A REPORT ON VISIT TO NATIONAL STOCK EXCHANGE (NSE) DELHI

SUBMITTED TO SUBMITTED BY DR. ASHISH KATHPAL Roll No.: 30310 RACHITA RANA

Batch (2010 2012)

INTRODUCTION
The National Stock Exchange (NSE) is a stock exchange located

at Mumbai, Maharashtra, India. It is the 9th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization of around US$ 2 trillion and over 1,615 listings as of June 2011. 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 NSE NIFTY (National Stock Exchange fifty), an index of fifty major stocks weighted by market capitalization. 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 Euro next and Goldman Sachs who have taken a stake in the NSE. As of 2011, the NSE VSAT terminals, 2, 30, 000 in total, cover more than 1500 cities across India. 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% The National Stock Exchange (NSE) is India's leading stock exchange covering various cities and towns across the country. NSE was set up by leading institutions to provide a modern, fully automated screen-based trading system with national reach. The Exchange has brought about unparalleled transparency, speed, efficiency, safety and market integrity.

NSE has played a catalytic role in reforming the Indian securities market in terms of microstructure, market practices and trading volumes. The market today uses state-of-art information technology to provide an efficient and transparent trading, clearing and settlement mechanism. It has witnessed several innovations in products & services viz. demutualization of stock exchange governance, screen based trading, compression of settlement cycles, dematerialization and electronic transfer of securities, securities lending and borrowing, professionalisation of trading members, fine-tuned risk management systems, emergence of clearing corporations to assume counterparty risks, market of debt and derivative instruments and intensive use of information technology.

MARKET HOURS

NSE's normal trading sessions are conducted from 9:15 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.[11] The exchange, in association with BSE (Bombay Stock Exchange Ltd.), is thinking of revising its timings from 9.00 am India Time to 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. Finally, on 18 November 2009 regulator decided to drop their ambitious goal of longest Asia Trading Hours due to strong opposition from its members.

NSE new market timing from 4 Jan 2010 is 9:00 am till 3:30 pm India Time. October 2010 Launch of 15-minute special pre-open trading session, a mechanism under which investors can bid for stocks before the market opens.

MILESTONES (2010-2011) August 2011 Launch of derivatives on Global Indices July 2011 Commencement of trading in 91 Day GOI Treasury Bill Futures January 2011 NSE receives "Financial Inclusion" Award.

MISSION Establishing a nation-wide trading facility for equities, debt instruments and hybrids, Ensuring equal access to investors all over the country through an appropriate communication network, Providing a fair, efficient and transparent securities market to investors using electronic trading systems, Enabling shorter settlement cycles and book entry settlements systems, and Meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technologies have become industry benchmarks and emulated by other market participants. NSE is more than a mere market facilitator. That force is guiding the industry towards new horizons and greater opportunities.

NSCCL
The National Securities Clearing Corporation Ltd. (NSCCL), a wholly owned subsidiary of NSE, was incorporated in August 1995. It was the first clearing corporation to be established in the country and the first clearing corporation in the country to introduce settlement guarantee. It was set up with the following objectives: To bring and sustain confidence in clearing and settlement of securities; To promote and maintain, short and consistent settlement cycles; To provide counter-party risk guarantee, and To operate a tight risk containment system. NSCCL commenced clearing operations in April 1996. It has since completed more than 2400 settlements (equities segment) without delays or disruptions. National Securities Clearing Corporation Limited First Indian Clearing Corporation to get rated CRISIL has assigned its highest corporate credit rating of AAA to the National Securities Clearing Corporation Ltd (NSCCL). 'AAA' rating indicates highest degree of strength with regard to honouring debt obligations. NSCCL is the first Indian Clearing Corporation to get this rating. The rating reflects NSCCLs status as Clearing Corporation for NSE, Indias largest stock exchange. The rating also factors in NSCCLs rigorous risk management controls and adequate settlement guarantee cover.

PRODUCTS Equities Equities Indices Mutual Funds Exchange Traded Funds Initial Public Offerings Security Lending and Borrowing Scheme Derivatives Equity Derivatives Currency Derivatives Interest Rate Futures Debt Retail Debt Market Wholesale Debt Market Corporate Bonds INDICES
S&P CNX Nifty (Standard & Poor's CRISIL NSE Index) 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)

BOOK BUILDING AT NSE The NSE has set up nation-wide network for trading whereby members can trade remotely from their offices located all over the country. The NSE trading network spans various cities and towns across India. NSE decided to offer this infrastructure for conducting online IPOs through the Book Building process. NSE operates a fully automated screen based bidding system called NEAT IPO that enables trading members to enter bids directly from their offices through a sophisticated telecommunication network. Book Building through the NSE system offers several advantages

The NSE system offers a nation wide bidding facility in securities It provides a fair, efficient & transparent method for collecting bids using latest electronic trading systems

Costs involved in the issue are far less than those in a normal IPO

The IPO market timings are from 10.00 a.m. to 5.00 p.m. On the last day of the IPO, the Book Running Lead Manager can further extend the session timings on specific request.

NSE Reverse Book Building System

NSE uses the reverse book building system; a fully automated screen based bidding system that allows offers to run in several issues concurrently. The system has the facility of defining a hierarchy amongst the users of the system. The Book Running Lead Manager can define who will be the Syndicate member and who will be the other members participating in the issue. The Syndicate Member and other Members also have a facility of defining a hierarchy among the users of the system as Corporate Manager, Branch Manager and Dealer. Trading Members The Book Running Lead Manager will give the list of trading members who are eligible to participate in the Book Building process to the Exchange. Members have to submit a onetime undertaking to the Exchange. Eligible trading members have to give in the prescribed format details of the user IDs that they would like to use. List of Approved Trading Members

ICICI Brokerage Services Limited. Karvy Stock Broking Limited. Master Capital Services Limited.

Subscribers Subscribers can approach any of the approved trading members for submitting offers in the NEAT IPO system. On line transaction registration slip are generated automatically after entering the offers in to the system, which acts as proof of the registration of each offer.

Reverse Book Building through the NSE system offers several advantages

The NSE system offers a nation wide bidding facility in securities. It provides a fair, efficient & transparent method for collecting offers using latest electronic trading systems.