Listed Securities are traded on BSE, NSE, etc. Private companies that go public must list on an exchange. An exchange requires entry and annual listing fees. Minimum stockholder equity, price, and count vary by exchange. Exchanges require high-quality securities to maintain their reputation with investors. Listed Share means the number of issued and outstanding shares of the company listed on the TSX, excluding dilutive securities not yet converted.
Features Of Listed Shares
Stock exchange is an organized market. Every stock exchange has a committee with management and control rights. All stock exchange transactions are regulated by the management committee.
Only authorized members can sell and buy stocks. A stock exchange is a market where only authorized members can participate. Investors must take their help to sell and buy.
Stock Exchange Trades
Only listed securities are allowed to be traded on the stock exchange. After fulfilling a number of requirements, a company's stock can officially be traded.
Obey Rules & Bylaws
When making transactions on the stock exchange, buyers and sellers are obligated to follow the rules and regulations set by the exchange organization.
How Does Listed Shares Work?
In order to finance their operations, companies issue shares to the public. They issue shares in an IPO on the primary market and then trade them on the secondary market. Investors typically purchase shares from other investors. And if you want to unload some share, you’ll have to find a buyer for them. Buying and selling shares are handled by stock exchanges, with brokers representing investors.
Benefits Of Listed Shares
NSE covers Indian equity, fixed income, and derivative markets. It offers exchange listings, trading services, clearing and settlement, indices, market data feeds, technology solutions, and financial education.
Effectiveness On A Larger Scale
NSE's products, services, and leadership across multiple asset classes in India's trading volume led to efficient price discovery. NSE's trading technology and risk management framework automate order execution, reducing trade costs.
The trading system provides trade and post-trade information. The trading system shows the top 5 buy and sell orders, the total no. of securities for sale, and provides market depth. The trading system provides corporate announcements, results, and actions.
NSE Clearing is responsible for bearing the credit risk associated with each trade partner. This risk refers to the possibility that a member will be unable to fulfil their obligations.
Who issues Listed Shares?
A Limited Company can issue share to the public (with SEBI approval) or to friends, relatives, business partners, etc. in case of a Private Limited Company. Private companies can’t invite the public to buy stock. The Companies Act, 2013 prohibits issuing more than 200 shares of a private limited company.
Why should you invest in Listed Shares?
Comparison Of Listed Shares With Other Products
|PARTICULARS||LISTED SHARES||UNLISTED SHARES|
|Meaning||Listed Shares are stocks listed on the National Stock Exchange (NSE) or Bombay Stock Exchange (BSE).||Unlisted shares are those that are not listed on the National Stock Exchange (NSE) or Bombay Stock Exchange (BSE).|
|Trading||Shares that are listed are traded on stock exchanges.||Shares are traded OTC. The shares can be bought and sold by brokers or directly.|
|Classification as Long Term and Short Term||Listed shares are long-term if held for over a year. Less than 12 months is short-term.||Unlisted shares are long-term if held for 24 months. Less than 24 months is short term.|
|Selling Price for Computation of Capital Gain||Stock exchange trading makes purchase and sale prices readily available.||First, the fair market value of the shares sold must be determined. The higher of fair market value and actual selling price is used to calculate capital gain. Merchant Banker or Chartered Accountant calculates FMV.|
|Benefit of Indexation||No indexation is provided when computing capital gains.||Indexation helps compute Long-Term Capital Gains.|
|Rate of Tax||Tax-free long-term gains up to Rs. 1 lakh. Gains over Rs. 1 lakh are taxed at 10%. Short-term gains are taxed 15%.||Long-term capital gains are taxed at 20% after indexation and 10% without indexation if held by a nonresident. Short term gains are taxed in slabs.|
|Set off and Carried Forward of Losses||Long-term capital losses can only be offset by long-term gains, but short-term losses can be offset by both. Losses carried forward for 8 years.||Long-term capital losses can only be offset by long-term capital gains, but short-term losses can be offset by both types of gains. Losses can be carried over for 8 years.|
As per Regulation 46 of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, the Company’s (a recognized stock exchange) securities must be held in dematerialized.
Dematerialization is the process by which a Shareholder can get physical certificates converted into electronic mode. Shareholders who want to dematerialize must have a depository participant account (DP).
As per Regulation 46 of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, a stock exchange’s securities must be dematerialized. The amendment to SEBI (Listing Obligation and Disclosure Requirements) Regulation 40 mandates that securities can only be transferred in dematerialized form as of December 5, 2018, which SEBI extended to April 1, 2019.
In the case of a share transfer between a resident buyer and a non-resident seller or vice versa, the buyer may pay up to 25% of the total consideration within 18 months of the transfer agreement. Deferred amount can be indemnity or Escrow. Always follow pricing guidelines.
Foreign Portfolio Investors (FPIs) registered under SEBI (FPI) Regulations and NRIs/OCIs can invest on Indian stock exchanges, subject to the individual and aggregate limits in schedules 2 and 3 of FEMA 20. (R).