Role of stock exchanges in the promotion of capital market a comparative study of India and Iran

Abstract

This study pertains to comparative analysis of Indian stock market with respect to Iranian stock market in particular and other various international counterparts in general. Stock Exchanges are now crossing national boundaries to extend their service areas and this has led to cross border integration. This not only increased the appeal of the exchange for investors but also attracted more volume of trading. The Indian stock exchange (NSE) holds a place of prominence not only in Asia, but also at global level. TSE is also emerging and trying to make a place at international level. The NSE and TSE both have set up infrastructure that serves the role models for securities industry in their respective countries in term of trading systems, cleaning and settlement practices. The standard set by NSE and TSE in terms of market practices, products, technology and service standards have become industry benchmarks and are being replicated by other market participants. Both these exchanges provide screen based automated trading system with high degree of transparency and equal access to investors irrespective of geographical locations. The newlinehigh level of information dissemination through online system has helped in integrating the retail investors on global basis. The national stock markets (NSEand TSE) have emerged as the major channel for financial integration of emerging market economies through globalization, deregulation and advancement in information technology. This has boosted cross border mobility of capital inflows in the pursuits of better yield through portfolio diversifications, a growing reliance on the saving potentials of other nations and a shift in the leverage preference of companies from debt to equity finance. newlineWith the initiation of reform, taken by SEBI (India) and SEO (Iran), the capital markets in both the countries resulted in paradigm shift in the working of Stock markets in India and Iran. The introduction of new products has been made in different market segment of both at NSE and TSE.