The stock exchange is one of the constituents of the capital market. A specialized market place that facilitates the exchange of securities that are already in existence is known as the Stock Exchange or Stock Market. The first stock Exchange originated in London in 1773. In India, the first Stock’ Exchange was started in Bombay in 1875. At present there are twenty-four Stock Exchanges in our country. Of them are thirteen are public limited companies and six are limited by guaranty and others are voluntary nonprofit making organizations. Only eight Stock Exchanges are permanent and others have to renew their license every year.

The Stock Exchanges regulate and control business in buying, selling and dealing in securities. They are regulated by the government. They do not engage only in the purchase and sale of securities but provide a place where members can carry out their business on their own account under codes, rules, and regulations. The National Stock Exchange Market was set up in the year 1993 for the purpose of providing a nationwide stock trading facility to investors, so as to bring the Indian financial market in line with the international financial market. Only the agents can operate the business in the stock exchanges. Shareholders have to open a separate account to buy and sell shares. It is called a Demat account. A demat account provides security of the shares.