National Stock Exchange of India
| National Stock Exchange of India (NSE) | |
| |
| Founded | 1992 |
|---|---|
| Headquarters | Mumbai, India |
| Key People | Ashishkumar Chauhan, Managing Director & CEO |
| Products | S&P CNX Nifty index |
| Website | www.nse-india.com |
The National Stock Exchange of India (NSE), launched in 1993, is the country's largest stock exchange and in January 2020 became the largest derivatives exchange by volume in the world. [1]
The NSE hosts India's main equities benchmark, the S&P CNX Nifty and is the world's largest exchange for single-stock futures trading on its integrated electronic trading platform. It also offers forex futures trading in dollar/rupees.
According to the annual Futures Industry Association's survey of derivatives exchanges in 2019, the National Stock Exchange of India was ranked as the world's largest derivatives exchange by contract volume, just ahead of the CME Group. The NSE retained its No. 1 ranking by volume from the FIA for a second consecutive year in 2020 with total trading volume of 8.85 billion contracts, up 48.1% from the previous year. In addition, the exchange was ranked No. 4 globally by volume of trades in cash equities in 2020, according to data maintained by the World Federation of Exchanges (WFE). [2] [3][4] [5]
In January of 2020, the NSE formally approached India's stock market regulator, Sebi, for an initial public offering of its shares.[6]
In July 2020 NSE introduced trading in treasury bills (T-bills) and state development loans (SDLs) in its capital market segment, allowing investors to buy and sell T-bills and SDLs through NSE trading members.[7]
Background[edit]
The NSE was created in 1992 by a consortium of Indian banks including State Bank of India, Union Bank of India and ICICI Bank, but ownership was broadened in 2007 by selling 5 percent stakes each to international investors NYSE Euronext, Goldman Sachs, General Atlantic Partners and Softbank Asian Infrastructure Fund. It began trading the equities and debt in 1994 and launched futures and options trading in 2000.[8] The launch of derivatives helped the NSE to zoom past its rival BSE in the early 2000s, and it now claims an 85 percent market share in equity cash trading and 94 percent in equity derivatives.[9]
Single stock futures contracts were launched in 2002 while currency futures were added in 2008, followed a year later by interest rate futures.[10]
The NSE handles nearly five times as many trades as the Bombay Stock Exchange (BSE), its closest rival, and 14 times as many trades as the Multi Commodities Exchange (MCX), according to the 2015 Futures Industry Association volume survey.
On May 17, 2018, the U.S. Commodity Futures Trading Commission granted a Part 30 exemption to the National Stock Exchange of India. The order allows NSE members to accept U.S. customer funds for trading futures and options listed on the exchange without having to register as futures commission merchants with the CFTC. The CFTC decision was based on a finding that the local laws and regulations in India applicable to NSE members provide a "comparable level" of customer protection.[11]
Key Product[edit]
The "NIFTY 50" index is National Stock Exchange of India's benchmark broad based stock market index for the Indian equity market. The Nifty benchmark consists of 50 stocks across 12 sectors and is one of the two main stock indexes used in India (the other is the BSE sensex).[12] It has been computed on a free-float basis since June 2009.
The Nifty index is owned and managed by India Index Services and Products (IISL), which is a wholly owned subsidiary of the NSE Strategic Investment Corporation Limited.
Social Stock Exchange[edit]
On February 22, 2023, National Stock Exchange of India received final approval from the Securities and Exchange Board of India (SEBI) to set up a Social Stock Exchange (SSE) as a separate segment of the NSE. The Social Stock Exchange segment will provide a new avenue for social enterprises to finance social initiatives. Any social enterprise, Non Profit Organization (NPOs) or For-Profit Social Enterprises (FPEs), that establishes its primacy of social intent can get listed on the SSE segment.
Clearing[edit]
In June of 2018, NSE and Nasdaq signed an agreement for Nasdaq to provide customized real-time clearing, risk management and settlement technology to NSE. The new post-trade technology will replace NSE's current clearing and settlement system operated by the National Securities Clearing Corporation Limited (NSCCL), a wholly owned subsidiary of NSE. [13]
Key People[edit]
- Ashishkumar Chauhan, Managing Director & CEO
- Girish Chandra Chaturvedi, Public Interest Director & Chairman
- J. Ravichandran, Group President
Chitra Ramkrishna was CEO from 2013 to 2016, when she resigned for personal reasons. [14]
Contract Volume[edit]
| Year | Total Annual Volume* | Percent Change |
| 2020 | 8,850,473,823 | 48.07% |
| 2019 | 5,977,219,777 | 57.27% |
| 2018 | 3,790,090,142 | 53.74% |
| 2017 | 2,465,333,505 | 16.3% |
| 2016 | 2,119,462,820 | (-) 30.1% |
| 2015 | 3,031,892,784 | 61.2% |
| 2014 | 1,880,362,513 | (-) 11.6% |
| 2013 | 2,127,151,585 | 5.8% |
| 2012 | 2,010,493,487 | (-) 8.6% |
| 2011 | 2,200,366,650 | 36.2% |
| 2010 | 1,615,790,692 | 75.9% |
| 2009 | 918,507,122 | -- |
Partnerships and Intiatives[edit]
NSE entered into a significant cross-listing partnership with the CME Group, the world's largest derivatives-exchange operator, in March of 2010, involving benchmark stock indexes in the two countries. Futures contracts on the NSE's benchmark S&P CNX Nifty Index (better known as the Nifty 50) are listed on CME Group, denominated in local currency.[15] In return, the NSE lists the CME Group's S&P 500 and Dow Jones Industrial Averages stock index contracts, denominated in Indian Rupees. The contracts commenced trading on July 19, 2010 along with two new contracts as part of its NSE partnership, the E-mini and E-micro S&P CNX Nifty (Nifty 50) futures.[16]
In July 2010, the exchange launched the India Volatility Index (India VIX) on a real-time basis; it previously only tracked end-of-the-day changes. India VIX is based on the index option prices of the benchmark Nifty. On July 19, 2010 NSE applied with SEBI to start futures and options on the index, after it has been tracked for a suitable period.[17]
In May of 2018 the NSE and the Singapore Exchange abandoned talks on a cross-border trading link in the midst of a court battle that soured their 18-year partnership. The venture would have enabled traders in Singapore to buy and sell derivatives on exchanges in the Gujarat tax-free zone known as Gift City.[18]
Four years later, the venture came to fruition on July 29, 2022, when India's Prime Minister Narendra Modi launched the NSE IFSC-SGX Connect, a joint venture between the NSE and Singapore Exchange (SGX) at the Gujarat International Finance Tec (GIFT) City, Gandhinagar. The platform enabled global investors to trade in dollar-denominated Nifty futures contracts available on the Singapore Exchange (SGX) in GIFT City. Investors also have real-time access to NSE IFSC market data.[19]
References[edit]
- ↑ India’s NSE overtakes CME Group as largest derivatives exchange globally. The Trade News.
- ↑ FIA 2019 Annual Volume Survey. Futures Industry.com.
- ↑ Brazil’s B3 overtakes CME Group in rankings for largest derivatives exchange. The TRADE.
- ↑ India’s NSE for the second year in the row is the world’s largest derivatives exchange. AP News.
- ↑ NSE is the world’s largest derivatives exchange for 2nd consecutive year. NSE India.
- ↑ NSE taps Sebi for IPO even as banks plan to offload shares. Livemint.
- ↑ NSE introduces trading of T-bills, SDLs in capital market segment. Economic Times.
- ↑ The Organisation. National Stock Exchange of India.
- ↑ What listing of BSE and NSE means for the exchanges and investors. Economic Times of India.
- ↑ Proposed stock exchange set to challenge NSE’s near-monopoly. Livemint.com.
- ↑ CFTC Opens Access to Indian Futures Market for U.S. Customers. CFTC.
- ↑ S&P CNX Nifty. NSE.
- ↑ National Stock Exchange of India signs post-trade technology and strategic partnership agreement with Nasdaq. Nasdaq.
- ↑ Biggest Indian Exchange’s CEO Resigns Just Months Before IPO. Bloomberg.
- ↑ National Stock Exchange of India and CME Group Announce Cross-Listing Relationship. PRNewswire-FirstCall.
- ↑ Press Release. NSE.
- ↑ Press Release. NSE.
- ↑ Singapore, India exchanges 'abandoning trade link talks'. The Business Times of Singapore.
- ↑ PM Launches NSE IFSC-SGX Connect in GIFT City. The Economic Times of India.