India’s National Stock Exchange

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CHAPTER-2

INDUSTRY AND COMPANY PROFILE

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2.1 INDUSTRY PROFILE

Indian financial market consists of two markets i.e., money market and capital market. Money market is mainly to meet the short-term needs and capital market for long term needs.

2.1.1 CAPTAL MARKET AND ITS STRUCTURE

Capital market is a financial market, which provides and facilitates an orderly exchange of long term needs. The capital market in India is classified into

1. Primary market

2. Secondary market

The primary market deals with the issue of new long term securities. Where as the secondary market deals with buying and selling of old or existing securities, which are already listed in the official trading list of recognized stock exchange.

Players of ‘New Issue Market’ are, among them the most important players are:

  • Merchant bankers.
  • Registrars.
  • Collecting and coordinating bankers.
  • Underwriters and broker.

2.1.2 ABOUT NSE

The National Stock Exchange is India’s leading stock exchange. National Stock Exchange was set up by the leading institutions to provide a fully automated screen-based trading system. The Stock Exchange has brought transparency, efficiency, safety and market integrity. The set up facilitates as a model to serve securities industry in terms of systems, practices and procedures. NSE has played a catalytic role in reforming Indian securities market in terms of microstructure, market practices and trading volumes. Today the market uses information technology to provide transparent and efficient trading, clearing and settlement mechanism, and has several innovations in products & services such as screen based trading, compression of settlement cycles, dematerialization and electronic transfer of securities, securities lending and borrowing, professionalization of trading members, market of debt and derivative instruments. The NSE of India Limited has created a report on the Establishment of New Stock Exchanges, which recommended a promotion of National Stock Exchange (NSE) by financial institutions to provide access to investors all over the country. NSE was promoted by the leading Financial Institutions (FIs) at the directive of the GOI & was incorporated in the year 1992 as tax-paying company in the country. Its recognition as a stock exchange (SE) under the Securities Contracts (Regulation) Act, 1956 in the year 1993, NSE started its operations in Wholesale Debt Market segment in the year 1994. The Capital Market segment started operations in the year 1994 and Derivatives segment started operations in the year 2000.

2.1.3 MISSION OF NSE

NSE’s mission is setting the agenda for the change in the securities markets in India.

  1. OBJECTIVES OF NSE

The main objectives of NSE are:

  1. Establishment of a nation wide trading facilities for equities and debt instruments.

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