National Stock Exchange

Nearly 23 years since it was brought in to cut the BSE to size, the NSE finds itself accused of some of the governance issues that had caused BSE’s fall from grace.

There were many regional exchanges at that point, but BSE was by far the biggest and most important of them all. It had the maximum number of companies listed on it, and more trading volumes. But retail investors in far-flung towns wanting to buy or sell shares on the BSE invariably ended up getting poor prices because their orders would be routed through a chain of sub-brokers to the main broker in Mumbai.

The broker lobby was opposed to computerisation as it meant transparent prices and less room for brokers to fleece their customers. Financial institutions like UTI asked for a membership on the exchange, but were denied.

When the newly established market regulator SEBI tried to get brokers to register with it for a fee, the proposal was stoutly opposed by brokers and jobbers. They refused to carry out transactions, with the result that BSE had to be shut for a week in April 1992. A hostile crowd booed the then Finance Minister Manmohan Singh, who had come down to the BSE to meet the agitating brokers, during his visit to the city.

NSE’s arrival on the scene dramatically changed the way the stock broking business was conducted. The biggest appeal of the NSE was its electronic or screen-based trading, which meant retail investors could get to know prices in real time, and were not at the mercy of their brokers. From a broker’s perspective, it was easy to get membership on the NSE by paying a refundable deposit. In contrast, the BSE operated like a closed club with a ‘card’-based membership. The card was stiffly priced, and not easy to come by.

Another distinguishing feature was that the NSE was was run by professionals and did not have even a single broker member on its board. In comparison, the BSE’s governing board was packed with brokers, and the officials in charge of operations complained of frequent interference by influential brokers. Most importantly, the NSE’s biggest advantage over the BSE was its pan-India reach, offering services across the country. The BSE had to wait for some months before it could expand beyond Bombay. That head start made quite a difference, as the NSE had already made a mark for itself in many of the smaller towns by the time the BSE came calling.

Bombay Stock Exchange

Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage, now spanning three centuries in its 133 years of existence. What is now popularly known as BSE was established as "The Native Share & Stock Brokers' Association" in 1875.

BSE is the first stock exchange in the country which obtained permanent recognition (in 1956) from the Government of India under the Securities Contracts (Regulation) Act 1956. BSE's pivotal and pre-eminent role in the development of the Indian capital market is widely recognized. It migrated from the open outcry system to an online screen-based order driven trading system in 1995. Earlier an Association Of Persons (AOP), BSE is now a corporatised and demutualised entity incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE (Corporatisation and Demutualisation) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI). With demutualisation, BSE has two of world's best exchanges, Deutsche Börse and Singapore Exchange, as its strategic partners.

Over the past 133 years, BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient access to resources. There is perhaps no major corporate in India which has not sourced BSE's services in raising resources from the capital market.

Today, BSE is the world's number 1 exchange in terms of the number of listed companies and the world's 5th in transaction numbers. The market capitalisation as on December 31, 2007 stood at USD 1.79 trillion . An investor can choose from more than 4,700 listed companies, which for easy reference, are classified into A, B, S, T and Z groups.

The BSE Index, S&P BSE SENSEX, is India's first stock market index that enjoys an iconic stature and is tracked worldwide. It is an index of 30 stocks representing 12 major sectors. The S&P BSE SENSEX is constructed on a 'free-float' methodology, and is sensitive to market sentiments and market realities. Apart from the S&P BSE SENSEX, BSE offers 21 indices, including 12 sectoral indices. BSE has entered into an index cooperation agreement with Deutsche Börse. This agreement has made S&P BSE SENSEX and other BSE indices available to investors in Europe and America. Moreover, Barclays Global Investors (BGI), the global leader in ETFs through its iShares® brand, has created the 'iShares® S&P BSE SENSEX India Tracker' which tracks the S&P BSE SENSEX. The ETF enables investors in Hong Kong to take an exposure to the Indian equity market.

The first Exchange Traded Fund (ETF) on S&P BSE SENSEX, called "SPIcE" is listed on BSE. It brings to the investors a trading tool that can be easily used for the purposes of investment, trading, hedging and arbitrage. SPIcE allows small investors to take a long-term view of the market.

BSE provides an efficient and transparent market for trading in equity, debt instruments and derivatives. It has a nation-wide reach with a presence in more than 359 cities and towns of India. BSE has always been at par with the international standards. The systems and processes are designed to safeguard market integrity and enhance transparency in operations. BSE is the first exchange in India and the 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 BSE On-line Trading System (BOLT).

BSE continues to innovate. In recent times, it has become the first national level stock exchange to launch its website in Gujarati and Hindi to reach out to a larger number of investors. It has successfully launched a reporting platform for corporate bonds in India christened the ICDM or Indian Corporate Debt Market and a unique ticker-cum-screen aptly named 'BSE Broadcast' which enables information dissemination to the common man on the street.

In 2006, BSE launched the Directors Database and ICERS (Indian Corporate Electronic Reporting System) to facilitate information flow and increase transparency in the Indian capital market. While the Directors Database provides a single-point access to information on the boards of directors of listed companies, the ICERS facilitates the corporates in sharing with BSE their corporate announcements.

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Forex Trading

The term 'Forex' stands for Foreign Exchange. Forex trading in simple terms is the trading in currencies from different countries against each other; for example the US Dollar against the Euro. Anyone who deals with a foreign country - be it a holiday there, or wanting to purchase something from that country or pay for a service, generally requires the currency of that country to do so. For example, to pay for your college fees at Dubai, I need to make the payments in UAE Dhirams as Indian Rupee .

Like the broker who changes my Indian Rupee to UAE Dhirams, I too trade on the Forex market on my own - all it required was to open an account with a Forex broker. I selected one from ForexSQ and have been trading since then. However, Forex trading is different from exchanging money at the Foreign Exchange outlets. There is much more to Forex trading than just exchanging one currency for another. The two currencies that have the highest trading volume on the Forex market are the US Dollar and th ..

Share Market Basics Tamil

A stock exchange in the platform where financial instruments like stocks and derivatives are traded. Market participants have to be registered with the stock exchange and SEBI to conduct trades. This includes companies issuing shares, brokers conducting the trades, as well as traders and investors.

First, a company gets listed in the primary market through an Initial Public Offering (IPO). In its offer document, it lists details about the company, the stocks being issued, and so on. During the listing, the stocks issued in the primary market are allotted to investors who have bid for the same.

Once listed, the stocks issued can be traded by the investors in the secondary market. This is where most of the trading happens. In this market, buyers and sellers gather to conduct transactions to make profits or cut losses.

Stock brokers and brokerage firms are entities registered with the stock exchange. They act as an intermediary between you, as an investor, and the stock exchange.

Your broker passes on your buy order to the exchange, which searches for a sell order for the same share. Once a seller and a buyer are fixed, a price is agreed finalized, upon which the exchange communicates to your broker that your order has been confirmed.

This message is then passed on to you. Even at the broker and exchange levels, there are multiple parties involved in the communication chain like brokerage order department, exchange floor traders, and so on. However, the trading process has become electronic today. This process of matching buyers and sellers is done through computers.

As a result, the process can be finished within minutes.

However, there are tens and thousands of investors. It is impossible for all to converge in one location and conduct their trades. This is where stock brokers and brokerage firms play role.

Once you place an order to buy a particular share at a said price, it is processed through your broker at the exchange. There are multiple parties involved in the process behind the scenes.

Meanwhile, the exchange also confirms the details of the buyers and the sellers to ensure the parties don’t default. It then facilitates the actual transfer of ownership of shares. This process is called settlement. Earlier, it used to take weeks to settle trades.

Now, this has been brought down to T+2 days. For example, if you conducted a trade today, you will get your shares deposited in your demat account by the day after tomorrow ( i.e. two working day).