NSE of India [ National Stock Exchange of India]

Indian companies needed a completely modern system to become more competitive and developed. Which is fulfilled by NSE. In this article, we will try to get complete information about what is National Stock Exchange of India. Establishment of National Stock Exchange - NSE is the most active stock exchange in India. It is a fully automated electronic computerized screen based trading system. Because of its national-level format and screen-based based on the Order Driven method, OTCEI has gone far ahead. The National Stock Exchange was established in the year 1991 by the Pherwani Committee. The National Commodity Market of India was established in November 1992, but it started functioning in April 1993. NSE was established to reform the stock exchanges, modernization of the trading system, and competition. NSE operated in the debt market sector from June 1994 and in the capital market sector from November 1994.

NSE's lead promoter I.D.B. (IDBI) as well as other subsidiary promoters were LIC, GIC, SBI Capital Markets, Stock Holding Corporation, Infrastructure Leasing and Financial Service, and merchant banks. Earlier in India only stock exchanges with local working area were found, which were limited to their own city. NSE removed this fragmentation of exchanges by adopting a national trading system. The National Stock Exchange is fully computerized, due to which the speed of transactions is fast and there is complete transparency. It is an Order Driven System based system which provides members spread all over India the opportunity to transact through a National 'Network'.

Objectives of the establishment of the National Stock Exchange?

NSE was established primarily to provide comprehensive facilities for all types of securities under a single organization.

(1) To provide transparent, efficient and fair market to the investors through electronic trading system

(2) Facilitating settlement by book entry with minimum transaction period. ,

(3) To provide national securities market through a network to investors across the country.

4) To provide a national level market for all types of securities in part and mixed.

(5) To implement the latest norms prevailing in the international securities market in NSE.

(6) Maximum price of securities can be obtained in stock market.

(7) To reduce transaction costs.

(8) Facilitating transactions in financial market instruments and securities.

what is the Executive Organization Structure of National Stock Exchange?

NSE mainly has the following two departments for which separate membership is required-

(1) Wholesale Debt Market - Under this market institutions, regular organizations and institutional investors deal in high value debt securities - Government Securities, Treasury Bills, PSUS, Bonds, CDS, CPS and Mutual Fund units. This market is a mega (a large) market where Mega Debts, Mega Players and Mega Investors are found.

Trading members of WDM are approved members of NSE. To become a trading member – regular institutions, subsidiaries of banks, financial institutions are selected through a detailed and complex process. Full time operators and dealers of these institutions must have minimum two years experience of financial or banking services. His net worth is minimum ₹ 2 crore and annual fee is ₹ 30 lakh. Trading members could not have relinquished their membership at least 5 years ago. Can deal in own name or in the name of his clients. They cannot run any other Fund Based action

2) Capital market sector In this market, deals are done in shares and retail loans like non-convertible debentures and hybrid securities. To enforce professional standards among mediators, a very complex process of their selection and acceptance is adopted. In this, parameters related to capital adequacy, past trading record, education and experience are applied. To be selected as an arbitrator of this market, first there is a written test and an interview. After being successful in that, minimum net worth etc. conditions have to be fulfilled. Individuals, registered firms, corporations and institutions are considered eligible as trading members. In case of individuals, they must be educated up to a minimum of graduation and must have at least one year of experience in securities dealings as brokers, sub-brokers, or authorized assistants. It is also necessary to hold a minimum of 5% of the paid-up share-capital from the incorporated organization with minimum 2 full time directors having 2 years experience in this field and graduate education.

what is the Functions of National Stock Exchange?

The major functions of the National Stock Exchange can be explained as follows-

(1) Completing the sale and purchase of shares and debentures at the national level through computers.

(2) To provide a high degree of transparency in securities dealings.

(3) To buy and sell securities at the same price in all the cities at a particular time.

(4) To keep the identity of the dealing investors secret.

(5) To provide better facilities to the investors.

(6) To develop the Debt Market.

(7) To increase the liquidity of securities.

(8) Very quick settlement of large-scale deals or transactions.

(9) To reduce the cost of transactions.

(10) To provide opportunities for investment in securities to small investors also.

What is The trading system of the National Stock Exchange?

(i) In the capital market sector, based on Order Driven method, the buy/sell orders received by the members are put through the computerized network for processing when they are first received, to be dealt with by the probable match. If the order does not match, it can be carried forward as Passive Orders in different books based on price, time, and priority or can be terminated at the same time or later. Thus, the system provides wide flexibility till the order is converted into a transaction.

(ii) In the wholesale loan market sector - Here also there is Order Driven trading system in which there is no identity of the buyer-seller. In this, the order may be big or small, but it can be given without any hesitation. Here the orders are automatically matched based on price and time priority. All this happens on a computerized network, which shows honesty and transparency. The orders that do not match continue to run in the system until they are terminated or the old orders are modified. This method is flexible enough. In this, various options of deals are available to the buyer-seller based on price, time, and quantity. Information on total order quantity, high and low prices, best buy-sell options, last price, etc. is always available in the market.

(iii) Partners – These are the organizations that are directly responsible for the settlement of transactions. These are elder partners who take responsibility for the settlement of their trades (which are done by TM). They keep an eye on the depth and expansion of the market through the screen. The following types of users are found in the wholesale loan market-

(A) Trady Users- They have the right to place and take orders on the trading system and deal with them.

(B) Privileged Users – They can set up their Screen Counters for the purpose of monitoring the market and receiving market information.

What Is the National stock exchange index?

The National Stock Exchange Index represents the behavior of the overall securities market. The change in the index is a measure of determining the profit or loss of a portfolio. The index is a measure of future expectations of the capital market and the profitability of the Indian corporate sector. The index falls when the future is bleak. The smallest thing in the index has an immediate and rapid effect.

BSE SENSEX plunged 350 points on Friday, 14-5-2004 due to the declaration of the 14th Lok Sabha election results, the leftist demand for investor closure related to Atal Bihari Vajpayee's government getting a majority, and the possibility of a Congress-led government. And slipped another 800 points on the next trading day, May 17, 2004. The market had to be closed twice on this day.

Changes in stock prices are influenced by (1) news of the company's progress and (2) changes in the country's economic and political conditions. Stock index is the most important market index of all types which represents broad and liquid securities. It is considered the ideal index of the country. It is often prevalent with a small index of a particular area. In India, index-related work is completed by the Indian Index Services and Products Ltd. organization and this work is done with the help of CRISIL and NSE. Indian Index Service and Products Ltd. in India. The technique adopted by IISL for the index is considered to be a world-famous technique. The prevalent index in India has been introduced and included in the new index. Thus NIFTY has been amended and converted into SQP CNX NIFTY. In this way, all the indexes have been made popular with the new name at present.

CNX Midcap 200 - Mid-cap sector companies have always been an attractive investment with substantial growth potential. It is an index of 200-Midcap securities that have substantial growth potential. To be included, the average market capitalization of the security must be in the range of 15 billion to 150 billion. CNX IBG Index - CNX Indian Business Group (IBG) consists of 250 listed companies promoted by Indian business families. The capitalization for December 1994 is selected based on weighted average and the base value is 1000 points.

The work of indexation is done based on several methods mentioned above. The index has more importance because the behavior of the entire securities market is affected by the index, so it is supported by the Central Government, RBI, and SBI and efforts are made to keep the index balanced.

FAQ

Who is the present chairman of the National Stock Exchange?

The National Stock Exchange of India Limited (NSE) has appointed Girish Chandra Chaturvedi as its new chairman.

How many National Stock Exchanges are there in India?

There are 23 stock exchanges in India. Two of them are national-level stock exchanges, namely Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The remaining 21 are Regional Stock Exchanges (RSEs).

Which committee was formed to establish the Indian National Exchange ??

Pherwani committee was formed

Who were the founding members of NSC

The chief promoters of NSE I.D.B. (IDBI), as well as other subsidiary promoters, were LIC, GIC, SBI Capital Markets, Stock Holding Corporation, Infrastructure Leasing and Financial Service, and merchant banks.