UNIVERSITY OF MUMBAI

A PROJECT REPORT ON

INTRODUCTION TO NATIONAL STOCK EXCHANGE IN

INDIA

STUDENT DECLARATION

I am Dhiraj Singh studying in the Third Year of Bachelor Of Management Studies course at
ICLES’ Motilal Jhunjhunwala College, Vashi Navi Mumbai, hereby declare that I have
completed the project titled “INTRODUCTION TO NATIONAL STOCK EXCHANGE IN
INDIA” As a part of the course requirement for BMS Program.

I further declare that the information presented in this project is true and original to the best of
my knowledge.

Date:

Place:
 DHIRAJ R. SINGH

ACKNOWLEDGEMENT

I am using this opportunity to express my gratitude to everyone who supported me throughout

the course of this BMS project. I am thankful for their aspiring guidance, invaluably constructive
criticism and friendly advice during the project work. I am sincerely grateful to them for sharing
their truthful and illuminating views on a number of issues related to the project.

I express my warm thanks to Ms. Rachana Sontakke for his support and guidance.

I would like to thank Mr. Pramod Paberkar Sir Principal of our College.

I am particularly appreciative to my HOD. Ms. Minu Singhwho gave her time to assist with my
requests for information, as well as for her guidance and valuable assistance from the offset of
this project.

I would like to express my deepest appreciation to my guide and AssistantProfessor

Ms. Zinatfarooqui who have invested his full effort in guiding me in achieving the goal. Her
insights and remarks were of great value.

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Finally, I would like to recognize and thank my parents and friends for their undying support.

Thank you,

Dhiraj Singh

EXECUTIVE SUMMARY

The purpose of this project was to get an insight in the current trends and future prospects in
National Stock Exchange Of India. It gives me immense pleasure to present this throughly
researched projects on Stock Market. This will also help in enlightening our knowledge about the
latest happenings in the National Stock Exchange Of India.

This report has been designed to eliminate the queries and doubts of common public about the e-
commerce. Therefore by considering certain norms, I have made an attempt to make it as simple
as possible.

The research work has been carefully presented and also appropriately evaluated just to ensure
the perfection of information laid down in this project.

It mentions about how National Stock Exchange Of India could be one of the most lucrative
profit generating center of an organization. It also mentions about certain latest modified theories
and experiments which could improve the efficiency of the organization.

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The new century has seen phenomenal growth in the development and application of National
Stock Exchange Of India new market in architecttural glazing point very clearly in direction of
increasingly sophisticated products with entirely new functions.

TABLE OF CONTEXTS

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 STOCK MARKET INTRODUCTION

Before liberalization, Indian economy was tightly controlled and protected by number of
measures like licensing system, high tariffs and rates, limited investment in core sectors only.
During 1980’s, growth of economy was highly unsustainable because of its dependence on
borrowings to correct the current account deficit. To reduce the imbalances, the government of
India introduced economic policy in 1991 to implement structural reforms. The financial sector
at that time was much unstructured and its scope was limited only to bonds, equity, insurance,
commodity markets, mutual and pension funds. In order to structure the security market, a
regulatory authority named as SEBI (Security Exchange Board of India) was introduced and first
electronic exchange National Stock Exchange also set up. The purpose behind this was to
regularize investments, mobilization of resources and to give credit. Mark Twain once has
divided the people into types: one who has seen the great Indian monument, The Taj Mahal and
the second, who have not. The same can be said about investors. There are two types of
investors: those who are aware of the investment opportunities available in India and those who
are not. A stock market is a place where buyers and sellers of stocks come together, physically or

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virtually. Participants in the market can be small individuals or large fund managers who can be
situated anywhere. Investors place their orders to the professionals of a stock exchange who
executes these buying and selling orders. The stocks are listed and traded on stock exchanges.
Some exchanges are physically located, based on open outcry system where transactions are
carried out on trading floor. The other exchanges are virtual exchanges whereas a network of
computers is composed to do the transactions electronically. The whole system is order-driven,
the order placed by an investor is automatically matched with the best limit order. This system
provides more transparency as it shows all buy and sell orders. The Indian stock market mainly
functions on two major stock exchanges, the BSE (Bombay Stock Exchange) and NSE (National
Stock Exchange). In terms of market capitalization, BSE and NSE have a place in top five stock
exchanges of developing economies of the world. Out of total fourteen stock exchanges of
emerging economies, BSE stood at fourth position 2 with market capitalization of $1,101.87b as
on June, 2012 and NSE at fifth position with market capitalization of $1079.39b as on June,
2012.

TRADING TIMINGS

Trading on the equities segment takes place on all days of the week (except Saturdays and
Sundays and holidays declared by the Exchange in advance). The market timings of the equities
segment are:

• Pre-open session

• Order entry & modification Open: 09:00 hrs

• Order entry & modification Close: 09:08 hrs*

With random closure in last one minute. Pre-open order matching starts immediately after close
of pre-open order entry.

• Regular trading session

• Normal/Retail Debt/Limited Physical Market Open: 09:15 hrs

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• Normal/Retail Debt/Limited Physical Market Close: 15:30 hrs.

NATIONAL STOCK EXCHANGE

INTRODUCTION TO NATIONAL STOCK EXCHANGES

The National Stock Exchange is located in Mumbai. It was incorporated in 1992 and became a
stock exchange in 1993. The basic purpose of this exchange was to bring the transparency in the
stock markets. It started its operations in the wholesale debt market in June 1994. The equity
market segment of the National Stock Exchange commenced its operations in November, 1994

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whereas in the derivatives segment, it started it operations in June, 2000. It has completely
modern and fully automated 3 screen based trading system having more than two lakh trading
terminals, whicprovides the facility to the investors to trade from anywhere in India. It is playing
an important role to reform the Indian equity market to bring more transparent, integrated and
efficient stock market. As on July 2013, it has a market capitalization above than $989 billion.
The total 1635 companies are listed in National Stock Exchange.. NSE was firstly introduced by
leading Indian financial institutions. It offers trading, settlement and clearing services in equity
and debt market and also in derivatives. It is one of India’s largest exchanges internationally in
cash, currency and index options trading. There are number of domestic and global companies
that hold stake in the exchange. Some domestic companies include GIC, LIC, SBI and IDFC ltd.
Among foreign investors, few are City Group Strategic Holdings, Mauritius limited, Norwest
Venture Partners FII (Mauritius), MS Strategic (Mauritius) limited, Tiger Global five holdings,
have stake in NSE. The National Stock Exchange replaced open outcry system, i.e. floor trading
with the screen based automated system. Earlier, the price information can be accessed only by
few people but now information can be seen by the people even in a remote location. The paper
based settlement system was replaced by electronic screen based system and settlement of trade
transactions was done on time. NSE also created National Securities Depository Limited (NSDL)
which permitted investors to hold and manage their shares and bonds electronically through
demat account. An investor can hold and trade in even one share. Now, the physical handling of
securities eliminated so the chances of damage or misplacing of securities reduced to minimum
and to hold the equities become more convenient. The National Security Depository Limited’s
electronically security handling, convenience, transparency, low transaction prices and efficiency
in trade which is affected by NSE, has enhanced the reach of Indian stock market to domestic as
well as international investors.

NSE was the first exchange in the country to provide a modern, fully automated screen-based
electronic trading system which offered easy trading facility to the investors spread across the
length and breadth of the country. Mr Vikram Limaye is Managing Director & Chief Executive
Officer (MD & CEO) of NSE.

National Stock Exchange has a total of more than US$1.41 trillion, making it as of March
2016. NSE's flagship index, the, the 51 stock index (50 companies with 51 securities inclusive

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of DVR), is used extensively by investors in India and around the world as a barometer of the
Indian capital markets. However, only about 4% of the Indian economy / GDP is actually
derived from the stock exchanges in India.

NSE was set up by a group of leading Indian financial institutions at the behest of the
government of India to bring transparency to the Indian capital market. Based on the
recommendations laid out by the government committee, NSE has been established with a
diversified shareholding comprising domestic and global investors. The key domestic investors
include, Limited and And the key global investors are Gagil FDI Limited, GS Strategic
Investments Limited, SAIF II SE Investments Mauritius Limited, Aranda Investments
(Mauritius) Pte Limited and PI Opportunities Fund I.

NSE offers trading, clearing and settlement services in equity, equity derivatives, debt and
currency derivatives segments. It is the first exchange in India to introduce electronic trading
facility thus connecting together the investor base of the entire country. NSE has 2500 VSATs
and 3000 leased lines spread over more than 2000 cities across India.

The exchange was incorporated in 1992 as a tax-paying company and was recognized as a stock
exchange in 1993 under the Securities Contracts (Regulation) Act, 1956, when was the Prime
Minister of India and was the Finance Minister. NSE commenced operations in the Wholesale
Debt Market (WDM) segment in June 1994. The capital market (equities) segment of the NSE
commenced operations in November 1994, while operations in the derivatives segment
commenced in June 2000.

Unlike countries like the United States where nearly 70% of the is derived from larger
companies and the sector, the corporate sector in India accounts for only 12-14% of the national
GDP (as of October 2016). Of these only 7,800 companies are listed of which only 4000 trade on
the stock exchanges at and NSE. Hence the stocks trading at the and NSE account for only
around 4% of the which derives most of its income related activity from the so-called
unorganized sector and households.

 The National Stock Exchange of India Limited (NSE) is the leading stock exchange of
India, located in Mumbai.
 NSE was established in 1992 as the first demutualized electronic exchange in the country.

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  NSE was the first exchange in the country to provide a modern, fully automated screen-
based electronic trading system which offered easy trading facility to the investors spread
across the length and breadth of the country.
 NSE was set up by a group of leading Indian financial institutions at the behest of the
government of India to bring transparency to the Indian capital market.
 NSE offers trading, clearing and settlement services in equity, equity derivatives, debt
and currency derivatives segments.

DEFINITION

The National Stock Exchange Of India Limited (NSE) is India's largest financial market.
Established in 1992, the NSE has developed into a sophisticated, electronic market, which ranks
third in the world for transacted volume.

HISTORY AND MILESTONES OF NATIONAL STOCK EXCHANGE

NSE's sustained leadership positions across asset classes in the Indian and global exchange
sectors demonstrates the robustness and liquidity of our exchange.
NSE was incorporated in 1992. It was recognised as a stock exchange by SEBI in April 1993 and
commenced operations in 1994 with the launch of the wholesale debt market, followed shortly
after by the launch of the cash market segment.
Between 1994 and 2016, we expanded our lines of business and product offerings through the
following key milestones:

Year Milestones

 Launched NIFTY 50 index futures trading on TAIFEX

 Launched platform for sovereign gold bond issuances
2016
 Launched electronic book-building platform for private placement of debt
securities

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  Entered into a memorandum of understanding to enhance the level of
2015 cooperation with the London Stock Exchange Group.
 Renamed CNX NIFTY to NIFTY 50.

 Launched NMF-II platform for mutual funds

 Launched NBF II segment for interest rate futures
2014  Launched trading on India VIX index futures
 Commenced trading on NIFTY 50 (then known as CNX NIFTY) on the
Osaka Exchange

2013  Launched the New Debt Segment(NDS).

 Commenced trading in index futures and options contracts on the FTSE 100
index
2012
 Launched SME-specific EMERGE platform for the listing and trading of
securities of SMEs.

 Commenced trading in index futures and options on global indices, namely

2011
the S&P 500 and Dow Jones Industrial Average.

NSE OFFERS

Equities

 Indices
 Mutual Funds
 Exchange Traded Funds
 Initial Public Offerings
 Security Lending and Borrowing Scheme
Derivatives

 Equity Derivatives (including Global Indices like CNX 500, Dow Jones and FTSE )
 Currency Derivatives
 Interest Rate Futures

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Debt

 Corporate Bonds
Equity Derivatives

The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with the
launch of index futures on 12 June 2000. The futures and options segment of NSE has made a
global mark. In the Futures and Options segment, trading in NIFTY 50 Index, NIFTY IT index,
NIFTY Bank Index, NIFTY Next 50 index and single stock futures are available. Trading in
Mini Nifty Futures & Options and Long term Options on NIFTY 50 are also available. The
average daily turnover in the F&O Segment of the Exchange during the financial year April 2013
to March 2014 stood at ₹1.52236 trillion (US$24 billion).

On 29 August 2011, National Stock Exchange launched derivative contracts on the world’s most
followed equity indices, the S&P 500 and the Dow Jones Industrial Average. NSE is the first
Indian exchange to launch global indices. This is also the first time in the world that futures
contracts on the S&P 500 index were introduced and listed on an exchange outside of their home
country, USA. The new contracts include futures on both the DJIA and the S&P 500, and options
on the S&P 500.

On 3 May 2012, the National Stock exchange launched derivative contracts (futures and options)
on FTSE 100, the widely tracked index of the UK equity stock market. This was the first of its
kind of an index of the UK equity stock market launched in India. FTSE 100 includes 100 largest
UK listed blue chip companies and has given returns of 17.8 per cent on investment over three
years. The index constitutes 85.6 per cent of UK’s equity market cap.

On 10 January 2013, the National Stock Exchange signed a letter of intent with the Japan
Exchange Group, Inc. (JPX) on preparing for the launch of NIFTY 50 Index futures, a
representative stock price index of India, on the Osaka Securities Exchange Co., Ltd. (OSE), a
subsidiary of JPX.

Moving forward, both parties will make preparations for the listing of yen-denominated
NIFTY Index futures by March 2014, the integration date of the derivatives markets of OSE and
Tokyo Stock Exchange, Inc. (TSE), a subsidiary of JPX. This is the first time that retail and
institutional investors in Japan will be able to take a view on the Indian markets, in addition to

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current ETFs, in their own currency and in their own time zone. Investors will therefore not face
any currency risk, because they will not have to invest in dollar denominated or rupee
denominated contracts.

In August 2008, currency derivatives were introduced in India with the launch of Currency
Futures in USD–INR by NSE. It also added currency futures in Euros, Pounds and Yen. The
average daily turnover in the F&O Segment of the Exchange on 20 June 2013 stood
at ₹419.2616 billion (US$6.5 billion) in futures and ₹273.977 billion (US$4.3 billion) in options,
respectively.

Interest Rate Futures

In December 2013, exchanges in India received approval from market regulator SEBI for
launching interest rate futures (IRFs) on a single GOI bond or a basket of bonds that will be cash
settled. Market participants have been in favour of the product being cash settled and being
available on a single bond. NSE will launch the NSE Bond Futures on 21 January on highly
liquid 7.16 percent and 8.83 percent 10-year GOI bonds. Interest Rate Futures were introduced
for the first time in India by NSE on 31 August 2009, exactly one year after the launch of
Currency Futures. NSE became the first stock exchange to get an approval for interest-rate
futures, as recommended by the SEBI-RBI committe

FEATURES OF NSE

Wide coverage: As the name suggests, NSE is a country wide stock exchange and has its access
throughout the country.

No fixed location for NSE: As it is screen based, there is no need for any stock exchange floor
and all the members of National Stock Exchange are able to transact through their computer
terminals, sitting at their respective offices.

Confidential trading in NSE : The identity of members is trading in NSE is withheld by the
National stock exchange. The transactions and orders are entered only through code numbers.
Thus, the anonymity of trading members is kept confidential with NSE.

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Transparency of NSE: There is total transparency in trading operations of NSE as the opening
and closing prices of stocks are available for the investors on screen in realtime. Trading
individuals will also be able to see their orders being executed.

Effective matching of order in NSE: Buy order and Sell orders are effectively and quickly
matched with the help of the trading software, i.e., buying and selling adjustments. The system
also ensures best prices for securities thorough out India (both for buying and selling). The
network system enables the trader to find a perfect match for his order or the system holds the
order until a perfect match for the Buy or Sell order is found.

Borrowings made easy in NSE: One of the salient features of NSE is that for the debt
instruments, the system helps by providing a perfect match with sensible interest rate and
repayment period. This exposure is available throughout India for the sale of debt instruments.

Settlement of transactions: Since trading in NSE is fully online based, the matching of order in
realtime makes it easy and ensures transactions are settled quickly and efficiently

OBJECTIVES OF NSE:

The important objectives of the NSE are given below:

(i) To provide a fair, transparent and efficient securities market to investors using
electronic trading system.
(ii) To establish nationwide trading facility for equities and debt instruments.
(iii) To ensure equal access to investors all over the country through an appropriate
communication network.
(iv) To improve the standard of securities market to international level.
(v) To set up a nationwide trading facility for all types of securities.
(vi) To enable book entry settlement and short settlement cycles.

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 (vii) To meet international benchmarks and standards.

ADVANTAGES OF NATIONAL STOCK EXCHANGE

A premier marketplace: The sheer volume of trading activity ensure that the impact cost is
lower on the Exchange which in turn reduces the cost of trading to the investor. NSE's automated
trading system ensure consistency and transparency in the trade matching which enhances
investors confidence and visibility of our market.

Visibility: The trading system provides unparallel level of trade and post-trade information. The
best 5 buy and sell orders are displayed on the trading system and the total number of securities
available for buying and selling is also displayed. This helps the investor to know the depth of
the market. Further, corporate announcements, results, corporate actions etc are also available on
the trading system.

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Largest exchange: NSE is the largest exchange in the county in terms of trading volumes.
During the year 2010-2011, NSE reported a turnover of 35,77,412 crores in the equities
segment.

Unprecedented reach: NSE provides a trading platform that extends across the length and
breadth of the country. Investors from 191 centres can avail of trading facilities on the NSE
Trading Network. The Exchange uses the latest in communication technology to give instant
access from every location.

Transaction speed:The speed at which the Exchange processes orders, results in liquidity and
best available prices. The highest number of trades in a day of 11,260,392 was recorded on May
19, 2009.

Short settlement cycles: The Exchange has successfully completed more than 2800 settlements
without any delays.

Broadcast facility for corporate announcements: The NSE network is used to disseminate
information and company announcements across the country. Important information regarding
the company is announced to the market through the Broadcast Mode on the NEAT System as
well as disseminated through the NSE website. Corporate developments such as financial results,
book closure, announcements of bonus, rights, takeover, mergers etc. are disseminated across the
country thus minimizing scope for price manipulation or misuse.

Trade statistics for listed companies: Listed companies are provided with monthly trade
statistics for all the securities of the company listed on the Exchange.

Investor service centers: Six investor-service centers opened by NSE across the country cater to
the needs of investors.

Nominal listing fees: The listing fee charged by the Exchange is much lower compared to the
listing fees charged by other exchanges.

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 DISADVANTAGES OF NSE

Speed of trading : Commodity products used to be bought & sold in the pits. Thus, in order for
several orders to complete, an investor or traders or speculator need to agreement his broker,
who in twist will transmit this trade order to the pit investors. Upon performing the transaction,
the pit dealer with inform the commodity broker of the buy and sell who will exceed the
confirmation to the customer Due to the time warp, the opportunity of slippage occurring is so
high.Nowadays, online commodity Futures buying & selling helps to reduce the time lag flanked
by the customer and the commodity exchange by giving a direct link. The commodity exchange
can provide most profitable Commodity MCX Tips for risk free trading.

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Leverage : Low margin base prerequisites can give confidence, poor capital management, which
can in revolve lead to needless risk taking. Thus, in this case, not merely are the possible,
multiplied, the possible for losses is also augmented many folds.

Risk of Physical Delivery :There is a real risk of having to get physical delivery of the
commodity products. Imagine waking up single day to discover a truck of soybean or oil waiting
on your entrance! However, in lots of cases, actual physical deliverance is not acted ahead. Most
commodity futures contracts are now settled through cash money once the tenure of the
commodity futures contract or agreement has expired.

Risky Business : Commodity trading in commodities has been looked upon as something just
for the specialist. Many commodity traders have lost his money and the deal is regarded as an
enormously risky gamble. As mentioned previously, commodities dealing is as risky as the
singles wants it to be. How careless or careful a trader is depending on him. A single can deal
with commodity products cautiously &risk only a pair of hundred dollars per deal. The main
difficulty is that nearly all people are annoyed. They chase the saying “the best technique to
make a little fortune dealing commodities . . . Start with a big one.” By getting reckless risks,
they simply ended up soreness themselves monetarily. Another cause why these singles lose their
cash is that they revolve over manage of their cash blindly to others populace like brokers or
money managers.There are basically 4 fundamental tips that must be included in every trading
strategy.

Trading with the Trend: A significant aspect of the dealing plan is assessing the main time
frame for the implementing these choices. You require to determine, whether you must observe a
bimonthly movement, half yearly movement or an hourly movement. You also require to decide,
if you what to be a position investor or trader, a short term investor or a day trader.

Cutting Your Losses: If your right of way is following commodity market trend rather than
predicting the commodity trend, then the after that step is choosing when to exit the deals which
are functioning out. Losses are to be predictable in any deals. Because the marketplace is
generally unsystematic, even the nearly all ideal trading technique will produce losses.
Professional commodity market traders are smart to see pass all losses & come to terms through
them and don’t regard them as being incorrect.

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Letting Your Profit Run: Letting your income run means, that you must allow your gainful
trades to scamper for as long as probable as the commodity market trend is expected to preserve
itself and produce more profits.

BROKER AND SUB- BROKER

Broker

A broker is an individual person who arranges transactions between a buyer and a seller for a
commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes
a principal party to the deal. Neither role should be confused with that of an agent—one who acts
on behalf of a principal party in a deal.

History of broker Early for marketer there where two source available to them to sell their
property.

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 1) Direct way that is through means of print media, pamphlet, door to door selling as
there was not that much growth in digital platforms. At that time radio was also
effective and useful tool for marketer
2) Indirect way selling by means of channel partner (broker) because early the
marketer alone cannot reach to whole target audience instead on behalf of him
channel partner use to sale his property. Broker was first introduced in the
business of real estate after it was bifurcated in another segment

Sub-broker

A ‘Sub-Broker’ is any person who is not a Trading Member of a Stock Exchange but who acts
on behalf of a Trading Member as an agent or otherwise for assisting investors in dealing in
securities through such Trading Members.

All Sub-Brokers are required to obtain a Certificate of Registration from SEBI without which
they are not permitted to deal in securities. SEBI has directed that no Trading Member shall deal
with a person who is acting as a Sub-Broker unless he is registered with SEBI and it shall be the
responsibility of the Trading Member to ensure that his clients are not acting in the capacity of a
Sub-Broker unless they are registered with SEBI as a Sub-Broker.

It is mandatory for Trading Members to enter into an agreement with all the Sub-Brokers. The
agreement lays down the rights and responsibilities of Trading Members as well as Sub-Brokers.

TRADING AT NSE

• Fully automated screen based trading mechanism.

• Strictly follow the principle of an order driven market.

• Trading member are linked through a communication network.

• This network allows them to execute trade from their officers.

• The prices at which the buyer and seller are willing to transact will appear on the screen.

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• When the prices match, the transaction will be completed

• A confirmation slip will be printed at the office of the trading member.

Market Basics

Electronic trading: Electronic trading eliminates the need for physical trading floors. Brokers
can trade from their offices, using fully automated screen-based processes. Their workstations
are connected to a Stock Exchange’s central computer via satellite using Very Small Aperture
Terminus (VSATs). The orders placed by brokers reach the Exchange’s central computer and are
matched electronically.

Index: An Index is a comprehensive measure of market trends, intended for investors who are
concerned with general stock market price movements. An Index comprises stocks that have

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large liquidity and market capitalization. Each stock is given a weight age in the Index equivalent
to its market capitalization. At the NSE, the capitalization of NIFTY (fifty selected stocks) is
taken as a base capitalization, with the value set at 1000. Similarly, BSE Sensitive Index or
Sensex comprises 30 selected stocks. The Index value compares the day’s market capitalization
vis-à-vis base capitalization and indicates how prices in general have moved over a period of
time.

Execute an order: Select a broker of your choice and enter into a broker-client agreement and
fill in the client registration form. Place your order with your broker preferably in writing. Get a
trade confirmation slip on the day the trade is executed and ask for the contract note at the end of
the trade date.

Need a broker:As per SEBI (Securities and Exchange Board of India.) regulations, only
registered members can operate in the stock market. One can trade by executing a deal only
through a registered broker of a recognized Stock Exchange or through a SEBI-registered sub-
broker.

Contract note:A contract note describes the rate, date, time at which the trade was transacted
and the brokerage rate. A contract note issued in the prescribed format establishes a legally
enforceable relationship between the client and the member in respect of trades stated in the
contract note. These are made in duplicate and the member and the client both keep a copy each.
A client should receive the contract note within 24 hours of the executed trade. Corporate
Benefits/Action.

Split: A Split is book entry wherein the face value of the share is altered to create a greater
number of shares outstanding without calling for fresh capital or altering the share capital
account. For example, if a company announces a two-way split, it means that a share of the face
value of Rs 10 is split into two shares of face value of Rs 5 each and a person holding one share
now holds two shares.

Buy Back: As the name suggests, it is a process by which a company can buy back its shares
from shareholders. A company may buy back its shares in various ways: from existing
shareholders on a proportionate basis; through a tender offer from open market; through a book-
building process; from the Stock Exchange; or from odd lot holders.A company cannot buy back

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through negotiated deals on or off the Stock Exchange, through spot transactions or through any
private arrangement.

Settlement cycle: The accounting period for the securities traded on the Exchange. On the NSE,
the cycle begins on Wednesday and ends on the following Tuesday, and on the BSE the cycle
commences on Monday and ends on Friday. At the end of this period, the obligations of each
broker are calculated and the brokers settle their respective obligations as per the rules, bye-laws
and regulations of the Clearing Corporation. If a transaction is entered on the first day of the
settlement, the same will be settled on the eighth working day excluding the day of transaction.
However, if the same is done on the last day of the settlement, it will be settled on the fourth
working day excluding the day of transaction.

Rolling settlement:The rolling settlement ensures that each day’s trade is settled by keeping a
fixed gap of a specified number of working days between a trade and its settlement. At present,
this gap is five working days after the trading day. The waiting period is uniform for all trades. In
a Rolling Settlement, all trades outstanding at end of the day have to be settled, which means that
the buyer has to make payments for securities purchased and seller has to deliver the securities
sold. In India, we have adopted the T+5 settlement cycle, which means that a transaction entered
into on Day 1 has to be settled on the Day 1 + 5 working days, when funds pay in or securities
pay out takes place.

Short selling; Short selling is a legitimate trading strategy. It is a sale of a security that the seller
does not own, or any sale that is completed by the delivery of a security borrowed by the seller.
Short sellers take the risk that they will be able to buy the stock at a more favorable price than
the price at which they “sold short.”

Auction: An auction is conducted for those securities that members fail to deliver/short deliver
during pay-in. Three factors primarily give rise to an auction: short deliveries, un-rectified bad
deliveries, and un-rectified company objections

Separate market for auctions: The buy/sell auction for a capital market security is managed
through the auction market. As opposed to the normal market where trade matching is an on-
going process, the trade matching process for auction starts after the auction period is over.

23
If the shares are not bought in the auction If the shares are not bought at the auction i.e. if the
shares are not offered for sale, the Exchange squares up the transaction as per SEBI guidelines.
The transaction is squared up at the highest price from the relevant trading period till the auction
day or at 20 per cent above the last available Closing price whichever is higher. The pay-in and
pay-out of funds for auction square up is held along with the pay-out for the relevant auction.

Bad Delivery: SEBI has formulated uniform guidelines for good and bad delivery of documents.
Bad delivery may pertain to a transfer deed being torn, mutilated, overwritten, defaced, or if
there are spelling mistakes in the name of the company or the transfer. Bad delivery exists only
when shares are transferred physically. In “Demat” bad delivery does not exist.

INTERNET TRADING IN NATIONAL STOCK EXCHANGE

At the end of March 2010, a total number of 363 members were permitted to allow investor’s
web based access to NSE’s trading system. The members of the exchange in turn had registered
5,143,705 clients for web based access as on March 31, 2010. During the year 2013-14, 11.13 %
of the trading value in the Capital Market segment ( ` 692,789 - US $ 135,974 million) was
routed and executed through the internet. The table below shows the growth of internet trading
from the fiscal years 2006-07 till 2008-09. Chart 4-2 shows the internet trading volumes in the
CM segment of NSE in comparison with the total traded volumes at NSE.

24
 City-wise Turnover in the CM Segment of NSE

The City wise turnover in the CM Segment of NSE is shown below:

25
The total market capitalisation of securities available for trading on the CM segment increased
from ` 363,350 crore (US $ 115,606 million) as at end March 1995 to ` 6,009,173 crore (US $
1,331,230 million) as at end March 2010. The Market capitalization witnessed an increase of
107.49 % during 2010-2011 as compared to the market capitalization of ` 2,896,194 crore (US $

26
568,439 million) in 2010-2011. As compared with 2010-2017, the market capitalization in 2010-
2011 increased by 23.69 %. The market capitalisation ratio of NSE was 97.49% as of March 31,
2010. The details of ‘50’ top companies by market capitalisation, which accounted for 62.24 %
of total market capitalisation as at end March 2010, are presented in Table 4-4. The companies
with the highest market capitalisation as of March 2010 was Reliance Industries Limited
followed by Oil and Natural Gas Corporation of India Limited and NTPC Ltd.

27
TOP COMPANIES IN INDIA BY MARKET CAPITALIZATION – NSE

28
LIST OF TOP 50 COMPANIES OF NATIONAL STOCK EXCHANGE

1. RELIANCE INDUSTRIES LTD.

2. OIL AND NATURAL GAS CORPORATION LTD.
3. BHARTI AIRTEL LIMITED
4. NTPC LTD
5. RELIANCE
6. COMMUNICATIONS LTD.
7. ICICI BANK LTD.
8. INFOSYS TECHNOLOGIES LTD.
9. TATA CONSULTANCY SERVICES LTD,
10. BHEL,
11. STATE BANK OF INDIA,
12. STEEL AUTHORITY OF INDIA
13. LARSEN & TOUBRO LTD.
14. HERO HONDA MOTORS LTD
15. ZEE ENTERTAINMENT LTD
16. INDIAN PETROCHEMICALS CORPORATION LTD.
17. CIPLA LTD
18. BHARAT PETROLEUM CORPORATION LTD.
19. VIDESH SANCHAR NIGAM LTD
20. DR. REDDY'S LABORATORIES
21. MAHANAGAR TELEPHONE NIGAM LTD
22. GLAXOSMITHKLINE PHARMA LTD.
23. ABB LTD.
24. POWER GRID CORPORATION OF INDIA
25. RELIANCE ENERGY LTD
26. SIEMENS LTD
27. ACC LIMITED
28. AMBUJA CEMENTS LTD
29. HCL TECHNOLOGIES LTD

29
30. HINDALCO INDUSTRIES LTD
31. NATIONAL ALUMINIUM CO LTD
32. SUN PHARMACEUTICALS IND.
33. MAHINDRA & MAHINDRA LTD
34. TATA POWER CO LTD
35. PUNJAB NATIONAL BANK
36. RANBAXY LABS LTD
37. ITC LTD
38. RELIANCE PETROLEUM LTD.
39. HDFC LTD
40. WIPRO LTD
41. STERLITE INDUSTRIES LTD
42. HDFC BANK LTD
43. TATA STEEL LIMITED
44. HINDUSTAN UNILEVER LTD.
45. SUZLON ENERGY LIMITED
46. GAIL (INDIA) LTD
47. GRASIM INDUSTRIES LTD,
48. TATA MOTORS LIMITED
49. MARUTI UDYOG LIMITED
50. HINDALCO INDUSTRIES LTD

30
 COMMODITY EXCHANGES

There are three categories:

•NCDEX

•MCX

•NMCE

A brief description of commodity exchanges is those which trade in particular commodities,

neglecting the trade of securities, stock index futures and options etc. In the middle of 19th
century in the United States, businessmen began organizing market forums to make the buying
and selling of commodities easier. These central marketplaces provided a place for buyers and
sellers to meet, set quality and quantity standards, and establish rules ofbusiness.Agricultural
commodities were mostly traded but as long as there are buyers and sellers, any commodity can
be traded. In 1872, a group of Manhattan dairy merchants got together to bring chaotic condition
in New York market to a system in terms of storage, pricing, and transfer of agricultural
products. IN 1933, during the Great Depression, the Commodity Exchange, Inc., was established
in New York through the merger of four small exchanges – the National Metal Exchange, the
RubberExchange of New York, the National Raw Silk Exchange, and the New York Hide
Exchange. The major commodity markets are in the United Kingdom and in the USA India there
are 25 recognized future exchanges, of which there are three national level multi-commodity
exchanges. After a gap of almost three decades, Government of India has allowed forward
transactions in commodities through Online Commodity Exchanges, a modification of traditional
business known as Adhat and Vayda Vyapar to facilitate better risk coverage and delivery of
commodities.

The three exchanges are:

1 National Commodity & Derivatives Exchange Limited (NCDEX)

National Commodity & Derivatives Exchange Limited (NCDEX) located in Mumbai is a public
limited company incorporated on April 23, 2003 under the Companies Act, 1956and had
commenced its operations on December 15, 2003.This is the only commodity exchange in the

31
country promoted by national level institutions. It is promoted by ICICI Bank Limited, Life
Insurance Corporation of India (LIC), National Bank for Agriculture and Rural Development
(NABARD) and National Stock Exchange of India Limited (NSE).It is a professionally managed
online multi commodity exchange. NCDEX is regulated by Forward Market Commission and is
subjected to various laws of the land like the Companies Act, Stamp Act, Contracts Act, Forward
Commission (Regulation) Act and various other legislations.

2 Multi Commodity Exchange of India Limited(MCX)

Headquartered in Mumbai Multi Commodity Exchange of India Limited (MCX), is an

independent and de-mutualized exchange with a permanent recognition from Government of
India. Key shareholders of MCX are Financial Technologies (India) Ltd., State Bank of India,
Union Bank of India, Corporation Bank, Bank of India and Canara Bank. MCX facilitates online
trading, clearing and settlement operations for commodity futures markets across the
country.MCX started offering trade in November 2003 and has built strategic alliances with
Bombay Bullion Association, Bombay Metal Exchange, Solvent Extractors ‘Association of
India, Pulses Importers Association and Shetkari Sanghatana.

3 National Multi-Commodity Exchange of India Limited (NMCEIL)

National Multi Commodity Exchange of India Limited (NMCEIL) is the first de-mutualized,
Electronic Multi-Commodity Exchange in India. On 25th July, 2001, it was granted approval by
the Government to organize trading in the edible oil complex. It has operationalized from
November 26, 2002. It is being supported by Central Warehousing Corporation Ltd., Gujarat
State Agricultural Marketing Board and Neptune Overseas Limited. It got its recognition in
October 2000.Commodity exchange in India plays an important role where the prices of any
commodity are not fixed, in an organized way. Earlier only the buyer of produce and its seller in
the market judged upon the prices. Others never had a say. Today, commodity exchanges are
purely speculative in nature. Before discovering the price, they reach to the producers, end-users,
and even the retail investors, at grassroots level. It brings a price transparency and risk
management in the vital market.

32
 OWNERSHIP AND MANAGEMENT THE NSE

NSE is owned by a set of leading financial institutions, banks, insurance companies and other
financial intermediaries. It is managed by a team of professional managers and the trading rights
are with trading members who offer their services to the investors The Board of NSE comprises
of senior executives from promoter institutions and eminent professionals, without having any
representation from trading members. While the Board deals with the broad policy issues, the
Executive Committees which include trading members, formed under the Articles of Association
and the Rules of NSE for different market segments, set out rules and parameters to manage the
day-to-day affairs of the Exchange. The ECs have constituted several committees, like
Committee on Trade Related Issues (COTI), Committee on Settlement Issues (COSI)etc.,
comprising mostly of trading members, to receive inputs from the market participants and
implement suggestions which are in the best interest of the investor sand the market. The day-to-
day management of the Exchange is delegated to the Managing Director and CEO who is
supported by a team of professional staff. Therefore, though the role of trading members at NSE
is to the extent of providing only trading services to the investors, the Exchange involves trading
members in the process of consultation and participation in vital inputs towards decision making

33
 SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

SECURITY AND EXCHANGE BOARD OF INDIASEBI AND ITS ROLE IN THE

SECONDARY MARKET

The SEBI is the regulatory authority established under Section 3 of SEBI Act 1992 to protect the
interests of the investors in securities and to promote the development of, and to regulate, the
securities market and for matters connected therewith and incidental thereto.

Securities and Exchange Board of India constituted under the Resolution of the Government of
India in the Department of Economic Affairs No.1 (44)SE/86, dated the12th day of April,
1988;The Board shall consist of the following members, namely:-

A Chairman

2. Two members from amongst the officials of the Ministry of the Central Government dealing
with Finance (and administration of the Companies Act, 1956 ;) 2 of 19343. One member from
amongst the officials of [the Reserve Bank4. Five other members of whom at least three shall be
the whole-time members

Departments of SEBI regulating trading in the secondary market (1) Market Intermediaries
Registration and Supervision department (MIRSD)

Registration, supervision, compliance monitoring and inspections of all market intermediaries in

respect of all segments of the markets viz. equity, equity derivatives, debt and debt related
derivatives.

POWERS & FUNCTIONS of SEBI

1. Regulating the business in stock exchanges and any other securities markets.

2. Registering and regulating the working of stock brokers, sub-brokers, share transfer agents,
bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters,
portfolio managers, investment advisers and such other intermediaries who may be associated
with securities markets in any manner.

34
3. Registering and regulating the working of the depositories, participants custodians of
securities, foreign institutional investors, credit rating agencies and such other intermediaries as
the board may, by notification, specify in this behalf.

4. Registering and regulating the working of (venture capital funds and collective investment
schemes) including mutual funds.

5. Promoting and regulating self-regulatory organizations.

6. Prohibiting fraudulent and unfair trade practices relating to securities markets.

7. Promoting investors' education and training of intermediaries of securities markets.

8. Prohibiting insider trading in securities.

9. Regulating substantial acquisition of shares and take-over of companies.

10. Calling for information from, undertaking inspection, conducting inquiries and audits of the
stock exchanges, (mutual funds) and other persons associated with the securities market and
intermediaries and self- regulatory organizations in the securities market.

11. Performing such functions and exercising such powers under the provisions of securities
contracts (regulation) act, 1956, as may be delegated to it by the central government.

12. Levying fees or other charges for carrying out the purpose of this section.

13. Conducting research for the above purpose

35
 Introduction of Bombay stock exchange

The Bombay Stock Exchange (BSE) is an Indian stock exchange located at Dalal Street, Kala
Ghoda, Mumbai(formerly Bombay), Maharashtra, India.

Established in 1875, the BSE is Asia’s first stock exchange, It claims to be the world's fastest
stock exchange, with a median trade speed of 6 microseconds,[3] The BSE is the world's 11th
largest stock exchange with an overall market capitalization of more than $ 2 Trillion as of July,
2017. More than 5500 companies are publicly listed on the BSE. Of these, as of November 2016,
there are only 7,800 listed companies of which only 4000 trade on the stock exchanges at BSE
and NSE. Hence the stocks trading at the BSE and NSE account for only about 4% of the Indian
economy.In terms of market capitalization, BSE is the eleventh largest stock exchange in the
world on 31st December, 2012. BSE is the oldest stock exchange in India. In the beginning
during 1855, some stock brokers were gathering under Banyan tree. But later on when the
number of stock brokers increased, the group shifted in 1874. In 1875, the group became an
official organization named as “The Native Chor and Stock Brokers Association”. In 1986, BSE
developed its Index named as SENSEX to measure the performance of the exchange. Initially,
there was an open outcry floor trading system which in 1995 switched to electronic trading
system. The exchange made the whole transition in just fifty days. BSE Online Trading, known
as BOLT is a automated, screen based trading platform with a capacity of 8 millions orders per
day. BSE provides an transparent and efficient market for trading in equities, debentures, bonds,
derivatives and mutual funds etc. It also provides opportunity to trade in the equities of small and

36
medium term enterprises. About 5000 companies are listed in Bombay Stock Exchange. As on
January 2013, the total market capitalization of the companies listed in BSE is $1.32 trillion. In
terms of transactions handling, BSE Ltd. is world’s fifth exchange. As far as Index Options
trading is concerned, BSE is one of the world’s leading exchanges. Some other services like risk
management, settlement, cleaning etc. The purpose of BSE automated systems and techniques
are to protect the interest of the investor, to stimulate market and to promote innovations around
the world. It is the first exchange across India and second across world to get an ISO 9000:2000
certification.

37
 History of Bombay stock exchange

Bombay Stock Exchange founded by Premchand Roychand. He was one of the most influential
businessmen in 19th-century Bombay. A man who made a fortune in the stockbroking business
and came to be known as the Cotton King, the Bullion King or just the Big Bull. He was also the
founder of the Native Share and Stock Brokers Association, an institution that is now known as
the BSE.

The Bombay Stock Exchange is the oldest exchange in Asia. Its history dates back to 1855, when
22 stockbrokers[7] would gather under banyan trees in front of Mumbai's Town Hall. The
location of these meetings changed many times to accommodate an increasing number of
brokers. The group eventually moved to Dalal Street in 1874 and became an official organization
known as "The Native Share & Stock Brokers Association" in 1875.

On August 31, 1957, the BSE became the first stock exchange to be recognized by the Indian
Government under the Securities Contracts Regulation Act. In 1980, the exchange moved to the
Phiroze Jeejeebhoy Towers at Dalal Street, Fort area. In 1986, it developed the S&P BSE
SENSEX index, giving the BSE a means to measure the overall performance of the exchange. In
2000, the BSE used this index to open its derivatives market, trading S&P BSE SENSEX futures
contracts. The development of S&P BSE SENSEX options along with equity derivatives
followed in 2001 and 2002, expanding the BSE's trading platform.

Historically an open outcry floor trading exchange, the Bombay Stock Exchange switched to an
electronic trading system developed by CMC Ltd. in 1995. It took the exchange only 50 days to
make this transition. This automated, screen-based trading platform called BSE On-Line Trading
(BOLT) had a capacity of 8 million orders per day. The BSE has also introduced a centralized
exchange-based internet trading system, BSEWEBx.co.in to enable investors anywhere in the
world to trade on the BSE platform.Now BSE has raised capital by issuing shares and as on 3rd
may 2017 the BSE share which is traded in NSE only closed with Rs.999 .

The BSE is also a Partner Exchange of the United Nations Sustainable Stock Exchange initiative,
joining in September 2012.

38
 BSE VS. NSE

The Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) are the leading stock
exchanges in India. While BSE has the distinction of being the oldest stock exchange in Asia,
NSE is the largest in the country. When choosing where to invest when it comes to Indian stock
markets it really depends on where the companies you want to invest in are listed and what type
of trading you like to do. Some companies are listed on both exchanges but for many companies
you want to invest in you may not have a choice on which exchange to use. For day traders the
high liquidity and sophistication of the NSE make that exchange the logical choice. Ultimately,
however, if you're investing based on preference for certain companies the listing or exchange
they happen to be on should not influence your decision on whether or not to invest in that
company.

Contents: BSE vs NSE

Formation

 The National Stock Exchange of India was promoted by leading financial institutions
at the behest of the Government of India, and was incorporated in November 1992 as a
tax-paying company. In April 1993, it was recognized as a stock exchange under the
Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the
Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities)
segment of the NSE commenced operations in November 1994, while operations in the
Derivatives segment commenced in June 2000.

 Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich
heritage. Popularly known as "BSE", it was established as "The Native Share & Stock
Brokers Association" in 1875. It was the first stock exchange in the country to obtain
permanent recognition in 1956 from the Government of India under the Securities
Contracts (Regulation) Act, 1956. Earlier an Association of Persons (AOP), the
Exchange is now a demutualised and corporatised entity incorporated under the
provisions of the Companies Act, 1956, pursuant to the BSE(Corporatisation and
Demutualisation) Scheme, 2005 notified by the Securities and Exchange Board of

39
 India (SEBI).Bombay Stock Exchange Limited received its Certificate of Incorporation
on 8th August, 2005 and Certificate of Commencement of Business on 12th August,
2005. The Exchange has succeeded the business and operations of BSE on going
concern basis and its recognition as an Exchange has been continued by SEBI.

Members

 While the BSE has over 874 members-brokers across the country, NSE has more than
,1000 members. In NSE, a prospective trading member is admitted to any of the
following combinations of market segments: Wholesale Debt Market segment, Capital
Market (CM) and the Futures and Options segments, CM Segment and the WDM
segment, or CM Segment, the WDM and the F and O segment. There is no such thing
at BSE and members join as any of the following : Trading Members, Trading cum
Clearing Members, Professional clearing member, Limited trading member and Self
Clearing member.


For NSE: In order to be admitted as a trading member, the individual trading
member/at least two partners of the applicant firm/at least two directors of the
applicant corporate must be graduates and must possess at least two years' experience
in securities markets. The applicant for trading membership/any of its
partners/shareholders/directors must not have been declared defaulters on any stock
exchange, must not be debarred by SEBI for being associated with capital market as
intermediaries and must not be engaged in any fund-based activity. The trades
executed on the Exchange may be cleared and settled by a clearing member. There is a
special category of members, called professional clearing members (PCMs), who do
not trade but only clear trades executed by others.

 The initial joining fee for a member at BSE is Rs. 90 Lakhs while that for an NSE
member is between 100 to 300 Lakh depending on the kind of membership one
chooses.

 In addition to annual fees, NSE members are required to pay transaction charges on
trades undertaken by them. They pay transaction charge at the rate of Rs. 3.5 for every

40
 Rs. 1 lakh of turnover in the CM segment. The transaction charges payable to the
exchange by the trading member for the trades executed by him on the F&O segment
are fixed at the rate of Rs. 2 per lakh of turnover (0.002%) subject to a minimum of Rs.
1,00,000 per year. At BSE, these fees differ according to the various types of members.

 For BSE, the requirements to becoming a member are:

 Authorised By NSC As A Brokerage House

 Authorisation Of BSE
 Negotiation From NSC
 Trained Staff At BSE(Brokers, Traders, Accountants)
 Data On Member Registration
 Company By-Laws
 Membership Fee
 Financial Statements
 Company
 Handbook On Internal Operations & Control
 Personal Information File For Management And Specialized Staff
 Contribution To The Guarantee Fund
 Payment For The Licensed Access To Use The Operating System

Listing

 Listing means formal admission of a security to the trading platform of the Exchange.
In BSE, the securities may be of any public limited company, Central or State
Government, quasi governmental and other financial institutions/corporations,
municipalities, etc. The objectives of listing are mainly to :provide liquidity to
securities; mobilize savings for economic development; protect interest of investors by
ensuring full disclosures. The Exchange has a separate Listing Department to grant
approval for listing of securities of companies in accordance with the provisions of the
Securities Contracts (Regulation) Act, 1956, Securities Contracts (Regulation) Rules,
1957, Companies Act, 1956, Guidelines issued by SEBI and Rules, Bye-laws and
Regulations of the Exchange. A company intending to have its securities listed on the
41
 Exchange has to comply with the listing requirements prescribed by the Exchange.
Some of the requirements are:

 Minimum Listing Requirements for new companies

 Minimum Listing Requirements for companies listed on other stock exchanges
 Minimum Requirements for companies delisted by this Exchange seeking relisting of
this Exchange
 Permission to use the name of the Exchange in an Issuer Company's prospectus
 Submission of Letter of Application
 Allotment of Securities
 Trading Permission
 Requirement of 1% Security
 Payment of Listing Fees
 Compliance with Listing Agreement
 Cash Management Services (CMS) - Collection of Listing Fees

 At NSE, the following criterias are to be fulfilled when one applies to be listed:

 Approval of Memorandum and Articles of Association

 Approval of draft prospectus
 Submission of Application
 Listing conditions and requirements

 Once a company fulfils these criterias then they have to submit the following to the
board:

 A brief on the promoters and management.

 Company profile.
 Copies of the Annual Report for last 3 years.
 Copies of the Draft Offer Document.
 Memorandum & Articles of Association.

 The listing fees depend on the companies paid up capital at both NSE and BSE. While
the initial listing fee at NSE is Rs.7,500, it is Rs.20,000 at BSE. The annual listing fees
42
 for a company with a paid up capital upto Rs. 5 Crores is Rs. 10,000 at BSE while it is
Rs. 8,400 at NSE. For a company with paid up capital between 5 to 10 crores, BSE
charges Rs. 15,000 while NSE charges Rs. 10,000.

Indices

The main Index of BSE is SENSEX while that of NSE is CNX Nifty. The other indices
at BSE are: BSE 500, BSE 100, BSE 200, BSE PSU, BSE MIDCAP, BSE SMLCAP,
BSE BANKEX, BSE Teck, BSE Auto, BSE Pharma, BSE Fast Moving Consumer
Goods (FMCG), BSE Consumer Durables (SYMBOL: Cons Dura), BSE Metal.
NSE also set up as index services firm known as India Index Services & Products
Limited (IISL) and has launched several stock indices, including: S&P CNX Nifty,
CNX Nifty Junior, CNX 100 (= S&P CNX Nifty + CNX Nifty Junior), S&P CNX 500
(= CNX 100 + 400 major players across 72 industries), CNX Midcap (introduced on 18
July 2005 replacing CNX Midcap 200).

43
 BSE VERSUS NSE COMPARISON CHART
Detail Bombay Stock Exchange National Stock Exchange

Number of 5,163 (as of late 2012) 1,635 (as of July 2013)

listed
companies

Market US$ 1.32 trillion (as of january 2013) US$0.989 trillion (as of july 2013)
capitalization
of listed
companies

Main Index BSE Sensex S&P CNX Nifty

Index value 19,900 (as of Sep 2013) 5,889 (as of Sep 2013)

Claim to Oldest stock exchange in Asia. Largest stock exchange in India in

fame terms of daily turnover and number of
trades.

Website www.bseindia.com www.nseindia.com

Geographical Presence in 417 cities Presence in 1,486 cities

spread

Number of 951 1009

members

Established 1875 1992

in

Name formerly Bombay Stock Exchange National Stock Exchange

Limited; now simply BSE

44
 OBJECTIVE OF STUDY

 To learn what is National Stock Exchange

 To find out what are the types of National stock exchange

 To study the awareness about National stock exchange in India
 To know how National stock exchange market works

 To understand the terms and jargons used in financial newspaper

 To know the regulatory framework for National stock exchange

45
 RESEACH AND METHOD

In everyday life human being has to face many problems viz. social, economical financial
problems. These problems in Life call for ac6ceptable acceptable and effective solutions and for
this purpose, research is required and a methodology applied for the solutions can be found out.

What is the primary data?

Primary data is information that you collect specifically for the purpose of your research project.
An advantage of primary data is that it is specifically tailored to your research needs.

Primary Data: Primary data has been collected by interviewing student.

Secondary Data: secondary data has been collected from various website and books related to e-
commerce

46
 SUMMARY AND CONCLUSION

The financial system is the most important institutional and functional vehicle for economic
transformation of a nation. Finance is a bridge between the present and the future and whether it
is the mobilisation of savings or their efficient, effective and equitable allocation for investment,
it is the success with which the financial system performs its functions that sets the pace for the
achievement of broader national objectives. The financial system is a set of inter-related
activities/services working together to achieve some predetermined purpose or goal which
includes different markets, the institutions, instruments, services and mechanisms which
influence the generation of savings, investment capital formation and growth. As economies
develop over time, financial systems become increasingly sophisticated, which calls for greater
need of risk management techniques. In the wave of globalization, the external economic factors
have an increasing impact on a country’s economy and the financial security issues are more
prominent as well. Innovation of derivatives in this direction have redefined and revolutionized
the landscape of financial system and it has earned a well -deserved and extremely significant
place among all the financial products available till date. The derivatives market in a financial
system may act as a buffer to the country’s economy. Derivatives trading play an important role
in providing the full range of markets necessary for economic efficiency. Derivatives are risk
management tool that help in effective management of risk. It provides an opportunity to transfer
risk, from the one who wish to avoid it; to one, who wish to accept it. The concepts which
underpin derivative contracts have been used for centuries and can be traced back to the Tulip
futures market. It was developed in Holland in the 17th century. In the 21st century the global
financial markets have undergone dramatic changes and shocks, as a direct result of the
proliferation of derivative instruments. The general acceptance of derivative instruments in the
global market place started in 202 the mid twentieth century through the introduction of currency
futures. Following the successful introduction of currency futures, innovations had taken place to
broaden the products in the derivative segment. There are various derivative contracts available,
out of which Futures are standardized contracts traded on liquid markets according to well
specified rules and procedures. Thus a futures contract is a legally binding agreement to buy or
sell a specific quantity of the underlying asset at a predetermined date in the future at a price
agreed on today.

47
 CONCLUSION

The financial system is the most important institutional and functional vehicle for economic
transformation of a nation. Finance is a bridge between the present and the future and whether it
is the mobilisation of savings or their efficient, effective and equitable allocation for investment,
it is the success with which the financial system performs its functions that sets the pace for the
achievement of broader national objectives. The financial system is a set of inter-related
activities/services working together to achieve some predetermined purpose or goal which
includes different markets, the institutions, instruments, services and mechanisms which
influence the generation of savings, investment capital formation and growth. As economies
develop over time, financial systems become increasingly sophisticated, which calls for greater
need of risk management techniques. In the wave of globalization, the external economic factors
have an increasing impact on a country’s economy and the financial security issues are more
prominent as well. Innovation of derivatives in this direction have redefined and revolutionized
the landscape of financial system and it has earned a well -deserved and extremely significant
place among all the financial products available till date. The derivatives market in a financial
system may act as a buffer to the country’s economy. Derivatives trading play an important role
in providing the full range of markets necessary for economic efficiency. Derivatives are risk
management tool that help in effective management of risk. It provides an opportunity to transfer
risk, from the one who wish to avoid it; to one, who wish to accept it. The concepts which
underpin derivative contracts have been used for centuries and can be traced back to the Tulip
futures market. It was developed in Holland in the 17th century. In the 21st century the global
financial markets have undergone dramatic changes and shocks, as a direct result of the
proliferation of derivative instruments. The general acceptance of derivative instruments in the
global market place started in 202 the mid twentieth century through the introduction of currency
futures. Following the successful introduction of currency futures, innovations had taken place to
broaden the products in the derivative segment. There are various derivative contracts available,
out of which Futures are standardized contracts traded on liquid markets according to well
specified rules and procedures. Thus a futures contract is a legally binding agreement to buy or
sell a specific quantity of the underlying asset at a predetermined date in the future at a price
agreed on today.

48
 LIMITATION

Every research has some of the limitations. some of them as follow:

 As the huge amount of population belt has of national stock exchange in India is huge so
the researcher could not collected information from each one. Then the researcher has
collected from some of the sample existing customer.
 As the research is been conducted by questionnaire so some of the people where not
supporting because time is been consuming.
 Due to scarcity of time project data is not covered all aspect.
 Data is been provided in short report not in detailed.
 All the area has been not covered.

49
 QUESTIONNAIRE

Q.1 WHERE YOU PREFER TO INVEST MONEY?

A. STOCK
B. BANK
C. GOLD
D. OTHER

ANS No of respondent Percentage %

STOCK 14 28
BANK 13 26
GOLD 17 34
OTHER 6 12
TOTAL 50 100

ANS

STOCK
BANK
GOLD
OTHER

50
Q.2 IN WHICH MARKET YOU WILL INVEST?

A. BSE
B. NSE

ANS No of respondent Percentage %

BSE 33 66
NSE 17 34
TOTAL 50 100

ANS

BSE
NSE

51
Q.3 DO YOU THINK INVESTING IN STOCK MARKET IS RISKY?

A. YES
B. NO
C. MAY BE

ANS No of respondent Percentage %

YES 25 50
NO 4 8
MAY BE 21 42
TOTAL 50 100

ANS

YES
NO
MAY BE

52
Q.4 WHAT ARE THE CHALLENGES FOR IMPLEMENTATION IN STOCK MARKET OF
IN INDIA?

A. SLOW PENETRATION OF INTERNET

B. SECURITY CONCERNS
C. LACK OF TRUST
D. CONSUMERS’ AWARENESS LEVEL
E. OTHER FACTORS

ANS No of respondent Percentage %

SLOW PENETRATION OF 7 14
INTERNET
SECURITY CONCERNS 13 26
LACK OF TRUST 8 16
CONSUMERS’ 14 28
AWARENESS LEVEL
OTHER FACTORS 8 8
TOTAL 50 100

ANS

SLOW PENETRATION OF
INTERNET
SECURITY CONCERNS

LACK OF TRUST

CONSUMERS’ AWARENESS
LEVEL
OTHER FACTORS

53
Q.5 DO YOU THING THAT THE GOVERNMENT OF INDIA IS DOING ENOUGH TO
PROMOTE STOCK MARKET IN INDIA?

A. YES
B. NO
C. MAY BE

ANS No of respondent Percentage %

YES 18 36
NO 14 28
MAY BE 17 36
TOTAL 50 100

ANS

YES
NO
MAY BE

54
Q.6 ARE PEOPLE AWARE OF THE STOCK MARKET ?

A. YES
B. NO
C. MAY BE

ANS No of respondent Percentage %

YES 18 36
NO 15 30
MAY BE 17 34
TOTAL 50 100

ANS

YES
NO
MAY BE

55
Q.7 HOW WOULD YOU RATE THE SERVICES PROVIDED BY STOCK BROKER IN
STOCK MARKET ?

A. SATISFACTORY
B. GOOD
C. BAD

ANS No of respondent Percentage %

SATISFACTORY 32 64
GOOD 16 16
BAD 2 4
TOTAL 50 100

ANS

YES
NO
MAY BE

56
Q.8 WOULD YOU RECOMMEND STOCK MARKET TO YOUR KNOWN ONE’S OR
RELATIVES?

A. YES
B. NO
C. MAY BE

ANS No of respondent Percentage %

YES 23 46
NO 8 16
MAY BE 19 38
TOTAL 50 100

ANS

YES
NO
MAY BE

57
Q.9 IS THE WEB SITE IS USER FRIENDLY?

A. YES
B. NO
C. MAY BE

ANS No of respondent Percentage %

YES 23 46
NO 6 12
MAY BE 21 42
TOTAL 50 100

ANS

YES
NO
MAY BE

58
Q.10 DO YOU THINK THAT THE APPLICATION OF STOCK MARKET ARE USEFULL?

A. YES
B. NO

ANS No of respondent Percentage %

YES 23 46
NO 1 2
MAY BE 26 52
TOTAL 50 100

ANS

YES
NO
MAY BE

59
 Bibliography

http://www.diffen.com/difference/BSE_vs_NSE

https://www.sharetipsinfo.com/bse-vs-nse.html

https://www.sharetipsinfo.com/bse-vs-nse.html

http://shodhganga.inflibnet.ac.in/bitstream/10603/36930/8/08_chapter%201.pdf

60
 ANNEXURE

NAME:

AGE:

GENDER:

QUALIFICATION:

QUESTIONNAIRE

Q.1 WHERE YOU PREFER TO INVEST MONEY?

E. STOCK
F. BANK
G. GOLD
H. OTHER

Q.2 IN WHICH MARKET YOU WILL INVEST?

C. BSE
D. NSE

Q.3 DO YOU THINK INVESTING IN STOCK MARKET IS RISKY?

D. YES
E. NO
F. MAY BE

Q.4 WHAT ARE THE CHALLENGES FOR IMPLEMENTATION IN STOCK MARKET OF

IN INDIA?

F. SLOW PENETRATION OF INTERNET

G. SECURITY CONCERNS
H. LACK OF TRUST
I. CONSUMERS’ AWARENESS LEVEL
J. OTHER FACTORS

61
Q.5 DO YOU THING THAT THE GOVERNMENT OF INDIA IS DOING ENOUGH TO
PROMOTE STOCK MARKET IN INDIA?

D. YES
E. NO

Q.6 ARE PEOPLE AWARE OF THE STOCK MARKET ?

D. YES
E. NO
F. MAY BE

Q.7 HOW WOULD YOU RATE THE SERVICES PROVIDED BY STOCK BROKER IN
STOCK MARKET ?

D. SATISFACTORY
E. GOOD
F. BAD

Q.8 WOULD YOU RECOMMEND STOCK MARKET TO YOUR KNOWN ONE’S OR

RELATIVES?

D. YES
E. NO

Q.9 IS THE WEB SITE IS USER FRIENDLY?

D. YES
E. NO

Q.10 DO YOU THINK THAT THE APPLICATION OF STOCK MARKET ARE USEFULL?

C. YES
D. NO

62