Stock Exchange (Share Bazaar) is one of the most vital parts of the capital market. Stock Exchange is the market from where purchase and sale of industrial and financial securities are done. It is the place where trading in securities is done through rules and regulations laid down by the SEBI (Securities and Exchange Board of India). It performs various functions and provides useful services to the investors and borrowing companies. Stock exchange is an organized market for buying and selling of securities. In the stock exchange, the sale and purchase of securities like shares and debentures, issued by public companies, and bonds and debentures, issued by government and public corporations are done. According to:
The Indian Securities Contracts (Regulation) Act of 1956, defines 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." The two most important stock exchanges in India are: The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE has been in existence since 1875. The NSE, on the other hand, was founded in 1992 and started trading in 1994. However, both exchanges follow the same trading mechanism, trading hours, settlement process, etc. India started permitting outside investments only in the 1990s. Foreign investments are classified into two categories: Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI). All investments, in which an investor takes part in the day-to-day management and operations of the company, are treated as FDI, whereas investments in shares without any control over management and operations are treated as FPI. For making portfolio investment in India, one should be registered either as a Foreign Institutional Investor (FII) or as one of the sub-accounts of one of the registered FIIs. Both registrations are granted by...
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