With the liberalization of the Indian economy, it was found expected to lift the Indian stock market trading system on par with the international standards, on the basis of the recommendations of high powered Pherwani Committee, the National Stock Exchange was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations, preferred commercial banks and others.
Wholesale debt market operations are like money market operations, institutions and corporate bodies enter into high value transactions in financial instruments such as government securities, treasury bills, public sector unit bonds, commercial paper, certificate of deposit, etc.
Known members of NSE are called trading members who trade on behalf of themselves and their clients. Participants include trading members and great players like banks who take direct settlement responsibility.
Trading at NSE takes place through a fully automated screen-based trading mechanism which adopts the principle of an order-driven market; trading members can stay at their offices and carry out the trading, since they are linked through a communication network. The prices at which the buyer and seller are eager to transact will appear on the screen. When the prices match the transaction will be completed and a verification slip will be printed at the office of the trading member.
See Also: Foreign Exchange Market In India
NSE has several advantages over the traditional trading exchanges. They are as follows :
Unless stock markets provide professionalized service, small investors and foreign investors will not be interested in capital market operations. And capital market being one of the major sources of long-term finance for industrial projects, India cannot afford to damage the capital market path. In this regard NSE gains vital importance in the Indian capital market system.
The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.
Subscribe to our Youtube Channel
This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.