Nse Fact Book 2009

Fact Book 2009

NATIONAL STOCK EXCHANGE OF INDIA LIMITED June 2009

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SECTION 1- NATIONAL STOCK EXCHANGE OF INDIA Introduction .......................................................................................................3 Incorporation and Management .........................................................................4 Market Segments And Products .........................................................................4 Achievements/Milestones ..................................................................................8 Developments during the year ...........................................................................9 Facts And Figures .............................................................................................11 Technology ......................................................................................................12 NSE Family ......................................................................................................16 NSCCL ............................................................................................................16 NSDL ...............................................................................................................16 NSE Infotech services Ltd ...............................................................................17 NSE.IT ............................................................................................................17 IISL

...............................................................................................................17

Dotex International Ltd. ..................................................................................18 NCDEX ...........................................................................................................18 NCCL ..............................................................................................................18 PXIL ...............................................................................................................18 SECTION 2- MEMBERSHIP ADMINISTRATION Eligibility Criteria ............................................................................................23 Trading Membership ........................................................................................23 Clearing Membership .......................................................................................24 Currency Derivative Membership ...................................................................24 Growth and Distribution Of Members ...........................................................25 Transaction Charges.........................................................................................25 SECTION 3- LISTING OF SECURITIES Benefits Of Listing On NSE ............................................................................33 Listing Criteria .................................................................................................33 Listing Agreement ............................................................................................34 Compliance By Listed Companies ...................................................................34 Disclosures By Listed Companies ....................................................................34 De-Listing .........................................................................................................34 CM Segment .....................................................................................................35 Listing Fees .......................................................................................................36 Contd...

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Contd...

Shareholding Pattern ........................................................................................36 WDM Segment .................................................................................................37 Funds Mobilisation On the Exchange..............................................................37 Initial Public Offerings (IPO’s) .................................................................... 37 Rights Issues .................................................................................................. 38 Preferential Allotment/ Private Placement ................................................ 38 QIPs .............................................................................................................. 38 SECTION 4- CAPITAL MARKET SEGMENT NEAT System ..................................................................................................55 Market Performance ........................................................................................56 Trading Volume ........................................................................................... 56 Liquidity ....................................................................................................... 56 Distribution of turnover .............................................................................. 57 Market Capitalisation .................................................................................. 57 Sectoral Distribution .................................................................................... 58 Trading Records during 2008-09 ................................................................. 58 Internet Trading .......................................................................................... 58 On-line IPOs................................................................................................. 59 Indices...............................................................................................................59 Volatility Index ............................................................................................ 60 Mutual Funds And Exchange Traded Funds ...................................................61 Charges .............................................................................................................61 Clearing & Settlement ......................................................................................62 Settlement Agencies ...................................................................................... 63 Settlement Cycles .......................................................................................... 64 Settlement Statistics ...................................................................................... 64 Risk Management System ................................................................................65 Capital Adequacy ......................................................................................... 65 On-Lime Monitoring.................................................................................... 65 Surveillance, Investigation & Inspection ..........................................................65 Margin Requirements .......................................................................................66 Categorisation of newly listed securities ..........................................................66 Value at Risk Margin........................................................................................67 Extreme Loss Margin .......................................................................................67 Mark to Market Margin ...................................................................................67 Contd...

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Contd...

Close out Facility .............................................................................................68 Index –based Market wide Circuit Breakers ....................................................68 Settlement Guarantee Fund .............................................................................69 SECTION 5- WHOLESALE DEBT MARKET SEGMENT Trading Mechanism..........................................................................................97 Market Performance ........................................................................................98 Turnover ....................................................................................................... 98 Market Capitalistion ................................................................................. 100 Transaction Charges....................................................................................... 100 Settlement....................................................................................................... 100 FIMMDA-NSE MIBID/MIBOR ...................................................................101 Zero Coupon Yield Curve ............................................................................. 102 NSE-VAR System .......................................................................................... 103 GOI- bond Index ............................................................................................ 103 SECTION 6- FUTURES &OPTIONS SEGMENT Trading Mechanism........................................................................................ 118 Contract Specification .................................................................................... 118 Selection Criteria For Stocks And Index Eligibility For Trading ..................120 Trading Value & Contracts Traded ...............................................................121 Product wise turnover on F&O segment.................................................... 123 Futures and Options on Benchmark Indices .............................................. 123 Sectorwise Stock Futures & Options Turnover ......................................... 124 Participant wise turnover on F&O Segment ............................................. 125 Member wise turnover on the Exchange .................................................... 125 High Volume Members ............................................................................... 125 Internet Trading ......................................................................................... 126 Traded Value Records ................................................................................ 126 Top 20 Futures And Options Contracts ........................................................127 Number of Trades .......................................................................................... 127 Charges ........................................................................................................... 127 Clearing And Settlement ................................................................................ 128 Clearing Mechanism ................................................................................... 129 Settlement Mechanism ................................................................................ 129 Settlement Statistics .................................................................................... 131 Risk Management System .............................................................................. 131 Contd...

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Contd...

NSE-SPAN® .................................................................................................. 132 Margins ....................................................................................................... 133 Position Limits .......................................................................................... 134 SECTION 7- CURRENCY DERIVATIVES SEGMENT Trading Mechanism........................................................................................ 159 Contract Specifications for Currency Futures ...............................................160 Turnover ........................................................................................................ 161 Traded Value Records .................................................................................... 162 Charges ........................................................................................................... 162 Clearing and Settlement ................................................................................. 163 Clearing Entities ........................................................................................ 163 Clearing Mechanism .................................................................................. 163 Settlement Mechanism ............................................................................... 164 Settlement Statistics ................................................................................... 165 Risk Management ........................................................................................... 165 Margining System ...................................................................................... 166 Position Limits for Currency Futures ....................................................... 167 SECTION 8- INVESTOR SERVICES, ARBITRATION Investor Services ............................................................................................. 171 Arbitration ..................................................................................................... 172 SECTION 9- KNOWLEGDE INITIATIVE NSE’s Certification in Financial Markets ......................................................177 Launch of New NCFM Modules ...................................................................177 NCFM Tests conducted in Regional languages..............................................178 CBSE- NSE joint Certification in Financial Markets.....................................178 NSE Research Initiative ................................................................................. 178 Investor Awareness and Education Programmes ..........................................178 National Institute of Securities (NISM) ........................................................179 Launch of Currency Derivatives Certification Examination by NISM ........179

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

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National Stock Exchange of India

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National Stock Exchange of India

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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 Rs. 17 crore in 1994-95 when NSE started its Cash Market segment to Rs.11,325 crore in 2008-09. Similarly, market capitalization of listed Indian firms went up from Rs.363,350 crore at the end of March 1995 to Rs.2,896,194 crore at end March 2009. Indian equity markets are today among the most deep and vibrant markets in the world. This transformation was the result of a number of initiatives led by the Government, market regulators and infrastructure providers like exchanges and depositories. NSE’s efforts in this area have included the creation of the first clearing corporation in the country in the form of the National Securities Clearing Corporation Limited (NSCCL). NSCCL today provides central counterparty services and manages settlement risk for multiple products, and is a major factor in the confidence market participants have in the ability of Indian markets to handle extreme shocks without causing any defaults. NSCCL is also the first clearing corporation in the country to receive. NSE has many other firsts to its name, including the first systematic process of member inspections, a sophisticated market surveillance system, and a country wide high capacity data network supporting close to 200,000 dealer terminals. The year 2008-09 was an eventful year for NSE, as it saw the launch of new and important products for the securities market. Introduction of Mini Nifty Futures and Options contracts on S&P CNX Nifty during the year has given retail investors an increased ability to participate in index futures and options trading. NSE also started publishing the first volatility index in the country India VIX*. Market participants now have an important tool to assess volatility and create trading strategies to exploit volatility movements. In May 2008, NSE developed a new trading application, NOW, or ‘NEAT on Web’. The NOW platform allows trading members to connect to the exchange through the internet, and has resulted in a significant reduction in both the access cost and turnaround time for providing access. This year also saw a watershed in the Indian currency market in the form of a currency futures contract. NSE was the first stock exchange in the country to launch the contract on August 29, 2008 in USDINR pair. The contract was an instant success, and currently has daily trading volumes in excess of Rs. 2,000 crore and open interest in excess of Rs. 1,000 crore. Other significant developments include Long term Options Contracts on S&P CNX Nifty, Short selling

*

“VIX” is a trademark of Chicago Board Options Exchange, Incorporated ("CBOE") and Standard & Poor’s 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.

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and Securities Lending and Borrowing Scheme, Direct Market Access (DMA), Futures and Options contracts on S&P CNX Defty index and the NSE E-Bids for Debt Segment. Further NSE also ventured into a new segment by promoting a Power Exchange (Power Exchange India Ltd -PXIL) along with NCDEX. Today, 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 and Currency futures. Our Exchange has more than 1,400 companies listed in the Capital Market and more than 95% of these companies are actively traded. The debt market has more than 3,954 securities available for trading. Index futures and options trade on seven different indices and on more than 230 stocks in stock futures and options. In currency futures contracts are currently traded in the USDINR pair. Globally, NSE is ranked first in single stock futures in terms of number of contracts traded, and third in stock index futures and stock index options. We also rank third in terms of number of equity shares traded and are the eighth largest derivatives exchange in the world.

Incorporation and Management The NSE is owned by a set of leading Indian and International financial institutions, banks, insurance companies, private equity funds, mutual funds, venture capital funds etc. 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-today affairs of the Exchange. The day-to-day management of the Exchange is delegated to the Managing Director and CEO 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 and Currency Futures. The Exchange provides trading

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in 4 different segments viz., Wholesale Debt Market (WDM) segment, Capital Market (CM) segment, Futures & Options (F&O) segment and the Currency Derivatives Segment (trading on which commenced on August 29, 2008) 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, PSU Bonds, Corporate debentures, CPs, CDs etc. However, along with these financial instruments, NSE also launched various products e.g. FIMMDA-NSE MIBID/MIBOR owing to the market need. A reference rate is said to be an accurate measure of the market price. In the fixed income market, it is the interest rate that the market respects and closely matches. In response to this, NSE started computing and disseminating the NSE Mumbai Inter-bank Bid Rate (MIBID) and NSE Mumbai Inter-Bank Offer Rate (MIBOR). Owing to the robust methodology of computation of these rates and its extensive use, this product has become very popular among the market participants. Keeping in mind the requirements of the banking industry, FIs, MFs, insurance companies, who have substantial investments in sovereign papers, 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 is Rs.1,394 crore (US $ 273.60 million) during 2008-09. 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 2008-09 was Rs. 11,325 crore. (US $ 2,223 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, CNX Nifty Junior, CNX 100 index, Nifty Midcap 50 index , S&P CNX Defty and single stocks are available. The average daily turnover in the F&O Segment of the Exchange during 2008-09 was Rs.45,311 crore (US $ 8,893 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 (USDINR). On the very first day of operations a total number of 65,798 contracts valued at Rs.291 crore were traded on the Exchange. Since then trading activity in this segment has been witnessing a rapid growth. During August 29, 2008 to March 31, 2009 the segment reported a trading value of Rs.162,272 crore (US $ 31,849 million). A total

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number of 518 trading members which includes 22 banks have taken membership in this market segment as at end March 2009.

Trading Value (Rs.crore) Segment/Year

2005-06

2006-07

2007-08

2008-09

CM

1,569,558

1,945,287

3,551,038

2,752,023

F&O

4,824,250

7,356,271

13,090,478

11,010,482

CDS*

–

–

–

162,272

WDM

475,523

219,106

282,317

335,952

6,869,332

9,520,664

16,923,833

14,260,729

Total

* Trading in Currency Futures on Currency Derivatives Segment (CDS) commenced on August 29, 2008 the trading value is from August 29, 2008 to 31st March 2009.

Market Segments Indicators- Trading Volume

Market Capitalisation (As at end March) (Rs.crore) Segment/Year

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Mar-06

Mar-07

Mar-08

Mar-09

CM

2,813,201

3,367,350

4,858,122

2,896,194

WDM

1,567,574

1,784,801

2,123,346

2,848,315

Total

4,380,775

5,152,151

6,981,468

5,744,510

Market Segment Indicators- Market Capitalisation

NSEs Worldwide Ranking in 2008 (Jan-Dec) •

NSE Ranks 3rd in Number of Trades in Equity Shares.

•

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

•

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

•

NSE Ranks 4th in terms of Number of Contracts traded in Stock Index Options.

•

NSE is the 8th Largest Derivatives Exchange in the World.

Source:WFE & FIA NSEs Worldwide Ranking for the period Jan-April 2009 •

NSE Ranks 1st in terms of Number of Contracts traded in Single Stock Futures

•

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

•

NSE Ranks 3rd in terms of Number of Contracts traded in Stock Index Options.

•

NSE Ranks 4th in Number of Trades in Equity Shares.

Source:WFE & FIA

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Achievements/Milestones Month/Year 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 December 1996

Setting up of National Securities Depository Ltd., first depository in India, co-promoted by NSE. 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 with CRISIL) for index services. Launch of NSE’s Web-site : www.nseindia.com.

May 1998 July 1998 October 1999

Launch of ‘NSE’s Certification Programme in Financial Markets’ (NCFM) Setting up of NSE.IT Ltd.

June 2000

Commencement of Derivatives Trading (in Index Futures).

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

October 2007

Launch of Gold BeES- Exchange Traded Fund (ETF).(First Gold ETF) Launch of Futures & Options on CNX 100 and CNX Nifty Junior contracts. Launch of Futures & Options on Nifty Midcap 50

January 2008

Launch of Mini Nifty derivative contracts

March 2008

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

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 September 2008

Launch of Currency Derivatives Segment with commencement of trading on Currency Futures on August 29, 2008. Launch of ASBA (Applications supported by Blocked Amount)

December2008

Launch of derivative contracts in DEFTY index

February 2009

Cross Margining Benefit in CM and F&O Segment

March 2009

Launch of NSE E-Bids for Debt Segment

June 2007

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Event

Developments during the year. The year 2008-09 was a significant year wherein major securities market reforms and launch of new products took place. April 2008

Launch of India VIX*

Volatility Index is a measure of market’s expectation of volatility over the near term. Volatility is often described as the “rate and magnitude of changes in prices” and in finance often referred to as risk. Volatility Index is a measure, of the amount by which an underlying Index is expected to fluctuate, in the near term, (calculated as annualised volatility, denoted in percentage e.g. 20%) based on the order book of the underlying index options. India VIX is a volatility index based on the Nifty 50 Index Option prices. From the best bid-ask prices of Nifty 50 Options contracts, a volatility figure (%) is calculated which indicates the expected market volatility over the next 30 calendar days. April 2008

Launch of Securities Lending & Borrowing Scheme

A Securities Lending & Borrowing mechanism allows market participants to take short positions effectively with less cost. It also provides the holder of idle securities with an alternative to earn a return on such holdings without risk. The Exchange launched a Securities Lending & Borrowing Scheme (SLBS) on April 21, 2008. The Exchange provides automated, screen based, order matching platform to participants to execute lending and borrowing transactions. Securities available for trading in F&O segment of the Exchange have been initially permitted to trade in this segment. The SLBS was revised from December 22, 2008 to increase the trading time & the lending/borrowing period. April 2008

Direct Market Access

During April 2008, Securities & Exchange Board of India (SEBI) allowed the direct market access (DMA) facility to the institutional investors. DMA allows brokers to offer clients direct access to the exchange trading system through the broker’s infrastructure without manual intervention by the broker. DMA facility gives clients direct control over orders, help in faster execution of orders, reduce the risk of errors from manual order entry and lend greater transparency and liquidity. DMA also leads to lower impact cost for large orders, better audit trails and better use of hedging and arbitrage opportunities through the use of decision support tools/algorithms for trading.

*

“VIX” is a trademark of Chicago Board Options Exchange, Incorporated ("CBOE") and Standard & Poor’s 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.

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April 2008

CBCS - Corporate Bond Clearing and Settlement

CBCS is a corporate bond reporting and integrated clearing system. The platform supports trade reporting system where both sides of a corporate bond trade report the deal to the platform. The deal can then be cleared through a settlement system if required. CBCS fills an important need in the corporate bond clearing and settlement space. As transaction volumes rise in the corporate bond market, participants will need to use common clearing and settlement facilities in order to reduce risks and increase settlement efficiency. July 2008

NOW ‘Neat on Web’

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

(b)

Flexible Risk Management System

(c)

High speed dealer terminals

(d)

Online trading facility for investors

August 2008

Launch of Currency Futures

On August 29, 2008, NSE launched trading in currency future contracts for the first time in India. To start with 12 monthly future contracts on the USD-INR pair have been made available for trading. The minimum lot size has been kept small at USD 1000 and applicable margins are also comparably very low due to the less volatile nature of the underlying. September 2008 ASBA – Application supported by blocked amount ASBA is an application for subscribing to an issue, containing an authorisation to block the application money in a bank account. The ASBA process is available in all public issues made through the book building route. An ASBA investor has to submit an ASBA physically or electronically through the internet banking facility, to the SCSB with whom the bank account to be blocked, is maintained. The SCSB then blocks the application money in the bank account specified in the ASBA, on the basis of an authorisation to this effect given by the account holder in the ASBA. The application money remains blocked in the bank account till finalisation of the basis of allotment in the issue or till withdrawal/ failure of the issue or till withdrawal/ rejection of the application, as the case may be. The application data is thereafter uploaded by the SCSB in the electronic bidding system through a web enabled interface provided by the NSE.

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December 2008

Launch of derivative contracts on S&P CNX DEFTY index

The Exchange introduced trading in futures and options contracts of S&P CNX Defty index from December 10, 2008. S&P CNX Defty is S&P CNX Nifty, measured in US dollars. February 2009

Cross Margining Benefit

On February 9, 2009, Cross margining was made available for positions across index futures to stock/stock futures and stock futures to stocks. It is available to all categories of market participant and benefit is computed on online real time basis. March 2009

NSE e-bids

NSE e-bids, NSE’s latest offering for credit markets, is an open bidding platform for FIIs to bid for allotments under the overall FII debt limits. After a one time signup, FIIs can bid for allotments and get updates of results.

FACTS AND FIGURES The growth in the stock market activity across the different market segments and products is visible from records reached as at the end of March 2009 as cited in the table below :

Facts & Figures upto March 31, 2009 Sr. No.

Parameter

Date

Magnitude

Capital Market Segment 1.

Number of Members

March 31, 2009

1,181

2.

Number of Securities available for trading

March 31, 2009

1,583

3.

Number of VSATs

March 31, 2009

2,648

4.

Number of Cities covered

March 31, 2009

201

5.

Settlement Guarantee Fund

March 31, 2009

Rs.4,843.50 crore (US $ 950.64 million)

6.

Investor Protection Fund

March 31, 2009

Rs.285.36 crore (US $ 56 million)

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Record number of trades

January 7, 2009

8,959,510

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Record daily turnover (quantity)

January 7, 2009

12,599.46 lakh

8.

Record daily turnover (value)

November 01, 2007

Rs.28,476.07 cr. (US $ 7,124.36 mn.)

9.

Record market capitalisation

January 07, 2008

Rs.6,745,724.00 cr. (US $ 1,687,696.77 mn.)

10.

Record value of S&P CNX Nifty Index

January 08, 2008

6357.10

11.

Record value of CNX Nifty Junior Index

January 04, 2008

13209.35

Contd...

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Contd... Sr. No.

Parameter

Date

Magnitude

Clearing & Settlement Record Pay-in/Pay-out (Rolling Settlement): 1

Funds Pay-in/Pay-out

October 23, 2007 *

Rs.4,567.70 cr. (US $ 1,142.78 mn.)

2

Securities Pay-in/Pay-out (Value)

December 31, 2007 *

Rs.9,195.56 cr. (US $ 2,300.62 mn.)

3

Securities Pay-in/Pay-out (Qty)

January 12, 2009 *

3,511.61 lakhs

* Settlement Date Derivatives (F&O segment) 1.

Number of Members

March 31, 2009

1,055

2.

Number of Contracts available for trading

March 31, 2009

19,480 a

3.

Settlement Guarantee Fund

March 31, 2009

Rs.23,655.86 crore (US $ 4,642.95 million)

4.

Investor Protection Fund

March 31, 2009

Rs.50.65 crore (US $ 9.94 million)

5.

Record number of trades

January 7, 2009

1,874,697

6.

Record daily turnover (value)

October 18,2007

Rs. 110,564 crore (US $ 27,661.50 mn.)

7.

Record Number of Contracts Traded

January 7, 2009

4,757,297

Currency Derivatives Segment (Currency Futures) 1.

Number of Members

March 31, 2009

518

2.

Record Daily turnover

March 20, 2009

Rs.3,911 crore

3.

Record number of trades

March 20, 2009

25,702

4.

Record number of contracts

March 20, 2009

7,75,933

Wholesale Debt Market Segment 1.

Number of Members

March 31, 2008

62

2.

Record daily turnover (value)

August 25,2003

Rs.13,911.57 cr. (US $ 3,179.79 mn.)

a No. of contracts available for trading in F&O segment as on 31st March 2009 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, 3 Defty Futures, 700 stock futures, 768 Nifty index options, 110 CNX IT options, 152 Bank Nifty options, 114 CNX 100 options, 132 Nifty Junior index options ,86 Nifty Midcap50 options, 114 Mini Nifty Options, 126 Defty Options, 17,136 stock option and 18 interest rate futures contracts

Technology 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

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the organisation 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 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 2,648 VSATs from nearly 201 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 99.7%. For all trades entered into NEAT system, there is uniform response time of less than 1.5 seconds. 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 fibre 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 2 mbps high-speed link to keep both the sites all the time synchronised 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. In the front office, there are 6 applications: (i)

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 two Stratus systems with Open Strata Link (OSL). The application has been benchmarked to support 15,000 users and handle more than 3 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.

(ii)

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

13

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. (iii)

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.

(iv)

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.

(v)

NEAT – MF system is an interface with the trading members of the CM segment for order collection of designated Mutual Funds units.

(vi)

NEAT- CD system is trading system for currency derivatives. Currently, currency futures are trading in the segment.

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:

14

(a)

NCSS (Nationwide Clearing and Settlement System) 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.

(b)

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. (c)

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.

(c)

Surveillance system offers the users a facility to comprehensively monitor the trading activity and analyse the trade data online and offline.

(d)

OPMS – the online position monitoring system that keeps track of all trades executed for a trading member vis-à-vis its capital adequacy.

(e)

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 real time information on initial margin value, mark to market profit or loss, collateral amounts, contract-wise latest prices, contractwise open interest and limits. The system also tracks online real time client level portfolio base upfront margining and monitoring.

(f)

PRISM-CD is the risk management system of the currency derivatives segment. It is similar in features to the PRISM of F&O Segment.

(f)

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

(g)

Listing system that 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 and

(h)

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

The exchange operates and manages a nationwide IP network of over 2500 VSATs and 2169 Leased Lines. In the new IP network, members have an advantage of a more generic and latest IP protocol and an overall better design, in terms of bandwidth and resilience.

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

15

existing VSAT/Leased line, in addition to internet links. The various features provided by NOW are: (a)

Comprehensive Administration features

(b)

Flexible Risk Management System

(c)

High speed dealer terminals

(d)

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 also operates Subsidiary General Ledger (SGL) for settling trades in government securities for its constituents. 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 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 CRISIL has assigned its highest corporate credit rating of ‘AAA’ to the National Securities Clearing Corporation Ltd (NSCCL). ‘AAA’ rating indicates highest degree of strength with regard to honouring debt obligations. NSCCL is the first Indian Clearing Corporation to get this rating. The rating reflects NSCCL’s status as Clearing Corporation for NSE, India’s largest stock exchange. The rating also factors in NSCCL’s rigorous risk management controls and adequate settlement guarantee cover.

NSDL Prior to trading in a dematerialized environment, settlement of trades required moving the securities physically from the seller to the ultimate buyer, through the seller’s broker and buyer’s broker, which involved lot of time and the risk of delay somewhere along the chain. Further, the system of transfer of ownership was grossly inefficient as every

16

transfer involved physical movement of paper to the issuer for registration, with the change of ownership being evidenced by an endorsement on the security certificate. In many cases, the process of transfer took much longer than stipulated in the then regulations. Theft, forgery, mutilation of certificates and other irregularities were rampant. All these added to the costs and delays in settlement, restricted liquidity. To obviate these problems, NSE to promote dematerialization of securities 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 it’s group companies exclusively.

NSE.IT NSE.IT Limited, a 100% technology subsidiary of NSE, was incorporated in October 1999 to provide thrust to NSE’s technology edge, concomitant with its overall goal of harnessing latest technology for optimum business use. It provides the securities industry with technology that ensures transparency and efficiency in the trading, clearing and risk management systems. Additionally, NSE.IT provides consultancy services in the areas of data warehousing, internet and business continuity plans. Amongst various products launched by NSE.IT are NEAT XS, a Computer-To-Computer Link (CTCL) order routing system, NEAT iXS, an internet trading system and Probos, professional broker’s back office system. NSE.IT also offers an e-learning portal, finvarsity (www. finvarsity.com) dedicated to the finance sector. The site is powered by Enlitor - a learning management system developed by NSE.IT jointly with an e-learning partner. New initiatives include payment gateways, products for derivatives segments and Enterprise Management Services.

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 Poor’s (S&P), the world’s leading provider of investible equity indices, for co-branding equity indices. IISL is India’s first specialized company focusing upon the index as a core product. It provides a broad range of

17

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, India’s 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 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. Currently NCDEX facilitates trading of 48 agro based commodities, 2 precious metal, 6 base metal, 3 energy products and 3 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.

18

Table 1-1 : Board of Directors* 1

Mr. S. B. Mathur Former Chairman, Life Insurance Corporation of India

Chairman

2

Mr. Ravi Narain National Stock Exchange of India Ltd.

Managing Director

3

Ms. Chitra Ramkrishna National Stock Exchange of India Ltd.

Deputy Managing Director

4

Mr. C. Achuthan Former Presiding Officer, Securities Appellate Tribunal

Director

5

Mr. Anjan Barua Chief General Manager ( Global Markets), State Bank of India

Director

6

Rear Admiral Madan Mohan Chopra AVSM (Retd.)

Director

7

Mr. A. P. Kurian Chairman, Association of Mutual Funds in India

Director

8

Dr. Rajiv B. Lall Managing Director & CEO, Infrastructure Development Finance Company Limited

Director

9

Mr. Lawrence Leibowitz Group EVP, Head of US Markets & Global Technology NYSE Euronext

Director

10

Mr. Anand G. Mahindra Vice Chairman & Managing Director, Mahindra & Mahindra Ltd.

Director

11

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

Director

12

Prof. (Dr.) K. R. S. Murthy Professor & Former Director, Indian Institute of Management, Bangalore

Director

13

Dr. R. H. Patil Chairman, The Clearing Corporation of India Limited

Director

14

Ms. Bhagyam Ramani General Manager, General Insurance Corporation of India

Director

15

Dr. V. A. Sastry

Director

16

Mr. Onkar Nath Singh Former Chairman & Mananging Director Industrial Investment Bank of India Ltd.

Director

17

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

Director

18

Mr. T. S. Vijayan Chairman Life Insurance Corporation of India

Director

* As on May 19, 2009

19

Table 1-2 : Executive Committees* I

CM & WDM SEGMENTS

1 Mr. Ravi Narain 2 Mr. Ashok Kumar Agarwal 3 Mr. D. C. Anjaria 4 Mr. Vimal Bhandari 5 Mr. C. J. George 6 Mr. Vivek Agarwal 7 Mr. Mayank Shah

MD &CEO, National Stock Exchange of India Limited Chairman, Globe Capital Market Ltd. Director, International Financial Solutions Pvt. Ltd. Country Manager – India AEGON International NV. Managing Director, Geojit Financial Services Ltd. Director,M/s. East India Securities Limited Director,M/s. Anagram Capital Limited

Chairman Trading Member Public Representative Public Representative Trading Member Trading Member

8 Mr. Y. H. Malegam

Chairman Emeritus, S.B.Billimoria & Co. Public Representative Chartered Accountants 9 Ms. Chitra Ramkrishna Deputy Managing Director, National Other Nominees Stock Exchange of India Ltd 10 Mr. P. M. Venkatasubramanian Ex-Managing Director, GIC Other Nominees 11 Mr. Gagan Rai

Managing Director & CEO, National Securities Depository Limited

Other Nominees

II F&O MARKET SEGMENT 1 Mr. Ravi Narain 2 Mr. D.C.Anjaria 3 Prof. V. Ravi Anshuman 4 Mr. Sunil Godhwani 5 Mr. Shailesh Haribhakti 6 Mr. Ketan Marwadi 7 Mr. A.V. Rajwade 8 Mr. M. Raghavendra 9 Ms. Chitra Ramkrishna 10 Ms. T. S. Jagadharini

MD &CEO, National Stock Exchange of Chairman India Limited Director, International Finance Solutions Public Representative Pvt. Ltd. Indian Institute of Management, Bangalore Public Representative Managing Director, Religare Securities Ltd. Executive Chairman and Managing Partner, BDO Haribhakti Managing Director, Marwadi Shares and Finance Limited Forex and Treasury Management Consultant Ex-General Manager, General Insurance Corporation of India Deputy Managing Director, National Stock Exchange of India Ltd Vice President, National Stock Exchange of India Limited

Trading Member

Managing Director & CEO, National Stock Exchange of India Limited Managing Director, Head of Markets, Citibank N.A. Chairman, The Clearing Corporation of India Limited Former Chairman, Bank of India

Chairman

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

III CDS SEGMENT 1 Mr. Ravi Narain 2 Mr. V. Srikanth 3 Dr. R. H. Patil 4 Mr. M. G.Bhide 5 Mr. Suresh Senapaty 6 Ms. Chitra Ramkrishna * As on May 19, 2009

20

Trading Member Public Representative Public Representative

Chief Financial Officer & Director,Wipro Public Representative Limited Deputy Managing Director, National Other Nominees Stock Exchange of India Limited

Membership Administration

2

22

Membership Administration

2

The 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 Exchange’s operations. The standards stipulated by the Exchange for trading membership 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

•

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

23

be graduates 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 Rs. 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.

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 Tables 2-1A to 2-1C. With effect from July 1, 2008 a processing fee of Rs. 10,000/- and an admission fee of Rs.5,00,000/- is charged for taking up new membership.

Currency Derivatives Membership Trading in Currency Derivatives commenced on August 29, 2008 at NSE. As of March 2009 a total number of 518 members are registered in this segment. 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 D 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 :

24

a)

Minimum net worth of Rs. 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 2009, the Exchange had 1,227 members. A large majority (88.59%) of them were corporate members, and the remaining, individuals, firms and banks. The growth of membership on NSE is presented in Table 2-2. A total of 31,798 (1,630 corporates, 2,240 partnership firms and 27,928 individuals) sub-brokers were affiliated to 585 trading members of the Exchange on March 31, 2009.

Transaction Charges In addition to annual fees, members are required to pay transaction charges on trades undertaken by them. They pay transaction charges at the rate of Rs. 3.5 for every Rs. 1 lakh of turnover in the CM segment. The transaction charges payable to the exchange by the trading member for the trades executed by him on the F&O segment are fixed at the rate of Rs. 2 per lakh of turnover (0.002%) subject to a minimum of Rs. 1 lakh per year. However, in the options sub-segment the transaction charges are levied on the premium value at the rate of 0.05% (each side) instead of on the strike price as levied earlier. Derivatives on S&P CNX Defty were launched on December 10, 2008. Transaction charges have been waived in respect of all trades done in the futures and options contracts of S&P CNX Defty till September 30, 2009. In order to encourage active participation in the Currency Derivatives segment, the Exchange, has waived the transaction charges till June 30, 2009. Transaction charges in the Wholesale Debt Market Segment too have been waived for the period April 1, 2009 to March 31, 2010.

25

26 25** 1

Collateral Security Deposit (CSD) 25 with NSCCL

Annual Subscription

Two directors should be graduates. Dealers should also have passed FIMMDA-NSE Debt Market (Basic Module) of NCFM Capital Market Module of NCFM.& SEBI approved certification test for Derivatives Two directors should be graduates. Dealers should also have passed FIMMDA-NSE Debt Market (Basic Module) of NCFM. & Capital Market Module of NCFM.

Two directors should be graduates. Dealers should also have passed FIMMDA-NSE Debt Market (Basic Module) of NCFM.

Two directors should be graduates. Dealers should also have passed SEBI approved certification test for Derivatives and Capital Market Module of NCFM.

Two directors should be graduates. Dealers should also have passed SEBI approved certification test for Capital Market Module of NCFM.

The Directors should not be defaulters on any stock exchange. They must not be debarred by SEBI for being associated with capital market as intermediaries They must be engaged solely in the business of securities and must not be engaged in any fund-based activity.

---------------Two year’s experience in securities market-----------------------

1

NIL

2

25**

15 *

260

30 200(Membership in WDM segment, CM segment and Trading/Trading and Self Clearing membership in F&O segment) 300(Membership in WDM segment, CM segment and Trading and Clearing membership in F&O segment)

Net worth requirement for Professional Clearing members in F&O segment is Rs. 300 lakhs. Further a Professional Clearing member needs to bring IFSD of 25 lakhs with NSCCL and Collateral Security Deposit (CSD) of 25 lakhs with NSCCL as deposits. * Additional IFSD of 25 lakhs with NSCCL is required for Trading and Clearing (TM-CM) and for Trading and Self clearing member (TM/SCM). ** Additional Collateral Security Deposit (CSD) of 25 lakh with NSCCL is required for Trading and Clearing (TM-CM) and for Trading and Self clearing member (TM/SCM). In addition, a member clearing for others is required to bring in IFSD of Rs. 2 lakh and CSD of Rs. 8 lakh per trading member he undertakes to clear in the F&O segment.

Track Record

Experience

(Amount in Rs. lakh) CM,WDM and F&O

NIL

2

25

15

235

30 200

CM and WDM

1

1

NIL

NIL

150

WDM

NIL

1

15 *

Interest Free Security Deposit (IFSD) 15 with NSCCL

Advance Minimum Transaction Charges for Futures Segment Education

CM and F&O 30 30 100 (Membership in CM 200 segment and Trading/ Trading and self clearing membership in F&O segment) 300 (Membership in CM segment and Trading and Clearing membership in F&O segment) 110

Deposit

30 100

CM

85

Interest Free Security (IFSD) with NSEIL

Particulars/ Segments Minimum Paid-up capital Net Worth

Table 2-1 A : Eligibility Criteria for Membership Corporates

Table 2-1B : Requirements for Professional Clearing Memberhip (All values in Rs. lakh) Particulars Eligibility

CM Segment

F&O Segment

CM and F&O Segment

Trading Member of NSE/SEBI Registered Custodians/Recognised Banks

Net Worth

300

300

300

Interest Free Security Deposit (IFSD) *

25

25

34

Collateral Security Deposit (CSD)

25

25

50

Annual Subscription

2.5

Nil

2.5

*

The Professional Clearing Member (PCM) is required to bring in IFSD of Rs. 2 lakh and CSD of Rs. 8 lakh per trading member whose trades he undertakes to clear in the F&O segment and IFSD of Rs. 6 lakh and CSD of Rs. 17.5 lakh (Rs. 9 lakh and Rs. 25 lakh respectively for corporate Members) per trading member in the CM segment.

27

28

* **

NIL

0.5

17.5

6

26.5

F&O segment)

1

0.5

17.5 **

6*

51.5

Trading and Clearing membership in

176.5

NIL

1

NIL

NIL

NIL

1.5

17.5

6

1

1.5

17.5 **

6*

201.5

membership on F&O segment)

segment and Trading and clearing

in the F&O segment) 300 (Membership in CM segment and

300 (Membership in WDM segment,CM

segment)

Trading and Self clearing membership

100 (Membership in CM segment and

150

200 (Membership in WDM segment, and Self Clearing membership in F&O

200

CM,WDM and F&O

segment)

200

CM and WDM

CM segment and Trading/Trading

75 (Membership in CM segment

75

WDM

and Trading membership in F&O

CM and F&O

CM

(Amount in Rs. lakh)

Additional IFSD of 25 lakhs with NSCCL is required for Trading and Clearing Member (TM-CM) and for Trading and Self clearing member (TM/SCM). Additional Collateral Security Deposit (CSD) of 25 lakh with NSCCL is required for Trading and Clearing (TM-CM) and for Trading and Self clearing member (TM/SCM).

Charges for Futures Segment

Advance Minimum Transaction

Annual Subscription

with NSCCL

Collateral Security Deposit (CSD)

(IFSD) with NSCCL

Interest Free Security Deposit

(IFSD) with NSEIL

Interest Free Security Deposit

Net Worth

Particulars

Table 2-1 C : Eligibility Criteria for Membership- Individuals/ Partnership Firms.

29

8 – –

Collateral Security Deposit (CSD) with NSEIL

Interest Free Security Deposit (IFSD) with NSCCL

Collateral Security Deposit (CSD) with NSCCL

25

25

8

2

1000

Trading cum Clearing Membership

–

–

10.5

2

100

Trading Membership

–

–

13

2

100

Trading Membership

25

25

18

2

1000

25

–

–

–

1000

Professional Clearing Membership

(Amount in Rs. lakh)

Trading cum Clearing Membership

New Applicants

In case the member is opting for membership of any other segment(s) in combination with the membership of Currency Derivatives segment, the applicable net worth will be the minimum net worth required for the other segment(s) or the minimum net worth requir

25

25

13

2

1000

Trading cum Clearing Membership

NCDEX Members

Clearing member pays Rs. 10 lakhs for clearing every trading member’s trades in cash & non-cash form.

2

100

Trading Membership

NSE Members

Interest Free Security Deposit (IFSD) with NSEIL

Networth

Particulars

Table 2-1 D : CURRENCY DERIVATIVES- Corporates, Individuals and Firms

30

*

6

6

126

126

125

Oct-07

Nov-07

Dec-07

6

118

117

Feb-09 9

9

9

9

9

9

9

9

8

8

8

8

8

8

8

8

8

8

8

9

9

9

9

9

CM & WDM Segment

47

47

47

47

47

47

47

48

48

48

48

48

48

48

48

48

48

48

48

47

47

47

47

47

CM, WDM & F&O Segment

1008

1,003

994

981

973

964

960

951

943

935

913

902

894

871

853

844

836

836

829

824

812

812

804

802

CM & F&O Segment

40

35

26

22

19

17

17

12

--

--

--

--

--

--

--

--

--

--

--

--

--

--

--

--

CD Segment

478

460

442

424

369

359

317

304

--

--

--

--

--

--

--

--

--

--

--

--

--

--

--

--

CD along with any of the other Segments *

1,227

1,218

1,201

1,184

1,173

1,164

1,157

1,144

1,122

1,115

1,094

1,084

1,075

1,057

1,039

1,031

1,024

1,024

1,022

1,020

1,013

1,014

1,011

1,009

Total

20

20

20

20

19

19

19

19

19

19

19

19

19

19

19

19

19

19

19

19

19

19

19

19

Professional Clearing Member

This includes membership in Currency Derivatives Segment (CDS) along with either of the other segments (CM, WDM, F&O) and not included in total because of multiple membership.

6

6

6

6

Mar-09

Oct-08

6

6

6

121

Sep-08

119

118

Aug-08

6

Jan-09

118

Jul-08

6

6

119

117

Jun-08

119

118

May-08

6

6

Dec-08

119

Apr-08

6

6

6

Nov-08

119

120

Mar-08

124

6

131

Sep-07

124

6

134

Jan-08

6

139

Jul-07

Aug-07

Feb-08

6

140

Jun-07

6

6

145

145

Apr-07

WDM Segment

CM Segment

May-07

Month/Year (end of period)

Table 2-2 : Growth and Distribution of Members

Listing of Securities

3

32

Listing of Securities

3

The stocks, bonds and other securities issued by issuers require listing for providing liquidity to investors. 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 satisfy the corporate governance requirement framed by regulators.

Benefits of Listing on NSE The benefits of listing on NSE are as enumerated below: •

NSE provides a trading platform that extends across the length and breadth of the country. Listing on NSE thus, enables issuers to reach and service investors across the country.

•

NSE being the largest stock exchange in terms of trading volumes, the securities trade at low impact cost and are highly liquid. This in turn reduces the cost of trading to the investor.

•

The trading system of NSE provides unparallel level of trade and post-trade information. The best 5 buy and sell orders are displayed on the trading system and the total number of securities available for buying and selling is also displayed. This helps the investor to know the depth of the market. Further, corporate announcements, results, corporate actions etc are also available on the trading system, thus reducing scope for price manipulation or misuse.

•

The facility of making initial public offers (IPOs), using NSE's network and software, results in significant reduction in cost and time of issues.

•

NSE’s web-site www.nseindia.com provides a link to the web-sites of the companies that are listed on NSE, so that visitors interested in any company can visit that company’s web-site from the NSE site.

•

Listed companies are provided with monthly trade statistics of the securities of the company listed on the Exchange.

•

The listing fee is nominal.

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

33

Contracts (Regulation) Rules, 1957, SEBI Guidelines and other relevant guidelines/acts. The criteria include minimum paid-up capital and market capitalisation, company/ promoter's 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 listing agreement 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.

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 the NEAT 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 are required obtain the prior approval of shareholders of the company by a special resolution passed at its general meeting, make a public announcement in the manner provided in these guidelines, make an application to

34

the delisting exchange 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 should 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 be made 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. The companies delisted during 2008-09 are mentioned in the table below. Sr. No.

Name of the Company

Date of Delisting

1

Bosch Chassis Systems India Limited

7-Nov-08

2

Pentamedia Graphics Limited

09-Jan-09

3

Pentasoft Technologies Limited

09-Jan-09

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. However, the permitted to trade category has been phased out gradually and no new company is been given the benefit of this category. At the end of March 2009, 1,432 companies were listed while 1,291 companies available for trading. These securities had a market capitalisation of Rs. 2,896,194 crore (US $ 568,439 million). The growth of securities available for trading on the CM segment is presented in Table 3-2.

35

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

1

Initial Listing Fees

2

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

Amount (Rs.) 25,000

a) Upto Rs. 1 Crore

10,000

b) Above Rs. 1 Crore and upto Rs.5 Crores

15,000

c) Above Rs. 5 Crore and upto Rs.10 Crores

25,000

d) Above Rs. 10 Crore and upto Rs.20 Crores

45,000

e) Above Rs. 20 Crore and upto Rs.30 Crores

70,000

f)

Above Rs. 30 Crore and upto Rs.40 Crores

75,000

g) Above Rs. 40 Crore and upto Rs.50 Crores

80,000

h) Above Rs. 50 Crores and upto Rs.100 Crores

1,30,000

i)

Above Rs. 100 Crore and upto Rs.150 Crores

1,50,000

j)

Above Rs. 150 Crore and upto Rs.200 Crores

1,80,000

k) Above Rs. 200 Crore and upto Rs.250 Crores

2,05,000

l)

Above Rs. 250 Crore and upto Rs.300 Crores

2,30,000

m) Above Rs. 300 Crore and upto Rs.350 Crores

2,55,000

n) Above Rs. 350 Crore and upto Rs.400 Crores

2,80,000

o) Above Rs. 400 Crore and upto Rs.450 Crores

3,25,000

p) Above Rs. 450 Crore and upto Rs.500 Crores

3,75,000

Companies which have a paid up share, bond and/ or debenture and/or debt capital, etc. of more than Rs.500 crores will have to pay minimum fees of Rs.3,75,000 and an additional listing fees of Rs.2,500 for every increase of Rs.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 Rs.1,000 crores will have to pay minimum fees of Rs.6,30,000 and an additional listing fees of Rs.2,750 for every increase of Rs.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 presents the sector-wise shareholding pattern at end-March 2009 of companies listed on NSE. On an average, the promoters hold more than 57.86%

36

of total shares. Though the public shareholding is nearly 40.49 %, Indian public held only 13.29% and the institutional holdings by (Financial Institutions, Banks, Central and State governments, Insurance companies , FIIs , MFs, VCF’s and FVCF’s) accounted for 17.34 %.

WDM Segment In 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 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 2009, 3,954 securities with issued capital of Rs. 2,848,315 crore (US $ 559,041 million) and a market capitalisation of Rs.2,848,315 crore (US $ 559,041 million) were available for trading on the WDM segment.

FUNDS MOBILISATION ON THE EXCHANGE During the year 2008-09, the resources raised through Public Issues, Rights Issues, QIP and Preferential Allotments is summarized in the table below. Particulars

No. of Issues

Amount Mobilised (Rs. Cr.)

(US $ mn.)

Public Issues

19

3,833.48

752.40

IPOs

19

3,833.48

752.40

FPOs

–

–

–

17

31,656.37

6,213.22

2

188.82

37.06

Preferential Allotment

168

40,607.80

7,970.13

Total

206

76,286.46

14,972.81

Rights Issues QIP

Initial Public Offerings (IPO’s) During the year 2008-09, 19 companies were listed through IPO mobilizing an amount of Rs 3,833 crore (US $ 752.40 million). Tata Capital Ltd. came out with an IPO for nonconvertible Debentures (NCD) mobilizing Rs. 1,500 crore (US $ 294.41 million) which was the third largest IPO. KSK Energy Ventures Limited was the largest IPO raising Rs. 830.66 crore (US $ 163.04 million) followed by Gammon Infrastructure Projects Limited raising Rs. 276.39 crore (US $ 54.25 million) The details of IPOs listed on NSE during 2008-09 is presented in Table 3-6.

37

RIGHTS ISSUES There were 17 Rights issues during 2008-09, out of which State Bank of India was the largest in terms of issue size of Rs.16,722.27 crore (US $ 3,282.09 million). The details of Rights Issues listed on NSE during 2008-09 is presented in Table 3-7.

PREFERENTIAL ALLOTMENT/PRIVATE PLACEMENT During 2008-09, there were 169 preferential allotments that raised Rs.40,607.80 crore (US $ 7,970.13 million). The details of Preferential Allotment listed on NSE during 2008-09 are presented in Table 3-8.

QIPs The amount raised through 2 QIPs during 2008-09, was Rs.188.82 crore (US $ 37.06 million).The details of QIPs are presented in Table 3-9.

Chart 3-1 : Number of Companies Listed

38

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)/ Market Capitalisation (MC) /Net Worth

PUEC ≥ Rs. 10 cr. and MC ≥ Rs. 25 cr.

PUEC ≥ Rs. 10 cr. and MC ≥ Rs. 25 cr. OR

Company/ Promoter’s Track Record

Atleast 3 years track record of either

PUEC ≥ Rs. 25 cr. OR MC ≥ Rs. 50 cr. OR The company shall have a net worth of not less than Rs.50 crores in each of the preceding financial years.

a) the applicant seeking listing OR b) the promoters/promoting company incorporated in or outside India OR

Atleast three years track record of either a) the applicant seeking listing; OR b) the promoters/promoting company, incorporated in or outside India.

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. 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 Rs.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.

(a) No disciplinary action by other stock exchanges/regulatory authority in past 3 yrs.

(b) Satisfactory redressal mechanism for investor grievances,

(b) Satisfactory redressal mechanism for investor grievances,

(c) distribution of shareholding

(c ) distribution of shareholding and

(d) details of litigation record in past 3 years

(d) details of litigation record in past 3 years.

(e) Track record of Directors of the Company

(e) Track record of Directors of the Company (f) Change in control of a Company/ Utilisation of funds raised from public

39

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 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 Rs.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.

40

Table 3-2 : Companies Listed,Permitted to Trade, Available for Trading on the CM Segment Month/Year (end of period)

No. of Companies Listed*

No. of Companies Permitted to Trade

Nov-94

0

300

Mar-95

135

Mar-96

422

Mar-97

No. of Companies Available for Trading *@

Market Capitalisation * (Rs. crore)

(US $ mn)

300

292,637

93,108

543

678

363,350

115,606

847

1,269

401,459

116,873

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

113,081

Mar-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

Apr-07

1,246

–

1,104

3,650,368

913,277

May-07

1,267

–

1,126

3,898,078

975,251

Jun-07

1,283

–

1,143

3,978,381

995,342

Jul-07

1,293

–

1,150

4,317,571

1,080,203

Aug-07

1,316

–

1,170

4,296,994

1,075,055

Sep-07

1,319

–

1,173

4,886,561

1,222,557

Oct-07

1,327

–

1,180

5,722,227

1,431,630

Nov-07

1,343

–

1,197

5,876,742

1,470,288

Dec-07

1,353

–

1,207

6,543,272

1,637,046

Jan-08

1,362

–

1,216

5,295,387

1,324,840

Feb-08

1,372

–

1,227

5,419,942

1,356,003

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

* At the end of the period @ Excludes suspended companies.

41

42

43.63

18.19

39.22

73.91

48.18

48.38

56.53

39.32

44.14

53.89

45.02

Finance

FMCG

Information Technology

Infrastructure

Manufacturing

Media & Entertainment

Petrochemicals

Pharmaceuticals

Services

Telecommunication

Miscellaneous

% to Total Number of Shares

2.59

8.06

13.86

12.96

7.77

4.86

9.12

1.54

7.86

16.08

2.10

1.95

1.08

Foreign Promoters

50.88

6.98

97,388,396,771 13,366,653,976

26.39

Engineering

Number of Shares

46.34

Indian Promoters

Promoters

Banks

Sectors

8.39

6.85

8.39

7.88

4.77

11.42

7.28

7.31

12.44

12.72

13.01

7.34

14.27

2.95

1.73

3.30

3.51

2.11

5.72

3.12

2.11

2.17

8.11

2.92

11.57

3.83

0.00

0.00

0.20

0.19

0.00

0.26

0.05

0.03

0.39

0.00

0.03

0.00

0.00

Venture Capital Funds including Foreign Venture Capital Funds

0.11

0.03

0.00

0.06

0.26

0.00

0.26

0.02

0.22

0.00

1.61

0.75

0.63

Any other

9.32

3.59

6.99

6.93

5.71

8.48

6.43

3.67

7.88

4.91

6.22

9.05

22.37

9.93

13.38

19.57

11.61

14.93

15.16

6.66

17.86

13.23

15.85

22.49

13.59

Individuals

Non- Institutional

5.64

Bodies Corporate

6.52

10.27

3.42

3.56

2.55

1.91

2.33

1.22

6.71

13.54

5.38

8.37

1.05

Any Other

(In per cent)

0.59

0.98

0.88

1.11

4.31

1.28

1.44

0.20

2.94

0.42

0.66

1.17

4.02

Shares held by Custodians and against which Depository Receipts have been issued

5.78

8.40

3.10

0.06

0.26

5.80

13.29

3.79

1.65

11,068,483,433 16,087,186,434 5,924,758,415 117,438,911 501,700,319 11,102,308,040 25,437,750,995 7,255,117,324 3,154,419,003

2.14

4.65

5.43

4.90

4.38

2.77

6.63

3.32

2.32

12.81

8.58

10.92

9.54

Mutual Funds

Institutional Foreign Financial Institutional Institutions/ Investors Banks/Central Government/ State Government(s) / Insurance Companies

Public

Table 3-3 : Shareholding Pattern at the end of March 2009 of companies Listed on NSE

Table 3-4 : Eligibility Criteria for Securities on WDM Segment Issuer

Eligibility Criteria for listing Public Issue /Private Placement

Corporates (Public limited companies and Private limited companies)

• Paid-up capital of Rs.10 crores; or • Market capitalisation of Rs.25 crores (In case of unlisted companies Networth more than Rs.25 crores) • Credit rating

Public Sector Undertaking, Statutory Corporation established/ constituted under Special Act of Parliament /State Legislature, Local bodies/ authorities,

• Credit rating

Mutual Funds: • Qualifies for listing under SEBI’s Regulations Units of any SEBI registered Mutual Fund/scheme : • Investment objective to invest predominantly in debt or • Scheme is traded in secondary market as debt instrument Infrastructure companies • Tax exemption and recognition as infrastructure company under related statutes/regulations Financial Institutions u/s. 4A of Companies Act, 1956 including Industrial Development Corporations

Banks

• Qualifies for listing under the respective Acts, Rules or Regulations under which the securities are issued. • Credit rating

Public Issue Qualifies for listing under the respective Acts, Rules or Regulations under which the securities are issued.

Private Placement Credit rating

• Scheduled banks • Scheduled Banks • Networth of Rs.50 crores or • Networth of Rs.50 crores or above above • Qualifies for listing under • Credit rating the respective Acts, Rules or Regulations under which the securities are issued.

43

Table 3-5 : Securities Available for Trading on WDM Segment (as on March 31) Securities

2008 Number

Amount (Rs.cr)

Government Securities

Amount

Number

(US $ mn)

Amount (Rs.cr)

Amount (US $ mn)

1,336

1,682,607

420,968

1,391

2,272,333

445,993

52

113,947

28,508

52

147,617

28,973

PSU Bonds

777

97,282

24,339

783

129,499

25,417

Institutional Bonds

262

32,419

8,111

263

57,628

11,311

Bank Bonds

396

99,615

24,922

459

132,662

26,038

Corporate Bonds

738

76,489

19,136

1,000

107,782

21,154

5

723

181

6

795

156

3,566

2,103,082

526,165

3,954

2,848,315

559,041

T-Bills

Others Total

44

2009

45

Gammon Infrastructure Projects Limited

Sita Shree Food Products Limited

Titagarh Wagons Limited

Kiri Dyes and Chemicals Limited

Gokul Refoils and Solvent Limited

Sejal Architectural Glass Limited

Archidply Industries Limited

First Winner Industries Limited

Lotus Eye Care Hospital Limited

KSK Energy Ventures Limited

Birla Cotsyn (India) Limited

Vishal Information Technologies Limited

Nu Tek India Limited

Resurgere Mines & Minerals India Limited

Austral Coke & Projects Limited

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Company Name

1

Sr. No.

Manufacturing

Manufacturing

Telecommunication

Services

Manufacturing

Infrastructure

Services

Manufacturing

Manufacturing

Manufacturing

Manufacturing

Manufacturing

Manufacturing

Manufacturing

Infrastructure

Sector

142.30

120.15

86.40

41.86

144.18

830.66

38.00

68.75

48.96

105.73

139.59

56.25

128.72

31.50

276.39

(Rs.cr)

Issue size

4-Sep-08

1-Sep-08

27-Aug-08

11-Aug-08

30-Jul-08

14-Jul-08

11-Jul-08

8-Jul-08

4-Jul-08

1-Jul-08

4-Jun-08

22-Apr-08

21-Apr-08

7-Apr-08

3-Apr-08

Date of Listing

7,260,000

4,450,000

4,500,000

2,790,829

102,982,730

34,611,000

10,000,000

5,500,043

6,615,720

9,194,155

7,158,392

3,750,053

2,383,768

10,500,000

16,550,000

No. of Securities issued

196.00

270.00

192.00

150.00

14.00

240.00

38.00

125.00

74.00

115.00

195.00

150.00

540.00

30.00

167.00

(Rs.)

Issue Price

225.95

533.55

199.15

194.60

9.45

191.75

35.65

89.20

50.70

81.25

182.05

158.95

706.85

43.70

158.15

Close Price on first day of trading

225.10

45.25

29.35

35.80

3.45

189.55

28.05

12.60

13.55

22.90

205.85

129.25

141.70

5.65

52.00

Close Price at end of March 2009

Table 3-6 : Initial Public Offerings (IPOs) during 2008-09

15.28

97.61

3.72

29.73

(32.50)

(20.10)

(6.18)

(28.64)

(31.49)

(29.35)

(6.64)

5.97

30.90

45.67

(5.30)

(%)

Price Appreciation/ Depreciation on the first day of trading with the issue price

Contd...

14.85

(83.24)

(84.71)

(76.13)

(75.36)

(21.02)

(26.18)

(89.92)

(81.69)

(80.09)

5.56

(13.83)

(73.76)

(81.17)

(68.86)

Price Appreciation/ Depreciation at end March 2009 with the issue price

46

Edserv Softsystems Limited

18

1

Services

Manufacturing

Manufacturing

Sector

23.84

26.27

23.93

(Rs.cr)

Issue size

Tata Capital Limited-N4

529.96

745.74

162.59

FINANCE

Tata Capital Limited-N2

(Rs.cr)

Issue size

61.71

Sector

Tata Capital Limited- N1

Tata Capital Limited- N3

2-Mar-09

6-Nov-08

6-Oct-08

Date of Listing

3,973,908

2,550,000

4,351,251

No. of Securities issued

60.00

103.00

55.00

(Rs.)

Issue Price

137.70

173.40

33.65

Close Price on first day of trading

19.55

234.30

15.10

Close Price at end of March 2009

129.50

68.35

(38.82)

(%)

Price Appreciation/ Depreciation on the first day of trading with the issue price

17-Mar-09

17-Mar-09

17-Mar-09

17-Mar-09

Date of Listing

5,299,567

7,457,427

1,625,906

6,171

No. of Securities issued

1,000.00

1,000.00

1,000.00

100,000.00

(Rs.)

Issue Price

1,020.68

1,037.45

1,032.44

102,010.66

(Rs.)

Close Price on first day of trading

1,087.50

1,074.94

1,074.00

108,000.00

(Rs.)

Close Price at end of March 2008

2.07

3.75

3.24

2.01

(%)

Price Appreciation/ Depreciation on the first day of trading

Initial Public Offerings (IPOs) of Non-convertible Debentures (NCDs) during 2008-09

Company Name & Series

Alkali Metals Limited

17

Sr. No.

20 Microns Limited

Company Name

16

Sr. No.

Contd...

(%)

8.75

7.49

7.40

8.00

Price Appreciation/ Depreciation at end March 2008

(67.42)

127.48

(72.55)

Price Appreciation/ Depreciation at end March 2009 with the issue price

Table 3-7 : Rights Issues during 2008-09 S. No.

Company Name

1

State Bank Of India

2

Amount Mobilised (Rs. Crore)

Amount Mobilised (US $ mn)

Date of Listing

16,722.27

3,282.09

7-Apr-2008

The Dhanalakshmi Bank Ltd.

198.76

39.01

8-May-2008

3

Network 18 Fincap Limited

102.96

20.21

22-May-2008

4

Godrej Consumer Products Limited

396.46

77.81

27-May-2008

5

The Indian Hotels Company Limited

843.88

165.63

30-May-2008

6

The Indian Hotels Company Limited

602.79

118.31

2-Jun-2008

7

Century Extrusions Limited

13.20

2.59

11-Aug-2008

8

Entegra Limited

127.15

24.96

16-Sep-2008

9

The Oudh Sugar Mills Ltd

23.99

4.71

19-Sep-2008

10

JK Tyre & Industries Limited

87.25

17.12

25-Sep-2008

11

Hindalco Industries Ltd.

4,544.63

891.98

24-Oct-2008

12

Tata Investment Corporation Ltd.

447.74

87.88

4-Nov-2008

13

Tata Motors Limited

4,139.33

812.43

4-Nov-2008

14

Tata Motors Limited

1,957.36

384.17

5-Nov-2008

15

Federal-Mogul Goetze (India) Limited.

128.86

25.29

22-Dec-2008

16

Dish TV India Limited

1,139.93

223.73

23-Jan-2009

17

Thomas Cook (India) Ltd

179.81

35.29

28-Jan-2009

31,656.37

6,213.22

Total

47

Table 3-8 : Preferential Allotments by NSE Listed Companies during 2008-09 S. No.

Company Name

1

Aditya Birla Nuvo Limited

2

Amount Raised Rs. Crore

Amount Raised US $ mn

341.27

66.98

Allied Digital Services Limited

61.84

12.14

3

Agro Dutch Industries Limited

8.95

1.76

4

Aksh Optifibre Limited

11.30

2.22

5

Alkyl Amines Chemicals Ltd.

10.00

1.96

6

Allcargo Global Logistics Limited

0.09

0.02

7

Alok Industries Limited

109.48

21.49

8

Alphageo (India) Limited

7.51

1.47

9

Ansal Housing and Construction Limited

18.17

3.57

10

Antarctica Ltd

1.25

0.25

11

Apollo Hospitals Enterprise Ltd

68.60

13.46

12

Apollo Tyres Ltd

82.04

16.10

13

Aptech Limited

30.09

5.91

14

Arihant Foundations & Housing Ltd

2.30

0.45

15

Aro Granite Industries Limited

4.43

0.87

16

Arvind Limited

49.92

9.80

17

Assam Company Limited

188.33

36.96

18

Aurionpro Solutions Limited

95.97

18.84

19

Autoline Industries Limited

52.92

10.39

20

Autolite (India) Limited

0.50

0.10

21

B.A.G Films and Media Limited

69.54

13.65

22

Banco Products (I) Ltd

10.17

2.00

23

Banswara Syntex Limited

2.84

0.56

24

Bartronics India Limited

60.19

11.81

25

Blue Coast Hotels and Resorts Limited

42.77

8.40

26

BOC India Limited

597.30

117.23

27

Bombay Rayon Fashions Limited

126.27

24.78

28

Cairn India Limited

2534.59

497.47

29

Cinevistaas Limited

3.18

0.62

30

Classic Diamonds (India) Limited

5.60

1.10

31

Core Projects and Technologies Limited

33.00

6.48

32

Cubex Tubings Ltd.

9.58

1.88

33

Cybertech Systems And Software Ltd.

2.32

0.46

34

Delta Corp Limited

123.45

24.23

35

Dwarikesh Sugar Industries Limited

7.52

1.47 Contd...

48

Contd... S. No.

Company Name

Amount Raised Rs. Crore

Amount Raised US $ mn

36

Easun Reyrolle Ltd

17.23

3.38

37

Electrosteel Castings Ltd

46.44

9.11

38

Electrotherm (India) Ltd.

140.50

27.58

39

Era Infra Engineering Limited

243.54

47.80

40

Escorts Ltd

30.26

5.94

41

Everonn Systems India Limited

91.39

17.94

42

Fresenius Kabi Oncology Limited

7.12

1.40

43

Garware Wall Ropes Ltd.

19.91

3.91

44

Garware Offshore Services Limited

31.33

6.15

45

GATI LIMITED

59.65

11.71

46

Gemini Communication Limited

1.73

0.34

47

Genesys International Corporation Limited

6.37

1.25

48

Genus Power Infrastructures Limited

19.90

3.91

49

The Great Eastern Shipping Co. Limited

0.31

0.06

50

Goldstone Infratech Limited

33.00

6.48

51

Goldstone Technologies Ltd.

5.44

1.07

52

GTL Infrastructure Limited

382.02

74.98

53

Gujarat NRE Coke Ltd.

30.00

5.89

54

Havells India Limited

155.25

30.47

55

Himadri Chemicals And Industries Ltd

7.79

1.53

56

Heritage Foods (India) Ltd.

48.81

9.58

57

Hikal Limited

64.46

12.65

58

Himatsingka Seide Ltd

3.33

0.65

59

Horizon Infrastructure Limited

1.65

0.32

60

ibn18 Broadcast Limited

225.18

44.20

61

ICSA (India) Limited

60.16

11.81

62

Idea Cellular Limited

7294.48

1,431.69

63

Ifb Agro Industries Ltd

2.01

0.39

64

Ifb Industries Ltd.

8.70

1.71

65

IMP Powers Ltd

23.02

4.52

66

Indo Asian Fusegear Limited

12.00

2.36

67

Ind-Swift Laboratories Ltd.

17.06

3.35

68

Infotech Enterprises Ltd

98.06

19.25

69

IOL Netcom Limited

6.65

1.31

70

Jayant Agro Organics Ltd.

18.00

3.53

71

JBF Industries Ltd.

30.63

6.01 Contd...

49

Contd... S. No.

Company Name

72

JCT Electronics Limited

73

JHS Svendgaard Laboratories Limited

74

JIK Industries Limited

75

Jindal Drilling And Industries Limited

76

Amount Raised Rs. Crore

Amount Raised US $ mn

114.34

22.44

1.84

0.36

30.04

5.90

153.60

30.15

Jain Irrigation Systems Limited

99.63

19.55

77

Jain Irrigation Systems Limited

52.72

10.35

78

JK Lakshmi Cement Limited

40.00

7.85

79

JMT Auto Limited

3.24

0.64

80

Jaiprakash Associates Limited

397.00

77.92

81

JSL Limited

118.68

23.29

82

JSW Steel Limited

217.60

42.71

83

Kalindee Rail Nirman (Engineers) Limited

3.60

0.71

84

Karuturi Global Limited

195.28

38.33

85

Khandwala Securities Limited

2.67

0.52

86

Kinetic Motor Company Limited

6.50

1.28

87

Klg Systel Ltd.

27.93

5.48

88

KDL Biotech Limited

8.73

1.71

89

Kopran Ltd.

4.53

0.89

90

K S Oils Limited

130.75

25.66

91

Lakshmi Energy and Foods Limited

58.91

11.56

92

Logix Microsystems Limited

10.63

2.09

93

Lyka Labs Ltd

6.70

1.31

94

Maars Software International Ltd.

7.72

1.52

95

Magma Fincorp Limited

32.29

6.34

96

Maharashtra Seamless Ltd

0.00

0.00

97

Malwa Cotton Spg. Mills Ltd

4.00

0.79

98

Marksans Pharma Limited

16.90

3.32

99

Mcnally Bharat Engineering Company Limited

20.97

4.11

100

Micro Technologies (India) Limited

5.01

0.98

101

Mid-Day Multimedia Limited

10.00

1.96

102

Morepen Laboratories Ltd

11.59

2.28

103

NCL Industries Limited

6.37

1.25

104

Neocure Therapeutics Ltd

3.90

0.76

105

Nuchem Ltd

0.75

0.15

106

Onward Technologies Ltd

5.94

1.17

107

Orchid Chemicals Ltd

92.38

18.13 Contd...

50

Contd... S. No.

Company Name

108

Pantaloon Retail (India) Ltd.

109

Amount Raised Rs. Crore

Amount Raised US $ mn

427.00

83.81

Parekh Aluminex Limited

80.59

15.82

110

Patel Integrated Logistics Limited

13.32

2.61

111

Pearl Polymers Ltd

1.22

0.24

112

Phillips Carbon Black Ltd.

44.70

8.77

113

Pioneer Embroideries Limited

1.73

0.34

114

Pitti Laminations Limited

2.88

0.57

115

Ponni Sugars (Erode) Limited

2.00

0.39

116

Prajay Engineers Syndicate Limited

80.30

15.76

117

Prakash Industries Ltd

148.75

29.20

118

Premier Limited

16.97

3.33

119

Prime Securities Limited

51.43

10.09

120

Provogue (India) Limited

373.52

73.31

121

Radico Khaitan Limited

92.00

18.06

122

Rain Commodities Limited

101.27

19.88

123

Ranbaxy Laboratories Ltd

3409.22

669.13

124

Reliance Industries Ltd

16824.00

3,302.06

125

Shree Renuka Sugars Limited

37.54

7.37

126

Radha Madhav Corporation Limited

38.80

7.62

127

Rohit Ferro-Tech Limited

21.59

4.24

128

Rpg Cables Ltd

43.68

8.57

129

Ruchi Soya Industries Ltd.

49.60

9.74

130

Sagar Cements Ltd.

75.45

14.81

131

Sah Petroleums Limited

31.98

6.28

132

Sambhaav Media Limited

13.28

2.61

133

Sanghvi Movers Ltd.

12.31

2.42

134

Sb&T International Ltd

2.00

0.39

135

SEL Manufacturing Company Limited

36.08

7.08

136

Shri Lakshmi Cotsyn Limited

14.19

2.79

137

Shriram City Union Finance Limited

186.00

36.51

138

Simbhaoli Sugars Limited

6.37

1.25

139

Simplex Infrastructures Limited

8.02

1.57

140

Sintex Industries Ltd.

122.23

23.99

141

S. Kumars Nationwide Ltd

43.73

8.58

142

Sona Koyo Steering Systems Ltd.

16.26

3.19

143

SREI Infrastructure Finance Limited

72.00

14.13 Contd...

51

Contd... S. No.

Company Name

144

Steel Strips Wheels Limited

145

Strides Arcolab Limited

146

Amount Raised Rs. Crore

Amount Raised US $ mn

31.35

6.15

201.83

39.61

Sterlite Technologies Limited

28.00

5.50

147

Sujana Universal Industries Limited

12.00

2.36

148

Summit Securities Limited

16.06

3.15

149

Su-Raj Diamonds and Jewellery Limited

30.77

6.04

150

Surana Corporation Limited

50.00

9.81

151

Suryajyoti Spinning Mills Limited

6.50

1.28

152

Talbros Automotive Components Limited

3.61

0.71

153

Techno Electric and Engineering Co Ltd

12.80

2.51

154

Tourism Finance Corpn Of India Ltd

63.83

12.53

155

Television Eighteen India Ltd.

111.44

21.87

156

UFLEX Limited

179.07

35.15

157

United Phosphorous Limited

206.96

40.62

158

UTV Software Communications Limited

842.58

165.37

159

Vakrangee Softwares Limited

54.23

10.64

160

Viceroy Hotels Limited

78.37

15.38

161

Vijay Shanthi Builders Limited

3.53

0.69

162

Visu International Limited

4.38

0.86

163

VLS Finance Ltd.

4.00

0.79

164

Walchandnagar Industries Ltd

50.72

9.95

165

Webel-SL Energy Systems Limited

3.75

0.74

166

Welspun Gujarat Stahl Rohren Limited

150.01

29.44

167

West Coast Paper Mills Ltd

22.25

4.37

168

XL Telecom Limited

16.34

3.21

169

Xpro India Limited

2.08

0.41

40,607.80

7,970.13

Total

Table 3-9 : Amount raised through QIP during 2008-09 Sr. No

52

Name of the company

1

Dynamatic Technologies Ltd.

2

Amount Raised (Rs.cr)

(US $ mn)

74.53

14.63

ibn18 Broadcast Limited

114.29

22.43

TOTAL

188.82

37.06

Capital Market Segment

4

54

Capital Market Segment

4

The Trading on the NSE’s capital market commenced on November 4, 1995 and has been witnessing a substantial growth over the years. The growth of NSE turnover figures shows a substantial rise from Rs. 1,805 crore (US $ 574.29 million) in the year 1994-95 to Rs. 2,752,023 crore (US $ 540,141.59 million) in 2008-09. With the increase in volumes, efficient and transparent trading platform, a wide range of securities like equity, preference shares, debt warrants, exchange traded funds as well as retail government securities, NSE upholds its position as the largest stock exchange in the country. The CM segment of NSE provides an efficient and transparent platform for trading of equity, preference shares, debentures, warrants, exchange traded funds as well as retail Government securities.

NEAT System National Exchange for Automated Trading (NEAT) is the trading system of NSE. NEAT facilitates a system on-line, fully automated, nationwide, anonymous, order driven, screen-based trading. In this system a member can punch into the computer quantities of securities and the prices at which he likes to transact and the transaction is executed as soon as it finds a matching sale for buy order for a counter party. The numerous advantages of the NEAT system are detailed out below : •

It electronically matches orders on a price/time priority and hence cuts down on time, cost and risk of error, as well as on fraud resulting in improved operational efficiency.

•

It allows faster incorporation of price sensitive information into prevailing prices, thus increasing the informational efficiency of markets.

•

It enables market participants to see the full market on real-time, making the market transparent. It allows a large number of participants, irrespective of their geographical locations, to trade with one another simultaneously, improving the depth and liquidity of the market.

•

It provides tremendous flexibility to the users in terms of kinds of orders that can be placed on the system. It ensures full anonymity by accepting orders, big or small, from members without revealing their identity, thus providing equal access to everybody.

•

It provides a perfect audit trail which helps to resolve disputes by logging in the trade execution process in entirety.

•

The trading platform of the CM segment is accessed not only from the computer terminals from the premises of brokers spread over about 192 cities, but also from the personal computers in the homes of investors through the Internet.

55

Market Performance Trading Volume Over the years the Capital market has witnessed a growth in the trading volumes from Rs. 1,805 crore (US $ 574.29 million) in 1994-95 the volumes increased to Rs. 2,752,023 crore (US $ 540,142 million) in 2008-09. The average daily trading volume increased from Rs. 17 crore during 1994-95 to Rs. 11,325 crore (US $ 2,223 million) during 2008-09. In the reporting year 2008-09 the volumes decreased by 22.50 % to Rs. 2,752,023 crore (US $ 540,142 million) from Rs. 3,551,038 crore (US $ 888,426 million) during 2007-08. The business growth of the CM segment is presented in Table 4-1 and Chart 4-1.

Chart 4-1 : Business Growth of Capital Market Segment

Liquidity The liquidity in the CM segment, as measured by the turnover ratio, has witnessed a steady increase and reached nearly 95.02 % during the year 2008-2009 compared to 73.09% during the year 2007-08. The securities available for trading for more than 100 days accounted for 97.85% as indicated in the table below:

Frequency Distribution of Securities Traded During 2008-09 No. of Days Traded

No. of Securities

% to Total

Above 100

1,273

97.85

91-100

5

0.38

81-90

4

0.31

71-80

0

0.00

61-70

1

0.08 Contd...

56

Contd... No. of Days Traded

No. of Securities

% to Total

51-60

2

0.15

41-50

4

0.31

31-40

4

0.31

21-30

2

0.15

11-20

3

0.23

1-10

3

0.23

1,301

100.00

Total

The percentage of companies traded compared to the number of companies available for trading is quite high at more than 99% for all the months during the fiscal 2008-09. The month wise statistics are indicated in the table below:

Trading Frequency of Companies during the period 2008-09 Month

Companies Available for Trading*

No. of companies Traded

% of Traded to Available for Trading

1,244 1,252 1,262 1,272 1,278 1,278 1,282 1,286 1,283 1,286 1,284 1,291

1,240 1,246 1,256 1,267 1,274 1,275 1,277 1,282 1,282 1,281 1,280 1,283

99.68 99.52 99.52 99.61 99.69 99.77 99.61 99.69 99.92 99.61 99.69 99.38

Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09

*At the end of the period. Includes listed/permitted to trade companies but excludes suspended companies

Distribution of Turnover The concentration of trading among top ‘N’ Securities/members is presented in Table 4-2. It is observed that the top ‘5’ and ‘100’ securities account for about 20.48 % and 87.69 % of total turnover in the CM segment in 2008-09. The top ‘50’ securities accounted for 74.66 % of the total turnover, details of which are presented in Table 4-3. Member-wise distribution of turnover as presented in Table 4-2 indicates increasing diffusion of trades among a large number of trading members over the years. During 2008-09, top ‘5’ brokers accounted for only 13.56% of turnover, while top ‘100’ brokers accounted for 75.42% of total turnover.

Market Capitalisation The total market capitalisation of securities available for trading on the CM segment increased from Rs. 363,350 crore (US $ 115,606 million) as at end March 1995 to

57

Rs. 2,896,194 crore (US $ 568,439 million) as at end March 2009. The Market capitalization witnessed a huge decrease of 40.38 % during 2008-09 as compared to the market capitalization of Rs.4,858,122 crore (US $ 1,215,442 million) in 2007-08. The details of ‘50’ top companies by market capitalisation, which accounted for 70.48 % of total market capitalisation as at end March 2009, are presented in Table 4-4.

Sectoral Distribution Table 4-5 presents the sectoral classification of ‘Top 50’ companies based on their trading value and on their Market capitalization. The trading value of the banking stocks featuring in the ‘Top 50’ witnessed a rise and contributed to 14.98 % of the trading value in comparison to 9.35 % in the previous fiscal 2007-08. Amongst the other sectors there has been no significant change in the contribution of the “Top 50 companies” in comparison to the previous fiscal. The infrastructure sector continued to dominate with 18.78 % of the trading value in the “Top 50” companies . On the other hand the Petrochemicals sector too continued to have the maximum share of 26.67 % of the market capitalisation in the “Top 50 companies”. On the whole the Infrastructure, Petrochemicals, Manufacturing and Banking sector continue to be the major contributors in the share of trading value and market capitalisation of the “Top 50” companies.

Trading Records during 2008-09 Ten of NSE’s most Active trading days in terms of trading values are presented in Table 4-6 . During the fiscal, the highest trading value of Rs.20,418.14 cr (US $ 4,007 million). THE Individual Securities Single day Trading Records are presented in Table 4-7.

Internet Trading – At the end of March 2009, a total number of 349 members were permitted to allow investor’s web based access to NSE’s trading system. The members of the exchange in turn had registered 5,627,789 clients for web based access as on March 31, 2009. During the year 2008-09 10.58 % of the trading value in the Capital Market segment (Rs. 582,070 - US $ 114,243 million) was routed and executed through the internet. The table below shows the growth of internet trading from the fiscal years 2007-08 and 2008-09. Year

Enabled Members*

Registered Clients*

Internet Trading Volume (Rs. crore)

Internet Trading Volume (US $ million)

% of total trading volume

2007-08

305

4,405,134

649,658

162,536

9.15

2008-09

349

5,627,789

582,070

114,243

10.58

* At the end of the financial year Note : Figures for IBT turnover and registered clients are as reported by trading members to the Exchange Figures of Turnover are Buy Turnover + Sell turnover.

58

On-line IPOs The on-line trading system of NSE is used by companies to make IPOs through book building. It is a fully automated screen based bidding system that allows trading members to enter bids on behalf of their clients. All bids received by the system are numbered, time stamped, and stored in the book till the last day of the book building process and the offer price is determined after the bid closing date. While ensuring efficient price discovery, this system reduces time taken for completion of the issue process. 298 companies have used the on-line IPO system of NSE by the end of March 2009.

Indices India Index Services and Products Ltd. (IISL), in technical partnership with S&P, have developed and have been maintaining scientifically an array of indices of stock prices on NSE. The popular indices are the S&P CNX Nifty, CNX Nifty Junior, S&P CNX Defty, S&P CNX 500, CNX Midcap, CNX 100, Nifty Midcap 50, S&P CNX Industry indices and CNX segment indices. S&P CNX Nifty, introduced in November 3, 1995, is based on 50 largest and highly liquid stocks. CNX Nifty Junior, introduced in December 1996, is built out of the next 50 large and liquid stocks. These indices are monitored and updated dynamically and are reviewed regularly. The comparative movement of major sectoral indices along with that of S&P CNX Nifty is presented in Chart 4-2.

Chart 4-2 : Movement of Sectoral Indices: 2007-08

The S&P CNX Nifty accounted for 65.35% of total market capitalisation as at end March 2009, while the CNX Nifty Junior accounted for 9.894% of market capitalisation (Table 4-8). The compositions of these two indices as at end March 2009 are presented in Table

59

4-9 and Table 4-10. The industry wise weightages of securities included in S&P CNX Nifty are presented in Table 4-11. The movements in S&P CNX Nifty and CNX Nifty Junior are presented in Table 4-12 and Table 4-13 respectively. The Performance of few of the indices is presented in Table 4-14.

Volatility Index Volatility Index is a measure of market’s expectation of volatility over the near term. Volatility is often described as the “rate and magnitude of changes in prices” and in finance often referred to as risk. Volatility Index is a measure, of the amount by which an underlying Index is expected to fluctuate, in the near term, (calculated as annualised volatility, denoted in percentage e.g. 20%) based on the order book of the underlying index options. Volatility Index is a good indicator of the investors’ perception on how volatile markets are expected to be in the near term. Usually, during periods of market volatility, market moves steeply up or down and the volatility index tends to rise. As volatility subsides, option prices tend to decline, which in turn causes volatility index to decline.

India VIX* NSE has been in the forefront of bringing the latest products and services to the Indian capital markets for the benefit of the investors. In another innovation in the Indian markets, NSE launched the India VIX on 08th April, 2008 a volatility index based on the Nifty 50 Options prices. From the best bidask prices of Nifty 50 Options contracts (which are traded on the F&O segment of NSE), a volatility figure (%) is calculated which indicates the expected market volatility over the next 30 calendar days. Higher the implied volatility higher the India VIX value and vice versa. There are some differences between a price index, such as the Nifty 50 and India VIX. Nifty 50 is calculated based on the price movement of the underlying 50 stocks which comprises the index. India VIX is calculated based on the bid-offer prices of the near and mid month Nifty 50 Index Options. Nifty 50 Index is an absolute number, e.g. 4500, 5000 etc., whereas India VIX is a percentage value (eg. 20%, 30% etc.). Whereas Nifty 50 signifies how the markets have moved directionally, India VIX indicates the expected near term volatility and how the volatility is changing from time to time.

Uses of Volatility Index Volatility Index offers great advantages in terms of trading, hedging and introducing derivative products on this index. Investors can use volatility index for various purposes as mentioned :

*

60

“VIX” is a trademark of Chicago Board Options Exchange, Incorporated ("CBOE") and Standard & Poor’s 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.

•

Investors’ portfolios are exposed to the market volatility. Investors could hedge their portfolios against volatility with an off-setting position in India VIX* futures or options contracts.

•

Volatility index depicts the collective consensus of the market on the expected volatility and being contrarian in nature helps in predicting the direction. Investors therefore could appropriately use this information for taking trading positions.

•

Investors could also use the implied volatility information given by the index, in identifying mis-priced options.

•

Short sale positions could expose investors to directional risk. Derivatives on volatility index could help investors in safeguarding their positions and thus avoid systemic risk for the market Based on the experience gained with the benchmark broad based index, sector specific volatility indices could be constructed to enable hedging by investors in those specific sectors.

Mutual Funds and Exchange Traded Funds Table 4-15 (A) & (B) presents the details of the names and volumes of Mutual funds and Exchange traded funds listed on the exchange. At the end of March 2009 a total of 11 Mutual funds and 14 Exchange traded funds were listed on the exchange.

Charges Brokerage Charges The maximum brokerage chargeable by trading member in respect of trades effected in the securities admitted to dealing on the CM segment of the Exchange is fixed at 2.5% of the contract price, exclusive of statutory levies like, securities transaction tax, SEBI turnover fee, service tax and stamp duty. However, the brokerage charges as low as 0.10% are also observed in the market. Transaction Charges A member is required to pay the exchange transaction charges at the rate of 0.0035% (Rs. 3.5 per Rs. 1 lakh) of the turnover. Securities Transaction Tax STT is levied on all transactions of sale and / or purchase of equity shares and units of equity oriented fund and sale of derivatives entered into in a recognised stock exchange.

61

The existing rates are as follows :Sr. No 1

2

3

Taxable securities transaction

Rate (%)

Payable by

Purchase of an equity share in a company or a unit of an equity oriented fund, where – (a) the transaction of such purchase is entered into in a recognised stock exchange; and (b) the contract for the purchase of such share or unit is settled by the actual delivery or transfer of such share or unit. Sale of an equity share in a company or a unit of an equity oriented fund, where – (a) the transaction of such sale is entered into in a recognised stock exchange; and (b) the contract for the sale of such share or unit is settled by the actual delivery or transfer of such share or unit. Sale of an equity share in a company or a unit of an equity oriented fund, where – (a) the transaction of such sale is entered into in a recognised stock exchange; and (b) the contract for the sale of such share or unit is settled otherwise than by the actual delivery or transfer of such share or unit.

0.125

Purchaser.

0.125

Seller.

0.025

Seller.

Contribution to Investor Protection Fund (CM Segment) The trading members contribute to Investor Protection Fund of CM Segment at the rate Re. 1/- per Rs 100 crores of the traded value (each side) in case of Capital Market segment

Clearing & Settlement While NSE provides a platform for trading to its trading members, the National Securities Clearing Corporation Ltd. (NSCCL) determines the funds/securities obligations of the trading members and ensures that trading members meet their obligations. The core processes involved in clearing and settlement are: (a) Trade Recording : The key details about the trades are recorded to provide basis for settlement. These details are automatically recorded in the electronic trading system of the exchanges. (b) Trade Confirmation : The parties to a trade agree upon the terms of trade like security, quantity, price, and settlement date, but not the counterparty which is the NSCCL. The electronic system automatically generates confirmation by direct participants. (c) Determination of Obligation : The next step is determination of what counter-parties owe, and what counter-parties are due to receive on the settlement date. The NSCCL interposes itself as a central counterparty between the counterparties to trades and nets the positions so that a member has security wise net obligation to receive or deliver a security and has to either pay or receive funds. (d) Pay-in of Funds and Securities : The members bring in their funds/securities to the NSCCL. They make available required securities in designated accounts with the

62

depositories by the prescribed pay-in time. The depositories move the securities available in the accounts of members to the account of the NSCCL. Likewise members with funds obligations make available required funds in the designated accounts with clearing banks by the prescribed pay-in time. The NSCCL sends electronic instructions to the clearing banks to debit member’s accounts to the extent of payment obligations. The banks process these instructions, debit accounts of members and credit accounts of the NSCCL. (e) Pay-out of Funds and Securities : After processing for shortages of funds/securities and arranging for movement of funds from surplus banks to deficit banks through RBI clearing, the NSCCL sends electronic instructions to the depositories/clearing banks to release pay-out of securities/funds. The depositories and clearing banks debit accounts of the NSCCL and credit accounts of members. Settlement is complete upon release of pay-out of funds and securities to custodians/members. (f) Risk Management : A sound risk management system is integral to an efficient settlement system. The NSCCL ensures that trading members’ obligations are commensurate with their net worth. It has put in place a comprehensive risk management system, which is constantly monitored and upgraded to pre-empt market failures. It monitors the track record and performance of members and their net worth; undertakes online monitoring of members’ positions and exposure in the market, collects margins from members and automatically disables members if the limits are breached. The risk management methods adopted by NSE have brought the Indian financial market in line with the international markets.

Settlement Agencies The NSCCL, with the help of clearing members, custodians, clearing banks and depositories settles the trades executed on exchanges. The roles of each of these entities are explained below: (a) NSCCL : The NSCCL is responsible for post-trade activities of a stock exchange. Clearing and settlement of trades and risk management are its central functions. It clears all trades, determines obligations of members, arranges for pay-in of funds/ securities, receives funds/securities, processes for shortages in funds/securities, arranges for pay-out of funds/securities to members, guarantees settlement, and collects and maintains margins/collateral/base capital/other funds. It is the counterparty to all settlement obligations of the members. (b) Clearing Members : They are responsible for settling their obligations as determined by the NSCCL. They have to make available funds and/or securities in the designated accounts with clearing bank/depositories, as the case may be, to meet their obligations on the settlement day. (c) Custodians : Custodian is a clearing member but not a trading member. They settle trades assigned to them by trading members. They are required to confirm whether they are going to settle a particular trade or not. If it is confirmed, the NSCCL

63

assigns that obligation to that custodian and the custodian is required to settle it on the settlement day. (d) Clearing Banks : Every clearing member is required to open a dedicated clearing account with one of the clearing banks. Based on his obligation as determined through clearing, the clearing member makes funds available in the clearing account for the pay-in and receives funds in case of a pay-out. (e) Depositories : Depositories help in the settlement of the dematerialised securities. Each custodian/clearing member is required to maintain a clearing pool account with the depositories. He is required to make available the required securities in the designated account on settlement day. The depository runs an electronic file to transfer the securities from accounts of the custodians/clearing member to that of NSCCL. As per the schedule of allocation of securities determined by the NSCCL, the depositories transfer the securities on the pay-out day from the account of the NSCCL to those of members/custodians. (f) Professional Clearing Member : NSCCL admits special category of members namely, professional clearing members. Professional Clearing Member (PCM) may clear and settle trades executed for their clients (individuals, institutions etc.). In such an event, the functions and responsibilities of the PCM would be similar to Custodians. PCMs may also undertake clearing and settlement responsibility for trading members. In such a case, the PCM would settle the trades carried out by the trading members connected to them. A PCM has no trading rights but has only clearing rights, i.e. he clears the trades of his associate trading members and institutional clients.

Settlement Cycles NSCCL clears and settles trades as per well-defined settlement cycles, as presented in Table 4-16. Since the beginning of the financial year 2003, all securities are being traded and settled under T+2 rolling settlement. The NSCCL notifies the consummated trade details to clearing members/custodians on the trade day. The custodians affirm back the trades to NSCCL by T+1 day. Based on the affirmation, NSCCL nets the positions of counterparties to determine their obligations. A clearing member has to pay-in/pay-out funds and/or securities. A member has a security-wise net obligation to receive/deliver a security. The obligations are netted for a member across all securities to determine his fund obligations and he has to either pay or receive funds. Members’ pay-in/pay-out obligations are determined latest by T+1 day and are forwarded to them on the same day so that they can settle their obligations on T+2 day. The securities/funds are paidin/paid-out on T+2 day and the settlement is complete in 3 days from the end of the trading day.

Settlement Statistics The settlement statistics of the CM segment is presented in Table 4-17. During 2008-09, NSCCL settled trades for Rs. 2,749,450 crore (US $ 539,637 million.) of which 22.44% were settled by delivery. However, these deliveries include only the net deliveries made by the trading members to the clearing corporation. Of total delivery, nearly 100% of

64

securities were delivered in demat form in 2008-09. Short deliveries averaged around 0.21 % of total delivery in 2008-09.

Risk Management System There have been a number of experiments with different risk containment measures in the recent pasts. NSE being aware of the importance of the risk containment measures has a dedicated Risk Group which looks into aspects relating to the risk management. These measures have been repeatedly reviewed and revised. The risk containment measures in vogue are described below:

Capital Adequacy The capital adequacy requirements stipulated by the NSE are substantially in excess of the minimum statutory requirements as also in comparison to those stipulated by other stock exchanges. A person seeking membership in the CM and F&O segment is required to have a net worth of Rs. 1 crore, and keep an interest free security deposit of Rs. 1.25 crore and collateral security deposit of Rs. 0.25 crore with the Exchange/NSCCL. The deposits kept with the Exchange as part of the membership requirement may be used towards the margin requirement of the member. Additional capital may be provided by the member for taking additional exposure.

On-Line Monitoring NSCCL has put in place an on-line monitoring and surveillance system, whereby exposure of the members is monitored on a real time basis. A system of alerts has been built in so that both the member and the NSCCL are alerted as per pre-set levels (reaching 70%, 85%, 90%, 95% and 100%) as and when the members approach these limits. The system enables NSSCL to further check the micro-details of members’ positions, if required and take pro-active action. The on-line surveillance mechanism also generates alerts/reports on any price/volume movement of securities not in line with past trends/patterns. Open positions of securities are also analyzed. For this purpose the exchange maintains various databases to generate alerts. These alerts are scrutinized and if necessary taken up for follow up action. Besides this, rumors in the print media are tracked and where they are found to be price sensitive, companies are approached to verify the same. This is then informed to the members and the public.

Surveillance , Inspection and Investigation As the securities transactions are prone to a variety of manipulations, the Exchange has instituted a strong surveillance mechanism to protect market integrity. Surveillance mechanism includes monitoring of orders and trades data, open positions and corporate information that flow into the market to identify possible market abuse practices. Various on-line and off-line alerts/reports are generated, on any price/volume movement of

65

securities not in line with past trends/patterns. Besides, rumors in the print media are tracked and where they are price sensitive, companies are contacted for verification. Replies received are informed to the members and the public. The investigation is based on various alerts which require further analysis. If further analysis suggests any possible irregular activity which deviates from the past trends/ patterns and concentration of trading at NSE at the client level, then a more detailed investigation is undertaken. If the detailed investigation establishes any irregular activity, then disciplinary action is initiated against the member. If the investigation suggests possible irregular activity across exchanges and/or possible involvement of clients, then the same is informed to SEBI. As per regulatory requirement, a minimum of 20% of the active trading members in the Capital Market segment and 50 % of active trading members in the derivatives segment are to be inspected every year to verify the level of compliance with various rules, byelaws and regulations of the Exchange. Usually, inspection of more members than the regulatory requirement is undertaken every year. The inspection randomly verifies if investor interests are being compromised in the conduct of business by the members.

Margin Requirements NSCCL imposes stringent margin requirements as a part of its risk containment measures. The categorization of stocks for imposition of margins has the structure as given below; •

The Stocks which have traded atleast 80% of the days for the previous six months constitute the Group I and Group II.

•

Out of the scrips identified for Group I & II category, the scrips having mean impact cost of less than or equal to 1% are categorized under Group I and the scrips where the impact cost is more than 1, are categorized under Group II.

•

The remaining stocks are classified into Group III.

•

The impact cost is calculated on the 15th of each month on a rolling basis considering the order book snapshots of the previous six months. On the basis of the impact cost so calculated, the scrips move from one group to another group from the 1st of the next month.

•

For securities that have been listed for less than six months, the trading frequency and the impact cost is computed using the entire trading history of the security

Categorisation of newly listed securities For the first month and till the time of monthly review a newly listed security is categorised in that Group where the market capitalization of the newly listed security exceeds or equals the market capitalization of 80% of the securities in that particular group. Subsequently, after one month, whenever the next monthly review is carried out, the actual trading frequency and impact cost of the security is computed, to determine the liquidity categorization of the security.

66

In case any corporate action results in a change in ISIN, then the securities bearing the new ISIN shall be treated as newly listed security for group categorization. Daily margin, comprises of VaR margin, Extreme Loss margin and Mark to Market margin. 1) Value at Risk Margin : All securities are classified into three groups for the purpose of VaR margin For the securities listed in Group I, scrip wise daily volatility calculated using the exponentially weighted moving average methodology is applied to daily returns in the same manner as in the derivatives market. The scrip wise daily VaR would be 3.5 times the volatility so calculated subject to a minimum of 7.5%. For the securities listed in Group II, the VaR margin is higher of scrip VaR (3.5 sigma) or three times the index VaR, and it is scaled up by root 3. For the securities listed in Group III, the VaR margin is equal to five times the index VaR and scaled up by root 3. The index VaR, for the purpose, would be the higher of the daily Index VaR based on NSE Nifty 50 or BSE Sensex. The index VaR would be subject to a minimum of 5%. Security specific Margin: NSCCL may stipulate security specific margins for the securities from time to time. The VaR margin rate computed as mentioned above will be charged on the net outstanding position (buy value-sell value) of the respective clients on the respective securities across all open settlements. There would be no netting off of positions across different settlements. The VaR margin shall be collected on an upfront basis by adjusting against the total liquid assets of the member at the time of trade. The VaR margin so collected shall be released on completion of pay-in of the settlement The VaR numbers are recomputed six times during the day taking into account price and volatilities at various time intervals and are provided on the website of the Exchange. 2) Extreme Loss Margin The Extreme Loss Margin for any security is be higher of 5%, or 1.5 times the standard deviation of daily logarithmic returns of the security price in the last six months. The Extreme Loss Margin is be collected/ adjusted against the total liquid assets of the member on a real time basis 3) Mark to Market Margin Mark to market loss is calculated by marking each transaction in security to the closing price of the security at the end of trading. In case the security has not been traded on a particular day, the latest available closing price at the NSE is considered

67

as the closing price. In case the net outstanding position in any security is nil, the difference between the buy and sell values is considered as notional loss for the purpose of calculating the mark to market margin payable. The mark to market margin (MTM) is collected from the member before the start of the trading of the next day. The MTM margin is also collected/adjusted from/ against the cash/cash equivalent component of the liquid net worth deposited with the Exchange. The MTM margin so collected is be released on completion of pay-in of the settlement.

Close Out Facility An online facility to close–out open positions of members in the capital market segment whose trading facility is withdrawn for any reason, has been provided with effect from June 13, 2007, On disablement, the trading members will be allowed to place close-out orders through this facility. Only orders which result in reduction of existing open positions at the client level would be accepted through the close-out facility in the normal market. Members would not be allowed to create any fresh position when in the close-out mode, to place close out orders with custodial participant code and to close out open positions of securities in trade for trade segment.

Index-based Market-wide Circuit Breakers a. An index based market-wide circuit breaker system applies at three stages of the index movement either way at 10%, 15% and 20%. These circuit breakers bring about a coordinated trading halt in trading on all equity and equity derivatives markets across the country. The breakers are triggered by movements in either Nifty 50 or Sensex, whichever is breached earlier. •

In case of a 10% movement in either of these indices, there would be a one-hour market halt if the movement takes place before 1:00 p.m. In case the movement takes place at or after 1:00 p.m. but before 2:30 p.m. there would be trading halt for ½ hour. In case movement takes place at or after 2:30 p.m. there will be no trading halt at the 10% level and market would continue trading.

•

In case of a 15% movement of either index, there should be a two-hour halt if the movement takes place before 1 p.m. If the 15% trigger is reached on or after 1:00 p.m. but before 2:00 p.m., there should be a one-hour halt. If the 15% trigger is reached on or after 2:00 p.m. the trading should halt for remainder of the day.

•

In case of a 20% movement of the index, trading should be halted for the remainder of the day.

NSE may suo moto cancel the orders in the absence of any immediate confirmation from the members that these orders are genuine or for any other reason as it may deem

68

fit. The Exchange views entries of non-genuine orders with utmost seriousness as this has market –wide repercussion. As an additional measure of safety, individual scrip-wise price bands have been fixed as below: •

Daily price bands of 2% (either way) on a set of specified securities

•

Daily price bands of 5% (either way) on a set of specified securities

•

Daily price bands of 10% (either way) on a set of specified securities

•

Price bands of 20% (either way) on all the remaining securities (including debentures, warrants, preference shares etc. which are traded on CM segment of NSE),

•

No price bands are applicable on scrip on which derivative products are available or scrips included in indices on which derivative products are available. However in order to prevent members from entering orders at non-genuine prices in such securities, the Exchange has fixed operating range of 20% for such securities.

The price bands for the securities in the Limited Physical Market are the same as those applicable for the securities in the Normal Market. For Auction market the price bands of 20% are applicable.

Settlement Guarantee Fund The Settlement Guarantee Fund provides a cushion for any residual risk and operates like a self-insurance mechanism wherein members themselves contribute to the fund. In the event of a trading member failing to meet his settlement obligation, then the fund is utilized to the extent required for successful completion of the settlement. This has eliminated counter-party risk of trading on the Exchange. The market has full confidence that settlement shall take place in time and shall be completed irrespective of default by isolated trading members.

69

70

250

244

251

254

251

247

251

254

253

251

249

20

21

21

22

22

20

22

1996-97

1998-99

1999-2000

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

Oct-07

246

1995-96

1997-98

102

1,176

1,116

1,166

1,140

1,130

1,113

1,088

1,114

928

856

804

899

1,019

1,201

1,227

919

874

897

751

802

678

7,847

6,089

4,509

3,780

2,397

1,753

1,676

984

546

–

–

264

381

–

66

–

–

3

170,945

143,797

106,218

105,315

79,636

97,911

77,081

855,456

844,486

797,685

713,300

364,066

278,408

329,536

242,704

165,327

135,685

135,561

39,912

1,391

(lakh)

(Rs. lakh)

455,589

266,050

231,241

267,227

193,648

207,585

168,567

1,945,287

1,569,558

1,140,072

1,099,534

617,989

513,167

1,339,510

839,052

414,474

370,193

294,503

67,287

1,805

(Rs. cr.)

113,983

66,562

57,854

66,857

48,448

51,935

42,173

446,269

351,840

260,588

253,407

130,103

105,157

287,202

192,353

97,683

–

–

–

–

20,709

13,302

10,511

12,147

9,221

9,885

8,428

7,812

6,253

4,506

4,329

2,462

2,078

5,337

3,303

1,651

1,520

1,176

276

17

–

–

–

–

5,181

3,328

2,630

3,039

2,307

2,473

2,109

1,792

1,402

1,030

998

518

426

1,144

757

389

(US $ mn.)

Average Daily Trading Value

(US $ mn.) (Rs. cr.)

Trading Value

–

–

–

–

–

–

–

57.77

55.79

71.90

98.09

115.05

80.58

203.62

82.23

84.38

76.88

70.23

16.76

0.50

(%)

Turnover Ratio

170,945

143,797

106,218

105,315

79,636

97,911

77,081

855,456

844,486

797,685

713,300

364,049

277,717

307,222

153,772

8,542

315

2

0

0

(Rs. lakh)

Demat Traded Quantity

Table 4-1 : Business Growth of CM Segment Traded Quantity

No. of Trades

–

No. of No. of Trading companies Days Traded

1994-95 (Nov.-Mar.)

Month & Year

6

0

0

455,589

266,050

231,241

267,227

193,648

207,585

168,567

1,945,287

1,569,558

1,140,072

1,099,534

617,984

512,866

1,264,337

711,706

23,818

351

(Rs. cr.)

113,983

66,562

57,854

66,857

48,448

51,935

42,173

446,269

351,840

260,588

253,407

130,102

105,095

271,084

163,159

5,613

–

–

–

–

(US $ mn.)

Demat Trading Value

5,722,227

4,886,561

4,296,994

4,317,571

3,978,381

3,898,078

3,650,368

3,367,350

2,813,201

1,585,585

1,120,976

537,133

636,861

657,847

1,020,426

491,175

481,503

419,367

401,459

363,350

(Rs. cr.)

Contd...

1,431,630

1,222,557

1,075,055

1,080,203

995,342

975,251

913,277

772,505

630,621

362,419

258,349

113,081

130,504

141,048

233,933

115,760

--

–

–

–

(US $ mn.)

Market Capitalisation

71

22

19

23

21

18

251

20

20

21

23

20

21

20

18

21

20

19

20

243

Dec-07

Jan-08

Feb-08

Mar-08

2007-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

2008-09

1,277

1,283

1,280

1,281

1,282

1,282

1,277

1,275

1,274

1,267

1,256

1,246

1,240

1,244

1,229

1,226

1,210

1,202

1,189

No. of No. of Trading companies Days Traded

Nov-07

Month & Year

Contd...

13,650

1,081

969

1,222

1,302

1,099

1,178

1,132

1,067

1,337

1,115

1,071

1,079

11,727

987

1,072

1,252

1,088

1,426,355

129,614

111,865

145,254

144,793

106,848

109,299

102,202

104,352

134,285

108,548

115,014

114,280

1,498,469

102,604

113,588

166,821

163,965

170,588

(lakh)

(Rs. lakh)

1,180

Traded Quantity

No. of Trades

2,752,023

202,799

149,857

191,184

212,956

173,123

216,198

262,261

234,251

295,816

264,428

277,923

271,227

3,551,038

253,012

280,176

447,138

366,385

414,419

(Rs. cr.)

540,142

39,803

29,413

37,524

41,797

33,979

42,433

51,474

45,977

58,060

51,900

54,548

53,234

888,426

63,301

70,097

111,868

91,665

103,683

11,325

10,140

7,887

9,559

10,141

9,618

10,810

12,489

11,713

12,862

12,592

13,896

13,561

14,148

14,056

13,342

19,441

19,283

18,837

2,223

1,990

1,548

1,876

1,990

1,888

2,122

2,451

2,299

2,524

2,471

2,727

2,662

3,540

3,517

3,338

4,864

4,824

4,713

(US $ mn.)

Average Daily Trading Value

(US $ mn.) (Rs. cr.)

Trading Value

–

–

–

–

–

95.02

–

–

–

–

–

–

–

–

–

–

–

–

73.09

(%)

Turnover Ratio

1,426,355

129,614

111,865

145,254

144,793

106,848

109,299

102,202

104,352

134,285

108,548

115,014

114,280

1,498,469

102,604

113,588

166,821

163,965

170,588

(Rs. lakh)

Demat Traded Quantity

2,752,023

202,799

149,857

191,184

212,956

173,123

216,198

262,261

234,251

295,816

264,428

277,923

271,227

3,551,038

253,012

280,176

447,138

366,385

414,419

(Rs. cr.)

540,142

39,803

29,413

37,524

41,797

33,979

42,433

51,474

45,977

58,060

51,900

54,548

53,234

888,426

63,301

70,097

111,868

91,665

103,683

(US $ mn.)

Demat Trading Value

2,896,194

2,896,194

2,675,622

2,798,707

2,916,768

2,653,281

2,820,388

3,900,185

4,472,461

4,432,427

4,103,651

5,098,873

5,442,780

4,858,122

4,858,122

5,419,942

5,295,387

6,543,272

5,876,742

(Rs. cr.)

568,439

568,439

525,147

549,305

572,477

520,762

553,560

765,493

877,814

869,956

805,427

1,000,760

1,068,259

1,215,442

1,215,442

1,356,003

1,324,840

1,637,046

1,470,288

(US $ mn.)

Market Capitalisation

Table 4-2 : Percentage Share of Top ‘N’ Securities/Member in Turnover No. of Securities/Members Year

5

10

25

50

100

Securities 1994-95 (Nov.-Mar.)

48.77

55.92

68.98

81.14

91.07

1995-96

82.98

86.60

90.89

93.54

95.87

1996-97

84.55

91.96

95.70

97.03

98.19

1997-98

72.98

85.17

92.41

95.76

97.90

1998-99

52.56

67.11

84.71

92.03

95.98

1999-00

39.56

59.22

82.31

88.69

93.66

2000-01

52.15

72.90

88.93

94.57

97.46

2001-02

44.43

62.92

82.24

91.56

95.91

2002-03

40.58

55.41

77.8

89.16

95.38

2003-04

31.04

44.87

64.32

79.44

91.03

2004-05

25.88

41.65

57.98

72.40

84.26

2005-06

22.15

31.35

46.39

59.22

73.12

2006-07

16.97

25.25

43.46

61.94

77.22

2007-08

16.29

26.78

45.46

61.47

77.29

2008-09

20.48

32.58

56.36

74.66

87.69

Members

72

1994-95 (Nov.-Mar.)

18.19

26.60

44.37

61.71

81.12

1995-96

10.65

16.56

28.61

41.93

58.59

1996-97

5.94

10.08

19.67

30.57

45.95

1997-98

6.29

10.59

18.81

29.21

44.24

1998-99

7.73

11.96

20.77

31.66

47.02

1999-00

7.86

12.99

22.78

34.41

49.96

2000-01

7.78

12.76

23.00

33.86

48.79

2001-02

7.14

12.29

23.63

36.32

53.40

2002-03

10.26

16.41

29.07

42.49

59.15

2003-04

11.58

17.36

30.34

44.05

61.37

2004-05

13.52

20.20

34.97

49.01

65.09

2005-06

14.62

22.57

38.17

52.57

38.45

2006-07

14.72

24.27

42.61

56.71

71.22

2007-08

14.57

25.71

44.70

60.11

73.90

2008-09

13.56

23.62

43.55

61.21

75.42

Table 4-3 : ‘50’ Most Active Securities during 2008-09 in Terms of Trading Value Rank

Name of Security & Industry

Trading Value (Rs. cr.)

% Share Market Capitalisation in Total as on March 31,2009 (US $ mn.) Trading (Rs. cr.) (US $ mn.) Value

% Share in Total Market Capitalisation

1

Reliance Industries Ltd-Petrochemicals

198,440

38,948

7.21

239,965

47,098

8.29

2

ICICI Bank Ltd.--Banks

118,915

23,340

4.32

37,034

7,269

1.28

3

Reliance Capital Limited--Finance

99,308

19,491

3.61

8,682

1,704

0.30

4

Bharti Airtel Limited-Telecommunication

74,260

14,575

2.70

118,782

23,314

4.10

5

State Bank Of India-Banks

72,639

14,257

2.64

67,748

13,297

2.34

6

Larsen & Toubro Ltd.-Engineering

71,991

14,130

2.62

39,316

7,717

1.36

7

Infosys Technologies Ltd--Information Technology

68,397

13,424

2.49

75,837

14,885

2.62

8

Reliance Infrastructure Ltd--Infrastructure

67,355

13,220

2.45

11,743

2,305

0.41

9

Housing Development Finance Corporation Ltd.--Finance

62,914

12,348

2.29

40,171

7,884

1.39

10

DLF Limited-Infrastructure

62,493

12,266

2.27

28,395

5,573

0.98

11

Bharat Heavy Electricals Ltd-Manufacturing

62,234

12,215

2.26

73,944

14,513

2.55

12

Reliance Communications Limited-Telecommunication

54,372

10,672

1.98

36,090

7,083

1.25

13

Satyam Computer Services Ltd-Information Technology

50,476

9,907

1.83

2,591

509

0.09

14

Reliance Natural Resources Limited-Manufacturing

49,831

9,780

1.81

7,325

1,438

0.25

15

Reliance Petroleum Limited--Petrochemicals

49,592

9,734

1.80

42,795

8,399

1.48

16

Tata Steel Limited-Manufacturing

44,236

8,682

1.61

15,047

2,953

0.52

17

Jaiprakash Associates Limited--Infrastructure

41,968

8,237

1.52

9,956

1,954

0.34

18

Axis Bank Limited-Banks

41,853

8,215

1.52

14,897

2,924

0.51 Contd...

73

Contd... Rank

Name of Security & Industry

Trading Value (Rs. cr.)

% Share Market Capitalisation in Total as on March 31,2009 (US $ mn.) Trading (Rs. cr.) (US $ mn.) Value

% Share in Total Market Capitalisation

19

Oil & Natural Gas Corpn Ltd-Petrochemicals

41,681

8,181

1.51

166,875

32,753

5.76

20

HDFC Bank Ltd--Banks

39,775

7,807

1.45

41,406

8,127

1.43

21

Suzlon Energy Limited-Manufacturing

37,557

7,371

1.36

6,345

1,245

0.22

22

Housing Development And Infrastructure Limited-Infrastructure

37,260

7,313

1.35

2,255

443

0.08

23

Unitech Ltd-Infrastructure

37,082

7,278

1.35

5,666

1,112

0.20

24

Educomp Solutions Limited --Information Technology

34,471

6,766

1.25

3,608

708

0.12

25

Steel Authority Of India Ltd.-Manufacturing

31,898

6,261

1.16

39,838

7,819

1.38

26

Cairn India Limited-Petrochemicals

28,547

5,603

1.04

34,918

6,853

1.21

27

NTPC Limited-Infrastructure

28,149

5,525

1.02

148,295

29,106

5.12

28

IFCI Limited--Finance

27,195

5,338

0.99

1,471

289

0.05

29

Ranbaxy Laboratories Ltd--Pharmaceuticals

26,974

5,294

0.98

6,966

1,367

0.24

30

Tata Consultancy Services Limited-Information Technology

24,268

4,763

0.88

52,703

10,344

1.82

31

Indiabulls Real Estate Limited--Infrastructure

24,175

4,745

0.88

2,560

502

0.09

32

Sterlite Industries ( India ) Limited-Manufacturing

24,141

4,738

0.88

25,335

4,973

0.87

33

Sesa Goa Ltd.-Manufacturing

22,887

4,492

0.83

7,841

1,539

0.27

34

ITC Ltd.--FMCG

22,655

4,447

0.82

69,770

13,694

2.41

35

Reliance Power Limited--Infrastructure

22,307

4,378

0.81

24,531

4,815

0.85

36

Punj Lloyd Limited-Infrastructure

20,775

4,078

0.75

2,762

542

0.10

37

Jindal Steel & Power Ltd.--Manufacturing

20,541

4,032

0.75

18,644

3,659

0.64

Contd...

74

Contd... Rank

Name of Security & Industry

Trading Value (Rs. cr.)

% Share Market Capitalisation in Total as on March 31,2009 (US $ mn.) Trading (Rs. cr.) (US $ mn.) Value

% Share in Total Market Capitalisation

38

Chambal Fertilizers & Chemicals Ltd-Petrochemicals

20,135

3,952

0.73

1,742

342

0.06

39

Kotak Mahindra Bank Limited--Banks

19,072

3,743

0.69

9,755

1,915

0.34

40

Hindustan Unilever Limited--FMCG

18,411

3,614

0.67

51,770

10,161

1.79

41

Essar Oil Limited-Petrochemicals

18,357

3,603

0.67

8,717

1,711

0.30

42

United Spirits Limited-FMCG

16,627

3,263

0.60

6,500

1,276

0.22

43

Tata Power Co. Ltd.-Infrastructure

16,559

3,250

0.60

17,019

3,340

0.59

44

Bank Of India--Banks

15,524

3,047

0.56

11,522

2,261

0.40

45

Infrastructure Development Finance Company Limited--Finance

15,524

3,047

0.56

7,007

1,375

0.24

46

Maruti Suzuki India Limited--Manufacturing

15,311

3,005

0.56

22,531

4,422

0.78

47

Aban Offshore Ltd.-Petrochemicals

14,674

2,880

0.53

1,503

295

0.05

48

GMR Infrastructure Limited--Infrastructure

14,095

2,766

0.51

17,269

3,389

0.60

49

Akruti City Limited-Infrastructure

13,614

2,672

0.49

5,716

1,122

0.20

50

Shree Renuka Sugars Limited--Manufacturing

13,033

2,558

0.47

2,517

494

0.09

2,054,549

403,248

74.66 1,695,672

332,811

58.55

Total

75

Table 4-4 : Top ‘50’ Companies by Market Capitalisation as on March 31, 2009 Rank

Name of Security & Industry

Market Capitalisation

% Share Trading Volume Dur- % Share in Total ing2008-09 in Market Total (Rs. cr.) (US $ mn.) Capitali- (Rs. cr.) (US $ mn.) Trading sation Volume

1

Reliance Industries Ltd-Petrochemicals

239,965

47,098

8.29

198,440

38,948

7.21

2

Oil & Natural Gas Corpn Ltd--Petrochemicals

166,875

32,753

5.76

41,681

8,181

1.51

3

NTPC Limited-Infrastructure

148,295

29,106

5.12

28,149

5,525

1.02

4

Bharti Airtel Limited-Telecommunication

118,782

23,314

4.10

74,260

14,575

2.70

5

Infosys Technologies Ltd-Information Technology

75,837

14,885

2.62

68,397

13,424

2.49

6

Bharat Heavy Electricals Ltd--Manufacturing

73,944

14,513

2.55

62,234

12,215

2.26

7

ITCLtd.--FMCG

69,770

13,694

2.41

22,655

4,447

0.82

8

State Bank Of India--Banks

67,748

13,297

2.34

72,639

14,257

2.64

9

NMDC Ltd. Manufacturing

61,770

12,124

2.13

476

93

0.02

10

Tata Consultancy Services Limited-Information Technology

52,703

10,344

1.82

24,268

4,763

0.88

11

Hindustan Unilever Limited--FMCG

51,770

10,161

1.79

18,411

3,614

0.67

12

Indian Oil Corporation Ltd- Petrochemicals

46,240

9,076

1.60

3,659

718

0.13

13

Reliance Petroleum Limited--Petrochemicals

42,795

8,399

1.48

49,592

9,734

1.80

14

HDFC Bank Ltd--Banks

41,406

8,127

1.43

39,775

7,807

1.45

15

Power Grid Corporation of India LimitedInfrastructure

40,237

7,897

1.39

7,472

1,466

0.27

16

Housing Development Finance Corporation Ltd.--Finance

40,171

7,884

1.39

62,914

12,348

2.29

17

Steel Authority Of India Ltd.--Manufacturing

39,838

7,819

1.38

31,898

6,261

1.16

18

Larsen & Toubro Ltd.-Engineering

39,316

7,717

1.36

71,991

14,130

2.62

19

ICICI Bank Ltd.--Banks

37,034

7,269

1.28

118,915

23,340

4.32

20

Reliance Communications Limited-Telecommunication

36,090

7,083

1.25

54,372

10,672

1.98

Contd...

76

Contd... Rank

Name of Security & Industry

Market Capitalisation

% Share Trading Volume Dur- % Share in Total ing2008-09 in Market Total (Rs. cr.) (US $ mn.) Capitali- (Rs. cr.) (US $ mn.) Trading sation Volume

21

Wipro Ltd- Information Technology

35,999

7,066

1.24

11,034

2,166

0.40

22

Cairn India Limited-Petrochemicals

34,918

6,853

1.21

28,547

5,603

1.04

23

GAIL (India) LimitedManufacturing

31,154

6,115

1.08

11,910

2,338

0.43

24

DLF Limited-Infrastructure

28,395

5,573

0.98

62,493

12,266

2.27

25

Sterlite Industries ( India ) Limited--Manufacturing

25,335

4,973

0.87

24,141

4,738

0.88

26

Reliance Power Limited-Infrastructure

24,531

4,815

0.85

22,307

4,378

0.81

27

Sun Pharmaceuticals Industries LtdPharmaceuticals

23,020

4,518

0.79

9,887

1,941

0.36

28

Maruti Suzuki India Limited--Manufacturing

22,531

4,422

0.78

15,311

3,005

0.56

29

Hero Honda Motors Ltd.Manufacturing

21,390

4,198

0.74

7,997

1,570

0.29

30

Hindustan Zinc Ltd.Manufacturing

19,063

3,741

0.66

1,219

239

0.04

31

Jindal Steel & Power Ltd.-Manufacturing

18,644

3,659

0.64

20,541

4,032

0.75

32

GMR Infrastructure Limited--Infrastructure

17,269

3,389

0.60

14,095

2,766

0.51

33

Cipla Ltd.Pharmaceuticals

17,104

3,357

0.59

6,045

1,186

0.22

34

Tata Power Co. Ltd.-Infrastructure

17,019

3,340

0.59

16,559

3,250

0.60

35

Power Finance Corporation LimitedFinance

16,597

3,257

0.57

2,522

495

0.09

36

Idea Cellular LimitedTelecommunication

15,531

3,048

0.54

12,418

2,437

0.45

37

Tata Steel Limited-Manufacturing

15,047

2,953

0.52

44,236

8,682

1.61

38

Axis Bank Limited--Banks

14,897

2,924

0.51

41,853

8,215

1.52

39

Tata Communications LimitedTelecommunication

14,773

2,900

0.51

3,288

645

0.12

40

Grasim Industries Ltd.Manufacturing

14,504

2,847

0.50

6,219

1,221

0.23

Contd...

77

Contd... Rank

Name of Security & Industry

% Share Trading Volume Dur- % Share in Total ing2008-09 in Market Total (Rs. cr.) (US $ mn.) Capitali- (Rs. cr.) (US $ mn.) Trading sation Volume

41

Neyveli Lignite Corporation LimitedInfrastructure

14,076

2,763

0.49

4,396

863

0.16

42

National Aluminium Company LimitedManufacturing

13,830

2,714

0.48

3,553

697

0.13

43

Bharat Petroleum Corpn. Ltd- Petrochemicals

13,596

2,668

0.47

5,560

1,091

0.20

44

Punjab National BankBanks

12,973

2,546

0.45

10,942

2,148

0.40

45

Mundra Port and Special Economic Zone Limitedservices

12,954

2,542

0.45

6,771

1,329

0.25

46

Reliance InfrastructureLtd-Infrastructure

11,743

2,305

0.41

67,355

13,220

2.45

47

Bank Of India--Banks

11,522

2,261

0.40

15,524

3,047

0.56

48

ACC LimitedManufacturing

10,781

2,116

0.37

6,517

1,279

0.24

49

Ambuja Cements Ltd .Manufacturing

10,750

2,110

0.37

3,266

641

0.12

50

Mahindra & Mahindra Ltd.- Manufacturing

10,697

2,100

0.37

6,707

1,316

0.24

2,041,226

400,633

70.48 1,545,412

303,319

56.16

Total

78

Market Capitalisation

79

66,812

26,700

500,458

128,794

430,484

388,646

–

–

Engineering

FMCG

Infrastructure

IT

Manufacturing

Petrochemicals

Pharmaceuticals

Services

Total

Media & Entertainment

2,182,792

–

182,192

254,523

Financial Services

Telecommunications

204,182

54,611

–

4,558

–

–

9,723

10,770

3,222

12,521

668

1,672

6,368

5,108

(US $ mn.)

2,054,549

–

128,631

26,974

371,426

321,668

177,613

385,833

57,693

71,991

204,941

307,779

(Rs.cr.)

403,248

–

25,247

5,294

72,900

63,134

34,860

75,728

11,324

14,130

40,224

60,408

(US $ mn.)

2008–09

Trading Value (Amount)

2007–08

(Rs.cr.)

Banks

Industry

%

100.00

–

8.35

–

–

17.80

19.72

5.90

22.93

1.22

3.06

11.66

9.35

2007–08

100.00

6.26

0.00

1.31

18.08

15.66

8.64

18.78

2.81

3.50

9.97

14.98

2008–09

Trading Value (% to Total ‘Top 50 Co’s)

3,163,594

–

289,080

23,189

25,462

725,669

711,980

251,388

539,261

127,532

88,702

97,743

283,587

(Rs.cr.)

79,149

–

7,232

580

637

18,155

17,813

6,289

13,492

3,191

2,219

2,445

7,095

(US $ mn.)

2007–08

2,041,226

–

185,176

12,954

40,124

544,388

389,277

164,539

301,563

121,540

39,316

56,767

185,581

(Rs.cr.)

400,633

–

36,345

2,542

7,875

106,848

76,404

32,294

59,188

23,855

7,717

11,142

36,424

(US $ mn.)

2008–09

Market Capitalisation (Amount)

%

100.00

–

9.14

0.73

0.80

22.94

22.51

7.95

17.05

4.03

2.80

3.09

8.96

2007–08

100.00

–

9.07

0.63

1.97

26.67

19.07

8.06

14.77

5.95

1.93

2.78

9.09

2008–09

Market Capitalisation (% to Total ‘Top 50 Co’s)

Table 4–5 : Industry Wise Classification ofTop ‘50’ Companies by Trading Volume and Market Capitalisation

Table 4-6 : NSE’s Most Active Trading days during the year 2008-09 Sr No.

Date

Highest Single Day Trading Value (Rs. cr.)

(US $ mn.)

1

23-Jul-2008

20,418.14

4,007.49

2

6-Aug-2008

18,615.50

3,653.68

3

29-May-2008

18,173.38

3,566.91

4

29-Apr-2008

18,087.42

3,550.03

5

24-Jul-2008

17,670.09

3,468.12

6

5-Aug-2008

17,293.10

3,394.13

7

30-Apr-2008

16,448.43

3,228.35

8

19-Sep-2008

16,294.38

3,198.11

9

18-Sep-2008

16,087.70

3,157.55

10

5-Jun-2008

16,002.37

3,140.80

Table 4-7 : Individual Securities Single day Trading Records- 2008-09 Rank

Symbol

Name of Company

Date 7-Jan-2009

Traded Value (Rs. cr.) (US $ mn.) 2,260 444

1

SATYAMCOMP

Satyam Computer Services

2

RELIANCE

Reliance Industries Ltd

26-Jun-2008

2,115

415

3

RELIANCE

Reliance Industries Ltd

3-Oct-2008

1,928

378

4

AKRUTI

Akruti City Limited

19-Mar-2009

1,763

346

5

RELIANCE

Reliance Industries Ltd

5-Jun-2008

1,732

340

6

RANBAXY

Ranbaxy Labs Ltd

11-Jun-2008

1,641

322

7

RELIANCE

Reliance Industries Ltd

18-Sep-2008

1,630

320

8

RCOM

Reliance Communications Ltd

1-Aug-2008

1,566

307

9

RELIANCE

Reliance Industries Ltd

5-Nov-2008

1,558

306

10

RELIANCE

Reliance Industries Ltd

25-Jul-2008

1,544

303

Table 4-8 : Market Capitalisation of Securities in the CM Segment Month/Year (end of period) Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06

Total MC

MC of S&P CNX Nifty

363,350 401,459 419,367 481,503 491,175 1,020,426 657,847 636,861 537,133 1,120,976 1,585,585 2,813,201

– 139,357 159,758 230,420 236,569 373,559 301,085 349,402 316,762 638,599 951,672 1,590,155

Share in Total MC (%) – 34.71 38.09 47.85 48.16 36.61 45.77 54.86 58.97 56.97 60.02 56.52

MC of CNX Nifty Junior

(In Rs. cr.) Share in Total MC (%)

– – 25,184 34,654 53,452 98,804 31,989 42,446 34,550 130,122 164,668 274,823

– – 6.01 7.20 10.88 9.68 4.86 6.66 6.43 11.61 10.39 9.77 Contd...

80

Contd... Month/Year (end of period) Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09

Total MC

MC of S&P CNX Nifty

3,367,350 3,650,368 3,898,078 3,978,381 4,317,571 4,296,994 4,886,561 5,722,227 5,876,742 6,543,272 5,295,387 5,419,942 4,858,122 5,442,780 5,098,873 4,103,651 4,432,427 4,472,461 3,900,185 2,820,388 2,653,281 2,916,768 2,798,707 2,675,622 2,896,194

1,909,448 2,096,100 2,206,712 2,219,151 2,358,907 2,331,929 2,774,625 3,328,356 3,257,297 3,522,527 2,966,421 3,016,694 2,848,773 3,108,589 2,933,759 2,434,104 2,617,902 2,639,434 2,406,508 1,785,998 1,706,210 1,832,610 1,790,600 1,721,191 1,892,629

Share in Total MC (%)

MC of CNX Nifty Junior

(In Rs. cr.) Share in Total MC (%)

323,308 321,560 343,150 388,710 397,396 393,906 448,284 487,986 525,730 643,625 522,450 528,511 453,625 522,020 468,104 379,051 421,873 434,157 385,721 273,943 245,652 295,471 269,166 253,285 286,405

9.60 8.81 8.80 9.77 9.20 9.17 9.17 8.53 8.95 9.84 9.87 9.75 9.34 9.59 9.18 9.24 9.52 9.71 9.89 9.71 9.26 10.13 9.62 9.47 9.89

56.70 57.42 56.61 55.78 54.64 54.27 56.78 58.17 55.43 53.83 56.02 55.66 58.64 57.11 57.54 59.32 59.06 59.02 61.70 63.32 64.31 62.83 63.98 64.33 65.35

Table 4-9 : Composition of S&P CNX Nifty Index as on March 31, 2009 Sl. No.

Name of Security

1

ABB Ltd.–Electrical Equipment

2

Issued Capital

Market Weightage Beta Capitalisation

(Rs. cr.)

(Rs. cr.)

R2

(%)

Volatility Return

(%)

(%)

Impact Cost (%)

42

9,042

0.48

0.89

0.53

2.36

16.20

0.09

ACC Ltd.–Cement And Cement Products

188

10,781

0.57

0.70

0.38

2.22

6.36

0.08

3

Ambuja Cements Ltd.– Cement And Cement Products

304

10,750

0.57

0.88

0.41

2.25

11.09

0.13

4

Axis Bank Ltd.–Banks

1,898

14,897

0.79

1.38

0.62

5.61

19.27

0.10

5

Bharti Airtel Ltd.– Telecommunication - Services

490

118,782

6.28

0.96

0.61

2.79

(2.00)

0.09

6

Bharat Heavy Electricals Ltd.–Electrical Equipment

362

73,944

3.91

1.02

0.59

2.92

7.60

0.07

7

Bharat Petroleum Corporation Ltd.– Refineries

1,779

13,596

0.72

0.52

0.17

2.63

(1.79)

0.08

8

Cairn India Ltd.–Oil Exploration/Production

155

34,918

1.84

1.00

0.38

3.00

10.21

0.10

Contd...

81

Contd... Sl. No.

Name of Security

9

Cipla Ltd.–Pharmaceuticals

10

Issued Capital

Market Weightage Beta Capitalisation

(Rs. cr.)

(Rs. cr.)

R2

(%)

Volatility Return

(%)

(%)

Impact Cost (%)

341

17,104

0.90

0.51

0.31

1.83

14.91

0.10

DLF Ltd.–Construction

84

28,395

1.50

1.54

0.56

4.73

10.07

0.10

11

GAIL (India) Ltd.–Gas

846

31,154

1.65

0.79

0.44

2.86

20.63

0.11

12

Grasim Industries Ltd.–Cement And Cement Products

92

14,504

0.77

0.72

0.37

2.72

15.22

0.07

13

HCL Technologies Ltd.– Computers - Software

133

6,835

0.36

1.00

0.38

3.18

1.85

0.12

14

Housing Development Finance Corporation Ltd.– Finance - Housing

284

40,171

2.12

1.24

0.62

4.16

10.80

0.07

15

HDFC Bank Ltd.–Banks

354

41,406

2.19

1.04

0.59

3.25

9.43

0.09

16

Hero Honda Motors Ltd.–Automobiles - 2 And 3 Wheelers

40

21,390

1.13

0.36

0.17

2.19

15.21

0.07

17

Hindalco Industries Ltd.– Aluminium

123

8,851

0.47

1.18

0.55

4.41

34.84

0.11

18

Hindustan Unilever Ltd.– Diversified

218

51,770

2.74

0.44

0.27

2.26

(6.31)

0.09

19

ICICI Bank Ltd.–Banks

1,111

37,034

1.96

1.64

0.74

5.28

1.60

0.08

20

Idea Cellular Ltd.– Telecommunication - Services

2,635

15,531

0.82

1.09

0.50

3.33

6.60

0.14

21

Infosys Technologies Ltd.– Computers - Software

286

75,837

4.01

0.70

0.41

2.26

7.52

0.06

22

ITC Ltd.–Cigarettes

377

69,770

3.69

0.53

0.36

2.67

0.98

0.09

23

Larsen & Toubro Ltd.– Engineering

58

39,316

2.08

1.12

0.67

3.51

9.39

0.08

24

Mahindra & Mahindra Ltd.–Automobiles - 4 Wheelers

246

10,697

0.57

0.98

0.40

3.07

23.08

0.09

25

Maruti Suzuki India Ltd.– Automobiles - 4 Wheelers

144

22,531

1.19

0.72

0.37

2.44

15.14

0.07

26

National Aluminium Co. Ltd.–Aluminium

644

13,830

0.73

0.98

0.32

3.16

3.07

0.15

27

NTPC Ltd.–Power

8,245

148,295

7.84

0.79

0.56

2.04

(2.78)

0.09

28

Oil & Natural Gas Corporation Ltd.–Oil Exploration/Production

2,139

166,875

8.82

0.85

0.55

2.78

12.91

0.10

29

Punjab National Bank– Banks

315

12,973

0.69

0.96

0.52

5.08

21.88

0.09

30

Power Grid Corporation Of India Ltd.–Power

4,209

40,237

2.13

0.82

0.48

1.89

(1.34)

0.11

31

Ranbaxy Laboratories Ltd.–Pharmaceuticals

187

6,966

0.37

0.70

0.18

4.36

2.41

0.07

32

Reliance Communications Ltd.–Telecommunication - Services

1,032

36,090

1.91

1.50

0.59

4.62

12.48

0.08

33

Reliance Capital Ltd.– Finance

237

8,682

0.46

1.56

0.64

5.93

0.26

0.06

34

Reliance Industries Ltd.– Refineries

1,454

239,965

12.68

1.25

0.74

3.34

20.43

0.05

35

Reliance Infrastructure Ltd.–Power

4,500

11,743

0.62

1.79

0.74

5.03

4.99

0.06

Contd...

82

Contd... Sl. No.

Name of Security

36

Reliance Petroleum Ltd.– Refineries

37

* * * * *

Market Weightage Beta Capitalisation

(Rs. cr.)

(Rs. cr.)

R2

Volatility Return

(%)

(%)

(%)

Impact Cost (%)

4,130

42,795

2.26

1.03

0.64

3.09

24.56

0.08

Reliance Power Ltd.– Power

134

24,531

1.30

1.04

0.25

3.34

2.40

0.09

38

Steel Authority Of India Ltd–Steel And Steel Products

632

39,838

2.10

1.28

0.55

4.67

26.82

0.09

39

State Bank Of India–Banks

67

67,748

3.58

1.10

0.64

3.86

4.08

0.06

40

Siemens Ltd.–Electrical Equipment

142

9,039

0.48

0.99

0.41

3.63

23.07

0.09

41

Sterlite Industries (India) Ltd.–Metals

104

25,335

1.34

1.34

0.53

3.66

46.05

0.07

42

Sun Pharmaceutical Industries Ltd.– Pharmaceuticals

299

23,020

1.22

0.28

0.08

2.36

9.23

0.07

43

Suzlon Energy Ltd.– Electrical Equipment

285

6,345

0.34

1.55

0.49

4.16

4.18

0.09

44

Tata Communications Ltd.–Telecommunication - Services

386

14,773

0.78

1.03

0.45

3.20

28.19

0.11

45

Tata Motors Ltd.– Automobiles - 4 Wheelers

220

8,112

0.43

1.15

0.50

5.15

20.76

0.07

46

Tata Power Co. Ltd.– Power

731

17,019

0.90

1.03

0.52

3.86

5.74

0.08

47

Tata Steel Ltd.–Steel And Steel Products

98

15,047

0.80

1.44

0.62

5.49

19.16

0.07

48

Tata Consultancy Services Ltd.–Computers - Software

325

52,703

2.78

0.90

0.44

3.88

11.48

0.09

49

Unitech Ltd.–Construction

292

5,666

0.30

1.68

0.42

5.31

23.54

0.12

50

Wipro Ltd.–Computers - Software

43

35,999

1.90

0.99

0.52

2.70

18.51

0.08

1,892,629

100.00

1.00

–

2.34

9.31

0.08

Total

* *

Issued Capital

43,440 2

Beta & R are calculated for the period 01-April-2008 to 31-March-2009 Beta measures thedegree to which any portfolio of stocks is affected as compared to the effect on the market as a whole. The coefficient of determination (R2) measures the strength of relationship between two variables the return ona security versus that of the market. Volatility is the Std. deviation of the daily returns for the period 01-March-2009 to 31-March-2009 Last day of trading was 31-March-2009 Impact Cost for S&P CNX Nifty is for a portfolio of Rs. 50 Lakhs Impact Cost for S&P CNX Nifty is the weightage average impact cost

83

Table 4-10 : Composition of CNX NIFTY Junior Index - as on March 31, 2009 Sl. No.

Name of Security

1

Aditya Birla Nuvo Ltd. --Textiles - Synthetic Adani Enterprises Ltd. --Trading Andhra Bank --Banks Apollo Tyres Ltd. -Tyres Ashok Leyland Ltd. --Automobiles - 4 Wheelers Asian Paints Ltd. -Paints Bank of Baroda --Banks Bank of India --Banks Bharat Electronics Ltd. --Electronics - Industrial Bharat Forge Ltd. -Castings/Forgings Biocon Ltd. -Pharmaceuticals Canara Bank --Banks Chennai Petroleum Corporation Ltd. -Refineries Container Corporation of India Ltd. --Travel And Transport Corporation Bank -Banks Cummins India Ltd. -Diesel Engines Dr. Reddy’s Laboratories Ltd. -Pharmaceuticals Glaxosmithkline Pharmaceuticals Ltd. --Pharmaceuticals Glenmark Pharmaceuticals Ltd. --Pharmaceuticals GMR Infrastructure Ltd. --Construction Housing Development and Infrastructure Ltd. --Construction IDBI Bank Ltd. --Banks Infrastructure Development Finance Co. Ltd. --Financial Institution IFCI Ltd. --Financial Institution

2 3 4 5

6 7 8 9 10 11 12 13

14

15 16 17

18

19

20 21

22 23

24

Issued Capital

Market WeighCapitalitage sation

(Rs. cr.)

(Rs. cr.)

Beta

R2

(%)

Volatility Returns Impact Cost (%)

(%)

(%)

95

4,227

1.48

0.85

0.40

4.70

7.01

0.23

25

6,600

2.30

0.89

0.44

1.49

9.36

0.25

485 50

2,192 920

0.77 0.32

0.79 0.55

0.50 0.19

3.45 6.70

4.87 21.26

0.18 0.24

133

2,415

0.84

0.70

0.38

3.21

8.36

0.18

96

7,543

2.63

0.26

0.12

1.74

-0.01

0.30

364 525 80

8,537 11,522 7,074

2.98 4.02 2.47

0.89 1.09 0.52

0.48 0.58 0.27

4.35 3.99 1.74

6.47 -2.73 2.71

0.13 0.12 0.15

45

2,179

0.76

0.72

0.30

4.41

3.16

0.20

100

2,863

1.00

0.62

0.25

3.61

40.69

0.19

410 149

6,794 1,406

2.37 0.49

0.80 0.70

0.44 0.36

2.51 2.78

0.09 4.19

0.13 0.17

130

9,344

3.26

0.31

0.13

1.33

13.19

0.26

143

2,591

0.90

0.61

0.38

1.97

8.08

0.21

40

3,663

1.28

0.53

0.29

1.99

18.51

0.25

84

8,256

2.88

0.38

0.14

3.36

25.10

0.14

85

9,253

3.23

0.14

0.06

1.79

-8.98

0.14

25

3,931

1.37

0.71

0.15

4.28

8.39

0.14

364

17,269

6.03

1.26

0.56

4.13

20.14

0.16

275

2,255

0.79

1.75

0.59

4.57

11.59

0.12

725 1,295

3,290 7,007

1.15 2.45

1.07 1.43

0.71 0.61

3.49 3.52

-6.20 2.27

0.15 0.13

762

1,471

0.51

1.54

0.66

3.62

6.63

0.17

Contd...

84

Contd... Sl. No.

Name of Security

25 Indian Hotels Co. Ltd. --Hotels 26 Indian Overseas Bank --Banks 27 Jindal Steel & Power Ltd. --Steel And Steel Products 28 Jaiprakash Associates Ltd. --Diversified 29 JSW Steel Ltd. --Steel And Steel Products 30 Kotak Mahindra Bank Ltd. --Banks 31 LIC Housing Finance Ltd. --Finance Housing 32 Lupin Ltd. -Pharmaceuticals 33 United Spirits Ltd. -Brew/Distilleries 34 Moser Baer India Ltd. -Computers - Hardware 35 Mphasis Ltd. -Computers - Software 36 Mangalore Refinery & Petrochemicals Ltd. -Refineries 37 Mundra Port and Special Economic Zone Ltd. --Travel And Transport 38 Oracle Financial Services Software Ltd. -Computers - Software 39 Patni Computer Systems Ltd. -Computers - Software 40 Power Finance Corporation Ltd. -Financial Institution 41 Raymond Ltd. --Textile Products 42 Reliance Natural Resources Ltd. --Gas 43 Sesa Goa Ltd. --Mining 44 Syndicate Bank --Banks 45 Tech Mahindra Ltd. -Computers - Software 46 Tata Teleservices (Maharashtra) Ltd. --Telecommunication - Services

Issued Capital

Market WeighCapitalitage sation

(Rs. cr.)

(Rs. cr.)

Beta

R2

(%)

Volatility Returns Impact Cost (%)

(%)

(%)

72

2,854

1.00

0.56

0.31

1.93

9.28

0.18

545

2,484

0.87

0.97

0.49

3.97

-1.62

0.15

15

18,644

6.51

1.18

0.52

2.67

15.59

0.11

237

9,956

3.48

1.85

0.72

5.54

27.42

0.12

187

4,355

1.52

1.19

0.40

5.72

23.72

0.13

346

9,755

3.41

1.34

0.64

4.84

8.77

0.14

85

1,906

0.67

1.15

0.53

3.34

10.51

0.12

83

5,669

1.98

0.49

0.22

2.78

5.43

0.14

100

6,500

2.27

0.95

0.26

3.59

4.21

0.09

168

894

0.31

1.19

0.45

3.70

6.63

0.17

209

4,247

1.48

0.70

0.25

3.33

20.62

0.18

1,753

7,187

2.51

0.91

0.46

1.60

4.86

0.24

401

12,954

4.52

0.84

0.32

3.29

-5.37

0.20

42

6,219

2.17

0.80

0.28

4.00

3.32

0.16

26

1,651

0.58

0.61

0.26

3.28

31.95

0.20

1,148

16,597

5.79

0.83

0.49

2.74

0.17

0.19

61

467

0.16

0.49

0.22

2.75

-1.99

0.22

817

7,325

2.56

1.52

0.62

6.20

8.73

0.11

79 522 122

7,841 2,508 3,227

2.74 0.88 1.13

0.91 0.67 0.92

0.35 0.41 0.38

4.55 4.61 2.26

22.96 -1.54 6.62

0.09 0.15 0.14

1,897

4,335

1.51

0.89

0.44

6.13

-3.18

0.16

Contd...

85

Contd... Sl. No.

Name of Security

47 UltraTech Cement Ltd. --Cement And Cement Products 48 Union Bank of India --Banks 49 Vijaya Bank --Banks 50 Wockhardt Ltd. -Pharmaceuticals Total * * * * * * *

Issued Capital

Market WeighCapitalitage sation

(Rs. cr.)

(Rs. cr.)

R2

Beta

Volatility Returns Impact Cost

(%)

(%)

(%)

(%)

124

6,864

2.40

0.60

0.27

3.21

17.28

0.23

505

7,418

2.59

0.82

0.46

3.66

13.31

0.15

434 55

1,012 934

0.35 0.33

0.73 0.63

0.52 0.36

2.63 4.33

-2.71 6.22

0.15 0.24

1.00

--

8.94

2.38

0.16

16,517

286,405

100

2

Beta & R are calculated for the period 01-April-2008 to 31-March 2009 Beta measures the degree to which any portfolio of stocks is affected as compared to the effect on the market as a whole. The coefficient of determination (R2) measures the strength of relationship between two variables, the return on a security versus that of the market. Volatility is the Std. deviation of the daily returns for the period 01-March 2009 to 31-March 2009 Last day of trading was 31 March 2009 Impact Cost for CNX Nifty Junior is for a portfolio of Rs. 25 lakhs Impact Cost for CNX Nifty Junior is the weightage average impact cost

Table 4-11 : Industry-wise Weightages of S&P CNX NIFTY Securities as on 31st March, 2009 Sl. No.

Industry

Market Cap

Weightage

(Rs. cr.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

86

Refineries Telecommunication - Services Computers - Software Power Banks Oil Exploration Electrical Equipment Construction Steel & Steel Products Engineering Cigarettes Pharmaceuticals Finance - Housing Automobile - 4 wheelers Cement & Cement Products Metals Diversified Aluminium Gas Automohiles - 2 and 3 wheelers Media & Entertainment Total

296,356 185,176 180,056 241,824 159,162 201,792 98,371 34,060 54,884 39,316 69,770 47,090 40,171 41,340 36,034 25,335 51,770 22,682 31,154 21,390 14,897 1,892,629

15.66% 9.78% 9.51% 12.78% 8.41% 10.66% 5.20% 1.80% 2.90% 2.08% 3.69% 2.49% 2.12% 2.18% 1.90% 1.34% 2.74% 1.20% 1.65% 1.13% 0.79% 100.00%

Table 4-12 : S&P CNX NIFTY Index* Month & Year

Open

High

Low

Close

Volatility (%)

1000.00

1067.49

813.12

985.30

1.62

–

988.33

1203.11

775.43

968.30

1.67

–

1997-98

931.95

1297.10

929.05

1116.90

1.52

–

1998-99

1117.15

1247.15

800.10

1078.05

1.86

16.53

1999-2000

1082.55

1818.15

916.00

1528.45

1.93

24.60

2000-01

1528.70

1636.95

1098.75

1148.20

1.98

17.21

2001-02

1148.10

1207.00

849.95

1129.55

1.40

18.10

2002-03

1129.85

1153.30

920.10

978.20

0.99

13.36

2003-04

977.40

2014.65

920.00

1771.90

1.43

20.70

2004-05

1771.45

2183.45

1292.20

2035.65

1.61

14.60

2005-06

2035.90

3433.85

1896.30

3402.55

1.04

20.26

2006-07

3403.15

4245.30

2595.65

3821.55

1.77

18.40

Apr-07

3820.00

4217.90

3617.00

4087.90

1.73

19.48

May-07

4089.45

4306.75

3981.15

4295.80

0.86

20.41

Jun-07

4296.05

4362.95

4100.80

4318.30

0.84

20.60

Jul-07

4318.40

4647.95

4304.00

4528.85

1.15

20.49

Aug-07

4528.85

4532.90

4002.20

4464.00

2.04

20.20

Sep-07

4466.65

5055.80

4445.55

5021.35

1.08

22.58

Oct-07

5021.50

5976.00

5000.95

5900.65

2.48

25.74

Nov-07

5903.80

6011.95

5394.35

5762.75

1.73

25.21

1995-96 (Nov.-Mar.) 1996-97

Price To Earning Ratio#

Dec-07

5765.45

6185.40

5676.70

6138.60

1.67

27.62

Jan-08

6136.75

6357.10

4448.50

5137.45

3.27

21.97

Feb-08

5140.60

5545.20

4803.60

5223.50

2.46

22.27

Mar-08

5222.80

5222.80

4468.55

4734.50

3.04

20.63

2007-08

3820.00

6357.10

3617.00

4734.50

2.02

20.63

Apr-08

4735.65

5230.75

4628.75

5165.90

1.28

22.20

May-08

5265.30

5298.85

4801.90

4870.10

1.21

20.74

Jun-08

4869.25

4908.80

4021.70

4040.55

1.91

17.28

Jul-08

4039.75

4539.45

3790.20

4332.95

2.97

18.22

Aug-08

4331.60

4649.85

4201.85

4360.00

1.61

18.43

Sep-08

4356.10

4558.00

3715.05

3921.20

2.32

16.85

Oct-08

3921.85

4000.50

2252.75

2885.60

5.03

12.57

Nov-08

2885.40

3240.55

2502.90

2755.10

3.83

12.08

Dec-08

2755.15

3110.45

2570.70

2959.15

2.46

12.97

Jan-09

2963.30

3147.20

2661.65

2874.80

2.73

13.40

Feb-09

2872.35

2969.75

2677.55

2763.65

1.81

13.12

Mar-09

2764.60

3123.35

2539.45

3020.95

2.34

14.30

2008-09

4735.65

5298.85

2252.75

3020.95

2.66

14.30

* S&P CNX Nifty commenced from November 3, 1995 # At the end of the period Note : Volatility is calculated as standard deviation of the Natural Log of returns for the respective month/ year.

87

Table 4-13 : CNX NIFTY Junior Index* Month & Year

Open

High

Low

Close

1996-97 (Nov.-Mar.)

1000.00

1997-98

1028.30

1998-99 1999-2000

Volatility (%)

Price To Earning Ratio#

1208.87

907.02

1032.95

1.76

–

1395.25

1016.65

1339.40

1.44

–

1339.75

2079.10

1177.20

2069.20

2.14

18.92

2099.75

5365.90

1631.90

3695.75

2.46

33.47

2000-01

3720.45

3771.80

1570.20

1601.80

2.75

9.69

2001-02

1601.40

1676.25

1038.75

1566.95

1.60

6.80

2002-03

1568.40

1690.35

1231.95

1259.55

1.23

11.68

2003-04

1260.75

3702.60

1259.75

3392.05

1.57

11.93

2004-05

3398.00

4705.25

2493.70

4275.15

1.83

13.82

2005-06

4275.35

6437.40

3998.80

6412.10

0.95

20.25

2006-07

6415.25

7566.65

4463.75

6878.05

2.05

18.48

Apr-07

6675.85

7554.55

6559.55

7527.30

1.53

17.23

May-07

7610.45

8153.05

7429.15

8022.55

0.95

17.30

Jun-07

8047.10

8708.35

7799.70

8699.05

1.10

20.19

Jul-07

8720.50

9247.00

8564.30

8849.60

1.13

18.71

Aug-07

8829.65

8966.25

7700.20

8632.75

2.30

18.51

Sep-07

8658.20

9838.30

8658.20

9820.90

1.11

21.06

Oct-07

9831.65

10726.65

8908.55

10643.30

2.85

21.43

Nov-07

10757.05

11740.95

10020.35

11431.65

2.05

23.09

Dec-07

11471.60

12533.95

11455.05

12488.25

1.70

26.48

Jan-08

12488.65

13209.35

8336.55

10130.00

4.40

19.89

Feb-08

10269.75

10684.40

9025.60

9636.10

2.42

19.56

Mar-08

9526.40

9526.40

7235.25

7975.75

4.16

16.69

2007-08 Apr-08

6675.85 7982.75

13209.35 9272.25

6559.55 7699.35

7975.75 9170.95

2.41 1.40

16.69 18.96

May-08

9236.40

9541.00

8075.50

8221.35

1.72

16.27

Jun-08

8228.20

8305.15

6201.05

6233.20

2.43

12.08

Jul-08

6239.20

7363.20

5756.85

6936.80

3.68

13.15

Aug-08

6877.80

7177.15

6799.55

7138.30

2.02

13.68

Sep-08

7118.20

7400.25

5633.10

6043.15

2.48

12.13

Oct-08

6070.10

6203.65

3603.20

4291.30

4.83

8.44

Nov-08

4435.40

4937.65

3706.70

3848.85

3.19

7.53

Dec-08

3853.85

4695.30

3675.50

4555.70

2.30

8.99

Jan-09

4568.55

5007.25

3964.95

4230.15

2.94

8.60

Feb-09

4214.15

4337.65

3869.25

3980.55

1.70

8.12

Mar-09

3941.55

4405.60

3587.60

4336.45

2.38

8.69

2008-09

7982.75

9541.00

3587.60

4336.45

2.80

8.69

* CNX Nifty Junior commenced from November 4, 1996. # At the end of period Note : Volatility is calculated as standard deviation of the Natural Log of returns for the respective month/ year

88

Table 4-14 : Performance of NSE Indices during the year 2008-09 Indices

Record high

Date

Value

Closing index values (31-03-09)

Average Daily Volatility

Y-o-Y Returns

S&P CNX Nifty

5298.85

02-May-2008

3020.95

2.65

-36.26

CNX Junior

9541.00

05-May-2008

4336.45

2.79

-45.07

CNX 100

5089.95

05-May-2008

2833.55

2.65

-37.53

S&P CNX 500

4315.95

05-May-2008

2294.85

2.50

-39.89

CNX Midcap

7192.40

05-May-2008

3407.45

2.14

-45.11

Nifty Midcap 50

2823.10

05-May-2008

1165.00

2.58

-50.87

CNX FMCG

6346.89

07-May-2008

5134.66

1.75

-17.11

CNX IT

4773.65

02-Jun-2008

2318.70

2.86

-36.90

Finance

5600.00

02-May-2008

1824.86

3.05

-60.87

Petrochemicals

6600.15

21-May-2008

3222.47

2.39

-31.10

Pharmaceuticals

5402.18

17-Jun-2008

3465.02

1.58

-23.46

Table 4-15 : Details of Mutual Funds and Exchange Traded Funds Listed on NSE A: List of Mutual Funds (MF’s) and Exchange Traded Funds (ETF’s) MUTUAL FUNDS Sr. No.

Symbol

1

FTCSF3YDIV

2

FTCSF3YGRO

3

FTCSF5YDIV

4

FTCSF5YGRO

5

Company Name

Date of Listing

FTCPOF3YDV

Franklin Templeton Mutual Fund-Capital Safety Fund-3Y (Divdend Option) Franklin Templeton Mutual Fund-Capital Saftey Fund 3Y (Growth Option) Franklin Templeton Mutual Fund-Capital Safety Fund-5Y Dividend Option Franklin Templeton Mutual Fund-Capital Safety Fund-5Y (Growth Option) Franklin Templeton Capital Protection Oriented Fund

28-May-2007

25-Jun-2007

6

FTCPOF3YGR

Franklin Templeton Capital Protection Oriented Fund

25-Jun-2007

7

FTCPOF5YDV

Franklin Templeton Capital Protection Oriented Fund

25-Jun-2007

8

FTCPOF5YGR

Franklin Templeton Capital Protection Oriented Fund

25-Jun-2007

9

UFTI5-10DP

26-Mar-2009

10

UFTI5-10DR

11

UFTI5-10GP

UTI Mutual Fund (Fixed Term Income Fund-SrV-Plan X-Ret Div Payout Opt) UTI Mutual Fund (Fixed Term Income Fund-SrV-Plan X-Ret Div Reinvst Opt) UTI Mutual Fund (Fixed Term Income Fund-SrV-Plan X-Retail Growth Opt)

28-May-2007 28-May-2007 28-May-2007

26-Mar-2009 26-Mar-2009

Contd...

89

Contd... EXCHANGE TRADED FUNDS Sr. No.

Symbol

Company Name

Date of Listing

1

NIFTYBEES

Benchmark Mutual Fund

8-Jan-2002

2

JUNIORBEES

Benchmark Mutual Fund-Nifty Junior Benchmark ETF

6-Mar-2003

3

UTISUNDER

UTI Mutual Fund

16-Jul-2003

4

LIQUIDBEES

Benchmark Asset Management Company Private Limited

16-Jul-2003

5

BANKBEES

Benchmark Asset Management Company Pvt. Ltd.

4-Jun-2004

6

GOLDBEES

19-Mar-2007

7

GOLDSHARE

Benchmark Mutual Fund - Gold Benchmark Exchange Traded Scheme UTI Mutual Fund - UTI Gold Exchange Traded Fund

17-Apr-2007

8

KOTAKGOLD

Kotak Mutual Fund - Gold Exchange Traded Fund

8-Aug-2007

9

PSUBNKBEES

1-Nov-2007

10

KOTAKPSUBK

Benchmark Mutual Fund - PSU Bank Benchmark Exchange Traded Scheme Kotak Mahindra Mutual Fund

16-Nov-2007

11

RELGOLD

Reliance Mutual Fund - Gold Exchange Traded Fund

26-Nov-2007

12

QGOLDHALF

Quantum Gold Fund -Exchange Traded Fund (ETF)

28-Feb-2008

13

RELBANK

27-Jun-2008

14

QNIFTY

Reliance Mutual Fund -Banking Exchange Traded Fund (ETF) Quantum Index Fund -Exchange Traded Fund (ETF)

18-Jul-2008

B : No of Trades and Trading Value Month & Year No. of Trades

Mutual Funds (MF’s) Trading Value (Rs. cr.)

(US $ mn.)

Exchange traded funds (ETF’s) No. of Trading Value Trades (Rs. cr.) (US $ mn.)

Apr-07

4,676

16.51

4.13

31,467

129.28

32.34

May-07

5,476

15.39

3.85

27,911

94.37

23.61

Jun-07

5,507

24.33

6.09

19,449

106.16

26.56

Jul-07

7,544

24.67

6.17

16,105

123.30

30.85

Aug-07

6,241

17.22

4.31

15,400

174.79

43.73

Sep-07

7,043

24.53

6.14

15,818

123.99

31.02

Oct-07

10,241

37.15

9.29

20,505

260.64

65.21

Nov-07

7,169

20.94

5.24

26,693

162.94

40.76

Dec-07

6,640

29.51

7.38

15,971

134.05

33.54

Jan-08

26,382

36.71

9.18

28,646

190.24

47.59

Feb-08

12,522

18.56

4.64

24,398

153.39

38.38

Mar-08

7,731

23.31

5.83

51,728

259.42

64.90

107,172

288.84

72.26

294,091

1,912.55

478.50

2007-08

Contd...

90

Contd... Month & Year No. of Trades

Mutual Funds (MF’s) Trading Value (Rs. cr.)

Exchange traded funds (ETF’s) No. of Trading Value Trades (Rs. cr.) (US $ mn.)

(US $ mn.)

Apr-08

5,632

18.97

3.72

34,930

588.88

115.58

May-08

4,605

17.19

3.37

52,396

221.75

43.52

Jun-08

5,247

26.29

5.16

50,864

252.92

49.64

Jul-08

4,685

68.13

13.37

67,007

584.22

114.67

Aug-08

2,742

14.18

2.78

81,896

237.00

46.52

Sep-08

5,622

21.35

4.19

88,739

486.11

95.41

Oct-08

5,253

20.47

4.02

147,770

541.54

106.29

Nov-08

2,513

7.09

1.39

119,429

277.60

54.48

Dec-08

2,338

14.99

2.94

111,034

309.10

60.67

Jan-09

685

0.90

0.18

85,273

268.22

52.64

Feb-09

384

0.47

0.09

102,870

310.93

61.03

Mar-09

531

0.92

0.18

95,849

322.24

63.25

40,237

210.95

41.40

1,038,057

4,400.50

863.69

2008-09

Table 4-16 : Settlement Cycle and Process in CM Segment Settlement Cycle Activity Trading

T+2 Rolling Settlement (From April 1, 2003) T

Custodial Confirmation

T+1

Determination of Obligation

T+1

Securities/Funds Pay-in

T+2

Securities/Funds Pay-out

T+2

Valuation Debit

T+2

Auction

T+3

Bad Delivery Reporting

T+4

Auction Pay-in/Pay-out

T+5

Close Out

T+5

Rectified Bad Delivery Pay-in/Pay-out

T+6

Re-bad Delivery Reporting

T+8

Close Out of Re-bad Delivery

T+9

91

92

77,909

106,882

383

550

958

1,614

1,720

2,397

3,750

4,503

6,000

7,857

674

786

752

890

871

894

1997-98

1998-99

1999-00

2000-01

2001-2002

2002-03

2003-04

2004-05

2005-06

2006-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

39,010

1996-97

135,865

101,384

95,458

76,643

850,515

818,438

787,996

704,533

365,403

274,695

304,196

238,605

165,310

135,217

134,317

64

262

1995-96

1,330

(lakh)

(lakh)

3

Traded Quantity

No. of Trades

Nov 94-Mar 95

Month/Year

34,119

25,753

30,283

21,663

24,635

20,619

239,074

227,240

202,277

175,550

82,353

59,299

50,203

48,713

27,991

22,051

16,453

7,264

688

(lakh)

Quantity of Shares Deliverable

25.11

25.40

28.33

27.81

25.81

26.90

28.11

27.77

25.67

24.92

22.54

21.59

16.50

20.42

16.93

16.31

12.25

18.62

51.74

% of Shares Deliverable to Total Shares Traded

252,895

226,239

264,949

192,100

199,170

168,181

1,940,094

1,516,839

1,140,969

1,090,963

621,569

508,121

1,263,898

803,050

413,573

370,010

292,314

65,742

1,728

(Rs. cr.)

Trading Volume

63,271

56,602

66,287

48,061

49,830

42,077

445,078

340,022

260,793

251,432

130,857

104,123

270,990

184,099

--

--

--

--

--

(US $ mn.)

Trading Volume

73,052

63,766

75,349

52,825

55,670

48,349

544,434

409,353

277,101

221,364

87,956

71,766

106,277

82,607

66,204

59,775

32,640

11,775

898

(Rs. cr.)

Value of Shares Deliverable

28.89

28.19

28.44

27.50

27.95

28.75

28.06

26.99

24.29

20.29

14.15

14.12

8.41

10.29

16.01

16.15

11.17

17.91

51.97

%of Deliverable to Value of Shares Traded

72,837

63,651

75,147

52,702

55,530

48,228

543,048

407,976

276,120

220,341

87,447

64,353

94,962

79,783

30,755

21,713

13,790

5,805

611

(Rs. cr.)

Securities Pay-in

6

93

62

97

57

64

52

769

894

871

1,014

469

364

339

635

305

333

382

179

(lakh)

0.27

0.24

0.32

0.27

0.26

0.25

0.32

0.39

0.43

0.58

0.57

0.61

0.68

1.30

1.09

1.51

2.32

2.46

0.85

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.08

11.58

110.13

69.73

72.90

66.25

32.17

1.76

(lakh)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.0000

0.0001

0.023

0.23

0.25

0.33

0.40

0.44

0.26

Short % of Short Unrectified % of Delivery Delivery Bad Unrecti(Auctioned to Total Delivery fied Bad quantity) Delive-rable (Auctioned Delivery to quantity) Delive-rable

Table 4-17 : Settlement Statistics in CM Segment

Contd...

21,496

24,264

20,938

15,074

15,431

14,528

173,188

131,426

97,241

81,588

34,092

28,048

45,937

27,992

12,175

10,827

7,212

3,258

300

(Rs. cr.)

Funds Pay-in

93

13,639

1,226

2008-09

1,054

Sep-08

Oct-08

1,057

1,082

Aug-08

1,002

1,329

Jul-08

Feb-09

1,122

Jun-08

Mar-09

1,079

1,211

1,069

Apr-08

May-08

Jan-09

11,645

2007-08

1,119

95,556

982

1,290

106,909

1,057

Feb-08

Mar-08

Dec-08

111,364

1,262

Jan-08

Nov-08

1,481,229

1,077

Dec-07

1,418,928

124,640

116,896

141,964

142,294

109,968

111,157

131,998

110,685

115,499

102,166

111,923

167,860

163,037

169,622

1,193

Nov-07

172,479

(lakh)

(lakh)

1,207

Traded Quantity

No. of Trades

Oct-07

Month/Year

Contd...

303,925

26,581

21,798

27,642

28,148

24,724

28,655

24,074

22,822

25,311

23,871

25,379

24,919

367,971

24,918

24,363

41,581

40,474

37,921

41,641

(lakh)

Quantity of Shares Deliverable

21.42

21.33

18.65

19.47

19.78

22.48

25.78

25.19

21.35

19.18

21.57

21.97

22.38

24.84

24.39

21.77

24.77

24.83

22.36

24.14

% of Shares Deliverable to Total Shares Traded

2,749,450

197395.5

152,625

187,393

213,387

178,208

230,192

247,189

238,279

290,699

272,697

278,962

262,423

3,519,919

251,676

281,395

449,261

374,515

415,129

444,407

(Rs. cr.)

Trading Volume

539,637

38,743

29,956

36,780

41,882

34,977

45,180

48,516

46,767

57,056

53,522

54,752

51,506

880,640

62,966

70,402

112,400

93,699

103,860

111,185

(US $ mn.)

Trading Volume

611,535

38,706

30,260

36,529

40,854

36,880

54,690

61,039

54,447

61,406

64,330

68,903

63,492

972,803

64,967

72,123

126,808

110,578

107,494

121,822

(Rs. cr.)

Value of Shares Deliverable

22.44

19.61

19.83

19.49

19.15

20.69

23.76

24.69

22.85

21.12

23.59

24.70

24.19

27.64

25.81

25.63

28.23

29.53

25.89

27.41

%of Deliverable to Value of Shares Traded

610,498

38,617

30,208

36,464

40,800

36,811

54,585

60,934

54,369

61,311

64,217

68,799

63,383

970,618

64,852

72,014

126,552

110,277

107,268

121,561

(Rs. cr.)

Securities Pay-in

49

51

122

133

108

108

625

75

42

48

47

40

67

44

43

55

55

54

55

997

(lakh)

0.21

0.28

0.19

0.17

0.17

0.16

0.23

0.18

0.19

0.22

0.23

0.21

0.22

0.27

0.20

0.21

0.29

0.33

0.28

0.26

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

(lakh)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

% of Short Unrectified Short % of Delivery Delivery Bad Unrecti(Auctioned to Total Delivery fied Bad quantity) Delive-rable (Auctioned Delivery to quantity) Delive-rable

220,704

13,332

10,525

12,726

15,075

14,772

25,889

26,208

17,862

21,015

22,216

21,745

19,339

309,543

21,804

25,790

45,524

31,670

31,607

41,417

(Rs. cr.)

Funds Pay-in

94

Wholesale Debt Market Segment

5

96

Wholesale Debt Market Segment

5

The Exchange started its trading operations in June 1994 by enabling the Wholesale Debt Market (WDM) segment of the Exchange. This segment provides a trading platform for a wide range of fixed income securities that includes Central government securities, treasury bills (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), certificates of deposit (CDs), corporate debentures, SLR and non-SLR bonds issued by financial institutions (FIs), bonds issued by foreign institutions and units of mutual funds (MFs). To further encourage wider participation of all classes of investors, including the retail investors, the Retail Debt Market segment (RDM) was launched on January 16, 2003. This segment provides for a nation wide, anonymous, order driven, screen based trading system in government securities. The settlement cycle is same as in the case of equity market i.e., T+2 rolling settlement cycle. Trading Mechanism The WDM trading system, known as NEAT (National Exchange for Automated Trading), is a fully automated screen based trading system that enables members across the country to trade simultaneously with enormous ease and efficiency. It supports an anonymous order driven market which operates on a price/time priority and provides tremendous flexibility to users in terms of orders with various time/price/quantity related conditions that can be placed on the system. It also provides on-line market information like total order depth, best buys and sells available, quantity traded, the high, low and last traded price for securities are available at all points of time. The WDM Trading system provides two market sub-types: continuous market and negotiated market. In the continuous market, the buyer and seller do not know each other and they put their best buy/sell orders, which are stored in order book with price/time priority. If orders match, it results into a trade. The trades in WDM segment are settled directly between the participants, who take an exposure to the settlement risk attached to any unknown counter-party. In the NEAT-WDM system, all participants can set up their counter-party exposure limits against all probable counter-parties. This enables the trading member/participant to reduce/ minimize the counter-party risk associated with the counter-party to trade. A trade does not take place if both the buy/ sell participants do not invoke the counter-party exposure limit in the trading system. In the negotiated market, the trades are normally decided by the seller and the buyer outside the exchange, and reported to the Exchange through a trading member for approval. Thus, deals negotiated or structured outside the exchange are disclosed to the market through NEAT-WDM system. In negotiated market, as buyers and sellers know each other and have agreed to trade, no counter-party exposure limit needs to be invoked.

97

The trades on the WDM segment could be either outright trades or repo transactions with settlement cycle of T+2 and repo periods (1 to 14 days). For every trade, it is necessary to specify the number of settlement days and the trade type (repo or nonrepo), and in the event of a repo trade, the repo term and repo rate.

Market Performance Turnover The trading volume on the WDM Segment of the Exchange witnessed a year on year increase of 19.00 % from Rs. 282,317 crore (US $ 70,632 million) during 2007-08 to Rs. 335,952 crore (US $ 65,937 million) during 2008-09. The average daily trading volume also accelerated from Rs.1,138 crore (US $ 285 million) during 2007-08 to Rs.1,412 crore (US $ 277 million) in fiscal 2008-09. The highest recorded WDM trading volume of Rs. 13,912 crore ( US $ 3,206 million) was registered on August 25, 2003. The business growth of the WDM segment is presented in Table 5-1 and Chart 5-1.

Chart 5-1 : Business Growth of WDM Segment

The transactions in government securities accounted for a substantial share of 69.74 % during 2008-09 on the WDM segment. The details of transactions in different securities are presented in Table 5-2. and Chart 5-2a There were no repo transactions recorded from the fiscal 2005-06 onwards till the current fiscal. The WDM’s SGL Outright Transactions as a percentage to the total SGL Outright transactions was 43.81 % in 2008-09. The participant-wise distribution of WDM trades is presented in Table 5-3 and Chart 5-2(b). The trading members accounted for 44.65 % of the total WDM trades followed by foreign banks which held a share of 27.26 %. Share of Indian banks in WDM trades

98

declined to 18.11 % during 2008-09 as compared with its share of 23.78 % in the corresponding period last year.

Chart 5-2 (a) : Security-wise Distribution of WDM Trades (2008-09)

Chart 5-2 (b) : Participant-wise distribution of WDM trades (2008-09)

The share of top ‘N’ securities/trading members/participants in turnover in WDM segment is presented in Table 5-4. The share of top ‘10’ securities decreased from 53.31 % in 2007-08 to 43.05 % in 2008-09. The share of top ‘50’ and top ‘100’ securities accounted for 72.45% and 83.87% respectively in the current year.

99

Market Capitalisation Market capitalisation of the WDM segment has witnessed a constant increase indicating an increase in the number of securities available for trading on this segment. Total market capitalisation of the securities available for trading on WDM segment stood at Rs. 2,848,315 crore (US $ 559,041 million) as on March 31, 2009. Central Government securities accounted for the largest share of the market capitalisation with 64.95%. The details of market capitalisation of WDM securities are presented in Table 5-5.

Transaction Charges The Exchange has waived the transaction charges for the Wholesale Debt Market segment of the Exchange for the period April 1, 2009 to March 31, 2010.

Settlement Settlement is on a rolling basis, i.e. there is no account period settlement. Each order has a unique settlement date specified upfront at the time of order entry and used as a matching parameter. It is mandatory for trades to be settled on the predefined settlement date. The Exchange currently allows settlement periods ranging from same day (T+0) settlement to a maximum of (T+2) for non-government securities while settlement of all outright secondary market transactions in government securities was standardized to T+1. In case of repo transactions in government securities, first leg can be settled either on T+0 basis or T+1 basis. In case of government securities, the actual settlement of funds and securities are effected directly between participants or through Reserve Bank of India (RBI). All trades in government securities are reported to RBI-SGL through the Negotiated Dealing System (NDS) of RBI, and Clearing Corporation of India Limited (CCIL) provides settlement guarantee for transactions in government securities including repos. The trades are settled on a net basis through the DvP-III system. In the DvP-III, the settlement of Securities and Funds are carried out on a net basis. For securities other than government securities and T-bills, trades are settled on a gross basis directly between participants on delivery versus payment basis. On the scheduled settlement date, the Exchange provides data/information to the respective member/participant regarding trades to be settled on that day with details like security, counter party and consideration. The settlement details for non-government securities, i.e. certificate no., Cheque no., constituent etc. are reported by the member/participant to the Exchange. The Exchange closely monitors the settlement of transactions through the reporting of settlement details by members and participants. In case of deferment of settlement or cancellation of trade, participants are required to seek prior approval from the Exchange. For any dispute arising in respect of the trades or settlement, the exchange has established arbitration mechanism for resolving the same.

100

FIMMDA-NSE MIBID/MIBOR A reference rate is an accurate measure of the market price. In the fixed income market, it is an interest rate that the market respects and closely matches. On these lines, NSE has been computing and disseminating the NSE Mumbai Inter-bank Bid Rate (MIBID) and NSE Mumbai Inter-bank Offer Rate (MIBOR) for the overnight money market from June 15, 1998, the 3 day rates from June 06, 2008, the 14-day MIBID/MIBOR from November 10, 1998 and the 1 month and 3 month MIBID/MIBOR from December 1, 1998. In view of the robust methodology of computation of these rates and their extensive use by market participants, these have been co-branded with Fixed Income and Money Market Dealers Association (FIMMDA) from March 4, 2002. These are now known as FIMMDA-NSE MIBID/MIBOR. These are presented in Table 5-6. The Chart 5-3 presents overnight MIBID/MIBOR for 2008-09.

Chart 5-3 : Overnight MIBID/MIBOR Rates, from 02nd April 2008 to 31st March 2009

FIMMDA-NSE MIBID/MIBOR are based on rates polled by NSE from a representative panel of 33 banks /primary dealers. Overnight Rates for Saturdays is calculated and disseminated at 1030Hrs (IST). The 3 day rates are polled and processed on the last working day of the week. The rates are broadcast through NEAT-WDM trading system immediately on release and also disseminated through websites of NSE and FIMMDA , through leading information vendors ,financial dailies and email. The FIMMDA-NSE MIBID/MIBOR is used as a benchmark rate for majority of deals struck for interest rate swaps, forward rate agreements, floating rate debentures and term deposits.

101

Zero Coupon Yield Curve Keeping in mind the requirements of the banking industry, financial institutions, mutual funds, insurance companies, etc. that have substantial investment in sovereign papers, NSE disseminates a ‘Zero Coupon Yield Curve’ (NSE Zero Curve) to help in valuation of securities across all maturities irrespective of its liquidity in the market. This product has been developed by using Nelson-Siegel functional form to estimate the term structure of interest rate at any given point of time and been successfully tested by using daily WDM trades data. This is being disseminated daily. The ZCYC depicts the relationship between spot interest rates in the economy and the associated term to maturity. It provides daily estimates of the term structure of interest rates using information on secondary market trades in government securities from the WDM segment. The term structure forms the basis for the valuation of all fixed income instruments. Modelled as a series of cashflows due at different points of time in the future, the underlying price of such an instrument is calculated as the net present value of the stream of cashflows. Each cashflow, in such a formulation, is discounted using the interest rate for the associated term to maturity; the appropriate rates are read off the estimated ZCYC. Once estimated, the interest rate-maturity mapping is used to compute underlying valuations even for securities that do not trade on a given day. Changes in the economy cause shifts in the term structure, changing the underlying valuations of fixed income instruments. The daily ZCYC captures these changes, and is used to track the value of portfolios of government securities on a day-to-day basis. Chart 5-4 plots the spot interest rates at different maturities for the year 2008-09.

Chart 5-4 : Zero Coupon Yield Curve, 2008-09

102

NSE-VaR System NSE has developed a VaR system for measuring the market risk inherent in Government of India (GOI) securities. NSE-VaR system builds on the NSE database of daily yield curves (ZCYC) and provides measures of VaR using 5 alternative methods (variancecovariance (normal), historical simulation method, weighted normal, weighted historical simulation and extreme value method). Together, these 5 methods provide a range of options for market participants to choose from. NSE-VaR system releases daily estimates of security-wise VaR at 1-day and multiday horizons for securities traded on WDM segment of NSE and all outstanding GoI securities with effect from January 1, 2002. Participants can compute their portfolio risk as weighted average of security-wise VaRs, the weights being proportionate to the market value of a given security in their portfolio. 1-day VaR (99%) measure for GoI Securities traded on NSE-WDM on March 31, 2009 is presented in Table 5-7.

GOI-Bond Index The increased activity in the government securities market in India and simultaneous emergence of mutual (gilt) funds has given rise to the need for a well defined Bond Index to measure returns in the bond market. The NSE-Government Securities Index prices components off the NSE Benchmark ZCYC, so that the movements reflect returns to an investor on account of change in interest rates only, and not those arising on account of the impact of idiosyncratic factors. The index provides a benchmark for portfolio management by various investment managers and gilt funds. It also forms the basis for designing index funds and for derivative products such as options and futures. Some of the salient features of this index are: •

The base date for the index is 1st January 1997 and the base date index value is 100

•

The index is calculated on a daily basis from 1st January 1997 onwards; weekends and holidays are ignored.

•

The index uses all Government of India bonds issued after April 1992. These were issued on the basis of an auction mechanism that imparted some amount of market-relatedness to their pricing. Bonds issued prior to 1992 were on the basis of administered interest rates.

•

Each day, the prices for all these bonds are estimated off the NSE Benchmark-ZCYC for the day.

•

The constituents are weighted by their market capitalisation.

•

Computations are based on arithmetic and not geometric calculations.

•

The index uses a chain-link methodology i.e. today’s values are based on the previous value times the change since the previous calculations. This gives the index the ability to add new issues and remove old issues when redeemed.

•

Coupons and redemption payments are assumed to be re-invested back into the index in proportion to the constituent weights.

•

Both the Total Returns Index and the Principal Returns Index are computed.

•

The indices provided are: Composite, 1-3, 3-8, 8+ years, TB index, GS index.

103

104

143

184

128

148

Jun-07

Jul-07

Aug-07

Sep-07

762

2006-07

98

897

2005-06

145

1,151

2004-05

May-07

1,078

2003-04

Apr-07

979

1,123

1,038

2000-01

2002-03

1,057

1999-00

2001-02

719

1,071

524

1996-97

1998-99

304

1995-96

1997-98

183

No. of active securities

1994- 95 (June-March)

Month/Year

934

1,230

2,089

1,065

1,093

928

19,575

61,891

124,308

189,518

167,778

144,851

64,470

46,987

16,092

16,821

7,804

2,991

1,021

Number of Trades

16,902

21,431

33,815

17,335

17,483

17,159

219,106

475,523

887,294

1,316,096

1,068,701

947,190

428,582

304,216

105,469

111,263

42,278

11,868

6,781

(Rs. cr.)

4,229

5,362

8,460

4,337

4,374

4,293

50,265

106,596

202,810

303,318

224,990

194,096

91,891

69,742

24,857

–

–

–

–

( US $ mn)

Trading Volume

All Trades

845

1,021

1,537

825

833

903

898

1,755

3,028

4,477

3,598

3,277

1,483

1,035

365

385

145

41

30

(Rs. cr.)

211

255

385

207

208

226

206

393

692

1,032

758

672

318

237

86

–

–

–

–

( US $ mn)

Average Daily Trading Volume

18.10

17.42

16.19

16.28

16.00

18.49

11.19

7.68

7.14

6.94

6.37

6.54

6.65

6.47

6.55

6.61

5.42

3.97

6.64

(Rs. cr.)

Average Trade Size

27

8

9

38

18

12

399

892

1,278

1,400

1,252

378

498

936

1,522

1,390

1,061

1,115

168

Number of Trades

Table 5-1 : Business Growth of WDM Segment

4.00

4.00

3.00

6.00

6.00

3.09

102.52

310.00

410.13

331.70

300.00

110.00

131.00

217.76

307.77

288.66

201.00

207.00

31.00

(Rs. cr.)

1.00

1.00

0.75

1.50

1.50

0.75

23.29

69.49

93.74

69.83

63.16

22.54

28.09

49.92

72.54

–

–

–

–

( US $ mn)

Trading Volume

Retail Trade

Contd...

0.02

0.02

0.01

0.03

0.03

0.02

0.05

0.07

0.05

0.03

0.03

0.01

0.03

0.07

0.29

0.26

0.47

1.74

0.45

(%)

Share in Total Trading Volume

105

147

110

117

144

118

148

601

122

137

190

127

75

124

126

140

218

232

221

265

711

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

2007-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

2008-2009

No. of active securities

Oct-07

Month/Year

Contd...

16,129

1,784

1,891

2,218

2,857

1,093

922

783

594

815

956

1,200

1,016

16,179

905

1,497

2,359

1,585

1,083

1,411

Number of Trades

All Trades

335,952

49,205

42,949

45,015

46,864

23,143

19,966

19,779

11,502

18,745

18,233

20,656

19,893

282,317

15,362

24,044

42,724

32,865

17,704

25,493

(Rs. cr.)

65,937

9,658

8,430

8,835

9,198

4,542

3,919

3,882

2,257

3,679

3,579

4,054

3,904

70,632

3,843

6,015

10,689

8,223

4,429

6,378

( US $ mn)

Trading Volume

1,412

2,590

2,260

2,251

2,232

1,286

1,109

989

605

815

868

1,033

995

1,138

853

1,145

1,858

1,730

843

1,159

(Rs. cr.)

277

508

444

442

438

252

218

194

119

160

170

203

195

285

214

286

465

433

211

290

( US $ mn)

Average Daily Trading Volume

20.83

27.58

22.71

20.30

16.40

21.17

21.66

25.26

19.36

23.00

19.07

17.21

19.58

17.45

16.97

16.06

18.11

20.74

16.35

18.07

(Rs. cr.)

Average Trade Size

257

33

28

15

11

7

10

12

16

10

106

3

6

211

36

7

27

12

7

10

Number of Trades

Retail Trade

64.00

7.17

5.78

4.77

6.03

2.79

2.45

3.43

4.98

3.39

20.35

0.35

2.10

49.00

4.00

2.00

7.00

4.00

2.00

4.00

(Rs. cr.)

12.56

1.41

1.13

0.94

1.18

0.55

0.48

0.67

0.98

0.67

3.98

0.07

0.41

12.26

1.00

0.50

1.75

1.00

0.50

1.00

( US $ mn)

Trading Volume

0.02

0.01

0.01

0.01

0.01

0.01

0.01

0.02

0.04

0.02

0.11

0.00

0.01

0.02

0.03

0.01

0.02

0.01

0.01

0.02

(%)

Share in Total Trading Volume

106

7,729

27,352

84,716

84,576

282,891

390,952

902,105

1,000,518

1,218,705

724,830

345,563

153,370

12,099

11,606

9,964

22,632

14,193

12,433

11,765

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2003-03

2003-04

2004-05

2005-06

2006-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

Oct-07

Government Securities

1995-96

Month & Year

11,230

3,277

5,355

7,260

6,209

4,778

4,307

51,954

105,233

124,842

55,671

32,275

25,574

23,143

11,013

10,705

18,870

10,957

2,260

T-Bills

1,275

367

889

2,296

257

185

165

4,418

12,173

17,835

27,112

19,985

10,987

7,886

4,867

5,041

4,050

2,769

1,149

PSU /Inst. Bonds/Others

Turnover (In Rs. Cr.)

1,224

827

992

1,626

905

914

589

9,365

12,554

19,787

14,609

15,924

8,619

6,600

5,445

5,147

3,627

1,199

729

Others

25,493

16,902

21,431

33,815

17,335

17,483

17,159

219,106

475,523

887,294

1,316,096

1,068,701

947,191

428,582

304,216

105,469

111,263

42,278

11,868

46.15

73.56

66.23

66.93

57.48

66.38

70.51

70.00

72.67

81.69

92.60

93.62

95.24

91.22

92.99

80.19

76.14

64.70

65.13

Total Turnover Government Securities

Table 5-2 : Security-wise Distribution of WDM Trades

44.05

19.39

24.99

21.47

35.82

27.33

25.10

23.71

22.13

14.07

4.23

3.02

2.70

5.40

3.62

10.15

16.96

25.92

19.04

T-Bills

5.00

2.17

4.15

6.79

1.48

1.06

0.96

2.02

2.56

2.01

2.06

1.87

1.16

1.84

1.60

4.78

3.64

6.55

9.69

PSU /Inst. Bonds

Turnover (In %)

Contd...

4.80

4.89

4.63

4.81

5.22

5.23

3.43

4.27

2.64

2.23

1.11

1.49

0.91

1.54

1.79

4.88

3.26

2.84

6.14

Others

107

32,082

19,014

11,355

194,347

13,466

16,293

12,026

13,831

8,243

12,854

13,859

16,526

32,725

33,734

27,053

33,677

Jan-08

Feb-08

Mar-08

2007-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

234,288

26,289

Dec-07

2008-2009

10,914

Government Securities

Nov-07

Month & Year

Contd...

56,824

8,522

8,152

4,251

6,952

4,960

3,836

5,212

2,643

3,034

3,145

2,365

3,751

66,062

2,937

3,244

6,353

5,567

5,547

T-Bills

30,008

5,006

5,287

5,160

5,093

965

1,887

939

377

553

1,654

1,201

1,886

9,232

401

1,007

1,619

316

455

PSU /Inst. Bonds/Others

Turnover (In Rs. Cr.)

14,831

2,000

2,457

1,870

2,095

693

384

774

238

1,326

1,407

798

790

12,676

668

779

2,670

693

788

Others

335,952

49,205

42,949

45,015

46,864

23,143

19,966

19,779

11,502

18,745

18,233

20,656

19,893

282,317

15,362

24,044

42,724

32,865

17,704

69.74

68.44

62.99

74.94

69.83

71.41

69.41

64.99

71.67

73.79

65.96

78.88

67.69

68.84

73.92

79.08

75.09

79.99

61.65

Total Turnover Government Securities

16.91

17.32

18.98

9.44

14.83

21.43

19.21

26.35

22.98

16.19

17.25

11.45

18.85

23.40

19.12

13.49

14.87

16.94

31.33

T-Bills

8.93

10.17

12.31

11.46

10.87

4.17

9.45

4.75

3.28

2.95

9.07

5.81

9.48

3.27

2.61

4.19

3.79

0.96

2.57

PSU /Inst. Bonds

Turnover (In %)

4.41

4.06

5.72

4.15

4.47

2.99

1.92

3.91

2.07

7.07

7.72

3.87

3.97

4.49

4.35

3.24

6.25

2.11

4.45

Others

108

3,921

2,787

9,703

21,975

16,327

56,675

99,602

222,779

265,145

458,001

301,325

152,215

67,660

5,206

7,140

6,600

13,604

9,807

7,670

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

Trading Members

1994-95 (June-March)

Month/Year

338

606

1,150

269

135

319

5,916

18,641

45,607

60,014

40,290

39,403

17,915

12,716

5,200

4,784

1,611

902

436

887

1,633

4,149

2,247

1,962

2,902

43,427

104,092

164,149

224,131

235,435

213,118

94,888

59,079

15,441

13,418

2,579

138

1

Turnover (In Rs.Cr.) FIs/MFs/ Primary Corporates Dealers

3,776

4,087

9,272

4,814

4,142

4,811

57,033

133,479

265,212

478,533

414,336

346,672

143,746

129,961

44,424

45,885

12,688

3,569

960

Indian Banks

4,231

5,298

5,640

3,405

4,105

3,921

45,070

67,096

111,000

95,417

113,496

125,219

72,430

45,785

24,079

25,201

15,698

4,473

1,463

Foreign Banks

16,902

21,431

33,815

17,335

17,483

17,159

219,106

475,523

887,294

1,316,096

1,068,701

947,191

428,582

304,216

105,469

111,263

42,278

11,868

6,781

Total Turnover

45.38

45.76

40.23

38.07

40.84

30.34

30.88

32.01

33.96

34.80

24.81

23.52

23.24

18.63

15.48

19.75

22.95

23.48

57.82

Trading Members

2.00

2.83

3.40

1.55

0.77

1.86

2.70

3.92

5.14

4.56

3.77

4.16

4.18

4.18

4.93

4.30

3.81

7.60

6.43

FIs/MFs/ Corporates

Table 5-3 : Participant wise Distribution of WDM Turnover

5.25

7.62

12.27

12.96

11.22

16.91

19.82

21.89

18.50

17.03

22.03

22.50

22.14

19.42

14.64

12.06

6.10

1.16

0.02

22.34

19.07

27.42

27.77

23.69

28.04

26.03

28.07

29.89

36.36

38.77

36.60

33.54

42.72

42.12

41.24

30.01

30.07

14.16

Contd...

25.03

24.72

16.68

19.64

23.48

22.85

20.57

14.11

12.51

7.25

10.62

13.22

16.90

15.05

22.83

22.65

37.13

37.69

21.57

Turnover (In %) Primary Indian Banks Foreign Banks Dealers

109

12,380

7,347

10,639

16,154

7,201

3,959

107,704

7,016

5,583

6,755

8,746

5,384

9,969

7,435

8,547

22,898

21,337

21,273

25,070

150,014

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

2007-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

2008-09

Trading Members

Oct-07

Month/Year

Contd...

11,408

2,298

1,503

1,373

2,057

1,435

1,232

135

109

174

330

361

400

6,606

273

757

1,226

792

338

398

22,106

1,525

2,414

3,412

4,546

1,521

1,737

775

1,064

1,430

841

1,739

1,102

24,392

745

1,863

3,004

2,363

1,238

1,412

Turnover (In Rs.Cr.) FIs/MFs/ Primary Corporates Dealers

60,851

10,746

6,983

5,388

9,776

3,726

3,754

3,054

1,856

3,488

3,306

5,540

3,233

67,135

3,218

6,047

9,429

8,466

3,015

6,057

Indian Banks

91,573

9,566

10,776

13,505

7,587

7,915

5,808

5,847

3,088

4,906

7,002

7,432

8,142

76,480

7,166

8,175

12,911

10,606

5,766

5,247

Foreign Banks

335,952

49,205

42,949

45,015

46,864

23,143

19,966

19,779

11,502

18,745

18,233

20,656

19,893

282,317

15,362

24,044

42,724

32,865

17,704

25,493

Total Turnover

44.65

50.95

49.53

47.40

48.86

36.93

37.24

50.40

46.81

46.66

37.05

27.03

35.27

38.15

25.77

29.95

37.81

32.37

41.50

48.56

Trading Members

3.40

4.67

3.50

3.05

4.39

6.20

6.17

0.68

0.95

0.93

1.81

1.75

2.01

2.34

1.78

3.15

2.87

2.41

1.91

1.56

FIs/MFs/ Corporates

6.58

3.10

5.62

7.58

9.70

6.57

8.70

3.92

9.25

7.63

4.61

8.42

5.54

8.64

4.85

7.75

7.03

7.19

6.99

5.54

18.11

21.84

16.26

11.97

20.86

16.10

18.80

15.44

16.14

18.61

18.13

26.82

16.25

23.78

20.95

25.15

22.07

25.76

17.03

23.76

27.26

19.44

25.09

30.00

16.19

34.20

29.09

29.56

26.85

26.17

38.40

35.98

40.93

27.09

46.65

34.00

30.22

32.27

32.57

20.58

Turnover (In %) Primary Indian Banks Foreign Banks Dealers

Table 5-4 : Share of Top ‘N’ Securities/Trading Members/ Participants in Turnover in WDM Segment. Year Securities 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Trading Members 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Participants 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

110

Top 5

Top 10

In Percent Top 25

Top 50

Top 100

42.84 57.59 32.93 30.65 26.81 37.11 42.20 51.61 43.10 37.06 43.70 47.42 40.90 39.65 31.31

61.05 69.46 48.02 46.92 41.89 55.57 58.30 68.50 65.15 54.43 57.51 59.78 51.29 53.31 43.05

80.46 79.60 65.65 71.25 64.30 82.12 80.73 88.73 86.91 81.58 71.72 72.02 65.82 68.35 60.42

89.81 86.58 78.32 85.00 78.24 90.73 89.97 94.32 92.74 90.66 80.59 81.04 77.15 79.64 72.45

97.16 93.24 90.17 92.15 86.66 95.28 95.13 97.19 96.13 95.14 89.55 89.36 86.91 89.55 83.87

51.99 44.36 30.02 27.17 29.87 32.38 35.17 35.18 31.77 30.72 35.75 39.68 57.75 65.32 69.92

73.05 68.58 51.27 47.85 50.45 53.41 54.25 58.68 53.71 53.01 56.84 60.63 78.01 80.24 82.89

95.37 96.10 91.57 83.38 86.55 84.46 86.82 88.36 85.49 86.71 86.74 89.38 96.43 97.60 98.38

100.00 100.00 99.96 99.82 99.98 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

– – 100.00 100.00 100.00 – – – – – – – – – –

18.37 29.66 25.27 23.60 22.47 15.54 17.51 17.49 17.27 16.66 16.82 17.5 25.85 28.36 24.08

27.38 47.15 44.92 38.96 37.39 27.87 28.85 29.25 28.29 25.96 28.64 30.53 40.65 40.64 38.24

38.40 70.49 67.00 65.59 62.79 52.51 50.64 50.19 49.22 44.25 47.24 53.61 59.99 55.58 51.19

42.20 76.32 76.33 77.96 79.27 74.76 69.72 69.16 68.14 59.87 61.71 65.84 68.17 61.77 55.34

– 76.58 77.10 80.22 84.51 81.32 76.78 76.49 75.20 65.17 66.00 67.97 69.09 61.84 55.38

111

60,719

86,175

125,492

169,830

196,290

260,002

319,865

397,228

542,601

658,002

959,302

1,006,107

1,059,789

1,182,278

1,188,185

1,193,749

1,216,175

1,252,307

1,268,344

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Govt. securities

Jun-94

Month/ Year

90,283

91,300

88,940

90,293

90,289

89,628

88,716

68,398

56,832

38,383

39,944

36,365

39,357

34,994

35,323

36,211

30,074

25,675

20,439

255,601

247,614

250,399

247,105

245,888

249,847

241,927

223,208

79,340

72,094

61,385

44,624

39,477

30,516

23,989

18,891

13,850

5,867

1,833

(Rs.cr)

PSU bonds State loans

154,924

150,513

144,375

125,892

119,433

115,183

70,186

73,502

32,692

34,919

23,849

17,725

15,345

11,292

17,497

13,460

8,452

17,129

18,476

T-bills

167,655

162,866

161,619

155,634

153,134

147,865

106,956

90,519

87,698

61,084

89,016

84,894

79,989

74,666

70,091

54,380

29,915

23,334

20,052

Others

1,936,806

1,904,600

1,861,509

1,812,673

1,796,928

1,784,801

1,567,574

1,461,734

1,215,864

864,481

756,794

580,836

494,033

411,470

343,191

292,772

207,783

158,181

121,518

Total

484,565

476,507

465,727

453,508

449,569

409,452

351,395

334,111

280,218

181,996

155,719

113,258

113,258

96,976

86,818

81,598

60,490

50,328

38,663

(US $ mn)

Total

65.49

65.75

65.33

65.86

66.12

66.24

67.61

68.83

78.90

76.12

71.70

68.39

64.75

63.19

57.20

58.01

60.40

54.48

49.97

Govt. securities

4.66

4.79

4.78

4.98

5.02

5.02

5.66

4.68

4.67

4.44

5.28

6.26

7.97

8.50

10.29

12.37

14.47

16.23

16.82

13.20

13.00

13.45

13.63

13.68

14.00

15.43

15.27

6.53

8.34

8.11

7.68

7.99

7.42

6.99

6.45

6.67

3.71

1.51

(in percent)

PSU bonds State loans

Table 5-5 : Market Capitalisation of WDM Securities

8.00

7.90

7.76

6.95

6.65

6.45

4.48

5.03

2.69

4.04

3.15

3.05

3.11

2.74

5.10

4.60

4.07

10.83

15.20

T-bills

Contd...

8.66

8.55

8.68

8.58

8.53

8.28

6.82

6.19

7.21

7.06

11.76

14.62

16.19

18.15

20.42

18.57

14.40

14.75

16.50

Others

112

1,282,109

1,309,579

1,314,985

1,318,419

1,357,485

1,386,566

1,392,219

1,437,643

1,438,743

1,434,072

1,424,369

1,455,397

1,471,565

1,535,826

1,621,942

1,808,270

1,848,128

1,868,684

1,849,971

Oct-07

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Govt. securities

Sep-07

Month/ Year

Contd...

129,499

129,609

129,070

119,165

111,178

108,922

108,330

103,866

101,200

101,085

98,845

98,524

96,268

97,433

96,542

94,287

94,626

92,094

91,467

422,362

376,820

364,204

344,721

332,923

324,218

325,475

322,447

319,827

317,095

317,972

314,716

315,661

307,112

294,341

278,966

268,667

263,329

258,683

(Rs.cr)

PSU bonds State loans

147,617

144,336

145,121

141,888

146,154

141,680

135,187

133,768

133,488

133,061

126,469

110,280

111,562

120,665

124,393

124,169

143,650

155,473

145,437

T-bills

298,867

290,538

265,364

254,872

230,372

218,959

213,708

210,117

207,843

209,648

210,154

207,488

207,636

201,300

197,104

186,740

184,816

180,585

176,891

Others

2,848,315

2,809,987

2,751,888

2,668,916

2,442,569

2,329,604

2,254,265

2,225,595

2,186,727

2,194,961

2,192,183

2,168,651

2,123,346

2,113,076

2,069,865

2,002,581

2,006,743

2,001,060

1,954,586

Total

559,041

551,518

540,115

523,830

479,405

457,233

442,447

436,819

429,191

430,807

430,262

425,643

531,235

528,666

517,855

501,021

502,062

500,641

489,013

(US $ mn)

Total

64.95

66.50

67.16

67.75

66.40

65.93

65.28

65.39

65.14

65.33

65.63

66.29

65.57

65.62

65.58

65.84

65.53

65.44

65.59

Govt. securities

4.55

4.61

4.69

4.46

4.55

4.68

4.81

4.67

4.63

4.61

4.51

4.54

4.53

4.61

4.66

4.71

4.72

4.60

4.68

14.83

13.41

13.23

12.92

13.63

13.92

14.44

14.49

14.63

14.45

14.50

14.51

14.87

14.53

14.22

13.93

13.39

13.16

13.23

(in percent)

PSU bonds State loans

5.18

5.14

5.27

5.32

5.98

6.08

6.00

6.01

6.10

6.06

5.77

5.09

5.25

5.71

6.01

6.20

7.16

7.77

7.44

T-bills

10.49

10.34

9.64

9.55

9.43

9.40

9.48

9.44

9.50

9.55

9.59

9.57

9.77

9.53

9.53

9.32

9.21

9.02

9.05

Others

Table 5-6 : FIMMDA NSE MIBID/MIBOR Rates 2008-09 Month/ Date

OVERNIGHT AT 9.40 a.m.

3 DAY AT 9.40 a.m.

14 DAY AT 11.30 a.m.

1 MONTH RATE AT 11.30 a.m.

3 MONTH RATE AT 11.30 a.m.

MIBID MIBOR MIBID MIBOR MIBID MIBOR MIBID MIBOR MIBID MIBOR 30-Apr-08

7.79

8.77

6.28

7.41

6.73

7.87

7.79

8.77

31-May-08

7.53

7.93

6.51

7.53

6.88

8.07

7.89

8.87

30-Jun-08

8.69

8.77

–

–

8.59

9.13

8.90

9.56

9.39

9.94

31-Jul-08

8.37

8.51

–

–

8.58

9.28

9.07

9.89

9.62

10.39

30-Aug-08

9.38

9.49

6.16

6.26

9.53

10.12

9.98

10.55

10.44

11.22

29-Sep-08

13.87

14.57

–

–

10.75

11.84

10.78

11.77

10.97

11.86

31-Oct-08

19.14

20.30

19.48

20.73

10.24

10.63

10.13

11.08

10.84

11.73

29-Nov-08

6.48

6.82

–

–

9.25

8.10

9.88

8.97

10.63

10.43

31-Dec-08

5.17

5.27

–

–

6.27

7.19

7.58

8.04

8.45

8.89

31-Jan-09

4.17

4.23

–

–

5.30

5.68

6.00

6.44

7.05

7.83

28-Feb-09

4.10

4.16

–

–

5.04

5.37

5.72

6.18

6.99

7.64

31-Mar-09

4.78

5.02

–

–

5.04

5.61

5.68

6.26

7.07

7.64

Overnight

:

Disseminated since June 15, 1998.

3 Day

:

Disseminated since June 06, 2008 is calculated and disseminated on every last working

14 Day

:

Disseminated since November 10, 1998.

1 Month

:

Disseminated since December 1, 1998.

3 Month

:

Disseminated Since December 1, 1998.

day of the week

Table 5-7 : 1-day Value-at-Risk (99%) for Government of India Securities Traded as on March 31, 2009 Security Security Type Name

GS GS GS GS GS GS GS GS GS GS GS TB TB TB TB TB

CG2009 CG2010 CG2010 CG2010 CG2010 CG2011 CG2012 CG2013 CG2014 CG2017 CG2019A 182D 364D 364D 364D 91D

Issue Name

5.48% 11.30% 12.25% 12.29% 7.55% 6.57% 7.00% 7.27% 7.56% 7.99% 6.05% 170409 120210 250310 290110 290509

Normal Weighted Historical Weighted EVT Normal Simulation Historical Simulation

0.224 0.771 0.752 0.617 0.72 0.897 1.07 1.137 1.211 1.444 1.767 0.059 0.638 0.683 0.622 0.184

0.485 2.046 1.982 1.541 1.875 2.444 2.749 2.723 2.665 2.771 3.256 0.12 1.61 1.751 1.559 0.393

0.287 0.951 0.93 0.745 0.877 1.108 1.29 1.331 1.308 1.556 1.845 0.076 0.767 0.836 0.749 0.237

0.449 1.947 1.899 1.478 1.84 2.064 4.428 1.671 1.388 3.221 5.214 0.106 1.537 1.657 1.492 0.638

0.258 0.858 0.842 0.684 0.805 0.959 1.036 0.992 0.967 1.164 1.449 0.066 0.706 0.760 0.689 0.209

Clean Accrued_ Price Interest (off NSEZCYC) 100.27 107.59 108.40 106.00 102.61 101.47 101.36 101.55 102.22 104.76 92.03 99.82 95.88 95.26 96.09 99.35

1.64 1.98 3.03 2.05 2.87 0.68 0.43 0.57 3.11 1.82 0.99 0.00 0.00 0.00 0.00 0.00

113

114

Futures & Options Segment

6

116

6

Futures & Options Segment

In the year 2008, NSE ranked as the eighth largest derivatives exchange in the world, the second largest exchange in terms of number of contracts traded in single stock futures and the third largest in terms number of contracts traded in the index futures category. The derivatives trading at NSE commenced on June 12, 2000 with futures trading on S&P CNX Nifty Index. Subsequently, the product base has been increased to include trading in options on S&P CNX Nifty Index, futures and options on CNX IT Index, Bank Nifty Index, CNX Nifty Junior, CNX 100, Nifty Midcap 50 Indices, S&P CNX Defty and 234 single stocks (Table 6-1) as of March 2009. The various products on the derivative segment of NSE and their date of launch is shown in the table below.

Products available for trading on Derivatives Segment Products on Derivative Segment S&P CNX Nifty Futures S&P CNX Nifty Options Single Stock Options Single Stock Futures Interest Rate Futures CNX IT Futures & Options Bank Nifty Futures & Options CNX Nifty Junior Futures & Options CNX 100 Futures & Options Nifty Midcap 50 Futures & Options Mini Nifty Futures & Options on S&P CNX Nifty Long term Options on S&P CNX Nifty S&P CNX Defty Futures and Options

Date of Launch June 12, 2000 June 4, 2001 July 2, 2001 November 9, 2001 June 24, 2003 August 29, 2003 June 13, 2005 June 1, 2007 June 1, 2007 October 5, 2007 January 1, 2008 March 3, 2008 December 10, 2008

Number of Securities on which F&O Contracts were available for Trading (2008-09) Month/Year

Number of Securities*

Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 2008-09

227 230 229 230 266 267 267 265 263 259 255 234 234

* at the end of the month

117

Trading on single stock options commenced on July 2, 2001 while single stock futures were launched on November 9, 2001. Since inception, NSE established itself as the sole market leader in this segment in the country and during 2008-09, it accounted for 99 % of the market share.

Trading Mechanism The derivatives trading system at NSE is called NEAT-F&O trading system. It provides a fully automated screen-based trading for all kind of derivative products available on NSE on a nationwide basis. It supports an anonymous order driven market, which operates on a strict price/time priority. It provides tremendous flexibility to users in terms of kinds of orders that can be placed on the system. Various time and price related conditions like Immediate or Cancel, Limit/Market Price, Stop Loss, etc. can be built into an order. Trading in derivatives is essentially similar to that of trading of securities in the CM segment. The NEAT-F&O trading system distinctly identifies two groups of users. The trading user more popularly known as trading member has access to functions such as, order entry, order matching and order & trade management. The clearing user (clearing member) uses the trader workstation for the purpose of monitoring the trading member(s) for whom he clears the trades. Additionally, he can enter and set limits on positions, which a trading member can take.

Contract Specification The contract specification for derivative products traded on NSE are summarised in Table 6-2 & Table 6-3. The index futures and index options contracts traded on NSE are based on S&P CNX Nifty Index, CNX IT Index, Bank Nifty, CNX Nifty Junior, CNX 100, Nifty Midcap 50 and S&P CNX Defty while stock futures and options are based on individual securities. Mini futures and options contracts and long term options contracts are also available on S&P CNX Nifty. Stock futures and options were available on 234 securities as of March 2009. At any point of time there are only three contract months available for trading, with 1 month, 2 months and 3 months to expiry. These contracts expire on last Thursday of the expiry month and have a maximum of 3-month expiration cycle. If the last Thursday is a trading holiday, the contracts expire on the previous trading day. A new contract is introduced on the next trading day following the expiry of the near month contract. All the derivatives contracts are presently cash settled.

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The long term option contracts are available for 3 serial month contracts, 3 quarterly months of the cycle March / June / September / December and 5 following semiannual months of the cycle June / December. Thus, at any point in time there are atleast 3 year tenure option available. Introduction of strike prices for option contracts Stock Options NSE introduces option strikes on a daily basis based on the price of the underlying. With regard to options on stocks the Exchange provides a minimum of seven strike prices for every option type (i.e Call & Put) during the trading month. At any time, there are atleast three strikes in-the-money (ITM), three strikes out-of-the-money (OTM) and one strike at-the-money (ATM). The table below gives details of generation of strike price interval for stock options.

Generation of strikes for Stock Options Price of underlying

Strike Price Interval

Schemes of Strikes

2.5

3-1-3

> Rs.50 - Rs.250

5

3-1-3

> Rs.250 - Rs. 500

10

3-1-3

> Rs.500 - Rs.1000

20

3-1-3

> Rs.1000 - Rs.2500

30

3-1-3

> Rs.2500

50

3-1-3

Less than or equal to Rs.50

Index Options The number of strikes provided in options on Indices- S&P CNX Nifty, CNX Nifty Junior, CNX 100, CNX IT, Bank Nifty Nifty Midcap 50 and S&P CNX Defty are related to the range in which previous day’s closing value of the index falls as per the table below.

Generation of strikes for Index Options Index Level From To

Revised Strike Interval

Revised number of strikes In the money-At the money-Out of the money

2.5

4-1-4

2001 to 4000

5

6-1-6

4001 to 6000

10

6-1-6

> 6000

20

7-1-7

Upto 2000

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Selection Criteria for Stocks and Index eligibility for trading Eligibility Criteria of Stocks The eligibility criteria for inclusion of scrips in F&O segment is as under: •

The stock is chosen from amongst the top 500 stocks in terms of average daily market capitalization and average daily traded value in the previous six months on a rolling basis.

•

The stock’s median quarter sigma order size over the last six months should not be less than Rs. 5 lakh.

•

The market wide position limit (MWPL) in the stock should not be less than Rs. 100 crore.

The criteria for exclusion of scrips in F&O segment will be as under: For an existing F&O stock, the continued eligibility criteria is that market wide position limit in the stock should not be less than Rs. 60 crores and stock’s median quarter-sigma order size over the last six months shall be not less than Rs. 2 lakh. The stock is excluded if the above criteria is not fulfilled for consecutively three months. Further, once the stock is excluded from the F&O list, it is not considered for reinclusion for a period of one year. Eligibility Criteria of Indices •

The Exchange may consider introducing derivative contracts on an index if the stocks contributing to 80% weightage of the index are individually eligible for derivative trading. However, no single ineligible stocks in the index should have a weightage of more than 5% in the index.

•

The above criteria is applied every month, if the index fails to meet the eligibility criteria for three months consecutively, then no fresh month contract are issued on that index. However, the existing unexpired contacts are permitted to trade till expiry and new strikes may also be introduced in the existing contracts.

Re-introduction of dropped stocks A stock which is dropped from derivatives trading may become eligible once again. In such instances, the stock is required to fulfill the eligibility criteria for three consecutive months to be re-introduced for derivatives trading. Eligibility criteria of stocks for derivatives trading especially on account of corporate restructuring The eligibility criteria for stocks for derivatives trading on account of corporate

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restructuring is as under. All the following conditions should be met in the case of shares of a company undergoing restructuring through any means for eligibility to reintroduce derivative contracts on that company from the first day of listing of the post restructured company/(s) (as the case may be) stock (herein referred to as post restructured company) in the underlying market. a)

The Futures and options contracts on the stock of the original (pre restructure) company were traded on any exchange prior to its restructuring;

b)

The pre restructured company had a market capitalisation of at least Rs.1000 crores prior to its restructuring;

c)

The post restructured company would be treated like a new stock and if it is, in the opinion of the exchange, likely to be at least one-third the size of the pre restructuring company in terms of revenues, or assets, or (where appropriate) analyst valuations; and

d)

In the opinion of the exchange, the scheme of restructuring does not suggest that the post restructured company would have any characteristic (for example extremely low free float) that would render the company ineligible for derivatives trading.

If the above conditions are satisfied, then the exchange takes the following course of action in dealing with the existing derivative contracts on the pre-restructured company and introduction of fresh contracts on the post restructured company a)

In the contract month in which the post restructured company begins to trade, the Exchange introduce near month, middle month and far month derivative contracts on the stock of the restructured company.

b)

In subsequent contract months, the normal rules for entry and exit of stocks in terms of eligibility requirements would apply. If these tests are not met, the exchange shall not permit further derivative contracts on this stock and future month series shall not be introduced.

Trading Value & Contract Traded The total turnover on the F&O Segment declined by 15.89% to Rs. 11,010,482 crore (US $ 2,161,037 million) during 2008-09 as compared with Rs.13,090,478 crore (US $ 3,275,076 million) during 2007-08. The average daily turnover during 2008-09 was Rs.45,311 crore (US $ 8,893 million), a year on year decline of 13.12 %. The business growth of F&O segment and the number of contracts traded during the year is presented in Table 6-4 and Chart 6-1.

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Chart 6-1 : Business Growth of F&O Segment

The total number of contracts traded increased by 54.68% to 66 crore contracts during 2008-09. Out of the total contracts traded, 33.71% of the contracts were traded on Stock futures followed by index options on which 32.26% of the contracts were traded. Number of contracts traded on Index futures was 32.01% while 2.02% of the total contracts were traded on stock options. (Chart 6-2).

Chart 6-2 : Product wise Number of Contracts Traded during 2008-09

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Product wise turnover on F&O Segment: During 2008-09, the traded value of index futures saw a year-on-year decline of 6.56 % and amounted to Rs.3,570,111 crore (US $ 700,709 million) in 2008-09 as against Rs.3,820,667 crore (US $ 955,884 million) during 2007-08. The traded value in stock futures declined by 53.90 % to Rs.3,479,642 crore (US $ 682,952 million) during 2008-09 over the turnover of Rs.7,548,563 crore (US $ 1,888,557 million) during 2007-08. Index options recorded turnover of Rs.3,731,502 crore (US $ 732,385 million) during 2008-09 , an increase of 173.95 % over the turnover of Rs.1,362,111 crore (US $ 340,783 million) during 2007-08. Stock options recorded turnover of Rs. 229,227 crore (US $ 44,991 million) during 2008-09, a decrease of 36.17 % over the turnover of Rs. 359,137 crore (US $ 89,852 million) during 2007-08. Index Options accounted for 33.89% of the total turnover during the 2008-09 fiscal followed by the trading in index futures at 32.42 %, Stock futures (31.60%) and stock options (2.08%) (Chart 6-3).

Chart 6-3 : Product wise trading volumes during 2008-09

Futures and Options on Benchmark Indices The details of traded volumes on Index Futures and Options, having the underlying as the NSE indices is shown in the table below.

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Benchmark Indices Contracts & Trading Volume in F&O Segment of NSE (2008-09) Products

Underlying

NIFTY

S&P CNX Nifty

BANKNIFTY

BANK Nifty

MINIFTY

S&P CNX Nifty

JUNIOR

CNX Nifty Junior

CNXIT

CNX IT

CNX100

CNX 100

Nifty Midcap 50

Nifty Midcap 50

Long term Option Contracts

S&P CNX Nifty

DEFTY

S&P CNX Defty

TOTAL

No. of Contracts

Rs.cr.

Turnover

396,820,905

7,067,827

1,387,208

7,473,386

104,377

20,486

18,107,079

127,266

24,979

6,370

128

25

103,485

1,870

367

154

3

1

US $ mn

2,459

58

11

623,416

14,585

2,863

2,709

84

17

423,139,963

7,316,198

1,435,956

During 2008-09, the S&P CNX Nifty Index accounted for more than 96.61 % of the turnover in Index futures and options. The S&P CNX Nifty accounted for 93.78 % of the total contracts. Sectorwise Stock Futures & Options Turnover Sectorwise turnover of stock futures and options is presented in the table below. Companies belonging to the IT Sector and FMCG Sector accounted for 20.90 % and 20.84% respectively of the total stock futures and options turnover on the Exchange.

Sectorwise Classification of turnover of the Single Stock Futures during 2008-09 Classification Manufacturing Petrochemicals Infrastructure Banks Information Technology Finance Telecommunication Pharmaceuticals Engineering FMCG Media & Entertainment Services Miscellaneous TOTAL

Total Turnover (Rs. crs) 775,253 772,781 609,975 490,837 279,708 238,199 214,268 115,267 99,063 66,115 23,654 14,357 9,391 3,708,869

Total Turnover ( US $ mn) 152,160 151,674 119,720 96,337 54,899 46,752 42,055 22,624 19,443 12,976 4,643 2,818 1,843 727,943

The stock futures and option turnover of top 5 companies in each sector for the period 2008-09 is presented in Table 6-5.

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Participant wise turnover on F&O Segment: During 2008-09, the retail investors accounted for 55.63 % of the turnover on the F&O segment of the Exchange. The gross turnover of the retail participants in the F&O Segment amounted to Rs.12,250,029 crore (US $ 2,404,324 million) followed by the Proprietory segment with gross turnover of Rs.6,826,484 crore (US $ 1,339,840 million) and the Institutional players with gross turnover of Rs. 2,944,454 crore (US $ 577,911 million). The share of retail participants and institutional participants in the gross turnover was 31.00 % and 13.37 % respectively. The month wise details of the turnover for the participants in the F&O segment is presented in Table 6-6. Chart 6-4 shows the participantswise F&O turnover during 2008-09.

Chart 6-4 : Participant wise F&O Turnover during 2008-09

Memberwise turnover on the Exchange: During 2008-09, there were 661 members which accounted for turnover of Rs.1,000 crore and more while 91 members registered turnover between Rs.500 crore and Rs.1,000 crore collectively in the futures and options category. In the month of September 2008, 301 trading members accounted for a turnover of Rs.1,000 crore and more, which was the highest number of members during the fiscal year 2008-09. The number of members in different turnover brackets in Futures and Options segment is presented in table 6-7a & 6-7b. High Volume Members The turnover of the top ‘5’ and ‘10’ members accounted to Rs.1,198,458 crore (US $ 235,222.39 million) and Rs.1,762,438 crore (US $ 345,915.21 million) respectively in

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2008-09 in the Futures segment. However, the turnover of the top ‘5’ and ‘10’ members in the options segment accounted to Rs.712,931 crore (US $ 139,927.61 million) and Rs. 1,227,826 crore (US $ 240,986.44 million) respectively in the same period. In the Futures segment, the share of top 5 and top ‘10’ members in turnover was 17% and 25% respectively, while in the options segment the share of top 5 and top 10 trading members in in turnover was 18% and 31 % respectively. (Table 6-7c). Internet Trading At the end of March 2009, a total number of 337 members were permitted to allow investor’s web based access to NSE’s trading system. The members of the exchange in turn had registered 4,426,577 clients for web based access as on March 31, 2009. In the Futures and Options Segment the trading volume of Rs.1,685,692 crore (US $ 421,739 million) during the year 2008-09, constituting 7.65 % of total trading volume was routed and executed through the internet. The following table shows the growth of internet trading during 2007-08 to 2008-09.

Internet Trading in the F&O Segment of the Exchange Year

Enabled Members*

Registered Clients*

Internet Internet % to Total Trading Value Trading Value Trading Value (Rs.cr)

(US $ mn)

2007-08

305

3,432,780

2,372,514

593,574

9.06

2008-09

337

4,426,577

1,685,692

330,852

7.65

* At the end of Financial year. Note : Figures for IBT turnover and registered clients are as reported by trading members to the Exchange Figures of Turnover are Buy Turnover + Sell turnover.

Traded Value Records Trading volumes in the F&O Segment during 2008-09 reached a high of Rs.82,698 crore (US $ 16,231 million) on September 25, 2008. The following table gives the record turnover of different products in the F&O Segment.

Records Achieved in the F&O Segment during 2008-09 Product

Traded Value (US $ Mn)

Date

Index Futures

31,638

6,210

25-Jun-08

Stock Futures

32,501

6,379

29-May-08

Index Options

32,782

6,434

24-Mar-09

Stock Options

2,099

412

25-Mar-09

82,698

16,231

25-Sep-08

Total F&O Traded Value

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Traded Value (Rs. in crores)

Top 20 Futures and Option contracts During 2008-09, top 20 Futures and options contracts in terms of number of contracts traded have been presented in Table 6-8 and Table 6-9. The top 20 Futures contracts accounted for 46.41 % of the total no. of contracts traded in the Futures segment while top 20 Option contracts accounted for 21.61 % of the total option contracts traded during 2008-09. Among the top 20 future contracts, Nifty July 2008 futures accounted for 10.12 % of the total top 20 contracts while Nifty October 2008 futures and Nifty November 2008 contributed 9.86 % and 9.17 % respectively. Top 3 option contracts on the basis of number of contracts traded during 2008-09 were Nifty March 2009 CE 2800, Nifty February 2009 PE 2700 and Nifty Nifty February 2009 PE 2800. Together these three option contracts formed 19.13 % of the total number of top 20 option contracts.

Number of Trades During 2008-09, maximum number of trades in the F&O Segment were witnessed in Stock Futures (57.78 %), Index futures (22.21 %), Index Options (16.49 %) and Stock Options (3.52 %) as mentioned in the table below.

Number of Trades in F&O Segment (2008-09) Products

Number of Trades (%)

Stock Futures

57.78

Index Futures

22.21

Index Options

16.49

Stock Options

3.52

TOTAL

100

The details of month wise trades on Index futures & options and stock futures & options is presented in Table 6-10.

Charges Brokerage Charges The maximum brokerage chargeable by a trading member in relation to trades effected in the contracts admitted to dealing on the F&O segment of NSE is fixed at 2.5% of the contract value in case of index futures and stock futures. In case of index options and stock options it is 2.5% of notional value of the contract [(Strike Price + Premium) × Quantity)], exclusive of statutory levies.

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Transaction Charges The transaction charges payable to the exchange by the trading member for the trades executed by him on the F&O segment are fixed at the rate of Rs. 2 per lakh of turnover (0.002%) subject to a minimum of Rs. 1,00,000 per year. However, for the transactions in the options sub-segment the transaction charges will be levied on the premium value at the rate of 0.05% (each side) instead of on the strike price as levied earlier. For a trading Member participating in trading S&P CNX Defty at any time during the year till September 30, 2009 there would be no transaction charges. The trading member would be required to make a lump sum contribution of Rs.500/- for the whole year as a contribution to Investor Protection Fund. Securities Transaction Tax The trading members are also required to pay securities transaction tax (STT) on nondelivery transactions at the rate of 0.017 (payable by the seller) for derivatives w. e. f June 1, 2008. Taxable securities transaction

Rate (%)

Taxable Value

Payable by

Sale of an option in securities

0.017

Option premium Seller

Sale of an option in securities, where option is exercised

0.125

Settlement Price

Purchaser

Sale of a futures in securities

0.017

Sale Price

Seller

Value of taxable securities transaction relating to an “option in securities” will be the option premium, in case of sale of an option in securities. Value of taxable securities transaction relating to an “option in securities” will be the settlement price, in case of sale of an option in securities, where option is exercised. Contribution to Investor Protection Fund (F&O Segment) The trading members contribute to Investor Protection Fund of F&O segment at the rate of Re.1/- per Rs. 100 crore of the traded value (each side) in case of Futures segment and Rs.1/- per Rs. 100 crore of the premium amount (each side) in case of Options segment.

CLEARING AND SETTLEMENT Clearing and Settlement NSCCL undertakes clearing and settlement of all trades executed on the F&O Segment of the Exchange. It also acts as legal counterparty to all trades on this segment and guarantees their financial settlement. The Clearing and Settlement process comprises of three main activities, viz., Clearing, Settlement and Risk Management.

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Clearing Mechanism The first step in clearing process is working out open positions and obligations of clearing (self-clearing/trading-cum-clearing/professional clearing) members (CMs). The open positions of a CM is arrived at by aggregating the open positions of all the trading members (TMs) and all custodial participants (CPs) clearing though him, in the contracts which they have traded. The open position of a TM is arrived at by summing up his proprietary open position and clients’ open positions, in the contracts which they have traded. While entering orders on the trading system, TMs identify orders as either proprietary or client. Proprietary positions are calculated on net basis for each contract and that of clients are arrived at by summing together net positions of each individual client. A TM’s open position is the sum of proprietary open position, client open long position and client open short position. Settlement Mechanism All futures and options contracts are cash settled i.e. through exchange of cash. The underlying for index futures/options of the index cannot be delivered. The settlement amount for a CM is netted across all their TMs/clients, across various settlements. For the purpose of settlement, all CMs are required to open a separate bank account with NSCCL designated clearing banks for F&O segment. Settlement of Futures Contracts on Index or Individual Securities Futures contracts have two types of settlements, the MTM settlement which happens on a continuous basis at the end of each day, and the final settlement which happens on the last trading day of the futures contract. •

MTM Settlement for Futures: The positions in futures contracts for each member are marked-to-market to the daily settlement price of the relevant futures contract at the end of each day. The CMs who have suffered a loss are required to pay the mark-to-market (MTM) loss amount in cash which is in turn passed on to the CMs who have made a MTM profit. This is known as daily mark-to-market settlement. CMs are responsible to collect and settle the daily MTM profits/losses incurred by the TMs and their clients clearing and settling through them. Similarly, TMs are responsible to collect/pay losses/ profits from/to their clients by the next day. The pay-in and pay-out of the mark-to-market settlement are effected on the day following the trade day (T+1). After completion of daily settlement computation, all the open positions are reset to the daily settlement price. Such positions become the open positions for the next day.

•

Final Settlement for Futures: On the expiry day of the futures contracts, after the close of trading hours, NSCCL marks all positions of a CM to the final settlement price and the resulting profit/loss is settled in cash. Final settlement loss/profit amount is debited/credited to the relevant CM’s clearing bank account on the day following expiry day of the contract.

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•

Settlement Prices for Futures: Daily settlement price on a trading day is the closing price of the respective futures contracts on such day. The closing price for a futures contract is currently calculated as the last half an hour weighted average price of the contract in the F&O Segment of NSE. Final settlement price is the closing price of the relevant underlying index/security in the Capital Market segment of NSE, on the last trading day of the Contract. The closing price of the underlying Index/security is currently its last half an hour weighted average value in the Capital Market Segment of NSE.

Settlement of Options Contracts on Index or Individual Securities Options contracts have three types of settlements, daily premium settlement, interim exercise settlement in the case of option contracts on securities and final settlement. •

Daily Premium Settlement for Options: Buyer of an option is obligated to pay the premium towards the options purchased by him. Similarly, the seller of an option is entitled to receive the premium for the option sold by him. The premium payable amount and the premium receivable amount are netted to compute the net premium payable or receivable amount for each client for each option contract. The CMs who have a premium payable position are required to pay the premium amount to NSCCL which in turn passed on to the members who have a premium receivable position. This is known as daily premium settlement. CMs are also responsible to collect and settle for the premium amounts from the TMs and their clients clearing and settling through them. The pay-in and pay-out of the premium settlement is on T+1 day (T=Trade day). The premium payable amount and premium receivable amount are directly credited/debited to the CMs clearing bank account.

•

Interim Exercise Settlement: Interim exercise settlement takes place only for option contracts on individual securities. An investor can exercise his in-the-money options at any time during trading hours, through his trading member. Interim exercise settlement is effected for such options at the close of the trading hours, on the day of exercise. Valid exercised option contracts are assigned to short positions in the option contract with the same series (i.e. having the same underlying, same expiry date and same strike price), on a random basis, at the client level. The CM who has exercised the option receives the actual profit or loss per unit of the option from the CM who has been assigned the option contract. Exercise settlement value is debited/credited to the relevant CMs clearing bank account on T+1 day (T=exercise date).

•

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Final Exercise Settlement: Final Exercise settlement is effected for option positions at in-the-money strike prices existing at the close of trading hours, on the expiration day of an option contract. All long positions at in-the-money strike prices are automatically assigned to short positions in option contracts with the same series, on a random basis.

For index options contracts, exercise style is European style, while for options contracts on individual securities, exercise style is American style. Final Exercise is Automatic on expiry of the option contracts. Final settlement loss/profit amount for option contracts on Index is debited/ credited to the relevant CMs clearing bank account on T+1 day (T=expiry day). Final settlement loss/profit amount for option contracts on Individual Securities is debited/credited to the relevant CMs clearing bank account on T+1 day. Open positions, in option contracts, cease to exist after their expiration day. The pay-in / pay-out of funds for a CM on a day is the net amount across settlements and all TMs/clients, in F&O Segment. Settlement of Custodial Participant (CP) Deals NSCCL provides a facility to entities like institutions to execute trades through any TM, which may be cleared and settled by their own CM. Such entities are called Custodial Participants (CP). To avail of this facility, a CP is required to register with NSCCL through this CM, which allots them a unique CP code. The CP and the CM are required to enter into an agreement as per specified format. Thereafter, all trades executed by such CP through any TM are required to have the CP code in the relevant field on the F&O trading system at the time of order entry. Such trades executed on behalf of a CP are required to be confirmed by their CM (and not the CM of the TM through whom the trade was executed), within the time specified by NSE, using the confirmation facility provided by NSCCL to the CMs in the F&O segment. Till such time the trade is confirmed by the CM of the CP, the same is considered as a trade of the TM and the responsibility of settlement of such trade vests with the CM of the TM. Once the trades have been confirmed by the CM of the CP, they form part of the obligations of the CM of the CP and they shall be responsible for all obligations arising out of such trades including the payment of margins and settlement of obligations. Settlement Statistics All derivative contracts are currently cash settled. The participants discharge their obligations through payment/receipt of cash. During 2008-09, such cash settlement amounted to Rs. 91,839.97 crore (US $ 18,025.51 million). The settlement of futures and options involved Rs.76,691.89 crore (US $ 15,052.38 million) and Rs. 15,148.08 (US $ 2,973.13 million) respectively. The details of settlement in the futures and options segment is presented in Table 6-11.

Risk Management System NSCCL has developed a comprehensive risk containment mechanism for the F&O segment. The salient features of risk containment measures on the F&O segment are: •

The financial soundness of the members is the key to risk management. Therefore, the requirements for membership in terms of capital adequacy (net worth, security

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deposits) are quite stringent. These requirements have already been explained in Table 2-1 in Chapter 2 of this publication. •

NSCCL charges an upfront initial margin for all the open positions of a Clearing Member (CM). It specifies the initial margin requirements for each futures/options contract on a daily basis. It follows VaR-based margining computed through SPAN. The CM in turn collects the initial margin from the trading members (TMs) and their respective clients.

•

The open positions of the members are marked to market based on contract settlement price for each contract at the end of the day. The difference is settled in cash on a T+1 basis.

•

NSCCL’s on-line position monitoring system monitors a CM’s open position on a real-time basis. Limits are set for each CM based on his effective deposits. The on-line position monitoring system generates alert messages whenever a CM reaches 70 %, 80 %, 90 % and a disablement message at 100 % of the limit. NSCCL monitors the CMs for Initial Margin violation, Exposure margin violation, while TMs are monitored for Initial Margin violation and position limit violation.

•

CMs are provided a trading terminal for the purpose of monitoring the open positions of all the TMs clearing and settling through him. A CM may set limits for a TM clearing and settling through him. NSCCL assists the CM to monitor the intra-day limits set up by a CM and whenever a TM exceed the limits, it stops that particular TM from further trading.

•

A member is alerted of his position to enable him to adjust his exposure or bring in additional capital. Margin violations result in disablement of trading facility for all TMs of a CM in case of a violation by the CM.

•

A separate Settlement Guarantee Fund for this segment has been created out of deposits of members.

The most critical component of risk containment mechanism for F&O segment is the margining system and on-line position monitoring. The actual position monitoring and margining is carried out on-line through Parallel Risk Management System (PRISM) using SPAN® (Standard Portfolio Analysis of Risk) system for the purpose of computation of on-line margins, based on the parameters defined by SEBI. NSE - SPAN® The objective of NSE-SPAN is to identify overall risk in a portfolio of all futures and options contracts for each member. The system treats futures and options contracts uniformly, while at the same time recognising the unique exposures associated with options portfolios, like extremely deep out-of-the-money short positions and intermonth risk. SPAN® is a registered trademark of the Chicago Mercantile Exchange (CME) used here under license.

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Its over-riding objective is to determine the largest loss that a portfolio might reasonably be expected to suffer from one day to the next day based on 99% VaR methodology. SPAN considers uniqueness of option portfolios. The following factors affect the value of an option: i.

Underlying market price.

ii.

Volatility (variability) of underlying instrument, and

iii.

Time to expiration.

iv.

Interest rate

v.

Strike price

As these factors change, the value of options maintained within a portfolio also changes. Thus, SPAN constructs scenarios of probable changes in underlying prices and volatilities in order to identify the largest loss a portfolio might suffer from one day to the next. It then sets the margin requirement to cover this one-day loss. The complex calculations (e.g. the pricing of options) in SPAN are executed by NSCCL. The results of these calculations are called risk arrays. Risk arrays, and other necessary data inputs for margin calculation are provided to members daily in a file called the SPAN Risk Parameter file. Members can apply the data contained in the Risk Parameter files, to their specific portfolios of futures and options contracts, to determine their SPAN margin requirements. Hence, members need not execute a complex option pricing calculations, which is performed by NSCCL. SPAN has the ability to estimate risk for combined futures and options portfolios, and also re-value the same under various scenarios of changing market conditions. NSCCL generates six risk parameters file for a day taking into account price and volatilities at various time intervals and are provided on the website of the Exchange. Margins The margining system for F&O segment is as below: •

Initial margin: Margin in the F&O segment is computed by NSCCL upto client level for open positions of CMs/TMs. These are required to be paid up-front on gross basis at individual client level for client positions and on net basis for proprietary positions. NSCCL collects initial margin for all the open positions of a CM based on the margins computed by NSE-SPAN. A CM is required to ensure collection of adequate initial margin from his TMs up-front. The TM is required to collect adequate initial margins up-front from his clients.

•

Premium Margin: In addition to Initial Margin, Premium Margin is charged at client level. This margin is required to be paid by a buyer of an option till the premium settlement is complete.

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•

Assignment Margin for Options on Securities: Assignment margin is levied in addition to initial margin and premium margin. It is required to be paid on assigned positions of CMs towards interim and final exercise settlement obligations for option contracts on individual securities, till such obligations are fulfilled. The margin is charged on the net exercise settlement value payable by a CM towards interim and final exercise settlement.

•

Exposure Margins: Clearing members are subject to exposure margins in addition to initial margins.

•

Client Margins: NSCCL intimates all members of the margin liability of each of their client. Additionally members are also required to report details of margins collected from clients to NSCCL, which holds in trust client margin monies to the extent reported by the member as having been collected form their respective clients.

Position Limits The market wide limit of open position (in terms of the number of underlying stock) on futures and option contracts on a particular underlying stock should be 20% of the number of shares held by non-promoters in the relevant underlying security i.e. free–float holding. This limit is applicable on all open positions in all futures and option contracts on a particular underlying stock. The enforcement of the market wide limits is done in the following manner:

134

•

At end of the day the exchange tests whether the market wide open interest for any scrip exceeds 95% of the market wide position limit for that scrip. In case it does so, the exchange takes note of open position of all client/TMs as at end of that day for that scrip and from next day onwards they can trade only to decrease their positions through offsetting positions.

•

At the end of each day during which the ban on fresh positions is in force for any scrip, the exchange tests whether any member or client has increased his existing positions or has created a new position in that scrip. If so, that client is subject to a penalty equal to a specified percentage (or basis points) of the increase in the position (in terms of notional value). The penalty is recovered before trading begins next day.

•

The normal trading in the scrip is resumed after the open outstanding position comes down to 80% or below of the market wide position limit. Further, the exchange also checks on a monthly basis, whether a stock has remained subject to the ban on new position for a significant part of the month consistently for three months. If so, then the exchange phases out derivative contracts on that underlying.

Trading Member wise Position Limits Index Futures Contract: The trading member position limits in equity index futures contracts is higher of Rs.500 Crore or 15% of the total open interest in the market in equity index futures contracts. This limit would be applicable on open positions in all futures contracts on a particular underlying index. Index Options Contract: The trading member position limits in equity index option contracts is higher of Rs.500 Crore or 15% of the total open interest in the market in equity index option contracts. This limit would be applicable on open positions in all option contracts on a particular underlying index. Futures and Option contracts on individual securities : i.

For stocks having applicable market-wise position limit (MWPL) of Rs. 500 crores or more, the combined futures and options position limit is 20% of applicable MWPL or Rs. 300 crores, whichever is lower and within which stock futures position cannot exceed 10% of applicable MWPL or Rs. 150 crores, whichever is lower.

ii.

For stocks having applicable market-wise position limit (MWPL) less than Rs. 500 crores, the combined futures and options position limit would be 20% of applicable MWPL and futures position cannot exceed 20% of applicable MWPL or Rs. 50 crore which ever is lower. The Clearing Corporation shall specify the trading member-wise position limits on the last trading day of the month which shall be reckoned for the purpose during the next month.

Client level position limits The gross open position for each client, across all the derivative contracts on an underlying, should not exceed 1% of the free float market capitalization (in terms of number of shares) or 5% of the open interest in all derivative contracts in the same underlying stock (in terms of number of shares) whichever is higher. Disclosure for Client Positions in Index based contracts Any person or persons acting in concert who together own 15% or more of the open interest on a particular underlying index is required to report this fact to the Exchange/ Clearing Corporation. Failure to do so shall be treated as a violation and shall attract appropriate penal and disciplinary action in accordance with the Rules, Byelaws and Regulations of Clearing Corporation.

135

Position limits for FII, Mutual Funds: FII & MF Position limits in Index options contracts: FII & MF position limit in all index options contracts on a particular underlying index is Rs.500 Crores or 15 % of the total open interest of the market in index options, whichever is higher. This limit would be applicable on open positions in all options contracts on a particular underlying index. FII & MF Position limits in Index futures contracts : FII & MF position limit in all index futures contracts on a particular underlying index is Rs. 500 crores or 15 % of the total open interest of the market in index futures, whichever is higher. This limit would be applicable on open positions in all futures contracts on a particular underlying index. In addition to the above, FIIs & MF’s shall take exposure in equity index derivatives subject to the following limits: a)

Short positions in index derivatives (short futures, short calls and long puts) not exceeding (in notional value) the FII’s / MF’s holding of stocks.

b)

Long positions in index derivatives (long futures, long calls and short puts) not exceeding (in notional value) the FII’s / MF’s holding of cash, government securities, T-Bills and similar instruments.

The FIIs should report to the clearing members (custodian) the extent of the FIIs holding of stocks, cash, government securities, T-bills and similar instruments before the end of the day. The clearing member (custodian) in turn should report the same to the exchange. The exchange monitors the FII position limits. The position limit for subaccount is same as that of client level position limits. Stock Futures & Options: For stocks having applicable market-wise position limit (MWPL) of Rs. 500 crores or more, the combined futures and options position limit is 20% of applicable MWPL or Rs. 300 crores, whichever is lower and within which stock futures position cannot exceed 10 % of applicable MWPL or Rs.150 crores, whichever is lower. For stocks having applicable market-wise position limit (MWPL) less than Rs. 500 crores, the combined futures and options position limit is 20% of applicable MWPL and futures position cannot exceed 20 % of applicable MWPL or Rs. 50 crore which ever is lower

136

Table 6-1 : List of Securities on which Futures & Options are available at NSE (as on 31 March 2009) Sr. No 1 3I Infotech Ltd.

Security

Symbol 3IINFOTECH

Launch Market Date Lot 06-Sep-07 10800

2 Aban Offshore Ltd.

ABAN

29-Dec-06

400

3 ABB Ltd.

ABB

20-Apr-05

500

4 ABG Shipyard Limited

ABGSHIP

21-Aug-08

3300

5 Aditya Birla Nuvo Limited

ABIRLANUVO

14-May-07

400

6 Adlabs Films Ltd

ADLABSFILM

14-May-07

1800

7 Allahabad Bank

ALBK

20-Apr-05

4900

8 Alok Industries Ltd.

ALOKTEXT

27-May-05

22152

9 Alstom Projects India Ltd

APIL

14-May-07

1200

10 Ambuja Cements Ltd.

AMBUJACEM

02-Jul-01

4124

11 Amtek Auto Ltd.

AMTEKAUTO

29-Dec-06

4800

12 Andhra Bank

ANDHRABANK

29-Aug-03

4600

13 Aptech Limited

APTECHT

06-Sep-07

3900

14 Arvind Limited

ARVIND

26-Sep-03

17200

15 Ashok Leyland Ltd

ASHOKLEY

20-Apr-05

19100

16 Asian Paints Limited

ASIANPAINT

21-Aug-08

400

17 Associated Cement Co. Ltd.

ACC

02-Jul-01

752

18 Aurobindo Pharma Ltd.

AUROPHARMA

12-May-05

2800

19 Axis Bank Ltd.

AXISBANK

20-Apr-05

900

20 Bajaj Auto Limited

BAJAJ-AUTO

26-May-08

800

21 Bajaj Hindustan Ltd.

BAJAJHIND

29-Dec-06

5700

22 Bajaj Holdings & Investment Ltd.

BAJAJHLDNG

14-Mar-08

1000

23 Balaji Telefilms Ltd.

BALAJITELE

21-Aug-08

5000

24 Ballarpur Industries Limited

BALLARPUR

31-Mar-08

14600

25 Balrampur Chini Mills Ltd.

BALRAMCHIN

29-Dec-06

9600

26 Bank Of Baroda

BANKBARODA

29-Aug-03

1400

27 Bank Of India

BANKINDIA

29-Aug-03

950

28 Bata India Ltd.

BATAINDIA

29-Dec-06

4200

29 Bharat Earth Movers Ltd.

BEML

29-Dec-06

750

30 Bharat Electronics Ltd.

BEL

31-Jan-03

552

31 Bharat Forge Co Ltd

BHARATFORG

20-Apr-05

4000

32 Bharat Heavy Electricals Ltd.

BHEL

02-Jul-01

300

33 Bharat Petroleum Corporation Ltd.

BPCL

02-Jul-01

1100

34 Bharti Airtel Ltd

BHARTIARTL

20-Apr-05

500

35 Bhushan Steel & Strips Lt

BHUSANSTL

06-Sep-07

1000

36 Biocon Limited.

BIOCON

06-Sep-07

3600

37 Birla Corporation Ltd

BIRLACORPN

14-May-07

3400

38 Bombay Dyeing & Mfg. Co Ltd.

BOMDYEING

29-Dec-06

1800 Contd...

137

Contd... Sr. Security No 39 Bombay Rayon Fashions Ltd 40 Cairn India Limited

Symbol BRFL CAIRN

Launch Market Date Lot 14-May-07 2300 09-Jan-07

2500

41 Canara Bank

CANBK

29-Aug-03

1600

42 Central Bank Of India

CENTRALBK

21-Aug-07

8000

43 Century Textiles Ltd

CENTURYTEX

20-Apr-05

1696

44 CESC Ltd.

CESC

12-May-05

1100

45 Chambal Fertilizers Ltd.

CHAMBLFERT

12-May-05

6900

46 Chennai Petroleum Corporation Ltd.

CHENNPETRO

20-Apr-05

3600

47 Cipla Ltd.

CIPLA

02-Jul-01

1250

48 Colgate Palmolive Ltd

COLPAL

17-Dec-07

550

49 Container Corporation Of India Limited

CONCOR

21-Aug-08

500

50 Corporation Bank

CORPBANK

12-May-05

1200

51 Crompton Greaves Ltd.

CROMPGREAV

29-Dec-06

2000

52 Cummins India Ltd

CUMMINSIND

20-Apr-05

1900

53 Dabur India Ltd.

DABUR

20-Apr-05

2700

54 Deccan Chronicle Holdings Ltd.

DCHL

21-Aug-08

6800

55 Dena Bank

DENABANK

14-May-07

10500

56 Develop Credit Bank Ltd

DCB

30-Nov-07

14000

57 Dish Tv India Limited

DISHTV

21-Aug-08

20600

58 Divi’S Laboratories Ltd.

DIVISLAB

12-May-05

310

59 DLF Limited

DLF

05-Jul-07

1600

60 Dr. Reddy’S Laboratories Ltd.

DRREDDY

02-Jul-01

800

61 Edelweiss Capital Ltd

EDELWEISS

12-Dec-07

1000

62 Educomp Solutions Ltd

EDUCOMP

14-May-07

150

63 Escorts India Ltd.

ESCORTS

27-May-05

9600

64 Essar Oil Ltd.

ESSAROIL

12-May-05

2824

65 Everest Kanto Cylinder Ltd

EKC

14-May-07

2000

66 Everonn Systems India Limited

EVERONN

21-Aug-08

800

67 Federal Bank Ltd.

FEDERALBNK

12-May-05

1702

68 Financial Technologies (I) Ltd

FINANTECH

14-May-07

600

69 Firstsource Solutions Limited

FSL

21-Aug-08

19000

70 GAIL (India) Ltd.

GAIL

26-Sep-03

1125

71 Gateway Distriparks Ltd.

GDL

29-Dec-06

5000

72 Gitanjali Gems Limited

GITANJALI

30-Nov-07

4000

73 Glaxosmithkline Pharma Ltd.

GLAXO

20-Apr-05

300

74 Gmr Infrastructure Ltd.

GMRINFRA

21-Aug-06

5000

75 Grasim Industries Ltd.

GRASIM

02-Jul-01

352

76 Great Offshore Ltd

GTOFFSHORE

30-Nov-07

1000

77 GTL Infrastructure Limited

GTLINFRA

21-Aug-08

9700

78 GTL Ltd.

GTL

29-Dec-06

1500 Contd...

138

Contd... Sr. Security No 79 Gujarat Alkalies & Chem

Symbol GUJALKALI

Launch Market Date Lot 29-Dec-06 5600

80 Gujarat Narmada Fertilizer Co. Ltd.

GNFC

12-May-05

5900

81 Gujarat State Petronet Limited

GSPL

21-Aug-08

12200

82 GVK Power & Infrastructure Limited

GVKPIL

21-Aug-08

19000

83 Havells India Limited

HAVELLS

06-Sep-07

2400

84 HCL Infosystems Ltd

HCL-INSYS

21-Aug-08

3400

85 HCL Technologies Ltd.

HCLTECH

31-Jan-03

2600

86 HDFC Bank Ltd.

HDFCBANK

29-Aug-03

400

87 Hero Honda Motors Ltd.

HEROHONDA

31-Jan-03

400

88 Hindalco Industries Ltd.

HINDALCO

02-Jul-01

7036

89 Hindustan Construction Co

HCC

29-Dec-06

8400

90 Hindustan Oil Exploration

HINDOILEXP

30-Nov-07

6400

91 Hindustan Petroleum Corporation Ltd.

HINDPETRO

02-Jul-01

1300

92 Hindustan Unilever Ltd

HINDUNILVR

02-Jul-01

1000

93 Hindustan Zinc Limited

HINDZINC

30-Nov-07

1000

94 Hotel Leela Ventures Ltd

HOTELEELA

14-May-07

15000

95 Housing Development And Infrastructure Ltd.

HDIL

24-Jul-07

3096

96 Housing Development Finance Corporation Ltd.

HDFC

02-Jul-01

150

97 ICICI Bank Ltd.

ICICIBANK

31-Jan-03

700

98 ICSA (India) Limited

ICSA

21-Aug-08

2400

99 Idea Cellular Ltd.

IDEA

09-Mar-07

5400

100 IFCI Ltd.

IFCI

27-May-05

15760

101 India Cements Ltd.

INDIACEM

27-May-05

2900

102 India Infoline Limited

INDIAINFO

14-May-07

5000

103 Indiabulls Real Estate Limited

IBREALEST

21-Aug-08

2600

104 Indian Bank

INDIANB

01-Mar-07

2200

105 Indian Hotels Co. Ltd.

INDHOTEL

20-Apr-05

7596

106 Indian Oil Corporation Ltd.

IOC

26-Sep-03

600

107 Indian Overseas Bank

IOB

20-Apr-05

5900

108 Indusind Bank Ltd.

INDUSINDBK

12-May-05

7700

109 Industrial Development Bank Of India Ltd.

IDBI

20-Apr-05

4800

110 Infosys Technologies Ltd.

INFOSYSTCH

02-Jul-01

200

111 Infrastructure Development Finance Company Ltd. IDFC

12-Aug-05

5900

112 IRB Infrastructure Developers Ltd

IRB

25-Feb-08

4400

113 Ispat Industries Limited

ISPATIND

30-Nov-07

24900

114 ITC Ltd.

ITC

02-Jul-01

2250

115 IVRCL Infrastructure & Projects Ltd.

IVRCLINFRA

27-May-05

2000

116 Jaiprakash Associates Ltd.

JPASSOCIAT

29-Dec-06

4500

117 Jaiprakash Hydro-Power Ltd.

JPHYDRO

18-Apr-05

12500

118 Jet Airways (India) Ltd.

JETAIRWAYS

14-Mar-05

2400 Contd...

139

Contd... Sr. No 119 Jindal Saw Limited

Security

Symbol JINDALSAW

Launch Market Date Lot 30-Nov-07 1000

120 Jindal Steel & Power Ltd

JINDALSTEL

20-Apr-05

320

121 JSL Ltd.

JSL

12-May-05

8000

122 JSW Steel Ltd.

JSWSTEEL

29-Dec-06

1650

123 K S Oils Limited

KSOILS

21-Aug-08

5900

124 Kesoram Industries Ltd

KESORAMIND

14-May-07

2000

125 Kingfisher Airlines Limited

KFA

14-May-07

8500

126 Kotak Mahindra Bank Ltd.

KOTAKBANK

29-Dec-06

1100

127 KSK Energy Ventures Ltd.

KSK

14-Jul-08

1700

128 Lakshmi Machines Ltd

LAXMIMACH

06-Sep-07

400

129 Lanco Infratech Ltd.

LITL

27-Nov-06

2550

130 Larsen & Toubro Ltd.

LT

15-Sep-06

400

131 LIC Housing Finance Ltd

LICHSGFIN

20-Apr-05

1700

132 Lupin Ltd.

LUPIN

29-Dec-06

350

133 Mahanagar Telephone Nigam Ltd.

MTNL

02-Jul-01

3200

134 Maharashtra Seamless Ltd.

MAHSEAMLES

12-May-05

2400

135 Mahindra & Mahindra Ltd.

M&M

02-Jul-01

1248

136 Mahindra Lifespace Developers Ltd

MAHLIFE

14-May-07

1400

137 Mangalore Refinery And Petrochemicals Ltd.

MRPL

20-Apr-05

8900

138 Maruti Udyog Ltd.

MARUTI

09-Jul-03

800

139 Mercator Lines Limited

MLL

21-Aug-08

9800

140 Mindtree Limited

MINDTREE

21-Aug-08

1200

141 Monnet Ispat Ltd

MONNETISPA

21-Aug-08

1800

142 Moser-Baer (I) Ltd

MOSERBAER

14-May-07

4950

143 Motor Industries Co Ltd

BOSCHLTD

30-Nov-07

100

144 Mphasis Ltd.

MPHASIS

12-May-05

1600

145 MRF Ltd.

MRF

21-Aug-08

200

146 Nagarjuna Constrn. Co. Ltd.

NAGARCONST

29-Dec-06

4000

147 Nagarjuna Fertiliser & Chemicals Ltd.

NAGARFERT

27-May-05

21000

148 National Aluminium Co. Ltd.

NATIONALUM

31-Jan-03

2300

149 National Thermal Power Corporation Ltd.

NTPC

05-Nov-04

1625

150 Nava Bharat Ventures Limited

NBVENTURES

21-Aug-08

3200

151 NDTV Ltd.

NDTV

12-May-05

3300

152 Network 18 Fincap Ltd.

NETWORK18

30-Nov-07

2000

153 Neyveli Lignite Corporation Ltd.

NEYVELILIG

20-Apr-05

5900

154 NIIT Limited

NIITLTD

30-Nov-07

8700

155 Noida Toll Bridge Company Ltd

NOIDATOLL

21-Aug-08

16400

156 Oil & Natural Gas Corp. Ltd.

ONGC

31-Jan-03

450

157 Opto Circuits (India) Limited

OPTOCIRCUI

21-Aug-08

4080

158 Oracle Financial Services Software Limited

OFSS

30-May-03

600 Contd...

140

Contd... Sr. Security No 159 Orchid Chemicals Ltd.

Symbol

Launch Market Date Lot 12-May-05 4200

ORCHIDCHEM

160 Oriental Bank Of Commerce

ORIENTBANK

29-Aug-03

2400

161 Pantaloon Retail (I) Ltd

PANTALOONR

14-May-07

1700

162 Patel Engineering Ltd.

PATELENG

14-May-07

2000

163 Patni Computer Syst Ltd

PATNI

20-Apr-05

2600

164 Peninsula Land Limited

PENINLAND

14-May-07

16500

165 Petronet Lng Limited

PETRONET

14-May-07

8800

166 Piramal Healthcare Ltd

PIRHEALTH

15-Feb-08

1500

167 Polaris Software Lab Ltd.

POLARIS

31-Jan-03

5600

168 Power Finance Corporation Ltd.

PFC

23-Feb-07

2400

169 Power Grid Corporation Of India Ltd.

POWERGRID

05-Oct-07

3850

170 Praj Industries Ltd.

PRAJIND

29-Dec-06

4400

171 PTC India Limited

PTC

21-Aug-08

4700

172 Punj Lloyd Ltd.

PUNJLLOYD

06-Jan-06

1500

173 Punjab National Bank

PNB

29-Aug-03

600

174 Rajesh Exports Ltd

RAJESHEXPO

14-May-07

9900

175 Ranbaxy Laboratories Ltd.

RANBAXY

02-Jul-01

1600

176 Reliance Natural Resources Ltd.

RNRL

14-May-07

7152

177 Reliance Capital Ltd

RELCAPITAL

20-Apr-05

552

178 Reliance Communications Ltd.

RCOM

15-Sep-06

1400

179 Reliance Industrial Infrastructure Limited

RIIL

21-Aug-08

800

180 Reliance Industries Ltd.

RELIANCE

02-Jul-01

300

181 Reliance Infrastructure Limited

RELINFRA

09-Nov-01

552

182 Reliance Petroleum Ltd.

RPL

11-May-06

3350

183 Reliance Power Ltd.

RPOWER

11-Feb-08

2000

184 Rolta India Ltd

ROLTA

14-May-07

1800

185 Rural Electrification Corporation Ltd.

RECLTD

12-Mar-08

3900

186 S Kumars Nationwide Ltd

SKUMARSYNF

14-May-07

11400

187 Sesa Goa Ltd.

SESAGOA

29-Dec-06

3000

188 Shipping Corporation Of India Ltd.

SCI

31-Jan-03

4800

189 Shree Renuka Sugars Ltd.

RENUKA

29-Dec-06

5000

190 Siemens Ltd

SIEMENS

20-Apr-05

1504

191 Sintex Industries Ltd.

SINTEX

21-Aug-08

1400

192 SREI Infrastructure Finance Limited

SREINTFIN

21-Aug-08

7000

193 SRF Ltd.

SRF

27-May-05

3000

194 State Bank Of India

SBIN

02-Jul-01

264

195 Steel Authority Of India Ltd.

SAIL

15-Sep-06

5400

196 Sterling Biotech Ltd

STERLINBIO

14-May-07

1250

197 Sterlite Industries (I) Ltd

STER

20-Apr-05

876

198 Strides Arcolab Ltd.

STAR

27-May-05

3400 Contd...

141

Contd...

142

Sr. Security No 199 Sun Pharmaceuticals India Ltd.

Symbol SUNPHARMA

Launch Market Date Lot 20-Apr-05 225

200 Sun Tv Network Ltd.

SUNTV

24-Apr-06

2000

201 Suzlon Energy Ltd.

SUZLON

19-Oct-05

6000

202 Syndicate Bank

SYNDIBANK

26-Sep-03

3800

203 Tata Chemicals Ltd

TATACHEM

20-Apr-05

2700

204 Tata Communications Ltd

TATACOMM

20-Apr-05

1050

205 Tata Consultancy Services Ltd

TCS

25-Aug-04

500

206 Tata Motors Ltd.

TATAMOTORS

02-Jul-01

1700

207 Tata Power Co. Ltd.

TATAPOWER

02-Jul-01

400

208 Tata Steel Ltd.

TATASTEEL

02-Jul-01

1528

209 Tata Tea Ltd.

TATATEA

02-Jul-01

550

210 Tata Teleserv(Maharastra)

TTML

29-Dec-06

10450

211 Tech Mahindra Limited

TECHM

06-Sep-07

1200

212 Television Eighteen India Ltd.

TV-18

21-Aug-08

3400

213 The Great Eastern Shipping Co. Ltd.

GESHIP

27-Nov-06

2400

214 The Karnataka Bank Ltd.

KTKBANK

27-May-05

5000

215 Thermax Ltd

THERMAX

21-Aug-08

1800

216 Titan Industries Ltd.

TITAN

12-May-05

412

217 Torrent Power Limited

TORNTPOWER

21-Aug-08

3400

218 Triveni Engg. & Inds. Ltd.

TRIVENI

29-Dec-06

7700

219 Tulip It Services Ltd

TULIP

06-Sep-07

1000

220 TVS Motor Company Ltd.

TVSMOTOR

12-May-05

11800

221 UCO Bank

UCOBANK

21-Aug-08

10000

222 Ultratech Cement Ltd.

ULTRACEMCO

29-Dec-06

800

223 Union Bank Of India

UNIONBANK

29-Aug-03

2100

224 Unitech Ltd

UNITECH

14-May-07

9000

225 United Phosphorous Ltd

UNIPHOS

14-May-07

2800

226 United Spirits Ltd.

MCDOWELL-N

29-Dec-06

250

227 UTV Software Communications Limited

UTVSOF

21-Aug-08

1200

228 Vijaya Bank

VIJAYABANK

20-Apr-05

6900

229 Voltas Ltd.

VOLTAS

29-Dec-06

5400

230 Welspun Guj St. Ro. Ltd.

WELGUJ

06-Sep-07

3200

231 Wipro Ltd.

WIPRO

31-Jan-03

1200

232 Wockhardt Ltd.

WOCKPHARMA

20-Apr-05

2400

233 Yes Bank Limited

YESBANK

06-Sep-07

4400

234 Zee Entertainment Enterprises Ltd.

ZEEL

12-Feb-07

2800

143

Price Bands

Trading Cycle

Last Trading/Expiration Day Expiration Period

Price Step

Rs. 0.05

As specified by SEBI currently minimum Rs.2 lakhs at the time of introduction

---------------------------------------European---------------------------------------

As specified by SEBI currently minimum Rs.1 lakh at the time of introduction

NA

Long Term Index Options

------------------------------------OPTIDX----------------------------------------

Mini Index Options

------------------------------------------------S&P CNX Nifty-------------------------------------------------------

FUTIDX

Mini Index Futures

No price band however Operating range has been kept which is 10 % of the base price

No Price band however Operating range has been kept as: Upper range - 99 % of the base price or Rs. 20 which ever is higher. Lower range - 0.05 (tick size)

No price band however Operating range has been kept which is 10 % of the base price

upto 3.5 years

Contd...

• 3 near month expiries • Three following quarterly expiries of the cycle (March, June, Sept & Dec) • After these 5 following half yearly expiries of cycle June / Dec ) No Price band however Operating range has been kept as: Upper range - 99 % of the base price or Rs. 20 which ever is higher. Lower range - 0.05 (tick size)

A maximum of three month trading cycle • Near month (One) • Next month (Two) and • Far month (Three). New contract is introduced on the next trading day following the expiry of near month contract

upto 3 months

Last Thursday of the expiry month or the preceding trading day, if last Thursday is a trading holiday

As specified by SEBI, currently minimum Rs.2 lakhs at the time of introduction

Style of Option

Contract Size

OPTIDX

Index Options

S&P CNX Nifty/ CNX Nifty Junior/ CNX 100/ Bank Nifty/ CNX IT/Nifty Midcap 50/S&P CNX Defty NA European

FUTIDX

Index Futures

Underlying Index

Security Description

Particulars

Table 6-2 : Contract Specification for Index Futures and Options

144

Final Settlement Price

Daily Settlement Price

Margins

Last trading day

>6000- 15 strikes (7-1-7) 7 ITM, 1 ATM, 7 ATM Upto 2000 50 > 2000 100

> 2001 upto 6000- 13 strikes (6-1-6) 6 ITM, 1 ATM, 6 OTM

In cash on T+1 basis

NA

NA

Mini Index Futures

Long Term Index Options

Upto 2000 > 2000

50 100

>6000- 15 strikes (7-1-7) 7 ITM, 1 ATM, 7 ATM

> 2001 upto 6000- 13 strikes (6-1-6) 6 ITM, 1 ATM, 6 OTM

Upto 2000 - 9 strikes (4-1-4) 4 ITM, 1 ATM & 4 OTM

For every option type ( i.e Call & Put)

Mini Index Options

Up-front initial margin on daily basis

Upto 2000 - 9 strikes (4-1-4) 4 ITM, 1 ATM & 4 OTM

For every option type ( i.e Call & Put)

Index Options

Closing price of futures Premium Value (net) Closing price of futures Premium Value (net) Premium Value (net) contract on the trading day contract on the trading day Closing value underlying Closing value underlying Closing value underlying Closing value underlying Closing value underlying Index on the last trading day Index on the last trading day Index on the last trading day Index on the last trading day Index on the last trading day of the futures contract. of the Options contract. of the futures contract. of the Options contract. of the Options contract.

NA

Strike Price Interval (in Rs.) Settlement

Settlement Day

NA

Index Futures

No. of Strike Prices

Particulars

Contd...

Table 6-3 : Contract Specification for Stock Futures and Options Particulars Security Description Underlying Style of Option Contract Size Price Steps

Stock Futures

Stock Options

FUTSTK

OPTSTK

Individual Securities NA

American

As specified by SEBI; Currently minimum Rs.2 lakhs at the time of introduction Rs. 0.05

Expiration Period Trading Cycle

Last Trading/Expiration Day Price Bands

No. of strike Prices Strike Price Interval (in Rs.) Settlement

Upto 3 months A maximum of three month trading cycle - the near month (one), the next month (two) and the far month (three). New contract is introduced on the next trading day following the expiry of near month contract Last Thursday of the expiry month or the preceding trading day, if last Thursday is a trading holiday No price band however Operating range No price bands however Operating has been kept which is: Upper range - 99% of the base price or Rs. 20 which ever is range has been kept which is 20% of the higher, Lower range - 0.05 (tick size) base price. NA 7 strikes (3 ITM, 1 ATM and 3 OTM) for every option type (i.e call and put) NA Between 2.5 and 100 depending on the price of underlying In cash on T+1 basis

Settlement Day Margins Daily Settlement Price

Final Settlement Price

Last trading day Up-front initial margin on daily basis Closing price of futures contract on the trading day Closing value underlying security on the last trading day of the futures contract.

Premium Value (net)

Closing value of such underlying security on the last trading day of the options contract.

Note: ITM: In-the-Money ATM: At-the-Money OTM-Out-of-the-Money

145

146

21,635,449

58,537,886 1,513,791

81,487,424 2,539,575 104,955,401 3,830,972

10,383,282

10,219,149

11,407,865

10,605,483

17,052,495

10,904,564

17,842,671

12,668,280

9,609,209

2005-06

2006-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

287,357

365,564

485,079

256,470

363,988

238,577

240,797

214,523

205,458

772,174

670,968

519,385

647,356

451,314

400,096

296,629

16,565,236

18,033,294

849,997

989,113

24,008,470 1,120,263

17,653,654

15,798,351

18,888,008

14,287,983

13,350,667

10,647,866

79,586,852 2,791,721

47,043,066 1,484,067

32,368,842 1,305,949

286,532

2004-05

554,462

10,676,843

17,191,668

43,951

2003-04

-

51,516

(Rs. cr)

Trading Value

2,126,763

-

1,957,856

No. of Contracts Traded

2002-03

21,482

2,365

(Rs. cr.)

Trading Value

Stock Futures

1,025,588

90,580

No. of Contracts Traded

Index Futures

2001-02

Jun-00 to Mar-01

Month/ Year

-

1,624,354

2,014,533

2,808,150

2,020,510

3,158,758

1,684,458

2,116,761

1,993,761

2,402,764

12,632,349

6,413,467

1,870,647

1,043,894

269,674

113,974

No. of Contracts Traded

Call

-

49,964

60,097

78,731

48,370

69,705

38,415

45,568

42,577

48,574

398,219

168,632

69,373

31,801

5,670

2,466

(Rs. cr)

Notional Trading Value

1,805,071

1,994,175

3,599,639

2,599,916

3,280,921

2,537,127

2,224,230

2,061,921

2,471,698

12,525,089

6,521,649

1,422,911

688,520

172,567

61,926

-

Put No. of Contracts Traded

Index Options

768,159

269,370

-

69,644 1,066,561

18,780

-

53,202

56,855

95,262

59,594

71,256

56,146

46,936

42,888

48,576

578,100

710,304

984,150

797,264

774,381

850,153

579,074

625,846

506,497

30,279

40,297

47,981

31,958

26,769

28,895

18,359

19,380

13,735

393,693 4,394,292 161,902

71,334

101,327

142,394

143,404

171,019

172,005

115,515

132,460

128,860

889,018

169,837 4,165,996 143,752 1,074,780

52,581 3,946,979 132,066 1,098,133

21,022 4,248,149 168,174 1,334,922

3,577 2,456,501

1,300

-

77,017,185

56,886,776

16,768,909

4,196,873

90,580

No. of Contracts Traded

3,432

5,379

6,347

5,527

5,629

5,687

3,569

3,977

3,315

30,253,304

35,521,913

49,385,474

34,119,312

40,235,925

34,737,234

30,731,428

28,383,804

26,540,967

31,909 216,883,573

36,518 157,619,271

36,792

49,038

30,489

6,383

-

Stock Options Call Put Notional No. of Notional No. of NoTrading Contracts Trading Contracts tional Value Traded Value Traded Trading Value (Rs. cr) (Rs. cr)

Table 6-4 : Business Growth of Futures & Options Market Segment

8,388

1,752

413

12

582,183 10,067

491,046

92,603

20,887

555

1,274,230

1,517,304

1,833,663

1,072,889

1,056,731

1,015,077

806,542

723,443

616,287

318,797 67,065

379,611 68,968

458,760 83,348

268,424 53,644

264,381 48,033

253,960 46,140

201,787 38,407

180,996 34,450

154,187 30,814

7,356,271 1,687,605 29,543

Contd...

16,779

17,255

20,853

13,421

12,017

11,544

9,609

8,619

7,709

6777.53

4308.48

2301.12

1933.25

368.94

8.46

2.49

(US $ mn) (Rs.cr) (US $ mn)

Average Daily Trading Value

4,824,250 1,081,428 19,220

2,547,053

2,130,649

439,864

101,927

2,365

(Rs.cr)

Trading Value

Total

147

15,692,532

Mar-08

16,126,212

14,491,601

23,736,610

No. of Contracts Traded

330,390

421,838

851,213

(Rs. cr)

Trading Value

11,161,427

17,941,870

20,423,139

14,433,984

19,332,343

21,649,445

19,471,367

20,007,895

17,695,542

15,750,767

20,497,152

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

276,677

205,679

234,141

269,997

256,950

324,962

380,198

300,449

395,380

377,939

267,641

280,100

10,184,028

17,156,838

22,814,332

22,262,785

289,362

185,121

215,830

230,466

17,949,270 187,211

19,858,409 239,264

20,076,138 332,728

17,594,216 324,011

22,232,227 382,601

19,154,946 375,987

16,693,260 380,161

15,601,531 336,901

15,617,055

9,986,938

10,573,686

11,144,623

10,296,361

12,967,476

12,161,148

7,568,163

9,144,707

6,056,056

2,243,173

2,672,588

26,667,882

2,639,845

2,185,165

2,018,823

No. of Contracts Traded

Call

228,218

147,329

158,702

171,697

158,042

231,565

268,033

174,797

198,174

139,919

58,115

67,954

668,816

66,131

59,931

60,753

(Rs. cr)

Notional Trading Value

Put

404,472

427,483

764,989

8,674

12,733

29,383

93,207

82,832

103,561

215,881

158,270

150,570

141,919

134,092

132,945

193,589

137,305

159,035

168,790

70,951

65,611

621,556

893,075

1,214,695

927,467

561,864

689,231

1,035,531

820,895

944,602

740,229

740,079

573,744

19,332

10,387

12,872

10,562

6,429

9,951

18,688

16,880

19,354

17,009

17,239

13,139

344,986

468,695

562,425

436,840

241,953

200,362

269,124

208,806

307,688

199,648

166,329

126,146

693,295 8,002,713 308,443 1,457,918

54,186

50,320

58,074

37,187,672

33,185,704

44,730,463

No. of Contracts Traded

821,215

899,217

1,453,881

(Rs.cr)

Average Daily Trading Value

205,458 45,623

224,973 42,820

363,743 63,212

63,095,807

55,744,576

63,502,665

64,793,766

58,145,378

63,134,828

62,111,566

46,893,543

60,797,360

51,601,129

33,840,055

33,729,824

1,039,931

712,370

778,118

829,166

745,356

941,646

1,197,872

957,445

1,160,174

1,084,064

797,908

766,431

204,108 51,997

139,818 37,493

152,722 38,906

162,741 39,484

146,292 41,409

184,818 47,082

235,107 57,042

187,919 47,872

227,708 50,442

212,770 51,622

156,606 39,895

150,428 38,322

57,384 657,390,497 11,010,482 2,161,037 45,311

10,461

5,585

6,004

4,526

2,632

2,960

4,636

4,003

5,630

4,421

3,801

2,725

8,893

10,205

7,359

7,636

7,750

8,127

9,241

11,196

9,396

9,900

10,132

7,830

7,521

13,048

11,414

10,713

15,815

(US $ mn) (Rs.cr) (US $ mn)

Trading Value

Total

50,693 425,013,200 13,090,478 3,275,076 52,153

1,862

2,168

3,800

Stock Options Call Put Notional No. of Notional No. of NoTrading Contracts Trading Contracts tional Value Traded Value Traded Trading Value (Rs. cr) (Rs. cr)

101,656,470 1,728,957 9,762,968 171,843 3,533,002

15,831,030

11,488,263

10,641,985

10,014,156

9,624,563

7,769,905

9,237,282

6,267,479

7,744,997

7,508,380

2,835,787

2,692,643

28,698,156

2,231,404

1,934,412

1,957,642

No. of Contracts Traded

Index Options

210,428,103 3,570,111 221,577,980 3,479,642 110,431,974 2,002,544

12,063,172

Apr-08

2008-09

359,970

352,226

450,657

(Rs. cr.)

Trading Value

Stock Futures

156,598,579 3,820,667 203,587,952 7,548,563

14,064,211

Feb-08

2007-08

16,148,838

No. of Contracts Traded

Index Futures

Jan-08

Month/ Year

Contd...

Table 6-5 : Sectorwise Trading Value of Top 5 companies in the F&O Segment (2008-09) BANKS Company Name

FMCG Turnover (Rs.cr)

Company Name

Turnover (Rs.cr)

State Bank of India Ltd.

154,695.13

Hindustan Unilever Ltd.

26,806.87

ICICI Bank Ltd.

130,624.28

ITC LTD.

26,498.97

HDFC Bank

49,174.31

United Spirits Ltd.

9,724.07

AXIS Bank

38,587.19

Tata Tea Ltd.

1,704.15

Bank of India Ltd.

28,388.71

Dabur India Ltd.

INFRASTRUCTURE Company Name DLF Ltd.

897.59

MEDIA & ENTERTAINMENT Turnover (Rs.cr) 104,071.21

Company Name

Turnover (Rs.cr)

Adlabs Films Ltd.

11,240.05

NTPC Ltd.

94,375.84

Zee Entertainment Enterprises Ltd.

5,416.68

Reliance Infrastrucuture Ltd.

61,957.74

Wire and Wireless (India) Ltd.

1,826.93

Housing Development and Infrastrucuture Limited

48,544.36

New Delhi Television Ltd.

1,718.84

UNITECH Ltd.

44,534.44

Dish TV India Ltd.

1,110.56

PHARMACEUTICALS Company Name Ranbaxy Laboratories Ltd.

TELECOMMUNICATION Turnover (Rs.cr) 58,826.24

Company Name

Turnover (Rs.cr)

Reliance Communications Ltd.

87,444.98

Orchid Chemicals & Pharmaceuticals Ltd.

12,836.9

Bharti Airtel Ltd.

75,999.36

Sun Pharmaceuticals Industries Ltd.

9,488.12

Idea Cellular Limited

22,680.14

CIPLA Ltd.

7,741.93

Tata Teleservices (Maharashtra) Ltd.

11,468.56

Sterling Biotech Limited

6,576.48

Tata Communications Limited

7,313.08

Contd...

148

Contd...

FINANCE

Company Name Reliance Capital Ltd.

INFORMATION TECHNOLOGY

Turnover (Rs.cr) 123,087.76

Company Name Infosys Technologies Ltd.

Turnover (Rs.cr) 106,209.29

Housing Development Finance Corporation Ltd.

41,593.76

Satyam Computer Services Ltd.

44,243.64

IFCI Ltd.

31,215.33

Educomp Solutions Ltd.

34,024.03

Infrastructure Development Finance Company Ltd.

22,356.03

Tata Consultancy Services Ltd.

28,587.54

WIPRO Ltd.

18,832.94

LIC Housing Finance Ltd.

5,832.87

PETROCHEMICALS Company Name

MANUFACTURING Turnover (Rs.cr)

Company Name

Reliance Industries Ltd.

368,248.83

Tata Steel Ltd.

Reliance Petroleum Ltd.

145,866.62

Reliance Natural Resources Ltd.

Turnover (Rs.cr) 104,187.28 70,316.3

Oil & Natural Gas Corpn. Ltd.

62,888.53

Bharat Heavy Electricals Ltd.

65,734.51

Cairn India Ltd.

50,964.19

Shree Renuka Sugars Ltd.

65,076.77

Essar Oil Ltd.

36,248.97

Steel Authority of India Ltd.

58,808.27

SERVICES

Company Name

ENGINEERING

Turnover (Rs.cr)

Company Name

Turnover (Rs.cr)

The Great Eastern Shipping Co. Ltd.

2,554.72

Larsen & Toubro Ltd.

87,232.74

Indian Hotels Co. Ltd.

1,965.07

Praj Industries Ltd.

10,994.26

Jet Airways (India) Ltd.

1,960.11

BEML Ltd.

356.24

Shipping Corporation of India Ltd.

1,764.49

Reliance Industrial Infrastructure Ltd.

239.88

Hotel Leela Venture Ltd.

1,542.52

Walchandnagar Industries Ltd.

239.6

149

150

Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 2007-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 2008-09

Month/Year

155,557 147,921 193,973 253,275 303,332 258,570 390,744 258,570 310,552 399,283 311,195 273,062 3,256,034 266,039 274,787 331,733 319,854 250,935 290,713 233,594 166,700 178,521 184,701 183,607 263,270 2,944,454

38,918 37,008 48,530 63,366 75,890 64,691 97,759 64,691 77,696 99,896 77,857 68,317 814,619 52,216 53,933 65,110 62,778 49,251 57,058 45,848 32,718 35,038 36,251 36,037 51,672 577,911

12.62 10.22 12.03 12.48 14.35 12.05 10.66 8.52 12.19 13.73 17.30 16.63 12.44 17.36 17.22 15.30 13.78 13.10 12.13 12.40 11.18 10.77 11.87 12.89 12.66 13.37

Institutional investors Gross Traded Value % to Gross Turnover Rs. crore US $ mn 748,614 919,717 1,005,414 1,258,173 1,263,505 1,350,709 2,349,707 2,039,421 1,659,533 1,817,156 1,063,876 1,009,899 16,485,724 852,917 876,167 1,158,405 1,265,173 1,079,934 1,361,914 1,034,923 835,439 934,367 869,059 807,243 1,174,488 12,250,029

187,294 230,102 251,542 314,779 316,113 337,931 587,868 510,238 415,195 454,630 266,169 252,664 4,124,524 167,403 171,966 227,361 248,317 211,960 267,304 203,125 163,972 183,389 170,571 158,438 230,518 2,404,324

Retail Gross Traded Value Rs. crore US $ mn 60.74 63.57 62.33 61.97 59.79 62.95 64.07 67.21 65.11 62.49 59.16 61.48 62.97 55.64 54.90 53.43 54.53 56.40 56.85 54.95 56.04 56.34 55.84 56.66 56.47 55.63

% to Gross Turnover 328,402 379,247 413,697 518,705 546,625 536,498 926,875 736,618 578,375 691,323 423,363 359,468 6,439,196 413,906 444,863 677,991 735,320 584,021 743,118 614,776 488,574 545,444 502,477 433,891 642,103 6,826,484

82,162 94,883 103,502 129,774 136,759 134,225 231,893 184,293 144,702 172,960 105,920 89,934 1,611,007 81,238 87,314 133,070 144,322 114,626 145,852 120,663 95,893 107,055 98,622 85,160 126,026 1,339,840

Proprietary Gross Traded Value Rs. crore US $ mn

Table 6-6 : Participant wise Trading Value in the F&O Segment (2008-09)

26.64 26.21 25.64 25.55 25.86 25.00 25.27 24.27 22.70 23.78 23.54 21.89 24.59 27.00 27.88 31.27 31.69 30.50 31.02 32.64 32.77 32.89 32.29 30.45 30.87 31.00

% to Gross Turnover

Table 6-7a : Number of Members in different turnover brackets during 2008-09 Turnover Month/ Year

Upto Rs. 10 Rs. 10 crores crores upto Rs. 50 crores

Rs. 50 crores upto Rs.250 crores

Rs. 250 crores upto Rs.500 crores

Rs. 500 crores upto Rs.1000 crores

Rs. 1000 crores and more

Apr-07

50

100

192

116

101

220

May-07

38

93

181

116

107

253

Jun-07

37

81

188

103

131

254

Jul-07

36

64

172

106

125

296

Aug-07

35

58

185

108

130

286

Sep-07

27

68

167

113

123

308

Oct-07

18

45

140

97

114

400

Nov-07

20

60

144

106

104

385

Dec-07

25

71

158

100

111

356

Jan-08

25

63

154

104

116

359

Feb-08

51

93

197

117

95

270

Mar-08

55

103

189

105

111

258

2007-08

12

13

45

37

54

691

Apr-08

55

95

218

112

103

242

May-08

59

104

215

109

110

243

Jun-08

50

100

211

109

89

289

Jul-08

58

99

195

126

85

297

Aug-08

64

114

210

117

97

273

Sep-08

58

107

219

114

87

301

Oct-08

78

130

229

102

102

246

Nov-08

90

127

251

96

102

212

Dec-08

80

112

248

106

100

237

Jan-09

93

123

253

99

110

220

Feb-09

100

124

252

103

102

215

Mar-09

72

126

201

118

104

280

2008-09

21

28

81

65

91

661

151

152

Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 2007-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 2008-09

Month

58 43 42 38 38 31 19 22 27 30 57 63 13 60 66 62 71 80 78 103 114 96 111 120 99 29

Upto Rs. 10 crores 297 294 298 291 253 269 219 255 302 289 346 335 98 316 325 271 262 291 260 297 314 316 324 314 270 111

Upto Rs. 10 crores

Rs. 10 Rs. 50 Rs. 250 Rs. 500 Rs. 1000 crores upto crores upto crores upto crores upto crores and Rs. 50 Rs.250 Rs.500 Rs.1000 more crores crores crores crores 182 180 44 33 43 189 187 42 36 40 185 187 54 26 44 182 187 55 36 48 190 187 66 40 66 202 181 58 39 57 186 204 78 45 82 210 186 64 44 60 196 172 60 38 53 198 188 50 43 53 189 160 40 40 48 185 167 47 39 48 96 176 96 91 295 189 187 43 35 55 189 194 38 33 61 179 180 69 43 106 163 196 64 61 114 154 209 63 57 101 163 195 73 70 125 182 181 76 38 113 190 175 68 25 106 178 171 73 47 98 180 177 68 46 103 182 191 48 55 106 179 196 67 46 143 99 162 103 90 382

Number of Members

Number of Members

Rs. 10 Rs. 50 Rs. 250 Rs. 500 Rs. 1000 crores upto crores upto crores upto crores upto crores and Rs. 50 Rs.250 Rs.500 Rs.1000 more crores crores crores crores 109 203 110 105 194 103 188 116 105 233 89 198 110 117 238 76 176 113 119 277 67 198 116 117 266 80 172 113 122 288 55 149 104 110 377 73 145 107 114 358 72 170 104 114 334 64 170 95 116 346 102 205 113 96 250 111 211 99 97 240 14 50 42 57 676 110 226 115 101 213 111 230 106 115 212 119 234 97 98 238 121 222 106 97 243 133 229 106 102 225 121 245 118 91 233 150 251 99 95 189 152 255 105 82 170 142 269 102 94 180 158 269 97 87 176 156 273 98 93 156 142 241 108 104 207 36 95 70 104 613

Options Segment

Futures Segment

Table 6-7b : No. of members in different Turnover Brackets in Futures and Options Segment for 2008-09

Table 6-7c : Segment wise Contribution of Top ‘N’ Members to turnover on Futures and Options segment (in percent) Month

Futures Segment

Options Segment

Top 10 Top 15 Top 25 Top 5 Top 10 Top 15 Top 25 Top 5 Members Members Members Members Members Members Members Members 2005-06

12

20

26

36

23

36

45

55

2006-07

14

22

28

38

23

36

46

58

Apr-07

14

24

31

41

21

35

45

59

May-07

14

23

30

39

20

33

43

57

Jun-07

14

23

30

40

21

34

43

58

Jul-07

14

23

29

39

22

34

43

57

Aug-07

15

24

30

41

20

33

43

56

Sep-07

14

23

29

39

21

33

43

56

Oct-07

14

23

30

40

23

35

44

56

Nov-07

15

23

30

40

26

37

46

58

Dec-07

15

24

31

40

25

37

45

58

Jan-08

16

24

31

41

28

39

48

59

Feb-08

17

24

30

41

25

38

48

60

Mar-08

16

24

30

40

24

37

47

59

2007-08

14

23

29

39

23

34

43

56

Apr-08

17

26

33

43

22

37

48

61

May-08

16

25

32

42

21

35

45

59

Jun-08

17

26

33

43

18

32

42

55

Jul-08

18

26

33

43

17

30

40

54

Aug-08

17

26

32

42

18

31

42

56

Sep-08

16

25

31

41

20

33

42

56

Oct-08

16

23

30

41

21

34

44

56

Nov-08

17

25

31

42

22

34

43

56

Dec-08

17

25

32

42

23

35

44

57

Jan-09

16

24

31

41

21

32

41

55

Feb-09

16

24

31

42

21

32

41

55

Mar-09

15

23

30

41

23

34

42

55

2008-09

17

25

31

41

18

31

40

54

153

Table 6-8 : Top 20 Futures contracts according to number of contracts 2008-09 S. No.

Name of the Contract

Number of Contracts

Turnover (Rs.cr.)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

NIFTY JULY 2008 NIFTY OCTOBER 2008 NIFTY NOVEMBER 2008 NIFTY JANUARY 2009 NIFTY MARCH 2009 NIFTY DECEMBER 2008 NIFTY JUNE 2008 NIFTY SEPTEMBER 2008 NIFTY FEBRUARY 2009 NIFTY AUGUST 2008 NIFTY MAY 2008 NIFTY APRIL 2008 NIFTY APRIL 2009 RELIANCE JULY 2008 RELIANCE JANUARY 2009 RELIANCE OCTOBER 2008 RELIANCE NOVEMBER 2008 RELIANCE DECEMBER 2008 RELIANCE JUNE 2008 RELIANCE FEBRUARY 2009 TOTAL

20,297,164 19,769,423 18,387,751 16,821,763 15,203,849 15,002,383 14,941,873 14,779,152 13,407,466 12,456,987 10,859,698 8,343,235 4,497,650 2,491,130 2,487,318 2,345,192 2,307,119 2,157,962 2,007,933 1,937,277 200,502,325

(US $ mn)

416,401.39 336,376.23 260,656.14 241,115.92 208,752.62 214,939.19 338,642.06 313,961.67 188,124.83 275,209.78 274,042.71 201,452.81 67,051.76 39,301.30 22,633.26 27,622.72 20,751.84 19,863.41 34,002.70 18,908.86 3,519,811.20

81,727.46 66,020.85 51,159.20 47,324.03 40,972.06 42,186.30 66,465.57 61,621.53 36,923.42 54,015.66 53,786.60 39,539.32 13,160.31 7,713.70 4,442.25 5,421.53 4,072.98 3,898.61 6,673.74 3,711.26 690,836.35

Percentage of contracts to Top 20 contracts 10.12 9.86 9.17 8.39 7.58 7.48 7.45 7.37 6.69 6.21 5.42 4.16 2.24 1.24 1.24 1.17 1.15 1.08 1.00 0.97 100.00

Table 6-9 : Top 20 Option contracts according to no. of contracts traded 2008-09 S. No.

Name of the Contract

Number of Contracts

Turnover (Rs.cr)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

154

NIFTY March 2009 CE 2800 NIFTY February 2009 PE 2700 NIFTY February 2009 PE 2800 NIFTY March 2009 CE 2700 NIFTY December 2008 CE 3000 NIFTY January 2009 PE 2700 NIFTY January 2009 PE 2800 NIFTY February 2009 CE 2800 NIFTY March 2009 PE 2600 NIFTY March 2009 CE 2900 NIFTY March 2009 PE 2700 NIFTY February 2009 CE 2900 NIFTY March 2009 PE 2500 NIFTY January 2009 CE 2800 NIFTY November 2008 PE 2700 NIFTY January 2009 CE 3000 NIFTY March 2009 CE 3000 NIFTY January 2009 CE 2900 NIFTY July 2008 CE 4300 NIFTY December 2008 CE 2900 TOTAL

3,224,838 46,028.25 3,056,883 42,109.77 3,039,443 43,809.91 2,742,878 38,082.10 2,722,357 41,735.03 2,652,939 36,698.92 2,590,551 37,455.22 2,583,973 37,171.88 2,566,821 34,225.26 2,505,805 36,878.73 2,499,347 34,683.97 2,411,719 35,799.32 2,371,797 30,200.65 2,337,225 33,470.20 2,088,443 29,216.45 2,009,187 30,995.26 1,912,220 28,928.38 1,859,902 27,610.15 1,788,470 39,062.20 1,748,845 26,223.13 48,713,643 710,384.78

Percentage of contracts (US $ mn) to Top 20 contracts 6.62 6.28 6.24 5.63 5.59 5.45 5.32 5.30 5.27 5.14 5.13 4.95 4.87 4.80 4.29 4.12 3.93 3.82 3.67 3.59 100.00

Table 6-10 : Number of trades in the Futures & Options Segment 2008-09 Month/Year

Index Futures

Stock Futures

Index Options

Stock Options

Total

Apr-07

2,038,185

8,170,413

769,882

517,312

11,495,792

May-07

2,098,729

10,413,251

707,752

630,424

13,850,156

Jun-07

2,251,004

11,127,763

716,888

578,186

14,673,841

Jul-07

1,871,019

14,313,227

616,592

818,098

17,618,936

Aug-07

3,069,790

12,159,749

1,053,308

760,914

17,043,761

Sep-07

2,125,228

13,888,158

716,206

806,026

17,535,618

Oct-07

3,554,883

18,816,027

1,349,886

983,678

24,704,474

Nov-07

2,572,671

14,446,566

919,748

709,814

18,648,799

Dec-07

1,905,167

13,298,252

720,893

568,343

16,492,655

Jan-08

3,004,614

16,404,002

812,499

635,442

20,856,557

Feb-08

3,149,318

10,189,345

904,751

399,656

14,643,070

Mar-08

3,256,450

9,961,015

1,082,078

359,972

14,659,515

30,897,058

153,187,768

10,370,483

7,767,865

202,223,174

Apr-08

3,271,644

11,208,858

1,224,318

544,051

16,248,871

May-08

2,816,276

12,191,813

1,047,539

685,693

16,741,321

Jun-08

4,490,539

13,547,829

2,648,194

681,604

21,368,166

Jul-08

5,557,672

15,679,079

3,713,214

933,961

25,883,926

Aug-08

4,103,495

12,452,067

3,082,063

764,533

20,402,158

Sep-08

5,289,846

13,859,395

4,276,123

844,724

24,270,088

Oct-08

5,781,231

13,374,817

4,458,908

605,226

24,220,182

Nov-08

5,779,280

12,154,631

4,857,126

584,173

23,375,210

Dec-08

6,220,608

14,899,917

4,816,107

934,064

26,870,696

Jan-09

5,136,302

14,413,326

4,226,118

1,155,822

24,931,568

Feb-09

4,631,594

11,035,948

4,021,976

870,032

20,559,550

Mar-09

5,819,745

8,438,603

5,368,456

727,417

20,354,221

58,898,232

153,256,283

43,740,142

9,331,300

265,225,957

2007-08

2008-09

155

Table 6-11 : Settlement Statistics in F&O Segment Month/Year

Index/Stock Futures MTM Settle- Final Settlement ment (Rs.cr) (Rs.cr)

Total

Premium Settlement (Rs.cr)

Exercise Settlement (Rs.cr)

(Rs.cr)

(US $ mn)

2000-01

84.08

1.93

--

--

86.01

18.44

2001-02

505.25

21.93

164.76

93.95

785.88

161.04

2002-03

1,737.90

45.76

331.21

195.88

2,310.76

486.47

2003-04

10,821.98

138.95

858.94

476.12

12,295.98

2833.83

2004-05

13,024.18

227.50

941.06

455.87

14,648.62

3348.25

2005-06

25,585.51

597.89

1,520.58

817.84

28,521.80

6393.59

2006-07

61,313.70

797.54

3,194.38

1,188.84

66,494.47

15254.52

Apr-07

4,162.90

41.96

385.58

188.36

4,778.80

1,197.69

May-07

3,251.10

94.92

294.13

211.43

3,851.58

965.31

Jun-07

3,794.50

72.59

367.07

92.24

4,326.39

1,084.31

Jul-07

4,935.20

71.64

498.15

247.67

5,752.66

1,441.77

Aug-07

11,299.00

107.60

599.84

143.88

12,150.33

3,045.20

Sep-07

5,300.00

103.42

569.62

583.62

6,556.66

1,643.27

Oct-07

15,924.00

222.61

918.41

669.84

17,734.85

4,444.82

Nov-07

16,248.00

282.38

615.11

327.17

17,472.66

4,379.11

Dec-07

14,125.00

77.17

478.38

203.60

14,884.14

3,730.36

Jan-08

39,768.00

105.11

777.95

767.43

41,418.49

10,380.57

Feb-08

13,679.00

64.00

604.58

169.88

14,517.46

3,638.46

Mar-08

12,168.00

68.72

651.35

187.14

13,075.21

3,276.99

144,654.70

1,312.12

6,760.17

3,792.26

156,519.23

39,227.88

Apr-08

5,391.50

66.71

785.96

164.02

6,408.19

1,257.74

May-08

5,601.50

203.64

603.59

190.78

6,599.51

1,295.29

Jun-08

9,182.80

137.30

1,126.00

341.86

10,787.96

2,117.36

Jul-08

11,070.00

59.52

1,015.90

208.83

12,354.25

2,424.78

Aug-08

4,844.80

129.30

742.07

145.52

5,861.69

1,150.48

Sep-08

7,120.40

225.92

921.39

178.64

8,446.35

1,657.77

Oct-08

9,409.20

54.34

1,384.10

1,418.90

12,266.54

2,407.56

Nov-08

5,782.10

45.97

785.52

160.42

6,774.01

1,329.54

Dec-08

4,300.70

151.65

770.55

581.94

5,804.84

1,139.32

Jan-09

4,476.70

58.28

936.39

154.79

5,626.16

1,104.25

Feb-09

3,247.10

65.42

800.53

134.22

4,247.27

833.62

Mar-09

4,766.80

300.24

1,088.50

507.66

6,663.20

1,307.79

75,193.60

1,498.29

10,960.50

4,187.58

91,839.97

18,025.51

2007-08

2008-09

156

Index/Stock Options

Currency Derivatives Segment

7

158

Currency Derivatives Segment

7

The Reserve Bank of India in its Annual Policy Statement for the Year 2007-08 proposed to set up a Working Group on Currency Futures to study the international experience and suggest a suitable framework to operationalise the proposal, in line with the current legal and regulatory framework. This Group submitted its report in April, 2008. Following this, RBI and Securities and Exchange Board of India (SEBI) jointly constituted a Standing Technical Committee to inter-alia evolve norms and oversee implementation of Exchange Traded Currency Derivatives. The Committee submitted its report on May 29, 2008. This report laid down the framework for the launch of Exchange Traded Currency Futures in terms of the eligibility norms for existing and new Exchanges and their Clearing Corporations/Houses, eligibility criteria for members of such Exchanges/Clearing Corporations/Houses, product design, risk management measures, surveillance mechanism and other related issues. The Regulatory framework for currency futures trading in the country, as laid down by the regulators, provide that persons resident in India are permitted to participate in the currency futures market in India subject to directions contained in the Currency Futures (Reserve Bank) Directions, 2008, which have come into force with effect from August 6, 2008. The membership of the currency futures market of a recognised stock exchange has been mandated to be separate from the membership of the equity derivative segment or the cash segment. 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 certain minimum prudential requirements pertaining to net worth, non-performing assets etc. NSE was the first exchange to have received an in-principle approval from SEBI for setting up currency derivative segment. National Stock Exchange was the first exchange to launch Currency futures trading in India. The Currency Derivatives segment at NSE commenced operations on August 29, 2008 with the launch of currency futures trading in US Dollar-India Rupee (USD-INR).

Trading Mechanism The Currency Derivatives trading system of NSE, called NEAT-CDS (National Exchange for Automated Trading – Currency Derivatives Segment) trading system, provides a fully automated screen-based trading for currency futures on a nationwide basis as well as an online monitoring and surveillance mechanism. The NEAT-CDS system supports an order driven market, wherein orders match automatically. Order matching is essentially on the basis of security, its price and time. All quantity fields are in contracts and price in Indian rupees. The exchange notifies the

159

contract size and tick size for each of the contracts traded on this segment from time to time. When any order enters the trading system, it is an active order. It tries to find a match on the opposite side of the book. If it finds a match, a trade is generated. If it does not find a match, the order becomes passive and sits in the respective order book in the system. Contract Specifications for Currency Futures NSE trades Currency Derivatives contracts having near 12 calendar month expiry cycles. All contracts expire two working days prior to the last working day of every calendar month (subject to holiday calendars). This is also the last trading day for the expiring contract. The contract would cease to trade at 12:00 noon on the last trading day. A new contract with 12th month expiry would be introduced immediately ensuring availability of 12 monthly contracts for trading at any point. The Instrument type: FUTCUR refers to 'Futures contract on currency' and Contract symbol: USDINR denotes a currency pair of 'US Dollars – Indian Rupee'. Each futures contract has a separate limit order book. All passive orders are stacked in the system in terms of price-time priority and trades take place at the passive order price (order which has come earlier and residing in the system). The best buy order for a given futures contract will be the order to buy at the highest price whereas the best sell order will be the order to sell at the lowest price. The contract specification for US Dollars – Indian Rupee (USDINR) Currency Futures is summarized in the table below. Symbol

USDINR

Market Type

Normal

Instrument Type

FUTCUR

Unit of trading

Lots (Minimum 1 Lot)

Lot Size

1 Lot is equal to USD 1000

Underlying

The exchange rate in Indian Rupees for US Dollars

Tick size

0.25 paise or INR 0.0025

Trading hours

Monday to Friday 9:00 a.m. to 5:00 p.m.

Contract trading cycle 12 month trading cycle.

Final settlement day

Two working days prior to the last business day of the expiry month.upto 12 Noon Last working day (excluding Saturdays) of the expiry month.

Quantity Freeze

The last working day will be the same as that for Interbank Settlements in Mumbai. 10,001 or greater

Base price

Theoretical price on the 1st day of the contract.

Last trading day

On all other days, Daily Settlement Price (DSP) of the contract Contd...

160

Contd... USDINR

Symbol

Operating Price range Tenure upto 6 months +/-3 % of base price

Tenure greater than 6 months

Position limits

Clients

Trading Members

Banks

higher of 6% of total open interest or USD 10 million

higher of 15% of the total open interest or USD 50 million

higher of 15% of the total open interest or USD 100 million

+/- 5% of base price

Initial margin

SPAN® Based Margin

Extreme loss margin

1% of MTM value of open position.

Calendar spreads

Rs. 250/- per contract for all months of spread

Settlement

Daily settlement : T + 1

Mode of settlement

Cash settled in Indian Rupees

Final settlement : T + 2 Daily settlement price Calculated on the basis of the last half an hour weighted average price. (DSP) Final settlement price

RBI reference rate

(FSP)

TURNOVER Trading in Currency Futures segment commenced on August 29, 2008. On the very first day of operations a total number of 65,798 contracts valued at Rs.291 crore were traded on the Exchange. Since then trading activity in this segment has been witnessing a rapid growth. The total traded volume from August 2008 till March 2009 was Rs.162,272 crore (US $ 31,849 million). Total number of contracts traded during the August 2008 to March 2009 were 32,672,768. The business growth of Currency Futures Segment is shown in Table 7-1 and Chart 7-1.

Chart 7-1 : Business Growth of Currency Futures

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

161

Traded Value Records Trading Volumes in the CDS Segment during 2008-09 reached a high of Rs.3,911.39 crore (US $ 767.69 million) on March 20, 2009. The following table shows the record highs in the Currency Derivatives segment. CDS Segment

Date

Number/Value

Record Number of Trades

March 20, 2009

25,702

Record No. of Contracts Traded

March 20, 2009

775,933

Record Daily Turnover (value in Rs. crores)

March 20, 2009

Rs.3911.39

Top 5 Currency Futures Contracts During 2008-09, top 5 Currency Futures contracts in terms of contracts traded and trading value are presented in the table below. Top 5 Currency Futures contracts according to number of contracts 2008-09 S. No.

Name of the Contract

1

27-Mar-09

9,222,657

47116.17

9,247.53

Percentage of contracts to Top 5 contracts 34.88

2

25-Feb-09

5,783,369

28455.59

5,585.00

21.06

3

28-Jan-09

4,883,849

23867.90

4,684.57

17.67

4

29-Dec-08

4,294,228

21048.27

4,131.16

15.58

5

26-Nov-08

2,962,925

14605.98

2,866.73

10.81

27,147,028

135,094

26,514.99

100.00

Total

Number of Contracts

Turnover (Rs.cr.)

(US $ mn)

CHARGES Brokerage Charges The maximum brokerage chargeable by a trading member in relation to trades effected in the contracts admitted to dealing on the Currency Derivatives segment of NSE is fixed at 2.5% of the contract value.

Transaction Charges The transaction charges payable to the exchange by the trading member for the trades executed by him on the Currency Derivatives segment would be as prescribed by the Exchange from time to time. In order to encourage active participation in the Currency Derivatives Segment, the Exchange has waived the transaction charges till June 30, 2009.

Contribution to Investor Protection Fund The trading members are required to make a lumpsum contribution of Rs.500/- to Investor Protection Fund of Currency Derivatives segment.

162

CLEARING AND SETTLEMENT NSCCL undertakes clearing and settlement of all trades executed on the Currency Derivatives Segment (CDS) of the Exchange. It also acts as legal counterparty to all trades on this segment and guarantees their financial settlement. The Clearing and Settlement process comprises of three main activities, viz., Clearing, Settlement and Risk Management.

Clearing Entities Clearing and settlement activities in the Currency Derivatives segment are undertaken by NSCCL with the help of the following entities:

Clearing members In the Currency Derivatives segment, trading member-cum-clearing member, clear and settle their own trades as well as trades of other trading members (TMs). Besides, there is a special category of members, called professional clearing members (PCM) who clear and settle trades executed by TMs. The members clearing their own trades and trades of others, and the PCMs are required to bring in additional security deposits in respect of every TM whose trades they undertake to clear and settle.

Clearing banks Funds settlement takes place through clearing banks. For the purpose of settlement all clearing members are required to open a separate bank account with NSCCL designated clearing bank for Currency Derivatives segment. The Clearing and Settlement process comprises of the following three main activities:

1)

Clearing

2)

Settlement

3)

Risk Management

Clearing Mechanism The clearing mechanism essentially involves working out open positions and obligations of clearing (trading-cum-clearing/professional clearing) members. This position is considered for exposure and daily margin purposes. The open positions of Clearing Members (CMs) are arrived at by aggregating the open positions of all the TMs and all custodial participants clearing through him, in contracts in which they have traded. A TM's open position is arrived at as the summation of his proprietary open position and clients' open positions, in the contracts in which he has traded. While entering orders on the trading system, TMs are required to identify the orders, whether proprietary (if they are their own trades) or client (if entered on behalf of clients) through 'Pro/Cli' indicator provided in the order entry screen. Proprietary positions are calculated on net basis (buy - sell) for each contract. Clients' positions are arrived at by summing together net (buy - sell) positions of each individual client. A TM's open position is the sum of proprietary open position, client open long position and client open short position.

163

Settlement Mechanism All futures contracts are cash settled, i.e. through exchange of cash in Indian Rupees. The settlement amount for a CM is netted across all their TMs/clients, with respect to their obligations on MTM settlement. Currency futures contracts have two types of settlements, the MTM settlement which happens on a continuous basis at the end of each day, and the final settlement which happens on the last trading day of the futures contract.

•

Mark to Market settlement (MTM Settlement): All futures contracts for each member are marked-to-market (MTM) to the daily settlement price of the relevant futures contract at the end of each day. The profits/ losses are computed as the difference between: 1.

The trade price and the day's settlement price for contracts executed during the day but not squared up.

2.

The previous day's settlement price and the current day's settlement price for brought forward contracts.

3.

The buy price and the sell price for contracts executed during the day and squared up. The CMs who have a loss are required to pay the mark-to-market (MTM) loss amount in cash which is in turn is passed on to the CMs who have made a MTM profit. This is known as daily mark-to-market settlement. CMs are responsible to collect and settle the daily MTM profits/losses incurred by the TMs and their clients clearing and settling through them. Similarly, TMs are responsible to collect/pay losses/profits from/to their clients by the next day. The pay-in and pay-out of the mark-to-market settlement are effected on the day following the trade day. In case a futures contract is not traded on a day, or not traded during the last half hour, a ‘theoretical settlement price’ is computed. After completion of daily settlement computation, all the open positions are reset to the daily settlement price. Such positions become the open positions for the next day.

•

Final settlement for futures On the last trading day of the futures contracts, after the close of trading hours, NSCCL marks all positions of a CM to the final settlement price and the resulting profit/loss is settled in cash. Final settlement loss/profit amount is debited/ credited to the relevant CM's clearing bank account on T+2 working day following last trading day of the contract (Contract expiry Day).

•

Settlement prices for futures Daily settlement price on a trading day is the closing price of the respective futures contracts on such day. The closing price for a futures contract is currently calculated

164

as the last half an hour weighted average price of the contract in the Currency Derivatives Segment of NSE. The final settlement price is the RBI reference rate on the last trading day of the futures contract. All open positions shall be marked to market on the final settlement price. Such marked to market profit / loss shall be paid to / received from clearing members.

Settlement Statistics During August 2008- March 2009, cash settlement for currency futures amounted to Rs.367.37 crore (US $ 72.10 million). The details of settlement statistics for currency futures is presented in Table 7-2.

Risk Management NSCCL has developed a comprehensive risk containment mechanism for the Currency Derivatives segment. The salient features of risk containment mechanism on the Currency Derivatives segment are: 1.

The financial soundness of the members is the key to risk management. Therefore, the requirements for membership in terms of capital adequacy (net worth, security deposits) are quite stringent. These requirements have been explained in the table 2-1 D of Chapter 2. Clearing member pays Rs. 10 lakhs for clearing every trading member’s trades in cash & non-cash form.

2.

NSCCL charges an upfront initial margin for all the open positions of a Clearing Member (CM). It specifies the initial margin requirements for each futures contract on a daily basis. It also follows a value at risk (VaR) based margining through SPAN®. The CM in turn collects the initial margin from the TMs and their respective clients.

3.

The open positions of the members are marked to market based on contract settlement price for each contract at the end of the day. The difference is settled in cash on a T+1 basis.

4.

NSCCL's on-line position monitoring system monitors the member open positions and margins on a real-time basis vis-à-vis the deposits provided by the CM/ limits set for the TM by the CM. The on-line position monitoring system generates alerts whenever the margins of a member reaches X% of the capital deposited by the CM or limits set for the TM by the CM. NSCCL monitors the CMs for initial margin and extreme loss margin violations, while TMs are monitored for initial margin violation.

5.

CMs are provided a trading terminal for the purpose of monitoring the open positions of all the TMs clearing and settling through him. A CM may set limits for a TM clearing and settling through him. NSCCL assists the CM to monitor the

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

165

intra-day limits set up by a CM and whenever a TM exceed the limits, it stops that particular TM from further trading. 6.

A member is alerted of his position to enable him to adjust his position or bring in additional capital. Margin violations result in withdrawal of trading facility for all TMs of a CM in case of a violation by the CM.

7.

A separate Settlement Guarantee Fund for this segment has been created out of the capital of members.

The most critical component of risk containment mechanism for the Currency Derivatives Segment is the margining system and on-line position monitoring. The actual position monitoring and margining is carried out on-line through Parallel Risk Management System (PRISM). PRISM uses SPAN® (Standard Portfolio Analysis of Risk) system for the purpose of computation of on-line margins, based on the parameters defined by SEBI.

Margining System NSCCL has developed a comprehensive risk containment mechanism for the Currency Derivatives segment. The most critical component of a risk containment mechanism is the online position monitoring and margining system. The actual margining is done on-line, on an intra-day basis using PRISM (Parallel Risk Management System) which is the real-time position monitoring and risk management system. The risk of each trading and clearing member is monitored on a real-time basis and alerts/disablement messages are generated if the member crosses the set limits. NSCCL uses the SPAN® (Standard Portfolio Analysis of Risk) system, a portfolio based margining system, for the purpose of calculating initial margins.

Types of margins The margining system for Currency Derivatives segment is explained below: a)

Initial margin: Margin in the Currency Derivatives segment is computed by NSCCL upto client level for open positions of CMs/TMs. These are required to be paid up-front on gross basis at individual client level for client positions and on net basis for proprietary positions. NSCCL collects initial margin for all the open positions of a CM based on the margins computed by NSCCL- SPAN®. A CM is required to ensure collection of adequate initial margin from his TMs up-front. The TM is required to collect adequate initial margins up-front from his clients.

b)

Extreme loss margin of 1% on the value of the gross open positions shall be adjusted from the liquid assets of the clearing member on an on line, real time basis.

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

166

c)

Client margins: NSCCL intimates all members of the margin liability of each of their client. Additionally members are also required to report details of margins collected from clients to NSCCL, which holds in trust client margin monies to the extent reported by the member as having been collected form their respective clients.

Position Limit for Currency Futures: Client Level Position Limit The client level position limit shall be applicable where the gross open position of the client across all contracts exceeds 6% of the total open interest or 10 million USD, whichever is higher.

Trading Member Level Position Limit: The trading member position limit shall be higher of 15% of the total open interest or 50 million USD. However, the position limit for a Trading Member, which is a bank, shall be higher of 15% of the total open interest or 100 million USD.

Clearing Member Position Limit: No separate position limit is prescribed at the level of clearing member. However, the clearing member should ensure that his own trading position and the position of each trading member clearing through him are within the limits specified above.

167

Table 7-1: Business Growth Of Currency Futures Month/ Year

Open Interest No. of Contracts Traded

Trading Value (Rs. Cr.)

Trading Value (US $ mn)

No. of Contracts traded

Trading Value (Rs.Cr.)

Trading Value (US $ mn)

Sep-08*

1,258,099

5,763

1,131

90,871

428

84

Oct-08

2,275,261

11,142

2,187

170,202

851

167

Nov-08

3,233,679

15,969

3,134

146,262

737

145

Dec-08

4,681,593

22,840

4,483

177,520

867

170

Jan-09

4,900,904

23,980

4,707

254,797

1,247

245

Feb-09

6,416,059

31,761

6,234

315,317

1,612

316

Mar-09

9,907,173

50,817

9,974

257,554

1,313

258

32,672,768

162,272

31,849

257,554

1,313

258

Aug 08-Mar09

* Includes turnover details for August 29, 2008-the first day of trading for Currency Futures at NSE

Table 7-2 Settlement Statistics In Currency Futures Segment (in Rs.Cr.) Month/Year

Currency Futures MTM Settlement

Aug-08

0.22

Sep-08

22.86

0.77

Oct-08

52.33

0.04

Nov-08

58.56

0.95

Dec-08

58.00

1.14

Jan-09

33.76

0.31

Feb-09

59.89

0.54

Mar-09

76.19

1.82

361.80

5.57

Aug ‘08-Mar ‘09

168

Final Settlement

Investor Services, Arbitration

8

170

Investor Services, Arbitration

8

Investors are the backbone of the securities market. Protection of their interests is paramount for NSE. In furtherance of their interests, NSE has put in place systems to ensure availability of adequate, up-to-date and correct information to investors to enable them to take informed decisions. It ensures that critical and price-sensitive information reaching the exchange is made available to all classes of investor at the same point of time. Such price-sensitive information as bonus announcements, mergers, new line of business, etc. received from the companies is disseminated to all the market participants through the network of NSE terminals all over India. Action is initiated by the Exchange where any kind of price-sensitive information is not provided to the Exchange at the prescribed time. It ascertains the veracity of rumours and disseminates facts in the interest of investors. In an attempt to ease the existing system of information dissemination by the listed companies, NSE launched the electronic interface for listed companies in August 2004. Under the new system, all corporate announcements including that of Board meetings which needs to be disclosed to the market is handled electronically in a straight through and hands free manner. It also conducts various seminars and programs for the investors all over the country with a view to educate them on their rights and obligations. They are also made aware of the precautions they need to take while dealing in the securities market. It makes an audit trail available on request for all transactions executed on NSE to enable investors to counter-check trade details for the trades executed on his behalf by the member. It has also prescribed and makes effort to ensure the implementation of various safeguards like time schedules for issuing contract notes, for receiving funds and securities purchased by investors, segregation of client funds and securities from those of members, etc. The Exchange has also launched a facility to verify trades on the NSE website. Using this facility, an investor who had received a contract note from the trading member of the Exchange can check whether the trade has been executed.

Investor Services NSE has put in place a system for redressal of investor grievances for matters/issues related to/against trading members/companies. The Investor Services Cell of NSE is manned by a team of professionals possessing relevant experience in the areas of securities markets, company and legal affairs, and specially trained to identify problems faced by the investor and to find and effect a solution quickly. It takes up complaints in respect of trades executed on the NSE through its NEAT terminal and routed through the NSE trading member or SEBI registered sub-broker of NSE trading member and trades pertaining to companies traded on NSE. The status of receipt and disposal of investor grievances by the Exchange is presented in Table 8-1.

Investor Protection Fund Some cushion to the interests of investors is provided by the Investor Protection Fund (IPF) set up by the stock exchange. The exchanges maintains an IPF to take care of

171

investor claims, which may arise out of non settlement of obligations by the trading member, who has been declared a defaulter, in respect of trades executed on the Exchange. The maximum amount of claim payable from the Fund to the investor is reviewed by Exchange periodically maximum amount payable out of IPF was Rs. 10 lakhs upto December 31, 2007 and same has been enhanced to Rs. 11 Lakhs in respect of claims against members declared defaulter after January 1, 2008.

Arbitration Arbitration is a speedy and alternative dispute resolution mechanism provided by the Exchange for resolving disputes between the trading members and between a trading member and his client, in respect of trades done on the Exchange. The arbitration mechanism is provided by the Exchange in all its Regional offices to facilitate the speedy dispute resolution mechanism. The parties to dispute appoint an arbitrator from the panel of arbitrators maintained by the Exchange and approved by SEBI. The arbitrator(s) pronounces an award after going through various documents submitted by the parties and hearing them. The status of arbitration matters with the Exchange as at end March 2009 is presented in Table 8-2.

172

Table 8-1 : Receipt and Disposal of Investor Grievance Year

Against Members Pending at the beginning

Against Companies

Received Disposed

Pending at the end

Pending at the beginning

Received Disposed

Pending at the end

1994-95

–

–

–

–

–

2

–

2

1995-96

–

56

13

43

2

39

17

24

1996-97

43

320

72

291

24

415

102

337

1997-98

291

259

439

111

337

576

716

197

1998-99

111

383

347

147

197

592

380

409

1999-00

147

197

298

46

409

808

842

375

2000-01

46

263

201

108

375

1,095

1,111

359

2001-02

108

789

710

187

359

607

667

299

2002-03

187

345

418

114

299

587

626

260

2003-04

114

282

253

143

260

527

558

229

2004-05

143

435

409

169

229

1,304

1,128

405

2005-06

169

1,128

1,051

246

405

1,023

1,200

228

2006-07

246

1,367

1,460

153

228

774

769

233

2007-08

153

1,915

1,101

967

233

964

888

309

2008-09

967

5,191

5,020

1,138

309

734

983

60

Table 8-2 : Status Report of Arbitration Matters Year

No. of Cases Received

Withdrawn

Awards

Pending

1998

164

2

162

0

1999 CM

153

5

147

1

2

1

1

0

149

6

143

0

1

0

1

0

342

19

323

0

2001 WDM

0

0

0

0

2001 F&O

1

0

1

0

275

7

268

0

2002 WDM

0

0

0

0

2002 F&O

5

0

5

0

136

4

132

0

2003 WDM

0

0

0

0

2003 F&O

17

0

17

0

1999 WDM 2000 CM 2000 WDM 2001 CM

2002 CM

2003 CM

Contd...

173

Contd... Year

No. of Cases Received

Withdrawn

Awards

Pending

119

6

113

0

2004 WDM

0

0

0

0

2004 F&O

42

3

39

0

2005 CM

138

3

135

0

2005 WDM

0

0

0

0

2005 F&O

66

0

66

0

2006 CM

224

5

219

0

2006 WDM

0

0

0

0

2006 F&O

191

8

183

0

2006 CO

1

0

1

0

2007 CM

275

9

266

0

2007 F&O

221

3

218

0

61

1

60

0

116

1

115

0

2008-09 CM

758

21

283

454

2008-09 F&O

2433

98

1356

979

Total

5,890

202

4,254

1,434

2004 CM

2008 CM upto March 2008 2008 F&O upto March 2008

174

Knowledge Initiative

9

176

Knowledge Initiative

9

Several initiatives have been taken over the last few years to promote the skills of market participants, to educate and protect the investors and to promote high quality research about the working of the securities market. In line with this NSE has launched several initiatives to strengthen the knowledge base of the Indian securities market and to protect investor interest. Major initiatives in this area are discussed below:

NSE’s Certification in Financial Markets (NCFM) Taking into account international experience and the needs of the Indian financial markets NSE introduced in 1998 a unique testing and certification programme called National Stock Exchange’s Certification in Financial Markets (NCFM). This was introduced with a view for protecting interests of investors in financial markets and more importantly, for minimizing risks of losses arising out of deficient understanding of markets and instruments. NCFM is an on-line testing system which tests the practical knowledge and skills required to operate in the financial markets in a secure and unbiased manner and awards certificates based on relative merits thus ensuring that the caliber of persons entering this field is kept high in the best interests of a mature and vibrant market. NCFM, has become extremely popular and is sought by the candidates as well as employers due to its unique on-line testing and certification programme. It offers all the certifications mandated by SEBI, NSDL, AMFI, FIMMDA and NSE itself. NCFM offers a comprehensive range of modules covering many different areas in finance (Table 8-1). The entire process from generation of question paper, testing, assessing, scores reporting and certifying is fully automated. It allows tremendous flexibility in terms of testing centres, test dates and test timing and provides easy accessibility and convenience to candidates. The number of centers from where the NCFM tests are conducted has increased in the recent past. Currently the NCFM tests are conducted from around 100 centers across the country.

Launch of New NCFM Modules On January 7, 2009, “Mutual Funds : A Beginners’ Module’ was launched under NCFM with a view to educate and create awareness about the role and function of mutual funds, the different mutual fund products being offered in the markets, risk profile of different products, the advantages of investing in mutual funds. This module is useful for first time investors in mutual funds, young students and anyone wanting to know about the basics of mutual funds. On February 2, 2009 “Options Trading Strategies Module” was launched under NCFM with a view to impart knowledge on the Options trading strategies so that investors can manage their risks better and use these strategies to enhance their income potential under different market conditions. This module has been introduced to explain some of

177

the important and basic Options strategies. There are 22 Options strategies covered in this module and the tests are based on these 22 strategies.

NCFM Tests conducted in regional languages All the NCFM modules were initially in English language. In response to the requests received for tests to be conducted in other languages as well, NSE introduced the Derivatives Market (Dealers) Module in Gujarati and Hindi which was launched on February 15, 2008 and June 19, 2008 respectively. In addition to this, the Capital Market (Dealers) module test in Gujarati and Hindi languages was introduced on February 19, 2009.

CBSE – NSE joint certification in Financial markets CBSE and NSE introduced a joint certification in Financial Markets for std. XI and XII. The course, titled “Financial Markets Management” had been introduced by CBSE during 2007-2008. This was the first such exercise to introduce financial literacy in schools. The new course comprises of various subjects, such as Languages, Economics, Business Studies, Accounting for Business etc. Besides these, two financial market related subjects, “Introduction to Financial Markets – I” and “Introduction to Financial Markets – II” are taught in Std. XI and XII respectively. Students opting for the course are required to take the NCFM on-line tests in “Financial Markets : A Beginners Module” in Std. XI and both “Capital Markets (Dealers) Module and Derivatives Markets (Dealers) Module”, in Std. XII.

NSE Research Initiative In order to improve market efficiency further and to set international benchmarks in securities industry, NSE administers a scheme called the NSE Research Initiative. The initiative fosters research which can support and facilitate stock exchanges to design market microstructure, participants to frame their strategies in the market place, help regulators to frame regulations, policy makers to formulate policy and broaden the horizon of knowledge about the securities market. The initiative has received a tremendous response from the academics as well as the market participants from within and outside the country. The studies completed/under progress under the initiative is presented in Table 8-2. The completed research papers and the paper under progress are provided on the NSE website www.nseindia.com.

Investor Awareness and Education Programmes NSE has been carrying out investor awareness seminars on a regular basis in various parts of the country. During the seminars, the investors are educated about their rights and obligations, new financial products, investment avenues and certification programmes. Various informative booklets and material are also distributed at the seminars. Besides covering the investors, the Exchange also reaches out to a larger number of persons across the country as a part of a Financial Literacy campaign. The purpose is to educate the masses about investing, various investment avenues, benefits of investing in equities and

178

upgrade the financial literacy and awareness among the masses. The higher secondary schools and colleges is also one of the focus areas in this exercise since an early education on investing helps the individual to take proper decision while investing in future. Further, this also helps in increasing the overall equity investor base in the country over a period of time with more people being acquainted with the benefits of investing in the equity markets. During 2008-09, there were 606 investor awareness and education programmes conducted by NSE.

National Institute of Securities Market (NISM) Pursuant to the announcement made by the Finance Minister in his Budget Speech in February 2005, Securities and Exchange Board of India (SEBI) established the National Institute of Securities Markets (NISM) in Mumbai. SEBI, by establishing NISM, has articulated the desire expressed by the Indian government to promote securities market education and research. Towards accomplishing the desire of Government of India and vision of SEBI, NISM has launched an effort to deliver financial and securities education at various levels and across various segments in India and abroad. To implement its objectives, NISM has established six distinct schools to cater the educational needs of various constituencies such as investor, issuers, intermediaries, regulatory staff, policy makers, academia and future professionals of securities markets. NISM seeks to add to market quality through educational initiatives. It is an autonomous body governed by its Board of Governors. An international Advisory Council provides strategic guidance to NISM. NISM brings out various publications on securities markets with a view to enhance knowledge levels of participants in the securities industry. NISM is mandated to develop and implement certification examinations for professionals employed in various segments of the Indian securities markets.

Launch of Currency Derivatives Certification Examination by NISM NISM has launched the Currency Derivatives Certification Examination to create a common minimum knowledge benchmark for persons working in the Currency Derivatives market segment, in order to enable a better understanding of currency markets and exchange traded currency future products, better quality investor service, operational process efficiency and risk controls. As per SEBI requirement, all approved users and sales personnel of trading members of currency derivatives segments of recognised stock exchanges are required to obtain the necessary certification by August 10, 2009. NISM has appointed NSE as one of the test administrators for conducting Currency Derivatives Certification Examination.

179

Table 9-1 : NCFM Modules Sr. No.

1 2 3 4 5 6 7 8 9 10 11 12 13 14

15 16 17

Name of Module

Fees (Rs.)

Financial Markets: A Beginners’ 750 Module Mutual Funds : A Beginners’ 750 Module Securities Market (Basic) Module 1500 Capital Market (Dealers) Module * 1500 Derivatives Market (Dealers) 1500 Module ** FIMMDA-NSE Debt Market 1500 (Basic) Module NSDL–Depository Operations 1500 Module Commodities Market Module 1800 AMFI-Mutual Fund (Basic) 1000 Module AMFI-Mutual Fund (Advisors) 1000 Module Surveillance in Stock Exchanges 1500 Module Corporate Governance Module 1500 Compliance Officers (Brokers) 1500 Module Compliance Officers (Corporates) 1500 Module Information Security Auditors 2250 Module (Part-1) Information Security Auditors 2250 Module (Part-2) FPSB India Exam 1 to 4*** 1500 per exam Options Trading Strategies 1500 Module

Test Duration (in minutes)

No. of Questions

MaxiPass mum Marks Marks (%)

60

50

100

50

Certificate Validity (in years) 5

60

50

100

50

5

105 105 120

60 60 60

100 100 100

60 50 60

5 5 3

120

60

100

60

5

75

60

100

60 #

5

120 90

60 62

100 100

50 50

3 No limit

120

72

100

50

5

120

50

100

60

5

90 120

100 60

100 100

60 60

5 5

120

60

100

60

5

120

90

100

60

120

90

100

60

120

75

140

60

NA

120

60

100

60

5

2

*

Candidates have the option to take the CMDM test in English, Gujarati or Hindi language. The workbook for the module is presently available in ENGLISH. ** Candidates have the option to take the DMDM test in English, Gujarati or Hindi language. The workbook for the module is also available in ENGLISH, GUJARATI and HINDI languages. # Candidates securing 80% or more marks in NSDL-Depository Operations Module ONLY will be certified as ‘Trainers’. *** Modules of Financial Planning Standards Board India (Certified Financial Planner Certification) i.e. (i) Risk Analysis & Insurance Planning (ii) Retirement Planning & Employee Benefits (iii) Investment Planning and (iv) Tax Planning & Estate Planning. The fees for FPSB Modules 1-4 are Rs. 2000/- per exam from test date April 1, 2009 onwards.

NISM Series I Certification Modules Sr. Name of Module No.

1 NISM-Series-I: Currency Derivatives Certification Examination * #

180

Fees (Rs.) Test Duration (in minutes) 1000

120

No. of Questions 60

MaxiPass Cermum Marks* tificate # Marks (%) Validity (in years) 100

60

Negative marking – 25% of the marks assigned to the question Passing Certificate will be issued only to those candidates who have furnished/ updated their Income Tax Permanent Account Number (PAN) in their registration details.

3

Table 9-2 : Studies under the NSE Research Initiative SL. No.

Title of Study

Completed Papers 1

Econometric Estimation of Systematic Risk of S&P CNX Nifty Constituents

2

Stock Market Development and its Impact on the Financing Pattern of the Indian Corporate Sector Efficiency of the Market for Small Stocks

3 4

8

Determinants of Financial Performance of Indian Corporate Sector in the Post-Liberalization Era: An Exploratory Study Should pension funds invest in equities? An analysis of risk-return tradeoff and asset allocation decisions Changes in liquidity following exposure to foreign shareholders: The effect of foreign listings, inclusion in country funds and issues of American Depositary Receipts Is the Spread Between E/P Ratio and Interest Rate Informative for Future Movement of Indian Stock Market? Merger Announcements and Insider Trading Activity in India: An Empirical Investigation

9

Achieving an Individual Investor Friendly System using the power of the Internet

10

Improved Techniques for using Monte Carlo in VaR estimation

11

Short selling and its Regulation in India in International Perspective

12

Empirical investigation of multi-factor asset pricing models using Artificial Neural Network

13

15

Idiosyncratic Factors in Pricing Sovereign Bonds: An Analysis of the Government of India Bond Market The Extreme Value Volatility Estimators and Their Empirical Performance in Indian Capital Markets Equity Market Interlinkages: Transmission of Volatility - A Case Of US and India

16

Institutional Investors and Corporate Governance in India

17

Dividend policy of Indian Corporate Firms : An Analysis of Trends & Determinants

18

Market Microstructure Effects of Transparency of Indian Banks

19

Futures Trading, Information and Spot Price Volatility of NSE-50 Index Futures Contract

20

Measuring productive efficiency of stock exchanges using price adjustment coefficients

21

Do Futures and Options trading increase stock market volatility?

22

24

Section switching stock market price effect in the Indian capital market and the policy implications thereof Study of Common Stochastic Trend and Co-integration in the Emerging Markets - A case study India, Singapore and Taiwan Market Discipline in the Indian Banking Sector: An Empirical Exploration

25

Conditional CAPM and Cross sectional returns - A study on Indian Securities Market

26

Evaluating index fund implementation in India

27

Measuring Volumes in the Indian Financial Markets Some Terminological and Conceptual Issues Corporate Social Responsibility Initiatives by NSE NIFTY Companies - Content, Implementation Strategies & Impact. Measures for Improving Common Investor Confidence in Indian Primary Market : A Survey

5 6 7

14

23

28 29 30 31

Informational Content of Trading Volume And Open Interest – An Empirical Study of Stock Options Market In India An analysis of the Dynamic Relationships Between South Asian and Developed Equity Markets

32

Corporate Governance and Market reactions

33

Insider Ownership and Corporate Governance Contd...

181

Contd... SL. No.

Title of Study

34

Improving Index Fund Implementation in India

35 36

Seasoned Capital Offerings: Earnings Management and Long-Run Operating Performance of Indian Firms Volatility Spillovers Across Stock, Call Money And Foreign Exchange Markets

37

Understanding the Microstructure in Indian Markets

38

Price and Volume Effects of S&P CNX Nifty Index Reorganization

39

41

Lead-Lag relationship between Equities and Stock Index Futures Market and its variation around Information Release: Empirical Evidence from India On The New Transformation-Based Approach To Measuring Value-At-Risk: An Application To Forex Market In India Optimal Hedge Ratio and Hedging Effectiveness of Stock Index Futures : Evidence from India

42

Evaluating Corporate Governance Risk: A Fuzzy logic approach

43 44

Do the S&P CNX Nifty Index and Nifty Futures Really Lead/Lag?Error Correction Model: A Cointegration Approach Under-Pricing and long run performance of Initial Public Offerings in Indian Stock Market

45

Price & liquidity effects of stock split: An Empirical evidence from Indian stock market

46

Risk Return Dynamics of Derivative Based Investment Strategies.

47

Pricing of Options on Defty

48

Price Limits Are they Worth the Price?

49

Volatility Persistence and the Feedback trading Hypothesis: Evidence from Indian Markets

50

Dynamic Interaction among Mutual Fund Flows, Stock Market Return and Volatility

51

Correlation Dynamics in Equity Markets: Evidence from India

52

Price Discovery and Arbitrage Efficiency of Indian Equity Futures and Cash Markets

40

Papers under Progress 1

Do Hetrogeneous beliefs affects trading volume and asset prices.

2

Imbalance created because of structured products in India equity market

3

Forecasting Of Indian Stock Market Index Using Artificial Neural Network

4

Global Stock Futures : A Diagnostic Analysis Of a Selected Emerging And Developed Markets With Special Reference To India Price Behaviour around Block Trades on the National Stock Exchange of India.

5 6 7 8 9

182

Does the Stock Market Overreact? An empirical evidence of the Contrarian Returns from the Indian Markets Dynamic Relationship between Stock Return, Trading Volume and Volatility:Evidence from Indian Stock Market Stock Market Seasonality: A Study of the Indian Stock Market

10

Determinants and the Stability of Dividends in India:Application of Dynamic Partial Adjustment Equation using Extended Instrumental Variable Approach Optimal Investment Horizons for S&P CNX Nifty and its Components

11

Forecasting Volatility using High Frequency Data

12

Examining Association between S&P CNX Nifty and selected Asian and US Stock Markets