The National Stock Exchange of India is a stock Exchange that is located in Mumbai, Maharashtra. The National Stock Exchange basically function in three market sections, that is, (CM) the Capital Market Section); F&Q (The Future and Options Market Sections) and WDM (Wholesale Debt Market Segment). It is important place where the trading of shares, debt etc takes place.
It was in year 1992 that the National stock Exchange was for the first time incorporated in India. It was not regarded as a stock exchange at once. Rather, the national Stock exchange was incorporated as a tax paying company and had got the recognition of a stock exchange only in year 1993 the recognition was given under the provisions of the Securities Contracts (Regulation) Act, 1956.
The National Stock exchange is highly active in the field of market capitalization and thus aiming it the ninth largest stock exchange in the said field. Similarly, the trading of the stock exchange in equities and derivatives is so high that it has resulted in high turnovers and thus making it the largest stock exchange in India.
It is the stock exchange wherein there is the facility of electronic exchange offering investors. This facility is available in almost types of equitable transactions such as equities, debentures, etc. it is also the largest stock exchange if calculated in the terms of traded values.
Origin and History of the National Stock ExchangeThe National Stock exchange was incorporated for the first time in November, 1992. The national stock exchange was not incorporated as the national stock exchange; rather, it had got the recognition of the recognized stock exchange in April, 1993. The National stock Exchange has increased its trading facilities in June 1994 when the WDM (Wholesale Debt Market Segment) was gone live. It is basically one of the three market segments in which the national stock Exchange works. In the same year, 1994 November, the Capital Market (CM) segment of the stock exchange goes live through VSAT.
The National Stock Exchange has become the first Clearing Corporation in India by the introduction of NSCCL in April 1995. In the same year, 1995 July, it has introduced the Investor protection fund which is a very important function introduced by the national Stock Exchange.
The National stock Exchange had grown with leaps and bounds and had shown tremendous growth mainly in all the fields and thus making it the largest stock exchange of India by October, 1995.
The concept of NSCCL was extended by the introduction of clearing and settlement with the help of NSCCL in year 1996. The National stock Exchange has introduced its Index for the first time in year April 1996. The index was known as the S&P CNX Nifty Index. In year June 1996, it has introduced the Settlement Guarantee Fund. The National Securities Depositor Fund was launched by the National Stock exchange in year 1996, November, and thus making it the first stock exchange who becomes the first depository in India.
Because of the efforts and introduction of new concept in the field of trading, the National stock Exchange has received the BEST IT USAGE award by the computer Society of India in the year November, 1996. It has also received an award for the TOP IT USER in the name of “Dataquest award” in year December, 1996.
The National stock exchange has also introduced another index in year December 1996 in the name of CNX Nifty Junior in year 1996. It had again received an award for the BEST IT USAGE award by the computer Society of India in the year December, 1996. In May, 1998 it had launched its first website. Further in October 1999, it had launched the NSE.IT LTD. Further in year October, 2002, it had launched the Government securities index.
The growth of the National Stock Exchange has been tremendous in every field. It had introduced several programmes and has achieved various achievements and awards while working best in the field in which it is working. The efforts and hard work that is contributed by the National Stock exchange has been tremendous and thus making an important and unique stock exchange in India.
NSE & BSE:
The economic and capital market in a country cannot exist without a stock exchange. The Indian capital market is guided by the two pillars viz. Bombay Stock Exchange and the National Stock Exchange. All the major transactions take place here though there are about 20 other stock exchanges in different cities of India. Both these stock exchanges are situated in Bombay [presently Mumbai]. The Bombay stock exchange [BSE] is located at the Dalal Street and was established in the year 1875. The national stock exchange [NSE] is located at Bandra (east) and was founded in the year 1992.
The indices NIFTY for NSE and SENSEX for BSE are displayed in all major portals, newspapers and financial magazines.
BSE has BSE small cap, BSE Mid cap and BSE500 as indices to take care of the medium and small companies while India index services & Products Limited [IISL] was launched to have indices like S&P CNX Nifty, CNX Nifty Junior, CNX 100, S&P CNX 500 and CNX Mid cap.
BSE and NSE have changed the meaning of trading in the share market in India giving the investors the confidence and endeavour to invest and make big money. BSE replaced the open cry system with automated trading BSE online trading [BOLT] system was established in the year 1995 and expanded to the other exchanges in 1997 by NSE there by giving the investors wider and easier trading options. Both the BSE and NSE have embraced the latest and sophisticated technology for smoother and better trading operations which has re affirmed the investor’s faith in the Indian stock market. There came a period when people were losing faith in the stock market because of the heavy rush, physical presence requirement, filling forms and the other paper work, lack of proper and timely news. But the computerisation and online trading has again changed the views of the people as trading became easier, simpler and faster.
Many time-consuming tasks have become simplified. The technological revolution that has been taking place has not only made trading easy in India but has changed the world markets too. One just requires an online trading account to operate in BSE or NSE and then they can do their trading business within the trading hours from anywhere in the world. All they would need is a computer with a broadband connection. Earlier transactions used to take a long time but now everything is done in a few minutes. There are no forms to be filled, registers to be maintained as they are all done electronically. One can view the stock market live once they are online.
The national stock exchange has been in the forefront of online stock trading in the country. Soon the online trading spread to the other exchanges in the country. The development in information technology has attracted the investors to trade in any of the BSE and NSE stock. This development in technology has seen the NSE facilitate easy and convenient trading among the investors. Satellite communication technology has been used to connect with the major cities and towns all over India. The necessary software and hardware is being upgraded regularly to keep up with the trends and development. As of this day the NSE can handle more than 15 million trades every day in the stock market.
The NSE has made a name for itself in the global market too. This included signing of a memorandum of understanding with the Singapore stock exchange for development of a market for Indian products to be listed in the Singapore exchange. Many license agreements have been made between Indian companies and benchmark indexes of US. Many foreign investors have been attracted by both BSE and NSE. There are many firsts to its credit by the Bombay stock exchange. It introduced free floating index, equity derivatives, launched its website Hindi and Gujarat. It obtained the 1st iso certification for having an exchange and starting exchange enabled internet trading platform The NSE too not to be left behind, has strongly made its name in the world market.