Overview of Stock Exchanges

8/9/2019 Overview of Stock Exchanges

http://slidepdf.com/reader/full/overview-of-stock-exchanges 1/26

STOCK EXCHANGES



What is a Stock Exchange?

The word “Stock” eans a !raction o!the ca"ita# o! a co"an$ and the word

“Exchange” eans a "#ace !or %&$ingand se##ing soe thing'

Hence stock exchange is a "#ace orinstit&tion !aci#itating %&$ing and se##ingo! “!raction ownershi"” o! co"anies'



(e)nition o! StockExchange The Sec&rities Contracts *+eg&#ation,

Act- ./01 de)nes stock exchange as2

“an association- organisation or %od$ o!indi3id&a#s- whether incor"orated or not-esta%#ished !or the "&r"ose o! assisting-reg&#ating and contro##ing the %&siness

o! %&$ing- se##ing and dea#ing insec&rities”



4&nctions o! Stock Exchanges

Ens&re increased #i5&idit$ and read$ arket !or thesec&rities'

6o%i#i7ation o! s&r"#&s !&nds o! indi3id&a#s and%&siness )rs !or in3estent in sec&rities'

(eterining the !air "rice o! 3ario&s sec&rities'Ens&re !air dea#ings and sa!et$ o! !&nds %eca&se o!strict reg&#ations on the working o! SEs'

8isted co"anies ha3e to !o##ow the r&#es !raed %$the SEs'

Act as a %aroeter o! the %&siness conditions in theco&ntr$'



Characteristics o! a good6arket

Availability of Information 9 regarding 3o#&e-"rices o! "re3io&s transactions- c&rrent %ids : o;ers

Liquidity 9 a%i#it$ to %&$<se## an asset at a known"rice that does not s&%stantia##$ di;er !ro "re3io&s

transactions Depth = N&ero&s "otentia# %&$ers : se##ers at

3ario&s "rices

Low Transaction costs = argins- %rokerage costs-

de"ositor$ charges Informational Eciency =>artici"ants want "rices

to ad&st to in!oration 5&ick#$

Well regulated



E3o#&tion o! Stock 6arkets in @ndia

The Nati3e Share and Stock rokersBAssociation- .D0 *o%a$ Stock Exchange,

Aheda%ad Share and Stock rokersB

Association- ./ Ca#c&tta Stock Exchange in ./F

Sec&rities Contract *+eg&#ation, Act- ./01

SE@ Act- .//

NSE- .//

Inited Stock Exchange- F..

6CX Stock Exchange- F.

Sec&rities Contract *+eg&#ation, *StockExchanges and C#earing Cor"orations,



Stock Exchanges in @ndia

Sr. No. Name of the Exchange

1 Ahmedabad Stock Exchange Ltd.

2 BSE Ltd.

3 Bangalore Stock Exchange Ltd.

4 Bhubaneswar Stock Exchange Ltd

5 Calcutta Stock Exchange Ltd.

Coch!n Stock Exchange Ltd

" #elh! Stock Exchange Ltd.$%he

& 'auhat! Stock Exchange Ltd.$%he

( )nter*Connected Stock Exchange o+ )nd!a

L!m!ted

1, -a!ur Stock Exchange Ltd



ot recogni!ed any longer2 6agadh- 6anga#ore-H$dera%ad- Coi%atore- Sa&rashtra K&tch- 8&dhiana

So&rce2 SE@

11 /C0 S0 Exchange L!m!ted

12/adha radesh Stock Exchange Ltd

13 /adras Stock Exchange Ltd.

14at!onal Stock Exchange o+ )nd!a Ltd.

15 %C Exchange o+ )nd!a

1 une Stock Exchange Ltd.

1"%he adodara Stock Exchange Ltd.

1&6.. Stock Exchange L!m!ted

1( 6n!ted Stock Exchange o+ )nd!a L!m!ted



Stock Exchanges aro&ndthe wor#d htt"2<<www'wor#d=

exchanges'org<statistics<onth#$=re"orts



O&r share in wor#d 6=ca"

SEBs arket ca" stands at IS( .'/ tri##ion *6a$F.,

Wor#d arket ca" stands at IS( 0D'0 tri##ion*6a$ F.,

J share2 'J

(ata So&rce2 Wor#d 4ederation o! Exchanges



(e3e#o"ent o! Sec&rities 6arkets in@ndia

4reedo in designing and "ricing instr&ents o!

)nancing

+eg&#ation %$ SE@

Screen ased Trading in a## the Stock Exchanges

Change in anageent str&ct&re 9

cor"oratisation and de&t&a#isation*OWNE+SH@>- 6ANAGE6ENT and T+A(@NG +@GHTS are

segregated !ro one another,



(e3e#o"ent o! Sec&rities6arkets in @ndia

@ntrod&ction o! ro##ing sett#eent *T now,

@ntrod&ction o! e5&it$ deri3ati3es trading

@ntrod&ction o! exchange traded c&rrenc$ !&t&res-interest rate !&t&res



Trading S$ste

"pen outcry system in the Stock

Exchanges witho&t the &se o! techno#og$

ti## NSE started trading in .//

NSE introd&ced #creen $ased Trading

#ystem in.// *NEAT,' @n .//0- SE

introd&ced O8T'

On #ine !&##$ a&toated screen %ased

tradin s ste'



C#earing

C#earing cor"oration 9 NSCC8 *NSE,

No3ation 9 act or re"#acing one"artici"ating e%er o! a contract with

another CC %&$s !ro se##erL %&$er %&$s !ro CC

Co&nter"art$ g&arantee

CC "rotects itse#! &sing argins



Sett#eent

$uyer gets the securities%shares andthe seller gets the money&

S$ste !o##owed "re3io&s#$ 2 "h$sica#de#i3er$'

Now 2 e#ectronic trans!er o! shares withthe he#" o! de"ositories



Sett#eent

The (e"ositories Act- .//1

Nationa# Sec&rities (e"ositor$ 8td *NS(8,

Centra# (e"ositories Ser3ices 8td' *C(S8,

Inder NS(8 and C(S8- there arede"ositor$ "artici"ants *(>s,



+isk Containent 6eas&res *at NSE,

(ai#$ 6argins in Cash 6arket Segent Ma#&e at +isk *Ma+, argin

Extree 8oss 6argin

6ark To 6arket 6argin

(argin requirements 9 >a$a%#e on T.





+e3en&e o! StockExchanges

Transaction charges 9 range o! +s to'0 "er #akh F'FFJ to F'FF0J

8isting !ees 9 @nitia# +s 0F-FFF !o##owed%$ ann&a# !ees *starts !ro .FFF,

Ann&a# s&%scri"tion 9 +s . #akh "er

e%er *cor"orates, Others #ike

@nterest incoe

@n3estent incoe



+e3en&e and Net >ro)t o! NSE : SE

+E,E-E ../.0 .0/.1 .1/.2

NSE .F1/'/. .FFF' .'0F

SE 0D' 0F/'00 F'01

ET

)+"3IT

../.0 .0/.1 .1/.2

NSE DF'/ DD'1. 0D'F.

SE .D'. .F'0D .0'./



+eg&#ation o! Stock 6arkets

The Ca"ita# @ss&es * Contro#, Act- ./D*re"ea#ed in .//,

Sec&rities Contract *+eg&#ation, Act-

./01 4oration o! SE@ in ./

A%o#ition o! CC@ in .// and

The SE@ Act- .// Sec&rities Contracts *+eg&#ation, *Stock

Exchanges and C#earing Cor"oration,

+eg&#ations- F.




O%ecti3es o! SE@ To >+OTECT the interest o! the in3estors in

sec&rities

To >+O6OTE the de3e#o"ent o! sec&ritiesarket in @ndia

To +EGI8ATE the sec&rities arket




4&nctions o! SE@ +eg&#ating the sec&rities arket

+ecognition and reg&#ation o! stock

exchanges +egistering and reg&#ating interediaries

+egistering and reg&#ating !&nctioning o!de"ositories- (>s and c&stodians

+egistering 4@@s

+egistering and reg&#ating !&nctioning o!MC4s- >6s- 64s- etc'




4&nctions o! SE@ >rootion and reg&#ation o! S+Os

>rohi%iting !ra&d&#ent and &n!air trade "ractices

>rohi%iting insider trading +eg&#ating 6 : A acti3ities

>rooting in3estor ed&cation and training o!interediaries

Cond&cting research re#ated to sec&rities arket >er!or the !&nctions and exercise "owers o! Go@

&nder SC+A- ./01




>owers o! SE@ (isco3er$ and "rod&ction o! %ooks o!

acco&nts and other re#ated doc&ents

S&oning- exaining and en!orcingattendance o! "ersons<re"resentati3es

@ns"ections o! %ooks- registers and otherdoc&ents o! interediaries and #isted

co"anies




@nternationa# Organi7ation o! Sec&ritiesCoissions Head5&artered in S"ain

association o! organi7ations that reg&#atethe wor#dBs sec&rities arkets

e%ers !ro o3er .FF di;erent co&ntries

+o#e2 to assist its e%ers to "roote high standards

o! reg&#ation and

act as a !or& !or nationa# reg&#ators tocoo"erate with each other and other

internationa# organi7ations

Documents

Overview of Stock Exchanges