(NEAT System, BOLT system and trading system user- hierarchy).pptx

neat system,Bolt system

1. NEAT System ,BOLT System and Trading System Users Hierarchy BY:ARCHI 7th Sem 14

2. STOCK TRADING ON NEAT AND BOLT T he trading on stock exchanges in India was in  open outcry  manner till mid 1990s. In order to provide efficiency, liquidity and transparency, NSE introduced, a nationwide, on-line, fully-automated Screen based trading system (SBTS) in November 1994 known as National Exchange for Automated Trading (NEAT) system. BSE online trading (BOLT) by BSE started in March 1995

3. Screen based trading system NEAT and BOLT are state-of-the-art client-server based applications where at the server end all trading information is stored in in-memory databases to achieve minimum response time and maximum system availability for users. A member, broker enter orders from the Trader Work Stations (TWSs) installed in their offices. A client of these broker can place orders through phone/internet for which he should enter Model Agreement with brokers first.

4. Internet based trading There are many brokers who provide internet based trading facility to their clients. Investors can buy/sell securities through Trader Terminals downloaded on their computers, Trading Apps on their mobiles etc. Both NSE and BSE systems run on ‘Order driven’ systems What is ‘order-driven’ system? In an order-driven system, the traders only put their orders for buying or selling of securities whereas, in ‘quote-driven’ system, the jobbers put buy as well as sell quotes in the same scrip with a price difference. The order-driven system ensures faster processing, matching and execution of orders in a transparent manner.

5. NSE system, is order driven from the beginning while BSE system turned completely order-driven after 13 th  August 2001. Till then it was both order and quote driven. Trading Hours Regular Trading in equities on the NEAT and BOLT systems are conducted from Monday to Friday between 9:15 a.m. to 3:30 p.m.  Thus uniform trading hours are followed by both the stock exchanges.  Pre-open session : 9:00 to 9:08 Block deal sessions: 8:45 am – 9:00 am and 2:05 p.m. – 2:20 pm Closing session: 15:40  hrs  to 16:00 hrs

6. Why trade on recognized stock exchanges only? Investors do not get any protection if he trades outside a stock exchange. Investors gets best prices prevailing in the market on Stock Exchanges No counter-party risk involved Access to investor grievance and redressal mechanism of stock exchanges Protection up to a prescribed limit from the Investor protection fund

7. How to know if the broker or sub broker is registered? Investor should check the Registration Certificate issued by SEBI A broker’s registration number begins with letters ‘INB’ and that of a sub-broker with the letters ‘INS’ The maximum brokerage that can be charged by a broker from his clients as commission cannot be more than 2.5% of the value mentioned in the respective purchase or sale note.

8. What is contract note? Contract Note is a confirmation of trades done on a particular day on behalf of the client by a trading member. It imposes a legally enforceable relationship between the client and the trading member with respect to purchase/sale and settlement of trades. It also helps to settle the disputes/claims between the investor and trading member.

9. TRADING SYSTEM USER-HIERARCHY 3 LEVELS OF USER-HIERARCHY Corporate Manager Branch Manager Dealers

10. 1.Corporate Manager The Corporate Manager is the user placed at the highest level. Such a user can perform all offer-related activities and receive the reports for all branches of the trading member. Additionally, the Corporate Manager can define the offer value limits for the branches and individual dealers of his firm. This facility is available only to the Corporate Manager. The Corporate Manager can modify his own offer or offers of all dealers and branch managers of his trading member firm. 2.Branch Manager The Branch Manager is the user who is placed under the Corporate Manager. Such user can perform and view Bid related activities for all dealers under that branch. The Branch Manager can modify his own offer or offers of any dealer under his branch.

11. 3.Dealer Dealers are users at the lower most level of hierarchy. A Dealer can perform and view offer related activities and information only for oneself and does not have access to information on other dealers under either, the same branch or other branches. A Dealer can modify only the Offers entered by him. Additionally, Syndicate members can view, modify and cancel bids placed by other members.