Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

ORGANIZATION,MANAGEMENT AND MEMBERSHIP OF STOCK EXCHANGE

No description
by

JASMEET KAUR

on 25 August 2015

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of ORGANIZATION,MANAGEMENT AND MEMBERSHIP OF STOCK EXCHANGE

ORGANIZATION,MANAGEMENT AND MEMBERSHIP OF
STOCK EXCHANGE

ORGANIZATION OF STOCK EXCHANGE
The stock exchanges are the exclusive centres for trading of securities. Stock exchanges originated as mutual organizations, owned by its member stock brokers. There has been a recent trend for stock exchanges to demutualize.In this way the mutual organization becomes a corporation, with shares that are listed on a stock exchange.
MODES OF ORGANIZATION OF STOCK EXCHANGE
VOLUNTARY ASSOCIATION
Some of the recognized stock exchanges in India have been constituted as voluntary non-profit making associations.
Examples include Bombay Stock Exchange, Ahmedabad Stock Exchange and Indore Stock Exchange.
This form usually suits members as they can frame rules, bye-rules and regulations that can suit them.
Membership can be acquired either by inheritance or through purchase of a card of another member.
New card of membership can also be purchased directly from the stock exchange with the approval of other members.
MODE OF ORGANIZATION OF STOCK EXCHANGE
In India, stock exchanges are free to establish themselves in any form of organization, viz., of public limited company, company limited by guarantee, an association of individuals, non-profit organization, etc. The Securities Contract(regulation) Act1956 usually encourages a stock exchange to be constituted in a limited company form.

BY : JASMEET KAUR
M.COM (H) 3RD SEM

TOPICS COVERED
1 Organization of Stock Exchange
2 Management of Stock Exchange
3 Membership on the Stock Exchange
4 Regulatory Framework
5 OTCEI
6 NSE
In India, stock exchanges are free to establish themselves in any form of organization, viz., of public limited company, company limited by guarantee, an association of individuals, non-profit organization, etc. The Securities Contract(regulation) Act1956 usually encourages a stock exchange to be constituted in a limited company form.
PUBLIC LIMITED COMPANIES
Exchanges in Calcutta, Delhi, Chennai, Bangalore, Cochin, Kanpur, Ludhiana, Mangalore and Jaipur are organized as public limited companies.
In this form, the membership is acquired by purchasing the requisite qualifying shares. However, these shares are not freely transferable. The powers of the members are derived from the MOA and AOA
Liability of members is limited. Shares can be forfeited if the governing body of stock exchange cancels the membership of any person.

COMPANIES LIMITED BY GUARANTEE
Stock exchanges in Hyderabad, Magadh, Pune, Bhubaneshwar and Saurashtra are in the form of companies limited by guarantee.
In this form there is no share capital. The liability of members is limited to the extent of guaranteed amount mentioned in the MOA and AOA of the company.
The membership in this form can be acquired if the board of directors permits the same by passing a resolution in this respect. Normally each member has one vote.

ORGANIZATIONAL FORMS
GOVERNING BOARD
The governing board is vested with the over-all management of affairs of the stock exchange in India. The governing board is also known as the board of governors or board of directors or the managing committee.
This body comprises of elected and nominated members, and is headed by a president. This is the highest authority to run the affairs of the exchange and its members. Various departments implement the decisions made by the governing board.

COMPOSITION OF GOVERNING BOARD
The governing board consist of president, vice-president, executive director, elected directors, public representatives and nominees of the government. The governing board consist of the following members as stated below:
Six members elected from the members of stock exchange, one-third of the elected members shall retire at each annual general meeting and one member shall be eligible for re-election subject to a maximum of two consecutive terms.
Three public representatives to be nominated by the board and one is executive director to be appointed by the stock exchange. The public representatives are also appointed for one year and they are also eligible for re-election. These are nominated by the board from the various departments such as government department, public financial institutions, investment institutions, R.B.I., education institution, industrialists, professional bodies like ICAI ICWAI and ICSI etc. An individual member is not allowed to be on the governing body of more than one stock exchange.
Three members nominated by the government or the board in accordance with the Act, the government nominees are not subject to retirement by rotation and they can hold the office till the government desires.


MANAGEMENT OF STOCK EXCHANGE
DUTIES OF THE GOVERNING BODY
Making, amending and suspending the operation of the rules, byelaws and regulations.
Exercising complete jurisdiction over all members with the power to admit and expel members.
Warning, fining and suspending members or their partners, attorneys, authorized clerks and employees.
Regulating stock exchange trading.
Supervising, directing and controlling all matters and activities affecting stock exchange
Regional Stock Exchanges –
Owned , controlled and managed by the trading members. The governing body is vested by powers to elect office bearers, admit and expel members, manage properties and finances of the exchange, resolve disputes and conduct day to day affairs .

OTCEI, BSE and NSE - are demutualized exchanges wherein the ownership and management are separated from the right to trade on the exchange.

MEMBERSHIP
Brokers are members of the stock exchange.The trading platform of a stock exchange is accessible only to brokers.The broker enters into trades in exchanges either on his own account or on behalf of the clients.
They are given a certificate of registration by SEBI and have to comply with the prescribed code of conduct.
Brokers are important intermediaries in the stock market as they bring buyer and seller together and aid in price discovery.
BROKER: A broker is a member of a recognized stock exchange, who is permitted to do trades on the screen-based trading system of different stock exchanges. He is enrolled as a member with the concerned exchange and is registered with SEBI.

SUB BROKER : A sub broker is a person who is registered with SEBI as such and is affiliated to a member of a recognized stock exchange.

JOBBER : He is not allowed to deal with the public directly .He deals with brokers who are engaged with the investors . Thus, the securities are bought by the jobbers and sells to members who are operating on the stock exchange as broker.

REGULATORY FRAMEWORK
Securities Contracts( Regulation) Act 1956 : Provides for direct and indirect control of virtually all aspects of securities trading and the running of stock exchanges and aims to prevent undesirable transactions in securities.

Companies Act : Deals with issue, allotment and transfer of securities and various aspects relating to company management.
REGULATORY FRAMEWORK
SEBI Act 1992 : Enacted to empower SEBI with statutory powers for protecting the interests of the investors,regulating and promoting the development of the securities market.

Depository System 1996 : Establishment of depositories in securities with the objective of ensuring free tranferability of securities with speed, accuracy and Security.

FUNCTIONING OF SEBI
NSE
The NSE of India is the leading stock exchange of India, covering 370 cities and towns in thecountry. It was established in1994 as a TAX company. It was established by 21 leading financial institutions and banks like the IDBI,ICICI,IFCI,LIC,SBI,etc.

Features of NSEI
Nation wide coverage i.e., investors from all over country
Ringless i.e., it has no ring or trading floor
Screen-based trading i.e., trading in this stock exchange is done electronically.
Transparency,i.e.,the use of computer screen for trading makes the dealings in securities transparent.
Professionalization in trading, i.e., it brings professionalism in its functions.
OTCEI
The OTCEI is a national,ringless and computerized stock exchange. It was established in october,1990.it started its operation in september,1992.
Advantages of OTCEI :
It helps the investors to have easy and direct access to the stock exchange
It helps investors to get fair prices for their securities
It provides safety to the investors
Provide computerized trading system
Provide investors with a convenient,effcient and transparent mode of investment.
Even Small Companies can get their shares listed on the stock exchange.

NEWS UPDATE
Dated : 13th Aug 2015
Kaya Limited, the skin care maker from the Marico group got listed on the stock exchanges on Friday August 14 after the scheme of arrangement with Marico Kaya Enterprises.

Pursuant to the scheme of arrangement investors of Marico Kaya have been allotted 1 equity share of Rs.10 each of Kaya Limited for every 1 equity share of Rs.10 each.
REFERENCES
Bharti, Pathak V. The Indian Financial System , Pearson, 2013, Secondary Markets.
Bhalla, VK. Investment Management, S Chand, 2008,The Stock Markets In India.
https://en.wikipedia.org/wiki/Stock_exchange
www.nse-india.com
THANK YOU...
Full transcript