Level 3 · Module 1 · The Basics
NSE, BSE & SEBI: Who Runs the Market
Three names you'll see forever. Here's exactly what each one does.
In this lesson
What you'll be able to do
- Distinguish exchange, depository and regulator
- Know the role of clearing corporations
- Understand investor protection mechanisms
Think about it
When you buy a share, who makes sure the seller actually delivers it?
Story
Let's picture it
Not the seller, and not your broker. A clearing corporation steps in the middle and guarantees both sides. Your money goes to it, the shares come from it, and neither party has to trust the other. This invisible plumbing is why lakhs of strangers can trade daily without a single handshake.
Visual
The chain of a trade
You
Place an order in your app
Broker
SEBI-registered member routes it to the exchange
Exchange (NSE/BSE)
Matches your order with a counterparty
Clearing corporation
Guarantees settlement between both sides
Depository (NSDL/CDSL)
Credits shares to your demat account
Plain English
The simple explanation
BSE (1875) is Asia's oldest exchange; NSE (1992) introduced fully electronic trading and dominates equity volumes today.
SEBI is the regulator: it frames rules, registers intermediaries, requires disclosures and acts against fraud and manipulation.
NSDL and CDSL are depositories where your shares sit electronically. Your broker is only an intermediary, the shares are in your name.
Real world
SCORES
SEBI's SCORES portal lets any investor file a complaint against a registered intermediary and track it. Knowing this exists changes the power balance for a retail investor.
Watch out
Common mistakes
- Dealing with unregistered 'advisors' or tipsters
- Not checking that a broker is SEBI-registered
- Assuming the broker owns your shares
Did you know?
Indian equity settlement moved to T+1, trades settle one working day after execution, among the fastest cycles globally.
Your turn
Mini challenge
Look up your broker's SEBI registration number on the SEBI website. It takes two minutes and is a habit worth having.
Quick quiz
1 / 3
Wrap up
Summary
Exchange matches, clearing corporation guarantees, depository holds, SEBI regulates. Your broker is just the door.
- NSDL/CDSL hold your shares, not the broker
- SEBI regulates and runs SCORES
- Settlement is T+1
Revise