A SUMMER TRAINING REPORT ON WORKING OF DEPOSITORY SYSTEM

Submitted To Punjab Technical University In Partial Fulfillment Of The Requirement For The Degree Of MASTER OF BUSINESS ADMINISTRATION

Supervised By: Gurjeet Pal Singh

Submitted By: Saloni Sharma University Roll no. 104522248380

GLOBAL INSTITUTE OF MANAGEMENT AMRITSAR (2010-2012)

Certificate
This is to certify that project entitled working of depository system being submitted by saloni sharma, a student of mba III semester of global institute of management, amritsar to Punjab technical university for the award of the degree of master of business administration, is a bonafide piece of work conducted under my direct supervision and guidance. To the best of my knowledge, no part of this work has been submitted for any other degree of any other university. The data sources have been duly acknowledged.

Gurjeet singh

Declaration
I Saloni Sharma,studying in Global Institute Of Management, Approved By PTU, Jalandhar hereby declare that the project entitled working of depository system is the original work done by me and the information provide in the study is authentic to the best of my knowledge. I further declare that this project report has not been submitted earlier to any other university or institute for the award of any degree/diploma. Nothing is copied in this project, if anything is found to be copied, I will be solely responsible for that.

Date:..

Saloni sharma Univ roll no. 104522248380 MBA 3rd SEM

Acknowledgement
An old Chinese proverb says, when eating your bamboo sprouts, remember the men who planted them. It is almost impossible to complete a big task on our own, without any help. Acknowledgement is not just a formality to be fulfilled, rather an opportunity to express our gratitude towards all those who have helped us in different ways. I would like to take this opportunity to express my gratitude towards all those people who have in various ways, helped in successful completion of this project. This work is the result of the inspiration, support, guidance, cooperation and facilities that were extended by persons at various levels and I am indebted to all of them. Their valuable assistance helped me in the successful completion of my summer training. I would also like to thanks Dr. N.S.Bhalla , director of global institute of management , Mr.B.D.Sharma for giving me the opportunity to work under Mr. Gurjeet pal singh , lecturer in global institute of management , amritsar . My sincere thanks to Mr. gurjeet pal singh for his extreme support and guidance. I will also take the opportunity to express my gratitude towards Mr. Atul Chiersal (training co- ordinator of LSE) as his continous enlightening led towards successful completion of this project. Last but not the least I am thankful to my family members, friends for their cooperation and encouragement at every stage of this project. Saloni sharma

PREFACE
The successful completion of this project was a unique experience for me because by visiting many place and interacting various person, I achieved a better knowledge about this system. The experience which I gained by doing this project was essential at this turning point of my carrier this project is being submitted which content detailed analysis of the research undertaken by me. The research provides an opportunity to the student to devote his/her skills knowledge and competencies required during the technical session. The research is on the topic Working of Depositary system

Chapter No. 1

Table Of Content Contents Introduction 1.1 Introduction To Lse

1.1.1 Vission Mission 1.1.2 Educational Initiatives 1.1.3 Lse Securities LTD. 1.1.4 Swot Analysis

Page No.

1.1.5 Listing Of Securities Of Companies Introduction To Depository

2.1 Depository 2.2 Depository Act 1996 2.3 Depository System 2.4 Legal Framework Of Depository System 2.5 Functions Of Depository System 2.6 Benefits Of Depository System 2.7 Safety Feature In The Depository System 2.8 Similarities B/W Bank And Depository 2.9 Difference B/W Bank And Depository 2.10 Some Important Process In Depository System 2.11 Demat And Remat

National Securities Depository System

3.1 About NSDL 3.2 Manageemnt Of NSDL 3.3 FEE STRUCTURE OF NSDL 3.4 Technology And Connectivity In NSDL 3.5 Common Software Use In NSDL

Central Securities Depository System

4.1 About CSDL 4.2 Shareholders Of CSDL 4.3 Board Of Directors And Management 4.4 Fee Structure Of CSDL

5 6 7

Suggestions And Conclusion References Annexure `

List of tables

List of graphs

CHAPTER :- 1 INTRODUCTION TO LUDHIANA STOCK EXCHANGE

1.1 Ludhiana stock exchange

The Ludhiana Stock Exchange Limited Was Established In 1981, By S.P. Oswal Of Vardhman Group And Sh. B.M. Munjal Of Hero Group, Leading Industrial Luminaries, To Fulfill A Vital Need Of Having A Stock Exchange In The Region Of Punjab, Himachal Pradesh, Jammu & Kashmir And Union Territory Of Chandigarh. Since Its Inception, The Stock Exchange Has Grown Phenomenally. The Stock Exchange Has Played An Important Role In Channelising Savings Into Capital For The Various Industrial And Commercial Units Of The State Of Punjab And Other Parts Of The Country. The Exchange Has Facilitated The Mobilization Of Funds By Entrepreneurs From The Public And Theory Contributed To The Oerall, Economic, Industrial And Social Development Of The States Under Its Jurisdiction. Ludhiana Stock Exchange Is One Of The Leading Regional Stock Exchange And Has Been In The We Forefront Of Other Stock Exchange In Every Spheres Whether It Is Formation Of Subsidiary For Provider The Platform Of Trading To Sectors, For Brokers Etc. In The Era Of Screen Based Trading Introduced By National Stock Exchange And Bombay Stock Exchange, Entering Into The Field Of Commodities Trading Or Imparting Education To The Public At Large By Way Of Starting Certification Programmes In Capital Market. 1.1.1 Vision And Mission Of Ludhiana Stock Exchange Reaching small investors by providing services relating to capital market including trading depository operations etc and creating mass awareness by way of education and training in the field of capital market . To create educated investors and fulfilling to gap of skilled work force in the domain in the capital market. Further, the exchange has 295 members out of which 162 are registered with national stock exchange as sub-brokers and 121 with bombay stock exchange as sub-brokers through our subsidiary.

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The composition of the governing board is as under:

LSE has a strong governance and administration, which encompasses a right balance of Industry Experts with highest level educational background, practicing professionals and independent experts in various fields of Financial Sector. The administration is presently headed by Sr. General Manager CUM Company Secretary and team of persons having indepth knowledge of Secretarial, Legal and Education & Training. The composition of the Governing Board is as under:Sr. No. Name of Director Category Chairman 1 Prof. Padam Parkash Kansal (Shareholder Director) 2 3 4 5 6 7 8 9 10 11 12 Sh. Joginder Kumar Sh. Rajinder Mohan Singla Sh. Satish Nagpal Sh. Vikas Batra Sh. Varun Chhabra Dr. Raj Singh Sh. Ashwani Kumar Sh. V.P. Gaur Sh. Jaspal Singh Sh. Sunil Gupta Sh. Sanjay Anand Vice Chairman (Shareholder Director) Shareholder Director Shareholder Director Shareholder Director Shareholder Director Registrar of Companies (Public Interest Director) Public Interest Director Public Interest Director Trading member Director Trading Member Director Trading member Director

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OPERATIONS OF LUDHIANA STOCK EXCHANGE 1. TURNOVER

Ludhiana Stock Exchange is one of the leading Stock Exchanges among the Regional Stock Exchanges of the country, and has been providing trading platform for the investors situated in Punjab, J&K, and Himachal Pradesh & Chandigarh. At present, it has 344 listed companies and among them, 220 are listed as regional companies. It had been generating significant amount of the business in the secondary market. It recorded a peak turnover of Rs.9154 crores during the year 2000-2001. The structural changes that took place in the recent past in the Capital Market of the country had a negative impact on the trading volume of the regional Stock Exchanges. There has been a significant reduction of turnover during the financial year 2001-2002, but the reduction in turnover of the Exchange has been more than adequately compensated by substantial rise in the turnover of LSE Securities Limited, a subsidiary of L u d h i a n a S t o c k Exchange .

LISTING
Listing is one of the major functions of a Stock Exchange wherein the securitiesof the Companies are enlisted for trading purpose. Any Company incorporatedunder Companies Act, 1956, coming out with an IPO, has to mandatory list itsshares on a Stock Exchange.T h e L i s t i n g D e p a r t m e n t o f L u d h i a n a S t o c k E x c h a n g e d e a l s w i th listing of securities, further listing of issues like bonus and rights i s s u e s , p o s t - l i s t i n g compliance of the companies, which are already listed with Ludhiana StockExchange. The Companies desirous of listing its securities on the Exchangehave to sign a Listing Agreement with the Stock Exchange. After getting thelisting approval, the Company has to ensure and report compliance of the postlisting requirements. The listing section of the LSE monitors the post-listingcompliance of all the listed companies and follows up with the companies, whichare found deficient in compliance.

TRADING ON BIGGER STOCK EXCHANGES

The exchange acquired the membership of NSE and BSE: through itssubsidiary, the LSE securities LTD, with the objective of providing an enablingmechanism to its member brokers to trade on NSE and BSE as a sub brokers of LSE securities Limited.Trading at NSE and BSE was commenced through the subsidiary route fromSeptember 200 and December 2000 respectively.

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END OF AN ERA
The management of the stock Exchange apprehended that the smaller regionals t o c k e x c h a n g e s w o u l d n o t b e a b l e t o m e e t t h e c h a l l e n g e s i m p o s e d b y expansion of bigger stock exchanges like NSE and BSE and might end up losingt h e i r b u s i n e s s t o V S A T c o u n t e r s o f t h e b i g g e r s t o c k e x c h a n g e s . I n o r d e r t o prepare for such an eventuality, stock exchanges set up a broking armed in thename of LSE Securities Ltd (a subsidiary company of stock exchange) in January2000 and built infrastructure and IT based sophisticated systems to enable itsmembers and investors to trade on NSE and BSE through the subsidiary route. LSEAL HAS:-OWN BUILDING LSEAL has its own six stories ultra modern building at Feroze Gandhi market at Ludhiana. It started its operation on 16th Aug, 1983. OWN BULLETIN LESAL is continuously publishing LSEAL Bulletin at the interval of quarter. It isalso publishing LSE annual report which provides information to the variousmembers and investors of stock exchanges. SCREEN BASED TRADING It was started at LSE on Nov. 18, 1996. The requisite software is developed byCMC Ltd. This screen Based Trading is based on VECTOR (Versatile Engine for Centralized Trading and on line reporting System) this system displays fundswith respect of opening prices of the stock exchanges as well as the last tradedprices. ON LINE TRADING THROUGH VSAT LSEAL has chalked out an ambitious program to expand online trading throughV - S A T to untie other than Ludhiana and plans to take the trading facility t o doorstep of investors in this year. The Board of Directors of LSE have approvedthe plan for expansion of online trading through VSAT with the object of broadbase business opportunities to the investor and members, the exchange has setup 30 trading terminals at remote sites and union territory of Chandigarh. Tradingthrough V-SAT has been smoothly conducted in October 1999. SETTLEMENT GUARANTEE FUND It provides guarantee to all genuine based trading system of the stock exchangeand was implemented a settlement guarantee fund with effect from 6th April,1998. SETTLEMENT AND CLEARING There is T+2 settlement cycle prevailing in the market. Members are given scripwise delivery notes. The members are required to deposit scrips sold by them tothe clearing house on the second working day following the day of transaction.Purchasing members are required to make the payment against the delivery alsoon aforesaid day. DEPOSITORY SYSTEM

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LSE commence trading in demat shares from November 16, 1998 by becoming aparticipant of NSDL. The exchange has set up in-house DP services to facilitatetrading and settlement in demat securities. INVESTOR GRIEVANCES CELL LSE has made special arrangement to handle investors complaints andgrievance so its premises for providing information relating to Capital market.This center has a well equipped library.The exchange introduced a computer based stock. Tel system for providing online real time information through a fully automatic system, to the investors andmembers of the general public such as prices of the scrips, book closures, newlistings, new issuers etc. Centre is also equipped with a screen for providing liverates of trading at NSE and BSE DEPOSITORY PARTICIPANT SERVICE The company is the DP of NSE and is the only depository in the region having online real time connectivity with NSDL. DP operation of the company not only benefited the investors of the region but has also proved to be a s o u r c e o f income for the company PROFILE OF LSE SECURITIES LTD.OBJECTIVE OF THE COMPANY LSE Securities Limited is a subsidiary of the Ludhiana Stock Exchange, whichwas formed with an objective to enhance business and investment opportunitiesfor the investors and members of Ludhiana Stock Exchange at large, throughinnovative products by encompassing a variety of activities related to the capitalm a r k e t . T h e c o m p a n y h a s a p a i d u p c a p i t a l o f R s . 5 . 6 5 c r o r e s , p r e f e r e n c e capital of Rs 7.90 lacs & the authorized capital of the company is Rs 8 crores.

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