The stock exchanges in India
by
24caratfinance
The securities regulation act of 1956 defined stock exchange as an association, organization, or an individual which is established for the purpose of assisting, regulating, and controlling business in buying, selling and dealing in securities.
A stock exchange comes under treasury sector which provides services to the stock brokers and the traders to carry out the trade of stocks, bonds and other financial securities. Stock exchanges help big MNCs and small companies to raise their funds. In order to raise capital via the stock exchange, the company has to get itself listed on the stock exchange and then share are issued as equity ordinary shares. Equity ordinary shares are for the real owners of the company. The Board of Directors of any company are elected by the equity ordinary shareholders only.
In India, the first stock exchange was established in 1875, opposite to the Town Hall, Bombay. This stock exchange had 22 stock brokers and all the activities were carried out under a banyan tree. Currently, its Asias oldest stock exchange named as Bombay Stock Exchange.
The initial members who are still running their business on this stock exchange are:
D.S. Prabhudas & Company
Jamnadas Morarjee
Champak Lal Devidas
Brijmohan Laxminarayan
The largest stock exchanges of India include:
National Stock Exchange
Bombay Stock Exchange
Calcutta Stock Exchange
Cochin Stock Exchange
OTC Exchange
Pune Stock Exchange
The national stock exchange of India was promoted by the leading financial institution of government of India and was incorporated in November 1992 as a tax paying company. In April 1993, it was recognized as a stock exchange under the securities contract (Regulation) Act, 1956. NSE commenced operation in the WDM in June 1994. The capital market segment of the NSE commenced operation in November 1994, while operation in the derivatives segment in June 2000.
The basic roles of National Stock Exchange of India are:
Raising capital for businesses
Mobilizing savings for investment
Facilitating company growth
Profit sharing
Corporate governance
Barometer of the economy
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) was established on 12th April 1988 under a resolution of the Government of India. On 31st January 1992. The Companies (Amendment) Act, 2000 has given certain powers to SEBI with regard to the issuing and transfer of securities and non-payment of the dividends.
Various functions of SEBI include:
Regulating the business on the stock exchange.
Promoting self-regulatory organizations.
Registering and regulating the work of collective investments like mutual funds.
Prohibiting unfair and fraudulent activities while trading.
Promoting education and training of intermediaries.
Apart from playing above mentioned roles, SEBI has various powers with it which include:
Approve the bye-laws of the stock exchange.
Inspect the books of accounts.
Grant license to any person for the purpose of dealing in certain areas related to stock market.
Delegate powers exercisable by it.
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Article Source:
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