FINANCIAL MARKET

A financial market is a market in which people and entities can trade financial securities, commodities, Securities include stocks and bonds, and commodities include precious metals or agricultural goods.

and other fungible items of value at low transaction costs and at prices that reflect supply and demand. There are both general markets (where many commodities are traded) and specialized markets (where

only one commodity is traded). Markets work by placing many interested buyers and sellers, including other. An economy which relies primarily on interactions between buyers and sellers to allocate economy such as a gift economy.

households, firms, and government agencies, in one "place", thus making it easier for them to find each resources is known as a market economy in contrast either to a command economy or to a non-market

In finance, financial markets facilitate:

The raising of capital (in the capital markets) Price discovery

The transfer of risk (in the derivatives markets) Global transactions with integration of financial markets The transfer of liquidity (in the money markets) International trade (in the currency markets) Money market

The Indian money market is "a market for short-term & Long term funds with maturity ranging from overnight to one year and includes financial instruments that are deemed to be close substitutes of money."[1] It is diversified and has evolved through many stages, from the conventional platform of treasury bills and call money to commercial paper, certificates of deposit, repos, FRAs and IRS more recently.

The Indian money market consists of diverse sub-markets, each dealing in a particular type of shortterm credit. The money market fulfills the borrowing and investment requirements of providers and users of short-term funds, and balances the demand for and supply of short-term funds by providing an equilibrium mechanism. It also serves as a focal point for the Central Bank's intervention in the market. Capital market

A capital market is a market for securities (debt or equity), where business enterprises and

Government can raise long-term funds. It is defined as a market in which money is provided for

periods longer than a year, as the raising of short-term funds takes place on other markets (e.g., the

money market). The capital market is characterized by a large variety of financial instruments: equity and preference shares, fully convertible debentures (FCDs), non-convertible debentures (NCDs) and partly convertible debentures (PCDs) currently dominate the capital market, however new shares, zero-coupon bonds, secured premium notes, etc.

instruments are being introduced such as debentures bundled with warrants, participating preference

Primary market

The primary market is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. This is typically done through a syndicate [disambiguation needed] of securities

dealers. The process of selling new issues to investors is called underwriting. In the case of a new stock the security offering, though it can be found in the prospectus. Primary markets create long term instruments through which corporate entities borrow from capital market. Secondary market

issue, this sale is an initial public offering (IPO). Dealers earn a commission that is built into the price of

The secondary market, also called aftermarket, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold.[1] Another such as Fannie Mae and Freddie Mac. frequent usage of "secondary market" is to refer to loans which are sold by a mortgage bank to investors The term "secondary market" is also used to refer to the market for any used goods or assets, or an alternative use for an existing product or asset where the customer base is the second market (for "third" market has developed for use in ethanol production). example, corn has been traditionally used primarily for food production and feedstock, but a "second" or

SEBI

The Securities and Exchange Board of India is the regulator for the securities market in India. It was Parliament. SEBI is headquartered in the business district of Bandra-Kurla complex in Mumbai. SEBI has to be responsive to the needs of three groups, which constitute the market: the issuers of securities the investors

formed officially by the Government of India in 1992 with SEBI Act 1992 being passed by the Indian

the market intermediaries. SEBI Committees: Technical Advisory Committee

Committee for review of structure of market infrastructure institutions Takeover Regulations Advisory Committee Primary Market Advisory Committee (PMAC) Mutual Fund Advisory Committee.

Secondary Market Advisory Committee (SMAC)

BSE

The Bombay Stock Exchange (BSE) (Bombay Share Bazaar) (formerly, The Stock Exchange, Bombay) is a stock exchange located on Dalal Street, Mumbai and is the oldest stock exchange in Asia. The equity market capitalization of the companies listed on the BSE was US$1 trillion as of December 2011, largest number of listed companies in the world.[2]

making it the 6th largest stock exchange in Asia and the 14th largest in the world.[1] The BSE has the As of March 2012, there are over 5,133 listed Indian companies and over 8,196 scrips on the stock

exchange,[3] the Bombay Stock Exchange has a significant trading volume. The BSE SENSEX, also called "BSE 30", is a widely used market index in India and Asia. Though many other exchanges exist, BSE and have similar total market capitalization (about USD 1.6 trillion), share volume in NSE is typically two times that of BSE. NSE the National Stock Exchange of India account for the majority of the equity trading in India. While both

The National Stock Exchange (NSE), located in Bombay, is India's first debt market. It was set up in 1993 to encourage stock exchange reform through system modernization and competition. It opened for trading in mid-1994. It was recently accorded recognition as a stock exchange by the Department of public sector companies.

Company Affairs. The instruments traded are, treasury bills, government security and bonds issued by The number of members trading on the exchange has been on a steady increase, helping integrate the national market and providing a modern system with a complete audit trail of all transactions. OTCEI

OTCEI was incorporated in 1990 as a Section 25 company under the Companies Act 1956 and is

recognized as a stock exchange under Section 4 of the Securities Contracts Regulation Act, 1956. The manner and to provide investors with a transparent & efficient mode of trading.

Exchange was set up to aid enterprising promoters in raising finance for new projects in a cost effective Modelled along the lines of the NASDAQ market of USA, OTCEI introduced many novel concepts to the Indian capital markets such as screen-based nationwide trading, sponsorship of companies, market making and scripless trading. As a measure of success of these efforts, the Exchange today has 115 for themselves like VIP Advanta, Sonora Tiles & Brilliant mineral water, etc. EQUITI MARKET AND DEBT MARKET

listings and has assisted in providing capital for enterprises that have gone on to build successful brands

The market in which shares are issued and traded, either through exchanges or over-the-counter

markets. Also known as the stock market, it is one of the most vital areas of a market economy because it gives companies access to capital and investors a slice of ownership in a company with the potential to realize gains based on its future performance.

Equity market

Investopedia explains 'Equity Market'

This market can be split into two main sectors: the primary and secondary market. The primary market is where new issues are first offered. Any subsequent trading takes place in the secondary market. Debt market

The debt market is any market situation where the trading debt instruments take place. Examples of establishes a structured environment where these types of debt can be traded with ease between interested parties.

debt instruments include mortgages, promissory notes, bonds, and Certificates of Deposit. A debt market

The debt market often goes by other names, based on the types of debt instruments that are traded. In the event that the market deals mainly with the trading of municipal and corporate bond issues, the the debt market may be known as a credit market. When fixed rates are connected with the debt instruments, the market may be known as a fixed income market. debt market may be known as a bond market. If mortgages and notes are the main focus of the trading,

INVESTMENT OBJECTIVE, ENVERNMENT AND INVESTMENT PROCESS