Question

Lalita wants to buy shares of Akbar Enterprises, through her broker Kushvinder.she has a Demat
Account and
a bank account for cash transactions in the securities market.

Discuss the subsequent steps involved in the screen based trading for buying and selling of securities in

this case.​

Answer 1

The screen-based trading system is where the shares quantity and rates at which a member wishes to sell can be punched into the machine.

• If an investor wishes to purchase or sell security, a registered broker must be addressed for an agreement known as a broker-client agreement.
• For security holding and transfer in the Demat form, investor has to open Demat' account with a depository member. They will also open a bank account for cash transactions.
• The investor then places an order to purchase/sell stock with the broker. An order confirmation slip is issued and broker then connects to stock exchange, matching the share and best present price.
• It is transmitted to the broker's terminal when shares can be purchased/sold at the price specified, and order is executed electronically. Broker gives investor a trade confirmation card.  
• After the trade has been completed, a contract notice is released by the broker within 24 hours. This note provides information of the share number purchased or sold, price, deal date and the brokerage fees.
• investor must deliver sold shares or pay cash for the shares purchased. It must be done immediately after contract notice has been issued. Subsequently, the broker can deliver shares in the form of Demat directly to an investor's Demat account.