What are my obligations when I purchase shares?
You must pay for the purchase (of your shares) by the 03rd market day after the date of purchase. In some instances, your broker may ask you for an advance payment if you are a new investor.
What are my Transaction Costs?
A transaction cost is charged when buying and selling shares. If the transaction value is below 1 million the transaction cost is 1.425% of the transaction value. If the transaction value is above 1 million the transaction cost is 1.225% of the transaction value. Adding on, if the transactions over Rs. 100 Million, then the transaction cost is 0.42% and nett amount to broker is negotiable. However the transaction cost for debt securities, is a flat rate of 0.2%. These are fixed rates and will not differ from one stockbroker to another.
How do I sell Shares?
In the same way you buy shares. You need to have the shares you intend on selling in your CDS account. Inform your broker of the name of the company, the number of shares you wish to sell and the price you wish to sell at. The broker will then carry out the transaction for you at the earliest possible opportunity, which is when a buyer asks for shares for your intended price. The shares will be sold on the CSE’s Automated Trading System. The broker will pay you by the 03rd market day after the date of sale.
How is the Trading Activity conducted?
Trading is conducted through the CSE’s Automated Trading System (ATS), introduced in 1997, is a transparent and efficient screen-based trading system and is a fully automated process. This replaced the Open Outcry System, where all trading had to be done on the trading floor by stock brokers. The Automated Trading System enables brokers to trade from their offices. If you wish to buy or sell shares, you can give your order by telephone, fax or by a personal visit to the broker’s office. Then your broker will enter your order into one of the terminals located at his office. The order will be transmitted instantaneously, electronically, to the Stock Exchange and entered into the central database of pending transactions.
If there is another order already in the system that matches with your order, the two orders will match and the trade will be carried out immediately. A trade confirmation will be printed immediately at the broker office and thus, you will be notified that your transaction has been carried out.
If there is no other order in the system that matches your order, then your trade cannot be done immediately and your order will remain in the trading system. As soon as an order is received from another investor that matches with your order, the transaction will be executed.
How will I know that my order has been executed?
You will receive a bought note or sold note from your broker, generated on the date of execution of the trade, within 24 hours of the said trade. The broker may also call and inform you that your order has been executed. The contract note that the broker sends you is confirmation of the order being executed. The note will have all the details of the said trade, ranging from the price to the how many shares of what company was bought or sold, and the date of which the transaction was completed/will be completed.
How do I keep track of my Transactions?
In addition to your copy of the contract note (in the case of a purchase or sale of shares) or a deposit form (in the case of a deposit of a share certificate in CDS) you will receive a statement from the CDS. If you have any transactions during the month, you will receive a monthly statement. If you have transactions during a quarter, you will receive a statement for that said quarter. If not, you will receive this statement
annually. This will contain all your transactions for the period including the opening balance and the closing balance stated in terms of the number of shares.
How do I monitor the performance of the Market?
Share prices are published in the daily newspapers and displayed live on the computers installed at stockbroker houses in the CSE public galleries. Radio and TV stations also carry daily updates while daily share prices can be obtained through the CSE website and other information vendors.
You can also read stock market reports published on a daily, weekly, monthly, quarterly and annual basis. These publications of the Stock Exchange contain market statistics, share prices, and other useful information for an investor. You may also obtain information from stockbrokers (since most of them compile regular research reports) and from information vendors.
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