Gujarat BoardEnglish MediumSTD 12 CommerceOCMFINANCIAL MARKET5 Marks
Question
What are the characteristics of stock exchange?
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Answer
Characteristics of stock exchange $($Secondary market$):$
Registered corporate body: Stock exchange is a registered and established corporate body that prepares rules and regulations for the transactions of securities.
Approval of government: Stock exchange has to obtain approval of the central government as per the provision of Securities Contracts $($Regulation$)$ Act, $1956.$
Organized market: It is an organized market for dealing in existing listed securities.
Membership: Membership of stock exchange must be obtained for dealing transactions in stock exchange.
Market of securities: Stock exchange is an approved organized market for buying and selling of securities.
Listing of securities: The securities which are listed on stock exchange are transacted in stock exchange.
Management: It is administered and managed by board of directors.
Strict control over the members: The Board of Directors exercise strict control over the members through their disciplinary powers.
Organizational structure: The organizational structure of stock exchange is in the form of public company.
Regulation of stock exchange: All the stock’exchanges of India are regulated by Securities and Exchange Board of India $(SEBI)$ and Securities Contracts $($Regulation$)$ Act.
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