Page 119 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Indian Financial System

Notes

Task Visit www.nseindia.com and make a note on the minimum services that the clearing
banks are required to provide to all clearing members of National Securities Clearing
Corporation Ltd. as also to the Clearing Corporation.

Self Assessment

Fill in the blanks:

11. The NSCCL (National Securities Clearing Corporation Limited) accepts ………………
drawn in its favour and maintains them in its custody.
12. The NSCCL (National Securities Clearing Corporation Limited) also provides clearing
and settlement services including …………………….. for the derivatives market.
13. The automated lending and borrowing mechanism of the …………………..provides a
facility to lend/borrow securities/funds at market-determined rates.
14. NSE (National Stock Exchange) is the largest stock exchange in India and the
…………………. largest in the world in terms of volume of transactions.

15. National Securities Clearing Corporation Ltd. (NSCCL) is a ……………………..of NSE
and was incorporated in August 1995.

6.8 Summary

 Stock exchange is the secondary market, which provides a place for regular sale and
purchase of different types of securities like shares, debentures, bonds and government
securities. It is an organised market where all transactions are regulated by the rules and
laws of the concerned stock exchanges.
 The functions of a stock exchanges are to provide ready and continuous market for securities,
information about prices and sales, safety to dealings and investment, helps mobilisation
of savings and capital formation. It acts as a barometer of economic and business conditions
and helps in better allocation of funds.
 Stock exchanges provide many benefits to companies, investors and the society as a whole.
But they also suffer from limitations like exclusive speculation and fluctuation in prices
due to rumours and unpredictable events.
 Along with genuine investment, at times, stock exchange transactions may be undertaken
by persons as a speculation.
 There are 23 stock exchanges in India presently, including BSE, NSE and OTCEI. Stock
Exchanges are regulated by the Securities Contracts (Regulation) Act and by SEBI. SEBI has
initiated a number of reforms in the primary and secondary market to regulate the stock
market. Documentary and procedural requirements for listing and trading have been
made stricter and foolproof to protect investors' interest.

6.9 Keywords

Budiwalas: He/she specializes in buying and selling simultaneously in different markets.
Commission Broker: The commission broker executes buying and selling on the floor of the
stock exchange.

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