public nominee directors.
    7. Computerization.
  16. Inter Connected Market System (ICMS).
  17. Online surveillance.
  18. Settlement guarantee funds.
  19. Current diversifications.
    1. Depository participant.
    2. Floating of subsidiary company for membership of major stcok exchanges.
    3. Facility to trade at NSE, derivatives trading and net trading.
    4. Commodities exchange.
  20. Bombay Stock Exchange.
  21. National Stock Exchange.
  22. Technology.
  23. Clearing and settlement.
  24. Online trading.
    1. Introduction.
    2. How the trading process is structured.
    3. Implication for online trading.
    4. Safety of transactions on the internet.
  25. Online or offline.
  26. Advantages of online trading.
  27. Other services that one gets by trading shares online.
  28. disadvantages of online trading.
  29. Trouble shooting.
    1. From the investors point of view.
    2. From the brokers point of view.
  30. The online trading process.
  31. Observations and findings.
  32. Playing the online game.
  33. Online trading at HSE.
    1. System.
    2. System overview.
    3. Trading session.
    4. Broker work station.
    5. Unique features of the broker work stations.
  34. Dematerialization of shares.
    1. Dematerialization of shares in a depository system.
    2. Structure of depository system.
    3. Depository participant.
    4. Objectives.
    5. Functioning of depository system.
    6. Functions of depository.
    7. Vesting of beneficial owner rights.
    8. Role of depository participant.
  35. Depositories in India.
    1. Services offered by NSDL.
    2. Special services offered by NSDL.
    3. CSDL.
    4. Objectives.
    5. Process of dematerialization.
    6. Dematerialization process.
    7. Points to remember.
  36. Rematerialization.
    1. Rematerialization procedure.
    2. Precautions.
  37. Trading and settlement of dematerialized securities.
  38. Procedure for buying dematerialized shares.
  39. Steps involved when you buy.
  40. Steps involved when you sell.
  41. Functioning of NSDL pool account.
    1. Settlement.
    2. Pool account.
    3. Delivery account.
    4. Receipt account.
  42. Procedure for pay-in of securities.
  43. Procedure for pay-out of securities.
  44. Comparative structure.
  45. Comparative saving.
  46. Entities connected to depositories.
  47. Conclusion.

The function of financial market is to facilitate the transfer of funds, from surplus sector (lenders) to deficit sector (borrower). Normally householders have excess of funds or saving, which they lend to a borrower in the corporate and public sector. Whose requirement of funds far exceeds their savings? A financial market consists of investors or buyers, sellers, dealers and does not refer to physical location. Formal trading rules and communication network for originating and trading financial securities link the participants in the market. As elsewhere in the world, the Indian Financial System consists of the following.

The capital market provides the framework in which savings and investment take place. On one hand it enables companies to raise resources from the people, investor and on the other it facilities household to invest their savings in industrial and commercial activities. Those saving instruments that can be bought or sold freely are called securities. These include a range of products like debt and equity, which can be traded. The market where such trader takes place is called the securities market and comprises the various exchanges, intermediaries and its regulatory institutions.

Deals with the issues of new instruments by the corporate sector such as equity shares, preference shares and debentures. The public sector consisting of central and state government, various public sector industrial units (psu's), statutory and other authorities such state electricity boards and port trusts also issue bonds. The primary market in which public issues of securities are made through a prospectus is a retail market and there is no physical location. Direct mailing, advertisements and brokers reach the investors. Screen based trading eliminates the need for trading floor.

[...] In addition to the above, many banks and financial institutions such as Canara Bank, IFCI, HDFC, ICICI, SBH, Indian Overseas Bank, Bank of Baroda, etc. are providing the facility of the dematerialization. CLEARING MEMBER CLEARING ACCOUNTS: Trade done at Stock Exchange in a particular settlement has to be settled through the clearing member (through whom trade is done). For this purpose, there is a clearing account of the clearing member (the broker). He collects in this account; securities sold by different clients and deliver the same to the exchange. [...]

[...] Frequent trading is generally contrary to the recommendations of financial theory, ultimately, it's possible for e-brokerages to allow inceptors to trade frequently at very low or even bid-ask spread that is pushed back by the market maker. At the same time, the investor may be unaware of the indirect costs incurred with each trade. Third, the evolution of electronic trading may increase market fragmentation in the short run. E-brokerages may increasingly channel trades away from low direct commissions, market fragmentation may have a negative impact on prices, increasing the bid-ask spread and potential for arbitrage opportunities. [...]

[...] In case of AE segment dematerialized securities are traded only in market lot, whereas in BE segment they can be traded in multiples of one share. The trading in Demat segment follows rolling settlement, whereas in physical segment the account period settlement is being followed. In rolling settlement each trading day is considered as a trading period and trade taking place in this period are settled on fifth working day. Typically trade takes place on Monday is settled on next Monday. [...]

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