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Fact Book
2010
NATIONAL STOCK EXCHANGE OF INDIA LIMITEDJune 2010
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C O N T E N T S
SECTION 1- NATIONAL STOCK EXCHANGE OF INDIA
Introduction ...........................................................................................3
Incorporation and Management ....................................................................3
Market Segments And Products .....................................................................3
Achievements/Milestones ...........................................................................5
Developments during the year......................................................................6
Facts And Figures .....................................................................................8
Technology .............................................................................................8
NSE Family ........................................................................................... 11
NSCCL ................................................................................................ 11
NSDL ................................................................................................ 12
NSE Infotech services Ltd ......................................................................... 12
NSE.IT ................................................................................................ 12
IISL ................................................................................................ 12
Dotex International Ltd. ........................................................................... 12
NCDEX ................................................................................................ 13
NCCL ................................................................................................ 13
PXIL ................................................................................................ 13
SECTION 2- MEMBERSHIP ADMINISTRATION
Eligibility Criteria ................................................................................... 19
Trading Membership ................................................................................ 19
Clearing Membership ............................................................................... 20
Currency Derivative Membership ................................................................. 20
Growth and Distribution Of Members ............................................................ 20
SECTION 3- LISTING OF SECURITIES
Listing Criteria ...................................................................................... 27
Listing Agreement .................................................................................. 27
Compliance By Listed Companies ................................................................ 27
Disclosures By Listed Companies ................................................................. 28
De-Listing ............................................................................................ 28
CM Segment ......................................................................................... 29
Listing Fees .......................................................................................... 30
Shareholding Pattern ............................................................................... 30
WDM Segment ....................................................................................... 30
Contd...
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Funds Mobilisation On the Exchange ............................................................ 31
Initial Public Offerings (IPOs) ............................................................ 32
Rights Issues ................................................................................. 32
Preferential Allotment/ Private Placement............................................ 32
QIPs ........................................................................................... 32
SECTION 4- CAPITAL MARKET SEGMENT
NEAT - CM System................................................................................... 49
Market Performance ................................................................................ 49
Trading Volume ............................................................................. 49
Liquidity ..................................................................................... 50
Distribution of turnover ................................................................... 51
Market Capitalisation ...................................................................... 52
Sectoral Distribution of Top 50 Companies ............................................ 52
Trading Records during 2008-09 .......................................................... 53
Internet Trading ............................................................................ 53
On-line IPOs ................................................................................. 54
Indices ................................................................................................ 54
Mutual Funds And Exchange Traded Funds ...................................................... 56
Charges ............................................................................................... 57
Clearing & Settlement ............................................................................. 58
Settlement Agencies ....................................................................... 59
Settlement Cycles .......................................................................... 60
Settlement Statistics ...................................................................... 60
Risk Management System .......................................................................... 60
Capital Adequacy ........................................................................... 60
On-Line Monitoring ......................................................................... 60
Margin Requirements ............................................................................... 61
Categorisation of newly listed securities ....................................................... 61
Value at Risk Margin ................................................................................ 61
Extreme Loss Margin ............................................................................... 62
Mark to Market Margin ............................................................................. 62
Close out Facility ................................................................................... 62
Index based Market wide Circuit Breakers ..................................................... 63
Settlement Guarantee Fund ...................................................................... 63
Contd...
Contd...
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SECTION 5- WHOLESALE DEBT MARKET SEGMENT
Trading Mechanism ................................................................................. 87
Market Performance ................................................................................ 88
Turnover...................................................................................... 88
Market Capitalistion ...................................................................... 90
Transaction Charges ................................................................................ 90
Settlement ........................................................................................... 90
FIMMDA-NSE MIBID/MIBOR ......................................................................... 90
Zero Coupon Yield Curve .......................................................................... 91
NSE-VAR System ..................................................................................... 92
GOI- bond Index..................................................................................... 93
SECTION 6- FUTURES &OPTIONS SEGMENT
Trading Mechanism ................................................................................107
Contract Specification ............................................................................107
Selection Criteria For Stocks And Index Eligibility For Trading .............................108
Trading Value & Contracts Traded ...............................................................109
Product wise turnover on F&O segment ...............................................110
Futures and Options on Benchmark Indices ...........................................111
Sectorwise Stock Futures & Options Turnover .......................................111
Participant wise turnover on F&O Segment ...........................................112
Member wise turnover on the Exchange ...............................................113
High Volume Members ....................................................................113
Internet Trading ...........................................................................113
Traded Value Records ..................................................................... 113
Top 20 Futures And Options Contracts .........................................................114
Number of Trades ..................................................................................114Charges ..............................................................................................114
Clearing And Settlement..........................................................................115
Clearing Mechanism .......................................................................115
Settlement Mechanism ...................................................................116
Settlement Statistics .....................................................................117
Risk Management System .........................................................................117
NSE-SPAN .........................................................................................118
Margins ......................................................................................119
Position Limits ............................................................................119
Contd...
Contd...SPAN is a registered trademark of the Chicago Mercantile Exchange (CME) used here under license.
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SECTION 7- CURRENCY DERIVATIVES SEGMENT
Trading Mechanism ................................................................................143
Contract Specifications for Currency Futures .................................................143
Turnover .............................................................................................145
Traded Value Records .............................................................................146
Clearing and Settlement..........................................................................146
Clearing Entities ..........................................................................146
Clearing Mechanism ......................................................................146
Settlement Mechanism ...................................................................146
Settlement Statistics .....................................................................147
Margining System .........................................................................147
Position Limits for Currency Futures ..................................................151
Risk Management .................................................................................. 151
SECTION 8- INVESTOR SERVICES, ARBITRATION
Investor Services ...................................................................................157
Arbitration ..........................................................................................157
SECTION 9- KNOWLEGDE INITIATIVE
About NSEs Certification in Financial Markets (NCFM) .....................................163
New Modules introduced under NCFM in 2009-10 ............................................ 163
NSEs Certified Capital Market Professionals (NCCMP) ......................................164
CBSE- NSE joint Certification in Financial Markets ........................................... 164
NSEs Certified Capital Market Professionals (NCCMP) ......................................164
NSE Manipal Education Training Programs ...................................................165
NSE Research Initiative ...........................................................................166
Investor Awareness and Education Programmes .............................................166
Contd...
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National Stock Exchangeof India
1
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1National Stock Exchange of IndiaSince its inception in 1992, National Stock Exchange of India has been at the vanguard of change
in the Indian securities market. This period has seen remarkable changes in markets, from how
capital is raised and traded, to how transactions are cleared and settled.
The market has grown in scope and scale in a way that could not have been imagined at the time.
Average daily trading volumes have jumped from`17 crore in 1994-95 when NSE started its Cash
Market segment to`16,959 crore in 2009-10. Similarly, market capitalization of listed companies
went up from`363,350 crore at the end of March 1995 to`6,009,173 crore at end March 2010.
Indian equity markets are today among the most deep and vibrant markets in the world.
NSE offers a wide range of products for multiple markets, including equity shares, Exchange
Traded Funds (ETF) , Mutual Funds, Debt instruments, Index futures and options, Stock futures and
options, Currency futures and Interest rate futures. Our Exchange has more than 1,400 companies
listed in the Capital Market and more than 92% of these companies are actively traded. The debt
market has 4,140 securities available for trading. Index futures and options trade on four different
indices and on 190 stocks in stock futures and options as on 31 st March , 2010. Currency futures
contracts are traded in four currency pairs. Interest Rate Futures (IRF) contracts based on 10 year
7% Notional GOI Bond are also available for trading.
Incorporation and Management
NSE was incorporated in November 1992, and received recognition as a stock exchange under
the Securities Contracts (Regulation) Act, 1956 in April 1993. It is managed by professionals who
do not directly or indirectly trade on the Exchange. The trading rights are with trading members
who offer their services to the investors. The Board of NSE comprises of senior executives frompromoter institutions and eminent professionals, without having any representation from trading
members. While the Board deals with the broad policy issues, the Executive Committees (ECs),
which include trading members, formed under the Articles of Association and the Rules of NSE for
different market segments, set out rules and parameters to manage the day-to-day affairs of the
Exchange. The day-to-day management of the Exchange is delegated to the Managing Director who
is supported by a team of professional staff. Therefore, though the role of trading members at NSE
is to the extent of providing only trading services to the investors, the Exchange involves trading
members in the process of consultation and participation in vital inputs towards decision making.
Tables 1-1 and 1-2 gives the composition of its Board of Directors and the Executive Committees.
Market Segments and Products
NSE provides a trading platform for of all types of securities for investors under one roof Equity,
Corporate Debt, Central and State Government Securities, T-Bills, Commercial Paper (CPs),
Certificate of Deposits (CDs), Warrants, Mutual Funds (MFs) units, Exchange Traded Funds (ETFs),
Derivativeslike Index Futures, Index Options, Stock Futures, Stock Options Currency Futures and
Interest Rate Futures. The Exchange provides trading in 4 different segments viz., Wholesale Debt
Market (WDM) segment, Capital Market (CM) segment, Futures & Options (F&O) segment and the
Currency Derivatives Segment (CDS).
The Wholesale Debt Market segment provides the trading platform for trading of a wide range of
debt securities which includes State and Central Government securities, T-Bills, state development
loans (SDLs), bonds issued by public sector undertakings (PSUs), floating rate bonds (FRBs),
zero coupon bonds (ZCBs), index bonds, commercial papers (CPs), certificate of deposits (CDs),
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corporate debentures, SLR and non-SLR bonds issued by financial institutions (FIs), bonds issued
by foreign institutions and units of mutual funds (MFs).
However, along with these financial instruments, NSE also launched various products e.g. FIMMDA-
NSE MIBID/MIBORowing to the market need. NSE also started the dissemination of its yet another
product, the Zero Coupon Yield Curve. This helps in valuation of sovereign securities across all
maturities irrespective of its liquidity in the market. The increased activity in the governmentsecurities market in India and simultaneous emergence of MFs (Gilt MFs) had given rise to the
need for a well defined bond index to measure the returns in the bond market. NSE constructed
such an index, NSE Government Securities Index. This index provides a benchmark for portfolio
management by various investment managers and gilt funds. The average daily turnover in the
WDM Segment was`2,359 crore (US $523 million) during 2009-10.
The Capital Market (CM) segment offers a fully automated screen based trading system, known
as the National Exchange for Automated Trading (NEAT) system. This operates on a price/time
priority basis and enables members from across the country to trade with enormous ease and
efficiency. Various types of securities e.g. equity shares, warrants, debentures etc. are traded on
this system. The average daily turnover in the CM Segment of the Exchange during 2009-10 was`16,959 crore. (US $3,757 million).
Futures & Options (F&O) segment of NSE provides trading in derivatives instruments like Index
Futures, Index Options, Stock Options, Stock Futures. The futures and options segment of NSE
has made a mark for itself globally. In the Futures and Options segment, trading in S&P CNX Nifty
Index, CNX IT index, Bank Nifty Index, Nifty Midcap 50 index and single stocks are available.
Trading in Mini Nifty Futures & Options and Long term Options on S&P CNX Nifty are also available.
The average daily turnover in the F&O Segment of the Exchange during 2009-10 was`72,392 crore
(US $ 16,097 million).
Currency Derivatives Segment (CDS) at NSE commenced operations on August 29, 2008 with the
launch of Currency futures trading in US Dollar-Indian Rupee (USD-INR). On the very first day of
operations a total number of 65,798 contracts valued at`291 crore were traded on the Exchange.
Since then trading activity in this segment has been witnessing a rapid growth.
Trading in Currency Futurescontracts in other pairs- Euro-INR, Pound Sterling-INR and Japanese
Yen-INR commenced on February 01, 2010. The average daily turnover in the Currency Futures
during 2009-10 was`7,428 crore (US $ 1,646 million).
Trading in Interest Rate Futures (IRF) commenced on August 31, 2009. Interest Rate Futures
contracts are based on 10 year 7% Notional GOI Bond. On its first day of trading, 14,559 contracts
were traded with a total value of`267.31 crores.
Trading Value
(`crore)
Segment/Year 2006-07 2007-08 2008-09 2009-10
CM 1,945,287 3,551,038 2,752,023 4,138,023
F&O 7,356,271 13,090,478 11,010,482 17,663,665
WDM 219,106 282,317 335,952 563,816
Currency Futures * -- -- 162,272 1,782,608
Interest Rate Futures ** -- -- -- 2,975
Total 9,520,664 16,923,833 14,260,729 24,151,088
* Trading in Currency Futures commenced on August 28, 2008
** Trading in Interest Rate Futures commenced on August 31,2009
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Market Capitalisation (As at end March)
(`crore)
Segment/Year Mar-07 Mar-08 Mar-09 Mar-10
CM 3,367,350 4,858,122 2,896,194 6,009,173
WDM 1,784,801 2,123,346 2,848,315 3,165,929
Total 5,152,151 6,981,468 5,744,510 9,175,102
NSEs Worldwide Ranking in 2009 (Jan-Dec)
4th in Number of Trades in Equity Shares.
2nd in terms of Number of Contracts traded in Single Stock Futures.
3rd in terms of Number of Contracts traded in Stock Index Futures.
2nd in terms of Number of Contracts traded in Stock Index Options.
7thLargest Derivatives Exchange in the World.
Source:WFE & FIA
Achievements/Milestones
Month/Year Event
November 1992 Incorporation
April 1993 Recognition as a stock exchange.
June 1994 WDM segment goes live.
November 1994 CM segment goes live through VSAT.
October 1995 Became largest stock exchange in the country.
April 1996 Commencement of clearing and settlement by NSCCL.
April 1996 Launch of S&P CNX Nifty.
November 1996 Setting up of National Securities Depository Ltd., first depository in India, co-promotedby NSE.
December 1996 Commencement of trading/settlement in dematerialised securities.
December 1996 Launch of CNX Nifty Junior.
May 1998 Promotion of joint venture, India Index Services & Products Limited (IISL) (along withCRISIL) for index services.
May 1998 Launch of NSEs Web-site : www.nseindia.com.
July 1998 Launch of NSEs Certification Programme in Financial Markets (NCFM)
October 1999 Setting up of NSE.IT Ltd.
June 2000 Commencement of Derivatives Trading (in Index Futures).
September 2000 Launch of Zero Coupon Yield Curve.
June 2001 Commencement of Trading in Index Options
July 2001 Commencement of Trading in Options on Individual Securities
November 2001 Commencement of Trading in Futures on Individual Securities
January 2002 Launch of Exchange Traded Funds (ETFs).
August 2003 Launch of Futures and Options on CNX IT Index
June 2005 Launch of Futures & Options on BANK Nifty Index
August 2006 Setting up of NSE Infotech Services Ltd.
December 2006 Derivative Exchange of the Year, by Asia Risk magazine
March 2007 Launch of Gold BeES- Exchange Traded Fund (ETF).(First Gold ETF)January 2008 Launch of Mini Nifty derivative contracts
March 2008 Launch of long term option contracts on S&P CNX Nifty Index.
Contd...
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Month/Year Event
April 2008 Launch of Securities Lending & Borrowing Scheme
April 2008 Launch of - India VIX* - The Volatility Index
April 2008 Direct Market Access (DMA)
June 2008 Setting up of Power Exchange India Ltd.July 2008 Launch of NOW Neat on Web
August 2008 Launch of Currency Derivatives Segment with commencement of trading on CurrencyFutures on August 29, 2008.
September 2008 Launch of ASBA (Applications supported by Blocked Amount)
February 2009 Cross Margining Benefit in CM and F&O Segment
March 2009 Launch of NSE E-Bids for Debt Segment
August 2009 Launch of Interest Rate Futures
November 2009 Launch of Mutual Fund Service System
December 2009 Commencement of settlement of corporate bonds
February 2010 Trading in Currency Futures on additional currency pairs
February 2010 Listing of Hang Seng BeES ETF on NSE
March 2010 NSE and CME Group announced cross-listing relationship
March 2010 NSE and Singapore Exchange sign Memorandum of Understanding (MOU)
April 2010 NSE and NSCCL receive Asian Banker awards
Developments during the year.
The innovation of new market products and services continued during 2009-2010. National
Stock Exchange became the first exchange to receive approval from SEBI to introduce Exchange
traded Interest Rate Futures (IRF) contracts for trading on the Currency Derivatives Segmentof the exchange. Trading in IRF commenced on August 31, 2009. On its first day of trading,
14,559 contracts were traded with a total value of`267.31 crores.
In November 2009, SEBI allowed transaction in Mutual Fund schemes through the stock exchange
infrastructure. Consequently, NSE launched India's first Mutual Fund Service System (MFSS)
on November 30, 2009 through which an investor can subscribe or redeem units of a mutual
fund scheme.
The clearing and settlement of corporate bonds was operationalised at NSCCL on December
01, 2009. As per SEBI circular dated October 16, 2009, all trades in corporate bonds between
specified entities, namely, mutual funds, foreign institutional investors/ sub-accounts, venturecapital funds, foreign venture capital investors, portfolio mangers, and RBI regulated entities
as specified by RBI are required to be cleared and settled through the National Securities
Clearing Corporation Limited (NSCCL) or the Indian Clearing Corporation Limited (ICCL). This
is applicable to all corporate bonds Over The Counter (OTC) or on the debt segment of Stock
Exchanges. All transactions are to be cleared and settled in terms of the norms specified by
NSCCL and ICCL.
Trading in Currency Futures contracts on additional currency pairs - Euro-INR, Pound
Sterling-INR and Japanese Yen-INR in the Currency Derivative Segment (CDS) of the Exchange
commenced from February 01, 2010.
Hang Seng BeES ETF - Indias first Exchange Traded Fund (ETF) tracking an overseas stock
market index was launched on NSE on February 15, 2010. The open ended ETF aimed to
Contd...
** VIX is a trademark of Chicago Board Options Exchange, Incorporated ("CBOE") and Standard & Poors has granted a license to NSE, withpermission from CBOE, to use such mark in the name of the India VIX and for purposes relating to the India VIX.
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provide domestic investors exposure to companies listed on the Hong Kong Stock Exchange
that constitute the Hang Seng index. There are 42 constituent companies in the Hang Seng
index such as HSBC Holdings, Hutchison, Cathay Pacific Airways, China Mobile, and PetroChina
etc. This product would give Indian markets an exposure to the Chinese market- which is the
fastest growing economy in the world.
The National Stock Exchange of India (NSE) and CME Group, announced cross-listingarrangements, including license agreements covering benchmark indexes for U.S. and Indian
equities on March 10, 2010.
They also entered into a Memorandum of Understanding with respect to other areas of
potential cooperation, including related to development and distribution of financial products
and services. Under the cross-listing arrangements, the S&P CNX Nifty Index (the Nifty 50), the
leading Indian benchmark index for large companies accounting for 22 sectors of the Indian
economy, will be made available to Chicago Mercantile Exchange (CME), for the creation and
listing of U.S. dollar denominated futures contracts for trading on CME, and the rights to the
S&P 500 and Dow Jones Industrial Average (DJIA ) will also be made available to NSE
for the creation and (subject to regulatory approval) listing of Rupee-denominated futurescontracts for trading on NSE. The license to the Nifty 50 from NSEs affiliate India Index
Services & Products Ltd. (IISL), which is exclusive to CME Group within the Americas and
Europe, is in addition to the existing licensing arrangement between Singapore Exchange Ltd.
(SGX) and IISL. The sublicenses to the S&P 500 and DJIA indexes, which are exclusive to NSE
for Rupee -denominated futures contracts traded within India, are being made available via
sublicenses from CME Group and each of Standard & Poors and Dow Jones, respectively.
The National Stock Exchange of India Limited (NSE) and Singapore Exchange (SGX) signed a
Memorandum of Understanding (MOU) on March 10, 2010 to cooperate in the development
of a market for India-linked products. Under the MOU, both exchanges aim to explore future
collaboration in the expansion, development and promotion of India-linked products and
services to be listed on SGX. Subject to regulatory approval, these products may include
equity products and other asset classes. The two exchanges also will look into a bilateral
securities trading link to enable investors in one country to seamlessly trade on the other
countrys exchange.
NSE has been awarded The Asian Banker Financial Derivative Exchange of the Year Award
and NSCCL has been awarded The Asian Banker Clearing House of the Year Award in April
2010. This is the highest award for exchanges that outperform their regional peers in terms
of growing financial derivatives related products and trading business and for clearing houses
in Asia Pacific region respectively.
The objectives of this award programme was to recognize exchanges, depositories, alternative
markets service providers, etc. who are leading the industry in creating sustainable and highly
liquid markets of the future, to recognize the use of technology and business models to
revolutionize the industry and create global access in an efficient and seamless manner, to
validate the leadership of the regional players that maintain the integrity of financial markets,
protect investor interests and still lead in innovation, to identify emerging best practices as
well as product and process innovations that set the benchmarks for all players to improve
their competitive profile. The Asian Banker, is one of Asias foremost intelligence provider
to the financial services industry. The Asian Banker Markets & Exchanges Achievement Award
Programme was instituted in 2010 to recognise the competition amongst exchanges, broker-dealers, financial institutions, fund managers and others in this fascinating and fast changing
industry. The programme is also designed to be a repository of evolving best practices from
which players can benchmark their own products and processes over the long term.
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FACTS AND FIGURES
The growth in the stock market activity across the different market segments and hightest attained
records is visible from the below facts and figures.
Figures as on March 31, 2010
Listed Companies 1,470
Trading Members 1,297
VSATS 2,527
Number of cities having VSATS 186
Securities available for trading in the CM segment 1,806
Contracts available for trading equity derivatives segment @ 23,533
Records reached (data from inception to March 31, 2010)
Parameter Date Magnitude
Capital Market Segment
Number of trades May 19, 2009 11,260,392
Traded Quantity May 19, 2009 19,225.95 lakh
Turnover May 19, 2009 `40,151.91 cr. (US $ 8,894.97 mn.)
Market capitalisation January 07, 2008 `6,745,724.00 cr. (US $ 1,687,696.77 mn.)
S&P CNX Nifty Index value January 08, 2008 6357.10
CNX Nifty Junior Index value January 04, 2008 13209.35
Futures & Options Segment
Number of trades January 28, 2010 1,971,214
Number of Contracts Traded January 28, 2010 6,300,279
Turnover January 28, 2010 `166,193.03 cr. (US $ 36,817.24 mn.)
Currency Derivatives Segment (Currency Futures)
Number of trades January 11, 2010 78,935
Number of Contracts Traded March 30, 2010 4,353,053
Turnover March 30,2010 `19,927 cr. (US $ 4,414 mn.)
Wholesale Debt Market Segment
Turnover August 25, 2003 `13,911.57 cr. (US $ 3,179.79 mn.)
@ No. of contracts available for trading in F&O segment as on 31st March 2010 includes 3 Nifty
index Futures, 3 CNX IT Futures , 3 Bank Nifty Futures, 3 CNX 100 Futures , 3 Nifty Junior Futures,
3 Nifty Midcap50 futures, 3 Mini Nifty Futures, 570 stock futures, 628 Nifty index options,
114 CNX IT options, 140 Bank Nifty options, 86 Nifty Midcap50 options, 98 Mini Nifty Options,
21,882 stock option
Technology and Application Systems in NSE
Technology has been the backbone of the Exchange. Providing the services to the investing
community and the market participants using technology at the cheapest possible cost has beenits main thrust. NSE chose to harness technology in creating a new market design. It believes that
technology provides the necessary impetus for the organization to retain its competitive edge and
ensure timeliness and satisfaction in customer service. In recognition of the fact that technology
will continue to redefine the shape of the securities industry, NSE stresses on innovation and
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sustained investment in technology to remain ahead of competition. NSE is the first exchange in
the world to use satellite communication technology for trading. It uses satellite communication
technology to energize participation from about 2,493 VSATs from nearly 185 cities spread all over
the country.
Its trading system, called National Exchange for Automated Trading (NEAT), is a state of-the-art
client server based application. At the server end all trading information is stored in an in-memorydatabase to achieve minimum response time and maximum system availability for users. It has
uptime record of 99.999%. For orders entered by the user, the response time within trading system
is around 5ms. NSE has been continuously undertaking capacity enhancement measures so as to
effectively meet the requirements of increased users and associated trading loads. NSE has also
put in place NIBIS (NSEs Internet Based Information System) for on-line real-time dissemination of
trading information over the Internet.
As part of its business continuity plan, NSE has established a disaster back-up site at Chennai along
with its entire infrastructure, including the satellite earth station and the high-speed optical fiber
link with its main site at Mumbai. This site at Chennai is a replica of the production environment
at Mumbai. The transaction data is backed up on near real time basis from the main site to thedisaster back-up site through the 3 STM-4 (1.86 GB) high-speed links to keep both the sites all the
time synchronized with each other. The various application systems that NSE uses for its trading
as well clearing and settlement and other operations form the backbone of the Exchange. The
application systems used for the day-to-day functioning of the Exchange can be divided into (a)
Front end applications and (b) Back office applications.
The various application systems that NSE uses for its trading as well clearing and settlement and
other operations form the backbone of the Exchange. The application systems used for the day-to-
day functioning of the Exchange can be divided into (a) Front end applications and (b) Back office
applications. In the front office, there are 7 applications:
NEAT-CM system takes care of trading of securities in the Capital Market segment that includes
equities, debentures/notes as well as retail Gilts. The NEAT CM application has a split architecture
wherein the split is on the securities and users. The application runs on three Stratus systems with
communication over TCP IP protocol. The application has been benchmarked to support 60,000
users and handle more than 30 million trades daily. This application also provides data feed for
processing to some other systems like Index, OPMS through TCP/IP. This is a direct interface with
the trading members of the CM segment of the Exchange for entering the orders into the main
system. There is a two way communication between the NSE main system and the front end
terminal of the trading member.
NEAT-WDM system takes care of trading of securities in the Wholesale Debt Market (WDM) segment
that includes Gilts, Corporate Bonds, CPs, T-Bills, etc. This is a direct interface with the trading
members of the WDM segment of the Exchange for entering the orders/trades into the main
system. There is a two way communication between the NSE main system and the front end
terminal of the trading member.
NEAT-F&O system takes care of trading of securities in the Futures and Options (F&O) segment that
includes Futures on Index as well as individual stocks and Options on Index as well as individual
stocks. This is a direct interface with the trading members of the F&O segment of the Exchange
for entering the orders into the main system. There is a two way communication between the NSE
main system and the front end terminal of the trading member.
Neat-IPO system is an interface to help the initial public offering of companies which are issuing
the stocks to raise capital from the market. This is a direct interface with the trading members of
the CM segment who are registered for undertaking order entry on behalf of their clients for IPOs.
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NSE uses the NEAT IPO system that allows bidding in several issues concurrently. There is a two way
communication between the NSE main system and the front end terminal of the trading member.
NEAT MF system is an interface with the trading members of the CM segment for order
collection of designated Mutual Funds units
NEAT- CD system provides interface for trading in currency derivatives and Interest Rate Futures
NEATPLUS NSE is offering a multi-market front end application NEATPlus to its members. This
application provides a common trading platform to NSE members to trade in Capital Market as
well as Futures and Options Market segments at NSE. Members can take login in CM and F&O
segments in a single terminal with ability to monitor and trade in Equity securities as well as Equity
derivatives from single screen. Members can use the existing VSAT/Leased Line connectivity for
accessing the NEATPlus application. Multiple market watch screens with Excel like features, ability
to select various fonts, customizable color schemes and themes are some of the other salient
features of the NEATPlus application.
The exchange also provides a facility to its members to use their own front end software through
the CTCL (computer to computer link) facility. The member can either develop his own software
or use products developed by CTCL vendors.
In the back office, the following important application systems are operative:
Nationwide Clearing and Settlement System NCSS is the clearing and settlement system of the
NSCCL for the trades executed in the CM segment of the Exchange. The system has 3 important
interfaces OLTL (Online Trade loading) that takes each and every trade executed on real time
basis and allocates the same to the clearing members, Depository Interface that connects the
depositories for settlement of securities and Clearing Bank Interface that connects the 13 clearing
banks for settlement of funds. It also interfaces with the clearing members for all required reports.
Through collateral management system it keeps an account of all available collaterals on behalf of
all trading/ clearing members and integrates the same with the position monitoring of the trading/
clearing members. The system also generates base capital adequacy reports.
Future and Options Clearing and Settlement System (FOCASS) is the clearing and settlement
system of the NSCCL for the trades executed in the F&O segment of the Exchange. It interfaces
with the clearing members for all required reports. Through collateral management system it keeps
an account of all available collaterals on behalf of all trading/clearing members and integrates the
same with the position monitoring of the trading/clearing members. The system also generates
base capital adequacy reports.
Currency Derivatives Clearing and Settlement System (CDCSS) is the clearing and settlement
system for trades executed in the currency derivative segment. Through collateral management
system it keeps an account of all available collateral on behalf of all trading /clearing members
and integrates the same with the position monitoring of the trading/clearing members. The System
also generates base capital adequacy report.
Surveillance system offers the users a facility to comprehensively monitor the trading activity and
analyze the trade data online and offline
Online Position Monitoring System (OPMS) OPMS is the online position monitoring system that
keeps track of all trades executed for a trading member vis--vis its capital adequacy.
Parallel RISk Monitoring System (PRISM) is the parallel risk management system for F&O trades
using Standard Portfolio Analysis (SPAN). It is a system for comprehensive monitoring and load
balancing of an array of parallel processors that provides complete fault tolerance. It provides
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real time information on initial margin value, mark to market profit or loss, collateral amounts,
contract-wise latest prices, contract-wise open interest and limits. The system also tracks online
real time client level portfolio base upfront margining and monitoring.
Parallel RISk Monitoring System Currency Derivatives (PRISM-CD) is the risk management system
of the currency derivatives segment. It is similar in features to the PRISM of F&O Segment.
Data warehousing that is the central repository of all data in CM as well as F&O segment of the
Exchange.
Listing system captures the data from the companies which are listed in the Exchange for
corporate governance and integrates the same to the trading system for necessary broadcasts for
data dissemination process.
Membership system that keeps track of all required details of the Trading Members of the
Exchange.
The exchange operates and manages a nationwide network. This network includes 9 POPs (Points of
Presence) setup across the country and catering to 3070+ leased lines. All the POPs are connectedto DC and DR over high Speed links (Mainly STMs). All the members are given a 2mb point to point
connection to the nearest POP. All the members have a choice of selecting the POPs based on their
office location. Also there are plans to setup additional POPs based on member requirements. The
old X.25 VSAT and Leased Line network has been decommissioned completely.
NSEs existing POPs are build on highly redundant infrastructure connecting to Core and DR setup
via high speed redundant backbone links from multiple service providers. Mini POP with low
connectivity requirement is fully owned and operated by NSE is proposed to be built in with
redundant Infrastructure at Rajkot. Member links would terminate at Mini POP and the traffic
would be routed via a dual backbone pipe to nearby Mini POP. In keeping up with the global
trends the Exchange is providing to its members a co-location facility for their DMA and ALGO IT
infrastructure at NSEIL premises in BKC shortly.
NOW
NSE is also offering internet based trading services to NSE members. This facility is branded as NOW
Neat on Web NOW provides an internet portal for NSE members and their authorized clients to
transact orders and trades to the various market of NSE viz. CM, F&O and Currency. The members
can also access NOW through their existing VSAT/ Leased line, in addition to internet links. The
various features provided by NOW are (a) comprehensive Administration features, flexible risk
management system, high speed dealer terminals and online trading facility for investors.
NSE Family
NSCCL
The National Securities Clearing Corporation Ltd. (NSCCL), a wholly-owned subsidiary of NSE, was
incorporated in August 1995 and commenced clearing corporation in April 1996. It was the first
clearing corporation in the country to provide novation/settlement guarantee that revolutionized
the entire concept of settlement system in India. It was set up to bring and sustain confidence in
clearing and settlement of securities; to promote and maintain short and consistent settlement
cycles; to provide counter-party risk guarantee, and to operate a tight risk containment system.It carries out the clearing and settlement of the trades executed in the equities and derivatives
segments of the NSE. It operates a well-defined settlement cycle and there are no deviations
from the same. It is the first clearing corporation in the country to establish the Settlement
Guarantee Fund (SGF) in June 1996. It has been managing, clearing and settlement functions since
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its inception without a single failure or clubbing of settlements. NSCCL has also introduced the
facility of direct payout to clients account on both the depositories viz., NSDL and CDSL.
Today NSCCL settles trades under the T+2 rolling settlement. It has the credit of continuously
upgrading the clearing and settlement procedures and has also bought Indian financial markets in
line with international markets
NSDL
To promote dematerialization of securities NSE joined hands with UTI and IDBI to set up the first
depository in India called the National Securities Depository Limited (NSDL). The depository
system gained quick acceptance and in a very short span of time it was able to achieve the
objective of eradicating the paper from the trading and settlement of securities, and was also
able to get rid of the risks associated with fake/forged/stolen/bad paper. Dematerialized delivery
today constitutes almost 100% of total of the total delivery based settlement.
NSE Infotech Services Ltd
NSE Infotech Services Ltd Information Technology has been the back bone of conceptualization,
formation, running and the success of National Stock Exchange of India Limited (NSE). NSE
has been at the forefront in spearheading technology changes in the securities market. It was
important to give a special thrust and focus on Information Technology to retain the primacy in the
market. Towards this a wholly owned subsidiary M/s. NSE Infotech Services Limited (NSETECH) was
incorporated to cater to the needs of NSE and all its group companies exclusively.
NSE.IT
NSE.IT Limited, a 100% subsidiary of NSE was setup in 1999 to provide thrust to NSEs technology
edge, concomitant with its overall goal of harnessing latest technology for optimum business
use. A Vertical Specialist Enterprise, NSE.IT offers end-to-end Information Technology (IT)
products, solutions and services. NSE.IT has expertise in a wide range of business applications
including high-end mission critical applications requiring real-time processing speeds. Additionally,
NSE.IT specializes in providing complete IT solutions to Stock Exchanges, Clearing Corporations,
Brokerage Firms, Insurance Firms and other organizations in the financial sector. NSE.IT is focused
on developing mission-critical technology solutions for the Financial Services market and the
facilitation of change within these markets.
IISL
India Index Services and Products Limited (IISL), a joint venture of CRISIL and NSE, was set up
in May 1998 to provide indices and index services. It has a licensing and marketing agreement
with Standard and Poors (S&P), the worlds leading provider of investible equity indices, for
co-branding equity indices. IISL is Indias first specialized company focusing upon the index as a
core product. It provides a broad range of services, products and professional index services. It
maintains over 96 equity indices comprising broad-based benchmark indices, sectoral indices and
customised indices. Many investment and risk management products based on IISL indices have
developed in the recent past, within India and abroad. These include index based derivatives on
NSE and on Singapore Exchange, Indias first exchange traded fund, a number of index funds, and
Licensing of the Index for various structured products.
DOTEX INTERNATIONAL LTD.
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
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this purpose. DotEx data provides products like : On-line streaming data feed, Intra-day Snapshot
data feed, end of day data and Historical Data.
NCDEX
NSE joined hand with other financial institutions in India to promote the NCDEX which provides for
a world class commodity exchange platform for Market Participants to trade in wide spectrum of
commodity derivatives. It was incorporated in the year 2003. Currently NCDEX facilitates trading
of agro based commodities, precious metal, base metal, energy products and polymers.
NCCL
National Commodity Clearing Limited (NCCL) is a company promoted by National Stock Exchange
of India Limited (NSEIL). It was incorporated in the year 2006. One of the objectives of NCCL is
to provide and manage clearing and settlement, risk management and collateral management
services to commodity exchanges. NCCL is having the requisite experience and exposure in
providing clearing and settlement facility, risk and collateral management services in the
commodities market including funds settlement with multiple clearing banks. Currently NCCL is
providing clearing and settlement services to NCDEX.
PXIL
A National Level Power Exchange by the name of Power Exchange India Limited (PXIL) has been set
up through a Joint Venture by India's two leading Exchanges, National Stock Exchange of India Ltd
(NSE) and National Commodity & Derivatives Exchange Ltd (NCDEX). PXIL has got the in-principle
approval from CERC to set up and operate the power exchange and will operate as a National Level
electricity exchange covering the entire Indian electricity market.
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Table 1-1 : Board of Directors *
1 Dr. Vijay L KelkarFormer Chairman, Finance Commission, India Former UnionFinance Secretar y and Advisor to the Finance Minister
Chairman
2 Mr. Ravi NarainNational Stock Exchange of India Ltd.
Managing Director
3 Ms. Chitra RamkrishnaNational Stock Exchange of India Ltd.
Joint Managing Director
4 Mr. C. AchuthanFormer Presiding Officer, Securities Appellate Tribunal
Director
5 Mr. Anjan BaruaDeputy Managing Director & Group Executive(Global Markets)State Bank of India
Director
6 Mr. A. P. Kurian
ChairmanAssociation of Mutual Funds in India
Director
7 Dr. Rajiv B. LallManaging Director & CEOIDFC Limited
Director
8 Mr. Anand G. MahindraVice Chairman & Managing DirectorMahindra & Mahindra Ltd.
Director
9 Mr. S. B. MainakExecutive Director(Investment-Risk Management and Research)
Director
10 Mr. Y. H. MalegamChairman EmeritusM/s. S.B. Billimoria & Co.Chartered Accountants
Director
11 Mr. S. B. MathurSecretary General, Life Insurance Council &Former Chairman, Life Insurance Corporation of India
Director
12 Dr. KRS MurthyProfessor & Former DirectorIndian Institute of Management, Bangalore
Director
13 Dr. R. H. PatilChairmanThe Clearing Corporation of India Ltd.
Director
14 Ms. Bhagyam RamaniGeneral Manager & Director, GIC
Director
15 Dr. V. A. SastryDirector, MUSA Software Engineering Pvt. Ltd.Former Director, Infosys Technologies Ltd.
Director
16 Mr. Deepak M SatwalekarFormer Managing Director & CEOHDFC Standard Life Insurance Company Ltd.
Director
17 Mr. Justice B.N.Srikrishna (Retd.)Former Judge, Supreme Court of India
Director
* As on July 8, 2010
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Table 1-2 : Executive Committees *
I CM & WDM SEGMENTS
1 Mr. Ravi Narain Managing Director, National Stock Exchangeof India Ltd.
Chairman
2 Mr. D. C. Anjaria Director, International Financial Solutions
Pvt. Ltd.
Public Representative
3 Mr. D. Balasundaram Chairman, M/s. Coimbatore Capital Limited Trading Member
4 Mr. Vimal Bhandari Country Manager India AEGON InternationalNV.
Public Representative
5 Mr. Atul Goel Partner, M/s. Pace Financial Services Trading Member
6 Mr. Y. H. Malegam Chairman Emeritus, M/s. S.B.Billimoria &Co., Chartered Accountants
Public Representative
7 Mr. Gagan Rai Managing Director & CEO, NationalSecurities Depository Limited
Other Nominees
8 Ms. Chitra Ramkrishna Joint Managing Director, National StockExchange of India Ltd
Other Nominees
9 Mr. Mayank Shah Director, M/s. Anagram Capital Limited Trading Member
10 Mr. Akhilesh Kumar Singh Managing Director & CEO, M/s. ShriramInsight Share Brokers Limited
Trading Member
11 Mr. P. M. Venkatasubramanian Former Managing Director, GIC Other Nominees
II F&O MARKET SEGMENT
1 Mr. Ravi Narain Managing Director, National Stock Exchangeof India Ltd.
Chairman
2 Mr. D.C.Anjaria Director, International Finance SolutionsPvt. Ltd.
Public Representative
3 Prof. V. Ravi Anshuman Professor, Indian Institute of Management,Bangalore
Public Representative
4 Ms. Madhabi Puri Buch Managing Director & CEO, M/s. ICICISecurities Limited
Trading Member
5 Mr. Shailesh Haribhakti Executive Chairman & Managing Partner,BDO Haribhakti
Public Representative
6 Mr. M. Raghavendra Former General Manager, General InsuranceCorporation of India
Other Nominees
7 Mr. A.V. Rajwade Forex Consultant Public Representative
8 Ms. Chitra Ramkrishna Joint Managing Director, National StockExchange of India Ltd
Other Nominees
9 Mr. Rajendra Dolatrai Shah Director, M/s. Nirpan Securities PrivateLimited
Trading Member
III CD SEGMENT
1 Mr. Ravi Narain Managing Director, National Stock Exchangeof India Ltd.
Chairman
2 Mr. M. G.Bhide Former Chairman, Bank of India Public Representative
3 Mr. Conrad Dsouza Senior General Manager, Treasury, HousingDevelopment Finance Corporation Ltd
Public Representative
4 Dr. R. H. Patil Chairman, The Clearing Corporation of IndiaLimited
Public Representative
5 Mr. S. Rajendren General Manager- International Banking &Treasury Union Bank Of India
Trading Member
6 Ms. Chitra Ramkrishna Joint Managing Director, National StockExchange of India Limited
Other Nominees
7 Mr. Suresh Senapaty Chief Financial Officer & Director,WiproLimited
Public Representative
8 Mr. V. Srikanth Managing Director, Head of Markets, CitiSouth Asia, Citibank N.A.
Trading Member
* As on July 8, 2010
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Membership
2
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2MembershipThe trading in NSE has a three tier structure-the trading platform provided by the Exchange, the
broking and intermediary services and the investing community. The trading members have been
provided exclusive rights to trade subject to their continuously fulfilling the obligation under the
Rules, Regulations, Byelaws, Circulars, etc. of the Exchange. The trading members are subject to its
regulatory discipline. Any person can become a trading member by complying with the prescribed
eligibility criteria and exit by surrendering trading membership without any hidden/overt cost.
There are no entry/exit barriers to trading membership.
Eligibility Criteria
The Exchange stresses on factors such as corporate structure, capital adequacy, track record,
education, experience, etc. while granting trading rights to its members. This reflects a conscious
effort by the Exchange to ensure quality broking services which enables to build and sustain
confidence in the Exchanges operations. The standards stipulated by the Exchange for tradingmembership are substantially in excess of the minimum statutory requirements as also in comparison
to those stipulated by other exchanges in India. The exposure and volume of transactions that can
be undertaken by a trading member are linked to liquid assets in the form of cash, bank guarantees,
etc. deposited by the member with the Exchange as part of the membership requirements.
The trading members are admitted to the different segments of the Exchange subject to the
provisions of the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board
of India Act, 1992, the rules, circulars, notifications, guidelines, etc., issued there under and the
byelaws, Rules and Regulations of the Exchange. All trading members are registered with SEBI.
Trading Membership
A prospective trading member is admitted to any of the following combinations of market
segments:
Wholesale Debt Market (WDM) segment,
Capital Market (CM) and the Futures and Options (F&O) segments,
CM Segment and the WDM segment, or
CM Segment, the WDM and the F&O segment.
Currency Derivatives (CD) segment.
CD along with either or all segments listed above.
In order to be admitted as a trading member, the individual trading member/at least two partners
of the applicant firm/at least two directors of the applicant corporate must be HSC and must
possess at least two years experience in securities markets. The applicant for trading membership/
any of its partners/shareholders/directors must not have been declared defaulters on any stock
exchange, must not be debarred by SEBI for being associated with capital market as intermediaries
and must not be engaged in any fund-based activity. In case of corporate applicant, the minimum
paid up capital should be`30 lakh and the dominant promoter/shareholder group should hold at
least 51% of paid-up equity capital of unlisted corporate entity. In case of listed corporate entity,
persons named as promoters in any document for offer of securities to the public or existing
shareholders or in the shareholding pattern disclosed by the corporate trading member under the
provisions of the Listing Agreement, whichever is later, is deemed to be in control.
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Clearing Membership
The trades executed on the Exchange may be cleared and settled by a clearing member. The
trading members in the CM segment are also clearing members. In the F&O segment, some
members, who are registered with SEBI as self-clearing members, clear and settle their own
trades. Certain others, registered as trading member-cum-clearing member, clear and settle their
own trades as well as trades of other trading members. Besides this, there is a special category
of members, called professional clearing members (PCMs), who do not trade but only clear trades
executed by others. This means that some members clear and settle their trades through a trading
member-cum-clearing member or a PCM, not themselves. The members clearing their own trades
or trades of others and the PCMs are required to bring in additional security deposits in respect
of every trading member whose trades they undertake to clear and settle. The requirements of
trading membership and clearing membership in the different market segments are presented in
Table 2-1. With effect from July 1, 2008 a processing fee of`10,000/- and an admission fee of
`5,00,000/- is charged for taking up new membership.
Currency Derivatives Membership
Trading in Currency Derivatives commenced on August 29, 2008 at NSE. The membership of the
currency futures market is separate from the membership of the equity derivative segment or the
cash segment. Membership for both trading and clearing, in the currency futures market is subject
to the guidelines issued by the SEBI. Table 2-1 contains the Eligibility Criteria for Membership in
Currency Derivatives for Corporates, Individuals and Firms. Banks authorized by the Reserve
Bank of India under section 10 of the Foreign Exchange Management Act, 1999 as AD Category - I
bank are permitted to become trading and clearing members of the currency futures market of
the recognized stock exchanges, on their own account and on behalf of their clients, subject to
fulfilling the following minimum prudential requirements as mentioned below :
a) Minimum net worth of`500 crores.
b) Minimum CRAR of 10 per cent.
c) Net NPA should not exceed 3 per cent.
d) Made net profit for last 3 years.
Growth and Distribution of Members
As at end March 2010, the Exchange had 1,136 members. The growth of membership on NSE
is presented in Table 2-2. A total of 41,153 (1,867 corporates, 2,705 partnership firms and
36,581 individuals) sub-brokers were affiliated to 609 trading members of the Exchange onMarch 31, 2010.
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Requirements
forProfessionalClearingMemberhip
(Allvaluesin`
lakh)
Particulars
CM
Segment
F&OSegment
CMandF&OSegment
Eligibility
Tradi
ngMemberofNSE/SEBIRegisteredCu
stodians/RecognisedBanks
NetWorth
300
300
300
InterestFreeS
ecurityDeposit(IFSD)*
25
25
34
CollateralSecu
rityDeposit(CSD)
25
25
50
AnnualSubscri
ption
2.5
Nil
2.5
*TheProfessio
nalClearingMember(PCM)isrequire
dtobringinIFSDof`
2lakhandCSD
of`
8lakhpertradingmember
whosetrades
heundertakestoclearintheF&Ose
gmentandIFSDof`
6lakhandCSDo
f`
17.5
lakh(`9lakhand`
25
lakhrespectivelyforcorporateMembers)pertrad
ingmemberintheCMsegment.
INDIVIDUALS/P
ARTNERSHIPFIRMS
(Amountin`
lakh)
Particulars
CM
CMand
F&O
WDM
CMand
WDM
CM,W
DMan
dF&O
NetWorth
75
75(MembershipinCMsegmentandTradingmembershipin
F&Osegment)
100(MembershipinCMsegmentandTradingandSelf
clearingmembershipintheF&O
segment)
300(MembershipinCMsegmentandTradingandClearing
membershipinF&Osegment)
200
200
200(MembershipinWDMsegment,CM
segmentandTrading/Tradi
ngandSelfClearing
membershipinF&Osegment)
300(MembershipinWDMsegment,CMsegment
andTradingandclearingm
embershiponF&O
segment)
InterestFreeS
ecurityDeposit(IFSD)withNSEIL
2
6.5
51.5
150
176.5
201.5
InterestFreeS
ecurityDeposit(IFSD)withNSCCL
6
6*
NIL
6
6*
CollateralSecu
rityDeposit(CSD)withNSCCL
1
7.5
17.5
**
NIL
17.5
17.5
**
AnnualSubscri
ption
0.5
0.5
1
1.5
1.5
AdvanceMinim
um
TransactionCharegesfor
FuturesSegme
nt
NIL
1
NIL
NIL
1
*AdditionalIFSDof25lakhswithNSCCLisrequired
forTradingandClearing(TM-CM)an
dforTradingandSelfclearingmemb
er(TM/SCM).
**AdditionalCo
llateralSecurityDeposit(CSD)of25
lakhwithNSCCLisrequiredforTrad
ingandClearing(TM-CM)andforTra
dingandSelfclearingmember(TM/S
CM).
Contd...
Contd...
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Table 2-2 : Distribution of Members
Month/Year(end of period)
CM WDM CDS CM/WDM/F&O/CDS
Apr-09 116 5 39 1,074
May-09 116 5 42 1,076
Jun-09 115 5 44 1,078
Jul-09 113 5 21 1,088
Aug-09 110 5 33 1,093
Sep-09 105 5 34 1,103
Oct-09 103 5 38 1,111
Nov-09 104 5 41 1,115
Dec-09 105 5 43 1,118
Jan-10 107 5 46 1,122
Feb-10 108 5 47 1,123
Mar-10 108 5 48 1,136
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Listing of Securities
3
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3Listing of SecuritiesNSE plays an important role in helping Indian companies access equity capital, by providing
a liquid and well-regulated market. As of March 2010, there were 1,470 companies listed on
NSE. The companies listed on the Exchange are from various sectors of the economy such as -- heavy industry, software, refinery, public sector units, infrastructure, and financial services.
Wide range of securities such as stocks, bonds and other securities can be listed in the Capital
Market (Equities) segment and its Wholesale Debt Market segment. Listing means formal admission
of a security to the trading platform of the Exchange. It provides liquidity to investors without
compromising the need of the issuer for capital and ensures effective monitoring of conduct of the
issuer and trading of the securities in the interest of investors. The issuer wishing to have trading
privileges for its securities satisfies listing requirements prescribed in the relevant statutes and
in the listing regulations of the Exchange. It also agrees to pay the listing fees and comply with
listing requirements on a continuous basis. All the issuers who list their securities have to satisfythe corporate governance requirement framed by regulators.
Listing Criteria
The Exchange has laid down criteria for listing of new issues by companies through IPOs, companies
listed on other exchanges etc. in conformity with the Securities Contracts (Regulation) Rules,
1957, SEBI Guidelines and other relevant guidelines/acts. The criteria include minimum paid-up
capital and market capitalisation, company/promoters track record, etc. The listing criteria for
companies in the CM Segment are presented in Table 3-1. The issuers of securities are required
to adhere to provisions of the Securities Contracts (Regulation) Act, 1956, the Companies Act,
1956, the Securities and Exchange Board of India Act, 1992 and the rules, circulars, notifications,
guidelines, etc. prescribed there under.
Listing Agreement
All companies seeking listing of their securities on the Exchange are required to enter into a formal
listing agreement with the Exchange. The agreement specifies all the quantitative and qualitative
requirements to be continuously complied with by the issuer for continued listing. The Exchange
monitors such compliance and companies who do not comply with the provisions of the listingagreement may be suspended from trading on the Exchange. The agreement is being increasingly
used as a means to improve corporate governance.
Compliance by Listed Companies
NSE has institutionalised a process of verifying compliance of various conditions of the listing
agreement. It conducts a periodic review for compliance on account of announcement of book
closure/record date, announcement of quarterly results, submission of shareholding pattern,
annual reports, appointment of compliance officer, corporate governance report, investor
grievances and various disclosures etc.
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Disclosures by Listed Companies
It is essential that all critical price sensitive/material information relating to securities is made
available to the market participants and the investors immediately to enable them to take informed
decisions in respect of their investments in securities. The Exchange therefore ensures certain
important timely disclosures by listed companies and disseminates them to market through theNEAT terminals and through its website. These disclosures include corporate actions, quarterly/
half yearly results, decisions at board meeting, non-promoters holding, announcements / press
releases etc.
De-listing
There are two kinds of delisting which can be done from the Exchanges as per the SEBI (Delisting
of Securities) Guidelines, 2003 in the following manner:
Voluntary De-listing of Companies
Any promoter or acquirer desirous of delisting securities of the company under the provisions
of these guidelines shall obtain the prior approval of shareholders of the company by a special
resolution passed through postal ballot, make a public announcement in the manner provided in
these guidelines, make an application to the delisting exchange for seeking in-principle approval
in the form specified by the exchange, and comply with such other additional conditions as may
be specified by the concerned stock exchanges from where securities are to be de-listed. Any
promoter of a company which desires to de-list from the stock exchange shall also determine an
exit price for delisting of securities in accordance with the book building process as stated in the
guidelines. The stock exchanges shall provide the infrastructure facility for display of the price at
the terminal of the trading members to enable the investors to access the price on the screen to
bring transparency to the delisting process.
Compulsory De-listing of Companies
The stock exchanges may de-list companies which have been suspended for a minimum period
of six months for non-compliance with the listing agreement. The stock exchanges have to give
adequate and wide public notice through newspapers and also give a show cause notice to a
company. The exchange shall provide a time period of 15 days within which representation may bemade to the exchange by any person who may be aggrieved by the proposed delisting.
The Stock Exchanges may, after consideration of the representation received from the aggrieved
persons, delist the securities of such companies. The stock exchange shall ensure that adequate
and wide public notice is given through newspaper and on the notice boards/trading systems of the
stock exchanges and shall ensure disclosure in all such notices of the fair value of such securities.
The stock exchange shall display the name of such company on its website. Where the securities
of the company are de-listed by an exchange, the promoter of the company shall be liable to
compensate the security holders of the company by paying them the fair value of the securities
held by them and acquiring their securities, subject to their option to remain security-holders with
the company.
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The companies delisted during 2009-10 are mentioned in the table below.
Name of the Company Date of Delisting
The Madras Aluminium Company Limited* 19-Jun-09
Lotte India Corporation Limited* 31-Jul-09
Matrix Laboratories Limited* 21-Aug-09
Pearl Global Limited* 21-Aug-09
SI Group - India Limited* 23-Sep-09
PHIL Corporation Limited^ 9-Feb-10
* Delisting of equity shares of the company on account of Voluntary delisting pursuant to SEBI
Delisting Guidelines-2003.
^ Delisting of equity shares of the company on account of Voluntary delisting pursuant to
Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009.
CM Segment
Two categories, namely listed and permitted to trade categories of securities (equity shares,
preference shares and debentures) are available for trading in the CM segment. At the end
of March 2010, 1,470 companies were listed, 37 companies were permitted for trading and
1,359 were available for trading. These securities had a market capitalisation of `6,009,173
crore (US $ 1,331,230 million). The growth of companies listed on the CM segment is presented
in Table 3-1.
Chart 3-1 : Companies Listed at end of March
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Listing Fees
The listing fees charged by the Exchange are presented in the following table:
Listing Fees in the CM Segment
Sr. No. Listing Fees Amount(`)
1 Initial Listing Fees 25,000
2 Annual Listing Fees (based on paid up share, bond and/ or debenture and/or debtcapital, etc.)
a) Upto`1 Crore 10,000
b) Above`1 Crore and upto`5 Crores 15,000
c) Above`5 Crore and upto`10 Crores 25,000
d) Above`10 Crore and upto`20 Crores 45,000
e) Above`20 Crore and upto`30 Crores 70,000
f) Above`30 Crore and upto`40 Crores 75,000
g) Above`40 Crore and upto`50 Crores 80,000h) Above`50 Crores and upto`100 Crores 1,30,000
i) Above`100 Crore and upto`150 Crores 1,50,000
j) Above`150 Crore and upto`200 Crores 1,80,000
k) Above`200 Crore and upto`250 Crores 2,05,000
l) Above`250 Crore and upto`300 Crores 2,30,000
m) Above`300 Crore and upto`350 Crores 2,55,000
n) Above`350 Crore and upto`400 Crores 2,80,000
o) Above`400 Crore and upto`450 Crores 3,25,000
p) Above`450 Crore and upto`500 Crores 3,75,000
Companies which have a paid up share, bond and/ or debenture and/or debt capital, etc. of more
than`500 crores will have to pay minimum fees of`3,75,000 and an additional listing fees of
`2,500 for every increase of`5 crores or part thereof in the paid up share, bond and/ or debenture
and/or debt capital, etc.
Companies which have a paid up share, bond and/ or debenture and/or debt capital, etc. of more
than`1,000 crores will have to pay minimum fees of`6,30,000 and an additional listing fees of
`2,750 for every increase of`5 crores or part thereof in the paid up share, bond and/ or debenture
and/or debt capital, etc.
Shareholding Pattern
In the interest of transparency, the issuers are required to disclose shareholding pattern on a
quarterly basis. Table 3-3 a presents the sector-wise shareholding pattern at end-March 2010 of
companies listed on NSE. On an average, the promoters hold more than 57.83% of total shares.
Though the public shareholding is nearly 39.86%, Indian public held only 12.03% and the institutional
holdings by (Financial Institutions, Banks, Central and State governments, Insurance companies,
FIIs , MFs, VCFs and FVCFs) accounted for 18.37 %. Table 3-3 b shows that around 9.13% of the
total shares held by promoters are pledged.
WDM SegmentIn the WDM segment, all government securities, state development loans and treasury bills are
deemed listed as and when they are issued. Other than those mentioned above, all eligible debt
securities whether publicly issued or privately placed can be made available for trading in the
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WDM segment. Amongst other requirements, privately placed debt paper of banks, institutions
and corporates require an investment grade credit rating to be eligible for listing. The listing
requirements for securities on the WDM segment are presented in Table 3-4.
The growth of securities available for trading on the WDM segment is presented in Table 3-5. As at
end March 2010, 4,140 securities with issued capital of`3,150,880crore (US $ 698,024 million)
and a market capitalisation of`3,165,929 crore (US $ 701,358 million) were available for trading
on the WDM segment.
Funds Mobilisation on the Exchange
During the year 2009-10, the resources raised through Public Issues, Rights Issues, QIP and
Preferential Allotments is summarized in the table below and Chart 3-2.
Particulars No. ofIssues
Amount
(`
cr) (US $ mn)Equity Public Issues 36 45,624 10,107
IPOs 33 23,684 5,247
FPOs 3 21,941 4,861
Rights Issues 16 4,893 1,084
QIP 64 42,484 9,412
Preferential Allotment 134 15,530 3,440
Non-Convertible Debentures 3 2,500 554
Initial Public Offer 1 1,000 443
Further Issue 2 1,500 111
Total 253 111,032 24,597
Chart 3-2 : No. of issues through various instruments during 2009-10
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Public Issues
Initial Public Offerings (IPOs)
Equity Shares
During the year 2009-10, 33 companies were listed through IPO mobilizing an amount of`23,684
crore (US $ 5,247 million). NHPC Limited was the largest IPO raising`6,038.55 crore (US $ 1,337.74
million) followed by Adani Power Limited raising`3,016.52 crore (US $ 668.26 million). The details
of IPOs listed on NSE during 2009-10 is presented in Table 3-6.
Non Convertible Debentures (NCDs)
During 2009-10, there were three NCD issues. L&T Finance came out with its initial public offer in
form of non-convertible debentures in September 2010. In March 2010, Shriram Transport Finance
Co. ltd. and L&T Finance came out with further issue in the form of non-convertible debentures.
Details about the resource mobilisation through NCDs is given in the table below:
S.No. Name of Company Date Amount Mobilised(`crs)
1 Shriram Transport Finance Co. Ltd.** 4-Sep-09 1000
2 L&T Finance Limited* 24-Sep-09 1000
3 L&T Finance Limited** 16-Mar-10 500
* The NCD issue is Initial Public Offer.
** The NCD issue is a further public offer.
Rights Issue
There were 16 Rights issues during 2009-10, out of which Religare Enterprises Ltd. was the largest
in terms of issue size of`1,814.31 crore (US $ 401.93 million). The details of Rights Issues listed
on NSE during 2009-10 is presented in Table 3-7.
Preferential Allotment / Private Placement
During 2009-10, there were 134 preferential allotments that raised ` 15,530.30 crore
(US $ 3,440.47 million). The details of Preferential Allotment listed on NSE during 2009-10 are
presented in Table 3-8.
QIPs
The amount raised through 64 QIPs during 2009-10, was`42,484.45 crore (US $ 9411.71 million).
The details of QIPs are presented in Table 3-9.
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Table 3-1 : Listing Criteria for Companies on the CM Segment of NSE
Criteria Initial Public Offerings (IPOs) Companies listed on other exchanges
Paid-up
Equity Capital
(PUEC)/MarketCapitalisation (MC)
/Net Worth
PUEC `10 cr. and MC `25 cr. PUEC `10 cr. and MC `25 cr. OR
PUEC `25 cr. OR
MC `50 cr. ORThe company shall have a net worth of not
less than`50 crores in each of the preceding
financial years.
Company/
Promoters Track
Record
Atleast 3 years track record of either
a) the applicant seeking listing OR
b) the promoters/promoting
company incorporated in or
outside India OR
c) Partnership firm and subsequently
converted into Company not
in existence as a Company for
three years) and approaches
the Exchange for listing. The
Company subsequently formed
would be considered for listing
only on fulfillment of conditions
stipulated by SEBI in this regard.
Atleast three years track record of either
a) the applicant seeking listing; OR
b) the promoters/promoting company,
incorporated in or outside India.
Dividend Record
/ Net worth /
Distributable
Profits
-- Dividend paid in at least 2 out of the last 3
financial years immediately preceding the
year in which the application has been made
OR The networth of the applicants atleast`50 crores OR The applicant has
distributable profits in at least two out of
the last three financial years.
Listing Listed on any other stock exchange for
at least last three years OR listed on
the exchange having nationwide trading
terminals for at least one year.
Other
Requirements
(a) No disciplinary action by other
stock exchanges/regulatory
authority in past 3 yrs.
(b) Satisfactory redressal mechanism
for investor grievances,
(c) distribution of shareholding
(d) details of llitigation record in past
3 years.
(e) Track record of Directors of the
Company
(a) No disciplinary action by other stock
exchanges/regulatory authority in past 3
yrs.
(b) Satisfactory redressal mechanism for
investor grievances,
(c) distribution of shareholding and
(d) details of llitigation record in past
3 years.
(e) Track record of Directors of the Company
(f) Change in control of a Company/
Utilisation of funds raised from public
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Note:
1. (a) In case of IPOs, Paid up Equity Capital means post issue paid up equity capital.
(b) In case of Existing companies listed on other exchanges, the existing paid up equity capital as well
as the paid up equity capital after the proposed issue for which listing is sought shall be taken into
account.
2. (a) In case of IPOs, market capitalisation is the product of the issue price and the post-issue number of
equity shares.
(b) In case of existing companies listed on other stock exchanges the market capitalisation shall be
calculated by using a 12 month moving average of the market capitalisation over a period of six months
immediately preceding the date of application. For the purpose of calculating the market capitalisation
over a 12 month period, the average of the weekly high and low of the closing prices of the shares as
quoted on the National Stock Exchange during the last twelve months and if the shares are not traded
on the National Stock Exchange such average price on any of the recognised Stock Exchanges where
those shares are frequently traded shall be taken into account while determining market capitalisation
after making necessary adjustments for Corporate Action such as Rights / Bonus Issue/Split.
3. In case of Existing companies listed on other stock exchanges, the requirement of`25 crores market
capital shall not be applicable to listing of securities issued by Government Companies, Public Sector
Undertakings, Financial Institutions, Nationalised Banks, Statutory Corporations and Banking Companies
who are otherwise bound to adhere to all the relevant statutes, guidelines, circulars, clarifications etc.
that may be issued by various regulatory authorities from time to time
4. Net worth means paid-up equity capital + reserves excluding revaluation reserve - miscellaneous expenses
not written off - negative balance in profit and loss account to the extent not set off.
5. Promoters mean one or more persons with minimum 3 years of experience of each of them in the same
line of business and shall be holding at least 20 % of the post issue equity share capital individually or
severally.
6. In case a company approaches the Exchange for listing within six months of an IPO, the securities may
be considered as eligible for listing if they were otherwise eligible for listing at the time of the IPO. If
the company approaches the Exchange for listing after six months of an IPO, the norms for existing listed
companies may be applied and market capitalisation be computed based on the period from the IPO to the
time of listing.
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Table 3-2 : Companies Listed, Permitted to Trade, Available for Trading
on the CM Segment
Month/Year(end of period)
No. ofCompanies
Listed*
No. ofCompanies
Permitted toTrade*
No. ofCompanies
Available forTrading *@
Market Capitalisation *
(`crore) (US $ mn)
Nov-94 0 300 300 292,637 93,108
Mar-95 135 543 678 363,350 115,606
Mar-96 422 847 1,269 401,459 116,873
Mar-97 550 934 1,484 419,367 116,880
Mar-98 612 745 1,357 481,503 121,807
Mar-99 648 609 1,254 491,175 115,761
Mar-00 720 479 1,152 1,020,426 240,496
Mar-01 785 320 1,029 657,847 141,048
Mar-02 793 197 890 636,861 130,504
Mar-03 818 107 788 537,133 113,081Mar-04 909 18 787 1,120,976 258,349
Mar-05 970 1 839 1,585,585 362,419
Mar-06 1,069 --- 929 2,813,201 630,621
Mar-07 1,228 --- 1,084 3,367,350 772,505
Mar-08 1,381 --- 1,236 4,858,122 1,215,442
Apr-08 1,390 --- 1,244 5,442,780 1,068,259
May-08 1,398 --- 1,252 5,098,873 1,000,760
Jun-08 1,407 --- 1,262 4,103,651 805,427
Jul-08 1,417 --- 1,272 4,432,427 869,956
Aug-08 1,422 --- 1,278 4,472,461 877,814
Sep-08 1,424 --- 1,278 3,900,185 765,493
Oct-08 1,431 --- 1,282 2,820,388 553,560
Nov-08 1,430 --- 1,286 2,653,281 520,762
Dec-08 1,428 --- 1,283 2,916,768 572,477
Jan-09 1,427 --- 1,286 2,798,707 549,305
Feb-09 1,425 --- 1,284 2,675,622 525,147
Mar-09 1,432 --- 1,291 2,896,194 568,439
Apr-09 1,420 -- 1,279 3,375,025 747,679
May-09 1,425 -- 1,280 4,564,572 1,011,203
Jun-09 1,426 -- 1,282 4,432,596 981,966
Jul-09 1,430 -- 1,287 4,816,459 1,067,005
Aug-09 1,431 -- 1,288 4,975,800 1,102,304
Sep-09 1,434 -- 1,287 5,353,880 1,186,061
Oct-09 1,439 -- 1,291 5,024,830 1,113,166
Nov-09 1,443 10 1,292 5,430,088 1,202,944
Dec-09 1,453 10 1,303 5,699,637 1,262,658
Jan-10 1,457 31 1,338 5,782,965 1,281,118
Feb-10 1,461 31 1,342 5,755,305 1,274,990
Mar-10 1470 37 1359 6,009,173 1,331,230