Stock Market Glossary

India's Stock Market Structure — NSE, BSE, SEBI, and How It All Fits

India has two primary stock exchanges: the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). NSE, founded in 1992, handles the majority of equity trading volume — consistently above 90% of total equity turnover in cash and derivatives segments. BSE, established in 1875 and Asia's oldest exchange, lists more companies but sees lower daily turnover.

The Securities and Exchange Board of India (SEBI) is the market regulator, equivalent to the US SEC. SEBI regulates exchanges, brokers, mutual funds, FPIs, investment advisors, research analysts, portfolio managers, and all market intermediaries. Every broker you trade with has a SEBI registration number — verify it on SEBI's intermediary portal before opening an account.

Depositories, Settlement, and Account Structure

In India, shares are held electronically in a demat account — short for dematerialised account. Two depositories operate: CDSL (Central Depository Services Limited, promoted by BSE) and NSDL (National Securities Depository Limited, promoted by NSE). Your broker opens a demat account with one of these through a Depository Participant (DP).

India moved to a T+1 settlement cycle in January 2023, meaning you receive shares purchased (or cash from shares sold) one business day after the transaction. This is faster than the T+2 standard used in most global markets. SEBI is piloting T+0 (same-day) settlement for select stocks.

Circuit Breakers, Market Segments, and Trading Mechanics

SEBI mandates index-level circuit breakers based on Nifty 50 movements. A 10% drop in the Nifty triggers a 45-minute trading halt. A 15% drop triggers a 1-hour 45-minute halt. A 20% drop closes markets for the rest of the day. These circuit breakers aim to prevent panic selling from cascading into full-scale crashes.

Individual stocks have separate price bands — most active stocks are in a 20% upper/lower circuit band, meaning the price cannot move more than 20% in either direction in a single session. Illiquid stocks in the T-group (trade-to-trade segment) have 5% circuit limits and require delivery — no intraday trading allowed.

Market segments on NSE: the Normal Market handles regular equity and F&O trading; the Block Deal Window allows large institutional trades of minimum ₹10 crore at negotiated prices; the Offer for Sale (OFS) mechanism allows promoters to sell shares through the exchange with price discovery. Understanding which segment a transaction uses matters for interpreting unusual price or volume patterns.