Financial Markets Test - 29

Dematerialisation is the process of converting physical shares into electronic format however, reconversion to physical form or rematerialisation is also possible.

The clearing and settlement operations of NSE are carried out by NSCCL. NSCCL (National Securities Clearing Corporation Ltd.) was incorporated in August, 1995 and it commenced its clearing operations for NSE in April, 1996.

One is the National Securities Depository Limited (NSDL) and the other is the Central Depository Service (India) Limited (CDSL). Every Depository Participant (DP) needs to be registered under this Depository before it begins its operation or trade in the market.

There are 23 stock exchanges in India. Among them, two are national-level stock exchanges namely Bombay Stock exchange (BSE) and National Stock Exchange (NSE). The rest 21 are Regional Stock Exchanges (RSEs).

As money became a commodity, the money market became a component of the financial markets for assets involved in short-term borrowing, lending, buying and selling with original maturities of one year or less.

Protective Functions of SEBI includes:

1. Prohibition of fraudulent and unfair trade practices.
2. Controlling insider trading
3. Undertaking steps for investor protection.
4. Promotion of fair practices and code of conduct in securities market.

However, regulation of takeover bids by companies is one of the many regulatory functions of SEBI.

Private placement is the allotment of securities by a company to institutional investors and some selected individuals. It helps the company to raise funds for capital more quickly than through a public issue. This method is chosen by the companies that cannot afford to raise capital through a public issue.

The minimum capital requirement for a company to be listed on the OTCEI is Rs 3 crores and the maximum is Rs 50 crores.

SEBI is not a participant in money market. The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India. In April 1988 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India.

The Reserve Bank of India is India's central banking institution, which controls the monetary policy of the Indian rupee. RBI is not a part of capital market.