BSE is an acronym for BOMBAY STOCK EXCHANGE NSE is an acronym for NATIONAL

STOCK EXCHANGE

Difference between NSE and BSE

NSE Stands for National Stock Exchange. It has more than 2000 stocks from different sectors
listed with it. It is fully automated electronic order processing exchange. Nifty is major index of
NSE and it comprise of 50 scripts from different sectors.
NSE official site: http://www.nseindia.com
BSE Stand for Bombay Stock Exchange. It is India's Oldest Stock Exchange with listing of
over 4000 scripts with it. This not fully automated yet but progress towards full automation is
underway. SENSEX is major index of BSE and it comprise of 30 scripts from different sectors.
BSE official Site: http://www.bseindia.com
What is Sensex? What is Nifty ? Difference between these two Answer:-

SENSEX - SENSITIVITY INDEX : NIFTY - NATIONAL FIFTY An abbreviation of the

Bombay Exchange Sensitive Index (Sensex) - the benchmark index of the Bombay Stock
Exchange (BSE). It is composed of 30 of the largest and most actively-traded stocks on the BSE.
Initially compiled in 1986, the Sensex is the oldest stock index in India. The Sensex is an
"index". What is an index? An index is basically an indicator. It gives you a general idea about
whether most of the stocks have gone up or most of the stocks have gone down. The Sensex is an
indicator of all the major companies of the BSE. The Nifty is an indicator of all the major
companies of the NSE. If the Sensex goes up, it means that the prices of the stocks of most of the
major companies on the BSE have gone up. If the Sensex goes down, this tells you that the stock
price of most of the major stocks on the BSE have gone down. Just like the Sensex represents the
top stocks of the BSE, the Nifty represents the top stocks of the NSE. Just in case you are
confused, the BSE, is the Bombay Stock Exchange and the NSE is the National Stock Exchange.
The BSE is situated at Bombay and the NSE is situated at Delhi. These are the major stock
exchanges in the country. There are other stock exchanges like the Calcutta Stock Exchange etc.
but they are not as popular as the BSE and the NSE. Most of the stock trading in the country is
done though the BSE & the NSE. Besides Sensex and the Nifty there are many other indexes.
There is an index that gives you an idea about whether the mid-cap stocks go up and down. This
is called the "BSE Mid-cap Index". There are many other types of indexes. Indexes are indicators
of the market which gives you a General idea about whether most of the stocks have gone up Or
down. There are two types of INDEXES: 1) SENSEX: SENSITIVITY INDEX Sensex is nothing
but index of BSE. It has got 30 listed companies. On the other hand, 2) NIFTY: NATIONAL
FIFTY and it is nothing but the index of NSE. It has got 50 listed companies
NSE:

The National Stock Exchange of India Limited has genesis in the report of the High Powered Study
Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock
Exchange by financial institutions (FIs) to provide access to investors from all across the country on
an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions
at the behest of the Government of India and was incorporated in November 1992 as a tax-paying
company unlike other stock exchanges in the country.

On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April
1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The
Capital Market (Equities) segment commenced operations in November 1994 and operations in
Derivatives segment commenced in June 2000.

Our Mission

NSE's mission is setting the agenda for change in the securities markets in India. The NSE was set-up
with the main objectives of:

 establishing a nation-wide trading facility for equities, debt instruments and hybrids,
 ensuring equal access to investors all over the country through an appropriate communication
network,
 providing a fair, efficient and transparent securities market to investors using electronic
trading systems,
 enabling shorter settlement cycles and book entry settlements systems, and
 meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology have become industry
benchmarks and are being emulated by other market participants. NSE is more than a mere market
facilitator. It's that force which is guiding the industry towards new horizons and greater opportunities.

Promoters

NSE has been promoted by leading financial institutions, banks, insurance companies and other
financial intermediaries:

 Industrial Development Bank of India Limited

 Industrial Finance Corporation of India Limited
 Life Insurance Corporation of India
 State Bank of India
 ICICI Bank Limited
 IL & FS Trust Company Limited
 Stock Holding Corporation of India Limited
 SBI Capital Markets Limited
 Bank of Baroda
 Canara Bank
 General Insurance Corporation of India
 National Insurance Company Limited
 The New India Assurance Company Limited
  The Oriental Insurance Company Limited
 United India Insurance Company Limited
 Punjab National Bank
 Oriental Bank of Commerce
 Corporation Bank
 Indian Bank
 Union Bank of India
 Infrastructure Development Finance Company Ltd.
 Corporate Structure
 NSE is one of the first de-mutualised stock exchanges in the country, where the ownership
and management of the Exchange is completely divorced from the right to trade on it. Though
the impetus for its establishment came from policy makers in the country, it has been set up
as a public limited company, owned by the leading institutional investors in the country.

From day one, NSE has adopted the form of a demutualised exchange - the ownership,
management and trading is in the hands of three different sets of people. NSE is owned by a
set of leading financial institutions, banks, insurance companies and other financial
intermediaries and is managed by professionals, who do not directly or indirectly trade on the
Exchange. This has completely eliminated any conflict of interest and helped NSE in
aggressively pursuing policies and practices within a public interest framework.

The NSE model however, does not preclude, but in fact accommodates involvement, support
and contribution of trading members in a variety of ways. Its Board comprises of senior
executives from promoter institutions, eminent professionals in the fields of law, economics,
accountancy, finance, taxation, etc, public representatives, nominees of SEBI and one full time
executive of the Exchange.

While the Board deals with broad policy issues, decisions relating to market operations are
delegated by the Board to various committees constituted by it. Such committees includes
representatives from trading members, professionals, the public and the management.The
day-to-day management of the Exchange is delegated to the Managing Director who is
supported by a team of professional staff.
 Board of Directors

1 Mr. S. B. Mathur Chairman

Administrator of the Specified Undertaking of

Unit Trust of India

2 Mr. Ravi Narain Managing Director

National Stock Exchange of India Ltd.

3 Ms. Chitra Ramkrishna Deputy Managing Director

National Stock Exchange of India Ltd.

4 Admiral Madan Mohan Chopra Director

AVSM(Retd.)

5 Mr. Onkar Nath Singh Director

Chairman & Managing Director
Industrial Investment Bank of India Ltd.
6 Mr. S. H. Khan Director
Ex-Chairman & Managing Director
Industrial Development Bank of India

7 Mr. A. P. Kurian Director

Chairman
Association of Mutual Funds in India

8 Mr. Anand G. Mahindra Director

Vice Chairman & Managing Director
Mahindra & Mahindra Ltd.

9 Mr. Y. H. Malegam Director

Chairman Emeritus,
M/s. S.B. Billimoria & Co.
Chartered Accountants

1 Prof. (Dr.) K.R.S.Murthy Director

0 Professor and Former Director
Indian Institute of Management, Bangalore

1 Ms. Vishakha Mulye Director

1 Chief Financial Officer & Treasurer,
ICICI Bank Limited  

1 Dr. R. H. Patil Director

2 Chairman
The Clearing Corporation of India Ltd.

1 Mr. Justice M.L. Pendse (Retd.) Director

3 Former Chief Justice of Karnataka High Court
and Judge of Bombay High Court

1 Mr. M. Raghavendra Director

4 Ex-General Manager
General Insurance Corporation of India

1 Mr. S. Venkiteswaran Director

5 Sr. Advocate
Executive Committee

Objective: To manage the day-to-day operations of the Exchange

Composition:

1. Mr. Ravi Narain

Managing Director
National Stock Exchange of India Ltd.

2. Mr. Sanjay Aggarwal

Managing Director
M/s. NDA Securities Ltd.

3. Mr. Shailesh Saraf

 Wholetime Director
M/s. Dynamic Equities Pvt. Ltd.

4. Mr. Ravindra Babu

Managing Director
M/s. Zen Securities Ltd.

5. Mr. Narender Nagpal

Executive Director
M/s. Deutsche Equities India Pvt. Ltd.

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

7. Ms. Chitra Ramkrishna

Deputy Managing Director
National Stock Exchange of India Ltd.

8. Mr. P. M. Venkatasubramanian
Ex-Managing Director, GIC

9. Ms. Vishaka Mulye

Chief Financial Officer & Treasurer
ICICI Bank Ltd.

10. Mr. D. C. Anjaria

Director,
International Financial Solutions Pvt. Ltd.

11. Mr. Vimal Bhandari

Country Manager - India
AEGON International NV.

For Futures & Options Segment

1. Mr. Ravi Narain

Managing Director
National Stock Exchange of India Ltd.

2. Mr. Rajesh Baheti

Partner
M/s. Crossseas Capital Services

3. Mr. Shitin D Desai

Executive Vice Chairman
M/s. DSP Merrill Lynch Ltd.

4. Mr. D.C.Anjaria
Director
 International Finance Solutions Pvt. Ltd.

5. Mr. Shailesh Haribhakti

Partner
M/s. Haribhakti & Co.

6. Prof. V. Ravi Anshuman

Indian Institute of Management
Bangalore

7. Mr. M. Raghavendra
Ex-General Manager
General Insurance Corporation of India

8. Ms. Chitra Ramkrishna

Deputy Managing Director
National Stock Exchange of India Ltd.

9. Mr. M. L. Soneji
Director (Membership & Arbitration)
National Stock Exchange of India Ltd.
NSE Milestones

November 1992 Incorporation

April 1993 Recognition as a stock exchange

May 1993 Formulation of business plan

June 1994 Wholesale Debt Market segment goes live

November 1994 Capital Market (Equities) segment goes live

March 1995 Establishment of Investor Grievance Cell

April 1995 Establishment of NSCCL, the first Clearing Corporation

June 1995 Introduction of centralised insurance cover for all trading members

July 1995 Establishment of Investor Protection Fund

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

June 1996 Establishment of Settlement Guarantee Fund

Setting up of National Securities Depository Limited, first depository in India,

November 1996
co-promoted by NSE

November 1996 Best IT Usage award by Computer Society of India

December 1996 Commencement of trading/settlement in dematerialised securities

December 1996 Dataquest award for Top IT User

December 1996 Launch of CNX Nifty Junior

February 1997 Regional clearing facility goes live

November 1997 Best IT Usage award by Computer Society of India

May 1998 Promotion of joint venture, India Index Services & Products Limited (IISL)

May 1998 Launch of NSE's Web-site: www.nse.co.in

July 1998 Launch of NSE's Certification Programme in Financial Market

August 1998 CYBER CORPORATE OF THE YEAR 1998 award

February 1999 Launch of Automated Lending and Borrowing Mechanism

April 1999 CHIP Web Award by CHIP magazine

October 1999 Setting up of NSE.IT

January 2000 Launch of NSE Research Initiative

February 2000 Commencement of Internet Trading

June 2000 Commencement of Derivatives Trading (Index Futures)

September 2000 Launch of 'Zero Coupon Yield Curve'

Launch ofBroker Plaza by Dotex International, a joint venture between NSE.IT

November 2000
Ltd. and i-flex Solutions Ltd.

December 2000 Commencement of WAP trading

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

December 2001 Launch of NSE VaR for Government Securities

January 2002 Launch of Exchange Traded Funds (ETFs)

NSE wins the Wharton-Infosys Business Transformation Award in the

May 2002
Organization-wide Transformation category

October 2002 Launch of NSE Government Securities Index

January 2003 Commencement of trading in Retail Debt Market

June 2003 Launch of Interest Rate Futures

August 2003 Launch of Futures & options in CNXIT Index

June 2004 Launch of STP Interoperability

August 2004 Launch of NSE’s electronic interface for listed companies

June 2005 Launch of Futures & options in BANK Nifty Index

Wholesale Debt Market

The Wholesale Debt Market segment deals in fixed income securities and is fast gaining ground in an
environment that has largely focussed on equities.

The Wholesale Debt Market (WDM) segment of the Exchange commenced operations on June 30,
1994. This provided the first formal screen-based trading facility for the debt market in the country.

This segment provides trading facilities for a variety of debt instruments including Government
Securities, Treasury Bills and Bonds issued by Public Sector Undertakings/ Corporates/ Banks like
Floating Rate Bonds, Zero Coupon Bonds, Commercial Papers, Certificate of Deposits, Corporate
Debentures, State Government loans, SLR and Non-SLR Bonds issued by Financial Institutions, Units
of Mutual Funds and Securitized debt by banks, financial institutions, corporate bodies, trusts and
others.

Large investors and a high average trade value characterize this segment. Till recently, the market
was purely an informal market with most of the trades directly negotiated and struck between various
participants. The commencement of this segment by NSE has brought about transparency and
efficiency to the debt market, along with effective monitoring and surveillance to the market.

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Equities

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

Trading volumes in the equity segment have grown rapidly with average daily turnover increasing
from Rs.17 crores during 1994-95 to Rs.6,253 crores during 2005-06. During the year 2005-06, NSE
reported a turnover of Rs.1,569,556 crores in the equities segment.

The Equities section provides you with an insight into the equities segment of NSE and also provides
real-time quotes and statistics of the equities market. In-depth information regarding listing of
securities, trading systems & processes, clearing and settlement, risk management, trading statistics
etc are available here.

National Securities Clearing Corporation Ltd. (NSCCL)

The National Securities Clearing Corporation Ltd. (NSCCL), a wholly owned subsidiary of NSE, was
incorporated in August 1995. 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. NSCCL commenced clearing
operations in April 1996.

NSCCL carries out the clearing and settlement of the trades executed in the Equities and Derivatives
segments and operates Subsidiary General Ledger (SGL) for settlement of trades in government
securities. It assumes the counter-party risk of each member and guarantees financial settlement. It
also undertakes settlement of transactions on other stock exchanges like, the Over the Counter
Exchange of India.

NSCCL has successfully brought about an up-gradation of the clearing and settlement procedures and
has brought Indian financial markets in line with international markets.

  National Securities Depository Ltd. (NSDL)

In order to solve the myriad problems associated with trading in physical securities, NSE
joined hands with the Industrial Development Bank of India (IDBI) and the Unit Trust of India
(UTI) to promote dematerialisation of securities. Together they set up National Securities
Depository Limited (NSDL), the first depository in India.

NSDL commenced operations in November 1996 and has since established a national
 infrastructure of international standard to handle trading and settlement in dematerialised
form and thus completely eliminated the risks to investors associated with fake/bad/stolen
paper

National Securities Depository Ltd. (NSDL)

In order to solve the myriad problems associated with trading in physical securities, NSE
joined hands with the Industrial Development Bank of India (IDBI) and the Unit Trust of India
(UTI) to promote dematerialisation of securities. Together they set up National Securities
  Depository Limited (NSDL), the first depository in India.

NSDL commenced operations in November 1996 and has since established a national
infrastructure of international standard to handle trading and settlement in dematerialised
form and thus completely eliminated the risks to investors associated with fake/bad/stolen
paper

Trading in Nifty

The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with index
futures on June 12, 2000. The futures contracts on NSE are based on S&P CNX Nifty. The Exchange
later introduced trading on index options based on Nifty on June 4, 2001.

The turnover in the derivatives segment has shown considerable growth in the last year, with NSE
turnover accounting for 60% of the total turnover in the year 2000-2001. Further details on index
based derivatives are available under the Derivatives (F&O) section of the website.

&P CNX Nifty Futures

A futures contract is a forward contract, which is traded on an Exchange. NSE commenced trading in
index futures on June 12, 2000. The index futures contracts are based on the popular market
benchmark S&P CNX Nifty index. (Selection criteria for indices)

NSE defines the characteristics of the futures contract such as the underlying index, market lot, and
the maturity date of the contract. The futures contracts are available for trading from introduction to
the expiry date.

 Contract Specifications
 Trading Parameters

Contract Specifications

Security descriptor
The security descriptor for the S&P CNX Nifty futures contracts is:
Market type : N
Instrument Type : FUTIDX
Underlying : NIFTY
Expiry date : Date of contract expiry

Instrument type represents the instrument i.e. Futures on Index.

Underlying symbol denotes the underlying index which is S&P CNX Nifty
Expiry date identifies the date of expiry of the contract

Underlying Instrument
The underlying index is S&P CNX NIFTY.

Trading cycle
S&P CNX Nifty futures contracts have a maximum of 3-month trading cycle - the near month (one),
the next month (two) and the far month (three). A new contract is introduced on the trading day
following the expiry of the near month contract. The new contract will be introduced for a three month
duration. This way, at any point in time, there will be 3 contracts available for trading in the market
i.e., one near month, one mid month and one far month duration respectively.

Expiry day
S&P CNX Nifty futures contracts expire on the last Thursday of the expiry month. If the last Thursday
is a trading holiday, the contracts expire on the previous trading day.

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Trading Parameters

Contract size
The value of the futures contracts on Nifty may not be less than Rs. 2 lakhs at the time of
introduction. The permitted lot size for futures contracts & options contracts shall be the same for a
given underlying or such lot size as may be stipulated by the Exchange from time to time.

Price steps
The price step in respect of S&P CNX Nifty futures contracts is Re.0.05.

Base Prices
Base price of S&P CNX Nifty futures contracts on the first day of trading would be theoretical futures
price.. The base price of the contracts on subsequent trading days would be the daily settlement price
of the futures contracts.

Price bands
There are no day minimum/maximum price ranges applicable for S&P CNX Nifty futures contracts.
However, in order to prevent erroneous order entry by trading members, operating ranges are kept at
+/- 10 %. In respect of orders which have come under price freeze, members would be required to
confirm to the Exchange that there is no inadvertent error in the order entry and that the order is
genuine. On such confirmation the Exchange may approve such order.
Quantity freeze
Order which may come to the exchange as a quantity freeze shall be based on the notional value of
the contract of around Rs. 5 crores. In respect of orders which have come under quantity freeze,
members would be required to confirm to the Exchange that there is no inadvertent error in the order
entry and that the order is genuine. On such confirmation, the Exchange may approve such order.
However, in exceptional cases, the Exchange may, at its discretion, not allow the orders that have
come under quantity freeze for execution for any reason whatsoever including non-availability of
turnover / exposure limits

Order type/Order book/Order attribute

· Regular lot order
· Stop loss order
· Immediate or cancel
· Spread order

Index Funds

Index Funds today are a source of investment for investors looking at a long term, less risky form of
investment. The success of index funds depend on their low volatility and therefore the choice of the
index.

S&P CNX Nifty is used by a number of well know mutual funds in India for promoting Index Funds.
These funds are:

(A) Index Funds :

1. IDBI Index I-NIT’99, an index fund scheme on S&P CNX Nifty launched by IDBI - Principal
Mutual Fund in July 1999.

2. UTI Nifty Fund launched by Unit Trust of India in March 2000.

3. Franklin India Index Fund launched by Franklin Templeton Mutual Fund in June 2000.

4. Franklin India Index Tax Fund launched by Franklin Templeton Mutual Fund in February 2001.

5. Magnum Index Fund launched by SBI Mutual Fund in December 2001.

6. Prudential ICICI Index Fund launched by Prudential ICICI Mutual Fund in February 2002.

7. HDFC Index Fund – Nifty Plan launched by HDFC Mutual Fund in July 2002.

8. Birla Index Fund launched by Birla Sun Life Mutual Fund in September 2002.

9. LIC Index Fund – Nifty Plan launched by LIC Mutual Fund in November 2002.

10. Tata Index Fund launched by Tata TD Waterhouse Mutual Fund in February 2003.

11. ING Vysya Nifty Plus Fund launched by ING Vysya Mutual Fund in January 2004.

12. Canindex Fund launched by Canbank Mutual Fund in September 2004

 13. Reliance Index Fund launched by Reliance Mutual Fund on Jan 2005

14. Principal Junior Cap fund launched by Principal PNB on May 2005

(B) Exchange Traded Fund :

1. NIFTY BeES an Exchange Traded Fund launched by Benchmark Mutual Fund in January 2002.

2. Junior BeES an Exchange Traded Fund on CNX Nifty Junior, launched by Benchmark Mutual
Fund in February 2003.

3. SUNDER an Exchange Traded Fund launched by UTI in July 2003.

4. Liquid BeES an Exchange Traded Fund launched by Benchmark Mutual Fund in July 2003.

5. Bank BeES an Exchange Traded Fund (ETF) launched by Benchmark Mutual Fund in May 2004.

6. Benchmark Split Capital launched by Benchmark Mutual Fund on August 2005

India Index Services & Products Ltd. (IISL)

India Index Services & Products Ltd. (IISL) is a joint venture between the National Stock Exchange of
India Ltd. (NSE) and CRISIL Ltd. (formerly the Credit Rating Information Services of India Limited).
IISL has been formed with the objective of providing a variety of indices and index related services
and products for the capital markets.

IISL has a consulting and licensing agreement with Standard and Poor's (S&P), the world's leading
provider of investible equity indices, for co-branding IISL's equity indices