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The stock exchange in India has gone through a transition state. The trading functions can be performed electronically with equal opportunities to find the best option for investing stocks. It provides an electronic trading platform for the exchange of stocks, shares, bonds, etc. It enables the issue and redemption of securities and capital events commonly known as ‘continuous auction’ markets with buyers and sellers performing different transactions.
National Stock Exchange
National Stock Exchange is an electronic platform where the investors can carry out trading, buy and sell equities, stock, debts and shares from the different stock markets or financial markets. This electronic facility provided the clients even in remote areas to access the stock price information with ease, previously only a few people were able to access that information. This process does not involve any market experts or specialists. It entirely works on its own, that is when an investor places a market order, the electronic order book tries to match it with a limit order. Due to this the sellers and buyers remain anonymous to each other.
The market timings are as follows-
Pre-opening sessions-
Order entry opens- at 9.00 hours
Order entry closes- at 9.08 hours
Regular sessions-
The market opens- at 9.15 hours
The market closes – at 15.30 hours
Benefits of NSE
- Fast transactions– The fast pace of placing orders allows the investors to avail of the stock for the best prices.
- Premium marketplace– The expenses of trading for investors decrease as the volume of trading activity in the stock exchange lowers the costs.
- Trade statistics– The trade statistics of a company can be evaluated due to which the performances of the organisation can be tracked.
Establishment of the National Stock Exchange
Before the establishment of the National Stock Exchange, the trading was confined to a group of brokers. So, in 1992 National stock Exchange was established to bring clarity and efficiency and transparency to Indian stock markets. So, the random trading memberships were replaced by the electronic trading platform. The NSE kept certain conditions for the people who were allowed to trade. They must be qualified, experienced and meet the minimum financial requirements. NSE separated the ownership and regulation of the management under the supervision of the Securities and Exchange Board of India (SEBI).
National Stock Exchange is the country’s leading financial exchange with its headquarters in Mumbai. Now National Stock Exchange of India has become the largest derivatives exchange by 2021 by the number of contracts traded based on the statistical evaluation of the Futures Industry Association (FIA).
Purpose of National Stock Exchange
The purpose of the National Stock Exchange is as follows-
1.Exposure of investors to electronic trading– Using an electronic trading system, investors can get fair and efficient securities from the financial market. It provides a nationwide trading facility for debt instruments, shares and equities. It enables appropriate communication and an interactive network for investors with equal opportunities. To enhance the standard of the securities market to a global level.
It was established to meet the needs of shorter settlement cycles and book entry settlements systems. To provide easy access to any individual even in remote areas for trading facilities. It facilitates easy trading by prioritising the orders as per the best prices available. It allows individuals to decide the value and efficiency of the company through supply and demand.
2.Raising capital- By issuing new shares and equities the companies are able to raise the capital fund for their own profit and expansion of business and financial operations. This increases the company’s revenue.
3 Economic efficiency- The National stock Exchange allows individuals to invest their cash merely for saving funds. Hence, if the capital invested remains untouched then the cash is used for other economic purposes, resulting in a more efficient economy.
Conclusion
The National Stock Exchange of India has paved the way to completely transform the trading market into virtual or electronic trading. It provides a fully automated and modern way of the stock exchange which has helped so many individuals to buy and sell the stocks. Therefore, the NSE is India’s largest financial market that enables efficient and fair transactions between investors and clients. It has been marked as the fourth largest market in trading volume in 2015.
The modern days are going to be fully relying on digitalisation and NSE has fulfilled these functions by establishing the first electronic stock market nationwide. Moreover, NSE is still finding ways to foster more innovative methods for trading in its technological space.
