'Role and Functions of Stock Exchange in India\r'

'A en enterprise REPORT ON ROLE AND FUNCTIONS OF STOCK fill in INTRODUCTION A  hold change every note is a form of  win over which cans service for  trite brokers and  callingrs to parcel out  posts, bonds, and other securities. memory board tacks besides provide facilities for outlet and redemption of securities and other mo fireary instruments, and large(p) events including the wages of in abide by and dividends. Securities trade windd on a channel step in hold sh ars issued by companies, unit trusts, derivatives, pooled enthronization products and bonds.To be subject to trade a aegis on a certain job mass meeting, it must be listed at that place. Usually, there is a central location at to the lowest degree(prenominal) for record keeping, but trade is increasingly slight linked to such a physical place, as modern grocerys be electronic networks, which gives them advantages of increased upper and re duced cost of trans titleions. Trade on an trade is by members only. The initial come toering of rakes and bonds to investors is by comment d matchless in the primary grocery store and incidental craft is done in the  alternative market.A store fill in is often the most important component of a  rakehell market. Supply and demand in inventorying markets atomic tot up 18 driven by dissimilar factors that, as in all free markets, chance upon the bell of stocks (see stock valuation). There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such craft is said to be off exchange or over-the- buffet. This is the usual way that derivatives and bonds  are traded. Increasingly, stock exchanges are part of a arena(a) market for securitiesSTOCK flip-flop DEFINITION fit in to economise and Dockerary â€Å" bourgeon exchanges are privately organized marke ts which are used to facilitate trading in securities. * According to securities contract ( regulation ) act of 1956 â€Å"An association, organization or remains of individuals, whether in incorporatedd or non, established for the employment of assisting, regulating and controlling business in bargain foring, interchange and dealing in securities. ” Features of banal reciprocation 1. merchandise for securities : agate line exchange is a market, where securities of corporate bodies, establishment and semi- governing bodies are bought and interchange. . Deals in second hand securities : It deals with shares, debentures bonds and such securities already issued by the companies. In short it deals with living or second hand securities and hence it is called secondary market. 3. Regulates trade in securities : express exchange does not buy or sell either securities on its own account. It merely provides the necessary infrastructure and facilities for trade in securities to its members and brokers who trade in securities. It regulates the trade activities so as to ensure free and fair trade 4.Allows dealings only in listed securities : In fact, stock exchanges maintain an official list of securities that could be purchased and sold on its adorn. Securities which do not figure in the official list of stock exchange are called unlisted securities. Such unlisted securities tidy sumnot be traded in the stock exchange. 5. Transactions effected only by dint of members : All the transactions in securities at the stock exchange are effected only done with(predicate) its authorised brokers and members. Outsiders or direct investors are not allowed to enter in the trading circles of the stock exchange.Investors make to buy or sell the securities at the stock exchange through and through and through the authorised brokers only. 6. Association of persons : A stock exchange is an association of persons or physical structure of indi viduals which may be registered or unregistered. 7. Recognition from primaeval administration : broth exchange is an organize market. It requires intelligence from the Central Government. 8. Working as per rules : Buying and selling transactions in securities at the stock exchange are governed by the rules and regulations of stock exchange as well as SEBI Guidelines.No deviation from the rules and guidelines is allowed in any case. 9. Specific location : storehouse exchange is a particular market place where authorised brokers come together daily (i. e. on working days) on the floor of market called trading circles and conduct trading activities. The prices of unlike securities traded are shown on electronic boards. subsequently the working hours market is closed. All the working of stock exchanges is conducted and controlled through computers and electronic system. 10. fiscal Barometers : Stock exchanges are the financial barometers and evelopment indicators o f interior(a) economy of the country. industrial speak and stability is reflected in the office of stock exchange. actual STRUTURE OF STOCK EXCHANGE IN INDIA STOCK EXCHANGE OTHERS NSE mad cow disease BOMBAY STOCK EXCHANGE The Bombay Stock commutation is the oldest exchange in Asia. It traces its history to the 1850s, when four Gujarati and one Parsi stockbroker would gather under banyan trees in former of Mumbais Town Hall. The location of these meetings changed many times, as the piece of brokers constantly increased.The group eventually moved to Dalal thoroughfare in 1874 and in 1875 became an official organization cognize as ‘The Native Share & adenosine monophosphate; adenylic acid; Stock Brokers Association. In 1956, the bovine spongiform encephalitis became the head start stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE SENSEX in 1986, giving the BS E a means to measure overall deed of the exchange. In 2000 the BSE used this indicator to rude its derivatives market, trading SENSEX futures contracts.The development of SENSEX options along with equity derivatives followed in 2001 and 2002, expanding the BSEs trading program. Historically an open outcry floor trading exchange, the Bombay Stock Exchange switched to an electronic trading system in 1995. It took the exchange only cardinal days to make this transition. This automated, screen-based trading platform called BSE On-line trading (BOLT) currently has a substance of 8 million orders per day. The BSE has also introduced the worlds first centralized exchange-based internet trading system, BSEWEBx. o. in to modify investors anywhere in the world to trade on the BSE platform. The BSE is currently housed in Phiroze Jeejeebhoy Towers at Dalal Street, Fort area. NATIONAL STOCK EXCHANGE The  subject area Stock Exchange (NSE) is stock exchange  laid at  Mumbai, India. It is in the top 20 largest stock exchanges in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization of around US$1 trillion and over 1,652 listings as of July 2012.Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most substantive stock exchanges in India, and between them are obligated for the vast majority of share transactions. The NSEs key index is the S&P CNX Nifty, cognise as the NSE NIFTY ( interior(a) Stock Exchange Fifty), an index of fifty major stocks weighted by market capitalization. NSE is mutually owned by a invest of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management sour as separate entities.There are at least 2 foreign investors NYSE Euro next and Gol dman Sachs who see transmitn a stake in the NSE. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India. In 2011, NSE was the third largest stock exchange in the world in terms of the number of contracts (1221 million) traded in equity derivatives. It is the second fastest growing stock exchange in the world with a recorded maturation of 16. 6%. ROLE OF STOCK EXCHANGE * reusable Mobilisation Of Savings Stock exchanges provide organised market for an individual as well as institutional investors.They regulate the trading transactions with victorian rules and regulations in order to ensure investors protection. This helps to consolidate the corporate trust of investors and small savers. Thus, stock exchanges attract small nest egg especially of large number of investors in the capital market. * Promoting Capital ecesis The funds mobilised through capital market are provided to the industries engaged in the labor of divers( a) goods and services useful for the society. This leads to capital formation and development of national assets. The savings mobilised are channelised into get hold of highways of investment. Wider Avenues of investment Stock exchanges provide a wider avenue for the investment to the people and organisations with investible surplus. Companies from diverse industries like breeding Technology, Steel, Chemicals, Fuels and Petroleum, Cement, Fertilizers, etc. offer various kinds of equity and debt securities to the investors. Online trading facility has brought the stock exchange at the doorsteps of investors through computer network. Diverse type of securities is made operational in the stock exchanges to suit the varying objectives and notions of different classes of investor.Necessary information from stock exchanges available from different sources guides the investors in the effective management of their investment portfolios. * Liquidity of investment Stock exchanges provide runniness of investment to the investors. Investors bunghole 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 realise the proceeds within a day or two.Even investors fuck switch over their investment from one trade protection to another according to the changing scenario of capital market. * coronation priorities Stock exchanges facilitate the investors to decide his investment priorities by providing him the basket of different kinds of securities of different industries and companies. He mint sell stock of one smart set and buy a stock of another company through stock exchange whenever he wants. He can manage his investment portfolio to maximise his wealth. * Investment safetyStock exchanges through their by-laws, Securities and Exch ange Board of India (SEBI) guidelines, transparent procedures try to provide safety to the investment in industrial securities. Government has established the National Stock Exchange (NSE) and everywhere The Counter Exchange of India (OTCEI) for investors safety. Exchange authorities try to curb speculative practices and minimise the risk for general investor to preserve his confidence. * Financial resources for public and private sectors Stock Exchanges make available the financial resources available to the industries in public and private sector through various kinds of securities.Due to the assurance of liquidity, marketing support, investment safety apprised through stock exchanges, the public issues of securities by these industries turn around strong public response (resulting in oversubscription of issue). * notes for Development Purpose Stock exchanges enable the government to mobilise the funds for public utilities and public under winnings which take up the developm ental activities like power projects, shipping, railways, telecommunication, dams & roads constructions, etc.Stock exchanges provide liquidity, marketability, price continuity and constant evaluation of government securities. * Indicator of Industrial Development Stock exchanges are the symbolic indicators of industrial development of a nation. Productivity, efficiency, economic-status, prospects of each industry and every unit in an industry is reflected through the price fluctuation of industrial securities on stock exchanges. Stock exchange sensex and price fluctuations of securities of various companies tell the consummate story of changes in industrial sector. Barometer of National thrift Stock exchange is taken as a Barometer of the economy of a country. Each economy is economically symbolized (indicators) by its most significant stock exchange. rising York Stock Exchange, London Stock Exchange, Tokyo Stock Exchange and Bombay Stock Exchange are considered as baro meters of U. S. A, United Kingdom, Japan and India respectively. At both national and international level these stock exchanges represent the build and conditions of their economies. Functions FUNCTIONS OF STOCKEXCHANGE * Continuous and ready market for securitiesStock exchange provides a ready and continuous market for purchase and barter of securities. It provides ready outlet for buying and selling of securities. Stock exchange also acts as an outlet/counter for the sale of listed securities . * Facilitates evaluation of securities Stock exchange is useful for the evaluation of industrial securities. This enables investors to know the true expense of their holdings at any time. Comparison of companies in the homogeneous industry is possible through stock exchange quotations (i. e price list). * Encourages capital formationStock exchange accelerates the surgical operation of capital formation. It creates the habit of saving, investing and risk taking among the investing class and converts their savings into gainful 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 auspices 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.Fraudulent practices are also checked effectively. Due to various rules and regulations, stock exchange functions as the custodian of funds of genuine investors. * Regulates company management nameed companies piss to comply with rules and regulations of concerned stock exchange and work under the vigilance (i. e supervision) of stock exchange authorities. * Facilitates public borrowing Stock exchange serves as a platform for marketing Government securities. It enables government to raise public debt slowly and quickly. * Provides change house facil ityStock 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 healthy shot salutary speculation, keeps the exchange active. Normal speculation is not wicked but provides more business to the exchange. However, excessive speculation is undesirable as it is dangerous to investors & the growth of corporate sector. * Serves as Economic BarometerStock exchange indicates the state of health of companies and the national economy. It acts as a barometer of the economic situation / conditions. * Facilitates Bank Lending Banks considerably know the prices of quoted securities. They offer loans to customers against corporate securities. This gives convenience to the owners of securities. List of Stock Exchanges In India » Bombay Stock Exchange » National Stock Exchange Regional Stoc k Exchanges » Ahmedabad » Bangalore » Bhubaneshwar » Calcutta » cochin china » Coimbatore » Delhi » Guwahati » Hyderabad » Jaipur » Ludhiana » Madhya Pradesh Madras » Magadh » Mangalore » Meerut » OTC Exchange Of India » Pune » Saurashtra » Kutch » UttarPradesh »Vadodara CONCLUSION Stock exchange is indispensible for the smooth and orderly functioning of corporate sector in a free market economy. A stock exchange need not be treated as a place for 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 will avoid misuse of this platform for excessive speculation, scams and other undesirable and anti tender activities.Thus, stock exchange serves the nation in some(prenominal) ways through its diversified economic services which include imparting liquidity to investments, providing marketability, enabling evaluation and ensuring price continuity of securities. Thus we can hypothecate that Stock exchange is the mirror of economy REFERENCES * Financial Management †I. M Pandey * Financial Management †Prasanna Chandra * business organization studies †B. S Raman * Business studies †P. K Lasar * http://moneycontrol. com * http://investopedia. com * http://wikipedia. com * http://kalyan-city. blogspot. in\r\n'