Stocks & Shares Education Centre

[Knil]

Re: How Stock Market Works ?

I have the following querry
With the introduction of on-line trading facility, why there is necessity of opening trading account with brokers. After observing all KYC Norms, exchanges should allow even small investors / traders to open on-line trading account directly with them. Thereby, those small investors / traders will save huge amount of brokerage charges. Other charges viz STT, D'mat account maintenance charges etc. can be directly recovered by the exchange. Senior members to comment, please.

 

[dhakkan]

Re: How Stock Market Works ?

The reason is Infrastructre and management cost, for opening retail accounts the exchanges need to have huge databases of users and trade details... and other overhead costs.....

So when the cost of managing retail account comes down and the benefits of allowing retail customers outweights the cost ....then they will allow retail users...

Its happening ..... with fully electronic exchanges...like Nasdaq....but not to the extent of each and every retail customers .....

But ....These brokers act as value add services....and have a important role to play...
Consider the situation .. when every user will open a Saving account with RBI...

 

[Knil]

Re: How Stock Market Works ?

Dear dhakkan,
As far as your observation i.e. Consider the situation .. when every user will open a Saving account with RBI... is concerned...
comparison is not correct. RBI is not doing any commercial business with individual customers through banks neither Banks are charging for transactions done in their accounts by the customer (like brokerages charged by brokers). I as a customer is not bothered whether account is maintained by A bank [commercial bank] OR B bank[RBI]. I am concerned only about the charges[brokerage]. Its like I am purchasing farm produce directly from the farmer rather than through retail vendor.

 

[dhakkan]

Re: How Stock Market Works ?

Good..point...thanks for correcting...

Please consider this also.. as mentioned....
what you are asking for is happening with new electronic exchanges...this exactly is what they are aiming for....just a matter of time and cost management... and you will get a account at the exchange you want....

a trivia : Nasdaq has higer volume than NYSE ...just because of the reason as you explained...everyone wants .. what you are asking ..me too...

 

[dhakkan]

Re: How Stock Market Works ?

I did not knew that SEBI was listning to you... check the news today (we are a step closer):

In a move that will usher in algorithmic trading and transform the Indian stock market, the country’s capital market regulator on Thursday allowed direct market access (DMA) to institutional investors. Foreign institutional investors (FIIs) and domestic institutions such as mutual funds and insurance firms can now directly execute their buy and sell orders without any manual intervention by their brokers.
However, brokers aren’t entirely out of the picture because the trades will still be executed through their systems.

link : <http:// www.livemint .com/2008/04/03235843/Institutions-now-get-direct-ma.html>

 

[share bull]

Re: What Is A Premium Issue ?

A Company can freely its Issue (at a premium) if it fulfils the following eligibility criteria:

i. it has a net tangible assets of atleast Rs. 3 crores in each of the preceeding 3 full years of which not more than 50% is held in monetary assets.

ii. the Company has a track record of distributable profits (as per Sec 205 of Companies Act, 1956) for atleast 3 out of the immediately precedig 5 years.

iii. the Company has had a pre-Issue networth of not less than Rs. 1 crore in each of the 3 preceding full years.

iv. the Company has not changed its name in the last 1 year; and if it has then atleast 50% of the revenue of the said full year has come from the business conveyed by the new name.

v. the proposed Issue size does not exceed 5 times the pre-Issue networth.

If a Company fails in any one or more of the above conditions, it shall have to compulsorily go for a book building issue where:

a. it gets its projects appraised by a financial institution with atleast 15% participation by financial institutions/banks and the appraising institution puts in atleast 10% of the above 15%

OR

b. the issue is made compulsorily through a book building route where QIBs (Qualified Institutional Buyers) subscribe to atleast 60% of the issue.

If a Company fulfills all the 5 criteria above, then it can make a fixed price issue or a book building issue where QIBs can subscribe up to 50% of the issue size. If the subscription is less than 50%, but the issue is oversubscribed from other i.e., retail & HNIs, the issue is till through.

 

[NXG90]

thank you very much Radhikasona! hardwork should be always praised.
keep posting. again thank you for info.

 

[funnykishi]

teck investor, i am going to take exam of ncfm , capital market and want to start carrier in this industry ,
please , can you guide me by what way i can succeed .

 

[AdaG]

yeah, just two rules to follow:
rule 1# remember the basics
rule 2# never forget rule no 1.

though ncfm certis gives very clear understanding of basics..one needs to learn much more than theoretical aspects of market behavior keeping his/her risk appetite in mind.

 

[AdaG]

Good work Radhika....

hey are you the same Radhika Nandlal of the moneycontrol MMB??