Stock Exchange

Definition
The Securities Contracts (Regulation) Act,
1956, has defined stock exchange as an
"association, organization or body of
individuals, whether incorporated or not,
established for the purpose of assisting,
regulating and controlling business of
buying, selling and dealing in securities".
 NSE BOMBAY, 1992 -The NSE's key
index is the S&P CNX Nifty, known as the
NSE NIFTY (National Stock Exchange
Fifty), an index of fifty major stocks
weighted by market capitalisation.
BSE oldest SE in Asia
Regional SE Ahmedabad SE, Calcutta
SE
Multi Commodity SE (MCX SX)-
launched on October 7, 2008, under the
regulatory framework of Securities &
Exchange Board of India (SEBI).
 MCX Stock Exchange Ltd (MCX-SX), Indias new stock
exchange, appositely reflects how the worlds most
evolved and hi-tech new-generation exchanges should
look like in future. With cutting-edge technology, world-
class services and cost optimisation, MCX-SX has
altered the face of the Indian financial markets.

Through deployment of state-of-the-art technology and

global best practices for regulatory compliance and
investor protection, MCX-SX enables importers,
exporters, investors, corporations and banks to hedge
their currency risks with greater transparency and safety.
Proved its mettle as the thought leader and innovator of
the industry by introducing innovative services and
pioneering market development initiatives
 OVER THE COUNTER EXCHANGE OF
INDIA (OTCEI) 1990 - Modelled along
the lines of the NASDAQ market of USA
is the only exchange to allow listing of
companies with paid-up below Rs.3
crores
is the only exchange to allow
companies with less than 3 year track
record to tap capital market
Screen based trading
 What is FIX? -- is a series of messaging specifications for the
electronic communication of trade-related messages
What is DMA? -Direct Market Access (DMA) facility through
various connectivity modes permits the trading members of
BSE to provide direct trading terminals to their DMA clients.
As quoted in the SEBI circular 'Direct Market Access (DMA) is a
facility which allows brokers to offer clients direct access to the
exchange trading system through the brokers infrastructure without
manual intervention by the broker. Some of the advantages offered
by DMA are direct control of clients over orders, faster execution of
client orders, reduced risk of errors associated with manual order
entry, greater transparency, increased liquidity, lower impact costs
for large orders, better audit trails and better use of hedging and
arbitrage opportunities through the use of decision support tools.

What is Cross Listing Arrangements?

 STOCK BROKER- A broker is an intermediary
who arranges to buy and sell securities on
behalf of clients (the buyer and the seller)
Stock Broker are registered member of stock
exchange. A stock broker can register to one or
more stock exchanges.
Only stock brokers can directly buy and sell
shares in Stock Market. An investor must
contact a stock broker to trade stocks. Broker
charge commissions (brokerages) for their
service. Brokerage is usually a percent of total
amount of trade and varies from broker to
broker.
Trading, Settlement and Risk
Management
 Insider Trading
Knowledge of unpublished sensitive information in hands of some
persons connected to the companies that would put them in an
advantageous position over others who lack it.
SEBI has banned insider trading

Under the Regulations, an Insider has been defined as any person

who,
is or was connected with the Company or is deemed to have been
connected with the Company and who is reasonably expected to
have access to unpublished price sensitive information in relation
to the Companys securities, or
has received or has had access to such unpublished price
sensitive information.
 Online Stock Trading
Advantages
Convenience
Single view
Research and Recommendations
Investment in IPOs, Mutual Funds and Bonds.
Check the trading history; demat account
balance and bank account balance at any time.
Provide online tools like market watch, graphs
and recommendations to do analysis of stocks.
 Disadvantages of Online Stock
Trading (Website based)
Website performance - sometime the
website is too slow or not enough user
friendly.
Little long learning curve especially for
people who do not know much about
computer and internet.
Brokerages are little high.
Online Stock Trading Companies in
India
ICICI Securities Pvt Ltd
India Bulls Sec Pvt Ltd
Share Khan
Reliance Money
HDFC Sec Pvt Ltd
 Process of Online Trading:
Open an account by filling an online
registration form.
A company executive gets in touch with the
client to collect the required documents.
The executive also helps the client with the
know-your-customer process.
To trade, the client needs a savings bank
account to deposit the funds and a demat
account where the shares are deposited.
With the online portal, one can link the
banking, trading and demat account.
 Once the form and the required documents are
submitted, the portal verifies the papers and
within a week, the client gets the welcome kit
which contains the product manual, user ID,
and various PIN numbers and passwords.
The client can then login his / her account and
start to place the orders through a broker. The
website shows real time quotes and the client
just needs to state the buy or sell order and the
funds earmarked for the trade. He / she is then
directed towards the payment gateway where
he would transfer the funds through net
banking.
 Is insider trading BAD? Why forbid insider
trading?
Code of conduct by different companies
for prevention of insider trading
What are the Sensex & the Nifty?
BSE Mid-cap Index
 Depository
A depository is an organisation which holds
securities (like shares, debentures, bonds,
government securities, mutual fund units etc.) of
investors in electronic form at the request of the
investors through a registered Depository
Participant. It also provides services related to
transactions in securities.
-- The minimum net worth stipulated by SEBI for a
depository is Rs.100 crore
- National Securities Depository Limited (NSDL)
and Central Depository Services (India) Limited
(CDSL) are registered with SEBI.
 Advantages
A safe and convenient way to hold securities;
Immediate transfer of securities;
No stamp duty on transfer of securities;
Elimination of risks associated with physical certificates such as bad
delivery, fake securities, delays, thefts etc.
Reduction in paperwork involved in transfer of securities;
Reduction in transaction cost;
No odd lot problem, even one share can be traded;
Nomination facility;
Change in address recorded with DP gets registered with all
companies in which investor holds securities electronically
eliminating the need to correspond with each of them separately;
Transmission of securities is done by DP eliminating
correspondence with companies;
Automatic credit into demat account of shares, arising out of
bonus/split/consolidation/merger etc.
Holding investments in equity and debt instruments in a single
account.