Business Studies and Management · Ch 8 — Financial Markets
National Stock Exchange of India (NSE)
National Stock Exchange of India (NSE)
The National Stock Exchange (NSE) is the latest, most modern and technology-driven exchange. It was incorporated in 1992, recognised as a stock exchange in April 1993, and began operations in 1994 with trading in the wholesale debt market segment. It launched the capital market segment in November 1994 and the futures and options segment in June 2000. The NSE has a nationwide, fully automated screen-based trading system. It was set up by leading financial institutions, banks, insurance companies and other financial intermediaries, and is managed by professionals who do not themselves trade on the exchange.
Objectives of NSE
a. Establishing a nationwide trading facility for all types of securities.
b. Ensuring equal access to investors all over the country through an appropriate communication network.
c. Providing a fair, efficient and transparent securities market using an electronic trading system.
d. Enabling shorter settlement cycles and book-entry settlements.
e. Meeting international benchmarks and standards.
Market segments of NSE
The exchange provides trading in two segments:
- Wholesale Debt Market Segment — a trading platform for a wide range of fixed-income securities such as central government securities, treasury bills, state development loans, PSU bonds, floating-rate bonds, zero-coupon bonds, commercial paper, certificates of deposit, corporate debentures and mutual funds.
- Capital Market Segment — an efficient and transparent platform for trading in equity, preference shares, debentures, exchange-traded funds and retail government securities.