National Stock Exchange

Inaugurated in 1994, the National Stock Exchange seeks to establish a nation-wide trading facility for equity, debt and hybrids; to facilitate equal access to investors across the country; to impart fairness, efficiency, and transparency to securities trading; to shorten settlement cycles; and to meet International securities market standards. 

The distinctive feature of National Stock Exchange, as its functions currently are as follows:

1. The National Stock Exchange employees a screen based trading system.

2. The National Stock Exchange has two segments: The capital market segment covers equities, convertible debentures, and retail trade in non convertible debentures. The wholesale debt market segment is a market for high value transactions in government securities, PSU bonds, commercial papers and other debt instruments.

3. The trading members in the capital market segment are connected to the central computer in Bombay through the satellite link using very small aperture terminals. The trading members in the wholesale debt market segment are linked, through dedicated high speed lines, Tony Central computer at Mumbai.

4. The National Stock Exchange has opted for an order driven system. When an order is placed by a trading member and order confirmation slip is generated. The computer stores the orders as and when receive in terms of price and time. It automatically searches for a match and no sooner the same is found the deal is struck. Since the system is order driven, buy and sell rates are independent. As a result the difference between them is sometimes as well as just 10 paise particularly for liquid securities.

5. When a trade takes place a trade confirmation slip is printed at the trading members work station. It gives details like quantity, price, code number of country party and so on. 

6. The Identity of a trading member is not revealed to others when he places an order for when his pending orders are displayed. Hence, last orders can be placed in the National Stock Exchange system without the fear of influencing the market sentiment.

7. On the eighth day of trading, each member gets a statement showing his next position, the amount of cash he has to transfer to the clearing Bank and the securities he has to deliver to the clearing house.

8. Members are required to deliver securities and cash by the 13th and 14th day respectively. The fifteenth day is the payout day.