UNIT - 1

Presented By Rajeshwari

STOCK EXCHANGES
Stock exchanges are entities that provide the trading platform for securities Without this , investors would not prefer to invest in securities Securities are listed on stock exchange In India two more popular stock exchange 1.NSE ( National Stock Exchange ) 2.BSE ( Bombay Stock Exchange )

NSE & BSE

1.NSE ( National Stock Exchange ) -9th largest stock exchange in world and largest stock exchange in India -Situated at New Delhi 2.BSE ( Bombay Stock Exchange ) -Oldest and 4th largest in Asia - Situated at Bombay

BSE & NSE

Bombay Stock Exchange Not fully automated but towards progress SENSEX is the major index of BSE Comprises 30 scripts from different sectors Sensitivity Index

National Stock Exchange It is fully automated electronic order processing exchange NIFTY is the major index of NSE Comprises 50 scripts from different sectors National Fifty

INDEX

An Index is basically an Indicator Gives idea about the stocks gone up or down Sensex goes up , prices of the stock increases and vice versa There are other stock exchanges are also there eg- Calcullta stock exchange Also , there are other index BSE Mid cap Index)

IMPORTANCE OF STOCK EXCHANGE

Organized Market Provide common meeting place Market Priced determination Transparency of prices of various securities Protection of the Investor By regulations of SEBI Capital Formation Mobilize peoples savings into capital formation Investment Channel Investment in productive industries Economic barometer Reflects changes taking place in an economy

IMPORTANCE OF STOCK EXCHANGE

Better Regulations of Company Management Stock exchange frames rules and regulations for companies Publishes Key Data - Used by investors and regulators Wider Market Wider investment source Due Diligence Close scrutiny of companies before listing Liquidity of Investments Marketability of the securities Safety Ensures safe and fair dealings in the securities

OTCEID
Over

the counter Exchange of India

An electronic stock exchange based in India It is comprised of small- and medium-sized firms looking to gain access to the capital markets electronic exchanges in the U.S. such as the Nasdaq, there is no central place of exchange and all trading is done through electronic exchange

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OTCEID

In India it was established in 1990 to provide investors and companies with an additional way to trade and issue securities This was the first exchange in India to introduce market makers MM are firms that hold shares in companies and facilitate the trading of securities by buying and selling from other participants.

TRADING & SETTLEMENT

Investors carries operations ( buying & selling of securities ) through broker & sub brokers Broker Enrolled member of Stock exchange trade & registered with SEBI Sub-broker affiliated to the members and registered with SEBI as sub-broker

DEMATERIALISATION

Is a process of Changing Paper certificates of securities into electronic form by depository DEPOSITORY Hold shares in De-mat for, maintains ownership records and facilitate transfer of ownership Two Depositories in India NSDL & CDSL Introduced in the year 1998 Now almost 100% shares are settled in de-mat form

TRADING

Buying & Selling is an agreement between the broker / sub-broker and the client ( investor) Broker charges a fee , between 0.5 t0 1 % of the value of transaction Stock exchange have scheduled pay-in-day & pay-out-day Pay-in-day: when the broker makes payment of delivery of securities to the exchange Pay-out-day: when the exchange makes payment or delivery of securities to the broker

ROLLING SETTLEMENT

In Rolling settlement, trading period (T) is one day From 2003 Transaction netted and settled on the 2nd working day on a T+2 Eg Trade done on Monday will be settled on Wednesday Earlier it was 5 days and now bring down to 2 working days

CIRCUIT BREAKER

Extreme volatility is not considered healthy Circuit breaker or Price bands system helps to control extreme volatility System applies when market moves in either directions Three stages of market movements are 10% , 15% , 20% Whenever this limits are breached Stock Exchange authority will halt the market for the specified period