IN
INDIAN SECURITIES MARKET
Prepared By:
Jyotsna Gupta
What is Securities Market
Securities market is an economic institute within which takes place
the sale and purchase transactions of securities between subjects of
the economy, on the basis of demand and supply.
Also we can say that securities market is a system of
interconnection between all participants (professional and
nonprofessional) that provides effective conditions: to buy and sell
securities, and also
to attract new capital by means of issuance new security
(securitization of debt),
to transfer real asset into financial asset,
to invest money for short or long term periods with the aim of
deriving profitability.
commercial function (to derive profit from operation on this market)
price determination (demand and supply balancing, the continuous
process of prices movements guarantees to state correct price for
each security so the market corrects mispriced securities)
informative function (market provides all participants with market
information about participants and traded instruments)
regulation function (securities market creates the rules of trade,
contention regulation, priorities determination)
Recent Trends and Development
in Indian Securities Market
Well-developed securities markets are the backbone of any
financial system. Apart from providing the medium for
channelizing funds for investment purposes, they aid in pricing of
assets and serve as a barometer of the financial health of the
economy.
Over a period, the Indian securities market has undergone
remarkable changes and grown exponentially, particularly in
terms of resource mobilisation, intermediaries, the number of
listed stocks, market capitalisation, turnover and investor
population.
The Recent Trends and Development in Indian Securities Market
Since 1992 are as following:
1. Corporate Securities Market: With the objectives of improving
market efficiency, enhancing transparency, preventing unfair
trade practices and bringing the Indian market up to international
standards, a package to develop the securities market was
introduced.
The issuers complying with the eligibility criteria were allowed
freedom to issue the securities at market determined rates.
The secondary market overcame the geographical barriers by
moving to screen based trading.
Trades enjoyed counter-party guarantee. The trading cycle
shortened to a day and trades are settled within 2 working
days, while all deferral products were banned. Physical
security certificates almost disappeared. A variety of
derivative products were permitted.