National Stock Exchange.

Introduction History NSE Index or NIFTY Innovations Markets Indices NSE Milestones Objectives NSE’s Capital Market Trading System (OPMS) Online position monitoring and risk management

system Implementation of STP Central hub Conclusion

Index

IntroductionThe NSE is India's largest and the worlds third largest stock exchange in terms of Transaction volumes & amounts. The NSE is based out of Bombay. The NSE has set up its trading platform as a nation-wide, fully automated screen based system. This enables anyone in any part of the country to trade on shares listed in the NSE.

The National Stock Exchange of India (NSE) situated in Mumbai - is the largest and most advanced exchange with 1016 companies listed and 726 trading members.

The NSE is owned by the group of leading financial institutions such as Indian Bank or Life Insurance Corporation of India. However, in the totally de-mutualised Exchange, the ownership as well as the management does not have a right to trade on the Exchange. Only qualified traders can be involved in the securities trading.

History

The NSE is one of the few exchanges in the world trading all types of securities on a single platform, which is divided into three segments: Wholesale Debt Market (WDM), Capital Market (CM), and Futures & Options (F&O) Market. Each segment has experienced a significant growth throughout a few years of their launch. While the WDM segment has accumulated the annual growth of over 36% since its opening in 1994, the CM segment has increased by even 61% during the same period.

The NSE Index or the Nifty Index as it is popularly known, is the index of the performance of the 50 largest & most profitable, popular companies listed in the index. Each company that is part of the index has its own weightage in the value of the Index. The value of the Nifty Index is the weighted average of the prices of these 50 companies.

NSE Index or NIFTY

The National Stock Exchange of India (NSE) is India's largest securities exchange in terms of daily trade numbers. It offers automated electronic trading of a variety of securities, including equity, corporate debt, central and state government securities, commercial paper, CDs, and exchange traded funds. The exchange has more than 1,000 listed members.

particularly on an equity index, in India. After four years of policy and regulatory debate and formulation, the NSE was permitted to start trading equity derivatives

Being the first and the only exchange to trade GOLD ETFs (exchange traded funds) in India.

NSE has also launched the NSE-CNBC-TV18 media centre in association with CNBC-TV18.

NSE.IT Limited, NSE has remained in the forefront of modernization of India's capital and financial markets, and its pioneering efforts include:

Innovations

Being the first national, anonymous, electronic limit order book (LOB) exchange to trade securities in India. Since the success of the NSE, existent market and new market structures have followed the "NSE" model.

Setting up the first clearing corporation "National Securities Clearing Corporation Ltd." in India. NSCCL was a landmark in providing innovation on all spot equity market (and later, derivatives market) trades in India.

Co-promoting and setting up of National Securities Depository Limited, first depository in India [8]

NSE pioneered commencement of Internet Trading in February 2000, which led to the wide popularization of the NSE in the broker community.

Being the first exchange that, in 1996, proposed exchange traded derivatives, setup in 1999 , is a 100% subsidiary of the National Stock Exchange of India. A Vertical Specialist Enterprise, NSE.IT offers end-to-end Information Technology (IT) products, solutions and services.

Currently, NSE has the following major segments of the capital market:

EquityFutures and OptionsRetail Debt MarketWholesale Debt MarketCurrency futuresMUTUAL FUNDSTOCKS LENDING & BROWING

Markets

August 2008 Currency derivatives were introduced in India with the launch of Currency Futures in USD INR by NSE. Currently it has also launched currency futures in EURO, POUND & YEN. Interest Rate Futures was introduced for the first time in India by NSE on 31 August 2009, exactly after one year of the launch of Currency Futures.

NSE became the first stock exchange to get approval for Interest rate futures as recommended by SEBI-RBI committee, on 31 August 2009, a futures contract based on 7% 10 Year GOI bond (NOTIONAL) was launched with quarterly maturities. [9]

NSE also set up as index services firm known as India Index Services & Products Limited (IISL) and has launched several stock indices, including:[11]

S&P CNX Nifty(Standard & Poor's CRISIL NSE Index)

CNX Nifty JuniorCNX 100 (= S&P CNX Nifty + CNX Nifty

Junior)S&P CNX 500 (= CNX 100 + 400 major

players across 72 industries)CNX Midcap (introduced on 18 July 2005

replacing CNX Midcap 200)

Indices

November 1992 IncorporationApril 1993 Recognition as a stock exchangeMay 1993 Formulation of business planJune 1994 Wholesale Debt Market segment

goes liveNovember 1994 Capital Market (Equities)

segment goes liveApril 1995 Establishment of NSCCL, the first

Clearing CorporationOctober 1995 Became largest stock exchange

in the country

NSE Milestones

April 1996 Launch of S&P CNX NiftyNovember 1996 Best IT Usage award by

Computer Society of IndiaDecember 1996 Commencement of

trading/settlement in dematerialised securities

November 1997 Best IT Usage award by Computer Society of India

May 1998 Promotion of joint venture, India Index Services & Products Limited (IISL)

May 1998 Launch of NSE's Web-site: www.nse.co.in

July 1998 Launch of NSE's Certification Programme in Financial Market

April 1999 CHIP Web Award by CHIP magazine

October 1999 Setting up of NSE.ITJanuary 2000 Launch of NSE Research

InitiativeFebruary 2000 Commencement of Internet

TradingJune 2000 Commencement of Derivatives

Trading (Index Futures)

August 2009 Launch of Interest Rate FuturesNovember 2009 Launch of Mutual Fund

Service SystemDecember 2009 Commencement of

settlement of corporate bondsFebruary 2010 Launch of Currency Futures

on additional currency pairs.April 2008 Launch of Securities Lending &

Borrowing Scheme

NSE was set up with the objectives of:Establishing nationwide trading facility for all

types of securities Ensuring equal access to investors all over

the country through an appropriate telecommunication network

Providing fair, efficient & transparent securities market using electronic trading system

Enabling shorter settlement cycles and book entry settlements

Meeting International benchmarks and standards

Objectives

Within a very short span of time, NSE has been able to achieve its objectives for which it was set up. Indian Capital Markets are a far cry from what they were 12 years back in terms of market practices, infrastructure, technology, risk management, clearing and settlement and investor service. To ensure continuity of business, NSE has built a full fledged BCP site operational for last 7 years.

Project ObjectiveNSE's Capital Market Trading system was operational on two machine split architecture using Fault Tolerant mainframes and geared to handle 3 million trades. However, the CM segment had started to experience trades nearing 3 Million trades which form a threshold. Based on the trends & expected volumes, growth in the medium term is more than thrice the current trading volume, i.e. about 10 Million transactions per day.

NSE's Capital market trading system

Business BenefitsSystem scaled on 3 machines with

distribution of users and securities with complete transparency to market participants.

System witnessed 3 million trades with faster response time to members at significantly lower system resource utilisation level.

Scalability to handle higher volumes (3 million to 6 million transactions per day).

OPMS is On-line Position Monitoring and Risk Management system for the Capital Market segment of the National Stock Exchange of India Limited. It tracks positions of trading members from Turnover and Exposure limits with a view of identifying and preventing potential settlement related issues. The positions are monitored on an on-line basis and the system provides for auto disablement of the violating member on the trading system

(OPMS) Online position monitoring and risk management system

Based on the volumes, it is expected that the current trading levels of about 3 million trades per day may rise to the new heights of 10 million trades per day in the near future. It was therefore necessary to initiate was to reengineer OPMS system without imposing any major cost associated with architectural overhauling.

Another key objective was to scale the violation detection mechanism by a mammoth factor from around 300 violation checks per second to handle more than 4000 violations per second.

Business BenefitsEffective and efficient Risk Management-

Violation turnover reduced from few seconds to few milliseconds & 99.96% trades processed for Risk Management within a second of occurrence.

Better utilisation of Resources- Peak capacity of trades handling capacity enhanced to 10 million trades & Average CPU utilisation reduced from 70% to 20%.

Linearly scalable

The National Stock Exchange (NSE) is a stock exchange located at Mumbai, India. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading.[1] NSE has a market capitalization of around Rs 47,01,923 crore (7 August 2009) and is expected to become the biggest stock exchange in India in terms of market capitalization by 2009 end.

Thus the NSE is a place where money can be invested using customer friendly methods and proper format.

Conclusion