modernisation of stock exchanges

Topics: Stock market, Stock exchange, Stock Pages: 27 (9811 words) Published: September 23, 2013
People buy goods and services in a place called market. However, when the people need to trade in stocks, shares, debentures etc. there is a specific place where one needs to go. One cannot deal with these items in a normal market place. Thus a place or a platform where the trading of these shares and stocks takes place is known as the STOCK MARKET. The price of these shares and stocks is not considered by monopoly; rather it is the demand and supply forces of the market that determines the prices of these shares and stocks. In earlier times, the trading, that is, the buying and selling of shares and stocks takes place at a particular place known as stock exchange. Thus, the person needs to go at that particular platform if he or she needs to trade in the shares. However with the advancement of technology, this process has almost become redundant. Now, the trading of shares and stock can take place electronically. There is a tremendous reduction of paperwork as everything has gone online. Stock Exchange (also called Stock Market or Share Market) is one important constituent of capital market. Stock Exchange is an organized market for the purchase and sale of industrial and financial security. It is convenient place where trading in securities is conducted in systematic manner i.e. as per certain rules and regulations. It performs various functions and offers useful services to investors and borrowing companies. It is an investment intermediary and facilitates economic and industrial development of a country. Stock exchange is an organized market for buying and selling corporate and other securities. Here, securities are purchased and sold out as per certain well-defined rules and regulations. It provides a convenient and secured mechanism or platform for transactions in different securities. Such securities include shares and debentures issued by public companies which are duly listed at the stock exchange, and bonds and debentures issued by government, public corporations and municipal and port trust bodies. Stock exchanges are indispensable for the smooth and orderly functioning of corporate sector in a free market economy. A stock exchange need not be treated as a place for speculation or a gambling den. It should act as a place for safe and profitable investment, for this, effective control on the working of stock exchange is necessary. This will avoid misuse of this platform for excessive speculation, scams and other undesirable and anti-social activities. London stock exchange (LSE) is the oldest stock exchange in the world. While Bombay stock exchange (BSE) is the oldest in India. Similar Stock exchanges exist and operate in large majority of countries of the world.

Pre-Independence Era
The concept of stock market place was not a very systematic system. People who needs to trade generally gathered on the streets which was popularly known as the DALAL STREET and the trading and the transaction used to take place from the Dalal street. It was in year 1875 that the first stock exchange was formulated in the name of “The Native Share and Stock Brokers Association” which is presently known as the ” Bombay stock exchange”. There after it was in year 1908, that the stock exchange in Calcutta was formulated known as  ” The Calcutta Stock Exchange Association”. This wind of stock exchange has also shown its pace in madras in 1920 resulting in the formation of the Madras Stock exchange which was started with around 100 brokers who are trading in the madras Stock exchange. It was in 1934 when the Lahore Stock exchange was established. The Uttar Pradesh stock exchange and the Nagpur stock Exchange was established in year 1940. In year 1944,the Hyderabad stock exchange was established. It was not until 1947 that any stock exchange was established in Delhi. It was in year 1947 that the “Delhi Stock and Share Broker Association Limited” and “The Delhi stocks and Shares exchange Limited” was established in Delhi....
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