• Register for CDSL's SMS Alert facility - SMART & obtain alerts for any debits or credits due to a corporate action, in your demat account.
  
• Accept the DIS book from your DP, only if each slip has been pre-printed with a serial number along with your demat account number & keep it in safe custody.
  
• Always mention the details like ISIN, number of securities accurately. In case of any queries, please contact your DP or Broker.
  
• Ensure that all demat account holder(s) sign on the DIS & please strike out any blank space on the slip. Cancellations or corrections on the DIS should be countersigned by all the account holder(s).
  
• Submit the DIS ahead of the delivery date for all type of market transactions. DIS can be issued with a future execution date.
  
• Intimate any change of address or change in bank account details to your DP immediately.
  
• Check the demat performance of the issuer company with your DP before sending certificates for demat. Before sending the shares to DP for dematerialisation please check with DP whether that company is in demat list or not.
  
• Before granting Power of Attorney to anyone to operate your demat account, carefully examine the scope & implications of powers being granted.
  
• The demat account has a nomination facility & it is advisable to appoint a nominee, in case of sole account holders.
  
• Ensure that, both, your holding & transaction statements are received periodically as instructed to your DP. You are entitled to receive a transaction statement every month if you have any transactions & once a quarter if there has been no transactions in your account.
  
• Check your demat account statement on receipt. In case you notice any unauthorized debits or credits, contact your DP for clarifications immediately.

• Do not leave your instruction slip book with anyone else. Do not sign blank DIS as it is equivalent to a bearer cheque. Avoid over-writing, cancellations, misspellings, changing of the name & quantity of securities.

An equity share represents the form of ownership. The holder of such a share is a member of the company & has voting rights.

Equity shares are “High-Risk High-Return Investments.” The major distinction of Equity investment from all other investment avenues is that while the return from many avenues such as Bank Deposits, Small Saving Schemes, Debentures, Bonds etc are fixed & certain, the earnings from equity investments are highly uncertain & varied. A good scrip picked up at the right time could fetch fairly good returns else the return may be meager or it may even turn negative, i.e. the invested fund itself may be eroded. In short, if the investment in fixed income category instruments is secured & risk-free to a large extent, investment in equities & related fields could be termed as risky.

Dividend is the part of profit distributed by the company among its investors. It is usually declared as a percentage of the paid-up value or face value of the share.

A Share issued by companies to their shareholders free of cost by capitalization of accumulated reserves from the profits earned in the earlier years.

A Bond is a promissory note issued by a company or government to its lenders. A Bond is evidence of debt on which the issuing company usually promises to pay the bondholder a specified amount of interest at intervals over a specified length of time, & to repay the original loan on the expiration date. A bond investor lends money to the issuer & in exchange, the issuer promises to repay the loan amount on a specified maturity date.

It is a Bond issued by a company bearing a fixed rate of interest usually payable half-yearly on specific dates & principal amount repayable on a particular date on redemption of the debentures. Debentures are normally secured / charged against the asset of the company in favor of debenture holder.

A Stock Exchange is a place where the buyer & seller meet to trade in shares in an organized manner. There are at present 25 recognized stock exchanges in the country that are governed by the Securities Contact (Regulation) Act, 1956.

You can buy the shares that are listed on any of the recognized stock exchanges.

To be able to buy or sell shares in the stock markets a client would need to be registered with a stock broker like Sushil Financial Services Private Limited who holds membership in stock exchanges & who is registered with SEBI.

Yes, you have to sign the “Member-Client Agreement” for the purpose of engaging a broker to execute trades on your behalf from time to time & furnish details relating to yourself to enable the member to maintain Client Registration Form.

This form is an agreement entered into between client & broker in the presence of witnesses wherein the client agrees (is desirous) to trade/invest in the securities listed on the concerned Exchange through the broker after being satisfied of broker’s capabilities to deal in the same.

There are several types of orders that you can dictate to a broker. The most common type, which is a regular buy or sell order, is called a market order. Another type of order is a limit order wherein you ask the broker to trade only if the price reaches a specific level. In a stop order, you tell the broker to sell your shares if the price drops to a certain level to prevent significant loss because if it drops to that level it is likely to drop further & your losses are likely to increase.

Trading can be done via the phone or by coming in person to the office of Sushil or through any other facility provided by Sushil like Internet trading. The dealer (employee of Sushil who is supposed to input the investors order into the stock exchange order system) after checking the authenticity of the person calling & after checking the margin available in the account would put/enter the order into the stock exchange system.

When the market goes up it is called a bullish trend & when the market goes down it is called a bearish trend.

When you act upon a stock & buy into it, you are taking a position. A position is an amount of money committed to an investment in anticipation of favorable price movements.

There are two kinds of positions:

Long positions: Long positions are what most people do. When you buy long, that means you are anticipating an upward movement in the price, & that is how you profit. People usually buy stocks at prices expecting to sell them later at higher prices & hence make profits.

Short positions: Short positions are the tricky ones. When you buy short, you are anticipating a fall in the price & the fall is the source of your profits. The shares will be sold & when the price falls they will be repurchased & given back & the difference is the where the investor profits. Of course, the investor who borrowed the shares carries the risk of not having the price move as anticipated, in which case he may lose money in repurchasing the stocks.

These funds invest in An index is a stock-market indicator created as a statistical measure of the performance of an entire market or segment of a market based on a sample of securities from the market. An index is thus a means to evaluate the overall performance of a market or of a segment of the market. An index measures the aggregate market movements.

Apart from being a general market indicator, indices are used as a benchmark to evaluate individual portfolio performance. Professional money managers will always try to outperform the market, i.e. they will always try to do better than the indices. For example, if the value of a portfolio moves up by 10% while the index moved up by only 5% then the portfolio is doing better than the market.

We have two renowned indices viz.

- BSE Sensitive Index (BSE SENSEX)
- S&P Nifty 50 (NIFTY)

BSE Sensex comprises of 30 large-cap companies. As the name suggests, it is a premier index on Bombay Stock Exchange (BSE). Nifty comprises of 50 large-cap companies on the National Stock Exchange (NSE).

The market watch, i.e. the screen kept open normally on the trade screen would show the following columns:

Best bid price
Best bid quantity
Best offer price
Best offer quantity
Last traded price.

The first 2 columns as given above show the available buyers for a particular share in the stock exchange & the next 2 columns show the available sellers, & the fifth column shows the price at which the last trade took place. Hence when a investor wants to buy a share at “market price” ideally the 3rd & the 4th column would depict how many shares one can get at a stipulated price. The client can also put a limit price order which would sit in the order book till it reaches a price time priority when the trade can be executed.

Contract Note is a confirmation of trades done on a particular day on behalf of the client. It establishes a legally enforceable relationship between the client & Sushil with respect to the settlement of the trades. The Contract Note would show settlement number, order number, trade number, time of trade, quantity & price of the trades, brokerage charged, etc & it would be signed by an authorized person of Sushil.

Pay-in day is the day when the broker shall make payment or delivery of securities to the exchange. Pay-out day is the day when the exchange makes payment or delivery of securities to the broker.

A depository can be compared to a bank. A depository holds securities (like shares, debentures, bonds, Government Securities, units etc.) of investors in electronic form. Besides holding securities, a depository also provides services related to transactions in securities. There are two main depositories in India, namely, a) National Securities Depository Ltd. (NSDL) & b) Central Depository Securities Ltd. (CDSL), both of which are regulated by SEBI. Sushil Financial Services Private Limited is a Depository Participant of CDSL & will hold your securities in electronic form.

You can approach Sushil Financial Services Private Limited or any DP of your choice & fill up an account opening form. At the time of opening an account, you have to sign an agreement with DP in a CDSL prescribed standard agreement, which details your & your DP’s rights & duties.

Any trade settled through a clearing corporation is termed as a ‘Market Trade’. These trades are done through stock brokers on a stock exchange. ‘Off Market Trade’ is one which is settled directly between two parties without the involvement of a clearing corporation. The same delivery instruction slip can be used either for market trade or off-market trade by ticking one of the two options.

In case of sales, the investor would need to transfer the shares to the pool account of Sushil for the specified settlement number. The pool account number for shares sold on BSE is CM-BP-ID IN654633 & the pool account number for shares sold on NSE is CM-BP-ID IN563698. The delivery should necessarily come from the demat account of the investor & not from any other person. Similarly Sushil would directly transfer shares bought to the account of the investor.

Payments to Sushil has to be made via a Account Payee cheque/Demand Draft for the BSE in favor of Sushil Financial Services Private Limited & for NSE in favour of Sushil Financial Services Private Limited. The payment should necessarily come from the bank account of the investor & not from any other person. Similarly Sushil would pay an Account Payee cheque in the name of the investor, which will also contain the Bank name & account number of the client.

The pay-out of funds & securities to the clients by Sushil will be within 24 hours of the pay-out.

In a Rolling Settlement trades executed during the day are settled based on the net obligations for the day. In NSE & BSE, the trades pertaining to the rolling settlement are settled on a T+2 day basis where T stands for the trade day. Hence trades executed on a Monday are typically settled on the following Wednesday (considering 2 working days from the trade day). The funds & securities pay-in & pay-out are carried out on T+2 day.

The securities are put up for auction by the Exchange on account of non-delivery of securities by the selling trading member to ensure that the buying trading member receives the securities due to him. The non-delivery by the trading member could arise on account of short delivery. The Exchange purchases the requisite quantity in the Auction Market & gives them to the buying trading member.

In case of purchase on your behalf, the member broker has the liberty to close out transactions by selling securities in case you fail to make full payment to the broker for the execution of contract before pay-in day as fixed by Stock Exchange for the concerned settlement period unless you already have an equivalent credit with the broker. The shortages in case of sales are met through auction process & the difference in price indicated in Contract Note & price received through auction is paid by member to the Exchange which is then liable to be recovered from the client.

In both the cases any loss in transactions will be deductible from the margin money paid by you.

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. The guidelines stipulate that “the close out price will be the highest price recorded in that scrip on the exchange in the settlement in which the concerned contract was entered into & up to the date of auction/close out OR 20% above the official closing price on the exchange on the day on which auction offers are called for, whichever is higher.” Since in the rolling settlement the auction & the close out takes place during trading hours the reference price in the rolling settlement for close out procedures would be taken as the previous day’s closing price.

Undoubtedly, it is “Don't put all your eggs in the same basket”. It is very tempting to make all your investment in the same sector when their stocks are going up, but since market trends are very volatile, you are, at the same time, making yourself extremely vulnerable to lose all your money. Dealing with single sector investment requires razor sharp timing with zero margin of error - a tall order in such a speculative & volatile business.

Hence, it is always advisable to make investments in different companies & in different sectors, so that you can achieve stable portfolio diversification & compensate losses in one sector against profits in another sector.

The trading member can charge:

Securities Transaction Tax.
Service tax as applicable.
Transaction charges levied by NSE, Stamp duty & other charges directly attributable to the transaction.

(Note: The brokerage & service tax is indicated separately in the contract note.)

Exchange prescribes margin rules from time to time, which currently are calculated on the Value at Risk model. Margins are to be paid by the investor before placing the order.

The right to get proof of price/brokerage charged, money/shares on time, Statement of Accounts & Contract Note from trading member.

The obligations are:

Signing a proper Member-Constituent Agreement
Possessing a valid contract or purchase/sale note
Delivering securities & making payment on time
Providing margin before trade

Any person who pursuant to a contract or arrangement with a client, advises or directs or undertakes on behalf of the client (whether as a discretionary portfolio manager or otherwise) the management or administration of a portfolio of securities or the funds of the client, as the case may be is a Portfolio Manager. Sushil Financial Services Private Limited is a SEBI Registered Portfolio Manager (Reg. No.INP000001116) that offers Discretionary Portfolio Management Services to an investor with a minimum of Rs.10 lakhs.