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Functions of New Issue Market Contents of Offer Document Methods of Floating New Issue Procedure for Initial Public Offer (IPO) SEBI Guidelines Players in New Issue Market Book Building Process Secondary Market Operations NSE,BSE,OTCEI,SEBI
As per the Securities Contracts Regulation Act 1956, a stock exchange has been defined as follows : It is an association organization or body of individuals whether incorporated or not, established for the purpose of assisting, regulating and controlling business in buying , selling and dealing in securities
Financial System
2. It performs several economic functions and
Marketability of Securities:
They facilitate buying and selling of securities at listed prices by providing continuous Marketability to the investors and provides a ready outlet for dealing in securities.
2. Safety of Funds:
Stock exchanges have to function under strict rules and
This helps to strengthen the investors confidence and promote larger investment.
Performance of companies.
Funds tend to be attracted towards securities of Profitable companies and this facilitates the flow of capital into profitable channels.
6. Promotion of Investment:
8. Miscellaneous Services:
Formation of NSE:
The National Stock Exchange of India was set up by Government of India on the recommendation of Pherwani Committee in 1991. The NSE was formed in November 1992
Objectives: NSE has the Following Objectives: 1. To establish Nation wide trading facility for all types of securities 2. To facilitate equal access to investors across the country 3. To provide fairness, efficiency and transparency to the securities trading 4. To enable shorter settlement cycles 5. To meet International Securities Market Standard
Major Features: NSE Employs a fully automated screen based trading system, investors can trade from 400 cities. The automated trade matching system secures the best price available in the market to the investor
The OTCEI was incorporated in 1990 as a company under the companies act 1952. It became fully operational in the year September 1992
The OTCEI is recognized by the Govt. of India as a recognized Stock Exchange under Section 4 of the Securities Control Regulation Act, 1956.
Features of OTCEI:
1. Trading on the OTCEI takes place through a net work of computers of OTC dealers located at different places within the same city and even across the cities 2. These computers allow dealers to quote , query and transact through a central OTC computer, using the telecommunication links. 3. Small and Medium sized companies may be enlisted on the OTCEI
4. A company which is listed on any other recognized stock exchange in India is not permitted simultaneously for listing on OTCEI
5. The OTCEI has been promoted by all India financial institutions, namely UTI,ICICI,IDBI, LIC,SBI etc. ________________________________________