Marketing

1. 1
SECONDARY MARKET

2. 2
 The securities market in India can be
divided into two segments –
Primary Market
Secondary Market
Structure of Securities Market

3.  Secondary Market refers to a market where
securities are traded after being initially offered
to the public in the primary market and/or listed
on the Stock Exchange.
 Majority of the trading is done in the secondary
market. Secondary market comprises of equity
markets and the debt markets.
3

4. 4
 In primary markets,
securities are bought by
way of public issue directly
from the company.
 New issue are available in
primary market.
 The primary is a
middlemen.
 New issue of common
stock;bonds and preferred
stock are sold by
companies.
 In Secondary
market share are traded
between two investors.
 Securities usually bought
and sold through the
secondary market.
 The secondary market are
broker and dealer.
 The secondary market
stock and bonds issues are
sold to the public.
primary marketprimary market secondary marketsecondary market

5.  Secondary Market has an important role to
play behind the developments of an efficient
capital market.
 Secondary market connects investors' favoritism
for liquidity with the capital users' wish of using
their capital for a longer period.
 Secondary market is that financial market in
which investor can buy and
sell shares and bonds after its issue by company.
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6. 6
Government securities

7. Securities and Exchange Board of India7
Participants in the Secondary
Market
 Stock Exchange
 Clearing Corporation
 Depositories/ DP
 Trading Member (Stock Broker)/
Clearing Member
 Registrar to an Issue and Share
Transfer Agent

8. Securities and Exchange Board of India8
Getting started
 To start trading the following are required –
 Trading account
•Member – Client Agreement
•Risk Disclosure Document
 Demat account
 Bank account
 Permanent Account Number (PAN)
 Unique Client Code

9. Securities and Exchange Board of India9
Where to trade
 The secondary market is divided into
two segments –
Cash/ Equity segment
Derivative segment –
•Equity Futures and Option (F & O) –
Index / Single Stock
•Currency Futures/ Option
•Interest Rate Futures

10. Securities and Exchange Board of India10
How to trade
 Trade through a SEBI registered Stock
Broker, by -
Placing margins as required with the
broker
placing order over the phone
email etc.
 Internet Trading
 Wireless / Mobile Trading.

11. Securities and Exchange Board of India11
Post Trade
 The stock broker is required to provide
contract notes confirming the trades done
within 24 hrs of executing the trade
 The contract notes can either be in physical
or electronic form

12.  Step 1. Investor / trader decides to trade
 Step 2. Places order with a broker to buy / sell
the required quantity of respective securities
 Step 3. Best priced order matches based on
price-time priority
 Step 4. Order execution is electronically
communicated to the broker’s terminal
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13.  Step 5. Trade confirmation slip issued to the
investor / trader by the broker
 Step 6. Within 24 hours of trade execution,
contract note is issued to the investor / trader by
the broker
 Step 7. Pay-in of funds and securities before
T+2 day
 Step 8. Pay-out of funds and securities on T+2
day 13

14. Securities and Exchange Board of India14
Settlement
 The settlement in the securities
market is done on a T+2 Rolling
Settlement Cycle (where T = Trading
Day).
Trading
(T)
Option of
Early Pay-in
(T1)
Auction
(T3)
Close out
(T4)
Pay-in and
Pay out
(T2)
TRADE SETTLEMENT
T + 2
FAILURE
TO
PAY-IN

15. Securities and Exchange Board of India15
Settlement - Auction
 Incase there is a shortage in Pay-in of shares at
the time of settlement on T+2, the Stock
Exchange purchases the requisite quantity in
the Auction Market and gives them to the
buying trading member.

16. Securities and Exchange Board of India16
Settlement - Close Out
 If the shares could not be bought in the auction
i.e. if shares are not offered for sale in the
auction, the transactions are closed out as per
SEBI guidelines

17. Securities and Exchange Board of India17
Charges by the Stock Broker
 Brokerage charged by member broker
(maximum 2.5%)
 Service tax as stipulated
 Securities Transaction Tax
 Penalties arising on specific default on
behalf of client (investor)

18. Securities and Exchange Board of India18
Investor Protection
Mechanism
 Investor Protection Fund or Consumer
Protection Fund (IPF/ CPF) is set up
by the Stock Exchanges to meet the
legitimate investment claims of the
clients of the defaulting members that
are not of speculative nature

19. Securities and Exchange Board of India19
Investor Grievance
Redressal
 Complaints can be filed with OIAE
department of SEBI against companies for
delay or non-receipt of shares, refund
orders, etc., and with Stock Exchanges
against brokers on certain trade disputes or
non receipt of payment/securities.
 Arbitration
 Court of Law

20. Securities and Exchange Board of India20
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