Objectives of National Stock Exchange (NSE)

Objectives of National Stock Exchange (NSE)

Objectives of the National Stock Exchange (NSE)

The National Stock Exchange was initially founded in Cincinnati in the year of 1885. It was previously known as the Cincinnati Stock Exchange, but moved to Chicago in 1995 and distorted its name in 2003. The National Stock Exchange can also refer to stock in India or Australia. Now, NSE is one of the most significant and most superior stock markets in India. NSE is the third biggest stock exchange in the world.

NSE was set up with the following objectives:

  1. Establishing a nationwide trading facility for all types of securities.
  2. Ensuring equal access to investors all over the country through an appropriate communication network.
  3. Providing a fair, efficient and transparent securities market using an electronic trading system.
  4. Enabling shorter settlement cycles and book-entry settlements.
  5. Meeting international benchmarks and standards.

Within a span of ten years, NSE has been able to achieve its objectives for which it was set up. It has been playing a leading role as a change agent in transforming the Indian capital market. NSE has been able to take the stock market to the doorstep of the investors.

Objectives for setting up NSE:

  • To endow with a fair, transparent and resourceful securities market to investors using an electronic trading system and establishing a countrywide trading facility for all types of securities.
  • Ensuring equivalent entrance to investors all over the country through a suitable communication network to establish nationwide trading competence for equities and debt instruments.
  • Providing for a reasonable, competent and translucent securities market using an electronic trading system and ensure the same right of entry to investors all over the country through an appropriate statement network.
  • Enabling shorter settlement cycles to ensure fairness, efficiency, and transparency of securities trading.
  • Meeting up with global benchmarks and standards to improve the standard of the securities market to the international level.
  • The NSE was established in order to offer a nation-wide trading facility for equities, debts, and hybrids. Thus, it intends to facilitate equal access to investors across the country.

The NSE was set-up with an express objective to fulfill the following functions:

  • NSE is a completely computerized screen-based trading system and it consists of an extensive debt market, capital market and derivatives market. When a trade is carried out, the trade verification slip is printed at the trading member’s work station.
  • Ensuring the same right of entry to investors across the state through a suitable communication network. Trading is done on the computer with the help of PC terminals in brokers’ offices. The NSE brokers connection themselves to the computerized quotation structure. Brokers are allowed to buy and sell electronically.
  • Providing a reasonable, resourceful and transparent securities market to investors using electronic trading systems. The trading members place an order with the NSE stating the circumstances in terms of price, time or size. On placement of the order, an order verification slip is prepared.
  • Meeting the present worldwide standards of securities markets. Members should deliver securities and cash on the thirteenth and fourteenth day of trading correspondingly. The fifteenth day of trading is the payout day.
  • The advantage of the computerized trading System is that the investor is able to find the best price for his scrips. Thus, the trading member can do business proficiently.

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