ISSUES IN INDIAN COMMERCE

ASSIGNMENT

INDIAN STOCK EXCHANGE

NATURE ORGANISATION FUNCTIONS

INTRODUCTIONStock exchanges are organized marketplace either corporation or mutual organization where members of the organization gather to trade company stocks or other securities. The members may act either as agents for their customers or principals for their own accounts.

Indian stock market marks to be one of the oldest stock market in Asia.

There are two leading stock exchanges in India which help us trade are:

National Stock Exchange

Bombay Stock Exchange

NATURE MARKET FOR SECURITIES Stock market is a market where securities of corporate bodies, government and semi government bodies are bought and sold.

DEAL IN SECOND HAND SECURITIES It deals with shares , debentures, bonds and such securities which are already issued by the companies , hence it is also called secondary market. REGULATES TRADE IN SECURITES It regulates the trade activities by providing the necessary infrastructure and facilities for trade in securities.

ALLOWS DEALINGS ONLY IN LISTED SECURIES Stock exchanges maintain an official list of securities that could be purchased and sold . The unlisted securities cannot be traded in stock exchange.

TRANSACTIONS EFFECTED ONLY BY MEMBERS All the transactions in securities at stock exchange are only through its authorized brokers and members.

ASSOCIATION OF PERSONS A stock exchange is an association of persons or body of individuals which may be registered or unregistered.

RECOGNITION FROM CENTAL GOVERNMENT Stock exchange is an organized market which requires recognition from the Central Government.

WORKING AS PER RULES Buying and selling transactions in securities at the stock exchange are governed by the rules and regulations of stock exchange as well as SEBI Guidelines.

SPECIFIC LOCATION Stock exchange is a particular market place where authorized brokers come together daily on the floor of market called trading cycles and conduct trading activities.

FINANCIAL BAROMETERS Stock exchanges are financial barometers and development indicators of national economy of the country which reflects Industrial growth and stability.

ORGANISATIONThe organization of stock exchange in India are governed by provisions of Security Contract (Regulation) Act 1956. This Act permits only recognized stock exchanges which have to function under the rules by laws and regulations approved by the Central Government.Stock Exchanges in India are organized in any of the following form :

VOLUNTARY NON PROFIT MAKING ASSOCIATION E.g. Bombay , Ahmedabad and Indore

PUBLIC LIMITED COMPANIES E.g. Kolkata , Delhi and Banglore Exchange

COMPANY LIMITED BY GUARANTEE E.g. Hyderabad , Madras Stock Exchange

FUNCTIONS ENSURES LIQUIDITY OF CAPITAL The exchanges provide a ready market where buyers and sellers are always available and those who are in need of hard cash can sell their holdings.

CONTINUOUS MARKET FOR SECURITIES The securities once listed continue to be traded at the exchange irrespective of the fact that owners go on changing.

EVALUATION OF SECURITES The investors can evaluate the worth of their holdings from the prices quoted at different exchanges for those securities.

MOBILISING SURPLUS SAVINGS The stock exchanges provide a ready market for various securities and the investors do not have any difficulty in investing their savings by purchasing shares ,bonds etc. from the exchanges.

HELPFUL IN RAISING NEW CAPITAL The new concerns raise capital for first time and existing concerns increase their capital for expansion and diversification.

SAFETY IN DEALINGS The dealings at stock exchanges are governed by well defined rules and regulations of Securities Contract (Regulation) Act,1956 as amended in 1996. Hence there is no scope for manipulating transactions.

LISTING OF SECURITIES The listing of securities is allowed only after a critical examination of capital structure , management and prospects of the company.

PLATFORM FOR PUBLIC DEBTS. The increasing government’s role in economic development has necessitated the raising of huge amounts for this purpose providing a platform for raising public debts.

CLEARING HOUSE OF BUSINESS INFORMATION The companies listing securities with exchanges have to provide financial statement, annual reports and other reports to ensure maximum publicity of corporate operations and working.

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