A stock market is a place where the shares of publicly listed companies are traded. It originated in India at the end of the 18th century when a lot of negotiable instruments were introduced in the market. A Stock Exchange helps in facilitating the trades that allow the smooth functioning of the transactions.
There were numerous stock exchanges in India that were formed during the early 1990s. As of now, the most important stock exchanges in India are the Bombay Stock Exchange(BSE) and the National Stock Exchange(NSE). In this article, we will understand in detail the various stock exchanges registered with The Securities & Exchange Board of India.
Bombay Stock Exchange was formed in 1875 and is one of the two principal large stock exchanges in India. The major objective of BSE is to provide an efficient and transparent market for trading currencies, equities, mutual funds etc. As per the official website of BSE, its vision is to “Emerge as the premier Indian stock exchange with best-in-class global practice in technology, product innovation, and customer service.”
BSE has a wholly-owned subsidiary. Indian Clearing Corporation Limited acts as a central counterparty to all the trades that happen on the exchange and provides settlements of the trades executed. Another subsidiary of BSE Limited is BSE Institute Limited which serves as a capital market educational institution in our country.
In the 1850s, 5 stockbrokers would gather under a banyan tree in front of the Mumbai Town Hall. Due to the increase in the number of brokers, the place of meetings kept changing before finally moving to Dalal Street in the year 1874. In order to measure the overall performance of the exchange, in 1986, the BSE developed the S&P BSE SENSEX index.
Apart from the Sensex, BSE also has other important indices such as BSE100, BSE200, BSE MIDCAP, BSE SMALLCAP, BSEAuto, BSEPharma, BSEMetal, etc.
National Stock Exchange is the leading stock exchange in India. It was established in the year 1992 as the first dematerialized electronic exchange in the country. It was the first exchange to provide a fully-automated screen-based trading system to the investors to facilitate easy trading. In the year 1993, NSE registered itself as a stock exchange under the Securities Contract Regulations Act. It operates with a vision to “to continue to be a leader, establish a global presence, facilitate the financial well-being of people .”
The benchmark index of NSE, Nifty 50 is used extensively by investors around the world to keep track of the Indian capital market. NSE had also played an important role in the creation of the National Securities Depository Limited. (NSDL) allows the investors to hold and transfer their shares electronically without any hassle. This eventually leads to holding the financial instruments conveniently in electronic form thereby reducing the fake certificate issues.
The NSE commenced trading in derivatives with the launch of index futures in the year 2000. Since then, the futures & options have come a long way in becoming a popular financial product. In the Futures and Options segment, trading in the NIFTY 50 Index, NIFTY IT index, NIFTY Bank Index, NIFTY Next 50 index, and single stock futures is available.
Calcutta Stock exchange is the second oldest stock exchange in Southeast Asia and was incorporated in the year 1908 with 150 members. Presently, CSE is located at the Lyons Range. It was granted recognition under the relevant provisions of the Securities Contract (Regulation) Act, 1956, and was replaced by the screen-based trading system only in the year 1997. The matter pertaining to the exit of the Calcutta stock exchange by SEBI is pending before the Calcutta High Court.
The Metropolitan stock exchange was recognized as a “notified stock exchange” in the year 2012 by SEBI. MSE offers an electronic and hi-tech trading platform in Capital Markets, Debt Markets, Futures & Options.
MSE launched its SX40 index on February 9th, 2013, and commenced trading from February 11th, 2013. ‘SX40’, is a free-float based index consisting of 40 large-caps, liquid stocks representing diverse sectors of the economy.
MSE considers ‘Information, Innovation, Education and Research’ as its four cornerstones of the unique market development philosophy to support its mission of financial literacy across India.
India International Exchange Limited is India’s first International Financial Services Centre located in Gujarat. Its operations started in 2017 and is a subsidiary of BSE Limited.
The exchange offers a single segment approach for all asset classes such as equities, currencies, commodities etc. The exchange uses an advanced technology platform and is the fastest in the world with a turn-around time of 4 microseconds. For global experts and market participants, India INX offers to be an offshore exchange that provides innovative products and services along with competitive advantages in terms of the tax structure.
On November 26th, 2016, NSE IFSC Limited (NSE International Exchange) was incorporated by the Registrar of Companies, Gujarat. It is a fully owned subsidiary company of the National Stock Exchange of India Limited (NSE). It has received approval from the Securities and Exchange Board of India (SEBI) to establish an international exchange in Gujarat International Finance Tech City (GIFT) – International Financial Service Centre (IFSC) Gandhinagar.
The city, which is a special economic zone, is India’s first IFSC. As a part of the advantages offered to the companies, Exchange and Financial Services units located in GIFT IFSC are offered a competitive tax structure and facilitative regulatory framework. It offers benefits such as exemptions from security transaction tax, commodity transaction tax, dividend distribution tax, capital gain tax waivers, and no income tax.
With an objective of increasing access to financial markets, NSE International Exchange has been launched to grow the financial market as well as expected to bring capital into India. Furthermore, Stock exchanges operating in the GIFT IFSC are permitted to offer trading in securities in any currency other than the Indian rupee.
Subject to the approval of SEBI, trading is permitted in:
that are available for trading in stock exchanges in FATF/ IOSCO compliant jurisdiction. NSE IFSC Limited had launched the trading on 5th June 2017 and offers longer trading hours in various products including in Index Derivatives, Stock Derivatives, Currency Derivatives, Commodity Derivatives, and Debt Securities.
Below is a comprehensive list of all the stock exchanges in India. Out of the below, 20 regional stock exchanges have already exited the business:
|S.No||Former Stock Exchange||Closed in|
|1||Ahmedabad Stock Exchange||2018|
|2||Delhi Stock Exchange||2017|
|3||Guwahati Stock Exchange||2015|
|4||Jaipur Stock Exchange||2015|
|5||Madhya Pradesh Stock Exchange||2015|
|6||Madras Stock Exchange||2015|
|7||OTC Exchange of India||2015|
|8||Pune Stock Exchange||2015|
|9||UP Stock Exchange||2015|
|10||Vadodara Stock Exchange||2015|
|11||Bangalore Stock Exchange||2014|
|12||Cochin Stock Exchange||2014|
|13||Inter-connected Stock Exchange of India||2014|
|14||Ludhiana Stock Exchange||2014|
|15||Bhubaneswar Stock Exchange||2005|
|16||Coimbatore Stock Exchange||2009|
|17||Hyderabad Stock Exchange||2007|
|18||Magadh Stock Exchange||2007|
|19||Mangalore Stock Exchange||2004|
|20||Trivandrum Stock Exchange||2010|
Taxation on mutual funds is a complex topic. Taxes paid on your mutual fund investments vastly depend on factors such as what kind of funds you have invested in, the duration of your investment, which income tax slab you belong to and so on.