What is Stock Exchange? Meaning
Stock Exchange (also called Stock Market or Share Market) is i of import cistron of capital market. Stock Exchange is an organized marketplace for the purchase as well as sale of industrial as well as fiscal security. It is convenient house where trading inwards securities is conducted inwards systematic fashion i.e. every bit per sure enough rules as well as regulations.
It performs diverse functions as well as offers useful services to investors as well as borrowing companies. It is an investment intermediary as well as facilitates economical as well as industrial evolution of a country.
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Stock telephone substitution is an organized marketplace for buying as well as selling corporate as well as other securities. Here, securities are purchased as well as sold out every bit per sure enough well-defined rules as well as regulations. It provides a convenient as well as secured machinery or platform for transactions inwards dissimilar securities. Such securities include shares as well as debentures issued past times world companies which are duly listed at the stock exchange, as well as bonds as well as debentures issued past times government, world corporations as well as municipal as well as port trust bodies.
Stock exchanges are indispensable for the polish as well as orderly performance of corporate sector inwards a complimentary marketplace economy. Influenza A virus subtype H5N1 stock telephone substitution ask non last treated every bit a house for speculation or a gambling den. It should deed every bit a house for security as well as profitable investment, for this, effective command on the working of stock telephone substitution is necessary. This volition avoid misuse of this platform for excessive speculation, scams as well as other undesirable as well as anti-social activities.
London stock exchange (LSE) is the oldest stock telephone substitution inwards the world. While Bombay stock exchange (BSE) is the oldest inwards India. Similar Stock exchanges be as well as operate inwards large bulk of countries of the world.
Definitions of Stock Exchange
According to Husband as well as Dockerary,
"Stock exchanges are privately organized markets which are used to facilitate trading inwards securities."
The Indian Securities Contracts (Regulation) Act of 1956, defines Stock Exchange as,
"An association, scheme or trunk of individuals, whether incorporated or not, established for the purpose of assisting, regulating as well as controlling trouble organisation inwards buying, selling as well as dealing inwards securities."
Features of Stock Exchange
Characteristics or features of stock telephone substitution are:-
- Market for securities : Stock telephone substitution is a market, where securities of corporate bodies, regime as well as semi-government bodies are bought as well as sold.
- Deals inwards instant paw securities : It deals amongst shares, debentures bonds as well as such securities already issued past times the companies. In curt it deals amongst existing or instant paw securities as well as thence it is called secondary market.
- Regulates merchandise inwards securities : Stock telephone substitution does non purchase or sell whatsoever securities on its ain account. It exactly provides the necessary infrastructure as well as facilities for merchandise inwards securities to its members as well as brokers who merchandise inwards securities. It regulates the merchandise activities as well as then every bit to ensure complimentary as well as fair trade
- Allows dealings exclusively inwards listed securities : In fact, stock exchanges keep an official listing of securities that could last purchased as well as sold on its floor. Securities which create non figure inwards the official listing of stock telephone substitution are called unlisted securities. Such unlisted securities cannot last traded inwards the stock exchange.
- Transactions effected exclusively through members : All the transactions inwards securities at the stock telephone substitution are effected exclusively through its authorised brokers as well as members. Outsiders or straight investors are non allowed to move into inwards the trading circles of the stock exchange. Investors convey to purchase or sell the securities at the stock telephone substitution through the authorised brokers only.
- Association of persons : Influenza A virus subtype H5N1 stock telephone substitution is an association of persons or trunk of individuals which may last registered or unregistered.
- Recognition from Central Government : Stock telephone substitution is an organised market. It requires recognition from the Central Government.
- Working every bit per rules : Buying as well as selling transactions inwards securities at the stock telephone substitution are governed past times the rules as well as regulations of stock telephone substitution every bit good every bit SEBI Guidelines. No departure from the rules as well as guidelines is allowed inwards whatsoever case.
- Specific location : Stock telephone substitution is a detail marketplace house where authorised brokers come upward together daily (i.e. on working days) on the flooring of marketplace called trading circles as well as acquit trading activities. The prices of dissimilar securities traded are shown on electronic boards. After the working hours marketplace is closed. All the working of stock exchanges is conducted as well as controlled through computers as well as electronic system.
- Financial Barometers : Stock exchanges are the fiscal barometers as well as evolution indicators of national economic scheme of the country. Industrial increase as well as stability is reflected inwards the index of stock exchange.
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