Marketing of

Financial
Services- Equity
services
Abhimanyu
Pradeep
Pratip
Rahul
Thomas

Stock Exchange
Organizedand regulated financial market where
securities (bonds,notes,shares) areboughtand sold
atprices governed by theforcesofdemand and supply.

Functions
Maintains active trading
Increase liquidity and marketability of the shares

Fixation of the Prices

Ensure safe and fair trading
Rules and regulations
Transparency

Aids in financing the industry

Negotiability and transferability of the securities
helps raise funds

Functions
Dissemination of Information
Various publications

Performance indicators
Price reflect the performance of the company

Self Regulation
Monitor the integrity of the members, companies
and clients
Settlement of disputes

Bombay Stock Exchange

Established in 1875 as The Native Shares and
Stock Brokers
Asias first stock exchange
World's11th largest stock exchange
Overallmarket capitalization: $1.7 tn. (23.1.15)
More than 5500 companies are publicly listed
Index: SENSEX

Scams
A. Harshad Mehta
. The 1992 security scam and its exposure

B. Ketan Parekh
. The exposure of the dupe

SEBI - INTRODUCTION
Securities and Exchange Board of India is the
regulator for the securities market in India.
Main Function Stop Fraudulent activities in Stock
Market
Head Quarters : Mumbai
Website : www.sebi.gov.in
Chairman : U.K.Sinha

1992
Statutory
power given
by GOI
1988- Established

1995
Addition
al Power
given

Why SEBI?
India is an information weak market
Restoring investors confidence who have been
beaten by repeated scams
Protecting, developing and regulating the
Securities market
Regulates the operations of Depositories, FIIs,
Credit rating agencies and other intermediaries

Role of SEBI
To meet the needs of three groups
Issuers Place to raise finance
Investors - Information
Intermediaries - Competitive professional market

Role of SEBI in Mutual

Funds & IPO
SEBI notified regulations for the mutual funds in
1993
Issued guidelines to MFs to protect the interest of
the investors
All MFs promoted by both public and private
sectors are governed by SEBI
All the rules and regulations relating to public
issues in INDIA are governed by SEBI

Achievements
Transforming the markets from paper to electronic
Reducing the settlement date to T+2

Location
Mumbai is the business capital of India
Popularity of stocks among Gujaratis, Sindhis,
Marwaris brought volume of trade for BSE
Mumbai has the only financial hub in India
Mumbai ensured higher success of IPOs
Electronics trading reduced significance for
multiple exchanges
Companies reluctant to pay multiple listing fees if
it is not profitable

Formation of NSE
NSE was established in 1992 as the first demutualized
electronic exchange in the country
NSE was set up by a group of DFI at the behest of the
government of India to bring transparency to the Indian
capital market after 1992 scam
NSE separated ownership and management in the
exchange underSEBI's supervision
NSE ensured that anyone who was qualified, experienced
and met minimum financial requirements was allowed
totrade

Electronic Trading
NSE started electronic platform based trading
The power started to shift from brokers to
institutional investors
High tech systems of BSE and NSE allow Algo
trading and HFT
In 1994, when trading started, NSE technology
was handling 2 orders a second. This increased to
60 orders a second in 2001. Today NSE can handle
1, 60,000 orders/messages per second, with
infinite ability to scale up at short notice on
demand
Use of technology reduced brokerage cost and
exchange fee

Clearing house services

NSE created National Securities Depository
Limited(NSDL) which allows investors to securely hold
and transfer their shares and bonds electronically
It allows investors to hold andtradein as few as one
share or bond
NSE introduced settlement guarantees that could
protect investors againstbrokerdefaults
This eliminated the need for paper certificates and
greatly reduced the incidents of forged or fake
certificates and fraudulent transactions

F&O Introduction
NSE was the first to launch future and options
trading in India at 2000
BSE started F&O trading at 2008
NSE has the largest basket of stock in India that
can be traded in F&O
No regional stock market has ever had F&O
trading
Different investment products like currency
derivatives increased liquidity of NSE

1993 blast
Most of the famous stock market scams were in BSE
Governments intention was to promote NSE as the only
stock exchange
BSE was a broker run exchange
BSE had ring trading like other regional stock
exchanges
BSE was the first stock exchange in the world to be
attacked by terrorists
The event gave BSE huge publicity, exposure,
sympathy and free press

Difference Btw NSE & BSE

Number of listed
companies

5,163 (as of late

2012)

1,635 (as of July

2013)

Market capitalization of US$ 1.32 trillion (as of

listed companies
january 2013)

US$0.989 trillion (as of

july 2013)

Main Index

BSE Sensex

S&P CNX Nifty

Index value

19,900 (as of Sep

2013)

5,889 (as of Sep 2013)

Location

Mumbai, India

Mumbai, India

Claim to fame

Oldest stock exchange

in Asia.

Largest stock exchange

in India in terms of
daily turnover

Trading Platform

National Exchange for

Automated Trading
(NEAT) is a state ofthe-art client server
based application. It
has uptime record of
over 99%

BOLT PLUS with a

median speed of 6
micro seconds became
worlds fastest
exchange mechanism
in 2013

Preference of FII & DII

TRANSPARENCY
Anyone who was qualified, experienced and met minimum
financial requirements was allowed to trade
Paper-based settlement was replaced by electronic depositorybased accounts and settlement of trades was always done on
time
SECURITY OF CAPITAL
One of the most critical changes was that a robust risk
management system was set in place, so that settlement
guarantees could protect investors against broker defaults

Preference of FII & DII

FORMATION OF NSDL
NSE was also instrumental in creating the National Securities
Depository Limited (NSDL) which allows investors to securely
hold and transfer their shares and bonds electronically
It also allows investors to hold and trade in as few as one share
or bond. This not only made holding financial instruments
convenient, but more importantly eliminated the need for paper
certificates and greatly reduced the incidents of forged or fake
certificates and fraudulent transactions that had plagued the
Indian stock market
The NSDL's security, combined with the transparency, lower
transaction prices and efficiency that NSE offered, greatly
increased the attractiveness of the Indian stock market to
domestic and international investors

Demise of RSEs
May 30, 2012 Sebi circular
Earn Rs 1,000 crore as annual turnover and have a net worth
of Rs 100 crore or more by May 30, 2014, failing which the
exchanges should consider "exit" options
April 29, 2014
15 of the 20 stock exchanges in the country have opted to
exit the business altogether
Of the remaining 15 stock exchanges, 11 have already
applied to exit the business
The Madras Stock Exchange is convening meeting for
passing the resolution for an exit
Ahmedabad Stock Exchange and Delhi Stock Exchange are
also convening the meeting for an exit
The MPSE (Madhya Pradesh Stock Exchange Ltd) is also
working on an exit

SETTLEMENT GUARANTEE FUND

(SGF)
RAISING THE GUARD
Settlement guarantee fund to have a core fund. A core fund is aimed
at providing extra cushion in trade settlement
Clearing members cant take exposure against core fund
Exchanges to contribute 25% of total assets in core fund
Contribution by non-defaulting member would be capped in case of
default by other member
Clearing corporation to maintain corpus of at least Rs 100 crore as
capital adequacy. All intermediaries, including stock exchanges,
clearing corporations (CC) and brokers, will have to contribute
towards the core fund

Thank you all for the patient listening!