INDIAN STOCK EXCHANGES
SCRA,1956
Any body of individuals, whether
incorporated or not, constituted for the
purpose of assisting, regulating or
controlling the business of buying and
selling or dealing in securities
ECONOMIC FUNCTIONS
Adequate Liquidity &
Marketability
Safety to Investors
Evaluation of Securities
Mobilization of Savings
Widening Share Ownership Base
DEVELOPMENT OF INDIAN STOCK
MARKETS
Eighteenth Century concept came, when transactions
were limited to loans and stock transactions of East
India Company
Corporate Share came to picture in 1830, with
enactment of the Companies Act in 1850
First
Organised Stock Exchange established in
July,1875 as an association of native brokers,named as
Native Shares and Stock Brokers Association. Its
formal deed of association was executed in 1887. This
is today Bombay Stock Exchange
DEVELOPMENT OF INDIAN STOCK MARKETS
1894-Ahemedabad Stock Exchange
1908-Calcutta SE
1930.Indore(MP)
1937-Madras
1943-Hyderabad
1947-Delhi
1957. Bangalore
1978-Cochin
DEVELOPMENT OF INDIAN STOCK MARKETS
1978-Cochin
1982-UP(Kanpur)
1982-Pune
1983-Ludhiana
1984-Gauhati
1985-Kanada(Mangalore)
1986-Magadh(Patna)
DEVELOPMENT OF INDIAN
STOCK MARKETS
1983-Jaipure
1989-Bhubaneswar
1989-Daurastra Kutch
1990-Vadodara Baroda
1991-Coimbatore
1991-Meerut
1989-OTCEI Bombay
ORGANISATIONAL STRUCTURE
OF A STOCK EXCHANGE
A.-GOVERNING BOARD
A-President,
Vice-President,
Secretary/Treasurer
Executive Director
Secretary
Monitoring Department
PRO & Library
ORGANISATIONAL STRUCTURE
OF A STOCK EXCHANGE
Secretary
Listing Deptt.
Operations Dept.
Computer
Inspection & Audit
Administration
ORGANISATIONAL STRUCTURE
OF A STOCK EXCHANGE
Operations Dept.
Settlement
Clearance
Computer
EDP
MIS
Administration
Investors Service Cell
Arbitration & Complaints
COMPOSITION OF GO VERNING
BOARD(as per SCR,1956)
Six members elected from the members of SE
Three nominated by Govt.
Three Public Representatives nominated by
Board
One Executive Director to be appointed by
Stock Exchange
MAJOR TASK OF GB
Power to make amend and suspend the
operation of the rules
Bye-laws and regulations amendment
Power to admit and expel members
To warn, fine suspend members
Approve formation and dissolutopn of
partnership
To determine mode and conditions of
St.Excs business & Regulate trading
To supervise, direct, & control all
matters & activities
MAJOR DEPARTMENTS OF
ST EX.
Listing Dept
Operations Dept.
Computer & EDP Dept.
Monitoring Dept.
Investor Service Dept.
Developments since 1991
Over-the Counter Market System(GSPatel, Abid
Hussain)
National Stock Market System
NSE comprises:
Stock Holding Corporation of India Ltd
National Clearing &Depository System
Securities Trading Corpoartion of India
DEMUTUALISATION OF ST.EXS
Demutualisation is the process
by which any member-owned
organisation can become
shareholder-owned company.
Which can be either listed, or
closely held by its shareholders.
DEMUTUALISATION OF ST.EXS
Demutualisation separates the OWNERSHIP and
CONTROL of Stock Exchange from the Trading
Rights of its members
Stock exchange can become a CORPORATE
ENTITY
From a Non-Profit making company to a Profit
making Company
Tax exempted unit to a Tax paying Company
REGULATIONS OF ST.EX
Central Govt. through
SCRegulation Act,1956
SE Division of Ministry of Finance
(Head Office at New Delhi & Br
Office at Mumbai/Calcutta)
Governing Board
FUNCTIONAL SPECIALISATION
OF MEMBERS
Bull Broker=Tejiwalla
Bear Brokers=Mandiwalla
Stag Brokers=New Issues for future Sell
=No interest in Purch/Sell of existings
Commission Brokers
Floor Brokers
Odd-lot Dealers
Dealers of Non-active shares
FUNCTIONAL SPECIALISATION
OF MEMBERS
Taravaniwalla=Jobbers
=Specialist in specific shares
=Market Makers
Budliwalla
GOVERNING BOARD
Links Govt. & Stock Exchanges
Close Watching Operations
Advise in Crisis
Ensures compliances of
Listing provisions
Issuance of Licence to Brokers
Directing SEBI to issue Rules &
Regulations for strengthening
Securities market in India
TRADING IN EXCHANGES
Open Outcry system to Online System
Floorbased Trading to Screen Based
Trading
Execution of Orders by price driven to
Matching Order
Transparent Transaction
Operational Efficiency, Less Time, No
Risk/Fraud
Elimination of Jobbers/Chain of Brokers
TRADING IN EXCHANGES
Low Transaction Cost
Integration of Different Trading
Centers in to a single trading
platform
Provision of Internet Trading
Two types of Trading Syste
Order Driven
Quote Driven
PROHIBITING INSIDER TRADING
& GRAY MARKET OPERATIONS
Trading in shares by Persons in the
Management of concerned SEs
Use of Undisclosed Price Sensitive
Information regarding the Company
TRADING IN TRADITIONAL
EXCHANGES
Buyer & Seller
Brokers- Buy Order/Sell Order
Brokers in Trading Floor
Auctioning(Bids & Offers)
Transaction is Finalised
Reported to Stock Exchange
Pay-In & Pay-Out
Feedback Confirmation
DEVELOPMENTS IN STOCK
EXCHANGES SINCE LIBERALISATION
High Power Committes
G.S.Patel Committee (on SE Reforms)
Abid Hussain Committee
(on CapitalMarket Reform)
Recommendations for Creation of OTCEI 1990
(Second Tier Stock Market)
Recommendation by Pherwani Committee,1991
for National Stock Market System
DEVELOPMENTS IN STOCK
EXCHANGES SINCE
LIBERALISATION(Clear (Regulations
on)
No Unfair Trading
Investors Protection
No Insider-Trading
Margin System(Sept.2001)
Intra-day Trading Limits
Cercuit Brakers Scripwise
SEBI-1995
USA-1987
DEVELOPMENTS IN STOCK
EXCHANGES SINCE
LIBERALISATION(Clear (Regulations on)
Trading/Settlement from 14 days to 7 days
Carry Forward to Rolling Settlement System
T+5 Jan(10 Scrips),May(153 Scrips),2000
T+3 April,2002
T+2 April,2003
Electronic Fund Transfer
Dematerialisation
