National Stock Exchange S.Y.F.

National Stock Exchange of India

From Wikipedia, the free encyclopedia

National Stock Exchange Limited

Type Stock Exchange

Location Mumbai, India
Coordinates
Founded 1992
National Stock Exchange
Owner
of India Limited
Mr.RAVI NARAIN
Key people
Managing Director
Currency INR
No. of listings 1587
Rs 47,01,923 crore(2009
MarketCap
August)
S&P CNX Nifty
Indexes CNX Nifty Junior
S&P CNX 500
Website www.nse-india.com

National Stock Exchange of India Limited (NSE),

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The National Stock Exchange of India Limited (NSE), is a

Mumbai-based stock exchange. It is the largest stock exchange in India
in terms of daily turnover and number of trades, for both equities and
derivative trading.. NSE has a market capitalization of around Rs
47,01,923 crore (7 August 2009) and is expected to become the biggest
stock exchange in India in terms of market capitalization by 2009 end.
Though a number of other exchanges exist, NSE and the Bombay Stock
Exchange are the two most significant stock exchanges in India, and
between them are responsible for the vast majority of share transactions.
The NSE's key index is the S&P CNX Nifty, known as the Nifty, an
index of fifty major stocks weighted by market capitalisation.

NSE is mutually-owned by a set of leading financial institutions, banks,

insurance companies and other financial intermediaries in India but its
ownership and management operate as separate entities. There are at
least 2 foreign investors NYSE Euronext and Goldman Sachs who have
taken a stake in the NSE.As of 2006, the NSE VSAT terminals, 2799 in
total, cover more than 1500 cities across India. In October 2007, the
equity market capitalization of the companies listed on the NSE was
US$ 1.46 trillion, making it the second largest stock exchange in South
Asia. NSE is the third largest Stock Exchange in the world in terms of
the number of trades in equities.It is the second fastest growing stock
exchange in the world with a recorded growth of 16.6%.

Contents

 1 Origins
 2 Innovations
 3 Markets
 4 Hours
 5 Indices
 6 Exchange Traded Funds on NSE
 7 Certifications
 8 See also

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 9 References
 10 External links

Origins

NSE building at BKC, Mumbai. 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.

Innovations

NSE has remained in the forefront of modernization of India's capital

and financial markets, and its pioneering efforts include:

 Being the first national, anonymous, electronic limit order book

(LOB) exchange to trade securities in India. Since the success of
the NSE, existent market and new market structures have followed
the "NSE" model.
 Setting up the first clearing corporation "National Securities
Clearing Corporation Ltd." in India. NSCCL was a landmark in

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providing innovation on all spot equity market (and later,

derivatives market) trades in India.
 Co-promoting and setting up of National Securities Depository
Limited, first depository in India[2].
 Setting up of S&P CNX Nifty.
 NSE pioneered commencement of Internet Trading in February
2000, which led to the wide popularization of the NSE in the
broker community.
 Being the first exchange that, in 1996, proposed exchange traded
derivatives, particularly on an equity index, in India. After four
years of policy and regulatory debate and formulation, the NSE
was permitted to start trading equity derivatives
 Being the first and the only exchange to trade GOLD ETFs
(exchange traded funds) in India.
 NSE has also launched the NSE-CNBC-TV18 media centre in
association with CNBC-TV18, a

It is the one of the most important stock exchanges in the world.

Markets

Currently, NSE has the following major segments of the capital market:

 Equity
 Futures and Options
 Retail Debt Market
 Wholesale Debt Market
 Currency futures

NSE became the first stock exchange to get approval for Interest rate
futures as recommended by SEBI-RBI committee, on 31 August,2009, a

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futures contract based on 7% 10 Year GOI bond (NOTIONAL) was

launched with quarterly maturities.

Hours

NSE's normal trading sessions are conducted from 9:55 am India Time
to 3:30 pm India Time on all days of the week except Saturdays,
Sundays and Official Holidays declared by the Exchange (or by the
Government of India) in advance. The exchange in association with BSE
(Bombay Stock Exchange Ltd.,) thinking to revise its timings from 9.00
am India Time till 5.00 pm India Time.

There were System Testing going on and opinions, suggestions or

feedback on the New Proposed Timings are being invited from the
brokers across India. And finally on Nov 18, 2009 regulator decided to
drop their ambitious goal of longest Asia Trading Hours due to strong
opposition from its members.

On Dec 16, 2009, NSE announced that it would pre-pone the market
opening to 9am from Dec 18, 2009. So NSE trading hours will be from
9:00 am till 3:30 pm India Time.

However, on Dec 17, 2009, after strong protests from brokers, the
Exchange decided to postpone the change in trading hours till Jan 04,
2010.

Indices

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(Standard & Poor's CRISIL NSE Index)

 CNX Nifty Junior
 CNX 100 (= S&P CNX Nifty + CNX Nifty Junior)

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 S&P CNX 500 (= CNX 100 + 400 major players across 72

industries)
 CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap
200)

Exchange Traded Funds on NSE

NSE has a number of exchange . These are typically index funds and
GOLD etfs. Some of the popular etf's on NSE are.

1. NIFTYBEES - ETF based on NIFTY index Nifty BEES Live quote 2.

Gold Bees - ETF based on Gold prices. Tracks the price of Gold. Each
unit equals to 1 gm of gold and bears the price of 1gm of gold. 3. Bank
Bees - ETF that tracks the CNX Bank Index.

Certifications

NSE also conducts online examination and awards certification, under

its programmers of NSE's Certification in Financial Markets (NCFM).
Currently, certifications are available in 19 modules, covering different
sectors of financial and capital markets. Branches of the NSE are located
throughout India.

History Of NSE (National Stock Exchange)

The National Stock exchange, in Bombay is the largest Stock

exchange of the country and the third largest in the world. Before the
NSE, the Indian securities industry was inefficient due to lack of proper
infrastructure and a few select brokerage firms controlling the industry.

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There was a great resistance to setting up modern facilities and

innovative infrastructure.

The basic idea of setting up the NSE was facilitating computerized

market trading. The intention was to set up a vibrant and viable debt
market, and in the middle of 1993 it came into existence. The trading
started in the middle of 1994.The NSE is jointly owned by a group of
financial institutions, Insurance companies, banks and other
financial intermediaries. In the completely de-metalized exchange the
ownership has no bearing to trade. The objective is to place all investors
across the country in more than 1200 cities on equal footing.

This was done by competitively harnessing the latest technology

and adapting a new system of operations through the VSAT (Very Small
Earth Based Aperture Terminals) terminals. The fully automatic screen
based trading system is based on the principle of an order driven market
which provides complete flexibility to the participants. There are no
trading floors as in conventional stock exchanges.

The trading is entirely screen based with automatic order

processing. One can obtain the entire market information, which is
dynamically updated, at the click of a button. The system also conceals
the identity of the market operators. As the market investors can sit and
operate from their own houses and homes, they have all the facilities of
back office support. The connection with other traders through the
satellite link is established, and each member receives the market
information at the same time.

The NSE is one of the first stock exchanges in the world to use the
VSAT system for end-to-end connectivity and computer based trading.
NSE has completely shifted the trading platform from the floors of
theStock Exchange to the computer terminals at the brokerage firms and
further to personal computers and laptops in the investors’ homes and
offices!

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The NSE is one of the very few exchanges in the world trading all
kinds of securities on a single platform. The three mutually exclusive
segments of the NSE are:

 Capital Market segment

 Wholesale and Debt Market segment
 Futures Adoptions Trading

The capital Market Segment covers trading in equities and retail

trade in convertible and non-convertible debentures and hybrids. This
segment covers the securities of medium and large companies with
nation wide investor base. This might include securities which are being
traded on other exchanges as well. The Capital Market increases the
volume of trade and liquidity considerably.

The wholesale and Debt Market segment of the NSE is a facility

for institutions including subsidiaries of banks which are involved in
financial services and other corporate bodies. The trading system
facilitates making of two way quotes in a very flexible manner.

These three trading platforms were established one after the other.
The wholesale Debt market commenced its operations in June 1994 and
the Capital Market Segment started operating at the end of 1994.The
futures and options segment began in 2000, and today the NSE holds the
14th position in the 40 futures and Exchanges today.

A company that wants to get listed with the NSE needs to enter a
listing agreement and is required to pay the specified listing fees. It also
needs to adhere to all the clauses of the agreement and to send details of
book closure, record dates, annual and half yearly reports, and cash flow
statements.

The NSE has emerged as the world’s third largest growing bourse
today with such a large number of companies being listed everyday. It
has outpaced world leaders such as the London Stock Exchange,
NASDAQ and NYSE. The NSE can handle up to 1 million trades per

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day .It recorded a 15% jump in the number of listed firms of 1244 during
the one year period which ended in April 2007.

Stock Market Analysis

Stock analysis is the process to identify stocks that can achieve

high profits at low risk by means of scrutinizing a company’s
fundamentals and also determine market trends. Stock markets go
through bull and bear phases i.e. share prices are moving up or down.
This kind of analysis will help investors choose the right kind of stocks
altogether. There are two major types of stock analysis namely
fundamental analysis and technical analysis.

Fundamental Analysis

Fundamental stock analysis is used to determine the movement of

the share prices in the longer term. It involves a detailed evaluation of
company’s macro and micro parameters overall. This analysis includes
analyzing the company’s financial status, management, market and
competitive advantage. It’s also normally done to determine the intrinsic
value of a company’s stock. The purpose of calculating the intrinsic
value is to: if a company’s stock value is above the intrinsic value, then
its stock is overvalued and vice versa. Fundamental analysis will include
the following quantitative parameters to determine the overall financial
heath of a company:

 Revenues
 Earnings
 Assets
 Liabilities
 Return on Investments(ROI)
 Return on Equity(ROE)
 Return on Assets (ROA)

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 Debt Ratio
 Capitalization
 Dividend Payout Ratio
 Price to Earnings(P/E) ratio and
 Book value

Fundamental analysis is always better for long-term and

institutional investors who understands finance and also has a long –
term investment plan. Every investor should understand company’s
fundamentals overall before investing in its stock in order to fetch profits
in the long-term investment horizon.Thus,fundamental analysis will
focus only on company’s fundamentals rather than company’s share
price which seems to be always volatile in nature.

Technical Analysis

Technical analysis is the process of analyzing the historical share

price movements that can be used to determine market trends. This in
turn can be used to make future predictions of the company’s stock
performance.  The different kind of charts are used intechnical analysis
to showcase various variables such as trade volume, oscillators, moving
average, short and long-term trend, line and bar charts. There are three
types oftechnical analysis namely:

 Primary trend- This comprises of overall up and downward trend

from one to several years.
 Secondary trend – This generally lasts from three weeks to three
months in case the primary trend is downward.
 Minor trend – This represents daily fluctuations and lasts for at
least a week

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Technical analysis is always better for amateur investors and also

has a short-term investment horizon.  But stock market analysts prefer
fundamental analysis rather than technical analysis. Sometimes, the
analysts use a hybrid approach i.e. the combination of both fundamental
and technical analysis to determine the stock prices of a company.

NSE's Certification In Financial Market

NSE's Certification in Financial Markets (NCFM) is a standard

certification that is accepted across the nation. It is compulsory for a
diverse range of qualified specialists operating in the Indian capital
markets. Persons aiming to join the financial arena in India stand a better
chance and have brighter job opportunities if they obtain the NCFM
certification.

Need for NCFM:

A major constituent of improvements in the financial industry is

the creation of a highly knowledgeable and talented work force in each
division of this industry to offer excellent liaison services to people
connected with the financial markets.

To supply such superior services, people employed in the financial

sector should adhere to certain established regulatory guidelines plus
have the essential aptitude and knowledge attained through an assessing
and accreditation facility.

Considering the global experience and the requirements of the

India financial industry, and backed by the objective of safeguarding
investors' interests in the financial sector but more significantly to
substantially reduce risks occurring due to a poor insight into the
working of thefinancial markets and mechanisms, the National Stock
Exchange, in 1998, initiated a system for examining and accreditation,
by starting NSE's Certification in Financial Markets (NCFM).

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NCFM assessment and certification has gained prominence in

India due to the lack of recognized instruction or preparation on
financial markets, particularly in the operations field, even as the
market has gone through tremendous change in the past few years.

What is NCFM?

NCFM facilitates taking tests online and is an innovative approach

of conducting examinations in India.

NCFM assesses the abilities and erudition necessary to function in

the financial markets in a fair and impartial style. It bestows certificates
on meritorious candidates thus making certain that the quality of
individuals joining this stream is maintained at a superior level for the
benefit of a dynamic and established market.

The complete procedure involving examining, evaluating, and

preparing marks statement in the NCFM is completely computerized.
The NCFM offers flexible schedules and smooth access to applicants via
intranet and internet.

NCFM Modules
NCFM presently checks proficiency in the following areas:
 Financial Markets: A Beginners' Module

 Derivatives Market (Dealers) Module

 Capital Market (Dealers) Module

 Securities Market (Basic) Module

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 FIMMDA-NSE Debt Market (Basic) Module

 Surveillance in Stock Exchanges Module

 NSDL - Depository Operations Module

 Commodities Market Module

 AMFI - Mutual Fund (Basic) Module

 AMFI - Mutual Fund (Advisors) Module

 Corporate Governance Module

 Compliance Officers (Brokers) Module

 Compliance Officers (Corporates) Module

 Information Security Auditors Module (Part-1)

 Information Security Auditors Module (Part-2)

 Modules of Financial Planning Standards Board India

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By delivering extensive expertise and information in the preferred area, NCFM

opens up a world of opportunities for NCFM qualified individuals.

NSCCL (National Securities Clearing Corporation Limited) — Its

Partners and Future

The NSCCL or the National Securities Clearing Corporation

Limited is the clearing corporation of the National Stock Exchange
(NSE).

The NSE (National Stock Exchange) is a Mumbai-based stock

exchange. NSE (National Stock Exchange) is the largest stock exchange
in India and the third largest in the world in terms of volume of
transactions. The NSE (National Stock Exchange) is mutually-owned by
a set of leading financial institutions, banks, insurance companies and
other financial intermediaries in India but its ownership and
management operate as separate entities.The NSE has remained a lead
player in the modernization of India's capital and financial markets.
Towards this end the NSE (National Stock Exchange) set up the first
clearing corporation in India - the NSCCL (National Securities Clearing
Corporation Ltd). The NSCCL was a landmark in providing novation on
all the spot equity market (and later, derivatives market) trades in India.

Part of the NSE Group

The National Securities Clearing Corporation Ltd. (NSCCL) is part

of the NSE (National Stock Exchange) group and is a wholly-owned
subsidiary of the NSE. It was incorporated in August 1995 and started
clearing operations in April 1996. It was formed to build confidence in
clearing and settlement of securities, to promote and maintain short and
consistent settlement cycles, to provide a counter-party risk guarantee
and to operate a tight risk containment system.

Clearing and Settlement

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The NSCCL (National Securities Clearing Corporation Limited)

carries out the clearing and settlement of the trades executed in the CM
segment of NSE (National Stock Exchange) and operates constituent
SGL for settlement trades in government securities.

Inter-region Clearing

The NSCCL (National Securities Clearing Corporation Limited)

facilitates inter-region clearing. It has Regional Clearing Centres at
Delhi, Kolkata and Chennai and a Central Clearing Centre at Mumbai.
Members have the option of delivering or receiving the securities at a
clearing centre chosen by them.

Certificates Handled

To provide a level playing field to members irrespective of their

location, the NSCCL (National Securities Clearing Corporation Limited)
moves securities in the normal pay-in and pay-out on behalf of the
Clearing Members from and to Regional Clearing Centres (RCC) and
the Central Clearing Centre (CCC) at Mumbai.

Pre-delivery Verification

The NSCCL (National Securities Clearing Corporation Limited)

was the first to start pre-delivery verification to detect bad papers such
as fake and forged certificates or lost and stolen share certificates.

Dematerialised Settlement

The only effective solution to the problem of fake/forged and

stolen shares was dematerialised trading and settlement. As SEBI made
demat settlements mandatory in an ever-increasing number of securities
in a phased manner, the proportion of shares delivered in the

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dematerialised form by the NSCCL (National Securities

ClearingCorporation Limited) has increased.

Risk Management

The NSCCL has also incorporated risk containment measures. A

risk group, constituted by the NSCCL (National Securities Clearing
Corporation Limited) identified additional areas of perceived risk and
intensified the monitoring of members' position having concentration in
certain high-risk securities that attract high volumes and volatility.

Also a structured exercise of requiring unusually high pay-in

liability members to make advance pay-in of funds has been put in place,
in addition to offering facility of early pay-in of securities in demat
mode.

Securities Lending/Borrowing

The automated lending and borrowing mechanism of the NSCCL

(National Securities Clearing Corporation Limited) provides a facility to
lend/borrow securities/funds at market-determined rates. This facilitates
timely delivery of securities and thereby improves the efficiency of the
system.

Professional Clearing Membership

The NSCCL (National Securities Clearing Corporation Limited)

started the Professional Clearing Membership and the Stock Holding
Clearing Corporation Ltd. has been admitted as the first professional
clearing member on CM Segment.

Derivatives Settlement

The NSCCL (National Securities Clearing Corporation Limited)

also provides clearing and settlement services including risk
management for the derivatives market.

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Multiple Depositories

The Central Depositories Securities Limited (CDSL) has been

connected to the NSCCL (National Securities Clearing Corporation
Limited) and clearing and settlement of securities in dematerialised form
through the CDSL has also been introduced.

Collateral FDRs

The NSCCL (National Securities Clearing Corporation Limited)

accepts FDRs drawn in its favour and maintains them in its custody.
This has added value in services to the members as they are not any
longer required to pay custodial charges but can be given instantaneous
credit and benefit.

As the importance and size of the NSE grows, the importance and
size of the NSCCL (National Securities Clearing Corporation Limited) is
also bound to go up.

Stock Split

A stock split is a process used to increase the number of shares in

order to issue more shares to current shareholders. In simple terms, when
a company likes to increase the number of shares in the market, a stock
split is used. For example, if an investor holds 100 shares of ABC at
Rs.100 per share, then it uses 2-1 stock split will result in owning 200
shares worth Rs.50 per share. The outcomes of stock split process result
in company’sincrease of number of shares and reduction in prices but
market capitalization remain the same.

The most common methods of stock splits are 2-1, 3-2 and 3-1.
Depending on the real time requirements, the different methods are used
accordingly. One of the best ways to calculate the new stock price is to

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divide the previous stock price by the stock split ratio. For example, ifa
company adopts 2-1 stock split option, then divide Rs.100 by 2 that will
result in Rs.50 per share. For 3-1 stock split option, then divide:
Rs.100/3 will result in Rs.33.33 per share overall.

The other possible option of stock split is termed as reverse split

i.e. 1-10 ratio means to investors is that every 10 shares investors own
will be considered as 1 share. This procedure is generally used by
companies with low stock prices. The companies would like toincrease
the stock prices in order to gain more credibility in the market and
prevent any delisting activities accordingly. In any case, the company’s
worth won’t change of opting stock –split or reverse stock-split.

Thus, stock split procedures help companies share to be more

affordable to small pool of investors and also provide greater liquidity
and marketability of its stocks in the market. The most important thing
to investors is that to keep in mind: stock split is not a sole deciding
factor to Buya Company’s stock because this will not effect in case on
the worth of the company at all.

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Project on,
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 National Stock Exchange S.Y.F.M

National stock
Exchange
Name: Paresh N. Bagwe.
STD: S.Y.B.com [F.M]
Roll No.: 03

Submitted to,
Prof. RanaAnjum Miss

Project on,

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 National Stock Exchange S.Y.F.M

National stock
Exchange
Name: Reshma S. Shirvadkar.
STD: S.Y.B.com [F.M]
Roll No.: 54

Submitted to,
Prof. RanaAnjum Miss

Index
Introduction
Content
Origin
Innovation

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Market
Indices
Exchange Traded Fund on NSE
History
Analysis
NSE Certification in Financial Market
 NSCCL

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