Currently, 200 large companies are traded on the NSE; that list is expected to gradually expand as the exchange stabilizes. The NSE is a computerized market for debt and equity instruments.
The NSE, located in Bombay, was set up in 1993 to encourage stock exchange reform through system modernization and competition. NSE's reach has been extended to 21 cities, of which 6 cities do not have their own stock exchanges. NSE plans to cover 40 cities by end-1996. The NSE has a very modern implementation of trading using contemporary technology in computers and communication. It is an electronic screen based system where members have equal opportunity and access for trading irrespective of their location, since they are connected by a satellite network.
The number of members trading on the exchange has increased from the 227 at commencement to 600 members as of November 1995. NSE, thus, helps to integrate the national market and provides a modern system with a complete audit trail of all transactions. In a further effort to improve the settlement system and minimize the risks associated therein, NSE has set up a subsidiary - National Securities Clearing Corporation (NSCC). On par with clearing corporations the world over, NSCC will shortly guarantee settlement of trades executed and settled through it. The instruments traded are treasury bills, government security, and bonds issued by public sector companies. The government of India issues around Rs.70 billion of debt instruments per year.
The market is still nascent; but, trading volumes are steadily rising. Average daily turnover in stocks have increased from Rs.70 million in November 1994 to Rs.990 million during July 1995.
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