Page 102 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Rupesh Roshan Singh, Lovely Professional University
Unit 6: Secondary Market

Unit 6: Secondary Market Notes

CONTENTS
Objectives
Introduction

6.1 Objectives and Functions of Secondary Market
6.2 Importance of Secondary Market
6.3 Stock Market

6.3.1 Functions of a Stock Exchange
6.3.2 Advantages of Stock Exchanges
6.3.3 Speculations in Stock Exchange
6.3.4 Stock Exchanges in India
6.4 Listing of Securities

6.5 Listing Agreement
6.6 Trading System in Stock Market
6.7 Role of NSCCL

6.8 Summary
6.9 Keywords
6.10 Review Questions
6.11 Further Readings

Objectives

After studying this unit, you should be able to:
 Learn the concept of secondary market;
 Explain the objectives and functions of secondary market;

 Discuss the concept of stock exchange;
 Explain trading and settlement;
 Understand role of NSCCL.

Introduction

Secondary market is a market where the sale of previously issued securities takes place. Thus,
secondary market provides a trading platform for the already issued securities of governments,
semi-governments and firms. It is a two-way market in which the investors and stockbrokers
are just as likely to be sellers as buyers.
The redeeming features of the secondary markets are:
1. A secondary market is a market for already existing long-term securities of governments,
semi-governments and corporate enterprise. This market exists only if someone creates it.

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