unit 1 stock exchange

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UNIT - 1

STOCK EXCHANGE

SEBI

NSE

OTCEI

SCRA

FEMA


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What is Stock Exchange?

Place where trading of shares is done in terms

of sale and purchase

Market place where trading of securities takes

place. Securities (Ownerships of a company) arebought and sold in a stock exchange

Place where a near to perfect price for anyproduct (security) is determined based on the

demand and supply factor existing in themarket


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Stock Exchange Introduction

Originated in 1800

Stock Exchange, Mumbai (BSE) was established in 1875

There are 23 Stock Exchanges in the India.

In the early 19thCentury, Indias stock market has risen to

greater heights. By 1990, India had 19 Stock Exchanges, by

1999, the number has risen to 23.

Around 9877 listed companies in stock exchange


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Indian Stock Exchanges

Bombay stock exchange

National stock exchange(Mumbai) Bangalore stock exchange

Uttar pradesh stock exchange(kanpur)

Magadh stock exchange(Patna)

Ahmedabad stock exchange

Vadodara stock exchange(Baroda)

Bhubaneswar stock exchange Calcutta stock exchange(kolkata)

Madras stock exchange

Cochin stock exchange

Coimbatore stock exchange

Gauhati stock exchange

Hydrabad stock exchange Madhya pradesh stock exchange(indore)

Jaipur stock exchange

Ludhina stock exchange

Mangalore stock exchange

Pune stock exchange

Saurashtrakutch stock exchange


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Sensitive Index calculated using a market- capitalization weighted

methodology. As per this methodology, the level of index at any

point of time reflect the total market value of 30 components stock

relative to a base period. (the market capitalization of a companyis determined by multiplying the price of its stock by the number of

shares issued by the company).

Nifty is an indicator of all the major companies of NSE.The Nifty indexis a composite of the top 50stocks listed on the National stock

exchange. It is a simplified tool which helps investors & ordinary

people alike, understand what happens in the stock market & by

extension, the economy.


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NIFTY


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SENSEX


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SEBI Security & Exchange Board of India

Established & Administration - 1988, Government

of India through executive resolution.

In 1992 upgraded as fully autonomous body

With the passing of the Securities and Exchange

Board of India Act (SEBI Act) on 30th January1992.


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SEBI appointed the L. C. Gupta Committee in 1998 to recommend

the regulatory framework for derivatives trading and suggest bye-

laws for Regulation and Control of Trading and Settlement of

derivative Contracts SEBI then appointed the J. R. Verma Committee to recommend

Risk Containment Measures (RCM) in the Indian Stock Index

Futures Market.

SEBI came into force on January 30, 1992.

It is a brief act containing 35 sections

The SEBI Act governs all the Stock Exchanges and the

Securities Transactions in India.

It consists of one Chairman and five members. One each from the

department of Finance and Law of the Central Government

One from the Reserve Bank of India

Two other persons and having its head office in Bombay and regional

offices in Delhi, Calcutta and Madras
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Objectives & Working of SEBI

to protect the interests of investors in securities;

to promote the development of Securities Market;

to regulate the securities market and

for matters connected therewith or incidental thereto

SEBI has introduced the comprehensive regulatory measures, prescribedregistration norms, the eligibility criteria, the code of obligations and the

code of conduct for different intermediaries like, bankers to issue, merchantbankers, brokers and sub-brokers, registrars, portfolio managers, credit

rating agencies, underwriters and others.

Two broad approaches of SEBI is to integrate the securities market at thenational level, and also to diversify the trading products This is to

increase the number of traders including banks, financial institutions,insurance companies, mutual funds, primary dealers etc. to transact

through the Exchanges.


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Players in the Stock Market

General investor public

Companies

Mutual funds Indian financial investors

Foreign institutional investors

Non resident Indians Brokers

Sub brokers


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NSE National Stock Exchange Located in Bombay

India's first debt market

Set up in 1993 to encourage stock exchange reform through system modernization

and competition.

Opened for trading in mid-1994.

Recently accorded recognition as a stock exchange by the Department of

Company Affairs. Instruments traded are, treasury bills, government security and bonds issued by

public sector companies
http://en.wikipedia.org/wiki/Image:Bombay-Stock-Exchange.jpg


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NSE Group

India Index Services & Products Ltd. (IISL) National Securities Clearing Corporation Ltd. (NSCCL)

NSE.IT Ltd.

National Securities Depository Ltd. (NSDL)

DotEx International Limited

NSE was promoted by leading Financial Institutions

at the behest of the Government of India and wasincorporated in November 1992 as a tax-paying

company unlike other stock exchanges in the country


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SPECULATION & KINDSIt involves the buying, holding, selling, short-term selling of

stocks, bonds, commodities,currencies,collectibles or any

valuable financial instrument to profit from fluctuations in its

price as opposed to buying it for use or for income via

method like dividends or interest.

Bull Market (Tejiwala):

Purchase the shares at current prices to sell at a higher price in the near future andmakes a profit if his expectations come true - long buyer

Bear Market (Mandiwala) :

Sells security in the hope that he will be able to buy them back at lesser price -

Short Selling.

Lame duckBear has made contracts to sell securities, find it difficult to meet his

commitment due to non-availability of security, they always struggling

Stag

Speculator who applies for a large number of a shares in a new issue with

the intention of selling them at a premium - Bullish and very cautious.
http://en.wikipedia.org/wiki/Image:National_Stock_exchange_Mumbai.JPGhttp://en.wikipedia.org/wiki/Image:National_Stock_exchange_Mumbai.JPG


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OTCEI Over the Counter

Exchange of India Promoted by Leading Financial institutions in India

OTCEI was established by UTI, IDBI, IFCI, LIC, GIC, SBI CAPTIAL MARKETS, CANBANK

FINANCIAL SERVICES.

Non-profit making company under Companies Act 1956.

OTCEI in 1993, became the first Exchange in the country to open Investor

Grievance Cells (IGCs) at four Metros - Chennai, Delhi, Kolkata and Mumbai. The

IGCs handle complaints/ queries from investors against brokers and/or companies

listed on the OTCEI.

It is a recognized stock exchange.

Two ways of making a public offer. Direct (with sponsor to the public) and Indirect

(with sponsor to public and companies). Faster transfers because trading is not with share certificates but with a different

tradable document called counter receipt (CR). Shares converted into CR and CRs

are converted into shares.

Players are investors, counter, settler, registrar / custodian, company and bank.


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SCRA - SECURITIES CONTRACTS (REGULATION) ACT, 1956

Merchant bankers specialise in different services. However,

since they are one of the major intermediaries between the

issuers and the investors, their activities are regulated by

(1) SEBI (Merchant Bankers) Regulations, 1992.

(2) Guidelines of SEBI and Ministry of Finance.

(3) Companies Act, 1956.

(4) Securities Contracts (Regulation) Act, 1956. (SCRA)


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FEMA Foreign Exchange

Management Act

Documents

unit 1 stock exchange