When you want to invest in stocks or commodity, the transaction is processed through a stock exchange. A stock exchange is an electronic market where you can buy and sell stocks and commodities. If a business wants to raise capital by issuing bonds or shares, the business will have to get itself registered on the stock exchange. There are stock exchanges across the globe and if you want to know how the market is performing in a specific country, all you need to do is visit the respective stock exchange website and gain information about the same. However, when it comes to India, most of us are only aware of the two major stock exchanges, which are the National Stock Exchange and the Bombay Stock Exchange. Nevertheless, there are many other stock exchanges in India. The stock exchanges are registered with the Securities and Exchange Board of India (SEBI).
In order to regulate the transactions, which are being carried out by the investors, there are certain rules and regulations established for each stock exchange, which fall under SEBI. Unless the stock exchanges follow these rules, they will not be able to allow the investors to make transactions. The regulations strive to protect the interest of the investors and to make it easier for them to carry out transactions of securities and commodities.
What is a Stock Exchange?
Primarily, it is important to understand what a stock exchange is. It is an organization where stocks, commodities, bonds, and derivatives such as futures and options are traded. It is a place where the buyers and the sellers come together in order to trade the financial instruments in the specific business hours and days. In order to trade in the exchange, the company should be listed on the stock exchange and there are rules and regulations, which need to be followed. Even brokers and companies, which offer trading services, are required to follow the specific set of rules and regulations for the purchase and sale of securities. There are companies, which are not on the stock exchange, and the shares of these companies are traded over the counter. Such companies are mostly smaller and less liquid. These companies have high risk and do not meet the requirements of being listed on the stock exchange.
Popular Stock Exchanges in the Country
There are two large stock exchanges in India—Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
Located in Mumbai, the BSE is the oldest stock exchange in Asia and is the 11th largest stock exchange in the world. There are more than 5,500 companies, which are publicly listed on this exchange.
A leading stock exchange in India, the NSE is located in Mumbai and it was the first exchange, which offered a modern, automated screen based trading system. It is one of the largest stock exchanges around the globe.
What is a Commodity Exchange?
A commodity exchange is a market where commodities or goods like gold, silver, coffee, corn, and soybeans, are being traded amongst the buyers and sellers. A commodity exchange has investments for the purpose of business operations as well.
List of Other Stock Exchanges in India
Apart from BSE and NSE, the other five stock exchanges in India are as follows:
- Calcutta Stock Exchange
- Magadh Stock Exchange
- NSE IFSC Limited
- Metropolitan Stock Exchange of India Limited
- India International Exchange (India INX)
List of Commodity Exchanges in India
Here are the commodity exchanges, which are listed in the country.
- Ace Derivatives and Commodity Exchange
- Indian Commodity Exchange Limited
- Multi Commodity Exchange of India Limited
- National Commodity and Derivatives Exchange Limited
- National Multi Commodity Exchange of India Limited
It is important to gain information about the stock exchange before you start to trade. Not many are aware of the fact that there are stock exchanges in India apart from BSE and NSE. Depending on whether you want to trade in securities or in commodities, you will have to choose the stock exchange. Every stock exchange plays an important role in the economy and it is important for every company to abide by the rules and regulations of the same. Even you, as an investor, need to be responsible by following the rules of the exchange and ensure that you make transactions within the given regulations.