– 700 001
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: 033-2220-2514, 2210-4486/4492, 2221-4664
CALCUTTA STOCK EXCHANGE
a get together under a “Neem Tree” way back in 1830s, the Calcutta
Stock Broking fraternity has come a long way. Though the once famous
shelter for Calcutta Stock brokers no longer exits, the roots laid in
the last century have dug deep into the city and the region. The region
today plays a crucial role in the country’s capital market. While
Calcutta Stock Exchange has emerged as the second largest house in the
Country, the investors from the eastern zone are also at the forefront
today. The origin of Stock Broking in India goes back to a time when
shares, debentures, and bonds representing titles to property, were
first issued on the condition of transfer from one person to another.
The earliest record of dealings in securities in India is that of East
India Company’s loan securities. The advent of the Companies Act in
1850 and the subsequent introduction of limited liability, made
investment in stocks and shares, popular. In the daily money market
report of January 2, 1864, published by M/s Roussac & Company,
Calcutta, we find quotations of nearly 91 joint stock companies, of
which the largest section comprised tea companies, followed by a few
coal and miscellaneous companies.
stock broking was practiced in Calcutta as early as 1836, the members of
the broking profession had neither a code of rules for their guidance,
nor a permanent place for congregation. The center of their activity was
near a ‘Neem’ tree where at present, stand the offices of the
Chartered Bank and James Finlay and Company Limited, on Netaji Subhas
Road, Calcutta. In 1894, James Finlay constructed their premises while
in 1905, Chartered Bank also began to build their operations in the
neighbourhood of the present Allahabad Bank. The brokers had no shelter
and business was carried on in the Street. The inconvenience of trading
in a public place, prompted the brokers to organize themselves and in
May 1908, an association was formed under the name and style of THE
CALCUTTA STOCK EXCHANGE ASSOCIATION at 2, China Bazar Street (now known
as 2, India Exchange Place). The building at 7, Lyons Range,
Calcutta-700 001, which was constructed in 1928 and which has been the
office of the Stock Exchange for the last 66 years, has become
absolutely incapable of accommodating the enormous increase not only in
the number of members of the Exchange but also in regard to the
phenomenal growth in the volume of business, being handled by the
members of the Exchange. On June 7, 1923, the association was registered
as a limited liability concern with an authorized capital of Rs.
3,00,000/- divided into 300 shares of Rs. 1000/- each. The shares were
subdivided into 4 shares of Rs. 250/- each in 1959. The Golden Jubilee
of the Association was celebrated in 1958, the Diamond Jubilee in 1968
and the Platinum Jubilee in 1983.
to February 1957, the Calcutta Stock Exchange was operating as an
autonomous institution. With the enactment of the Securities Contracts
(Regulation) Act, 1956, no stock exchange can operate in the country
without being recognized by the Government. The Act came into force on
and from February 20, 1957. Under the provisions of this act, the
Calcutta Stock Exchange came to be recognized on and from October 10,
1957. The Central Government had granted permanent recognition to the
Calcutta Stock Exchange with effect from April 14, 1980 under Section-4
of the Securities Contracts (Regulation) Act, 1956.
Calcutta Stock Exchange organizes a training course since 1982 for
imparting training to persons who are interested in taking up
stock-broking as a career. The training program is now spread over a
period of nine months and about 40 lectures are delivered in each term.
The program is free of any tuition fee. No charge is levied on the
students for the supply of study materials which are prepared according
to the syllabus. At the end of each term, an examination is held on
subjects covered by the syllabus and lectures and a certificate is given
to the successful candidates. With the introduction of the training
program, Calcutta Stock Exchange has made a stipulation that any one,
other than those having professional qualifications like Chartered
Accountants, interested in becoming a member and/or assistant to a
member, should complete the training course and obtain a certificate
after duly passing the examination conducted by the Calcutta Stock
the time of its incorporation in 1908, the Stock Exchange had 150
members. Today, the total membership has risen to nearly 800.
OF MARKET TRANSACTIONS
There are many ways by which an investor can perform the market transactions at the CSE. Few of the ways are:
Buy Orders: Are used by the investor when he anticipates a rise
in prices. When the investor feels the right time for purchase, he
enters a buy order.
Sell-long Orders: When the investor determines that the
securities held by him for a long period of time are going to experience
a fall in prices, he enters a sell-long order.
Sell-short Orders: It involves selling shares that are not owned
but borrowed, in anticipation of a price decline.
Market Order: Is operated at the prevailing market price. In
case of a buy order, the best price is the lowest available selling
price. In case of a sell order, the best price is the highest available
Limit Order: Aids in setting the boundaries of the risk, the
investor wishes to assume. When using the limit order, the investor
specifies in advance, the limit price at which he wants the transactions
to be carried out.
Individuals as well as companies can become a member of the stock exchange of India. A member can function as a broker or as a principal. The members operating on the CSE are:
Brokers: they buy and sell securities as agents of their clients
on the floor of the exchange for a commission which is not more than
1.25% of the value of transactions. Sub-brokers are authorized
assistants of the brokers.
Taravaniwalas: They operate as principals to make profits from
the buying and selling of securities on their own account.
Arbitrageurs: They buy and sell shares in more than one stock
exchange, to take advantage of the price differentials in such
D. Odd-lot Dealers: An order for less than the unit of trading, is considered an odd lot. A lot consisting of shares, other than 10 or 100 (say 132), is an odd-looted-lot. Dealers buy odd-lots at a lower price, convert them into marketable lots and sell at a higher price for profits.
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