Stock Market BasicsLesson 3 of 7beginner

Who Is Who: SEBI, NSE, BSE, NSDL, CDSL and Your Broker

Six names appear everywhere in Indian markets. Here is what each one actually does, and which one to approach when something goes wrong.

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Six institutions stand between you and a share. Each has one job. Once you can name the job, the whole system stops feeling mysterious — and you know exactly who to approach when something goes wrong.

SEBI — the referee

Securities and Exchange Board of India. Set up under an Act of Parliament in 1992, SEBI is the regulator of the entire securities market.

It writes the rules that everyone else follows: how a company must disclose information, how an IPO is priced and allotted, what a broker can and cannot do with your money, what counts as insider trading. It inspects, it investigates, and it punishes — fines, bans, and prosecution.

SEBI does not run a market and does not hold your shares. Think of it as the referee, not a player. It also runs investor education (investor.sebi.gov.in) and a complaints platform called SCORES, which is where an unresolved complaint ultimately goes.

NSE and BSE — the marketplaces

BSE (Bombay Stock Exchange, founded 1875) is Asia's oldest exchange. NSE (National Stock Exchange, started trading in 1994) is the larger of the two by volume in most segments.

An exchange does one core thing: it matches buy orders with sell orders, fairly and fast, by strict rules of price and time priority. It also decides which companies may list, monitors trading for manipulation, publishes prices, and sets circuit limits.

Most large companies are listed on both. The price on the two is nearly identical, because any meaningful gap is instantly traded away. You can buy on one and, in most cases, sell on the other — shares are not tied to an exchange.

NSDL and CDSL — the vaults

Shares today are electronic. They are not printed on paper and not stored by your broker. They sit in a depository.

India has two: NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited). One of them holds your shares, in an account in your name, with your PAN attached.

This is the single most reassuring fact for a new investor: your shares are not with your broker. If your broker's business fails tomorrow, your shares still exist at NSDL or CDSL, recorded as yours.

Your broker — the gateway

A stockbroker is a SEBI-registered member of an exchange. You cannot place an order on NSE yourself; you route it through a broker, who is responsible for your identity check, for collecting margin, and for sending the order to the exchange.

A broker also usually acts as a Depository Participant (DP) — the agent through which your demat account with NSDL or CDSL is opened and operated.

What your broker can do: place, modify and cancel orders you authorise; debit charges you agreed to; hold funds you transferred, in a segregated client account.

What your broker must not do: trade in your account without your instruction, use your funds for its own business, or move your shares without your authorisation.

RTA — the company's record keeper

A Registrar and Transfer Agent (KFin Technologies, Link Intime, MUFG Intime and others) maintains the shareholder register for a company and handles the mechanics of corporate actions — working out who gets a dividend, processing IPO allotment, sending bonus shares.

You mostly deal with an RTA for two things: IPO allotment status, and problems with an unclaimed or missing dividend.

How they fit together in one trade

Worked example

You tap "Buy 10 shares at ₹500" on your app.

  1. Broker checks your funds and sends the order to the exchange.
  2. NSE/BSE matches it against a seller's order and confirms the trade.
  3. Clearing corporation stands between you and the seller and guarantees settlement.
  4. The next working day (T+1), money leaves your account and 10 shares arrive.
  5. NSDL/CDSL records those 10 shares in your demat account and messages you.
  6. SEBI has written the rules governing every step above.

Where to complain, in order

This sequence matters, because skipping a step usually sends you back to the start.

  1. Your broker. Raise a written complaint and keep the reference number.
  2. The exchange. NSE and BSE both run investor grievance mechanisms, including arbitration. Exchanges also operate an Investor Protection Fund for defaulting brokers.
  3. SEBI SCORES. SEBI's online complaint system. The entity must respond within a defined timeline, and you can escalate and track the complaint.
  4. Smart ODR. A SEBI online dispute-resolution portal for conciliation and arbitration after the above steps.

For a depository issue — wrong holdings, an unauthorised debit — complain to your DP and to NSDL or CDSL directly.

Key takeaways

  • SEBI regulates. NSE and BSE match orders. NSDL and CDSL hold your shares. Your broker is the gateway.
  • Your shares sit in a depository in your own name, not with your broker.
  • A clearing corporation guarantees every trade, so you never need to know your counterparty.
  • An RTA handles allotment, dividends and the shareholder register for the company.
  • Complaints escalate in order: broker, then exchange, then SEBI SCORES.

Check your understanding

0 of 3 answered

  1. 1.Your broker shuts down unexpectedly. What happens to shares you already own?
  2. 2.Which body writes the rules for how IPOs are priced and disclosed?
  3. 3.You have complained to your broker and received no resolution. What is the correct next step?

Frequently asked questions

Is my broker holding my shares?
No. Your shares are held in your demat account with NSDL or CDSL, in your own name. Your broker only has permission to place orders.
Who do I complain to about my broker?
First the broker, then the exchange, then SEBI's SCORES platform. Each step has a defined timeline.
Lesson 3 of 34 overall