NSCCL&SHCIL

INTRODUCTION
NSCCL a wholly owned subsidiary of NSE- incorporated aug 1995 Responsible for post trade activities of Stock exchange Clearing and settlement of trade Risk management Determines obligations of member Arranges for pay-in of funds/securities. Receives fund / securities. Process for shortages in fund/securities. Arranges for pay-out of funds/securities.

PRODUCTS AND SERVICES

Clearing and settlement. Guarantee Risk management Corporate bonds SMS alerts

CLEARING MEMBERS

PARTNERS

CLEARING BANKS

DEPOSITORIES

PROFESSIONAL CLEARING MEMBERS

CUSTODIANS

Transaction Cycle

Trading & Settlement Process

Depository

Investor

Clearing House

Broker

Exchange

Order Placement

NSE has main computer which is connected through Very Small Aperture Terminal (VSAT) installed at its office. Brokers have terminals (identified as the PCs in the Figure 1) installed at their premises which are connected through VSATs/leased lines/modems. An investor informs a broker to place an order on his behalf. The broker enters the order through his PC, which runs under Windows NT and sends signal to the Satellite via VSAT/leased line/modem. The signal is directed to mainframe

Contd..

The order confirmation message is immediately displayed on the PC of the broker. This order matches with the existing passive order(s), otherwise it waits for the active orders to enter the system. On order matching, a message is broadcast to the respective member.

Cont..

All orders received on the system are sorted with the best priced order getting the first priority for matching i.e., the best buy orders match with the best sell order. Similar priced orders are sorted on time priority basis, i.e. the one that came in early gets priority over the later one. Orders are matched automatically by the computer keeping the system transparent, objective and fair. Where an order does not find a match, it remains in the system and is displayed to the whole market, till a fresh order comes in or the earlier order is cancelled or modified.

Clearing and settlement

All orders received on the system are sorted with the best priced order getting the first priority for matching i.e., the best buy orders match with the best sell order. Similar priced orders are sorted on time priority basis, i.e. the one that came in early gets priority over the later one. Orders are matched automatically by the computer keeping the system transparent, objective and fair. Where an order does not find a match, it remains in the system and is displayed to the whole market, till a fresh order comes in or the earlier order is cancelled or modified.

CONTD.

The obligations of members are downloaded to members/custodians by the clearing agency The members/custodians make available the required securities in their pool accounts with depository participants (DPs) by the prescribed pay-in time for securities.

CONTD

The depository transfers the securities from the pool accounts of members/custodians to the settlement account of the clearing agency. The securities are transferred on the pay-out day by the depository from the settlement account of the clearing agency to the pool accounts of members/custodians.

Settlement Process in CM segment of NSE

PROCESS

(1) Trade details from Exchange to NSCCL (real-time and end of day trade file). (2) NSCCL notifies the consummated trade details to CMs/custodians who affirm back. Based on the affirmation, NSCCL applies multilateral netting and determines obligations. (3) Download of obligation and pay-in advice of funds/securities. (4) Instructions to clearing banks to make funds available by pay-in time. (5) Instructions to depositories to make securities available by pay-in-time. (6) Pay-in of securities (NSCCL advises depository to debit pool account of custodians/CMs and credit its account and depository does it). (7) Pay-in of funds (NSCCL advises Clearing Banks to debit account of custodians/CMs and credit its account and clearing bank does it). (8) Pay-out of securities (NSCCL advises depository to credit pool account of custodians/CMs and debit its account and depository does it). (9) Pay-out of funds (NSCCL advises Clearing Banks to credit account of custodians/CMs and debit its account and clearing bank does it). (10) Depository informs custodians/CMs through DPs. (11) Clearing Banks inform custodians/CMs.

SHCIL AS A DEPOSITORY PARTICIPANT

SHCIL
Stock Holding Corporation of India ltd (SHCIL) was incorporated under the companies Act, 1956 on July 28, 1986 . SHCIL was incorporated as a public limited company SHCIL has a network of more than 200 branches spread across the country

 Vision of the Company: To become one stop shop for all financial services. Mission of the Company: To spread Quality Service through the innovative use of technology.

Learning process
Basic concepts of depository system Knowledge about SHCIL as a DP Knowledge of demat accounts and process like dematerialisation , rematerialisation

Depositories
Depository is an organization where the securities of a share holder are kept in the electronic form at the request of the shareholder through a medium of a depository participant (DP) There are two depositories registered with SEBI. National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL).

Services provided by Depository

Dematerialisation (usually known as demat) is converting physical certificates to electronic form Rematerialisation, known as remat, is reverse of demat, i.e. getting physical certificates from the electronic securities Transfer of securities, change of beneficial ownership Settlement of trades done on exchange connected to the Depository

Functions of depositories
Dematerlisation Transfer and registration Pledge Linkages with clearing system

Some facts
National Securities Depository Ltd. - NSDL Having 95 Cr. Demat A/c as on 31-03-2010 300 DPs in India
Central Depository Services Ltd. - CDSL Having 65 laks Demat A/c as on 31-03-2010 500 DPs in India

BENEFITS AND SAFETY OF DEPOSITORY SYSTEM

Elimination of bad deliveries Elimination of all risks associated with physical certificate No stamp duty Immediate transfer and registration of certificate Buyer is secured Reduction in rate of interest on loan Reduction in brokerage of 0.25% to 0.5% Reduction in handling huge volumes of paper

Competitors
1. ICICIDirect 2. Sharekhan 3. Indiabulls 4. 5Paisa 5. Motilal Oswal Securities 6. HDFC Securities 7. Reliance Money 8. IDBIPaisaBuilder 9. Religare 10. Geojit 11. Networth Stock Broking 12. Kotak Securities 13. Standard Chartered 14. Angel Trade 15. HSBC InvestDirect 16. Comfort Securities 17. Just Trade

products
FUND INVEST GOI RELIF BOND INSURANCE ADD SHARES

Advantages of shcil as a DP
Privacy of each Trading Members operations strictly maintained One-point contact for all the activities Dedicated team of professionals to handle queries of investors Tie-up with banks having nation-wide reach for banking activities Collateral Management Focus- low service charges

Broking cum demat a/c charges Broking services Broking stamp paper Brokerage Dp services a/c opening charges Stamp duty Annual maintainence charges Dematerialization Kit charges

Rs 220/- + dp stamp paper Rs 220/0.60%delv min.50/-intraday 0.10%min or whichever is less

Nil As applicable in state Free for first year Rs 3/- per certificate Rs 30/-

Postage per demat request

Late transaction charges Fail trade charges Minimum brokerage charges Amc charges after one year Service tax

Rs 25/Rs 10/Rs 25/Rs.50/- or 2.5% whichever is less Rs 350/As applicable

conclusion
Stock market is very volatile No body can time the market Always profit is not necessary Patience is very necessary for an investor

Thank you