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PART-1
EXECUTIVE SUMMARY:
The present repot is prepared for the partial of M.B.A and as a part of curriculum. The survey is
an attempt to determine and ―INDIAN BROKING INDUSTRY ANALYSIS WITH RESPECT
TO NIRMAL BANG SECURITIES.‖ To pursue research area are Lucknow was chosen where
the survey conducted through personnel interview.
The data collection is an analyzed and some practical tools were applied to get inferences from
the survey. The results are printed in the graphs and diagrams.
The research report has two sections in its first section company and industry profile is given,
where as second Research Methodology is given which includes samples design, analysis on
sample and presentation is in the form of diagram and charts.
Finally some suggestions with respect to the survey for the future improvement is given to
improve the survey because their competitors have also taken up the surveys.
At the end of the report limitations, SWOT analysis, conclusion of the research and Appendix
which includes questionnaire and the list of the city where the Sriram insight share brokers Ltd
are running. Last there is Bibliography, FAQ, and Glossary that has the technical terms of the
report.

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COMPANY PROFILE
INTRODUCTION:
Nirmal Bang Group is one of the largest retail broking houses in India, providing the investors
state of art services in capital markets in the country. The Group has memberships of Bombay
Exchange Limited, National Stock of India Limited, Multi Commodity Exchange of India
Limited, National Commodity and Derivatives Exchange Limited and is also a depository
participant of NSDL and CDS (I) L, the depositories of the country.
Nirmal Bang Securities Pvt Ltd. is the stock-Broking arm of the Rs. 7,500 crore (approx) Nirmal
Bang. With over 450 branches, 8000 employees (approx), 28 lakh investors, Nirmal Bang, with
evolved into a premier financial supermarket providing a host of services including stock-
broking, distribution of investment products, properly, property development, industrial
investment, risk management, insurance products and consumer finance.
Founded in 1986 by Shri Nirmal Bang, the Nirmal Bang Group is recognized as one of
the largest retail broking houses in India, providing an array of financial products and
services.
Our retail and institutional clients have access to products such as equities, derivatives,
commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and
PMS.
Nirmal Bang Securities Private Limited, a retail broking house, provides an online share trading
platform to customers to trade on equities, derivatives, commodities, currency derivatives,
insurance, depository services, and subscription to initial public offerings and mutual funds in
India. The company offers daily and company reports, stock ideas, and sector updates. It also

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provides franchising opportunities to individual to use its infrastructure by being its channel
partners
NIRMAL BANG consultant:
As the flagship company of the NIRMAL BANG Group, NIRMAL BANG Private Limited has
always remained at the helm of organizational affairs, pioneering business policies, work ethic
and channels of progress. NIRMAL BANG believes that they were best positioned to venture
into that activity as a Depository Participant. They were one of the early entrants registered as
Depository Participant with NSDL (National Securities Depository Limited), the first Depository
in the country and then with CDSL (Central Depository Services Limited). Today, It service over
1Lac customer accounts in this business spread across over 350 cities/towns in India and are
ranked amongst the largest Depository Participants in the country. With a growing secondary
market presence. It has transferred this business to NIRMAL BANG SECURITIES PRIVATE
LIMITED (NBSPL), their associate and a member of NSE, BSE, and MCX & NCDEX.
Throughout our history, we have fostered one overriding purpose — to provide each client
with personal service and quality work. By adhering to this principle, we have grown to
become a successful land well-respected of highly qualified professionals. The Group is
headed by Mr. Dilip Bang and Mr. Kishore Bang who bring forward industry expertise,
insight and most importantly, create an environment of unmatched commitment to clients.
We are registered members of the Bombay Stock Exchange Limited (BSE), National
Stock Exchange of India Limited (NSE), Multi Commodity Exchange of India Limited
(MCX), National Commodity & Derivatives Exchange Limited (NCDEX), National Multi
Commodity Exchange of India Limited (NMCE) and MCX Stock Exchange Limited and are
also depository participants of NSDL and CDSL.

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Vision:
―TO CREATE VALUABLE RELATIONSHIPS AND PROVIDE THE BEST FINANCIAL
SERVICES MOST PROFESSIONAL.‖
Mission:
―To work together with integrity and make customer feel valued.‖
Core value:
―RESPECT OUR COLLEAGAUES AND THE BUSINESS ITSELF.
NIRMAL BANG --- Early Days:
The birth of NIRMAL BANG was on a modest scale in 1986. It began with the vision and
enterprise of a small group of practicing Chartered Accountants who founded the flagship
company. NIRMAL BANG Securities Private Limited. It started with consulting and financial
accounting automation, and carved inroads. Since then, They have utilized their experience
and superlative expertise to go from strength to strength…to better their services, to provide
new ones, to innovate, diversify and in the process, evolved NIRMAL BANG as one of
India‘s premier integrated financial service enterprise.
Thus over the last 20 years NIRMAL BANG has traveled the success route, towards building a
reputation as an integrated financial services provider, offering a wide spectrum of services. And
they have made this journey by taking the route of quality service, path breaking innovations in
service, versatility in service and finally totality in service.
Their highly qualified manpower, cutting-edge technology, comprehensive infrastructure and
total customer-focus has secured for them the position of an emerging financial services giant

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enjoying the confidence and support of an enviable clientele across diverse fields in the financial
world. Their values and vision of attaining total competence in their servicing has served as the
building block for creating a great financial enterprise, which stands solid on their fortresses of
financial strength - their various companies.
With the experience of years of holistic financial servicing behind them and years of complete
expertise in the industry to look forward to, they have now emerged as a premier integrated
financial services provider. And today, they can look with pride at the fruits of their mastery and
experience–comprehensive financial services that are competently segregated to service and
manage a diverse range of customer requirements.
Business Focus:
The focus of the businesses the Customer service, Customer education, Customer support,
Customer relations and last but not the least Customer acquisition. Trade execution transparency,
timely settlements, risk monitoring and superior service shall have topmost priority, in the best
interests of all concerned.
HISTORY:

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Founded in 1986 by Shri Nirmal Bang, the Nirmal Bang Group is recognized as one of
the largest retail broking houses in India, providing an array of financial products and
services.
Our retail and institutional clients have access to products such as equities, derivatives,
commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and
PMS.
Throughout our history, we have fostered one overriding purpose — to provide each client
with personal service and quality work. By adhering to this principle, we have grown to
become a successful and well-respected of highly qualified professionals. The Group is
headed by Mr. Dilip Bang and Mr. Kishore Bang who bring forward industry expertise,
insight and most importantly, create an environment of unmatched commitment to client.
We are registered members of the Bombay Stock Exchange Limited (BSE), National
Stock Exchange of India Limited (NSE), Multi Commodity Exchange of India Limited
(MCX), National Commodity & Derivatives Exchange Limited (NCDEX), National Multi
Commodity Exchange of India Limited (NMCE) and MCX Stock Exchange Limited and are
also depository participants of NSDL and CDSL.
Historian Fernando Braudel suggested that in Cairo in the 11th century, Muslim and
Jewish merchant and already set up every form of trade association and had knowledge
of many methods of financial dealings, disproving the belief that these were originally
invented later by Italians.
In 12th century France the courratiers de changes were concerned with managing and
regulation the debts of agricultural communities and behalf of the bank. Because these
men also trade with debts, they could be called the first brokers.

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A common misbelieve is that in late 13th century Bruges commodity traders gathered
inside the house of a man called Van der Beurze, and in 1309 they became the ―Bruges
Beurse‖ institutionalizing what had been.
Until then, an informal meeting, but actually, the family Van der Beurze had a building in
Antwerp where those gathering occurred; the Van der Beurze had Antwerp, as most of the
merchants of that period.
As their primary place for trading. The idea quickly spread around Flanders and neighboring
countries and ―Beurzen‖ soon opened in Ghent and Amsterdam.
In the middle of the 13th century, Venetian market began to trade in government securities. In
1351 the Venetian government outlawed spreading rumors intended to lower the price of
government securities during the 14th century.
This was only possible because these were independent city states not ruled by a duke but a
council of influential citizens. The Dutch later started joint stock companies, which let
shareholders invest in business venures and get a share of their profits or losses.
In 1602, the Dutch East India Company issued the first share on the Amsterdam stock exchange.
It was the first company to issue stock and bonds.
The Amsterdam stock Exchange (Ro Amsterdam Beurs) is also said to have been the first stock
exchange to introduction continuous trade in the early 17th century.
The Dutch ―pioneered short selling, option trading, debt-equity swaps, and merchant banking.
Units trust and other speculative instrument, much as we know them‖ (Murray Sayle,‖Japan
Goes Dutch‖, London Review of books XXIII.7, April 5, 2001).
There are now stock markets in virtually every developed and most developing economy, with
the world‘s biggest market being in the United stated, UK, Japan, China, Canada, Germany and
France.

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BOARD OF DIRECTORS OF NIRMAL BANG:
NAME POSITION
Mr. Dilip M. Bang Director
Mr. Kishor M. Bang Director
Mr.Rakesh Bhandari Chartered Accountant

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Mr. Deepak Agarval Chartered Accountant
Mr.Suvinay Sharma Chartered Accountant
Mr.Naresh Samdani Chartered Accountant
Mr. Deepak Patel Chartered Accountant
Mr. Sunil Jain Chartered Accountant
Mr.Anup Agarval Chartered Accountant
Mr.Brijmohan Bohra Chartered Accountant
Miss. Monika Bafna Chartered Accountant
Mr.Brijmohan Bohra Company Secretaria
PRODUCT AND SERVICES:
PRODUCTS:
 Mutual fund schemes
 Portfolio Management System
 Shares – online and offline
 Bonds

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 Fixed Deposits
 Commodities
 Currency
SERVICES:
 Equities, and Derivatives trading on the National Stock Exchange of India Ltd. (NSE),
and Bombay Stock Exchange Ltd. (BSE),
 Commodities trading on National Commodity and Derivatives Exchange India (NCDEX)
and Multi Commodity Exchange of India Ltd. (MCX),
 Depository services,
 Online trading services,
 IPO Services,
 Dial-n-Trade
 Portfolio management services,
 Fundamental and Technical Research services,
 In addition to this they also provide advisory services and distributions for mutual
funds.
 Daily research reports and market review (High Noon & Eagle Eye)
 Pre-market Report
 Daily trading calls based on Technical Analysis

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 Personalized Advice
 Live Market Information
WIDE OPTION WHILE TRADING AT NIRMAL BANG:
A product for every need:
Nirmal Bang is the most comprehensive website, which allows you to invest in shares, mutual
funds, derivatives (Future and Option) and other financial products. Simply put, we offer you
products for every investment need of yours.
Trading in shares:
Nirmal Bang offers you various options while trading in shares.
Cash trading:
This is a delivery based system, which is generally done with the information of taking delivery
of shares or monies.
Margin Trading:
You can also do an intra-settlement trading up to 3 to 4 times your available funds, where in
you take long buy/short sell position in stocks with in the intention of squaring off the position
within the same day settlement cycle.
In margin trading, you take buy/sell position in stocks(s) with the intention of acquiring off the
position within the same settlement cycle. If, during the course of the settlement cycle, he price
moves in your favor (rises in case you have a buy position or falls in case you have a sell
position), you make profit. In case you have the option to take/give delivery of buy/sell position
respectively if you have sufficient cash/securities to do so.
Normally to buy shares, you have to place (ensure availability of limit) 100% of the order
value, while to sell shares, you need to have shares in your Demat account. However, margins

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are blocked only to safeguard any adverse price movement. At present, you have to place
33.33% of the order value as margin. With margin trading, you can leverage on your trading
limit by taking buy/sell positions much more than what you could have taken in cash segment.
However, the risk profile of your transaction goes up.
Margin PLUS Trading:
Through Margin PLUS you can do an intra-settlement trading up to 10 times your available
funds, where in you take long buy/sell position in stock with the intention of squaring off the
position within the same day‘s settlement cycle. Margin PLUS will give a much higher leverage
in your limits.
Margin PLUS is an order placement feature where you can take a position at market price and
also place a cover order for the position specifying the SLTP and the limit price. This will
minimize the loss cover at the time of taking the position itself. There by it gives a clear view of
maximum downside involved in a particular position at a particular price, Nirmal Bang won‘t
levy a normal margin ranging from 21% to 50%. It would block he maximum loss which
customer can suffer.
Spot Trading:
This facility can be used only for selling you is demat stocks which already exist in you‘re demat
account. When you are looking at an immediate liquidity option, ‗cash on spot‘ may work the
best for you, on selling shares through ―cash on spot‖, money is certified to your bank a/c the
same evening & not on the exchange payout date.
BTST:

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Buy today sell tomorrow (BTST) is a facility that allows you sell shares even on 1 st and 2nd day
after the buying order date, without you having to Waite for the receipt of shares into your demat
account.
Call N Trade:
Call N Trade allow you call on a local number in your city & trade on the telephone through our
customer services Executive. Trading in NSE/BSE: through Nirmal Bang you can trade on NSE
and BSE.
Market order:
This is an order to buy sell securities at the best price obtainable in the market at the time it is
matched by the exchange. Therefore, change of its getting executed are better. In case of market
order for NSE, all market order placed which are not executive fully; it becomes a limit order for
the balance quantity at the last traded price.
Market Order in BSE: Explanation:
Market order can be placed only during market hours (i.e., when the Exchanges is open for
trading).
You could trade by placing market orders during market hours that allows you to trade at the best
obtainable price in the market at the time of execution of the order.
Limit Order:
Limit Order is an order to buy or sell securities in which you specify the maximum price per unit
in case of a buy order and the minimum price per unit in case of sell order. The actual transaction
can be at a price more favorable than the price specified.

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Allow you to place a buy/sell order at a price defined by you. The execution can happen at a
price more favorable than the price, which is defined by you, limit orders can be placed by you
during holidays & non market hours too.
Online confirmation of Order and trade:
You get online confirmation of orders and trades- the status of any order is updated on real-time
basis in the Order Book. As soon as you place your order they are validated by the system and
sent to the exchange for execution. The entire process is fully automation and there are no
manual interventions.
GTC, GTD and IOC Order:
A Good Till cancelled (GTC) order remains in the system until the trading members cancels it.
However, the system cancels this order if it is not trade within a number of days parameterized
by the Exchanges. A Good Till Days/Date (GTD) order allows the user to specify the number of
days/date till which the order should stay in the system if not executed. The maximum number of
days for which the GTC/GTD order can remain in the system is notified by the exchange from
time to time after which the day/date on which the order is placed and inclusive of holidays. An
immediate or cancel (IOC) order allows the user to buy or sell a security as soon as the order is
released into the system, falling which the order is cancelled from the system. Partial match is
possible for the order and the unmatched portion of the order is cancelled immediately.
Disclose Quantity (DQ) Order:
Normally, the order quantity is disclosed in full to the market. An order with a disclosed quantity
(DQ) condition/attribute allows the trading members to disclose only a part of the order quantity
to the market. For example, an order of 1000 with a disclosed quantity condition of 200 will
mean that 200 is displaced to the market at a time. After this traded, another 200 is automatically

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released soon till the full order is executed. DQ (Disclosed Quantity) should not be less that 10%
of the order quantity and at the same time should not be greater than or equal to the order
quantity.
Stop Loss Order:
A stop loss order allows the client to place an order which gets activated only when the market
price of the relevant securities reached or crosses a threshold price specified by the investors in
the form of ‗stock loss trigger price‘. When a stop loss trigger price (SLTP) is specified in a limit
order, the order becomes one which is conditional on the market price of the stock crossing the
specified SLTP. The order remains passive (i.e. not eligible for execution) till the condition is
satisfied. Once the last traded price of the stock reached or surpasses the SLTP, the order
becomes activated (i.e. eligible for execution by being taken up in the matching process of the
exchange) and then on behave like a normal limit order. It is used as a tool to limit the maximum
loss on a position.
Stop Loss by Order:
‗A‘ short sell reliance shares at Rs. 325 in experience that the price will fall. However, in the
event the price rises above his buy price ‗A‘ would like to limit sell order specifying a stock loss
trigger price Rs. 305 and a limit price of Rs. 300. The stop loss trigger prices price has to be
between the limit prices an trade price at the time of placing the stop loss order. Once the last
trade price touches or crosses Rs. 305, the orders get converted into a limit sell order at RS. 300.
Trade in derivatives:
Future market:

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Through Nirmal Bang you can now trade in index and stock futures on the NSE in future trading,
you take buy/sell position in index or stock (S) contract having a longer contract period of upto 3
month.
Trading in FUTURE is simple if, during the course of the contract life, the price moves in favor
(i.e. rises in case you have a by position or sell in case you have a sell position), you make a
perfect. Presently only selected stock, which meet the certain liquidity and volume, have been
enabled for future trading.
Calculate index and now your margin are tools to help you in calculating your margin
requirement and also the index & stock price movement.
Option market:
An option is a contract, which gives buyer the right to buy or sell shares at a specific prices, on a
before a specific date. For this, the buyer has to pay to the seller some money, which is called
premium. There is now obligation on the buyer to complete the transaction if the price is not
favorable to him.
To take the buy/sell position on index/stock option, you have to place certain % of order value as
margin. With option trading, you can leverage on your trading limit buy taken buy/sell position
much more that what you could have taken in cash segment.
The buyer of a call option has the right but not the obligation to purchase the underlying asset at
the specified strike price buy paying a premium whereas the seller of the call has the obligation
of selling the underlying asset at the specified strike price.
The buyer of a put option as the right but not the obligation to sell the underlying asset at the
specified strike price paying a premium whereas the seller of the put has the obligation of buying
the underlying the asset at the specified price. Buy paying lesser amount of premium, you can
create position order option and take advantage of more trading opportunities.

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Systematic investment plans (SIP):
SIP allows you to invest a certain some of money over a period of time periodically. Just fill in
investment amount, the period of investment and the frequency of investing and submit. We will
do the rest for you automatically investing periodically for you.
Systematic withdrawal plan:
This allows you to withdraw or certain some money over up period of time periodically.
Transfer-in: we can convert to existing mutual funds into electronic more through a transfer-in
request.
IPOS and BONDS Online:
You can also invest in initial public offers (IPO‘s) and bonds online without going through the
hassles of filling any application form/paperwork.
Get –in-depth analysis for new IPO‘s issue (initial public offering) which are about to hit the
market and analysis on these. IPO calendar, recent IPO listing, prospectus/offer document, and
IPO analysis are few of the features, which helps you keep, keep on talk of the IPO markets.
DEMAT SERVICES OF NIRMAL BANG:
Company offering
Nirmal Bang is a registered member (Depository participant) of CDSL.
In this system, physical security holding are converted into electronic (or in other words,
dematerialized) holdings.
Why NIRAML BANG Demat Account?
 Demat A/C free open.
 Demat access through internet and phone.
 Portfolio valuation on the account statements.

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 Online execution of transactions at branches.
 Special rates for stock market intermediaries and sub brokers.
 Transaction update from back-office four times a day.
WHY PEP0PLE GOES TO NIRMAL BNAG FOR SHARE TRADING:
Client Focus:
Client relationship from the core of our business. We value each client, no matter what size, as a
long-term relationship. And we seek to provide unmatched services to each client and place him
as a partner at the center of everything we do.
From the very beginning of the relationship, we work closely with every client to identify his
financial goals and risk tolerance levels and leverage our strength of the product offering,
research and financial strength to help achieve his goals. In the process, we become an
professional partners, creating opportunity, adding value and transform vision into reality.
Diverse services offering:
In addition to traditional broking services, we are also equipped to handle commodity trading
facility as well as currency derivatives and have access to a wide range of financial services like
IPOs, mutual funds and insurance.
Timely services:
In an increasingly competitive environment, clients today require personalized solution and
greater flexibility and responsiveness than ever before. Our professionals are always ‗on call‘.

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We provide them services throughout the year and not just at the end of the year. We believe
such service is essentials for delivering solution and constructive relationship.
Able team:
We have developed a strong and enduring team by recruiting from leading graduate and
postgraduate universities and promoting from within. Our team work together to provide
superior results to our client. At the same time, each of our clients is assigned a specific team
member who ‗owner‘ the relationship, providing continuity, responsiveness and a point of easy
access to the firm.
Culture:
We strive to maintain standards at all times and lay emphasis on honesty, integrity and
confidentiality. We speak and act to ensure transparency at all levels and in everything we do.
Financial strength:
The strength of our balance sheet is such that it gives greater confidence to all our retail and
institutional clients in detail with us. The financial strength of the group helps in future building
the network and infrastructure to cater to the larger market.
Infrastructure:
We believe or best infrastructure gives a significant advantage allowing us to provide efficient,
transparent and qualitative services. Our technology supports everything from executive trades
and managing our investors of stocks to communicating up-to-the-second information to our
clients and monitoring for compliance.
Client interface:

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We have trading terminal (both direct and indirect), online monitoring, control terminal
(administration terminals) and back office support terminal (settlement terminal) across all
location and centers.
We have India‘s best single screen Multi Exchanges Trading Software platform. Our entire
centers across the country are connected through our own network, leased ISDN lines and LAN
network, MPLS and internet.
The high-end IBM serves with sophisticated security features that we use caters to trading
points across the country. This also gives u rte advantage of scalability in terms of location and
size of our planned operations. We provide telephonic and chat support for technical and
functional issues of branches, franchises and all our clients. Our websites www.nirmalbang.com
is comprehensive and provides online feeds, net trading and provides online feed, net trading
portfolio tracking tool. Investors also have access to a wide range of financial news, information
and various research reports facilitating quick decision-making.
Our online trading portal at www.nirmalbang.com is equipped with facilities like all segment
broadcasts, multi-features graphs, online payment gateways and automatic password mailer
utility for better security. It user-friendly navigation allows easy viewing of trading accounts,
depository accounts and research reports, which are linked to the trading platform.
The website also has a provision for creating portfolios and monitoring them on a regular basis.
Our ‗wealth trackers‘ module helps investors in getting ready updates n their investment so that
they can know the changing trends of the markets and the impact of the same on their portfolio.
Back office:
For back office operations, we use the lidha Didha system of Apex Soft cell Pvt. Ltd. This is one
of the top most back office software in the industry. It has the capacity to process over one lakh
traders in a five minute frame.

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Our operation teams has an easy-to-navigate client login system, which is used to generate
activity reports, short-terms and long-term tax reports, holding and portfolio valuation reports as
well as trading to delivery activity reports.
We also have the requisite infrastructure needed to handles STP, upload and download and
download information to or from exchanges, bank and depositories, support units to ensure
delivery notes, bills and ledgers of trading accounts and cash management services for efficient
and effective fund management within the group.
Internal control:
Compliance and internal control play a major role in determining business strategies as well as
day-to-day operation of the group. A well-equipped risk management department ensures that
the delinquency rates are minimal, while efficient risk management software provides online
MTM margin data to branches and franchisees. Our efficient back-up system and software have
been developed specially for branches and channel partners with a capacity to handle numerous
transactions. Our online position monitoring system ensures better risk management and
surveillance from our head office as well as branches and franchises. Our people from them
cornerstone of the business and their expertise and motivation delivery of exceptional solution
and services to all our clients.
Experienced professional:
Our teams of professional consist of individual with significant experience in securities trading,
market structure, trading technology and portfolio management. They have a strong experience
in trade execution and understanding of order flow dynamics. This combined with technical
analysis of market momentum, help our clients to determine the price at which they buy and /or
sell.

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We believe, we are the first choice for our clients because we among the very best at trade
executive solution and assets management services. At Nirmal bang, each and every professional
is focused on turning the initial trade or investment into a collaborative, person-to-person
relationship that keeps delivering true added value.
Research Expertise:
Our research team is headed by two senior research analysts who have more than 15 years of
experience in this field.
Our team of experienced fundamental research and technical analysts provide reports on
industries, sectors, companies and individual stocks. Our research reports are backed by in-depth
research and analysis of emerging as well as current market trends. Besides, our research
analysts also appear on leading business news channel where they share their insights on the
market.
Nirmal Bang Group‘s business strives the largest number of common people. Consider these:
Equity* /commodity/ currency*/mutual fund/IPO/PMS/insurance/DP products.
Management philosophy:
Nirmal Bang Group‘s business ventures are highly successful due to our Management
philosophy. Features of this include total empowerment of its employee, decentralized decision-
making process and freedom of action. Most of all, the Group views every employee as a
potential partner in business. Group Companies has also been instrumental in creating
innumerable indirect jobs in the communities they serve.
Human Resources :
Human resources are the key to any services sectors industry. We have a strong and vibrant
workforce in every field or our activity, be it research, system, accounts, marketing or

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networking. With the manpower strength of over 1100 employees, the Company is managed by a
highly motivated, qualified & talented team of professional qualified CA‘s, MBA,s, Engineers,
etc with proven track records.
Technology used in Nirmal Bang:
Stock-broking being a process intensive activity, issues such as speed, accuracy, round-the-clock
system availability and system securities are of paramount importance and technology forms the
backbones of the business.
This is why Nirmal Bang is technology driven. We boast of state-of-the-art technology and an in-
house team of highly competent software and networking engineers who constantly review
system and procedures to ensure operational efficiency.
All our branches are connected through Wide Area Network (WAN) and are served by a
centralized back office processing system, which enables clients to obtain up to date information
online at the click of a button
Customer Focus:
Despite a rapidly expanding client base and a dizzying increase in transaction volumes, each
client at Nirmal Bang is special. We specialize in building long term relationship with our
customers by providing them with the four things they desire most, viz., speed,, convenience,
reliability and personalized services. Our continuous strive to provide best services to our clients,
results in receipt of not a single Arbitration Award against the company since its inception.

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ONLINE SHARE TRADING AT NIRMAL BANG
Online trading means trading/investing in equities, derivatives, commodities etc through the
Internet. It enables the investor to electronically connect (through Internet) to buy or sell stocks,
derivatives etc with the other investors. In online trading, one can access a stockbroker's website
through an Internet-enabled PC and can place orders.
Online trading started in February 2000 when a couple of brokers started offering an online
trading platform for their customers.
Highlights
 Streaming quotes
 Self-execution and instant confirmation
 Complete control over their trading decisions
 Can access accounts Online

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 Convenience of trade
 Wide access to historical charts and past data
BENEFIT OF ONLINE TRADING
I. Freedom from paperwork:-Integrated trading, bank and de-mat account with
digital contracts removers all paperwork.
II. Instant credit and transfer:-instant transfer of funds from bank account of the
choice to Nirmal Bang trading account.
III. Trade anywhere:-enjoy the ease of trading from any part of the world in a completely
secure environment.
IV. Dial n Trade:-call toll free number to place orders through telebrokers.
V. Timey advice:-make informed decisions with expert advice, investment calls and live
market commentary.

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VI. Real-time portfolio tracking:-benefit from real-time information for investment
and current portfolio value.
VII. After-hour orders:-place order after market hours, which get executed as soon as the
markets opens.
Advantages:-
Live Streaming Quotes
Access all Trading Calls
Advanced Charting features
Create your own technical rules for trading
A Single Trading Screen for all segments
OFFLINE SHARE TRADING AT NIRMAL BANG
In offline trading the investor places orders with the stockbroker either verbally (personally or
telephonically) or in a written form (fax). This may be because he is not comfortable in accessing
the Internet.
Highlights:
 Trading over the phone
 No access to live market watch
 Absence of online Fund transfer

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Merits of offline trading
 Low brokerage
 Less margin
 Flexibility in credit period
 Customized advice
Demerits of offline trading
 Problems in getting in touch with the broker
 Limited clientele
 Problem of attention from the broker due to load
 Reliance on the broker‘s information
 Customer has to believe what the broker says
 Broker Might not give the best price
 Reconciliation of account and cash settlements

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 Paperwork
 Geographical Restrictio
SWOT ANALYSIS OF NIRMAL BANG:
Strengths:
Company having young management team which consist of very talented and knowledge.
Professional from different fields
Nirmal Bang is a well capitalized group with net worth of 3500 crores.
Company is unaffected in this global recession which shows company‘s never say die.
Spirits. It means company is armed with proper resources to fight any adverse situation.
Company‘s research team provides tremendous research calls to their clients with high.
Success records and generates level of satisfaction level of satisfied to client.
Weakness:
Investors are not completely aware of Nirmal Bang, so the brand value of the company
not yet created.
The market share of the company in commodity and equity market in terms of turnover is
not significant.
Opportunities:
The growth of capital market is very high. Investors are now ready to invest their money
in this market because the returns is much higher compare to other place for investment,
so they are ready to bear factors associated with it. It means volume will increase year by
year in this sector.
As Nirmal Bang having its presence in 36 location of the country, so company has good
opportunity to extend its branches all over the country. Company has not come yet with

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its own IPO; this is a good chance for the company to be a public limited company which
will help company to get money created brand awareness in this market.
Threats:
Company has a face a tough competition from major market leaders, so it will be a
difficult task for Nirmal Bang to sustain itself in this cut throat competitions.
Recently financial a huge loss, so investors now investing their money at much safer
place instead of this market.
STRATEGY:
The main strategies used in training were as follow.
DATA CALLING
In data calling we were provided data of mobile numbers and our job was to generate
appointments. After that we were required to convert that appointment into closure. Apart from
given data we also brought latest business directory. We called to different business people and
tried to generate appointments.
CALLED CALLING
Called calling means to go at different corporate houses and to meet different People and to get
their visiting card by it we get lead and our immediate task was to call them & to fix
appointment.
REFERENCE

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Another important strategy was to use our reference means our family, friends, relatives etc. In
marketing or selling we can never neglect references & they always play a major role.
STALL ACTIVITY
Stall activity means to make stall at public place. Then our job was to give them a newspaper
with brochures and to take their name and contact number. So it was another process of
generating lead. After that our job was to follow
STOCK MARKET
A stock market is a public market for the trading of company stock and derivatives at an agreed
price these are securities listed on a stock as well as those only traded privately.
The since of world stock market was estimated at about $36.6 trillions US at the beginning of
October 2008. The total world derivatives market has been estimated at about $791 trillion
faceoff nominal value.
11 times the size of the entire world economy. The value of the derivatives market, because it is
stated in terms of national values, cannot be directly compared to a stock or a fixed income
security, which traditionally refers to an actual value.
Moreover, the vast majority PF derivatives ‗cancels‘ each other out (i.e., a derivatives ‗bet‘ on an
event occurring is offset by a comparable derivatives ‗bet‘ on event not occurring)

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Many such relatively illiquid securities are valued as market to model, rather than an actual
market price. The stock are listed and traded on stock exchanges which are entities of an
corporation of mutual organization specialized in the business of bringing buyers and sellers of
the organization to a listing of stock and securities together.
The stock market in the united states in the united states includes the trading of all securities
listed on the NYSE Euro next, the NASDAQ, the Amex, as well as on the many regional
exchanges, e.g. OTCBB and Pink sheets. European examples of stock exchanges included the
London Stock Exchange, the Deutsche Borse.
TWO MAJOR STOCK MARKETS
 BSE
(BOMBAY STOCT EXCHANGE)
▪ NSE
(NATIONAL STOCK EXCHANGE)

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BOMBAY STOCK EXCHANGES
This stock exchanges, Mumbai, popularity known as ―BSE‖ was established in 1875 as ―The
native share and stock brokers associations‖, as a voluntary non-profit making association.It has
an evolved over the years into its status as the premiere stock exchanges in the country. It may be
noted that the stock exchanges the oldest one in Asia, even older than the Tokyo Stock
Exchanges, which was founded in 1878.
The exchanges, while providing an efficient and transparent market for trading in securities,
upholds the interests of the investors and ensures redressed of their grievances, whether against
the companies or its own members brokers.
It also strives to educate and enlighten the investors by making available necessary informative
inputs and conducting investor‘s education programmers. A governing board comprises of
elected directors, 2SEBI nominees, 7 public representatives and an executive director is the apex
body, which decides the policies and regulates the affairs of the exchanges.
The executive director as the chief executive officer is responsible for the day today
administration of the exchanges. The average daily turnover of the exchange during the year
2000-01 (April-March) was Rs 3984.19 crores and average numbers of daily trades 5.69 Lakhs
However the averages daily turnover of the exchanges during the year 2001-2002 has declined to
Rs. 1224.10 crores and number of average daily trades 5.69 Lakhs. The average daily turnover of

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the exchanges during the year 2001-2003 has declined and number of average daily trades during
the period is also decreased.
The Ban on all deferral products like BLESS AND ALBM in the Indian capital markets by SEBI
with effect from July 2, 2001, abolition of account period settlements, introduction of
compulsory rolling settlements in all scripts trades on the exchanges. With effect from dec31,
2001 etc. have adversely impacted the liquidity and consequently there is a considerable decline
in the daily turnover at the exchanges. The average daily turnover of the exchanges present
scenario is 110363 (Laces) and number of average daily trades 1057(laces).
The BSE switched from the open outcry system to the screen based system in 1995. It
accelerated its computerization programme in response to the thereat from NSE.
Jobbers play an important role on the BSE. A jobber is a broker who trades on his own account
and hence offers a two-way quote. The bid price reflects the price at which the jobber is willing
to sell.
Investors have to transact via a broker. The broker feeds his buy/sell quotes in his terminal,
which is linked, to the main server at the BSE, because of this NSE has adopted a quote driven
system and an order driven system.
Shares listed on the BSE are classified into two groups, viz. Specified and cash, also referred to
as A and B groups. The A group comprises equity shares of such companies, which have a large
volume of business in the secondary market. Presently, about 150 shares have been classified as
A group shares the rest belong to B group.
NATIONAL STOCK EXCHANGES:
The NSE was incorporated is now 1992 with an equity capital of Rs 25 crores. The international
securities consultancy (ISC) of Hong Kong has helped in setting up NSE.

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ISE has prepared the details business plans and installation of hardware and software system.
The promotion for NSE were financial institutions, insurances companies, banks and SEBI
capital markets Ltd, infrastructure leasing and financial services Ltd and stock holding
corporation Ltd.
It has been set up to strengthen the move towards professionalization of the capital market as
well as provide nation wide securities trading facilities to investors. NSE is not an exchange in
the traditional sense where broker own and manage the exchanges.
A two tier administrative set up involving a company board and a governing aboard of the
exchanges is envisaged. NSE is a national market for shares PSU bonds, debentures and
government securities since infrastructure and trading facilities are provided.
Inaugurated in 1994, the National Stock Exchange seeks for:-
1. Establish a notion-wide trading facility for equities, debt, and hybrids.
2. Facilitate equals access to investors across the country.
3. Impact fairness, efficiency, and transparency to securities.
4. Shorten settlement cycle.
5. Meet international securities market standards.
The NSE, besides operating the traditional market for equities, convertible debentures, non-
convertible debentures etc., also operate a wholesale debt market, is a separate segment of the
NSE as distinct from the capital market segment.
The NSE has adopted fully automated screen based trading system, which allows trading
members to trade from their offices through a communication network. Besides there is
flexibility with regards to price, time and volume conditions.
Features of National Stock Exchange:-
Nation-wide Access

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The NSE provides nation-wide trading facilities and equal access to investors all over the
country. High quality services to members are maintained through efficient, transparent and fair
trading systems and procedures.
Automation-Screen Based Trading
The NSE market is a fully automated screen based trading environment. There is no trading floor
as is prevalent in the traditional stock exchanges, nor do the dealers use the telephone to arrange
money market deals as was the practice. Rather the market will operate with all market
participants stationed at their offices and making use of computer terminals, to enter orders, to
receive the current market status, the traders executed and other market related information.
Anonymity of the Trading Member s Identity The identity of the trading member placing the
order is not disclosed in the NSE computer trading system. By enabling the trading members and
participants to hide their identity, it allows placing large orders into the system by the big
players, without fear of large orders influencing the price of the market.
Complete Transparency The system provides complete transparency of trading operations.
Investors can know whether their orders have been placed into the system, the rate at which their
deal has taken place the counter party and the time at which the trade was executed. The trading
system also provides complete market information online through various inquiry facilities. The
system at any point of times gives the member complete information on the total order depth for
a security, the best buys and sells available in the market the quantity traded in that security etc.
All these information are updated online, enabling the member to make better decisions. All the
key information is updated on a real time basis.
The response time is very quick. As a result it is possible for the investors to know the actual
position of the market before placing the orders. Investors can also know the fate of the orders
almost as soon as they are placed with trading members.

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The trading system is top on the line and user friendly. Some of its new features include a
corporate hierarchy which gives the trading members an opportunity to set up a network of
branches and exercise control on their orders. Flexibility in trading. The trading system provides
enormous flexibility to trading members. When entering an order, a trading member can place
various conditions in terms of price, time or size.
Benefits from NSE:-
To Investors
The investor is assured of the best price in the market. Price and brokerage are separately shown
on contract notes. Date and time of trade are indicated. The system will be better monitored and
regulated ensuring a fair deal to investors. Safety of securities is enhanced in a depository and
there is no problem of bad delivery, loss, theft or forgery. To Trading Members They can
provide efficient service to their clients.
Their back office load is reduced considerably as the system generates details of trade
undertaken. They can benefit from high growth in trading volumes which typically takes place
when on automated trading system is introduced.
They can trade from their respective offices and can make use of full back office support for
trading.
There is no need to occupy office premises near a stock exchange unlike what was previously
required this can lead to reduced establishment costs.
They can install a computer network of their own to receive their own client orders, which they
can interface with the exchange, leading to a large increase in business.
Large growth opportunities also emerge on the NSE, as Foreign Financial institutions prefer the
automated and regulated market.

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MEMBERS OF THE STOCK EXCHANGE:
The securities contract regulation act 1956 has provided uniform regulation for the admission of
members in the stock exchanges. The qualifications for becoming a member of a recognized stock
exchange are given below:
 The minimum age prescribed for the members is 21 years.
 He should be an Indian citizen.
 He should be neither a bankrupt nor compound with the creditors.
 He should not be convicted for fraud or dishonesty.
 He should not be engaged in any other business connected with a company.
 He should not be a defaulter of any other stock exchange.
 The minimum required education is a pass in 12th standard examination.
Taxation of Indian Resident:
The below mentioned FAQs are restricted to tax implication of the resident investors only.
Tax on transactions Of Buy and sell securities:
Yes, you are liable to play tax on his transaction: on the difference between the price at which
you sell and the price at which you acquired it. You can also claim deduction for expenses
incurred these securities along with cost of buying these securities. Further if these securities are
held or along term before selling them, your cost of acquisition can be increased by the
indexations, which reduce your capital gains, indexation benefits, is not available on debenture
and bonds. In case these securities are held as stock-in-trade i.e. if you are in the business of
buying and selling securities. The profit and loss from purchase and sell of securities will be
taxed under the head ―profit of gains of business or profession‖.

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The nature of income under which transaction in securities will be taxed:
Profit and loss from purchase and sales of securities will be taxed under the head of income
from ―capital gains‖, provided such securities are held as investment by you. In case these
securities a new held as stock-in-trade. If you are in the business of buying and selling securities
under the head ―profit or gains of business or profession‖.
Capital gain/loss:
Capital gain/loss means any profit or loss arising from transfer of a capital asset affected in the
previous year.
Capital Assets:
Capital asset means property of any kind held by an assesses, whether or not connected with his
business or profession, but does not include 1:stock-in-trade, 2: personal effect such as jewelers,
furniture, and motor car held for personal use. 3: 61/2% Gold Bonds. 1980. 4: 7% Gold Bonds.
5: National Defiance Gold Bonds 1999. 6. Gold deposit Bond under the gold deposit scheme,
1999 notified by the central government.
Transfer of a capital asset:
Transfer includes sale, exchanges or relinquishment of the asset of the extinguishment on any
right there in or compulsory acquisition thereof under any low. In a case where as asset is
converted by the owner or treated by him, is also treated as transfer. However, the following
specific transaction are not regarded as transfer e.g. (a) any distribution of capital assets on total
or partial partition of an HUF (a) any transfer of a capital under a gift or will or an irrevocable
trust expect share, debenture or warrants allotted to employee under approved EFOP scheme,

39. P a g e | 39
(b) Issue of share by resulting of amalgamated company in lieu of shares held in the demerged or
amalgamating company (providing in case of amalgamation, Amalgamation Company in Indian
company)
(c) any transfer by way of conversion of bonds or debentures of a company into shares or
debentures of that company in case of (a) and (b) above, if the resulting owner sells the capital
asst subsequently, the cost of acquisition shall be deemed to be the cost at which the capital asset
was acquire by the previous owner. In case of demerger, it shall be the portion of the cost which
bears to the total cost the same proportion as the net-book value of the assets transferred in the
demerged bears to the net worth of the demerged company immediately before demerged. The
cost of acquisition of the original shares would stand reduced correspondingly.
Short term Asset:
Capital is divided as long term and short term with reference to the period of holding of the asset
by you. The period of holding computed from the date acquisition to the date immediately
preceding its sale. If the shares, unit os specific mutual fund u/s 10(23D) or any other listed
securities are held by you for less than 12 months then such shares/ units or listed securities
would be treated as short term assets. In all other cases, the asset is required to hold for 36 month
so as to quality for long term capital gain.
Long Term Asset:
If the shares, unit of specified mutual fund u/s 10(23D) or any other listed security are held by
you for more then 12 month then such share/units or listed security would be treated as long term
asset.
Example:
You purchase 1000 shares of ACC on 10.6.2005 for Rs 1, 10,000/-

40. P a g e | 40
You were allotted 1000 shares as bonus on 11.8.2005
You sold these shares on 12.8.2006 for Rs 1, 30,000/-
Calculation of long term capital gain would be as follows:
Amount in Rs
Sale consideration 1, 30,000
Cost of 1000 shares purchased on 10.6.2000 110000*406/389 (indexation benefits) 1, 14,807
Cost of one thousand bonus shares nil
Long term capital 15, 193
MARKET PARTICIPANTS:
A few decades ago, worldwide, buyers and sellers were individual‘s investors, such as wealthy
businessman, both long family histories (and emotional ties) to particular corporations.
Overtime, market have become more ―institutionalized‖ buyers and sellers are larger institutions
(e.g. Pension funds, insurance companies , mutual funds, index funds, exchange traded funds,
hedge funds investors groups, banks and various other financial institutions).
The rise of the institutional investors has brought with t some improvement in market operations.
This, the government was responsible for ―fixed‖(and exorbitant) fees being markedly reduced

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for the ‗small‘ investors, but only after the large institutions had managed to break the brokers‘
solid fronts on fees. (They then went to ‗negotiated‘ fees, but only for large institutions.
However, corporate governance (at least in the west) has been very much adversely affected by
rise of (largely ‗absentee‘) institutional ‗owners‘
NAME OF THE STOCK EXCHANGES IN INDIA:
At present there are 23 stock exchanges recognized under the securities Contracts (regulation),
Act, 1956. Those are:
 Ahmadabad Stock Exchange Association Ltd.
 Bangalore Stock Exchange
 Bhubaneswar Stock Exchange Association
 �Calcutta Stock Exchange
 Cochin Stock Exchange Ltd.
 Coimbatore Stock Exchange
 Delhi Stock Exchange Association
 Guwahati Stock Exchange Ltd
 Hyderabad Stock Exchange Ltd.
 Jaipur Stock Exchange Ltd
 Kanara Stock Exchange Ltd
 Ludhiana Stock Exchange Association Ltd
 Madras Stock Exchange
 Madhya Pradesh Stock Exchange Ltd.
 Magadh Stock Exchange Limited
 Meerut Stock Exchange Ltd.
 Mumbai Stock Exchange

42. P a g e | 42
 National Stock Exchange of India
 OTC Exchange of India
 Pune Stock Exchange Ltd.
 Saurashtra Kutch Stock Exchange Ltd.
 Uttar Pradesh Stock Exchange Association
 Vadodara Stock Exchange Ltd.
ROLE OF STOCK EXCHANGES IN THE MARKET/ORGANIZATION:-
Stock exchanges have multiple roles in the economy, this may include the following:
1. Raising capital for businesses
The Stock Exchange provide companies with the facility to raise capital for expansion through
Selling shares to the investing public.
2. Mobilizing savings for investment
When people draw their savings and invest in shares, it leads to a more rational allocation of
Resources because funds, which could have been consumed, or kept in idle deposits with banks,
are mobilized and redirected to promote business activity with benefits for several economic
sectors such as agriculture, commerce and industry, resulting in stronger economic growth and
higher productivity levels and firms.
3. Facilitating company growth
Companies view acquisitions as an opportunity to expand product lines, increase distribution
Channels, hedge against volatility, increase its market share, or acquire other necessary business
assets. A takeover bid or a merger agreement through the stock market is one of the simplest and
most common ways for a company to grow by acquisition or fusion.

43. P a g e | 43
4. Redistribution of wealth
Stock exchanges do not exist to redistribute wealth. However, both casual and professional stock
investors, through dividends and stock price increases that may result in capital gains, will share
in the wealth of profitable businesses.
5.Corporate governance
By having a wide and varied scope of owners, companies generally tend to improve on their
management standards and efficiency in order to satisfy the demands of these shareholders and
the more stringent rules for public corporations imposed by public stock exchanges and the
government. Consequently, it is alleged that public companies (companies that are owned by
shareholders who are members of the general public and trade shares on public exchanges) tend
to have better management records than privately-held companies (those companies where
shares are not publicly traded, often owned by the company founders and/or their families and
18
heirs, or otherwise by a small group of investors). However, some well-documented cases are
known where it is alleged that there has been considerable slippage in corporate governance on
the part of some public companies. The dot-com bubble in the early 2000s, and the subprime
mortgage crisis in 2007-08, are classical examples of corporate mismanagement. Companies like
Pets.com (2000), Enron Corporation (2001), One.Tel (2001), Sunbeam (2001), Webvan (2001),
Adelphia (2002), MCI WorldCom (2002), Parmalat (2003), American International Group
(2008), Lehman Brothers (2008), and Satyam Computer Services (2009) were among the most
widely scrutinized by the media.
7. Creating investment opportunities for small investors
As opposed to other businesses that require huge capital outlay, investing in shares is open to

44. P a g e | 44
both the large and small stock investors because a person buys the number of shares they can
afford. Therefore the Stock Exchange provides the opportunity for small investors to own shares
of the same companies as large investors.
8. Government capital-raising for development projects
Governments at various levels may decide to borrow money in order to finance infrastructure
projects such as sewage and water treatment works or housing estates by selling another
category of securities known as bonds. These bonds can be raised through the Stock Exchange
whereby members of the public buy them, thus loaning money to the government. The issuance
of such bonds can obviate the need to directly tax the citizens in order to finance development,
although by securing such bonds with the full faith and credit of the government instead of with
collateral, the result is that the government must tax the citizens or otherwise raise additional
funds to make any regular coupon payments and refund the principal when the bonds mature.
9. Barometer of the economy
At the stock exchange, share prices rise and fall depending, largely, on market forces. Share
prices tend to rise or remain stable when companies and the economy in general show signs of
stability and growth. An economic recession, depression, or financial crisis could eventually lead
to a stock market crash. Therefore the movement of share prices and in general of the stock
indexes can be an indicator of the general trend in the economy.
Credit rating and information Services of India Ltd. (CRISIL):-
It is first credit rating agency in the country to evaluate debt obligations of the companies,
depending on their ability to service these obligations and assigns rating to them expressed as
numeric and alphabetical symbols. The ratings convey the credit agency s opinion on the risk

45. P a g e | 45
associated with a particular debt obligation. The credit rating is however not the recommendation
of the credit rating agency to the investor to buy or sell the securities.
INVESTMENT INFORMATION AND CREDIT RATING AGENCY OF
INDIA LTD.(ICRA):-
The ICRA has been set up with the primary objective of providing guidance
to the investors/ creditor in determining the credit risk associated with a debt
Instrument/ credit obligation.
Credit Analysis and Research LTD. (CARE):-
Its main objective is of rating of all types of debt for the benefit to the investors. It is the third
Credit Rated Agency in India.
Stock Market:-
The stock Market is broadly divided into two parts primary market and a secondary market. New
securities are issued in the primary market and outstanding securities are traded in the secondary
market.
The secondary market in India comprises about 23 stock exchanges recognized by the
government under Securities Contract Regulation Act.
The principal exchanges are the National Stock Exchange and Bombay Stock Exchange,
accounting for the bulk of the trading on the Indian Stock Exchange.
Importance of Stock Market in India:
The stock market is one of the most important sources for companies to raise money. This
allows businesses to be publically traded or raised additionally capital for expansion by selling
share of ownership of the company in a public market.

46. P a g e | 46
The liquidity that an exchange provides affords investors the ability to quickly and easily sell
securities. This is an attractive feature of investing in stocks, compared to other less liquid
investment such as real estates.
History has shown that the price of shares and other assets is an important part of the dynamic of
economies activity, and can influence or be an indicator of social mood.
An economy where the stock market is on the rise is considered to be an up and coming
economy.
In fact, the stock market is often considered the primary indicators of a country‘s economics
strength and development. Rising share prices, for instance, tend to be associated with increased
business investment and vice versa.
Share prices also affect the wealth of household and their consumption.
Therefore, central banks tend to keep an eye on the control and behavior of the stock market and,
in general, on the smooth operation of financial system functions. Financial stability is the raison
d‘être of central banks.
Exchanges also act as the clearinghouses for each transaction, meeting that they collect and
deliver the shares, and guarantee payment to the seller of a securities. This eliminates the risk to
an individual buyers or seller that the counterparty could default on the transaction.
The smooth functioning of all these activities facilities economies growth in that lower costs
enterprise risks promote the production of goods and services as well as employment.
In this way the financial system contribution to increased prosperity. An important aspect of
modern markets, however, including the stock markets, is absolute discretion.
For example, in the USA stock we see more unrestrained acceptance of any firm than in similar
markets. Such as, Chinese firms with no significant value to American society to just name one
segment.

47. P a g e | 47
This profit USA banker on Wall Street, as they reap large commissions from the placement, and
the Chinese company which yields funds to invest in china.
Yet accrues no intrinsic value to the long-term stability of the American economy, rather just
short-term profits to American business man and the Chinese; although, when foreign company
has a presence in the new market, there can be benefits to the market‘s citizens
Conversely, there are very few large foreign corporation listed on the Toronto Stock exchange
TSX, Canada‘s largest stock exchange. This discretion has insulated Canada to some degree to
worldwide financial condition.
In order for the stock markets to truly facilitate economy‘s growth via lower costs and better
employment, great attention must be given to the foreign participants being allowed in. Relation
of the stock market to the modern financial system.
The financial system in most western countries has undergone a remarkable transformation. One
features of this development is disintermediation. A portion of the funds involved in saving and
financing bank lending and deposit operation.
The general public‘s heightened interest in investing in the stock market, either directly or
through mutual funds, has been an important component of this process. Statistics show that in
recent decades share have made up an increasingly large proportion of household‘s financial
assets in many countries.
In the 1970‘s, in Sweden, deposit account and other very liquid assets with little risk made up
almost 60 percent of households‘ financial wealth, compared to less than 20 percent in the 2000s.
The major part of this adjustment in financial portfolio has directly to shares but a good deal now
take the form of various kinds of institutional investment for groups of individuals, e.g., pension
funds, mutual funds, hedge funds, insurance investment of premiums, etc.

48. P a g e | 48
The trend towards form of saving with a higher risk has been accentuated by new rules for most
funds and insurance, permitting a higher proportion of shares to bonds.
Similar tendencies are to be found in other industrialized countries. In all developed economies
system, such as the European Union, the United State, Japan and other developed nations, the
trend has been the same: saving has moved away from traditional (government insured) bank
deposits to more risky securities of one sort or another.
The Stock Market, Individual Investors, and Financial Risk:
Riskier long-term saving required that an individual possess the ability to manage the associated
increased risks. Stock prices fluctuated widely, in marked contrast to the stability of (government
insured) bank deposits or bonds.
This something that could affect not only the individual investors or households, but also the
economy on a large scale. The following deals with some of the risks of the financial sectors in
general and the stock market in particular.
This is certainly more important now that so many newcomers have entered the stock market, or
have acquired other ‗risky‘ investment (such as ‗investment‘ property, i.e., real estate and
collectables.)
With each passing year, the noise level in the stock market rises. Television commentators,
financial writers, analysis, and market strategies are all over taking each other to get investors
‗attention‘.
At the same time, individual investors, immersed in chat rooms and message boards, are
exchanging questionable and often misleading tips.
Yet, despite all this available information, investors find it increasingly difficult to profit. Stock
prices skyrocket with little reasons, then plummet just as quickly.

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And people who have turned to investing for their children‘s education and their own retirement
become frightened. Sometimes there appears to be no rhyme or reason to the market, only folly.
This is a quote from the prefaces to a published biography about the long-terms value oriented
stock investors warren Buffett.
The behavior of the stock market in India:
From experiences we know that investors may ‗temporarily‘ move financial prices away from
their long terms aggregate price ‗trend‘ (positive or up trends are referred to as bull markets:
negative or down trends are referred to as bear markets.)
Over-reaction may occur so that excessive optimism (euphoria) may drive prices unduly high or
excessive pessimism may drive unduly low. New theoretical an empirical arguments have since
been put forward against the notion that financial markets are ‗generally‘ efficient (i.e., in the
sense that prices in the aggregate tends to follow a Gaussian distribution.)
(But this largely theoretic academic viewpoint- knows as ‗hard‘ EMH- also predicts that little or
no trading should take place, contrary to fact, since prices are already at or near equilibrium,
having priced in all public knowledge.) The ‗hard‘ efficient-market hypothesis is sorely tested by
such events as the stock market crash in 1987, when the Dow Jones index plummeted 22.6
percent—the largest-ever one-day fall in the United States.
This events demonstrated that share prices can fall dramatically even though, to this day, it is
impossible to fix a generally agreed upon definite cause: a thorough search failed to detect any
‗reasonable‘ development that might have accounted for the crash. (But note that such events are
predicted to occur strictly by chance, although very rarely.)
It seems also to be the case more generally that many price movements (beyond that which are
predicted to occur ‗randomly‘) are not occasioned by new information: a study of the fifty largest

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one-day share prices movements in the United States in the post-war period seems to confirm
this.
However, a ‗soft‘ EMH has emerged which does not required that prices remain at or near
equilibrium, but only that market participants not be able to systematically profits from any
momentary market ‗inefficiencies‘.
Various explanation for such large and apparently non-random prices movement have been
promulgated. For instance, some research has shown that change in estimated risks, and the use
of certain strategies, such as stop-loss limit and value at Risk limits, theoretically could cause
financial markets to overcorrect.
But the best explanation seems to be that the distribution of stock market prices is non-Gaussian
(in which case EMH, in any of its current forms, would not be strictly applicable.)
Other research has shown that psychological factors may result in exaggerated (statically
anomalous) stock prices movement (contrary to EMH which assumes such behaviors‘ cancel
out‘).
Psychological research has demonstrated that peoples are predisposed to ‗seeing‘ patterns, and
often will perceive a pattern in what is, in fact, just noise, (something like seeing familiar shapes
in clouds or ink blots.)
In the present context this means that a succession of good new items about a company may lead
investors to overreact positively (unjustifiably driving the prices up). A period of good returns
also boosts the investor‘s self-confidence, reducing his (psychological) risk threshold.
Another phenomenon—also from psychology—that works against an objective assessment is
group thinking. As social animal, it is now easy to stick to an opinion that differs markedly from
that of a majority of the group.

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An example with which one may be familiar is the reluctance to enter a restaurant that is empty;
people generally prefer to have their opinion validated by those of other in the group.
In one paper the authors draw an analogy with gambling. In normal times the market behaves
like a game of roulette; the probabilities are known and largely independent of the investment
decision of the different players.
In times of market stress, however, the game becomes more like poker (herding behavior takes
over). The players now must give heavy weight to the psychology of other investors and how
they are likely to react psychology.
The stock market, as any other business, is quite unforgiving of amateurs. Inexperienced
investors rarely get the assistance and support they need.
In the period running up to 1987 crash, less than 1 percent of the analysis recommendation had
been to sell (and even during the 2000-2002 bear market, the average did not above 5%)
In the run up to 2000, the media amplified the general euphoria, with reports of rapidly rising
share prices and the notion that large sums of money could be quickly earned in the so called In
the run up to 2000, the media amplified the general euphoria, with reports of rapidly rising share
prices and the notion that large sums of money could be quickly earned in the so called new
economy stock market.
(And later amplified the glom which descended during the 2000-2002 bear market, so that by
summer of 2002, prediction of a DOW average below 5000 were quite common).
Irrational behavior:
Sometimes the market seems to react irrationally to economic or financial news, even if that
news is likely to have no real effect on the technical value of securities itself.
But this may be more apparent than real, since often such has been anticipated, and a counter
reaction may occurs if the news is better (or worse) than expected.

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Therefore, the stock market may be swayed in either by press releases, rumors euphoria and
mass panic; but generally only briefly, as more experienced investors (especially the hedge funds
quickly rally to take advantage of even the slightest, momentary hysteria.
Over the short-term, stock and other securities can be battered or buoyed by any number of fast
market-changing events, making the stock market behavior difficult to predict. Emotion can
drive prices up and down, people are generally not as rational as they think, and the reasons for
buying and selling are generally obscure.
Behaviorists argue that investors often behave ‗irrationally‘ when making investment decision
thereby incorrectly pricing securities. This causes market inefficiencies, which, in turn, are
opportunities, to make money.
However, the whole notion of EMH is that these non-rational reactions to information cancel out,
leaving the prices of stock determined. The Dow Jones industrial Average biggest gain in one
day was 936.42 points or 11 percent, this occurred on October 12, 2008.
Leveraged strategies
Stock that a traders does not actually own may be traded suing short selling; margin buying may
be used to purchase stock with borrowed funds; or, derivatives may be used to control large
blocks of stock for a much smaller of amount of money than would be required by outright
purchases or sale.
Short selling
In short selling, the traders borrow stock (usually from his brokerage which holds it‘s
client‘s shares or its own share on account to lend to short sellers) then sells it on the market,
hoping for the price to all.

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The trader eventually buys back the stock, making money if the price fell in the meantime
or losing money if it rose; exiting a short position by buying back the stock is called ―covering a
short position‖.
This strategy may also be used by unscrupulous traders to artificially lower the price of a
stock. Hence most markets either prevent short selling or place restriction on when and how a
short sale can occur.
The practice of naked shorting is illegal in most (but not all) stock markets.
Margin buying:
In margin buying, trader borrows money (at interest)to buy a stock and hopes for it to rise. Most
industrialized countries have regulation that requires that if the borrowing is based on collateral
from other stock the trader owns outright, it can be a maximum of a certain percentage of those
other stocks‘ value.
In the United State, the margin requirements have been 50% for many years (that is, if you want
to make a $100 investment, you need to put up$500, and there is often a maintenance margin
below the $500).
A margin call is made if the total value of the investor‘s account cannot support the loss of the
trade.
(Upon a decline in the value of the margined securities additional funds may be requires to
maintain the account‘s equity, and with or wit out the margined securities or any others within
the account may be sold by the brokers to protect its loan position. This investors is responsible
for any shortfall following such forced sale).
Regulation of margin requirement (by the Federal Reserve) was implemented after the crash of
1929. Before that, speculators typically only needed to put up a little as 10% (or even less) of

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the total investment represented by the stocks purchased. Other rules may include the
prohibition of free-riding: putting in an order to buy stocks without paying initially (there is
normally a three-day grace period for delivery of the stock.)
But then selling them (before the three-days are up) and using part of the proceeds to make the
original payment (assuming that the value of the stocks has not declined in the interim).
Investment strategies:
One of the many thing people always want to know about the stock market is, ―How do I know
money investing?‖ There are many different approaches; two basic methods are classified as
either fundamental analysis or technical analysis.
Fundamental analysis refers to analyzing companies by their financial statements founds in SEC
Filing, business trends, general economic conditions, etc.
Technical analysis studies prices action in market through the use of charts and quantitative
techniques to attempt to forecast prices trends regardless of the company‘s financial prospects.
One examples of a technical strategy is the Trend following method, used by John W Henry and
risk control and diversification.
Additional, many choose to invent via the index method. One holds a weight or unweight
portfolio consisting of the entire stock market or some segment of the stock market (such as the
S&P 500 or Wilshire 5000).The principle aim of this strategy is to maximize diversification,
minimize taxes from too frequent trading and ride the general trend of the stock market (which,
in the U.S, has averaged nearly 10% year, compounded annually, since World War II).
Taxation:

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According to much national or state legislation, large arrays of fiscal obligation are taxed for
capital gains. Taxes are charged by the state over the transactions, dividends and capital gains
on the stock market, in particular in the stock market.
However, these fiscal obligations may vary from jurisdiction to jurisdiction because, among
other reasons, it could be assumed that taxation is already incorporated into the stock prices
through the different taxes companies pay to the state, or that tax free stock market operations
are useful to boost economic growth.
ACCOUNT OPENING KIT IN NIRMAL BANG PVT LTD:
MANADATORY DOCUMENT:-
PROOF FO IDENTITY (For individual /Karta / Sole proprietor / Authorized
person (s) for Partnership, corporate and Trust)
Photocopy of PAN card
PROOF OF ADDRESS (For individual / Karta / Sole proprietor / Authorized
person (s) for Partnerships, Corporate and Trust)
Photocopy of any one of the following:
Passport, Voter ID Card, Driving license, Bank Passbook, Rent Agreement, Ration Card, Current
Telephone Bill, Current Electric Bill, Flat Maintenance Bill, and Certificate Issued by employer
registered under MAPIN, Insurance Policy.
BANK AND DP PROOF:
 Letter from client‘s banker certifying the account number and the period from which the
accounts in operation as per prescribed format.

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 Copy of a pas book / bank statement containing name of the client
 Copy of current transaction statement / holding statement / certification by DP containing the
name of DP and client.
PROOF OF INCOME AND ASSETS:
1. Copy of the salary of the constituent for the last month
2. Income tax statement for the last 2 financial years
3. Assets liability statement
4. Copy of the values certificate in case of immovable property
FOR MINORS:
In additional to the abovementioned documents, the following documents would also be required
for minors.
I. Birth certificate of Minor.
ADDITIONAL DOCUMENTS FOR NON-INDIVIUALS:
1) Copy of the balance sheet for the last 2 financial years (copies of annual balance sheet to be
submitted every years)
2) Copy of latest share holding pattern including list of all those holding more than 5% in the share
capital of the company, duly certified by the company secretary/ whole time Director/MD. (copy
of updated shareholding patterns to be submitted every year)
3) Copies of the memorandum and articles of association in case of a company / body corporate or
partnership deed in case of a partnership firm

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4) Copy of the Resolution of Board of Directors‘ approving participation in equity / derivatives/
debts trading and naming authorized persons for dealing in securities.
5) Photographs of partners/whole time directors, individual promoters holding 5% or more, either
directly or indirectly, in the shareholding of the company and of persons authorized to deal in
securities.
6) Net worth certified by Chartered accountant.
7) Declaration on letterhead of firm as per prescribed format for sole proprietorship and partnership
Firms.
BASIC RISKS INVOLVED IN TRADING ON THE STOCK EXCHANGE
(EQUITY AND OTHER INSTRUMENT)
Of higher volatility:
Volatility refers to the dynamic changes in price that securities undergo when trading activity
continues on the Stock Exchanges. Generally, higher the volatility of a security/contract, greater
is its price swings.
There may be normally greater volatility in thinly traded securities/contracts than in active
securities/contracts. As a result
Of volatility, your order may only be partially executed or not executed at all.
Or the price at which your order got executed may be substantially different from the last traded
price or changes substantially thereafter, resulting in notional or real losses.
Risk of lower liquidity:
Liquidity refers to the ability of market participants to buy and or sell securities/ contracts
expeditiously at a competitive price and with minimal price difference.

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Generally, it is assumed that more the number or order available in a market, greater is the
liquidity.
Liquidity is important because with greater liquidity, it is easier for investors to buy and/or sell
securities/ contracts swiftly and with minimal price difference, and as a result, investors are more
likely to pay or receive a competitive price for securities/contracts purchased or sold.
There may be a risk of lower liquidity in some securities/contracts as compared to active
securities/contracts. As a result, your order may only be partially executed, or may be executed
with relatively greater price difference or may not be executed at all.
Buying/Selling without intention of giving and or taking delivery of a securities, as part of a day
trading strategy, may also result into losses, because in such a situation, stock may have to be
sold/purchased at a low/high prices, compared to the executed price levels, so as not to have any
obligation to delivery/receive a security.
Risks of wider spreads:
Spread refers to the difference in best buy prices and the best sell prices. It represents the
differential between the prices of buying a securities and immediately selling it or vice versa.
Lower liquidity and higher volatility may result in wider than normal spreads for loss liquid or
illiquid securities/contracts. This is turn will hamper better price formation.
Risk-reducing orders:
 Most exchanges have a facility for investors to place ―limit orders‖, ―stop loss orders‖ etc‖. The
placing of such orders (e.g., ―stop loss‖ limit orders) which are intended to limit losses to
certain amount may not be effective many a time because rapid movement in market conditions
may make it impossible to execute such orders..

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 A ―market‖ order will be executed promptly, subject to available of orders on opposite side,
without regard to price and that, while the customer may receive a prompt of a ―market‖ order,
the execution may be at available prices of outstanding orders, which satisfy the order quantity,
on price time priority. It may be understood that these prices may be significantly different from
the last traded prices or the best prices in that security.
 A ―limit‖ order will be executed only at the time ―limit‖ price specified for the order or a better
price. However, while the customer receives prices protection, there is a possibility that the
order may not be executed at all.
 A stop loss order is generally placed ―away‖ from the current price of a stock / contract, and
such order gets activated if and when stock/contract reaches, or trades through, the stop price.
 Sell stop order are entered ordinarily below the current price, and buy stop orders are entered
ordinarily above the current price. When the stock reaches the pre-determined price, or trades
through such price, the stop loss order convert to a market/limit order and is executed at the
limit order.
 There is no assurance therefore that the limit order will be executable since a stock/contract
might penetrate the pre-determined price, in which case, the risk of such order not getting
executed arises, just as with a regular limit order
Risk of New Announcements:
Issuers make news announcements that may impact the prices of the securities/contracts. These
announcements may occur during trading, and when combined with lower liquidity and higher
volatility, may suddenly cause an unexpected positive or negative movement in the price of the
security/contracts.
Risk of Rumors:

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Rumors about companies at times float in the market through word of mouth, newspapers,
websites or news agencies, etc. the investors should be wary of and should desist from acting on
rumors.
System Risk:
 High volume trading will frequently occur at the market opening and before market close. Such
high volume may also occur at any point in the day. These may cause delays in order execution
or confirmation.
 During periods of volatility, on account of market participants continuously modifying their
order quantity or prices or placing fresh orders, there may be delays in order execution and its
confirmation.
 Under certain market condition, it may be difficult or impossible to liquidate a position in the
market at a reasonable price or at all, when there are no outstanding order either on the buy side
or the sell side, or if trading is halted in a security due to any action on account of unusual
trading activity or stock hitting circuit or for any other reason.
Risk of Option Holders:
 An option holder run the risk of losing the entire amount paid for the option in a relatively short
period of time. This risk reflects the nature of an option as a wasting asset which becomes
worthless when it expires.
 An option holder who neither sells his option in the secondary market nor exercises it prior to
its expiration will necessary lose his entire investment in the option. If the price of the
underlying does not change in the anticipated direction before the option expires to an extent
sufficient to cover the cost of the option, the investors may lose all or a significant part of his
investment in the option.

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 The exchange may impose exercise restrictions and have absolute authority to restrict the
exercise of option at certain times in specified circumstances.
INVESTOR’S RIGHTS AND OBLIGATIONS:
From the trade date upto five trading days. Where trade on the websites, do not tally with the
detail mentioned in the contract note, immediately get in touch with the investors grievances cell
of NSE/BSE.
 Ensure that payment/delivery of securities against is given to the concerned members within one
working day prior to the date of pay-in-announced by NSE/BSE or it‘s clearing
corporation/clearing House.
Payments should be made only by account payee cheque in favors of the firm/company of the
trading members and a receipt or acknowledgement towards what such payment is made be
obtained from the member.
Delivery of securities is made to the pool account of the members rather than to the beneficiary
account of the members.
 In case pay-out of money and /or securities is not received on the next working day after date
pay-out announced by NSE/BSE or its clearing corporation/clearing House.

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Please follow-up with the concerned members for its release. In case pay-put is not released as
above from the members within five working days, ensure that you lodge a complaint
immediately with the investors‘ Grievance cell of NSE/BSE.
 Every member is required to send a complete ‗statement of Accounts‘, for both funds and
securities settlement to each of its constituents, at such periodicity as may be prescribed by time
to time.
You should report errors, if any, in the statement immediately, but not later than 30 calendar
days of receipt thereof, to the members. In case the error is not rectified or there is a dispute,
ensure that you refer such matter to the investors Grievance cell of NSE/BSE, without delaying.
 In case of a complaint against a members/registered sub-broker, you should address the
complaint to the office as may be specified by NSE/BSE from time to time.
 In case where a member surrenders his membership, NSE/BSE gives a public notice inviting
claim, if any from investors. In case of a claim, relating to ―transaction executed on the trading
system‖ of NSE/BSE, ensure that you lodge a claim with NSE/BSE/NSCCL clearing House
within the stipulated people and with the supporting documents.
 In case where a member is expelled from trading membership or declared a defaulter, NSE/BSE
gives a public notice inviting claims, if any, from investors. In case of claim, relating to
―transaction executed on the trading system‖ of NSE/BSE, ensure that you lodge a claim with
NSE/BSE within the stipulated period and with the supporting documents.
 Claims against a defaulter/expelled member found to be valid as prescribed in the relevant
Rules/Bye-laws and the scheme under the Investors‘ Protection Fund (IPF) may be payable first
out of the amount vested in committee for settlement of claims against Defaulters, on pro-rata
basis if the amount is inadequate.