National Stock Exchange of India: Meaning, Objectives and Market Segments!
NSEI was incorporated in 1992 but started its operations in 1994 with trading in the wholesale debt market segment.
In November 1994, it launched the capital market segment as a trading platform for equities. Further, in June 2000, it entered futures and options segment for various derivative instruments.
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A nationwide fully automated screen based trading system has since been set up at NSEI. In a nutshell, we can say that it’s the latest, most modern and technology driven exchange.
The NSEI was established by banks, insurance companies, financial institutions and other financial intermediaries. The board of members of NSEI consist of senior executives from promoter institutions and professionals who do not directly or indirectly trade on the exchange.
Objectives of NSEI:
Following are the main objectives of NSEI:
(i) To ensure equal access for investors all over the country with the help of appropriate communication network.
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(ii) To provide fair, efficient and transparent trading of securities through electronic system.
(iii) To set up a nationwide trading facility for all types of securities.
(iv) To enable book entry settlement and short settlement cycles.
(v) To meet international benchmarks and standards.
Market Segments of NSEI:
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NSEI trades in the following two segments:
1. Whole Sale Debt Market Segment:
This segment refers to the trading platform for a wide range of fixed income securities like central government securities, bonds issued by public sector undertakings, zero coupon bonds, treasury bills, commercial papers, certificates of deposit, mutual funds, corporate debentures etc.
2. Capital Market System:
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This segment of NSEI provides a platform for transparent and fair trading of equity, preference shares, debentures, exchange traded funds as well as retail Government securities.