Full Form of BSE

Full Form of BSE – Bombay Stock Exchange

The full form of BSE is the Bombay Stock Exchange. The BSE is the oldest stock exchange of Asia which was established in the year 1875 as Native Shares and Stock Broker’s Association and is the first exchange in India that was recognized as the exchange in the year 1957 under the Securities Contract (Regulation) Act by the government. Since then it is playing a pivotal role in the development of the capital market of the country.

History

  • The Bombay Stock Exchange was established in the year 1875 and is also called the Stock Exchange Mumbai. Before establishing the BSE, the group of the five stockbrokers was there who used to conduct the different meetings in front of the Mumbai town hall under a banyan tree.
  • But gradually, over time, the number of brokers in the meeting increases, and because of this, the venue of the meeting used to change frequently. After a few decades, in 1874, the group of brokers moved to Dalal Street for their meetings and made it their permanent location.
  • It was then established in the year 1875 as Native Shares and Stock Broker’s Association in the following year, thereby providing it an official organization. After decades of its working, it became the first exchange in India that was recognized as the exchange in 1957 under the Securities Contracts (Regulation) Act by the government.
  • After some years of its recognition, in the year 1986, a tool was developed to measure the Bombay stock exchange’s overall performance known as the SENSEX, which is the stock market index consisting of the 30 well established as well as financially sound companies that are listed on the Bombay stock exchange.
  • In 1995, the Bombay stock exchange switched to the electronic trading system known as BOLT (BSE On-Line Trading). Also, it became the first stock exchange in the world, which introduced an internet trading system at a centralized level.
Full Form of BSE

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Features

The following are the features of the Bombay Stock Exchange:

Functions of BSE

The following are the main functions of the Bombay Stock Exchange:

Functions of BSE

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#1 – Price Determination

The price determination in the secondary market depends upon the demand and supply of the securities. Bombay Stock Exchange helps in the process of valuation by constantly valuing all the listed securitiesListed SecuritiesListed security refers to a financial instrument such as stocks, bonds, derivatives, etc., registered with and readily tradable on the stock exchanges like NASDAQ and NYSE.read more. Such share prices can be easily tracked through the index that is popularly known as SENSEX.

#2 – Economical Contribution

Since the Bombay Stock Exchange deals with the securities listed and these securities are sold and re-sold continuously, it allows the funds to keep moving instead of remaining idle, which boosts the economy.

#3 – Marketability and Liquidity

They provide high liquidityLiquidityLiquidity shows the ease of converting the assets or the securities of the company into the cash. Liquidity is the ability of the firm to pay off the current liabilities with the current assets it possesses.read more as the listed securities can be sold at any point in time, converting it into cash. It works continually, and the investor can sell and purchase the security simply according to their wish.

Importance of BSE

The following are the main importance of the Bombay Stock Exchange:

Difference between BSE and NSE

The following are the main differences between BSE and NSE:Differences Between BSE And NSE:The BSE (Bombay Stock Exchange) is India's oldest stock exchange, founded in 1875, with a benchmark index of SENSEX, which gives top 30 stock indexes, and the NSE (National Stock Exchange), founded in 1992, with a benchmark index of Nifty, gives top 50 stock indexes.read more

  • NSE stands for the National Stock Exchange, which is the largest stock exchange of the country and was founded in 1992, whereas BSE stands for the Bombay Stock Exchange, which is the oldest stock exchange of the country and was founded in the year 1875.
  • The benchmark index of the NSE is Nifty, which consists of 50 companies that are most actively traded, whereas the benchmark index of the BSE is SENSEX, which is the stock market index consisting of the 30 well established as well as financially sound companies that are listed on the Bombay Stock Exchange.

Benefits

The following are the benefits of the Bombay Stock Exchange:

Conclusion

BSE is the abbreviation used for the Bombay Stock Exchange. As the name implies, It is the stock exchange that was established in the year 1875. The benchmark index of the BSE is SENSEX that consists of the 30 companies that are financially sound and well established, which helps in measuring the Bombay Stock Exchange’s overall performance.

The transactions that occur at the BSE are regulated and governed strictly within the legal framework as India’s securities exchange board governs its functions. Thus it opens the platform for the speculation but within a legal framework.

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This has been a guide to the Full Form of BSE, i.e. (Bombay Stock Exchange) and it’s meaning. Here we discuss the features and functions of BSE and its benefits and importance. You may refer to the following articles to learn more about finance –