National Stock Exchange
The National Stock Exchange is the largest stock exchange in India in terms of number of trades and daily turnover, for both the equity market and the derivative market. Last recorded, the market capitalization of NSE was at Rs. 47,01,923 crore(August 2009). Both Bombay Stock Exchange and National Stock Exchange are two of the most preferred and the important stock exchanges in India, trading on a huge volume of stocks. The main index of NSE is S&P CNX Nifty, also known as NSE Nifty (National Stock Exchange Fifty), which is an index of 50 major stocks, computed for market capitalization.
The National Stock Exchange is the second fastest growing stock exchange in the world with an astounding record of 16 percent per year. It is also the third largest stock exchange in the world with respect to trading in equities. The managing director of NSE is Mr. Ravi Narain. It is mutually owned by leading banks, insurance companies, financial institutions and financial intermediaries; however there is a distinction between the ownership and management. There are two foreign investors who have a stake in NSE, Goldman Sachs and NYSE Euronext. One of the biggest landmarks for NSE came in October 2007 when the equity market capitalization of companies listed on the NSE touched USD $1.46 trillion, making it the third largest stock exchange in the second largest stock exchange in South Asia.
The National Stock Exchange of India was floated by major financial institutions on the approval of Government of India and was deemed as a tax paying company in November 1992. In April 1993, National Stock Exchange got the recognition of a. stock exchange. under the Securities Contracts(Regulations Act) of 1956. It started operations in the wholesale debt market in June 1994, then moved to Capital Market or the .equities. segment in November 1994. NSE made inroads in the Derivatives segment in June 2000.
The trading sessions at the NSE begin from 9am to 3.30 pm on all days except Saturdays, Sundays and official holidays that are declared by the government of India. Actually, there were supposed to push the timing all the way to 5pm to reach the reach of the longest trading hours in Asia, but had to withdraw due to stiff opposition by its members.
As of now, NSE deals in 8 segments of the capital market- Equity, Futures and Options, Wholesale Debt, Retail Debt, Currency Futures, Mutual Funds and Stock Lending-Borrowing. Currency derivatives were introduced in 2008 with the start of Currency Futures in USD. Now there are currency futures in Pound, Yen and Euro. Just one year after Currency Futures, Interest Rate Futures was introduced in August 31, 2009. Futures Contract means an agreement to trade a specific amount of a financial instrument or commodity amount at a specified price on a stipulated future date. Incidentally, the contract can be sold before the date of settlement.
National Stock Exchange has also been credited for consistently bringing in innovation in the financial and stock markets. It pioneered Internet trading in February 2000, which led to increased confidence at the investor and broker level. It is the only and the first stock exchange to trade Gold Exchange Traded Funds in India. NSE introduced the first electronic limit order book (LOB) exchange to buy and sell securities in India; this has later been emulated by other market structures in the country.
NSE has also set up .National Securities Clearing Corporation Ltd. the first clearing corporation for equity market and derivates market in India. It is credited for setting up the first depository in India, known as National Securities Depository Limited. NSE also has wide reach in media, with the launch of NSE-CNBC-TV18 media center, which is a tie-up with CNBC TV 18. NSE also conducts online exams under its program known as Certification in Financial Markets(NCFM) which has major industry recognition. The certifications are for 19 modules that cover various sectors of the financial markets.