Raju Department of Business Administration Stock Exchange Secondary market is the segment of the capital market in which outstanding issues are traded The secondary market is also called stock market ID: 1028728
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1. STOCK EXCHANGEMs. Aleena RajuDepartment of Business Administration
2. Stock ExchangeSecondary market is the segment of the capital market in which outstanding issues are traded. The secondary market is also called stock market.
3. Origin of Stock ExchangeThe origin of sto0ck exchange may be in the middle of the nineteenth century when companies act was enacted in 1850.In 1875 the native share and stock brokers association were formed in Bombay.After Bombay similar associations or exchanges were formed in Ahmadabad in 1894, Calcutta in 1908 and Madras in 1937
4. In order to make sure orderly activities in the stock market , the central government introduced a legislation called the Securities Contracts ( regulations) Act in 1956.There are eight active stock exchanges in India. BSE Ltd., Calcutta Stock Exchange Ltd., Indian Commodity Exchange Limited, Metropolitan Stock Exchange of India Ltd., Multi Commodity Exchange of India Ltd., National Commodity & Derivatives Exchange Ltd., National Stock Exchange of India Ltd.
5. Functions of Stock ExchangesProvides ready market for corporate securitiesEasy withdrawal of money/ taking position in a companyProvide facility for switching of shares.Provides appropriate conditions whereby purchase and sale of securities take place at reasonable and fair price.
6. Enable the investor to estimate his financial wealthProtect the interest of investorsManagement and working of companies are influenced.Ensuers investable funds or capital to flow into profitable companiesEnhances reputation of the company
7. Stock prices taken as a barometerFacilities public borrowingPrice fluctuations are kept within reasonable limitsCollateral value of securities can be easily estimatedProvides employment to manyProvides good revenue to the exchequer
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9. MEMBERS OF STOCK EXCHANGEBrokersFloor brokersJobber/floor tradersMarket makersArbitrageursSecurity dealersOdd – lot dealers
10. National Stock Exchanges NSE or National Stock Exchange is the leading stock exchange of India. It is the fourth largest in the world (based on equity trading volume). Based in Mumbai and established in 1992, it was the first stock exchange in India to offer a screen-based system for trading.The NSE was initially set up with an aim to usher in transparency to the Indian market system, and it has ended up delivering on its aim quite well. With the help of the government, the NSE successfully offers services such as trading, clearing as well as the settlement in debt and equities comprising domestic and international investors.
11. Objectives of NSETo establish a nationwide trading facility for equities, debt and hybrid securities To facilitate equal access to investors across the countryTo impart transparency and efficiency to transactions in securitiesTo shorten the settlement cycleTo reduce the too much of speculative bent of the investors/ operators.To meet international securities market standard.
12. FEATURES OF NSEIt is a ringless, national, fully computerized exchange.It has two sections- capital market segment and the wholesale debt market segment.Traders in NSE are guaranteed by the national securities clearing corporation (NSCC). Counter party risk is eliminated
13. Bombay Stock ExchangeThe BSE or the Bombay Stock Exchange is a lot older than its cousin. It was Asia’s first stock exchange. With a trading speed of 6 microseconds, the BSE is the fastest stock exchange in the world.The BSE does have some interesting history. A man named Premchand Roychand founded the Native Share and Stock Brokers Association in the 19th century. In those times, it used to function in Dalal Street under a banyan tree - where traders would gather together to buy and sell stocks. Gradually, the network expanded and the exchange was established by the name of Bombay Stock Exchange in 1875.
14. Over-The-Counter Exchange of IndiaThe Over-The-Counter Exchange of India (OTCEI) is an electronic stock exchange based in India that consists of small- and medium-sized firms aiming to gain access to overseas capital markets, including electronic exchanges in the U.S. such as the NASDAQ. There is no central place of exchange, and all trading occurs through electronic networks.
15. Features of the Over-The-Counter Exchange of IndiaUse of modern technologyRestrictions for other stocksMinimum issued capital for the aspirants Restrictions for big companiesAll India network
16. Difference between OCTEI and other Stock ExchangesOTCEIOTHER STOCK EXCHANGESTrading done through networkTrading takes place on floorFor listing, minimum paid up capital for 30 lakhFor listing of companies, minimum paid up capital of 5 croreTraders in securities listed only at OCTEITrade in securities of all companiesSettlement may not be quickQuick settlementPrimary objectives to help small companiesPrimary objective is to improve capital market