Investors awareness regarding Depository in India

Taranjeet kaur MBA3rd 1272395

Introduction of Stock exchange

A stock exchange is a place or a market where securities, shares, debentures, bonds, mutual funds of Joint Stock Company, central and state government organizations, local bodies and foreign government are bought and sold. S T O C K Securities provide for investor. Tax Benefits planning and exemption. Optimum return on investment. Cautious Approach. Knowledge of Market Ex C H A N G E - Exchange of Securities Transacted. - Cyclopedia of Listed Companies. - High Yield. Authentic Information New Entrepreneur encouraged. Guidance of Investor & Company. Equity

LSE
The Ludhiana Stock Exchange Limited was established in 1981, by Sh. S.P. Oswal of Vardhman Group and Sh. B.M. Lal Munjal of Hero Group.
The vision and mission of stock Exchange is: Vision 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. Mission To create educated investors and fulfilling the gap of skilled work force in the domain in Capital Market.

Profile of LSE Securities Ltd

LSE Securities Ltd., was incorporated in January, 2000 with a view to revive the capital market in the region and for taking full advantage of the emerging opportunities being provided by expansion of bigger stock exchanges like NSE and BSE. LSE Securities Limited is a subsidiary of the Ludhiana Stock Exchange, which was formed with an objective to enhance business and investment opportunities for the investors and members of Ludhiana Stock Exchange at large, through innovative products by encompassing a variety of activities related to the capital market.

Constituents of a DP System
DEPOSITORIES

DEPOSITORY PARTICIPANTS
ISSUER OF SHARES OR COMPANY REGISTRAR AND TRANSFER AGENT CLEARING CORPORATION/ CLEARING MEMBER STOCK BROKERS

INVESTORS

DEPOSITORY
The Depository Act defines "Depository is an organization where securities of a shareholder are held in the form of electronic accounts, in the same way as bank holds money".
A Depository is a provider of facility for holding securities . It is a kind of bank for securities like shares, debentures, bonds, etc.

DEPOSITORY
Holds securities in accounts Transfers securities between accounts Transfers without handling physical securities Safekeeping of securities

DEPOSITORY IN INDIA
National Securities Depository Ltd. NSDL

Central Depository Services Ltd. CDSL

Depository Participant

A Depository Participant (DP) is the representative (agent) of the investor in the depository system. Interface between depository and investor
Regulated by SEBI

Should have minimum Net Worth of Rs. 1crore

Issuers & RTA

An Issuer of share is the company which had launched its shares in the market via IPO o RTA are appointed by Issuer companies to act on their behalf.
o RTA is a trust company, bank or similar financial institution assigned by a corporation to maintain records of investors and account balances and transactions, to cancel and issue certificates, to process investor mailings and to deal with any associated problems.

Clearing corporation/ clearing member

o A clearing corporation is an independent central organisation created to facilitate efficient, fast and economical settlement of transactions at SE.
o It acts as a central mechanism for consolidating and settling transactions instead of the member firms settling each trade individually amongst themselves. o The members of Clearing Corporation are called as clearing members. o Eg: All trades done at NSE are settled through National Securities Clearing Corporation Limited (NSCCL)

Stock exchanges/stock brokers

o Stock Exchange (SE) is an organised market for dealings in securities commonly referred as secondary market. One of its main functions is price discovery i.e to cause prices to reflect currently available information about a security. o Stock Brokers (SB) are members of SE primarily engaged in 2 main activities i.e buy and sell securities for their clients charging a commission and as dealers or traders they buy and sell on their own account for trading gains.

Investors
o May be individuals or corporate who have acquired shares either in primary market or in secondary market

Objective of the study

1.

To understand the basic concept of depository. To Know the awareness of people regarding Stock exchange. To know that how many people in the city are aware of the depository system & invest in share market.

2. 3.

4. To know the where people have already opened their demat account and on what basis.

RESEARCH METHODOLOGY
RESEARCH RESEARCH RESEARCH RESEARCH RESEARCH METHODOLOGY METHODOLOGY METHODOLOGY METHODOLOGY METHODOLOGY

Analysis and Interpretation of the Data

The collected data were not easily understandable, so I like to analyze the collected data in a systematic manner and interpreted with simple method. The analysis and interpretation of the data involves the analyzing of the collected data and interpretation it with pictorial representation such as bar charts, pie charts and others.

Gender
Gender play vital role in investment decisions. Gender classified on sex Basis i.e. male and female. Gender classification is requiring to marketer because different gender exhibit different perception .

Gender Male Female Total

No of respondents 70 30 100

no of respondents
70 30 100

30% male female

70%

From the above table we conclude that , the majority of the respondents belong to the male group.

Occupation
Occupation is also influences a persons investment pattern. Business men will more invest in underlying securities, rather than other .
Occupation Business Employees House wives Student No of respondents 60 20 00 20

Total

100

AGE

Age 18-24
25-30 Above 30 Total

No of respondents 20
30 50 100

Knowledge about stock exchange

respondents
response Yes No Total Respondents 76 24 100

yes
total

no

Have you ever invested in share market

Response Respondents

total
Yes No total 60 40 100

no
yes

respondent s 0 100 200

How long you have been transacting in the stock market

Time no of respondent 20 30 40 100

Less than 1 year 10

1 year 2 year More than 3 year Total respondents

Respondents having Demat A/C

Response Yes no of respondents 70

No
Total

30
100

Would you like to open

response Yes No total Respon Percentage dent 18 12 30 60 40 100

In which depository would you want to open demat account

depositor No of percenta y responde ge nt NSDL CDSL 22 8 73 27
NSDL 73%

No of respondent

CDSL 27%

In which security do you Trade

Security No of respondents

Equity
Bonds debenture All total

20
20 40 20 100

Name the DP in which you have Demat A/C

respondents LSE securities Bank DP Any other Total 50 30 20 100

no of respondents
Any other
Bank DP LSE Security 0 20 40 60

no of responde nts

Finding
Among the people surveyed majority of the male respondents are more than female. Out of the survey of 100customers 50% have a Demat account. There are basically two depositories in India. They are NSDL and CDSL. Out of the survey 73% of accounts are open in NSDL and rest are open in the NSDL etc. In future aspect of the people were interested to open a account in LSE 50% and 30% are in the banks and rest are the hands of other companies. Depositary system provides the fast settlement of the tractions.

Conclusions
From the survey conducted it is observed that depository provides various benefit to both investors and companies. From the study conducted the following conclusions can be drawn. Indian stock markets are growing and are showing new path ways to trade in various financial instruments. Investors are using all services that provided by Stock exchange and Depository. It shows that lack of knowledge and awareness regarding Stoke exchange and Depository it reason that more investors are away from stoke market.

Suggestions
We have made a survey regarding the customer awareness regarding the depository. In our survey we had confronted with different difficulties, which are faced by investors, and in this regard our suggestions are: The DP's should provide the facility to check the accounts on Internet, The DP's should send the statement of holdings to their clients in time,DP's should create more awareness among the investors through advertising campanies,DP's should try to open their branches in every city so that volumes should increase, The DP's are lacking in management area so effective management in overall depository section can help the DP's in improving their quality of service. The overall trend says that all are having problem with the high charge structure of the DP's and that should be reduced so that small investors could not find any hesitation in opening an account with the DP's.