Stock Exchange Functions (12th Commerce)

6. Stock Exchange –
Meaning
• The Stock Exchange is an organized second
hand market for the purchase and sale of
corporate securities.
• In this regulated market securities are bought
and sold for investment and speculation.
• The securities traded on a Stock Exchange
consist of shares, debentures, and bonds issued
by companies, corporations and Government to
the public

7. Stock Exchange – Definition
• An association or organization or
body of individuals established
for the purpose of assisting,
regulating and controlling the
business of buying, selling and
dealing in securities”
The Securities Contracts Act–1956

8. List of Indian Stock Exchanges ofList of Indian Stock Exchanges of
Stock ExchangesStock Exchanges

15. BHUVANESHWARBHUVANESHWAR
STOCK EXCHANGESTOCK EXCHANGE

19. GUWHATHI STOCKGUWHATHI STOCK
EXCHANGEEXCHANGE

22. CANARA STOCK EXCHANGECANARA STOCK EXCHANGE

26. MAGADH STOCKMAGADH STOCK
EXCHANGEEXCHANGE

29. CAPITAL STOCKCAPITAL STOCK
EXCHANGE ,EXCHANGE ,
KERALAKERALA

32. About Bombay Stock Exchange.About Bombay Stock Exchange.
►Established in 1875.Established in 1875.
►It is the oldest Stock exchange of India andIt is the oldest Stock exchange of India and
Asia.Asia.
►Head office located in Mumbai.Head office located in Mumbai.
►SENSEX shows the price list of sharesSENSEX shows the price list of shares
traded in BSE.traded in BSE.
►SENSEX stands for Sensitive Index.SENSEX stands for Sensitive Index.

35. About National Stock
Exchange
• Established in 1992.
• Head office located in Mumbai.
• NIFTY shows the prices of
shares trading in NSE.
• NIFTY stands for National Stock
Exchange Fifty.

37. Functions of Stock Exchange

38. 1.Providing Liquidity and Marketability to
Existing Securities
• The basic function of a Stock
Exchange is to provide liquidity
and marketability to existing
securities.
• It is a ready market for
conversion of securities into
cash and vice versa.
• It gives the chance to investors
to disinvest and reinvest.

39. 2.Pricing of Securities
• Pricing of securities is the main function of
a Stock Exchange.
• Stock Exchange fixes prices for shares
trading on it.
• Share prices on a Stock Exchange are
determined by the forces of demand and
supply.

41. 3.Safety of Transactions
• Existing legal framework in Stock
Exchange provides safety of transactions.
• Stock Exchange provides a safe and fair
deal in securities market.

42. 4.Contributes to Economic Growth
• Stock Exchange contributes to economic
growth.
• Through the process of disinvestment and
reinvestment, savings will turn into
investment avenues.
• This leads to capital formation and
economic growth.

43. 5.Spreading of Equity Cult
• Stock Exchange develops the habit of
equity cult among the Public.
• Stock Exchange encourages people to
save and invest in securities.

44. 6.Providing Scope for Speculation
• Stock Exchange gives scope for
speculation within the limits of the law.
• Stock Exchange encourages the
speculative activity in a restricted and
controlled manner.

45. 7.Improves the Company’s
Performance
• Stock Exchange
improves the
company’s
performance.
• Because the prices
of the best
companies will be
high in the Stock
Market.

46. 8.Helps in Raising New Capital
• The new companies and existing
companies need capital for their activities.
• The Stock Exchanges are helpful in
raising capital both by new and old
companies.

47. 9.Clearing House of Business
Information
• According to the instructions of the Stock
Exchanges, all the listed companies have
to provide financial statements, annual
reports and other reports to the exchange.
• Stock Exchange supplies this information
to all the investors and public.

48. 10. Economic Barometer
• Stock Exchange is an economic
barometer of the country. Economic
conditions of the country are known
through the stock indices.

49. Conclusion
• Stock Exchange is a part of capital
market. Stock Exchange is an economic
barometer of the country. It is a ready
market for conversion of securities into
cash and vice versa.