Secondary Markets (Stock Exchanges) – Introduction

Friends, inwards our final ship service nosotros convey discussed nearly the Introduction of Indian Capital Market along alongside ane of its types Primary Capital Market. In this ship service nosotros shall hash out nearly the secondary Markets. The Secondary (or Indirect) marketplace deals inwards securities already issued or existing. It sells in addition to purchases the securities already issued. Secondary marketplace does non contribute whatever fresh majuscule directly, but it does in addition to thus yesteryear making the securities issues effect on the brain majuscule to a greater extent than liquid.

 It is a marketplace where stocks, shares in addition to other securities are sold in addition to purchased. It is scheme where listed or approved existing securities are systematically sold in addition to purchased. An organized stock telephone commutation requires an association of persons to regulate its activities, authorized stock brokers etc.  Only throgh members the marketing of securities on stock telephone commutation tin last done. They are of the next types.
  1. Commission broker
  2. Floor broker
  3. Taraniwala
  4. Jobber or dealer
  5. Badla Wala or Financier
  6. Arbitrager.
Role in addition to functions of Stock Exchanges :
The organized stock telephone commutation performs the next functions.
  1. Minimises the Danger of Speculative Dealings : An organized stock telephone commutation operating nether good defined rules in addition to regulations attention to minimize the dangers of speculative dealings in addition to toll discrimination.
  2. Ensures Liquidity of Capital : The stock exchanges render a house where shares in addition to stocks are converted into cash. The exchanges render a ready marketplace where buyers in addition to sellers are ever available in addition to those who are inwards demand of hard cash tin sell their holdings.
  3. Continuous Market for Securities : The stock exchanges render a ready marketplace for securities. The exchanges render a regular marketplace for trading securities. 
  4. Evaluation of Securities : The stock telephone commutation helps to determine the value of securities held.
  5. Mobilizing Surplus Savings : The stock exchanges render a ready marketplace for diverse securities. The investors produce non convey whatever hard inwards investing their savings yesteryear purchasing shares, bonds etc. from the exchanges.
  6. Helpful inwards Raising New Capital : The novel in addition to existing concerns demand majuscule for their activities. The shares of novel concerns are registered at stock exchanges in addition to existing companies likewise sell their shares through brokers etc. at exchanges.
  7. Safety inwards Dealings : The dealings at stock exchanges are governed yesteryear well-defined rules in addition to regulations of Securities Contract (Regulation) Act, 1956. There is no compass for manipulating transactions.l
  8. Increases Creditworthiness : Only listed securities tin last purchased in addition to sold at stock exchanges. The listing of securities gives privilege to the company. A fellowship whose shares are listed inwards a stock telephone commutation is considered to last a audio company.
  9. Platform for Public Debt : The increasing government’s role inwards economical evolution has  necessitated the raising of huge amounts for this purpose. The stock exchanges render a platform for raising world debts.
  10. Clearing House of Business Information : The companies listing securities alongside telephone commutation convey to render fiscal statements annual reports in addition to other reports to ensure maximum publicity of company operations in addition to working. The economical in addition to other data provided at stock exchanges attention companies to create upwards one’s heed their policies.
  11. Acts equally Barometer of Business : A competitive in addition to efficient stock telephone commutation acts equally a barometer of concern status inwards the country.
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