30-08-2014, 12:28 PM
BONANZA PORTFOLIO LIMITED
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REGULATORY FRAME WORK
This Securities Contract Regulation Act, 1956 and Securities and Exchange board of India (SEB1) Act, 1992, provides a comprehensive legal framework. A 3-tier regulatory structure comprising the ministry of finance, SEB1 and the Governing Boards of the Stock Exchanges regulates the functioning of Stock Exchanges.
Ministry of finance: The Stock Exchange division of the Ministry of Finance has powers related to the application of the provision of the SCR Act and licensing of dealers in the other area. According to SEBI Act, The Ministry of Finance has the appellate and the supervisory power over the SEBI. It has powered to grant recognition to the Stock Exchange and regulation of their operations. Ministry of Finance has the power to approve the appointments of executives chiefs and the nominations of the public representatives in the government Boards of the Stock Exchanges. It has the responsibility of preventing undesirable speculation.
The Securities and Exchange Board of India
The Securities and Exchange Board of India even though established in the year 1988. Received statutory powers only on 30th January 1992. Under the SEBI Act, a wide variety of powers are vested in the hands of SEBI. SEBI has the powers to regulate the business of Stock Exchanges, other security and mutual funds. Registration and regulation of market intermediaries are also carried out by SEBI. It has responsibility to prohibit the fraudulent unfair trade practices and insider dealings. Takeovers are also monitored by the SEBI has the multi pronged duty to promote the healthy growth of the capital market and protect the investors.The Governing Board of stockexchanges: The Governing Board of the Stock Exchange consists of elected members of directors, government nominees and public representatives. Rules, by laws and regulations of the Stock Exchange substantial powers to the executive director for maintaining efficient and smooth day-to day functioning of Stock Exchange. The Governing Board has the responsibility to maintain and orderly and well-regulated market.
The Governing body of the Stock Exchange consists of 13 members of which
A. Six members of the Stock Exchange are elected by the members of the Stock Exchange.
B. Central Government nominates not more than three members.
C. The board nominates three public representatives.
D. SEBI nominates persona not exceeding three and
E. The Stock Exchange appoints one Executive Director.
One third of the elected members retire at annual general meeting (AGM). The retired member can offer himself for election if he is not elected for two consecutive years. If a member serves in the governing body for two years consecutively, he should refrain offering himself for another two years.
INVESTMENT RISK PROFILE
All investors have differing attitudes towards risk. When it comes to investing, it is important to consider your risk profile or tolerance carefully, including how comfortable you are with the possibility of losing money, or that returns on your investments could vary widely from year to year.
Understanding your personal risk tolerance will help you choose an appropriate asset allocation - the following points can help you to determine an investment mix that's appropriate for your needs.
INVESTMENT EXPERIENCE
How would you describe your investment experience and understanding of financial markets?
• Just started investing in the last year
• You understand the basics of investing
• You have been investing on your own for several years and are reasonably confident of your knowledge of financial markets
• Your knowledge of financial markets is well above average and you make investment decisions confidently
RISK TOLERANCE
To establish investment strategies that suit your profile of risk and will be comfortable with, you need to consider the possibility that the value of your investment may decline even though this may be temporary. Are you prepared to accept the possibility of a negative return at any time in exchange for potentially higher long term returns? What percentage of your money would you be prepared to invest in higher-risk investments?
Which of the following is important to you:
• Avoiding any short-term losses
• Receiving regular income from investments
• Long-term growth in the value of investments
• Protection against inflation
In October 1987 the stock market fell more than 20% in one day. If you owned an investment that fell by 20% in a short time what would you do or what did you do in 1987:Sell all of the remaining investment (Conservative)
• Sell a portion of the remaining investment (Conservative to Balanced)
• Hold the investment and sell nothing (Balanced or Aggressive)
• Buy more of the investment (Aggressive)
INVESTMENT GOALS AND OBJECTIVES
Why are you investing? Is it for something in the near future (new car, or down payment on a home) or something farther off (a young child's education or your own retirement)? If your investing goals are short term you want your money to be there - with interest - when you need it. Therefore you will need to focus on relatively short term investments like term deposits or a cash management trust. If on the other hand, you are investing for the long term, you may be able to afford to take some risk in pursuit of a higher return. Shares, property, and growth orientated managed which historically have provided higher returns than fixed interest or cash over time, may be more appropriate.
INVESTMENT TIMEFRAME
When do you expect to need to access all or part of your investments:
• Less than 1 year (immediate access)
• Less than 2 years (short term)
• 2 to 5 years (short to mid-term)
• 6 to 10 Years (mid to long term)
• Over 10 Years (long term)
LIQUIDITY / CASH REQUIREMENTS
How much money do you need to keep available for emergencies such as house repairs, a dental emergency or serious car repairs? These emergencies can be a serious setback if you are not prepared. The amount of your emergency fund will depend on your current lifestyle and expenses. As a general rule you should have about 3 months of income set aside to meet emergencies without needing to rely on credit cards. A cash management trustthat pays high interest can be a good place to keep emergency funds.
INTRODUCTION TO ONLINETRADING
The Internet revolution has been changing the fundamentals of our society. It shapes the way we communicate and the way we do business. It brings us closer and closer to vital sources of information. It provides us with means to directly interact with service-oriented computer systems tailored to our specific needs; therefore, we can serve ourselves better by making our own decisions. This prevailing shift of the business paradigm is reshaping the financial industry and transforming the way people invest.
FINDINGS AND CONCLUSIONS:-
Most of the respondents are ready to take either no risk or nominal risk while doing the investment.
Most of the respondents are generally go for longer time horizon.
There is a situation of investment fall by 15% then most of the respondents are neither conservative nor aggressive.
Most of the respondents are agree to take limited losses in expectation of higher returns.
Most of the respondents are give their opinion in the favor of experiencing the ups and downs of the market.
Most of the respondents are agreeing with this there main concern is safety.
Most of the respondents are said that they are not sure about fairly experienced in investment.
Most of the respondents are in favors of they are very much concern with security related to future income.
This study shows most of the respondents either go for conservative risk profile or balanced risk profile.
This study helps in describing the risk profile of investors.
This study describes the strong relationship between demographic data in respect of different parameters.