Está en la página 1de 79

SUMMER TRAINING PROJECT ON

LUDHIANA STOCK EXCHANGE


&
ITS SUBSIDIARY COMPANY

UNDER TAKEN AT LUDHIANA STOCK EXCHANGE

Submitted to:Pooja M. Kohli.


(EXECUTIVE DIRECTOR)
Submittedby:Meenu Sood
(A-136)
MBA
()

PREFACE
This report is the result of my weeks of summer training at Ludhiana stock
exchange. Summer training is an integral part of MBA course and efficient utilization of
material , time and resources which are very much important for successful completion of
any taste. In order to be competent all the students are required to take a real time project
work. This exposure to project work will help them to knew that how academic
knowledge is applied in actual business situations.
Keeping all this in view, this project report of Ludhiana stock exchange securities
Ltd is prepared the all rounded encouraging support by many persons towards this
report, this report has created confidence in me regarding the approval of subject matter.
Actually this report is a result of an assignment, to improve myself and again
confidence. In this I have done my best to make it a genuine body. But as well all knows a
maximum TO ERROR IS HUMAN. Therefore, there is a chance for some mistake.
Also a critical appraisal by anyone will be heartly welcomed.
For the accomplishment of any objective mgt of material, time financial resources
is very important. Above to this coordination determines degree of success. Keeping this
in view, repot of FUNCTIONING OF LUDHIANA STOCK EXCHANGE
is prepared by all the rounded encouraging support by many persons towards this report
has created in me the confidence regarding the approval of the subject matter.
The present report is well arranged in a coherent manner. In my project I have
made the study of all the depts and consulting heads staff members of various respective
depts.
Actually this report is an result of an assignment, to improve myself and gain confidence,
in this i have done my best to make it a genuine study but there is a chance of mistake.

ACKNOWLEDGEMENT
You cannot discover new oceans unless you have the courage to lose sight of the share
The world of capital market was far from us,but we got an opportunity to emission
the capital Market at Ludhiana stock exchange. We are indebted to our Teachers and
Gurus who molded at this junction of our career from where we can take off better in the
competitive scenario of todays world.
We would like to thanks Miss Pooja M Kohli (Executive Director), Ludhiana stock
exchange securities limited for giving us an opportunity to do our SUMMER TRAINING
in this esteemed organization.
Its my privilege to express the everlasting feeling of indebtness to Mr.kuber kansal
and Mr. Atul chikersal(coordinator)for their valuable suggestions constructive outcome
and untiring help during the summer training.
A feeling of elathim insists me on expressing my heartiest thanks, deep sense of
gratitude to all my major advisors for their judicious impeccable.

Meenu Sood

STUDENT DECLARATION

I hereby declare that theAnalytical studyOnOVERALL STUDY ON LSE and its


SUBSIDIARY COMPANYINLUDHIANA STOCK EXCHANGE Submitted in partial
fulfillment of the Requirement for the degree of MASTER OF BUSINESS
ADMINISTRATION To Punjabi

University, patiala is my original work and not

submitted for the award of any other diploma, degree.

Place: Ludhiana

Meenu sood

Date

Signature

CERTIFICATE

This is to certify that the project report entitled LSE and its SUBSIDIARY
COMPANY submitted by Ms. Meenu Sood is a bona fide piece of work conducted
under my direct supervision and guidance. No part of this work has been submitted for
any other degree of any other university.
It may be considered for evaluation in partial fulfillment of the degree of Masters in
Business Administration.

Pooja M. Kohli
Signature

CONTENTS:-

1. Introduction of Stock Exchange

History

Features

Functions

List of regional stock exchanges

2. Introduction of Ludhiana stock exchange

Profile

Achievements

Objectives

Operations

3. Introduction to LSE Securities Ltd.

Features

Board of Directors

4. Introduction to Departments of stock exchange

Operation Dept.

Margin section

Clearing section

Market surveillance section

Computer section.
=Service Deptt.

Legal section

Investor grievance section

Listing section

Accounts deptt.

Technical deptt.

Membership deptt.

Personnel deptt.

Depository deptt.

5. Regulatory frame work of stock exchange


6. Conclusion.
7. Bibliography

INTRODUCTION
TO
STOCK
EXCHANGE

INTRODUCTION TO STOCK EXCHANGE


A stock exchange is an institution of capital Market which generates capital and
provides the same to industrial houses. A stock exchange is nervous system of capital
Market. the changes in the capital Market are brought about by a complex set of factor, all
operating on the Market simultaneously.
A stock exchange is the key institution facilitating the issues and sale of various
types of securities it is a pivot around which every activity of the capital Market revolves.
In the absence of stock exchanges, the people with saving would hardly invest in
cooperate securities for which there would no liquidity (buying and selling facility).
Corporate investments from the general public would have been thus lower.
Stock exchanges thus represent the Market place for buying and selling of
securities and ensuring liquidity to them in interest of the investors. The stock exchanges
are virtually the nerve centre of the capital Market and reflect the health of the countrys
economy as a whole.
The stock exchange is a place or a Market were securities, shares, debentures,
bonds. Mutual funds of join stock companies, central and state govt. organization, local
bodies and foreign govt. are brought and sold. A stock exchange is a platform for the trade
of already issued securities through primary Market. It is the essential pillar of the private
sector and corporate economy. It is the open auction Market were buyer and seller meet
and evolve a competitive price for the security. It reflects hope aspiration and fears of
people regarding the performance of the economy.
It is a Market as well as the sources for the capital. Corporate and government
raise sources from the Market. The house hold invest there savings in the securities.

THE STOCK EXCHANGE DEFINED.


The supreme court of India has defined the role of stock exchanges in these words:
A stock exchange fulfills the vital function in the economic development of a
nation. Its main function is to liquefy capital by enabling a person who has invested
money in, say a factory or a railway to convert it in by disposing off his share in the
enterprises to someone else.

HISTORY OF STOCK EXCHANGE IN INDIA


The stock started in the pre independence era. It is discussed as below:S.No

YEAR

Development of stock exchanges

1.

18th century

Trading of shares of east India company in kolkata and

2.

1850

Mumbai was started.


Joint stock companies came into existence

3.

1860

Speculations in securities was done for first.

4.

1875

Formation of stock exchange in Mumbai.

5.

1894

Formation of Ahmadabad stock exchange.

6.

1908

Formation of Calcutta stock exchange

7.

1939

Formation of Lahore and madras stock exchange.

8.

1940

Formation of U.P and Delhi stock exchange

9.

1956

Securities contract(regulation)Act was enacted

10.

1988

SEBI was setup.

11.

1992

SEBI was given statutory powers under SEBI Act.

12.

1993

NSE was formed for first.

13.

2000

Depositories was introduced.

14.

2002

Start of rolling settlement and banning of BADLA trading.

15.

2003

Introduction of T+2 settelment.

FEATURES OF STOCK EXCHANGE


1. Stock exchanges have been an association of individual members called member
broker.
2. Stock exchanges are formed for the express purpose of regulating and facilitating
the buying and selling by an institution at large.
3. Stock exchange operate with due recognition with govt. under securities and
contract regulation act 1956.
4. The member brokers are middleman who transact on behalf of public for
commission.
5. BOD limit is given by SEBI.
6. Total 13 directors are in every stock exchange.
7. Board is headed by president.
8. SEBI has been set to oversee the orderly development of stock exchange.
9. Stock exchange list the companies who wishes to raise the funds of cap.from public.
10. Stock exchange facilitates trading in securities of the public sector companies as
well as govt.securities.
11. The recognition accorded to a stock exchange is valid for period of 5 years subject
to satisfactory performance of stock exchange during this period.
12. Daily total turnover of all the stock exchanges is Rs.70000 crores (approx.)
13. In India only recognized stock exchanges can operate.
14. Stock exchanges provide finance for production outputs.
15. It is a nerve centre.

FUNCTIONS OF STOCK EXCHANGES


1. It channelizes the household savings into investments.
2. It plays vital role in the development of economy of the country.
3. Provides liq1uidity and transparency.
4. It encourages the companies to perform the best possible way.
5. Ensure funds and capital to flow into profitable enterprises.
6. Increase the Market value of shares.
7. Protect interest of investors.
8. Provide platform for investors to trade.
9. To ensure recognized code of conduct.
10. Stock exchanges indirectly helps in providing employment to millions of peoples.

LIST OF VARIOUS REGIONAL STOCK EXCHANGES:

S.NO

Name of Stock Exchange

Year

Bombay stock exchange

establishment
1875

Voluntary

non-profit

2.

Ahmadabad Stock exchange

1897

organization
Voluntary

non-profit

3.

Calcatta stock exchange

1908

organization
Public limited company

4.

M.P stock exchange Indore

1930

Voluntary

5.

Madras stock exchange

1937

organization
Co. limited by guarantee

6.

Delhi stock exchange

1940

Public limited company

7.

Hydrabad stock exchange

1943

Co. limited by guarantee

8.

Banglore stock exchange

1957

Pvt. Converted into public

9.

Cochin stock exchange

1978

ltd. Company
Public limited company

10.

U.P stock exchange kanpur

1982

Public limited company

11.

Pune stock exchange

1982

Co. ltd. By guarantee

12.

Ludhiana stock exchange

1983

Public limited company

13.

Jaipur stock exchange

1983

Public limited company

14.

Gwahati stock exchange

1984

Public limited company

15.

Kanaar stock exchange

1985

Public limited company

16.

Magadh stock exchange

1986

Co. ltd. By guarantee

17.

Bhubaneshwar stock exchange

1989

Co. ltd. By guarantee

18.

Saurashtra stock exchange

1990

Co.

1.

of Type of Organizations

ltd.

non-profit

By

guarantee,

19.

Vadodara stock exchange

1990

unrecognised
Private limited company.

20.

Meerut stock exchange

1991

Private limited company

21.

OTCEI stock exchange

1993

Pure demutulised

22.

National stock exchange

1995

Pure demutulised

23.

Coimbatore stock exchange

1997

Private limited company

24.

Sikkim stock exchange

1997

Private limited company

25.

Multi

26.

exchange(MCX)
NCDEX

commodity 2008
2009

Public limited company


Private limited organisation

From above Saurashtra, Magadh, Hyderabad,and Mangalore are unrecognized and rest
are recognized. BSE is in worlds 5th position in transaction.
MCX and NCDEX are the new exchanges which only deals in commodities.

INTRODUCTION
TO
LUDHIANA
STOCK
EXCHANGE

INTRODUCTION OF LUDHIANA STOCK EXCHANGE PROFILE


It was established n the year 1981 at near clock tower,Ludhiana with 220 members by
Sh.S.P.Oswal and Sh. B.M. Munjal leading industrialists to fulfill a vital need of having a

stock exchange in the region.since,its inception LSEA(Ludhiana Stock Exchange


Association limited)has grown phenomenally switched from manual trading to screen
based trading on 18th November 1996 and no.of listed companies increased from 160 in
90s to 376 of which 245 are regional and 131 are non regional companies(as on March
31,2005).
LSEA has played an important role in generating for the companies in the states of
Punjab,Himachal Pradesh,Haryana,and jammu Kashmir. bt now in LSE there are 212
regional and 114 are non regional out of 326 registered companies.
Out of 295 broker members there are 156 are registered with NSE and 121 are
registered with BSE and remaining are registered with both.
In Feb 2002 the trading is closed due to lack of funds and infrastructure as
compare to NSE and BSE.
Total listed capital of the aforesaid companies(regional and non regional)is 3072.6
approx.
Now the present addressof the stock xchange is feroze Gandhi Market ,ferozepur
road ,Ludhiana and exchange has an ultra mound building which is centrally air
conditioned.
LSE has its own index as 1993 base yearand index is based on prices as on 1 st
April.
LSEA published its own bulletin at the interval of a quarter.
Govrening board consists of 12

directors.out of which 6 are Shareholders

directors,3are trading member directors


3 are public interest directors and 1 is Executive director.
SHAREHOLDER DIRECTORS OF LSE LTD.
1. CHAIRMAN- Sh.Padam Prakash Kansal
2. VICE CHAIRMAN-Sh. Joginder kumar
3. TRADING MEMBER DIRECTOR-Sh.Sanjay Anand
4. TRADING MEMBER DIRECTOR-Sh.T.S. Thapar
5. SHAREHOLDER DIRECTOR-Sh,Ravinder nath Sethi
6. SHAREHOLDER DIRECTOR-Sh.Ashok kumar
7. PUBLIC INTEREST DIRECTOR-Sh.Ashwani kumar
8. PUBLIC INTEREST DIRECTOR-Dr.Raj Singh
9. PUBLIC INTEREST DIRECTOR-Sh.Ved Prakash Gaur
10.DING MEMBER DIRECTOR-Sh.Sunil Gupta

11.SHAREHOLDER DIRECTOR-Sh.Varun Chhabra


12.SHAREHOLDER DIRECTOR-Sh.Satish Nagpal
13.EXECUTIVE DIRECTOR-Pooja.M.Kohli

ACHIEVEMENTS OF LSE

First regional stock exchange to give proposal of making subsidiary as broker


of NSE and BSE for survival of stock exchange and second to start operations
like broker of NSE and BSE.

First regional stock exchange to starttrading in commodities market

by

subsidiary.

First regional stock exchange to start courses on capital market,only BSE is


performing this sort of activities andNSE uis also performing courses on
capitqal market only for members but LSE will star outsiders also.

Derivative trading is done in LSE.

Commodity trading is also done here.

LSE also introduced a settlement guarantee fund (SGF). The SGF guarantees
settlement of transactions and the carryforward facility provides liquidity to
the market.

LSE became the first in India to start LSE Securities Ltd., a 100% owned
subsidiary of the exchange. The LSE Securities got the ticket as sub-broker of
the NSE. In 1998, the exchange also got permission to start derivative trading.

For the settlement of dematerialised securities, the Ludhiana Stock Exchange


has also been linked up with National Securities Depository Ltd. (NSDL).

Beside them some more achievements are:1. LSE brand is popular among masses. The brand image of LSE can be capitalized.
2.LSE have requisite infrastructure for the Capital Market activities which includes a
multi-storeyed, centrally air conditioned building situated in the financial hub of the city
i.e. Feroze Gandhi Market.
3. LSE have well experienced staff handling operations of Stock Exchange.
4. LSE have competent Board and professional management.
5. LSE have much needed networking of sub brokers in the entire region, who are having
rich experience in Stock Market operations for the last 25 years.
6. LSE have more than 40,000 clients spread across Punjab, Himachal Pardesh, Jammu &
Kashmir and adjoining areas of Haryana and Rajasthan.

7. The turnover of LSE subsidiary is the highest amongst all subsidiaries of Regional
Stock Exchanges in India.

OBJECTIVES OF LSE

At NSE aInvestor grievances:- The major objective of LSE is the handling of investors
complaints and grievances. For this purpose it has established investors grievances cells
that receives complaints from investors.

LSE floated its subsidry company, LSESL, with objectives of obtaining trading right
on bigger stock exchanges.

Improving trading settlement from T+2 to T+1.

Providing platform for free Market.

Safeguarding general public interest.

Keep an effective surveillance on member brokers.

Reduction in huge paper works.

The major objective of LSE is introduction of NEAT (National Exchange for


Automated Trading) system.

Effective clearing and settlemend BSE

OPERATION OF LUDHIANA STOCK EXCHANGE:-

The Ludhiana stock exchange is the technology savvy, forward looking and modern
regional stock exchange.
DATE OF ESTABLISHMENT

Date of incorporation: October 17,1981.


Date of recognition

: April 29,1983.

Governing council, committees and Administation.


The council of mgt of the exchange consist of 13 members of which:
=> shareholder director :

6 members

=> Trading member director :

3 members

=> Executive Director :

1 member

=> Public interest director :

3 members

At every Annual General Meeting, 1/3rd of the Elected directors retired by rotation,
Administration of the exchange is managed by the executive director who is assisted by
the company secretary and a team of executives, assistants, technicians and sub staffs.
The exchange has three statutory committees namely: Disciplinary Committee.
Arbitration committee.

Default committee.
In addition it has five advisory and standing committees including the investors
grievances committee, to assist the Administration.

THE LUDHIANA STOCK EXCHANGE WORKS AS FOLLOWING:It has following departments:1.Secretarial department
2.Membership department
3.Technical department
4.Legal department
5.IGC department
6.Accounts department
7.Listing department
8.Personnel department
9.Internal control department.

1. Secretarial department :-LSE is a public ltd. Company. the min. cap. Required is
5 lac .
Minimum member required is 7 members.
SEBI nominates the public relation director.
What this department does:

To convene the meetings of the Board this dept. is responsible.

7 days before this meeting ,a notice about the place,date, time ,is sent to
board by this department.

To draft/compile the agenda of the meeting and send to board members.

Board proceedings are recorde in the form of minutes which is drafted


within 30 days and given to chairman of committee and board.

The 2 committes of this dept are:-

1.STATUTORY COMMITTEE
2.NON STATUTORY COMMITTEE

1.STATUTORY COMMITTEE:-It includes the following :

Investor service committee

Disciplinary committee

Default committee

Arbitrary committee

2.NON STATUTORY COMMITTEE:

HRM committee

Computer committee

Share transfer committee

Facility mgt. committee

Audit committee

Trading membership committee.

2.Membership department:-It is primary and secondary department

without which

working of entrepreneurs and members of any stock exchange is impossible .All the
members are required to comply with rules under SCRA,1956.
ELIGIBILITY OF MEMBER SHIP:The applicant should be citizen of India and must have completed 21 years of age.
REQUIREMENTS FOR INDIVIDUAL MEMBERS OF EXCHANGE:-

1. Age limit:- Minimum=21 years.Maxmimum=60 years.


2. Qualification:a. Matriculation.
b. He should at least have 3 yrs capital Market experience.
c. He should not be bankrupt.
d. Person should also be registered from SEBI.

REQUIREMENT FOR CORPORATE MEMBER OF EXCHANGE:A. The company should be registered under section 322 of the companies Act.
B. Company should not be bankrupt.
C. Minimum paid up capital required is Rs. 25 lacs.
D. The copies of MOA and AOA
E. Qualification and proof of age.
In LSE 295 members are there out of which 156 are registered with NSE and 1321
are registered with BSE.and rest with both.
.
3.Technical department:-The head of this department is Mr. Navraj singh
This department holds all the technical problems in the techniques. This department
of LSE is regulating the activities related to the fields of electrical , mechanical
and civil engineering besides having other functions like that of security.
There are some of the important aspect:1.electrification of building.
2.Air conditioning plants.
3.Maintenance of the generator.
4.fire fighting system
5.Maintenance of the telephone exchange
6.Water supply
SECURITY:- These

is

an additional

charge

given

to

this

department. The

supervision of the security staff, maintenance of metal detector is also under this
previous.
4.legal department:-The head o f this department is Mr. Prashant saluja .it holds all the
legal formalities to be done on every department and on the stock exchange.

1. to define stock exchange against any type of case.


2. To see that all the SEBI guidelines are followed.
3. to see all the govt. rules and regulations are followed.
4. to check that all the work which is going one is legal .
5. To suggest selective and correct measures when needed.
6. Monthly report to SEBI regarding case of total pending , total solved etc.
5.IGC:-The head of this deparment is again Mr. Prashant Saluja.It solve all the
investor related problems and does the following services:-

INVESTOR RELATED SERVICES


INVESTOR GRIEVANCES:-the exchange has enabled special arrangements to handle
investors grievance or complaints .It has established an investor

grievance cell that

receives complaints with companies and memberBroker to ensure this satisfactorily redressal have been fully computerized. In
addition ,to 6this the exchange has an investor grievance committee. It is the committee
between members and brokers.
INVESTOR PROTECTION FUND:The exchange has set up an investor protection fund in the monthof January, 1990 for
providing compensation to individual investors in case of a member of the exchange. The
fund has a corpus of Rs.78.60 lacs as of February 28, 2005. In case nay member broker
default to meet his obligation towards investors in respect of deals that took place through
the trading system of the stock exchange, then the concerned investors are compensated
from the fund.
INVESTORS SERVICES CENTRE:The exchange has set up an investors service centre in its premises for providing
information regarding to the general public. The centre has a well- equipped library,
which subscribe to leading economic financial dailies and periodicals. It also stores the
annual reports of the company listed at the stock exchange.

6.Accounts department:- The head of this department is Mr. Kuber Kansal.This


department makes and holds all the financial reports of the company and present it
quarterly.
FUNCTIONS:

To make and receive payment to the outside agencies(cos. Listed at


LSE,brokers working in LSE.)

To keep the record of all incoming and outgoing money and preparation
of financial matters at the end of the financial year.

To get the a/cs audited from the 3rd party.

To disburse personnel expenses.

7.Listing department:-The head of this department is Mr. Sudesh Kumar. It lists the
companies those who want to issue their holdings in the public.
Guidelines for Listing
Listing means admission of securities to dealings on a recognized stock stock exchange.
The securities may be of any public limited company, Central,tral or State Government,
quasi governmental and other financial institutions/corporations, municipalities, etc.
The objectives of listing department are mainly to :

provide liquidity to securities;

mobilize savings for economic development;

protect

interest

of

investors

by

ensuring

full

disclosure.

BSE.

BSE has set various guidelines and forms that need to be adhered to and submitted
by the companies. These guidelines will help companies to expedite the
fulfillment of the various formalities and disclosure requirements that are required
at various stages of

Public Issues

Initial Public Offering

Further Public Offering

Preferential Issues

Indian Depository Receipts

Amalgamation

Qualified Institutions Placements

8.Personnel department:-The head of this department is Mrs. Geeta Goyal.


It helps in the Recruitment of the personnel, whenever and wherever a vacancy arises.It
also helps in the maintenance of attendance register.the personnel department also
helps in the appointment of the clerks, representative brokers. This department fulfills
all the vacant seats of the LSE.
9. Internal control department:-This dept. is introduced newly in the LSE. This
department is headed under :SECRETARIAL:-This department is headed under Mrs.Sarabjeet Kaur .Under this
department all the records are maintained and all the

minutes of the Board

meetings are recorded. It helps in the drafting and compiling of the agenda of all
the meetings.
FINANCE:-Finance is the life blood of every organization. The head of this
department is Mr.Kuber Kansal.
This deptt. helps in arranging finance from various activities in the stock exchange.
It decides that from where the finance will come and where it will be utilized in
the best possible manner so that in future benefits can be availed from that
finance. It also see that the finance where is used is properly used or not.
The Internal control department controls

the internal working of the LSE.

It puts effective control on the member brokers and other staff members and see
that they are working in a well behaved manner or not and if not than proper

control is put on them so that they can work properly in future. It helps the clients
in giving proper information so that they can work properly.
TRADING SYSTEM:Online screen based trading system commenced at LSE on November

18,1996

.however .w.e.f. 23rd jan.2002 there has been no trading at our exchange.
ONLINE TRADING THROUGH VSATS
With the objective to broad based business opportunities to the investors and members,
the change has set up 37 trading terminals at remote cities in the state of Punjab, Delhi,
and union territory of Chandigarh. Now from October 1999 ,trading through VSATs(Very
Small Apurture Terminal) is being smoothly conducted.
SETTLEMENT GUARANTEE FUND(SGF)
Ludhiana stock exchange implemented a settlement guarantee fund (SGF)w.e.f. April 6,
1998.It provides guarantee of all the genuine trades made through the screen based
trading system of the stock exchange. The SGF had a corpus of Rs. 13.34 crores and
membership of 176 brokers as on data available up to 2007.
DEPOSITORY SYSTEM
It is an instituition which deals in securities as a bank deals in funds.
Ludhiana stock exchange commenced trading in Demat shares from November 16,1998
by becoming a participants of NSDL and CDSL. The exchange has set up in house DP
services to facilitate trading and settlement in DEMAT securities.
CLEARING AND SETTLEMENT
There is weekly settlement cycle prevailing at the LSE. Which commences on Monday
and ends on Friday .at the end of each settlement, members are given scripwise delievery
notes.The members are required to depositthe scrips sold by them to the clearing houses
on the second working day following the day of transaction. Payments against delievery

are made

by purchasing members also on the aforesaid day. The stock exchange

management ensures that strict compliance is made with the condition

for trading,

settlement schedule.
ROLLING SETTLEMENT
The exchange introduced the rolling settlement in 10 srips w.e.f. January 10, 2000 and in
another 34 scrips w.e.f. march 21.2000 and in another 119 scrips w.e.f. May 8, 2000.
It is the trading system of the securities in the transaction that is buying and
selling of securities.
The transaction can be secured up by a counter transaction on the same day
only.initially settlement system was T+5 but was graduallu reduced to T+2 on 1 st April ,
2003.
TRADING ON BIGGER STOCK EXCHANGES
The exchange acquired the membership of NSE and

BSE

through its

subsidiary. The LES securities limited, with the objective of providing an enabling
mechanism

to its member brokers to trade on NSE and

BSE as sub brokers of LSE

Securities limited.
Trading at BSE and NSE commenced through

the subsidiary routes from

September 2000 and December 2000, respectively, and the trading in F&O segment of
NSE commenced in February 2002.
The average daily trading volumes on BSE, NSE (capital market) and

NSE

(F&O) during the month of February 2005 has ben Rs.18 crores , Rs. 38 crores and Rs.
144 crores respectively.

CORPORATE MEMBERSHIP OF NSE AND BSE


SEBI , at the initiative of LSE , permitted smaller stock exchanges to trade in bigger
stock exchanges

through their subsidiary companies .LSE floated

its subsidiary

company, the LSE Securities Limited, with the objectives of obtaining trading rights
on bigger stock exchanges. It obtained

corporate membership of both NSE and

BSE. AT present 100 and 60 members of LSE


respectively through the

are

operating on

NSE AND BSE

subsidiary route.

REVENUE STREAMS
The streams of corporate membership of NSE and BSE is a self financing project
and will generate

surplus

after meeting

operations

expenses

at

a very low

break -even point.


DEPOSITORY PARTICIPANT DP SERVICES
The company has a depository participant of NSDL and

is the only depository in

the region having On- line real time connectivity with NSDL. DP operation of
the company not only benefited the investors of the region , but also
to be a source of income for

the company.

proved

LISTING OF SECURITIES AT LSE


At present, Ludhiana Stock Exchange has 330 listed companies, out of which 214
are regional and 116 are Non-regional. The total listed capital of aforesaid companies is
Rs. 3168.91 Crores appx. The market capitalization of the said companies is more than
Rs. 3372.34 crores. The Stock Exchange is covering the vast investor base through the
listing of abovesaid companies, which are situated in the region comprising of Punjab,
Himachal Pardesh, Jammu & Kashmir, Chandigarh.
At present, Ludhiana Stock Exchange has 330 listed companies, out of which 214 are
regional and 116 are Non-regional. The total listed capital of aforesaid companies is Rs.
3168.91 Crores appx. The market capitalization of the said companies is more than Rs.
3372.34 crores. The Stock Exchange is covering the vast investor base through the listing
of abovesaid companies, which are situated in the region comprising of Punjab, Himachal
Pardesh, Jammu & Kashmir, Chandigarh.
At present, Ludhiana Stock Exchange has 330 listed companies, out of which 214 are
regional and 116 are Non-regional. The total listed capital of aforesaid companies is Rs.
3168.91 Crores appx. The market capitalization of the said companies is more than Rs.
3372.34 crores. The Stock Exchange is covering the vast investor base through the listing
of abovesaid companies, which are situated in the region comprising of Punjab, Himachal
Pardesh, Jammu & Kashmir, Chandigarh.
At present, Ludhiana Stock Exchange has 330 listed companies, out of which 214 are
regional and 116 are Non-regional. The total listed capital of aforesaid companies is Rs.
3168.91 Crores appx. The market capitalization of the said companies is more than Rs.
3372.34 crores. The Stock Exchange is covering the vast investor base through the listing
of abovesaid companies, which are situated in the region comprising of Punjab, Himachal
Pardesh, Jammu & Kashmir, Chandigarh.
Despite the fact, the implementation of SEBI (Delisting of Securities) guidelines, 2003
has resulted into the Delisting of good companies listed at Exchange, however still there
are leading Companies listed with our Exchange, notable among them are United
Breweries Limited, Vardhman Acrlyics Limited, SMC global securities limited, Himachal
Futuristic Communications Limited etc.

Ludhiana Stock Exchange has facilitated the capital generation for agro based industries
as Punjab is a agricultural led economy. It will continue to do so, once it gets approval for
a tie up with bigger Exchanges for commencing trading operations.

INTRODUCTION
TO
LUDHIANA STOCK EXCHANGE
&

SECURITIES LTD

INTRODUCTION OF LUDHIANA STOCK EXCHANGE AND


SECURITIES LTD.
Introduction;It is wholly subsidiary company of Ludhiana stock exchange. It has been formed with the
objectives of growth and survival of LSE as an institution through increased volumes and
liquidity in trading at the exchange. The main objectives of the co is To establish and
carry on the business of the stock broking as a member of recognized stock exchange (s)
in India or abroad and other allied matters and for this purpose to buy, obtain or acquire
stock exchange membership or membership rights in India or abroad.
Trading member of MCX-Stock Exchange Limited. Trading Members of LSE can access
NSE and BSE by registering themselves with SEBI as Sub-brokers of LSESL.
LSE Securities Ltd., was incorporated in 07TH January, 2000 with a view to revive the
capital market in the region and for taking full advantage of the emerging opportunities
being provided by expansion of bigger stock exchanges like NSE and BSE. The company
since its inception has marched forward rapidly and has maintained consistent growth
record.
LSE SECURITIES LIMITED (LSESL) is a subsidiary of the Ludhiana Stock Exchange
Limited under the policy formulated by the Securities and Exchange Board of India
(SEBI) for Revival of Small Stock Exchanges.The policy enunciated by the SEBI permits
a stock exchange to float a subsidiary, which can take up membership of larger stock
exchanges, such as the National Stock Exchange of India Ltd. (NSE), and Bombay Stock
Exchange Ltd. (BSE). LSESL has been registered by SEBI as a Trading-cum-Clearing
Member in the Capital Market segment and Futures &

Options segment of NSE and

Capital Market segment of BSE and NCE


FEATURES OF LUDHIANA STOCK EXCHANGE AND SECURITIES LIMITED

The company has a paid-up capital of Rs 5.55 crores

The Council of the management of the Company comprises of 10 directors of


which 3are broker members and 7non-brokers. Five non broker members are
Independent Directors of eminent status from the field of finance, law and
management and remaining two are Chief Executive Officer of LSE Securities
Limited and Executive Director of the holding company (Ludhiana Stock
Exchange), who are on the Board of the company as ex-officio Directors
Operations of the company are run in a professional, transparent and fair manner
keeping in view of the interest of investors as well as other stake-holders.

The LSE Securities Ltd. commenced trading operations in Capital Market


Segments of BSE and NSE in September, 2000 and December 2000 respectively.
The turnover of the Company at NSE and BSE is growing by leaps and bounds
ever since in incorporation. There was encouraging response from the sub-brokers
specially at NSE counters.During the financial year 2005-06, the Company
recorded a turnover of Rs. 7975 crores and Rs.3834 crores in "Capital Market"
segments of NSE and BSE respectively. For the year ended 2005-2006, there were
128 sub-brokers registered for NSE and 68 for BSE.

The LSE Securities Ltd. commenced trading operations in Future and Options
Segment of NSE in February 2002. The Company became the first subsidiary of
any Regional Stock Exchange which commenced trading in F&O Segment of
NSE.

The LSE Securities Limited has provided facility to its sub-brokers for trading on
NSE and BSE through VSAT counters which are located outside Stock Exchange
Building

In order to provide professional services to the investors of LSE Securities


Limited through its sub-brokers, the company motivated its sub-brokers and its
staff to qualify the certification in financial markets conducted by NSE.

The LSE Securities Ltd. commenced its operations as Depository Participant of


NSDL in August 2000.

In order to further strengthen its services to sub-brokers and investors, the


Company applied for the DP of CDSL. It started DP operations of CDSL in
December 2001

As a result of efficient services and competitive rates, the Company has been able
to increase its market share in the DP business at the cost of other DPs in the

region. As on date DP of NSDL and CDSL of the Company at Ludhiana is


servicing over 35000 beneficiary accounts.

To increase its presence in the region further, the company plans to open its
branches of Depository Services in the major cities of the region. To start with, it
has already opened its branches at Jalandhar Amritsar and Chandigarh.

It acts as financial consultants and provide advice,services,consultancy in various


fields

such

as

general

administration,

secretarial,commercial,financial,legal,economic,directs and indirect taxation and


other levies.

It also helps in obtaining trading rights on bigger stock exchanges.

BOARD OF DIRECTORS OF LSESL

DETAILS OF DIRECTORS OF LSE SECURITIES LIMITED


Sr.No.
1.
2.
3.
4.
5.
6.
7.

Name
Mr.Ved Parkash Gaur
Mr.Joginder Kumar
Mr. Anurag Arora
Mr. Vishal Goomber
Mr. Jatinder Garg
Mr. Manjit Singh Sarna
Mr. Lalit Kishore

Designation
Date of Appointment
Chairman
18.02.2013
Chairman
19.08.2012
Chairman
26.09.2009
Vice-Chairman
27.09.2008
Member-Director
26.09.2009
Member-Director
27.09.2008
Member-Director
27.09.2008
Public
Representative

8.

Mr. Susheel Bhakoo

DirectorDirector
Public

9.

Mr. Vijay K. Bansal

DirectorDirector
Public

10.

Dr. Prem Kumar

DirectorDirector
Public

11.

Dr. Anil Kumar Angrish

DirectorDirector
Public

12.

13.

Mr.Pawan Kumar Garg

Mrs. Pooja M. Kohli

Director-

Independent12.03.2008
Representative
Independent12.03.2008
Representative
Independent14.02.2009
Representative
Independent19.07.2007
Representative
Independent27.08.2008

Director
LSE-Representative
Director

14.02.2009

INTRODUCTION
TO
DEPARTMENTS
OF
LUDHIANA
STOCK
EXCHANGE

DEPARTMENTS OF LUDHIANA STOCK EXCHANGE AND THEIR


WORKING
In order to fulfill its objectives of safety and security to the investment of the
investor to provide the proper service under the prescribed guidelines of SEBI ,
there are
which

many different
different functions

departments
are

under which different departments under

performed , which

are

assigned

to those

departments. These are following departments of LSE:Operational Department:-

Margin
Section

Clearing
House

Market
Surveillance

Computer
Section

Service Department:-

Legal Department

Secretarial
Department
Listing Section

Accounting Section

Technical Section

Membership
department

Personnel
Department
Depository
Department

All

the department perform specific function and all

connected

the section are inter

with each other. There is an organized network of recording of

activities performed there. But before studying the inter dependence of section ,
here is the detail of all.
OPERATIONAL DEPARTMENT
MARGIN SECTION:It is necessary for every stock exchange to establish margin section margin has been
created for the safety purpose of the client so that he cant be defaulted and doesnt
suffer loss that much which he cant bear to pay out.
In case of forward trading margin is not there but if it is under stock exchange
margin is always kept for safety.
The basic function

is to collect different types of margin from brokers as per

regulation given by SEBI.


The idea behind the section is:1. To prevent the members from doing excessive speculation trading.
2. To keep track of the members who are expected to default in future.
Thus margin section by keeping a track of base minimum capital and addition base
minimum
that

capital and by setting exposure limit for each broker member

ensures

any member buy or sell scrips in proportion to his net worth. To make these

relations practical every broker

has to deposit

certain %age of the total

transactions done by him either by way of cash in the bank or by scrips.


The Deposit Act as a security money with the stock management for the
particular broker.Margin money is charged both on total turnover and total purchase
of the brokers.
FUNCTIONS OF MARGIN SECTION

To collect BMC , ABMC

To keep track on the member brokers.

Collection of the margin.

Release of the margins

BASE MINIMUM CAPITAL:Each broker is required to deposit with the stock exchange Rs. 50,000 in the
form of cash/FDR/Bank guarantee of the scip from the approved list.
For getting membership in NSE and BSE 2,50,000 is deposit for registration. Out
of this 100,000 shares are issued and balance 1.5 lac are given for trading. (1.5
lac is BMC)
1.5 *8 times is 12 lac. Upto this he can do trading.
If any person is not satisfied with 12 lac than he can give margin and that is
again multiplied

with 8. that is

called ADDITIONAL BASE

MARGIN

CAPITAL(ABMC).
INTRA DAY GROSS EXPOSURE LIMIT
Each broker would have an intra day gross exposure limit is sum total value of
purchase and sale of each scrip would be equal to 25 times(in case of NSE and
BSE) of the sum total of permanent security deposited by him. It indicates the
aggregates of sale and purchase and calculated on daily bases.
NET EXPOSURE LIMIT
Each member would have a net position limit i.e. net volume of purchase and
sale of each scrip would be equal to 8.5 times in case of NSE and 6 times in case
of BSE of the subtotal of BMC and ABMC. So it indicates the difference between
sale and purchase are calculated on daily bases. Net position of each member at
the end of the day would be carried out on the next day.
PAYMENT OF MARGIN:Member brokers are required to make payment of margin by 10:30 am on the
T +1 basis.

TYPES OF MARGIN
1. Value at Risk margin(VAR):-This margin is developed by CHICAGO STOCK
EXCHANGE. This system comes of 100% of the market risk through the
use of different statistical formulae.VAR margin is calculated on daily basis.
2. Market To Market Loss(MTML):- It is calculated after the close of trading
cycle.in each settlement Market to Market loss is in a scrip would be netted
against mark to market profit in the other scrip. But such netted would be
allowed only on the scrip prescribed by SEBI. Thus , stock exchanges collects
on daily basis 100% notional loss from each broker for every scrip. It is
calculated as the difference between buying and selling price and current
value(closing price) of that scrip at the end of the day.
3. Exposure Margin:-Exposure margin is charged 5% -10%

of the sale and

purchase of shares.
CLEARING DEPARTMENT:This department takes care of pay in and pay out of securities. In LSE now adays,
the system i.e. prevalent for trading is T+2 that means settlement of transaction
should take place within 2days.SEBI decided the following activities schedule for
exchange for T+2 rolling settlement.

Sr.No.
1.

Day
T

Description of activity
Trade date

2.

T+1

Custodian

3.

T+2

day/deposit of margin
Pay in/ Pay out

T+3
T+4

securities/ funds
Auction day
Pay in/ Pay out of Auction/

4.
5.

closeout of

confirmation
of

shortages as

soon as possible.
PROCEDURE:1. when shares are being sold by the sub broker, he on the basis of
settlement schedule i.e.T+2 has to download all the information of shares
being sold to the broker, then the broker will further download this to the
delievery officeNSE and BSE.This process is called PAY IN SECURITIES.
2. After pay in sec. pay out takes place.In this step all the information about
the scrip would first be downloaded to the broker by

NSE, then it

would be downloaded to sub- broker.


AUCTION:Auction of securities can be done at local level of NSE and BSE.It can be done if
the sub broker doesnot give all the information to the broker i.e. in case if broker
fails to deliver the scrips on T+2 delivery day.
The n it is the responsibility of clearing house to sttel the undelivered scrips

by

conducting auction of pending securities and T+5 cycle will start.But in case if the
funds are not settled by the sub- broker then his terminal would be de- activated
and it would be activated only on the repayment of funds.
PENALTY:In case sub broker does not give all the information to the

broker then he has to,

pay penalty of 1% according to BSE ano 0.25%according to NSE


IN CASE OF AUCTION AT NSE,BSE:Auction in case of NSE,BSE would be done at the closing price +20% of the
value or settlement trade date to auction date , high price which ever is higher.
CLOSE OUT:-

In case the shares of particular scrips are not available on the date of auction
then it is the obligation of the solicitor (exchange) to give monitory benefits to
initiatori.e. buyer against the default of
defaulter of securities in this manner settlement cycle is completed.
MARKET SURVEILLANCE DEPARTMENT:The main task of this section is to see the market sanctity is maintained and the
investors are not cheated. So market surveillance entails scientifically in identifying
points ina stock price movement or trading volumes, which don,t match with
the co.,s fundamentals. So the price and volume trends in a stock exchange are
checked for abnormalities, scientifically.this department keeps a check on trading
and coordinates with the margin department and keeps a close watch on the
increase and release of limits. It helps in checking:1. Unusual price rigging.
2. Insider trading
3. False markets
4.

frauds

A crucial aspect of any surveillance system is trecking brokers whose trading


activities are consent rated
Now SEBI
and

in few stocks

and confirm the doubt with them.

fixed certain online inspect in parameters of

asked all the stock exchanges

for modern

stock watch system

imposition

of the online

surveillance by stock exchanges to mitigate the risk of default.


COMPUTER SECTION OR EDP:The computer section is the nerve

centre

of the

entire

tock exchange.This

section remains active all the time and is directly involve in all the activities, of
LSE.

This

section

is

PROCESSING.It prepares

also

known

as EDP

i.e.ELECTRONIC

DATE

several reports namely:-

1. Sub-brokers

wise

delievery

payment).
2. Downloading of delievery orders
3. downloading of receiving orders
4. sub- broker wise final settlement

bill

received

order(after

5. HDFC bank enteries.


TIMING FOR TRADING SECTION
Market opens
Trading session
Closing session(trading)
Post closing

9:oo am
9:30 am to 15:30 pm
3:30 pm to 3:40 pm
3:40 pm to 4:00 pm

Back up session

4:00 pm to 5:00 pm

The computer section play a pivot role

in generating reports

supplying daily

quotations processing data for settlement of transactions.


FUNCTIONS:

There are four servers of NSE , 1 back up survey NSDL server and CDSL
server, so computer department has to maintain all these servers properly.

All types of report, which is asked by SEBI, are sent by the computer
department.

The work of system maintenance is also being done by the


department(hardware problems, software problem or any

computer

problem or any

problem or problem related to the system).

Computer department also has to maintain a back up reports.

They had

also to deliever the reports to different epartments i.e. clearing,

margin, account.

REPORTS MAINTAINED BY COMPUTER DEPARTMENT:1.Scrip wise summary statement:In this type of report all the detail about the scrips with the sub brokers has to
deal

with the qty. wise statement of the scrips purchase position, net position

and average rate of the scrips are included.


2.Scrip wise detail statement:-

In this particular statement

all the details

about the scrips

included information like how much shares are

is included. It

being purchased or sold by

client and also its rates, it also includes information about the price at which he
purchased or sold his scrip.
3.Receive order statement:As the name indicates the particular statement includes the no. of shares

the

broker will receives and also qty,symbol of the scrip.


4.Delievery order statement:This particular statement includes the information of how much shares are to be
delievered by the broker.
5.Final obligation:In this particular report the obligation of a broker i.e. whether he has to pay or
receive is being included after including all the charges(i.e miscellaneous , service tax,
stamp duty, NSE charges,BSE charges) and all this amount is being deposited in
bank.
6.Margin sheet:It goes to each member and is also kept by the computer department as a record. In this,
how much margin the broker has to pay and which type of margin he has to pay is
included.
Out of these mentioned reports receive order statement and delivery order statement are
not delivered to FAO. Rest of all the reports are to be submitted to NSE, BSE and FAO.
1.Matching statements:NSE sends reports to LSE included all the information related to scrips in detail and this
particular report is being crossed checked by computer department so as to ensure
accuracy of the information.

Contract note:It is sent to NSE , BSE and FAO in 24 hrs. it includes the name of registred office,
dealing office if any, address of a member, registration no., client address, settlement no..
SERVICE DEPARTMENT:Legal section:-

Whenever there is a dispute between two brokers, between client and brokers and move
to court, the legal dept. come in picture to fight for the cause of investers and against
defolting members. It plays an important role in working governance and keeps a Dog
Watch. On all the matters related to the stock exchange.
Functions:1. to settle the investors grievances and compliance(IGC).
2. to define stock exchange against any type of case.
3. To see that all the SEBI guidelines are followed.
4. to see all the govt. rules and regulations are followed.
5. to check that all the work which is going one is legal .
6. To suggest selective and correct measures when needed.
7. Monthly report to SEBI regarding case of total pending , total solved etc.
This dept. also deals with transfer of shares. In order to be a member of a stock exchange
a person has to hold at least one share. If the member wishes to sell his ticket, he has to
intimate the secretarial dept. in adance. A notice is given there after in newspaper for
objection with in ten days of such a notice, the clients can lodge there claims. A ten day
notice is also to be displayed in the notice board of stock exchange for objection to be
raised by members. This dept. covers>Personnel dept.
>Membership.
Investor Grievance Section:LSE has formed a separet investor grievance cell, which receives complaints from
investors against companies. And member broker to ensure there satisfactory redressal.
In 1959, MOF said that for every exchange it is mandatory to set up a committee to
handle the investor complaints. justice delay, justice deny,-- Gandhi ji.
Types of investor grievances:1. Against listed companies.
2. Against member brokers.
Procedure:i.

Compliant to be filed in communed exchange.

ii.

Forward to conserned listed company.

iii.

Advice to resolve in 45 days.

iv.

Reminder to resolve in 30 days.

v.

Advice to appear companies officials investors grieveances committee(IGC).

vi.

Trading suspend.

vii.

Matter forward to SEBI.

viii.

SEBI imposes penalties of 1 lac per day from delay maximum to 1 crore or which
ever is less.

ix.

Appeal to SAT(Securities Appellate Tribunal).

Secretarial Department:An LSE has personnel dept. in its orgainstional chart. Main duties. Responsibilities of
this dept is as follows.:
Maintenance of records of minutes like :Meeting of BOD.
meeting of vatious committees.
Meeting of members.
minutes of AGM.
Minutes of extraordinary general meeting.
Listing section:For doing in LSE the co. first have to be listed and the function of the listing of
the co. is done by listind dept. for getting listed the concerned co. has to pay a certain fee
and that fee would depend upon the authorized capital of the co..
Listing means admission of the securities of a co. to deal on a recognized stock
exchange
Listing

is

governed

Companies act, 1956


SCRAct,1956
SEBI guidelines
Necessity of listing:

In case the co. goes public.

under

the

following

act:-

If the co. declares in the prospectus

Co. to do so in SCRact,1956

Benefits of the listing:

stock exchange provide platform for free market.

Securities available a the competitive prices

Listed shares preferred for investments.

Listing safeguards general public interest.

Provide liquidity to the securities of the co.

Easier to get loan for listed cos.

Main documents:

MOA and AOA

Copy of prospectus or statement in lieu of prospectus

Copy of offer of sale and circulars of the advertisements.

Copy of balance sheet

Certified copies of the agreement

with the financial instituition, selling

agent ,etc.

List of top 50 shareholdings

A brief history of the co. since its in incorporation

Particulars of shares and debentures issues

Statement containing particulars , if any , commission and brokerage etc.

Share holding pattern.

ANNUAL LISTING FEES:Paid up capital listing fees:Upto 1crore


1 to 5 crore
5 to 10 crore

7000
10000
18000

10 to 20 crore
20 to 50 crore
50 to 75 crore

36000
54000
90000

After this every increase in the paid up cap. With 5 crore than fee will increase
2500rs.and will be added to this.
ACCOUNTS DEPARTMENT:It deals with the maintenance of records regarding income and expenditure of the
stock exchange . it also prepares annual accounts of the stock exchange.most of the
work in this department of LSE is done manually although

help is taken from

computer for making trial balance, income and expenditure statement and b/s.this
report is generally published in august every year.
FUNCTIONS:

To make and receive payment to the outside agencies(cos. Listed at


LSE,brokers working in LSE.)

To keep the record of all incoming and outgoing money and preparation
of financial matters at the end of the financial year.

To get the a/cs audited from the 3rd party.

To disburse personnel expenses.

SOURCES OF FUNDS OF LSE:

Initial listing fees from the co.

Annual listing from companies

Membership fees from brokers at the beginning

Annual computer fee from broker

Annual library charges from brokers

Fines and penalties from broker.

Service charges from brokers

Interest earned on fixed deposits

Electricity charges per room.

Maintenance charges.

TECHNICAL DEPARTMENT:This department of LSE

is regulating the activities related to the fields of

electrical , mechanical and civil engineering besides having other functions like
that of security.
There are some of the important aspect:1.electrification of building.
2.Air conditioning plants.
3.Maintenance of the generator.
4.fire fighting system
5.Maintenance of the telephone exchange
6.Water supply
SECURITY:- These

is

an additional

charge

given

to

this

department. The

supervision of the security staff, maintenance of metal detector is also under this
previous.
MEMBERSHIP DEPARTMENT:-

It is primary and secondary deptt. Without

entrepreneurs can effectively do the working of any stock exchange is impossible


all the member are required to comply with rules under the SCRact,1956. This
deptt, deals with the membership of individual and corporaye members the trade
in market is done through the authoriswed member who are duly registered with
concerned stock exchanges and SEBI.
CATEGORIES OF MEMBER BROKER:MEMBER:-

Individual

corporate

ELIGIBILITY OF MEMBER SHIP:The applicant should be citizen of India and must have completed 21 years of age.

REQUIREMENTS FOR INDIVIDUAL MEMBERS OF EXCHANGE:-

3. Age limit:- Minimum=21 years.


Maxmimum=60 years.

4. Qualification:e. Matriculation.
f. He should at least have 3 yrs capital Market experience.
g. He should not be bankrupt.
h. Person should also be registered from SEBI.
REQUIREMENT FOR CORPORATE MEMBER OF EXCHANGE:F. The company should be registered under section 322 of the companies Act.
G. Company should not be bankrupt.
H. Minimum paid up capital required is Rs. 25 lacs.
I. The copies of MOA and AOA
J. Qualification and proof of age.
Through sale and transfer of membership:a. Member can sell or transfer there membership rights with all requirements to
obtain prior approval from SEBI.
Personnel department:. The dept carries out the activities as follows:1. Recruitment of the personnel, whenever and wherever a vacant arises.
2. Maintenance of attendance registers.
3. Appointment or removal of floor clerks or authorized representatives of brokers.
4. Maintain records of leaves and overtime of employees.
5. Promotion, demotion ,registration, conveyance and allowance ,etc.
Depositary Department:An institution which deals in securities as a bank deals in funds.

The depository Act 1996 defines a compsny formed and register under companies act
1956.and which has been granted a certificate of registration under sub section 1A of
section 12 of the SEBI act 1992.
The term depository means a palce where something is deposited for keeping in bank in
which other deposit funds or other depository securities.
Names of Depositories:a. NSDL(National Security Depository LTD.)
b. CDSL(Central Depository Service Ltd.)
NSDL is about 10 years old.
Depository System:It is concerned with conversion of physical security to electronic form, settlement of
trades in electronic transfer of ownership of shares and electronic custody of securities.
This electronic system is faster then the paper work.
COMMENCMENT OF BUSINESS:For commencement of business of depository one has to take certain following steps:A. Registration:As per the rules of SEBI act, a depository can deal

in securities only after

obtaining the certificate of registration from SEBI . On being satisfied with the
eligibility parameters of a company
certificate of registration

to act as depository SEBI may grant

subject to certain conditions.

B.Commencement of business:A depository which has obtained a

registration, can start operation only after

getting a certificate of commencement of business from SEBI.Depository must


apply for and obtained a certificate of commencement of business from SEBI
with in 1 year from the date of receiving
SEBI.
C.Rights and obligation of depositories:-

a certificate

of registration from

The depository has some rights and obligations under the depository act 1996.
Every depository must have adequate methods for reviewing,monitoring and properly
evaluating its methods and procedures.
For its smooth functioning it

should properly conduct inspection at appropriate

times and should forward the repot of inspection to the SEBI.


It should maintain such a system so, as to ensure that all the records are properly
maintain and there
In event of the loss

is no loss or destruction of records.


of any type of record.It should have the adequate back up

system for back up of records.


SERVICES OF THE DEPOSITORY:Depository was established under depository sevices act,1996. these depository
services are provided through DP.
RECORDS TO BE MAINTAINED WITH DP:Records like:1. Records of securities dematerialized and rematerialize.
2.The name of the transfer of transferee.

3.Account no. , bank a/c of v all client.


4.No. of shares the client has in his account.
5.Records of approval , notice entry and cancellation of pledge.
6.Some other records which are said to be maintained by SEBI.

STRUCTURE OF DP:For any client it is necessary for him to firstly open an account with the DP. There
are mainly 2 types account:a. Beneficiary account:- There are the accont of investor where their security
are held in electronic form.
b. clearing member account:- any trade done on the exchange in a particular
settlement has to be settled tgrough clearing member. For this purpose
there is a claring account of clearing member(broker).
He collect in this account all the securities sold by different client any deliver the same to
the exchange. In code of purchase he receives the securities from NSDL and distributes
same to the client.
Dematerialisation (De-mat):It is a process were physical form of shares is being converted into electronic mode. Such
acc. Is maintained in DP.
1. the client opens De-mat acc. With any DP.
2. upon De-mat, the certificates are destroyed and credit entry of exactly
equal no. of securities is created in DP in electronic mode.
3. The BO acc. Of holder is credited.
4. The securities loss there identity.
Securities that can be Dematerialised:1. Shares, bonds, debentures.
2. Units of mutual funds.
3.

certificate of deposits.

4. Unlisted securities.

DE-MAT CHART:1

DP

Investor
6
2

3
xR

& T agent

NSDL

DE-MAT PROCESS:1. The register holder of the securities will make the request.
2. Securities must be recognized by depository as eligible.
3. The company issuer should have established connectivity with the depository.
4. The holder to have a beneficiary account.
5. The A/C to be in the same name as appear on the securities certificates to
be de -materialized.

REMATERIALISATION:This process is the reverse of the dematerialization It is the process by which the
electronic holding of the shares is converted into physical form.
REMAT CHART:-

Depository

R&T agent

Depository
participant

Benefial
owner(Invest
or)

REMAT PROCESS:1. The beneficial owner of the securities to make the request to DP in DRF.
2. DP enter the remat request in DRM.
3. The DP forwards DRF to the issuer or to its R&T agent.
4. The request to be made with in 7 days of accepting it from the client.
5. The issuer or the R&T agent verifies the RRF & confirms to DP.
6. The DP on receiving confirmation of debits the client A/C& informs the
client.
7. The issuer /R&T agent prepares physical security certificates to be issued to
B.O.
8. The certificates are dispatched to the B.O.
9. No trading is possible on the securities sent for REMAT.

PLEDGE:Any member can take the loan against the securities.For this purpose the
depository pledge the securities of the client.The shares of the client would be
sealed.no one can take his shares out.The pledge so created can be closed on

either repayment of loan or can be invoked on default. The pledge shares can
not be leaded.

REGULATORY
FRAMEWORK
OF
LUDHIANA
STOCK
EXCHANGE

REGULATORY FRAMEWORK OF STOCK EXCHANGE


For the control of the capital market and these stock exchanges the government has
made some rules and laws with which exchanges have to comply with, which are
as follows:-

Legislations governing securities market:1. Securities Contract (Regulations) act,1956


2. Companies Act,1956
3. Securities and Exchange Board Of India ,1992
4. Depositories Act ,1996

1. Securities Contract (Regulations) act,1956:Its main objectives are:

To control over stock exchanges through recognition and continued


supervision.

To control over stock exchanges through contracts in securities.

To control over stock exchanges through listing of securities.

2. Companies Act,1956:It was established on the following grounds:

To control cos. Mgt.

To secure allotment and transfer of securities.

Provision regarding prospectus and public issue of cos.

Policies regarding payment of interest and dividend.

To keep ensure regular supply of annual reports and there information to


shareholders and stock exchanges.

Premium, discount, rights and bonus issues.

Substantial acquisition of share.

3. Securities and Exchange Board Of India ,1992:

It came into existence on the 30th june 1992.

To protect the interest of the investors .

To promote the development of the securities market.

To regulate the securities market.

To exercise control over the securities market intermediates.

Present Chairman is Mr.C.B. BHAVRE.

4. Depositories Act ,1996:An recent development in the securities market was electronic form of the
shares or securities and vanishing the certificate system and reduce the time of
the settlement of the delieveries and payments and also secure the delievery of
the securities for this two main depiository companies came into existence i.e.
CDSL and NSDL. The main objective of the depository act are:

To make the securities freely transferable.

Dematerialization of

To provide ownersh in the depository mode.

No role of the companies with regard to transfer of shares..

the securities.

Table 1.Percentage distribution of sample according to Do you invest in share


market.

Table 2.Percentage distribution of sample according to which account do you


have ?

Table 3.Percentage distribution of sample according to In which category do you


invest? (Multiple options can be answered)

Table 4.Percentage distribution of sample according to what is the objective of your


investment in Equity?

Table 5.Percentage distribution of sample according to if you invest then in which


segments do you invest?

Table 6.Percentage distribution of sample according to where do you think Nifty is


heading?

Table 7.Percentage distribution of sample according to In which brokerage house


presently you have Demat account?

Table 8.Percentage distribution of sample according to from how many months you
are dealing with your brokerage house. ?

Table 9.Percentage distribution of sample according to What is the most appropriate


reason for choosing this brokerage house?

Table 10.Percentage distribution of sample according to what is the rate of


brokerage on delivery day basis?

QUESTIONNAIRE
This survey is only done for educational purpose.
All information furnished will be kept confidential and will not be disclosed.
NAME:Age :Occupation :PHONE NUMBER:ADDRESS:EMAIL:Q 1 Do you invest in stock market ?
YES

NO

Demat

Trading

Derivatives

Any other specify______________

Direct equity markets.

Mutual funds

Currency markets

Commodity markets

Long term gain

Short term gain

Divined income

Q 2 Which account do you have ?

Q 3 In which category do you invest ? (Multiple options can be answered)

Q 4 What is the objective of your investment in Equity ?

Q 5 If you invest then in which segments do you invest ?


Equity cash

Equity Day Trading

Currency

Commodities

8500

8200

Other

Angel broking

Indiabulls

Motilal Oswal

Sharekhan

Other ____________________

< 6 months

6 to 9 months

9 to 12 months

> 12 months

Q 6 where do you think Nifty is heading ?

Q 7 In which brokerage house presently you have Demat account ?

Q 8 From how many months you are dealing with your brokerage house. ?

Q 9 What is the most appropriate reason for choosing this brokerage house ?
Brokerage.

Deposits

SMS tips

Online trading facility

Brand image of broker

< 0.20

0.20 to 0.50

Q 10 What is the rate of brokerage on delivery day basis ?

> 0.50

CONCLUSION:-

LSE is the one of the best regional stock exchange.even it is the first regional
exchange which

has

its

subsidiary

co. named

as

LUDHIANA

STOCK

EXCHANGE AND SECURITIES LTD.it has many sub centres in the different
cities Chandigarh,
Amritsar ,and Jallandhar .
It ensures that the funds of the investor are used properly.it
is governed by a good Legal Framework.Its subsidiary co. helps in obtaining
trading rights on the bigger stock exchanges and even it carries on the
business of custodian & depository.It has the renowned members in its BOD.
They work under the regulations of the SEBI,NSE and BSE.
So after working on this project

I concluded that trading through

this company is safe for every investor as the trading is fully transferable and
there is very less chance of any complaint.

BIBLIOGRAPHY

Newspapers : The business standard


The economics times

MAGAZINES: Business World


LSEs Magazine
The business standard

INTERNET SITES: www.nseindia.com


www.bseindia.com
www.sebi.gov.in
www.lse.co.in