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SUMMER TRAINING REPORT SUBMITTED TOWARDS THE PARTIAL FULFILMENT OF POST GRADUATE DEGREE IN MANAGEMENT

'GROWTH OF ONLINE TRADING IN INDAIN CAPITAL MARKET'

SUBMITTED BY:

(NAME) NEHA BACCHIS

MBA-(2016-2018)

ENROLLMENT NO. : A30101916067

INDUSTRY GUIDE

(WITH PROPER TITLE AND DESIGNATION)

MR.B.SANJEEV KUMAR

AMITY GLOBAL BUSINESS SCHOOL NOIDA

ACKNOWLEDGEMENT

The beatitude, delight and elation that accompany the successful completion of any task would not be complete without the expression of appreciation of simple virtues to the people who made it possible.

The final project report is submitted to AMITY UNIVERSITY UTTAR PRADESH, Noida for partial fulfillment of diploma, MBA

This project is an attempt to study 'The Growth of Online Trading in Indian Capital Market' at SMC Global Securities Limited.

I would like to convey my thanks to the Management SMC Global Securities Limited for giving me the opportunity to do my two-month project training in their esteemed organization.  I am highly obliged to Mr. B Sanjeev Kumar (HEAD ONLINE TRADING) for granting me to undertake my training at Rajendra Place branch.

I express my thanks to all Sales Managers and other relationship managers under whose guidance and direction, I gave a good shape to my training. Their constant review and excellent suggestions throughout the project are highly commendable.  My heartfelt thanks go to all the executives who helped me to gain knowledge about the actual working and the processes involved in various departments.I would also like to sincerely thank my faculty guide Mr. ARNAB CHAKRABORTYwhose guidance has helped me to understand and complete my project in a timely and proper manner.

DECLARATION

I do hereby declare that the project report is submitted as partial fulfillment of the requirement of MBAProgram of AMITY UNIVERSITY UTTAR PRADESH, NOIDA.

The Project has been done under the guidance of Mr. B SANJEEV KUMAR, in Rajendra Place branch, Delhi and Mr. ARNAB CHAKRABORTY , Faculty guide, AMITY UNIVERSITY UTTAR PRADESH, Noida.

No part of this report has been published or submitted elsewhere for the fulfillment of any degree or diploma for any institute or university.

CONTENTS

S. No. TITLE PAGE NO.

1 Executive Summary 6

2 Project Details

- Project Title 7

- Title Justification 7

- Scope of Study 7

- Research Objective 7

- Research Methodology 8

- Research Design 8

- Sampling Methodology 8

- Limitation of Study 9

3 Company Profile

- Background 10

- Promoters 11-12

- Corporate Ethos 12

- Services Provided 12

- Feature of the Products 13-22

- Competitors 23-43

- Government Policies 44-49

- Major Problems 50-51

- Achievements 52

- SMC Partners 53-56

- Market Share and Current Position 56-57

4 Literature Review

- Introduction 58-59

- Indian Exchanges: NSE & BSE 59

- The Network Design 59

- Recommendations of SEBI 60-61

- Online Trading 62-63

- Advantages of Online Trading 63-65

- Disadvantages of Offline Trading 65

- Indian E-Broking Scenario 66-68

- Changes in Online Trading Mechanism 68-69

- Growth of Online Trading 70-73

5 Analysis 74-90

6 Findings 91-92

7 Conclusion 93

8 Recommendations 94

9 Industry Relevance 95

10 Learnings 96

11 Questionnaire 97-99

EXECUTIVE SUMMARY

 As per the title suggest the project report has been prepared regarding the growth of online trading in India.  Online trading was initiated by NSE in India and soon after the other exchanges also followed it.

There was a major boom in year 2000 when a large number of online trading companies came with a bang but only few were able to survive because of lack of computer knowledge and low internet penetration.  There are two types of online trading companies one is the banking online trading companies and the other is non-banking trading.  A few examples of banking online trading companies are HDFC securities, ICICI direct.com, UTI securities etc.

On the other hand non -banking trading companies are SMC Global Securities, IL&FS Invest smart, Religare Securities, Angel Broking, Reliance Money etc.  A study was undertaken to determine the growth of various online trading companies in India in terms of trade done by them through online and services provided by them.

Major findings indicates that out of a survey of 200 respondents it was seen that most of the investors prefer online trading because of few major factors such as time saving convenience, protection from fraudulent brokers etc. although during my research project I've seen that most of the respondents feel online trading, a secure way of investing into stock market still a few of them feel that it is unsafe and a little complicated even though they possess information about online trading.

Today the online trading companies having cut-throat competition in terms of brokerage, discounts, lower margin money, zero balance accounts, etc.  Due to the rising education awareness and use of internet there is a huge potential for online trading in future and companies must come up with innovative offerings to capture the untapped market.

PROJECT DETAILS

PROJECT TITLE:

'Growth of Online Trading in Indian Capital Market'

TITLE JUSTIFICATION:

The above title is self-explanatory.  This study mainly deals with growth and development of online trading in India since its inception in the year 2000. Due to subprime mortgage crisis in year 2008 NASDAQ and S&P 500, two major stock exchange of the world entered into the bearish market. It also affected the stock market all over the world including India.  It is the challenge for the growth and development of trading in India that's why I chose this particular topic for the study.

SCOPE OF STUDY:

Since the year 2000 a big boom has been witnessed in the Indian Stock Market when the market showed the coming up of Online Trading System. Many online stock trading companies came but initially due to lack of online trading some companies vanished and some survived. The companies which survived are getting the handsome returns also attracting the foreign Investment Companies. Nowadays this sector is facing cut-throat competition and also provides huge growth prospects. The study then goes to evaluate and analyze the findings so as to present a clear picture of the trends in the online trading sector.

RESEARCH OBJECTIVES:

The objectives of my research project is '

1. To determine the growth and future of online trading industry in India

2. To understand the customer perception of online trading.

3. To see the type of technology used by stock exchanges and by the Indian customer in online trading

4. To determine what type of products the customers deal while doing the online trading.

5. To understand the presence of major online traders in the Indian market and looking about the features provided by them

6. To find out the important factor which do mostly affect to the customer

7. To be able to compare and analyze the various Financial Products.

8. Business development and revenue generation.

RESEARCH METHODOLOGY

The research methodology for the project completed in two phases:

First Phase is the collection of Secondary Data:  This involves the collection of Secondary data using internet and internal sources for comparison ofOnline trading account of other Broking houses in the market like ICICI Direct, MOTILAL Oswal, Religare and Reliance Money etc. This also involves talking to their executives regarding various features provided to the customer along with their Brokerage structure.

Second Phase is Collection of Primary Data and Analysis:  After collecting the Secondary data the next phase will be collection of primary data using Questionnaires. The questionnaire will be filled by around 200 people who will be mainly from Delhi/NCR and Kolkata region. The sample will consist of people who are employed or are clients of Punjab National Bank dealing in investment options to know their financial requirements. Based on these requirements different investments will be informed to them for further perusal. The data collected will be then entered into and MS-excel for analysis of the data collected.

RESEARCH DESIGN

Exploratory and descriptive research

The research is primarily both exploratory and descriptive in nature. The sources of information are both primary and secondary. The secondary data has been taken by referring to various magazines, newspapers, internal sources and internet to get the figures required for the research purposes. The objective of the exploratory research is to gain insights and ideas. The objective of the descriptive research study is typically concerned with determining the frequency with which something occurs. A well-structured questionnaire was prepared for the primary research and personal interviews were conducted to collect the responses of the target population.

SAMPLING METHODOLOGY

Sampling Technique: Initially, a rough draft was prepared a pilot study was done to check the accuracy of the Questionnaire and certain changes were done to prepare the final questionnaire to make it more judgmental.

Sampling Unit: The respondents who were asked to fill out the questionnaire in Delhi are the sampling units.These respondents comprise of employees and clients of PNB. The people have been interviewed in the open market, in front of the companies, telephonic interviews and through other sources also.

Sample Size:  The sample size was restricted to only 200 respondents.

Sampling Area:  The area of the research was New Delhi and Kolkata

LIMITATION OF THE STUDY

The various limitations of the study are:

' People were not willing to fill the entire questionnaire due to the less time available to them

' Some respondents might be hesitant to divulge personal and financial information which can affect the validity of all responses

' There is lack of awareness among people about investing in stock market. So the people who are aware of such things were found in specific areas for survey purposes.

' Most people are comfortable with traditional system in small towns and like to trade from their respective brokers, hence not providing a true opinion of theirs.

' Some of the respondents who did not do online trading were able to respond to only few questions.

' The survey was done in the Delhi and Kolkata region and may not truly express the opinion of whole country.

COMPANY PROFILE

SMC GLOBAL

BACKGROUND:

SMC Group was registered in the year 1994 though it has been in operations since 1990.   It is one of India's leading financial services and investment solutions providers.  SMC has been rated as India's best Equity, Derivatives & Currency Broker and Broking house with the largest Distribution Network.

SMC is a Delhi based company but over the years, it has expanded its operations domestically as well as internationally.  Its existing network includes regional offices at Mumbai, Kolkata, Chennai, Ahmedabad, Jaipur, Hyderabad, Bangalore plus a growing network of branches and 2500+ registered sub-brokers and authorized persons spread across 550+ cities and towns in India.  SMC is also amongst the first financial firms in India who have expand operations in the lucrative gulf market, by acquiring license for broking and clearing member with Dubai Gold and Commodities Exchange (DGCX).  They have a workforce of more than 3000 employees and over 20000 registered associates serving to the financial needs of a large base of investors.

SMC offers a large variety of financial services which includes institutional and retail brokerage of equity derivatives;  commodities, currency, online trading, depository services, distribution of IPOs, mutual funds, fixed deposits and bonds.  There are dedicated desks for NRIs and institutional clients, insurance broking (both life and general), clearing services, margin financing, investment banking, portfolio management, wealth advisory & research.  It is a provider of one of best trading platforms in terms of speed, convenience and risk management to trade in NSE, BSE, NCDEX, MCX, NMCE, ICEX, ACE, USE, NCDEX SPOT, MCX-SX and DGCX.

PROMOTERS

Mr. S C Aggarwal(Chairman & Managing Director, SMC Group)

Mr. Aggarwal is a promoter of the SMC Group.  He has rich and extensive experience of more than 23 years.  He is a fellow member of the Institute of Chartered Accountants of India (ICAI).  He has an in-depth knowledge and strong understanding of various intricacies of Securities Market and Financial Services.  It is through his exceptional leadership skills and outstanding commitment towards the company that SMC received several accolades.  His efforts have led to the diversification of group business from Stock Broking and Arbitrage to Commodity Broking, IPOs & Mutual Funds distribution, Insurance Products, Merchant Banking, Wealth Management and Advisory Services.  He is the chairman of the India European Union Business Promotion Council of ASSOCHAM, co-chairman of the National Council of Capital Markets and a senior member of the management committee of ASSOCHAM.  He has also acted as a member of the expert group on behalf of ASSOCHAM Working Group constituted by the Ministry of Corporate Affairs and the Cost Accounting Board.

Mr. Mahesh C Gupta (Vice Chairman & Managing Director, SMC Group)

Mr. Mahesh C Gupta is a Promoter of the SMC Group with more than 25years of widespread experience in Securities Market.  He is a fellow member of the Institute of Chartered Accountants of India.  His extraordinary leadership skill, astute business acumen and disciplined life style have helped SMC strongly diversify to a fully-fledged financial services firm with presence across 550 cities providing Brokerage services in equity, commodity, currency & derivatives, depository services, clearing services, Investment banking, portfolio & wealth management, distribution of Insurance, IPOs, Mutual Funds, Fixed Deposits and other 3rd party products.  His principles of honesty, transparency and moral integrity have given SMC strong foundation based on which it has become India's leading financial services provider.  Mr. Gupta has also given his vital contribution in various conferences & seminars on securities market.

Mr. D K Aggarwal (Chairman & Managing Director ' SMC Comtrade Limited ;  Chairman & Managing Director - SMC Capitals Limited;  Chairman & Managing Director - SMC Investments & Advisors Ltd )

Mr. DK Aggarwal is a promoter and one of the key architects of success of the SMC Group. Innovation in offerings, Branding, Research and Arbitrage are his forte.  He has more than 23 years of wide and rich experience in Equity and Commodity Broking and Arbitrage.  He is an eminent speaker and regularly presents his views and expertise on various market related issues through print and television media.  He is also a fellow member of the Institute of Chartered Accountants of India.  He is the Immediate Past President of Commodity Participants Association of India.

SERVICES PROVIDED

' Broking

1. Equities & Derivatives

2. Currency

3. Commodities

4. Clearing Services

5. Institutional Broking

6. Loan Against Securities

' Research

' Online Trading

' Insurance Broking

' Investment Banking

FEATURES OF THE PRODUCTS

1. EQUITIES & DERIVATIVES

They have an experienced team of Research Analysts and Advisory Managers who guide the clients to appropriate solutions, backed by in-depth research, knowledge and expertise on a regular basis. They constantly help the clients with strategies for equity and derivatives investment, recommendations for trading on futures and options, hedging with Nifty and other products and opportunities of near risk free arbitrage between various segments.

Facilities Offered:

CALL & TRADE:  The clients can enjoy trading by simply calling to dealing desk at their branch or sub-broker with whom the client's account is opened.

ONLINE TRADING:

' Browser Based:  The client can trade at their fingertips by visiting www.smctradeonline.com and login into their Online Equity section.

' Application Based:  privilege users can download and install the application on their Desktop PC, Smart phone or Tablet device.

2. CURRENCY:

Currently in India, there are four major exchanges offering Currency future trading ' NSE, BSE, MCX-SX and USE. SMC Global Securities is a Trading cum Clearing Member of all these exchanges for the currency segment. They believe in the tremendous potential of currency future to become a dominant force of the Indian financial market with a turnover which can outperform even equity and commodity segment.

SMC Complex International DMCC (part of SMC Group) is one of the initial, leading and experienced clearing and broking members of Dubai Gold and Commodities Exchange (DGCX). It offers trading in Forex (USD/INR, USD/EUR, USD/GBP, USD/JPY), Gold, Silver, Crude (WTI & Brent) and Steel Rebar Contracts.

Facilities Offered:

CALL & TRADE:  The clients can enjoy trading by simply calling to dealing desk at their branch or sub-broker with whom the client's account is opened.

ONLINE TRADING:

' Browser Based:  The client can trade at their fingertips by visiting www.smctradeonline.com and login into their Online Equity section.

' Application Based:  privilege users can download and install the application on their Desktop PC, Smart phone or Tablet device.

3. COMMODITIES

SMC Comtrade Limited, a key constituent of SMC Group of Companies, came into existence at the very start of Commodity Exchanges in India.Their research team guides the investors to make wise trading and investment decisions in metals, agri ' commodities, bullions and crude oil.

 SMC Comex International DMCC is one of the initial, leading and experienced clearing and broking members of Dubai Gold and Commodities Exchange (DGCX). It offers commodity trading in Gold, Silver, Crude (WTI & Brent), Forex (USD/INR, USD/EUR, USD/GBP, USD/JPY) AND Steel Rebar Contracts.

Facilities Offered:

CALL & TRADE:  The clients can enjoy trading by simply calling to dealing desk at their branch or sub-broker with whom the client's account is opened.

ONLINE TRADING:

' Browser Based:  The client can trade at their fingertips by visiting www.smctradeonline.com and login into their Online Equity section.

' Application Based:  privilege users can download and install the application on their Desktop PC, Smart phone or Tablet device.

4. CLEARING SERVICES

SMC is one of the leading clearing members, which currently manages the clearing services for more than 259 trading members in different segments of different exchanges.

Facilities Offered:

They are offering Clearing and Settlement Services in the following exchanges:

1. Equity Derivatives:  NSE F&O, BSE F&O AND MCX-SX F&O

2. Currency Derivative:  NSE (Currency), BSE, MCX-SX (Currency) and USE

3. Commodity Derivative:  MCX, NCDEX, ICEX, ACE, NMCE, UCX, NCDEX SPOT, and DGCX

4. Debt Segment:  NSE, BSE and MCX-SX  

5. INSTITUTIONAL BROKING:

Institutional Broking Services at SMC cater to the investment needs of leading domestic and foreign institutional investors backed by incisive research. This division is one-stop investment gateway and knowledge repository for the clients, servicing their unique and sophisticated needs.

Facilities offered:

Their efficient trade execution, quality research, top quality human resources and complete compliance with stock exchange regulations as well as business standard ethics lend towards their exemplary institutional services to investors through:

' IPOs

' Equities

' Derivatives

' Mutual Funds

SMC also focuses on identifying undiscovered value stocks to investors through their gamut of institutional research services. This division is well suited to the investment side of all classes of institutional investors including Mutual Funds, Insurance Companies, Banks and FIIs.

6. RESEARCH:

With the EIC (Economy, Industry, Company) approach, their research team offers timely Research reports covering investment summary, Equity trend, sector trends, commodity trend, currency trend, along with the trend of world markets. The same is covered in their esteemed weekly magazine 'Wise Money'. They have a team of highly experienced analysts in all the segments such as Equity, Commodity, Derivatives, Mutual Funds and Currency.

Facilities Offered:

' Equity Reports

1. Equity Morning Mantra

2. Derivatives Daily

3. Daily and Weekly Corporate Action Meter

4. Equity Techno Funda Report

5. Annual Top Picks

' Commodities Reports:

1. Commodity Daily Report (English/Hindi)

2. Special Commodities Updates (English)

3. Monthly Report on Bullions & Energy (English/Hindi)

4. Monthly Report on Base Metals (English/Hindi)

5. Monthly Report on Spices (English/Hindi)

6. Monthly Report on Oilseeds (English/Hindi)

7. Monthly report on other Commodities (English/Hindi)

8. Commodities Techno Funda (English/Hindi)

9. Commodity Weekly Outlook (Hindi)

10. Commodity Annual Outlook (English/Hindi)

' Currency Reports:

1. Currency Daily Buzzer

' IPO and Mutual Fund Reports:

1. IPO Report (As and When)

2. Mutual Fund Weekly Update

' Special Reports:

1. Result Updates

2. Pre-Budget Analysis

3. Post-Budget Analysis

4. RBI Policy

' Newsletters:

1. Wise Money

' SMS Service

' Chat Rooms.

7. ONLINE TRADING:

SMC Online is investors' single gateway for all their financial needs.  Now, investors can invest online in Equities, Commodities, IPOs, Mutual Fund Schemes and Currency Futures anywhere anytime.  Investors can access a multitude of resources like live quotes, charts, research advice and online assistance to help them make informed decisions.  They can also access their account from anywhere using SMC's Call-N-Trade services.

Facilities Offered:

SMC Trading Platforms offer investors the ease and convenience of an uninterrupted trading experience.  SMC offers seamless Online Trading experience with freedom to opt for a product that meets the investor's needs:

' SMC SELECT ' Easy to use simple web-based trading platform for beginners

' SMC EXCLUSIVE ' Advanced web-based trading platform with live streaming quotes

' SMC PRIVELEDGE ' Software based trading platform for active traders

' SMC MOBITRADE '  state-of-art mobile trading application

' SMC TABTRADE ' state-of-art tablet trading application

Clients opting for above mentioned products get facility to invest in IPOs and Mutual Fund Schemes at no extra cost.

8. INSURANCE BROKING:

SMC offers risk management services and a complete range of insurance solutions through its subsidiary company SMC Insurance Brokers Pvt. Ltd.  The company holds a Direct Insurance Broker's license from Insurance Regulatory and Development Authority (IRDA) and provides a wide array of Life Insurance and General Insurance products under professional guidance of experts in the field.  SMC provides customized solutions to individual clients, small and medium enterprises as well as to the leading corporate houses and institutions across the country.  Their philosophy is 'a transaction is for a moment but a relationship is forever'.

Value Addition for Their Customers:

' Comprehensive Risk Portfolio Management including identification, measurement, assessment and handling of the risk, of which insurance is an integral part

' Designing of customized and qualitative insurance program

' Offer of choices while recommending suitable insurance policies

' Assistance in deciding sum insured to avoid under-insurance

' Due to their volume of business, knowledge of market and expertise, they are able to obtain the best possible premium rates.

' Selection of Policy wording and clauses where choice is available

' Assistance in processing of claims to obtain fair and prompt settlement from Insurance Companies

9. INVESTMENT BANKING:

SMC Capitals Limited is the Investment Banking arm of SMC group and is a SEBI registered Category I Merchant Banker with strong management team; financial sponsors and corporate partners to help corporate clients achieve their financial and strategic goals.  They offer a wide spectrum of investment banking services covering Corporate Advisory, Public Placement and Debt Syndication, Merger and Acquisition Advisory, Valuation Services and ESOP.

Facilities Offered:

' Corporate Advisory

' Public Issue Management

' Capital Restructuring

' Private Equity and Debt Syndication

' Buybacks

' Delisting

' ESOP

' QIPs

' FCCBs

' Merger & Acquisition Advisory

' Valuation Services

COMPETITORS

1. ANGEL BROKING

Angel Broking Group has emerged as one of the major retail broking houses in India.  It was incorporated in 1987, and has a membership of BSE, NSE, NCDEX and MCX.  Angel is also registered as a depository participant with CDSL.

Angel's retail stock broking house offers a range of retail centric services including:

' E-Broking

' Insurance Services

' Mutual Funds

' NRI Services

' Commodities and Currency Trading

TRADING PLATFORMS

Angel Broking offers four trading platforms to its customers.

1. ANGEL EYE ' It is a browser based trading platform where rates are updated automatically.  All segments are available on a single screen.  It provides portfolio tracking and trading on the application. It is for day traders who trade multiple times during the day.

2. ANGEL SPEEDPRO ' It is an application based trading platform.  The rates are updated automatically.  This platform is useful for investors and traders to access the market from different terminals.

3. ANGEL TRADE ' It is a browser based trading platform for investors.  It is an easy online trading platform accessible even behind proxy and firewall system set up.

4. ANGEL SWIFT ' This platform allows investors to access and trade even on tablets, smart phones and mobiles.  

ANGEL TRADE BROKERAGE CHARGE 2017

a.   Account Opening Fees:

Stock trading account ' Rs. 575/-

Demat account ' Rs. 200/-

Commodity Trading ' Rs. 625/-

b. Brokerage:  The brokerage in Angel Broking is decided on the basis of the initial margin provided by the investor to open the account.  The concept being the higher the initial margin deposited higher would be the trading done by the customer.

' If initial margin cheque is more than Rs. 25000

Intraday (Buy & Sell):  Rs. 0.04% per trade

Delivery (Buy & Sell):  Rs. 0.40% per trade

F&O (Buy & Sell):  Rs. 0.04% per trade

' If initial margin cheque is more than Rs. 50000

Intraday (Buy & Sell):  Rs. 0.03% per trade

Delivery (Buy & Sell):  Rs. 0.30% per trade

F&O (Buy & Sell):  0.03% per trade

' If initial margin cheque is more than Rs. 100000

Intraday (Buy & Sell):  Rs. 0.02% per trade

Deliver (Buy & Sell):  Rs. 0.20% per trade

F&O (Buy & Sell):  0.02% per trade

' If initial margin cheque is more than Rs. 300000

Intraday (Buy & Sell):  Rs. 0.015% per trade

Deliver (Buy & Sell):  Rs. 0.15% per trade

F&O (Buy & Sell):  0.015% per trade

' If initial margin cheque is more than Rs. 100000

Intraday (Buy & Sell):  Rs. 0.01% per trade

Deliver (Buy & Sell):  Rs. 0.10% per trade

F&O (Buy & Sell):  0.01% per trade

2. AXIS DIRECT

Axis Direct is a brokerage subsidiary of AXIS Bank.  It is a full service broker and provide all the services including Equity trading, F&O trading, Commodity trading, Mutual Funds and IPO.  They provide the service of 3-1 account which means that when an investor opens its trading account with them, they will also open the bank account and Demat account.  Axis Direct also provides good technical tools like scanners and technical charting which make sure that an investor can make an informed decision before buying the stock.

THE BROKERAGE CHARGES FOR AXIS DIRECT ARE AS FOLLOWS:

a. The account opening charges is Rs. 999, which includes opening of Demat account, Bank account and Trading account.

b. They provide two types of brokerage plans:

' FIXED PLAN

PRODUCT SEGMENT BROKERAGE BROKERAGE BASIS

Cash, E ' Margin 0.80% Percentage of turnover

Encash 1.00% Percentage of turnover

Intraday, Cover, Futures, Intraday Futures 0.10% Percentage of turnover

' VARIABLE PLAN

PRODUCT SEGMENT MONTHLY TURNOVER (Rs.) BROKERAGE RATE

Equity (cash), E- Margin 0-300000

300001-1000000

1000001-2500000

2500001-7500000

7500001-20000000

20000001 and above 0.70%

0.60%

0.50%

0.45%

0.30%

0.20%

Intraday, Cover Futures, Intraday Futures ( Currency, Equity, Index) 0-50000000

50000001-100000000

100000001-200000000

200000001 and above 0.05%

0.04%

0.035%

0.03%

Options (Equity, Currency, Index) Rupees per lot 0-200000

200001-500000

500001-1000000

1000001-2000000

2000001 and above

Rs. 100

Rs. 90

Rs. 80

Rs. 70

Rs. 65

3. HDFC SECURITIES

HDFC Securities is equity trading company of HDFC Bank. It is one of the largest brokers in India.  HDFC Securities trading account provide a unique 4-in-1 feature that integrates investor's HDFC Securities trading account with their existing HDFC bank savings account, Demat account and Investment account.  Funds/ shares are seamlessly moved from the linked Demat/Bank account to execute the transactions.  It also helps in easy transfer and withdrawal of funds.  It provides a whole range trading activities including Equity, Derivatives, Commodity and Currency trading.

HDFC BROKERAGE CHARGES ARE AS FOLLOWS:

' Equity

Minimum brokerage per order (subject to ceiling of 2.5% of total traded value) Resident NRI

Applicable to both buy and sell orders Rs. 25 Rs. 25

' Delivery Based Trades:

Brokerage Resident Indians ' 0.50% or min Rs.25/- or ceiling of 2.5% on transaction value (Both Buy & Sell)For NRI's ' Brokerage 0.75% or min Rs. 25 or ceiling of 2.5% on transaction value (Both Buy & Sell)

Brokerage  scrips less than Rs.10 per share Minimum brokerage of Rs. 0.05/- per unit will be charged. Brokerage will be charged within the limits prescribed by SEBI / Exchanges. (Both Buy & Sell)

' Square-Off Trades Cash & Carry Scrips:

Brokerage 0.10% or min Rs.25/- or ceiling of 2.5% on transaction value (Both Buy & Sell)

Brokerage  scrips less than Rs.10 per share Minimum brokerage of Rs. 0.05/- per unit will be charged. Brokerage will be charged within the limits prescribed by SEBI / Exchanges. (Both Buy & Sell)

' Square-Off Trades  Margin Scrips:

Brokerage 0.05% or min Rs.25/- or ceiling of 2.5% on transaction value (Both Buy & Sell)

Brokerage  scrips less than Rs.10 per share Minimum brokerage of Rs. 0.05/- per unit will be charged. Brokerage will be charged within the limits prescribed by SEBI / Exchanges. (Both Buy & Sell)

***'Other taxes and levies (Transaction Charges & service tax )as prescribed by Govt and regulatory authorities would be applicable.

DERIVATIVES:

FUTURES MARKET:

Non-Square Off (Carry Forward) Trades:

Brokerage Resident Indians ' 0.05% or min Rs.25/- or ceiling of 2.5% of transaction value (Both Buy & Sell)For NRI's ' 0.05% or min Rs.25/- or ceiling of 2.5% of transaction value (Both Buy & Sell)

Service Tax 10.30%on Brokerage (Till 31st March 2016)

12.36% on Brokerage (Effective from 1st April 2016)

Square-Off Trades:

Brokerage Resident Indians ' 0.025% or min Rs.25/- or ceiling of 2.5% of transaction value (Both Buy & Sell)For NRI's ' 0.025% or min Rs.25/- or ceiling of 2.5% of transaction value (Both Buy & Sell)

Service Tax 10.30%on Brokerage (Till 31st March 2016)

12.36% on Brokerage (Effective from 1st April 2016)

OPTION MARKET :

Brokerage Resident Indians ' Higher of 1% of the premium amount or Rs.100 per lot (Both Buy & Sell)For NRI's ' Higher of 1% of the premium amount or Rs.100 per lot (Both Buy & Sell)

Apart from this brokerage, these taxes and STT would be applied to the trades.

Securities Transaction Tax (STT) 0.03% of transaction value (On Sell transaction) (Effective from 1st June 2016)

Stamp Duty 0.003% on turnover

SEBI Turnover Tax 0.0001% on turnover

4. INDIABULLS SECURITIES

Indiabulls Securities (ISL) is the India ' Based Stock Broker. ISL is a part of Indiabulls Group, a leading business house in India with businesses spread across many sectors including Infrastructure, Power, Real Estate and Financial Services.  Indiabulls Securities provides integrated capital market related services in India including Stock Broking, Equity Research, Depository Services, IPO Investment, Commodities Trading and Trading in Currency Derivatives.   It offers these services through its online trading platform (Power Indiabulls) and also through a wide network of branches and sub brokers.

TRADING PLATFORMS PROVIDED BY INDIABULLS SECURITIES ARE:

1. Power Indiabulls (PIB)

PIB is Indiabulls Securities Online Trading Platform. It offers built-in internet trading features along with Live Streaming Stock Quotes.  PIB can be accessed through a web browser like Internet Explorer.  It offers features which suites beginners to advance traders.  Live Market News, Tic by Tic Live Intraday Charts, Technical Analysis are few key features available in PIB.

2. Website Trading

Indiabulls trading website allows its customers to place orders online, track transactions, invest in IPO's and Mutual Funds, Transfer Funds, Track Portfolio and access research reports and news.

3. Mobile Power Indiabulls (MPIB)

The Mobile Trading Platform of Indiabulls allows Trade in Equity, Access to Real Time Stock Quotes and Market Research Reports, Customized Alerts and Messages, View Margin Report and Trading Account Summary etc.  It allows you to trade anytime from anywhere.

INDIABULLS SECURITIES BROKERAGE CHARGES 2013:

' Trading Account Opening Charges (One Time): Rs 800

' Trading Annual maintenance charges (AMC): NIL

' Demat Account Opening Charges (One Time): NIL

' Demat Account Annual Maintenance Charges (AMC): Rs 450

' Equity Delivery Based Trades Brokerages: 0.40%

' Equity Intra-day Trades Brokerages: 0.04%

' Equity Future Trades Brokerages: 0.04%

' Equity Options Trades: 2.5% or Rs 100 per lot whichever is higher

' Minimum Brokerage(Equity): 3 Paisa per share

5. KOTAK SECURITIES

Incorporated in 1994, Kotak Securities is a full services broker part of popular India based Kotak Mahindra Bank.  The bank has over 1400 branches across India servicing more than 8 lakh customers.  Kotak Securities Limited is among the largest traditional broker in India providing wide range of investment options to its customers including Trading in Equity & Derivatives, Investment in IPO's, Mutual Funds, Fixed Deposits, Bonds and many more share market related investment products.  Kotak Sec is the member of BSE and NSE, the popular stock exchanges in India.  Company provides stock trading facilities though many ways including trading terminal, website, mobile application, trading though branches and call & trade.

Like other tradition brokers in India, Kotak offers facility of Margin Finance, Margin against Securities, Fundamental and Technical analysis, Research Reports & Tips, SMS alerts and Portfolio Management Services (PMS).  Kotak Security is also the member of National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) and provides its own depository services to the customers.

The 3-in-1 account is the key offering of Kotak Securities.  The Trinity Account [3 in 1 Account] offers the combination of broker account, bank account and a demat account.  All these accounts are linked together and work seamlessly to make stock market investment very easy.

KOTAK SECURITIES'S TRADING PLATFORMS:

Kotak Securities offers multiple trading platforms to suite investor's requirement. Following are the trading platforms available by Kotak Sec:

1. Website Based Trading ' A stock treading website which can be accessed though any popular Web Browser.  This is the most convenient and popular way to invest with Kotak Securities.  Kotak also offers a light weight trading website 'Xtralite', which can be used by investors with slow speed internet.

2. Trading Terminals (KEATProX and FASTLANE) ' Kotak offers two different trading terminal based application which are very popular among stock traders.  KEATProX is an exe based installable desktop application providing fastest trading experience.  FASTLANE is a Java applet based application which gives you a trading terminal kind of experience without any installation on your computer.  FASTLANE gives KEATProX like features and the benefits of website based trading as it can be access from anywhere though web browser.

3. Mobile Stock Trading ' Kotak offers high speed mobile based application to trade in Stock Market.  Through this mobile app, a customer can Execute Trades, Monitor Portfolio, View Streaming Quotes and Intraday Charts.

4. Branch Advisory and Call & Trade ' Kotak also offers trading facility though its 1600+ branches and though call centers using call & trade facility.

KOTAK SECURITIES BROKERAGE CHARGES 2016:

Account opening fees:

' Trading Account Opening Charges (One Time): Rs 850

' Trading Annual maintenance charges (AMC): Rs 0

' Demat Account Opening Charges (One Time): -

' Demat Account Annual Maintenance Charges (AMC): Rs 700 per annum

Trading Brokerages:

Kotak Gateway (Fixed Brokerage) (* All charges are on both sides)

' Delivery Based Trades: 0.49%

' Intra-day Trades: 0.049%

' Futures Trades: 0.049%

' Options Trades: Rs. 100/- per lot or 1% on premium which ever is higher

Kotak Gateway (Variable Brokerage) (* All charges are on both sides)

' Delivery Based Trades Brokerages: 0.59% to 0.18% (For trading amount of '< 1lakh' to '> 2 crore')

' Intra-day Trades Brokerages: 0.06% to 0.03% both sides (For trading amount of '< 25 lakhs' to '> 5 crore')

' F&O Trades Brokerages (Intraday): 0.07% to 0.023% both sides (For trading amount of '< 2 crores' to '> 25 crores')

' F&O Trades Brokerages (Settlement): 0.09% to 0.032% both sides (For trading amount of '< 2 crores' to '> 25 crores')

' Options Trades: Rs. 100/- per lot

6. RELIANCE SECURITIES

7. RELIGARE

Religare is an emerging markets financial services group with a presence across Asia, Africa, Middle East, Europe, and the Americas.  In India, Religare's largest market, the group offers a wide array of products and services including broking, insurance, asset management, lending solutions, investment banking and wealth management.  With 10,000-plus employees across multiple geographies, Religare serves over a million clients, including corporate and institutions, high net worth families and individuals, and retail investors.

Religare Securities Ltd. (RSL), a wholly owned subsidiary of Religare Enterprises Limited (REL), an emerging markets financial services group is a market leading securities firm in India.  The company offers equity & currency broking services to more than 7,50,000 clients using both, offline and online platforms and also offers depository participant services.  RSL is a member of the NSE, BSE, MCXSX, USE and a depository participant with NSDL and CDSL. RSL employs more than 5000 employees and has a wide distribution reach that spans across more than 1800 locations in India.

Online platform provides customers the opportunity to trade in Equities, Commodities, Currency Futures, apply for IPOs and invest in Mutual Funds.

ACCOUNT TYPES

Religare allows customer to choose from a wide range of financial services through its sophisticated and customized trading platform called R-ACE (Religare Advanced Client Engine). Given below are 3 types of R-ACE accounts available to investors.

1. R-ACE (Basic):  R-ACE (Religare Advanced Client Engine) is a basic online trading account provided by Religare.  Investors can trade and access their account information both online as well as over the phone.  This account comes with a browser-based online trading platform with no requirement of an additional software installation.

2. R-ACE Lite (Advanced):  R-ACE Lite is the advanced trading platform, which provides all the features as provided by R-ACE (Basic) account.  Additionally it also provides real-time streaming stock quotes and alerts.  This account comes with a browser-based online trading platform with no requirement of an additional software installation.

3. R-ACE Pro (Professional):  As the name indicates this account is meant for high volume traders.  In addition to the features mentioned above, it also comes with a Trading Terminal Software which needs to be installed on your computer.  This terminal directly connects the investor to the stock market and is equipped with all industry standard Trading Terminal features such as technical charting (intra-day and EOD), multiple watch list, advanced hot-key functions for faster trading, derivative chains, futures & options calculator etc.

RELIGARE BROKERAGE CHARGES 2016:

Religare offers three kinds of online accounts (as stated above) with zero account opening fees. They provide different brokerage options based on the volume and frequency of trading, as well as to suit the needs of both beginners and traders.

1. R-ACE (Basic)

Account activation charges: -.

2. R-ACE Lite (Advanced)

Account activation charges: -

3. R-ACE Pro (Professional)

Account activation charges: -

8. SHAREKHAN

Incorporated in February 2000, Sharekhan is India's 2nd largest stock broker providing brokerage services through its online trading website Sharekhan.com and 1950 Share shops which includes branches & Franchises in more than 650 cities across India.  Sharekhan has seen incredible growth over last 13+ years though it's very successful online trading platform and the chain of franchises located in almost every part of India.Sharekhan has over 12 lakh retail and institutional customers.

Services offered by Sharekhan include trading in equity, F&O and Commodity and investment in IPO's, Mutual Funds, Insurance, Bonds and NCD's.  Company also provide Sharekhan Demat Account and registered as a depository participant with NSD and CDS.

Sharekhan.com is the finest investment portal for India stock market.  The well designed website provides wide range on investment options, latest stock market updates and many tools for investors.  Sharekhan also offers 'Sharekhan TradeTiger', one of the most popular trading terminals, for retail investors.  The TradeTiger is quite similar to Broker Terminal and allows frequent traders to place and execute their orders at a high speed.  It also provides live data and other tools on the same screen to help the users with their trades.

Sharekhan has its own research teams which regularly publishes investment advices, stock tips, quarterly company result analysis and news alerts to its customer though email, SMS and on Sharekhan.com.  Sharekhan has an excellent knowledge center on its website to help stock and commodity market investors of all kind.  It also offers free online and classroom seminars / workshops to investors.  EachSharekhan Accounts comes with online and in-person help from Sharekhan representative.

ACCOUNT TYPES

1. Classic account

Allow investor to buy and sell stocks online along with the following features like multiple watch lists, Integrated Banking, demat and digital contracts, Real-time portfolio tracking with price alerts and Instant credit & transfer.

a. Online trading account for investing in Equities and Derivatives

b. Free trading through Phone (Dial-n-Trade)

I. Two dedicated numbers for placing your orders with your cellphone or landline.

II. Automtic funds tranfer with phone banking (for Citibank and HDFC bank customers)

III. Simple and Secure Interactive Voice Response based system for authentication

IV. get the trusted, professional advice of our telebrokers

V. After hours order placement facility between 8.00 am and 9.30 am

c. Integration of: Online trading + Bank + Demat account

d. Instant cash transfer facility against purchase & sale of shares

e. IPO investments

f. Instant order and trade confirmations by e-mail

g. Single screen interface for cash and derivatives

2. TradeTiger account

This is a net based executable application for active traders who trade frequently during the day's trading session. Following are few popular features of Trade Tiger account.

a. A single platform for multiple exchange BSE & NSE (Cash & F&O), MCX, NCDEX

b. Multiple Market Watch available on Single Screen

c. Hot keys similar to a traditional broker terminal

d. Tie-up with 12 banks for online transfer of funds

e. Different tools available to gauge market such as Tick Query, Ticker, Market Summary, Action Watch, Option Premium Calculator, Span Calculator

f. Graph Studies are available including Average, Band- Bollinger, Know SureThing, MACD, RSI, etc

SHAREKHAN BROKERAGE CHARGES 2016:

Account Opening Fees & Annual maintenance charges (AMC)

' Trading Account Opening Charges (One Time): Rs 850 (Classic Account), Rs 1200 (Trade Tiger Account)

' Trading Annual maintenance charges (AMC): Rs 450 (First year remains free)

' Demat Account Opening Charges (One Time): Included in trading account opening charges

' Demat Account Annual Maintenance Charges (AMC): Rs. 450 (Free for 1st year with trading account.)

Trading Brokerages

' Intra-day Trades: 0.1% on the buy side and 0.1% on the sell side.

' Delivery Based Trades: 0.5% or 10 paise per share or Rs. 18/- per scrip whichever is higher.

' F&O Trades: 0.1% on the first leg and 0.02% on the second leg if squared off on the same day and 0.1% if squared off on any other day.

' Options Trades: Rs. 100/- per contract or 2.5% on the premium (which ever is higher).

GOVERNMENT POLICIES

The following description is a summary of the relevant regulations and policies as prescribed by the Government of India and other regulatory bodies that are applicable to the business of SMC Global Securities.

1. Securities Contract Regulation Act, 1956

The Securities Contract (Regulation) Act, 1956 ('SCRA') seeks to prevent undesirable transactions in securities by regulating the business of dealing in securities and other related matters.  The SCRA provides for grant of recognition for stock exchanges by the Central Government.  Every recognized stock exchange is required to have in place a set of rules relating to its constitution and bye-laws for the regulation and control of contracts.  The said act deals with recognition, de-recognition, regulation / control on the stock exchanges, empowers the stock exchanges for making its own bye laws, rules and the provisions pertaining to listing of securities, delisting of securities and dealing in securities.  The said enactment also provides for appellate mechanism.

The bye-laws inter-alia provide for:

I. The opening and closing of markets and the regulation of the hours of trade;

II. The fixing, altering or postponing of days for settlements;

III. The determination and declaration of market rates, including the opening, closing highest and lowest rates for securities;

IV. the terms, conditions and incidents of contracts, including the prescription of margin requirements, if any, and conditions relating thereto, and the forms of contracts in writing;

V. The regulation of the entering into, making, performance, recession and termination of contracts, including contracts between members or between a member and his constituent.

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2. Stock Broker Regulations

The Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992, as amended from time to time ('Stock Broker Regulations') provides that no person shall carry on activity as a stock broker unless he holds a certificate granted by SEBI under the Stock Broker Regulations.

Further, the Stock Broker Regulations provides the eligibility criteria and conditions required to be satisfied in order to obtain the certificate of registration. They further provide the procedure for obtaining the certificate of registration to carry on business as a stock broker and/or a sub-broker who is required to be affiliated to a stock broker registered under the aforesaid regulations. On registration, the stockbroker and sub-broker are required to adhere to a code of conduct prescribed under the Stock Broker Regulations. In addition, a stock broker and/or a sub-broker are required to abide by the rules, regulations and bye-laws of the stock exchange or stock exchanges of which it is a member.

Apart from the registration of stockbrokers and sub-brokers, the Stock Broker Regulations provide for registration of Trading or clearing members and self-clearing members.

' A trading member is a member of the derivatives exchange or derivatives segment of a stock exchange and who settles the trade in the clearing corporation or clearing house through a clearing member.

' A clearing member is a member of a clearing corporation or clearing house of the derivative exchange or derivatives segment of an exchange, which clears and settles transactions in securities.

' A self-clearing member is a member of a clearing corporation or clearing house of the derivatives exchange or derivatives segment of a stock exchange who may clear and settle transactions on its own account or on account of its clients only, and shall not clear or settle transactions in securities for any other trading member(s)

3. Portfolio Manager Regulations

The Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993 ('Portfolio Manager Regulations') provide that no person shall carry on activity as a portfolio manager unless he holds a certificate granted by SEBI under the Portfolio Manager Regulations. A portfolio manager has been defined as a person who, pursuant to a contract or arrangement with a client, advises or directs or undertakes on behalf of the client (whether as a discretionary portfolio manager or otherwise) the management or administration of a portfolio of securities or the funds of the client.

4. Insurance Broker Regulations

The Insurance Regulatory and Development Authority (Insurance Brokers) Regulations, 2002, as amended from time to time ('Insurance Broker Regulations') provide inter alia for licensing and capital requirements for persons who are insurance brokers. These regulations require that a company interested in entering the business of dealing in insurance or reinsurance to apply to the Insurance Regulatory Development Authority for a license and also prescribe a code of conduct which such insurance brokers may follow.

5. Commodities Broking Regulations

Commodities trading, is governed by the Forward Contracts (Regulation) Act,1952 (FCRA) and the Forward Contracts (Regulation) Rules, 1954 (FCRR). The FCRA provides, inter alia, for the establishment of the Forward Market Commission (FMC). Associations interested in dealing with forward contracts, such as commodity exchanges like MCX and NCDEX must make applications in the prescribed format as provided under the FCRR.

6. Internet Trading Regulation Internet based trading was approved by SEBI through its Circular No. SMDRP/POLICY/CIR-06/2000 dated January 31, 2000 under which stock brokers registered with the SEBI and who is interested in providing internet based trading services must obtain permission from the concerned stock exchanges. Prior to the grant of the permission, the concerned stock exchange will have to ensure that certain minimum conditions such as a minimum networth of ` 0.5 crore, security and confidentiality of the data used by the broker by the use of encryption technology, adequate backup systems and data storage capacity. The web site of the broker who is providing such a facility should contain information for investor protection together with certain other mandatory security features as prescribed under the Regulations

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7. Underwriting

The SEBI (Underwriters) Regulations, 1993, as amended from time to time ('Underwriters Regulations') provides that no person shall act as underwriter unless he holds a certificate granted by the Board under these regulations. Furthermore it also provides that every stock broker or merchant banker holding a valid certificate of registration under Section 12 of the SEBI Act, 1992 shall be entitled to act as an underwriter without obtaining a separate certificate under the Underwriters Regulation.

8.Mutual Funds Regulations

The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 govern the law pertaining to the business of mutual funds in India. The SEBI, with a view to improving professional standards, has made it mandatory for all mutual funds to appoint agents/distributors who have obtained certification from the AMFI. In

Case of firms/companies, the requirement of certification is made applicable to the persons engaged in sales and

Marketing.

The AMFI has issued guidelines in consonance with the various circulars issued by SEBI in this regard. The primary objective of these guidelines is to ensure that mutual funds do not use unethical means to sell, market or induce any Investor to buy units of their scheme(s) and mobilize funds on the strength of professional fund management and practice as well as sound risk management policies. These guidelines are mandatory. Mutual funds are required to ensure compliance with these guidelines both by intermediaries distributing their products and through them, sub-broker acting on behalf of such intermediaries.

9.NBFC Regulations - The Reserve Bank of India Act

The RBI is entrusted with responsibility of regulating and supervising activities of NBFCs by virtue of power vested in Chapter III B of the Reserve Bank of India Act of 1934 ('RBI Act'). The RBI Act defines an NBFC under Section 45-I (f) as:

'a financial institution which is a company;

' a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner;

' and such other non-banking institution or class of such institutions as the RBI may, with the previous approval of the Central Government and by notification in the Official Gazette, specify.'

MAJOR PROBLEMS

INTERNAL PREOBLEMS:

1. Restrictive or penal order may be passed against SMC by SEBI in ongoing and / or future proceedings that could restrict, stop or hamper their operations or services, or a part thereof, or levy penalties in connection therewith, which may in turn adversely affect their operations and profitability.

2. There are certain criminal cases pending against the company and some of their Directors.

3. The Company and its Subsidiaries are involved in a number of legal and regulatory proceedings that, if determined against them or their Subsidiaries, could have a material adverse impact on our business, financial conditions and results of operations.

4. They have previously been penalized in past for not complying with the stock exchanges and regulator(s) directions and circulars and may face further penalties from any exchange and/or other regulatory bodies that govern them in cases of non-compliance in future.

5. Certain of their Subsidiaries and their Group Companies have incurred losses during the last three fiscal years and the four month period ending July 31, 2012, which may adversely affect their results of operations.

6. Negative cash flows in recent fiscal years.

7. Investment out of the Net Proceeds in certain of their Subsidiaries may be in the form of equity or unsecured loan. Should the Company decide to make an investment through unsecured loan, in the event of default on repayment of such loan or inability of their Subsidiaries to repay such loan, the Company will not be in a position to enforce any security in order to recover such loan amounts

8. They face intense competition in our businesses, which may limit their growth and prospects.

EXTERNAL PROBLEMS:

1. Political instability or changes in the Government could delay the liberalisation of the Indian economy and adversely affect economic conditions in India generally, which could impact their financial results and prospects.

2. The proposed adoption of IFRS could result in their financial condition and results of operations appearing materially different than under Indian GAAP.

3. Their business and activities will be regulated by the Competition Act, 2002 ('Competition Act') and any application of the Competition Act to them could have a material adverse effect on their business, financial condition and results of operations.

4. A slowdown in economic growth in India could adversely impact our business. Their performance and the growth of business are necessarily dependent on the performance of the overall Indian economy.

5. Their Equity Shares are quoted in Indian rupees in India and investors may be subject to potential losses arising out of exchange rate risk on the Indian rupee and risks associated with the conversion of Indian rupee proceeds into foreign currency.

6. Unfavorable changes in legislation, including tax legislation, or policies applicable to them could adversely affect results of operations.

7. Investors may not be able to enforce a judgment of a foreign court against them or their management.

8. There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect investors' ability to sell Equity Shares or the price at which Equity Shares can be sold at a particular point in time.

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ACHIEVEMENTS

' India's Best Currency Broker (Source: ICRA & Bloomberg-UTV Financial Leadership Awards, 2012 & 2011)

' Broking house with Largest distribution Network in the country (Source: BSE-D&B Equity Broking Awards, 2011 & 2010)

' India's Best Wealth management Company (Source : Business Sphere 2011)

' India's Best Equity Broking House (Source: BSE-D&B Equity Broking Awards, 2010)

' India's Best Market Analyst awards, 2012 for Equity Fundamentals - IPO & Commodities ' Viewers' Choice (Source: Zee Business Best Market Analyst Awards, 2012)

' Amongst top 10 financial firms in IPO Mobilization (Source: Prime Data Rankings, March 2012)

' Awarded as India's Fastest Growing Retail Distribution Network in Financial Services (Source: Business Sphere, 2010)

' Received Major Volume Driver award by BSE for 3 years consecutively (2004-05, 2005-06 & 2006-07)

' Best Equity Broking house in Derivative Segment in India (Source: BSE IPF-D&B Equity Broking Awards, 2013 & 2012)

' Fastest Growing Equity Broking House -Large Firm(Source: BSE IPF-D&B Equity Broking Awards, 2013)

' Emerging Investment Banker of the year (Source: SMEs Excellence Awards organised by ASSOCHAM)

' Best Equity Broking House in India (Source: BSE IPF - D&B Equity Broking Awards, 2015)

' Best Research Analyst Award in Equity Fundamentals -Infrastructure (Source: Zee Business - India's Best Market Analyst Awards, 2015)

' Award for Continuous Innovation in HR Strategy at Work by Employer Branding Award 2012-13

' Learning and Talent Technology Excellence Award by Star News HR and Leadership Awards, 2014.

SMC PARTNERS

PUNJAB NATIONAL BANK

Punjab National Bank, founded in 1895, carries a glorious history of 121years and has a nationwide footprint of around 7000 branches, thus being present in almost every city & town across the nation. It is India's Largest Nationalized bank, IInd largest Public Sector Bank & IIIrd largest among all banks in India. PNB offers all retail & corporate banking products & services and has a huge customer base of more than 8.5 crores. Further, on technology front, PNB also happens to be the only PSU bank with 100% CBS (Core Banking Solutions). 13th April 2009 was a historic day for SMC, as SMC entered into a strategic alliance with Punjab National Bank, the largest nationalized bank in India, for offering Online Trading services to PNB customers pan India.

An institution like Punjab National Bank, choosing to partner with us, simply speaks of the credibility and recognition of SMC. Now you can see you are most preferred & trustworthy financial advisor SMC, at more than 14,650 locations pan India (SMC's Network of 55 branches and 2800+ registered sub brokers and authorized persons , around 7000 PNB branches, 6800+ ATMs) and with this huge delivery channel, SMC is looking forward to meet the financial investments needs of crores of Indians.

With the PNB-SMC alliance in place, Punjab National Bank offers a 3-in-1 Online Trading account comprising of PNB Savings account, PNB Demat account & SMC Online Trading account wherein all three accounts would be integrated through one trading portal itself. This service would be available at designated PNB branches pan India. SMC, which provides Online Trading through its website www.smcindiaonline.co

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MARKET SHARE AND CURRENT POSITION

EQUITY MARKET:

SMC's market share was approximately 8.70% of the total turnover of NSE, BSE and MCX-SX in FY 16-17. It has been successful in generating a combined turnover of approx. Rs. 40.55 lacs crores in its capacity as trading and clearing member.

CURRENCY BROKING:

SMC's market share was approximately 8.75% of total turnover of MCX-SX, NSE Currency in FY 16-17. In FY 16-17, SMC has clocked combined volume of Rs. 8,80 lacs crore in its capacity as trading and clearing member.

However, recent restriction of open interest imposed by SEBI in currency segment will lead to reduction in turnover and revenue from the currency broking segment in FY 16-17

COMMODITY MARKET:

Their market share on MCX and NCDEX was approximately4.80%.

LITERATURE REVIEW

INTRODUCTION

Nearly two billion people are connected to the Internet. During the last twenty years, the technology revolution has had an intense and irreversible impact on the world and Indian stock market has also witnessed these changes.From its formal inception in the 19th century, the Indian capital market has come a long way and can be said to be in a maturity stage, backed by a developed legal system. The internet has made financial products and services available to more customers and eliminated geographical barriers.Earlier investors were solely dependent on their brokers but nowadays they are participating more in buying and selling of shares with the help of internet. E-trading has saved time, energy and money as it helps to access the market from anywhere at any time.

India was introduced to the Internet in the early 90's and the use started to increase rapidly. India stands 2nd in the list of countries in Asia by number of internet users. The Stock markets introduced Internet trading (online-trading) in February 2002 which has brought a tremendous change in trading. The National Stock Exchange started the first form of online trading wherein user/investors can buy/sell stocks in a day without much paper work. Earlier it used to take around 60 days to buy/sell stocks in stock markets and the investor also had to go through loads of paper work. But thanks to Internet the wait has curbed and in the last ten years, Indian capital markets have recorded 1788% of growth in exchange turnover.

The Indian exchanges and brokering houses have been very slow in moving their transactions online and the major reason has been the lot government regulations. The initial delay was due to laying down the specifications for creating Closed User Groups (CUGs). This issue was resolved between the Department of Telecommunications (DoT) and the Finance Ministry around 1998 and after that soon emerged the online trading portals like SMC Global Securities, IL&FS Investsmart, ICICIDirect.com, motilaloswal.com, sharekhan.com etc. Connectivity related issue was perhaps the most important technological factor.RBI made regulation that it is mandatory for company to store at least 7 year financial and transactional data.

In the non-stop, 24 hours a day, seven days a week world of investing, we are able to

' Obtain investment news around the clock

' Check quotes on exchanges all over the world ' day or night

' Easily compare one investment to another via numerous ratios, charts, graphs, and tables

' Screen for the best investments to fit our individual goals and requirements

' Trade stocks as easily and quickly as professional traders

' Calculate retirement needs based on various scenarios

' Regularly monitor portfolios and make necessary changes quickly and almost effortlessly

' Control the routing of individual trades for the best possible price and execution

Even many years after the launch of the first online brokerage firm, there remain a large contingent of individual investors who still pick up the phone and call their stock broker to buy and sell investments. However, every year a growing number of investors are placing their trades using online brokers. Though the trade through online broking is very miniscule compare to total trading, the signs are that it will grow to 45%-50%  in next few years.

INDIAN EXCHANGES:  NSE and BSE

The NSE and BSE are among the largest exchanges in the country handling very large daily trading volumes, support large amounts of data traffic, and have a very large nationwide network. The trading volume in year 2000 was huge with the average daily turnover in the capital markets segment at NSE is around Rs 2600 crore and in the derivatives segment, around Rs 1300 crore. The average daily traffic volume was around one million trades per day in the capital markets segment and around 50,000 trades per day in the derivatives segment and there were around 15,000 registered users in both segments and an average of around10000 users is logged in at a time. At BSE the average daily turnover in 2003-2004 (April-March) was Rs 1449.10 crore and the number of average daily trades was Rs 7.25 lakh.

THE NETWORK DESIGN

Any online exchange should always be-on, safe, secure, redundant and should have adequate backup & recovery processes. The Vice President of NSE-IT G.M Shenoy tells that the basic design objective of NSE was to provide fair, equal and transparent access across all NSE nationwide locations and to provide connectivity to the trading members as soon as possible.

RECOMMENDATIONS OF SEBI

The SEBI has also played an important role in the issue of the guidelines regarding online trading so that the chances of fraud and misrepresentation are minimized.The stock brokers which are being registered with Securities Exchange Board of India (SEBI) will have to apply to stock exchanges for a formal permission. The following conditions must be fulfilled-

' The online trading company must have a minimum net worth of Rs 50 lakh

' The encryption technology should be there in the system used by the brokers to ensure the provision for confidentiality ,security ,justifiability and reliability of data .The user id, first level and second level password, automatic expiry of passwords at the end of a reasonable period,

' The brokers must maintain adequate back-up systems and data storage capacity which must be checked by the stock exchanges.

' SEBI has recently announced that to reduce the fraud cases each and every  broking house has to give back the full amount of customer after each three month, they will have to show the zero balance of every customer's account  at the end of every 3 month

' To ensure the authenticity and accuracy of data a certification agency must be appointed using the certification technologies when notified by the government or the SEBI.

' The better client and the broker relationship to be maintained.

' To determine the risk associated with the clients the brokers must have the have sufficient verifiable information about clients and the stock exchange must ensure it.

' The clients must be taken into an agreement stating about all the obligations and rights including the minimum service standards to be maintained by the service provider broker for services specified by SEBI/exchanges for Internet-based trading from time to time.

' The web site of the broker providing the online trading facility should contain information rules and regulations affecting client broker relationship, arbitration rules, investor protection rules, etc meant for investor protectionAn e-mail should be sent to he investor for the confirmation of his Order or trade.

A separate working group has been set up to look into the surveillance and enforcement-related issues arising due to Internet-based securities trading. However, general anti-fraud provisions (SEBI Fraudulent and Unfair Trade Practices Regulations, 1995) will apply to all transactions involving securities or financial services, regardless of the medium.

ONLINE TRADING

Online trading involves investment activity which takes place over the Internet and it does not require physical inclusion of the broker. An investor has to register with an online trading portal like Investsmart.in, ICICIdirect.com, Religare, motilaloswal.com and sharekhan.com and many companies like that and investor gets into an agreement with the firm to trade in different securities according to the terms and conditions given on the agreement. As the servers of the online trading portal are connected all the time to the stock exchanges and designated banks the order processing is done in real time and investors can also have updates on the trading.

They can also check the status of their orders either through e-mail or through the interface that it cannot be accessed by a third party. Some options are usually given to users such as to link their bank account, Demat accounts and brokerage accounts into a single interface. A single window is also there for all exchanges and a single screen is there for the complete order routing mechanism. The hardware used comprises Web and application servers, switches, routers, firewalls and security devices, and specialized appliances. There are two broad models in play in the online brokerage space-

' Bank-backed firms

' Entrepreneur-floated firms.

Bank-backed brokerages such as AXIS direct and HDFC Securities have expanded on the basis of their brand name and the trust of investors in them. The integrated 3-in-1 accounts offered by these bank-backed brokerages help their parent bank by giving it accounts along with float income.

In second case i.e. Entrepreneur-backed companies like Investsmart, Indiabulls, Sharekhan,   Religare and IndiaInfoline have expanded by offering customers a mix of online and offline accounts, higher margin finance amounts and lower brokerage rates. Though the bank based has performed better but the latter have not lagged too far behind.

The reason why online trading has developed over conventional offline brokerage firms is that this conventional method struggled with unfavorable economies. Staff cost is just one example of it. As the markets opens for 335 minutes a day one dealer can at best execute 500 trades in a day while online company like ICICI direct executes 150,000-200,000 trades a day on the National Stock Exchange alone accounting for 3-4% of NSE trades of 5 million a day. It would require a large amount of dealers to service this demand. Besides the salary costs it would also demand huge expenses in real estate and support systems.

The offline model has got a downfall in the form of  lower bandwidth and IT costs and the cost of bandwidth has fallen to one-eighth of what it was in 2000 giving online broking an advantage especially in the case of lower-volume retail investors. In 2006, 20% of volumes on the NSE comes from this and it gone up to 50% in year 2008-2009 providing explosive growth for online broking in India.

To be a successful trading portal it will definitely depend on bunch of services provided by it for an end-user. Most of the portals charge a small registration fee and brokerage based on various conditions but it's important for the organization to keep focused on customer-centric services and delivery models to actually enjoy the most attention.

ADVANTAGES OF ONLINE TRADING

1. Provides with the Freedom of Information

The Internet provides a new sense of controlling our financial future as the amount of  investment information available online is truly outstanding. An investor can:  

' Know the price of any stock he desires at any point time on the internet.

' An investor can review the price history of any stock in chart format online

' An investor can follow in-depth the events happening in the market

' Helps an investor in receiving a wealth of free commentary and analysis about stock markets in the global economy

' Helps an investor to conduct an extensive financial research of any company he desires

' He may also consult with other investors online present around the world

 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.

2. Provides Control to Investors Money

When an investor wants to buy or sell stock he no longer needs to call his broker on the   phone thus helping in the execution of the order instantly on the internet.

3. Provides access to the market

Through the sophisticated information streams, dedicated trading platforms and sophisticated tools the investor can access the markets which provide more agility in buying and selling stocks.

4. Ensures the best price for investors

Some companies like Investsmart (IL&FS)specialize in the techniques which offer the best price deals for the buy and sell orders of the investors and traders providing the highlevel of transparency by displaying of information relating to the specific stocks and company profiles which help in getting the best quote for the orders.

5. Online trading offers greater transparency

Online trading offers the investors with greater transparency by providing with an audit trail. The process involves a complete integrated electronic chain starting from orderplacement, to clearing and settlement and finally ending with a credit into the depositoryaccount of the investor. All these stages are inspected which brings the transparency into thesystem.

6. Provides hassle free trading

Online trading provides an integration of the bank account, trading account anddemat accounts, which leads to easy and paperless trading for the client.

7. Online trading allows instant trade execution

Online transactions help in the quick execution of the entire trading transaction right from logging to the trader's site and to the settlement of the bank account in a veryshort period of time.

8. Online trading reduces the settlement risk

This method of trading reduces the settlement risk for the investor as when a short sell order is played the orders are squared off at the specified cut-off time and are not allowed to be carried forward.

.

9. Online help desk

Some companies provide online help desk an investor cancan contact the TeleTrading Executives from the Tele Trading team during and after market hours and canclarify questions.

10. Instant order trade confirmations

Through online trading every trade is confirmed immediately and investor receives anon-screen confirmation following every trade with full details for the investors recordswhich avoids costly errors that would have been discovered when it is too late.

11. Keeps Information Secure

As per the guideline provided by SEBI every effort has to be made to keep theinvestors account and personal information secure by use of encryption technology andupdated security technology to advanced fraud prevention measures.

DISADVANTAGES OF ONLINE TRADING

' In online terminal, investor can't get customized expert advice, whereas in offline the broker gives suggestions according to investors strategy (i.e. short term or long-term)

' Brokerage is high compared to offline.

' Privacy is less due to hacking scandals

' Transactional errors due to technical problems

INDIAN E-BROKING SCENARIO

The Indian stock broking business has gone through a sea of changes. From that of a business dominated by few individual players to institutional members, as did trading open outcry and hidden deeds to screen best and transparency. India enters the cyber-trading era to equal the current market trends taking into consideration the need to facilitate inflow of funds in the capital market. The trading system will enable all categories of investors, resident and non-resident Indian, to trade online. Online brokerage in India is still in its early days. In India online trading has not still grasped the market, but has done a very important amount of progress in the past years and the future of online trading is bright. That is why many new companies are coming into this form of business structure and the existing companies are changing to this new format besides offline and other traditional forms of business. With only a mere share of 10% online trading a combined gross turnover of around Rs. 27,08,279 crores handled by the NSE there is a much greater scope for online trading.

TRADING VALUE OF DIFFERENT MARKET SEGMENTS

SEGMENT/YEAR 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Capital Market 1945287 3551038 2752023 4138024 3577412 2810893 2708279

Equity Futures & Options 7356242 13090478 11010482 17663665 29248221 31349732 31533004

Wholesale Debt Market 219106 282317 335952 563816 559447 633179 688788

Currency F&O* ------ ------- 162272 1782608 3449788 4674990 5274465

Interest Rate Futures** ------ ------- ------- 2975 62 3959 0.22

Total 9520635 16923833 14260729 24151088 36834929 39472753 40204536

*Trading in Currency Futures commenced on August 28, 2008

**Trading in Interest Rate Futures commenced on August 31, 2009

Internet Trading Value in the CM segment in comparison

With total trading volumes at NSE

YEAR ENABLED MEMBERS REGISTERED CLIENTS INTERNET TRADING VALUE (RS. Cr.) INTERNET TRADING VALUE (US $ Bn.) PERCENTAGE OF TOTAL TRADING VOLUME

2010-11 242 2279098 337524 77.43 17.35%

2011-12 305 4405134 668399 167.23 18.82%

2012-13 349 5627789 692789 135.97 25.17%

2013-14 363 5145705 921380 204.12 11.13%

2014-15 387 5640513 765271 171.39 10.70%

2015-16 428 6148447 597430 116.78 10.63%

445 6268798 583073 107.20 10.7%

* At the end of the financial year

Trading value are calculated as buy side + sell side turnover

Above data is based on statistics on Internet Based Trading uploaded by members.

Reasons for the emergence of online trading in India

The reasons for providing online trading facility to investors by the Indian companies are various. They are as follows:

' Online trading has a very good future in India as it is not exploited properly so far.

' Consistent increase in the number of users of internet.

' Consistent increase in the number of personal computer users.

' Part of diversification.

' Less investment in technology and other areas compared to the returns.

' More awareness in investors about the stock market.

At present some of the dominant players in the online trading market of share market are '

 

 

 

 

CHANGES IN ONLINE TRADING MECHANISM

Earlier the organizations which provided the facility of online trading were not safe enough to invest but some of the changes in the past years in the Indian share market have created the interest of trading in the shares by the people. Broadly we can classify three important factors which have contributed to the development of online trading in India-

Firstly the major step was taken by the National Stock Exchange (NSE) in the year 1994 which allowed the electronic trading and seeing to this various other stock exchanges in India followed soon. This helped in making the fast, accurate and transparent transactions saving a lot of time then the traditional method of trading. The investors were also saved by the clutches of the fraud brokers at the times when the clients were not aware of the true prices of the shares.

 Secondly, in the year 1996 the dematerialization of the shares came (also known as DEMAT) which avoided the online presence of shares in an electronic form avoiding them from theft, pilferage or from other losses like counterfeiting and frauds regarding share transfer.

The third step was the rapid growth of computer education and learning of internet by the people. With the evolving of internet the online trading became a hit and the investors became confident in investing just with a click of a mouse.

With the happening of such events the ratio of trading has improved a lot. As it takes less time people praise this technology for trading purposes. Some people who traded rarely now even trades 2-3 times every day as it provides edge of researching about companies on the internet. The number of small investors is increasing on the daily basis that trades on the internet.If a person invests or trades in equities, derivatives, commodities etc through the use Internet it is known as online trading enabling the investor to connect electronically to buy or sell stocks, derivatives etc with the other investors. This can be done with the help of online service providers like investsmart, indiaInfoline etc. A person can access a stockbroker's website through a PC connected to Internet and can place his orders. The benefits are-

' A person can see the latest market movement through streaming quotes.

' Reduces time lag due to self-execution and instant confirmation.

' Empowers traders to have a complete control over their trading decisions.

' A person can access his accounts and related information on the Website.

' Provides greater convenience of trade as a person can trade from home or other convenient location.

' It is cheap in terms of cost associated and offers reduction in overheads

' A trader can view the historical charts on his computer.

GROWTH OF ONLINE TRADING

According to an article by Krishnamurthy B in 2006 after inception of online trading in India in the year 2000 online trading is gained momentum with trading volumes growing by 150 per cent per annum in the years 2003-2006 and it was more than approx. 200% in the year 2008 The volume of all trades executed through the Internet on the National Stock Exchange had grown from less than $1 billion in June 2003 to over $110 billion in year 2016 -17. In the starting of 2008 the growth of online share was good but at the mid of the year when subprime crisis affected India including all over the world, market of online trading got shrunk by more than 50%.

Now the growth of online trading is on its right track, Indian stock market has been announced the one of the safest and stable market of the world, so here in India the online trading is growing like anything in comparison to the whole world

At the end of year 2016-2017 there were more than 70,00,000 registered clients on the NSE and the amount of Internet trading to about 109.20 billion dollars. In the year 2016India  has 145crore internet users,the percentage of internet user is growing in each year

At the same time the number of subscribers trading through the portal of Kotak Securities had gone up significantly by 180 per cent and the number of online trading customers had grown from 45,000 to 90,000. And the company expected to have at least 140,000 customers by the end of that fiscal. In the recent past years of 2010 ICICIDirect and Indiabulls recorded an annual volume growth of 100 per cent and Indiabulls had about 30 per cent of India's online trading volumes.Today the total volume of online trade in India is about 10-15% of total trades.

According to brokers the better broadband connectivity across the country and wider awareness of equity as an asset class will raise the online trade volumes to over 50% of total trade.In India the demography is such that 75% of the population is under the age of 36 and more than 50% of the 75% is under age of 25 and this is another supporting factor

The Chief Executive of Reliance Money Ltd says that online investing is still at a nascent stage in India and expects that Internet-based trading will eventually take about half of the total stock market trading as like with developed markets such as the US. Philippines has the highest online trade with about 55-60% execution of trade is online. The reason is because they had wider Internet connectivity years before India. The biggest challenge in India remains better Internet connectivity. The earlier Web-based technology used for Internet trading has been replaced by specialized software which gives real-time global data streaming rates to trader helping investors to analyze the market trends and helps in faster execution of trades. Earlier the investors made trade calls over the phone which sometimes led to the delays.

2008-09 and after that there was a sharp decline. This decline was a result of the crash which took place in the market in mid-year 2008. After that there has been a stable growth in online trading and this growth is slowly gaining momentum.

"Issues that need to be addressed are education on cybercrime and the security solutions around it," says Vinesh Menon, Deputy CEO & Head for Online Investment & Branch Channel, Bajaj Capital

"It's a matter of time when we will see exponential growth in the online trading segment, not just through the computer but also through our mobile phones," adds Menon. With over 20 million investors, India boasts of the third highest investor base in the world, unthinkable till a few years ago. The most online stock broking companies started from 2000 onwards because of development of global Internet economy and for years 2000 to 2003 the stock market was under a bear hug. The intense competition among a new wave of online brokerage companies hammered down brokerage rates from 1% (in 2000) to 0.25 %, or even lower to 5 paisa.

The number of investors opting for online trading has gone up manifold, according to the recently published 'India's Leading Equity Broking Houses, 2012' by Dun & Bradstreet (D&B). The publication says that less than 10% of the 191 broking firms surveyed reported huge growth in opening of e-broking accounts and some firms saw a surge in value of up to 400% in e-broking during 2012.

According to the report, numbers of e-broking accounts registered in 2012 have grown exponentially. Indiabulls Securities Ltd added 4,51,611 accounts while a relatively new firm in the industry, Reliance Money added 2,15,678 accounts during the same time period. Motilal Oswal Securities Ltd managed to add 19,065 accounts while Unicon Financial Intermediates Pvt Ltd could increase their e-broking accounts by 13,787.

 E-broking is contributing a sizeable portion to the trading volumes and also to the revenue generated for leading stock broking firms. Some examples of the percentage contribution to trading volumes contributed by e-broking are 91% in case of Reliance Money, 62% for India Bulls, 20% each for ASL Capital and Shreyas Stock, 19% Angel Broking, and 15% Farsight Capital. In respect of revenues generated from e-broking, India Bulls (63%), Reliance Money (54%), Unicon Financial (30%) and Shreyas Stock (20%) reported higher shares in 2012.   

Another significant trend is the growth in international business of broking firms. Firms that reported presence of offices outside India include Reliance Money, Motilal Oswal, Karvy Stock Broking, JRG securities, Vogue and Bonanza Portfolio.

ANALYSIS

QUESTION:  Age group of the sample?

AGE FREQUENCY TOTAL

21-30 IIIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII 50

31-40 IIIII IIIII IIIII IIIII IIIII IIII 29

41-50 IIIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII 55

51-60 IIIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII III 63

60+ III 3

INTERPRETATION

As majority of my respondents are the employees or the customers of Punjab National Bank they mainly fall in the age group of 41-60 i.e. 59% of the total population (31.5% of 51-60 and 27.5% of 41-50 respective age groups).  25% of the respondents are of the age group 21- 30 consisting majorly of students.

QUESTION:  Gender

GENDER FREQUECY TOTAL

MALE IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII 113

FEMALE IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII II 87

200

INTERPRETATION

113 of the 200 respondents (56.5%) are male and 43.5% of the sample is female.

QUESTION:  What is your occupation?

OCCUPATION TOTAL

SERVICE 156

PROFESSIONAL 15

HOUSEWIFE 2

BUSINESS 10

STUDENT 17

INTERPRETATION

78% of the respondents are in service as the sample mainly consisted of employees of Punjab National Bank. 8.5% are students and 7.5 % are professionals. 10 out of 200 respondents are heading their own business and 2 respondents are housewives.

QUESTION:  What is your annual income?

ANNUAL INCOME GROUP FREQUENCY TOTAL

BELOW Rs.100000 IIIII IIIII IIIII IIIII IIII 24

Rs.100000- Rs.200000 IIIII IIIII IIIII III 18

Rs.200000-Rs.300000 IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIII 39

Rs.300000-Rs.400000 IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII 40

Rs.400000+ IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIII 79

200

INTERPRETATION

There is a close relationship between the age group and the income group higher the age group higher is the income level. 59.5% of the respondents are of the income level Rs. 300000 to Rs. 400000+.  39.5% of the respondents are of income level of more than rupees four lakh closely followed by 20% respondents who are of the income level between rupees three lakh to four lakh.  19.5% of the respondents are of the income level between rupees two lakh to three lakh. Mainly the respondents of this income level are of the age group 31- 40 years.

QUESTION:  Do you invest money in the stock market?

INVEST IN STOCK MARKET TOTAL

YES 47

NO 153

INTERPRETATION

76.5% of the respondents do not invest their money in the stock market. This trend is very closely connected to the age group of the respondents. As majority of the respondents are of the age group between 41 to 60 years, they are very risk averse. They feel that investing money in the stock market is a risky affair and hence do not prefer this facility. Another reason for not investing in stock exchange is that majority are nearing their retirement age and do not feel appropriate of taking risk with their savings. 23.5% of the respondents who do invest in the stock market are of younger age or have excess money available to them. These include respondents with occupation such as business or professions or are of age 60+.

QUESTION:  What percentage of your monthly household income could be available for investment?

INCOME AVAILABLITY FOR INVESTMENT TOTAL

LESS THAN 5% 98

5% - 10% 58

10% - 15% 20

15% - 20% 14

20%+ 10

INTERPRETATION

49% of the respondents are only willing to invest less than 5% of their monthly household income. This is mainly due to the factor that the sample size of my research is majorly of age group 51-60 years and hence is very risk averse and non-speculative in nature. 29% of respondents are willing to invest anything from 5% to 10% of their household income. 10%-15% of household income is available for investment by 10% of the respondents. 7% of the respondents are ready to invest 15%-20% of their income and 20% of income is available for investment by the remaining 5% of the respondents.

QUESTION:  Where do you often invest your money?

INVESTMENT OPTIONS TOTAL

EQUITY 12

COMMODITY 4

MUTUAL FUND 17

INSURANCE 65

TERM DEPOSITS 103

REAL ESTATE 10

NONE 4

INTERPRETATION

Term Deposit is most preferred investment option by the respondents. It is popular among the respondents because it is less risky and easily available as compared to other investment options. As the large portion of my sample size is in the age bracket of 41-60 this is an expected trend. Similarly going by this trend the second most preferred investment option is insurance. Insurance is viewed as a safe and relatively risk free investment option in which returns are little higher than term deposits and the respondents feel that it is a secure mode of investment.

QUESTION:  What is the primary objective of your investment?

OBJECTIVE OF INVESTMENT FREQUENCY TOTAL

CAPITAL APPRECIATION IIIII IIIII IIIII III 18

SOURCE OF INCOME IIIII IIIII III 13

RETIREMENT PLANNING IIIII IIIII IIIII IIIII III 23

WEALTH PRESERVATION IIIII IIIII IIIII 15

TAX BENEFITS IIIII IIIII IIIII IIIII IIIII IIIII II 32

RISK COVERING IIIII IIIII IIIII IIIII IIII 24

LIQUIDITY IIIII IIIII I 11

RETURN IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIII 79

NONE IIIII 5

OTHERS 0

INTERPRETATION

The main reason for the respondents for investing their income is to make sure that they get returnson their investments. Returns are the most preferred objective chosen by the respondents which is in clich'' to the responses to the previous questions.  In previous questions majority of the respondents are opting for options which are risk free or offer security to their income. If the main objective for investment for the respondents is to earn returns then they should have been opting for investing their income in Equity, Real Estate, etc instead of Term Deposit and Insurance. The second preferred objective for investment is Tax Benefits which is closely followed by Retirement planning and Risk Covering.

QUESTION:  Do you have any knowledge of share market?

KNOWLEDGE OF SHARE MARKET TOTAL

YES 98

NO 102

200

INTERPRETATION

49% of the respondents have knowledge about the share market and the remaining 51% have no clue about how or what is share market.

QUESTION:  Which kind of service you prefer?

SERVICE PREFERRED TOTAL

ONLINE 1 88

OFFLINE 2 26

BOTH 3 41

NONE 4 45

INTERPRETATION

88 out of 200 respondents prefer the online service for trading i.e. 44% making it the most preferred service among the respondents. 13% of the respondents prefer offline services, these are people who are in higher age bracket and hence find the use of technology a little difficult.

QUESTION:  Do you owe a computer?

OWNER OF A COMPUTER TOTAL

YES 185

NO 15

INTERPRETATION

92.5% of the total respondents are having computer in their house and only 7.5% are not having computer in their house.

The people who are having computer that is 185 can also go for online trading which can be a large number of people who will go for online trading. They will not need to do an additional investment for computer to go for online trading. 7.5% respondents who do not have their own computer are those who are either of lower income group or are of high age group, who find it difficult to use the new technology.

QUESTION:  To operate a computer is easy for you?

OPERATING A COMPUTER IS EASY TOTAL

STRONGLY AGREE 58

AGREE 131

CANNOT SAY 7

DISAGREE 4

STRONGLY DISAGREE 0

200

INTERPRETATION

94.5% of the respondents find operating a computer easy. Majority of the respondents who find operating a computer easy are themselves the owner of a computer. 58 out of the 200 respondents Strongly Agree with the statement that 'Operating a Computer is Easy' and 131 of the respondents Agree with the same statement. There are 3.5% of respondents who cannot comment on this statement because they do not use or own a computer. 2% of the respondents disagree with the statement stated above.

QUESTION:  Do you have any Demat or Trading account?

HAVE DEMAT / TRADING ACCOUNT TOTAL

YES 54

NO 146

INTERPRETATION

In present scenario it is a compulsion for any trader to have a Demat and Trading Account if they want to trade online, even if it is through a brokerage firm. 27% of the respondents are the owners of such account and hence are active trading members in the stock market. 73% of the respondents do not have Demat/Trading Account. These can be viewed as prospective customers as majority of them are owners of computers and do find operating a computer easy and prefer the Online Service for trading.

QUESTION:  With which company do you have your Demat and Trading account?

COMPANY WITH WHICH THEY HAVE DEMAT/TRADING ACCOUNT TOTAL

SMC GLOBAL 1

INDIA INFOLINE 0

SHAREKHAN 5

ICICI DIRECT 15

HDFC SECURITIES 0

INDIA BULLS 1

PNB 26

OTHERS 6

NONE 146

INTERPRETATION

Out of the 54 respondents who are the owner of either Demat/Trading Account, this question was put to them to find out with which brokerage firm they have these accounts with. As a large portion of my sample is the employees or clients of Punjab National Bank, it is not a surprise that majority of the respondents are have a Demat Accout with the same. 48.148% of the respondents who have either of the accounts have it with Punjab National Bank.27.78% of the respondents have their account with ICICI Direct. These findings suggest that respondents prefer services with companies which provide all the services under one roof i.e. Savings Account, Demat Account and Trading Account, rather than going to a brokerage firm.

QUESTION:  Online trading is secure way of trading. Do you agree?

ONLINE TRADING IS SECURE TOTAL

STRONGLY AGREE 28

AGREE 86

CANNOT SAY 70

DISAGREE 13

STRONGLY DISAGREE 3

INTERPRETATION

43% of the respondents find online trading is secure as compared to offline trading. 35% of the respondents feel that they cannot comment on the security of online trading. 14% of the respondents feel very strongly about the security of online trading. 13 out of the 200 respondents do not agree with the statement that, 'Online Trading is Secure'.

QUESTION:  Online trading is easy and fast way of trading. Do you agree?

ONLINE TRADING IS EASY AND FAST TOTAL

STRONGLY AGREE 55

AGREE 78

CANNOT SAY 65

DISAGREE 2

STRONGLY DISAGREE 0

INTERPRETATION

27.5% of the respondents strongly agree with the statement that online trading is easy and fast. 39% agree with the same. 65 of the 200 respondents have no view regarding the functionality of online trading and 1% of the respondents do not agree with the statement and feel that it is not an easy and fast way of trading in comparison to offline trading.

QUESTION:  Introduction of online trading has helped to attract the new investors thus increasing the trade volumes at stock market. Do you agree?

ONLINE TRADING HAS HELPED ATTRACT NEW  INVESTORS TOTAL

STRONGLY AGREE 49

AGREE 87

CANNOT SAY 64

DISAGREE 0

STRONGLY DISAGREE 0

INTERPRETATION

68% of the respondents agree that the facility of online trading has helped attract new investors in the Indian capital market.  32% of the respondents have no opinion regarding the same. This can be inferred by the fact that many of the respondents do not have any knowledge about the share market.

QUESTION:  What factors would you consider before choosing a brokerage firm?

FACTORS CONSIDERED BEFORE CHOOSING A BROKERAGE FIRM TOTAL

RESEARCH REPORT 14

FUNDING FACILITY 17

BROKERAGE RATE 72

TRADING PLATFORM 17

ACCOUNT OPENING CHARGES 7

OTHERS 0

NONE 71

INTERPRETATION

36% of the respondents consider the Brokerage Rate charged by the broking firm before selecting the firm with which they will open their trading account. As a large portion of my sample does not have any knowledge about the share market this explains the reason why 35.5% of the respondents do not consider any factor before selecting a broking firm as they are not interested in trading itself.

QUESTION:  How often do you trade?

TRADE FEQUENCY TOTAL

DAILY 0

WEEKLY 1

MONTHLY 23

YEARLY 24

OTHER 3

NONE 149

INTERPRETATION

74.5% of the respondents do not trade at all. This was an obvious outcome as a large size of my sample does not have any knowledge of share market and also they do not have either a Demat or Trading Account. Out of those people who do trade 12% of them trade yearly and 11.5% trade monthly. None of the respondents trade daily and only 1 respondent trades weekly. Another 1.5% of the respondents trade very rarely.

QUESTION:  Do you know about SMC Global?

KNOWLEDGE OF SMC GLOBAL TOTAL

YES 25

NO 122

PARTIAL 53

INTERPRETATION

61% of the respondents are not aware about SMC Global. This can be because of two reasons:  

a. As the respondents of my questionnaire are not really big enthusiasts towards the stock market, they may simply ignore all the aspects related to the same.

b. There is lack in effort by the management of SMC Global in generating awareness about itself in the market either through advertisements or any other form of promoting itself.

Respondents who are either completely aware or have partial information about SMC Global are the employees of Punjab National Bank. They have knowledge about SMC because of the collaboration between the two institutes. 12.5% of the respondents have complete knowledge of the company and the remaining 26.5% of respondents have partial know how about the company.

QUESTION:  Are you interested in opening an account with SMC Global?

INTERESTED IN OPENING AN ACCOUNT WITH SMC GLOBAL TOTAL

INTERESTED 22

NOT INTERESTED 118

WILL THINK ABOUT IT 20

NEED MORE INFORMATION 38

OTHERS 2

INTERPRETATION

59% of the respondents are not interested in opening an account with SMC Global. This was a predictable outcome, as stated earlier majority of the respondents of my questionnaire are of higher age group and lack any knowledge about the share market. 19% of the respondents need more information about SMC and facilities offered by it before making any decision. 11% of the respondents are definitely interested in opening an account with SMC and 10% of the respondents will definitely give consideration to the idea of opening an account with SMC Global.

FINDINGS

Having carried out a comprehensive analysis of the findings after having interacted with 200 respondents, I have derived the following inferences:

I. A large chunk of the respondents neither have the knowledge of share market nor are they investing into the stock market. For a marketer there is a huge untapped potential.

II. There is a clear risk adverse attitude among majority of the respondents in 50+ age group. However around 40% of them also want high returns. There is scope for educating these customers on risk-reward matrix and they can be persuaded for a wider spread, a portion which can be into stock market instruments.

III. Majority of the respondents prefer either Term Deposits or Insurance based investments. There is scope for persuading them to consider pooled investment in stock market.

IV. Among those who are open to considering stock market related investments there is a preference for online trading. So there is scope for simultaneous marketing of product and trading mode.

V. Access to technology is a constant rather than variable as almost all of them have access to computers. No separate marketing strategy needs to be factored.

VI. Demat/Trading Accounts have low penetration and, in my view this offers an excellent opening.

VII. ICICI Direct is identified as a major competitor for SMC Global Securities in terms of Demat/Trading Accounts. Although my questionnaire did not have a direct question on this, during discussions it appeared that they take this service as an add on from their trusted banker. For SMC to succeed it has to be demonstrated that as an area of core competency SMC can handle these Accounts with valuable additional services.

VIII. There is generally positive inclination towards online trading being secured, easy and fast barring a very small minority. So there are not going to be many objections on the count of security against a push for online trading.

IX. There is a general view that online trading would propel more customers than offline trading. Increasingly because of busy professional lives people want flexibility in all their activities, and online trading provides them this ease through its anywhere anytime features.

X. The service differentiation may be a major driver for selecting the provider of a service; the brokerage rates provide an upfront comparison at the point of making the initial choice. So while service differential may be a factor for customer retention, SMC will have to demonstrate that it is competitive on brokerage rate. For 36% of the respondents it is the most important consideration.

XI. SMC has to do a lot of work for popularizing itself as a brand. The awareness in the sample group is low. Only 12.5% know about the company and its activities, and 61% have not even heard about it.

XII. There was not much keenness about opening accounts with SMC. This is directly proportionate to the level of awareness about the company.

CONCLUSION

The online trading is growing with a rapid pace with the rising level of education among the customers. The other factors being that the Indian Investor nowadays wants to deal himself in trading rather than depending upon other middlemen. They also consider the factors like time saving in doing the online transactions, convenience etc. Although some people feel that online trading is not secure but the people doing the trading online is happy about the increasing security concerns among the companies.

The year 2012 ' 13 has not been so good for the stock market due to economic slowdown and the Sensex and Nifty has been dipping and affecting the business negatively for these companies. This is why the confidence of investors was very low towards the economy and hence people did not prefer to open the DMAT and Trading accounts. So the companies have to reduce their account opening fees to attract more and more customers. Also people trade very less in the bearish market and the company's profits against brokerage fees soars downwards. It is also a found fact that during the bearish market the ratio of online trading becomes very less. Also there is an intense competition among the companies and the companies come up with new and new promotion schemes such as discounted and negotiable brokerages, Zero balance accounts, waiving a/c opening fee and AMC etc. As the internet penetration is growing in India this business holds a huge potential for growth.

Now if the existing company will have to capture the market they will have to look for the innovation in their product as well as service mix

The mantra for success in the current situation will be educating the customers about the benefits of online trading and the amount of ROI that can be generated through it.

RECOMMENDATIONS

' The companies should come up with more and more innovative features in their web portals.

' We came to know about most important factor about the product with the help of factor analysis , so we should go for change the product according to the customer need

' We should also focus upon the value added services. Generally company does claim that if you will by the product you will get these benefits but company doesn't provide the services here. So services always does matter when we talk of ONLINE TRADING

' Company should also look  for the problem which customer generally face when they do trading (like problem of operating properly)

' The customer should be educated regularly regarding the new technologies and techniques of trading online and also other relevant information.

' The companies should look after to develop more safe and secure ways of transacting business online.

' The companies should make maximum efforts to detect fraud cases and minimize them.

' Company should carry out strategic campaigns for grand popularization.

' It should also consider being a part of financial literacy program.

' Company should consider synergy with financial institutions with large customer base who are not actively involved in equity products, mutual funds, etc.

INDUSTRY RELEVANCE

 My research project is Quite Relevant to the Investment Industry. The following things can be useful for SMC GLOBAL SECURITIES

' SMC will be able to know their market position with other competitors.

' The company will also get to know some areas of improvement which came forward through my research.

' The changing perception of Indian consumers and their requirements will also be made clear.

' The company will be able to do the effective segmentation of their market based on the research analysis.

' The investment companies at large will be able to understand how to keep themselves abreast with the changing technology.

LEARNINGS

The two month summer training was a good experience for me to learn the practical aspects of the corporate life.

' I improved my communication skills by learning how to talk to different kind of people as it requires the different approach to handle each person.

' I learnt how to manage a team of member to achieve a goal

' I learnt to how handle the pressure under difficult situations.

' I became aware about various aspects of working of stock exchange

' I learnt few  things about back office work

' I learnt about the consumer perception about the stock market and online trading.

' Patience was the thing I learnt the most as I have to approach the clients who were to be explained same things again and again while approaching or calling them at regular Intervals.

QUESTIONNAIRE

1. NAME: ''....................................................................................................

2. AGE: ''''''''''

3. GENDER:  '''''''''...

4. OCCUPATION: '''''''''..

5. E-MAIL: ''''''''''..

6. What is your annual income?

' Below 100000

' 100000 - 200000

' 200000 - 3000000

' 300000 ' 400000

' 400000+

7. Do you invest your money in Stock Market?

' Yes

' No

8. What percentage of your monthly household income could be available for investment?

' Less than 5%

' 5% - 10%

' 10% - 15%

' 15% - 20%

' 20%+

9. Where do you often invest your money?

' Equity

' Commodity

' Mutual Fund

' Insurance

' Term Deposit

' Real Estate

10. What is the primary objective of your investment?

' Capital appreciation

' Source of income

' Retirement planning

' Wealth preservation

11. Do you have any knowledge of share market?

' Yes

' No

12. Which kind of service you prefer?

' Online

' Offline

' Both

13. Do you owe a computer?

' Yes

' No

14. To operate a computer is easy for you?

' Strongly agree

' Agree

' Cannot say

' Disagree

' Strongly disagree

15. Do you have any Demat or Trading account?

' Yes

' No

16. With which company do you have your Demat and Trading account?

' SMC Global

' India Infoline

' Sharekhan

' ICICI Direct

' HDFC Security

' India Bulls

' Others (Specify) ____________________

17. Online trading is secure way of trading. Do you agree?

' Strongly agree

' Agree

' Cannot say

' Disagree

' Strongly disagree

18. Online trading is easy and fast way of trading. Do you agree?

' Strongly agree

' Agree

' Cannot say

' Disagree

' Strongly disagree

19. Introduction of online trading has helped to attract the new investors thus increasing the trade volumes at stock market. Do you agree?

' Strongly agree

' Agree

' Cannot say

' Disagree

' Strongly disagree

20. What factors would you consider before choosing a brokerage firm?

' Research report

' Funding facility

' Brokerage rate

' Trading platform

' Account opening charges

' Others (Specify)''''__________________

21. How often do you trade?

' Daily

' Weekly

' Monthly

' Yearly

' Other (specify) ____________________

22. Do you know about SMC Global?

' Complete

' Partial

' No

23. Are you interested in opening an account with SMC Global?

' Interested

' Not interested

' Will think about it

' Need more information

' Others (Specify)  ______________

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