14.6         ndian     onom
     brokers—in India also known as ‘Taravaniwallah’            through a government resolution in an effort
     (in the BSE).7 A jobber is located at a particular         to give the Indian stock market an organised
     trading post on the floor of the stock exchange and        structure) with its head office in Mumbai. Its
     does buying and selling for small price differences,       initial paid-up capital was Rs. 50 crore provided
     called the spread. He has no contact with the              by the promoters—the IDBI, the IFCI and the
     investing public.                                          ICICI.
          In the London Stock Exchange he is called                   The Board of SEBI comprises nine members
     a market-maker while in the New York Stock                 excluding the chairman—one member each from
     Exchange he is called a specialist. The Bombay             the Ministries of Finance and Law, one member
     Stock Exchange has made it mandatory for every             from the RBI and two other members appointed
     company with a share capital of over Rs. 3 crore           by the central government. It has four full-time
     to appoint jobbers or market-makers if it seeks            members (including the chairman).
     enlistment. Such an arrangement enables investors                Main functions/powers of the Board as per
     to buy and sell shares on the stock exchange and           the SEBI Act, 1992 are:
     thus liquidity increases.
                                                                      (i) Registering and stock exchanges,
     Market-Maker                                                         merchant banks, mutual funds,
                                                                          underwriters, registrars to the issues,
     Functions as an intermediary in the market ready
                                                                          brokers, sub-brokers, transfer agents and
     to buy and sell securities. He simultaneously
     quotes two-way rates—like a jobber basically with
     the only difference that he quotes two-way rates,               (ii) Levying various fees and other charges (as
     for buying and selling at the same time.8                            1 per cent of the issue amount of every
                                                                          company issuing shares are kept by it as
          On the floor of India’s OTCEI, only market-
                                                                          a caution money in the concerned stock
     makers are allowed to play. In the money market
                                                                          exchange where the company is enlisted).
     of India, the Discount and Finance House of
     India (DFHI) is the chief market-maker.9                      (iii) Promoting investor education.
          Since he quotes the selling price while buying            (iv) Inspection and audit of stock exchanges
     a particular share, he makes market for that share,                  and various intermediaries.
     hence such a name.                                              (v) Performing other concerned functions as
          The NASDAQ of the USA is a market-                              may be prescribed from time to time.
     maker’s stock exchange where they are connected
     by the web-enabled trading terminals.                         commoDity traDing
                                                                Commodity trading happens similar to ‘stocks’
        SeBi                                                    (shares, securities, debentures, bonds) trading in
     The regulator of Indian stock market, set up under         the stock market. However, commodities are actual
     the Security and Exchange Board of India Act, 1992         physical goods such as corn, silver, gold, crude oil,
     (as a non-statutory body set on 12 April, 1988             etc. Futures are contracts for commodities that
                                                                are traded at a futures exchange like the Chicago
        7.  Surendra Sundararajan, Book of Financial Terms (New
            Delhi: Tata McGraw Hill, 2004), p. 117.
                                                                Board of Trade (CBOT). Futures contracts have
        8.  Tim Hindle, op. cit., p. 129.
                                                                expanded beyond just commodities, now there are
        9.  Surender Sundararajan, Book of Financial Terms,     futures contracts on financial markets like foreign
            p. 134.                                             currencies, interest rates, etc.