INTRODUCTION

A stock exchange is an important part of a country's economy. It facilitates the exchange of securities between investors and helps companies and governments raise capital. The National Stock Exchange of India, called the NSE, is a nationwide stock exchange headquartered in Mumbai, India. It provides electronic securities trading for investors across India with a network of more than 1,500 locations. The exchange has played a role in modernizing Indian capital markets The National Stock Exchange (NSE), located in Bombay, is India's first debt market. It was set up in 1993 to encouragestock exchange reform through system modernization and competition. It opened for trading in mid-1994. It was recently accorded recognition as a stock exchange by the Department of Company Affairs. The instruments traded are, treasury bills, government security and bonds issued by public sector companies.

History
NSE was incorporated in November 1992 and achieved some early milestones. Its Wholesale Debt Market segment, which began in June 1994, was the country's first formal screen-based debt trading facility. Its equities segment became the largest exchange by volume in India within one year of its November 1994 commencement. NSE grew its trading volume and launched more products in the years following its incorporation, including options in 2001 and Exchange-Traded Funds, known as ETFs, in 2002.

Operating Subsidiaries
NSE uses several subsidiaries to conduct business. The National Securities Clearing Corporation Ltd. -- NSCCL -provides clearing and settlement of securities. The National Securities Depository Limited -- NSDL -- limits forgery and fraud by eliminating the need for paper documents in trades. NSE.IT Limited provides Information Technology products and services to financial firms. DotEx International Ltd. is NSE's streaming data company. NSE also operates through several joint ventures and affiliate companies

Securities Offered
The exchange offers investors a range of products in its segments. Its Capital Market segment offers equity shares of companies and its Wholesale Debt Market segment offers debt securities, such as government and corporate bonds. As of March 2010, more than 1,400 companies were listed in its Capital Markets segment, and 4,140 debt securities were available for trading in its debt segment. Some of its other offerings include mutual funds, index and stock futures and options and currency futures.

NSE's Effect on Capital Markets

NSE has been a major influence in the evolution of India's capital markets. It was set up with the objectives of establishing a nationwide trading facility to give investors equal access to fair and efficient securities trading. Since its inception, it has helped improve India's markets by providing transparency, infrastructure, technology and better market practices.

The Organisation
The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges. It recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. The National Stock Exchange (NSE) operates a nation-wide, electronic market, offering trading in Capital Market, Derivatives Market and Currency Derivatives segments including equities, equities based derivatives, Currency futures and options, equity based ETFs, Gold ETF and Retail Government Securities. Today NSE network stretches to more than 1,500 locations in the country and supports more than 2, 30,000 terminals. With more than 10 asset classes in offering, NSE has taken many initiatives to strengthen the securities industry and provides several new products like Mini Nifty, Long Dated Options and Mutual Fund Service System. Responding to market needs, NSE has introduced services like DMA, FIX capabilities, co-location facility and mobile trading to cater to the evolving need of the market and various categories of market participants. NSE has made its global presence felt with cross-listing arrangements, including license agreements covering benchmark indexes for U.S. and Indian equities with CME Group and has also signed a Memorandum of Understanding (MOU) with Singapore Exchange (SGX) to cooperate in the development of a market for India-linked products and services to be listed on SGX. 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 is committed to operate a market ecosystem which is transparent and at the same time offers high levels of safety, integrity and corporate governance, providing ever growing trading & investment opportunities for investors.

NSE Group:
1. India Index Services & Products Ltd. (IISL) 2. National Securities Clearing Corporation Ltd. (NSCCL) 3. NSE.IT Ltd. 4. National Securities Depository Ltd. (NSDL) 5. DotEx International Limited

NSCCL

NCCL

NSETECH

IISL

DotEx

NSE.iT Intl.LTD

National Securities Clearing Corporation Ltd. (NSCCL)

The National Securities Clearing Corporation Ltd. (NSCCL), a wholly owned subsidiary of NSE, was incorporated in August 1995. 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 counterparty risk guarantee, and to operate a tight risk containment system. NSCCL commenced clearing operations in April 1996. NSCCL carries out the clearing and settlement of the trades executed in the Equities and Derivatives segments and operates Subsidiary General Ledger (SGL) for settlement of trades in government securities. It assumes the counter-party risk of each member and guarantees financial settlement. It also undertakes settlement of transactions on other stock exchanges like, the Over the Counter Exchange of India. NSCCL has successfully brought about an up-gradation of the clearing and settlement procedures and has brought Indian financial markets in line with international markets.

National Commodity Clearing Limited

In order to harness its expertise in the area of Clearing and Settlement activities and in keeping pace with the growing commodity markets in India and to provide a special thrust and focus on the Clearing & Settlement needs of the commodity markets, a subsidiary company, namely, National Commodity Clearing Limited (NCCL) has been incorporated jointly between NSE and NCDEX. Presently, the Company provides IT and process support in respect of clearing & settlement needs of NCDEX.

NSE Infotech Services Limited

Information Technology has been the backbone of conceptualization, formation, running and the success of National Stock Exchange of India Limited (NSE). NSE has been at the forefront in spearheading technological 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, namely, NSE Infotech Services Limited (NSETECH) has been incorporated to cater to the needs of NSE and all its group companies, exclusively.

India Index Services & Products Ltd. (IISL)

India Index Services and Products Limited (IISL), a joint venture between NSE andCRISIL Ltd. (formerly the Credit Rating Information Services of India Limited), was set up in May 1998 to provide a variety of indices and index related services and products for the Indian capital markets. It has a licensing and marketing agreement with Standard and Poor's (S&P), the world's leading provider of investible equity indices, for co-branding equity indices. IISL provides a broad range of services, products and professional index services. It maintains over 80 equity indices comprising broad-based benchmark indices, sectoral indices and customised indices. Many investment and risk management products based on IISL indices have been developed in the recent past, within India and abroad. These include index based derivatives traded on NSE,Singapore Exchange(SGX) and Chicago Mercantile Exchange (CME) and a number of index funds and exchange traded funds.

DotEx International Limited

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 this purpose. DotEx data products may be classified under the following broad categories:

On-line streaming data feed (Level 1 and Level 2 data) Intra-day Snapshot data feed

End of day data

Historical data

NSE.IT Ltd.
NSE.IT, a 100% subsidiary of National Stock Exchange of India Limited (NSE), is the information technology arm of the largest stock exchange of the country. A leading edge technology user, NSE houses state-of-the-art infrastructure and skills. NSE.IT possesses the wealth of expertise acquired in the last six years by running the trading and clearing infrastructure of largest stock exchange of the

country. NSE.IT is uniquely positioned to provide products, services and solutions for the securities industry. There has been a long felt need for top-of-the-line products, services and solutions in the area of trading, broker front-end and back-office, clearing and settlement, web-based trading, risk management, treasury management, asset liability management, banking, insurance etc. NSE.IT's expertise in these areas is the primary focus. The company also plans to provide consultancy and implementation services in the areas of Data Warehousing, Business Continuity Plans, Stratus Mainframe Facility Management, Site Maintenance and Backups, Real Time Market Analysis & Financial News over NSE-Net, etc. NSE.IT is an Export Oriented Unit with STP and plans to go global for various IT services in due course. In the near future the company plans to release new products for Broker Back-office Operations and enhance NeatXS / Neat iXS to support Straight Through Processing on the ne

NSE Milestones
November 1992 April 1993 May 1993 June 1994 November 1994 March 1995 April 1995 June 1995 July 1995 October 1995 April 1996 April 1996 June 1996 November 1996 November 1996 December 1996 December 1996 December 1996 February 1997 November 1997 May 1998 May 1998 July 1998 August 1998 February 1999 April 1999 Incorporation Recognition as a stock exchange Formulation of business plan Wholesale Debt Market segment goes live Capital Market (Equities) segment goes live Establishment of Investor Grievance Cell Establishment of NSCCL, the first Clearing Corporation Introduction of centralised insurance cover for all trading members Establishment of Investor Protection Fund Became largest stock exchange in the country Commencement of clearing and settlement by NSCCL Launch of S&P CNX Nifty Establishment of Settlement Guarantee Fund Setting up of National Securities Depository Limited, first depository in India, co-promoted by NSE Best IT Usage award by Computer Society of India Commencement of trading/settlement in dematerialised securities Dataquest award for Top IT User Launch of CNX Nifty Junior Regional clearing facility goes live Best IT Usage award by Computer Society of India Promotion of joint venture, India Index Services & Products Limited (IISL) Launch of NSE's Web-site: www.nse.co.in Launch of NSE's Certification Programme in Financial Market CYBER CORPORATE OF THE YEAR 1998 award Launch of Automated Lending and Borrowing Mechanism CHIP Web Award by CHIP magazine

October 1999 January 2000 February 2000 June 2000 September 2000 November 2000 December 2000 June 2001 July 2001 November 2001 December 2001 January 2002 May 2002 October 2002 January 2003 June 2003 August 2003 June 2004 August 2004 March 2005 June 2005 December 2006 January 2007 March 2007 June 2007 October 2007 January 2008 March 2008 April 2008 April 2008 August 2008 August 2009 November 2009 December 2009 February 2010 March 2010 April 2010 July 19, 2010 July 19, 2010

Setting up of NSE.IT Launch of NSE Research Initiative Commencement of Internet Trading Commencement of Derivatives Trading (Index Futures) Launch of 'Zero Coupon Yield Curve' Launch of Broker Plaza by Dotex International, a joint venture between NSE.IT Ltd. and i-flex Solutions Ltd. Commencement of WAP trading Commencement of trading in Index Options Commencement of trading in Options on Individual Securities Commencement of trading in Futures on Individual Securities Launch of NSE VaR for Government Securities Launch of Exchange Traded Funds (ETFs) NSE wins the Wharton-Infosys Business Transformation Award in the Organization-wide Transformation category Launch of NSE Government Securities Index Commencement of trading in Retail Debt Market Launch of Interest Rate Futures Launch of Futures & options in CNXIT Index Launch of STP Interoperability Launch of NSEs electronic interface for listed companies India Innovation Award by EMPI Business School, New Delhi Launch of Futures & options in BANK Nifty Index 'Derivative Exchange of the Year', by Asia Risk magazine Launch of NSE CNBC TV 18 media centre NSE, CRISIL announce launch of IndiaBondWatch.com NSE launches derivatives on Nifty Junior & CNX 100 NSE launches derivatives on Nifty Midcap 50 Introduction of Mini Nifty derivative contracts on 1st January 2008 Introduction of long term option contracts on S&P CNX Nifty Index Launch of India VIX Launch of Securities Lending & Borrowing Scheme Launch of Currency Derivatives Launch of Interest Rate Futures Launch of Mutual Fund Service System Commencement of settlement of corporate bonds Launch of Currency Futures on additional currency pairs NSE- CME Group & NSE - SGX product cross listing agreement Financial Derivative Exchange of the Year Award' by Asian Banker Commencement of trading of S&P CNX Nifty Futures on CME Real Time dissemination of India VIX.

July 28, 2010 October 12, 2010 October 28, 2010 October 29, 2010

LOI signed with London Stock Exchange Group Introduction of Call auction in Pre-open session Introduction of European Style Stock Options Introduction of Currency Options on USD INR

Technology
Across the globe, developments in information, communication and network technologies have created paradigm shifts in the securities market operations. Technology has enabled organisations to build new sources of competitive advantage, bring about innovations in products and services, and to provide for new business opportunities. Stock exchanges all over the world have realised the potential of IT and have moved over to electronic trading systems, which are cheaper, have wider reach and provide a better mechanism for trade and post trade execution. NSE believes that technology will continue to provide the necessary impetus for the organisation 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 sustained investment in technology to remain ahead of competition. NSE's IT setup is the largest by any company in India. It uses satellite communication technology to energise participation from around 200 cities spread all over the country. In the recent past, capacity enhancement measures were taken up in regard to the trading systems so as to effectively meet the requirements of increased users and associated trading loads. With upgradation of trading hardware, NSE today can handle up to 15 million trades per day in Capital Market segment. In order to capitalise on in-house expertise in technology, NSE set up a separate company, NSE Infotech Services Ltd. which provides a platform for taking up all IT related assignments of NSE.

The Exchange uses powerful UNIX servers, procured from HP for the back office processing. The latest software platforms like ORACLE RDBMS, SQL/ORACLE FORMS Front - Ends, etc. have been used for the Exchange applications. The Exchange currently manages its data centre operations, system and database administration, design and development of in-house systems and design and implementation of telecommunication solutions. There are over 500 server class computer systems which include non-stop fault-tolerant Stratus servers and high end UNIX servers, operational under one roof to support the NSE applications. This coupled with the nationwide VSAT network makes NSE the country's largest Information Technology user. In an ongoing effort to improve NSE's infrastructure, a corporate network has been implemented, connecting all the offices at Mumbai, Delhi, Calcutta and Chennai. This corporate network enables speedy inter-office communications and data and voice connectivity between offices.

NSE has its online presence at www.nseindia.com. The website displays its live stock quotes which are updated online and corporate announcements. The website has been designed to cater to the needs of Investors, Members, Issuers and other market participants. NSE today allows members to provide internet trading facility to their clients through the use of NOW (NSE on web), a shared web infrastructure.

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

Equity Futures and Options Retail Debt Market Wholesale Debt Market Currency futures MUTUAL FUND STOCKS LENDING & BORROWING

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.

Hours
NSE's normal trading sessions are conducted from 9:15 am India Time to 3:30 pm India Time on all days of the week except Saturdays, Sundays and Official Holidays declared by the Exchange (or by the Government of India) in advance.[11] The exchange, in association with BSE (Bombay Stock Exchange Ltd.), is thinking of revising its timings from 9.00 am India Time to 5.00 pm India Time. There were System Testing going on and opinions, suggestions or feedback on the New Proposed Timings are being invited from the brokers across India. And finally on 18 November 2009 regulator decided to drop their ambitious goal of longest Asia Trading Hours due to strong opposition from its members. On 16 December 2009, NSE announced that it would advance the market opening to 9:00 am from 18 December 2009. So NSE trading hours will be from 9:00 am till 3:30 pm India Time. However, on 17 December 2009, after strong protests from brokers, the Exchange decided to postpone the change in trading hours till 4 Jan 2010. NSE new market timing from 4 Jan 2010 is 9:00 am till 3:30 pm India Time.

Exchange Traded Funds on NSE

NSE has a number of exchange . These are typically index funds and GOLD etfs. Some of the popular etf's on NSE are.

NIFTYBEES - ETF based on NIFTY index Nifty BEES Live quote GoldBees - ETF based on Gold prices. Tracks the price of Gold. Each unit is equalent to 1 gm of gold and bears the price of 1gm of gold.

BankBees - ETF that tracks the CNX Bank Index.