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Secondary market
1. Secondary Market
Shabarisha N., M.Com, PGDHRM, UGC-NET
Assistant Professor
SBSSS, Christ (Deemed to be University)
Bengaluru
E-mail: professorshabarisha@gmail.com
2. Introduction
• Secondary market or stock market or stock exchange.
• A market where existing securities are purchased and sold
• An organized mechanism for trading in existing securities
• It fulfills basic objective of investors- liquidity and transferability
• Hastings, “Stock exchange or securities market comprises all the places
where buyers and sellers of stocks and bonds or their representatives
undertake transactions involving the sale of securities”
• Pyle, “Stock exchanges are market places where securities that have been
listed there on may be bought and sold for either investment or
speculation”
• Husband and Dockeray, “Securities or stock exchanges are privately
organized markets which are used to facilitate trading in securities”
• SCRA, “The stock exchange has been defined as any body of individuals
whether incorporated or not, constituted for the purpose of assisting,
regulating or controlling the business of buying, selling or dealing in
securities”
3. Development of Stock Market in India
• Dates back to the end of 18th century when long term negotiable securities
were first issued
• Real beginning occurred in the middle of 19th century after enactment of
the Companies Act in 1850 (limited liability, investors interest in
corporate securities)
• The Native Share and Stock Brokers’ Association, (the BSE) was formed
in Bombay in 1875.
• Followed by formation of association/exchanges in- Ahmadabad(1894),
Calcutta(1908), Madras(1937),
• Enactment of SCRA (1956)
• The Calcutta Stock exchange was the largest stock exchange in India till
1960s.
• In 1961- 1,203 listed companies across the various stock exchanges of the
country(of these 576 listed on CSE and 297 were on BSE)
• Later half of the 1960s relative importance of CSE declined while the
BSE increased sharply.
4. Year No. of Stock
Exchanges
No. of listed
companies
Market
Capitalization(Rs. in
crores
1946 07 1,125 971
1961 07 1,203 1,292
1971 08 1,599 2,675
1975 08 1,852 3,273
1980 09 2,265 6,750
1985 14 4,314 25,302
1990 19 5,968 70,521
1990-1991 22 6,229 11,02,790
1999-2000 23 9,871 1,19,26,300
2002-2003 23 9,413 63,19,212
2003-2004 23 5,528 12,01,207
2004-2005 23 4,731 13,18,795
Table 3.1- Phenomenal growth in operations of the Stock markets in India till
nineties
Source: SEBI, Annual Report
5. • Till the early 1990s, the Indian secondary market comprised regional stock exchanges
with the BSE heading the list.
• The Indian stock market was plagued with many limitations;
Uncertainty of execution prices
Uncertain delivery and settlement periods
Front running, trading ahead of a client based knowledge of the client order
Lack of transparency
High transaction costs
Absence of risk management
Systematic failure of the entire market and market closures due to scams
Club(association) mentality of brokers
Kerb trading- private off-market deals
• Mid eighties- G.S. Patel committee, and Abib Hussain committee recommendation on
capital market reforms
• 1991, an expert study instituted by Department of Economic Affairs, MOF,
GOI(Uniform one-week settlement system, MIS)
• After initiation of reforms in 1991(a high powered study group- Pherwani
Committee), the Indian secondary market now has a 3 tier form;
Regional Stock exchanges
The National Stock Exchange(1994) – Screen based trading system
The Over the Counter Exchange of India(1992)- Screen based trading system
6. Functions/Services/Features/Role of Stock Exchanges
• Occupy an important place in the economy
• Very sensitive
• “Barometer of the state of economy”/ “the mart of the world”/
“business of business”
• Following are the functions/services/features/role of Stock
Exchanges;
Ideal meeting place
Mobilization of Savings
Providing safety to investors
Distribution of new securities
Continuous, ready, open and broad-based market for securities
Liquidity
Capital formation
Speculative trading
Sound price setting(fair prices)
7. Efficient channeling of savings
Economic barometer
Dissemination of market data
Perfect market conditions
Seasoning of securities(holding securities issued by new companies)
Optimal resource allocation(national savings to industry/commerce)
Platform for public debt
Clearing house Business information(NSCCL, Data POWESS of
CMIE, SEBI-EDIFAR)
Evaluation of securities
True market mechanism(fair and true pricing)
Investor education
Industrial financing
Company regulation
Listing of securities(A, B1, B2, C, F, Z)
8. Difference between Stock exchange and Commodity Exchange
Table no. 3.2
Feature/ Point of
Difference
Stock Exchange Commodity Exchange
Function Providing easy Offering hedging or marketability,
insurance, liquidity to commodities
Object Facilitating capital formation and
making best use of capital
resources
Facilitating goods flow through risk
reduction
Participants Investors and speculators Producers, dealers, traders and body of
speculators
Period of dealings Cash, ready delivery and dealings
for account for a fortnight
Instant cash dealings and a settlement
period of 2 or 3 months for futures
market dealings
Articles traded Industrial securities commodities
speculation Ensures saleability of securities Ensures assumption and absorption of
price risk
Forward contract Simplified and securities are
standardized
Standards are to be fixed for
deliverable goods
Price quotation Only one quotation in forward
and in futures many quotations
Only one quotation in forward and in
futures many quotations
9. Functionaries/ Participants/ Traders in secondary market
• Remisiers
The sub – brokers employed by a member (stock-broker) to secure business
are called – Remisiers.
They act as agents of the members
They are not permitted to enter the trading floor for exchange dealings
The members pay them commission on the business procured by them
therefore they are called as “half commission men”
• Authorized clerks
Who assist a member in transacting business, especially at times where the
volume is heavy
The employees of a member of a stock exchange are called as authorized
clerks
These clerks are authorized to transact business on behalf of their member-
employer
Such persons can sign on behalf of their employers where they are provided
with the power of attorney
10. • Jobbers:
Jobbers are security merchants dealing in securities as independent operators
They buy and sell securities on their own behalf and try to earn through price
changes in market
They can not deal on behalf of public and are prohibited from taking commissions
They directly deal with brokers who in turn make transaction on behalf of public
They generally quote 2 prices- price at which they wish to buy and wish to sell
The difference between these two prices is called as “Jobbers profit” technically
“Jobbers turn”
• Brokers:
Brokers are commission agents who acts as intermediaries between buyers and
sellers of securities
They do not purchase or sell securities on their own behalf
They bring together buyers and sellers and help them to make a deal
They charge commission on both the parties
• Tharawaniwalas:
These are the members of stock exchange who act both as Jobbers and Brokers.
They make transaction on his own behalf like a Jobber and may also transact on
behalf of public as a broker.
11. Types of speculators in Stock Exchange:
• Bull or Tejiwala (optimism)
Is an operator who expects a raise in prices of securities in the future
In anticipation of price raise he makes purchase of shares with the
intention to sell at higher prices in future
He has no intention to taking delivery of securities but dealing with
(sells them) only differences in prices
He tries to raise prices of securities by placing a big purchase of
orders
Hence this tendency of speculator is compared to a bull
• Bear or Mandiwala (pessimism)
He expects prices to fall in future and sells securities at present with a
view to purchase them at lower prices in future
The bear does not have securities at present but sells them at prices in
anticipation that he will supply them by purchasing at lower prices in
future
He trying to bring down the prices
12. • Stag
Is a cautious speculator in the stock market
He applies for shares in new companies and expects to sell them
at a premium if he gets allotment
He selects those companies whose shares are in more demand
and are likely to carry a premium
He sells the shares before being called to pay the allotment
money
He applies for large number of shares, so that he gets some
allotment even if there is over subscription
• Lame Duck
When a bear finds it difficult to fulfill his commitment, is called
struggling like a lame duck.
13. Organization structure of a stock exchange:
• Guided by its objectives including arrangement for;
Listing of companies
Control of trading in securities
Settlement and clearance
Regulation of members activities
Dispute settlement
• A brief description of the common organizational structure may be as follows;
01. Governing Board
Consists of 13 members - one President, one Vice-President, 1 Executive
Director, Elected Directors, 3 Public Representatives, 3 Nominees of the
Government.
Functions/tasks of Governing body are;
• Making, amending, suspending rules, byelaws, regulations
• Complete jurisdiction over members
• Warning, fining, suspending members
• Determining and regulating mode of business in exchanges
• Supervising, controlling, directing all matters connected with exchange
14. 02. Mode of Organization
• Free to establish themselves in any form of organization viz., public limited
companies, company limited by guarantee, association of individuals, non-profit
organization, etc.
• Brief description of the way the stock exchanges in India is organized are;
Voluntary organizations (non-profit) – BSE, Ahmadabad SE, Indore SE
Public Limited Companies – Calcutta, Delhi, Chennai, Bangalore, Cochin, Kanpur,
Ludhiana, Mangalore and Jaipur SE
Companies Limited by Guarantee (no share capital, liability of members is limited
to the extent of the guaranteed amount mentioned in AoA and MoA) –
Hyderabad, Magadh, Pune, Bhubaneswar and Saurastra SE
03. Membership
Only members are allowed to participate
Membership restricted to persons with high financial standing and sufficient
knowledge and experience relating to stock market
Members are subject to the rules and regulations
Need to make payment of cash deposit as margin money
15. 04. Departments
The major departments of an typical SE are;
Listing department
Operations department
Computer and EDP department
Inspection and Audit department
Monitoring department
Investors Service department
16. Stock Market trading in India
Stock Market Trading in India
Cash/ Normal Trading
Capital
Market
(Equity)
Segment
Wholesale
Debt Market
Segment
Derivatives Trading
Trading of
Government
Securities
Secondary Market
for Corporate debt
securities
Clearing and Settlement ;
•Clearing Entities Settlement Mechanism
•Clearing Mechanism Risk Management
17. 01.Capital /Equity Market Segment
Trading Mechanism- NSE-NEAT, BSE-BOLT
Transaction Charges- 2.5 % of the contract price, brokerage
charges of 0.15
Clearing and Settlement – NSE- NSCCL
Trading recording – Automatic recording system
Dematerialized settlement
Risk management system- capital adequacy(1 crore),
trading and exposure limits, margin requirements, index
based circuit filters, settlement guarantee fund,
surveillance, online monitoring,
Investigation and inspection
18. 02. Wholesale debt market segment
Facilitates institutions/ body corporate(institutional investors) to enter
into high value transactions in G-Secs, T-bills, PSU-Bonds, units of
MFs, CDs, CPs,
Trading members and Participants
Trading system- computerized, online trading system
Market type- Continuous and negotiated market
Trade type- outright trading as Non-repo and Repo
Order matching rules- a). Non-repo trading: buy order-highest buy price
and sell order- lowest sell price
b). Repo trading: buy order-lowest buy price
and sell order- highest sell price
Security descriptor- Into; security type, security, issue, settlement, trade
type, repo term
Clearing and settlement- NSE- NSCCL
NSE SGL A/c facility for constituents- Constituents who are unable to
get DVP(Delivery v/s Payment) settlement. Provides counterparty
guarantee for trade
19. 03. Trading of Government Securities (January 2003)
Eligible SE- RBI has permitted to banks and Financial institutions
to deal with G-Secs or through members of BSE, NSE, and OTCEI
Eligible securities- All G-Secs
Listing of G-Secs- Deemed to be listed at issuance
Members eligible to trade in G-Secs- Members of eligible SE
having net worth of Rs. 1 crore or more
Trading module- traded along with equity segment in screen
based, order driven trading mechanism
Clearing and settlement system T+2 basis as in case equity
segment
Risk management systems-same as equity segment
Margins- calculated based on ZCYC
Reporting requirements- A weekly reporting mechanism
Inspection- SEBI
20. 04. Secondary market for corporate debt securities
Debt securities issued on the basis of Private placement or through
offer document
Tenure- Debt security should have a maturity of at least 365 days
Extent of Disclosure – Issuer company should make full disclosure
in its offer document and listing agreement according to Schedule II
of the Companies Act, SEBI DIP Guidelines
Appointment of intermediaries- SEBI registered Debenture
Trustees
Credit rating- SEBI registered credit rating agencies
Listing- Rule 19(2)(b) SCRA, listing of debt instruments
21. 02. Derivatives trading
Types- Forwards, Futures, Options
Regulatory Framework- By SCRA
Recommendations- LC. Gupta committee
Derivative exchanges- Online based
Derivative products-?????
Participants- ??????
Clearing and settlement
22. Procedure for dealing at Stock Exchange
Settlement
Contract Note
Trade Confirmation
Order Confirmation
Order Placing
Agreement
Client Registration
23. 1. Client Registration
The client approaches the broker and executes a client registration form.
2. Agreement
An agreement between the client and the broker as specified by the
exchange called as ‘client member agreement’
3. Order Placing
The client places the order in writing with the broker for purchase or
selling of certain number of scrips at a certain specified price.
4. Order Confirmation
After collecting the order from the client, the broker places the order in
his computer system, which is in turn transmitted to the computer
system of the exchange. The order confirmation slip is obtained by the
broker from the exchange.
5. Trade Confirmation
A trade confirmation slip is generated as soon as the order is matched by
the computer against the price generated by the matching algorithm
(price-time-priority) The trade confirmation slip gives details of the
trade executed. The client makes payment of necessary margin money to
the broker.
24. 6. Contract Note
The broker issues the contract note to the client in respect of all the orders
that are executed during the day. Such a note spells out the obligations of
the parties concerned (Buyer, seller and the broker)
7. Settlement
The process of fulfillment of the obligations of the trade by the parties to
the transaction/contract is known as settlement. Approved contracts by the
stock exchange are to be settled on the date of expiration based on;
Settlement of ready delivery contracts or liquidation in full – the contract should
be settled within 3 to 7 days followed by actual expiration date with mere
delivery.
Settlement of forward delivery contacts – it is for speculative purpose only and it
is done on the basis of;
Liquidation in full
Liquidation by payment of differences in prices
Carryover to the next settlement (carry forward system/ badla system)
• Carry forward system- when buyer of the contract does not willing to buy
the underlying asset at that time, settlement will be carry forward to the
next future date and in consideration with an amount payable by buyer of
the contract to the seller is said to be badla amount or cantago charge.
25. Settlement may be takes place in;
1. Electronic Settlement Mode: Here stock exchange allowed to settle
the contract on the basis of electronic system. The procedure for
purchasing dematerialized securities is as follows;
Investor/client instructs/approaches his DP to receive for credit into
his account in the prescribed form
Investor purchases securities in any of the SE linked with a DP
through a broker
Broker receives payment from the investor and arranges for payment
to the clearing house
Broker receives credit of securities in his clearing account on the day
of pay-out
Broker gives instruction to DP to debit clearing account and credit
clients account with shares
Investor receives shares into his account by way of book entry
26. The procedure for selling dematerialized securities is as follows;
Investor can sell his held securities in any of the SE linked with
DP through a broker
Investor instructs/approaches his DP to debit his demat account
with number of securities sold and credit the broker’s clearing
account
Before the pay-in day, broker of the investor transfers the
securities to the clearing corporation
The broker receives payment from the SE through clearing
corporation
Investor receives the payment from his broker for the sale of his
securities electronically.
27. 2. Rolling Settlement:
In January 1998, SEBI introduced Rolling Settlement system on a voluntary
basis in SE for securities which are eligible for dematerialized trading and
settlement.
Compulsory rolling settlement system was introduced initially for 10 scrips in
January 2000 and then increased to 163 scrips by May 2000, and 414 scrips
in 02nd July 2001. (abolished Badla system)
It was introduced in the form of T+5 settlement system where T=Trading day
and 5 days are additionally trading days following actual trading day.
W.e.f. 02nd January 2002, all scrips have been brought under compulsory
rolling settlement system
In 01st April 2003, previously there was T+2 system, further moved to T+1
system and which is presently practicable.
Advantages of Rolling settlement system are;
Eliminates scope for speculation and arbitrage
Simple to understand compared with badla system
More transparent and regulated
Reduces period of settlement of transaction/contract
Eliminates delay in settlement
28. Settlement cycle-(NSCCL) Table no. 3.3
Activity Rolling Settlement
Trading T
Custodial confirmation T+1
Determination of obligation T+1
Securities/ funds pay-in T+1
Securities/ funds pay-out T+2
Valuation day T+2
Auction T+3
Bad delivery reporting T+4
Auction pay-in/ pay-out T+5
Close out T+5
Rectified bad delivery pay-in/pay-out T+6
Re-bad delivery reporting T+8
Close out of re-bad delivery T+9
29. Systems of Stock Trading
All the SE in the world uses one of the following systems;
1. Auction trading system
This is an order-driven or custom-driven system where customers’ buy and
sell orders are matched at a central place
Allows the buyer and the seller to find a mutually agreeable price, with no
intervention from the brokers-dealers
The buy and sell orders are automatically matched and in case of any
imbalances, the specialists who fills that gap (specialists- market makers
acting as brokers on acceptance of orders, maintain prices for investors bids
and maintain fair and orderly market for securities)
It provides better price, growth of markets for investors; similarly results in
high volatility
NYSE and all the SEs in India except BSE are adopting this system
30. 2. Dealer Trading System
Quote-driven or dealer-driven trading system where dealers compete to give
the customers the best price
Trading takes place through an electronic media with the help of well-
networked computer system.
The market makers(creating and maintaining a market for securities) quote
both ‘bid and ask’ prices for the two sides of the market both buy and sell
continuously.
NASDAQ
3. Hybrid trading
Is an auction type of trading with bids and offers being made by open out-cry
and at the same time it is a quote-driven system too
BSE opted and currently practicing this system
4. Margin Trading
Here an investor is allowed to buy securities on credit by making a deposit of
a certain amount in the concerned SE.
Much in vogue in USA
31. Listing of Securities
It refers to the steps that are required to register and to place on record the
securities of a corporate entity with the appropriate authority(SE).
In simple words, inclusion of any security for the purpose of trading in a
recognized stock exchange.
Securities are required to be listed under section 9 of SCRA of 1956,
Characteristics
• Agreement- Possible through ‘Listing Agreement’ (Clause 49)
• Purpose- Ensures free transferability of securities, official
quotation and liquidity in trading securities, ideal market place for
securities.
• Restriction- A corporate entity is free to have its securities listed in
any number of stock exchanges, but its should be regional SEs.
• Investors Protection- Listing is a barometer of performance and
continued good performance of the company and offers protection
of investors’ interests
32. Steps in listing
Initial listing
• Making a simple application by the payment of initial listing fee as
prescribed by the respective SEs this is to be done before offering
securities to the public and registration of prospectus with the Registrars
of Companies.
Final Listing
• Getting the approval of the recognized exchange for the listing by means
of an agreement with the exchange
Registration and Recording
• It involves Registering and placing on record the corporate securities.
This is for the purpose of trading by the registered members of the stock
exchange and for the official quotation/ announcement of the security
price, for the benefit of public.
Continued Listing
• Involves making efforts by the companies for the purpose of continuing to
remain listed on the exchange until it is delisted from the records of the
exchange.
33. Particulars to be furnished
1. Copies of MoA and AoA , and in the case of debenture issue, a copy of the trust
deed
2. Copies of all prospectuses or statements in lieu of prospectuses issued by the
company
3. Copies of offers for sale and circulars or advertisements offering any securities
for subscription or sale during the last five years
4. Copies of balance sheets and audited accounts for the last 5 years
5. Statement showing dividends and cash bonuses, paid during the last ten years
6. Certified copies
Agreements or other documents(between vendors, promoters, primary market
participants)
Agreements with managing agents and secretaries, treasurers, selling agents, MDs, GM,
sales manager,)
Every letter, report, court order
Letter of consent of the SEBI
7. Statements containing particulars of the date of, and parties to all materials
contracts, agreements(agreements for technical advice, collaborations)
8. Statement of brief history of the company since its incorporation
9. Particulars of shares, debentures issued for consideration other than cash,
10. A list of highest ten holders of each class of securities
11. Particulars of shares, debentures for which permission to deal is applied for.
34. Listing- Benefits
Marketability and Liquidity
High collateral value for bank loans
Easy evaluation of the real worth of securities
Safeguarding public interest-equitable allotment, easy transfer,
disclosure of proper information
Tax advantage for listed securities
High status and confidence in investors
35. Stock Market Index
Is a barometer of market behaviour
Reflects market direction and indicates day-to-day fluctuations
in stock prices
Reflects expectations about the behaviour of the economy as a
whole
It is a precursor (forerunners) of economic cycles
Provides informations about average share prices in the market
Represents the return obtained by a typical portfolio investing in
the market
The index on a day is calculated as the percentage of the
aggregate market value of the set of scrips combined in the
index on that day to the average market value of the same scrips
during the base period.
36. Methodologies for calculating the index
1. Market Capitalization Weighted
• Full Market Capitalization Method- Number of shares outstanding multiplied
by the market price of company’s share determines the scrip’s weighted in the
index. The share with the highest market capitalization would have a higher
weighted and would be most influential in this type of index. Example; S&P 500
Index in USA, S&P CNX Nifty in India.
• Free-float Market Capitalization Method- Free-float is the percentage of
shares that are freely available for purchase in the markets(excluding strategic
investments in a company; government held securities, controlled by
shareholders and their families, company’s management, shares locked under
ESOP). Here, weight of a scrip is based on the free-float market capitalization
which reflects the investible market capitalization may be much less than the
total.. For ex. If the free-float of a company is 15percent, and the other 85% are
publicly held, the float factor will be 0.85, by which the company's market
capitalization will be multiplied before weighting its value against the rest of the
index. In other words, the number of shares used for calculation is the number of
shares "floating", rather than outstanding. Financial Time Stock
Exchange(FTSE)-LSE, S&P Indices(NYSE, NASDAQ), Dow Jones Industrial
Average indices, BSE-TECK Index, SENSEX are the examples.
37. • Modified Capitalization Weighted Method– It seeks to limit the
influence of the largest stocks in the index which otherwise would
dominate the entire index. This method sets a limit on the
percentage weight of the largest stock or a group of stocks. The
NASDAQ-100 Index is the example for this.
2. Price Weighted Average Method- In this method, the price of
each stock in the index is summed up which is then equated to an
index starting value. An arbitrary date is set as the base and the
Laspeyre’s Price Index which measures price changes against a
fixed base period quantity weight is used. Examples are, The Dow
Jones Industrial Average Index, Nikkie 225.
3. Equal Weighing Method- An equally weighted index weights
each stock equally regardless of its market capitalization or
economic size (sales, earnings, book value). Due to daily price
movements of the stocks within the index, the portfolio must be
constantly re-balanced to keep the positions in each stock equal to
each other. The value line index at Kansas City Board of Trade is
an example.
39. Factors influencing Prices on Stock Exchange
• Financial position of the company
• Demand and supply factors
• Role of financial institutions
• Lending rate/Bank rate
• Speculation activities
• Trade cycle/Economic cycles
• Government control
• Market players
• Weather conditions(agricultural)
• Corporate activism(mergers, acquisition)
• Conditions of BOP
• The price level changes
• General market sentiments
40. Screen Based Trading System
• Screen based trading system is one of the major development of
secondary market, where computer screen replaces traditional trading
ring and distant participants can trade with each other through
computer networks. A central computer of stock exchange is
connected through very small operational terminals and the personal
computers of the brokers are connected through main computer. When
the investor places an order through their personal computers and
these personal computers send a signal to VSAT (in the form of
waves). If the order gets matched , a message may be broadcasted or
disseminated on computer or otherwise it will have to wait till it is
matched. This system provides transparency in trading.
• Advantages:
Provides full information about market
Enable investors all over the country to trade each other
Avoids need of people to assemble on the floor of SE
Greater transparency and confidence
42. The Bombay Stock Exchange Ltd.
Genesis
Established in 1875 under the name of ‘The native share and stock
brokers association’ as a voluntary, non-profit organization. It was the
oldest stock exchange in Asia. BSE is a corporatized and demutualised
entity.
Management
A governing board, consisting of 10 elected directors- an executive
director, 3 government nominees, a RBI nominee, 5 public representatives
BOLT- BSE On line Trading
BSE has obtained permission from the SEBI for expansion of its BOLT
network to locations outside Mumbai. According to new arrangements,
members are free to install their own trading terminal at any place in the
country. In order to expand BOLT network BSE has admitted subsidiary
companies formed by 13 regional stock exchanges as its members as on
November 20, 2001 and acting as sub-brokers.
43. Features of BSE:
Oldest and largest SE in Asia
It is the first SE introduced equity derivatives in India
A free float index, US $ version of BSE Sensex and internet trading
platform were launched initially by BSE in India
It is the first amongst all SEs in the country to collect ISO 9001:2000
certification for surveillance system
It is the earliest to have the special facility for financial training
BOLT used by BSE is one of the few SEs trading system in the world
that manages hybrid or mixed mode of trading.
The companies listed on BSE Ltd command a total market
capitalization of USD 1.32 Trillion as of January 2013.
It is also one of the world’s leading exchanges (3rd largest in
December 2012)
It is also the first Exchange in the country and second in the world to
receive Information Security Management System Standard BS 7799-
2-2002 certification for its On-Line trading System (BOLT).
BSE also provides depository services through its Central Depository
Services Ltd. (CDSL) arm.
44. • Largest number of listed companies in the world – 5458 as of 31 Aug 2014
• 11th Largest exchange Globally in terms of market capitalization - Over USD
1.49 Trillion
• 3rd most liquid exchange globally for Index Options
• 7th largest exchange in the world in terms of number of trades in Equity
Shares
• 2nd largest in the World in terms of number of currency options contracts
traded.
• 3rd largest in the world in terms of number of currency futures contracts
traded.
• Full bouquet of products including Equity, Equity Derivatives, Currency
Derivatives, Interest Rate Derivatives, Debt Products, Security Lending &
Borrowing Platform, IPO, SME Platform, Mutual Funds, ETFs and Offer for
Sale (OFS).
• Partnership with S&P Dow Jones Indices on Index Products
• Exchange Technology from Deutsche Boerse Group (Eurex Platform)
• Cross listing of benchmark index S&P BSE SENSEX in BRICS countries
45. Safety of Market
The following measures are initiated by BSE both on-floors and off-
floors safer;
• Surveillance Department: The exchange has set up a separate surveillance
department to keep a close watch on price movements of scrips, to detect
market manipulation, to monitor abnormal prices and volumes which are not
consistent with normal trading pattern.
• Circuit Filters: The limit imposed by the SE for the price of securities to
move within a prescribed band. The imposition of circuit filters on scrips
ensures that price of scrip cannot move upward or downward beyond the
limit set for a day settlement.
• OLRT: Online Real Time Surveillance System- which is using by BSE with
effect from July 15th, 1999. Under this system alerts are generated by system
on-line, in real time, based on certain preset parameters like the price and
volume variations in scrips, members taking unduly large positions not
commensurate with their financial position or having concentrated positions
in one or few scrips. This system includes databases such as company profile,
member’s profile, and historical database of turnover and price movements in
scrips, members’ turnover, their pay-in obligations etc.
46. • Equity
• Equity Derivatives
• Currency Derivatives
• Interest Rate Derivatives
• ETFs
• Debt – Corporate Bond and Government Securities.
• Mutual Funds (Close Ended)
• SME IPO
• Securities Lending and Borrowing
Secondary
Market
products
• IPOs / FPOs and Rights Issues
• Institutional Placement Programme (IPP)
• Reverse Book Building (RBBS)
• Offer For Sale (OFS)
• Mutual Funds (Open Ended)
• Securitized Debt Instruments
• Structured Products
Primary
Market
products
BSE Products
47. Trading and Settlement
• Trading- BOLT
• Scrips Group- The scrips traded on the exchange have been
classified into A, B1, B2, C, F and Z.
• Exit route scheme- This is a scheme of selling physical shares
in compulsory demat scrips.
• Permitted securities- The exchange permits trading in the
securities of the companies listed on other stock exchanges
under “permitted securities” category, which meet the relevant
norms specified by the exchange.
• Closing prices- The closing prices of scrips are computed on
the basis of weighted average price of all trades in the last 15
minutes of the continuous trading session, if there is no trade
during the last 15 minutes, then the last traded price in the
continuous trading session is taken as the official closing price.
Compulsory Rolling Settlement Segment
48. BSE Indices
Broad
Indices
Thematic
Indices
Investment
Strategy Indices
Volatility
Indices
Sustainability
Indices
Sectoral Indices
S&P BSE
SENSEX
S&P BSE PSU S&P BSE IPO S&P BSE
REALVOL-1MTH
S&P BSE
GREENEX
S&P BSE Auto
S&P BSE MID
CAP
S&P BSE India
Infrastructure Index
S&P BSE SME IPO S&P BSE
REALVOL-2MTH
S&P BSE
CARBONEX
S&P BSE BANKEX
S&P BSE
SMALL CAP
S&P BSE
CPSE(Central
Public Sector
Enterprises)
S&P BSE DOLLEX 30 S&P BSE
REALVOL-3MTH
S&P BSE CAPITAL GOODS
S&P BSE 100 S&P BSE 500
SHARIAH
S&P BSE DOLLEX
100
S&P BSE Consumer Durables
S&P BSE 200 S&P BSE DOLLEX
200
S&P BSE FMCG
S&P BSE 500 S&P BSE SENSEX
Futures Index
S&P BSE Health Care
S&P BSE SENSEX
Futures Index
(USD)
S&P BSE IT
S&P BSE METAL
S&P BSE Oil & Gas
S&P BSE Power
S&P BSE Realty
S&P BSE TECK
49. BSE- SENSEX
• Established in 2nd January, 1986.
• The base period of this index is 1978-79. The base value is 100 points
• It is a Market Capitalization Weighted Index of 30 stocks representing a
sample of large, well-established and financially sound companies
• BSE’s popular equity index - the S&P BSE SENSEX - is India's most widely
tracked stock market benchmark index. It is traded internationally on the
EUREX as well as leading exchanges of the BRCS nations (Brazil, Russia,
China and South Africa). The constituents of SENSEX are as follows;
Axis Bank Ltd Gail India Ltd Infosys Ltd Reliance Industries Ltd
Bajaj Auto Ltd HDFC Bank Ltd ITC Ltd Sesa Sterlite Ltd
Bharat Heavy
Electricals Ltd
Hero MotoCorp Ltd Larsen & Toubro Ltd State Bank of India
Bharti Airtel Ltd Hindalco Industries Ltd Mahindra & Mahindra Ltd Sun Pharmaceutical
Industries Ltd
Cipla Ltd/India Hindustan Unilever Ltd Maruti Suzuki India Ltd
Coal India Ltd Housing Development
Finance Corp
NTPC Ltd
Dr Reddy's
Laboratories Ltd
ICICI Bank Ltd Oil & Natural Gas Corp Ltd
50. S&P BSE MID CAP and S&P BSE SMALL CAP
• Base Year- 2002-03
• Base Index Value- 1000
• Date of Launch- April 11,2005
• Method of calculation- Free-float market capitalization method.
• Number of scrips- Variable
• Index calculation frequency- Real Time
• Index Calculation and maintenance- Free-float Market Capitalization
Method
S&P BSE 100
• Also known as BSE National Index
• Date of Launch- 3rd January, 1989
• Number of scrips- The equity shares of 100 companies from specified
and non-specified list of 5 SEs (Mumbai, Calcutta, Delhi, Ahmadabad,
Madras).
• Base Year- 1983-84
• Method of calculation- Free-float market capitalization method
51. • The BSE introduced two new indices during 1993-94-
The S&P BSE 200 and Dollex. The S&P BSE 200 reflects
the movement in the shares of 200 selected companies
from its specified and non-specified lists. The Dollex is a
dollar version of the S&P BSE 200 which has 1989-09 as
the base year.
• The BSE introduced 5 sectoral indices from August 1999-
The BSE IT Index, BSE Capital Goods Index, BSE
FMCG, BSE Health care, and the BSE Consumer
Durables Index.
• In 2001, the BSE launched the BSE-PSU index and
Dollex-30, BSE TECK INDEX.
• Market capitalization of all these indeces isn except for
BSE PSU Index.
52. Date BSE Milestones
11th Feb 2014 Launch of Institutional Trading Platform on BSE SME
28th Jan 2014 Launch of Interest Rate Futures (BSE –IRF)
28th Nov 2013 Launch of Currency Derivatives (BSE CDX)
19th Feb 2013 BSE enters into Strategic Partnership with S&P Dow Jones Indices
30th Mar 2012 BSE launched trading in BRICSMART indices derivatives
13th Mar 2012 Launch of BSE - SME Exchange Platform
22nd Feb 2012 Launch of S&P BSE-GREENEX to promote investments in Green India
15th Jan 2011 Co-location facility at BSE - tie up with Net magic
7th Jan 2011 BSE Training Institute Ltd. with IGNOU launched India's first 2 year full time
MBA program specializing in Financial Market
17th Nov 2011 Maharashtra and United Kingdom Environment Ministers launched Concept
Note for S&P BSE Carbon Index
BSE Milestones : 2011 To 2014
53. Date BSE Milestones
27th Dec 2010 Commencement of S&P BSE Shariah Index
10th Dec 2010 Launch of SIP
22nd Nov 2010 Launch of SLB
12th Nov 2010 Commencement of S&P BSE Volatility Index
11th Oct 2010 Launch of Fastrade on Web (FoW) - Exchange hosted platform
4th Oct 2010 EUREX - S&P BSE SENSEX Futures launch
29th Sep 2010 Introduction of Smart Order Routing (SOR)
21st Sep 2010 First to introduce Mobile-based Trading
23rd July 2010 Options on BOLT
12th May 2010 Dissemination of Corporate Action information via SWIFT platform
22nd Apr 2010 New DBM framework @ Rs.10 lakhs - 90% reduction in Membership Deposit
20 th Jan 2010 S&P BSE PSU website launched
4th Jan 2010 Market time changed to 9.0 a.m. - 3.30 p.m.
18th Dec 2009 BSE's new derivatives rates to lower transaction costs for all
14th Dec 2009 Marathi website launched
7th Dec 2009 Launch of clearing and settlement of Corporate Bonds through Indian Clearing
Corporation Ltd.
BSE Milestones : 2006 To 2010
54. 4th Dec 2009 BSE Launches BSE STAR MF – Mutual Fund trading platform
25th Nov 2009 BSE launches FASTRADE™ - a new market access platform
5th Oct 2009 BSE Introduces New Transaction Fee Structure for Cash Equity Segment
1st Oct 2009 Bombay Stock Exchange introduces trade details facility for the Investors
24th Aug 2009 S&P BSE IPO Index launched
7th Aug 2009 BSE - USE Form Alliance to Develop Currency & Interest Rate Derivatives
Markets
18th May 2009 The S&P BSE SENSEX raised 2110.70 points (17.34%) and Index-wide upper
circuit breaker applied
1st Oct 2008 Currency Derivatives Introduced
10th Jan 2008 S&P BSE SENSEX All-time high 21206.77
16th May 2007 “Appointed Date” under the Scheme i.e. Date on which Corporatization and
Demutualization was achieved. Notified by SEBI in the Official Gazette on
29.06.2007
7th Mar 2007 Singapore Exchange Limited entered into an agreement to invest in a 5% stake in
BSE
2nd Jan 2007 Launch of Unified Corporate Bond Reporting platform : Indian Corporate Debt
Market (ICDM)
2nd Nov 2006 iShares S&P BSE SENSEX India Tracker listed at Hong Kong Stock Exchange
21st Oct 2006 BSE Hindi website launched
7th Jul 2006 BSE Gujarati website launched
7th Feb 2006 S&P BSE SENSEX closed above 10000
55. Date BSE Milestones
19th Aug 2005 BSE becomes a Corporate Entity
12th Aug 2005 Certificate of Commencement of Business
8th Aug 2005 Incorporation of Bombay Stock Exchange Limited
20th May 2005 The BSE (Corporatization and Demutualization) Scheme, 2005
(the Scheme) announced by SEBI
17th May 2004 Second biggest fall of all time, Circuit filters used twice in a
day (564.71 points, 11.14%)
2nd Jun 2004 S&P BSE SENSEX closes over 6000 for the first time
1st Dec 2003 T group launched
1st Sep 2003 S&P BSE SENSEX shifted to free-float methodology
1st June 2003 Bankex launched
1st Apr 2003 T+2 settlement Introduced
16th Jan 2003 Retail trading in G Sec
1st Jan 2003 India 's first ETF on S&P BSE SENSEX - ‘SPICE' introduced
1st Apr 2002 T+3 settlement Introduced
BSE Milestones : 2001 To 2005
56. 15th Feb 2002 Negotiated Dealing System (NDS) established
1st Feb 2002 Two way fungibility for ADR/GDR
31st Dec 2001 All securities turn to T+5
29th Nov 2001 100% book building allowed
1st Nov 2001 Stock futures launched
25th Jul 2001 S&P BSE Dollex 30 launched
11th Jul 2001 BSE Teck launched, India 's First free float index
9th Jul 2001 Stock options launched
2nd Jul 2001 VaR model introduced for margin requirement calculation
15th Jun 2001 WDM operations at commenced
4th Jun 2001 S&P BSE PSU index introduced
1st Jun 2001 Index Options launched
1st Feb 2001 BSE Webx Launched
1st Mar 2001 Corporatization of Exchanges proposed by the Union Govt.
57. Date BSE Milestones
9th Jun 2000 Equity Derivatives introduced
11th Feb 2000 S&P BSE SENSEX crosses 6000 intra-day
11th Oct 1999 S&P BSE SENSEX closed above 5000
15th Jul 1999 CDSL commences work
1st Jun 1999 Interest Rate Swaps (IRS) / Forward Rate Agreements (FRA)
allowed
22nd Mar 1999 Central Depository Services Ltd.(CDSL) set up with other
financial institutions
1997 BSE On-Line Trading (BOLT) system expanded nation-wide
21st Jul 1997 Brokers Contingency Fund (BCF) introduced
12th May 1997 Trade Guarantee Fund (TGF) introduced
19th Aug 1996 First major S&P BSE SENSEX revamp
BSE Milestones : 1996 To 2000
58. Date BSE Milestones
14th Mar 1995 BSE On-Line Trading (BOLT) system introduced
1992 Securities Appellate Tribunal (SAT) established
29th May 1992 Capital Issues (Control) Act repealed
1st May 1992 SEBI Act established ( An Act to protect, develop and regulate the
securities market)
30th Mar 1992 S&P BSE SENSEX closes above 4000
15th Jan 1992 S&P BSE SENSEX closes above 2000
25th Jul 1990 S&P BSE SENSEX closes above 1000
3rd Jan 1989 BSE Training Institute (BTI) inaugurated
10th Jul 1987 Investor's Protection Fund (IPF) introduced
2nd Jan 1986 S&P BSE SENSEX, country's first equity index launched (Base
Year:1978-79 =100)
31st Aug 1957 BSE granted permenant recognition under Securities Contracts
(Regulation) Act (SCRA)
2nd Feb 1921 Clearing House started by Bank of India
9th Jul 1875 The Native Share & Stock Broker's Association formed
BSE Milestones : 1875 To 1995
59. The National Stock Exchange of India Ltd.
• Was set up based on the recommendations of the High
Powered Study Group on establishment of new stock
exchanges
• Got recognition as a exchange under the SCRA, on April,
1993
• Incorporated in November 1992 with an equity capital of Rs.
25 crores
• Promoted by International Securities Consultancy (ISC) of
Hong Kong in association with FIs, Insurance companies,
Banks, SBI Capital Markets Ltd, ILFS Ltd, SHCL,
• Commenced operations in the WDM – June 1994
• Commenced operations in the Equity segment- November
1994
• Commenced operations in the Derivatives segment- June 2000
60. The Mission
• Establishing a nationwide 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
• Meeting the current international standards of securities markets
Trading Mechanism
• NSE has a order-driven (Auction) trading system
• It has adopted a fully automated screen-based trading system
• Price, time, and volume conditions are flexible
• Adopted NSE-NEAT System
61. Electronic Trade Monitoring System
• The stock-watch system is a computer system designed and programmed
to monitor market activity
• The algorithm for the NSE system is similar to NASDAQ
Corporate Structure
• Is the first demutualized stock exchange in India
• A Public limited company, owned by leading financial institutions in the
country
• The ownership, management and trading is in the hands of three different
sets of people
• Is owned by leading FIs, banks, insurance companies, and managed by
professionals who do not directly or indirectly trade on the exchange
Board
• Consists of senior executives from promoter institutions, eminent
professionals in the field of law, economics, accountancy, finance,
taxation, etc, public representatives, 3 nominees of SEBI including a
senior official of SEBI and one full time executive of the exchange.
62. Promoters of NSE
• IDBI
• IFCIL
• LIC
• SBI
• ICICI
• ILFSL
• SHCIL
• SBI Capital Market Ltd
• UTI
• BoB
• Canara Bank
• GIC
• NICL
• The New India Assurance Company Ltd
• The Oriental Insurance Company Ltd
• United India Insurance Company Ltd
• PNB
• Oriental Bank of Commerce
• Corporation Bank
• Indian Bank
• Union Bank of India
63. Committees
• The exchange has constituted with various committees on areas like, good market practices, settlement
procedures, risk containment systems, etc.
Executive Committee
Committee on settlement issues (COSI)
Dispute resolution committee (DRC)
Committee on Trade Related Issues (COTI)
Advisory committee- Listing of securities
Products of NSE
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
64. NSE Group
National Securities Clearing Corporation Limited (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 introduce settlement guarantee. It commenced
clearing operations in April 1, 1996.
• NSCCL has been assigned the highest corporate rating of 'AAA' for three
consecutive years. This is the first Indian Clearing Corporation to get this
rating.
NSE Infotech Services Limited (NSETECH)
• NSE Infotech Services Limited (NSETECH) is a wholly owned
subsidiary incorporated to cater to the needs of NSE and all its group
companies exclusively.
India Index Services & Products Ltd. (IISL)
• India Index Services & Products Limited (IISL), a subsidiary of NSE
Strategic Investment Corporation Limited was setup in May 1998 to
provide a variety of indices and index related services and products for
the Indian capital markets.
65. DotEx International. Ltd. (DotEx)
• The data and info-vending products of NSE are provided through a
separate company DotEx International Ltd., a 100% subsidiary of
NSE., which is a professional set-up dedicated solely for this
purpose. DotEX also offers "NOW" a fully managed, secure and
reliable trading gateway, providing immediate, scalable and
seamless access through internet to members and internet investors.
NSE.IT Ltd.
• NSE.IT is a 100% subsidiary of National Stock Exchange of India
Limited (NSE). NSE.IT Limited, a Vertical Specialist Enterprise,
offers end-to-end Information Technology (IT) products, solutions
and services and has expertise in a wide range of business
applications. It specializes in providing complete IT solutions to
Stock Exchanges, Clearing Corporations, Brokerage Firms,
Insurance Firms and other organizations in the Capital Market,
Banking and Insurance industry. NSE.IT has emerged as the
preferred technology partner for deploying high end solutions for
the financial services sector.
66. Value Added Services at NSE
Computer to computer link facility (CTCL)
• NSE offers CTCL facility to its members by which members can use their
own trading front-end software in order to trade on the NSE trading system
• It is a replacement of NEAT software system (currently using software)
• To meet their specialized needs like, online trade analysis, risk management
tools, integration of back-office operations.
Mutual Fund Service System (MFSS)
• Is a facility provided by NSE/NSCCL to the investors for transacting in the
dematerialized units of open-ended schemes of mutual funds due to limited
platform .
• The objective of this system is to provide investors one stop shop for
transacting in financial products
• The entire process of buying and redeeming open-ended MFs scheme units
takes place directly between the investor and the AMC
• Orders are settled through NSCCL
• T+3 rolling settlement
67. Exchange Traded Funds (ETFs)
• Is a mutual fund scheme, which combines the best features of open-ended
and close-ended funds
• Usually trades like a single stock on the exchange
• It is priced continually and can be bought or sold throughout the trading day
(intraday price movements)
• These are cost efficient and tax efficient
Index Funds
• Are a source of investment for investors looking at a long-term, less risky,
form of the investment.
• A type of mutual fund with a portfolio constructed to match or track the
components of a market index
• It depends on their low volatility
Working Capital Funding
• This is a facility provided to clearing members in association with the
clearing banks to meet their working capital requirements through an
agreement.
68. NSE VaR for G-Secs
Promoted by regulatory authorities as a way of
monitoring and managing the market risk based on setting
minimum capital standards. The revised Basel Accord
(Jan, 1998) makes it mandatory for all banks to use VaR
as a basis of managing market risk beyond the
requirement of credit risk.
Constituent SGLAccount
Subsidiary General Ledger Account, facility provided by
the RBI, to large banks and FIs, to hold their investments
in G-Secs in the electronic form i.e., via Delivery Versus
Payment (DVP) mechanism.
69. Broad Indices Thematic Indices Strategy Indices Fixed Income Indices Sectoral Indices
CNX Nifty(50) CNX Commodities
Index
CNX 100 Equal Weight GSEC10 NSE Index(8
-13 years)
CNX Auto Index
CNX Nifty
Junior(100)
CNX Consumption
Index
CNX Alpha Index(50) GSECBM NSE
Index(10 years Bond)
CNX Bank Index
LIX 15 CPSE Index CNX Defty CNX Energy Index
CNX 100 CNX Infrastructure
Index
CNX Dividend
Opportunities Index(50)
CNX Finance Index
CNX 500 CNX MNC Index CNX High Beta Index(50) CNX FMCG Index
CNX
Midcap(100)
CNX PSE Index CNX Low Volatility
Index(50)
CNX IT Index
India VIX CNX Service Sector
Index
CNX Nifty Dividend CNX Media Index
LIX15 Midcap CNX Shariah25 NV20 Index CNX Metal Index
CNX 200 CNX Nifty Shariah /
CNX 500 Shariah
NV15 Index CNX Pharma Index
Nifty Midcap 50 Nifty PR 1X Inverse CNX PSU Bank Index
CNX Small cap
Index(100)
Nifty PR 2X Leverage CNX Realty Index
Nifty TR 2X Leverage
Nifty TR 1X Inverse
NSE Indices
70. Date Milestones
March 24, 2014 Commencement of trading of CNX Nifty Futures on OSE.
February 26, 2014 NSE Launched NVIX Futures – Futures on India VIX index.
January 21, 2014 NSE Launched ‘NSE Bond Futures II’
May 13, 2013 NSE launched the first dedicated Debt Platform on the Exchange
January 10, 2013 Agreement on Launch of S&P CNX Nifty Futures in Japan
January 03, 2013 NSCCL Rated “CCR AAA “ for fifth consecutive year
September 18,
2012
NSE launches SME operations
June 27, 2012 NSE launches financial literacy initiative ' Jagruti' in Mohali, in partnership with
India Post
May 03, 2012 Futures and Options contracts on FTSE 100
March 22, 2012 NSE and India Post start Unique Financial Inclusion Initiative "Jagruti"
March 14, 2012 NSE launches “EMERGE” - SME Platform
December 2011 NSCCL Rated “CCR AAA” for fourth consecutive year - 28th Dec 2011
September 2011 Launch of derivatives on CNX PSE and CNX Infrastructure Indices
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.
NSE Milestones- 2011-2014
71. Date Milestones
December, 2010 NSCCL rated 'CCR AAA' for third consecutive year.
November, 2010 Launch of mobile trading for all investors
October, 2010 Introduction of Currency Options on USD INR
October, 2010 Introduction of European Style Stock Options
October, 2010 Introduction of Call auction in Pre-open session
July, 2010 LOI signed with London Stock Exchange Group
July, 2010 Real Time dissemination of India VIX.
July, 2010 Commencement of trading of CNX Nifty Futures on CME
April 2010 Financial Derivative Exchange of the Year Award' by Asian
Banker
March 2010 NSE- CME Group & NSE - SGX product cross listing agreement
February 2010 Launch of Currency Futures on additional currency pairs
December 2009 Commencement of settlement of corporate bonds
NSE Milestones- 2006-2010
72. November 2009 Launch of Mutual Fund Service System
August 2009 Launch of Interest Rate Futures
August 2008 Launch of Currency Derivatives
April 2008 Launch of Securities Lending & Borrowing Scheme
April 2008 Launch of India VIX
March 2008 Introduction of long term option contracts on CNX Nifty Index
January 2008 Introduction of Mini Nifty derivative contracts on 1st January
2008
October 2007 NSE launches derivatives on Nifty Midcap 50
June 2007 NSE launches derivatives on Nifty Junior & CNX 100
March 2007 NSE, CRISIL announce launch of IndiaBondWatch.com
January 2007 Launch of NSE – CNBC TV 18 media centre
December 2006 'Derivative Exchange of the Year', by Asia Risk magazine
73. Date Milestones
June 2005 Launch of Futures & options in BANK Nifty Index
March 2005 'India Innovation Award' by EMPI Business School, New Delhi
August 2004 Launch of NSE's electronic interface for listed companies
June 2004 Launch of STP Interoperability
August 2003 Launch of Futures & options in CNXIT Index
June 2003 Launch of Interest Rate Futures
January 2003 Commencement of trading in Retail Debt Market
October 2002 Launch of NSE Government Securities Index
May 2002 NSE wins the Wharton-Infosys Business Transformation Award in
the Organization-wide Transformation category
January 2002 Launch of Exchange Traded Funds (ETFs)
December 2001 Launch of VaR for Government Securities
November 2001 Commencement of trading in Futures on Individual Securities
July 2001 Commencement of trading in Options on Individual Securities
June 2001 Commencement of trading in Index Options
NSE Milestones- 2001-2005
74. Date Milestones
December 2000 Commencement of WAP trading
November 2000 Launch of Broker Plaza by Dotex International, a joint venture
between NSE.IT Ltd. and i-flex Solutions Ltd.
September 2000 Launch of 'Zero Coupon Yield Curve'
June 2000 Commencement of Derivatives Trading (Index Futures)
February 2000 Commencement of Internet Trading
January 2000 Launch of NSE Research Initiative
October 1999 Setting up of NSE.IT
April 1999 CHIP Web Award by CHIP magazine
February 1999 Launch of Automated Lending and Borrowing Mechanism
August 1998 CYBER CORPORATE OF THE YEAR 1998 award
July 1998 Launch of NSE's Certification Programme in Financial
Market(NCFM)
May 1998 Launch of NSE's Web-site: www.nse.co.in
NSE Milestones- 1996-2000
75. May 1998 Promotion of joint venture, India Index Services & Products
Limited (IISL)
November 1997 Best IT Usage award by Computer Society of India
February 1997 Regional clearing facility
December 1996 Launch of CNX Nifty Junior
December 1996 Dataquest award for Top IT User
December 1996 Commencement of trading/settlement in dematerialized securities
November 1996 Best IT Usage award by Computer Society of India
November 1996 Setting up of National Securities Depository Limited, first
depository in India, co-promoted by NSE
June 1996 Establishment of Settlement Guarantee Fund
April 1996 Launch of CNX Nifty
April 1996 Commencement of clearing and settlement by NSCCL
76. Date Milestones
October 1995 Became largest stock exchange in the country
July 1995 Establishment of Investor Protection Fund
June 1995 Introduction of centralized insurance cover for all
trading members
April 1995 Establishment of NSCCL, the first Clearing
Corporation
March 1995 Establishment of Investor Grievance Cell
November
1994
Capital Market (Equities) segment
June 1994 Wholesale Debt Market segment
May 1993 Formulation of business plan
April 1993 Recognition as a stock exchange
November Incorporation
NSE Milestones- 1991-1995
77. STOCK MARKET GUIDELINES
• Never buy on rumors or market gossip
• Buy only on the basis of fundamental analysis and
Technical Analysis
• Buy a diversified list of companies
• Study the sales, GP, NP in relation to capital employed
• A declaration on Bonus or LOW P/E ratio, along with
strong fundamental analysis shows the company is a good
buy.
• Always watch for low priced or under valued securities and
which are about to turn around
• Avoid both fear and greed (self-indulgence)
• Buy low and sell high
• A LONG TERM INVESTOR GAINS MORE THAN A
SPECULATOR.
