NSE

 

                



                              National Stock Exchange

  History:

  National Stock Exchange was incorporated in the year 1992 to bring about transparency in the Indian equity markets. Instead of trading memberships being confined to a group of brokers, NSE ensured that anyone who was qualified, experienced, and met the minimum financial requirements was allowed to trade.[19] In this context, NSE was ahead of its time when it separated ownership and management of the exchange under SEBI's supervision. Stock price information that could earlier be accessed only by a handful of people could now be seen by a client in a remote location with the same ease. The paper-based settlement was replaced by electronic depository-based accounts and settlement of trades was always done on time. One of the most critical changes involved a robust risk management system that was set in place, to ensure that settlement guarantees would protect investors against broker defaults.

NSE's sustained leadership positions across asset classes in the Indian and global exchange sectors demonstrates the robustness and liquidity of our exchange.

NSE was incorporated in 1992. It was recognised as a stock exchange by SEBI in April 1993 and commenced operations in 1994 with the launch of the wholesale debt market, followed shortly after by the launch of the cash market segment.




Trading on NSE
Market Trading Hours

Market timings are stipulated by the regulator for each segment operational on the exchange. Updated market timings and the holiday calendar followed by each segment are listed in the link provided below.

Equity:
NSE started trading in the equities segment (Capital Market segment) on November 3, 1994 and within a short span of 1 year became the largest exchange in India in terms of volumes transacted.

Permitted Asset Class
Various products are traded on the Capital Market segment viz: Equity shares, Preference shares, Warrants, Debentures, Exchange traded Funds, Mutual Funds (close ended), Government Securities and Indian Depository Receipts.


Equity Derivatives
The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with the launch of index futures on June 12, 2000. The futures contracts are based on the popular benchmark S&P CNX Nifty Index.

Products
Since the launch of the Index Derivatives on the popular benchmark S&P CNX Nifty Index in 2000, the National Stock Exchange of India Limited (NSE) today have moved ahead with a varied product offering in equity derivatives. The Exchange currently provides trading in Futures and Options contracts on 9 major indices and 226 securities. The Exchange also introduced trading in Mini Derivatives contracts to provide easier access for small investors to invest in Nifty futures and options.

Debt Segment
The erstwhile Wholesale Debt Market (WDM) segment of the Exchange commenced operations on June 30, 1994. This provided the first formal screen-based trading facility for the debt market in the country. It has now been merged under the New Debt Market as the Negotiated Trade Reporting Platform.


NSE Bond Futures
An Interest Rate Futures contract is "an agreement to buy or sell a debt instrument at a specified future date at a price that is fixed today." The underlying security for Interest Rate Futures is either Government Bond or T-Bill. Exchange traded Interest Rate Futures on NSE are standardized contracts based on 10-Year Government of India Security (NBF II) and 91-day Government of India Treasury Bill (91DTB). All futures contracts available for trading on NSE are cash settled. more »

Foreign Institutional Investors

Gross Open Position Limit
FIIs have been permitted by regulators to trade in Interest Rate Futures. The gross open positions of the FII across all contracts shall not exceed 10% of the total open interest or INR 600 crores, whichever is higher.

Gross Short Position Limit
In addition, the total gross short (sold) position of each FII in IRF shall not exceed its long position in the government securities and in Interest Rate Futures, at any point in time.

Market Wide Position Limit across all FIIs
The total gross long (bought) position in cash and IRF markets taken together for all FIIs shall not exceed the aggregate permissible limit for investment in government securities for FIIs.

Compliance by FIIs
FIIs shall ensure compliance with the above limits. Stringent action shall be taken against FII in case of violation of the limits.

Currency Derivatives
A currency future, also known as FX future, is a futures contract to exchange one currency for another at a specified date in the future at a price (exchange rate) that is fixed on the purchase date. On NSE the price of a future contract is in terms of INR per unit of other currency e.g. US Dollars. Currency future contracts allow investors to hedge against foreign exchange risk. Currency Derivatives are available on four currency pairs viz. US Dollars (USD), Euro (EUR), Great Britain Pound (GBP) and Japanese Yen (JPY). Currency options are currently available on US Dollars. 



Foreign Institutional Investors

Gross Open Position Limit
Foreign Portfolio Investors (FPIs) may take long as well as short positions per stock exchange up to the following limit without having to establish the existence of any underlying exposure:

USD-INR currency pair: USD 15 million;
EUR-INR, GBP-INR and JPY-INR currency pairs (all put together): USD 5 million.

Gross Short Position Limit
FPI’s shall ensure that their short positions at a stock exchange across all contracts in USD-INR pair do not exceed USD 15 million and do not exceed USD 5 million equivalent in EUR-INR, GBP-INR and JPY-INR pairs, all put together at any point of time

The FPI can take long positions beyond these limits in each of the currency pairs subject to having underlying exposure. These limits are as follows

To take long positions in excess of USD 15 million in USD-INR pair and in excess of USD 5 million equivalent in EUR-INR, GBP-INR and JPY-INR pairs, all put together, FPIs shall be required to have an underlying exposure in Indian debt or equity securities, including units of equity/debt mutual funds.

Risk Management
Risk containment measures include capital adequacy requirements of members, monitoring of member performance and track record, stringent margin requirements, position limits based on capital, online monitoring of member positions and automatic disablement from trading when limits are breached, etc.,.
  • Capital Market-Equities
  • Equity Derivatives
  • Currency Derivatives
  • NSE Bond Futures

  • Capital Market-Equities
More about Risk Management:

  • Margins
  • Margins for institutional deals
  • Voluntary Close out facility
  • Margin Shortfall
  • Cross Margining
  • Categorisation of stocks for imposition of margins
  • Liquid AssetsPay-insFormats for Collaterals / File Formats

  • Equity Derivatives
A sound risk management system is integral to an efficient clearing and settlement system. NSE introduced for the first time in India, risk containment measures that were common internationally but were absent from the Indian securities markets.

Risk containment measures include capital adequacy requirements of members, monitoring of member performance and track record, stringent margin requirements, position limits based on capital, online monitoring of member positions and automatic disablement from trading when limits are breached, etc.

Risk Management for Derivative products is managed with Standard Portfolio Analysis of Risk (SPAN)® is a highly sophisticated, value-at-risk methodology that calculates performance bond/margin requirements by analyzing the "what-if's" of virtually any market scenario.

  • Currency Derivatives
More about Risk Management
  • Liquid Assets
  • Margins
  • Parameters
  • Payment of Margins
  • Position Limits
  • Violations
  • Client Margin Reporting
  • Formats for collaterals
  • Penalties

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