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The Indian Securities Contracts (Regulation) Act of 1956, defines Stock Exchange as,
“An association, organization or body of individuals, whether incorporated or not,
established for the purpose of assisting, regulating and controlling business in
buying, selling and dealing in securities.”
The Indian Securities Contracts (Regulation) Act of 1956, defines Stock Exchange as,
“An association, organization or body of individuals, whether incorporated or not,
established for the purpose of assisting, regulating and controlling business in
buying, selling and dealing in securities.”
7. Checking functions
New securities checked before being approved and admitted to listing. Thus stock
exchange exercises rigid control over the activities of its members.
8. Adjustment of equilibrium
The investors in the stock exchange promote the adjustment of equilibrium of
demand and supply of a particular stock and thus prevent the tendency of fluctuation
in the prices of shares.
9. Maintenance of liquidity
The bank and insurance companies purchase large number of securities from the
stock exchange. These securities are marketable and can be turned into cash at any
time. Therefore banks prefer to keep securities instead of cash in their reserve . This
it facilities the banking system to maintain liquidity by procuring the
marketable securities.
Stock exchange accelerates the process of capital formation. It creates the habit of
saving, investing and risk taking among the investing class and converts their savings
into profitable investment. It acts as an instrument of capital formation. In addition,
it also acts as a channel for right (safe and profitable) investment.
15.Pricing of Securities:
The stock market helps to value the securities on the basis of demand and supply
factors. The securities of profitable and growth oriented companies are valued higher
as there is more demand for such securities. The valuation of securities is useful for
investors, government and creditors. The investors can know the value of their
investment, the creditors can value the creditworthiness and government can impose
taxes on value of securities.
In stock exchange securities of various companies are bought and sold. This process
of disinvestment and reinvestment helps to invest in most productive investment
proposal and this leads to capital formation and economic growth.
20. Liquidity:
The main function of stock market is to provide ready market for sale and purchase of
securities. The presence of stock exchange market gives assurance to investors that
their investment can be converted into cash whenever they want. The investors can
invest in long term investment projects without any hesitation, as because of stock
exchange they can convert long term investment into short term and medium term.
2 Deals in second hand securities : It deals with shares, debentures bonds and
such securities already issued by the companies. In short it deals with existing
or second hand securities and hence it is called secondary market.
3 Regulates trade in securities : Stock exchange does not buy or sell any 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
The European Union (EU) is a unique political and economic partnership that currently consists
of 28 member states (see the map in the Appendix).1 Built through a series of binding treaties,
the Union is the latest stage in a process of integration begun after World War II to promote
peace and economic recovery in Europe. Its founders hoped that by creating specified areas in
which member states agreed to share sovereignty—initially in coal and steel production, trade,
and nuclear energy—it would promote interdependence and make another war in Europe
unthinkable.
Since the 1950s, this European integration project has expanded to encompass other economic
sectors; a customs union; a single market in which capital, goods, services, and people move
freely (known as the “four freedoms”); a common trade policy; a common agricultural policy;
many aspects of social and environmental policy; and a common currency (the euro) that is
used by 19 member states. Since the mid-1990s, EU members have also taken steps toward
political integration, with decisions to develop a Common Foreign and Security Policy (CFSP)
and efforts to promote cooperation in the area of Justice and Home Affairs (JHA). Twenty-two
EU members participate in the Schengen area of free movement, which allows individuals to
travel without passport checks among most European countries.
The EU is generally considered a cornerstone of European stability and prosperity, but the
union faces a number of internal and external challenges. Perhaps most notable is “Brexit”—
the United Kingdom’s (UK’s) looming exit from the EU following the June 2016 public
referendum in which British voters favored leaving the bloc by 52% to 48%. The UK remains
a full member of the EU until it completes withdrawal negotiations and formally exits the bloc
(which is widely expected to occur in March 2019). Although Brexit may have political,
economic, and institutional implications for the EU, this report largely addresses the EU and
its institutions as they currently exist. For more information on the range of issues confronting
the EU, including Brexit and concerns such as terrorism and migration, see CRS Report
R44249, The European Union: Current Challenges and Future Prospects.
EU member states work together through common institutions (see next question) to set policy
and promote their collective interests. Decisionmaking processes and the role of the EU
institutions vary depending on the subject under consideration. On a multitude of economic
and social policies (previously termed Pillar One, or the European Community), EU members
have essentially pooled their sovereignty and EU institutions hold executive authority.
Integration in these fields—including trade and agriculture—has traditionally been the most
developed and far- reaching. EU decisions in such areas often have a supranational quality
because most are subject to a complex majority voting system among the member states and
are legally binding.
For issues falling under the Common Foreign and Security Policy (once known as Pillar Two),
member states have agreed to cooperate, but most decisionmaking is intergovernmental and
requires the unanimous agreement of all EU countries. Any one national government can veto
a decision. For many years, unanimity was also largely the rule for policymaking in the Justice
and Home Affairs area (formerly Pillar Three). However, the 2009 Lisbon Treaty extended the
EU’s majority voting system to most JHA issues, thus giving EU institutions a greater role in
JHA policymaking (see “What Is the Lisbon Treaty?”).
The EU is governed by several institutions. They do not correspond exactly to the traditional
branches of government or division of power in representative democracies. Rather, they
embody the EU’s dual supranational and intergovernmental character:
The European Council acts as the strategic guide for EU policy. It is composed of
the Heads of State or Government of the EU’s member states and the President of the
European Commission; it meets several times a year in what are often termed “EU
summits.” The European Council is headed by a President, appointed by the member
states to organize the Council’s work and facilitate consensus.
The European Commission is essentially the EU’s executive and upholds the
common interest of the EU as a whole. It implements and manages EU decisions and
common policies, ensures that the provisions of the EU’s treaties are carried out
properly, and has the sole right of legislative initiative in most policy areas. It is
composed of one Commissioner from each EU country, who is appointed by agreement
among the member states to five-year terms and approved by the European Parliament.
One Commissioner serves as Commission President; the others hold distinct portfolios
(e.g., agriculture, energy, trade). On many issues, the Commission handles negotiations
with outside countries.
The Council of the European Union (also called the Council of Ministers) represents
the national governments. The Council enacts legislation, usually based on proposals
put forward by the Commission, and agreed to (in most cases) by the European
Parliament. Different ministers from each country participate in Council meetings
depending on the subject under consideration (e.g., foreign ministers would meet to
discuss the Middle East, agriculture ministers to discuss farm subsidies). Most
decisions are subject to a complex majority voting system, but some areas—such as
foreign and defense policy, taxation, or accepting new members—require unanimity.
The Presidency of the Council rotates among the member states, changing every six
months; the country holding the Presidency helps set agenda priorities and organizes
most of the work of the Council.
The European Parliament represents the citizens of the EU. It currently has 751
members who are directly elected for five-year terms (the most recent elections were
in May 2014; the next elections are due in May 2019). Each EU country has a number
of seats roughly proportional to the size of its population. Although the Parliament
cannot initiate legislation, it shares legislative power with the Council of Ministers in
many policy areas, giving it the right to accept, amend, or reject the majority of
proposed EU legislation in a process known as the “ordinary legislative procedure” or
“co-decision.” The Parliament also decides on the allocation of the EU’s budget jointly
with the Council. Members of the European Parliament (MEPs) caucus according to
political affiliation, rather than nationality; there are eight political groups and a number
of non-attached MEPs.
Other institutions also play key roles. The Court of Justice interprets EU laws and its
rulings are binding; a Court of Auditors monitors financial management; the European
Central Bank manages the euro and EU monetary policy; and advisory committees
represent economic, social, and regional interests
The Association of Southeast Asian Nations (ASEAN) was formed in 1967 by Indonesia,
Malaysia, the Philippines, Singapore, and Thailand to promote political and economic
cooperation and regional stability. Brunei joined in 1984, shortly after its independence from
the United Kingdom, and Vietnam joined ASEAN as its seventh member in 1995. Laos and
Burma were admitted into full membership in July 1997 as ASEAN celebrated its
30th anniversary. Cambodia became ASEAN’s tenth member in 1999.
Membership
ASEAN commands far greater influence on Asia-Pacific trade, political, and security issues
than its members could achieve individually. This has driven ASEAN’s community building
efforts. This work is based largely on consultation, consensus, and cooperation.
U.S. relations with ASEAN have been excellent since its inception. The United States became
a Dialogue Partner country of ASEAN in 1977. Dialogue partners meet regularly with ASEAN
at the working and senior levels to guide the development of our regional relations. In July
2009, Secretary Clinton signed the Treaty of Amity and Cooperation in Southeast Asia (TAC)
which has greatly enhanced U.S. political relations with ASEAN.
Every year following the ASEAN Ministerial Meeting, ASEAN holds its Post-Ministerial
Conference (PMC) to which the Secretary of State is invited. In 1994, ASEAN took the lead
in establishing the ASEAN Regional Forum (ARF), which now has 27 members and meets
each year at the ministerial level just after the PMC.
Objectives
The ASEAN Declaration states that the aims and purposes of the Association are: (1) to
accelerate the economic growth, social progress and cultural development in the region through
joint endeavors in the spirit of equality and partnership in order to strengthen the foundation
for a prosperous and peaceful community of Southeast Asian nations, and (2) to promote
regional peace and stability through abiding respect for justice and the rule of law in the
relationship among countries in the region and adherence to the principles of the United
Nations Charter. In 1995, the ASEAN Heads of State and Government re-affirmed that
“Cooperative peace and shared prosperity shall be the fundamental goals of ASEAN.”
Fundamental Principles
The Treaty of Amity and Cooperation (TAC) in Southeast Asia, signed at the First ASEAN
Summit on 24 February 1976, declared that in their relations with one another, the High
Contracting Parties should be guided by the following fundamental principles:
The TAC stated that ASEAN political and security dialogue and cooperation should aim to
promote regional peace and stability by enhancing regional resilience. Regional resilience shall
be achieved by cooperating in all fields based on the principles of self-confidence, self-reliance,
mutual respect, cooperation, and solidarity, which shall constitute the foundation for a strong
and viable community of nations in Southeast Asia.
Although ASEAN States cooperate mainly on economic and social issues, the organization has
a security function, with a long-discussed program for confidence-building measures and for
establishing a nuclear-weapon-free zone in Southeast Asia, with the objective of implementing
ASEAN’s 1971 Declaration on a Zone of Peace, Freedom and Neutrality (ZOPFAN), and a
Southeast Asia Nuclear Weapon-Free Zone (SEANWFZ), which would be a component of
ZOPFAN.
Developments
2019
On 1 March, the 10th meeting of the ASEAN-US Joint Cooperation Committee took place in
Jakarta. Both parties discussed shared strategic priorities, including transnational crime,
cybersecurity, and developments in the U.S.-DPRK relationship.
2018
On 5 January, Dato Lim Jock Hoi assumed office as ASEAN’s new secretary general—he will
serve from 2018-2022.
In April, ASEAN Centre for Energy published the report Pre-Feasibility Study on the
Establishment of Nuclear Power Plant in ASEAN, outlining the recent developments and
prospects of civilian nuclear power for the ASEAN member states.
On 25 September, Thailand ratified the CTBT. With Thailand’s ratification, all ten ASEAN
countries have now ratified the treaty.
From 13-15 November, the 33rd ASEAN summit took place in Singapore. The 6th ASEAN-
U.S. Summit also took place on the sidelines of the larger ASEAN summit, at which U.S. Vice
President Mike Pence stated that North Korea must disclose “a complete list” of its weapons
and facilities at the two countries’ next meeting. The outgoing ASEAN Chair, Singapore Prime
Minister Lee Hsien Loong, handed over the ASEAN chairmanship to Thailand Prime Minister
General Prayut Chan-o-cha at the conclusion of the larger summit.