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The Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia, located in Mumbai, India. It was founded in 1875 as the Native Share and Stock Brokers Association and has been a symbol of the growth and progress of the Indian economy since then. Today, the BSE is the world’s 6th largest stock exchange by market capitalization, with a total market capitalization of over $3.56 trillion. Thus, below is everything there is to know about the Bombay Stock Exchange.
History:
- The BSE was founded in 1875 by a group of brokers who gathered under a banyan tree in Mumbai’s Fort area.
- Initially known as the Native Share and Stock Brokers Association, it started with only five stockbrokers.
- The exchange became a public limited company in 2005 and was renamed BSE Limited.
- Over the years, the BSE has played a critical role in the growth of the Indian economy by providing a platform for businesses to raise capital and for investors to buy and sell shares.
Trading Mechanism:
- The BSE operates on an electronic trading platform called BSE On-Line Trading (BOLT) system, which was introduced in 1995.
- The BOLT system enables trades to be executed within seconds, ensuring speedy and efficient transactions.
- The BSE also operates a separate trading platform for debt securities, known as the Wholesale Debt Market (WDM).
Indices:
- The BSE operates several benchmark indices, including the BSE Sensex and the BSE 500 Index.
- The BSE Sensex is the most widely followed stock market index in India and represents the top 30 companies listed on the BSE based on market capitalization.
- The BSE 500 Index, on the other hand, comprises the top 500 companies listed on the BSE based on market capitalization.
- The BSE also has several sectoral indices, including the BSE Bankex, BSE Auto Index, BSE FMCG Index, and BSE Healthcare Index, among others.
Listing Requirements:
- To list on the BSE, a company must meet the exchange’s listing requirements, which include financial criteria and corporate governance standards.
- The BSE also has specific guidelines for the minimum public shareholding and the minimum number of shareholders that a company must have to list on the exchange.
- Companies listed on the BSE are required to comply with ongoing reporting and disclosure requirements to ensure transparency and fair dealing for investors.
Regulatory Framework:
- The Securities and Exchange Board of India (SEBI) is the primary regulator of the Indian securities market, including the BSE.
- The BSE is also regulated by the Reserve Bank of India (RBI) and the Ministry of Finance.
- The BSE has a separate regulatory arm, known as the BSE Limited, which oversees compliance by companies listed on the exchange with listing requirements, trading rules, and other regulations.
In conclusion, the Bombay Stock Exchange is a symbol of India’s economic growth and progress. From its humble beginnings under a banyan tree to its current status as a global financial powerhouse, the BSE has played a critical role in providing a platform for businesses to raise capital and for investors to buy and sell shares. You can also check the top BSE gainers and top BSE losers to find out the best and the worst-performing BSE companies. 5paisa is a great place to learn about investing in the stock market. As the Indian economy continues to grow, the BSE is poised to play an even more significant role in driving economic growth and development.
