sepm presentaton
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8/7/2019 SEPM Presentaton
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Group A SharesGroup A Shares Group B SharesGroup B Shares Group C SharesGroup C Shares
ExamplesExamples ExamplesExamples ExamplesExamples
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The important function of a broker is to execute hisclients orders swiftly and carefully.
The broker must obtain specific instructions as to:
1. The name of the company whose securities have to bebought or sold.
2. The precise number of share required.
3. The limit / market price condition etc.
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ABO (At Best Order) Day Order
Limit Order GTC ( A Good Till Cancelled)
Immediate or Cancel Order GTD ( A Good Till Days)
DO (Discretionary Order) IOC ( Immediate or Cancel
Order) Limited Discretionary Order MKT (Market) Order
Stop Loss Order ATO (At The Open)
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1. Spot Delivery Settlement
2. Hand Delivery Settlement
3. Clearing Settlement
4. Special Delivery Settlement
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The rules and procedures for buying and selling securities
are the same in all the recognized stock exchanges in
India. The procedures are listed below:
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A. Purchase of Shares:
(i) Purchase of existing shares from the Market:-
Placing the order with the broker Receipt of Contract Note
Intimation of deliverySending shares for transfer
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(i) Purchase of shares being issued by a Company:-
Filling application formwith application money
Receipt of allotmentletter/refund order
Payment of allotment
money and call money
Endorsement of payment
on share certificate
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B. Sale of Shares:
Placing the order with the broker Receipt of contract note
elivery of share certificateReceipt of payment
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y
Carry forward & badla charges:-
It refers to postponement of the settlement of a
transaction till the next settlement period. It is nothing
but facility to carry forward the transaction form onesettlement period to another. It involves payment of
some charges known as BADLA CHARGES by the
speculator. Badla charges are fixed based on demand and
supply condition in the market.
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y Stock Exchanges allow speculative trading in shares listed
in the forward list, allowing thereby for short-selling andlong-buying of shares.
y All transactions on the specified list are taken stock on
the badla day, once a week, being every Friday which isnow on a weekly basis. The mechanics of these badla
transactions are quite intricate, though pretty logical.
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Two things may happen on the badla day as far asspeculative transactions are concerned:
1. They are carried forward from one settlement period to
the next by drawing up a fresh set of contract notes togive effect to the carry forward.
2. Either an interest called Seedha Badla is paid to the seller
by the buyer or charges as Undha Badla is paid by theseller to the buyer depending on the net overbought or
oversold position in any scrip.
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y All business transacted in any week, between a Monday
and Friday of the week, is settled on the next Saturday
(riot the one immediately following). The price at whichthey are actually bought or sold is considered for the
settlement. Delivery is made on the following Monday.
y Settlement and delivery in respect of specified shares
take place as between the members and through the
caring house. Both delivery of shares and, payment or
receipt of money would he through the clearing.
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After the Badla Day
y All deliveries of shares/payments arising out of the badla
day adjustments have to be settled with respective
deliveries and payments before the next badla day.
y The transactions contracted by the member in respect of
specified shares are entered into the "Settlement
Register." The transactions executed during thesettlement period with the clients/other members are
balanced in this register and the outstanding transactions
are adjusted at the "Carry Forward" or the "Havala" rates
on the badla day.
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Client Broker Bulls / Tejiwallas
Floor Brokers Bears / Mandiwallas
Jobbers (Taravaniwallas) Stags
Badla Financier / Badliwallas Wolves
Arbitragers Lame ducks
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y Option Dealing
yWash sales
y Arbitrage
y Cornering
y Rigging the market
y Blank transfers
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