Question

Give explanatory notes on (a) stock exchange in India; and (b) Regulations of stock exchanges

Answer 1

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Then the Securities Contracts (Regulation) Act, 1956 was passed which corporatized and demutualised the stock exchanges. ... The Securities and Exchange Board of India (SEBI) was established as the apex body for regulation of stock exchanges in India in 1988.

Answer 2

Explanation:

SOLUTION :

Functions of stock exchange are :  

(i) Providing liquidity and marketability of existing securities :  

The most important function of stock exchange is that it provides continuous market for purchase and sale of securities. Investment in securities can be converted into cash as and when required.

 

(ii) Pricing of securities :  

The prices of shares and securities at the stock exchanges are determined on the basis of demand and supply. Stock exchange is the mechanism to determine the prices of securities. Such information helps the investor to decide to buy or sell or to hold the securities.

 

(iii) Safety of transactions.

(iv) Contribute to economic growth.

(v) Spreading equity cult.

(vi) Provide scope for speculation

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