National Stock Exchange of India
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| National Stock Exchange of India | |
| |
| Founded | November 1992 |
|---|---|
| Headquarters | Mumbai |
| Key People | Ravi Narain, CEO; Chitra Ramkrishna, deputy MD; S B Mathur, chairman |
| Products | Cash equities, corporate and government bonds, index and stock futures and options |
| Web site | http://www.nse-india.com/ |
The National Stock Exchange of India (NSE) is a multi-asset class electronic platform whose rapid expansion saw it ranked as one of the world’s largest equities platform and eighth-largest derivatives house in 2006[1]. Derivatives volumes climbed a further 43 percent in 2007 to 310 million contracts[2]. It is also the second-largest global venue for single-stock futures, and hosts benchmark stock indexes including the S&P CNX Nifty[3].
The company quickly overtook the Bombay Stock Exchange in the volume of transactions following its launch in 1994, and NYSE Euronext and three other financial buyers acquired a combined 20-percent stake in the for-profit organization in January 2007.
Contents |
History and Ownership
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The NSE was created following the recommendations of the high-level Pherwani Committee in 1991, one of a number of government-led initiatives to strengthen India’s financial system and attract inward investment.
The slow pace of reform at the established Bombay Stock Exchange saw a number of banks - including State Bank of India, ICICI Bank, Union Bank of India - combine to create the NSE, which introduced a national system of screen-based electronic trading and a clearinghouse.[4]
The exchange launched a wholesale debt market segment in June 1994, with its equities trading platform following in November 1994 and the futures and options segment started in June 2000.
The NSE is owned by a group of 27 banks and other investors, expanding its domestically-dominated ownership in January 2007 when 20 percent was sold to overseas interests. NYSE Euronext paid $115 million for 5 percent stake, with Goldman Sachs, General Atlantic Partners and Softbank Asian Infrastructure Fund also taking 5 percent holdings. The investments follow the release of rules by Indian regulators allowing combined foreign ownership of an Indian exchange of up to 49 percent, with no single investor allowed more than 5 percent.[5]
Product Development
- The Capital Market (Equities) segment of NSE facilitates trading in the following instruments:
- Shares -- equity shares and preference shares
- Debentures -- partly convertible, fully convertible and non-convertible debentures, as well as warrants/coupons/secured premium notes/other hybrid bonds
- Units of Mutual Funds
- Futures and Options: Trading in derivatives began with the launch of index futures on June 12, 2000. The futures contracts are based on the popular benchmark S&P CNX Nifty Index. The Exchange introduced trading in Index Options (also based on Nifty) on June 4, 2001. (The "Nifty" is by far the most active index product on the exchange.[6]) NSE also became the first exchange to launch trading in options on individual securities from July 2, 2001. Futures on individual securities were introduced on Nov. 9, 2001 (today more than 200 are offered both in futures and options on individual securities).
- Debt Instruments: corporate bonds, wholesale debt instruments, retail debt instruments
- IPOs
- Indices: Major indices and sector-specific indices. India Index Services & Products Ltd. (IISL), a joint venture between the National Stock Exchange of India Ltd. (NSE) and CRISIL Ltd. (formerly the Credit Rating Information Services of India Limited) was formed to provide a variety of indices and index-related services and products for the capital markets. IISL has a consulting and licensing agreement with Standard and Poor's Corp. (S&P) for co-branding IISL's equity indices.
- Exchange-traded funds: 10 listed
Clearing
The National Securities Clearing Corporation Ltd. (NSCCL), a wholly owned subsidiary of NSE, was incorporated in August 1995 and began clearing operations in April 1996. It was the first clearing corporation to be established in the country and also the first clearing corporation in the country to introduce settlement guarantee.
In addition, a subsidiary company, National Commodity Clearing Limited (NCCL) has been incorporated jointly between NSE and the Mumbai-based National Commodity and Derivatives Exchange Ltd NCDEX. The company provides IT and process support for clearing and settlement needs of NCDEX.
References
- ↑ 2006 Volume Survey. FIA Magazine. Retrieved on November 19, 2007.
- ↑ Statistics. NSE. Retrieved on January 22, 2008.
- ↑ 2007 Market Highlights. WFE. Retrieved on February 11, 2008.
- ↑ "A Comparative Study of the Bombay Stock Exchange and the National Stock Exchange of India". National University of Singapore. Retrieved on November 19, 2007.
- ↑ "NYSE buys into Indian bourse". Financial Times. Retrieved on November 19, 2007.
- ↑ "Derivatives Update October 2007”. NSE. Retrieved on Nov. 24, 2007.
