For stock brokers 1 permission from stock exchange

For stock brokers:
1. Permission from stock exchange for net trading
2. Net worth of Rs. 50 lac
3. Adequate back-up system
4. Secured and reliable software system
5. Adequate, experienced and trained staff
6. Communication of order (trade confirmation to investor by e-mail)
7. Use of authentication technologies
8. Issue of contract notes within 24 hours of the trade execution
9. Setting up a website.
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The net is used as a medium of trading in internet trading. Orders are
communicated to the stock exchange through website. Internet trading started in
India on 1st April 2000 with 79 members seeking permission for online trading.
The SEBI committees on internet based securities trading services has allowed the
net to be used as an Order Routing System (ORS) through registered stock brokers
on behalf of their clients for execution of transaction. Under the Order Routing
System the client enters his requirements (security, quantity, price, and buy/sell) in
broker's site. They are checked electronically against the clients account and routed
electronically to the appropriate exchange for execution by the broker. The client
receives a confirmation on execution of the order. The customer's portfolio and
ledger accounts get updated to reflect the transaction. The user should have the
user id and password to enter into the electronic ring. He should also have demat
account and bank account. The system permits only a registered client to log in
using user id and password. Order can be placed using place order window of the
website.
Procedure for net trading
Step 1:
Those investors, who are interested in doing the trading over internet
system i.e. NEAT-IXS, should approach the brokers and get them self
registered with the Stock Broker.
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Step 2:
After registration, the broker will provide to them a Login name, Password
and personal identification number (PIN).
Step 3:
Actual placement of an order. An order can then be placed by using the place
order window as under:
1. First by entering the symbol and series of stock and other parameters like
quantity and price of the scrip on the place order window.
2. Second, fill in the symbol, series and the default quantity.
Step 4:
It is the process of review. Thus, the investor has to review the order placed
by clicking the review option. He may also re-set to clear the values.
Step 5:
After the review has been satisfactory, the order has to be sent by clicking
on the send option.
Step 6:
The investor will receive an "Order Confirmation" message along with the order
number and the value of the order.
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Step 7:
In case the order is rejected by the Broker or the Stock Exchange for certain
reasons such as invalid price limit, an appropriate message will appear at the
bottom of the screen. At present, a time lag of about 10 seconds is there in
executing the trade.