Functioning of Stock Exchange
Listing of shares, on a stock exchange, means, such shares can be bought and sold, in stock exchange.
A Company, which intends to issue shares, through prospectus, shall have to apply to one or more stock exchanges, for getting its shares listed.
The detailed and elaborate procedure of getting the shares listed on a stock exchange is monitored by SEBI. The SEBI, issues guidelines and notifications, from time to time, with regard to listing of securities.
Once the shares are listed, the are divided into two categories:
Group "A" Shares: are referred to as " Cleaned Securities " or " specified shares". The facility for carrying forward a transaction from one account period to another is available for these shares. Group "A" shares represent companies, with huge amount of capital, and equally a large scope for investment. These shares are frequently traded and command higher price earning multiples.
Group "B" Shares: are referred to as, Non cleaned securities or non-specified shares. For these groups facility of carrying forward is not available.
Whenever a share is moved from Group "B" to Group " A " its market price rises; likewise, when a share is shifted from Group "A" to Group "B", its market price declines. There are some criteria and guide lines, laid down by stock exchange, for shifting stocks from the non-specified list to the specified list.