Indian capital market b.v.raghunandan

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explains the Indian capital market with emphasis on stock exchanges in India


ChapterV-Stock Exchange PG Department of Economics,St.Aloysius College,MangaloreCapital Market- B.V.Raghunandan, SVS College, BantwalCapital Market: MeaningThe capital market is the market for securities, where companies and governments can raise long-term funds. It is a market in which money is lent for periods longer than a year. The capital market includes the stock market and the bond- wikipediaPlayers in the Capital MarketGovernmentsPublic Sector UndertakingsInsurance CompaniesMutual FundsNon-Banking Financial CompaniesProvident Funds and Pension Funds Commercial BanksFinancial InstitutionsCorporatesRetail InvestorsOthers: FFI,HNI,NRI, Investment Trusts, Capital Market InstrumentsEquity SharesPreference SharesGovernment BondsCorporate Bonds / Debentures Perpetual BondsClassification of MarketsPrimary MarketsSecondary MarketsSecondary Market for Corporate Securities:Stock ExchangeStock Exchange is, an organised market for second-hand corporate and government securitiesA More Inclusive DefinitionStock Exchange is a regulated market for second-hand corporate securities, government securities, commodities, and foreign exchangeCharacteristics of Stock ExchangeOrganised MarketSecurities MarketSecondary marketPart of Capital MarketListed SecuritiesRestricted MembershipDealing only by MembersStandardised PracticesFacilitatorSpeculation8Role and Functions of a Stock ExchangeReady MarketLiquidity for SecuritiesEvaluationPrice StabilityCapital FormationPromoting Saving HabitsInvestor ProtectionCorporate GovernancePublic FinanceGrowth of Joint Stock CompaniesEnabling Book-Building RouteCapital MobilityForeign FundsIndex CompilationTechnical AnalysisEconomic DevelopmentMembers of a Stock Exchange: Jobber & His CharacteristicsDealerSpecialistStability in the MarketDealing with BrokersJobbers ProfitEqualising QuantitySpeculationTwo-way QuotesMatching Demand and SupplyCompany SponsorshipBrokers & Their CharacteristicsAgentGeneralistConduit between Jobber and the PublicIncome in the form of CommissionTypes of DealingsDealings in Cash MarketDealings in Futures & Options MarketCash MarketRolling SettlementT+2 SettlementTrading DayPay-In DayPay-Out DayFutures & Options MarkerMeant for Risk Management Arising Out of Dealings in Cash MarketExchange TradedBig Investors and Institutions Take PositionsFor Protecting the Value of HoldingProviding for the Risks Arising Out of TradingFutures: CharacteristicsStandardised FeaturesCounter-Party is the Clearing HouseMargin RequirementTime SpreadThree Contracts for SettlementFutures: Trading MechanismTrading StrategiesUses: -Hedging -Speculation -ArbitrageTypes of Futures: Stock Future and Index Future OptionA contract to buy or sell without an obligationEuropean Option and American OptionCall Option and Put OptionUses of Options: -Hedging -Speculation -Arbitrage Advantages of OptionNo Big InvestmentNo Margin as in FuturesNo ObligationNo Marked-to-MarketMore Gain than RiskPremium paid alone is the DisadvantageListing of Shares: ProcedureInitial Public OfferSize of Public Offer: Not Less than 25% of Issued Capital & Post Issue Paid Up Capital is not less than Rs.10 CroreFiling Application: MA, AA, Prospectus, Directors Report, Specimen Copies of Share Certificates and Debenture Certificates-Wide Distribution of Shares: 5 for Each Rs.1 Lakh cap-Dividend & Bonus in the Past 10 years-Brief History of the Company-Management PatternListing Procedure .ContinuedPayment of Listing FeesSigning Listing AgreementScreening the ApplicationListing the SharesSEBI: FunctionsRegulation of Securities MarketRegistration of FIsRegistration of Collective Investment SchemeEducation & TrainingProhibition of Insider TradingProhibition of Unfair Trade PracticesRegulation of M&ARegistration of FIIRegistration & Regulation of SEsConducting ResearchPowers of SEBILevying FeesApproving Bye-laws of SEsOrdering Amendment of Bylaws of SEBIInspectionCompulsory ListingPower of PunishmentTHANK YOU