National Stock Exchange of India Limited (NSE) is the leading stock exchange of India, located in Mumbai, Maharashtra. It is under the ownership of Some leading financial institutions, Banks, and Insurance companies. NSE was established in 1992 as the first dematerialized electronic exchange in the country. NSE was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system that offered easy trading facilities to investors spread across the length and breadth of the country. Vikram Limaye is Managing Director & Chief Executive Officer of NSE.National Stock ExchangeNational Stock Exchange of India (NSE).
National Stock Exchange has a total market capitalization of more than US$3 trillion, making it the world’s 9th-largest stock exchange as of May 2021. NSE’s flagship index, the NIFTY 50, a 50 stock index is used extensively by investors in India and around the world as a barometer of the Indian capital market. The NIFTY 50 index was launched in 1996 by NSE.However, Vaidyanathan (2016) estimates that only about 4% of the Indian economy / GDP is actually derived from the stock exchanges in India.
history of NSE.
National Stock Exchange was incorporated in the year 1992 to bring about transparency in the Indian equity markets. Instead of trading memberships being confined to a group of brokers, NSE ensured that anyone who was qualified, experienced, and met the minimum financial requirements was allowed to trade. In this context, NSE was ahead of its time when it separated ownership and management of the exchange under SEBI’s supervision.
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 Pherwani committee, NSE was established with a diversified shareholding comprising domestic and global investors. The key domestic investors include Life Insurance Corporation, State Bank of India, IFCI Limited, IDFC Limited and Stock Holding Corporation of India Limited. Key global investors include Gagil FDI Limited, GS Strategic Investments Limited, SAIF II SE Investments Mauritius Limited, Aranda Investments (Mauritius) Pte Limited, and PI Opportunities Fund I.
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 P. V. Narasimha Rao was the Prime Minister of India and Manmohan Singh 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. NSE offers trading, clearing and settlement services in equity, equity derivative, debt, commodity derivatives, and currency derivatives segments. It was the first exchange in India to introduce an electronic trading facility thus connecting the investor base of the entire country. NSE has 2500 VSATs and 3000 leased lines spread over more than 2000 cities across India.
Markets of NSE.
Equity Derivatives EditThe 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 the 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.[14] 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$21 billion).
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 the 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.[14] 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$21 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, the USA. The new contracts include futures on both the DJIA and the S&P 500 and options on the S&P 50
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 favor 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 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 approval for interest-rate futures, as recommended by the SEBI-RBI committee.
Debt Market.
On 13 May 2013, NSE launched India’s first dedicated debt platform to provide a liquid and transparent trading platform for debt-related products
The Debt segment provides an opportunity for retail investors to invest in corporate bonds on a liquid and transparent exchange platform. It also helps institutions that are holders of corporate bonds. It is an ideal platform to buy and sell at optimum prices and help Corporates to get adequate demand when issue bonds.
Financial literacy of NSE.
NSE has collaborated with several universities like Gokhale Institute of Politics & Economics (GIPE), Pune, Bharati Vidyapeeth Deemed University (BVDU), Pune, Guru Gobind Singh Indraprastha University, Delhi, the Ravenshaw University of Cuttack and Punjabi University, Patiala, among others to offer MBA and BBA courses. NSE has also provided mock market simulation software called NSE Learn to Trade (NLT) to develop investment, trading, and portfolio management skills among the students.[20] The simulation software is very similar to the software currently being used by the market professionals and helps students to learn how to trade in the markets.
NSE also conducts online examinations and awards certification, under its Certification in Financial Markets (NCFM) programs.[21] At present, certifications are available in 46 modules, covering different sectors of financial and capital markets, both at the beginner and advanced levels. The list of various modules can be found at the official site of NSE India. In addition, since August 2009, it has offered a short-term course called NSE Certified Capital Market Professional (NCCMP).[22] The NCCMP or NSE Certified Capital Market Professional is a 100-hour program for over 3–4 months, conducted at the colleges, and covers theoretical and practical training in subjects related to the capital markets. NCCMP covers subjects like equity markets, debt markets, derivatives, macroeconomics, technical analysis, and fundamental analysis. Successful candidates are awarded joint certification from NSE and the concerned.
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