About Major Stock Exchanges in India
Most of the trading in the Indian stock market takes place on its two stock exchanges: the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The major Stock exchanges in India are listed below.
- National Stock Exchange
- Bombay Stock Exchange
- Social Stock Exchange
National Stock Exchange
The National Stock Exchange of India (NSE) is one of the leading stock exchanges in India. It was established in 1992 and is located in Mumbai. The NSE plays a crucial role in the Indian financial market, providing a platform for trading various financial instruments, including equities, derivatives, and currency futures. The NSE operates on an automated electronic trading system known as the National Exchange for Automated Trading (NEAT). This system allows for faster and more efficient order matching, ensuring transparency and liquidity in the market. It also provides a fair and equal opportunity for investors to participate in trading.
The NSE has significantly introduced new financial products and innovations in the Indian stock market. It pioneered the introduction of index-based trading in India with the launch of the Nifty 50 index, which has become a widely tracked benchmark for the Indian equity market. The NSE has also introduced various other indices and products to cater to the diverse needs of investors.
The key capital market categories under NSE are
- Equity
- Future and Options
- Retail Debt Market
- Wholesale Debt Market
- Currency Futures
- Mutual Fund
- Stocks Lending and Borrowing
Also, read about the Banks Board Bureau here for the UPSC Exam!
Bombay Stock Exchange
The Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia and one of the premier stock exchanges in India. Established in 1875, it is located in Mumbai. It is a vital platform for trading various financial instruments, including equities, derivatives, and debt securities. The BSE plays a pivotal role in the Indian capital market and has been instrumental in shaping the country's financial landscape. It operates on an electronic trading platform known as the BSE Online Trading (BOLT) system. It ensures efficient order matching and facilitates seamless trading activities.
It has almost 5000 listed businesses, making it the ninth-largest stock market in the world. It is known for its electronic trading platforms that enable investors to trade in investment trusts, currencies, bonds, and derivatives. Furthermore, the BSE actively promotes investor education and awareness programs to enhance financial literacy and empower investors to make informed decisions. It also focuses on initiatives to attract foreign investors and promote the internationalization of the Indian capital market.
Also, check out the Difference Between NSE and BSE here.
Social Stock Exchange
- A Social Stock Exchange (SSE) is a specialized stock exchange that focuses on listing and trading securities of social enterprises and impact-driven organizations.
- SSEs aim to create a platform where investors can support and finance companies. It generates positive social and environmental impact alongside financial returns.
- The securities listed on SSEs may include social impact bonds, green bonds, social enterprise stocks, and other impact investment products.
- SSEs typically have stringent eligibility criteria. It requires organizations to meet specific social and environmental standards to be listed.
- The disclosure requirements on SSEs emphasize transparency and accountability in reporting social and environmental performance.
- SSEs provide a marketplace for impact investors to allocate capital towards ventures aligned with their social and environmental goals.
- Establishing SSEs is a global initiative, with exchanges in various countries, such as the United Kingdom, Canada, and India.
- SSEs contribute to the growth of the impact investing ecosystem by connecting impact-driven enterprises with investors seeking both financial returns and positive societal outcomes.
- The emergence of SSEs highlights the increasing demand for investment opportunities that align with sustainable development goals and address pressing global challenges.
- SSEs play a significant role in promoting the integration of financial markets with social and environmental considerations, fostering a more inclusive and responsible approach to investing.
Check out the article on Insolvency and Bankruptcy Code here!
