Secondary market instrument, Invesment Management

Secondary market instrument, Invesment Management

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  Vishnuraj C.R & Anjana K.S SecondaryMarket InstrumentS & How to Buy Secondary Market Instruments INVESTMENT MANAGEMENT
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  TABLE OF CONTENTS 1.History of Stock Exchange in India 2. Secondary Market 3. Difference between Primary & Secondary market 4. Stock trading Screen Based Trading System (SBTS) National Exchange for Automated Trading (NEAT) 5. Instruments of Secondary Market Share Bonds 6. Process of Buying Secondary Market Instrument
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  History of StockExchange in India ➢ In India BSE is the oldest stock exchange. (1861) ➢ Trading in shares & stocks took place under banyan tree at the place where the BSE is now situated. ➢ BSE in the year 1875 namely ‘Native Share and Stock Brokers Association’ ➢ In 1991,the Indian Secondary market acquired a three tier form which consists of ; 1861 2017 • Regional Stock Exchange • National Stock Exchange (NSE) • Over the Counter Exchange of India (OTCEI)
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  Secondary Market The secondarymarket, also called the aftermarket, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold. After the initial issuance, investors can purchase from other investors in the secondary market.
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  Difference between primary& secondary market Primary market Secondary market • Securities are offered to public for subscription. • Purpose of raising capital or fund. • Already existing securities are traded. • Purpose of capital appreciation.
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  Stock trading ➢ ScreenBased Trading System (SBTS) Introduced by NSE Where a member can punch quantities & price of security in computer Transactions is executed as soon as a matching sale or buy order from a counter party is found SBTS
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  ➢ National Exchangefor Automated Trading (NEAT) • A satellite communication technology for trading. • It’s a state of the art client server based application. • Has a uptime record of 99.7% • Uniform response time of less than one second.
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  InstrumentS of SecondaryMarket Secondary market Shares Bonds Equity shares Cumulative convertible preference share Cumulative preference share Right shares Bonus shares Preference shares Zero coupon bonds Treasury bills Convertible bonds The financial products/instruments which are dealt in the secondary market are:
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  share Shares are unitsof ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.
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  BOND • Negotiable certificateevidencing indebtedness. • Normally unsecured. • Issued by a company, municipality or government agency.
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  Process of BuyingSecondary Market Instrument The first step in trading shares is select a broker for transacting on behalf of the investor. ➢ Make sure that broker is registered with SEBI and the Exchanges. ➢ Broker registration number begins with the letter ‘INB’ ➢ A sub broker with the letter ‘INS’ 1. Finding a broker
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  There are threetypes of account to its clients: 2. Opening an Account Trading Account Demat Account Commodity Account
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  Procedures for openingan Account Step 1: To open a demat account, you have to approach a depository participant (DP), an agent of depository, and fill up an account opening form. Step 2: Along with the account opening form, you must enclose photocopies of some documents for proof of identity and proof of address. Step 3: You will have to sign an agreement with DP in the depository prescribed standard format. Step 4: The DP will then open an account and give you the demat account number. You can have multiple demat accounts if you so wish. You can choose your DP as per your convenience and there is no compulsion to open DP account with your stock broker.
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  Depository service Depository Depository Participants National Securities Depository Limited(NSDL) Central Securities Depository Limited(CSDL) You –the customer ICICI Direct Sharekhan Tradejini, IL&FS HDFC Sec
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  3. Best pricedorder matched • Priority • Precedence • Parity 4. Executing the Order As per the Instructions of the investor, the broker executes the order i.e. he buys or sells the securities. 5. Trade confirmation 6. Settlement.
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  SHARE APPLICATION FORM