ACCOUNTING OPENING PROCEDURE OF DEMAT ACCOUNT FOR NSEL

1) For opening A client account (Trading account / client code) with a member of NSEL.

Time to time NSEL publishes the list of members who are recognised as members. Select the member after

considering the charges, brokerages, presence in your locality, ease of dealings, nature of customer care, quick in

transaction, efficiency and last but not least, customer feed back.The list of Members from whom you can start demat

account for buying and selling e-Gold, e-Silver, e-Copper, e-Zinc, e-Lead.are shown in the link below

Select the Member of the NSEL after much deliberations. Fill up the account opening form with Member. The forms

are available in websites of the respective Members. After filling up the form produce it before the Member along with

the proof of identity and proof of residence. Sign the Member - Client agreement form.

Authorised members of NSEL

List of members authorised by NSEL to deal with e-series products

All the Depository Participants from whom you can start Demat account to buy and sell e-Gold, e-Silver, e-Zinc,

e-Lead, e-Copper.

2) For opening Beneficiary account / Demat account for the commodities segment with any of the DPs of the

NSEL.

Beneficiary account is the account where we hold the e-units in dematerialized form with the Depository. It is just like

a Bank account. In the Beneficiary account we keep our e-Series items like e-Gold, e-Silver, e-Lead, e-Copper, e-

Zinc. Select the DP after considering their Brokerages and transaction charges, annual maitainance charges, ease of

dealing, location, customer care, customer feed back. Fill up the Account opening form . It is even available in the

websites of DPs. Submit the account opening form along with the Proof of identity and Proof of residence. Then sign

the agreement with the Depository participant. PAN card is must for Beneficiary account opening.

Along with these documents, you have to produce the following items.

1. 3 photographs

MICR Cheque  copy.

List of Depository Participants from where we can open the Demat account

http://www.nationalspotexchange.com/EmpanelledDPs.pdf

List of Depository participants who are authorized by the NSEL from whom you can start Demat account for

trading in e-series products.

To invest in Gold in India as e-Gold

To invest in e-Gold in india. All information of e-Gold in india. Merits and demerits in investing e-Gold in

India.Charges in e-Gold, things to do for buying e-Gold.

To invest in Silver in India as e-Silver

To invest in Silver in India. How to buy e-Silver. Best investment in Silver. No Silver etf. One and only

investment option in Silver in India.

Majority of the Members approved by the NSEL have a DP arm which is empaneled or approved by the NSEL. Some

of the Members have agreements or arrangement with any of the impaneled DP of NSEL. When you read that two

type of accounts are needed to invest in e-series, you may have thought that the account opening is difficult. But it is

not so. It is just like we open a demat account for equity trading. All the two accounts mentioned above can be

opened in one Member itself. Almost all the members approved by the NSEL have DP with them. Atleast an

arrangement with DP exist for all the members.

Before opening an accoung for trading in e-Gold, e-Silver, e-Copper, e-Zinc, e-Lead, one should carefully examine

the NSEL approved member and the availability of DP arm or arrangements with any DP. He should carefully

examine and compare various members and finally should select the best member.

Time taken for opening   an   account  with NSEL is 1 to 3 days. It may vary with the members and DPs. If an

individual has a demat account opened for trading in MCX then that Demat account can be used for NSEL.

Charge strecture

Charges for making a Demat account may comes in between Zero to Maximum of Rs. 750. Annual maintainance

charge comes to around less 0.5%.

Uses of Having Demat account with NSEL

Now you know how you can got a Demat account with NSEL. With the Demat account with NSEL you can invest in

Gold, Copper, Silver, Lead, Zinc electronically as e-Gold, e-Silver, e-Copper, e-Zinc, e-Lead. You can trade and

margin trade and invest in the e-Gold, e-Silver, e-Copper, e-Zinc, e-Lead instruments. You can buy the e-series

products even on an emi basis. NSEL has a pan India online   trading  platform which is open from 10 am to 11.30 pm.

Online trading platform is open from Mondays to Fridays. This flexibility in the opening hours make this type of unique

and more popular. In the times of urgent needs, you can sell your holding even as late as 11.30 pm. No need to pay

taxes like VAT or Sales Tax in buying and selling e-series units like e-Gold, e-Silver, e-Copper, e-Zinc, e-Lead.

Money will come accrue to your account on the 3rd day of transaction. If you want to take Delivery of the e-series

units that you hold, then you can take at the delivery locations of the NSEL. For conver sion of e-Gold, e-Silver into

physical units, the following criteria applies.

1) e-Gold; 8gram, 10 gram, 100gram, 1kilo gram

2) e-Silver; 100 gram, 1kilogram, 5kilogram, 30 kilogram.

Almost every house in India, invests in precious metals, especially gold and silver. NSEL (National Spot

Exchange limited), India has give a chance to retail investors to enter into the commodities market

through its E-series product and invest in demat gold. Currently, NSEL offers only gold and silver trading

in their E-series, but there are plans to include copper and nickel too. Rather than investing in physical

gold, one can hold gold or silver in demat account, as it not only saves locker and insurance costs but can

be bought in very small quantities. Small time investors can invest in small denominations, like 1 gram, 2

grams and so on, regularly.

Requirements:

Retail investors can open a demat account with any of the Depository Participants (DP) of NSEL like

Karvy, IL & FS, Religare, Goldmine, Monarch Capital, SMC, SSD securities, India Infoline, and trade in

this, just like mutual funds or equity shares.  Visit this link for the full list of empanelled DPs for us to trade

in egold and/or esilver.  But remember that you need to have a separate demat account for trading e-gold

and e-silver in commodities market backed by National Spot Exchange limited.  Like with equities, trading

settlement is done on T+2 days.

The holder can also take physical delivery of the gold, if he wishes to, by surrendering the required units

to the exchange. Presently, there are three centers which offer physical delivery of gold in India and they

are on the process of increasing this to many more cities in India.

Advantages:

Investing in e-gold and e-silver are seen as safer options today since they are not affected by inflation and

other economic risks.  Since gold is an excellent hedge against inflation, it is always best to buy gold as a

short or long term investment.

E-gold and e-silver investment gives better returns as compared to ETF’s since the fund houses charge

additional costs like AMC, vault charges which are comparatively lower here. National Spot Exchange

charges 0.4 % annually while it is 2.5 % for ETFs. Transparent pricing, seamless trading, no holding cost

are some of the advantages of e-gold and e-silver trading. Hassle free buying and selling of commodity is

possible in demat gold and silver. It is emerging as a better alternative to ETF, which is like any other

mutual fund.

Disadvantages:

The buyer is not the outright holder of the gold as the institution holds the metal on his behalf. With e-

gold, security is always an issue as there is always a risk of account being hacked. Due to security breach

losses can occur, which are irreversible but perhaps you are protected by insurance against this issue.

Also there are custody charges that one has to pay at 60 paise per month.

This is just another way to buy our favorite commodity in which our Indians are more attached to than

ever, the gold as well as silver.  I would personally suggest you to go for this to buy e-silver if you already

have an gold ETF account.  But if you are looking have physical gold at the end of the investment period

or when needed, go for e-gold offered by them.

Opening a separate Demat and Trading account for trading in NSEL

First of all you will have to open a Demat and Trading account with one of the

authorized participants with NSEL.

This has to be a separate trading account from the one that you might be using for

trading stocks.

There is a list of authorized depository participants (DPs), and you can open an

account with any of these to start trading in NSEL.

You can expect to pay an initial charge of about Rs. 350 or so for opening the Demat

account depending on who you open this with, and then expect a slightly lower AMC

(Annual Maintenance Charge) of about Rs. 250 or so every year on this account.

Some DPs might offer you a scheme where if you give them a refundable deposit of Rs.

2,000 they will waive off the opening charges, and subsequent AMC, so you can check

that up.

To open an account go to this link and look up a member in your city, and talk to them.

You will require documents such as PAN, 3 passport photographs, bank proof, and

address proof.

Buying E-Gold, E-Silver or E-Copper through NSEL

Once you have your account set up, you can then carry out transactions. You can buy

gold, silver or copper, and one unit of the E-Series is equivalent in the following way:

1. E-Gold: 1 gram

2. E-Silver: 100 grams

3. E-Copper: 1 kilo

The commission to transact is about 0.5% if you take the delivery, and 0.05% for intra

– day trading. I use the word about because these might differ from one broker to the

other, and I wanted to give you gauge of what you can expect.

You can trade the E-Series from 10:00 in the morning to 11:30 in the night on

weekdays, and the settlement is done on a T+2 basis.

The price of the three contracts is visible on the website of NSEL, and once you buy a

contract, it will be credited to your demat account after settlement.

Converting E-Gold, E-Silver or E-Copper in Physical Form

You can hold the E-Series products in Demat form, and you also have the option of

converting it into physical form – this is known as rematerialization.

There are two key things to note here:

1. Rematerialization is currently not done in every city, so if you need this option,

then check with the agent first.

2. VAT: When you rematerialize you will have to pay some rematerialization charges

(which will be in the range of Rs. 200 for 10 grams gold), but the VAT might be a

bigger amount based on how much electronic quantity you hold.

Currently, there are no holding charges, but I don’t know how far this will continue, so

you can expect to pay holding charges sometime in the future, if not immediately.

Information I couldn’t find on E-Series Products

There were a couple of things that I wanted to find out, but wasn’t able to get to, and I

thought they were meaningful enough to be shared here, and see if anyone else knows

about them.

Does SEBI regulate these E-Series Products?

If someone faces an issue with NSEL, or the E-Series products, then who should they

address it to. Can they go to SEBI? Is SEBI actively regulating it or does it fall under

the purview of some other agency.

Does anyone hold the underlying physical gold?

Gold ETFs hold underlying physical gold equivalent to the number of units of funds

they have issued, and they publish the data periodically, but I didn’t find information

on who holds the physical gold, or if at all it is being held at somewhere at all times.

If everyone who holds a E-Series contract requests for gold rematerialization then

what will happen.

Conclusion

There are no silver ETFs right now, so this is an alternative if you’re looking to invest

in silver, but there are gold ETFs that you can look at if you’re looking to invest in

gold.

This product doesn’t have a long track record, so even if you are interested in buying

E-Gold or E-Series – I’d say it’s better to be safe than sorry, and start off with smaller

quantities.

Details & Information about trading E-Gold as commodity on National Spot Exchange

(NSEL)

It was recently when we covered the details about Trading E-Silver on National Spot Exchange. In

this article, we will focus on another precious metal and the hot favourite of India for investment -

Gold. 

Traditionally, India has been known as the largest consumer of physical gold, and that continues till

date. People have been buying Gold in physical form and storing it as an investment since long time.

With the invest of electronic trading and other contracts, the gold investments have taken a new path.

No more buying of physical gold, no more storing it in safe lockers, rather go the electronic way and

get the gold investments safely into your demat account. 

To enable such E-Gold trading, the National Spot Exchange (NSEL) has a good product called E-

Goldwhich allows individual small investors to trade in Gold in electronic form, without having take

physical delivery. There are many benefit of E-Gold trading and investments, which we will list below.

E-Gold Trading on National Spot Exchange

(NSEL)

First, let's begin with the basic details of E-Gold Trading:

How can I trade E-Gold?

It's simple. Just open a demat account (like the one required for share trading) with a DP/Broker who

has the membership to allow its clients to trade in the E-series on National Spot Exchange of India

(NSEL). Once you get that, you can begin trading by simply placing your buy and sell orders through

phone/internet, depending upon what channels your broker provides for trading and transactions. 

What are the timings for E-Gold on National Spot Exchange (NSEL)? 

This is a bit tricky part. The E-series products E-Gold (and E-Silver) have very long trading hours 10:00

AM to 11:30 PM - i.e. 13:30 hours of non-stop

trading. 

In one way, it is good as you can buy sell at the time you wish. However, it becomes difficult for

traders to trade for such long time. Another issue is that all these commodities and their prices are

influenced by international rates (Remember the recent fluctuations in silver prices). So if you are a

trader and have bought E-Gold say at the price of 20,000 in the morning, it is quite possible that by the

time the trading ends on the NSEL exchange, the prices may come down substantially. You need to be

alert for this kind of trading fluctuations for long trading hours.

The trading days for NSEL for E-Gold trading are usually Monday to Friday (except Bank Holidays)

What will be the underlying unit for E-Gold?

Each E-Gold unit will be comprised on 1 Gram of pure gold with 995 purity level.

What is the lot size and tick size for E-Gold trading?

One can trade E-Gold in 1 unit and its multiples, and the maximum lot size is set to 10,000 units of E-

Gold.

The tick size indicates the minimum price movement, and that is set to 10 paisa. That means, any

price will have to be quoted in multiples of 10 paisa only for E-Gold trading.

What are the margin requirements for E-Gold Trading?

The exchange has set the initial margin as 5% and delivery margin as 10% for trading E-Gold.

However, depending upon the broker you wish to trade with, the margin requirements might vary,

please confirm with your broker about that.

What is the settlement cycle for E-Gold?

E-Gold contracts follow T+2 settlement cycle.

What are the risks in trading E-Gold?

Please note that there is the general price fluctuation risk which is always there. We have seen that

happening for Silver prices recently, and to some extent gold prices are also fluctuating. So whether

your buy (go Long on E-Gold) or sell (go short on E-Gold), the price movement will affect your trading

profits. 

Then, as mentioned above there is the long trading hours risk. What if you purchase something at high

price in the morning and it comes down substantially due to international price changes by the time

the exchange closes?

Third, you need to accept the risk of international price changes which might happen overnight, when

the exchange is closed.

Transaction costs will again be another thing to look at and it will vary from broker to broker.

Then, all the brokers you generally trade with, may not have NSEL membership for allowing trading in

E-Gold. You may have to incure extra charges for trading on NSEL listed products

What are the other competitor products available in the market againsts E-Gold?

There are lots of Gold Based ETF's which one can consider. Since majority of the gold based ETF are

listed on common exchanges like NSE and BSE, you can save charges for getting a NSEL exchange

trading account - again, check with your broker. Here is the List of Gold ETF India available for

trading on NSE

HDFC has its own HDFC Gold ETF

CIRCUIT

Stock prices of companies listed on the stock exchanges are influenced by several factors - company financials,

investor's perception of the company's growth, industry trends, government regulations, market speculation, to name

a few.

Some factors are predictable and can be studied and analysed using

statistical tools like graphs and techniques like ratio analysis, trend analysis,

theory of probability etc.

Certain other factors and their influence on prices of a particular stock or the

market in general and the degree of their impact are completely

unpredictable. 

Since market sentiments cannot be predicted accurately and their impact on stock prices is difficult to judge,

sometimes the movement of stock prices can beat all logic and move tremendously in any direction.

Circuit Breaker is a system to sustain sanity of the stock market in such situations. For example, the BSE Sensex

moved up by 2110.79 points on May 18, 2009 after the Parliament election results were announced. The trading had

to be halted since the market became extremely volatile and moved beyond reasoning.

What is a circuit?

Circuits are of two types - circuit for an index and for a stock. So, if an index or the price of a stock increases or

declines beyond a specified threshold it is said to have entered into a circuit. Securities and Exchange Board of India

[ Images ] specifies this threshold as a percentage of the prior day's closing figures.

What is a circuit breaker?

Factors like market speculations force stock prices or indices to enter in a circuit. Such a condition is beyond the

control of regulatory authorities. Hence they use the circuit breaker to curb such market situations.  Circuit breaker,

simply put, is a set of rules formed and issued by SEBI in order to bring back normalcy in the stock markets in the

event an index or stock enters a circuit. SEBI has different circuit breakers for indices and for stocks.

Circuit breaker for an Index

Circuit breakers are applied only on equity and equity derivative markets. Whenever the major stock indices like BSE

Sensex and Nifty cross the threshold level, SEBI rules require that the trading at the stock exchange be stopped for a

certain period of time beginning from half an hour to even an entire day. The time frame for which trading is stopped

depends upon the time and amount of movement in the indices. The idea is to allow the market to cool down and

resume trading at normal levels. The thresholds are implemented stage wise.

Movement in Indices Time Close period

10 per cent Before 1.00 pm 1 hour

1.00 pm to 2.30 pm ½ hour

After 2.30 pm Does not close

15  per cent Before 1.00 pm 2 hour

1.00 pm to 2.30 pm 1  hour

After 2.30 pm Close for the rest of the day

20 per cent Any time Close for the rest of the day

Circuit Breaker for a stock

A price band specifies the span or price range for a stock to move without any interference from regulatory

authorities. Only when the stock prices move beyond the range, it is considered as entering into a circuit and circuit

breakers are applied. Daily price bands of 2 per cent, 5 per cent and 10 per cent are applicable to different equity

stocks. Price bands of 20 per cent  are applicable to all remaining scrip like preference shares or debentures. For

example, for a stock with a price band of 5 per cent that closes at Rs100 on the previous day, the price band will be

between Rs 105 and Rs 95.

What are an Upper circuit and Lower circuit?

Stock prices can either move up or down and hence circuit breakers are required for movements in both directions.

An upward movement over the threshold will cause a stock to enter an upper circuit. Similarly a downward movement

in stock price beyond the threshold will cause a stock to enter a lower circuit.

The objective of circuit breakers is to control the stock markets at times when they move beyond reasonable limits.

When a stock enters an upper circuit, it puts an investor who has already invested in the stock at an advantage. On

the contrary a stock movement into a lower circuit places the investor at a disadvantage because it is now difficult to

sell off these shares as they have lost a lot of money.

Upper circuit is a system to curb excessive speculation in the stock market, applied by the stock

exchange authorities, when the index spurts or plunges by more than a fixed limit. Trading is then

suspended for some time to let the market cool down.

The market wide circuit breakers would be triggered by movement of either Sensex or the NSE S&P

CNX Nifty whichever is breached earlier.

In case of a 10% movement of either of these indices, there would be a 1-hour market halt if the

movement takes place before 1 p.m. In case the movement takes place at or after 1 p.m. but before

2.30 p.m. there will be a trading halt for 1½ hour. In case the movement takes place at or after 2.30

p.m. there will be no trading halt at the 10% level and the market will continue trading.

In case of a 15% movement of either index, there will be a 2-hour market halt if the movement takes

place before 1 p.m. If the 15% trigger is reached on or after 1 p.m. but before 2 p.m., there will be a 1

hour halt. If the 15% trigger is reached on or after 2 p.m. the trading will halt for the remainder of the

day.

In case of a 20% movement of the index, the trading will be halted for the remainder of the day.

Although introduced in November 1992, it was used for the first time in the Bombay Stock Exchange

on Tuesday, 9 March 1993 when the Sensex declined by more than 5% from the opening level, i.e.

from 2451.20 to 2318.26. At that time, the circuit was 5%.

Read more: http://wiki.answers.com/Q/What_is_upper_circuit_in_stock_market#ixzz1NjJ8dRx1

Stock Markets India

What is Upper Circuit/ Lower Circuit? Where to check the circuit filters?

Index-based Market-wide Circuit Breakers

The index-based market-wide circuit breaker system applies at 3 stages of the index movement, either

way viz. at 10%, 15% and 20%. These circuit breakers when triggered, bring about a coordinated

trading halt in all equity and equity derivative markets nationwide. The market-wide circuit breakers

are triggered by movement of either the BSE Sensex or the NSE S&P CNX Nifty, whichever is breached

earlier.

In case of a 10% movement of either of these indices, there would be a one-hour market halt if the

movement takes place before 1:00 p.m. In case the movement takes place at or after 1:00 p.m. but

before 2:30 p.m. there would be trading halt for ½ hour. In case movement takes place at or after

2:30 p.m. there will be no trading halt at the 10% level and market shall continue trading.

In case of a 15% movement of either index, there shall be a two-hour halt if the movement takes place

before 1 p.m. If the 15% trigger is reached on or after 1:00p.m. but before 2:00 p.m., there shall be a

one-hour halt. If the 15% trigger is reached on or after 2:00 p.m. the trading shall halt for remainder of

the day.

In case of a 20% movement of the index, trading shall be halted for the remainder of the day.

These percentages are translated into absolute points of index variations on a quarterly basis. At the

end of each quarter, these absolute points of index variations are revised for the applicability for the

next quarter. The absolute points are calculated based on closing level of index on the last day of the

trading in a quarter and rounded off to the nearest 10 points in case of S&P CNX Nifty.

Upper Circuit/ Lower Circuit in Stocks, Indices - NSE Circuit Breakers

In addition to the circuit breakers, price bands are also applicable on individual securities. More

information about upper/lower circuit band for individual securities can be found on company

information pages on NSE/ BSE website.