A

Project Report

On

ONLINE TRADING

Of

JRG Securities

Submitted in partial fulfillment of the requirement for the award of degree

of

POST GRADUATE DIPLOMA IN

MANAGEMENT(FINANCE)

By

RATHNAM RAMCHENDER

PGDM/09-11/25

NOVA BUSINESS SCHOOL

(affiliated to autonomous university)

Hyderabad

2009-2011

1
 CERTIFICATE

This is to certify that R.RAMCHENDER, bearing of

reg.no:PGDM/09-11/25 Student of PGDM, from NOVA
BUSINESS SCHOOL, HYDERABAD, has completed the
project titled “FINANCE” Curriculum in our Organization.

He has done the project using ONLINE TRADING

during the period 17-05-2010 to 07-07-2010, Supervision
of Mr.V.Bhushan, from JRG SECURITIES,
HYDERABAD.

He has completed the assigned project well within

the time frame. He is sincere, hardworking and his
conduct during period is commendable.

We wish all the best in his future endeavor.

For JRG
SECURITIES,

2
 DECLARATION

I Ramchender Rathnam here by declare that the project

report on “ONLINE TRADING” submitted by me to “NOVA

BUSINESS SCHOOL” as partial fulfillment for the award of my

own and it has not been submitted to any other institution or

published any where before.

Date:

RATHNAM RAMCHENDER

Place : Hyderabad

Ht no:PGDM/09-11/25

3
 ACKNOWLEDGEMENT

I take this opportunity to acknowledge, all the people who

rendered their valuable advice in bringing the project to function.

As part of curriculum at NOVA BUSINESS SCHOOL under

AUTONOMOUS UNIVERISTY Hyderabad the project enables us to
enhance our skills expand our knowledge by applying various
theories concepts and laws to real life scenario which would
further prepare us to face the extremely competitive corporate
world in near future.

I respectfully express my gratitude for giving me opportunity to

undertake this project work.

I express my gratitude to my faculty guide Miss Sangamitra das

(Finance lecturer) Nova Business School, Hyderabad for his
unparallel support through out my project.

I have tried my level best to put my experience and trading in

writing this reports I am grateful to jrg securities as an
organization and its various employees for helping me to learn
and explore may fields.

ABSTRACT

4
The establishment of costs relating the responsibilities of
executives to the requirement of a policy and the continuous
comparison of actual with cost sheet results either to secure by
individual action the objectives of that policy or to provide a basis
for its revision

The project is taken up with the object to study “ ONLINE

TRADING “ IN JRG SECURITIES.

The project is mainly a study to examine the cost structure to

examine the cost structure of product in Sagar Cement Limited to
examine which production is more profitable and to compare the
position of past with present and to position itself.

It also analyze the variations. The study helps to show the

relative importance of fixed cost and Variable cost with the help
of breakeven chart. It helps to know the amount over head costs
at various levels of operations. This study helps to prepare
budgets such as flexible budgets.

INDEX
chapter Content Page no

5
1 Introduction 09-19
BRIEF ABOUT THE STOCK EXCHANGE

NEED FOR STUDY

OBJECTIVES OF THE STUDY

RESEARCH METHODOLOGY

LIMITATIONS OF THE STUDY

32 Company profile
Introduction to Online 63-73
20-62
4 Analysis
Trading & Interpretation 74-82
DEFFERENCE BETWEEN ONLINE
5 Findings & Suggestions 83-90
&OFFLINE TRADING

6 Bibliography & Questionare

INVESTMENT ADVISORY SEVICES
91-94
BENEFITS OF ONLINE BROKING

PROCESS OF ONLINE TRADING

6
 TABL LIST OF TABLES PAGE NO
E

1 Indian Capital Market at Glance 12-13

• 2020 century

• 21st century

2 Share of Online Trading in Total Cash 30-34

Turnover of National Stock Exchange

• Table 1.1(year 2005)

• Table 1.2(year 2006)

• Table 1.3(year 2007)

• Table 1.4(year 2008)

• Table 1.5(year 2009)

7
TABLE LIST OF FIGURES PAGE NO

1 Problems of Online Broking 53

2 Analysis of Interpretation 75-82

• For how long you have been trading
with online trading

• How will you describe your experience

with online trading till date

• What amount of money you invest

normally

• How often do you trade

• Which trading you prefer

• Whether online trading settled in Indian

investor psyche

• What shortcomings do you feel in Indian

online trading

• Which media would you prefer the most

for investment

8
 CHAPTER-1
ONLINE TRADING

9
INTRODUCTION

The capital market is the market for securities, where companies and the
government can raise long term funds. The capital market includes the stock
market and the bond market. Financial regulators ensure that investors are
protected against fraud. The capital markets consist of the primary market,
where new issues are distributed to investors, and the secondary market, where
existing securities are traded.

Capital market thus plays a vital role in channelizing the savings of individuals
for Investment in the economic development of the country. As a result the
investors are not constrained by their individual abilities, but by the abilities of
the companies, which in turn enhance the savings and investments in the
country, liquidity of capital market is an important factor affecting growth.

Since projects require long term finance, but on the other hand, the investor may
not like to relinquish control over their savings for a long time. A liquid stock
market ensures a quick exit without incurring heavy losses or costs. Thus
development of efficient market system is necessary for creating conductive
climate for investment and economic growth.

10
 Capital market Segment – Primary And Secondary

Broadly , the comprises of two segments – the new issue market which
is commonly known as primary market and the stock market which is known as
secondary market.

1.PRIMARY

2.SECONDERY

Primary

A primary offering, such as with a corporate bond, means you are buying it
directly from the issuer, at par value, usually. A secondary market is where you
sell or buy existing issues. I.E. If you bought a bond last year, now need to get
your principal, you can sell it in the secondary market. You may not get par
value. If rates are up since you bought the bond, then you will likely have to sell it
at a discount to be able to get rid of it. If rates have fallen since you bought it, you
could get a premium for it.

Secondary

The market where securities are traded after they are initially offered in the
primary market. Most trading is done in the secondary market. To explain further,
it is trading in previously issued financial instruments. An organized market for
used securities. Bombay Stock Exchange (BSE), National Stock Exchange NSE,
bond markets, over-the-counter markets, residential mortgage loans,
governmental guaranteed loans etc

11
Secondary Market refers to a market where securities are traded after being
initially offered to the public in the primary market and/or listed on the Stock
Exchange. Majority of the trading is done in the secondary market. Secondary
market comprises of equity markets and the debt markets. For the general
investor, the secondary market provides an efficient platform for trading of his
securities. For the management of the company, Secondary equity markets
serve as a monitoring and control conduit—by facilitating value-enhancing control
activities, enabling implementation of incentive-based management contracts,
and aggregating information (via price discovery) that guides management
decisions.

12
 INDIAN CAPITAL MARKET AT GLANCE

2020th century

190 Formulation of Calcutta stock exchange

8
1800 Trading of shares of east India company in Kolkata
193 And Mumbaiof Lahore and madras stock exchange
Formulation
9
1850 Joint stock company came into existence
194 Formulation of U.P and Delhi stock exchange
1860
0 Speculation and feverish dealing in securities

1875
195 Formulation
Securities of stock
contract exchange
and of act
regulation Mumbai
enacted
6
1894 Formulation of Ahmadabad stock exchange
195 Scam of Haridas Mundhra
7

198 Securities and exchange board of India set up

8

199 Scam of MS Shoes

1

199 SEBI given power Under SEBI act,1992

2

199 Formation of National stock exchange

3

199 HARSHAD MEHTA Scam

5

199 SESA GOA Scam

5

199 CRB scam

7

199 BPL And Videocon Scam

8

13
21st century

200 Depositories came into existence (electronic form

0 of shares)

200 Ketan Parekh scam

1
200 Start of rolling settlement and banning of Badla
2 trading
200 Introduction of T+3 settlement in April
2
200 Introduction of T+2 settlement in April
3
200 BSE Sensex touches all time high 6954 in January
5
200 BSE Sensex touches all time high 12500,the highest
6 intraday fall of 1100
200 BSE reaches the level of
7
200 BSE touches all time high in January 2008
8
200 Sensex saw its highest ever loss of 1,408 points at
8 the end of the session.
200 Sexsex saw its 15 month low,from its all time high
8
2009 Sexsex saw its down trend & highest ever loss
because of Satyam case.

14
BRIEF ABOUT THE STOCK EXCHANGES

Stock Exchange is a market like any other centralized market where both
buyers and sellers come and conduct their business of purchase and sale of
shares & securities. In other words, it is a market place for shares and securities
where trading takes place in a controlled and protected environment.

MEANING OF STOCK EXCHANGE

A stock exchange, share market or bourse is a corporation or mutual

organization which provides "trading" facilities for stock brokers and traders, to
trade stocks and other securities. Stock exchanges also provide facilities for the
issue and redemption of securities as well as other financial instruments and
capital events including the payment of income and dividends. The securities
traded on a stock exchange include: shares issued by companies, unit trusts and
other pooled investment products and bonds.

To be able to trade a security on a certain stock exchange, it has to be

listed there. Usually there is a central location at least for recordkeeping, but
trade is less and less linked to such a physical place, as modern markets are
electronic networks, which gives them advantages of speed and cost of
transactions. Trade on an exchange is by members only. The initial offering of
stocks and bonds to investors is by definition done in the primary market and
subsequent trading is done in the secondary market. A stock exchange is often
the most important component of a stock market. Supply and demand in stock
markets is driven by various factors which, as in all free markets, affect the price
of stocks (see stock valuation).

15
 There is usually no compulsion to issue stock via the stock exchange
itself, nor must stock be subsequently traded on the exchange. Such trading is
said to be off exchange or over-the-counter. This is the usual way that bonds are
traded. Increasingly, stock exchanges are part of a global market for securities.

CONCEPT OF SHARE TRADING

The concept of share broking emerged after the establishment of the
joint stock companies. The ownership of the companies was divided into small
parts and that every part was called share. So, the term “Share” denominates
some part in the ownership of the company. The shares are freely transferable
subject to the some certain restrictions. When the need was felt to sell the shares
by the owner of the shares, it was difficult to find out the buyers of the shares
who want to buy the shares at the price the seller want to sell. At that time a need
was felt to bring the buyers and sellers on a common platform. To solve this
problem, a group of persons came into picture, which used to bring the buyers
and sellers together for the trade of the shares. These persons are called the
share Brokers who find the persons who wish to buy or sell their securities. The
whole process of finding the buyers and sellers of the securities by the brokers is
called the Share Broking.

The origination of the Indian securities market may be traced

back to 1975, when 22 enterprise brokers under a Banyan tree established the
Bombay Stock Exchange (BSE). Over the last 130 years, the Indian securities
market has evolved continuously to become one of the most dynamic, modern
international standards both in terms of structure and in terms of operating
efficiency.

16
 PERIOD OF THE STUDY

The present study of online trading in motilal oswal financial services limited
covers 5 years from 2005,2006,2007,2008and2009.

NEED FOR STUDY

• To know the operation of the company

• To know the companys online trading in the above mentioned period.

• To need for study is to improve the online trading position of the company

• To analysis the existing situation of the company .

• To improve the grey areas of the company .

• The online department can implement and can get position result by
maintaining proper online trading reports.

Sources of data collection are:

For the successful research the manipulation of certain things, concepts, and Symbols
for the purpose of generalization is inevitable. Research is simply the pursuit of truth with
the help of the study

17
 OBJECTIVES OF THE STUDY

1. To understand the appropriate organizational structure of the JRG

securities .

2. To analyse the online trading and its process.

RESEARCH METHODOLOGY

The basic task of research is to generate accurate information for use in

decision making. Research can be defined as the systematic and objective
process of gathering, recording and analyzing data for aid in making business
decisions.There are basically two techniques adopted for obtaining information:

18
1. Primary Data

Primary Data is gathered specifically for the project at hand through

personal interviews with the accounts officers.

Secondary data is previously collected and assembled for some project

other than the one at hand. It is gathered and recorded by someone else prior to

current needs of the researcher. It is less expensive than the primary data.

2.SECONDARY DATA

Secondary data was collected from JRG SECURITIES

Scope of study:

The study is limited to JRG SECURITIES

Data Collection:

Data is collected from secondary sources.

19
 LIMITATIONS

Despite of the training my level best, there were still some

limitation which I think remains there to draw fruitful
conclusion. There were some practical problem which
come across and could not be properly death with
 The advisory services being promised by the brokers would

be of little use to investors looking for an insight into the

market.

 As a client one will access the NSE through a server of the

online brokerage and this may involve queuing delays

 If one like to ask his broker "Aaj kya achcha lag raha hai" he may

not be able to do so. If he want advice on a particular stock in his

portfolio he may not even be able to get that.

20
 CHAPTER-2
INTRODUCTION TO ONLINE TRADING

INTRODUCTION TO ONLINE TRADING

21
 Meaning of Online Trading

“Change is the law of nature”. There were times when man was a wanderer or
a normal. He himself had to go place to place in search of food, water and now
everything is available at your doorstep just at the click of the mouse. The growth
of information technology has affected almost all sectors of life. Internet has
enabled us to get every information at our doorstep. When Internet has affected
all sectors he could “stock markets” the most important player of the economy,
has remained far behind? Like all other sectors Internet has set its feet in the
stock markets also.

Internet trading commissions are clearly posted on the websites of the various
services, and are typically a fixed rate charge, depending upon the type of
security being traded and the size of trade. In theory, therefore, an Interest
investor always knows what commission he is being charged on each trade.
Internet investors can take as much time as they would like to take prior to
placing a trade order. Similarly the online investor likely does not have to worry
that his broker is making unauthorized trades. Since there is no individual broker
making a commission, the only person who is authorized to trace in a the
account is the actual investor. Furthermore, the internet investor can never
become a victim of excessive trading (where for the broker) since the investor
maintains total control over the number of transactions which take place in the
account.

All of these positive features of internet trading may lead the unwary investor to
believe that Internet trading is a way to take control of their finances and save
more money in the process. Unfortunately, this is not always the case. The

22
advantages of Internet stock trading have also its weaknesses and these
weaknesses present significant drawbacks for the average investor.

First and foremost, the average investor is not an expert in the financial markets.
There is a danger for allowing the autonomy of online trading to hull you into the
belief that you are an expert investor. An online investor sitting at home at a
personal computer also foregoes proper investment advice and financial
planning, perhaps among the most valuable services provided by traditional
brokers.

There are, of course, additional risks relative to performing transactions over the
Internet especially on a shared computer. Those people whom investors have
provided their account number and password can freely trade that account while
the investor will have little, if any, resource against the brokerage firm for the
breach of security.

23
When was online trading introduced in INDIA?

Online trading started in India in February 2000 when a couple of

brokers started offering an online trading platform for their customers.

ONLINE TRADING BY NSE & BSE

The central computer located at the Exchange is connected to the workstations

of the Brokers through satellite using Very Small Aperture Terminals (VSATs).
Orders placed at the Brokers' workstations reach the central computer and are
matched by the computer based on price and time priority.

Both the exchanges have switched over from the open outcry trading system to a
fully automated computerized mode of trading known as BOLT (BSE On Line
Trading) and NEAT (National Exchange Automated Trading) System. It facilitates
more efficient processing, automatic order matching, faster execution of trades
and transparency. The scrips traded on the BSE have been classified into 'A',
'B1', 'B2', 'C', 'F' and 'Z' groups. The 'A' group shares represent those, which are
in the carry forward system (Badla). The 'F' group represents the debt market
(fixed income securities) segment. The 'Z' group scrips are the blacklisted
companies. The 'C' group covers the odd lot securities in 'A', 'B1' & 'B2' groups
and Rights renunciations. key regulator governing Stock Exchanges, Brokers,
Depositories, Depository participants, Mutual Funds, FIIs and other participants
in Indian secondary and primary market is the Securities and Exchange Board of
India (SEBI) Ltd.

DIFFERENCE BETWEEN ONLINE AND OFFLINE

TRADING
24
 Nevertheless, with all the convenience of online trading there are still
investors who prefer the old fashion way of offline trading. Offline trading has lost
some popularity but it is still the main form of investing. Offline trading offers
many benefits as well.

1. The one benefit that an investor appreciates the most is that they are not alone
when making investment decisions.

2. There are experienced and professional brokerage companies that handle

their investments for them.

3. Investors are not faced with the challenge of making these vital investment
decisions; especially, if they do not have the experience necessary to make the
appropriate investments.

4. Also, there is someone there to answer any questions that may cause
concerns. Not to mention, with offline trading mistakes are less likely to take
place. No one wants to throw their money away or stand by and watch someone
else throw their money away. It may be wise to hire a professional to assist you
in making the correct investment decisions if you feel you lack the knowledge
necessary.

25
Points of difference between online trading and ofline
trading are as follows:

1. Online trading is very expensive as compare to manual trading or offline

trading.

2. Online trading consumes less time as compare to manual trading.

3. Online trading has very helpful to finding the records easily but offline trading
takes more time to finding the records.

4. In the help of online trading, there is no chance of any errors while doing the
trading. in offline trading there are some errors exist like barriers of
communication .

5. With the help of online trading, we know the international market rate of share
very easily.

26
 DEMATERIALISATION OF SHARES

Dematerialization is the process wherein shares certificates or other securities

held in physical form are converted into electronic form and credited to demat
account of an investor opened with a depository participant. SEBI has made
compulsory trading of shares of all the companies listed in stock exchanges in
demat form with effect from 2nd January 2002.The procedure of opening a demat
account with DP is similar to opening an account with a bank.

ELECTRONIC SETTLEMENT OF TRADE

A. Procedure for purchasing dematerialized securities

The procedure for purchasing dematerialized securities is also similar to the
procedure for buying physical securities.

1. Investor instructs DP to receive credits into his account in the

prescribed form. There may be one time standing instruction or
separate instruction each time to receive credits.
2. Investor purchases securities in any of the stock exchanges linked to
depository through a broker.
3. Broker receives payment from investor and arranges payment to
clearing corporation.
4. Broker receives credit to securities in clearing account on the payout
day.
5. Broker gives instructions to DP to debit clearing account and credit
client’s account. Investor receives shares into his account by way of
book entry.
B. Procedure of selling dematerialized securities
27
The procedure for selling dematerialized securities in stock exchanges is similar
as selling physical securities. The only major difference is that instead of
delivering physical securities to the broker, the investor instructs his DP to debit
his demat account with the number of securities sold by him and credit the
brokers clearing account. The procedure for selling dematerialized securities is
given below:

1. Investor sells securities in any of the stock exchange linked to

depository through a broker.
2. Investor instructs his DP to debit his demat account with the number
of securities sold and credit the broker’s clearing account.
3. Before the pay-in-day, broker of the investor transfers the securities
to clearing corporation.
4. The broker receives payment from the stock exchange.
5. The investor receives payment from the broker for sale of securities
in the same manner as received in case of sale of physical
securities.

28
REMATERILISATION OF SHARES

Rematerialization is the process of conversion of electronic holdings of

securities into physical certificate form. For rematerilisation of scrips, the investor
has to fill up a remat request form (RRF) and submit it to the DP. The DP
forwards the request to depository after verifying the investor’s balances.
Depository in turn initiates the registrars and transfer agent or the issuer
company. RTA/ Company prints the certificates and dispatches the same to the
investor.

Market timings:

Trading on the derivatives segment takes place on all days of the week (except
Saturdays and Sundays and holidays declared by the Exchange in
advance). The market timings of the derivatives segment are:

Normal Market / Exercise Market Open time : 09:55 hours

Normal market close
: 15:30 hours
Set up cut of time for Position limit/Collateral value
: till 15:30 hrs
Trade modification end time / Exercise Market
: 16:15 hours

29
 Advent of online trading

online trade using E*TRADE technology. what began with a single click over 16
years ago has now taken the world by storm. The concept was visualized by one
bill porter, a physicist and inventor with more than dozen of patents to his credit,
who provided online quotes and trading services to fidelity, Charles Schwab, and
quick and Reilly. This led bill to wonder why, as an individual investor, he had to
pay a broker hundreds of dollars for stock transactions. with incredible foresight,
he saw the solution at hand, some day everyone would own computers and
invest through them with unprecedented efficiency and control. And today his
dream has become a reality.

30
 SHARE OF ONLINE TRADING IN TOTAL CASH TURNOVER
OF NATIONAL STOCK EXCHANGE

Table 1.1(Year 2005)

MONTH CASH ONLINE RATIO(%)

TURNOVER(cr.) TURNOVER(cr.)
January 64,762.24 1,923.34 2.97
Feb 48,289.18 1,559.07 3.23
March 43,159.93 1,302.69 3.02
April 48,971.31 1,425.83 2.91
May 54,690.14 1,981.36 3.62
June 61,585.35 2,142.41 3.48
July 78,877.63 2,720.59 3.45
August 85,346.58 3,301.88 3.87
September 1,03,345.50 3,825.88 3.70
October 1,15,595.32 4,344.33 3.76
November 92,885.71 4,024.02 4.33
December 1,10,372.64 5,876.21 5.32

Source: Ludhiana stock exchange

TABLE-1.2 (Year 2006)

31
 MONTH CASH TURNOVER ONLINE TURNOVER RATIO
January 1,34,268.72 6,015.04 4.48
February 1,08,718.06 5,170.01 4.76
March 1,04,876.53 4,330.23 4.13
April 1,00,951.17 5,244.27 5.20
May 98,919.93 5,187.01 5.24
June 84,898.47 5,358.95 6.31
July 93,836.13 6,819.45 7.27
August 86,855.72 6,192.31 7.13
September 88,508.05 6,976,.41 7.88
October 75,697.32 6,261.90 8.27
November 82,035.27 7,490.16 9.13
December 1,15,593.10 11,000.62 9.52

Source: Ludhiana stock exchange

TABLE-1.3 (Year 2007)

32
 MONTH CASH TURNOVER RATIO
ONLINE TURNOVER

January 68,718.95 1,251.84 . 1.82

February 49,563.77 917.80 1.85

March 44,262.50 868.85 1.96
April 53,320.02 914.73 1.72
May 54,979.06 1,237.28 2.25
June 44,241.07 1,108.66 2.51
July 51,398.43 1,290.57 2.51
August 46,113.05 1,310.78 2.84
September 46,498.62 1,318.01 2.84
October 51,902.22 1,476.51 2.85
November 51,351.48 1,639.28 3.19
December 61,973.34 1,915.65 3.09

33
Source: Ludhiana stock exchange

34
 TABLE-1.4(Year 2008)

MONTH CASH TURNOVER ONLINE TURNOVER RATIO

January 57,229.44 5.85 0.01

February 1,06,854.21 190.18 0.18

March 79,036.68 29.10 0.04
April 57,229.44 5.85 0.01
May 79,036.68 29.10 0.04
June 1,19,373.43 88.58 0.07

July 1,10,056.22 97.49 0.09

August 1,25,347.04 165.09 0.13

September 1,42,479.78 229.98 0.16

October 1,06,854.21 190.18 0.18

November 1,22,731.11 350.79 0.29

December 1,31,414.65 366.75 0.28

Source: Ludhiana stock exchange

35
 TABLE-1.5(year 2009)

ONLINE TURNOVER
MONTH CASH TURNOVER RATIO
(RS. CRORES)
January 1,48,829.84 1,130.49 0.76
February 1,35,932.23 1,573.62 1.16
March 60,226.21 849.81 1.41
April 35,615.63 268.9 0.76
May 48,329.11 343.92 0.71
June 42,783.00 238.47 0.56
July 27,227.76 401.68 1.48
August 29,417.15 388.98 1.32
September 35,322.82 453.58 1.28
October 35,326.454 604.17 1.71
November 42,132.23 805.86 1.91
December 54,467.79 1,048.24 1.92

Source: Ludhiana stock exchange

36
 Internet Based Trading through Order Routing Systems

Internet based trading on conventional exchanges, uses the Internet as a

medium for communicating client orders to the exchange, through broker web sites.
Broker’s web sites may serve a variety of functions. These may include;

• Allowing the clients to directly trade through investors;

• Advertise the broker dealers’ services to potential investors;
• Offer market information and investment tools similar to those offered by
information vendor or SRO web sites;
• Offer real-time or delayed quote information, continuously update quotes
while the user visits other sites, or allow investors to create a personal stock
ticker;
• Provide market summaries and commentaries, analyst reports and trading
strategies and market data on currencies, mutual funds, options, market
indices and news; and
• Offer investors access to portfolio management tools and analytic programs;
• Information on commission and fees; and
• Account information and research reports.

In an Order Routing system, a broker offering Internet trading facility provides an

electronic template for the customer to enter the name of the security, whatever it is to
be bought or sold, the quantity and whatever the order is a market or limit order. Once
the broker’s system receives this information.

37
Use of Internet as Alternative Trading Systems (Provision for price
discovery and matching outside conventional exchanges)

In foreign jurisdiction, Alternative trading systems have been developing outside

conventional securities markets, which provide investors with additional proprietary
electronic trading facilities for securities that are traded principally on securities
exchanges, or other organized markets. They have price discovery functions, matching
systems and crossing systems. The systems that are currently in use in outside
jurisdictions are closed systems and are not accessible to the general public through the
Internet. The securities markets regulators abroad the maintained flexible and open
policies designed to encourage innovation in the secondary securities markets. As a
result, a number of market participants, usually broker-dealers, have developed
computerized “alternative trading systems” by which the system centralize, display,
match, cross or otherwise execute trading interest.

Use of Internet for making Initial Public Offerings

Issues of securities of using the Internet to communicate directly with their

shareholders, potential investors and analysts by disseminating corporate information.
In foreign jurisdiction, they are also using the Internet to communicate to the public for
the following:

• Public offerings;
• Private offerings; and
• Disclosure and communication
Issuers are using the Internet to market themselves to potential investors. The Internet
is also being used for fulfilling necessary disclosure requirements, for disseminating the
prospects in electronics form and even for receiving share applications in public issues
electronically. In India, SEBI has taken initiative in permitting use of the network of
stock exchange for collection of investor applications in public offerings by the issuer
companies.

Investment Advisory Services

38
 Brokers as well as other service provides such as investment firms, research
outfits etc. are using the Internet for marketing and advertising purposes, for presenting
information on portfolio analysis and market information, and for communicating with
and receiving orders from potential investors. The services offered by the service
providers to the investors are generally the following:

• Advertising
• Providing investment information and investment advice;
• Underwriting
• Communicating with the investors;
• Customer orders; and
• Record keeping

Working Groups set up by the Committee

39
Considering the present state of capital markets in India and keeping in view the
ongoing developments in Internet based securities business, it was felt that SEBI as a
regulator could strive to identify areas where use of Internet in the capital market is
possible within the existing legal framework. One such area identified by the Committee,
which is also the central within the existing legal framework. One such area identified by
the Committee, which is also the central theme of this report, is the area of Internet
trading on existing electronic exchange. In this area, through early introduction of Cyber
Laws would be highly describe but their existence is not a necessary precondition. To
look into the existing regulatory scenario and to bring out some ground rules for use of
the medium of Internet, the Committee therefore constituted the following two working
groups to look into the area of:

i. Security protocols and standardization of interfaces for Interest based

securities trading, chaired by Prof. Deepak B. Phatak, IIT, Pawai, Mumbai
ii. Surveillance and monitoring related issues arising due to Interest based
securities trading, chaired by Shri. L.K. Singhvi, Sr. ED, SEBI

The committee also requested Ms D N Raval, Executive Director, SEBI to

examine the legality of introduction of Internet trading and issue of Alternative trading
systems. This report of the standing committee examines the regulatory and security
requirements Internet Based Trading on Conventional Exchanges. Separate reports (s)
will cover the other areas related to Internet applications in the securities markets.

40
 The report of the first working group on security protocols and standardization of
interfaces has since been submitted and incorporated in the report. The committee
would like to place on record its sincere thanks to Dr. D.B. Phatak, Ms. D.N. Raval and
their team members. The global financial market is undergoing a transformation due to
rapid technological developments. It thus becomes imperative that for developing in
effective regulatory framework developments in other parts of the world should be
studies and analyzed.

With nearly who million on-line investors, Internet trading in the United States is
growing by leaps and bounds. Internet trading is being facilitated by large brokerage
houses, thus changing the total concept of securities trading. A team comprising of
members from stock exchanges and SEBI visited the United states to these
development and had interactions with brokerages houses, Internet service providers
and other agencies involved in facilitating Internet trading. The team also discussed the
developments in the emerging regulatory and supervisory framework in United States
with the Securities and Exchange Commission officials. They were also tripped of the
various initiatives taken by SEC in this regard. These inputs have been utilized while
drafting this report.

Recommendations of the Committee

Application for Permission by Brokers

41
 SEBI registered Stock Brokers interested in providing Internet based trading
services will be required to apply to the respective stock exchange for a formal
permission. The stock exchange should grant approval or reject the application as the
case may be, and communicate its decisions to the number within 30 calendar days of
the date of completed application submitted to the exchange. The stock exchange,
before giving permission to brokers to start Internet based services shall ensure the
fulfillment of the following minimum conditions.

Net worth Requirement

The broker must have a minimum net worth of Rs. 50 lacks if the broker is
providing the Internet based facility on his own. However, if some brokers collectively
approach a service provider for providing the interest trading facility, net worth, criteria
as stipulated by the stock exchange will apply. The net worth will be computed as per
the SEBI circular no FITTC/DC/CIR-1/98 dated June 16, 1998.

Operational and System Requirements:

Operational Integrity:

The stock Exchange must ensure that the system used by the broker has provision for
security, reliability and confidentiality of data through use of encryption technology. This
stock exchange must also ensure that records encryption technology. The stock

42
Exchange must also ensure the records maintained in electronic from by the broker are
not susceptible to manipulation.

System Capacity

The stock Exchange must ensure that the brokers maintain adequate backup
systems and data storage capacity. The stock Exchange must also ensure that the
workers have adequate system capacity for handling data transfer, and arranged for
alternative means of communications in case of Internet link failure.

Qualified Personnel:

The stock Exchange must lay down the minimum qualification fro personnel
to ensure that the broker has suitably qualified and adequate personnel to handle
communication including instructions as well as other back office work which is likely to
increase because of higher volumes.

Written Procedures:

Stock Exchange must develop uniform written procedures to handle contingency s

tuitions and for review of incoming and outgoing electronic correspondence.

43
Signature Verification/ Authentication:

It is desirable that participants use authentication technologies. For this purpose is

should be mandatory for participants to use certification agencies as and when notified
by Government/SEBI. They should also clearly specify when manual signatures would
be required.

Client Broker Relationship

Know Your Client:

The stock Exchange must ensure that brokers have sufficient,

verifiable information about clients, which would facilitate risk evaluation of clients.

Broker- Client Agreement:

Brokers must enter into an agreement with clients spelling out all obligations and rights.
This agreement should also inter alia, the minimum service standards to be maintained
by the broker for such service specified by SEBI/Exchange for the internet based
trading from time to time. Exchange will prepare a model agreement for this purpose.
The broker agreement with clients should not have any clause that is less
stringent/contrary to the conditions stipulated is the model agreement.

Investor Information:

The broker web site providing the internet based trading facility should contain
information meant for investor protection such as rules and regulations affecting client
broker relationship arbitration rules, investor protection rules etc. The broker web site
providing the Internet based trading facility should also provide and display prominently,
hyper link to the web site/page on the web site of the relevant stock exchange (s)
displaying rules/ regulations/ circulars. Ticker/quote/order book displayed on the web-
site of the broker should display the time stamp as well as source of such information
against the given information.

44
Order/Trade Confirmation:

Order/Trade confirmation should also be sent to the investor through email at client’s
discretion at the time specified by the client in addition to the other made of display of
such confirmation of real time basis on the broker web site. The investor should be
allowed to specify the time interval on the web site itself within which he would like to
receive this information through email. Facility for reconfirmation of orders which are
larger than that specified by the member's risk management system should be provided
on the internet based system.

Handling Complaints by Investors:

Exchanges should monitor complaints from investors regarding service provided by

brokers to ensure a minimum level of service. Exchange should have separate cell
specifically to handle Internet trading related complaints. It is desirable that exchanges
should also have facility for on-line registration of complaints on their web site.

Risk Management:

Exchanges must ensure that brokers have a system-based control

on the trading limits of clients, and exposures taken by clients. Brokers must set pre-
defined limits on the exposure and turnover of each client. The broker systems should
be capable of assessing the risk of the client as soon as the order comes in. The client
should be informed of acceptance/rejection of the order within a reasonable period. In
case system based control rejects an order because of client having exceeded limits
etc., the broker system may have a review and release facility to allow the order to pass
through.

Contract Notes:

45
Contract notes must be issued to clients as per existing regulations, within 24 hours of
the trade execution.

Cross Trades:

As a matter of abundant precaution, the committee seeks to reiterate that as III the case
of existing system, brokers using Internet based systems for routing client orders will
also not be allowed to cross trades of their clients with each other. All orders must be
offered to the market for matching.

It is emphasized that in addition to the requirements mentioned above, all existing

obligations of the broker as per current regulation will continue without changes.
Exchanges may also like to specify more stringent standards as they may deem fit for
allowing Internet based trading facilities to their brokers.

Enforcement:

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

46
FEATURES OF ONLINE TRADING:

The Online Trading is having many features which make it most suitable for the
investors to go for. Some of these features are as follows:

The Internet can provide a new sense of control over your financial future. The amount
of investment information available online is truly astounding. It's one of the best
aspects of being a wired investor. For the first time in history, any individual with an
Internet connection can:

• Know the price of any stock at any time

• Review the price history of any stock in chart format
• Follow market events in-depth
• Receive a wealth of free commentary and analysis about stock
markets and the global economy
• Conduct extensive financial research on any company

One of the great appeals of using an online trading account is the fact that the account
belongs to you, and is under your direct control. When you want to buy or sell stock, you
no longer need to call your broker on the phone; hope that he is in the office to place
your order; possibly argue with the broker about the order; and hope that the transaction
is executed instantly.

47
At the most basic level, an online trading account gives you more agility in buying and
selling stocks. This is through sophisticated information streams, dedicated trading
platforms and sophisticated tools for accessing the markets.

Every broker house aims at providing the investor with the best price available. Also due
to the high level of transparency with regard to display of information relating to the
specific stocks and company profiles, you will be able to get the best quote for your
orders.

Online trading offers you greater transparency by providing you with an audit trail. This
involves a complete integrated electronic chain starting from order placement, to
clearing and settlement and finally ending with a credit into your depository account. All
these stages are subject to inspection, thus bringing in transparency into the system.

Online trading integrates your bank account, your trading account and your demat
accounts, which leads to easy and paperless trading for you.

48
You as an Investment online customer will be able to execute the entire trading
transaction, right from logging on to our site, to the execution and settlement of your
bank account, in a very short period of time.

Trading on the net, gives even the smallest retail investor access to information that
earlier was available only to the big traders. This provides a level playing field for all
investors in the securities market.

This method of trading reduces the settlement risk for the investor, as in this case all
short sell orders are squared off at the specified cut-off time and not allowed to be
carried forward.

In the case of a demat account your demat account is checked by us before executing
your sell transaction. This reduces the settlement risk for the buyer, who is assured of
the delivery of the securities and for you as a seller of the securities

Every trade is confirmed immediately and you will receive an on-screen confirmation
following every trade with full details for your records. This avoids costly errors that
would have been discovered when it is too late.

49
Your Bank, Depository and online account are integrated for your convenience. Various
broking houses provide access to many of the popular banks.

Broking houses work hard to keep our account and personal information secure. From
updated security technology to advanced fraud prevention measures, they have the
people and tools in place to provide a strong defense against electronic scams and
fraud.

50
 BENEFITS OF ONLINE BROKING

1) Less Costly:

The most significant advantage of the Online broking is the cost reduction in the
brokerage. Due to the power of the Internet one has the privilege of becoming the
clients of really large brokerages with the benefits of enjoying the low charges hithelio
before enjoyed only by the big players. As the DP account has got linked to the trading
account most players do not charge a minimum transaction cost thus truly allowing one
to buy a single share and achieve meaningful rupee price averaging whatever be your
buying power.

2) Peace of Mind:

One can never have complete peace of mind but online investing does away with the
hassles of filling up instruction slips, visits to the broker for handing over these slips and
consequent costs.

3) Keeping Records:

The site one trades on keeps a record of all transactions down to unexecuted orders
and cancelled orders thus keeping one abreast of all your transactions 24 hours a day.
No paperwork means more time at one’s disposal for research and analysis.

4) Access to Information and investment Tools:

Most online investing sites have a wealth of information for their registered members.
This includes research reports, results, analysis and even gossip and the buzz in the
market.

51
5.) Unparalleled Liquidity:

The bank account linked with the trading account invariably has an A TM free.
Most partner banks offer Internet banking as well. This results in one’s money becoming
available to him whenever he like from his trading account. Conversely in case he spot
an opportunity in the market he can immediately allocate money from his savings
account to his trading account and make profits.

6.) Unparalleled Safety:

Most sites are secure using 128-bit algorithms -highest available

commercially anywhere in the world. Moreover even if somebody broke in and
tampered with one’s account the money from the stocks he sold or the stock bought
from the money in his account is in his account only.

7.) Reduces the settlement risk:

This method of trading reduces the settlement risk for the investor, as in
this case no Short sale is possible i.e. the seller will not be able to sell the securities
unless he has their actual possession. In the case of a demat account (required for an
online transaction), when a seller wants to sell the securities, his demat account is
checked by the Depository Participant before executing the sale transaction. This
reduces the settlement risk for the buyer, who is assured of the delivery of the
securities.

8.) Offers greater transparency:

52
 Online trading gives greater transparency to the investors by providing them an
audit trail. This involves a complete integrated electronic chain starting from order
placement, to clearing and settlement and finally ending with a credit to the depository
account of the investor. All these stages are subject to inspection, thus bringing in
transparency into the system.

9.) Ease of trade:

It is the ease of doing the trade through net, with a click of mouse, one can buy
or sell any share that is dematerialized.

Other than the above-mentioned advantages, Internet trading provides some

additional advantages to the investors, brokers and also helps the nation to channelize
the resources. Net trading would increase competition in the market hence increase in
the bargaining power of the investors. The entire communication between the investor,
broker and exchange would take place within milliseconds.

PROBLEMS OF ONLINE BROKING

53
There is a flip side to everything and online trading is no exception.

Chart

4%
14% 21%

More Costly
Lack Of Know ledge
11% Loyalty to Traditional Broker
Lack of Trust
Slow Speed
23%
Other

27%

27% Loyality is of traditional broker

23% people says that online trading is more costly than manual trading.

21% people not prefer online trading because of lack of knowledge.

So, the main problems of online trading are as follows:

54
1.) "Server not found":

This may appear on one’s screens when he is desperately trying to get out of an
unprofitable position. Some of the online sites are providing a telephone number for use
in case their sites are overloaded or their server down.

2.) Connectivity of the Broker with NSE:

Recently ICICI Direct had a connectivity problem with the NSE for two and halfhours
during trading hours. This problem is rare but be alive to its possibility.

3.) Cyber attack:

In the event of a malicious attack on the systems of one’s broker he is protected only if
the company is taking proper precautions against such attacks and if proper backup is
regularly been taken. He may like to choose a brokerage that has a stated security
policy and contingency plan in place.

4.) Non-availability of a seamless interface:

As a client one will access the NSE through a server of the online brokerage and this
may involve queuing delays. If a number of client access the server the server takes its
own time sending the orders to the NSE server. He must check out the seamlessness of
this interface before selecting an online brokerage. The faster the orders are processed
the more seamless is the interface.

5.) Non- availability of personalized advice:

If one like to ask his broker "Aaj kya achcha lag raha hai" he may not be able to do so. If
he want advice on a particular stock in his portfolio he may not even be able to get that.

55
6.) Margin:

If Internet trading alone is not fast and furious enough; many people are trading on
margin. That is where the brokerage firm lends you money by leveraging his account,
allowing him to buy a large amount of securities by putting up only a small amount of
money. He may have forgotten what he read in the small print of his agreement, but the
brokerage firm has the right to change the maintenance margin requirements without
any warning or notice to him. In fact, the firm has the right to liquidate his securities
holdings (and it can pick and choose which ones) without any notice to one if he fail to
meet the margin call. And there he was leveraged to the hilt, hoping to hit a home run
when he discovered that he is required to make a large deposit that he cannot make.
The next thing one know, the firm is selling off his securities at a point in time that is not
the best for him. These are the perils of trading on margin.

7.) Little use of advisory services

The advisory services being promised by the brokers would be of little use to investors
looking for an insight into the market. Many would not like to rely on research reports,
which are there for all. So, net investors will have to do their own research and take
their own decision, whether wild or wise.

8.) Increased charges:

Some of the brokers are of the view that they would have to provide advisory services to
the customers. But with increased volumes, they will have to follow the international
practice of charging a little more than the normal charges from a customer looking for
personal advice.

WHY PEOPLE ARE BENDING TOWARDS ONLINE TRADING

56
Several broking houses now offer online trading facilities. You can trade online with e-
brokerages such as ICICI Direct, Kotakstreet, India bulls, India info line’s 5paisa.com
and HDFC securities.

If you are already comfortable trading with your regular broker, here are few reasons
why you may consider switching to trading online, or at least another avenue of trading.
an obvious advantage of online trading is that your transaction would be virtually
paperless. Your trading account would be linked to your demat and bank account,
ensuring a smooth transaction process. This is especially helpful in the extent T+2
settlement system, where you have just two days to settle your transaction.

The normal process of issuing of delivery note, in case of a sale, or arranging for a
payment in case of purchaser of shares, is all taken care of the minute your order is
executed online. The absence of manual intervention ensures that you are completely in
control of all transaction.

There is also little room for error, as your order is always confirmed before it is
executed. You can also make better decision as you have a clear record of all your
previous transaction. When you trade offline, a demat statement is normally sent to you
only on a quarterly basis .keeping track of your portfolio can be a hassle in such a case.
The inter net can provide a new sense of control over your financial future. The amount
of investment information available online is truly astounding. Its one of the best aspect
of being a wired investor for the first time in history, any individual with an internet
connection can

• Know the price of any stock at any time

• Review the price history of any stock in chart format
57
 • Follow market events in-depth
• Receive a wealth of free commentary and analysis about stock markets and
globe economy.
• Conduct extensive financial research on any company
• Talk with other investors around the world

At invests mart you can get real-time stock quotes, daily roundups of the stock market,
experts commentary, and a deep community of fellow investors.

Convenience is probably the greatest advantage online trading offers investors. if don’t
have time to trade during market hours ,perhaps you are at work, you can log on the
web-trading site and place your order offline, during off market hours. Your order would
join the queue and be expected the next day. You would need to enjoy a good
relationship with your broker, for you to be able to reach him in the late hours. For non-
resident Indians (NRI), trading online is perhaps their easiest option to invest in the
Indian stock markets.

What is more, the time difference, in some cases, can work to their advantage .Antony,
an NRI-based in New York, places his order in the evening after work, when it is day
time India and the markets are open. We also have access to considerable information
online. By just logging on to ICICI direct online, for instance, we can get the latest news,
market information and company research.

Moreover, if our connection is maddeningly slow and we want to get your order
executed immediately, most e-brokerages also provide a facility to trade offline by
placing our order via the phone.

58
PROCESS OF ONLINE TRADING

An investor interesting in trading through Internet shall have to, firstly register himself
with an Internet brokerage firm. Some formalities such as filling the account opening
form of the e-broker, copies of identity proof, copy of residence proof are made to
register himself with the e-trader. Secondly, the investor would be required to open a
bank account with a scheduled bank and sufficient balance should be kept in the
account. Thirdly he would be required to open account with a depository participant
because only dematerialized shares can be traded on Internet.

The client places order via the net by logging on to his

Broker’s site.

The broker accepts and executes the order and

places it with the exchange

The exchange accepts the order after checking the share

limit for the day.

The broker makes the payment either directly via the client
bank account or pays through its own account and recovers
it later from the client.

The exchange receives money and completes the

settlement.

The client is intimated about the settlement

either through the demat or via e-mail.

So, generally following steps are followed while doing the trading through the Internet:

59
Step-I:

Those investors interested in doing the trading over Internet system, that is, NEAT - ISX
(NSE), should approach the brokers and register with the Stock Broker.

Step-2:

After registration, the broker will provide to them a login name, password and a personal
identification number (PIN).

Step-3:

Actual placement of an order, Using the place order window as under can then place an
order:

(a) First by entering the symbol and series of stock and other parameters such as
quantity and price of the scrip on the place order window.

(b) Second, fill in the symbol, series and the default quantity.

Step-4:

It is the process of review. Thus, the investor has to review the order placed by clicking
the review option. He may also re-set to clear the values.

Step-5:

After the review has been satisfactory; the order has to be sent by clicking on the send
option.

Step-6:

60
The investor will receive an "Order Confirmation" 'message along with the
order number and the value of the order.

Step- 7:

In case the order is rejected by the Broker or the Stock Exchange for
certain reasons such as invalid price limit, an appropriate message will
appear at the bottom of the screen. At present, a time lag of about ten
seconds is there in executing the trade.

Step-8:

It is regarding charging payment, for which there are different modes.

Some brokers will take some advance payment from the, investors and will
fix their trading limits. When the trade is executed, the broker will ask the
investor for transfer of funds by the investor to his account.

THE MECHANICS OF ONLINE TRADING

61
 CLIENT BROKER STOCK EXCHANGE

Accepts the Accepts the order

Places an order on order, Checks after checking the
the net on the the client’s scrip limit of the
broker’s website Identity and broker for the day
through the places the
distinctive I.D. order with the
code stock Executes the
exchange order
The settlement of
the deal (buy/sell
order) gets
reflected in his
Demat account.
Pays the

Exchange
The client is
though his
intimated about Receives the
owns account
the execution of money and
and receives it
the deal by e-mail. completes the
from the client
Pays the broker settlement
account.
pending physical
delivery.

Rolling Settlement Cycle:

In a rolling settlement, each trading day is considered as a trading period

and trades executed during the day are settled based on the net obligations for the day.
At NSE and BSE, trades in rolling settlement are settled on a T+2 basis i.e. on the 2nd
62
working day. For arriving at the settlement day all intervening holidays, which include
bank holidays, NSE/BSE holidays, Saturdays and Sundays are excluded. Typically
trades taking place on Monday are settled on Wednesday, Tuesday's trades settled on
Thursday and so on.

Concept Of Buying Limit

Suppose you have sold some shares on NSE and are trying to figure out
that if you can use the money to buy shares on NSE in a different settlement cycle or
say on BSE. To simplify things for ICICI Direct customers, we have introduced the
concept of Buying Limit (BL). Buying Limit simply tells the customer what is his limit for
a given settlement for the desired exchange. Assume that you have enrolled for a ICICI
Direct account, which requires 100% of the money required to fund the purchase, be
available.

Suppose you have Rs 1,00,000 in your Bank A/C and you set aside Rs 50,000 for which
you would like to make some purchase. Your Buying Limit is Rs 50,000. Assume that
you sell shares worth Rs 1,00,000 on the NSE on Monday. The BL therefore for the
NSE at that point of time goes up to Rs 1,50,000. This means you can buy shares up to
Rs 1,50,000 on NSE or BSE. If you buy shares worth Rs 75,000 on Tuesday on NSE
your BL will naturally reduce to Rs75,000. Hence your BL is simply the amount set
aside by you from your bank account and the amount realized from the sale of any
shares you have made less any purchases you have made.

Your BL of Rs 50,000, which is the amount set aside by you from your Bank account
for purchase is available for BSE and NSE. As you have made the sale of shares on
NSE for Rs.100000, the BL for NSE & BSE rises to 1,50,000. The amount from sale of
shares in NSE will also be available for purchase on BSE. ICICI Direct

63
 Future Agenda:

Under the existing legal and regulatory framework, SEBI registered brokers can offer
trading on Internet through order is routing systems. However, with the rapid
development of the technology, we have to evolve fisher steps in this direction it is
therefore proposed that as the next step link between the depositories and banks shall
be established after the necessary regulations have been passed. This would reduce
the clearing and settlement time and would also minimize the risk of all the participants
involved in the transactions. We have to look forward towards achieving an ideal
scenario where all the services related to securities markets including marketing of
initial public offers on internet, providing investment advisory services to the clients,
broking, clearing and settlement etc., are provided on the Internet by an intermediary. In
a nutshell it can be said that we are moving towards a one-stop service center.

64
CHAPTER-3
COMPANY PROFILE

65
 COMPANY PROFILE

JRG SECURITIES company profiles provided detailed financial data and key
credit information. JRG SECURITIES predominantly operates in the Finance
Services sector. The Company is a brokerage house, a member of various
exchanges in the capital and commodity markets and the insurance sector. JRG is a
member of the National Stock Exchange of India (NSE), Bombay Stock Exchange
(BSE), the Multi Commodity Exchange of India Ltd Stock Exchange (MCX-SE),
the Colombo Stock Exchange (CSE), and are also the depository participants of the
National Securities Depository Ltd (NDSL) and Central Depository Services
(India) Limited (CDSL). Duckworth Limited, subsidiary of Baring India Private
Equity Fund II Limited, took complete control of the Company. In August 2008, a
100% subsidiary, JRG Business Investment Consultants Ltd was floated to
undertake the business of investment advisory services, financial portfolio
management and marketing and distribution of financial products.

There are five types of reports available, immediately after purchase. In order to
purchase a report, please select a report type from the dropdown list above and
Add to Cart. You will be able to download report(s) purchased in PDF format from
your Customer Area (you need to be logged in to view) and the links are valid for
14 days. Please remember to save the PDF to your computer.

JRG SECURITIES Quickview Report - A snapshot containing company

description, key financial data items and ratios. The report provides a quick
company overview for three years, presented in a one page standard company
report. Data is presented in local currency and in a standardised GAAP format for
easy comparison.

JRG SECURITIES Trader Report - A trading document with concise and

objective company information in a consistent format, designed to answer basic
trading needs. This report covers six years of financial information and includes
shares information, major shareholders, income statement and balance sheet data in
addition to key financial ratios.

JRG SECURITIES Dossier Report - Gives you 10 years of financial history up

to 150 lines of numerical data, including analytic ratios presented in a five page
standard company report. Substantial supplementary information including
subsidiaries, directors, major shareholders as well as business and geographical
breakdown is also covered.
66
JRG SECURITIES Business Risk Report - A one-page standard business risk
measurement report. The report provides peer-to-peer comparisons of business risk
factor analyses including operating, strategic, asset, size & diversity, overall
adjustment and industry standard deviation.

JRG SECURITIES Credit Risk Report - Provides an analysis of a company's

creditworthiness and debt capacity including a rating and a number of standard
ratios analysis & model results. The report includes an analysis of a company's
creditworthiness and debt capacity by using a methodology based on well-
established academic research. It provides peer-to-peer comparisons of credit risk
factors analyses including credit rating, other standard credit scoring
measurements, non-financial information, subsidiaries, major shareholders,
profitability, interest coverage, capitalization and debt service capacity, liquidity,
balance sheet and income statement.

* Wealth Management

* Broking & Distribution

* Commodity Broking

* Portfolio Management Services

* Institutional Equities

* Private Equity

* Investment Banking Services and

* Principal Strategies

Today JRG is one of the foremost brokerage houses, being a member of

various exchanges in the capital and commodity markets and the insurance sector.
67
JRG is a member of the National Stock Exchange of India (NSE), the Bombay
Stock Exchange, the National Multi Commodity Exchange of India Ltd
(NMCEIL), the National Commodities Derivatives Exchange Ltd (NCDEX), the
Multi Commodity Exchange of India Ltd (MCX) and the Indian Pepper and Spices
Trades Association (IPSTA). JRG is a full-fledged depository participant of the
National Securities Depository Ltd and Central Depository Services (India)
Limited.

JRG is also one of southern India's leading Insurance Brokers. No wonder, we call
ourselves, the Financial Supermarket. JRG constantly infuses quality into service.
We provide our clients full expertise to play in the market with confidence. They
avail full-fledged trading facilities and services through our nation-wide offices in
securities and in commodities.

To help our clients better, we have located our offices in major towns and placed
highly qualified and experienced financial experts to man them. A team of
dynamic finance professionals with decades of experience leads them. These
professionals share a common vision not only to transform the company into a
highly professional organization, but also make their clients earn the maximum
from their hard-earned money.

What has made this remarkable growth possible at JRG?

Trust. Commitment. Integrity.

Our transparency, commitment and integrity in all dealings have earned us trust,
which in turn has enabled us to build long term relationships.

68
Date of Establishment 1994
Revenue 7.90482 ( USD in Millions )
Market Cap 834.8563795 ( Rs. in Millions )
Corporate Address Velliappallil Buildings,T B Road
,PalaKottayam-686575, Kerala
www.jrg.co.in
Management Details Chairperson - Rahul Bhasin
MD - Gaurav Vivek Soni
Directors - B R Menon, Gaurav Vivek
Soni, Munish Dayal, P Viswanathan,
Pradeep Mallick, Rahul Bhasin, Regi
Jacob, S K K Nair, Syam Kumar R, T M
Venkataraman
Business Operation Finance - Investment
Background JRG Securities Ltd is a premier brokerage
house in India on the fast growth track. In
the last one decade, they have emerged
as a powerhouse in the financial services
industry. They started functioning in the
stock market in 1992. Over the years, they
grew from strength to strength to become
a major player in India’s broking services
sector.

JRG is one of the foremost brokerage

houses, being a member of
Financials Total Income - Rs. 403.674134 Million
( year ending Mar 2009)
Net Profit - Rs. -10.993871 Million ( year
ending Mar 2009)
Company Secretary Syam Kumar R
Bankers
Auditors BSR & Associates

69
JRG is one of the foremost financial services companies in India, being a member of
various exchanges in the capital and commodity markets and the insurance sector. JRG
is a member of the National Stock Exchange of India (NSE), the Bombay Stock
Exchange, the National Multi Commodity Exchange of India Ltd (NMCEIL), the National
Commodities Derivatives Exchange Ltd (NCDEX)

Commodity Broking

Through JRG securities Commodities Broker (P) Ltd MOFL fully owned subsidiary; JRG
provide commodity trading facilities and related products and services on MCX and
NCDEX. Besides access to the best of research in the form of Daily Fundamentals &
Technical Reports on highly traded commodities, MOFL clients also get access to
MOFL exclusive Customized Trading Advice on both the trading platforms.JRG offer
these services through MOFL branches, Business Partner locations, the internet and
mobile channels

Portfolio Management Services

Jrg securities Portfolio Management Services offer a range of investments solutions

through discretionary services. At jrg have helped create Wealth for MOFL customers
through MOFL Portfolio Management Services. MOFL knowledge of the markets
together with MOFL understanding of MOFL customers and their risk profiles has
helpedMotilaldesign a range of portfolio offerings for MOFL clients. These include the
Value Strategy, Bulls Eye Strategy, Trillion Dollar Opportunity Strategy and Focused
Strategy Series I. As of December 31st, 2009, the Assets Under Management of MOFL
various portfolio schemes stood at Rs.5.04 bn.

70
jrg group has applied to the regulatory bodies for a license to operate as a Domestic
Asset Management Company (Mutual Fund) and Motilal expect to begin operations
soon.

Institutional Equities

jrg offer equity broking services in the cash and derivative segments to institutional
clients in India and overseas. These clients include companies, mutual funds, banks,
financial institutions, insurance companies, and FIIs. As at December 31st, 2009, jrg
Were empanelled with over 300 institutional clients including 200 FIIs. jrg service these
clients through dedicated sales teams across different time zones.

Investment Banking

Motilal offer financial advisory services relating to mergers and acquisitions (domestic
and cross-border), divestitures, restructurings and spin-offs through JRG securities
Investment Advisors Private Ltd. (MOIAPL)

Motilal also offer capital raising and other investment banking services such as the
management of public offerings, private placements (including qualified institutional
placements), rights issues, share buybacks, open offers/delistings and syndication of
debt and equity.

MOIAPL has closed 23 transactions in 2008-09 worth US$ 1.8 billion and had 18
mandates in hand as at March 31, 2009.

71
Private Equity

In 2006, MOFL private equity subsidiary, JRG SECURITIES Private Equity Advisors
Private Ltd (MOPEAPL) was appointed as the investment manager and advisor to a
private equity fund, India Business Excellence Fund, which was launched with a target
of raising US$100 mn. The fund is aimed at providing growth capital to small and
medium enterprises in India, with investments typically in the range of US$3 mn to
US$7 mn.

MOPEAPL will manage and advise the fund and other private equity funds, which may
be raised in the future. In its final closing, in December 2008, the fund obtained
commitments of US$125 mn (Rs.4,875 mn) from investors in India and overseas. The
Fund has deployed/ committed $ 58 mn across 8 deals.

MOPEAPL has recently launched an INR 750 crores domestic Real Estate Private
Equity Fund called “India Realty Excellence Fund” sponsored by JRG SECURITIES
Financial Services Ltd.

Principal Strategies Group

For effective management of treasury operations and to capitalize on market

opportunities, the Group has set up a 30 member team which would be responsible for
effective deployment of funds into different trading and arbitrage strategies.

Focus on Research

Research is the solid foundation on which JRG Securities advice is based. Almost 10%
of revenue is invested on equity research and Motilal hire and train the best resources
to become advisors. At present JRG have 23 equity analysts researching over 27
sectors. From a fundamental, technical and derivatives research perspective; jrg
securities research reports have received wide coverage in the media (over a 1000
mentions last year). MOFL consistent efforts towards quality equity research has
72
reflected in an increase in the ratings and rankings across various categories in the
AsiaMoney Brokers Poll over the years

Awards and Accolades

Jrg securities Financial Services has received many accolades in the year gone by.
Some of them are:

* Rated ‘Best Overall Country Research’ for a Local Brokerage in the 2008
AsiaMoney Brokers poll

* Rated India’s top broking house in terms of total number of trading terminals by the
Dun & Bradstreet survey

* Rated ‘Outstanding Commodity Broking House-2008’ by Globoil India

* Ranked second best for Customer Responsiveness in the Financial Sector at the
Avaya GlobalConnect Customer Responsiveness awards

Strong Management Team

The organization finds its strength in its team of young, talented and confident
individuals. Qualified professionals carry out different functions under the able
leadership of its promoters, MOFL talented pool of people comprises qualified and
experienced professionals with an established track record. Motilal believe that MOFL
management's entrepreneurial spirit, strong technical expertise, leadership skills, insight
into market/customer needs provideMotilalwith a competitive strength which will
helpMotilalimplement MOFL business strategies.re Capital Management.

‘MOFSL Code of Conduct’ – applicable to all Directors & the Senior Management

The Board of Directors (“the Board”) and the Senior Management of jrg securities
73
Financial Services Limited (“the Company”) subscribe to the ‘MOFSL Code of

Conduct’ adopted by Company.

This Code of Conduct is applicable to all the Directors and to the Senior

Management of the Company (from CEO level up to the Associate Director level).

It is expected that all concerned would:

i) Dedicate sufficient time, energy and attention to the Company so as to ensure diligent
performance of their duties of office and in exercising their powers attached to that
office;

ii) act honestly and use their powers of office, in good faith and in the best interests of
the Company as a whole and fulfill their obligations to the

Company’s shareholders;

iii) enhance shareholders value and comply with all regulations and laws that govern
shareholders’ rights. To inform shareholders about all relevant aspects of the
Company’s business and disclose such information in accordance with the respective
regulations and agreements;

iv) ensure the confidentiality of information and proper use of information for the
purpose the information is provided for or received whilst being in office of Director. Any
confidential information is only disclosed if authorised by the Company, or the person
from whom the information is provided, or as required by law;

v) disclose potential conflicts of interest that they may have regarding any matter that
may come before the Board and abstain from discussion and voting on any matter in
which the Director has or may have a conflict of interest;

vi) not engage in conduct likely to bring discredit upon the Company;

vii) ensure adequacy of systems and controls to protect the Company’s assets and
property and ensure its efficient use for business purposes;

74
viii) ensure that use of intellectual properties of the Company and ‘MOFSL’/‘MOSL’
brand and logo’s shall be governed by the manual/code prepared in this behalf by the
Company and in accordance with the Agreement(s), if any, entered/to be entered by the
Company in this behalf;

ix) report the suspected violations of this Code to the Chairman of the Board;

x) not accept gifts from persons or firms who deal with the Company where the gift is
being made in order to influence the Directors/Senior Management actions as a
member of the Board/Company, or where acceptance of gifts could create the
appearance of a conflict of interest;

xi) affirm the compliance with the code on annual basis to the Company Secretary, in
the ‘Form - A’ given in the Annexure to this Code. The Annual Report of the Company
shall carry a declaration to this effect signed by the Chief Executive Officer of the
Company;

xii) In addition to this code, comply with all the applicable laws, regulations, Company’s
Policies and Codes of the Company including the ‘Code of Conduct for Prevention of
Insider Trading in Shares of Motilal Oswal Financial Services Limited’ and the Corporate
Press Norms for communication.

75
CHAPTER-4
Analysis and Interpretation

76
 Analysis and Interpretation

1. For how long you have been trading with on line-trading?

(a)1 year (b) 2 year
(c) 3 year (d) 4 year
Sample size 100

50

40

30 1year
2year
20 3year
4year
10

0
YEAR

According to this survey we find that 44% people says that we

are investing the money online from one year and 26% people
says that we are investing the money online from 2 years and
19% to 11% people says that we are investing money online
from 3 to 4 year. so we can say that now online trading is very
popular in the modern market.

2. How will you describe your experience with on-line trading till
date?
77
 (a) very easy to operate
(b) very difficult to operate
(c) not secure
(d) Any other
Sample size 100

60

50 I find it very easy to operate

40
I find it very difficult to
30 operate

20 I feel it is not secure

10 Any other
0
Experience

According to this survey we find that 60% of people find very easy to
operate and 15% people find diffcuilt two operate and 10% and 15%
people find no secure and any other. so we can say that online
trading is very simple to operate and easy to understand.

3. what amount of money you invest normally ?

(a) 50000 (b) 100000 to 150000
(c) 150000 to 2000000 (d) Any other amount
78
 Sample size 100

35
30
25
50000
20
100000to150000
15
150000to200000
10 Any Other
5
0
Money

According to this survey we find that 35% of people invest

money normally 50000 and 28% of people invest money
100000to150000 and 23% and 14% of people invest money
between 150000to200000 and any other. So we can say that
the people are not invest more money in the share market
because there is a great risk involved while doing the trading.

79
4 . How often do you trade?
(a)Daily (b) Weekly
(c) Monthly (d) More than one month
Sample Size 100

40
35
30
25 daily
20 weekly
15 monthly
10 more than 1 month

5
0
Time

According to this survey we find that 10% of people do trade Daily

and 40% people do trade weekly and 32% and 18% people do
trade month and more than month. So we can say that people are
generally invest in stock market weekly basis.

5. which trading you prefer?

80
 (a) On line trading (b) Manual trading
(c) Both

Sample Size 100

50

40

30 On line trading
Offline trading
20
Both
10

0
Relationship

According to this survey we find that 20% people prefer online

trading and 32% people prefer offline trading rest of 48% people
prefers both. So we can say that mostly people are awareness
about the on line trading and because of this reason the mostly
people are optimizing offline trading.

6. Whether online trading settled in Indian investor psyche

(a) Yes (b) No
Sample Size 100
81
 70
60
50
40 Yes
30 No
20
10
0
Settleled

According to this survey we find that 30% people says yes and
70% people says no. so we can find that on line trading is not
settled in the Indian psyche because some people are not
experience towards online trading.

82
7. What shortcomings do you feel in Indian On-Line trading ?
(a) Lack of awareness the investors about on-line trading
(b) Shortage of domestic technical expertise
(c) Shortage Of Infra structure
(c) any other

Sample Size 100

50

40 Lack of awareness

30 Shortage of
expertise
20 Shortage Of Infra
structure
10 any other

0
Shortcomings

According to this survey we find that 15% of people says lack of

awareness 49% says Shortage of expertise and 14% people
says Shortage Of Infra structure and 22% says any other. So
we can say that mostly people are shortage of experience
about the Indian derivatives market or share market.

8. Which media would you prefer the most for investment?

83
 (a) T.V (b) Newspaper
(c) Magazines (D) Journals

60

50

40 T.V
30 Newspaper
Magazines
20
Journals
10

0
Media

According to this survey we find that 55% people Prefer T.V and 25%
people prefer newspaper and 10% people prefer magazines and 10%
people prefer journals. So we can suggest that mostly people are
very easily grapped the knowledge through T.V.

84
CHAPTER-5
FINDINGS

85
 FINDINGS

1. For how long you have been trading with on line-trading?

According to this survey we find that 44% people says that we
are investing the money online from one year. 11% people
says that we are investing money online from 4 year. so we can
say that now online trading is very popular in the modern
market.

2. How will you describe your experience with on-line trading till
date?
According to this survey we find that 60% of people find very easy
to operate. and15% people find no secure. so we can say that online
trading is very simple to operate and easy to understand

3. what amount of money you invest normally ?

According to this survey we find that 35% of people invest
money normally 50000. 14% of people invest money between
150000to200000. So we can say that the people are not invest
more money in the share market because there is a great risk
involved while doing the trading.

4. How often do you trade?

According to this survey we find that 10% of people do trade
Daily. 18% people do trade more than month. So we can say that
people are generally invest in stock market weekly basis.

86
 5. which trading you prefer?
According to this survey we find that 20% people prefer online
trading and 32% people prefer offline trading. So we can say
that mostly people are awareness about the on line trading and
because of this reason the mostly people are optimizing offline
trading.

6. Whether online trading settled in Indian investor psyche

According to this survey we find that 30% people says yes and
70% people says no. so we can find that on line trading is not
settled in the Indian psyche because some people are not
experience towards online trading.

7. What shortcomings do you feel in Indian derivatives market?

According to this survey we find that 37% of people says lack of
awareness 49% says Shortage of expertise and 14% people says
any other. So we can say that mostly people are shortage of
experience about the Indian derivatives market or share market.

8. Which media would you prefer the most for investment?

According to this survey we find that 41% people Prefer T.V
and 39% people prefer newspaper and 20% people prefer
magazines. So we can suggest that mostly people are very easily
grapped the knowledge through T.V.

CONCLUSION

87
Online trading is the new concept in the stock market. In India, online
trading is still at its infancy stage. Online trading has made it easy to trade
in the stock market as now people can trade while sitting at their home.
Now stock market is easily accessible by the people. There are some
problems while doing the trade through the internet. Major problem faced
by online trader is that the investors are loyal to their traditional brokers,
they rely upon the suggestions given by their brokers. Another major
problem is that the people don't have full knowledge regarding online
trading. They find it difficult to trade them selves, as a wrong entry made by
them, can bring them huge losses.

Nevertheless to say that online trading has the bright future as the
percentage of the trade done through online trading is increasing day by
day.

SUGGESTIONS

88
The introduction of the Internet has surprisingly changed our way of life as

a society. It has defined the way we do business and the way we

correspond. The Internet has opened many opportunities for online trading.

The financial industry revolves around the Internet. Every thing is just a few

clicks away.

This makes online trading most convenient. But there are still investors who

prefer the old fashion way of offline trading and they mainly prefer offline

trading for security reasons.

Internet has introduced a way for consumers to manage their money

online. Not to mention, Internet has transformed the way investment

companies operate their business and has made it easy for private

investors to gain straight access to a range of different markets and online

tools that were at one point only reserved by the use of investment

professionals.

89
Consumer investing and online trading has dramatically changed over the

last decade. Online trading dynamically continues to be redefined. Services

have expanded to include integrated management of additional financial

accounts. Not to mention, it has subsequently expanded in conjunction with

ground-breaking improvements to the traditional trading interface, such as

telephone interface systems.

Of course, online trading has many pros. There are several wonderful

reasons to invest online and consider online trading.

1. Money saving opportunities the amount of money you save depends

primarily on the online brokerage firm that you choose. No two firms are the

same. There may be different regulations, similar to bank regulations.

There are minimum deposits required that must be maintained. As

mentioned above, this will depend on the online brokerage firm.

2. Instant online access You can gain instant access to your account, the

value of your portfolio updates immediately before your eyes.

90
3. Enter online trades at anytime You can enter online trades at anytime

and from anywhere. This is very convenient if you live in a different time

zone than the country you are trading in. Not to mention, it is especially fit

for investors with busy schedules.

4. With online trading you are in charge You are in control of your

investments. No sales pitches and no hassle. You decide where to invest

your money.

91
CHAPTER-6
BIBLIOGRAPHY

92
 BIBLIOGRAPHY

• MAGAZINES
• Business World
• INTERNET SITES
• www.nseindia.com
• www.bseindia.com
• www.on-linetrading.com
• www.sebi.gov.in
• www.nsdl.com
• www.cdsl.com
• www.jrgsecurities.com

Questionaire
93
 Dear respondent,

I am student of PGDM. I am working on the project of “On-Line

trading”. You are requested to fill the questionnaire to enable, to undertake
the study on the said Project.
Name……………………….
Occupation………………
Address ……………………
Phone no………………….

1. For how long you have been trading with on line-trading?

(a) 1 year (b) 2 year
(c) 3 year (d) 4 year

2 .How will you describe your experience with on-line trading till date?
(a) very easy to operate
(b) very difficult to operate
(c) not secure
(d) Any other

3. What amount of money you are invested normally ?

(a) 50000 (b) 100000 to 150000
(c) 150000 to 2000000 (d) Any other amount
4. How often do you trade?
(a)Daily (b) Weekly
(c) Monthly (d) More than one month
94
5. In which trading you will prefer?
(a) Online trading (b) offline trading
(c) Both

6. According to you online trading setteled in Indian investor psyche

(a) Yes (b) No
7. What shortcomings do you feel in Indian On-line Trading ?
(a) Lack of awareness the investors about on-line trading
(b) Shortage of domestic technical expertise
(c) Shortage Of Infra structure
(d) If any other
8. Which media would you prefer the most for investor?
(a) T.V (b) Newspaper
(c) Magazines (d) Journals
9. Do you have any of the 80(C) and 80(D) tax plans?
a) Yes b) No
If yes, please mention.
a) Child plan
b) Pension plan
c) Endowment plan
d) Protection plan
others, specify: ____________________

95