The stock exchange plays an important role in the stock market. The stock market is operated through the stock exchange. But do you know what is stock exchange and what are its functions?
If you are still unaware of stock exchange, then you must read today's blog post once. Because in today's article, we will try to find answers to the following questions.
Apart from the written questions, today we are going to give you answers to many other questions through this article. If you want to invest in the share market, then you should know well what is the stock exchange because all the activities taking place in the stock market are related to the stock exchange.
Also, if you have recently entered the world of the stock market, then you must know about the Stock Exchange. Let us know in detail what a is Stock Exchange.
What is the Stock Exchange?
A Stock Exchange is an institution or place where a stock market is run through which the general public or investors buy and sell stocks, bonds, debentures, and other securities.
It is necessary for any company or organization to have its name listed in any stock exchange of India, only then they get the right to buy/sell their company's stocks, bonds, debentures, and other securities in the stock market.
To get its name listed on the stock exchange, the company has to follow the rules imposed by the stock exchange such as regularly reporting its income and expenses, getting all its commercial transactions audited by a legally independent organization, etc.
These rules ensure that people trading in shares know how good or bad the actual commercial position of the company really is. Stock exchanges work within the rules made by SEBI (Securities and Exchange Board of India).
If the commercial situation is good then how good is it and if it is bad then to what extent is it bad. Services relating to the issue and redemption of securities and other financial instruments, capital infusion, payment of income and dividends, etc. are often provided by the Stock Exchange. At present, there are a total of 24 stock exchanges in India, of which BSE and NSE are the main two stock exchanges.
Among these, BSE is the oldest stock exchange. But one thing you must remember is that no investor can buy or sell shares directly from the Stock Exchange. For this, you must have a Demat Account through which you can buy and sell.
You can open Demat Account yourself with the help of online apps or you can also take the help of a share broker. If a share broker opens a Demat Account for you, you may also have to pay fees to him.
History of Stock Exchange in India
The first stock exchange in the world was established in the Netherlands in 1602 by the Dutch East India Company, which is currently known as Euronext Amsterdam Stock Exchange. This stock exchange is the oldest stock exchange in the world.
If we talk about India, BSE i.e. Bombay Stock Exchange, established in Mumbai in 1875, is the oldest stock exchange in India. The oldest stock exchange not only in India but in entire Asia is the Bombay Stock Exchange.
In the beginning, all the activities related to the stock exchange used to depend on paperwork due to which most people were confused about what is stock exchange? What is stock market? How to invest in the stock market? Information about other things was available. But the present times have changed.
All the work related to stock exchange has started happening online through computers and the internet, due to which many people are investing in the stock market. Activities related to stock market can be done sitting at home. In today's time, SEBI keeps an eye on these activities.
How does Stock Exchange work?
Generally speaking, Stock Exchange acts as a link between the investor and any company. Often when any company needs additional capital to further its business, it issues shares in the market to the general public or other investors.
Here the role of stock exchange increases because when any company wants to issue its shares for the first time, it becomes mandatory for that company to register its name in the stock exchange.
When a company is listed in the Stock Exchange, that company gets the right to carry out all the activities related to the Share Market.
Which are the main two Stock Exchanges of India?
Although there are many stock exchanges in India, but among them there are two main stock exchanges which are very popular.
- BSE (Bombay Stock Exchange)
- NSE (National Stock Exchange)
These two stock exchanges are the major stock exchanges in India. Detailed information about these is given below.
1. BSE (Bombay Stock Exchange)
BSE whose full name is Bombay Stock Exchange. This is the oldest stock exchange in India and Asia which is located in Mumbai, the capital of Maharashtra state. BSE was established in 1875.
Asia's oldest and the country's first stock exchange – Mumbai Stock Exchange has been permanently recognized under the Securities Contract Regulation Act 1956.
Official website:- www.bseindia.com
This stock exchange has access to 417 cities in India. BSE has been playing an important role since the beginning in giving India its best position in the international financial market. It has been more than 100 years since the Mumbai Stock Exchange was established.
2. NSE (National Stock Exchange)
Established in 1992, NSE i.e. National Stock Exchange is India's largest and technologically leading stock exchange. From a business perspective, it is the world's third-largest stock exchange.
Official website:- www.nseindia.com
Only after the establishment of NSE, emphasis was given to completely electronic transactions and activities by removing paperwork.
NSE's index is Nifty Fifty on which the names of the top 50 companies across the country are informed. Whenever there is a fall in Nifty Fifty, then a decline is seen in NSE and whenever Nifty Fifty increases, then there is an increase in NSE.
What are the Functions of Stock Exchange?
1. The Indian Stock Exchange provides a platform to various individuals and investors to invest in the stock market.
2. Through stock exchange, investors get the benefit of liquidity due to which investors can buy and sell shares anytime as per their need.
3. The stock exchange completely records the fluctuations in the prices of shares in the stock market.
4. Stock exchange provides a ready market for buying and selling securities of various companies where both buyers and sellers are present.
5. Stock exchanges play an important role in measuring the economic progress of the country.
These were some of the functions of Stock Exchange, which we have given you information here.
How many stock exchanges are there in India?
Earlier there were a total of 23 stock exchanges in India, but at present, there are 7 active stock exchanges. the list of which we have provided below –
1. National Stock Exchange of India (NSE)
2. Bombay Stock Exchange (BSE)
3. Multi Commodity Exchange of India Limited (MCX)
4. National Commodity and Derivatives Exchange Limited (NCDEX)
5. India Commodity Exchange Limited (ECX)
6. The Universal Commodity Exchange (UCX)
7. Metropolitan Stock Exchange of India (MSE)
Metropolitan Stock Exchange is valid till 15 September 2023.
Today in this article we have provided detailed information to all of you about Stock Exchange. What is Stock Exchange? What are its functions? What is the history of stock exchange? Which are the main stock exchanges of India? We have tried to answer these questions in the simplest possible words.
With this, that's all in today's article, so we hope from all of you that you must have liked this entire article, if you like this article then share it with other people as well.
FAQ
Q.1 What is a Stock Exchange?
Ans: A stock exchange is a place where the names of various companies are listed so that that company and any other organization can get the right to buy and sell stocks, bonds, debentures and other securities in the stock market for the purpose of general public and investors. Can make available for.
Q.2 Which are the main two stock exchanges of India?
Ans: BSE and NSE are the two main stock exchanges of India.
Q.3 How many stock exchanges are there in India?
Ans: At present, there are a total of 24 stock exchanges in India, out of which BSE and NSE are the main two stock exchanges.
Q.4 What is the full form of BSE?
Ans: The full name of BSE is Bombay Stock Exchange.
Q.5 What is the full form of NSE?
Ans: The full name of NSE is National Stock Exchange.
Q.6 Where is the oldest stock exchange of India?
Ans: The oldest stock exchange in India is the Mumbai Stock Exchange (BSE) which was established in 1875.
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