BOMBAY STOCK EXCHANGE

The origin of the Bombay Stock Exchange dates back to 1875.

It was organized under the name of “The Native Stock and share brokers Association” as non-profit making Association.

It was recognised on a permanent basis in 1957.

The objectives of the stock exchange areTo safeguard the interest of investing public

having dealings on the exchange.To establish and promote honorable and just

practices in securities transactions.To promote, develop and maintain well-

regulated market for dealing in securities.To promote industrial development in the

country through efficient resource mobilization by the way of investment in corporate securities.

Trading System:- In March 1995, The Bombay Stock

Exchange has introduced screen based trading called BOLT (Bombay On-Line trading)

- After getting approval from SEBI, BOLT connection have been installed in Ahmedabad, Rajkot, Pune, Vadodara and Calcutta.

Securities traded:- The securities traded in the BSE are classified into

three groups namely, ‘A’ Group and non-specified securities.

- The latter is sub-divided into ‘B1’ and ‘B’ groups.- ‘A’ group contains with large outstanding shares,

good track record and large volume of business.- ‘A’ group contains 150 companies.- Relatively liquid securities come under the ‘B1”

group and it comprises of 746 companies- The remaining shares re placed under the ‘B’ group.

Surveillance system:There is a separate surveillance

department in the stock exchange.The surveillance department aims at

providing free and fair market, arresting unsystematic risk.

Surveillance system: The Surveillance can be classified intoPrice SurveillancePre-monitoring

a) Price Surveillance The surveillance department keeps a

close watch over the price movements of scrip's and aims at an early detection of market manipulation like price rigging.

b) Pre-monitoring Monitoring each and every to avoid

default.

The NSE of India became operational in the capital market segment on 3rd November 1994 in Mumbai.

Promoters of NSE: IDBI, ICICI, IFCI, LIC, GIC,SBI, Bank of Baroda, Canara Bank, Corporation Bank, Indian Bank, Oriental Bank of Commerce, Union Bank of India, Punjab National Bank.

Membership: Membership is based on factors such

as capital adequacy, corporate structure, track record, education experience etc.

Advantages of NSE: Wider Accessibility Screen based trading Non-disclosure of the trading members identity. Transparent transactions Matching of orders Effective settlement of corporate benefit. Trading in dematerialized form Subsidiary General Ledger facility in the debt

market

Recent trends in NSE:

1. Expansion

- After establishing its operation in Mumbai, the NSE had expanded its operation to other cities.

- NSE has installed 2580 VSATS in 317 cities across the country.

Recent trends in NSE

2. Quality:

3. More liquidity

4. Less Brokerage.

5. Insurance against risk

6. Quick clearing and settlement

7. Foreign Institutional investors trading

Over the Counter Exchange of India

- Started in 1992

- Objective is to provide a market for the smaller companies that could not afford the listing fees of the large exchanges and did not fulfill the minimum capital requirement for listing.

Promoters: OTCEI is incorporated under sec 25 of

the Indian Companies Act 1956. UTI, GIC, ICICI, IDBI,IFCI,LIC,SBI

Capital Markets, Canbank Financial Services.

Players in the OTCEI Market: Act as brokers, buy and sell securities

according to the instructions of the investors.

Market makers in securities, they quote the prices at which members are willing to buy and sell the specified number of securities.

Members may be public financial institutions, scheduled banks, mutual funds, SEBI approved merchant bankers, banking subsidiaries, venture capital funds and other non-banking financial companies with minimum net worth of Rs 2.5 crores.

Scrips to be traded:1. The minimum capital requirement for a

company to be listed on the OTCEI is Rs 3 Crores and the maximum is Rs 50 crores.

2. For companies with an issued capital of more than Rs.30 lakhs but less than 300 lakhs, the minimum public offer should be 25 per cent of the issued capital or 20 lakhs worth of shares in face value which ever is higher.

Scrips to be traded:

3. Companies with an issued capital of more than Rs 30 crores seeking to be listed have to comply with listing requirements and guidelines that are applicable to such companies in other stock exchanges.

Present situation:

1. Sluggish growth

2. Lack of liquidity

Inter-Connected Stock Exchange: Started as a trial run on August 1998. The main objective of ISE – to inter-

link the 15 odd regional stock exchanges of the country to ensure liquidity.

Participant:

- 15 stock exchanges participating in ISE are Bangalore, Bhuvaneshwar, Chennai, Kochi, Coimbatore, Guwahati, Hyderabad, Jaipur, Ludhiana, Indore, Magadh (Patna), Mangalore, Saurashtra, UP, Vadodara.

Membership:

- The membership to ISE costs Rs.16,000 along with a capital adequacy deposit of Rs 4 lakh, as stipulated by SEBI.

It is an organization promoted by the Industrial Development Bank of India, the Unit Trust of India and the National Stock Exchange of India Ltd. to provide Electronic depository facilities for securities traded in the equity and the debt market.

The functioning:

a) Enables surrender and withdrawal of securities to and from the depository

b) Maintains investors holdings in the electronic form

c) Effects settlement of securities traded on exchanges.

d) Carries out settlements of trader that have not been done of the stock exchanges.

Participants: NSDL participant can be a public

financial institution, bank, custodian , registered stock broker or a NBFC subject to approval from the depository company and the SEBI.

Individual Investor and NSDL: The investor has to open an account

with the depository participant that is similar to the opening of a bank account.

Investors can get a list of depository participant from NSDL.

Individual Investor and NSDL: The investor can choose any

depository participant of his choice and fill up an account opening from.

Reasonable charges are received by the depositories for the opening of accounts and every transaction in the accounts.

Transactions of the NSDL:

1. New Issues

2. Secondary market transactions