National Stock Exchange of India

National Stock Exchange of India

Since 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 31st 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 from promoter 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), Derivatives like 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),

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. FIMMDANSE MIBID/MIBOR owing 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 government securities 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 Futures contracts 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 CM F&O WDM Currency Futures * Interest Rate Futures ** Total 2006-07 1,945,287 7,356,271 219,106 --9,520,664 2007-08 3,551,038 13,090,478 282,317 --16,923,833 2008-09 2,752,023 11,010,482 335,952 162,272 -14,260,729 2009-10 4,138,023 17,663,665 563,816 1,782,608 2,975 24,151,088

* Trading in Currency Futures commenced on August 28, 2008 ** Trading in Interest Rate Futures commenced on August 31,2009

Market Capitalisation (As at end March)

( ` crore)
Segment/Year CM WDM Total Mar-07 3,367,350 1,784,801 5,152,151 Mar-08 4,858,122 2,123,346 6,981,468 Mar-09 2,896,194 2,848,315 5,744,510 Mar-10 6,009,173 3,165,929 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.

7th Largest Derivatives Exchange in the World. Source:WFE & FIA

Achievements/Milestones
Month/Year November 1992 April 1993 June 1994 November 1994 October 1995 April 1996 April 1996 November 1996 December 1996 December 1996 May 1998 May 1998 July 1998 October 1999 June 2000 September 2000 June 2001 July 2001 November 2001 January 2002 August 2003 June 2005 August 2006 December 2006 March 2007 January 2008 March 2008 Incorporation Recognition as a stock exchange. WDM segment goes live. CM segment goes live through VSAT. Became largest stock exchange in the country. Commencement of clearing and settlement by NSCCL. Launch of S&P CNX Nifty. Setting up of National Securities Depository Ltd., first depository in India, co-promoted by NSE. Commencement of trading/settlement in dematerialised securities. Launch of CNX Nifty Junior. Promotion of joint venture, India Index Services & Products Limited (IISL) (along with CRISIL) for index services. Launch of NSEs Web-site : www.nseindia.com. Launch of NSEs Certification Programme in Financial Markets (NCFM) Setting up of NSE.IT Ltd. Commencement of Derivatives Trading (in Index Futures). Launch of Zero Coupon Yield Curve. Commencement of Trading in Index Options Commencement of Trading in Options on Individual Securities Commencement of Trading in Futures on Individual Securities Launch of Exchange Traded Funds (ETFs). Launch of Futures and Options on CNX IT Index Launch of Futures & Options on BANK Nifty Index Setting up of NSE Infotech Services Ltd. Derivative Exchange of the Year, by Asia Risk magazine Launch of Gold BeES- Exchange Traded Fund (ETF).(First Gold ETF) Launch of Mini Nifty derivative contracts Launch of long term option contracts on S&P CNX Nifty Index. Event

Contd...

Contd...
Month/Year April 2008 April 2008 April 2008 June 2008 July 2008 August 2008 September 2008 February 2009 March 2009 August 2009 November 2009 December 2009 February 2010 February 2010 March 2010 March 2010 April 2010 Event Launch of Securities Lending & Borrowing Scheme Launch of - India VIX* - The Volatility Index Direct Market Access (DMA) Setting up of Power Exchange India Ltd. Launch of NOW Neat on Web Launch of Currency Derivatives Segment with commencement of trading on Currency Futures on August 29, 2008. Launch of ASBA (Applications supported by Blocked Amount) Cross Margining Benefit in CM and F&O Segment Launch of NSE E-Bids for Debt Segment Launch of Interest Rate Futures Launch of Mutual Fund Service System Commencement of settlement of corporate bonds Trading in Currency Futures on additional currency pairs Listing of Hang Seng BeES ETF on NSE NSE and CME Group announced cross-listing relationship NSE and Singapore Exchange sign Memorandum of Understanding (MOU) 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 Segment of 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, venture capital 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
VIX is a trademark of Chicago Board Options Exchange, Incorporated ("CBOE") and Standard & Poors has granted a license to NSE, with permission from CBOE, to use such mark in the name of the India VIX and for purposes relating to the India VIX.

**

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-listing arrangements, 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 futures contracts 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, brokerdealers, 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.

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 Trading Members VSATS Number of cities having VSATS Securities available for trading in the CM segment Contracts available for trading equity derivatives segment @ 1,470 1,297 2,527 186 1,806 23,533

Records reached (data from inception to March 31, 2010) Parameter Date Capital Market Segment Number of trades Traded Quantity Turnover Market capitalisation S&P CNX Nifty Index value CNX Nifty Junior Index value May 19, 2009 May 19, 2009 May 19, 2009 January 07, 2008 January 08, 2008 January 04, 2008 11,260,392 19,225.95 lakh ` 40,151.91 cr. (US $ 8,894.97 mn.) ` 6,745,724.00 cr. (US $ 1,687,696.77 mn.) 6357.10 13209.35 Magnitude

Futures & Options Segment Number of trades Number of Contracts Traded Turnover January 28, 2010 January 28, 2010 January 28, 2010 1,971,214 6,300,279 ` 166,193.03 cr. (US $ 36,817.24 mn.)

Currency Derivatives Segment (Currency Futures) Number of trades Number of Contracts Traded Turnover January 11, 2010 March 30, 2010 March 30,2010 78,935 4,353,053 ` 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 been its 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 redene the shape of the securities industry, NSE stresses on innovation and

sustained investment in technology to remain ahead of competition. NSE is the rst 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-memory database 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 ber 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 the disaster 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 ofce 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-today functioning of the Exchange can be divided into (a) Front end applications and (b) Back ofce applications. In the front ofce, 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.

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 ofce, 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 ofine 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

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real time information on initial margin value, mark to market prot 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 connected to 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 ofce 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 trafc 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, exible 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

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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

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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.

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Table 1-1 : Board of Directors *

1 Dr. Vijay L Kelkar Former Chairman, Finance Commission, India Former Union Finance Secretar y and Advisor to the Finance Minister Mr. Ravi Narain National Stock Exchange of India Ltd. Ms. Chitra Ramkrishna National Stock Exchange of India Ltd. Mr. C. Achuthan Former Presiding Ofcer, Securities Appellate Tribunal Mr. Anjan Barua Deputy Managing Director & Group Executive (Global Markets) State Bank of India Mr. A. P. Kurian Chairman Association of Mutual Funds in India Dr. Rajiv B. Lall Managing Director & CEO IDFC Limited Mr. Anand G. Mahindra Vice Chairman & Managing Director Mahindra & Mahindra Ltd. Mr. S. B. Mainak Executive Director (Investment-Risk Management and Research) Mr. Y. H. Malegam Chairman Emeritus M/s. S.B. Billimoria & Co. Chartered Accountants Mr. S. B. Mathur Secretary General, Life Insurance Council & Former Chairman, Life Insurance Corporation of India Dr. KRS Murthy Professor & Former Director Indian Institute of Management, Bangalore Dr. R. H. Patil Chairman The Clearing Corporation of India Ltd. Ms. Bhagyam Ramani General Manager & Director, GIC Dr. V. A. Sastry Director, MUSA Software Engineering Pvt. Ltd. Former Director, Infosys Technologies Ltd. Mr. Deepak M Satwalekar Former Managing Director & CEO HDFC Standard Life Insurance Company Ltd. Mr. Justice B.N.Srikrishna (Retd.) Former Judge, Supreme Court of India Chairman

Managing Director

Joint Managing Director

Director

Director

Director

Director

Director

Director

10

Director

11

Director

12

Director

13

Director

14

Director

15

Director

16

Director

17

Director

* As on July 8, 2010

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Table 1-2 : Executive Committees *

I 1 2 3 4 5 6 7 8 9 10 11 II 1 2 3 4 5 6 7 8 9 III 1 2 3 4 5 6 7 8 CM & WDM SEGMENTS Mr. Ravi Narain Mr. D. C. Anjaria Mr. D. Balasundaram Mr. Vimal Bhandari Mr. Atul Goel Mr. Y. H. Malegam Mr. Gagan Rai Ms. Chitra Ramkrishna Mr. Mayank Shah Mr. Akhilesh Kumar Singh Managing Director, National Stock Exchange of India Ltd. Director, International Financial Solutions Pvt. Ltd. Chairman, M/s. Coimbatore Capital Limited Chairman Public Representative Trading Member

Country Manager India AEGON International Public Representative NV. Partner, M/s. Pace Financial Services Chairman Emeritus, M/s. S.B.Billimoria & Co., Chartered Accountants Managing Director & CEO, National Securities Depository Limited Joint Managing Director, National Stock Exchange of India Ltd Director, M/s. Anagram Capital Limited Managing Director & CEO, M/s. Shriram Insight Share Brokers Limited Trading Member Public Representative Other Nominees Other Nominees Trading Member Trading Member Other Nominees

Mr. P. M. Venkatasubramanian Former Managing Director, GIC F&O MARKET SEGMENT Mr. Ravi Narain Mr. D.C.Anjaria Prof. V. Ravi Anshuman Ms. Madhabi Puri Buch Mr. Shailesh Haribhakti Mr. M. Raghavendra Mr. A.V. Rajwade Ms. Chitra Ramkrishna Mr. Rajendra Dolatrai Shah CD SEGMENT Mr. Ravi Narain Mr. M. G.Bhide Mr. Conrad Dsouza Dr. R. H. Patil Mr. S. Rajendren Ms. Chitra Ramkrishna Mr. Suresh Senapaty Mr. V. Srikanth Managing Director, National Stock Exchange of India Ltd. Director, International Finance Solutions Pvt. Ltd. Professor, Indian Institute of Management, Bangalore Managing Director & CEO, M/s. ICICI Securities Limited Executive Chairman & Managing Partner, BDO Haribhakti Former General Manager, General Insurance Corporation of India Forex Consultant Joint Managing Director, National Stock Exchange of India Ltd Director, M/s. Nirpan Securities Private Limited

Chairman Public Representative Public Representative Trading Member Public Representative Other Nominees Public Representative Other Nominees Trading Member

Managing Director, National Stock Exchange Chairman of India Ltd. Former Chairman, Bank of India Senior General Manager, Treasury, Housing Development Finance Corporation Ltd Public Representative Public Representative

Chairman, The Clearing Corporation of India Public Representative Limited General Manager- International Banking & Treasury Union Bank Of India Joint Managing Director, National Stock Exchange of India Limited Chief Financial Ofcer & Director,Wipro Limited Trading Member Other Nominees Public Representative

Managing Director, Head of Markets, Citi Trading Member South Asia, Citibank N.A.

* As on July 8, 2010

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