Stock Exchange of India

Stock Exchange of India

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  Stock Exchange OfIndia The stock market or exchange is a place where stocks and share and other long term commitments or investments are bought and sold. For the existence of the capitalist system of economy and for the smooth functioning of the corporate form of organization , the stock exchange is , therefore , an essential institution.In this system , an investor who puts his savings in a company by buying its securities can not get the amount back from the company directly. The only way the capital invested in stocks and shares of a joint stock company may be realized by its owner is through the sale of those stocks and shares to others.
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  History Of StockExchanges In India The first organized stock exchange of India was started in Bombay when the Native Shares Stock Brokers Association known as Bombay Stock Exchange (BSE) was formed by the brokers in Bombay in 1875. BSE was Asia’s oldest stock exchange. In 1894 , the Ahmadabad Stock Exchange was started and The Calcutta Stock Exchange was started in 1908. The number of stock exchanges rose from 7 in 1939 to 21 in 1945. There were also illegal “Dabba” markets in which stocks and shares were also bought and sold. Under the Securities Contract (Regulation) Act Of 1956 , the Government Of India has so for recognized 20 Stock Exchanges. Bombay is the premier exchange of in the country.
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  Recognized Stock ExchangesIn India 1. Ahmedabad Stock Exchange Ltd. 2. Banglore Stock Exchange Ltd. 3. Bhuvaneshwar Stock Exchange Ltd. 4. Bombay Stock Exchange Ltd. 5. The Calcutta Stock Exchange Ltd. 6. Cochin Stock Exchange Ltd. 7. Delhi Stock Exchange Ltd. 8.The Gauhati Stock Exchange Ltd. 9.Inter Connected Stock Exchange Of India Ltd. ( Navi Mumbai 10. Jaipur Stock Exchange Ltd.
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  11- The LudhianaStock Exchange Of India Ltd. 12- Madras Stock Exchange Of India Ltd. 13-Madhya Pradesh Stock Exchange Of India Ltd. 14- Multi Commodity Exchange of India Limited Mumbai. 15-National Stock Exchange Of India Ltd. Mumbai. 16- OTC Exchange Of India Mumbai 17-Pune Stock Exchange Ltd. 18- U.P Stock Exchange Ltd. Kanpur. 19- United Stock Exchange Of India (USE) Mumbai 20- Vadodara Stock Exchange Ltd.
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  How Business isTransacted In a Stock Exchange A typical investment transaction will consist of four stages. 1. Placing an order with a broker- A client places his order with a stock broker who alone is entitled to transact business in a stock exchange either to buy or to sell the shares of a company at fixed prices or at best prices. 2- Execution of the order- The broker or his authorized clerk will execute the order and the same will appear in the Stock Exchange Daily Official List which will include the number and price of shares which exchanged hands
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  3-Reporting the dealto the client- As soon as the deal is transacted , the broker sends a contract note to the client giving details of the security bought or sold , the price, the broker’s commission etc. 4- Settlement Of Transaction- There are two methods of settlement of transactions. 1- In the case of ready delivery ( or cash ) transactions , payment has to be made immediately on the transfer of securities or with in a period of one to seven days. 2- In the case of forward delivery contract , the settlement is made on a fixed day – its generally fortnightly , though in some stock exchanges like Chennai , it is weekly. In this case of forward delivery , there is a system of carry over i.e. postponement of delivery or payment involving a payment by one to another
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  Role Of StockExchanges In India • Effective Mobilization of savings • Promoting Capital formation • Wider Avenues of investment • Investment priorities • Investment safety • Wide Marketability to Securities • Financial resources for public and private sectors • Funds for Development Purpose