•CLASS :12 COMMERCE

•Subject : Business studies

•As per C.B.S.E. guidelines

FINANCIAL MARKET•MEANING:

A FINANCIAL MARKET IS A MARKET FOR THE CREATION AND EXCHANGE OF FINANCIAL ASSETS, SUCH AS SHARES, DEBENTURES, BONDS , ETC.

IT MAIN AIM AT BRINGING TOGETHER BORROWERS AND LENDERS OF FUNDS.

Functions of Financial Market•1. Mobilizes funds.•2. Facilitates price discovery•3. Provides liquidity to financial assets•4. Reduces the cost of transaction

TWO MAJOR SEGMENTS•THERE ARE TWO MAJOR TYPES OF

FINANCIAL MARKETS ARE•Capital market which deals in long-term

and medium –term funds.•Financial market which deals in short

term funds.

Money Market Instruments•Treasury bill: Instrument of short term

borrowing issued by the RBI on behalf of Indian Government

•Commercial bill: Short term instrument used to finance working capital requirement of the business.

•Commercial Paper: Unsecured instrument issued in the form of Promissory note.

•Certificate of Deposit(CD): Bearer document issued by commercial banks and development financial institutions against deposits kept by companies, individuals and institutions with them.

•Call money: Short finance generally used by banks to maintain Cash Reserve Ratio(CRR).

Participants of Money Market•Reserve Bank of India•Non Banking Finance Companies•Large Corporate Houses•Commercial Banks•State Government•Mutual Funds

Types of Capital Market•Primary Capital Market: It refers to

market where securities are sold for the first time.

•Secondary Capital Market: It refers to market for sale and purchase of previously issued securities.

Methods of FLOATATION There are different methods of floating new

issues in the primary market.•Offer through Prospectus•E-IPO•Offer for Sale•Private Placement•Right Issue

Stock Exchange •A stock exchange is an institution which

provides a ready market for buying and selling of existing securities, i.e. , shares, Stocks, bonds, debentures ,etc.

Its functions•Provides marketability and liquidity to

existing securities•Pricing of Securities•Safety of Transaction•Contribution to economic growth•Spreading equity cult

Trading Procedure•Selection of a broker•Opening demat account•Placing order•Execution of order•Settlement

SEBI•Security and exchange Board of India was

setup in1992 to regain the trust af all investors and to protect their interests and to control and regulate business of stock exchange.

OBJECTIVES•To provide a fair, efficient and transparent

security market•To enable shorter settlement cycle•To meet modern global standards of

securities market.•To introduce various reforms for proper

working of Indian Securities market

FUNCTIONS of SEBI•Regulatory Functions•Development Functions•Protective Functions

•Thanking you