In normal terms, a stock exchange is a place where securities are traded between investors and traders with the involvement of stock brokers. In India, there are two primary stock exchanges – Bombay Stock Exchange and National Stock Exchange.
For almost every investor and trader, having the knowledge of these two stock exchanges is a norm but in order to take right investment decisions, it is necessary to have complete knowledge of BSE and NSE. So, let’s get the same right here in this post.
The main job of a stock broker is to act as an intermediary between an investor and the stock exchange. Businesses that seek to raise funds issue shares listed on the stock exchanges. Through the use of IPO, shares are allotted to the investors in the main market and once IPO is done, the company gets featured on the exchange that gives a chance to trade in shares. For instance, if you are willing to buy shares of ABC or XYZ, you can buy it over the exchange easily as IPOs are done only 3 days. After this, one can trade in shares only through the secondary market. It is the place where all shares are traded and the stock markets are controlled by the Securities and Exchange Board of India (SEBI). It is important for nearly every trader or investor to gain the knowledge of NSE and BSE in share market and the difference between them before entering the stock market.
If you’re looking to invest in stock markets, the first thing you need to do is to open a demat or trading account with a depository participant or stockbroker.
National Stock Exchange
Started its operations in 1992, National Stock Exchange is the youngest stock exchange of the country. The exchange was launched with an aim to deliver newest, fastest, fully automated, and screen-based trading in India. It boasts of hassle-free trading across various parts of the country.
NSE is known to introduce the next-gen electronic trading system in the country that eliminated the paper-based trading settlement.
Mr. Vikram Limaye is the MD & CEO of NSE.
Bombay Stock Exchange
It is oldest and most popular stock exchange of India. Founded by Mr. Premchand Roychand, BSE was formerly known by the name – “The Native Share & Stock Brokers Association” in 1875.
In the year 1957, BSE was officially acknowledged as the premier stock exchange of the country by India’s Central Government, under the Securities Contract Regulation Act, 1956. Almost all top 10 stock brokers in India perform trading through BSE. The stock exchange offers a wide range of services including market data, risk management, and CDSL etc.
Here’re a few reasons why companies get listed on stock exchanges:
1.Transparency
As stock exchanges are regulated by the Securities and Exchange Board of India, investors remain confident that all their transactions are being done in a legally prescribed manner. In addition, this enables automation of trading which further increases investor’s confidence.
2.Extended Reach
Any company get listed on BSE and NSE has a high chance of getting market exposure as these stock exchanges operate online.
If you would ask the best stock broker in India
about which stock exchange to proceed with, the answer would certainly be the BSE. Though both exchanges operate in a similar fashion, the craze for BSE is truly more overpowering than BSE due to its popularity and reach.