Stock Exchange
Stock Exchange
Stock Exchange
Stock exchange is an organized market for buying and selling corporate and other securities. Here, securities are purchased and sold out as per certain well-defined rules and regulations. It provides a convenient and secured mechanism or platform for transactions in different securities. Such securities include shares and debentures issued by public companies which are duly listed at the stock exchange, and bonds and debentures issued by government, public corporations and municipal and port trust bodies.
Stock exchanges are indispensable for the smooth and orderly functioning of corporate sector in a free market economy. A stock exchange need not be treated as a place for speculation or a gambling den. It should act as a place for safe and profitable investment, for this, effective control on the working of stock exchange is necessary. This will avoid misuse of this platform for excessive speculation, scams and other undesirable and anti-social activities
London stock exchange (LSE) is the oldest stock exchange in the world. While Bombay stock exchange (BSE) is the oldest in India.
Listing
Listing means permission to quote shares and debenture officially on the trading floor of the stock exchange.
Requirement of listing
Following information must be filled by the exchange: Memorandum of article of association. Copies of all prospectuses. Copies of balance sheet, audited accounts,agreements,promoters,underwriters ,brokers. Details of shares and debenture &shares forfeited.
Details of issue of bonus and dividend declared. History of company in brief. Agreement with managing director etc. List of highest 1o holders of each class or kind of securities of company.
Objectives of listing
To ensure the proper supervision and control of dealings in securities. To protect the interest of shareholders and the investors. To ensure marketing facilities for securities. To ensure liquidity of securities. To regulate the dealings in securities.
Advantage of listing
Publicity of security. Protection of investors. Ensure liquidity. Better goodwill.
Settlement of forward delivery contract: can be done speculative purposes, can be done in any of three ways: liquidity in full liquidation in full payment of differences carry over to the next settlement
Electronic settlement for trade. purchasing the dematerlised securities & selling the the dematerlised securities Rolling statement-T+5 T-is trade date 5- 5 days are given for delivery of securities and payment
Tarawaniwalas:- The menbers of bombay stock exchange divided them in to two parts i.e:Brokers & Tarawaniwalas Last one act like a broker as well as jobber, he purchase and sell security on their own and from the side of public also.
Stag:- satg purchase the shares to sell them in premium. Lame duck:- when bear find it difficult to fulfill its commitment it is known as lame duck.