What is Stock Exchange in India

 Meaning of Stock Exchange

A stock exchange is an organized market where shares, stocks, debentures and other securities are bought and sold. Under the Securities Contract (Regulation Act, 1956 the term stock exchange has been defined as “an association, organization or body of individuals, whether incorporated or not, established for the purpose of assisting, regulating and conducting business in buying, selling and dealing in the list securities”.

 Thus, a stock exchange is an association of persons engaged in buying and selling securities. It is a market where dealings in the listed securities are made by the members of the exchange on their own behalf and on behalf of others. The stock which is an organized market in commodities.

The main features of stock exchange are as follows.

1.  An organization in the form of an association or the company.

2.  A governing board or board of directors to supervise and regulate the activities.

3.  A framework of rules and regulations.

4.  A system of communication between members.

5.  Brokers to serve as a link between the buyers and sellers.

 Definitions of Stock Exchange

According to Husband and Dockerary.

	“Stock exchanges are privately organized markets Which are used to facilitate trading in securities.”

  

Organization of Stock Exchanges in India 

 

Under the Securities Contracts (Regulation) Act, 1956 dealings in securities can take place only at the recognized stock exchanges.

-: There are 23 recognized stock exchanges: -

·     Mumbai (BSE)

·     Kolkata

·     Chennai

·     Delhi

·     Ahmedabad

·     Hyderabad

·     Bangalore

·     Indore

·     Cochin

·     Kanpur

·     Pune

·     Ludhiana

·     Guwahati

·     Kanara(Mangalore)

·     Patna

·     Bhubaneshwar

·     Jaipur

·     Coimbatore

·     Rajkot and Vadodara

·     Exchange(NSE) (Greater Bombay and over the country

·     OTCEI- Over the Counter Exchange of India and Inter-Connected Stock Exchange of India Ltd.

Every stock exchange is managed by a governing board or executive committee or Council of Management.

The members of this body are elected from among the themselves the president or chairman of the stock exchange. In the day-to-day management the governing board is assisted by a number of committees such as listing committee, arbitration committee, defaulters’ committee, admission committee etc. The governing board is empowered to make rules and regulations in consultation with the Government and members of stock exchange.

 

  

What is National Stock Exchange (NSE) 

 The National Stock Exchange was set up as joint stock company by all India financial institutions and banks on November 27, 1992. It started operations on July 1, 1994 to provide countrywide screen based on-line trading facilities to investors. There is which are linked with central computer at NSE. Nationwide trade facilities through electronic clearing and settlement system are available to investors. NSE is a countrywide on-line trading system, conforming to international standards. A company with a minimum capital of Rs 10 crore is eligible for listing on the NSE.

Objectives of NSE: The main objectives of NSE are as follows

1.  To establish a nationwide trading facility for equities, debt instruments and hybrids.

2.  To ensure equal access to investors all over the country through an appropriate communication network.

3.  To provide a fair, efficient and transparent securities market to investors using electronic trading systems.

4.  To enable shorter settlement cycles and book entry settlement system.

5.  To meet the current international standards of securities markets.

6.  Automated screen based trading with real time response.

7.  Nationwide access- no need for office near central processing unit. A trader can be located where.

8.  Anonymity of trading members, large orders can be placed in the system without fear of influencing price through settlement.