seminar on national stock exchange

Index

Title Page No.

1.Introduction To E-Commerce 2

2.Tntroduction To National Stock Exchange 4

3.History of National Stock Exchange 7

4.Current Scenario 10

5.Working Of National Stock Exchange 16

5.1 Applications of E-Commerce in NSE 17

5.2 Organizational Structure 21

5.3 Appendix 22

5.4 Applications of National Stock Exchange 26

6. Problems of National Stock Exchange 30

7. Achievements 32

8. SWOT Analysis 35

8.1 Strengths 35

8.2 Weaknesses 36

8.3 Opportunities 36

8.4 Threats 36

9. Conclusion 38

10. References and Bibliography 40

S.B.E.S College of Science of 43

E-commerce:


1. Introduction:

Electronic commerce, commonly known as (electronic marketing) e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. The use of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.

A large percentage of electronic commerce is conducted entirely electronically for virtual items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers have electronic commerce presence on the World Wide Web

Electronic commerce that is conducted between businesses is referred to as business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre-qualified participants (private electronic market). Electronic commerce that is conducted between businesses and consumers, on the other hand, is referred to as business-to-consumer or B2C. This is the type of electronic commerce conducted by companies such as Amazon.com.

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of the business transactions


National Stock Exchange

(NSE )


2. Introduction:

The National Stock Exchange of India Limited ( NSE ) is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization of around Rs 47, 01,923 crore (7 August 2009) and is expected to become the biggest stock exchange in India in terms of market capitalization by 2009 end. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the Nifty, an index of fifty major stocks weighted by market capitalization.

NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. There are at least 2 foreign investors NYSE Euro next and Goldman Sachs who have taken a stake in the NSE.As of 2006, the NSE terminals, 2799 in total, cover more than 1500 cities across India. In October 2007, the equity market capitalization of the companies listed on the NSE was 1.46 trillion, making it the second largest stock exchange in South Asia. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities. It is the second


fastest growing stock exchange in the world with a recorded growth of 16.6%


The NSE is owned by a set of leading Indian and International financial institutions, banks, insurance companies, private equity funds, mutual funds, venture capital funds etc. 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 from promoter 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-today affairs of the Exchange. The day-to-day management of the Exchange is delegated to the Managing Director and CEO 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.


History


3. History of National Stock Exchange:

The stock market has a long history. According to French historian Fernand Braudel, in 11th century Cairo, Islamic and Jewish traders had already established every form of trade association.

They were knowledgeable about credit and payment methods. Braudel's suggestions negate the opinion that the Italians contrived these methods later. In 12th Century France, the courratiers de change dealt with managing and regulating the debts of agricultural communities on behalf of the banks. They can be referred to as the first brokers, because they only dealt with debts. The people of Flanders and the neighboring counties also implemented this idea, and Beurzen was soon introduced in Ghent and Amsterdam. In late 13th Century, commodity traders in Bruges gathered inside the house of a man named Van Der Beurse. In 1309, they were named the "Brugse Beurse," and institutionalized their unofficial meetings. The Bankers of Venice started trading in government securities in the middle of the 13th century. In 1351, the Government of Venice prohibited the spread of rumors done with the intention of decreasing government fund prices. During the 14th century, the Bankers of Pisa, Verona, Genoa, and Florence also started trading in government securities. This was possible because these independent city-states were governed by a group of influential citizens, and not by a duke.

Later, joint stock companies were started in the Netherlands. This provided shareholders the opportunities to invest in business ventures and get a contribution of their profits or losses. In 1602, the Dutch East India Company issued their first shares through the Amsterdam Stock Exchange, and it was the first company to issue stocks and bonds. A stock exchange in London started trading stocks in 1688. The Amsterdam Stock Exchange (or Amsterdam Beurs) was the first stock exchange to introduce continuous trading in the earlier part of the 17th Century. According to Murray Sayle, the Dutch were the originators of short selling, option trading, debt-equity swaps, merchant banking, unit trusts, and other speculative instruments. Stock markets are currently present in every developed and most developing country, but the biggest stock markets are present in the United States, Canada, China (Hong Kong), India, UK, Germany, France, and Japan. The NSE deals in online examination and awards certification. Branches of the NSE are located all over India.


The NSE is India's first national, anonymous, electronic limit order book (LOB) exchange which deals with securities. The NSE introduced the first Indian clearing corporation, "National Securities Clearing Corporation Ltd.", the first depository of India, National Securities Depository Limited. History and Origin of The National Stock Exchange of India In November 1992, the NSE was integrated as a tax-paying company and at the command of the Government of India, top financial institutions were promoted it. In April 1993, under the Securities Contracts (Regulation) Act, 1956, the NSE was known as a stock exchange. In June 1994, the NSE started operations in the Wholesale Debt Market (WDM) segment and in November 1994, the Capital Market (Equities) segment of the NSE started operations. In 1996, the NSE was the first exchange in India that planned to trade derivatives specifically on an equity index. In February 2000, the NSE started an Internet trading system.


Current Scenario


4. Current Scenario:

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

Equity Futures and Options Retail Debt Market Wholesale Debt Market 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.

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

1. NIFTYBEES - ETF based on NIFTY index Nifty BEES Live quote

2. Gold Bees - ETF based on Gold prices. Tracks the price of Gold. Each unit is equality to 1 gm of gold and bears the price of 1gm of gold. 3. BankBees - ETF that tracks the CNX Bank Index.

Since 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 Rs. 17 crore in 1994-95 when NSE started its Cash Market segment to Rs.11, 325 crore in 2008-09. Similarly, market capitalization of listed Indian firms went up from Rs.363, 350 crore at the end of March 1995 to Rs.2, 896,194 crore at end March 2009. Indian equity markets are today among the most deep and vibrant markets in the world. This transformation was the result of a number of initiatives led by the Government, market regulators and infrastructure providers like exchanges and depositories. NSE’s efforts in this area have included the creation of the first clearing corporation in the country in the form of the National Securities Clearing Corporation Limited (NSCCL). NSCCL today provides central counterparty services and manages settlement risk for multiple


products, and is a major factor in the confidence market participants have in the ability of Indian markets to handle extreme shocks without causing any defaults.NSCCL is also the first clearing corporation in the country to receive. NSE has many other firsts to its name, including the first systematic process of member inspections, a sophisticated market surveillance system, and a country wide high capacity data network supporting close to 200,000 dealer terminals. The year 2008-09 was an eventful year for NSE, as it saw the launch of new and important products for the securities market. Introduction of Mini Nifty Futures and Options contracts on S&P CNX Nifty during the year has given retail investors an increased ability to participate in index futures and options trading. NSE also started publishing the first volatility index in the country India VIX*.

Current Trade Scenario:

MARKET CLOSED Dec 17, 2009 16:00:31 hours IST

INDEX CURRENT PREV. %CHANGE

S&P CNX NIFTY 5041.75 5042.05 -0.01%

CNX NIFTY JUNIOR 10139.15 10063.50 0.75%

CNX IT 5692.05 5637.00 0.98%

BANK NIFTY 8697.20 8667.40 0.34%

CNX 100 4967.05 4961.45 0.11%

S&P CNX DEFTY 3729.95 3745.00 -0.40%

S&P CNX 500 4189.45 4177.30 0.29%

CNX MIDCAP 7238.60 7176.90 0.86%

NIFTY MIDCAP 50 2583.20 2560.90 0.87%

Market participants now have an important tool to assess volatility and create trading strategies to exploit volatility movements. In May 2008, NSE developed a new trading application, NOW, or ‘NEAT on Web’. The NOW platform allows trading members to connect to the exchange through the internet, and has resulted in a significant reduction in both the access cost and turnaround time for


http://www.nseindia.com/content/indices/ind_niftymidcap50.htm

http://www.nseindia.com/content/indices/ind_cnxmidcap.htm

http://www.nseindia.com/content/indices/ind_cnx500.htm

http://www.nseindia.com/content/indices/ind_defty.htm

http://www.nseindia.com/content/indices/ind_cnx100.htm

http://www.nseindia.com/content/indices/ind_cnxbank.htm

http://www.nseindia.com/content/indices/ind_cnxit.htm

http://www.nseindia.com/content/indices/ind_jrnifty.htm

http://www.nseindia.com/content/indices/ind_nifty.htm

http://www.nseindia.com/homepage.htm#indices%23indices

providing access. This year also saw a watershed in the Indian currency market in the form of a currency futures contract. NSE was the first stock exchange in the country to launch the contract on August 29, 2008 in USDINR pair. The contract was an instant success, and currently has daily trading volumes in excess of Rs. 2,000 crore and open interest in excess of Rs. 1,000 crore. Other significant developments include Long term Options Contracts on S&P CNX Nifty, Short selling and Securities Lending and Borrowing Scheme, Direct Market Access (DMA), Futures hand Options contracts on S&P CNX Defty index and the NSE E-Bids for Debt Segment. Further NSE also ventured into a new segment by promoting a Power Exchange (Power Exchange India Ltd -PXIL) along with NCDEX.Today, 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 and Currency futures. Our Exchange has more than 1,400 companies listed in the Capital Market and more than 95% of these companies are actively traded. The debt market has more than 3,954 securities available for trading. Index futures and options trade on seven different indices and on more than 230 stocks in stock futures and options. In currency futures contracts are currently traded in the USDINR pair. Globally, NSE is ranked first in single stock futures in terms of number of contracts traded, and third in stock index futures and stock index options. We also rank third in terms number of equity shares traded and are the\eighth largest derivatives exchange in the world.Inco 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), Derivatives like Index Futures, Index Options, Stock Futures, Stock Options and Currency Futures. The Exchange provides trading 5 in 4 different segments viz., Wholesale Debt Market (WDM) segment, Capital Market (CM) segment, Futures & Options (F&O) segment and the Currency Derivatives Segment (trading on which commenced on August 29, 2008) 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, PSU Bonds, Corporate debentures, CPs, CDs etc. However, along with these financial instruments, NSE also launched various products e.g. FIMMDA-NSE MIBID/MIBOR owing to the market need. A reference rate is said to be an accurate measure of the market price. In the fixed income market, it is the interest rate that the market respects and closely matches. In


response to this, NSE started computing and disseminating the NSE Mumbai Inter-bank Bid Rate (MIBID) and NSE Mumbai Inter-Bank Offer Rate (MIBOR). Owing to the robust methodology of computation of these rates and its extensive use, this product has become very popular among the market participants. Keeping in mind the requirements of the banking industry, FIs, MFs, insurance companies, who have substantial investments in sovereign papers, 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 government securities 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 is Rs.1, 394 crore (US $ 273.60 million) during 2008-09. 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 2008-09 was Rs. 11,325 crore. (US $ 2,223 million). Futures & Options (F&O) segment of NSE provides trading in derivatives instruments like Index Futures, Index Options, Stock Options, and 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, CNX Nifty Junior, CNX 100 index, Nifty Midcap 50 index, S&P CNX Defty and single stocks are available. The average daily turnover in the F&O Segment of the Exchange during 2008-09 was Rs.45, 311 crore (US $ 8,893 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 (USDINR). On the very first day of operations a total number of 65,798 contracts valued at Rs.291 crore were traded on the Exchange. Since then trading activity in this segment has been witnessing a rapid growth. During August 29, 2008 to March 31, 2009 the segment reported a trading value of Rs.162,272 crore (US $ 31,849 million). A total 6 number of 518 trading members which includes 22


banks have taken membership in this market segment as at end March 2009.

Trading Volume:

Market Capitalization (As at End March)At end March)

Segment/Year

Mar-06 Mar-07 Mar-08 Mar-09

CM 2,813,201 3,367,350 4,858,122 2,896,194

WDM 1,567,574 1,784,801 2,123,346 2,848,315

Total 4,380,775 5,152,151 6,981,468 5,744,510

At end March)


Working


5. Working of National Stock Exchange:

The trading in NSE has a three tier structure-the trading plat for 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. The NSE established an index services firm called India Index Services & Products Limited (IISL), and has opened a number of stock indexes, including: S&P CNX Nifty NX Nifty Junior CNX 100 (= S&P CNX Nifty + CNX Nifty Junior) S&P CNX 500 (= CNX 100 + 400 major players across 72 industries) CNX Midcap (introduced on July 18, 2005 replacing CNX Midcap 200)

Other NSE Indices are - S&P CNX Defty CNX IT Bank Nifty Market Capitalization

At present, the NSE has the four most important segments of the capital market which are: Equity Futures and Options Retail Debt Market Wholesale Debt Market

Major Companies listed in The National Stock Exchange of India:

Dabur Glaxo

Escorts

Hindustan Lever


Bank of Baroda

Infosys Technologies

ONGC

Hero Honda

Jet Airways

Top Investors

Corporation Bank

ITC

MTNL

ICICI Bank

Grasim

Biocon

Maruti

HDFC Bank

Cipla

Federal Bank

Asian Paints

5.1 Applications of E-Commerce in National Stock Exchange:

Demat Account:

Demat refers to a dematerialized account. Though the company is under obligation to offer the securities in both physical and demat mode, you have the choice to receive the securities in either mode. If you wish to have securities in demat mode, you need to indicate the name of the depository and also of the depository participant with whom you have depository account in your


application. It is, however desirable that you hold securities in demat form as physical securities carry the risk of being fake, forged or stolen.

Dematerialization and trading in the demat mode is the safer and faster alternative to the physical existence of securities. Demat as a parallel solution offers freedom from delays, thefts, forgeries, settlement risks and paper work. This system works through depository participants (DPs) who offer demat services and the securities are held in the electronic form for the investor directly by the Depository.

Share khan Depository Services offers dematerialization services to individual and corporate investors. We have a team of professionals and the latest technological expertise dedicated exclusively to our demat department, apart from a national network of franchisee, making our services quick, convenient and efficient. At Share khan, our commitment is to provide a complete demat solution which is simple, safe and secure Just as you have to open an account with a bank if you want to save your money, make cheque payments etc, Nowadays, you need to open a demat account if you want to buy or sell stocks.

So it is just like a bank account where actual money is replaced by shares. You have to approach the DPs (remember, they are like bank branches), to open your demat account. Let's say your portfolio of shares looks like this: 150 of Infosys, 50 of


Wipro, 200 of HLL and 100 of ACC. All these will show in your demat account. So you don't have to possess any physical certificates showing that you own these shares. They are all held electronically in your account. As you buy and sell the shares, they are adjusted in your account. Just like a bank passbook or statement, the DP will provide you with periodic statements of holdings and transactions.


Need of Demat Account:

Nowadays, practically all trades have to be settled in dematerialized form. Although the market regulator, the Securities and Exchange Board of India (SEBI), has allowed trades of upto 500 shares to be settled in physical form, nobody wants physical shares any more. So a demat account is a must for trading and investing.


Uninterrupted access to online trading:

NSE’s fault-tolerant Stratus server ensures continuous availability of trading operations even if there is a component failure. Major components of the Stratus system, including CPUs, memory, disks, and I/O connections, are replicated and operate in parallel. To provide another level of availability, the server at NSE is connected to Stratus Customer Assistance Centers (CACs) around the clock via Stratus’ Remote Service Network (RSN™). The Stratus server uses self-checking hardware and diagnostics to monitor its own operation. If a problem is detected, the server automatically isolates the error, notifies a Stratus CAC to send a replacement part, and removes the faulty part from service - all while trading operations continue at full speed. When troubleshooting is needed, Stratus service engineers remotely investigate the situation through the RSN. Naralkar noted, “The online, 24-hour-a-day nature of Stratus customer service plays a large role in our own ability to provide continuous, high-performance trading services to our members. The Stratus support team also has been extremely responsive to any requirements we have had for additional assistance.” NSE has set up a complete full-fledged disaster recovery site in another city by replicating the entire production environment consisting of Stratus systems, back-office servers and networking equipment. As a result, NSE can switch over its operations to its backup site within a day in case a disaster strikes at its main site.


5.2 Organizational Structure:

Sr.No CM & WDM SEGMENTS1.

Mr. Ravi NarainMD &CEO, National Stock Exchange of India Limited

Chairman

2 Mr.AshokKumar Agarwal

Chairman, Globe Capital Market Ltd.

Trading Member

3 Mr. D. C. AnjariaDirector, International Financial Solutions Pvt. Ltd.

Public Representative

4 Mr. Vimal BhandariCountry Manager – India AEGONInternational NV.


5 Mr. C. J. GeorgeManaging Director, Geojit Financial Services Ltd.

Trading Member

6 Mr. Vivek AgarwalDirectorM/s. East India Securities Limited

Trading Member

7 Mr. Mayank Shah DirectorM/s. Anagram Capital Limited

8 Mr. Y. H. MalegamChairman Emeritus, S.B.Billimoria & Co. Chartered Accountants


9 Ms.Chitra RamakrishnaDeputy Managing Director, National Stock Exchange of India Ltd

Other Nominees


5.3 Appendix:


5.4 Applications of NSE:

(i) 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 two Stratus systems with Open Strata Link (OSL). The application has been benchmarked to support 15,000 users and handle more than 3 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.

(ii) 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 direct interface with the trading members of the WDM segment 14 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.

(iii) 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.

(iv) 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. 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.

(v) NEAT – MF system is an interface with the trading members of the CM Segment for order collection of designated Mutual Funds units.


(vi) NEAT- CD system is trading system for currency derivatives. Currently, currency futures are trading in the segment. 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:

(a) NCSS (Nationwide Clearing and Settlement System) 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 thatconnects 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.

(b) 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 15 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.

(c) 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.

(c) Surveillance system offers the users a facility to comprehensively monitor the trading activity and analyze the trade data online and offline.

(d) OPMS – the online position monitoring system that keeps track of all trades executed for a trading member vis-à-vis its capital adequacy.

(e) 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 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.

(f) PRISM-CD is the risk management system of the currency derivatives segment. It is similar in features to the PRISM of F&O Segment.

(f) Data warehousing that is the central repository of all data in CM as well as F&O segment of the Exchange.

(g) Listing system that 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 and

(h) Membership system that keeps track of all required details of the Trading Members of the Exchange. The exchange operates and manages a nationwide IP network of over 2500 VSATs and 2169 Leased Lines. In the new IP network, members have an advantage of a more generic and latest IP protocol and an overall better design, in terms of bandwidth and resilience. 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 16 existing VSAT/Leased line, in addition to internet links. The various features provided by NOW are:

(a) Comprehensive Administration features(b) Flexible Risk Management System(c) High speed dealer terminals(d) Online trading facility for investors


Problems


6. Problems of National Stock Exchange:

NSE deployed Websense in 2000. Says Neelakantan, “In 2005, they carried out a review to see if they needed to upgrade. They evaluated a competitive solution and they found that Websense was more suitable to their needs. Web sense had a huge database of URLs. Plus, it had better categorisation and URL identification. So they decided to stick with the product.”

In 2000, NSE integrated the product with their firewall, and was using it purely for web filtering. But with increasing Internet threat, they opted for a standalone deployment. And they have had no major security problems in the last seven years


Achievements


7. Achievements:

Month/Year Event

November 1992 IncorporationApril 1993 Recognition as a stock exchangeJune 1994 WDM segment goes live.November 1994 CM segment goes live through

VSATOctober 1995 Became largest stock exchange in

the country.April 1996 Commencement of clearing and

settlement by NSCCLApril 1996 Launch of S&P CNX NiftyNovember 1996 Setting up of National Securities

Depository Ltd., first depository in India, co-promoted by NSE

December 1996 Commencement of trading/settlement in dematerialized securities

December 1996 Launch of CNX Nifty JuniorMay 1998 Promotion of joint venture, India

Index Services & Products Limited (IISL) (along with CRISIL) for index services

May 1998 Launch of NSE’s Web-site : www.nseindia.com

July 1998 Launch of ‘NSE’s Certification Programme in Financial Markets’

October 1999 Setting up of NSE.IT LtdJune 2000 Commencement of Derivatives

Trading (in Index Futures).June 2001 Commencement of Trading in

Index OptionsJuly 2001 Commencement of Trading in

Options on Individual SecuritiesNovember 2001 Commencement of Trading in

Futures on Individual SecuritiesJanuary 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)

June 2007 Launch of Futures & Options on CNX 100 and CNX Nifty Juniorcontracts

October 2007 Launch of Futures & Options on Nifty Midcap 50

January 2008 Launch of Mini Nifty derivative contracts

March 2008 Launch of long term option contracts on S&P CNX Nifty Index.

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 LtdJuly 2008 Launch of NOW ‘Neat on Web’August 2008 Launch of Currency Derivatives

Segment with commencement of trading on Currency Futures on August 29, 2008.

September 2008 Launch of ASBA (Applications supported by Blocked Amount)

December2008 Launch of derivative contracts in DEFTY index

February 2009 Cross Margining Benefit in CM and F&O Segment

March 2009 Launch of NSE E-Bids for Debt Segment


SWOT

Analysis


8. SWOT Analysis:

8.1 Strengths:

1. Investments are the oxygen of growth. Within the larger context of the country’s Increasing investments in Securities Market, the Company is also investing in multiple spheres - people, technology, capacity expansion and brand building. NSE Ranks 1st in terms of Number of Contracts traded in Single Stock Futures This is essential for sustaining the growth momentum and continuous Value creation.

2. NSE has largest share in worlds market because Company is constantly honing people management leadership skills of the employees and is increasingly investing in Innovative human resource On an on-going basis, the Company endeavors to ensure a vibrant and motivated workforce

3. There is a large contribution of Ahmedabad Stock Exchange to a great extent in terms of turn over as also building up the economy of the country.

4. Due to Demutualization of regional stock exchanges and favorable terms of SEBI, different investors can be a part of the Exchange Talent acquisition and retention is one of the key results there on

5. 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

6. "The consistent availability of online trading and financial data that Stratus has enabled us to deliver to India’s financial markets clearly has contributed to our rapid expansion and success."


8.2 Weaknesses:

No trading by trading members on screen of Ahmedabad Stock Exchange

Limited.

Due to change in technology the role of regional stock exchange

needs to be reinvented.

8.3 Opportunities:

1. A large domestic market that is still into traditional fixed income and other government savings is all buy bound to enter the market sooner if not later

2. System scaled on 3 machines with distribution of users and securities with complete transparency to market participants.

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

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

8.4 Threats :

Global Economic slowdown, Currency mismanagement, High global commodity prices. Over valuation in Index scripts, Non Liquidity in non-derivatives related scripts. Change in government focus on controlling inflation.


Conclusion


9. Conclusion:

According to business point of view E-Commerce plays a vital role in an

industry. It has become one the most important factor operated in

each and every organization .In NSE E-Commerce is implemented

through the means of demat account which can be accessed form

anywhere throughout the world. Demat account is used for online

trading (i.e. online Stock Exchange). The main aim of online trading

was to reduce paper work (Human Efforts) and also to reduce the time

span required for maintaining the record of each and every customer.

The use of demat account has proved to be faster than the earlier once

because first, the people used to stand in queue for trading but due to

implementation of demat account the trading has become more easier.


References

And

Bibliography


10. References and Bibliography:

Web Sources:

Nse-india.com Wikipedia, the free encyclopedia

Moneycontrol.com

Book References:

Fact Book-2009 Alternative Dispute Resolution Book

Frontiers of E-commerce by Kulokota & Whinston.

India Today

Economic Times


seminar on national stock exchange

Documents