Stock exchange

A stock exchange is a form of exchange which provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends. Securities traded on a stock exchange include stock issued by companies, unit trusts, derivatives, pooled investment products and bonds. Stock exchanges often function as "continuous auction" markets, with buyers and sellers consummating transactions at a central location, such as the floor of the exchange.[

history
Securities markets took centuries to develop.[4] The idea of debt dates back to the ancient world, as evidenced for example by ancient Mesopotamian clay tablets recording interest-bearing loans. There is little consensus among scholars as to when corporate stock was first traded. Some see the key event as the Dutch East India Company's founding in 1602, while others point to earlier developments. Economist Ulrike Malmendier of the University of California at Berkeley argues that a share market existed as far back as ancient Rome.

n 1171, the authorities of the Republic of Venice, concerned about their war-depleted treasury, drew a forced loan from the citizenry. Such debt, known as prestiti, paid 5 percent interest per year and had an indefinite maturity date. Initially regarded with suspicion, it came to be seen as a valuable investment that could be bought and sold. The bond market had begun. From 1262 to 1379, Venice never missed an interest payment, solidifying the credibility of the new instruments. Other Italian city-states such as Florence and Genoa became bond issuers as well, often as a means of paying for warfare. Bonds were traded widely in Italy and beyond, a business facilitated by bankers such as the Medicis. War between Venice and Genoa resulted in suspension of prestiti interest payments in the early 1380s, and when the market was restored, it was at a lower interest rate. Venice's bonds traded at steep discounts for decades thereafter. Other blows to financial stability resulted from the Hundred Years War, which caused monarchs of France and England to default on debts to Italian banks, and the Black Death, which ravaged much of Europe. Still, the idea of debt as a tradable investment endured. London's first stockbrokers, however, were barred from the old commercial center known as the Royal Exchange, reportedly because of their rude manners. Instead, the new trade was conducted from coffee houses along Exchange Alley. By 1698, a broker named John Castaing, operating out of Jonathan's Coffee House, was posting regular lists of stock and commodity prices. Those lists mark the beginning of the London Stock Exchange.

One of history's greatest financial bubbles occurred in the next few decades. At the center of it were the South Sea Company, set up in 1711 to conduct English trade with South America, and the Mississippi Company, focused on commerce with France's Louisiana colony and touted by transplanted Scottish financier John Law, who was acting in effect as France's central banker. Investors snapped up shares in both, and whatever else was available. In 1720, at the height of the mania, there was even an offering of "a company for carrying out an undertaking of great advantage, but nobody to know what it is." By the end of that same year, share prices were collapsing, as it became clear that expectations of imminent wealth from the Americas were overblown. In London, Parliament passed the Bubble Act, which stated that only royally chartered companies could issue public shares. In Paris, Law was stripped of office and fled the country. Stock trading was more limited and subdued in subsequent decades. Yet the market survived, and by the 1790s shares were being traded in the young United States.

Role of stock exchange

Stock exchanges have multiple roles in the economy. This may include the following:[6]

Raising capital for businesses

The Stock Exchange provide companies with the facility to raise capital for expansion through selling shares to the investing public

National stock exchange

The National Stock Exchange of India Ltd. (NSE) (Marathi: Rashtriya hare Bzar)) is the countrys leading stock exchange located in the financial capital of Mumbai, India. National Stock Exchange (NSE) was established in the mid 1990s as a demutualised electronic exchange. NSE provides a modern, fully automated screen-based trading system, with over two lakh trading terminals, through which investors in every nook and corner of India can trade. NSE has played a critical role in reforming the Indian securities market and in bringing unparalleled transparency, efficiency and market integrity. NSE has a market capitalisation of more than US$989 billion and 1,635 companies listed as on July 2013. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. NSE's flagship index, the CNX NIFTY 50, is used extensively by investors in India and around the world to take exposure to the Indian equities market. NSE was started by a clutch of leading Indian financial institutions. It offers trading, clearing and settlement services in equity, debt and equity derivatives. It is India's largest exchange, globally in cash market trades, in currency trading and index options. NSE has diversified shareholding.

There are many domestic and global institutions and companies that hold stake in the exchange. Some of the domestic investors include LIC, GIC, State Bank of India and IDFC Ltd. Foreign investors include MS Strategic (Mauritius) Limited, Citigroup Strategic Holdings Mauritius Limited, Tiger Global Five Holdings and Norwest Venture Partners X FII-Mauritius, who have a stake in NSE. As on June 2013, NSE has 1673

Markets
NSE offers trading in the following segments: Equities

Equities Indices Mutual Funds Exchange Traded Funds Initial Public Offerings Security Lending and Borrowing Scheme

Derivatives

Equity Derivatives (including Global Indices like S&P 500, Dow Jones and FTSE ) Currency Derivatives Interest Rate Futures

Debt Corporate Bonds

Bombany stock exchange

Bombay Stock Exchange (BSE), (Bombay hare Bzar) is a stock exchange located on Dalal Street, Mumbai, Maharashtra, India. It is the 11th largest stock exchange in the world by market capitalisation as on 31 December 2012.[2] Established in 1875, BSE Ltd. (formerly known as Bombay Stock Exchange Ltd.), is the India's oldest Stock Exchange and one of Indias leading exchange groups. Over the past 137 years, BSE has facilitated the growth of the Indian corporate sector by providing it an efficient capital-raising platform. Popularly known as BSE, the bourse was established as "The Native Share & Stock Brokers' Association" in 1875. BSE is a corporatized and demutualised entity, with a broad shareholder-base which includes two leading global exchanges, Deutsche Bourse, Fuse and Singapore Exchange as strategic partners. BSE provides an efficient and transparent market for trading in equity, debt instruments, derivatives, mutual funds. It also has a platform for trading in equities of small-and-medium enterprises (SME). More than 5000 companies are listed

on BSE making it world's No. 1 exchange in terms of listed members. The companies listed on BSE Ltd command a total market capitalization of USD Trillion 1.32 as of January 2013. BSE Ltd is world's fifth most active exchange in terms of number of transactions handled through its electronic trading system. It is also one of the worlds leading exchanges (3rd largest in December 2012) for Index options trading (Source: World Federation of Exchanges). BSE also provides a host of other services to capital market participants including risk management, clearing, settlement, market data services and education. It has a global reach with customers around the world and a nation-wide presence. BSE systems and processes are designed to safeguard market integrity, drive the growth of the Indian capital market and stimulate innovation and competition across all market segments. BSE is the first exchange in India and second in the world to obtain an ISO 9001:2000 certification. It is also the first Exchange in the country and second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its On-Line trading System (BOLT). It operates one of the most respected capital market educational institutes in the country (the BSE Institute Ltd.). BSE also provides depository services through its Central Depository Services Ltd. (CDSL) arm. BSEs popular equity index - the S&P BSE SENSEX [Formerly SENSEX ] - is India's most widely tracked stock market benchmark index. It is traded internationally on the EUREX as well as leading exchanges of the BRCS nations (Brazil, Russia, China and South Africa). On Tuesday, 19 February 2013 BSE has entered into Strategic Partnership with S&P DOW JONES INDICES and the SENSEX has been renamed as "S&P BSE SENSEX".

Delhi Stock Exchange .

The Delhi Stock Exchange (DSE) is located in New Delhi, India. It was incorporated on June 25, 1947. The exchange is an amalgamation of Delhi Stock and Share Brokers' Association Limited and the Delhi Stocks and Shares Exchange Limited. It is India's fifth exchange. The exchange is one of the premier Stock Exchange in India. The Delhi Stock Exchange is well connected to 50 cities with terminals in North India. The exchange has over 3,000 listed companies. It has received the market regulator's permission from BSE and has become a member. Now it facilitates the DSE members to trade on the BSE terminals. The exchange is also considered the same from NSE.

Some other names of stock exchange working in india:

The Mumbai Stock Exchange The Ahmedabad Stock exchange Association Ltd. Bangalore Stock Exchange Ltd. C Stock Exchange Association Ltd. The Calcutta Stock Exchange Association Ltd. Cochin Stock Exchange Ltd. The Delhi Stock Exchange Association Ltd. The Guwahati Stock Exchange Ltd. The Hyderabad Stock Exchange Ltd. Jaipur Stock Exchange Ltd. Kanara Stock Exchange Ltd. The Ludhiana Stock Exchange Association Ltd. Madras stock Exchange Ltd. Madhya Pradesh Stock Exchange Ltd. The Magadh Stock Exchange Ltd. Mangalore Stock Exchange Ltd. Pune Stock Exchange Ltd. Saurashtra Kutch Stock Exchange Ltd. The Uttar Pradesh Stock Exchange Association Ltd. Vadodara Stock Exchange Ltd. Coimbatore Stock Exchange Meerut Stock Exchange Ltd. Over The Counter (OTC) Exchange of India The National Stock Exchange of India