JK Securities

An equity share represents the form of ownership. The holder of such a share is a member of the company and 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 and certain, the earnings from equity investments are highly uncertain and 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 and risk-free to a large extent, investment in equities and 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, and to repay the original loan on the expiration date. A bond investor lends money to the issuer and 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 and 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 and 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 JK Securities Pvt Ltd. who holds membership in stock exchanges and 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 and furnish details relating to yourself to enable the member to maintain Client Registration Form.

This form is an agreement entered into between client and 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 and your losses are likely to increase.

Trading can be done via the phone or by coming in person to the office of JK Securities Pvt Ltd. or through any other facility provided by JK Securities Pvt Ltd. like Internet trading. The dealer (employee of JK Securities Pvt Ltd. who is supposed to input the investors order into the stock exchange order system) after checking the authenticity of the person calling and 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 and when the market goes down it is called a bearish trend.

When you act upon a stock and 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 : -

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. Index measures 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 2 renowned indices viz.

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

The first 2 columns as given above show the available buyers for a particular share in the stock exchange and the next 2 columns show the available sellers, and 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 and 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 and JK Securities Pvt Ltd. with respect to the settlement of the trades. The Contract Note would show settlement number, order number, trade number, time of trade, quantity and price of the trades, brokerage charged, etc and it would be signed by an authorized person of JK Securities Pvt Ltd.

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) and b) Central Depository Securities Ltd. (CDSL), both of which are regulated by SEBI. JK Securities Pvt Ltd. is a Depository Participant of NSDL and will hold your securities in electronic form.

You can approach JK Securities Pvt Ltd. or any DP of your choice and fill up an account opening form. At the time of opening an account, you have to sign an agreement with DP in a NSDL prescribed standard agreement, which details your and your DP's rights and 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 JK Securities Pvt Ltd. for the specified settlement number. The pool account number for shares sold on SLB is IN554044, NSE it is IN554044, MSEI is IN471732 and MF-NSE is IN565576. The delivery should necessarily come from the demat account of the investor and not from any other person. Similarly JK Securities Pvt Ltd. would directly transfer shares bought to the account of the investor.

Payments to JK Securities Pvt Ltd. has to be made via a Account Payee cheque/Demand Draft in favor of JK Securities Pvt Ltd.. The payment should necessarily come from the bank account of the investor and not from any other person. Similarly JK Securities Pvt Ltd. would pay an Account Payee cheque in the name of the investor, which will also contain the Bank name and account number of the client.

The pay-out of funds and securities to the clients by JK Securities Pvt Ltd. 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 and 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 and securities pay-in and 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 and gives them to the buying trading member.

A. 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 and the difference in price indicated in Contract Note and 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 and upto 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 and 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.

In case a broker fails to deliver to you in time and make the proper payment of money/shares or you have a complaint against the conduct of the broker, you can file a complaint with the respective stock exchange. The exchange is required to resolve all complaints. To resolve the dispute the complainant can also resort to arbitration as provided on the reverse of Contract Note /Purchase or Sale Note. However, if the complaint is not addressed by the Stock Exchanges or is unduly delayed then the complaints along with supporting documents may be forwarded to Secondary Market Department of SEBI. Your complaint would be followed up with the exchanges for expeditious redressal.

In case of a complaint against a sub-broker, for redressal the complaint may be forwarded to the concerned broker with whom the sub broker is affiliated.

The trading member can charge:

Note: The brokerage and 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 and Contract Note from trading member.

The obligation to - Sign a proper Member-Constituent Agreement Possess a valid contract or purchase/sale note Deliver securities & make payment on time Provide Margin before trade

Three kinds of accounts are required to be able to trade on-line. They are:

Tax rates on investments gains are categorized as long term & short term capital gains.