The National Stock Exchange of India Limited (NSE) was incorporated in November 1992 by IDBI and other All-India Financial Institutions and became recognised stock exchange with effect from April 26, 1993 to provide nationwide stock trading facilities. The NSE has a fully automated screen-based trading system. It operates on the principles of an order-driven market. It was a part of the financial market sector reforms being undertaken in the economy. To identify the lacunae of the Indian stock market and to investigate what was wrong with the current system, a committee was constituted under the chairmanship of Sh. M. J. Pherwani, who mooted the idea of a National Stock Exchange. The basic idea of setting up of NSE was to facilitate computerised trading in debt market instruments. It provides a nationaly-integrated stock market system, facilitating an easy flow of transactions and resources on a cost-effective manner.
Promoters of NSE:
Following financial institutions were the promoters of National Stock Exchange :
- Industrial Development Bank of India(IDBI).
- Industrial Finance Corporation of India(IFCI).
- Industrial credit and Investment corporation of India(ICICI).
- Life Insurance Corporation of India(LIC).
- General Insurance Corporation of India(GIC).
- SBI Capital Markets Limited.
- Stock Holding Corporation of India Limited.
- Infrastructure Leasing and Financial services Limited.
Market Segments of NSE:
The NSE was intended to establish a viable and vibrant debt market which was in an under developed stage. Now, it provides the traditional retail market for securities and also operates a Wholesale Debt Market (which may be termed as money market segment). The NSE consists of three mutually exclusive segments :
- Wholesale debt market segment, started operations in June 1994.