“Analysis of financial services provided by standard chartered securities with reference to Nagpur branch

CAPITAL MARKET

The capital market is the market for securities, where companies and governments can raise long term funds by investing in bonds, equities and mortgages, and where money is lent for periods longer than a year. A capital market involves trading in equity, credit market, insurance, foreign exchange, and hybrid and derivative instruments. It helps in enhancing capital formation in the economy.

It is classified into primary market and the secondary market:

PRIMARY MARKET:

The primary market is one that deals with the issuance of new securities. The process of selling new issues to investors is called underwriting. In the case of a new stock issue, this sale is an initial public offering (IPO).

Methods of issuing securities in the primary market are:

• Initial public offering;
• Rights issue (for existing companies);
• Preferential issue.

SECONDARY MARKET:

The secondary market, also known as the aftermarket, is one where previously issued securities i.e. the securities that have already been issued in its initial private or public offering, and financial instruments such as stock, bonds, options, and futures are bought and sold i.e. a market where investors purchase securities or assets from other investors, rather than from issuing companies themselves. BSE, NSE, NYSE, HANG SHENG, NASDAQ etc. are some of the examples of secondary market.

SECURITIES:

‘Securities’ as per the Securities Contracts Regulation Act (SCRA), 1956, includes instruments such as shares, bonds, scrip’s, stocks or other marketable securities of similar nature in or of any incorporate company or body corporate, government securities, derivatives of securities, units of collective investment scheme, interest and rights in securities, security receipt or any other instruments so declared by the Central Government.

STOCK EXCHANGE:

It is a common platform where the buyers and sell come together to transact in stock and shares. It may be a physical entity where brokers trade on a physical trading floor via an “open outcry” system or virtual environment.

There are two leading stock exchanges in India:

·         Bombay Stock Exchange (BSE)

·         National Stock Exchange (NSE)

HOW STOCK EXCHANGE WORKS:

Stock exchanges in India, under the overall supervision of the regulatory body i.e. Securities Exchange Board of India (SEBI) provide s a trading platform by BSE and NSE where the trade is done through a computerized trading i.e. internet based trading system available and removes the hassle to meet at physical location to trade.

SECURITIES EXCHANGE BOARD OF INDIA:

SEBI is the regulatory authority established under Sec.3 of SEBI Act, 1992 provided with statutory powers to:

·         Protect interest of investors in securities

·         Promote the development of securities market

·         Regulate the securities market