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This post is meant to give overview of Indian Financial Markets. The actors in Indian Financial Market include Regulators, Stock Exchanges, Commodities Exchanges and the Depositories. The regulators include:
1) Securities and exchange board of India (SEBI) that governs the Equity markets and Depositories. 2) Forward Market Commision (FMC) that governs Commodities markets. 3) Reserve Bank of India (RBI) that governs Banks and Fixed Income Money Markets. The three regulatory bodies don’t interfere in one anothers area , though the regulatory frame work of SEBI and RBI overlap to some extent. The two stock exchanges in India, governed SEBI, National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), contribute almost 99.9% turnover in the market. Other exchanges like Delhi Stock Exchange don’t have significant turnover and are almost dead.
The Depositories takes care of the share certificates in Demateralized(DEMAT) form . The two depositories in Indian market are: 1) National Securities Depositories Limited (NSDL)
2) Central Depositories Services Limited(CDSL)
These depositories also hold Commodities in DEMAT form. The Commodities Market is governed by Forward Market Commission(FMC). The two prominent Commodities exchanges in India are
1) Multi Commodity Exchange (MCX)
2) National Commodities & Derivatives Exchange (NCDEX)
Reverve Bank of India (RBI) govern banks and money markets in India . The trading platform for money markets is Negotiated Dealing System (NDS). Trading in money markets is dominated by Institutional players and thus retail investors can participate only through Liquid Mutual funds.