NSE Factbook2010

8/7/2019 NSE Factbook2010

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Fact Book

2010

NATIONAL STOCK EXCHANGE OF INDIA LIMITEDJune 2010


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C O N T E N T S

SECTION 1- NATIONAL STOCK EXCHANGE OF INDIA

Introduction ...........................................................................................3

Incorporation and Management ....................................................................3

Market Segments And Products .....................................................................3

Achievements/Milestones ...........................................................................5

Developments during the year......................................................................6

Facts And Figures .....................................................................................8

Technology .............................................................................................8

NSE Family ........................................................................................... 11

NSCCL ................................................................................................ 11

NSDL ................................................................................................ 12

NSE Infotech services Ltd ......................................................................... 12

NSE.IT ................................................................................................ 12

IISL ................................................................................................ 12

Dotex International Ltd. ........................................................................... 12

NCDEX ................................................................................................ 13

NCCL ................................................................................................ 13

PXIL ................................................................................................ 13

SECTION 2- MEMBERSHIP ADMINISTRATION

Eligibility Criteria ................................................................................... 19

Trading Membership ................................................................................ 19

Clearing Membership ............................................................................... 20

Currency Derivative Membership ................................................................. 20

Growth and Distribution Of Members ............................................................ 20

SECTION 3- LISTING OF SECURITIES

Listing Criteria ...................................................................................... 27

Listing Agreement .................................................................................. 27

Compliance By Listed Companies ................................................................ 27

Disclosures By Listed Companies ................................................................. 28

De-Listing ............................................................................................ 28

CM Segment ......................................................................................... 29

Listing Fees .......................................................................................... 30

Shareholding Pattern ............................................................................... 30

WDM Segment ....................................................................................... 30

Contd...


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Funds Mobilisation On the Exchange ............................................................ 31

Initial Public Offerings (IPOs) ............................................................ 32

Rights Issues ................................................................................. 32

Preferential Allotment/ Private Placement............................................ 32

QIPs ........................................................................................... 32

SECTION 4- CAPITAL MARKET SEGMENT

NEAT - CM System................................................................................... 49

Market Performance ................................................................................ 49

Trading Volume ............................................................................. 49

Liquidity ..................................................................................... 50

Distribution of turnover ................................................................... 51

Market Capitalisation ...................................................................... 52

Sectoral Distribution of Top 50 Companies ............................................ 52

Trading Records during 2008-09 .......................................................... 53

Internet Trading ............................................................................ 53

On-line IPOs ................................................................................. 54

Indices ................................................................................................ 54

Mutual Funds And Exchange Traded Funds ...................................................... 56

Charges ............................................................................................... 57

Clearing & Settlement ............................................................................. 58

Settlement Agencies ....................................................................... 59

Settlement Cycles .......................................................................... 60

Settlement Statistics ...................................................................... 60

Risk Management System .......................................................................... 60

Capital Adequacy ........................................................................... 60

On-Line Monitoring ......................................................................... 60

Margin Requirements ............................................................................... 61

Categorisation of newly listed securities ....................................................... 61

Value at Risk Margin ................................................................................ 61

Extreme Loss Margin ............................................................................... 62

Mark to Market Margin ............................................................................. 62

Close out Facility ................................................................................... 62

Index based Market wide Circuit Breakers ..................................................... 63

Settlement Guarantee Fund ...................................................................... 63

Contd...

Contd...


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SECTION 5- WHOLESALE DEBT MARKET SEGMENT

Trading Mechanism ................................................................................. 87

Market Performance ................................................................................ 88

Turnover...................................................................................... 88

Market Capitalistion ...................................................................... 90

Transaction Charges ................................................................................ 90

Settlement ........................................................................................... 90

FIMMDA-NSE MIBID/MIBOR ......................................................................... 90

Zero Coupon Yield Curve .......................................................................... 91

NSE-VAR System ..................................................................................... 92

GOI- bond Index..................................................................................... 93

SECTION 6- FUTURES &OPTIONS SEGMENT

Trading Mechanism ................................................................................107

Contract Specification ............................................................................107

Selection Criteria For Stocks And Index Eligibility For Trading .............................108

Trading Value & Contracts Traded ...............................................................109

Product wise turnover on F&O segment ...............................................110

Futures and Options on Benchmark Indices ...........................................111

Sectorwise Stock Futures & Options Turnover .......................................111

Participant wise turnover on F&O Segment ...........................................112

Member wise turnover on the Exchange ...............................................113

High Volume Members ....................................................................113

Internet Trading ...........................................................................113

Traded Value Records ..................................................................... 113

Top 20 Futures And Options Contracts .........................................................114

Number of Trades ..................................................................................114Charges ..............................................................................................114

Clearing And Settlement..........................................................................115

Clearing Mechanism .......................................................................115

Settlement Mechanism ...................................................................116

Settlement Statistics .....................................................................117

Risk Management System .........................................................................117

NSE-SPAN .........................................................................................118

Margins ......................................................................................119

Position Limits ............................................................................119

Contd...

Contd...SPAN is a registered trademark of the Chicago Mercantile Exchange (CME) used here under license.


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SECTION 7- CURRENCY DERIVATIVES SEGMENT

Trading Mechanism ................................................................................143

Contract Specifications for Currency Futures .................................................143

Turnover .............................................................................................145

Traded Value Records .............................................................................146

Clearing and Settlement..........................................................................146

Clearing Entities ..........................................................................146

Clearing Mechanism ......................................................................146

Settlement Mechanism ...................................................................146

Settlement Statistics .....................................................................147

Margining System .........................................................................147

Position Limits for Currency Futures ..................................................151

Risk Management .................................................................................. 151

SECTION 8- INVESTOR SERVICES, ARBITRATION

Investor Services ...................................................................................157

Arbitration ..........................................................................................157

SECTION 9- KNOWLEGDE INITIATIVE

About NSEs Certification in Financial Markets (NCFM) .....................................163

New Modules introduced under NCFM in 2009-10 ............................................ 163

NSEs Certified Capital Market Professionals (NCCMP) ......................................164

CBSE- NSE joint Certification in Financial Markets ........................................... 164

NSEs Certified Capital Market Professionals (NCCMP) ......................................164

NSE Manipal Education Training Programs ...................................................165

NSE Research Initiative ...........................................................................166

Investor Awareness and Education Programmes .............................................166

Contd...


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National Stock Exchangeof India

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1National Stock Exchange of IndiaSince 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`17 crore in 1994-95 when NSE started its Cash

Market segment to`16,959 crore in 2009-10. Similarly, market capitalization of listed companies

went up from`363,350 crore at the end of March 1995 to`6,009,173 crore at end March 2010.

Indian equity markets are today among the most deep and vibrant markets in the world.

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, Currency futures and Interest rate futures. Our Exchange has more than 1,400 companies

listed in the Capital Market and more than 92% of these companies are actively traded. The debt

market has 4,140 securities available for trading. Index futures and options trade on four different

indices and on 190 stocks in stock futures and options as on 31 st March , 2010. Currency futures

contracts are traded in four currency pairs. Interest Rate Futures (IRF) contracts based on 10 year

7% Notional GOI Bond are also available for trading.

Incorporation and Management

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 frompromoter 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-to-day affairs of the

Exchange. The day-to-day management of the Exchange is delegated to the Managing Director 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.

Tables 1-1 and 1-2 gives the composition of its Board of Directors and the Executive Committees.

Market Segments and Products

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),

Derivativeslike Index Futures, Index Options, Stock Futures, Stock Options Currency Futures and

Interest Rate Futures. The Exchange provides trading in 4 different segments viz., Wholesale Debt

Market (WDM) segment, Capital Market (CM) segment, Futures & Options (F&O) segment and the

Currency Derivatives Segment (CDS).

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, state development

loans (SDLs), bonds issued by public sector undertakings (PSUs), floating rate bonds (FRBs),

zero coupon bonds (ZCBs), index bonds, commercial papers (CPs), certificate of deposits (CDs),


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corporate debentures, SLR and non-SLR bonds issued by financial institutions (FIs), bonds issued

by foreign institutions and units of mutual funds (MFs).

However, along with these financial instruments, NSE also launched various products e.g. FIMMDA-

NSE MIBID/MIBORowing to the market need. 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 governmentsecurities 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 was`2,359 crore (US $523 million) during 2009-10.

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 2009-10 was`16,959 crore. (US $3,757 million).

Futures & Options (F&O) segment of NSE provides trading in derivatives instruments like Index

Futures, Index Options, Stock Options, 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, Nifty Midcap 50 index and single stocks are available.

Trading in Mini Nifty Futures & Options and Long term Options on S&P CNX Nifty are also available.

The average daily turnover in the F&O Segment of the Exchange during 2009-10 was`72,392 crore

(US $ 16,097 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 (USD-INR). On the very first day of

operations a total number of 65,798 contracts valued at`291 crore were traded on the Exchange.

Since then trading activity in this segment has been witnessing a rapid growth.

Trading in Currency Futurescontracts in other pairs- Euro-INR, Pound Sterling-INR and Japanese

Yen-INR commenced on February 01, 2010. The average daily turnover in the Currency Futures

during 2009-10 was`7,428 crore (US $ 1,646 million).

Trading in Interest Rate Futures (IRF) commenced on August 31, 2009. Interest Rate Futures

contracts are based on 10 year 7% Notional GOI Bond. On its first day of trading, 14,559 contracts

were traded with a total value of`267.31 crores.

Trading Value

(`crore)

Segment/Year 2006-07 2007-08 2008-09 2009-10

CM 1,945,287 3,551,038 2,752,023 4,138,023

F&O 7,356,271 13,090,478 11,010,482 17,663,665

WDM 219,106 282,317 335,952 563,816

Currency Futures * -- -- 162,272 1,782,608

Interest Rate Futures ** -- -- -- 2,975

Total 9,520,664 16,923,833 14,260,729 24,151,088

* Trading in Currency Futures commenced on August 28, 2008

** Trading in Interest Rate Futures commenced on August 31,2009


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Market Capitalisation (As at end March)

(`crore)

Segment/Year Mar-07 Mar-08 Mar-09 Mar-10

CM 3,367,350 4,858,122 2,896,194 6,009,173

WDM 1,784,801 2,123,346 2,848,315 3,165,929

Total 5,152,151 6,981,468 5,744,510 9,175,102

NSEs Worldwide Ranking in 2009 (Jan-Dec)

4th in Number of Trades in Equity Shares.

2nd in terms of Number of Contracts traded in Single Stock Futures.

3rd in terms of Number of Contracts traded in Stock Index Futures.

2nd in terms of Number of Contracts traded in Stock Index Options.

7thLargest Derivatives Exchange in the World.

Source:WFE & FIA

Achievements/Milestones

Month/Year Event

November 1992 Incorporation

April 1993 Recognition as a stock exchange.

June 1994 WDM segment goes live.

November 1994 CM segment goes live through VSAT.

October 1995 Became largest stock exchange in the country.

April 1996 Commencement of clearing and settlement by NSCCL.

April 1996 Launch of S&P CNX Nifty.

November 1996 Setting up of National Securities Depository Ltd., first depository in India, co-promotedby NSE.

December 1996 Commencement of trading/settlement in dematerialised securities.

December 1996 Launch of CNX Nifty Junior.

May 1998 Promotion of joint venture, India Index Services & Products Limited (IISL) (along withCRISIL) for index services.

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

July 1998 Launch of NSEs Certification Programme in Financial Markets (NCFM)

October 1999 Setting up of NSE.IT Ltd.

June 2000 Commencement of Derivatives Trading (in Index Futures).

September 2000 Launch of Zero Coupon Yield Curve.

June 2001 Commencement of Trading in Index Options

July 2001 Commencement of Trading in Options on Individual Securities

November 2001 Commencement of Trading in Futures on Individual Securities

January 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 ETF)January 2008 Launch of Mini Nifty derivative contracts

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

Contd...


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Month/Year Event

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 Ltd.July 2008 Launch of NOW Neat on Web

August 2008 Launch of Currency Derivatives Segment with commencement of trading on CurrencyFutures on August 29, 2008.

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

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

March 2009 Launch of NSE E-Bids for Debt Segment

August 2009 Launch of Interest Rate Futures

November 2009 Launch of Mutual Fund Service System

December 2009 Commencement of settlement of corporate bonds

February 2010 Trading in Currency Futures on additional currency pairs

February 2010 Listing of Hang Seng BeES ETF on NSE

March 2010 NSE and CME Group announced cross-listing relationship

March 2010 NSE and Singapore Exchange sign Memorandum of Understanding (MOU)

April 2010 NSE and NSCCL receive Asian Banker awards

Developments during the year.

The innovation of new market products and services continued during 2009-2010. National

Stock Exchange became the first exchange to receive approval from SEBI to introduce Exchange

traded Interest Rate Futures (IRF) contracts for trading on the Currency Derivatives Segmentof the exchange. Trading in IRF commenced on August 31, 2009. On its first day of trading,

14,559 contracts were traded with a total value of`267.31 crores.

In November 2009, SEBI allowed transaction in Mutual Fund schemes through the stock exchange

infrastructure. Consequently, NSE launched India's first Mutual Fund Service System (MFSS)

on November 30, 2009 through which an investor can subscribe or redeem units of a mutual

fund scheme.

The clearing and settlement of corporate bonds was operationalised at NSCCL on December

01, 2009. As per SEBI circular dated October 16, 2009, all trades in corporate bonds between

specified entities, namely, mutual funds, foreign institutional investors/ sub-accounts, venturecapital funds, foreign venture capital investors, portfolio mangers, and RBI regulated entities

as specified by RBI are required to be cleared and settled through the National Securities

Clearing Corporation Limited (NSCCL) or the Indian Clearing Corporation Limited (ICCL). This

is applicable to all corporate bonds Over The Counter (OTC) or on the debt segment of Stock

Exchanges. All transactions are to be cleared and settled in terms of the norms specified by

NSCCL and ICCL.

Trading in Currency Futures contracts on additional currency pairs - Euro-INR, Pound

Sterling-INR and Japanese Yen-INR in the Currency Derivative Segment (CDS) of the Exchange

commenced from February 01, 2010.

Hang Seng BeES ETF - Indias first Exchange Traded Fund (ETF) tracking an overseas stock

market index was launched on NSE on February 15, 2010. The open ended ETF aimed to

Contd...

** VIX is a trademark of Chicago Board Options Exchange, Incorporated ("CBOE") and Standard & Poors has granted a license to NSE, withpermission from CBOE, to use such mark in the name of the India VIX and for purposes relating to the India VIX.


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provide domestic investors exposure to companies listed on the Hong Kong Stock Exchange

that constitute the Hang Seng index. There are 42 constituent companies in the Hang Seng

index such as HSBC Holdings, Hutchison, Cathay Pacific Airways, China Mobile, and PetroChina

etc. This product would give Indian markets an exposure to the Chinese market- which is the

fastest growing economy in the world.

The National Stock Exchange of India (NSE) and CME Group, announced cross-listingarrangements, including license agreements covering benchmark indexes for U.S. and Indian

equities on March 10, 2010.

They also entered into a Memorandum of Understanding with respect to other areas of

potential cooperation, including related to development and distribution of financial products

and services. Under the cross-listing arrangements, the S&P CNX Nifty Index (the Nifty 50), the

leading Indian benchmark index for large companies accounting for 22 sectors of the Indian

economy, will be made available to Chicago Mercantile Exchange (CME), for the creation and

listing of U.S. dollar denominated futures contracts for trading on CME, and the rights to the

S&P 500 and Dow Jones Industrial Average (DJIA ) will also be made available to NSE

for the creation and (subject to regulatory approval) listing of Rupee-denominated futurescontracts for trading on NSE. The license to the Nifty 50 from NSEs affiliate India Index

Services & Products Ltd. (IISL), which is exclusive to CME Group within the Americas and

Europe, is in addition to the existing licensing arrangement between Singapore Exchange Ltd.

(SGX) and IISL. The sublicenses to the S&P 500 and DJIA indexes, which are exclusive to NSE

for Rupee -denominated futures contracts traded within India, are being made available via

sublicenses from CME Group and each of Standard & Poors and Dow Jones, respectively.

The National Stock Exchange of India Limited (NSE) and Singapore Exchange (SGX) signed a

Memorandum of Understanding (MOU) on March 10, 2010 to cooperate in the development

of a market for India-linked products. Under the MOU, both exchanges aim to explore future

collaboration in the expansion, development and promotion of India-linked products and

services to be listed on SGX. Subject to regulatory approval, these products may include

equity products and other asset classes. The two exchanges also will look into a bilateral

securities trading link to enable investors in one country to seamlessly trade on the other

countrys exchange.

NSE has been awarded The Asian Banker Financial Derivative Exchange of the Year Award

and NSCCL has been awarded The Asian Banker Clearing House of the Year Award in April

2010. This is the highest award for exchanges that outperform their regional peers in terms

of growing financial derivatives related products and trading business and for clearing houses

in Asia Pacific region respectively.

The objectives of this award programme was to recognize exchanges, depositories, alternative

markets service providers, etc. who are leading the industry in creating sustainable and highly

liquid markets of the future, to recognize the use of technology and business models to

revolutionize the industry and create global access in an efficient and seamless manner, to

validate the leadership of the regional players that maintain the integrity of financial markets,

protect investor interests and still lead in innovation, to identify emerging best practices as

well as product and process innovations that set the benchmarks for all players to improve

their competitive profile. The Asian Banker, is one of Asias foremost intelligence provider

to the financial services industry. The Asian Banker Markets & Exchanges Achievement Award

Programme was instituted in 2010 to recognise the competition amongst exchanges, broker-dealers, financial institutions, fund managers and others in this fascinating and fast changing

industry. The programme is also designed to be a repository of evolving best practices from

which players can benchmark their own products and processes over the long term.


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FACTS AND FIGURES

The growth in the stock market activity across the different market segments and hightest attained

records is visible from the below facts and figures.

Figures as on March 31, 2010

Listed Companies 1,470

Trading Members 1,297

VSATS 2,527

Number of cities having VSATS 186

Securities available for trading in the CM segment 1,806

Contracts available for trading equity derivatives segment @ 23,533

Records reached (data from inception to March 31, 2010)

Parameter Date Magnitude

Capital Market Segment

Number of trades May 19, 2009 11,260,392

Traded Quantity May 19, 2009 19,225.95 lakh

Turnover May 19, 2009 `40,151.91 cr. (US $ 8,894.97 mn.)

Market capitalisation January 07, 2008 `6,745,724.00 cr. (US $ 1,687,696.77 mn.)

S&P CNX Nifty Index value January 08, 2008 6357.10

CNX Nifty Junior Index value January 04, 2008 13209.35

Futures & Options Segment

Number of trades January 28, 2010 1,971,214

Number of Contracts Traded January 28, 2010 6,300,279

Turnover January 28, 2010 `166,193.03 cr. (US $ 36,817.24 mn.)

Currency Derivatives Segment (Currency Futures)

Number of trades January 11, 2010 78,935

Number of Contracts Traded March 30, 2010 4,353,053

Turnover March 30,2010 `19,927 cr. (US $ 4,414 mn.)

Wholesale Debt Market Segment

Turnover August 25, 2003 `13,911.57 cr. (US $ 3,179.79 mn.)

@ No. of contracts available for trading in F&O segment as on 31st March 2010 includes 3 Nifty

index Futures, 3 CNX IT Futures , 3 Bank Nifty Futures, 3 CNX 100 Futures , 3 Nifty Junior Futures,

3 Nifty Midcap50 futures, 3 Mini Nifty Futures, 570 stock futures, 628 Nifty index options,

114 CNX IT options, 140 Bank Nifty options, 86 Nifty Midcap50 options, 98 Mini Nifty Options,

21,882 stock option

Technology and Application Systems in NSE

Technology has been the backbone of the Exchange. Providing the services to the investing

community and the market participants using technology at the cheapest possible cost has beenits main thrust. NSE chose to harness technology in creating a new market design. It believes that

technology provides the necessary impetus for the organization to retain its competitive edge and

ensure timeliness and satisfaction in customer service. In recognition of the fact that technology

will continue to redefine the shape of the securities industry, NSE stresses on innovation and


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sustained investment in technology to remain ahead of competition. NSE is the first exchange in

the world to use satellite communication technology for trading. It uses satellite communication

technology to energize participation from about 2,493 VSATs from nearly 185 cities spread all over

the country.

Its trading system, called National Exchange for Automated Trading (NEAT), is a state of-the-art

client server based application. At the server end all trading information is stored in an in-memorydatabase to achieve minimum response time and maximum system availability for users. It has

uptime record of 99.999%. For orders entered by the user, the response time within trading system

is around 5ms. NSE has been continuously undertaking capacity enhancement measures so as to

effectively meet the requirements of increased users and associated trading loads. NSE has also

put in place NIBIS (NSEs Internet Based Information System) for on-line real-time dissemination of

trading information over the Internet.

As part of its business continuity plan, NSE has established a disaster back-up site at Chennai along

with its entire infrastructure, including the satellite earth station and the high-speed optical fiber

link with its main site at Mumbai. This site at Chennai is a replica of the production environment

at Mumbai. The transaction data is backed up on near real time basis from the main site to thedisaster back-up site through the 3 STM-4 (1.86 GB) high-speed links to keep both the sites all the

time synchronized with each other. The various application systems that NSE uses for its trading

as well clearing and settlement and other operations form the backbone of the Exchange. The

application systems used for the day-to-day functioning of the Exchange can be divided into (a)

Front end applications and (b) Back office applications.

The various application systems that NSE uses for its trading as well clearing and settlement and

other operations form the backbone of the Exchange. The application systems used for the day-to-

day functioning of the Exchange can be divided into (a) Front end applications and (b) Back office

applications. In the front office, there are 7 applications:

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 three Stratus systems with

communication over TCP IP protocol. The application has been benchmarked to support 60,000

users and handle more than 30 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.

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 a direct interface with the trading

members of the WDM segment 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.

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.

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.


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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.

NEAT MF system is an interface with the trading members of the CM segment for order

collection of designated Mutual Funds units

NEAT- CD system provides interface for trading in currency derivatives and Interest Rate Futures

NEATPLUS NSE is offering a multi-market front end application NEATPlus to its members. This

application provides a common trading platform to NSE members to trade in Capital Market as

well as Futures and Options Market segments at NSE. Members can take login in CM and F&O

segments in a single terminal with ability to monitor and trade in Equity securities as well as Equity

derivatives from single screen. Members can use the existing VSAT/Leased Line connectivity for

accessing the NEATPlus application. Multiple market watch screens with Excel like features, ability

to select various fonts, customizable color schemes and themes are some of the other salient

features of the NEATPlus application.

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:

Nationwide Clearing and Settlement System NCSS 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 that connects 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.

Future and Options Clearing and Settlement System (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 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.

Currency Derivatives Clearing and Settlement System (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.

Surveillance system offers the users a facility to comprehensively monitor the trading activity and

analyze the trade data online and offline

Online Position Monitoring System (OPMS) OPMS is the online position monitoring system that

keeps track of all trades executed for a trading member vis--vis its capital adequacy.

Parallel RISk Monitoring System (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


17/17611

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.

Parallel RISk Monitoring System Currency Derivatives (PRISM-CD) is the risk management system

of the currency derivatives segment. It is similar in features to the PRISM of F&O Segment.

Data warehousing that is the central repository of all data in CM as well as F&O segment of the

Exchange.

Listing system 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.

Membership system that keeps track of all required details of the Trading Members of the

Exchange.

The exchange operates and manages a nationwide network. This network includes 9 POPs (Points of

Presence) setup across the country and catering to 3070+ leased lines. All the POPs are connectedto DC and DR over high Speed links (Mainly STMs). All the members are given a 2mb point to point

connection to the nearest POP. All the members have a choice of selecting the POPs based on their

office location. Also there are plans to setup additional POPs based on member requirements. The

old X.25 VSAT and Leased Line network has been decommissioned completely.

NSEs existing POPs are build on highly redundant infrastructure connecting to Core and DR setup

via high speed redundant backbone links from multiple service providers. Mini POP with low

connectivity requirement is fully owned and operated by NSE is proposed to be built in with

redundant Infrastructure at Rajkot. Member links would terminate at Mini POP and the traffic

would be routed via a dual backbone pipe to nearby Mini POP. In keeping up with the global

trends the Exchange is providing to its members a co-location facility for their DMA and ALGO IT

infrastructure at NSEIL premises in BKC shortly.

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 existing VSAT/ Leased line, in addition to internet links. The

various features provided by NOW are (a) comprehensive Administration features, flexible risk

management system, high speed dealer terminals and online trading facility for investors.

NSE Family

NSCCL

The National Securities Clearing Corporation Ltd. (NSCCL), a wholly-owned subsidiary of NSE, was

incorporated in August 1995 and commenced clearing corporation in April 1996. It was the first

clearing corporation in the country to provide novation/settlement guarantee that revolutionized

the entire concept of settlement system in India. It was set up to bring and sustain confidence in

clearing and settlement of securities; to promote and maintain short and consistent settlement

cycles; to provide counter-party risk guarantee, and to operate a tight risk containment system.It carries out the clearing and settlement of the trades executed in the equities and derivatives

segments of the NSE. It operates a well-defined settlement cycle and there are no deviations

from the same. It is the first clearing corporation in the country to establish the Settlement

Guarantee Fund (SGF) in June 1996. It has been managing, clearing and settlement functions since


18/17612

its inception without a single failure or clubbing of settlements. NSCCL has also introduced the

facility of direct payout to clients account on both the depositories viz., NSDL and CDSL.

Today NSCCL settles trades under the T+2 rolling settlement. It has the credit of continuously

upgrading the clearing and settlement procedures and has also bought Indian financial markets in

line with international markets

NSDL

To promote dematerialization of securities NSE joined hands with UTI and IDBI to set up the first

depository in India called the National Securities Depository Limited (NSDL). The depository

system gained quick acceptance and in a very short span of time it was able to achieve the

objective of eradicating the paper from the trading and settlement of securities, and was also

able to get rid of the risks associated with fake/forged/stolen/bad paper. Dematerialized delivery

today constitutes almost 100% of total of the total delivery based settlement.

NSE Infotech Services Ltd

NSE Infotech Services Ltd Information Technology has been the back bone of conceptualization,

formation, running and the success of National Stock Exchange of India Limited (NSE). NSE

has been at the forefront in spearheading technology changes in the securities market. It was

important to give a special thrust and focus on Information Technology to retain the primacy in the

market. Towards this a wholly owned subsidiary M/s. NSE Infotech Services Limited (NSETECH) was

incorporated to cater to the needs of NSE and all its group companies exclusively.

NSE.IT

NSE.IT Limited, a 100% subsidiary of NSE was setup in 1999 to provide thrust to NSEs technology

edge, concomitant with its overall goal of harnessing latest technology for optimum business

use. A Vertical Specialist Enterprise, NSE.IT offers end-to-end Information Technology (IT)

products, solutions and services. NSE.IT has expertise in a wide range of business applications

including high-end mission critical applications requiring real-time processing speeds. Additionally,

NSE.IT specializes in providing complete IT solutions to Stock Exchanges, Clearing Corporations,

Brokerage Firms, Insurance Firms and other organizations in the financial sector. NSE.IT is focused

on developing mission-critical technology solutions for the Financial Services market and the

facilitation of change within these markets.

IISL

India Index Services and Products Limited (IISL), a joint venture of CRISIL and NSE, was set up

in May 1998 to provide indices and index services. It has a licensing and marketing agreement

with Standard and Poors (S&P), the worlds leading provider of investible equity indices, for

co-branding equity indices. IISL is Indias first specialized company focusing upon the index as a

core product. It provides a broad range of services, products and professional index services. It

maintains over 96 equity indices comprising broad-based benchmark indices, sectoral indices and

customised indices. Many investment and risk management products based on IISL indices have

developed in the recent past, within India and abroad. These include index based derivatives on

NSE and on Singapore Exchange, Indias first exchange traded fund, a number of index funds, and

Licensing of the Index for various structured products.

DOTEX INTERNATIONAL LTD.

The data and info-vending products of NSE are provided through a separate company DotEx

International Ltd., a 100% subsidiary of NSE, which is a professional set-up dedicated solely for


19/17613

this purpose. DotEx data provides products like : On-line streaming data feed, Intra-day Snapshot

data feed, end of day data and Historical Data.

NCDEX

NSE joined hand with other financial institutions in India to promote the NCDEX which provides for

a world class commodity exchange platform for Market Participants to trade in wide spectrum of

commodity derivatives. It was incorporated in the year 2003. Currently NCDEX facilitates trading

of agro based commodities, precious metal, base metal, energy products and polymers.

NCCL

National Commodity Clearing Limited (NCCL) is a company promoted by National Stock Exchange

of India Limited (NSEIL). It was incorporated in the year 2006. One of the objectives of NCCL is

to provide and manage clearing and settlement, risk management and collateral management

services to commodity exchanges. NCCL is having the requisite experience and exposure in

providing clearing and settlement facility, risk and collateral management services in the

commodities market including funds settlement with multiple clearing banks. Currently NCCL is

providing clearing and settlement services to NCDEX.

PXIL

A National Level Power Exchange by the name of Power Exchange India Limited (PXIL) has been set

up through a Joint Venture by India's two leading Exchanges, National Stock Exchange of India Ltd

(NSE) and National Commodity & Derivatives Exchange Ltd (NCDEX). PXIL has got the in-principle

approval from CERC to set up and operate the power exchange and will operate as a National Level

electricity exchange covering the entire Indian electricity market.


20/17614

Table 1-1 : Board of Directors *

1 Dr. Vijay L KelkarFormer Chairman, Finance Commission, India Former UnionFinance Secretar y and Advisor to the Finance Minister

Chairman

2 Mr. Ravi NarainNational Stock Exchange of India Ltd.

Managing Director

3 Ms. Chitra RamkrishnaNational Stock Exchange of India Ltd.

Joint Managing Director

4 Mr. C. AchuthanFormer Presiding Officer, Securities Appellate Tribunal

Director

5 Mr. Anjan BaruaDeputy Managing Director & Group Executive(Global Markets)State Bank of India

Director

6 Mr. A. P. Kurian

ChairmanAssociation of Mutual Funds in India

Director

7 Dr. Rajiv B. LallManaging Director & CEOIDFC Limited

Director

8 Mr. Anand G. MahindraVice Chairman & Managing DirectorMahindra & Mahindra Ltd.

Director

9 Mr. S. B. MainakExecutive Director(Investment-Risk Management and Research)

Director

10 Mr. Y. H. MalegamChairman EmeritusM/s. S.B. Billimoria & Co.Chartered Accountants

Director

11 Mr. S. B. MathurSecretary General, Life Insurance Council &Former Chairman, Life Insurance Corporation of India

Director

12 Dr. KRS MurthyProfessor & Former DirectorIndian Institute of Management, Bangalore

Director

13 Dr. R. H. PatilChairmanThe Clearing Corporation of India Ltd.

Director

14 Ms. Bhagyam RamaniGeneral Manager & Director, GIC

Director

15 Dr. V. A. SastryDirector, MUSA Software Engineering Pvt. Ltd.Former Director, Infosys Technologies Ltd.

Director

16 Mr. Deepak M SatwalekarFormer Managing Director & CEOHDFC Standard Life Insurance Company Ltd.

Director

17 Mr. Justice B.N.Srikrishna (Retd.)Former Judge, Supreme Court of India

Director

* As on July 8, 2010


21/17615

Table 1-2 : Executive Committees *

I CM & WDM SEGMENTS

1 Mr. Ravi Narain Managing Director, National Stock Exchangeof India Ltd.

Chairman

2 Mr. D. C. Anjaria Director, International Financial Solutions

Pvt. Ltd.

Public Representative

3 Mr. D. Balasundaram Chairman, M/s. Coimbatore Capital Limited Trading Member

4 Mr. Vimal Bhandari Country Manager India AEGON InternationalNV.


5 Mr. Atul Goel Partner, M/s. Pace Financial Services Trading Member

6 Mr. Y. H. Malegam Chairman Emeritus, M/s. S.B.Billimoria &Co., Chartered Accountants


7 Mr. Gagan Rai Managing Director & CEO, NationalSecurities Depository Limited

Other Nominees

8 Ms. Chitra Ramkrishna Joint Managing Director, National StockExchange of India Ltd

Other Nominees

9 Mr. Mayank Shah Director, M/s. Anagram Capital Limited Trading Member

10 Mr. Akhilesh Kumar Singh Managing Director & CEO, M/s. ShriramInsight Share Brokers Limited

Trading Member

11 Mr. P. M. Venkatasubramanian Former Managing Director, GIC Other Nominees

II F&O MARKET SEGMENT


Chairman

2 Mr. D.C.Anjaria Director, International Finance SolutionsPvt. Ltd.


3 Prof. V. Ravi Anshuman Professor, Indian Institute of Management,Bangalore


4 Ms. Madhabi Puri Buch Managing Director & CEO, M/s. ICICISecurities Limited

Trading Member

5 Mr. Shailesh Haribhakti Executive Chairman & Managing Partner,BDO Haribhakti


6 Mr. M. Raghavendra Former General Manager, General InsuranceCorporation of India

Other Nominees

7 Mr. A.V. Rajwade Forex Consultant Public Representative

8 Ms. Chitra Ramkrishna Joint Managing Director, National StockExchange of India Ltd

Other Nominees

9 Mr. Rajendra Dolatrai Shah Director, M/s. Nirpan Securities PrivateLimited

Trading Member

III CD SEGMENT


Chairman

2 Mr. M. G.Bhide Former Chairman, Bank of India Public Representative

3 Mr. Conrad Dsouza Senior General Manager, Treasury, HousingDevelopment Finance Corporation Ltd


4 Dr. R. H. Patil Chairman, The Clearing Corporation of IndiaLimited


5 Mr. S. Rajendren General Manager- International Banking &Treasury Union Bank Of India

Trading Member

6 Ms. Chitra Ramkrishna Joint Managing Director, National StockExchange of India Limited

Other Nominees

7 Mr. Suresh Senapaty Chief Financial Officer & Director,WiproLimited


8 Mr. V. Srikanth Managing Director, Head of Markets, CitiSouth Asia, Citibank N.A.

Trading Member

* As on July 8, 2010


22/17616


23/176

Membership

2


24/17618


25/17619

2MembershipThe trading in NSE has a three tier structure-the trading platform 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.

Eligibility Criteria

The Exchange stresses on factors such as corporate structure, capital adequacy, track record,

education, experience, etc. while granting trading rights to its members. This reflects a conscious

effort by the Exchange to ensure quality broking services which enables to build and sustain

confidence in the Exchanges operations. The standards stipulated by the Exchange for tradingmembership are substantially in excess of the minimum statutory requirements as also in comparison

to those stipulated by other exchanges in India. The exposure and volume of transactions that can

be undertaken by a trading member are linked to liquid assets in the form of cash, bank guarantees,

etc. deposited by the member with the Exchange as part of the membership requirements.

The trading members are admitted to the different segments of the Exchange subject to the

provisions of the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board

of India Act, 1992, the rules, circulars, notifications, guidelines, etc., issued there under and the

byelaws, Rules and Regulations of the Exchange. All trading members are registered with SEBI.

Trading Membership

A prospective trading member is admitted to any of the following combinations of market

segments:

Wholesale Debt Market (WDM) segment,

Capital Market (CM) and the Futures and Options (F&O) segments,

CM Segment and the WDM segment, or

CM Segment, the WDM and the F&O segment.

Currency Derivatives (CD) segment.

CD along with either or all segments listed above.

In order to be admitted as a trading member, the individual trading member/at least two partners

of the applicant firm/at least two directors of the applicant corporate must be HSC and must

possess at least two years experience in securities markets. The applicant for trading membership/

any of its partners/shareholders/directors must not have been declared defaulters on any stock

exchange, must not be debarred by SEBI for being associated with capital market as intermediaries

and must not be engaged in any fund-based activity. In case of corporate applicant, the minimum

paid up capital should be`30 lakh and the dominant promoter/shareholder group should hold at

least 51% of paid-up equity capital of unlisted corporate entity. In case of listed corporate entity,

persons named as promoters in any document for offer of securities to the public or existing

shareholders or in the shareholding pattern disclosed by the corporate trading member under the

provisions of the Listing Agreement, whichever is later, is deemed to be in control.


26/17620

Clearing Membership

The trades executed on the Exchange may be cleared and settled by a clearing member. The

trading members in the CM segment are also clearing members. In the F&O segment, some

members, who are registered with SEBI as self-clearing members, clear and settle their own

trades. Certain others, registered as trading member-cum-clearing member, clear and settle their

own trades as well as trades of other trading members. Besides this, there is a special category

of members, called professional clearing members (PCMs), who do not trade but only clear trades

executed by others. This means that some members clear and settle their trades through a trading

member-cum-clearing member or a PCM, not themselves. The members clearing their own trades

or trades of others and the PCMs are required to bring in additional security deposits in respect

of every trading member whose trades they undertake to clear and settle. The requirements of

trading membership and clearing membership in the different market segments are presented in

Table 2-1. With effect from July 1, 2008 a processing fee of`10,000/- and an admission fee of

`5,00,000/- is charged for taking up new membership.

Currency Derivatives Membership

Trading in Currency Derivatives commenced on August 29, 2008 at NSE. The membership of the

currency futures market is separate from the membership of the equity derivative segment or the

cash segment. Membership for both trading and clearing, in the currency futures market is subject

to the guidelines issued by the SEBI. Table 2-1 contains the Eligibility Criteria for Membership in

Currency Derivatives for Corporates, Individuals and Firms. Banks authorized by the Reserve

Bank of India under section 10 of the Foreign Exchange Management Act, 1999 as AD Category - I

bank are permitted to become trading and clearing members of the currency futures market of

the recognized stock exchanges, on their own account and on behalf of their clients, subject to

fulfilling the following minimum prudential requirements as mentioned below :

a) Minimum net worth of`500 crores.

b) Minimum CRAR of 10 per cent.

c) Net NPA should not exceed 3 per cent.

d) Made net profit for last 3 years.

Growth and Distribution of Members

As at end March 2010, the Exchange had 1,136 members. The growth of membership on NSE

is presented in Table 2-2. A total of 41,153 (1,867 corporates, 2,705 partnership firms and

36,581 individuals) sub-brokers were affiliated to 609 trading members of the Exchange onMarch 31, 2010.


27/176


28/17622

Requirements

forProfessionalClearingMemberhip

(Allvaluesin`

lakh)

Particulars

CM

Segment

F&OSegment

CMandF&OSegment

Eligibility

Tradi

ngMemberofNSE/SEBIRegisteredCu

stodians/RecognisedBanks

NetWorth

300

300

300

InterestFreeS

ecurityDeposit(IFSD)*

25

25

34

CollateralSecu

rityDeposit(CSD)

25

25

50

AnnualSubscri

ption

2.5

Nil

2.5

*TheProfessio

nalClearingMember(PCM)isrequire

dtobringinIFSDof`

2lakhandCSD

of`

8lakhpertradingmember

whosetrades

heundertakestoclearintheF&Ose

gmentandIFSDof`

6lakhandCSDo

f`

17.5

lakh(`9lakhand`

25

lakhrespectivelyforcorporateMembers)pertrad

ingmemberintheCMsegment.

INDIVIDUALS/P

ARTNERSHIPFIRMS

(Amountin`

lakh)

Particulars

CM

CMand

F&O

WDM

CMand

WDM

CM,W

DMan

dF&O

NetWorth

75

75(MembershipinCMsegmentandTradingmembershipin

F&Osegment)

100(MembershipinCMsegmentandTradingandSelf

clearingmembershipintheF&O

segment)

300(MembershipinCMsegmentandTradingandClearing

membershipinF&Osegment)

200

200

200(MembershipinWDMsegment,CM

segmentandTrading/Tradi

ngandSelfClearing

membershipinF&Osegment)

300(MembershipinWDMsegment,CMsegment

andTradingandclearingm

embershiponF&O

segment)

InterestFreeS

ecurityDeposit(IFSD)withNSEIL

2

6.5

51.5

150

176.5

201.5

InterestFreeS

ecurityDeposit(IFSD)withNSCCL

6

6*

NIL

6

6*

CollateralSecu

rityDeposit(CSD)withNSCCL

1

7.5

17.5

**

NIL

17.5

17.5

**

AnnualSubscri

ption

0.5

0.5

1

1.5

1.5

AdvanceMinim

um

TransactionCharegesfor

FuturesSegme

nt

NIL

1

NIL

NIL

1

*AdditionalIFSDof25lakhswithNSCCLisrequired

forTradingandClearing(TM-CM)an

dforTradingandSelfclearingmemb

er(TM/SCM).

**AdditionalCo

llateralSecurityDeposit(CSD)of25

lakhwithNSCCLisrequiredforTrad

ingandClearing(TM-CM)andforTra

dingandSelfclearingmember(TM/S

CM).

Contd...

Contd...


29/176


30/17624

Table 2-2 : Distribution of Members

Month/Year(end of period)

CM WDM CDS CM/WDM/F&O/CDS

Apr-09 116 5 39 1,074

May-09 116 5 42 1,076

Jun-09 115 5 44 1,078

Jul-09 113 5 21 1,088

Aug-09 110 5 33 1,093

Sep-09 105 5 34 1,103

Oct-09 103 5 38 1,111

Nov-09 104 5 41 1,115

Dec-09 105 5 43 1,118

Jan-10 107 5 46 1,122

Feb-10 108 5 47 1,123

Mar-10 108 5 48 1,136


31/176

Listing of Securities

3


32/17626


33/17627

3Listing of SecuritiesNSE plays an important role in helping Indian companies access equity capital, by providing

a liquid and well-regulated market. As of March 2010, there were 1,470 companies listed on

NSE. The companies listed on the Exchange are from various sectors of the economy such as -- heavy industry, software, refinery, public sector units, infrastructure, and financial services.

Wide range of securities such as stocks, bonds and other securities can be listed in the Capital

Market (Equities) segment and its Wholesale Debt Market segment. Listing means formal admission

of a security to the trading platform of the Exchange. It provides liquidity to investors without

compromising the need of the issuer for capital and ensures effective monitoring of conduct of the

issuer and trading of the securities in the interest of investors. The issuer wishing to have trading

privileges for its securities satisfies listing requirements prescribed in the relevant statutes and

in the listing regulations of the Exchange. It also agrees to pay the listing fees and comply with

listing requirements on a continuous basis. All the issuers who list their securities have to satisfythe corporate governance requirement framed by regulators.

Listing Criteria

The Exchange has laid down criteria for listing of new issues by companies through IPOs, companies

listed on other exchanges etc. in conformity with the Securities Contracts (Regulation) Rules,

1957, SEBI Guidelines and other relevant guidelines/acts. The criteria include minimum paid-up

capital and market capitalisation, company/promoters track record, etc. The listing criteria for

companies in the CM Segment are presented in Table 3-1. The issuers of securities are required

to adhere to provisions of the Securities Contracts (Regulation) Act, 1956, the Companies Act,

1956, the Securities and Exchange Board of India Act, 1992 and the rules, circulars, notifications,

guidelines, etc. prescribed there under.

Listing Agreement

All companies seeking listing of their securities on the Exchange are required to enter into a formal

listing agreement with the Exchange. The agreement specifies all the quantitative and qualitative

requirements to be continuously complied with by the issuer for continued listing. The Exchange

monitors such compliance and companies who do not comply with the provisions of the listingagreement may be suspended from trading on the Exchange. The agreement is being increasingly

used as a means to improve corporate governance.

Compliance by Listed Companies

NSE has institutionalised a process of verifying compliance of various conditions of the listing

agreement. It conducts a periodic review for compliance on account of announcement of book

closure/record date, announcement of quarterly results, submission of shareholding pattern,

annual reports, appointment of compliance officer, corporate governance report, investor

grievances and various disclosures etc.


34/17628

Disclosures by Listed Companies

It is essential that all critical price sensitive/material information relating to securities is made

available to the market participants and the investors immediately to enable them to take informed

decisions in respect of their investments in securities. The Exchange therefore ensures certain

important timely disclosures by listed companies and disseminates them to market through theNEAT terminals and through its website. These disclosures include corporate actions, quarterly/

half yearly results, decisions at board meeting, non-promoters holding, announcements / press

releases etc.

De-listing

There are two kinds of delisting which can be done from the Exchanges as per the SEBI (Delisting

of Securities) Guidelines, 2003 in the following manner:

Voluntary De-listing of Companies

Any promoter or acquirer desirous of delisting securities of the company under the provisions

of these guidelines shall obtain the prior approval of shareholders of the company by a special

resolution passed through postal ballot, make a public announcement in the manner provided in

these guidelines, make an application to the delisting exchange for seeking in-principle approval

in the form specified by the exchange, and comply with such other additional conditions as may

be specified by the concerned stock exchanges from where securities are to be de-listed. Any

promoter of a company which desires to de-list from the stock exchange shall also determine an

exit price for delisting of securities in accordance with the book building process as stated in the

guidelines. The stock exchanges shall provide the infrastructure facility for display of the price at

the terminal of the trading members to enable the investors to access the price on the screen to

bring transparency to the delisting process.

Compulsory De-listing of Companies

The stock exchanges may de-list companies which have been suspended for a minimum period

of six months for non-compliance with the listing agreement. The stock exchanges have to give

adequate and wide public notice through newspapers and also give a show cause notice to a

company. The exchange shall provide a time period of 15 days within which representation may bemade to the exchange by any person who may be aggrieved by the proposed delisting.

The Stock Exchanges may, after consideration of the representation received from the aggrieved

persons, delist the securities of such companies. The stock exchange shall ensure that adequate

and wide public notice is given through newspaper and on the notice boards/trading systems of the

stock exchanges and shall ensure disclosure in all such notices of the fair value of such securities.

The stock exchange shall display the name of such company on its website. Where the securities

of the company are de-listed by an exchange, the promoter of the company shall be liable to

compensate the security holders of the company by paying them the fair value of the securities

held by them and acquiring their securities, subject to their option to remain security-holders with

the company.


35/17629

The companies delisted during 2009-10 are mentioned in the table below.

Name of the Company Date of Delisting

The Madras Aluminium Company Limited* 19-Jun-09

Lotte India Corporation Limited* 31-Jul-09

Matrix Laboratories Limited* 21-Aug-09

Pearl Global Limited* 21-Aug-09

SI Group - India Limited* 23-Sep-09

PHIL Corporation Limited^ 9-Feb-10

* Delisting of equity shares of the company on account of Voluntary delisting pursuant to SEBI

Delisting Guidelines-2003.

^ Delisting of equity shares of the company on account of Voluntary delisting pursuant to

Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009.

CM Segment

Two categories, namely listed and permitted to trade categories of securities (equity shares,

preference shares and debentures) are available for trading in the CM segment. At the end

of March 2010, 1,470 companies were listed, 37 companies were permitted for trading and

1,359 were available for trading. These securities had a market capitalisation of `6,009,173

crore (US $ 1,331,230 million). The growth of companies listed on the CM segment is presented

in Table 3-1.

Chart 3-1 : Companies Listed at end of March


36/17630

Listing Fees

The listing fees charged by the Exchange are presented in the following table:

Listing Fees in the CM Segment

Sr. No. Listing Fees Amount(`)

1 Initial Listing Fees 25,000

2 Annual Listing Fees (based on paid up share, bond and/ or debenture and/or debtcapital, etc.)

a) Upto`1 Crore 10,000

b) Above`1 Crore and upto`5 Crores 15,000

c) Above`5 Crore and upto`10 Crores 25,000

d) Above`10 Crore and upto`20 Crores 45,000

e) Above`20 Crore and upto`30 Crores 70,000

f) Above`30 Crore and upto`40 Crores 75,000

g) Above`40 Crore and upto`50 Crores 80,000h) Above`50 Crores and upto`100 Crores 1,30,000

i) Above`100 Crore and upto`150 Crores 1,50,000

j) Above`150 Crore and upto`200 Crores 1,80,000

k) Above`200 Crore and upto`250 Crores 2,05,000

l) Above`250 Crore and upto`300 Crores 2,30,000

m) Above`300 Crore and upto`350 Crores 2,55,000

n) Above`350 Crore and upto`400 Crores 2,80,000

o) Above`400 Crore and upto`450 Crores 3,25,000

p) Above`450 Crore and upto`500 Crores 3,75,000

Companies which have a paid up share, bond and/ or debenture and/or debt capital, etc. of more

than`500 crores will have to pay minimum fees of`3,75,000 and an additional listing fees of

`2,500 for every increase of`5 crores or part thereof in the paid up share, bond and/ or debenture

and/or debt capital, etc.

Companies which have a paid up share, bond and/ or debenture and/or debt capital, etc. of more

than`1,000 crores will have to pay minimum fees of`6,30,000 and an additional listing fees of

`2,750 for every increase of`5 crores or part thereof in the paid up share, bond and/ or debenture

and/or debt capital, etc.

Shareholding Pattern

In the interest of transparency, the issuers are required to disclose shareholding pattern on a

quarterly basis. Table 3-3 a presents the sector-wise shareholding pattern at end-March 2010 of

companies listed on NSE. On an average, the promoters hold more than 57.83% of total shares.

Though the public shareholding is nearly 39.86%, Indian public held only 12.03% and the institutional

holdings by (Financial Institutions, Banks, Central and State governments, Insurance companies,

FIIs , MFs, VCFs and FVCFs) accounted for 18.37 %. Table 3-3 b shows that around 9.13% of the

total shares held by promoters are pledged.

WDM SegmentIn the WDM segment, all government securities, state development loans and treasury bills are

deemed listed as and when they are issued. Other than those mentioned above, all eligible debt

securities whether publicly issued or privately placed can be made available for trading in the


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WDM segment. Amongst other requirements, privately placed debt paper of banks, institutions

and corporates require an investment grade credit rating to be eligible for listing. The listing

requirements for securities on the WDM segment are presented in Table 3-4.

The growth of securities available for trading on the WDM segment is presented in Table 3-5. As at

end March 2010, 4,140 securities with issued capital of`3,150,880crore (US $ 698,024 million)

and a market capitalisation of`3,165,929 crore (US $ 701,358 million) were available for trading

on the WDM segment.

Funds Mobilisation on the Exchange

During the year 2009-10, the resources raised through Public Issues, Rights Issues, QIP and

Preferential Allotments is summarized in the table below and Chart 3-2.

Particulars No. ofIssues

Amount

(`

cr) (US $ mn)Equity Public Issues 36 45,624 10,107

IPOs 33 23,684 5,247

FPOs 3 21,941 4,861

Rights Issues 16 4,893 1,084

QIP 64 42,484 9,412

Preferential Allotment 134 15,530 3,440

Non-Convertible Debentures 3 2,500 554

Initial Public Offer 1 1,000 443

Further Issue 2 1,500 111

Total 253 111,032 24,597

Chart 3-2 : No. of issues through various instruments during 2009-10


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Public Issues

Initial Public Offerings (IPOs)

Equity Shares

During the year 2009-10, 33 companies were listed through IPO mobilizing an amount of`23,684

crore (US $ 5,247 million). NHPC Limited was the largest IPO raising`6,038.55 crore (US $ 1,337.74

million) followed by Adani Power Limited raising`3,016.52 crore (US $ 668.26 million). The details

of IPOs listed on NSE during 2009-10 is presented in Table 3-6.

Non Convertible Debentures (NCDs)

During 2009-10, there were three NCD issues. L&T Finance came out with its initial public offer in

form of non-convertible debentures in September 2010. In March 2010, Shriram Transport Finance

Co. ltd. and L&T Finance came out with further issue in the form of non-convertible debentures.

Details about the resource mobilisation through NCDs is given in the table below:

S.No. Name of Company Date Amount Mobilised(`crs)

1 Shriram Transport Finance Co. Ltd.** 4-Sep-09 1000

2 L&T Finance Limited* 24-Sep-09 1000

3 L&T Finance Limited** 16-Mar-10 500

* The NCD issue is Initial Public Offer.

** The NCD issue is a further public offer.

Rights Issue

There were 16 Rights issues during 2009-10, out of which Religare Enterprises Ltd. was the largest

in terms of issue size of`1,814.31 crore (US $ 401.93 million). The details of Rights Issues listed

on NSE during 2009-10 is presented in Table 3-7.

Preferential Allotment / Private Placement

During 2009-10, there were 134 preferential allotments that raised ` 15,530.30 crore

(US $ 3,440.47 million). The details of Preferential Allotment listed on NSE during 2009-10 are

presented in Table 3-8.

QIPs

The amount raised through 64 QIPs during 2009-10, was`42,484.45 crore (US $ 9411.71 million).

The details of QIPs are presented in Table 3-9.


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Table 3-1 : Listing Criteria for Companies on the CM Segment of NSE

Criteria Initial Public Offerings (IPOs) Companies listed on other exchanges

Paid-up

Equity Capital

(PUEC)/MarketCapitalisation (MC)

/Net Worth

PUEC `10 cr. and MC `25 cr. PUEC `10 cr. and MC `25 cr. OR

PUEC `25 cr. OR

MC `50 cr. ORThe company shall have a net worth of not

less than`50 crores in each of the preceding

financial years.

Company/

Promoters Track

Record

Atleast 3 years track record of either

a) the applicant seeking listing OR

b) the promoters/promoting

company incorporated in or

outside India OR

c) Partnership firm and subsequently

converted into Company not

in existence as a Company for

three years) and approaches

the Exchange for listing. The

Company subsequently formed

would be considered for listing

only on fulfillment of conditions

stipulated by SEBI in this regard.

Atleast three years track record of either

a) the applicant seeking listing; OR

b) the promoters/promoting company,

incorporated in or outside India.

Dividend Record

/ Net worth /

Distributable

Profits

-- Dividend paid in at least 2 out of the last 3

financial years immediately preceding the

year in which the application has been made

OR The networth of the applicants atleast`50 crores OR The applicant has

distributable profits in at least two out of

the last three financial years.

Listing Listed on any other stock exchange for

at least last three years OR listed on

the exchange having nationwide trading

terminals for at least one year.

Other

Requirements

(a) No disciplinary action by other

stock exchanges/regulatory

authority in past 3 yrs.

(b) Satisfactory redressal mechanism

for investor grievances,

(c) distribution of shareholding

(d) details of llitigation record in past

3 years.

(e) Track record of Directors of the

Company

(a) No disciplinary action by other stock

exchanges/regulatory authority in past 3

yrs.

(b) Satisfactory redressal mechanism for

investor grievances,

(c) distribution of shareholding and

(d) details of llitigation record in past

3 years.

(e) Track record of Directors of the Company

(f) Change in control of a Company/

Utilisation of funds raised from public


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Note:

1. (a) In case of IPOs, Paid up Equity Capital means post issue paid up equity capital.

(b) In case of Existing companies listed on other exchanges, the existing paid up equity capital as well

as the paid up equity capital after the proposed issue for which listing is sought shall be taken into

account.

2. (a) In case of IPOs, market capitalisation is the product of the issue price and the post-issue number of

equity shares.

(b) In case of existing companies listed on other stock exchanges the market capitalisation shall be

calculated by using a 12 month moving average of the market capitalisation over a period of six months

immediately preceding the date of application. For the purpose of calculating the market capitalisation

over a 12 month period, the average of the weekly high and low of the closing prices of the shares as

quoted on the National Stock Exchange during the last twelve months and if the shares are not traded

on the National Stock Exchange such average price on any of the recognised Stock Exchanges where

those shares are frequently traded shall be taken into account while determining market capitalisation

after making necessary adjustments for Corporate Action such as Rights / Bonus Issue/Split.

3. In case of Existing companies listed on other stock exchanges, the requirement of`25 crores market

capital shall not be applicable to listing of securities issued by Government Companies, Public Sector

Undertakings, Financial Institutions, Nationalised Banks, Statutory Corporations and Banking Companies

who are otherwise bound to adhere to all the relevant statutes, guidelines, circulars, clarifications etc.

that may be issued by various regulatory authorities from time to time

4. Net worth means paid-up equity capital + reserves excluding revaluation reserve - miscellaneous expenses

not written off - negative balance in profit and loss account to the extent not set off.

5. Promoters mean one or more persons with minimum 3 years of experience of each of them in the same

line of business and shall be holding at least 20 % of the post issue equity share capital individually or

severally.

6. In case a company approaches the Exchange for listing within six months of an IPO, the securities may

be considered as eligible for listing if they were otherwise eligible for listing at the time of the IPO. If

the company approaches the Exchange for listing after six months of an IPO, the norms for existing listed

companies may be applied and market capitalisation be computed based on the period from the IPO to the

time of listing.


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Table 3-2 : Companies Listed, Permitted to Trade, Available for Trading

on the CM Segment

Month/Year(end of period)

No. ofCompanies

Listed*

No. ofCompanies

Permitted toTrade*

No. ofCompanies

Available forTrading *@

Market Capitalisation *

(`crore) (US $ mn)

Nov-94 0 300 300 292,637 93,108

Mar-95 135 543 678 363,350 115,606

Mar-96 422 847 1,269 401,459 116,873

Mar-97 550 934 1,484 419,367 116,880

Mar-98 612 745 1,357 481,503 121,807

Mar-99 648 609 1,254 491,175 115,761

Mar-00 720 479 1,152 1,020,426 240,496

Mar-01 785 320 1,029 657,847 141,048

Mar-02 793 197 890 636,861 130,504

Mar-03 818 107 788 537,133 113,081Mar-04 909 18 787 1,120,976 258,349

Mar-05 970 1 839 1,585,585 362,419

Mar-06 1,069 --- 929 2,813,201 630,621

Mar-07 1,228 --- 1,084 3,367,350 772,505

Mar-08 1,381 --- 1,236 4,858,122 1,215,442

Apr-08 1,390 --- 1,244 5,442,780 1,068,259

May-08 1,398 --- 1,252 5,098,873 1,000,760

Jun-08 1,407 --- 1,262 4,103,651 805,427

Jul-08 1,417 --- 1,272 4,432,427 869,956

Aug-08 1,422 --- 1,278 4,472,461 877,814

Sep-08 1,424 --- 1,278 3,900,185 765,493

Oct-08 1,431 --- 1,282 2,820,388 553,560

Nov-08 1,430 --- 1,286 2,653,281 520,762

Dec-08 1,428 --- 1,283 2,916,768 572,477

Jan-09 1,427 --- 1,286 2,798,707 549,305

Feb-09 1,425 --- 1,284 2,675,622 525,147

Mar-09 1,432 --- 1,291 2,896,194 568,439

Apr-09 1,420 -- 1,279 3,375,025 747,679

May-09 1,425 -- 1,280 4,564,572 1,011,203

Jun-09 1,426 -- 1,282 4,432,596 981,966

Jul-09 1,430 -- 1,287 4,816,459 1,067,005

Aug-09 1,431 -- 1,288 4,975,800 1,102,304

Sep-09 1,434 -- 1,287 5,353,880 1,186,061

Oct-09 1,439 -- 1,291 5,024,830 1,113,166

Nov-09 1,443 10 1,292 5,430,088 1,202,944

Dec-09 1,453 10 1,303 5,699,637 1,262,658

Jan-10 1,457 31 1,338 5,782,965 1,281,118

Feb-10 1,461 31 1,342 5,755,305 1,274,990

Mar-10 1470 37 1359 6,009,173 1,331,230

Documents

NSE Factbook2010