Contents :
- Meaning & Definition of Stock Exchange.
- Features and Functions of Stock Exchange.
- Services of Stock Exchange.
- Organisation and Membership of Stock Exchanges in India.
- Needs and Objectives of National Stock Exchange in India.
- Trading and Settlement System of National Stock Exchange.
What is Stock Exchange ?
Stock Market (also Share Market) is one important constituent of capital market. Stock Exchange is an organized market for the purchase and sale of industrial and financial security. It is convenient place where trading in securities is conducted in systematic manner i.e. as per certain rules and regulations.
Meaning of Stock Exchange
“Stock Exchange or securities market comprises all the places where buyers and sellers of stock and bonds or their representatives undertake transactions involving the sale of securities.”
Stock exchanges are the important ingredients of capital market. They constitute the prime-center through which bulk of investment activities will be conducted by individual and institutional operators. They are described as the citadel of capital or fortress of finance. Various forces governing commercial investments are reflected through the stock exchanges. They facilitate safe, suitable and satisfactory mobilisation of capital required mostly by companies. Government and semi-governmental bodies also process their capital or finance raising securities through the stock exchanges.
Stock exchanges are, in short, the theatres of trading in securities and act as guage-glass of economic situation in the country.
Definitions of Stock Exchange
Husband and Dockeray :
“Securities or stock exchange are privately organised markets which are used to facilitate trading in securities.”
The Securities Contracts (Resolution) Act, 1956 :
“It is an association organisation or body of individuals, whether incorporated or not, established for the purpose of assisting, regulating and controlling business in buying, selling and dealing in securities.”
From the above definitions, it is clear that the stock exchanges are the institutions organised for providing the necessary facilities to carry on trading or dealings in securities representing claims on capital. The securities dealt on the stock exchanges include shares and debentures issued by the companies, the Government Securities, the bonds issued by semi-government bodies, etc.