Page 235 - DCOM510_FINANCIAL_DERIVATIVES

Financial Derivatives

Notes National Stock Exchange (NSE): The National Stock Exchange (NSE) is stock exchange located
at Mumbai, India. It is the 11th largest stock exchanges in the world by market capitalisation and
largest in India by daily turnover and number of trades, for both equities and derivative trading.
OTC market, over-the-counter market: A stock exchange where securities transactions are made
via telephone and computer rather than on the floor of an exchange.

Primary Market: The primary market provides the channel for sale of new securities.
SEBI: The Securities and Exchange Board of India (SEBI) is the regulator for the securities market
in India. It was established on 12 April 1992 through the SEBI Act, 1992.

Secondary Market: Secondary market refers to a market where securities are traded after being
initially offered to the public in the primary market and/or listed on the Stock Exchange.
Securities Markets: Securities market is an economic institute within which take place sale and
purchase transactions of securities between subjects of economy on the base of demand and
supply.

14.6 Review Questions

1. Briefly explain the securities markets in India.
2. What is primary market and secondary market?
3. Describe the securities market regulation in India.
4. “Self-regulation is not always effective”. Elucidate.

5. What are the components of security market?
6. What are the two standing committees of HLGCM?
7. Discuss about Securities and Exchange Board of India Act, 1992.

8. What are the functions of SEBI?
9. “The number of instruments available in derivatives has increased.” Provide data.

Answers: Self Assessment

1. 24 2. Security market
3. Investors in securities 4. Asian stock market
5. Stock (secondary) 6. True

7. True 8. False
9. True 10. False
11. Depositories Act 12. SROs
13. SEBI Act 14. Investors

15. Transfer of securities

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