Scribd
Upload
64 views1 page

Stock Exchange

The stock exchange is a marketplace where buyers and sellers of invested capital, such as stocks and bonds, meet to conduct transactions. Stock exchanges are a modern institution that emerged as negotiable financial instruments like stocks and bonds were created. While ancient civilizations had marketplaces to trade goods, they did not trade income-generating assets. Today, most people invest their surplus funds in interest-bearing securities through a stock exchange or savings bank to generate income. Under Indian law, a stock exchange is defined as an association established to assist, regulate, and control the business of buying, selling, and dealing in securities.

Uploaded by

nourama
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
64 views1 page

Stock Exchange

The stock exchange is a marketplace where buyers and sellers of invested capital, such as stocks and bonds, meet to conduct transactions. Stock exchanges are a modern institution that emerged as negotiable financial instruments like stocks and bonds were created. While ancient civilizations had marketplaces to trade goods, they did not trade income-generating assets. Today, most people invest their surplus funds in interest-bearing securities through a stock exchange or savings bank to generate income. Under Indian law, a stock exchange is defined as an association established to assist, regulate, and control the business of buying, selling, and dealing in securities.

Uploaded by

nourama
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

What is stock exchange

“The stock exchange is a meeting place of the buyers and sellers of invested capital; that is, of
incomes present or prospective. This is a comparatively modern institution because invested capital
transferable by negotiable instruments is of modern origin. There were exchanges in the ancient
world where traders met to deal in various kinds of movable goods. The Agora of Greece, and the
Forum of Rome, and the Fairs of the Middle Ages were such exchanges, but negotiable incomes
(stocks and bonds) did not then exist. At the present time no person of intelligence keeps surplus
money uninvested. He buys some interest-bearing security, or puts it in a savings bank, in which case
the savings bank buys an interest- bearing security, or employs it in such manner as to yield an
income.”1

The Stock Exchanges in India as elsewhere have a vital role to play in the development of the country
in general and industrial growth of companies in the private sector in particular and helps the
Government to raise internal resources for the implementation of various development programmes
in the public sector. As a segment of the capital market, it performs an important function in
mobilizing and channelising resources which remain otherwise scattered. Thus, the Stock Exchanges
tap the new resources and stimulate a broad based investment in the capital structure of industries.

Definition of Stock Exchange

The Indian Securities Contract (Regulation) Act of 1956, defines Stock Exchange as,

“An association, organisation or a body of individuals, whether incorporated or not, established for
the purpose of assisting, regulating and controlling business in buying, selling and dealing with
securities.”

Section 2(j) of the Act-


2
(j) “stock exchange” means—

(a) any body of individuals, whether incorporated or not, constituted before corporatisation and
demutualisation under sections 4A and 4B, or

(b) a body corporate incorporated under the Companies Act, 1956 (1 of 1956) whether under a
scheme of corporatisation and demutualisation or otherwise, for the purpose of assisting, regulating
or controlling the business of buying, selling or dealing in securities.

1
Horace White; The Stock Exchange and Money Market, pp. 88
2
Substituted by the Securities Laws (Amendment) Act, 2004 (w.e.f. 12-10-2004)

You might also like