Providing liquidity and marketability to existing securities. Companies are able to raise funds either by issuing more shares through rights shares or bonus shares. In this essay we will discuss about stock exchange in india. They dont realize there are many kinds that accomplish different goals. The role of a stock exchange london stock exchange. You may be surprised to discover the number of stock markets blanketing the globe. The stock exchange deals with new issues and secondhand shares. The stock exchange market mainly provides liquidity by enabling firm to raise funds through the sell of securities with relative ease and speed. The main function of stock market is to provide ready market for sale and purchase of securities.
Essay on the meaning of stock exchange essay on the features of. Stock exchange provides a ready and continuous market for purchase and sale of securities. Role and function of stock markets using the exemplar of london stock exchange and frankfurt stock. Role and functions of stock exchange in india 2481 words. Role of stock exchanges in capital market of india. The main object of establishing a stock exchange is it operates as per guidelines and rules issued by securities and exchange board of india sebi. When it comes to stock exchanges, sebi has the power to regulate and approve any laws related to functions in the stock exchanges. A stock exchange can be basically defined as an organized market where stock, bond 1 and shares are issued, bought and sold through brokers and dealers 2. Stock exchanges play a crucial role in the consolidation of a national economy in general and in the development of industrial sector in particular.
Because high return projects also tend to be comparatively risky, stock. Stock exchanges are the markets for purchasing and selling securities. Bombay stock exchange bse is the oldest stock exchange in india. Stock exchange indicates about the good or bad health of economy. Every major change in country and economy is reflected in the prices of shares. This ensures that stock market will run smoothly with transparency.
Comments off on the role of stock exchange in the economic development of pakistan. Stock market is also known as stock exchange or share market in all over the world. The regulatory function of exchanges is exercised in the context of an existing legal framework. What is the role of the nairobi stock exchange and what role has it played in the economy of kenya. Most people think about the stock market when talking about financial markets. Stock exchange provides a place to the buyers and sellers of the shares and securities. The standardsetting role of stock exchanges was essentially exercised through the issuance of listing, ongoing disclosure, maintenance and delisting requirements. Functions of stock exchange main functions in the market. What is stock exchange and its function basic of stock market you are just few videos away to get expert in stock market. Functions of stock exchanges the stock market occupies an important place in the financial system of our country, which is of vital importance for the proper functioning of the corporate enterprises. As a result the stock exchange market is able to influence investment and economic growth.
Functions of the stock exchange liquidity and marketability. Role and function of stock markets publish your masters. One of the main drawing factors of the stock exchange is that it enables high liquidity. There is a strong positive relationship between stock. Especially, in developing countries like india, the stock exchanges play a cardinal role in promoting the level of capital. The regulatory function of stock exchanges was in the past mostly limited to issuing rules and clarifying aspects of existing frameworks. Providing liquidity and marketability to existing securities the basic function of a stock exchange is to provide liquidity and marketability to existing securities. Even a country not known for having a sophisticated economy, like.
A stock exchange is a reliable barometer to measure the economic condition of a country. Here is a compilation of essays on stock exchange for class 9, 10, 11 and 12. Exchanges ability to introduce and enforce regulations. Essay about role and functions of stock exchange in india. It functions as the first level regulator in the security market.
This function includes sebi has designed guidelines and code of conduct that are enforced to financial intermediaries and corporates. What is the role of a stock exchange that makes it vital to an economy. The main function of a stock exchange is to facilitate the transactions associated with both buying and selling of. The role of stock exchange in corporate governance oecd. The main functions performed by a stock exchange are as under. The stock market consists of those institutions dealing in longterm funds, and these include the stock exchange. The role of zimbabwe stock exchange as an investment. A close examination of the bullish phase at bombay stock exchange during juneoctober, 1990 period brings out some important observations. Companies are able to raise funds either by issuing more shares through rights shares. Essay on the meaning of stock exchange essay on the definition of stock exchange essay on.
Role and function of stock markets grin publishing. It is one of the important constituent of capital market. Each market relies on each other to create confidence in investors. The role of stock exchanges in fostering economic growth. It facilitates the transfer of funds between investors and. Stock exchange plays an active role in the capital formation in the country. Great strides have been made to align the market with international best practice, regulation being a key factor in investment decisions. It was established in 1875 under the name the native share and stock broker association. The role of stock exchange in the economic development of pakistan. It provides a platform where shares can be sold and bought by buyers and sellers. Pdf establishing a stock exchange in emerging economies. Stock exchange also acts as an outletcounter for the sale of listed securities. It provides ready outlet for buying and selling of securities.
Important functions of stock exchanges are briefly explained below. Stock exchanges help companies raise money to expand. Due to various rules and regulations, stock exchange functions as the custodian of funds of genuine investors. Stock exchanges may also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividends. Role and functions of stock exchange introduction a stock exchange is a form of exchange which provides services for stock brokers and traders to trade stocks, bonds, and other securities. Some of the important functions of stock exchange secondary market are listed below. As they provide a ready and continuous market for securities, the securities can be converted into cash without delay. It is a form of exchange which provides services to traders to buy or sell bonds or other securities.
The role of the stock market is to raise longterm funds for corporations primary market while providing a platform for the trading of securities secondary market. The effect of the stock exchange on economic growth. It has the powers to access the books of records and accounts for all the stock exchanges and it can arrange for periodical checks and returns into the workings of the stock exchanges. Stock markets can affect economic growth when they are internationally integrated. The securities can be sold at a moments notice and be converted to cash. Find paragraphs, long and short essays on stock exchange especially written for school and college students.
It is market where the owners may purchase or sell dispose off their securities as per certain well defined rules and regulations. Stock exchange provides a ready market for the shares, debentures, and bonds issued by various. Stock exchange provides a ready and continuous market for buying and selling securities. Some of the important functions of stock exchangesecondary market are listed below. Stock exchanges also provide facilities for issue and redemption of securities and. The shares are much more liquid, and as such they are much more attractive to invest in. The role of stock exchanges in fostering economic growth and sustainable development 6 1. After the outbreak of 1992 security scam in which a bse member, harshad mehta, was exposed manipulating the market, the government of india decided to promote establishing nse based on recommendations made by high powered study group on establishment of new stock exchanges. Regulates company management listed companies have to comply with rules and regulations of concerned stock exchange and work under the vigilance i. Stock exchanges play a vital role in the functioning of the economy by providing the backbone to a modern nations economic infrastructure. Stock market is one of the most vigorous sector which plays an important role in contributing to the wealth of an economy. At the same time, the stock exchanges are seen as very useful institutions as they provide a variety of services to the investors.
It is the most dynamic and organised component of capital market. Listed companies have to comply with rules and regulations of concerned stock exchange and work under the vigilance i. Savings so mobilized can be utilized to invest in various projects boosting industrial and economic development of a country. Pdf stock exchanges have played a great role in the investment process in. The role of stock exchanges in fostering economic growth and sustainable.
Powers and functions securities and exchange commission. The role of stock exchange in the economic development of. The organisations which are listed also have to function within the stringent rules and regulations. National stock exchange nse was established in 1992 under the authorization of idbi. A stock exchange standardizes investments, allowing people to buy or sell discrete and equal shares of ownership in various companies.
The presence of stock exchange market gives assurance to. The role, objective, structure and functions of sebi. This guarantees the security of dealing through the stock. Presentations ppt, key, pdf logging in or signing up. Role of the stock exchange could be highlighted with reference to the following functions performed by it, in the economy of a nation.
The effect of the stock exchange, page 5 closely related to liquidity is the function of risk diversification. Role of the stock exchange or functions of the stock exchange. Markets exchange a variety of products to help raise liquidity. Stock exchange is an organized market where government securities, shares, bonds and debentures of the trading units are regularly transacted. Stock exchange is a convenient meeting place for buyers and sellers of secondhand securities. The commission shall have the powers and functions provided by the securities regulation code, presidential decree no. Growth rate of stock market signify growth percentage rise in economy. The role and functions of a stock exchange authorstream. The large stock exchange market lower the cost of mobilizing savings, facilitating investment. A stock exchange, securities exchange or bourse is a facility where stockbrokers and traders can buy and sell securities, such as shares of stock and bonds and other financial instruments. Sebi also regulates the takeover of companies and conducts the inquiries. They also provide individuals the ability to invest in companies. It is a ready market for conversion of securities into cash and vice versa.
Stock exchange is a market place where stock, shares and other types of securities are bought and sold. Following are some of the essential functions of a stock exchange. But when a company wants to go in for diversification, they can issue the shares and raise more funds. These are implemented by the sebi for regulating stock exchange.
It provides ready outlet for buying and selling of. It gives the chance to investors to disinvest and reinvest. The stock exchange functions of nairobi stock exchange. A presentation report on role and functions of stock exchange introduction a stock exchange is a form of exchange which provides services for stock brokers and traders to trade stocks, bonds, and other securities. The secondhand market is always extraordinarily large than the new issue market. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of. The role and functions of a stock exchange authorstream presentation. The role of the stock exchange in the economy finance. It registers and regulates mutual funds and working of those connected with stock exchange in any manner e.
1195 1370 240 1407 926 1157 1575 1368 1021 1460 1612 1280 1288 1535 544 265 331 1073 369 26 335 1012 651 332 1250 260 527 429 1369 1325 292 622 363 1343 768 1152 539 433 438 1049 1329 209 1114 197