BSE is an acronym for BOMBAY STOCK EXCHANGE NSE is an acronym for NATIONAL STOCK EXCHANGE
Difference between NSE and BSE
NSE Stands for National Stock Exchange. It has more than 2000 stocks from different sectors listed with it. It is fully automated electronic order processing exchange. Nifty is major index of NSE and it comprise of 50 scripts from different sectors. NSE official site: http://www.nseindia.com BSE Stand for Bombay Stock Exchange. It is India's Oldest Stock Exchange with listing of over 4000 scripts with it. This not fully automated yet but progress towards full automation is underway. SENSEX is major index of BSE and it comprise of 30 scripts from different sectors. BSE official Site: http://www.bseindia.com What is Sensex? What is Nifty ? Difference between these two Answer:SENSEX - SENSITIVITY INDEX : NIFTY - NATIONAL FIFTY An abbreviation of the Bombay Exchange Sensitive Index (Sensex) - the benchmark index of the Bombay Stock Exchange (BSE). It is composed of 30 of the largest and most actively-traded stocks on the BSE. Initially compiled in 1986, the Sensex is the oldest stock index in India. The Sensex is an "index". What is an index? An index is basically an indicator. It gives you a general idea about whether most of the stocks have gone up or most of the stocks have gone down. The Sensex is an indicator of all the major companies of the BSE. The Nifty is an indicator of all the major companies of the NSE. If the Sensex goes up, it means that the prices of the stocks of most of the major companies on the BSE have gone up. If the Sensex goes down, this tells you that the stock price of most of the major stocks on the BSE have gone down. Just like the Sensex represents the top stocks of the BSE, the Nifty represents the top stocks of the NSE. Just in case you are confused, the BSE, is the Bombay Stock Exchange and the NSE is the National Stock Exchange. The BSE is situated at Bombay and the NSE is situated at Delhi. These are the major stock exchanges in the country. There are other stock exchanges like the Calcutta Stock Exchange etc. but they are not as popular as the BSE and the NSE. Most of the stock trading in the country is done though the BSE & the NSE. Besides Sensex and the Nifty there are many other indexes. There is an index that gives you an idea about whether the mid-cap stocks go up and down. This is called the "BSE Mid-cap Index". There are many other types of indexes. Indexes are indicators of the market which gives you a General idea about whether most of the stocks have gone up Or down. There are two types of INDEXES: 1) SENSEX: SENSITIVITY INDEX Sensex is nothing but index of BSE. It has got 30 listed companies. On the other hand, 2) NIFTY: NATIONAL FIFTY and it is nothing but the index of NSE. It has got 50 listed companies
NSE's mission is setting the agenda for change in the securities markets in India. ensuring equal access to investors all over the country through an appropriate communication network. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000. enabling shorter settlement cycles and book entry settlements systems.
The standards set by NSE in terms of market practices and technology have become industry benchmarks and are being emulated by other market participants. Based on the recommendations. banks.
NSE has been promoted by leading financial institutions. 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. providing a fair. insurance companies and other financial intermediaries:
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Industrial Development Bank of India Limited Industrial Finance Corporation of India Limited Life Insurance Corporation of India State Bank of India ICICI Bank Limited IL & FS Trust Company Limited Stock Holding Corporation of India Limited SBI Capital Markets Limited Bank of Baroda Canara Bank General Insurance Corporation of India National Insurance Company Limited The New India Assurance Company Limited The Oriental Insurance Company Limited United India Insurance Company Limited Punjab National Bank
. which 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. It's that force which is guiding the industry towards new horizons and greater opportunities. NSE is more than a mere market facilitator.NSE:
The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges. efficient and transparent securities market to investors using electronic trading systems. 1956 in April 1993. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act. The NSE was set-up with the main objectives of:
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establishing a nation-wide trading facility for equities. and meeting the current international standards of securities markets. debt instruments and hybrids.
but in fact accommodates involvement. While the Board deals with broad policy issues. Ravi Narain National Stock Exchange of India Ltd. The NSE model however.The day-to-day management of the Exchange is delegated to the Managing Director who is supported by a team of professional staff. who do not directly or indirectly trade on the Exchange. NSE has adopted the form of a demutualised exchange .) Mr. accountancy. H. S. From day one. eminent professionals in the fields of law. Chitra Ramkrishna National Stock Exchange of India Ltd. Mathur Chairman Administrator of the Specified Undertaking of Unit Trust of India Mr. Its Board comprises of senior executives from promoter institutions.the ownership. Admiral Madan Mohan Chopra AVSM(Retd. nominees of SEBI and one full time executive of the Exchange. A. S. Kurian Chairman Managing Director
Deputy Managing Director
. banks. public representatives. etc. Mr.
NSE is one of the first de-mutualised stock exchanges in the country. does not preclude. P. where the ownership and management of the Exchange is completely divorced from the right to trade on it. finance. Such committees includes representatives from trading members. owned by the leading institutional investors in the country. This has completely eliminated any conflict of interest and helped NSE in aggressively pursuing policies and practices within a public interest framework. Ms. it has been set up as a public limited company. management and trading is in the hands of three different sets of people. professionals. NSE is owned by a set of leading financial institutions.y y y y y y y
Oriental Bank of Commerce Corporation Bank Indian Bank Union Bank of India Infrastructure Development Finance Company Ltd. Onkar Nath Singh Chairman & Managing Director Industrial Investment Bank of India Ltd. Khan Ex-Chairman & Managing Director Industrial Development Bank of India Mr. support and contribution of trading members in a variety of ways. insurance companies and other financial intermediaries and is managed by professionals. B.
Board of Directors
Mr. the public and the management. Though the impetus for its establishment came from policy makers in the country. taxation. economics. decisions relating to market operations are delegated by the Board to various committees constituted by it.
R. Y.Association of Mutual Funds in India 8 Mr.) Director Former Chief Justice of Karnataka High Court and Judge of Bombay High Court 14 Mr.
. H. S. Mr. S.) K. (Dr. Chartered Accountants Director
10 Prof. Zen Securities Ltd.
4. Mr.Murthy Professor and Former Director Indian Institute of Management. Billimoria & Co. Patil Chairman The Clearing Corporation of India Ltd.
13 Mr. NDA Securities Ltd. Dynamic Equities Pvt. ICICI Bank Limited 12 Dr. Anand G. Ltd.L. M. Vishakha Mulye Chief Financial Officer & Treasurer.
2. Mr. Bangalore 11 Ms. H.S.
3. Shailesh Saraf Wholetime Director M/s. Justice M.B. Advocate Director
Objective: To manage the day-to-day operations of the Exchange Composition: 1. Ravindra Babu Managing Director M/s. Raghavendra Ex-General Manager General Insurance Corporation of India 15 Mr. Ravi Narain Managing Director National Stock Exchange of India Ltd. Mr. R. Malegam Chairman Emeritus. Mr. Pendse (Retd. M/s. Mahindra Vice Chairman & Managing Director Mahindra & Mahindra Ltd. Venkiteswaran Sr. Sanjay Aggarwal Managing Director M/s.
Ltd. H. Ltd. Anjaria Director. D. International Financial Solutions Pvt. Haribhakti & Co.Billimoria & Co. C. Prof. Deutsche Equities India Pvt. Mr. Rajesh Baheti Partner M/s. Venkatasubramanian Ex-Managing Director.
6. DSP Merrill Lynch Ltd. Mr. Mr. Ravi Anshuman
11.5.C. S. Shailesh Haribhakti Partner M/s.
4. Chartered Accountants Ms.
For Futures & Options Segment 1. Mr. Vimal Bhandari Country Manager .India AEGON International NV.
7. Mr. Ltd. Y. Mr.Anjaria Director International Finance Solutions Pvt. V. Narender Nagpal Executive Director M/s. Ravi Narain Managing Director National Stock Exchange of India Ltd. Shitin D Desai Executive Vice Chairman M/s. Mr.
9. Mr. Chitra Ramkrishna Deputy Managing Director National Stock Exchange of India Ltd. Vishaka Mulye Chief Financial Officer & Treasurer ICICI Bank Ltd.
10. Crossseas Capital Services Mr. GIC Ms. Malegam Chairman Emeritus M/s. P. D.
8. Soneji Director (Membership & Arbitration) National Stock Exchange of India Ltd. Mr. Mr.
9. Raghavendra Ex-General Manager General Insurance Corporation of India Ms.Indian Institute of Management Bangalore 7. L.
. Chitra Ramkrishna Deputy Managing Director National Stock Exchange of India Ltd. M.
IT Launch of NSE Research Initiative Commencement of Internet Trading Commencement of Derivatives Trading (Index Futures)
. copromoted 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. first depository in India.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 Setting up of NSE.co.nse. 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. India Index Services & Products Limited (IISL) Launch of NSE's Web-site: www.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 October 1999 January 2000 February 2000 June 2000 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 commencement of this segment by NSE has brought about transparency and efficiency to the debt market. Treasury Bills and Bonds issued by Public Sector Undertakings/ Corporates/ Banks like Floating Rate Bonds. corporate bodies. along with effective monitoring and surveillance to the market. 1994. Certificate of Deposits. SLR and Non-SLR Bonds issued by Financial Institutions. Commercial Papers. a joint venture between NSE.
. financial institutions. Till recently. The Wholesale Debt Market (WDM) segment of the Exchange commenced operations on June 30. Large investors and a high average trade value characterize this segment.IT Ltd. This provided the first formal screen-based trading facility for the debt market in the country.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 June 2005
Launch of 'Zero Coupon Yield Curve' Launch ofBroker Plaza by Dotex International. 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 NSE¶s electronic interface for listed companies Launch of Futures & options in BANK Nifty Index
Wholesale Debt Market
The Wholesale Debt Market segment deals in fixed income securities and is fast gaining ground in an environment that has largely focussed on equities. trusts and others. and i-flex Solutions Ltd. the market was purely an informal market with most of the trades directly negotiated and struck between various participants. This segment provides trading facilities for a variety of debt instruments including Government Securities. Corporate Debentures. Zero Coupon Bonds. Units of Mutual Funds and Securitized debt by banks. State Government loans.
NSDL commenced operations in November 1996 and has since established a national infrastructure of international standard to handle trading and settlement in dematerialised form and thus completely eliminated the risks to investors associated with fake/bad/stolen paper
National Securities Depository Ltd. clearing and settlement. was incorporated in August 1995. the first depository in India.253 crores during 2005-06.1. 1994 and within a short span of 1 year became the largest exchange in India in terms of volumes transacted. a wholly owned subsidiary of NSE.
National Securities Depository Ltd. to promote and maintain. (NSCCL)
The National Securities Clearing Corporation Ltd. 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. the Over the Counter Exchange of India. risk management. short and consistent settlement cycles. In-depth information regarding listing of securities. During the year 2005-06. (NSCCL). NSE joined hands with the Industrial Development Bank of India (IDBI) and the Unit Trust of India (UTI) to promote dematerialisation of securities. and to operate a tight risk containment system. to provide counterparty risk guarantee. 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. NSE reported a turnover of Rs. NSCCL commenced clearing operations in April 1996. It also undertakes settlement of transactions on other stock exchanges like. It assumes the counter-party risk of each member and guarantees financial settlement.569. trading statistics etc are available here.17 crores during 1994-95 to Rs. The Equities section provides you with an insight into the equities segment of NSE and also provides real-time quotes and statistics of the equities market. Together they set up National Securities Depository Limited (NSDL). (NSDL)
. It was set up to bring and sustain confidence in clearing and settlement of securities.Equities
NSE started trading in the equities segment (Capital Market segment) on November 3.6.
National Securities Clearing Corporation Ltd. trading systems & processes. Trading volumes in the equity segment have grown rapidly with average daily turnover increasing from Rs. (NSDL)
In order to solve the myriad problems associated with trading in physical securities.556 crores in the equities segment.
Together they set up National Securities Depository Limited (NSDL). the first depository in India. Futures on Index. Further details on index based derivatives are available under the Derivatives (F&O) section of the website.
&P CNX Nifty Futures
A futures contract is a forward contract. The turnover in the derivatives segment has shown considerable growth in the last year. NSE commenced trading in index futures on June 12. and the maturity date of the contract.e. NSDL commenced operations in November 1996 and has since established a national infrastructure of international standard to handle trading and settlement in dematerialised form and thus completely eliminated the risks to investors associated with fake/bad/stolen paper
Trading in Nifty
The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with index futures on June 12. 2000. which is traded on an Exchange.In order to solve the myriad problems associated with trading in physical securities. NSE joined hands with the Industrial Development Bank of India (IDBI) and the Unit Trust of India (UTI) to promote dematerialisation of securities. The index futures contracts are based on the popular market benchmark S&P CNX Nifty index.
Contract Specifications Trading Parameters
Contract Specifications Security descriptor The security descriptor for the S&P CNX Nifty futures contracts is: Market type : N Instrument Type : FUTIDX Underlying : NIFTY Expiry date : Date of contract expiry Instrument type represents the instrument i. market lot. The futures contracts on NSE are based on S&P CNX Nifty. (Selection criteria for indices) NSE defines the characteristics of the futures contract such as the underlying index. 2000. The futures contracts are available for trading from introduction to the expiry date. with NSE turnover accounting for 60% of the total turnover in the year 2000-2001. 2001. The Exchange later introduced trading on index options based on Nifty on June 4. Underlying symbol denotes the underlying index which is S&P CNX Nifty Expiry date identifies the date of expiry of the contract
the near month (one).
Price steps The price step in respect of S&P CNX Nifty futures contracts is Re. A new contract is introduced on the trading day following the expiry of the near month contract. On such confirmation. the Exchange may approve such order. The permitted lot size for futures contracts & options contracts shall be the same for a given underlying or such lot size as may be stipulated by the Exchange from time to time. the next month (two) and the far month (three). The base price of the contracts on subsequent trading days would be the daily settlement price of the futures contracts. the Exchange may. However. However. This way. members would be required to confirm to the Exchange that there is no inadvertent error in the order entry and that the order is genuine. the contracts expire on the previous trading day.e. If the last Thursday is a trading holiday. operating ranges are kept at +/.
Trading cycle S&P CNX Nifty futures contracts have a maximum of 3-month trading cycle . at its discretion.10 %. in exceptional cases.Underlying Instrument The underlying index is S&P CNX NIFTY. one mid month and one far month duration respectively. in order to prevent erroneous order entry by trading members.05.
Quantity freeze Order which may come to the exchange as a quantity freeze shall be based on the notional value of the contract of around Rs.
Price bands There are no day minimum/maximum price ranges applicable for S&P CNX Nifty futures contracts.
Trading Parameters Contract size The value of the futures contracts on Nifty may not be less than Rs. members would be required to confirm to the Exchange that there is no inadvertent error in the order entry and that the order is genuine. The new contract will be introduced for a three month duration. In respect of orders which have come under quantity freeze. 2 lakhs at the time of introduction.. On such confirmation the Exchange may approve such order.
Expiry day S&P CNX Nifty futures contracts expire on the last Thursday of the expiry month.. 5 crores. not allow the orders that have come under quantity freeze for execution for any reason whatsoever including non-availability of turnover / exposure limits
Base Prices Base price of S&P CNX Nifty futures contracts on the first day of trading would be theoretical futures price. there will be 3 contracts available for trading in the market i. In respect of orders which have come under price freeze.0. one near month. at any point in time.
8.Principal Mutual Fund in July 1999. 9. Magnum Index Fund launched by SBI Mutual Fund in December 2001. less risky form of investment. 6. 2. ING Vysya Nifty Plus Fund launched by ING Vysya Mutual Fund in January 2004. 7. HDFC Index Fund ± Nifty Plan launched by HDFC Mutual Fund in July 2002. S&P CNX Nifty is used by a number of well know mutual funds in India for promoting Index Funds. These funds are: (A) Index Funds : 1. 11. LIC Index Fund ± Nifty Plan launched by LIC Mutual Fund in November 2002. Principal Junior Cap fund launched by Principal PNB on May 2005
(B) Exchange Traded Fund : 1. 3.Order type/Order book/Order attribute · Regular lot order · Stop loss order · Immediate or cancel · Spread order
Index Funds today are a source of investment for investors looking at a long term.
. Prudential ICICI Index Fund launched by Prudential ICICI Mutual Fund in February 2002. Franklin India Index Tax Fund launched by Franklin Templeton Mutual Fund in February 2001. Tata Index Fund launched by Tata TD Waterhouse Mutual Fund in February 2003. an index fund scheme on S&P CNX Nifty launched by IDBI . Canindex Fund launched by Canbank Mutual Fund in September 2004 13. Reliance Index Fund launched by Reliance Mutual Fund on Jan 2005 14. The success of index funds depend on their low volatility and therefore the choice of the index. Franklin India Index Fund launched by Franklin Templeton Mutual Fund in June 2000. NIFTY BeES an Exchange Traded Fund launched by Benchmark Mutual Fund in January 2002. 12. 5. IDBI Index I-NIT¶99. 10. Birla Index Fund launched by Birla Sun Life Mutual Fund in September 2002. 4. UTI Nifty Fund launched by Unit Trust of India in March 2000.
IISL has been formed with the objective of providing a variety of indices and index related services and products for the capital markets. Liquid BeES an Exchange Traded Fund launched by Benchmark Mutual Fund in July 2003. SUNDER an Exchange Traded Fund launched by UTI in July 2003. launched by Benchmark Mutual Fund in February 2003. (NSE) and CRISIL Ltd. (formerly the Credit Rating Information Services of India Limited). 6. Benchmark Split Capital launched by Benchmark Mutual Fund on August 2005
India Index Services & Products Ltd. 4. 3.2. (IISL) is a joint venture between the National Stock Exchange of India Ltd. Bank BeES an Exchange Traded Fund (ETF) launched by Benchmark Mutual Fund in May 2004. (IISL)
India Index Services & Products Ltd. Junior BeES an Exchange Traded Fund on CNX Nifty Junior. IISL has a consulting and licensing agreement with Standard and Poor's (S&P). 5. the world's leading provider of investible equity indices. for co-branding IISL's equity indices