The stock exchange is the most crucial part of the share market. Indian stock market is one of the oldest and the robust market in Asia. It houses Asia’s first stock exchange – Bombay Stock Exchange, popularly known as BSE. Most of us know about only these two stock exchanges in India- Bombay stock exchange (BSE) and National stock exchange (NSE). But, the list of stock exchanges in India is more than that.
The Securities and Exchange Board of India (SEBI) is the regulatory authority for Stock Exchanges in India. SEBI’s primary functions are to protect investor interests, promote and regulate the Indian securities markets. To conduct, any type of transaction every stockbroking firm must be registered under SEBI. Foreign Portfolio Investors are also required to register to participate in the Indian securities markets.
In this post, we are going through these following topics.
What are the Stock market and the Stock Exchange?
However, it is necessary to understand the difference between a stock market and a stock exchange.
A stock market or share market is a place where shares of publicly listed companies are traded. So, the Indian stock market includes all the stock exchanges across the nation. All kind of transactions takes place through these stock exchanges.
So, the stock exchange is a facility or an association where the stockbrokers and traders can buy and sell shares, stock, bonds, option, trading, commodities, and other financial instruments during the specific hours of business days.
This is exactly similar to the vegetable market. Now, the market doesn’t own the vegetables but connects the buyers and sellers of vegetables at a particular location.
So, the stock exchanges do not own the stocks. Companies listed their stocks in the exchanges. This is an organized marketplace where the members’ trade company stock or other listed securities.
However, the members could be agents of different broking houses acting on behalf of their clients, or they could be principals representing their own accounts. So, the exchange imposes rules and regulations on the firms and brokers. That helps for efficient trading. It also provides the facility for the issue and redemption of securities.
What are the National stock exchanges of India?
India has two national level stock exchanges – National stock exchange and Bombay stock exchange.
National Stock Exchange (NSE)
According to the World Federation of Exchanges (WFE) report, NSE is the second largest stock exchange in the world by numbers of trades in equity shares from January to June 2018.
The NSE has nearly 1952 listed companies (as of April 2018) and a market capitalization of $2.7 trillion (as of April 2018).
Above all, NSE was the first exchange of India to afford a fully automated screen-based electronic trading system. Therefore, it provides a comfortable trading facility for investors across the whole world.
In the year 1994 NSE launched electronic screen-based trading in derivatives in the form of index futures. Therefore, NSE is a pioneer in technology implementation in the share transaction.
Today, NSE conducts transactions in the wholesale debt, equity, and derivative markets. Benchmark index of NSE is NIFTY. It offers NIFTY 50 Index which tracks the largest assets in the Indian equity market.
National Stock Exchange Website: National Stock Exchange of India Ltd.
Bombay Stock Exchange (BSE)
Premchand Roychand was founded BSE in 1875. He entered the lists as a stockbroker in the year 1849. He was recorded as the first Indian broker able to speak, read and write English.
BSE is Asia’s first & the Fastest Stock Exchange in the world with the speed of 6 microseconds. It also provides depository services through its Central Depository Services Ltd. (CDSL).
BSE systems and processes are designed to drive the growth of the Indian capital market and stimulate innovation and competition across all market segments. So, this was the first exchange in India and second in the world to obtain an ISO 9001:2000 certifications.
Benchmark index of BSE is Sensex. The BSE has nearly 5439 listed companies (as of April 2018) and a market capitalization of $2.3 trillion (as of April 2018).
Bombay Stock Exchange Website: Bombay Stock Exchange
What are the Commodity market and Commodity Exchange?
A commodity market is a kind of market that trades in the primary sector rather than the manufactured products.
- Soft commodities are agricultural products – wheat, coffee, cocoa, fruit, sugar, etc.
- Hard commodities are mined metal, gold, silver, soybeans, crude oil, etc.
So, the commodity exchange is an exchange where various commodities, agricultural products, and other raw materials are traded.
The SEBI controlled the commodity market in India since September 2015. Before that Forward Market Commission, Overseen by Ministry of Consumer Affairs regulated Commodities market.
The trade timings of the Commodity Exchange from Monday to Friday are Indian Standard Time – 10 am to 11.30pm.
List of stock exchanges in India
So, here you can find the list of existing stock exchanges in India as of November 2018 as per SEBI website.
|Sr. No.||Name||Address||Valid Upto|
|1||BSE Ltd.||Address: P J Tower, Dalal Street, Mumbai 400023
|2||Calcutta Stock Exchange Ltd.||
Address: 7, Lyons Range, Murgighata, Dalhousie, Kolkata, West Bengal 700001
|3||India International Exchange (India INX)||
Address: India International Exchange IFSC Limited, 101, First Floor, Hiranandani Signature Tower, GIFT City IFSC – 382355, Gujarat, India.
|Dec 28, 2018|
|4||Magadh Stock Exchange Ltd.||“SEBI vide order dated September 3, 2007, refused to renew the recognition granted to Magadh Stock Exchange Ltd.”||PERMANENT|
Metropolitan Stock Exchange of India Ltd.
|Website: http://www.msei.in/index.aspx||Oct 02, 2019|
|6||National Stock Exchange of India Ltd.||Address: Bandra Kurla Complex, Bandra (East) Mumbai 400051
Website : https://www.nseindia.com
|7||NSE IFSC Ltd.||Address: NSE IFSC LIMITED, Unit No. 46 – 53, 1st Floor, GIFT Aspire One Business Centre, Block 12, Road 1-D – Zone 1, GIFT SEZ, Gandhinagar 382355.
May 28, 2019
Note:The Hyderabad Securities and Enterprises Ltd (erstwhile Hyderabad Stock Exchange), Coimbatore Stock Exchange Ltd, Saurashtra Kutch Stock Exchange Ltd ,Mangalore Stock Exchange, Inter-Connected Stock Exchange of India Ltd, Cochin Stock Exchange Ltd, Bangalore Stock Exchange Ltd , Ludhiana Stock exchange Ltd, Gauhati Stock Exchange Ltd, Bhubaneswar Stock Exchange Ltd, Jaipur Stock Exchange Ltd, OTC Exchange of India , Pune Stock Exchange Ltd, Madras Stock Exchange Ltd, U.P.Stock Exchange Ltd, Madhya Pradesh Stock Exchange Ltd, Vadodara Stock Exchange Ltd, Delhi Stock Exchange Ltd and Ahmedabad Stock Exchange Ltd have been granted exit by SEBI vide orders dated January 25, 2013, April 3, 2013, April 5, 2013, March 3, 2014, December 08, 2014, December 23, 2014, December 26, 2014, December 30, 2014, January 27, 2015, February 09, 2015, March 23, 2015, March 31, 2015 ,April 13, 2015, May 14, 2015, June 09, 2015, November 09, 2015, January 23, 2017 and April 02, 2018 respectively.
List of Commodity Derivative Exchanges
Now, you can find the list of commodity derivative exchanges in India as of November 2018 as per SEBI website.
|Sr. No.||Name||Address||Valid Upto|
|1||Ace Derivatives and Commodity Exchange Limited||Address: Rawat-ni-wadi, Nr.Central Bank of India, Gandhi Road, Ahmedabad-380001
|2||Indian Commodity Exchange Limited||
Address: Reliable Tech Park, 403-A, B-Wing, 4th Floor, Thane-Belapur Road, Airoli (E), Navi Mumbai-400708
|3||Multi Commodity Exchange of India Ltd.||Address: Exchange Square, CST No.225, Suren Road, Andheri (E), Mumbai-400093
|4||National Commodity & Derivatives Exchange Ltd.||Address: Akruti Corporate Park,1st Floor, Near G.E.Garden, L.B.S. Marg, Kanjurmarg(West), Mumbai – 400 078
|5||National Multi Commodity Exchange of India Limited.||Address: 5,4th Floor, H.K. House, B/h JivabhaiChambers, Ashram Road, Ahmedabad.-380009
What are the functions of Stock exchange?
Here are some of the crucial Functions of the Stock Exchanges in India.
So, the stock exchanges is a much reliable barometer to gauge the economic health of any country. Every significant change in a country reflected in its economy as well as the prices of shares. Therefore, the rise or fall in the share prices indicates the upward or downward trend in economic growth.
Safety in stock transactions
Above all, only the listed companies under stock exchanges authorities are allowed to offer their share publically in the stock market. So, these exchange authorities allowed these companies names in the trade list only after verifying the soundness of the company. Therefore, in the time of trading, these companies operated within the strict rules and regulations.
Stock exchange protect investors
So, one of the most significant purposes of the stock exchanges is to guard investors’ money against any type of fraud. Only genuine companies are listed in the stock exchange, and all kind of activities are controlled by of them. Therefore, the funds of the investors are very much protected.
Control on companies
The listed companies have to submit their annual report, and audited balance sheet to the stock exchanges in every quarter. Otherwise, such companies will be blacklisted, and they will find it difficult to raise their capital any more. In this way, investors also become alert about the growth of the companies. So, they can more invest or withdraw their hard earned money on time.
Attracts foreign capital
As because of dynamism and higher return on capital, the stock exchanges in India are capable of attracting more foreign investors. In this way, the exchanges rate of the currency will improve when there is more trade undertaken by the government.
Mobility of funds
The stock exchanges allow both the investors and the companies to buy or sell shares in a regulated manner and to create the availability of funds. Therefore, the stock exchanges are facilitated allocation of the funds of the investor to the productive channels and strengthened the economy crucially.
Stock exchange helps Capital formation
Stock exchanges play a vital role in capital formation in any country. So, a company when wants to go for diversification they can issue the shares and raise more funds. Therefore, they can generate more capital, and this promotes economic growth in the country as well.
The main function of the stock exchange is to provide a ready market for buy or sale of securities. Above all, due to the presence of stock exchanges in the market gives assurance to the investors that their investment can be converted into cash whenever they required. So, the investors can invest in long-term investment projects without any hesitation. Because of the stock exchanges, they can convert a long-term investment into short term and medium term easily.
Promotes the Habits of Savings and Investment
The stock market offers attractive opportunities for investment in various shares, bonds, and securities. Therefore, these kinds of opportunities encourage people to save more and investment.
Now, let sum-up our discussion. However, we can realize the necessity of stock exchanges in this way. So, if there were no stock exchanges in your country how you would find a seller or a buyer? Maybe you could, but it would take an enormous time to find the right one. Again, there will be no authenticity of the buyer or seller. Therefore, the stock exchange is the solution.
Stock exchanges provide a filter for you. In other words, Stock exchanges ensure that only legal businesses with healthy balance sheets get listed on the exchanges.
At last, let think from the perspective of a company owner. For instance, you are the owner of the company, and you want to raise capital to grow your business. The simple and effective way would be to offer shares to the public through a stock exchange for capital expansions. So, again stock exchange is your solution.
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