The document discusses stock exchange operations including settlement, custody, and NSDL and CDSL. It defines settlement as the process of moving shares from the seller's account to the buyer's account and money from the buyer to the seller. It also discusses custody, the safekeeping of securities by financial institutions, and NSDL and CDSL which are depositories that hold shares electronically.
The document discusses stock exchange operations including settlement, custody, and NSDL and CDSL. It defines settlement as the process of moving shares from the seller's account to the buyer's account and money from the buyer to the seller. It also discusses custody, the safekeeping of securities by financial institutions, and NSDL and CDSL which are depositories that hold shares electronically.
The document discusses stock exchange operations including settlement, custody, and NSDL and CDSL. It defines settlement as the process of moving shares from the seller's account to the buyer's account and money from the buyer to the seller. It also discusses custody, the safekeeping of securities by financial institutions, and NSDL and CDSL which are depositories that hold shares electronically.
The document discusses stock exchange operations including settlement, custody, and NSDL and CDSL. It defines settlement as the process of moving shares from the seller's account to the buyer's account and money from the buyer to the seller. It also discusses custody, the safekeeping of securities by financial institutions, and NSDL and CDSL which are depositories that hold shares electronically.
To: Mr. Lakshmi Pathi Sir ( Assistant Professor ) STOCK MARKET OPERATIONS 01 SETTLEMENT 02 CUSTODY 03 NSDL & CDSL 01 Settlement 1. Meaning
2. Types
3. process
4. violations SETTLEMENT
Meaning – where the shares are moved from the seller's account to the buyer's account and the money is moved from the buyer to the seller.
Types – 1. Spot settlement – This is when the settlement is done immediately following the rollingsettlement principle of T+2. 2. Forward settlement – This happens when you agree to settle the trade at a future date which could be T +5 or T+7.
Process - Mentioned below are the steps of settlement by the Bombay Stock Exchange: ▪ The shares on the Bombay Stock Exchange (BSE) are all settled in T+2 days. ▪ T+2 days are also used to close government securities and fixed income instruments for individual inve stors. ▪ When you buy or sell securities, you pay in and out on the same day of the trade. ▪ After the BSE completes the pay-out of monies and securities, the client deposits the securities within one working day.
Violations - Stock settlement violations occur when new trades to buy are not properly covered by settled funds. Although settlement violations generally occur in cash accounts, they can also occur in margin accounts, pa rticularly when trading non-marginable securities. 02 Custody 1. Meaning
2. Custodian
3. Key Takeaways CUSTODY
Meaning – custody can be defined as "a safekeeping service that a financial institution provides for a customer's securities. For a fee, the institution collects dividends, interest, and proceeds from security sales and disburses funds according to the customer's written instructions.” Custodians – who hold responsibility for assets in custody have existed for millennia, since the first money le nders in the temples of early civilisations took deposits of gold minas and shekels from passing merchants.
KEY TAKEAWAYS - ▪ A custodian bank holds financial assets for safekeeping to minimize the risk of theft or loss. ▪ Investment advisors are required to arrange for a custodian for assets they manage for their clients. ▪ These assets may be stored in physical or electronic form. ▪ Custodian banks can also manage financial accounts, handle settlements, and deal with compliance and tax issues. ▪ Custodian banks can serve as mutual fund custodians. 03 NSDL & CDSL NSDL & CDSL
Meaning - NSDL and CDSL are share depositories that hold the shares of millions of stock market investors in an electronic form. NSDL stands for National Securities Depositories Limited CDSL stands for Central Depositories Services Limited Function of NSDL and CDSL - Both CDSL and NSDL function as depositories. This means they are administrative bodies holding securities, financial instruments, and stocks of investment in a dematerialized or electronic form. Through the means of their DP or depository participant, an investor can place a request to either depository. In general, both CDSL and NSDL work like banks for investors. Role of CDSL - CDSL was set up with the objective of providing convenient, dependable and secure depository serv ices at affordable cost to all market participants. Role of NSDL - NSDL aims at ensuring the safety and soundness of Indian marketplaces by developing settlement s olutions that increase efficiency, minimize risk and reduce costs. NSDL & CDSL
Difference Between NSDL & CSDL -
Sr. No. Particulars NSDL CDSL
National Securities Depo Central Depositories Serv
1. Abbreviation sitory Ltd. ices Ltd.
2. Stock exchange National Stock Exchange Bombay Stock Exchange
3. Establishment year 1996 1999
Number of depository pa 4. 278** 599* rticipants registered
5. Investor Accounts 1.95 crore** 2.11 crore*
16-digit alpha numeric n
Demat account number f umber. Account number 16-digit demat account n 6. ormat begins with ‘IN’ followed umber by 14 numeric digits
**- As on February 29, 2020 *- As on March 31, 2020
NSDL & CDSL
Conclusion - In essence, neither NSDL nor CDSL matters when you want to invest in the capital market – what matters is your broker. Choosing the right broker is essential to profit from the stock market. The best broker charges lower-than-average fees and maximises your profits THANK YOU By : Divya shree Sahana Navya Sanjana Sharanya
