History of stock exchanges

What is stock exchange?

The stock exchange or market is a place where stocks, shares and other long-term commitments or investment are bought and sold.

Economic significance:

The economic significance of a stock market results from the increased marketability resulting from a stock exchange share quotation. The stock exchange is an essential institution for the existence of the capitalist system of the economy and for the smooth functioning of the corporate form of organisation.

Definition of stock exchange according the Securities Contracts (Regulation) Act of 1956 :

The Securities Contracts (Regulation) Act of 1956 defines, a stock exchange as “an association, organisation or body of individuals, whether incorporated or not, established for the purpose of assisting, regulating and controlling, business in buying, selling and dealing in securities.”

Stock Exchanges are noted as “an essential concomitant of the Capitalistic System of economy. It is indispensable for the proper functioning of corporate enterprise. It brings together large amounts of capital necessary for the economic progress of a country. It is a stronghold of capital and part of money market. It provides necessary mobility to capital and indirect the flow of capital into profitable and successful enterprises. It is the barometer of general economic progress in a country and exerts a powerful and significant influence as a stimulant of business activity.”

History of stock exchange in india:

The first organised stock exchange in India was started in 1875 at Bombay and it is stated to be the oldest in Asia. In 1894 the Ahmedabad Stock Exchange was started to facilitate dealings in the shares of textile mills there. The Calcutta stock exchange was started in 1908 to provide a market for shares of plantations and jute mills.

Then the madras stock exchange was started in 1920. At present there are 23 stock exchanges in the country, 21 of them being regional ones with allotted areas. Two others set up in the reform era, viz., the National Stock Exchange (NSE) and Over the Counter Exchange of India (OICEI), have mandate to have nation-wise trading.

Location of stock exchanges in india:

They are located at Ahmedabad, Vadodara, Bangalore, Bhubaneswar, Mumbai, Kolkata, Kochi, Coimbatore, Delhi, Guwahati, Hyderabad, Indore, Jaipur’ Kanpur, Ludhiana, Chennai Mangalore, Meerut, Patna, Pune, Rajkot.

Regulator of stock exchanges:

The Stock Exchanges are being administered by their governing boards and executive chiefs. Policies relating to their regulation and control are laid down by the Ministry of Finance. Government also Constituted Securities and Exchange Board of India (SEBI) in April 1988 for orderly development and regulation of securities industry and stock exchanges.

27 thoughts on “History of stock exchanges

  1. So well explained in very easy language even a person from non commerce background can eaisly understanding,awesome keep it up.


  2. School me history padhne ka Mann nahi karta tha but aap ka blog padh k history se utha hua vishwaas jagh Gaya.


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