SEBI, the Securities and Exchange Board of India, is the statutory regulator of the Indian securities market — it writes the rules for exchanges, brokers, mutual funds and listed companies, and enforces them to protect investors. It sets disclosure norms, licenses intermediaries and can investigate and penalise market manipulation, insider trading and fraud.

difference between NSDL and CDSL

Both are depositories that hold your shares in electronic (demat) form, and they do essentially the same job — the difference is only which one your broker uses to open your demat account. NSDL is the older, National Stock Exchange–linked depository; CDSL is associated with BSE. Your holdings are equally safe in either, and a 16-digit demat number that starts with “IN” is NSDL while an all-numeric one is CDSL.

the settlement cycle for equity in India is currently

T+1 — trades settle one working day after the transaction, so shares you buy today are credited to your demat account the next working day, and money from a sale reaches you the next working day. India moved fully to T+1 for equities in January 2023, and SEBI has since begun rolling out an optional T+0 (same-day) settlement for a limited set of stocks.

what happens to my shares if my broker goes bankrupt

Your shares stay safe because they are held in your own demat account at a depository (NSDL or CDSL), not by the broker — the broker only routes your orders and cannot spend securities sitting in your account. If a broker defaults, the exchange’s investor protection fund can also compensate eligible claims, which is why shares are held with a depository rather than in the broker’s name.

what is a clearing corporation

A clearing corporation sits between the buyer and the seller of every trade and guarantees that each side gets what it is owed — shares to the buyer, money to the seller — even if one party defaults. In India this role is played by bodies such as NSE Clearing, and it is what makes it safe to trade with a stranger you will never meet.

NSE, BSE, SEBI: how the machine is wired

When you tap Buy on your phone, your order passes through at least five separate institutions in under a second. Knowing what each one does is not trivia — it is what tells you which risks are real and which are imaginary.

The exchanges

An exchange is a matching engine plus a rulebook. It does not buy or sell anything itself. Its entire job is to take every buy and sell order in the country for a given stock, line them up by price and time, and pair them off fairly.

	NSE	BSE
Founded	1992, fully electronic from day one	1875 — Asia’s oldest exchange
Flagship index	NIFTY 50	SENSEX (30 stocks)
Listed companies	Around 2,000+	Over 5,000
Share of equity turnover	The large majority	Smaller in cash, tiny in derivatives
Where you will actually trade	Most volume, tighter spreads	Useful for small companies listed only here

Both are regulated identically and a share of Reliance is the same share whichever venue you buy it on. Prices differ by paise at most, because arbitrageurs close any gap instantly.

What actually happens when you press Buy

Loading diagram…

1
Your broker receives the order
Zerodha, Groww, Angel One and the rest are members of the exchange. You are not; you access the exchange through them. The broker performs risk checks — do you have the funds, is the stock in a restricted list — and forwards the order.
2
The exchange matches it
Your order enters the order book and is matched against the best available opposite order by strict price-time priority. Better price wins; among equal prices, whoever queued first wins.
3
The clearing corporation guarantees it
NSE Clearing (or ICCL for BSE) steps in as the counterparty to both sides. This is the quiet miracle of modern markets: you never need to know or trust whoever sold to you, because the clearing corporation guarantees settlement even if they default.
4
The depository moves the shares
Shares are electronic entries held at NSDL or CDSL. On settlement, the depository debits the seller’s demat account and credits yours. Your broker cannot quietly hold your shares — they sit in your name at the depository.
5
Settlement completes on T+1
India settles one working day after the trade. Buy on Monday, the shares are in your demat account on Tuesday. India moved to T+1 ahead of most of the world, and is piloting same-day settlement.

The regulator

SEBI sits above all of it. It licenses brokers and exchanges, mandates what companies must disclose and when, prosecutes insider trading and manipulation, and sets the rules on margins, leverage and client fund handling.

Two SEBI rules protect you more than any other, and both came from painful history. Client funds must be segregated from the broker's own money and cannot be used for the broker's business. And since 2022, shares pledged for margin stay in your demat account rather than being transferred to the broker — a direct response to the Karvy scandal, where a broker pledged clients' shares to raise money for itself.

The trading day

Session	Timing (IST)	What happens
Pre-open	9:00 – 9:15 AM	Orders collected, no matching until the end. A single equilibrium opening price is calculated to absorb overnight news.
Regular session	9:15 AM – 3:30 PM	Continuous matching. This is where almost all volume occurs.
Closing price window	3:00 – 3:30 PM	The official close is a volume-weighted average of the last 30 minutes — not the final trade. This makes the close much harder to manipulate.
Post-close	3:40 – 4:00 PM	Orders at the closing price only.

Check yourself

Your broker suddenly shuts down. What happens to the 200 shares of Infosys you own?

Simple bhasha mein

Sabzi mandi ka system

Sabzi mandi mein aap seedha kisan se nahi milte. Ek jagah hai jahan sab aate hain, rate board pe lagta hai, aur ek committee dekhti hai ki koi dhandhli na ho. NSE aur BSE wahi mandi hain, aapka broker bichauliya, aur SEBI woh committee jo dekhti hai ki taraazu sahi hai ya nahi.

What to remember

The exchange matches orders; it never takes a side.
The clearing corporation guarantees settlement, so you never need to trust your counterparty.
Your shares live at NSDL or CDSL in your name — not with your broker.
India settles on T+1: buy Monday, own it Tuesday.
The official closing price is a 30-minute weighted average, not the last trade.

You reached the endMark it done and keep your streak going.

Up nextBSE vs NSE: two exchanges, and why it barely matters to you Previous: Where shares come from: IPOs and the two markets

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Common questions

Short, direct answers to what people ask about this topic.

what does SEBI do: SEBI, the Securities and Exchange Board of India, is the statutory regulator of the Indian securities market — it writes the rules for exchanges, brokers, mutual funds and listed companies, and enforces them to protect investors. It sets disclosure norms, licenses intermediaries and can investigate and penalise market manipulation, insider trading and fraud.
difference between NSDL and CDSL: Both are depositories that hold your shares in electronic (demat) form, and they do essentially the same job — the difference is only which one your broker uses to open your demat account. NSDL is the older, National Stock Exchange–linked depository; CDSL is associated with BSE. Your holdings are equally safe in either, and a 16-digit demat number that starts with “IN” is NSDL while an all-numeric one is CDSL.
the settlement cycle for equity in India is currently: T+1 — trades settle one working day after the transaction, so shares you buy today are credited to your demat account the next working day, and money from a sale reaches you the next working day. India moved fully to T+1 for equities in January 2023, and SEBI has since begun rolling out an optional T+0 (same-day) settlement for a limited set of stocks.
what happens to my shares if my broker goes bankrupt: Your shares stay safe because they are held in your own demat account at a depository (NSDL or CDSL), not by the broker — the broker only routes your orders and cannot spend securities sitting in your account. If a broker defaults, the exchange’s investor protection fund can also compensate eligible claims, which is why shares are held with a depository rather than in the broker’s name.
what is a clearing corporation: A clearing corporation sits between the buyer and the seller of every trade and guarantees that each side gets what it is owed — shares to the buyer, money to the seller — even if one party defaults. In India this role is played by bodies such as NSE Clearing, and it is what makes it safe to trade with a stranger you will never meet.