MFS - Stock Exchanges (1)

8/19/2019 MFS - Stock Exchanges (1)

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Marketing ofFinancial

Services- EquityservicesAbhimanyuPradeep

Pratip

Rahul

homas


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Stock E!change

"rgani#ed and regulated %nancial market &heresecurities 'bonds( notes( shares) are bought and soldat prices governed by the forces of demand and supply*


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Functions

• Maintains active trading +ncrease liquidity and marketability of the shares

• Fi!ation of the Prices

• Ensure safe and fair trading Rules and regulations

ransparency

• Aids in %nancing the industry ,egotiability and transferability of the securities

helps raise funds


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Functions

• issemination of +nformation .arious publications

• Performance indicators Price re/ect the performance of the company

• Self Regulation Monitor the integrity of the members( companies

and clients

Settlement of disputes


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0ombay Stock E!change

• Established in 1234 as “The Native Shares andStock Brokers”

• Asia5s %rst stock e!change

• 6orld7s 11th largest stock e!change

• "verall market capitali#ation8 91*3 tn* ':;*1*14)

• More than 44


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SE0+ - +,R"B+",

• Securities and E!change 0oard of +ndia is theregulator for the securities market in +ndia*

• Main Function C Stop Fraudulent activities in StockMarket

• >ead Duarters 8 Mumbai• 6ebsite 8 &&&*sebi*gov*in

• Bhairman 8 *@*Sinha

http://www.sebi.gov.in/http://www.sebi.gov.in/


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1?22- Established

1??: CStatutorypo&er givenby "+

1??4 CAdditional Po&ergiven


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6hy SE0+

• +ndia is an information &eak market

• Restoring investors con%dence &ho have beenbeaten by repeated scams

• Protecting( developing and regulating the

Securities market• Regulates the operations of epositories( F++5s(

Bredit rating agencies and other intermediaries


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Role of SE0+

• o meet the needs of three groups +ssuers C Place to raise %nance

+nvestors - +nformation

+ntermediaries - Bompetitive professional market


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Role of SE0+ in MutualFunds G +P"• SE0+ noti%ed regulations for the mutual funds in

1??;

• +ssued guidelines to MFs to protect the interest ofthe investors

• All MFs promoted by both public and privatesectors are governed by SE0+

• All the rules and regulations relating to publicissues in +,+A are governed by SE0+


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Achievements

• ransforming the markets from paper to electronic

• Reducing the settlement date to H:


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Iocation

• Mumbai is the business capital of +ndia

• Popularity of stocks among uJaratis( Sindhis(Mar&aris brought volume of trade for 0SE

• Mumbai has the only %nancial hub in +ndia

• Mumbai ensured higher success of +P"s

• Electronics trading reduced signi%cance formultiple e!changes

• Bompanies reluctant to pay multiple listing fees if

it is not pro%table


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Formation of ,SE

• ,SE &as established in 1??: as the %rst demutuali#edelectronic e!change in the country

• ,SE &as set up by a group of F+ at the behest of thegovernment of +ndia to bring transparency to the +ndian

capital market after 1??: scam• ,SE separated o&nership and management in the

e!change under SE0+7s supervision

• ,SE ensured that anyone &ho &as quali%ed( e!perienced

and met minimum %nancial requirements &as allo&edto trade


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Electronic rading

• ,SE started electronic platform based trading

• he po&er started to shift from brokers toinstitutional investors

• >igh tech systems of 0SE and ,SE allo& KAlgo

trading5 and >F• +n 1??L( &hen trading started( ,SE technology

&as handling : orders a second* his increased to< orders a second in :


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Blearing house services

• ,SE created ,ational Securities epository

Iimited ',SI) &hich allo&s investors to securely holdand transfer their shares and bonds electronically

• +t allo&s investors to hold and trade in as fe& as oneshare or bond

• ,SE introduced settlement guarantees that couldprotect investors against broker defaults

• his eliminated the need for paper certi%cates andgreatly reduced the incidents of forged or fakecerti%cates and fraudulent transactions


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FG" +ntroduction

• ,SE &as the %rst to launch future and optionstrading in +ndia at :


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1??; blast

• Most of the famous stock market scams &ere in 0SE

• overnments intention &as to promote ,SE as the onlystock e!change

• 0SE &as a broker run e!change

• 0SE had ring trading like other regional stocke!changes

• 0SE &as the %rst stock e!change in the &orld to beattacked by terrorists

• he event gave 0SE huge publicity( e!posure(sympathy and free press

iO


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iOerence 0t& ,SE G 0SENumber of listedcompanies

5,163 (as of late2012)

1,635 (as of July2013)

Market capitali#ation oflisted companies

S9 1*;: trillion 'as of January :


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Preference of F++ G ++

TRN!"R#N$%

• Anyone &ho &as quali%ed( e!perienced and met minimum%nancial requirements &as allo&ed to trade

• Paper-based settlement &as replaced by electronic depository-based accounts and settlement of trades &as al&ays done ontime

!#$&R'T% $"'T*

"ne of the most critical changes &as that a robust riskmanagement system &as set in place( so that settlementguarantees could protect investors against broker defaults


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Preference of F++ G ++

R+T'N N!*

• ,SE &as also instrumental in creating the ,ational Securitiesepository Iimited ',SI) &hich allo&s investors to securelyhold and transfer their shares and bonds electronically

• +t also allo&s investors to hold and trade in as fe& as one shareor bond* his not only made holding %nancial instrumentsconvenient( but more importantly eliminated the need for papercerti%cates and greatly reduced the incidents of forged or fakecerti%cates and fraudulent transactions that had plagued the+ndian stock market

• he ,SI7s security( combined &ith the transparency( lo&ertransaction prices and eQciency that ,SE oOered( greatlyincreased the attractiveness of the +ndian stock market todomestic and international investors


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emise of RSE5s

+ay 30, 2012 !ebi circular

Earn Rs 1(


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SEIEME, ARA,EE F,'SF)

R'!'N/ T# /&R

•Settlement guarantee fund to have a core fund* A core fund is aimedat providing e!tra cushion in trade settlement

•Blearing members can5t take e!posure against core fund

•E!changes to contribute :4 of total assets in core fund

•Bontribution by non-defaulting member &ould be capped in case ofdefault by other member

•Blearing corporation to maintain corpus of at least Rs 1


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Tan you all for the patient listeningU

Documents

MFS - Stock Exchanges (1)