under in this slide tell about the business environment just like stock exchg, SEBI-1,SEBI-2 etc

1. Business
Environment
MANISH SHARMA
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2. Stock Exchange
• Market where securities are bought and sold.
• Securities include shares, scrips, bonds,
debentures, government’s securities etc.
• Bombay stock exchange (BSE), National stock
exchange (NSE), Over the counter exchange of
India (OTCEI) are some examples of stock
exchange in India.
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3. Bombay Stock Exchange
• Established in 1875.
• It is oldest stock exchange in Asia.
• It has more than 5000 companies listed in it.
• SENSEX is the major index of BSE.
• Other indexes are BSE-100, BSE-200, BSE-500
and DOLLEX.
• Dollex is the dollar value of BSE-200.
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4. SENSEX
• It is a 30 share based index.
• The companies are given weights according to
their market capitalization.
• Market capitalization is equal to share price
multiplied by the number of shares.
• Base year is 1978-79, Base value is equal to
100.
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5. National Stock Exchange (NSE)
• Established in 1992 as a tax paying company,
in 1993 it got recognized as a stock exchange
and in 1994 it started its operation.
• More than 1500 companies are listed.
• It is a fully automated screen based trading
system.
• NIFTY is the index of NSE.
• NIFTY is a 50 share based index with 1995 as
its base year and 1000 as its base value.
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6. Over the counter exchange of India
• Established in 1990.
• It is a ring-less, screen-based automated
system.
• Modeled along the lines of NASDAQ.
• Convenient, transparent and efficient mode of
trading.
• It is a quote driven system where as NSE is a
order driven system.
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7. Insider trading
• When any person who has potential access to
any price sensitive information about a
company which is not available with the
general public uses that information to do
trading of share in the stock market it is called
insider trading.
• It is illegal most of the time.
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8. Options
• It gives the holder the right but not the
obligation to buy or sell a specific quantity at a
predetermined price on or before a particular
date.
• A buy option is called a call option.
• A sell option is called a put option.
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9. Short selling
• Selling a share when you do not have it and
buying it before the time of due delivery time
is called short selling.
• This is done when a investor thinks that the
market price will go down so he will sell at
high price now and buy later at low price then
deliver it to the concerned party and make
money by doing transaction in this way.
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10. Front running
• When a broker gets a bulk order and realizes
that if he puts this order in the system the
price of the share will increase, he will first
buy share on his account and then put the
bulk buying order in the system the price will
increase and the broker will make money by
doing transaction in this way. This is called
front running.
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11. Future trading
• Future trading is a contract to trade a particular
quantity and at a predetermined price agreed
today but the delivery will occur in future at
some specified date.
• Buyer is said to be long and seller is said to be
short.
• Future is a standardized contract not written by
the parties whereas forward is a nonstandardized
contract written by the parties themselves.
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12. Circuit breakers
• Circuit breakers are used to prevent the
excessive fluctuation in prices in both
directions.
• When the price either increases or decreases
by a pre determined percentages the circuit
will break and the trading will be closed for
some time then it will again resume.
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13. Badla
• Badla is a facility to carry over of the
completion of a forward contract to another
or next settlement period any number of time
on payment of the badla charges.
• It was banned by SEBI in 1993, then in 1996 it
was allowed and finally in 2001 it was banned
since the future market was started in 2000.
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14. Role of securities market
• Allocation of resources to the best companies.
• Conducive to sustained economic growth.
• Bridge between savings and investment.
• Connectivity to the rest of the world.
• Prevent capital flight to the developed
countries.
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15. Securities and exchange board of India
(SEBI)
• It was constituted in 1988 as a non-statutory
body.
• Initial capital was 7.5 crore rupee provided by
IDBI,ICICI and IFCI.
• In 1992, it was given the statutory status and
power.
• Main office is in Mumbai.
• Regional offices at Delhi, Kolkata and Chennai.
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16. Members of SEBI
• There are 6 members including the chairman.
• Chairman is nominated by the central
government.
• 2 members are nominated by central
government.
• 1 member is from RBI.
• 2 members are officers of central ministries.
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17. Objectives of SEBI
• To protect investor’s interest.
• Promotion and development of securities
market.
• To regulate the securities market.
• Any other matter connected therewith and
incidental thereto.
SEBI is quasi-legislative, quasi-executive and
quasi-judicial body.
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18. Functions of SEBI-1
• Registering and regulating the working of
brokers, sub brokers, share transfer agents,
merchant bankers, underwriter, portfolio
managers, investment advisers, bankers to an
issue, FII, depositories, credit rating agencies,
custodian of securities etc.
• Promoting and regulating self-regulatory
organizations.
• Prohibiting insider trading.
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19. Functions of SEBI-2
• Prohibiting fraudulent and unfair trade
practices.
• Promoting investor’s education and training of
intermediaries of securities market.
• To promote research and investigation.
• Regulating substantial acquisition of shares
and takeover of companies.
• Levying fees or other charge.
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