The National Stock Exchange of India is one of the largest outlets for the trading of stocks, bonds, securities and commodities in the country. Less than 20 years old, the NSE is supported by seven different subsidiary companies that handle everything from the clearance and settlement of securities to the IT needs of the NSE, along with the technology needs of member and non-member companies.
The National Stock Exchange was first formed in 1992 as a tax-paying company, a first for stock exchanges in India. The NSE moved into the wholesale debt market and the capital market in 1994, and the derivatives market in 2000. NSE also engages in Internet trading, exchange traded funds (ETF) and started India’s first volatility index in 2008. The NSE was also the first India exchange to begin current and interest rate futures exchanges.
National Securities Clearing Corporation
One of seven subsidiaries of the NSE, the National Securities Clearing Corporation, was opened in 1995 to help in the clearance and settlement of securities in a timely fashion. The NSCC basically makes sure that the purchases and sales of stocks and securities takes place without a hitch. It was also the first clearing corporation in India to introduce settlement guarantees.
National Commodity Clearing Limited
The National Commodity Clearing Limited, another NSE subsidiary, operates much like the National Securities Clearing Corporation, except the NCCL is a clearinghouse for the NSE commodities market. The NCCL’s main job is to provide IT and process support for NSE in this regard.
NSE Infotech Services Limited
A wholly owned subsidiary of NSE, Infotech Services Limited handles the information technology needs of the entire NSE group exclusively.
Unlike Infotech, NSE.IT focuses on the promotion of its technology products to NSE member and non-member companies. NSE.IT provides solutions for trading, broker services, clearing and settlement, Web trading, risk management, financial management, asset management, banking and insurance. NSE.IT also consults and provides implementation of such services as date warehousing, business continuity plans and mainframe management.
National Security Depository Limited
National Security Depository Limited is an NSE subsidiary that helps detect fraud. NSDL operates with two other India-based firms to help eliminate investor risk in the securities market, including the use of bad, fake or stolen paper.
DotEx International Ltd. and India Index Services and Products Ltd.
DotEx International handles online streaming data feeds, intraday snapshot data feeds, end-of-day data and historical data for the NSE. This company is wholly owned by NSE and serves only this purpose. The NSE’s final subsidiary, India Index Services and Products Ltd., handles index-related services for all of the Indian financial markets, including the NSE. The index service provides more than 80 different indexes in India, and many of the nation’s risk management and investment products are based on the work of the IISP. Other funds, including the stock exchange in Singapore, use derivatives and indexes created by the IISP.