Introduction to Stock exchange.
Stock exchange is an organized secondary market,where the listed securities are bought and sold by investors.The holder of securities can find immediate buyer and the proposed buyer of securities can find a seller as the stock exchange helps in determining the reasonable and fair price.
This task will be held by the members of stock exchange such as commission broker,broker,jobber etc.
Definition
Economist Pyle says that "Security exchanges are market places where securities that have been listed there on may be bought and sold either for investment or speculate"
There are mainly two stock exchanges in India they are:
1. Bombay Stock Exchange (BSE)
The Bombay Stock exchange is formerly known as "Native stock and share Brokers Association". Which was established in the year 1876.
2. National stock exchange (NSE)
The National stock exchange was Incorporated in November, 1992. It is a countrywide screen based online trading system and has international standards.
Evolution of stock exchange
The concept of stock exchange was developed in 1850, where the companies Act was passed and enabled the issue of long-term negotiable securities.The first stock exchange was set up in 1875 as the "Native share and stock brokers association" in Bombay, which is at present known as Bombay Stock Exchange(BSE) later on, stock exchanges in Ahmedabad (1894), Calcutta (1908) and Madras(1937) came into existence. At present there are 23 Stock Exchange in India.
Now, Let's take a look at the procedure for Listing of the Securities.
A company with minimum issued capital of Rs.3 crores of which at least RS.1.8 crore(60%) is offered to the public can apply for Listing in the prescribed proforma along with the following documents:
1. Copies of memorandum of Association and Articles of Association, prospectus, Director' Report, Balance sheets and agreements with underwriters and brokers etc.
2. Particulars regarding capital structure.
3. A statement showing the distribution of shares.
4. Particulars of dividends and bonus declared and or paid during the last 10 years.
5. Particulars of shares or debentures which permission to deal is applied for.
6. Brief report on company's activities since it's incorporation.
7. Listing agreement which required initial and annual listing fee
This is the procedure for Listing of Securities.
-Srikanth Mudiraj.
