Role and Functions of Stock Exchange in India

A PRESENTATION REPORT ON ROLE AND FUNCTIONS OF STOCK EXCHANGE INTRODUCTION A accumulation remodel is a arrange of exchange which arranges services for accumulation brokers and traders to employment stocks, bonds, and other securities. Accumulation remodels so arrange facilities for consequence and compensation of securities and other financial tools, and chief events including the acquittal of proceeds and dividends. Securities employmentd on a accumulation remodel embody shares issued by companies, part trusts, derivatives, pooled siege products and bonds. To be abilityful to employment a guard on a infallible accumulation remodel, it must be inventoryed there. Usually, there is a accessible subsidence at last for proceedings maintenance, but employment is increasingly soon linked to such a substantial fix, as new-fangled communicates are electronic networks, which gives them advantages of increased expedite and lowly require of transactions. Employment on an remodel is by members barely. The moderate subsidy of accumulations and bonds to investors is by limitation manufactured in the primary communicate and following trading is manufactured in the minor communicate. A accumulation remodel is frequently the most momentous content of a accumulation communicate. Supply and require in accumulation communicates are driven by sundry deedors that, as in all unhindered communicates, seek the expense of accumulations (see accumulation valuation). There is commsolely no ce to consequence accumulation via the accumulation remodel itself, nor must accumulation be followingly employmentd on the remodel. Such trading is said to be off remodel or over-the-counter. This is the low way that derivatives and bonds are employmentd. Increasingly, accumulation remodels are dissect of a global communicate for securities STOCK EXCHANGE DEFINITION According to Husband and Dockerary "Stock remodels are secret unconfused communicates which are used to prepare trading in securities. * According to securities lessen ( mastery ) act of 1956 "An contortment, construction or gregariousity of men-folks, whether incorporated or not, formal for the resolve of aiding, governing and persuasive employment in buying, vending and negotiation in securities. " Features of Accumulation Remodel 1. Communicate for securities : Accumulation remodel is a communicate, where securities of municipal bodies, council and semi-council bodies are bought and sold. . Deals in relieve influence securities : It deals delay divides, debentures bonds and such securities alcheerful consequenced by the companies. In soon it deals delay penny or relieve influence securities and hereafter it is denominated relieveary communicate. 3. Regulates employment in securities : Accumulation remodel does not buy or vend any securities on its own narratement. It just arranges the indispensable infrastructure and facilities for employment in securities to its members and brokers who employment in securities. It organizes the employment activities so as to secure unhindered and untarnished employment 4. Allows negotiations barely in inventoryed securities : In deed, accumulation remodels suppress an professional inventory of securities that could be dissipationd and sold on its pavement. Securities which do not shape in the professional inventory of accumulation remodel are denominated unlisted securities. Such unlisted securities cannot be employmentd in the accumulation remodel. 5. Transactions performed barely through members : All the transactions in securities at the accumulation remodel are performed barely through its authorised brokers and members. Outsiders or straightforward investors are not recurrent to penetrate in the trading circles of the accumulation remodel. Investors own to buy or vend the securities at the accumulation remodel through the authorised brokers barely. 6. Contortment of beings : A accumulation remodel is an contortment of beings or gregariousity of men-folks which may be registered or unregistered. 7. Acknowledgment from Accessible Government : Accumulation remodel is an organised communicate. It requires acknowledgment from the Accessible Government. 8. Launched as per rules : Buying and vending transactions in securities at the accumulation remodel are inferior by the rules and masterys of accumulation remodel as polite as SEBI Guidelines. No hiatus from the rules and guidelines is recurrent in any plight. 9. Specific subsidence : Accumulation remodel is a dissecticular communicate fix where authorised brokers succeed coincidently daily (i. e. on launched days) on the pavement of communicate denominated trading circles and pass trading activities. The expenses of opposed securities employmentd are shown on electronic boards. After the launched hours communicate is barred. All the launched of accumulation remodels is passed and inferior through computers and electronic regularity. 10. Financial Barometers : Accumulation remodels are the financial barometers and evelopment indicators of gregarious arrangement of the dominion. Industrial bud and uprightness is reflected in the protest of accumulation remodel. EXISTING STRUTURE OF STOCK EXCHANGE IN INDIA STOCK EXCHANGE OTHERS NSE BSE BOMBAY STOCK EXCHANGE The Bombay Accumulation Remodel is the oldest remodel in Asia. It traces its fact to the 1850s, when impure Gujarati and one Parsi accumulationbroker would supplement beneathneathneath banyan trees in front of Mumbai's Town Hall. The subsidence of these meetings alterable sundry terms, as the estimate of brokers eternally increased. The collection ultimately moved to Dalal Street in 1874 and in 1875 became an professional construction disclosed as 'The Native Divide & Accumulation Brokers Association'. In 1956, the BSE became the highest accumulation remodel to be recurrent by the Indian Government underneath the Securities Contracts Mastery Act. The Bombay Accumulation Remodel exposed the BSE SENSEX in 1986, giving the BSE a tool to estimate aggravateall enterprise of the remodel. In 2000 the BSE used this protest to notorious its derivatives communicate, trading SENSEX futures lessens. The bud of SENSEX options parallel delay equity derivatives followed in 2001 and 2002, expanding the BSE's trading platform. Historically an notorious noise pavement trading remodel, the Bombay Accumulation Remodel switched to an electronic trading regularity in 1995. It took the remodel barely fifty days to establish this transition. This automated, screen-based trading platarrange denominated BSE On-line trading (BOLT) currently has a compatability of 8 darling influence per day. The BSE has so introduced the globe's highest accessibleized remodel-based internet trading regularity, BSEWEBx. o. in to enpowerful investors anywhere in the globe to employment on the BSE platform. The BSE is currently lineaged in Phiroze Jeejeebhoy Towers at Dalal Street, Fort area. NATIONAL STOCK EXCHANGE The National Accumulation Exchange (NSE) is accumulation remodel located at Mumbai, India. It is in the top 20 comprehensivest accumulation remodels in the globe by communicate chiefization and comprehensivest in India by daily turnaggravate and estimate of employments, for twain equities and derivative trading. NSE has a communicate chiefization of around US$1 trillion and aggravate 1,652 inventoryings as of July 2012. Though a estimate of other remodels pause, NSE and the Bombay Accumulation Exchange are the two most expressive accumulation remodels in India, and shapeless them are chargeable on for the mighty seniority of divide transactions. The NSE's key protest is the S&P CNX Nifty, disclosed as the NSE NIFTY (National Accumulation Remodel Fifty), an protest of fifty senior accumulations weighted by communicate chiefization. NSE is mutually owned by a set of promotive financial institutions, banks, prophylactic companies and other financial intermediaries in India but its ownership and skillful-treatment produce-an-effect as unconnected entities. There are at last 2 extraneous investors NYSE Euro next and Goldman Sachs who own fascinated a peril in the NSE. As of 2006, the NSE VSAT terminals, 2799 in whole, caggravate further than 1500 cities poise India. In 2011, NSE was the third comprehensivest accumulation remodel in the globe in provisions of the estimate of lessens (1221 darling) employmentd in equity derivatives. It is the relieve fastest growing accumulation remodel in the globe delay a proceedingsed bud of 16. 6%. ROLE OF STOCK EXCHANGE * Able Mobilisation Of Savings Accumulation remodels arrange organised communicate for an special as polite as institutional investors. They organize the trading transactions delay appertinent rules and masterys in disposeify to secure investor's refuge. This helps to conglutinate the self-reliance of investors and trivial savers. Thus, accumulation remodels allure trivial carefuls distinctly of comprehensive estimate of investors in the chief communicate. * Promoting Chief arrangeation The funds mobilised through chief communicate are arranged to the industries affianced in the origirealm of sundry movables and services beneficial for the gregariousity. This leads to chief arrangeation and bud of gregarious effects. The carefuls mobilised are meansised into mismisappropriate entrances of siege. Rove Avenues of siege Accumulation remodels arrange a rove entrance for the siege to the race and organisations delay investible poiseplus. Companies from separate industries affect Instructure Technology, Steel, Chemicals, Fuels and Petroleum, Cement, Fertilizers, etc. present sundry kinds of equity and debit securities to the investors. Online trading quickness has brought the accumulation remodel at the doorsteps of investors through computer network. Separate affectness of securities is made availpowerful in the accumulation remodels to benefit the varying objectives and notions of opposed disposees of investor. Necessary instructure from accumulation remodels availpowerful from opposed sources guides the investors in the able skillful-treatment of their siege portfolios. * Liquidity of siege Accumulation remodels arrange liquidity of siege to the investors. Investors can vend out any of their sieges in securities at any term during trading days and trading hours on accumulation remodels. Thus, accumulation remodels arrange liquidity of siege. The on-line trading and online colonization of demat securities prepares the investors to vendout their sieges and realise the proceeds delayin a day or two. Even investors can switch aggravate their siege from one guard to another according to the changing scenario of chief communicate. * Siege priorities Accumulation remodels prepare the investors to flow his siege priorities by providing him the basket of opposed kinds of securities of opposed industries and companies. He can vend accumulation of one order and buy a accumulation of another order through accumulation remodel whenever he wants. He can conduct his siege portfolio to maximise his riches. * Siege prophylactic Stock remodels through their by-laws, Securities and Remodel Board of India (SEBI) guidelines, obvious procedures try to arrange prophylactic to the siege in industrial securities. Council has formal the Gregarious Accumulation Remodel (NSE) and Aggravate The Counter Remodel of India (OTCEI) for investors' prophylactic. Remodel authorities try to subdue foggy practices and minimise the expose for low investor to protect his self-reliance. * Financial tool for notorious and retired sectors Accumulation Exchanges establish availpowerful the financial tool availpowerful to the industries in notorious and retired sector through sundry kinds of securities. Due to the selfreliance of liquidity, communicateing patronage, siege prophylactic certain through accumulation remodels, the notorious consequences of securities by these industries seize potent notorious tally (resulting in aggravatesubscription of consequence). * Funds for Bud Resolve Accumulation remodels enpowerful the council to mobilise the funds for notorious utilities and notorious beneathneathtakings which seize up the budal activities affect ability projects, shipping, railways, telecommunication, dams & roads constructions, etc. Stock remodels arrange liquidity, communicateability, expense uninterruptedness and faithful evaluation of council securities. * Indicator of Industrial Bud Accumulation remodels are the symbolic indicators of industrial bud of a realm. Productivity, aptitude, economic-status, prospects of each diligence and integral part in an diligence is reflected through the expense interruption of industrial securities on accumulation remodels. Accumulation remodel sensex and expense interruptions of securities of sundry companies utter the unimpaired fable of changes in industrial sector. Barometer of Gregarious Arrangement Accumulation remodel is fascinated as a Barometer of the arrangement of a dominion. Each arrangement is economically symbolized (indicators) by its most expressive accumulation remodel. New York Accumulation Exchange, London Accumulation Exchange, Tokyo Accumulation Remodel and Bombay Accumulation Remodel are considered as barometers of U. S. A, United Kingdom, Japan and India respectively. At twain gregarious and intergregarious roll these accumulation remodels delineate the way and provisions of their economies. Functions FUNCTIONS OF STOCKEXCHANGE * Rectilineal and cheerful communicate for securities Stock remodel arranges a cheerful and rectilineal communicate for dissipation and sale of securities. It arranges cheerful exit for buying and vending of securities. Accumulation remodel so acts as an exit/counter for the sale of inventoryed securities . * Facilitates evaluation of securities Accumulation remodel is beneficial for the evaluation of industrial securities. This strengthens investors to perceive the penny rate of their holdings at any term. Comparison of companies in the selfselfsame diligence is likely through accumulation remodel quotations (i. e expense inventory). * Encourages chief arrangeation Stock remodel accelerates the mode of chief arrangeation. It creates the familiarity of careful, investing and expose gate shapeless the investing dispose and converts their carefuls into profitpowerful siege. It acts as an tool of chief arrangeation. In specification, it so acts as a means for proper (secure and remunerative) siege. * Provides prophylactic and guard in negotiations Accumulation remodel arranges prophylactic, guard and equity (justice) in negotiations as transactions are passed as per polite defined rules and masterys. The managing gregariousity of the remodel keeps curb on the members. Fraudulent practices are so checked ablely. Due to sundry rules and masterys, accumulation remodel functions as the keeper of funds of sincere investors. * Regulates order skillful-treatment Listed companies own to consent delay rules and masterys of uneasy accumulation remodel and product beneathneathneath the carefulness (i. e supervision) of accumulation remodel authorities. * Facilitates notorious borrowing Accumulation remodel serves as a platarrange for communicateing Council securities. It strengthens council to construct notorious debit largely and immediately. * Provides determine lineage quickness Stock remodel arranges a determine lineage quickness to members. It settles the transactions shapeless the members immediately and delay readiness. The members own to pay or seize barely the net dues (poise amounts) accordingly of the determine lineage quickness. * Facilitates hearty theory Hearty theory, keeps the remodel erratic. Normal theory is not hazardous but arranges further employment to the remodel. However, enormous theory is undesirpowerful as it is hazardous to investors & the bud of municipal sector. * Serves as Economic Barometer Stock remodel indicates the narrate of heartiness of companies and the gregarious arrangement. It acts as a barometer of the economic establish / provisions. * Facilitates Bank Lending Banks largely perceive the expenses of quoted securities. They present loans to customers resisting municipal securities. This gives ease to the owners of securities. Inventory of Accumulation Exchanges In India » Bombay Accumulation Remodel » Gregarious Accumulation Remodel Regional Accumulation Exchanges » Ahmedabad » Bangalore » Bhubaneshwar » Calcutta » Cochin » Coimbatore » Delhi » Guwahati » Hyderabad » Jaipur » Ludhiana » Madhya Pradesh Madras » Magadh » Mangalore » Meerut » OTC Remodel Of India » Pune » Saurashtra » Kutch » UttarPradesh »Vadodara CONCLUSION Accumulation remodel is indispensible for the flatten and disposeifyly functioning of municipal sector in a unhindered communicate arrangement. A accumulation remodel want not be treated as a fix for theory or a gambling den. It should act as a fix for secure and profitpowerful investable. , for this able curb on the launched of accumulation remodel is indispensable. This procure escape perversion of this platarrange for enormous theory, scams and other undesirpowerful and anti gregarious activities. Thus, accumulation remodel serves the realm in sundry ways through its medley economic services which embody imparting liquidity to sieges, providing communicateability, enabling evaluation and ensuring expense uninterruptedness of securities. Thus we can say that Accumulation remodel is the ponder of arrangement REFERENCES * Financial Skillful-treatment – I. M Pandey * Financial Skillful-treatment – Prasanna Chandra * Employment studies – B. S Raman * Employment studies – P. K Lasar * http://moneycontrol. com * http://investopedia. com * http://wikipedia. com * http://kalyan-city. blogspot. in