Stock Exchanges in India: Conception to Revolution Stock Exchanges in India: Conception to Revolution

Stock Exchanges have been defined under Section 2(i) of SCRA !"#$ as
%bod& of individuals 'hether incorporated or not constituted for the
purpose of assisting regulating or controlling the business of bu&ing
selling or dealing in securities%(
Stock markets are generally considered as barometer of an economy. The health of an
economy is very well indicated by the movements in the stock market, as the stock market takes
into account all the economic activities of the nation relating to the macro as well as micro
economic aspects. The macro economic fundamentals like rate of growth of economy, Inflation
rate, Foreign Exchange ate of the !ational "urrency, Food grain production# ate of Industrial
$roduction, etc. also impact the movements in the Stock %arket.
Stock Exchange is an institution that plays a vital role in the economic development of a
country. &istory is witness to the fact that in those countries where there are strong and well
regulated Stock Exchanges, the economy of those countries has grown at much faster pace as
compared to other countries, where Stock Exchanges are either not existed or defunct. Stock
Exchange is an important institution of "apital %arket and pivotal around which every activity
of the economy of the country revolves. Stock Exchanges are continuously involved in capital
generation process and ensure un'interrupted flow of capital originating from the household
investors to the industry and government houses. It also ensures that capital flows into the most
profitable channels. Stock Exchanges thus provide a mechanism for the collection of savings and
provide the same to industry. Imagine the situation where Stock Exchanges had not existed, the
savings of the households would have been kept lying in banks and at very low returns and
industry would also have been deprived of much needed finance, and as a result, the economic
growth of the country would have been seriously affected.
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The history of the stock exchanges in India can be traced back to the later half of ()
th

century. *fter the *merican "ivil +ar ,(-./'.(0 due to the share mania of the public, the
number of brokers dealing in shares increased. The brokers organi1ed an informal association in
%umbai named 2The !ativ Stock and Share 3rokers *ssociation4 in (-56. Increased activity in
trade and commerce during the First +orld +ar and Second +ar resulted in an increase in the
stock trading. *s a result of which various stock exchanges were established in different centres
like "hennai, 7elhi, !agpur, 8anpur, &yderabad and 3angalore. Securities and "ontract
egulation *ct ()6. gave powers to the central government to regulate the stock exchanges. The
S" *ct recogni1ed the stock exchanges in %umbai, 8olkata, "hennai, *hmedabad, 7elhi,
&yderabad and Indore. *t present we have 9: stock exchanges and 9( of them had hardware and
software compliant to solve ;98 problem. Since, only two stock exchanges are functioning
nationwide i.e. 3SE and !SE and all other egional stock exchanges are working as subsidiary
of these two stock exchanges.
Till recent past, floor trading took place in all the stock exchanges. In the floor trading
system, the trade takes place through open outcry system during the official trading hours.
Trading posts are assigned for different securities where buy and sell activities of securities took
place. This system needs a face to face contact among the traders and restricts the trading
volume. The speed of the new information reflected on the prices was rather slow. The deals
were also not transparent and the system favoured the brokers rather than the investors.
The setting up of !SE and <T"EI with the Screen 3ased facility resulted in more and
more stock exchanges turning towards the computer based trading. 3ombay Stock exchange
introduced the screen based trading system in ())6, which is known as 3<=T ,3ombay <nline
Trading System0, and !ational Stock exchange introduced this system in %ay ())5 which is
known as !E*T ,!ational Exchange of *utomated Trading0.
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In the pre'independence era Stock Exchanges in India were not regulated by any >overn'
ment agency. !eed for the regulation of Stock Exchanges in India was felt when *tlay
"ommittee in ()9( recommended the regulation of 3SE, and conse?uently, 3SE Securities
"ontract control was passed in ()66. =ater on S"* was passed in ()6. by an *ct of
$arliament. Earlier %inistry of Finance was controlling the Stock Exchanges. In ())9, SE3I *ct
was passed and the entire control of Securities market has since been vested with SE3I under the
legislative powers of S"*, ()6. and S" ,ules0, ()65.
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The Stock Exchanges are governed by a 3oard of 7irectors or "ouncil of %anagement
which is comprised of elected brokers, SE3I !ominees and public representatives. The 3oard
has powers to make, and operate rules, bye'laws and regulations and has @urisdiction over all its
members. The total strength of number of 7irectors in an exchange is generally 6/A elected
directors among 3roker "ommunity, 6/A directors from $ublic named as $ublic epresentative
7irectors and oneB two SE3I nominees and one Executive 7irectorB%anaging 7irectorB "hief
Executive <fficer of the Exchange.
5E56ERS:
3usiness at a stock exchange can be transacted by members of the stock exchange only.
%embership is restricted to persons who are financially sound and possess ade?uate experience.
The eligibility criteria is defined in the S",0*, ()6. and its rules. Further, members of the
recogni1ed Stock Exchanges are sub@ect to authori1ation and registration with SE3I, and have to
pay certain fees to Stock Exchange and SE3I. * member can transact on his behalf or on behalf
of his client. * non'member can deal in shares only through its members. The relationship
between client and member is fiduciary in nature. %ember acts as a custodian and handles
securities of his client as per his instructions.
C+R7+RA*ISA*I+0 8 2E53*3A4ISA*I+0 +- S*+C. E/C)A01ES: C+R7+RA*ISA*I+0 8 2E53*3A4ISA*I+0 +- S*+C. E/C)A01ES:
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The accepted norms of behaviour of members and their self imposed rules for trading
governed the stock markets of the country. %embers were responsible for their conduct with one
another, with users of the Exchange and other stakeholders. +ith securities law in place, the
concept of self'regulation under regulatory oversight emerged. 3ut conflict of interest between
members being owners of the Exchanges and also in the management of the Stock Exchanges
persisted, which led to the concept of demutualisation. SE3I set up a "ommittee under the
"hairmanship of Custice %.&. 8ania to study and suggest about "orporatisation and
7emutualisation of Indian Stock Exchanges in 9//9, which provided the framework of
"orporatisation D 7emutualisation in Indian Stock Exchanges
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%utualised Stock Exchanges had their own inherent disadvantages. Following are the
limitations of mutual Stock Exchanges, which led to demutuali1ationE
=ack of ade?uate funds
=ack of professional management
=ack of transparency
=ack of public confidence
&istorically, brokers owned, controlled and managed the Stock Exchanges. In case of disputes,
the integrity of the Exchange suffered. Therefore regulators focused on reducing the dominance
of brokers in the management of Stock Exchanges. They advised them to reconstitute their
>overning 3oards to provide for at least 6/A non'broker representation. &owever, this did not
materially alter the situation. In face of extreme volatility in the securities market in 9///, the
>overnment proposed to "orporatise and 7emutualise the Stock Exchanges by which
ownership, management and trading membership would be segregated from one another.
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The concept of 7emutualisation broadly means the separation of ownership from the
management so that, conflict of interest could be avoided and the Exchanges could behave as a
Ffor profit organi1ationF. F7eF means no and FmutualisationF means association. Therefore
demutuali1ation means no to the association. In other words, segregation of three important
functions of Stock Ex' changes, i.e., Trading, <wnership D %anagement.
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SE3I in order to corporatise D demutualise the Stock Exchanges constituted %.&. 8ania
committee to review the present structure of Indian Stock Exchanges and suggested uniform
model of a "orporatised and 7emutualised Stock Exchange. The 8ania committee submitted its
report in 9//:. SE3I in CanF9//: advised all the Exchanges to frame a scheme for
"orporatisation D 7emutuali1ation on the lines of the recommendation of %.&. 8ania
committee before Culy :/, 9//:, for its approval. *ll the Stock Exchanges prepared the
respective schemes of corporatisation D demutuali1ation and sent the same to SE3I for its
approval in SepF 9//:.
*s the >overnment of India had already announced its intention to "orporatise D 7emutualise
the Exchanges in its budgets in 9//9 D 9//6, it promulgated an ordinance named as Securities
=aw ,*mendment0 <rdinance 9//G, thereby amending the Securities "ontract egulation *ct,
()6. D 7epositories *ct, ()).. The ordinance included various provisions to give a head start to
the process of "orporatisation D 7emutuali1ation of Stock Exchanges. SE3I approved the
7emutualisation Scheme of 3SE in %ayF9//6 and advised the other Stock Exchanges to submit
their schemes of "orporatisation D 7emutualisation in accordance with the approved scheme of
3SE. The other regional Stock Exchanges also submitted their respective schemes of
7emutualisation to SE3I in Culy'*ugust 9//6. SE3I has approved the aforesaid schemes.
$ursuant to SE3IFs approval, these Exchanges are converted into FFor $rofitF entities and will be
liable to payment of Income Tax as per Income Tax *ct, ().(.
6+56A, S*+C. E/C)A01E 6+56A, S*+C. E/C)A01E
3ombay Stock Exchange is the oldest stock exchange in *sia with a rich heritage, now spanning
three centuries in its (:: years of existence. +hat is now popularly known as 3SE was
established as 2The !ative Share D Stock 3rokersH *ssociation4 in (-56. It is located at 7alal
Street, %umbai, India. 3SE is the first stock exchange in the country which obtained permanent
recognition ,in ()6.0 from the >overnment of India under
the Securities "ontracts ,egulation0 *ct ()6.. 3SEHs
pivotal and pre'eminent role in the development of the
Indian capital market is widely recogni1ed. It migrated
from the open outcry system to an online screen'based
order driven trading system in ())6. Earlier an *ssociation
of $ersons ,*<$0, 3SE is now a corporatised and
demutualised entity incorporated under the provisions of
the "ompanies *ct, ()6., pursuant to the 3SE
,"orporatisation and 7emutualisation0 Scheme, 9//6
notified by the Securities and Exchange 3oard of India
,SE3I0. +ith demutualisation, 3SE has two of worldHs
best exchanges, 7eutsche 3Irse and Singapore Exchange,
as its strategic partners.
%ore than ./// Indian companies list on the stock exchange, and it has a significant trading
volume. The 3SE SE!SEJ ,SE!SITIKIT; I!7EJ0, also called the 23SE':/4, is a widely used
market index in *sia. Though many other exchanges exist, 3SE and !ational Stock Exchange of
India account for most of the trading in shares in India.
<ver the past (:: years, 3SE has facilitated the growth of the Indian corporate sector by
providing it with an efficient access to resources. There is perhaps no ma@or corporate in India
which has not sourced 3SEHs services in raising resources from the capital market. Today, 3SE is
the worldHs number one exchange in terms of the number of listed companies and the worldHs 6th
in transaction numbers. The market capitali1ation as on 7ecember :(, 9//5 stood at LS7 (.5)
trillion . *n investor can choose from more than G,5// listed companies, which for easy
reference, are classified into *, 3, S, T and M groups.
The 3SE Index, SE!SEJ, is IndiaHs first stock market index that en@oys an iconic stature , and is
tracked worldwide. It is an index of :/ stocks representing (9 ma@or sectors. The SE!SEJ is
constructed on a Nfree'floatH methodology, and is sensitive to market sentiments and market
realities. *part from the SE!SEJ, 3SE offers 9( indices, including (9 sectoral indices. 3SE has
entered into an index cooperation agreement with 7eutsche 3Irse. This agreement has made
SE!SEJ and other 3SE indices available to investors in Europe and *merica. %oreover,
3arclays >lobal Investors ,3>I0, the global leader in ETFs through its iShares brand, has created
the NiShares 3SE SE!SEJ India TrackerH which tracks the SE!SEJ. The ETF enables investors
in &ong 8ong to take an exposure to the Indian e?uity market.
6SE 5ilestones
The first Exchange Traded Fund ,ETF0 on SE!SEJ, called 2S$I"E4 is
listed on 3SE. It brings to the investors a trading tool that can be easily
used for the purposes of investment, trading, hedging and arbitrage.
S$I"E allows small investors to take a long'term view of the market.
3SE provides an efficient and transparent market for trading in e?uity,
debt instruments and derivatives. It has a nation'wide reach with a
presence in more than :6) cities and towns of India. 3SE has always
been at par with the international standards. The systems and processes
are designed to safeguard market integrity and enhance transparency in
operations. 3SE is the first exchange in India and the second in the world
to obtain an IS< )//(E9/// certifications. It is also the first exchange in
the country and second in the world to receive Information Security
%anagement System Standard 3S 55))'9'9//9 certification for its 3SE
<n'line Trading System ,3<=T0.
3SE continues to innovate. In recent times, it has become the first
national level stock exchange to launch its website in >u@arati and &indi
to reach out to a larger number of investors. It has successfully launched
a reporting platform for corporate bonds in India christened the I"7% or
Indian "orporate 7ebt %arket and a uni?ue ticker'cum'screen aptly
named N3SE 3roadcastH which enables information dissemination to the
common man on the street.
In 9//., 3SE launched the 7irectors 7atabase and I"ES ,Indian
"orporate Electronic eporting System0 to facilitate information flow
and increase transparency in the Indian capital market. +hile the
7irectors 7atabase provides a single'point access to information on the
boards of directors of listed companies, the I"ES facilitates the
corporates in sharing with 3SE their corporate announcements.
Services +ffered b& 6SE:
3SE also has a wide range of services to empower investors and facilitate smooth transactionsE
Investor Services: The 7epartment of Investor Services redresses grievances of
investors. 3SE was the first exchange in the country to provide an amount of s.( million
towards the investor protection fund# it is an amount higher than that of any exchange in
the country. 3SE launched a nationwide investor awareness programme' NSafe Investing
in the Stock %arketH under which 9.G programmes were held in more than 9// cities.
*he 6SE +n:line *rading (6+4*): 3SE <n'line Trading ,3<=T0 facilitates on'line
screen based trading in securities. 3<=T is currently operating in 96,/// Trader
+orkstations located across over :6) cities in India.
6SE;E6/(co<: In February 9//(, 3SE introduced the worldHs first centrali1ed
exchange'based Internet trading system, 3SE+E3J.com. This initiative enables
investors anywhere in the world to trade on the 3SE platform.
Surveillance: 3SEHs <n'=ine Surveillance System ,3<SS0 monitors on a real'time basis
the price movements, volume positions and membersH positions and real'time
measurement of default risk, market reconstruction and generation of cross market alerts.
6SE *raining Institute: 3TI imparts capital market training and certification, in
collaboration with reputed management institutes and universities. It offers over G/
courses on various aspects of the capital market and financial sector. %ore than 9/,///
people have attended the 3TI programmes.
)ours of +peration
/-E// O /)E// 3eginning of the 7ay Session
/)E// O /)E:/ =ogin Session
/)E66 O (6E:/ Trading Session
(6E:/ O (6E6/ $osition Transfer Session
(6E6/ O (.E/6 "losing Session
(.E/6 O (.E:6 <ption Exercise Session
(.E:6 O (.E6/ %argin Session
(.E6/ O (5E:6 Puery Session
(5E:6 '''''''' End of 7ay Session
A'ards
The +orld "ouncil of "orporate >overnance has awarded the >olden $eacock >lobal
"S *ward for 3SEHs initiatives in "orporate Social esponsibility ,"S0.
The *nnual eports and *ccounts of 3SE for the year ended %arch :(, 9//. and %arch
:( 9//5 have been awarded the I"*I awards for excellence in financial reporting.
The &uman esource %anagement at 3SE has won the *sia O $acific &% awards for
its efforts in employer branding through talent management at work, health management
at work and excellence in & through technology
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The !ational Stock Exchange of India =imited ,!SE0, is the largest stock exchange in India in
terms of daily turnover and number of trades, for both e?uities and derivative trading.
Though a number of other exchanges exist, !SE and the
3ombay Stock Exchange are the two most significant
stock exchanges in India, and between them are
responsible for the vast ma@ority of share transactions.
The !SEHs key index is the SD$ "!J !ifty, known as
the !ifty, an index of fifty ma@or stocks weighted by
market capitalisation. !SE is mutually'owned by a set
of leading financial institutions, banks, insurance
companies and other financial intermediaries in India
but its ownership and management operate as separate
entities. There are at least 9 foreign investors !;SE
Euronext and >oldman Sachs who have taken a stake in
the !SE. *s of 9//., the !SE KS*T terminals, 95)) in
total, cover more than (6// cities across India. In <ctober 9//5, the e?uity market capitali1ation
of the companies listed on the !SE was LSQ (.G. trillion, making it the second largest stock
exchange in South *sia. !SE is the third largest Stock Exchange in the world in terms of the
number of trades in e?uities. It is the second fastest growing stock exchange in the world with a
recorded growth of (...A.
!SE has played a catalytic role in reforming the Indian securities market in terms of
microstructure, market practices and trading volumes. The market today uses state'of'art
information technology to provide an efficient and transparent trading, clearing and settlement
mechanism, and has witnessed several innovations in products D services vi1. demutualisation of
stock exchange governance, screen based trading, compression of settlement cycles,
dematerialisation and electronic transfer of securities, securities lending and borrowing,
professionalisation of trading members, fine'tuned risk management systems, emergence of
clearing corporations to assume counterparty risks, market of debt and derivative instruments
and intensive use of information technology.
In recognition of the fact that technology will continue to redefine the shape of the securities
industry, !SE stresses on innovation and sustained investment in technology to remain ahead of
competition. !SEHs IT set'up is the largest by any company in India. It uses satellite
communication technology to energise participation from around 9// cities spread all over the
country. In the recent past, capacity enhancement measures were taken up in regard to the trading
systems so as to effectively meet the re?uirements of increased users and associated trading
loads. +ith upgradation of trading hardware, !SE today can handle up to (6 million trades per
day in "apital %arket segment. In order to capitalise on in'house expertise in technology, !SE
set up a separate company, !SE Technology Services =td. which is expected to provide a
platform for taking up all IT related assignments of !SE.
!E*T is a state'of'the'art client server based application. *t the server end, all trading
information is stored in an in'memory database to achieve minimum response time and
maximum system availability for users. The trading server software runs on a fault tolerant
ST*TLS main frame computer while the client software runs under +indows on $"s.
!SE is one of the largest interactive KS*T based stock exchanges in the world. Today it supports
more than 9/// KS*Ts and :/// leased lines across the country. The !SE' network is the largest
private wide area network in the country and the first extended "' 3and KS*T network in the
world. "urrently more than )/// users are trading on the real time'online !SE application.
There are over (6 large computer systems which include non'stop fault'tolerant computers and
high end L!IJ servers, operational under one roof to support the !SE applications. This
coupled with the nationwide KS*T network makes !SE the countryHs largest Information
Technology user.
+rigins
The !ational Stock Exchange of India was promoted by leading Financial institutions at the
behest of the >overnment of India, and was incorporated in !ovember ())9 as a tax'paying
company. In *pril ()):, it was recogni1ed as a stock exchange under the Securities "ontracts
,egulation0 *ct, ()6.. !SE commenced operations in the +holesale 7ebt %arket ,+7%0
segment in Cune ())G. The "apital %arket ,E?uities0 segment of the !SE commenced operations
in !ovember ())G, while operations in the 7erivatives segment commenced in Cune 9///.
0SE -a<il&
!SE has remained in the forefront of moderni1ation of IndiaHs capital and financial markets, and
its pioneering efforts includeE
3eing the first national, anonymous, electronic limit order book ,=<30 exchange to trade
securities in India. Since the success of the !SE, existent market and new market
structures have followed the 2!SE4 model.
Setting up the first clearing corporation 2!ational Securities "learing "orporation =td.4
in India. !S""= was a landmark in providing innovation on all spot e?uity market ,and
later, derivatives market0 trades in India.
"o'promoting and setting up of !ational Securities 7epository =imited, first depository
in India.
Setting up of SD$ "!J !ifty.
!SE pioneered commencement of Internet Trading in February 9///, which led to the
wide populari1ation of the !SE in the broker community.
3eing the first exchange that, in ())., proposed exchange traded derivatives, particularly
on an e?uity index, in India. *fter four years of policy and regulatory debate and
formulation, the !SE was permitted to start trading e?uity derivatives
3eing the first and the only exchange to trade ><=7 ETFs ,exchange traded funds0 in
India.
!SE has also launched the !SE'"!3"'TK(- media centre in association with "!3"'
TK(-.
5arkets
"urrently, !SE has the following ma@or segments of the capital marketE
E?uity
Futures and <ptions
etail 7ebt %arket
+holesale 7ebt %arket
"urrency futures
)ours of +peration
!SEHs normal trading sessions are from /)E//am to /:E:/pm on all days of the week except
Saturdays, Sundays and holidays declared by the Exchange in advance.
Indices
!SE also set up as index services firm known as India Index Services D $roducts =imited ,IIS=0
and has launched several stock indices, includingE
SD$ "!J !ifty
"!J !ifty Cunior
"!J (// ,R SD$ "!J !ifty S "!J !ifty Cunior0
SD$ "!J 6// ,R "!J (// S G// ma@or players across 59 industries0
"!J %idcap ,introduced on (- Culy 9//6 replacing "!J %idcap 9//0
Certifications
!SE also conducts online examination and awards certification, under its programmes of !SEHs
"ertification in Financial %arkets ,!"F%0. "urrently, certifications are available in () modules,
covering different sectors of financial and capital markets. 3ranches of the !SE are located
throughout India.
0SE 5ilestones
!ovember ())9 Incorporation
*pril ()): ecognition as a stock exchange
%ay ()): Formulation of business plan
Cune ())G +holesale 7ebt %arket segment goes live
!ovember ())G "apital %arket ,E?uities0 segment goes live
%arch ())6 Establishment of Investor >rievance "ell
*pril ())6 Establishment of !S""=, the first "learing "orporation
Cune ())6 Introduction of centralised insurance cover for all trading
members
Culy ())6 Establishment of Investor $rotection Fund
<ctober ())6 3ecame largest stock exchange in the country
*pril ()). "ommencement of clearing and settlement by !S""=
*pril ()). =aunch of SD$ "!J !ifty
Cune ()). Establishment of Settlement >uarantee Fund
!ovember ()). Setting up of !ational Securities 7epository =imited,
first depository in India, co'promoted by !SE
!ovember ()). 3est IT Lsage award by "omputer Society of India
7ecember ()). "ommencement of tradingBsettlement in dematerialised
securities
7ecember ()). 7ata?uest award for Top IT Lser
7ecember ()). =aunch of "!J !ifty Cunior
February ())5 egional clearing facility goes live
!ovember ())5 3est IT Lsage award by "omputer Society of India
%ay ())- $romotion of @oint venture, India Index Services D $roducts
=imited ,IIS=0
%ay ())- =aunch of !SEHs +eb'siteE www.nse.co.in
Culy ())- =aunch of !SEHs "ertification $rogramme in Financial
%arket
*ugust ())- ";3E "<$<*TE <F T&E ;E* ())- award
February ())) =aunch of *utomated =ending and 3orrowing
%echanism
*pril ())) "&I$ +eb *ward by "&I$ maga1ine
<ctober ())) Setting up of !SE.IT
Canuary 9/// =aunch of !SE esearch Initiative
February 9/// "ommencement of Internet Trading
Cune 9/// "ommencement of 7erivatives Trading ,Index Futures0
September 9/// =aunch of NMero "oupon ;ield "urveH
!ovember 9/// =aunch of 3roker $la1a by 7otex International, a @oint
venture between !SE.IT =td. and i'flex Solutions =td.
7ecember 9/// "ommencement of +*$ trading
Cune 9//( "ommencement of trading in Index <ptions
Culy 9//( "ommencement of trading in <ptions on Individual Securities
!ovember 9//( "ommencement of trading in Futures on Individual
Securities
7ecember 9//( =aunch of !SE Ka for >overnment Securities
Canuary 9//9 =aunch of Exchange Traded Funds ,ETFs0
%ay 9//9 !SE wins the +harton'Infosys 3usiness Transformation
*ward in the <rgani1ation'wide Transformation category
<ctober 9//9 =aunch of !SE >overnment Securities Index
Canuary 9//: "ommencement of trading in etail 7ebt %arket
Cune 9//: =aunch of Interest ate Futures
*ugust 9//: =aunch of Futures D options in "!JIT Index
Cune 9//G =aunch of ST$ Interoperability
*ugust 9//G =aunch of !SEHs electronic interface for listed companies
%arch 9//6 NIndia Innovation *wardH by E%$I 3usiness School, !ew
7elhi
Cune 9//6 =aunch of Futures D options in 3*!8 !ifty Index
7ecember 9//. N7erivative Exchange of the ;earH, by *sia isk
maga1ine
Canuary 9//5 =aunch of !SE O "!3" TK (- media centre
%arch 9//5 !SE, "ISI= announce launch of India3ond+atch.com
Cune 9//5 !SE launches derivatives on !ifty Cunior D "!J (//
<ctober 9//5 !SE launches derivatives on !ifty %idcap 6/
Canuary 9//- Introduction of %ini !ifty derivative contracts on (st
Canuary 9//-
%arch 9//- Introduction of long term option contracts on SD$ "!J
!ifty Index
*pril 9//- =aunch of India KIJ
*pril 9//- =aunch of Securities =ending D 3orrowing Scheme
*ugust 9//- =aunch of "urrency 7erivatives
KIS&*= 8L%*
*ssistant $rofessor in "ommerce
7ev Sama@ "ollege for +omen
Fero1epur "ity',$un@ab0
%obile !o.'))(G/9:::9
Email E vkf1rThotmail.com
Abstract
Stock Exchange is an institution that plays a vital role in the economic development of a country.
&istory is witness to the fact that in those countries where there are strong and well regulated
Stock Exchanges, the economy of those countries has grown at much faster pace as compared to
other countries, where Stock Exchanges are either not existed or defunct. Stock Exchange is an
important institution of "apital %arket and pivotal around which every activity of the economy
of the country revolves. Stock Exchanges are continuously involved in capital generation process
and ensure un'interrupted flow of capital originating from the household investors to the industry
and government houses. It also ensures that capital flows into the most profitable channels. Stock
Exchanges thus provide a mechanism for the collection of savings and provide the same to
industry