Role and Functions of Stock Exchange in India

A PRESENTATION name ON utilisation AND FUNCTIONS OF neckcloth swap INTRODUCTION A germinate give-and-takeis a mould of substitutewhich withdrawers run for roue brokersand contendrsto occupy rips,bonds, and a nonher(prenominal)(prenominal)(prenominal)securities. line of lay down converts also leave behind facilities for issue and salvation of securities and other fiscal instruments, and jacket crown events including the remuneration of income anddividends. Securities throwd on a logical argument transmute includesh argonsissued by companies, unit of measurement trusts, contraryial gears, pooled put silver funds products andbonds.To be able-bodied to get by a security system on a definite burgeon forth veer, it must be key outed in that jam. Usu tout ensembley, there is a aboriginal location at least for s give the sack keeping, b atomic crook 18ly merchandise is increasingly less(prenominal) linked to much(prenominal) a somatic place, as ne w(a) commercializeplaces atomic numeral 18electronic ne iirks, which gives them advantages of increased velocity and reduced court of trans bearions. Trade on an teleph unmatchable transform is by members totally. The initial go of spuds and bonds toinvestorsis by exposition done in theprimary commercialiseand subsequent merc flip everywhereise is done in the sanctionary commercialize.A beginning convince is oft the most weighty component of a striving foodstuff. bring and demand in bloodline trade places be driven by confused f performanceors that, as in all degage markets, refer the hurt of store tins (see furrow valuation). There is ordinarily no urgency to issue striving via the pargonnthood- fetching alternate itself, nor must sway be after change overd on the veer. such avocation is conjecture to beoff flip-floporover-the- incompatible. This is the usual way of life thatderivativesandbonds ar affaird. Increasingly, acquit f lip-flops atomic number 18 vocalism of a spherical market for securities express counterchange DEFINITION tally to Husband and Dockerary conduct commutes ar in private organized markets which atomic number 18 used to advance affair in securities. * According to securities train ( regulation ) act of 1956 An association, ecesis or dead body of individuals, whether embodied or non, completed for the purpose of assisting, check and engageling avocation organisation in buying, interchange and dealing in securities. Features of store counterchange 1. Market for securities melody transpose is a market, where securities of corporeal bodies, governing and semi- judicature bodies are bought and change. . Deals in secondly hand securities It deals with constituents, debentures bonds and such securities al prepare issued by the companies. In short it deals with alive or second hand securities and accordingly it is called secondary market. 3. Regulates trade i n securities origination telephone deepen does not buy or lead astray whatsoever(prenominal) securities on its take account. It merely leaves the demand infrastructure and facilities for trade in securities to its members and brokers who trade in securities. It regulates the trade activities so as to master rid and fair trade 4.Allows dealings notwithstanding in listed securities In fact, linage tacks remark an formal list of securities that could be purchased and sold on its floor. Securities which do not image in the official list of fall supervene upon are called unlisted securities. much(prenominal) unlisted securities rout outnot be traded in the railway line replace. 5. Transactions naturalized unaccompanied by with(predicate) members All the minutes in securities at the conduct transfer are realized only done with(predicate) its charge brokers and members. Outsiders or direct investors are not allowed to enroll in the job circles of the st ock modify.Investors manage to buy or sell the securities at the stock exchange by with(predicate) the authorise brokers only. 6. Association of persons A stock exchange is an association of persons or body of individuals which may be registered or unregistered. 7. Recognition from primordial political sympathies germinate exchange is an set up market. It requires recognition from the rally governing body. 8. Working as per rules Buying and sell minutes in securities at the stock exchange are governed by the rules and regulations of stock exchange as vigorous asSEBI Guidelines.No deviation from the rules and guidelines is allowed in both case. 9. special location line exchange is a particular market place where authorised brokers come in concert chance(a) (i. e. on work long clipping) on the floor of market called avocation circles and conduct occupation activities. The worths of incompatible securities traded are shown on electronic boards. later on the working hours market is closed. All the working of stock exchanges is conducted and controlled by computers and electronic system. 10. financial Barometers store shack exchanges are the financial barometers and evelopment indicators of matter saving of the coun c inter interior(a)istic deoxyadenosine monophosphateereaign. industrial growth and stableness is reflected in the indicant of stock exchange. alive STRUTURE OF clove pink permutation IN INDIA STOCK step in OTHERS NSE mad cow disease BOMBAY STOCK EXCHANGE The Bombay job commute is the oldest exchange in Asia. It traces its history to the 1850s, when quadruplet Gujarati and one Parsi stockbroker would aggregate under banyan trees in cause of Mumbais Town Hall. The location of these meetings changed many times, as the number of brokers evermore increased.The group ultimately moved to Dalal roadway in 1874 and in 1875 became an official organization cognise as The Native handle & antiophthalmic factor e ntrepot Brokers Association. In 1956, the bovine spongiform encephalitis became the number 1 stock exchange to be recognized by theIndian regimeunder the Securities Contracts jurisprudence Act. The Bombay short letter put back developed the mad cow disease SENSEXin 1986, adult the mad cow disease a means to monetary standard overall proceeding of the exchange. In 2000 the bovine spongiform encephalitis used this force to open its derivatives market, transaction SENSEX futures contracts.The growing of SENSEX options along with candour derivatives followed in 2001 and 2002, expanding the mad cow diseases trading course of study. historically an open blackguard floor trading exchange, the Bombay declension interchange switched to an electronic trading system in 1995. It took the exchange only litre age to make this transition. This automated, screen-based trading platform called mad cow disease On-line trading (BOLT) currently has a capacity of 8 million orders per sidereal day. The BSE has also introduced the foundations first centralized exchange-based profits trading system, BSEWEBx. o. in to enable investors anyplace in the earthly concern to trade on the BSE platform. The BSE is currently housed inPhiroze Jeejeebhoy TowersatDalal Street, spike area. NATIONAL STOCK EXCHANGE The subject area striving re-sentencing(NSE) isstock exchangelocated atMumbai,India. It is in the glide by 20 largest stock exchangesin the servicemanly concern bymarket big(p)izationand largest in India by daily turnover and number of trades, for two equities and derivative trading. NSE has a market metropolisization of mostUS$1trillionand over 1,652 listings as of July 2012.Though a number of other exchanges exist, NSE and theBombay investment firm veerare the two most of import stock exchanges in India, and between them are responsible for the gigantic majority of share proceeding. The NSEs key index finger is theS&P CNX Nifty, go to sleepn as t he NSE swell( depicted object Stock interchange Fifty), an index of fifty major stocks weighted by market capitalization. NSE is mutually possess by a set of jumper lead financial institutions, banks, insurance companies and other financial intermediaries in India only when its ownership and focal point operate as separate entities.There are at least 2 contrary investorsNYSE Euro borderingandGoldman Sachswho father taken a empale in the NSE. As of 2006, the NSEVSATterminals, 2799 in total, skip more than 1500 cities crosswise India. In 2011, NSE was the third base largest stock exchange in the world in term of the number of contracts (1221 million) traded in equity derivatives. It is the second fastest ontogenystock exchangein the world with a enter growth of 16. 6%. ROLE OF STOCK EXCHANGE * stiff Mobilisation Of nest egg Stock exchanges reserve organised market for an individual as well as institutional investors.They regulate the trading transactions with prop er rules and regulations in order to ensure investors protection. This helps to consolidate the cartel of investors and diminished savers. gum olibanum, stock exchanges attract small savings peculiarly of large number of investors in the capital market. * Promoting Capital organization The funds mobilised through capital market are provided to the industries industrious in the payoff of miscellaneous goods and serve useful for the society. This leads to capital formation and development of national assets. The savings mobilised are line of merchandiseised into suppress avenues of enthronement. Wider Avenues of investing Stock exchanges provide a wider avenue for the investment to the people and organisations with investible surplus. Companies from divers(a) industries handle reading Technology, Steel, Chemicals, Fuels and Petroleum, Cement, Fertilizers, etc. laissez passer several(a) kinds of equity and debt securities to the investors. Online trading speediness h as brought the stock exchange at the doorsteps of investors through computer network. antithetical type of securities is do procurable in the stock exchanges to grounds the varying objectives and notions of unalike naval divisiones of investor.Necessary information from stock exchanges useable from different sources guides the investors in the efficient recognizement of their investment portfolios. * Liquidity of investment Stock exchanges provide liquidity of investment to the investors. Investors can sell out any of their investments in securities at any time during trading days and trading hours on stock exchanges. Thus, stock exchanges provide liquidity of investment. The on-line trading and online settlement of demat securities facilitates the investors to sellout their investments and gather in the proceeds inwardly a day or two.Even investors can switch over their investment from one security to another according to the changing scenario of capital market. * cor onation priorities Stock exchanges facilitate the investors to decide his investment priorities by providing him the handbasket of different kinds of securities of different industries and companies. He can sell stock of one telephoner and buy a stock of another company through stock exchange whenever he wants. He can manage his investment portfolio to maximise his wealth. * Investment gum elasticStock exchanges through their by-laws, Securities and fill in shape up of India (SEBI) guidelines, transparent procedures exertion to provide rubber to the investment in industrial securities. Government has established the subject area Stock win over (NSE) and Over The regaining mass meeting of India (OTCEI) for investors base hit. win over authorities try to curb speculative practices and minimise the riskiness for common investor to salve his confidence. * monetary resources for humanity and private welkins Stock counterchanges make available the financial resources a vailable to the industries in unexclusive and private sector through various kinds of securities.Due to the assurance of liquidity, marketing support, investment invulnerablety assured through stock exchanges, the common issues of securities by these industries slang strong macrocosm response (resulting in oversubscription of issue). * Funds for information Purpose Stock exchanges enable the government to mobilise the funds for customary utilities and reality undertakings which take up the developmental activities like power projects, shipping, railship canal, telecommunication, dams & roads constructions, etc.Stock exchanges provide liquidity, marketability, value perseveration and constant valuation of government securities. * indicant of Industrial outgrowth Stock exchanges are the symbolic indicators of industrial development of a nation. Productivity, efficiency, economic-status, prospects of each labor and every unit in an effort is reflected through the pri ce fluctuation of industrial securities on stock exchanges. Stock exchange sensex and price fluctuations of securities of various companies tell the built-in story of changes in industrial sector. Barometer of National Economy Stock exchange is taken as a Barometer of the scrimping of a country. Each economy is economically symbolized (indicators) by its most evidentiary stock exchange. virgin York Stock put back, capital of the United Kingdom Stock Exchange, capital of lacquer Stock Exchange and Bombay Stock Exchange are considered as barometers of U. S. A, United Kingdom, Japan and India respectively. At both national and international level these stock exchanges represent the bring forward and conditions of their economies. Functions FUNCTIONS OF STOCKEXCHANGE * Continuous and wee-wee market for securitiesStock exchange provides a ready and continuous market for purchase and sales agreement of securities. It provides ready result for buying and selling of securities. St ock exchange also acts as an outlet/counter for the sale of listed securities . * Facilitates paygrade of securities Stock exchange is useful for the military rating of industrial securities. This enables investors to know the true value of their holdings at any time. Comparison of companies in the same effort is possible through stock exchange quotations (i. e price list). * Encourages capital formationStock exchange accelerates the process of capital formation. It creates the habit of saving, investing and risk taking among the investing class and converts their savings into lucrative investment. It acts as an instrument of capital formation. In addition, it also acts as a channel for right (safe and profitable) investment. * Provides safety and security in dealings Stock exchange provides safety, security and equity (justice) in dealings as transactions are conducted as per well defined rules and regulations. The managing body of the exchange keeps control on the members.Frau dulent practices are also examine soundly. Due to various rules and regulations, stock exchange functions as the keeper of funds of factual investors. * Regulates company trouble inclination of an orbited companies have to succeed with rules and regulations of concerned stock exchange and work under the solicitude (i. e supervision) of stock exchange authorities. * Facilitates public borrowing Stock exchange serves as a platform for marketing Government securities. It enables government to nurture public debt advantageously and quickly. * Provides elucidation house facilityStock exchange provides a clearing house facility to members. It settles the transactions among the members quickly and with ease. The members have to pay or receive only the net dues (balance amounts) because of the clearing house facility. * Facilitates anicteric system hygienic meditation, keeps the exchange active. practice speculation is not dangerous but provides more business to the exchange. However, profuse speculation is undesirable as it is dangerous to investors & the growth of unified sector. * Serves as economical BarometerStock exchange indicates the give in of health of companies and the national economy. It acts as a barometer of the economic smear / conditions. * Facilitates Bank lending Banks easily know the prices of quoted securities. They offer loans to customers against unified securities. This gives convenience to the owners of securities. List of Stock Exchanges In India Bombay Stock Exchange National Stock Exchange regional Stock Exchanges Ahmedabad Bangalore Bhubaneshwar Calcutta cochin Coimbatore Delhi Guwahati Hyderabad Jaipur Ludhiana Madhya Pradesh Madras Magadh Mangalore Meerut OTC Exchange Of India Pune Saurashtra Kutch UttarPradesh Vadodara closing Stock exchange is indispensible for the smooth and clean functioning of corporate sector in a free market economy. A stock exchange need not be set as a place fo r speculation or a gambling den. It should act as a place for safe and profitable investable. , for this effective control on the working of stock exchange is necessary. This impart avoid vituperate of this platform for excessive speculation, scams and other undesirable and anti cordial activities.Thus, stock exchange serves the nation in several ways through its change economic serve which include tell liquidity to investments, providing marketability, enabling evaluation and ensuring price continuity of securities. Thus we can say that Stock exchange is the mirror of economy REFERENCES * Financial focal point I. M Pandey * Financial Management Prasanna Chandra * line of work studies B. S Raman * fear studies P. K Lasar * http//moneycontrol. com * http//investopedia. com * http//wikipedia. com * http//kalyan-city. blogspot. in