"The Stock Exchanges have a vital role to play in development of a country in general, and industrial growth of companies in the private sector in particular, and helps the Government to raise internal resources for the

As a segment of the capital market, Stock Exchanges perform an important function in mobilizing and channelizing resources which remain otherwise scattered. Thus, the Stock Exchanges tap the new resources and stimulate a broad based investment in the capital structure of industries. Stock Exchanges perform the following roles - Acts as a continuous market for securities: Investors can invest in any securities, but in case of any risk, they can exit from that security and freshly re-enter into whichever security they feel as secure. Responsible for Securities Evaluation: The stock price indicates the performance and stability of the company. Through these investors decide according to their risk appetite whether to enter or exit or hold. The stock exchange acts as a regulator for the securities price evaluation for all the listed stocks. Mobilizes savings: Most of the public cannot invest the bulk amount in securities, so they invest in indirect ways such as mutual funds and investment trusts, and these are mobilized by stock exchanges. Enables healthy speculation: Stock exchange encourages businessmen and provides healthy speculation opportunities to speculate and gain profits from fluctuations in stock prices. Protect investors: Stock exchange ensures the protection of the funds of investors by allowing only genuine companies to be listed in the stock exchange. Ensures Liquidity: Banks and some other institutions invest their funds in the stocks and earn a profit within a short period and are sold immediately if there is any necessity of funds. Thus, there is an opportunity to liquidate immediately at any time if required in the stock market. Acts as an economic barometer: The country's economic growth is measured with the trends in the stock market. An upward trend in the stock market denotes growth potential and downward trend denotes the fall in the economy. Hence the stock exchange is called as an economic barometer as it indicates conditions prevailing in the country. Exercise Vigilance / Control on Companies: Every company listed on an exchange must produce their annual reports and an audited balance sheet to the stock exchange Such reports being available in public domain promotes transparency Attracts foreign capital: Foreign institutional investors (FII) are likely to invest in developing economy as the rate of returns will be high in developing economies due to growth opportunities. Stock exchanges ensure Safety of Capital and Fair Dealing: The transactions made in the stock exchange are made available to the public under well-defined rules and regulations abided by laws. This ensures safety and fair dealings for the average investors. Regulate company management: The firms wanting to get their securities listed must follow certain rules and fulfil certain conditions. Stock exchanges safeguard the interest of the investors and regulate the company management.