The National Stock Exchange is the latest, most modern and technology driven exchange. It was incorporated in 1992 and was recognised as a stock exchange in April 1993. It started operations in 1994, with trading on the wholesale debt market segment. Subsequently, it launched the capital market segment in November 1994 as a trading platform for equities and the futures and options segment in June 2000 for various derivative instruments. NSE has set up a nationwide fully automated screen based trading system.
The NSE was setup by leading financial institutions, banks, insurance companies and other financial intermediaries. It is managed by professionals, who do not directly or indirectly trade on the exchange. The trading rights are with the trading members who offer their services to the investors. The board of NSE comprises of senior executives from promoter institutions and eminent professionals, without having any representation from trading members.
Objectives Of NSE
NSE was set up with the following objectives –
- 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 electronic trading system.
- d. Enabling shorter settlement cycles and book entry settlements.
- e. Meeting international benchmarks and standards.
Within a span of ten years, NSE has been able to achieve its objectives for which it was set up. It has been playing a leading role as a change agent in transforming the Indian capital market. NSE has been able to take the stock market to the door step of the investors. It has ensured that technology has been harnessed to deliver the services to the investors across the country at the lowest cost. It has provided a nation wide-screen based automated trading system with a high degree of transparency and equal access to investors irrespective of geographical location.
Market Segments Of NSE
The Exchange provides trading in the following two segments –
- Whole Sale Debt Market Segment
This segment provides a trading platform for a wide range of fixed income securities that include central government securities, treasury bills, state development loans, bonds issued by public sector undertakings, floating rate bonds, zero coupon bonds, index bonds, commercial paper, certificate of deposit, corporate debentures and mutual funds.
- Capital Market Segment
The capital market segment of NSE provides an efficient and transparent platform for trading in equity, preference, debentures, exchange traded funds as well as retail Government securities.
Bibliography : NCERT – Business Studies