Nature and role of stock exchange in india pdf

That is, if two orders are entered into the system, the order having the best price gets the higher priority and within the orders of the same price priority is given to the older order. Order matching is done by comparing the best buy order, the buy order with the highest price, with the best sell order, the sell order with the lowest price.

This is because a seller would like to sell to the buyer offering the highest price and vice versa. While orders can be partially matched till the complete order can be completed, the matches are always made based on the passive price of the order and not the active price at which the match is made.

NEAT also allows members to specify conditional clauses on the submitted orders These clauses can be of the following kinds:. NSE employs a rolling settlement mechanism where each trading day is considered as a trading period and trades executed during the day are settled based on the net obligations for the day. The market timings of the equities segment are:.

Equity trading takes place on all days of the week, except for Saturdays, Sundays and other holidays declared by NSE in advance. In , NSE was equipped to handle 2 orders a second.

This increased to 60 orders a second by Today NSE can handle 1,60, orders per second. Save my name, email, and website in this browser for the next time I comment. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account. Functions of NSE The NSE was set-up with an express objective to fulfil the following functions: establishing a nation-wide trading facility for equities, debt and other hybrid instruments ensuring equal access to investors across the nation through an appropriate communication network providing a fair, efficient and transparent securities market to investors using electronic trading systems enabling shorter settlement cycles and book entry settlements systems , and meeting the current international standards of securities markets NSE successfully fulfilled these functions by establishing the first electronic stock market of the nation.

Features of National Stock Exchange NSE, like every other leading stock exchange today, runs an order-driven market as opposed to quote-driven market. SEBI always give first preference to protect investor's wealth in the stock market. The listing companies made into mandatory for providing investment information and disclosure of information on a regular basis for giving more clarity on investment activities.

SEBI always protects investor's rights and interest through accurate and authentic way by providing investing information and disclosure of information on a continuous basis for generating more clarity on stock market activities. For the market intermediaries on a continuous basis providing training and development regarding investment activities, and it always offers a competitive, professionalized advantage and expanding the market operations with an adequate and efficient way so as to render better service to investors and issuers.

Securities and Exchange Board of India specific ObjectivesThe regulated stock market has specific objectives in order to promote and function effectively and efficiently. To guide, educate, protect the right, interest of individual and retail investors is a major objective for building sustainable development in the capital market.

To prevent trading malpractices at any stage and achieve a balance between self-regulation through the securities industries and its through statutory regulation.

Prevent trading and investment malpractices in the capital market for enhancing market efficiency and effectiveness in the Indian economy. To regulate, develop and promote a code of conduct and fair practices for the brokers, merchant brokers, with a view to make them competitive and professional II. Organization structure of Securities and Exchange Board of IndiaThe activity of the Securities Exchange Board of India divided into five major operational departments such as each department is especially headed by an Executive Director.

Apart from its head office in Mumbai, SEBI has two major regional offices such as Kolkata, New Delhi to consider investor complaints and finding relevant solutions with the issuers, intermediaries and stock exchanges in the concerned regional areas.

SEBI has nominated two advisory committees named as Primary market advisory committee and the second one is Secondary market advisory committee. These committees are basically nonstatutory mode in nature in Securities Exchange Board of India is not always bound by the advice of these committees. Organization design of SEBI is so clear with a board of members for major decision making and there is a proper delegation of authority will be done through by the hierarchal way for avoiding more confusion in the stock market.

After few years of establishment of SEBI, venture capital funds operated under the control of SEBI and provided proper guidelines for the venture capital funds during the year In the year SEBI got independent status for running all Venture capital funds, Depositories and credit rating agencies etc. New issue market developed in recent scenarios eventually stock market operations extended by the active investors and traders in the market.

The enrolment of stock exchanges predominately increased from 1, to by the end of the year Market capitalization tremendously increased between the eighties and nineties because of more investors and traders participation in the stock market. A number of changes made in regulatory and developmental measures have been adopted to increase the efficiency of the secondary market operations and for encouraging the investor's savings and mobilization of funds. The minimum capital for listing has been raised to Rs.

Healthy stocks market activities and always look forward to bring positive outlook in the market. Corporate Scenario in the Indian Stock MarketThe liberalization made through the industrial policy since the initiation made in the Seventh Five year plan in UTI started operations in the year of for mobilization of funds from the public. Investors got more benefits by investing in the stock market and given more tax relaxations for encouraging the investments and mobilization of funds, for example, exemption of dividend income increased from income tax schedule for the amount of Rs.

There were nearly around 2 lakh companies registered in India and registration graph increased in an abnormal way within a short period of time and more companies started promoting the products by issuing shares in new issue market as well as secondary market. More than 8, companies enrolled in all major stock exchanges in India.

Their market capitalization increased 35, crores in the year on the Bombay stock exchange. The company which they want to be listed should maintain paid up capital Rs. The bank finance for listing companies mentioned certain details on OTCEI or on regular stock exchanges. BSE switched over to weekly settlement system in specified shares and in another B1 Category of cash scripts with about of them during Feb.

The BSE has also allowed expansion of the online trading system on other stock exchanges for enhancing stock market operations during the year Exchange ReformsSEBI changed the market scenario with the online trading system and build BOLT system for providing transparency trading and investments in the stock market and made an account for every transaction in the stock market and the journey started in the year of The main theme of online system limiting the physical transfer shares and the launching of the Depository system, on-line electronic trading for all exchanges, encouraging the online registration to various sub-brokers through the country in India.

Rolling settlement introduced for monitoring system and making the stock market system transparent way. Ongoing ReformsMarket pathway involved so many trading and investing complications such as malpractices on the part of companies, brokers, investment, fund management consultancies involved in the stock market. Such malpractices impact on investors' confidence and not comfortable for their investments in the stock market. SEBI has the right to search and find relevant information about the organization.

With the connection of securities trading, SEBI has the power to restrict, control, and allow trading and investments of a given script without any external evaluation. In Mutual funds scenario, one individual investor cannot invest more than 10 percent of the total net assets of a scheme in the short term deposits of a single bank, said the Securities and Exchange Board India.

No deviation from the rules and guidelines is allowed in any case. The prices of different securities traded are shown on electronic boards. After the working hours market is closed.

All the working of stock exchanges is conducted and controlled through computers and electronic system. The securities of profitable and growth oriented companies are valued higher as there is more demand for such securities. The valuation of securities is useful for investors, government and creditors. The investors can know the value of their investment, the creditors can value the credit worthiness and government can impose taxes on value of securites.

B Economic Barometer : Any stock exchange in the world is a reliable barometer to measure the economic condition of any country like India. Every major change in country and economic is reflected in the boom or recession cycle of the economy. Stock market is also known as a pulse of economic mirror reflects the economic conditions of a country. C Contributes to Economic Growth : In stock market Securities of various companies are bought and sold and this process of disinvestment and reinvestment helps to invest in most productive investment proposal and this leads to capital formation and economic growth.

D Safety in Stock Exchange : In stock exchange only the listed securities are traded and stock market authorities include the companies names in the trade list only after verifying the soundness of company. The companies which are listed they also have to operate within the strict rules and regulations. This ensures safety of dealing through stock market.

To ensure liquidity and demand of supply of securities the stock market permits healthy speculation of securities. F Better Allocation of Capital : The share of profit making companies are quoted at higher prices and are actively traded so much companies can easily raise fresh capital from Stock exchange. The general public hesitates to invest in securities of loss making companies. So, Stock market facilitates allocation of investor's fund to profitable channels.

G Liquidity and Stock Market : The main function of stock market is to provide ready market for sale and purchase of securities. The presence of stock market gives assurance to investors that their investment can be converted into cash whenever they want. The investors can invest in long term investment projects without any hesitation, as because of Stock market they can convert long term investment into short term and medium term.

H Saving and Investment : The Stock market promotes or offers attractive opportunities of saving and investment in various securities. These opportunities encourage people to save more and invest in Securities of corporate sector rather than investing in unproductive assets such as gold, silver, etc. Stock Market and Modern Financial System : The financial system under stock market in most of the countries has undergone a remarkable transformation generally in western countries.

One features of this development is disintermediation. A portion of the funds involved in saving and financing, flows directly to the financial markets instead of being routed via the traditional bank lending and deposit operations. The general public interest in investing in the Stock market, either directly or through mutual funds, has been an important component of this process.

Statistics show that in recent decades, shares have made up an increasingly large proportion of households' financial assets in many countries as well as India.