MBA PROJECT FREE: A STUDY ON ONLINE TRADING SYSTEM AT INTER-CONNECED STOCK EXCHANGE OF INDIA LIMITED

INTRODUCTION TO THE STUDY

                   Stock exchange is an organized market place where securities are traded. These securities are issued by the government, semi-government bodies, public sector undertakings and companies for borrowing funds and raising resources. Securities are defined as any monetary claims (promissory notes or I.O.U) and also include shares, debentures, bonds and etc., if these securities are marketable as in the case of the government stock, they are transferable by endorsement and alike movable property. They are tradable on the stock exchange. So are the case shares of  companies.

              Under the Securities Contract Regulation Act of 1956, securities’ trading is regulated by the Central Government and such trading can take place only in stock exchanges recognized by the government under this Act. As referred to earlier there are at present 23 such recognized stock exchanges in India. Of these, major stock exchanges, like Bombay Stock Exchange National Stock Exchange, Inter-Connected Stock Exchange, Kolkata, Delhi, Chennai, Hyderabad and Bangalore etc. are permanently recognized while a few are temporarily recognized. The above act has also laid down that trading in approved contract should be done through registered members of the exchange. As per the rules made under the above act, trading in securities permitted to be traded would be in the normal trading hours (10 A.M to 3.30 P.M) on working days in the trading ring, as specified for trading purpose. Contracts approved to be traded are the following:

A.   Spot delivery deals are for deliveries of shares on the same day or the next day as the payment is made.

B.   Hand deliveries deals for delivering shares within a period of 7 to 14 days from the date of contract.

C.   Delivery through clearing for delivering shares with in a period of two months from the date of the contract, which is now reduce to 15 days.(Reduced to 2 days in demat trading)

D.   Special Delivery deals for delivering of shares for specified longer periods as may be approved by the governing board of the stock exchange.

                          Except in those deals meant for delivery on spot basis, all the rest are to be put through by the registered brokers of a stock exchange. The securities contracts (Regulation) rules of 1957 laid down the condition for such trading, the trading hours, rules of trading, settlement of disputes, etc. as between the members and of the members with reference to their clients.

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