Introduction to e-com(NSE)

8/7/2019 Introduction to e-com(NSE)

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Index

S.B.E.S College of Science Page 1 of 43

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


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E-commerce:



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1. Introduction:

Electronic commerce, commonly known as(electronic marketing) e-commerce or eCommerce, consists of thebuying and selling of products or services over electronic systems suchas the Internet and other computer networks. The amount of tradeconducted electronically has grown extraordinarily with widespreadInternet 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 transactionprocessing, electronic data interchange (EDI), inventory managementsystems, and automated data collection systems. Modern electroniccommerce typically uses the World Wide Web at least at some point inthe transaction's lifecycle, although it can encompass a wider range oftechnologies such as e-mail as well.

A large percentage of electronic commerce isconducted entirely electronically for virtual items such as access topremium content on a website, but most electronic commerce involvesthe transportation of physical items in some way. Online retailers are

sometimes known as e-tailers and online retail is sometimes known ase-tail. Almost all big retailers have electronic commerce presence onthe World Wide Web

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

Amazon.com.

Electronic commerce is generally considered to bethe sales aspect of e-business. It also consists of the exchange of datato facilitate the financing and payment aspects of the businesstransactions



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National StockExchange

(NSE)



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2. Introduction:

The National Stock Exchange of India Limited( NSE ) is a Mumbai-based stock exchange. It is the largest stockexchange in India in terms of daily turnover and number of trades, forboth equities and derivative trading. NSE has a market capitalization ofaround Rs 47, 01,923 crore (7 August 2009) and is expected tobecome the biggest stock exchange in India in terms of marketcapitalization 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 thevast majority of share transactions. The NSE's key index is the S&PCNX Nifty, known as the Nifty, an index of fifty major stocks weightedby market capitalization.

NSE is mutually-owned by a set of leading financialinstitutions, banks, insurance companies and other financial

intermediaries in India but its ownership and management operate asseparate entities. There are at least 2 foreign investors NYSE Euro nextand Goldman Sachs who have taken a stake in the NSE.As of 2006, theNSE terminals, 2799 in total, cover more than 1500 cities across India.In October 2007, the equity market capitalization of the companieslisted on the NSE was 1.46 trillion, making it the second largest stockexchange in South Asia. NSE is the third largest Stock Exchange in theworld in terms of the number of trades in equities. It is the second



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fastest growing stock exchange in the world with a recorded growth of16.6%



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The NSE is owned by a set of leading Indianand International financial institutions, banks, insurance companies,private equity funds, mutual funds, venture capital fundsetc. NSE wasincorporated in November 1992, and received recognition as a stock

exchange under the Securities Contracts (Regulation) Act, 1956 in April1993. It ismanaged by professionals who do not directly or indirectlytrade on the Exchange. The trading rights are with trading memberswho offer their services to the investors. TheBoard of NSE comprisesof senior executives from promoter institutions and eminentprofessionals, without having any representation from tradingmembers. While the Board deals with the broad policy issues, theExecutive Committees (ECs), which

Include trading members, formed under the Articlesof Association and the Rules of NSE for different market segments set

out rules and parameters to manage the day-today affairs of theExchange. The day-to-day management of the Exchange is delegatedto the Managing Director and CEO who is supported by a team ofprofessional staff. Therefore, though the role of trading members atNSE is to the extent of providing only trading services to the investors,the Exchange involves trading members in the process of consultationand participation in vital inputs towards decision making.



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History



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3.History of National Stock Exchange:

The stock market has a long history. According to

French historian Fernand Braudel, in 11th century Cairo, Islamic andJewish 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 contrivedthese methods later.

In 12th Century France, the courratiers dechange dealt with managing and regulating the debts of agriculturalcommunities on behalf of the banks. They can be referred to as thefirst brokers, because they only dealt with debts. The people ofFlanders and the neighboring counties also implemented this idea, and

Beurzen was soon introduced in Ghent and Amsterdam. In late 13thCentury, commodity traders in Bruges gathered inside the house of aman named Van Der Beurse. In 1309, they were named the "BrugseBeurse," and institutionalized their unofficial meetings.

The Bankers of Venice started trading ingovernment securities in the middle of the 13th century. In 1351, theGovernment of Venice prohibited the spread of rumors done with theintention of decreasing government fund prices. During the 14thcentury, the Bankers of Pisa, Verona, Genoa, and Florence also startedtrading in government securities. This was possible because theseindependent city-states were governed by a group of influential

citizens, and not by a duke.

Later, joint stock companies were started in theNetherlands. This provided shareholders the opportunities to invest inbusiness ventures and get a contribution of their profits or losses. In1602, the Dutch East India Company issued their first shares throughthe Amsterdam Stock Exchange, and it was the first company to issuestocks and bonds. A stock exchange in London started trading stocks in1688. The Amsterdam Stock Exchange (or Amsterdam Beurs) was thefirst stock exchange to introduce continuous trading in the earlier partof 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 mostdeveloping country, but the biggest stock markets are present in theUnited States, Canada, China (Hong Kong), India, UK, Germany,France, and Japan.

The NSE deals in online examination andawards certification. Branches of the NSE are located all over India.



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The NSE is India's first national, anonymous, electronic limit order book(LOB) exchange which deals with securities. The NSE introduced thefirst Indian clearing corporation, "National Securities ClearingCorporation Ltd.", the first depository of India, National SecuritiesDepository Limited. History and Origin of The National Stock Exchange

of India In November 1992, the NSE was integrated as a tax-payingcompany and at the command of the Government of India, topfinancial institutions were promoted it. In April 1993, under theSecurities Contracts (Regulation) Act, 1956, the NSE was known as astock exchange. In June 1994, the NSE started operations in theWholesale Debt Market (WDM) segment and in November 1994, theCapital Market (Equities) segment of the NSE started operations. In1996, the NSE was the first exchange in India that planned to tradederivatives specifically on an equity index. In February 2000, the NSEstarted an Internet trading system.



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Current Scenario



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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 ratefutures as recommended by SEBI-RBI committee, on 31 August,2009, a

futures contract based on 7% 10 Year GOI bond (NOTIONAL) waslaunched with quarterly maturities.

NSE has a number of exchanges. These are typically index funds andGOLD 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. Eachunit 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 StockExchange of India has been at the vanguard of change in the Indiansecurities market. This period has seen remarkable changes inmarkets, from how capital is raised and traded, to how transactions arecleared and settled. The market has grown in scope and scale in a waythat could not have been imagined at the time. Average daily tradingvolumes have jumped from Rs. 17 crore in 1994-95 when NSE startedits Cash Market segment to Rs.11, 325 crore in 2008-09. Similarly,market capitalization of listed Indian firms went up from Rs.363, 350crore 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 andvibrant markets in the world. This transformation was the result of anumber of initiatives led by the Government, market regulators andinfrastructure providers like exchanges and depositories. NSEs effortsin this area have included the creation of the first clearing corporationin the country in the form of the National Securities ClearingCorporation Limited (NSCCL). NSCCL today provides centralcounterparty services and manages settlement risk for multiple



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products, and is a major factor in the confidence market participantshave in the ability of Indian markets to handle extreme shocks withoutcausing any defaults.NSCCL is also the first clearing corporation in thecountry to receive. NSE has many other firsts to its name, including thefirst systematic process of member inspections, a sophisticated market

surveillance system, and a country wide high capacity data networksupporting close to 200,000 dealer terminals. The year 2008-09 was aneventful year for NSE, as it saw the launch of new and importantproducts for the securities market. Introduction of Mini Nifty Futuresand Options contracts on S&P CNX Nifty during the year has givenretail investors an increased ability to participate in index futures andoptions trading. NSE also started publishing the first volatility index inthe 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 toassess volatility and create trading strategies to exploit volatilitymovements. In May 2008, NSE developed a new trading application,NOW, or NEAT on Web. The NOW platform allows trading members toconnect to the exchange through the internet, and has resulted in asignificant reduction in both the access cost and turnaround time for

http://www.nseindia.com/homepage.htm#indices%23indiceshttp://www.nseindia.com/content/indices/ind_nifty.htmhttp://www.nseindia.com/content/indices/ind_nifty.htmhttp://www.nseindia.com/content/indices/ind_jrnifty.htmhttp://www.nseindia.com/content/indices/ind_cnxit.htmhttp://www.nseindia.com/content/indices/ind_cnxbank.htmhttp://www.nseindia.com/content/indices/ind_cnx100.htmhttp://www.nseindia.com/content/indices/ind_cnx100.htmhttp://www.nseindia.com/content/indices/ind_defty.htmhttp://www.nseindia.com/content/indices/ind_defty.htmhttp://www.nseindia.com/content/indices/ind_cnx500.htmhttp://www.nseindia.com/content/indices/ind_cnx500.htmhttp://www.nseindia.com/content/indices/ind_cnxmidcap.htmhttp://www.nseindia.com/content/indices/ind_niftymidcap50.htmhttp://www.nseindia.com/content/indices/ind_niftymidcap50.htmhttp://www.nseindia.com/homepage.htm#indices%23indiceshttp://www.nseindia.com/content/indices/ind_nifty.htmhttp://www.nseindia.com/content/indices/ind_jrnifty.htmhttp://www.nseindia.com/content/indices/ind_cnxit.htmhttp://www.nseindia.com/content/indices/ind_cnxbank.htmhttp://www.nseindia.com/content/indices/ind_cnx100.htmhttp://www.nseindia.com/content/indices/ind_defty.htmhttp://www.nseindia.com/content/indices/ind_cnx500.htmhttp://www.nseindia.com/content/indices/ind_cnxmidcap.htmhttp://www.nseindia.com/content/indices/ind_niftymidcap50.htm


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providing access. This year also saw a watershed in the Indiancurrency market in the form of a currency futures contract. NSE wasthe first stock exchange in the country to launch the contract onAugust 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 significantdevelopments include Long term Options Contracts on S&P CNX Nifty,Short selling and Securities Lending and Borrowing Scheme, DirectMarket Access (DMA), Futures hand Options contracts on S&P CNXDefty index and the NSE E-Bids for Debt Segment. Further NSE alsoventured into a new segment by promoting a Power Exchange (PowerExchange India Ltd -PXIL) along with NCDEX.Today, NSE offers a widerange of products for multiple markets, including equity shares,Exchange Traded Funds (ETF) , Mutual Funds, Debt instruments, Indexfutures 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 morethan 230 stocks in stock futures and options. In currency futurescontracts are currently traded in the USDINR pair. Globally, NSE isranked first in single stock futures in terms of number of contractstraded, and third in stock index futures and stock index options. Wealso rank third in terms number of equity shares traded and arethe\eighth largest derivatives exchange in the world.Inco

NSE provides a trading platform for of alltypes of securities for investors under one roof Equity, CorporateDebt, Central and State Government Securities, T-Bills, CommercialPaper (CPs), Certificate of Deposits (CDs), Warrants, Mutual Funds(MFs) units, Exchange Traded Funds (ETFs), Derivatives like IndexFutures, Index Options, Stock Futures, Stock Options and CurrencyFutures. 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 DerivativesSegment (trading on which commenced on August 29, 2008) TheWholesale Debt Market segment provides the trading platform fortrading of a wide range of debt securities which includes State andCentral Government securities, T-Bills, PSU Bonds, Corporatedebentures, CPs, CDs etc. However, along with these financialinstruments, NSE also launched various products e.g. FIMMDA-NSEMIBID/MIBOR owing to the market need. A reference rate is said to bean accurate measure of the market price. In the fixed income market,it is the interest rate that the market respects and closely matches. In



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response to this, NSE started computing and disseminating the NSEMumbai Inter-bank Bid Rate (MIBID) and NSE Mumbai Inter-Bank OfferRate (MIBOR). Owing to the robust methodology of computation ofthese rates and its extensive use, this product has become verypopular 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 alsostarted the dissemination of its yet another product, the Zero CouponYield Curve. This helps in valuation of sovereign securities across allmaturities irrespective of its liquidity in the market.

The increased activity in the government securitiesmarket in India and simultaneous emergence of MFs (Gilt MFs) hadgiven rise to the need for a well defined bond index to measure thereturns in the bond market. NSE constructed such an index, NSEGovernment 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 automatedscreen based trading system, known as the National Exchange forAutomated Trading (NEAT) system. This operates on a price/timepriority basis and enables members from across the country to tradewith 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 during2008-09 was Rs. 11,325 crore. (US $ 2,223 million). Futures & Options

(F&O) segment of NSE provides trading in derivatives instruments likeIndex Futures,

Index Options, Stock Options, and StockFutures. The futures and Options segment of NSE has made a mark foritself globally. In the Futures and Options Segment, trading in S&P CNXNifty Index, CNX IT index, Bank Nifty Index, CNX Nifty Junior, CNX 100index, Nifty Midcap 50 index, S&P CNX Defty and single stocks areavailable. The average daily turnover in the F&O Segment of theExchange during 2008-09 was Rs.45, 311 crore (US $ 8,893 million).Currency Derivatives Segment (CDS) at NSE commenced operations onAugust 29, 2008. With the launch of Currency futures trading in USDollar-Indian Rupee (USDINR). On the very first day of operations atotal number of 65,798 contracts valued at Rs.291 crore were tradedon the Exchange. Since then trading activity in this segment has beenwitnessing a rapid growth. During August 29, 2008 to March 31, 2009the segment reported a trading value of Rs.162,272 crore (US $ 31,849million). A total 6 number of 518 trading members which includes 22



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banks have taken membership in this market segment as at end March2009.

Trading Volume:

Market Capitalization (As at End March)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


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Working



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5. Working of National Stock Exchange:

The trading in NSE has a three tier structure-the trading plat forprovided by the Exchange, the broking and intermediary services andthe investing community. The trading members have been providedexclusive rights to trade subject to their continuously fulfilling theobligation under the Rules, Regulations, Byelaws, Circulars, etc. of theExchange. The trading members are subject to its regulatory discipline.Any person

Can become a trading member by complying with the prescribedeligibility criteria and exit by surrendering trading membership withoutany hidden/overt cost. There are no entry/exit barriers to tradingmembership.

The NSE established an index services firm called IndiaIndex Services & Products Limited (IISL), and has opened a number ofstock indexes, including: S&P CNX Nifty NX Nifty Junior CNX 100 (=S&P CNX Nifty + CNX Nifty Junior) S&P CNX 500 (= CNX 100 + 400major 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 MarketCapitalization

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

Major Companies listed in The National StockExchange of India:

Dabur

Glaxo

Escorts

Hindustan Lever

Bank of Baroda

Infosys Technologies



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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 StockExchange:

Demat Account:

Demat refers to a dematerialized account. Though thecompany is under obligation to offer the securities in both physical anddemat mode, you have the choice to receive the securities in eithermode. If you wish to have securities in demat mode, you need to

indicate the name of the depository and also of the depositoryparticipant with whom you have depository account in yourapplication.It is, however desirable that you hold securities in demat form asphysical securities carry the risk of being fake, forged or stolen.



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account. Just like a bankpassbook or statement, the DP will provideyou with periodic statements of holdings and transactions.



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Need of Demat Account:

Nowadays, practically all trades have to be settled indematerialized form. Although the market regulator, the Securities and

Exchange Board of India (SEBI), has allowed trades of upto 500 sharesto be settled in physical form, nobody wants physical shares any more.So a demat account is a must for trading and investing.



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Uninterrupted access to online trading:

NSEs fault-tolerant Stratus server ensurescontinuous availability of trading operations even if there is acomponent failure. Major components of the Stratus system, including

CPUs, memory, disks, and I/O connections, are replicated and operatein parallel. To provide another level of availability, the server at NSE isconnected to Stratus Customer Assistance Centers (CACs) around theclock via Stratus Remote Service Network (RSN). The Stratus serveruses self-checking hardware and diagnostics to monitor its ownoperation. If a problem is detected, the server automatically isolatesthe error, notifies a Stratus CAC to send a replacement part, andremoves the faulty part from service - all while trading operationscontinue at full speed. When troubleshooting is needed, Stratus serviceengineers remotely investigate the situation through the RSN. Naralkarnoted, 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 supportteam also has been extremely responsive to any requirements wehave had for additional assistance. NSE has set up a complete full-fledged disaster recovery site in another city by replicating the entireproduction environment consisting of Stratus systems, back-officeservers and networking equipment. As a result, NSE can switch over itsoperations to its backup site within a day in case a disaster strikes atits main site.



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5. 2 Organizational Structure:

Sr.No CM & WDM SEGMENTS1. Mr. Ravi Narain MD &CEO, National

Stock Exchange ofIndia Limited

Chairman

2 Mr.AshokKumarAgarwal

Chairman, GlobeCapital Market Ltd.

Trading Member

3 Mr. D. C. Anjaria Director,InternationalFinancial SolutionsPvt. Ltd.

PublicRepresentative

4 Mr. Vimal Bhandari Country Manager IndiaAEGONInternationalNV.


5 Mr. C. J. George Managing Director,Geojit FinancialServices Ltd.

Trading Member

6 Mr. Vivek Agarwal DirectorM/s. EastIndia SecuritiesLimited

Trading Member

7 Mr. Mayank Shah DirectorM/s.

Anagram CapitalLimited

8 Mr. Y. H. Malegam Chairman Emeritus,S.B.Billimoria & Co.CharteredAccountants


9 Ms.Chitra Ramakrishna Deputy ManagingDirector, NationalStock Exchange ofIndia Ltd

Other Nominees



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5.3 Appendix:



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5.4 Applications of NSE:

(i) NEAT CM system takes care of trading of securities in theCapital Market segment that includes equities, debentures/notes aswell as retail Gilts. The NEAT CM application has a split architecture

wherein the split is on the securities and users. The application runs ontwo Stratus systems with Open Strata Link (OSL). The application hasbeen benchmarked to support 15,000 users and handle more than 3million trades daily. This application also provides data feed forprocessing to some other systems like Index, OPMS through TCP/IP.This is a direct interface with the trading members of the CM segmentof the Exchange for entering the orders into the main system. There isa two way communication between the NSE main system and the frontend 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, CorporateBonds, CPs, T-Bills, etc. This is direct interface with the tradingmembers of the WDM segment 14 of the Exchange for entering theorders/trades into the main system. There is a two way communicationbetween the NSE main system and the front end terminal of thetrading member.

(iii) NEAT F&O system takes care of trading of securities in theFutures and Options (F&O) segment that includes Futures on Index aswell as individual stocks and Options on Index as well as individualstocks. This is a direct interface with the trading members of the F&Osegment of the Exchange for entering the orders into the main system.There is a two way communication between the NSE main system andthe front end terminal of the trading member.

(iv) NEAT IPO system is an interface to help the initial public offeringof companies which are issuing the stocks to raise capital from themarket. This is a direct interface with the trading members of the CMsegment who are registered for undertaking order entry on behalf oftheir clients for IPOs. NSE uses the NEAT IPO system that allowsbidding in several issues concurrently. There is a two waycommunication between the NSE main system and the front endterminal of the trading member.

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



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(vi) NEAT- CD system is trading system for currency derivatives.Currently, currency futures are trading in the segment. The exchangealso provides a facility to its members to use their own front endsoftware through the CTCL (computer to computer link) facility. The

member can either develop his own software or use productsdeveloped by CTCL vendors. In the back office, the following importantapplication systems are operative:

(a) NCSS (Nationwide Clearing and Settlement System) is the clearingand settlement system of the NSCCL for the trades executed in the CMsegment of the Exchange. The system has 3 important interfaces OLTL (Online Trade loading) that takes each and every trade executedon real time basis and allocates the same to the clearing members,Depository Interface that connects the depositories for settlement ofsecurities and Clearing Bank Interface thatconnects the 13 clearing

banks for settlement of funds. It also interfaces with the clearingmembers for all required reports. Through collateral managementsystem it keeps an account of all available collaterals on behalf of alltrading/ clearing members and integrates the same with the positionmonitoring of the trading/clearing members. The system alsogenerates base capital adequacy reports.

(b) FOCASS is the clearing and settlement system of the NSCCL forthe trades executed in the F&O segment of the Exchange. It interfaceswith the clearing members for all required reports. Through collateralmanagement system it 15 keeps an account of all available collaterals

on behalf of all trading/clearing members and integrates the same withthe position monitoring of the trading/ clearing members. The systemalso generates base capital adequacy reports.

(c) CDCSS is the clearing and settlement system for trades executedin the currency derivative segment. Through collateral managementsystem it keeps an account of all available collateral on behalf of alltrading /clearing members and integrates the same with the positionmonitoring of the trading/clearing members. The System alsogenerates base capital adequacy report.

(c) Surveillance system offers the users a facility to comprehensivelymonitor the trading activity and analyze the trade data online andoffline.

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



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(e) PRISM is the parallel risk management system for F&O tradesusing Standard Portfolio Analysis (SPAN). It is a system forcomprehensive monitoring and load balancing of an array of parallelprocessors that provides complete fault tolerance. It provides real timeinformation on initial margin value, mark to market profit or loss,

collateral amounts, contract-wise latest prices, contract wise openinterest and limits. The system also tracks online real time client levelportfolio base upfront margining and monitoring.

(f) PRISM-CD is the risk management system of the currencyderivatives segment. It is similar in features to the PRISM of F&OSegment.

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

(g) Listing system that captures the data from the companies whichare listed in the Exchange for corporate governance and integrates thesame to the trading System for necessary broadcasts for datadissemination process and

(h) Membership system that keeps track of all required details of the Trading Members of the Exchange. The exchange operates andmanages a nationwide IP network of over 2500 VSATs and 2169Leased Lines. In the new IP network, members have an advantage of amore generic and latest IP protocol and an overall better design, interms of bandwidth and resilience. Now NSE is also offering internet

based trading services to NSE members. This facility is branded asNOW NEAT on Web. NOW provides an internet portal for NSEmembers and their authorized clients to transact orders and trades tothe various market of NSE viz. CM, F&O and Currency. The memberscan also access NOW through their 16 existing VSAT/Leased line, inaddition 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



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Problems



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6. Problems of National Stock Exchange:

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

In 2000, NSE integrated the product with their firewall, and was using itpurely for web filtering. But with increasing Internet threat, they optedfor a standalone deployment. And they have had no major security

problems in the last seven years



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Achievements



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7. Achievements:

Month/Year Event

November 1992 IncorporationApril 1993 Recognition as a stock exchange June 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 inIndia, co-promoted by NSE

December 1996 Commencement of trading/settlement indematerialized securities

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

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

May 1998 Launch of NSEs Web-site :www.nseindia.com

July 1998 Launch of NSEs CertificationProgramme 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 inOptions on Individual Securities

November 2001 Commencement of Trading inFutures on Individual Securities

January 2002 Launch of Exchange Traded Funds(ETFs)

August 2003 Launch of Futures and Options on



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CNX IT Index

June 2005 Launch of Futures & Options onBANK Nifty Index

August 2006 Setting up of NSE InfoTechServices Ltd

December 2006 Derivative Exchange of the Year,by Asia Risk magazine

March 2007 Launch of Gold BeES- ExchangeTraded Fund (ETF).(First Gold)

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

October 2007 Launch of Futures & Options onNifty Midcap 50

January 2008 Launch of Mini Nifty derivativecontracts

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

April 2008 Launch of Securities Lending &Borrowing Scheme

April 2008 Launch of - India VIX* TheVolatility 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 DerivativesSegment with commencement oftrading on Currency Futures onAugust 29, 2008.

September 2008 Launch of ASBA (Applicationssupported by Blocked Amount)

December2008 Launch of derivative contracts inDEFTY index

February 2009 Cross Margining Benefit in CM andF&O Segment

March 2009 Launch of NSE E-Bids for DebtSegment



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SWOT

Analysis



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8. SWOT Analysis:

8.1 Strengths:

1. Investments are the oxygen of growth. Within the larger contextof the countrys Increasing investments in Securities Market, theCompany is also investing in multiple spheres - people,technology, capacity expansion and brand building. NSE Ranks 1stin terms of Number of Contracts traded in Single Stock Futures This is essential for sustaining the growth momentum andcontinuous Value creation.

2. NSE has largest share in worlds market because Company isconstantly honing people management leadership skills of theemployees and is increasingly investing in Innovative humanresource On an on-going basis, the Company endeavors to ensurea vibrant and motivated workforce

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

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

5. NSE became the first stock exchange to get approval for Interestrate futures as recommended by SEBI-RBI committee, on 31August,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 thatStratus has enabled us to deliver to Indias financial marketsclearly has contributed to our rapid expansion and success."



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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 milliontransactions per day).

8.4 Threats:

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



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Conclusion



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ReferencesAnd

Bibliography



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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

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