By: Shikha Chouhan B.Com(Hons.

) VI Sem

What Is STOCK EXCHANGE

Stock exchange is that place where trading of shares is

done in terms of sale and purchase.

BOMBAY STOCK EXCHANGE

There are 23 stock exchanges in the India. Mumbai's (earlier known as Bombay), Bombay Stock Exchange is the largest, with over 6,000 stocks listed. The BSE accounts for over two thirds of the total trading volume in the country. Established in 1875, the exchange is also the oldest in Asia. Among the twenty-two Stock Exchanges recognised by the Government of India under the Securities Contracts (Regulation) Act, 1956, it was the first one to be recognised and it is the only one that had the privilege of getting permanent recognition ab-initio.

NAMES OF STOCK EXCHANGE

1.Bombay stock exchange 2.National stock exchange(Mumbai) 3.Banglore stock exchange 4.Utter Pradesh stock exchange(Kanpur) 5.Magadh stock exchange(Patna) 6.Ahmedabad stock exchange 7.vadodara stock exchange(Baroda) 8.Bhubaneswar stock exchange 9.Calcutta stock exchange(Kolkata) 10.Madras stock exchange

NAMES OF STOCK EXCHANGE

11.Cochin stock exchange 12.coimbatore stock exchange 13.Gauhati stock exchange 14.Hydrabad stock exchange 15.Madhya Pradesh stock exchange(Indore) 16.Jaipur stock exchange 17.Ludhina stock exchange 18.Mangalore stock exchange 19.Pune stock exchange 20.Saurashtra kutch stock exchange

THE NATIONAL STOCK EXCHANGE

The National Stock Exchange (NSE), located in Bombay, is India's first debt market. It was set up in 1993 to encourage stock exchange reform through system modernization and competition. It opened for trading in mid-1994. It was recently accorded recognition as a stock exchange by the Department of Company Affairs. The instruments traded are, treasury bills, government security and bonds issued by public sector companies.

BENEFITS OF STOCK EXCHANGE

FROM THE POINT OF VIEW OF COMMUNITY:

1.It assist the economic development by providing a body of interested investors. 2.It uploads the position of superior enterprises and assist them in raising further funds. 3.It encourages capital formation 4.Government can undertake projects of national importance and social value raising funds through the sale of its securities on the stock exchange. 5.It is the stock exchanges that central bank of a country can control credit by undertaking open market operations (purchase and sale of securities)

 FROM THE COMPANY POINT OF VIEW

1.A company whose shares quoted on stock exchange they enjoy better reputation and credit. 2.The market for the shares of such a company is naturally widened. 3.The market price of securities is likely to be higher in relation to its earnings, dividends and property values. This raises the bargaining power of the company in the event of a takeover, merger or amalgamation.

 FROM THE INVESTORS POINT OF VIEW 1.Liquidity of the investment is increased 2.The securities dealt on a stock exchange are good collateral security for loans. 3.The stock exchange safeguards interests of investors through strict enforcement of rules and regulations. 4.The present net worth of investments can be easily known by the daily quotations. 5.His risk is considerably less when he holds or purchases listed securities.

BROKER
A broker is an individual or party (brokerage firm) that

arranges transactions between a buyer and a seller, and gets a commission when the deal is executed.

 Brokers also can furnish considerable market information

regarding prices, products and market conditions. Brokers may represent either the seller (90 percent of the time) or the buyer (10 percent) but not both at the same time. An example would be a stockbroker, who makes the sale or purchase of securities on behalf of his client. Brokers play a huge role in the sale of stocks, bonds and other financial services. There are advantages to using a broker. First, they know their market and have already established relations with prospective accounts. Brokers have the tools and resources to reach the largest possible base of buyers. They then screen these potential buyers for revenue that would support the potential acquisition. An individual producer, on the other hand, especially one new in the market, probably will not have the same access to customers as a broker.

STOCK BROKER
A stockbroker is a regulated professional individual, usually associated with a brokerage firm or brokerdealer, who buys and sells shares and other securities for both retail and institutional clients, through a stock exchange or over the counter, in return for a fee or commission.

Sub-broker
Sub-broker means any person not being a member of a

Stock Exchange who acts on behalf of a member-broker as an agent or otherwise for assisting the investors in buying, selling or dealing in securities through such memberbrokers.
All Sub-brokers are required to obtain a Certificate of Registration from SEBI without which they are not permitted to deal in securities. SEBI has directed that no broker shall deal with a person who is acting as a subbroker unless he is registered with SEBI. It is mandatory for member-brokers to enter into an agreement with all the sub-brokers. The agreement lays down the rights and responsibilities of member-brokers as well as sub-brokers.

 Not to act as stock-broker or sub-broker without registration.

No stock-broker or sub-broker shall buy, sell, deal in securities, unless he holds a certificate granted by the Board under the Regulations: Provided that such person may continue to buy, sell or deal in securities if he has made an application for such registration till the disposal of such application. Conditions for grant of certificate to stock-broker. The Board may grant a certificate to a stock-broker subject to the following conditions namely: (a) he holds the membership of any stock exchange; (b) he shall abide by the rules, regulations and bye-laws of the stock exchange or stock exchanges of which he is a member; (c) in case of any change in the status and constitution, the stock broker shall obtain prior permission of the Board to continue to buy, sell or deal in securities in any stock exchange; (d) he shall pay the amount of fees for registration in the manner provided in the regulations; and

(e) he shall take adequate steps for redressal of grievances of the investors within one month of the date of the receipt of the complaint and keep the Board informed about the number, nature and other particulars of the complaints received from such investors. Conditions of grant of certificate to sub-broker. 5. (1) The Board may grant a certificate to a sub-broker subject to the following conditions, namely: (a) he shall pay the fees in the manner provided in the regulations; (b) he shall take adequate steps for redressal of grievances of the investors within one month of the date of the receipt of the complaint and keep the Board informed about the number, nature and other particulars of the complaints received; (c) in case of any change in the status and constitution, the sub- broker shall obtain prior permission of the Board to continue to buy, sell or deal in securities in any stock exchange; and (d) he is authorised in writing by a stock-broker being a member of a stock exchange for affiliating himself in buying, selling or dealing in securities: Provided such stock-broker is entitled to buy, sell or deal in securities.

MARKET MAKER
A market maker is a company, or an individual, that quotes both a buy and a sell price in a financial instrument or commodity held in inventory, hoping to make a profit on the bid-offer spread, or turn.

HOW A MARKET MAKER MAKES MONEY

A market maker aims to make money by buying stock at a lower price than the price at which they sell it, or selling the stock at a higher price than they buy it back. Ordinarily, they can make money in both rising or falling markets, by taking advantage of the difference between "bid" and "offer" prices.

JOBBER
A jobber is a market dealer, buying and selling in quick succession for a profit of few ticks ( few paisa ).

These are also called as "scalpers" at few places.

If a jobber observes that a particular scrip is going up then he / she will purchase a quantity and keep it for selling immediately e.g. buy @100 sell @ 100.40 to 100.80 and if the price doesn't go up within 10 to 20 seconds, they will sell the entire lot @ whatever be the price. They will do such trading for the entire day and earn nice amount at the end of the day.

CONSULTANT
An advisor who helps investors with their longterm investment planning. An investment consultant, unlike a broker, does more in-depth work on formulating clients' investment strategies, helping them fulfil their needs and goals. The idea behind an investment consultant is that

they be part of the client's investment strategy for a long period of time. The consultant's job is to actively monitor the client's investments and continue to work with the client as goals change over time.

PORTFOLIO MANAGER
A portfolio manager can be a single individual, but is more

likely, especially at larger companies, to be a team of leaders that meets regularly to monitor ongoing projects and programs, and vet new ones. As the relatively new concept of portfolio management gains interest, companies may bring in consultants to help set up and train individuals on the art and science of portfolio management. As with a financial portfolio, one goal of portfolio management is balance : riskier projects or programs can be offset with more sure-to-succeed programs undertaken at the same time, so that the company's overall risk remains manageable.

INSTITUTIONAL INVESTORS
Institutional investors are organizations which pool large sums of

money and invest those sums in securities, real property and other investment assets. They can also include operating companies which decide to invest their profits to some degree in these types of assets. Types of typical investors include banks, insurance companies, retirement or pension funds, hedge funds, investment advisors and mutual funds. Their role in the economy is to act as highly specialized investors on behalf of others. For instance, an ordinary person will have a pension from his employer. The employer gives that person's pension contributions to a fund. The fund will buy shares in a company, or some other financial product. Funds are useful because they will hold a broad portfolio of investments in many companies. This spreads risk, so if one company fails, it will be only a small part of the whole fund's investment