FAQ'S

1 WHO IS A BROKER?

A broker is a member of a stock exchange, who is permitted to do equity trades in there. Broker is enrolled member of the exchange and is registered with SEBI. In other word broker is an intermediate person (or a company) between an investor and a stock exchange. They buy & sell shares and other securities for investors in stock market.Please note that an investor cannot direct deal with stock exchange.

2 WHAT IS SECURITIES TRANSACTION TAX (STT)?

Securities Transaction Tax (STT) is a tax being levied on all transactions done on the stock exchanges. Securities Transaction Tax is applicable on purchase or sale of equity shares, derivatives, equity oriented funds and equity oriented Mutual Funds. Current STT on purchase or sell of an equity share is 0.075%.

3 I HAVE LOST THE SHARE CERTIFICATES I WAS HOLDING FOR XYZ COMPANY. HOW DO I GET DUPLICATE SHARE CERTIFICATES?

Registrar of the company usually helps in resolving this kind of issues. If you know the registrar of the company, contact then with your quires. If you do not know the registrar of the company, visit ‘Investor Relations' section of the company's website or contact the company and ask them about the registrar handing their share. For example: If you lost Reliance Industries Limited (RIL) share certificates.

4 WHY DO SHARE PRICES MOVE UP AND DOWN?

The answer in two words is "Demand & Supply". Simply if there is more demand of a company shares and less people are willing to sell them, the share will move upwards. If there is a huge supply but no body is interested in buying shares at the current price, the share will move downwards. Now the major question is how does demand or additional supply comes in to the market and the answer is, there are many factors involve in this including company's financial result, overall economy situations, sector performance, government rules & regulations, major political & natural events, future of the company, upcoming products & services, company management changes, stock market frauds etc. Any of the above and many more factors affect demand & supply of a company stock and ultimately move it prices to go up & down. It's very hard to predict stock movement and require lots of research and expertise.

5 WHAT ARE BSE / NSE?

BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) are among two largest stock exchanges in India where shares of move then 5000 companies are traded. In simple term BSE / NSE provides a platform for investors to buy and sell the listed company shares.

6 WHAT IS THE DIFFERENCE BETWEEN PRIVATE LIMITED AND PUBLIC LIMITED COMPANIES?

Private Limited Company - Private limited company is owned privately by a small group of people such as a family. They are not allowed to offer shares (in the company) to the general public and can operate through just one director. A private limited company can not trade its shares on the stock market. Private companies have several advantages over public companies. A private company has no requirement to publicly disclose much, if any financial information; such information could be useful to competitors. Private companies also have far less government regulations then public limited company. Public Limited Company - Public limited company is owned publicly by a large number of investors. Public Limited companies are listed in stock market and there shares are actively traded among its investors. Public limited companies can raise capital easily by the sale of its securities.

7 IS DEMAT ACCOUNT REQUIRED FOR OPTIONS TRADING?

Options contracts in India are settled in cash and there are no deliveries involved. Whatever the profit/loss is settled in cash. The profit will be credited to your account and loss would be deducted from the trade value. So, a trader doesn't need a demat account for Options trading. However, he would need a trading account and a linked savings bank account to buy/sell Call and Put options from the exchanges.