Functions of Bombay Stock Exchange (BSE)
The key functions of the Bombay Stock Exchange are as follows:
1. Price Determination: On the secondary market, the prices of securities are determined by demand and supply. Therefore, the BSE assists in this process by continuously evaluating all listed securities. Moreover, investors can readily monitor the prices of these securities using the SENSEX index.
2. Contributes to the Economy: BSE provides a trading platform for various companies’ securities. Continuous reinvestment and disinvestment are integral to the trading procedure. This presents an opportunity for capital formation, funds flow, and economic growth.
3. Facilitates Liquidity: The most essential function of the BSE is to facilitate the sale and purchase of securities. This enables investors to convert existing securities into cash at any time. Therefore, investors can purchase and sell at any time, providing them with high liquidity.
4. Transactional Safety: After verifying the company’s position, BSE ensures that the securities are listed. In addition, all listed companies are required to abide by the Securities and Exchange Board of India (SEBI) rules and regulations.
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