pest analysis of securities broking industry

BY:

HIMANSHU JINDIA JUHI DARGAN

SUKHBIR SINGH

VIDYANAND KUMAR

Securities Broking

“the right destination for financial talent”

IntroductionBroker primarily work as agent for buying and selling of

securities earn commission for each of the transactions

“Broker is an intermediary who facilitates entry & exit in Equity market”

History

• Origin

• Pre-Independence Scenario

• Post-Independence Scenario

Economic Environment

Structure • 191 companies listed under NSE and BSE

• Divided into four regions North – 40% South – 24%East – 5%West -- 31%

Source : CMIE database(Prowess)

Income of the Industry


Trading Statistics of Stock Exchanges

Source : SEBI Handbook 2009

Registered Brokers and Sub-BrokersStock Exchanges Brokers Sub-

BrokersAhmadabad 325 96Bangalore 257 158BSE 984 30059Bhubaneswar 213 17Calcutta 926 84Cochin 435 43Coimbatore 135 19Delhi 375 261Gauhati 103 4ICSE 946 3Jaipur 488 33Ludhiana 301 36


Contd.Stock Exchanges Brokers Sub-

BrokersMadhya Pradesh 174 5Madras 183 110NSE 1243 31328OTCEI 713 19Pune 188 156UPSE 351 3Vadodara 312 37

Total 8652 62471


Shining Stones of the Industry

Major Players


Products

Major Element of Cost

Source : CMIE database (Prowess)

TECHNOLOGICAL ENVIRONMENT

IntroductionDevelopment in information, communication and

network technologies

Created a paradigm shift in securities market operations

Bringing about innovations in product and services

Provide new business opportunities

Insure timeliness and satisfaction in customer service

Technology of NSE• IT set is largest by any company in India

• Use satellite communication technology

• Energize participation from around 200 cities spread all

over the country

• With up gradation of trading hardware, NSE today can

handle up to 15 million trades per day

Source : www.nseindia.com

Types of Trading Environment

Mobile TradingBroking houses are now betting on mobile trading to

boost revenues

Provides a Java application for your cell phone

BSE launched its Mobitrack service

Political and Legal Environment

Why strict rules and regulations are there in stock market?

STOCK MARKET AND SCAM

Harshad Mehta scam (4000 crores) : 1992

Ketan Parekh scam (2000 crores) : 2001

Source : www.subashares.com

SECURITIES AND EXCHANGE BOARD OF INDIA How to become a Stock Broker?

SEBI (STOCK BROKERS AND SUB-BROKERS) RULES AND REGULATION,1992 Registration of stock brokers Registration of sub-brokers

Code of conduct for stock brokers

Code of conduct for Sub-brokers

Source : SEBI Manual, 2007

Cont.Regulation of transaction between clients and brokers

Risk disclosure document

Unique client code

Model tripartite agreement

Dealing by foreign brokers

Source : SEBI Manual, 2007

Bitter & Curative experience in legal frame work

Badla in share market (Badla to Derivatives)

Harshad Mehta Scam and Others.

Settlement Period & Settlement Cycle

Know your customers (KYC Norms)

Source : www.ezineaticles.com

Socio-Cultural Environment

Psychological NervesPeople encourage themselves to invest in stock market

Festivals

Social ResponsibilityProvide the facility of free demonstrations

Limited number of clients under the relationship

manager

Promotional activities for the awareness of the customer

Co-operation with other department and other branches

Should not give fake news to their customers

Contd.Complete information about products and services

offered

Educate about the rules and regulations of SEBI to its

customers

Health of Brokers

Neck inclined to one side causes pain

Headache

Loss in Vision

Stress

Diabetes due to stress

THANK

YOU

pest analysis of securities broking industry

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