PRESENTATION
ON
STOCK EXCHANGE OPERATION
PRESENTED BY:
BHARAT BALDUA
INTRODUCTION TO STOCK
EXCHANGE
Securities markets represent the highest development of sophisticated
and advanced economies. Their economic role is to provide a benchmark
for managers of the opportunity costs of funds raised for investment.
Two major Stock exchanges in India are:
1- BSE (Bombay Stock Exchange) / Sensex
2- NSE (National Stock Exchange) / Nifty
WHAT IS BSE SENSEX?
A very common name for all traders in the stock market, BSE, stands for
Bombay Stock Exchange. The oldest market not only in the country, but also
in Asia. In the early days, BSE was known as "The Native Share & Stock
Brokers Association." It was established in the year 1875 and became the first
stock exchange in the country to be recognized by the government. In 1956,
BSE obtained a permanent recognition from the Government of India under
the Securities Contracts (Regulation) Act, 1956.
the past and even now, it plays a pivotal role in the development of the
country's capital market. This is recognised worldwide and its index,
SENSEX, is also tracked worldwide. BSE is made up of 30 companies.
BSE NETWORK
The Exchange reaches physically to 417 cities and towns in the country.
The framework of it has been designed to safeguard market integrity and
to operate with transparency. It provides an efficient market for the
trading in equity, debt instruments and derivatives. Its online trading
system, popularly known as BOLT, is a proprietary system and it is BS
7799-2-2002 certified. The BOLT network was expanded, nationwide, in
1997. The surveillance and clearing & settlement functions of the
Exchange are ISO9001:2000 certified.
BSE FACTS
•First in India to introduce Equity Derivatives.
•First in India to launch a Free Float Index.
•First in India to launch Exchange Enabled Internet Trading
Platform.
•First in India to obtain ISO certification for Surveillance, Clearing &
Settlement.
•'BSE On-Line Trading System (BOLT) has been awarded the globally
recognized the Information Security Management System standard
BS7799-2:2002.
•First to have an exclusive facility for financial training
OBJECTIVE OF SENSEX
•To measure market movements.
•Benchmark for funds performance.
•For index based derivatives products.
NIFTY OR NSE
The National Stock Exchange of India (NSE) was incorporated in
November 1992 as a tax-paying company. It is recognized under Securities
Contracts (Regulation) Act, 1956 in 1993 as a stock exchange. In June 1994,
it commenced operations in the Wholesale Debt Market (WDM). In
November, the same year, the Capital Market (Equities) segment
commenced operations and the Derivatives segment in June 2000.
Nifty is an indicator of all the major companies of NSE.
The Nifty index is a composite of the top 50stocks listed on the National
stock exchange. It is a simplified tool which helps investors & ordinary
people alike, understand what happens in the stock market & by extension,
the economy.
NSE GROUPS
•National Securities Clearing Corporation Ltd. (NSCCL)
It is a wholly owned subsidiary, which was incorporated in August 1995 and
commenced clearing operations in April 1996. It was formed to build confidence in
clearing and settlement of securities, to promote and maintain the short and
consistent settlement cycles, to provide a counter-party risk guarantee and to operate a
tight risk containment system.
•NSE.IT Ltd.
It is also a wholly owned subsidiary of NSE and is its IT arm. This arm of the NSE is
uniquely positioned to provide products, services and solutions for the securities
industry. NSE.IT primarily focuses on in the area of trading, broker front-end and
back-office, clearing and settlement, web-based, insurance, etc. Along with this, it also
provides consultancy and implementation services in Data Warehousing, Business
Continuity Plans, Site Maintenance and Backups, Stratus Mainframe Facility
Management, Real Time Market Analysis & Financial News.
•
CONTD…
India Index Services & Products Ltd. (IISL)
It is a joint venture between NSE and CRISIL Ltd. to provide a variety of indices and
index related services and products for the Indian Capital markets. It was set up in May
1998. IISL has a consulting and licensing agreement with the Standard and Poor's
(S&P), world's leading provider of investible equity indices, for co-branding equity
indices.
•National Securities Depository Ltd. (NSDL)
NSE joined hands with IDBI and UTI to promote dematerialization of securities. This
step was taken to solve problems related to trading in physical securities. It
commenced operations in November 1996.
•DotEx International Limited
DotEx was formed to provide a well structured inter trading platform for the members
to further offer online trading facilities to their customers.
NSE FACTS
•It uses satellite communication technology to energies
participation from around 400 cities in India.
•NSE can handle up to 1 million trades per day.
•It is one of the largest interactive VSAT based stock exchanges in
the world.
•The NSE- network is the largest private wide area network in
India and the first extended C- Band VSAT network in the world.
•Presently more than 9000 users are trading on the real time-
online NSE application.
OBJECTIVES OF NSE
•Establishing nationwide trading facilities for all types of securities .
•Ensuring equal access to investors all over the country through an
appropriate telecommunication network.
•Providing fair , efficient & transparent securities market using
electronic trading system.
•Meeting international benchmark and standards.
MECHANICS/WORKING OF
SHARE TRADING
A- Purchase of Shares- It is further divided into two parts:
• Purchase of existing shares from the market:
1- Placing the order with broker.
2- Receipt of contract note.
3- Intimation of Delivery.
4- Sending shares for transfer.
• Purchase of shares being issued by company:
1- Filling IPO form.
2- Receipt of allotment letter.
CONTD…..
B- Sale of Shares
1- Placing the order with the broker.
2- Receipt the contract note.
3- Delivery of share certificate and transfer deed.
4- Receipt of payment.
TYPES OF TRADING
Intra-Day Trading.
Delivery.
Short-Selling
Margin Trading.
Future Trading/Derivative.
TYPES OF ORDER
At Market Rate.
Limit Order.
Stop-Loss Order.
Order After Hours.
WHO CONTROL THE STOCK
EXCHANGE
MISSION OF SEBI
Securities & Exchange Board of India (SEBI)
formed under the SEBI Act, 1992 with the prime
objective are:
Protecting the interests of investors in securities,
Promoting the development of, and
Regulating, the securities market and for matters connected
therewith or incidental thereto.’
THANK YOU
