stock ex bcom vi

7/29/2019 Stock Ex Bcom VI

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By: Shikha Chouhan

B.Com(Hons.) VI Sem


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What Is STOCK EXCHANGE Stock exchange is that place where trading of shares is

done in terms of sale and purchase.


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BOMBAY STOCK EXCHANGE There are 23 stock exchanges in the India. Mumbai's

(earlier known as Bombay), Bombay Stock Exchange

is the largest, with over6,000 stocks listed. The BSEaccounts for overtwo 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 theGovernment 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.


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NAMES OF STOCK EXCHANGE1.Bombay stock exchange

2.National stock exchange(Mumbai)

3.Banglore stock exchange4.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


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NAMES OF STOCK EXCHANGE

11.Cochin stock exchange12.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 exchange19.Pune stock exchange

20.Saurashtra kutch stock exchange


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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 throughsystem 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, treasurybills, government security and bonds issued by public

sector companies.


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BENEFITS OF STOCK EXCHANGE

FROM THE POINT OF VIEW OF COMMUNITY:

1.It assist the economic developmentby providing abody of interested investors.

2.It uploads the position of superior enterprises andassist them in raising further funds.

3.It encourages capital formation

4.Government can undertake projects of national

importance and social value raising funds through thesale of its securities on the stock exchange.

5.It is the stock exchanges that central bankof a countrycan control creditby undertaking open market

operations (purchase and sale of securities)


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FROM THE COMPANY POINT OF VIEW

1.A company whose shares quoted on stock exchange

they enjoybetter 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.


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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 investorsthrough 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.


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

arranges transactions between abuyerand a seller, and

gets a commission when the deal is executed.
http://en.wikipedia.org/wiki/Brokerage_firmhttp://en.wikipedia.org/wiki/Buyerhttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Commission_(remuneration)http://en.wikipedia.org/wiki/Commission_(remuneration)http://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Buyerhttp://en.wikipedia.org/wiki/Brokerage_firm


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Brokers also can furnish considerable market information

regarding prices, products and market conditions. Brokers mayrepresent 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 thesepotential 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.


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STOCK BROKER

A stockbroker is a regulated professional individual,

usually associated with abrokerage firm orbroker-

dealer, who buys and sells shares andothersecurities for both retail and institutional clients,

through a stock exchange orover the counter, in

return for a fee orcommission.
http://en.wikipedia.org/wiki/Brokerage_firmhttp://en.wikipedia.org/wiki/Broker-dealerhttp://en.wikipedia.org/wiki/Broker-dealerhttp://en.wikipedia.org/wiki/Share_(finance)http://en.wikipedia.org/wiki/Security_(finance)http://en.wikipedia.org/wiki/Retail_investorhttp://en.wikipedia.org/wiki/Institutional_investorhttp://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Over_the_counterhttp://en.wikipedia.org/wiki/Feehttp://en.wikipedia.org/wiki/Commission_(remuneration)http://en.wikipedia.org/wiki/Commission_(remuneration)http://en.wikipedia.org/wiki/Feehttp://en.wikipedia.org/wiki/Over_the_counterhttp://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Institutional_investorhttp://en.wikipedia.org/wiki/Retail_investorhttp://en.wikipedia.org/wiki/Security_(finance)http://en.wikipedia.org/wiki/Share_(finance)http://en.wikipedia.org/wiki/Broker-dealerhttp://en.wikipedia.org/wiki/Broker-dealerhttp://en.wikipedia.org/wiki/Broker-dealerhttp://en.wikipedia.org/wiki/Brokerage_firm


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Sub-broker

Sub-broker means any person not being a member of aStock Exchange who acts on behalf of a member-brokerasan agent or otherwise for assisting the investors in buying,selling or dealing in securities through such member-

brokers.

All Sub-brokers are required to obtain a Certificate ofRegistration from SEBI without which they are not

permitted to deal in securities. SEBI has directed that nobroker shall deal with a person who is acting as a sub-broker unless he is registered with SEBI.

It is mandatory for member-brokers to enter into anagreement with all the sub-brokers. The agreement laysdown the rights and responsibilities of member-brokers as

well as sub-brokers.


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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 shallobtain 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


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(e) he shall take adequate steps forredressal 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 thecomplaints 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 shallobtain 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-brokerbeing 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.


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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 tomake a profit on the bid-offer spread, orturn.


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HOW A MARKET MAKER MAKES MONEY

A market maker aims to make money bybuying stock

at a lower price than the price at which they sell it, or

selling the stock at a higher price than they buy itback. Ordinarily, they can make money in both rising

or falling markets, by taking advantage of the

differencebetween "bid" and "offer" prices.


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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 20seconds, 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.


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CONSULTANT

An advisor who helps investors with their long-

term investment planning. An investment consultant,

unlike a broker, does more in-depth work on

formulating clients' investment strategies, helpingthem fulfil their needs and goals.

The idea behind an investment consultant is that

they be part of the client's investment strategy for along 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.


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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 portfoliomanagement 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 managementis 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.


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INSTITUTIONAL INVESTORS

Institutional investors are organizations whichpool 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 includebanks, 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. Thefund will buy shares in a company, or some other financial product.

Funds are useful because they will hold abroad 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


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