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Equity Market In India

CHAPTER I – SECURITIES MARKET IN INDIA ▪ AN OUTLINE

A. Introduction

A
fter the securities are issued in the primary market, they are traded in the secondary market by the investors. The stock exchanges along with a host of other intermediaries provide the necessary platform for trading in secondary market and also for clearing and settlement. The securities are traded, cleared and settled within the regulatory framework prescribed by the Exchanges and the SEBI. Till recently, it was mandatory for the companies to list their securities on the regional stock exchange nearest to their registered office, in order to provide an opportunity to investors to invest/trade in the securities of local companies. However, following the withdrawal of this restriction, the companies have an option to choose from any one of the existing stock exchanges in India to list their securities. Due to the earlier regulation requiring companies to get listed first at the regional stock exchange, there are in all 23 exchanges operating today in the country.

With the increased application of information technology, the trading platforms of all the stock exchanges are accessible from anywhere in the country through their trading terminals. However, the trading platform of NSE is also accessible through internet and mobile devices. In a geographically widespread country like India, this has significantly expanded the reach of the exchanges to the homes of ordinary investors and assuaged the aspirations of people to have exchanges in their vicinity.

As a result of the reforms/initiatives taken by the Government and the Regulators, the market microstructure has been refined and modernized. The investment choices for the investors have also broadened. The securities market moved from T+3 settlement periods to T+2 rolling settlement with effect from April 1, 2003. Further, straight through processing has been made mandatory for all institutional trades executed on the stock exchange....