Stock Exchange of India


⇒The Securities Contracts (Regulation) Act of 1956 defines, a stock exchange as “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.”

⇒There are 24 stock exchanges in India.

  • Bombay Stock Exchange 1875 – one of the oldest in the world and oldest in Asia.
  • Madras Stock Exchange – 1920Ahmedabad Stock Exchange- 1894.
  • Calcutta Stock Exchange – 1908
  • Securities and Exchange Board of India (SEBI): April 1988

⇒There is also an Over The Counter Exchange of India (OTCEI) which allows listing of small and medium sized companies.

SEBI

Securities and Exchange Board of India.

⇒ It was given statutory status and powers through an ordinance promulgated on January 30, 1992.

⇒ It is managed by six members.

  • chairman nominated by Central Government.
  • 2 members (officers of Central Gov-ernment)
  • 1 member (from RBI)
  • 2 members nominated by Central Government.

⇒ Its office is situated in Mumbai with regional offices at Delhi, Chennai and Calcutta.

⇒ It has all the statutory powers for regulating Indian Capital Market.

⇒ Initial capital of SEBI was 7.5 crore provided by its promoters- ICICI, IDBI, IFCI.

Functions of SEBI

  • Check insider trading of securities.
  • Encourage self-regulatory organizations.
  • Eliminate malpractice of security market.
  • Safeguard interests of investors.
  • Regulate capital market with suitable measures, etc.

⇒ Bombay Stock Exchange (BSE) or Sensex includes 30 shares.

⇒ National Stock Exchange (NSE) or Nifty includes 51 shares.