BSE Ltd, formerly the Bombay Stock Exchange, is a stock exchange based on Dalal Street, Mumbai, where shares, derivatives, debt, mutual funds and currencies are traded electronically. Founded in 1875, it is Asia's oldest exchange and is overseen by the market regulator, SEBI is the statutory regulator of India's securities market, with the legal duty to protect investors and to promote and regulate that market. Read the full meaning of SEBI.
Individuals asking what BSE is will find the basic idea simple: it is a marketplace that matches buyers and sellers of listed securities, mainly the shares of companies. The brokers' association from which it began was formalised in 1887 as a member run nonprofit body, and it later became the Bombay Stock Exchange. BSE Ltd is a shareholder owned company that is itself listed, and it is not a government department.
Electronic trading, ICCL settlement and SEBI oversight
Trading on BSE is fully electronic, and the regular market hours are 9:15 AM to 3:30 PM, from Monday to Friday. Investors place their orders through registered brokers and the orders are matched on the exchange system.
Clearing and settlement of these trades are handled by the subsidiary Indian Clearing Corporation Ltd (ICCL). BSE was the first Indian exchange to receive permanent recognition under the Securities Contracts (Regulation) Act, 1956. SEBI oversees the exchange activities and the ownership of the company is a separate matter.
In a hypothetical case, an investor buys 10 shares of a listed company at Rs 100 each through a broker. The trade is matched on the exchange and settled through ICCL, for a total of Rs 1,000.
BSE the exchange, Sensex the index, NSE the rival
BSE has more listed companies than any other Indian exchange. The company BSE Ltd is listed on the NSE, and its shares have traded there since 2017 under the ticker "BSE".
The A regulated electronic marketplace in Mumbai where buyers and sellers trade shares and other securities at publicly visible prices. Read the full meaning of NSE (National Stock Exchange) is a separate exchange that competes with BSE for trading business, and it is not part of BSE.
BSE is the exchange, whereas Sensex is a benchmark index that BSE calculates on a Free float is the part of a listed company's shares that the public can freely buy and sell on the exchange, excluding promoter and government holdings. Read the full meaning of Free Float market capitalisation basis. The Sensex is not a measure of all listed companies.
The Sensex is an index of 30 companies run by BSE, while BSE lists far more companies than the Sensex holds.