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

1. Capital Market-B.V.Raghunandan, SVS College, Bantwal PG Department of Economics, St.Aloysius College, Mangalore

2. Capital Market: Meaning The 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- wikipedia

3. Players in the Capital Market Commercial Banks Financial Institutions Corporates Retail Investors Others: FFI,HNI,NRI, Investment Trusts, Governments Public Sector Undertakings Insurance Companies Mutual Funds Non-Banking Financial Companies Provident Funds and Pension Funds

4. Capital Market Instruments Equity Shares Preference Shares Government Bonds Corporate Bonds / Debentures Perpetual Bonds

5. Classification of Markets Primary Markets Secondary Markets

6. Secondary Market for Corporate Securities:Stock Exchange Stock Exchange is, ” an organised market for second-hand corporate and government securities”

7. A More Inclusive Definition Stock Exchange is a regulated market for second-hand corporate securities, government securities, commodities, and foreign exchange

8. Characteristics of Stock Exchange Organised Market Securities Market Secondary market Part of Capital Market Listed Securities Restricted Membership Dealing only by Members Standardised Practices Facilitator Speculation

9. Role and Functions of a Stock Exchange Public Finance Growth of Joint Stock Companies Enabling Book-Building Route Capital Mobility Foreign Funds Index Compilation Technical Analysis Economic Development Ready Market Liquidity for Securities Evaluation Price Stability Capital Formation Promoting Saving Habits Investor Protection Corporate Governance

10. Members of a Stock Exchange: Jobber & His Characteristics Dealer Specialist Stability in the Market Dealing with Brokers Jobber’s Profit Equalising Quantity Speculation Two-way Quotes Matching Demand and Supply Company Sponsorship

11. Brokers & Their Characteristics Agent Generalist Conduit between Jobber and the Public Income in the form of Commission

12. Types of Dealings Dealings in Cash Market Dealings in Futures & Options Market

13. Cash Market Rolling Settlement T+2 Settlement Trading Day Pay-In Day Pay-Out Day

14. Futures & Options Marker Meant for Risk Management Arising Out of Dealings in Cash Market Exchange Traded Big Investors and Institutions Take Positions For Protecting the Value of Holding Providing for the Risks Arising Out of Trading

15. Futures: Characteristics Standardised Features Counter-Party is the Clearing House Margin Requirement Time Spread Three Contracts for Settlement

16. Futures: Trading Mechanism Trading Strategies Uses: -Hedging -Speculation -Arbitrage Types of Futures: Stock Future and Index Future

17. Option A contract to buy or sell without an obligation European Option and American Option Call Option and Put Option Uses of Options: -Hedging -Speculation -Arbitrage

18. Advantages of Option No Big Investment No Margin as in Futures No Obligation No Marked-to-Market More Gain than Risk Premium paid alone is the Disadvantage

19. Listing of Shares: Procedure Initial Public Offer Size of Public Offer: Not Less than 25% of Issued Capital & Post Issue Paid Up Capital is not less than Rs.10 Crore Filing 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 Pattern

20. Listing Procedure ….Continued Payment of Listing Fees Signing Listing Agreement Screening the Application Listing the Shares

21. SEBI: Functions Regulation of Securities Market Registration of FIs Registration of Collective Investment Scheme Education & Training Prohibition of Insider Trading Prohibition of Unfair Trade Practices Regulation of M&A Registration of FII Registration & Regulation of SEs Conducting Research

22. Powers of SEBI Levying Fees Approving Bye-laws of SEs Ordering Amendment of Bylaws of SEBI Inspection Compulsory Listing Power of Punishment

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