INVESTING IN STOCK MARKETS-MEANING-IMPORTANT INFO ABOUT SEBI

1. INVESTING IN STOCK
MARKETS.
CHAPTER-1
INDIAN STOCK MARKET
BY VEENA N M
ASSISTANT PROFESSOR

2. INTRODUCTION OF STOCK EXCHANGE
Investment & Need of Investment
• The money you earn is partly spent and the rest saved for
meeting future expenses. Instead of keeping the savings idle
you may like to use savings in order to get return on it in the
future. This is called Investment.
• One needs to invest to
1. earn return on your idle resources
2. generate a specified sum of money for a specific goal in life
3. make a provision for an uncertain future

3. When to Start Investing?
• The sooner one starts investing the better. By investing early
you allow your investments more time to grow, increases your
income, by accumulating the principal and the interest or
dividend earned on it, year after year.
• The three golden rules for all investors are:
1. Invest early
2. Invest regularly
3. Invest for long term and not short term

4. Where to Invest
• One may invest in:
1. Physical assets like real estate, gold/jewellery, commodities
etc
2. Financial assets such as fixed deposits with banks, small
saving instruments with post offices,
insurance/provident/pension fund etc or securities market
related instruments like shares, bonds, debentures etc.

5. Short & Long Term Options for Investment
• Short Term:
1. Savings Bank Account
2. Money Market or Liquid Funds
3. Fixed Deposit with Banks
• Long Term:
1.Post Office Savings
2. Public Provident Fund
3. Bonds
4. Mutual Funds

6. Introduction to Indian Stock Markets
Indian stock markets refer to the financial market places
in India where securities such as stocks and bonds are
bought and sold. The primary stock exchanges in India
are the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE). These exchanges
provide a platform for companies to raise capital by
issuing shares to investors and for investors to trade
those shares among themselves.

7. MEANING OF SHARES
•Shares represent ownership of a company. When
an individual buys shares in your company, they
become one of its owners.

8. MEANING OF SHARES
•A share represents a unit of equity ownership in a
company. Shareholders are entitled to any profits
that the company may earn in the form of
dividends. They are also the bearers of any losses
that the company may face. In simple words, if
you are a shareholder of a company, you hold a
percentage of ownership of the issuing company
in proportion to the shares you have bought.

9. Classification Of Equity Shares based on Share
Capital
• Authorised Share Capital
• Issued Share Capital
• Subscribed Share Capital
• Paid-Up Capital

10. DIFFERENCE BETWEEN SHARES AND
STOCKS
• A stock is a financial instrument representing part
ownership in single or multiple organizations.
• A share is a single unit of stock. It's a financial
instrument representing the part ownership of a
company.

11. BONDS
• A bond is simply a loan taken out by a company.
Instead of going to a bank, the company gets the
money from investors who buy its bonds. In exchange
for the capital, the company pays an interest coupon,
which is the annual interest rate paid on a bond
expressed as a percentage of the face value.

12. History
•The history of Indian stock markets dates back to
the 19th century when the country had its first
organized stock exchange, the Bombay Stock
Exchange (BSE), established in 1875. Over the
years, the Indian stock market has experienced
significant growth and development, witnessing
various regulatory changes and technological
advancements.

13. https://youtu.be/oDkiJcRWvRQ

14. Organization
• The stock market in India is organized into two major stock
exchanges: the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE). These exchanges operate as
self-regulatory organizations and provide a platform for
trading in various financial instruments. Additionally, there
are regional stock exchanges, such as the Calcutta Stock
Exchange (CSE) and the Madras Stock Exchange (MSE),
although their significance has diminished over time.

15. Governing Body
The Securities and Exchange Board of India
(SEBI) is the primary regulatory body that
governs the Indian stock markets. SEBI was
established in 1988 and is responsible for
regulating and overseeing the functioning of the
securities market in India. It aims to protect the
interests of investors and promote the growth and
development of the securities market.

16. Functions of Stock Exchange
• Facilitating trading
• Listing of securities
• Providing market information: Stock exchanges disseminate market data, such
as prices, trading volumes, and indices, which helps investors make informed
decisions.
• Ensuring fair practices: Stock exchanges enforce rules and regulations to ensure
fair trading practices and prevent fraud and market manipulation.
• Settlement and clearing: Exchanges facilitate the settlement and clearing of
trades by providing infrastructure for the transfer of securities and funds.

17. Players in the Stock Market
• Investors: Individuals, institutions, and entities that buy and sell securities in the stock market.
• Listed Companies: Companies that have listed their securities on the stock exchanges to raise capital.
• Stockbrokers: Intermediaries who execute trades on behalf of investors and provide other related
services.
• Depositories: Entities that hold securities in electronic form and facilitate their transfer and settlement.
• Regulators: Institutions such as SEBI, which regulate and oversee the functioning of the stock market.
• Clearing Corporations: Entities responsible for clearing and settling trades, ensuring the transfer of
securities and funds between buyers and sellers.
• Research Analysts: Professionals who analyze the performance of companies and provide investment
advice.

21. SEBI
SEBI- Securities and Exchange Board of India

22. WHEN WAS SEBI WAS ESTABLISHED?
12 April 1988

23. WHAT DOES THE SEBI WORK FOR?
•The Preamble of the Securities and Exchange
Board of India Act, 1992 prescribes the basic
functions of the Securities and Exchange Board
of India (SEBI) as "to protect the interests of
investors in securities and to promote the
development of, and to regulate the securities
market and for matters connected therewith

24. Who is chairman of SEBI?
•Madhabi Puri Buch
•Madhabi Puri Buch is the chairperson of the
securities regulatory body Securities and
Exchange Board of India (SEBI). She is the
first woman chairperson to lead SEBI, and
also SEBI's first non-IAS chairperson.

25. Madhabi Puri Buch

26. WHO CAN BE MEMBER OF SEBI?
•Legal Stream: Bachelor's Degree in Law from a
recognized University / Institute. vi. Official
Language Stream: : Master's Degree in Hindi
with English as one of the subjects at Bachelor's
Degree level or Master's Degree in Sanskrit /
English / Economics / Commerce with Hindi as a
subject at Bachelor's Degree level.

27. WHERE IS TH HEADQUARTER OF
SEBI?
•SEBI has its headquarters at the business
district of Bandra Kurla Complex in
Mumbai and has Northern, Eastern,
Southern and Western Regional Offices in
New Delhi, Kolkata, Chennai, and
Ahmedabad respectively.

28. IS SEBI IS A GOVERNMENT?
•The Securities and Exchange Board of
India was constituted as a non-statutory
body on April 12, 1988 through a
resolution of the Government of India.

29. How many statutory bodies are there in
India?
•There are about 20 constitutional bodies in India,
some of which are as follows: Finance
Commission – The Indian Constitution defines a
quasi-judicial body to supervise the government's
finances.

31. Objectives:
• The Securities and Exchange Board of India (SEBI) has the
following objectives:
• Protecting the interests of investors.
• Promoting the development of the securities market.
• Regulating and overseeing all intermediaries in the securities
market.
• Preventing fraudulent and unfair trade practices.
• Promoting investor education and awareness.

32. ROLES
• SEBI plays a crucial role in the Indian stock market. Some of its key functions include:
• Regulating and supervising stock exchanges, brokers, and other intermediaries.
• Ensuring compliance with securities laws and regulations.
• Promoting fair practices and preventing market manipulation.
• Registering and regulating mutual funds, venture capital funds, and other market
participants.
• Conducting investigations and imposing penalties for violations.
• Educating investors and promoting investor protection.

33. FUNCTIONS
• SEBI has been granted various powers to fulfill its objectives, including:
• The power to grant or cancel registration of intermediaries in the securities market.
• The power to investigate and inspect the books of market participants.
• The power to issue regulations and guidelines for the securities market.
• The power to impose penalties, including fines and suspensions, for non-
compliance with regulations.
• The power to initiate legal proceedings against violators of securities laws.
• SEBI's role and powers are crucial in maintaining transparency, integrity, and
investor confidence in the Indian stock market.

42. Take away points
• INTRODUCTION
• MEANING OF SHARES ,STOCK, BOND
• MARKET
• HISTORY
• GOVERNING BODY