Demat Operations Case Study for Integrated Enterprises

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A Descriptive Model on ‘Demat Operations’ – A case study for
Integrated Enterprises (India) Ltd

Introduction:

Depository Participant (DP):

The investor obtains Depository Services through a DP of NSDL. A DP can be a
bank, financial institution, a custodian, a broker, or any entity eligible as per SEBI
(Depositories and Participants) Regulations, 1996. The SEBI regulations and NSDL bye
laws also lay down the criteria for any of these categories to become a DP.

Just as one opens a bank account in order to avail of the services of a bank, an
investor opens a depository account with a DP in order to avail of depository facilities.
Though NSDL commenced operations with just three DPs, Depository Participant
Services are now available in most of the major cities and towns across the country.

Demat Trading:

Instead of signing the transfer deed as seller and delivering share certificates to a broker,
you shall give your DP debit instruction when you sell your shares in the electronic form.
You can trade through any broker of your choice registered with the stock exchanges
connected with NSDL but will have to provide the details of your account with the DP.
The money would be received from the broker/ paid to the broker in the same fashion as
done in case of buying/ selling of physical shares. The DP will provide you a statement
updated every fortnight giving details of your holdings.

Shares bought in the electronic form can be pledged/ hypothecated by making application
to the DP in the prescribed form. For the purpose of calculation of capital gains tax, the
cost of acquisition of shares would be determined on the principle of first in first out. The
process of opening an account with a DP is similar to the opening of bank account.
Photograph, Introduction and signing the prescribed agreement form are some of the
requirements.

If there are any discrepancies in your holdings statement or pass book entries, you can
contact your DP. If the problem cannot be resolved at DP end, you can approach NSDL.
There is absolutely no restriction to the number OD DPs you can open accounts with. Just
as you can have savings or current accounts with more than one bank, you can open
accounts with more than one DP.

There is no minimum balance required for your account with DP. In fact you could have
nil security in your account.

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What's the security that a person has with respect to proof of his holdings? Upon opening
an account with DP, you sign an agreement where the DP indemnifies you for any misuse
of your holdings.

When any company announces right, bonus or dividend for a particular security, the DP
will give details of the clients having electronic holdings of that security as of record
date/ book closure to the registrar. The registrar will then calculate the benefits due to all
shareholders. The disbursement of cash benefits like dividend or interest will be done by
the registrar whereas distribution of securities entitlements will be done by the DP based
on information provided by the registrar

The investor retains the choice of receiving the corporate benefits in physical or
electronic form. For discrepancies in corporate benefits in the form of securities, you can
approach your DP who will then approach the registrar. In case of discrepancies in cash
benefits, you will have to contact the registrar directly.

Features of Demat services in Integrated Enterprise (India) limited

In our continuous endeavor to offer the best services to our customers, we provide the
following benefits:

• Highly competitive service charges
• Wide network of 112 branches across the country
• Secured transmission and storage of data
• Statement of Holdings updated on hourly basis in our websites
• Complete range of demat related services
• Managed by a team of well organized and specialized personnel
• Quick, efficient and simple procedures
• Online services such as Speed-e and IDeAS
• Relationship Scheme
• Trading services
• Online connectivity with Head Office
• Full fledged Back Office System
• Tax related processing services are also conveniently available to all account
holders

Demat Process:

A request form together with the share certificates desired to be dematerialized is given to
the DP. He sends the request along with the share certificates to the company/ registrars
through NSDL for confirmation of its genuineness. After checking the records, the
registrar will destroy the certificates and sends confirmation of dematerialization to
NSDL. NSDL then confirms the dematerialization of shares to your DP to credit the
holding of shares in your account electronically. This takes about 15 days from the date

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of request. Electronic holdings can be converted back into certificates, if so desired, in a
similar fashion as that for dematerialization.

Benefits of Demat:

In the depository system, the ownership and transfer of securities takes place by means of
electronic book entries. At the outset, this system rids the capital market of the dangers
related to handling of paper. NSDL provides numerous direct and indirect benefits, like:

♦ Elimination of bad deliveries-

In the depository environment, once holdings of an investor are dematerialized, the
question of bad delivery does not arise i.e. they cannot be held "under objection".
Statistically, in the physical environment, about 20% of delivered stock constitutes bad
deliveries. Of these, about 1% is ultimately absorbed by the system as bad delivery cost.
Rectification of objection usually involves extensive follow up by the investor. Also, the
investor cannot sell the securities till they are registered. This means that in the physical
environment, every fifth person taking delivery of stock gets securities, the genuineness
to which there is a doubt whereas he parts with genuine funds

♦ Elimination of all risks associated with physical
certificates-

Dealing in physical securities have associated security risks of theft of stocks, mutilation
of certificates, loss of certificates during movements through and from the registrars, thus
exposing the investor to the cost of obtaining duplicate certificates and advertisements,
etc. This problem does not arise in the depository environment
No stamp duty for transfer of equity instruments & units of mutual funds in the
depository
(In case of physical shares, stamp duty of 0.5% is payable on transfer of shares).

♦ Immediate transfer and registration of securities
–

In the depository environment, once the securities are credited to the investors account on
pay out, he becomes the legal owner of the securities. There is no further need to send it
to the company's registrar for registration. Having purchased securities in the physical
environment, the investor has to send it to the company's registrar so that the change of
ownership can be registered. This process usually takes around three to four months and
is rarely completed within the statutory framework of two months thus exposing the
investor to opportunity cost of delay in transfer and to risk of loss in transit. To overcome
this, the normally accepted practice is to hold the securities in street names i.e. not to
register the change of ownership. However, if the investors miss a book closure the
securities are not good for delivery and the investor would also stand to loose his
corporate entitlements.

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♦ Faster settlement cycle –

The exclusive Demat segments follow rolling settlement cycle of T+5 i.e. the settlement
of trades will be on the 5th working day from the trade day. This will enable faster
turnover of stock and more liquidity with the investor.

♦ Pay in & pay out of securities & funds is on the
same day for scrip less trades –

In the exclusive Demat segments the settlement of trades (both securities and funds) is on
the 5th working day from the trade day. This means that a buyer who parts with funds on
the 5th working day, gets the securities on the same day evening and a seller who parts
with securities on the 5th working day gets funds on the same day evening. This reduces
the funding cost of 5-6 for a broker (in case of institutional trades) that they have to bear
in the physical segment. In the physical segment, the settlement period is spread over a
period of three to four days.

♦ Faster disbursement of non cash corporate
benefits like rights, bonus, etc. –

NSDL provides for direct credit of non-cash corporate entitlements to an investors
account, thereby ensuring faster disbursement and avoiding risk of loss of certificates in
transit.

♦ Reduction in rate of interest on loans granted

This benefit is provided by some banks against pledge of dematerialized securities as
dematerialized securities eliminates the following hassles/ risks: getting securities
registered in their name at the time of book closure and risk of stocks coming under
objections when they are send to the company's registrar for registration if the pledgee
defaults in repayment.

 Increase in maximum limit of advances from Rs.10 lakhs to Rs.20 lakhs per
borrower and reduction in minimum margin from 50% to 25% by banks for
advances against dematerialized securities as per the Monetary and Credit Policy
for the first half of 1998-99 announced by the Reserve Bank of India.

 Reduction in brokerage of 0.25% to 0.5% by many brokers for trading in
dematerialized securities - Brokers provide this benefit to investors as dealing in
dematerialized securities reduces their back office cost of handling paper and also
eliminates the risk of being the introducing broker.

 Reduction in handling of huge volumes of paper

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 Periodic status reports to investors on their holdings and transactions, leading to
better controls.

You can open two types of e-share (depository) accounts

• Individual Account
• Corporate Account

Individual Account:

The following documents are required for opening an individual e-share account

 Account opening set complete in all respects
 Client-DP agreement on a (Rs. 20/- or Rs.50/-) non-judicial stamp paper
 1passport size photograph of all applicants with signatures across the
photographs.
 PAN card for all holders
 Proof of Identity & Proof of Address (Any one of the following)

 Voter's ID Card
 Driving License
 Passport

Corporate Account:

The following documents are required for opening a corporate account

• Account opening set complete in all respects
• Client-DP agreement on a (Rs. 20/- or Rs. 50/-) non-judicial stamp paper
• 1 passport size photograph of all Authorized Signatories with signatures across
the photograph
• Introduction by an existing e-share client or bank manager's attestation
• Certified copy of Memorandum & Articles of Association
• Board resolution signed by the Chairman/MD/CEO/CS/any person above the rank
of the authorized signatories
• PAN card of the Company and all the authorized signatories
• Latest Bank Statement
• List of Directors
• Proof of Address of all the authorized signatories
• Cancelled cheque leaf

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NRI Account:

Repatriable/ Non-repatriable:

• Completed Application form, duly signed by all applicants
• Execute agreement on a (Rs. 20/- or Rs. 50/-) non-judicial stamp paper
• 1 passport size photograph of all applicants with signatures across the
photographs
• PAN card for all holders
• Proof of Identity & Proof of Address (Both local and foreign address)
• RBI approval wherever applicable.

KINDS OF ACCOUNTS

Joint Account:

In the event of the death of one of the Joint holders, the securities will be
transmitted to the surviving holder(s). The surviving holder(s) will have to request us
(vide a form called Transmission Form) to transmit (transfer) the securities lying in the
joint account to the e-share account of the surviving holder(s). For this purpose, the
surviving holder(s) can have an e-share account with the same DP or with different DP.
They must submit the following documents to effect the transmission

 Transmission form complete in all respects
 Notarised copy of the death certificate
 Client Master report of the surviving holder account, if it belongs to any
other DP

The account of the surviving holder(s) must be in the same sequence as that of the
account with the deceased. (For e.g. if the account holding pattern is in the name of Mr.
A, B & C and Mr. B has died, the surviving holders must have an account with Mr. A as
the first holder and Mr. C as the second holder.)

Sole Holder Account- with nomination:

If the e-share account is held by a single holder and nominee has been registered,
the shares will be transmitted to the nominee. The requisition will have to be submitted
by the nominee along with the following documents:

 Transmission form complete in all respects
 Notarised copy of the death certificate
 Affidavit & verification in the prescribed format

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 A duly stamped & signed Client Master report of the nominee account, if it
belongs to any other DP

Sole Holder Account- without nomination:

In case of death of the sole holder, the legal heir(s) or legal representative(s) of
the deceased must request us to transmit the balances lying in the Client account of the
deceased to the account of the legal heir(s) or legal representative(s). For this, the legal
heir (s) or the legal representative(s) of such securities must submit an instruction called
the transmission form to us along with the following documents:

• Original death certificate/ copy of the death certificate duly notarised
• A copy of the Succession certificate duly notarised or an order of a court of
competent jurisdiction where the deceased has not left a Will; or
• A copy of the Probate or Letter of Administration duly notarised.

However, if the legal heir(s) or the legal representative(s) express inability to produce
either of the documents mentioned under (b) and (c) above, and the market value of
the securities held in each account of the deceased as on the date of application for
transmission does not exceed Rs.1lakh, then we will process the transmission request
on the basis of the following documents:

 Transmission form; (Annexure O)
 Copy of the death certificate, duly notarised
 Letter of Indemnity duly supported by a guarantee of an independent Surety
acceptable to the DP, made on appropriate non judicial stamp paper;
 An Affidavit & verification made on appropriate non judicial stamp paper and
 No Objection Certificate(s) from all the legal heir(s) other than the deponent.
Signed & stamped Client Master report of the deponent account, if it belongs to any other
DP

Operational issues pertaining to depository operations:

Specific issues with respect to opening and operating depository accounts are as given
below

 In the depository system, with respect to the status of investments, the only
difference is the form in which the securities are dealt. As it does not alter
investment activities per se, there is no need for any special approvals to open or
operate a depository account.

 The account can be opened by the person or by his/her power of attorney holder
provided the POA has the necessary authorizations

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 At the time of dematerializations of any securities into these accounts, the
account holder should hand over to his DP, copies of RBI approvals obtained at
the time of acquiring these securities. If these securities were acquired under a
scheme which does not require special approval from RBI by the acquirer, then
no approval letter is needed. (For e.g. when shares are issued to NRI in public
issues, RBI gives a general approval to the issuing companies and the investor
need not take any separate approval.)

 When securities are to be debited from the account, the account holder should
provide a copy of the relevant RBI approval for sale of securities to the DP.

 When securities are to be credited to the account, the account holder should
provide a copy of the relevant approval for purchase of securities to the DP.

 If the same approval is applicable to multiple.

Account Maintenance:

To avail of the various services offered by NSDL an investor/ a broker/ an approved
intermediary (for lending & borrowing) has to open a NSDL depository account with any
of its DPs.

Depository accounts are of three types:

• Beneficiary account: An investor who wants to hold securities in dematerialised
(demat) form and receive or deliver securities by inter-account transfers must
have a depository account called beneficiary account with a DP of his choice.

• Clearing member account: Member brokers of those stock exchanges which
have established electronic connectivity with NSDL need to open a clearing
member account, with a DP of his choice, to clear and settle trades in the demat
form. This account is popularly known as Settlement account or "Pool account".
This account is meant only to transfer securities to and receive securities from the
clearing corporation/ house and hence, the member broker does not have any
ownership (beneficiary) rights over the shares held in such an account.

Further, clearing members of stock exchanges permitting Automatic Lending or
Borrowing Mechanism (ALBM) transactions can request for a "clearing member
ALBM" account to participate in ALBM transactions. These additional CM
Accounts maintained for the purpose of ALBM transactions will have to be
necessarily opened with the clearing house of the concerned stock exchange e.g. a
BSE clearing member's "normal clearing member account" could be with a DP

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XYZ, but his "clearing member ALBM" account will have to necessarily be with
the clearing house of the BSE.

• Intermediary account: Any person choosing to act as an approved 'intermediary'
for stock lending and borrowing needs to open an intermediary account with any
DP of his choice. An intermediary account may be opened with the DP only after
the intermediary has obtained registration from the Securities & Exchange Board
of India and with the prior approval of NSDL. This account is meant only to
deposit the securities received from the lender and lend them to the borrower
under stock lending and borrowing scheme. The intermediary does not have any
ownership (beneficiary) rights over the shares held in such an account.

Dematerialization:

Dematerialization is the process by which a client can get physical certificates converted
into electronic balances.

An investor intending to dematerialize its securities needs to have an account with a DP.
The client has to deface and surrender the certificates registered in its name to the DP.
After intimating NSDL electronically, the DP sends the securities to the concerned
Issuer/ R&T agent. NSDL in turn informs the Issuer/ R&T agent electronically, using
NSDL Depository system, about the request for dematerialisation. If the Issuer/ R&T
agent finds the certificates in order, it registers NSDL as the holder of the securities (the
investor will be the beneficial owner) and communicates to NSDL the confirmation of
request electronically. On receiving such confirmation, NSDL credits the securities in the
depository account of the Investor with the DP.

Rematerialisation:
Rematerialisation is the process by which a client can get his electronic holdings
converted into physical certificates. The client has to submit the Rematerialisation request
to the DP with whom he has an account. The DP enters the request in its system, which
blocks the client's holdings to that extent automatically. The DP releases the request to
NSDL and sends the request form to the Issuer/ R&T agent. The Issuer/ R&T agent then
prints the certificates dispatches the same to the client and simultaneously electronically
confirms the acceptance of the request to NSDL. Thereafter, the client's blocked balances
are debited.

• A client can rematerialize his dematerialised holdings at any point of time.
• The Rematerialisation process is completed within 30 days.
• The securities sent for Rematerialisation cannot be traded.

Market Transfers:

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Trading in dematerialised securities is quite similar to trading in physical securities. The
major difference is that at the time of settlement, instead of delivery/receipt of securities
in the physical form, the same is affected through account transfers.

Delivery of securities to or from a clearing member are called "Market Trades" in the
depository system. A simple way of determining whether a trade is a market trade is that,
either source or target in a transfer instrument is a CM account; such a transfer is a
"Market Trade"

Procedure in Case of Market Transfer for Retail Investors:

In the diagram, the selling client and clearing member1 have their respective accounts
with DP1 and the buying client and clearing member2 have their respective accounts with
DP2. DP1, DP2 and the Clearing Corporation/ Clearing House have on line electronic
connectivity with NSDL. The following paragraphs, explain the flow of securities to
effect settlement of a market trade:

Step-1: - Seller gives delivery instruction to DP1 to debit his account and transfer
securities to "Clearing Member1 Pool A/c" with DP1. [Clearing Member1 gives
corresponding receipt instruction to DP1 to accept in his clearing account securities
transferred by seller through DP1 if he has not already given standing receipt instruction
for all credits into his clearing account.]

Step-2: - Securities are transferred from "Selling Client A/c" to "Clearing Member1 Pool
A/c" with DP1.

Step-3: - Clearing Member1 gives delivery to CC instruction to DP1 to debit his
"Clearing Member1 Pool A/c" and credit his "Clearing Member1 Delivery A/c". The

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transfer will take place on the "execution date" mentioned in the instruction. Delivery to
CC instruction to be given as per final/ net delivery obligation.

Step-4: - Securities lie in the "Clearing Member1 Delivery A/c" till settlement day. At
the time of pay-in, securities lying in "Clearing Member1 Delivery A/c" are automatically
flushed to the Clearing Corporation/ Clearing House. No debit instruction is needed for
this transfer. The deadline time for pay-in of securities to the Clearing Corporation/
Clearing House may vary from one exchange to another.

Step-5: - At the time of payout securities are transferred from the Clearing Corporation/
Clearing House to "Clearing Member2 Receipt A/c" with DP2. No credit instruction is
needed because this transfer is automatic.

Step-6: - Securities are transferred from "Clearing Member2 Receipt A/c" to "Clearing
Member 2 Pool A/c". Receipt account of clearing members is purely a transit account for
maintaining audit trail.

Step-7: - Clearing Member2 gives a delivery instruction to DP2 to debit his "Clearing
Member 2 Pool A/c" and credit "Buying Client A/c" with DP2. [Buyer gives
corresponding receipt instruction to DP2 to accept in his account securities transferred
from "Clearing Member2 Pool A/c" through DP2 unless he has not given a standing
instruction to receive credits to his account.]

Note: - Funds are not handled by NSDL. Clearing Member2 obtains cheque from buyer
and gives it to the Clearing Corporation/ Clearing House. Only after the cheque is
cleared by clearing bank, the Clearing Corporation/ Clearing House allows credit of
securities to clearing member2 and thereafter, communicates the match to NSDL.

Step-8: - Securities are transferred to "Buying Client A/c" from "Clearing Member2 Pool
A/c" with DP2. Note: Until delivery instruction is given by the clearing member, the
securities will remain in his "Pool A/c". However, if they are not transferred to a
"Beneficial Owner A/c", the securities will not be eligible to any corporate benefits like
bonus, dividends, etc.

Off - Market Transfers:

Trading in dematerialised securities is quite similar to trading in physical securities. The
major difference is that at the time of settlement, instead of delivery/receipt of securities
in the physical form, the same is affected through account transfers.

Trades which are not settled through the Clearing Corporation/ Clearing House of an
exchange are classified as "Off Market Trades". Delivery of securities to or from sub
brokers, delivery for trade-for-trade transactions, by this definition are off-market trades.

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Procedure in case of an Off-Market Transfer Involving Two Clients:

The selling client will have to give a delivery instruction to his DP to transfer securities
from his depository account to the buying client's depository account. To receive
securities from the selling client's depository account, the buying client must give a
receipt instruction if he has not already given a standing receipt instruction to his DP.

The details in the "delivery" and "receipt" instructions must match else the transfer will
not take place. The transfer will take place on the "execution date" indicated in the
instructions. If the buying client has given a standing receipt instruction, this may be
ignored.

The payment aspect is handled outside the NSDL environment between the selling and
buying clients.

Inter-Depository Transfers:

Transfer of securities from an account in one depository to an account in another
depository is termed as an inter-depository transfer. This facility is quite similar to the
account transfers within NSDL.

• It can be done only for securities that are available for dematerialisation on both
the depositories.
• The account in NSDL can be either a clearing account or a beneficiary account.

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• For debiting the clearing account or the beneficial account with NSDL, the form
for "Inter-depository delivery instruction" is required to be submitted by the
clearing member/beneficial owner to its DP.
• For crediting the clearing account or the beneficial account, the standing
instruction given for automatically crediting the account is applicable. In case the
standing instructions are not given, then the form for "Inter-Depository Receipt
Instruction" is required to be submitted by the clearing member/beneficial owner
to its DP.
• As both the depositories are connected to each another, the batches to effect inter
- depository transfers are presently exchanged on each working day.
• Online transfer of inter depository instructions has commenced w.e.f December
14, 2002. In the online inter depository transfer (OLIDT) module, Inter
Depository Transfer instructions for the day will be exchanged online between the
two depositories. Thus, the instructions executed by DPs may get settled at shorter
intervals.
• The deadline time for DPs to verify & release Inter Depository Transfer delivery/
receipt instructions is 6 p.m. on weekdays and 2.30 p.m. on Saturdays.
• The Issuer/Registrar & Transfer Agent is informed about the transfer by both the
depositories and it amends its records accordingly.
• Government securities cannot be transferred from one depository to another using
this facility.

Pledge:

Securities held in a depository account can be pledged/hypothecated to avail of
loan/credit facility. Pledge of securities in NSDL depository requires that both the
borrower (Pledgor) and the lender (pledgee) should have account in NSDL depository.

Corporate Actions:

Corporate actions are benefits given by a company to its investors. These may be either
monetary benefits like dividend, interest or non-monetary benefits like bonus, rights, etc.
NSDL facilitates distribution of corporate benefits.

Monetary benefits (dividends etc):

NSDL will give the beneficiary ownership details to the Issuer/R & T Agent. The Issuer/
R & T Agent will carry out the necessary processing and the distribution of such benefits
will be outside the system.

Non-monetary benefits (rights bonus etc):

NSDL will give the beneficiary ownership details to the Issuer/ R & T Agent. The Issuer/
R & T Agent will carry out the necessary processing and upload the beneficiary
ownership details to NSDL. NSDL will then credit the beneficiary owners' accounts by
downloading the data to the DPs.

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Special services offered by DPs with respect to these accounts are as
follows:

Standing Instruction Facility:

DP enters the advise for the transfer of securities to or from a beneficial owner's account
only on receipt of instructions from the client. The clients need to give delivery
instruction to transfer securities from their account & receipt instruction to get credit into
their account. However, for ease of operation, a facility of standing instruction is
provided to the clients for receiving securities to the credit of their accounts without any
further instruction from them.

Change in Address:

The client can change his address by submitting the changes in writing to the DP along
with proof of identity, proof of new address with original document of new address for
verification and latest transaction statement received from the DP of the client. The
changes conveyed to the DP will be automatically communicated to the companies in
which he is holding shares in dematerialized form.

Bank Account Details:

Details of bank account of the client, including the 9-digit code number of the bank and
branch appearing on the MICR cheque issued by the bank have to given to the DP at the
time of account opening. Companies use this information for printing them on
dividend/interest warrants preventing its misuse. In case the client wishes to change this
bank account details, he can do so by submitting the changes in writing to the DP.

Nomination:

A client can make a nomination of his account in favour of any person by filing the
nomination form with his DP. Such nomination is considered to be conclusive evidence
of the account holder'(s) disposition in respect of all the securities in the account for
which the nomination is made.

Transposition cum Demat:

This is a facility whereby securities held jointly can be dematerialized in an account of
same joint holders but having different sequence of names. e.g. securities held in joint
names of X and Y can also be dematerialised in an account opened in the names of Y and
X by submitting an additional form called Transposition Form along with
Dematerialization Request Form (DRF) to the DP.

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Consolidation of Accounts:

Some clients could have opened multiple accounts to dematerialize their shares held in
multiple combinations & sequence of names. However, they may not need so many
accounts after they have dematerialised their securities and may want to bring all their
shareholdings into one or fewer accounts. Using off-market account transfer instruction
such consolidation can be done.

Closure of Account:

A client can close a depository account by giving an application in the prescribed form.
In case there is any balance in the account sought to be closed, the following steps are
necessary.

(a) Re-materialization of all securities standing to the credit of the account at the time of
making the application for closure; or
(b) Transferring the balance to the credit of another account opened by the same account
holder(s) either with the same participant or with a different participant.

Freezing of Accounts:

Account freezing means suspending any further transaction from the depository account
till the account is de-frozen. A depository account maintained with a DP can be frozen if
the DP receives a written instruction in prescribed form from the client. A frozen account
can be de-frozen or re-activated if the client submits written instruction in prescribed
form to the DP.

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INDUSTRY PROFILE

About NSDL

Although India had a vibrant capital market, which is more than a century old, the
paper-based settlement of trades caused substantial problems like bad delivery and
delayed transfer of title till recently. The enactment of Depositories Act in August 1996
paved the way for establishment of NSDL, the first depository in India. This depository
promoted by institutions of national stature responsible for economic development of the
country has since established a national infrastructure of international standards that
handles most of the securities held and settled in dematerialized form in the Indian capital
market.

Using innovative and flexible technology systems, NSDL works to support the
investors and brokers in the capital market of the country. NSDL aims at ensuring the
safety and soundness of Indian marketplaces by developing settlement solutions that
increase efficiency, minimize risk and reduce costs. At NSDL, we play a quiet but central
role in developing products and services that will continue to nurture the growing needs
of the financial services industry.

In the depository system, securities are held in depository accounts, which is more
or less similar to holding funds in bank accounts. Transfer of ownership of securities is
done through simple account transfers. This method does away with all the risks and
hassles normally associated with paperwork. Consequently, the cost of transacting in a
depository environment is considerably lower as compared to transacting in certificates.

Promoters Shareholders

NSDL is promoted by Industrial Development Bank of India Limited (IDBI) - the
largest development bank of India, Unit Trust of India (UTI) - the largest mutual fund in
India and National Stock Exchange of India Limited (NSE) - the largest stock exchange
in India. Some of the prominent banks in the country have taken a stake in NSDL.

Promoters

• Industrial Development Bank of India Limited
• Unit Trust of India
• National Stock Exchange of India Limited

Other Shareholders

• State Bank of India
• Oriental Bank of Commerce
• Citibank NA

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• Standard Chartered Bank
• HDFC Bank Limited
• The Hongkong and Shanghai Banking Corporation Limited
• Deutsche Bank
• Dena Bank
• Canara Bank
• Union Bank of India

Legal Framework

As a part of its on-going market reforms, the Government of India promulgated
the Depositories Ordinance in September 1995. Based on this ordinance, Securities and
Exchange Board of India (SEBI) notified its Depositories and Participants Regulations in
May 1996. The enactment of the Depositories Act the following August paved the way
for the launch of National Securities Depository Ltd. (NSDL) in November 1996. The
Depositories Act has provided dematerialisation route to book entry based transfer of
securities and settlement of securities trade.

In exercise of the rights conferred by the Depositories Act, NSDL framed its
Byelaws and Business Rules. The Byelaws are approved by SEBI. While the Byelaws
define the scope of the functioning of NSDL and its business partners; the Business Rules
outline the operational procedures to be followed by NSDL and its "Business Partners."

Depository System - Business Partners

NSDL carries out its activities through various functionaries called "Business
Partners" who include Depository Participants (DPs), Issuing companies and their
Registrars and Share Transfer Agents, Clearing corporations/ Clearing Houses of Stock
Exchanges. NSDL is electronically linked to each of these business partners via a satellite
link through Very Small Aperture Terminals (VSATs) or through Leased landlines. The
entire integrated system (including the electronic links and the software at NSDL and
each business partner's end) is called the "NEST" [National Electronic Settlement &
Transfer] system.

17


18


Issuing Companies/ their Registrar & Transfer Agents:

Securities issued by issuers who have entered into an agreement with NSDL can
be dematerialised in the NSDL depository. As per this agreement, issuer agrees to verify
the certificates submitted for dematerialisation before they are dematerialised and to
maintain electronic connectivity with NSDL. Electronic connectivity facilitates
dematerialisation, Rematerialisation, daily reconciliation and corporate actions,.

Clearing Corporation / House:

The clearing corporations/houses of stock exchanges also have to be
electronically linked to the depository in order to facilitate the settlement of the trades
done on the stock exchanges for dematerialised shares. At present, all the major clearing
corporations/houses of stock exchanges are electronically connected to NSDL.

The following stock exchanges have linked up with NSDL to facilitate trading and
settlement of dematerialised securities:

• Madras Stock Exchange Ltd. (MSE)
• National Stock Exchange of India Ltd. (NSE)
• Inter-connected Stock Exchange of India Ltd. (ISE)
• OTC Exchange of India (OTCEI)
• The Calcutta Stock Exchange Association Ltd. (CSE)
• The Delhi Stock Exchange Association Ltd. (DSE)
• The Stock Exchange, Mumbai (BSE)
• The Stock Exchange, Ahmedabad (ASE)

19


NSDL Facts & Figures

As on December 31, 2007
Number of certificates eliminated (Approx.)
467 Crore

Number of companies in which more than 75% shares are
dematted
1914

Average number of accounts opened per day since
November 1996
3371

Presence of demat account holders in the country
74% of all pincodes in the country

The model for Dematerialization of NSDL

INVESTOR DEPOSITORY NSDL
PARTICIPANT

REGISTER

(a) Investor surrender certificates for dematerialization to depositary participant.
(b) Depositary participant intimates NSDL of the request through the system.
(c) Depositary participant’s submits the certificate to the registers.
(d) Registrar confirms the dematerialization request from NSDL.
(e) NSDL up dates its account of informs the depositary participant.
(f) Depositary participant up dates its accounts and inform the investor.

The entire process of dematerialization may take about 15 days.

20


An Investor makes a dematerialization request, along with the investor physical
Certificates of securities, to the issuer or its registrar through a depositary participant.

After prescribed verification and confirmation, their registrar substitutes in its records
NSDL as registered owner in respect of the securities and inform NSDL accordingly.
NSDL then enters the name of the investor as the beneficial owner of the securities,
credits the investor’s account, and informs the investor’s depositary participant
accordingly.

Need and Objectives for a Depositary in India

The present system of settlement based on physical delivery of paper certificates
was probably adequate in the past when there was small number of investors participating
in the transaction of the capital market.

Increasing market and operational inefficiencies features the old system of stock
Trading and settlement. This section of the market comprised the secondary market,
which is popularly called as the ‘stock market’, comprising 23 recognized stock
exchanges and is the organized market regulated by the Securities and Exchange Board
of India (SEBI) for purchase and sale of securities through, intermediaries called stock-
brokers and Sub Brokers. The old trading system is affected

(A) Unwarranted delay in transfer of shares,
(B) Duplicate / fake forged shares,
(C) Court injunction cases,
(D) Bad deliveries
(E) Loss in transits/ theft/mutilation,
(G) Disputes or corporate actions,
(H) Huge transaction cost,
(I) Longer settlement cycles.
(J) Poor infrastructure, large paper volume
.
All these factors serve as barriers to entry of an investors in to the market. This
failure gave the idea of setting up of an electronic system with scrip less trading and
quick settlements cycle.

The main depository players are

a) Depositary (new NSDL and CDSL)
b) Issuer companies/Registrars of transfer agent (RTA)
c) Depositary participant
d) Investors

21


e) Brokers (clearing members (CM)

COMPANY PROFILE

ABOUT INTEGRATED ENTERPRISES (INDIA) LIMITED

With our 34 years expertise in investments consulting, we provide you the best
investment solutions that are suitable to reach your financial goals successfully. Our
gamut of investment solutions include fixed deposits, post office schemes, bonds and
mutual funds. We ascertain your risk profile and guide you with the right mix of various
products, which effectively reduces your tax liability, increases your savings and
ultimately enhances your wealth. We take care of your complete investment process -
from identifying the best investment avenue to restructuring your portfolio on a regular
basis. Whether you have a conservative, balanced or aggressive investment risk appetite,
our experts will guide you to build a portfolio to optimize the return on investments.

With service excellence always at the fore, Integrated Enterprises is one of India's
market-leading financial solutions providers serving over 6 lac investor families. We
commenced operations in 1974, when there were very few companies to offer the

22


services that we covered. Now, with a strong presence of 112 branches all over the
country and a comprehensive suite of products and services, we take care of the needs of
the investor community as a whole.

Our services include distribution of financial products - Mutual Funds, IPO’s,
Fixed Deposits, Bonds, Insurance and Post office Schemes. Integrated also provides
Demat services and has built a strong customer base of more than 2 lakhs Demat account
holders. Our processing services include PAN, TAN applications, e-TDS returns. We
undertake merchant banking activities and also act as share transfer agent and registrar to
an issue.

Our core competence lies in reaching out to all prospective investors and
satisfying their financial needs by providing them with the best product that suits them.
We achieve this with the help of well-experienced manpower with vast domain
knowledge and varied skill sets.

Integrated Enterprises provide innovative and tailored solutions to all financial
needs of its customers.

VISION
A fully diversified financial services company providing quality service to
corporates and retail investors with absolute integrity

MOTTO

“Building relationship with absolute integrity”

VALUES

Integrated has grown over the last decades based on a foundation of core values
and vision. This has been our vantage point in building a strong customer relationship
and reaching new heights in the future.

a) Integrity

We are trustworthy of customers and provide high quality services to their utmost
satisfaction. We follow an honest and ethical approach in all our dealings with the
customers

23


b) Commitment

We have a strong commitment to serve our customers. We understand individual
customer needs and make them choose the right product that suits them.

c) Workforce

Our people are our greatest strengths. We have a well-managed workforce who
have domain knowledge and are expertise in their field of operation

d) Customer focus

We are driven by our customers. We provide them with outstanding service by
catering to all their financial needs under one roof. We continuously strive to understand
and exceed customer expectations and ensure long-term satisfaction

e) Teamwork

Our efforts are based on teamwork and collaboration. We create a work culture
that is conducive to innovative ideas and thoughts. We achieve our goals through
efficient teamwork, partnership and joint effort. We work towards a unified approach in
providing financial solutions to all investors.

MILESTONES

1974 - Integrated begins operations
Investors start investing in companies through us
Accepts company deposits, post office schemes and bonds

1984 - Expansion of Integrated Branch Network across the country

1993 - Starts offering Merchant Banking services. Approved by SEBI as Category 1
Merchant Banker

1994 - Starts acting as Share Transfer Agent approved by SEBI as Category I RTI/STA

1998 - Diversified its activities as a Depository Participant offering Demat services to its
Customers

2004 - Integrated expands its product range to include tax related services such as PAN,
TAN and e-TDS filing

24


2005 - Adds E-Return filing to its array of services

2006 - Opens its 100th branch.
Entry into Share Broking Services through its subsidiary company
Integrated becomes a one-stop shop offering wide range of financial services
Personalized Financial Planning to Retail Investors

CREDENTIALS

• 34 years of experience as Total Financial Solutions Provider
• Wide spectrum of products and services to cater to the diversified needs of
investors
• Serving over 6 lakhs investor families
• Investors have the facility of choosing all services under one roof
• Wide network of 112 branches across the country
• State-of-the-Art infrastructure is being used to provide effective service to the
clients
• Highly competent workforce with professional knowledge and expertise
• Largest Depository Participant in India with a strong customer base of more than
2 lakhs Demat account holders
• More than 20 lakhs PAN applications have been made through us
• Category 1 Merchant Banker approved by SEBI
• Category 1 Registrar & STA approved by SEBI with more than 200 major client.

SERVICES DONE BY IEP

25


Investments: Marketing corporate fixed deposits, debentures

Demat services: Opening depository accounts, Demat

Share broking services: Facilitating buying and selling of securities through NSE

Insurance: Marketing life, health and general insurance schemes

Corporate services: Merchant banking, registrar to an issue

Tax related services: Processing of PAN, TAN, and e- TCS

MANAGEMENT

SHRI. P. VAIDYANATHAN
Chairman

He is the Chairman and founder of the Company. He is the architect of the
company's growth and success. He has been a driving force for the Company to reach
great heights. He has more than 35 years experience in Financial Services Industry. His
innovative ideas and envisioned future have fetched best results to the organization. In
view of his experience and expertise in the field of Finance, he is in the Board of City
Union Bank, Franklin Templeton Asset Management Company, Hatsun Agro Products
and a member of executive committee of National Securities Depository Limited
(NSDL). He is a Chartered Accountant, Cost Accountant and a Company Secretary by
qualification.

SHRI. S. BALASUBRAMANIAN
Director & Chief Operating Officer

He is the Chief Operating Officer and Director of the Company. He has more than
15 years of experience with a Private Sector Bank and has been with the Company for

26


more than 10 years holding various positions. In view of his dynamic leadership and
decision-making skills, he has been inducted in the Board. He is a qualified Chartered
Accountant and a Cost Accountant. He is also technically qualified with CAIIB.

SHRI. M. JAYARAMAN
Whole Time Director

He is heading the IT Division of the Company. He has been associated with the
Company for more than 12 years. He has contributed materially towards the Networking
of the Branches through Internet and processing of applications on a real-time basis. He
has given his valuable inputs in designing the MIS of the Company. He is basically an
Engineer with 22 years of experience.

TOP MANAGEMENT TEAM

Shri. S. Balasubramanian - Chief Operating Officer & Whole Time Director

Shri. M. Jayaraman - Whole Time Director, In charge of e-TDS Division

Mr. V. Krishnan - Vice President, In charge of North & West India Operations

Mr. S. Narayanan - Asst. Vice President, Marketing

Mr. R. Murali - Asst. Vice President, Systems & Operations

Mr. S. Vasudevan - Asst. Vice President, e-TDS Division

Mr. K. Arun - General Manager, Marketing

27


Mr. K.T. Vinod Kumar - General Manager, Demat Division

Mr. K. Suresh Babu - General Manager, Registry Division

Mr. R. Sivakumar - General Manager, Systems

Mr. N. Ramesh - Senior Executive, Share Broking Division

Mr. K. Gurumurthy - Senior Executive, HR

STATEMENT OF THE PROBLEM

S There are many investors who have their shares in physical format (i.e.) nearly 25% of
the investors are holding their shares in physical format.

t So to make them understand the necessity of making those Physical shares (i.e.) paper
format shares into Demat form. Where they can avoid the problem of carrying those
paper form shares with them while they go out for trade.

p This also helps the investors to keep them aware of the fraudulent forms that run in the
market. In case if they have the Demat form they need not want to worry about the
duplicate paper forms prevail in the market.

d Here, with the help of the DP’s they can get the information of those scrips, which are
in their Demat, account.

i Here this, will also simplify their trading process. By the help of having the Demat
account they get the shares or value of the shares within 2-4 days.

a It was studied that, from 1996 till 31/December/2007 there where 74% of the investors
hold their shares in Demat account.

28


P And in 1914 companies more than 75% of the investors are holding their shares in
Demat account. (Till: 31-12-2007).

D Till 31-12-2007, the number of Demat accounts opened per day are 337 with various
DP’s.

D Given the volume of Demat Operation, the researcher is interested in making a Demat
study with regard to Integrated Enterprises (India) Ltd (i.e.) Why many of the Investors
open Demat account with Integrated Enterprises (India) Ltd.

OBJECTIVES

# To study the profile of capital market investors.

# To study the securities held under Demat System.

# To study the profile of Relationship account.

# To study the trading pattern through Demat.

29


SCOPE OF THE STUDY

# The first scope is to know, what kind of age group investors are they. And also to
know their exposure to market.

# The next scope is to know the securities of which kind they go for. And what kind of
sectors they mainly prefer to invest.

# The next scope is related with the company (i.e.) in which scheme the investors have
opened is Demat account, and maintaining his shares. In case of Integrated there are four
schemes, which have their own benefits.

# The next scope of the study is to know, how the investors trade. And what kind of
pattern and volume they trade.

30


RESEARCH METHODOLOGY

Research design:

Research design can be thought of as the structure of research -- it is the "glue" that holds
all of the elements in a research project together. We often describe a design using a
concise notation that enables us to summarize a complex design structure efficiently.

Analysis:
By the time you get to the analysis of your data, most of the really difficult work has been
done. It's much more difficult to: define the research problem; develop and implement a
sampling plan; conceptualize, operationally and test your measures; and develop a design
structure. If you have done this work well, the analysis of the data is usually a fairly
straightforward affair.

Descriptive Statistics are used to describe the basic features of the data in a study. They
provide simple summaries about the sample and the measures. Together with simple
graphics analysis, they form the basis of virtually every quantitative analysis of data.
With descriptive statistics you are simply describing what is, what the data shows.
O Here descriptive Analysis is used, since the clients are walk-in clients.
O These clients are who come to trade (buy& sell) shares.
O Data collected are primary data.

31


Sampling:

Convenience Sampling is used for data collection.

Research tool:

A well-structured Questionnaire is used for collecting data from clients.
This Questionnaire is prepared on the basis of the objectives of the case.

CHAPTER- 4

ANALYSIS AND INTERPRETATION

 To study the profile of Capital Market investors

4.1 PERCENTAGE ANALYSIS;

Table 4.1.1

Classification of Respondents based on Gender

Male Female Total
Total 49 26 75
Percentage 65.33333 34.66667 100

Interpretation:

32


Here Sample size taken is 75. Out of 75, 49 are Male (65.33%)

and 26 are Female (34.67%).

And this clearly shows that Males are dominating to invest in

shares and take risks. Whereas Females are not taking risk by investing in

shares rather they go for safety investment (i.e.) Mutual Funds where it is a

indirect investment in shares and risks involved also less.

Figure 4.1.1

Classification of Respondents based on Gender

33


60

50

40
Male
Population

30
Female
20

10

0
1
Male&Female

Table 4.1.2

Classification of Respondents based on Age

Percentage
Gender/Age Male Female Total (%)
<25 1 0 1 1.333333
25-35 9 0 9 12

34


35-45 12 20 32 42.66667
45-55 19 6 25 33.33333
>55 8 0 8 10.66667
Total 49 26 75 100
Percent 65.33333 34.66667 100

Interpretation:

In case of age most of the investors are from the age group 35-45.
There are totally 32 investors falling under this category at 42.67%. Where Males are 12
and Females are 20. Here, Females dominate because, Males of this age belongs to
working category and are busy earning people. So on behalf of them they approve their
wife’s to trade (or) open the account in their wife’s name and by call they trade.

These 35-45 age groups dominate because they like to take more risk and earn more
returns since this peer group is the working group.

Then, followed by 45-55 age group investors. There are totally 25 investors
falling under this category at 33.33%. Where Males are 19 and Females are 6.

Here they are standing at next stage door (where they are nearing their retiring stage). So
they like to take the advantage of earning more profit for their future and be safe.

In case of other groups they are Safety considering people .So only few of
those groups invest in shares.

Figure 4.1.2
Splitting of Population Age wise
Classification of Respondents based on Age
25

20
Population

15 Male
10 Female

5

0
<25 25-35 35-45
35 45-55 >55
Age


Table 4.1.3

Classification of Respondents based on their Profession

Gender/Occupation Male Female Total Percentage

Bank 2 0 2 2.66666667

Business 6 0 6 8

Engineer/Tech 9 0 9 12

Government staff 1 3 4 5.33333333

House Wife 0 15 15 20

36


Retired 10 2 12 16

Service 17 5 22 29.3333333

Teacher 2 1 3 4

Others 2 0 2 2.66666667

Total 49 26 75 100

Percentage 65.33333 34.66667 100

Interpretation:

Here, most of the investors belong to Service category. They are 22 in
number. Here, they go for investing because they want to diversify their capital and to get
returns out of that.
Then, followed by House Wife’s because they go as per the information of
their Husband’s who want their belonging’s to trade. They are nearly 15 in number.
Then, it is the Retired group who play this, as they have capital with them
to invest and they also get the enough capital from their children. So they take risk and
invest to make more profit out of that.
Other occupation persons are very less since they are busy and they are of
idea, that they don’t wish to take risk.

Figure 4.1.3

Classification of Respondents based on their Profession

37


120

100

80
Male
Female

60

40

20

0
se ff

Te ce

ge
R e

rc tal
Bu ank

s
Se d
en h

O r
G ine ess

he
a

if

er
ire
nm ec

H t st

W

i

Pe To

ta
rv

th
ac
B

et
n

er r/T

en
si
e

ou
g
En

ov

Table 4.1.4

Classification of Respondents based on their Exposure

38


Gender/Expose Male Female Total Percentage

Advertisement 7 0 7 9.3333333

Friends 21 10 31 41.333333

Relatives 11 12 23 30.666667

Others 10 4 14 18.666667

Total 49 26 75 100

Percentage 65.33333 34.66667 100

Interpretation:

Here, most of the investors are exposed to the market by their Friends
(31). This is because they are those who work with them and who live nearby of them.
And they have the experience and knowledge in the market.
Then, followed by the Relatives (23) who are the well wishers of them.
And they need them to follow the market.
Then, it is Others and Advertisement’s which make them less expose to
the market. Because, in case of Others very few has the idea of Stock Market and they
invest on their own interest. Whereas in case of Advertisement no one will go for
investing and take the risk.

Figure 4.1.4

Classification of Respondents based on their Exposure

39


Exposure to Stock Market

25

20
Population

15 Series1
10 Series2

5

0
0 1 2 3 4 5
Guides

 To study the securities held under Demat System

Table 4.1.5

Classification of Respondents based on the Securities held by them

40


Blue Chip Ordinary Both Total Percentage

Male 9 14 26 49 65.333333

Female 8 6 12 26 34.666667

Total 17 20 38 75 100

Percentage 22.66667 26.66667 50.66667 100

Interpretation:

Here, 38 of the investors hold Both Blue chip & Ordinary Securities in
their DEMAT System because they want to diversify their capital in all sectors so that
they can get return of all kind.

Then, followed by the investors who hold the Ordinary securities is 20.

They feel that, by going for the Ordinary one’s they can get normal profit and if there is
loss also it will be less while comparing to Blue chips.

Next, followed by 17 investors who go for the Blue Chip. Because they make more profit
then Ordinary ones.

Figure 4.1.5

Classification of Respondents based on the Securities held by them

41


Kind of Securities

30

25

20 Male
Female
15

10

5

0
Blue Chip Ordinary Both

Table 4.1.6

Classification of Respondents based on different Scrips held in Demat

Sectors Population Percentage
IT/Tele/Comm. 23 16

42


Agro/Farm/Fer 6 4.17
Pharmacy 1 0.69
Realties 3 2.08
Infrastructure 21 14.59
Power 12 8.33
Textile 4 2.78
Banking 20 13.89
Oil Petroleum 3 2.08
Cement 8 5.56
Industrial 4 2.78
Resource 1 0.69
Media 1 0.69
Mixture 37 25.69

Interpretation:

Here, Most of the investors belong to Diversification/Mixture (37/75).

This is because, they can split (or) diversify their capital in different sectors, so that they
can gain more profit.

Next, followed by IT/Telecom/Communication (23/75). Because it was a booming
sector, So all go for this.

Then, it is Infrastructure (21/75) investors go for this sector, because everyone thinks it is
a developing sector.

Figure 4.1.6

Classification of Respondents based on different Scrips held in Demat

43


Population

40
35
30
25
20 Population
15
10
5
0

ia
le
ma

l
m

re

ria
m

ed
xti
om

tu

leu

st
ar

Te

M
uc

du
Ph
/C

tro
str

In
ele

Pe
fra
/T

l&
In
IT

Oi

Sectors

 To study the profile of Relationship account

Table 4.1.7

Classification of Respondents based on the Schemes

44


Gen/Schemes Male Female Total Percentage

RS.1000 14 9 23 30.666667

RS.4000 19 9 28 37.333333

RS.5000 5 5 10 13.333333

RS.10000 11 3 14 18.666667

Total 49 26 75 100

Percentage 65.33333 34.66667 100

Interpretation:

Here, 28 of the investors have opened their DEMAT a/c under Rs.4000
scheme. Because the amount is repaid after deducting the monthly maintenance when
they are closing their a/c. And other charges are also less.

Then followed by the Rs.1000 scheme, where 23 have opened their a/c.
Here mainly those who trade rarely open their a/c. And they can give cheque for extra
amount so that they can maintain their 1000 balance. And at the time of closing they can
get that the amount back. The only difference between this scheme and 4000 scheme is
here, the charges are little higher. But while comparing to other DP’s it is less.

Then it is Rs.10000 scheme, 14 have opened their a/c. Here, they are mainly Intraday
players. And they are execution of all charges.

Then, it is Rs.5000 Scheme (2 in one scheme), 10 have opened their a/c. Here they can do
Intraday also. And the charges will be as 4000 scheme

Figure 4.1.7

Classification of Respondents based on the Schemes

45


Scheme

20
18
16
14
12
Male
10
Female
8
6
4
2
0
RS.1000 RS.4000 RS.5000 RS.10000

 To study the Trading pattern through Demat

Table 4.1.8

Classification of Respondents based on the usage of demat account

46


Male Female Total Percentage

Daily User 11 3 14 18.666667

Weekly 22 10 32 42.666667

Fortnightly 12 11 23 30.666667

Any Other 4 2 6 8

Total 49 26 75 100

Percentage 65.33333 34.66667 100

Interpretation:

Here, 32 of the investors use weekly. Because they are mainly the delivery
players.

Next, followed by the fortnightly users. Where they are 23 players in my study who use
fortnightly. They are the working category people.

Next, 14 of them are Daily users. They are mostly Intraday players.

Then, only it is any other, where 6 are there. Hey are mainly the Long term players.

Figure 4.1.8

Classification of Respondents based on the usage of demat account

47


Users

25

20

15
Male
10 Female

5

0
Daily User Weekly Fortnightly Any Other

Table 4.1.9

Classification of Respondents based on their Trading Account

48



With CUB 44 22 66 88

With Others 5 4 9 12

Total 49 26 75 100

Percentage 65.33333 34.66667 100

Interpretation:

Here, most of the investors who use their Demat a/c in IEP, have their
Trading a/c with CUB Share Broking, which is the Subsidiary of IEP. And this is also
inside the IEP itself. Where they don’t want to go to trade with others. And they can
reduce their job.

Figure 4.1.9

Classification of Respondents based on their Trading Account

49


Having Trading a/c

50
45
40
35
30
With CUB
25
With Others
20
15
10
5
0
Male Female

Table 4.1.10

Classification of Respondents based on holding Scrips

Investors Percentage

50


<25 49 65.333333

25-50 18 24

50-75 3 4

75-100 1 1.3333333

>100 4 5.3333333

Total 75 100

Percentage 100

Interpretation:

Here, Most of the investors hold <25 Scrips (49) in their Demat a/c.
Because they don’t want to take more risk by investing in more Scrips. And some are
mainly the Intraday players who buy& sell on spot itself. So, they always hold very less
only.

And the others will be who do delivery and some may get shares from their
company itself when the company issues.

Figure 4.1.10

Classification of Respondents based on holding Scrips

51


Investors

<25
25-50
50-75
75-100
>100

Table 4.1.11

Classification of Respondents based on their trading pattern


52


Intraday 12 5 17 22.666667

Delivery 27 19 46 61.333333

Long 6 2 8 10.666667

Short 0 0 0 0

All The above 4 0 4 5.3333333

Total 49 26 75 100

Interpretation:

Here, most of them are delivery players. Totally 46 investors are delivery
players. Here, think and do business. They buy whey the market is in negative and sell
when the market is at the peak.

Next, it is Intraday players 17. These players are retired and house wives. They take more
risk. This is that, they buy at morning and sell at evening or afternoon. Even it goes in
loss they sell it out.

Figure 4.1.11

Classification of Respondents based on their trading pattern

53


Players

30
25

20
15 Male
10 Female

5

0
-5 0 1 2 3 4 5 6

Investors

To know the Volume the investor’s trade:

# If we see the Intraday player’s trade in 100’s. Because they buy and sell them in the
evening itself. And these players will hold only less volume of shares in their Scrips & in
Demat a/c. They may also trade with other broker’s and have Demat a/c. But there they
can make only delivery.

54


# In case of delivery they trade once in a while. So, they trade up to 500’ s-1000.

# In case of Long it also like Delivery, where they after one year sell (i.e.) if they buy
today they may sell after 12 months, and at that time they will sell at large volume.

# In case of Short term, here no one are trading. Here the tax involved has been increased
from 10% - 15%, at the time of budget. So most of them stopped trading in short term. It
is <1 year.

# In case of combination they are as per the investor’s wish.

CONTENT ANALYSIS

In Case of Suggestions and Facilities:

(1) Most of the investor’s are asking for one more thermal, so that they can sit

and give order.

55


(2) Most are feeling bad of power facility here. Since there is a power shut down

and there is no good backup for them. And all ask for Generators so that they

can trade even when power goes of.

(3) Some say the service is good and some say still it has to de improved.

(4) Some ask for good customer service.

FINDINGS

The middle-aged group people come to invest in shares at Integrated.

All those invest are the persons in Service

56


Most of the investors are exposed to stock market through friends.

Most of the investors choose to invest in both Blue Chip and Ordinary Shares.

Most of the investors go for the Mixture of Scrips

Investors selectedly go to Rs.4000 Scheme

Investors Mainly go for Using Demat a/c Weekly.

Investors are mainly belonging to CUB Share Broking.

Investors go for safe trading mainly (i.e.) they go for Delivery.

Suggestions:

The investors greater than 55-aged group must be focused mainly.

Advertisement must be given more priority to attract the investors, which is less in case

of Integrated.

57


Investors must be given awareness of others Schemes, So that they can know the

advantage of other schemes to invest.

Most of the investors are feeling Uncomfortable while Opening Demat account with

IEP, Because of more process involved and strict rules.

58

Demat Operations Case Study for Integrated Enterprises

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