Future Plans

FUTURE PLANS

Expansion

The Capital Market segment of the Exchange became operational in November 1994. Initially, the entire turnover accounted from Mumbai. After stabilising operations in Mumbai, NSE expanded its operations to other cities. The turnover from Mumbai accounts for 43%, Delhi accounts for 19%, Calcutta accounts for 11% and 28% from other centres. As of Feb'98, NSE terminals are present in 175 towns and cities in 16 states. It is expected that by the end of 1998 NSE terminals will be available in over 200 cities. NSE will add more terminals in cities where it already has presence to provide better services to investors. The Exchange proposes to expand its VSAT network to 2500 and expand its reach. Further, NSE is working to increase the capacity of the trading system from the present 4,00,000 trades per day to more than 10,00,000 trades per day.

The satellite hub and computer equipment for the disaster recovery site at Pune has been procured, installed and tested for proper operations. A detailed Business Continuity Plan (BCP) has been worked out to put the disaster recovery site for live operations. The back-up site of the Exchange at Pune will be made operational soon. This facility is in line with international practices and the NSE will be able to commence normal business operations within a very short time frame should a disaster occur.

In keeping with the fast changing scenario in the Capital Markets, NSE has chalked out plans for the various business segments, some of which are:

Initial Public Offerings

Initial Public Offerings in India have been typically fixed price offers. A major problem with such fixed price offerings has been the information asymmetries between the issuers and the investors. To revive the primary market, NSE is proposing to provide a facility for conducting primary issues for Initial Public Offers (IPOs), subsequent issues by companies, private placements as well as book building through screen based automated trading system. The advantages of this system will be on-line issue of securities thereby reducing the cost of issue of securities and an efficient retail distribution network among others.

Retail Debt Market

Fixed income securities such as debentures are an ideal investment avenue for risk averse investors. It provides a fixed and regular income with safety of capital. The deregulation of interest rates has led to borrowings by the Government, Corporates and Institutions at market determined rates. This has enabled retail investors to invest in fixed income securities particularly Corporate and Institutional bonds in favourable terms vis a vis other investment opportunities.

With a view to providing liquidity to these instruments, the Exchange plans to start a retail debt segment to cater to the growing demands of the investors in the debt segment. Debentures are presently traded on the Capital Market (CM) and the Wholesale Debt Market (WDM) segment of the Exchange. However, as WDM segment continues to be wholesale in nature and CM segment focuses on equity, there was a need for a separate market for debentures. A separate RDM trading system would be developed for the same.

The securities traded on the Retail Debt Market segment would comprise of Corporate Debentures and Institutional Bonds. Members of the Exchange from all the NSE centres would be eligible to trade on the RDM system.

The National Securities Clearing Corporation Ltd. (NSCCL) would settle the trades done on the RDM segment on a net basis. The NSCCL would also extend settlement guarantee for trades done on NSE.

Derivatives

As soon as regulatory approvals are obtained, NSE plans to launch
a futures and options segment. NSE initially plans to launch trading
of futures and options on Nifty, an index that is uniquely suited to the demands of index-based products. The Exchange will subsequently initiate trading in options on individual stocks and select securities. The Exchange also has plans to launch fixed income derivatives. The Clearing Corporation will guarantee settlement through a separate settlement fund. There will be an equally focussed margin and risk management system in place to monitor and manage the clearing and settlement of the derivatives segment.

Home Media NewsPapers Television Radio Magazines Government Geography Maps States&UTs History Travel Art&Culture Art Dance Theatre Music Jewellery Festivals Astrology Business CreditCards Tax Career Banks StockExchange NSE BSE Entertainment Bollywood Tollywood Movies Music Food Shopping Sports Cricket Tennis Golf Adventure Sports National Info.