Stock Exchanges

Stock Exchanges in India provide a nation-wide computerized screen- based trading platform to facilitate buying and selling of securities, through their registered trading members / brokers and at market determined prices. They establish and enforce rules for their trading members, ensuring a fair and transparent trading environment. To mitigate risks, exchanges implement robust risk management systems, protecting against potential defaults on payments or delivery obligations. Additionally, exchanges oversee listing conditions and disclosure requirements for listed companies, promoting market integrity. These exchanges offer a range of trading opportunities across various asset classes, including equity, derivatives, debt, mutual funds and government securities, catering to diverse investor needs.

The formalization of stock exchanges in India began with the establishment of the Bombay Stock Exchange (BSE) in 1875, making it Asia’s oldest stock exchange. The performance of BSE is measured by the Sensex. Further, the launch of the National Stock Exchange (NSE) in 1994 revolutionized trading through its electronic, nationwide platform, replacing the old outcry system and making markets more accessible and efficient. The performance of NSE is measured by NIFTY 50.

Over the years, market reforms like electronic trading, dematerialization of shares, rolling settlements, etc. have significantly improved market efficiency. Further, enhanced corporate governance, disclosure norms and risk management frameworks have strengthened investor confidence in the Indian markets.