COMPARATIVE STUDY OF

BSE AND NSE

1
 A
PROJECT REPORT
ON

" COMPARATIVE STUDY OF BSE AND NSE "

PROJECT SUBMITTED TO R.T.M.

UNIVERSITY, NAGPUR, IN PARTIAL FULFILLMENT OF THE
DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION.

SUBMITTED BY GUIDANCE
Mr. KISHOR BARANGE PROF. J. ALLONE

NABIRA MAHAVIDYALAYA, KATOL.

( 2018 – 19 )
2
 CERTIFICATE

This is to certify that

Mr. KISHOR BARANGE, is a bonafied student
Of NABIRA MAHAVIDYALAYA, KATOL, has successfully
completed the project work as prescribed by the
R.T.M. UNIVERSITY, NAGPUR , in the partial fulfillment
of the requirement of Bachelor of Business
Administration (BBA) program for the academic year
2018 - 19.
The project work entitled as,
"COMPARATIVE STUDY OF BSE AND NSE"

PROJECT GUIDE PRINCIPAL

PROF. J. ALLONE DR. RAJIV S. SATOKAR

3
 DECLARATION

I Mr.KISHOR BARANGE, hereby declare that

The project work entitled "COMPARATIVE STUDY OF BSE
AND NSE" submitted by me to the R.T.M.UNIVERSITY,
NAGPUR, in partial fulfillment of the requirement for the
degree of Bachelor of Business Administration (BBA)
under the guidance of Prof. J. Allone . It is my original
work and the conclusions drawn therein are based on the
material collected by myself.

The report submitted, is my own work

And has not been duplicated from any other source.
I shall be responsible for any unpleasure moment.

Place: KATOL. KISHOR BARANGE.

BBA 6th SEM.
Date: ...../...../2019.
4
 ACKNOWLEDGEMENT

I would like to express my special thanks of

gratitude to my project guidance Prof. J. Allone as well as
our other teacher staff, who gave me the golden
opportunity to do this wonderful project on the topic
―COMPARATIVE STUDY OF BSE AND NSE‖ which also
helped me in doing a lot of research and I came to know
about so many new things.
I am really thankful to them.
Secondly I would also like to thanks my parents and
friends who helped me a lot for completing this project
within the limited time.
I am making this project not only for marks but also for
increasing my knowledge.

THANKING YOU!
KISHOR BARANGE

5
 INDEX
Sr particular Page no.
no.
1 INTRODUCTION 8–9
2 HISTORY OF STOCK EXCHANGES 10 – 11

3 FUNCTIONS 12 – 16

4 ABOUT NSE 17 - 35

6 BOARD OF DIRECTORS 36 – 37
7 PROMOTERS 38 – 39
8 ABOUT BSE 40 – 44

9 FUNCTIONS OF BSE 45 - 47

10 BOARD OF DIRECTORS 48

11 TRADING AND SETTLEMENT 49 – 52

12 DIFFERENCE BETWEEN NSE AND BSE 53 - 55

13 INDEXES 56

14 COMPARISON BETWEEN NSE AND BSE 57 – 64

15 CONCLUSION 65

16 BIBLIOGRAPHY 66

6
INTRODUCTION

7
 INTRODUCTION TO STOCK EXCHANGES

A stock exchange is a form of exchange which provides services

for stock brokers and traders to trade stocks, bonds, and
other securities. Stock exchanges also provide facilities for issue
and redemption of securities and other financial instruments, and
capital events including the payment of income and dividends.
Securities traded on a stock exchange include shares issued by
companies, unit trusts, derivatives, pooled investment products
and bonds.

To be able to trade a security on a certain stock exchange, it

must be listed there. Usually, there is a central location at least
for record keeping, but trade is increasingly less linked to such a
physical place, as modern markets are electronic networks,
which gives them advantages of increased speed and reduced
cost of transactions. Trade on an exchange is by members only.

The initial offering of stocks and bonds to investors is by

definition done in the primary market and subsequent trading is
done in the secondary market. A stock exchange is often the
most important component of a stock market. Supply and
8
demand in stock markets are driven by various factors that, as in
all free markets, affect the price of stocks (see stock valuation).

There is usually no compulsion to issue stock via the stock

exchange itself, nor must stock be subsequently traded on the
exchange. Such trading is said to be off exchange or over-the-
counter. This is the usual way that derivatives and bonds are
traded. Increasingly, stock exchanges are part of a global market
for securities.

9
 HISTORY OF STOCK EXCHANGES IN INDIA

The first organised stock exchange in India was started in 1875

at Bombay and it is stated to be the oldest in Asia. In 1894 the

Ahmedabad Stock Exchange was started to facilitate dealings in

the shares of textile mills there. The Calcutta stock exchange

was started in 1908 to provide a market for shares of plantations

and jute mills.

Then the madras stock exchange was started in 1920. At present

there are 24 stock exchanges in the country, 21 of them being

regional ones with allotted areas. Two others set up in the

reform era, viz., the National Stock Exchange (NSE) and Over

the Counter Exchange of India (OICEI), have mandate to have

nation-wise trading.
10
They are located at Ahmedabad, Vadodara, Bangalore,

Bhubaneswar, Mumbai, Kolkata, Kochi, Coimbatore, Delhi,

Guwahati, Hyderabad, Indore, Jaipur‘ Kanpur, Ludhiana,

Chennai Mangalore, Meerut, Patna, Pune, Rajkot.

The Stock Exchanges are being administered by their governing

boards and executive chiefs. Policies relating to their regulation

and control are laid down by the Ministry of Finance.

Government also Constituted Securities and Exchange Board of

India (SEBI) in April 1988 for orderly development and

regulation of securities industry and stock exchanges.

11
 FUNCTIONS OF STOCK EXCHANGES

We discuss about major functions of stock exchange

under these headings:-

 Providing a ready market: The organization of stock

exchange provides a ready market to speculators and
investors in industrial enterprises. It thus, enables the
public to buy and sell securities already in issue.

 Providing quoting market prices: It makes possible the

determination of supply and demand on price. The very
sensitive pricing mechanism and the constant quoting
of market price allows investors to always be aware of
values. This enables the production of various indexes
which indicate trends etc.

 Providing facilities for working: It provides

opportunities to Jobbers and other members to perform
12
 their activities with all their resources in the stock
exchange.

 Safeguarding activities for investors: The stock

exchange renders safeguarding activities for investors
which enables them to make a fair judgment of
securities. Therefore directors have to disclose all
material facts to their respective shareholders. Thus
innocent investors may be safeguard from the clever
brokers.

 Operating a compensation fund: It also operate a

compensation fund which is always available to
investors suffering loss due due the speculating
dealings in the stock exchange.

 Creating the discipline: Its members controlled under

rigid set of rules designed to protect the general public

13
 and its members. Thus this tendency creates the
discipline among its members in social life also.

 Checking functions: New securities checked before

being approved and admitted to listing. Thus stock
exchange exercises rigid control over the activities of
its members.

 Adjustment of equilibrium: The investors in the stock

exchange promote the adjustment of equilibrium of
demand and supply of a particular stock and thus
prevent the tendency of fluctuation in the prices of
shares.

 Maintenance of liquidity: The bank and insurance

companies purchase large number of securities from the
stock exchange. These securities are marketable and
can be turned into cash at any time. Therefore banks

14
 prefer to keep securities instead of cash in their reserve
. This it facilities the banking system to maintain
liquidity by procuring the marketable securities.

 Promotion of the habit of saving: Stock exchange

provide a place for saving to general public. Thus it
creates the habit of thrift and investment among the
public. This habit leads to investment of funds
incorporate or government securities. The funds placed
at the disposal of companies are used by them for
productive purposes.

 Refining and advancing the industry: Stock exchange

advances the trade , commerce and industry in the
country. it provides opportunity to capital to flow into
the most productive channels. Thus the flow of capital
from unproductive field to productive field helps to

15
 refine the large scale enterprises.

 Promotion of capital formation: It plays an important

part in capital formation in the country. its publicity
regarding various industrial securities makes even
disinterested people feel interested in investment.

 Increasing Govt. Funds: The govt. can undertake

projects of national importance and social value by
raising funds through sale of its securities on stock
exchange.

16
 NSE
(NATIONAL STOCK EXCHANGE)

17
 ABOUT NSE
The National Stock Exchange (NSE) is stock exchange located
in Mumbai, India. It is the 11th largest stock exchange in the
world by market capitalisation and largest in India by daily
turnover and number of trades, for both equities and derivative
trading. NSE has a market capitalisation of more than US$2.27
trillion and 2000 companies listed as of January 2019.Though a
number of other exchanges exist, NSE and the Bombay Stock
Exchange are the two most significant stock exchanges in India
and between them are responsible for the vast majority of share
transactions. The NSE's key index is the S&P CNX Nifty, now
known as the NSE NIFTY (National Stock Exchange Fifty), an
index of fifty major stocks weighted by market capitalisation.

NSE is mutually owned by a set of leading financial institutions,

banks, insurance companies and other financial intermediaries in
India but its ownership and management operate as separate
entities.There are at least 2 foreign investors NYSE Euronext
and Goldman Sachs who have taken a stake in the NSE. As of
2006, the NSE VSAT terminals, 2799 in total, cover more than

18
1500 cities across India. In 2019, NSE was the third largest
stock exchange in the world in terms of the number of contracts
(1221 million) traded in equity derivatives. It is the second
fastest growing stock exchange in the world with a recorded
growth of 16.6%.

The National Stock Exchange (NSE) is India's leading stock

exchange covering various cities and towns across the country.
NSE was set up by leading institutions to provide a modern,
fully automated screen-based trading system with national reach.
The Exchange has brought about unparalleled transparency,
speed & efficiency, safety and market integrity. It has set up
facilities that serve as a model for the securities industry in
terms of systems, practices and procedures.

NSE has played a catalytic role in reforming the Indian

securities market in terms of microstructure, market practices
and trading volumes. The market today uses state-of-art
information technology to provide an efficient and transparent
trading, clearing and settlement mechanism, and has witnessed
several innovations in products & services viz. demutualisation
of stock exchange governance, screen based trading,
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compression of settlement cycles, dematerialisation and
electronic transfer of securities, securities lending and
borrowing, professionalisation of trading members, fine-tuned
risk management systems, emergence of clearing corporations to
assume counterparty risks, market of debt and derivative
instruments and intensive use of information technology.

Origins
The National Stock Exchange of Independent India was set up
by Government of India on the recommendation of Pherwani
Committee in 1991. Promoted by leading financial institutions
essentially led by IDBI at the behest of the Government of India,
it was incorporated in November 1992 as a tax-paying company.
In April 1993, it was recognized as a stock exchange under the
Securities Contracts (Regulation) Act, 1956. NSE commenced
operations in the Wholesale Debt Market (WDM) segment in
June 1994. The Capital market (Equities) segment of the NSE
commenced operations in November 1994, while operations in
the Derivatives segment commenced in June 2000.

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Markets

Currently, NSE has the following major segments of the capital

market:

Equities

 Equities
 Indices
 Mutual Funds
 Exchange Traded Funds
 Initial Public Offerings
 Security Lending and Borrowing Scheme

Derivatives

 Equity Derivatives (including Global Indices like S&P 500,

Dow Jones and FTSE )
 Currency Derivatives
 Interest Rate Futures

Debt

 New Debt Segment

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 Retail Debt Market
 Wholesale Debt Market
 Corporate Bonds

Equity Derivatives The National Stock Exchange of India

Limited (NSE) commenced trading in derivatives with the
launch of index futures on 12 June 2000. The futures and
options segment of NSE has made a mark for itself globally. In
the Futures and Options segment, trading in S&P CNX Nifty
Index, CNX IT index, Bank Nifty Index, Nifty Midcap 50 index
and single stocks are available. Trading in Mini Nifty Futures &
Options and Long term Options on S&P CNX Nifty are also
available. The average daily turnover in the F&O Segment of
the Exchange during 2009-10 was ` 72,392 crore (US $ 16,097
million)

On 29 August 2011, National Stock exchange launched

derivative contracts on the world‘s most followed equity indices,
the S&P 500 and the Dow Jones Industrial Average. This was
the first time that derivative contracts on global indices are
available in India. This is the also the first time in the world that
futures contracts on the S&P 500 index were introduced and
22
listed on an exchange outside of their home country, USA. The
new contracts include futures on both the DJIA and the S&P
500, and options on the S&P 500. The first day volumes at the
close of trading on 29 August 2011 at 15:30, on the 2 indices in
futures and options contracts was nearly Rs 122 crores (1220
million).

On 3 May 2012, The National Stock exchange launched

derivative contracts (futures and options) on FTSE 100, the
widely tracked index of the UK equity stock market. This was
the first of its kind for an index of the UK equity stock market to
be launched in India. FTSE 100 includes 100 largest UK listed
blue chip companies and has given returns of 17.8 per cent on
investment over three years. The index constitutes 85.6 per cent
of UK‘s equity market cap. NSE recorded a volume of 500
crores (5000 million) on the 1st day of trading.

Currency Derivatives In August 2008 currency derivatives were

introduced in India with the launch of Currency Futures in USD
INR by NSE. It also added currency futures in euro, pounds and
yen. Interest Rate Futures were introduced for the first time in

23
India by NSE on 31 August 2009, exactly one year after the
launch of Currency Futures.

Debt Market on 13 May, 2013 NSE launched India's first

dedicated debt platform to provide a liquid and transparent
trading platform or debt related products.

NSE became the first stock exchange to get approval for interest
rate futures, As recommended by SEBI-RBI committee, on 31
August 2009, a futures contract based on 7% 10 Year
Government of India (Notional) was launched with quarterly
maturities.

24
 Exchange Traded Funds on NSE

ETFs launched on NSE Exchange Traded Funds are essentially

Index Funds that are listed and traded on exchanges like stocks.
An ETF is a basket of stocks that reflects the composition of an
Index, like S&P CNX Nifty. The ETFs trading value is based on
the net asset value of the underlying stocks that it represents.

ETF Schemes launched on NSE

 Equity
 Gold
 Debt
 World Indices

In recent times, Exchange-traded funds (ETFs) have gained a

wider acceptance as financial instruments whose unique
advantages over mutual funds have caught the eye of many an
investor. These instruments are beneficial for Investors that find
it difficult to master the tricks of the trade of analyzing and
picking stocks for their portfolio. Various mutual funds provide
25
ETF products that attempt to replicate the indices on NSE, so as
to provide returns that closely correspond to the total returns of
the securities represented in the index.

26
 Certifications

NSE also conducts online examination and awards certification,

under its programmes of NSE's Certification in Financial
Markets (NCFM). Currently, certifications are available in 32
modules, covering different sectors of financial and capital
markets, both at beginner and advanced levels. The list of
various modules can be found at the official site of NSE India.
Branches of the NSE are located throughout India. NSE has
been offering a short-term course called NSE Certified Capital
Market Professional (NCCMP) since August 2009.

27
 Benefits of Listing on NSE

A premier marketplace

The sheer volume of trading activity ensure that the impact cost
is lower on the Exchange which in turn reduces the cost of
trading to the investor. NSE's automated trading system ensure
consistency and transparency in the trade matching which
enhances investors confidence and visibility of our market.

Visibility

The trading system provides unparallel level of trade and post-

trade information. The best 5 buy and sell orders are displayed
on the trading system and the total number of securities
available for buying and selling is also displayed. This helps the
investor to know the depth of the market. Further, corporate
announcements, results, corporate actions etc are also available
on the trading system.

Largest exchange

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NSE is the largest exchange in the county in terms of trading
volumes. During the year 2010-2011, NSE reported a turnover
of 35, 77,412 crores in the equities segment.

Unprecedented reach

NSE provides a trading platform that extends across the length

and breadth of the country. Investors from 191 centers can avail
of trading facilities on the NSE Trading Network. The Exchange
uses the latest in communication technology to give instant
access from every location.

Transaction speed

The speed at which the Exchange processes orders, results in

liquidity and best available prices. The highest number of trades
in a day of 11,260,392 was recorded on May 19, 2009.

Short settlement cycles

The Exchange has successfully completed more than 2800

settlements without any delays.

29
 Investor Rights and Obligations

Investor Rights -

 Right to get Unique Client Code (UCC) allotted

 Get a copy of KYC and other documents executed
 Get trades executed in only his/her UCC
 Place order on meeting the norms agreed to with the Member
 Get best price
 Contract note for trades executed
 Details of charges levied
 Receive funds and securities on time
 Receive statement of accounts from trading member
 Ask for settlement of accounts

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 Investor Obligations - Under Obligation To

 Execute Know Your Client (KYC) documents and provide

supporting documents
 Understand the voluntary conditions being agreed with the
member
 Understand the rights given to the Members
 Read Risk Disclosure Document
 Understand the product and operational framework and
deadlines
 Pay margins
 Pay funds and securities for settlement on time
 Verify details of trades
 Verify bank account and DP account for funds and securities
movement
 Review contract notes and statement of account

Rights to Remedies

31
 Take up a complaint against member with the Exchange
 Take up a complaint against listed company
 File arbitration against member if there is dispute
 Challenge the arbitration award before court of law

Obligation Towards Remedies

 Take up complaint within reasonable time

 Complaint to be supported by appropriate documents
 When additional information is called for provide the same
 To participate in resolution meetings

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 Purpose, Vision & Values of NSE :

Purpose:

Committed to improve the financial well-being of people.

Vision:

To continue to be a leader, establish global presence, facilitate

the financial well being of people.

Values:

NSE is committed to the following core values :

 Customer focused culture

 Trust, respect and care for the individual
 Passion for excellence
 Teamwork

33
 Awards & Recognition

NSCCL Rated ―CCR AAA‖ for fourth consecutive year - 28th

Dec 2011.

For fourth consecutive year CRISIL has assigned its highest

corporate credit rating of ‗CCR AAA‘ to the National Securities
Clearing Corporation Ltd (NSCCL). 'CCR AAA' rating indicates
highest degree of strength with regard to honouring debt
obligations. As per CRISIL the rating reflects NSCCL‘s status
as Clearing Corporation for NSE. The rating also factors in
NSCCL‘s rigorous risk management controls and adequate
settlement guarantee cover.

CRISIL has further stated that NSCCL‘s risk management

system is comprehensive, and is regularly upgraded to pre-empt
market failures. The company addresses risks in clearing and
settlement with its stringent norms for selection of members,
robust margining system, and risk-based position limits and
surveillance mechanism.

NSE and NSCCL receive Asian Banker awards

34
NSE has been awarded 'The Asian Banker Financial Derivative
Exchange of the Year Award" NSCCL has been awarded 'The
Asian Banker Clearing House of the Year Award".

35
 BOARD OF DIRECTORS

Sr.No. Name & Company Designation

Mr. Ashok Chawla

Former Secretary, Ministry Chairman
1
of Finance [Public Interest Director]
Government of India

Managing Director &

2 Mr. Vikram Limaye
CEO

Mr. Abhay Havaldar

3 Former Advisory Director - Shareholder Director
General Atlantic LLC

Mr. Dinesh Kanabar

Former Dy. CEO of KPMG in
4 Public Interest Director
India &
CEO of Dhruva Advisors LLP

Mr. Naved Masood

Public Interest Director
5 Former Secretary, Ministry
of Corporate Affairs
Government of India.
36
 Mr. T. V. Mohandas Pai
Chairman of Manipal Global
Education Services Private
6 Public Interest Director
Limited &
Former CFO - Infosys
Technologies Limited

Mr. Prakash Parthasarathy

Former Chief Investment
7 Shareholder Director
Officer
PremjiInvest

Ms. Dharmishta Raval

Advocate & Former
8 Public Interest Director
Executive Director
SEBI

Ms. Sunita Sharma

Managing Director,
9 Shareholder Director
LIC Housing Finance
Limited

37
 PROMOTERS
NSE has been promoted by leading financial institutions,
banks, insurance companies and other financial
intermediaries:

1. Industrial Development Bank of India Limited

2. Industrial Finance Corporation of India Limited
3. Life Insurance Corporation of India
4. State Bank of India
5. ICICI Bank Limited
6. IL & FS Trust Company Limited
7. Stock Holding Corporation of India Limited
8. SBI Capital Markets Limited
9. The Administrator of the Specified Undertaking of
Unit Trust of India
10. Bank of Baroda
11. Canara Bank
12. General Insurance Corporation of India
38
13. National Insurance Company Limited
14. The New India Assurance Company Limited
15. The Oriental Insurance Company Limited
16. United India Insurance Company Limited
17. Punjab National Bank
18. Oriental Bank of Commerce
19. Corporation Bank
20. Indian Bank

21. Union Bank of India

39
 BSE
(BOMBAY STOCK EXCHANGE)

40
 ABOUT BSE
Bombay Stock Exchange is the oldest stock exchange in
Asia What is now popularly known as the BSE was
established as "The Native Share & Stock Brokers'
Association" in 1875.

Over the past 135 years, BSE has facilitated the growth of
the Indian corporate sector by providing it with an
efficient capital raising platform.
Today, BSE is the world's number 1 exchange in the
world in terms of the number of listed companies (over
4900). It is the world's 5th most active in terms of number
of transactions handled through its electronic trading
system. And it is in the top ten of global exchanges in
terms of the market capitalization of its listed companies
(as of January 12, 2019). The companies listed on BSE
command a total market capitalization of USD Trillion
2.1 as of Jan, 2019.

41
BSE is the first exchange in India and the second in the
world to obtain an ISO 9001:2000 certifications. It is also
the first Exchange in the country and second in the world
to receive Information Security Management System
Standard BS 7799-2-2002 certification for its BSE On-
Line trading System (BOLT). Presently, BSE are ISO
27001:2005 certified, which is a ISO version of BS 7799
for Information Security.

The BSE Index, SENSEX, is India's first and most

popular Stock Market benchmark index. Exchange traded
funds (ETF) on SENSEX, are listed on BSE and in Hong
Kong. Futures and options on the index are also traded at
BSE.

42
 HISTORY OF BSE
The Bombay Stock Exchange is known as the oldest
exchange in Asia. It traces its history to the 1850s, when
stockbrokers would gather under banyan trees in front of
Mumbai's Town Hall. The location of these meetings
changed many times, as the number of brokers constantly
increased. The group eventually moved to Dalal Street in
1874 and in 1875 became an official organization known
as 'The Native Share & Stock Brokers Association'. In
1956, the BSE became the first stock exchange to be
recognized by the Indian Government under the Securities
Contracts Regulation Act.

The Bombay Stock Exchange developed the BSE Sensex

in 1986, giving the BSE a means to measure overall
performance of the exchange. In 2000 the BSE used this
index to open its derivatives market, trading Sensex
futures contracts. The development of Sensex options
43
along with equity derivatives followed in 2001 and 2002,
expanding the BSE's trading platform.

Historically an open-cry floor trading exchange, the

Bombay Stock Exchange switched to an electronic
trading system in 1995. It took the exchange only fifty
days to make this transition.
Today BSE is among the 10 major international
exchanges in context of market investment of the firms
registered under it. The total amount of investment
dominated by the cataloged firms under BSE as on 31st
March, 2010 was USD 1.36 Trillion.

44
 FUNCTIONS OF BSE

The Stock Market is a pivotal institution in the financial system.

A well-ordered stock market performs several economic
functions:

 It ensures the measure of safety and fair dealing

 It performs an ‗act of magic‘ by translating short-term

investments into long-term funds for companies.

 It directs the flow of capital in the most profitable channels.

 It induces companies to raise their standard of performance.

 It offers guidance to management about the cost of capital.

Measure of Safety and Fair Dealing:

The stock exchanges operate under a regulatory framework

45
which seeks to protect the interest of investors. The rules,
regulations, and bye-laws of a stock exchange, which are
approved by the central government, are meant to ensure that a
reasonable measure of safety is provided to investors and
transactions take place in competitive conditions which are fair
to all concerned.

Act of Magic:
Most of the investors are interested in short-term investments.
The requirements of companies are, however, long-term in
nature—they require equity capital on a more or less permanent
basis and debenture capital for 3 to 15 years. Thanks to the
negotiability and transferability of securities, through the stock
market, it is possible for companies to obtain their long-term
requirements from investors with short-term horizons. While
one investor is substituted by another when a security is
transacted, the company is assured of availability of funds.

Flow of Capital in the Most Profitable Channels:

Companies which have more profitable investment opportunities
are normally able to raise substantial funds through the stock
46
market whereas companies which do not have such
opportunities are normally not able to do so.

Inducement to Companies to Raise their Standard of

Performance:
When the equity, capital of a company is listed on a stock
exchange, the performance of the company is reflected in the
market price of the equity stock, which is readily available for
public consumption. Put differently, the company‘s performance
is more ‗visible‘ in the eyes of public. Such a public exposure
normally induces companies to raise their standard of
performance.

Guidance of Cost of Capital:

The market value of the securities of company are required for
computing its cost of capital. Such values can be obtained from
stock market quotations. Hence the stock market offers guidance
on cost of capital.

47
 BOARD OF DIRECTORS

Sr Names Designation
no.

1 Shri S. Ravi Chairman

2 Shri Ashishkumar Chauhan Managing

Director & CEO
3 Justice Vikramjit Sen Public Interest
Director
4 Shri Sumit Bose Public Interest
Director
5 Shri S. S. Mundra Public Interest
Director
6 Shri. David Wright Public Interest
Director
7 Dr. Shriprakash Kothari Shareholder
Director
8 Smt. Rajshri Sabnavis Shareholder
Director
9 Smt. Usha Sangwan Shareholder
Director
48
 TRADING AND SETTLEMENT

Trading:

Each Stock Exchange has listed and permitted securities that are
traded on it. There are two ways of organizing the trading
activity.

Open Outcry System: Under the open outcry system traders

shout and resort to signals on the trading floor of the exchange
which consists of several ‗notional‘ trading posts for different
securities. A member (or his representative) wishing to buy or
sell a certain security, reaches the trading post where the
security is traded. Here, he comes in contact with others
interested in transacting in that security. Buyers make their bid
and sellers make their offers and bargains are closed at mutually
agreed-upon prices. In stock where jobbing is done, the jobber
plays an important role. He stands ready to buy or sell on his
account. He quotes his bid (buying) and asks (selling) prices. He
provides some stability and continuity to the market.

49
Screen Based System: In the screen-based system the trading
ring is replaced by the computer screen and distant participants
can trade with each other through the computer network. A large
screen based trading system (a) enhances the informational
efficiency of the market as more participants trade at a faster
speed; (b) permits the market participants to get a full view of
the market, which increases their confidence in the market; and
(c) establishes transparent audit trails.

Settlement:

The settlement of transactions is done on a settlement period

basis. Earlier, the settlement period on the Indian Stock
Exchanges was 7 days, but now it is T+1 settlement. T+1
includes the day of trade and an additional day. During a
settlement period, buying and selling transactions in a particular
security can be squared up. Square off is a same day settlement
cycle. At the end of settlement period, transactions are settled on
net basis. Since the settlement period used to be 7 days and the
settlement is for the net position, most of the transactions are
squared within the settlement period. Clearly these transactions

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are motivated by a desire to profit from price variations within
the settlement period.

Traditionally, trades have been settled by physical delivery. This

means that the securities have to physically move from the seller
to the seller‘s broker, from the seller‘s broker to the buyer‘s
broker (through the clearing house of the exchange or directly),
and from the buyer‘s broker to the buyer. Further the buyer has
to lodge the securities with the transfer agents of the company
and the process of the transfer may take one to three months.
This leads to high paperwork cost and creates bad paper risks.

To mitigate the cost and the risks associated with the physical
delivery, settlement in the developed securities market is mainly
through electronic delivery facilitated by depositories. A
‗depository‘ is an institution which immobilizes physical
certificates (of securities) and effect transfers of ownership by
electronic book entry. A beginning in the direction of electronic
delivery has been made in India with the establishment of the
National Securities Depository Limited (NSDL), India‘s first
depository, in 1996. As NSDL expands its operations and as
new depositories come into being, settlement will progressively
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be done more by electronic delivery and less by physical
delivery.

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 DIFFERENCE BETWEEN NSE AND BSE

The Bombay Stock Exchange (BSE) and the National Stock

Exchange of India Ltd (NSE) are the two primary exchanges in
India. In addition, there are 22 Regional Stock Exchanges.
However, the BSE and NSE have established themselves as the
two leading exchanges and account for about 80 per cent of the
equity volume traded in India.

The difference between NSE and BSE:

BSE:-
Bombay Stock Exchange Limited is the oldest stock exchange in
Asia with a rich heritage. Popularly known as ―BSE‖, it was
established as ―The Native Share & Stock Brokers Association‖
in 1875. It was the first stock exchange in the country to obtain
permanent recognition in 1956 from the Government of India
under the Securities Contracts (Regulation) Act, 1956

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NSE:-
The National Stock Exchange of India was promoted by leading
financial institutions at the behest of the Government of India,
and was incorporated in November 1992 as a tax-
paying company. In April 1993, it was recognized as a stock
exchange under the Securities Contracts (Regulation) Act, 1956.

Figure and facts:

Both are the stock exchange recognized by SEBI(Securities and
Exchange Board of India).
The NSE and BSE are equal in size in terms of daily traded
volume. The average daily turnover at the exchanges has
increased from Rs 851 crore in 1997-98 to Rs 1,284 crore in
1998-99 and further to Rs 2,273 crore in 1999-2000 (April –
August 1999). NSE has around 1500 shares listed with a total
market capitalization of around Rs 9,21,500 crore (Rs 9215-bln).
The BSE has over 6000 stocks listed and has a market
capitalization of around Rs 9,68,000 crore (Rs 9680-bln). Most
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key stocks are traded on both the exchanges and hence the
investor could buy them on either exchange.
Anyone can deal in securities by any of the exchange. A person
need to open a demat account to buy and sell securities in any of
the exchange.

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 INDEXES
SENSEX (Sensitive index):-

This index is comprised of 30 of the largest and most actively-traded

stocks on the BSE.

Other index in BSE are; BSE 500, BSE 100, BSE 200, BSE PSU, BSE
MIDCAP, BSE SMLCAP, BSE BANKEX, BSE Teck, BSE Auto, BSE
Pharma, BSE Fast Moving Consumer Goods (FMCG), BSE Consumer
Durables (SYMBOL: Cons Dura), BSE Metal.

The BSE Sensex is the older and more widely followed index.

NIFTY (NATIONAL FIFTY):-

This index is comprised of 50 of the largest and most actively-traded

stocks on the BSE.

NSE also set up as index services firm known as India Index Services &
Products Limited (IISL) and has launched several stock indices,
including: S&P CNX Nifty, CNX Nifty Junior, CNX 100 (= S&P CNX
Nifty + CNX Nifty Junior), S&P CNX 500 (= CNX 100 + 400 major
players across 72 industries), CNX Midcap (introduced on 18 July 2005
replacing CNX Midcap 200).

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COMPARISON BETWEEN
NSE AND BSE

57
 Basic between NSE and BSE

 Both are stock exchange of India.

 NSE has around 1500 shares listed whereas the BSE has over
6000 stocks listed.

 NSE has capitalization of around Rs 9,21,500 crore (Rs 9215-

bln). The BSE has market capitalization of around Rs
9,68,000 crore (Rs 9680-bln).

 NSE index is caleed as NIFTY whereas BSE index is

SENSEX.

 NSE has 50 companies for NIFTY whereas BSE has 30

companies for SENSEX.

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 Comparison chart of NSE and BSE
BSE NSE

Number of listed 5,400 (as of late 2019) 2000 (as of June 2019)
companies:

Market capitalization USD 2.1 trillion (as of jan USD 2.27 trillion (as of jan
of listed companies: 2019) 2019)

Main Index: BSE Sensex S&P CNX Nifty

Index value: 36500 (as of jan 2019) 10,800 (as of jan 2019)

Location: Mumbai, India Mumbai, India

Claim to fame: Oldest stock exchange Largest stock exchange

in Asia. in India in terms of daily
turnover and number of
trades.
Key Person: Mr Ashish Chauhan (MD & Mr. Vikram
CEO) Limaye(Managing Director
and CEO)
Website: www.bseindia.com www.nseindia.com

Geographical spread: Presence in 417 cities Presence in 1,486 cities

Number of members: 951 (Oct 2007) 1,009 as on March 2007

Established in: 1875 1992

Name: Bombay Stock Exchange National Stock Exchange

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 DIAGRAMATIC PROJECTION OF THE DIFFERENCE
OF NSE AND BSE

Comparison of Trade Value of BSE and NSE:

NSE BSE

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COMPARISON OF MARKET CAPITALISATION OF NSE AND
BSE

BSE 1627

NSE : 1588

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INVESTOR STOCK EXCHANGE PREFERENCE

NSE : 58%

BSE : 36%

OTHERS : 5%

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REASON FOR PREFERING NSE

0
LIQUIDITY BRAND VALUE TRUST DIVERSIFIED SERVICES

63
CLIENT SATISFACTION CHART

0
NSE BSE BOTH

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 CONCLUSION

Stock market is something which you cannot predict what is

going to happen in the market tomorrow without analysis. So it
is always preferable to0 go for some professional help if you
wish to invest in Indian stock market. We should also be
acquainted with the concept of NSE and BSE.

BSE and NSE are both major stock exchanges in India. But
there are difference between NSE and BSE. Investors invest
their money in order to reap huge benefits form markets from
their investment. But nobody can predict the market as we have
already discussed. Also growth of these stock exchanges is
decided by our countries growth. But we should be aware that it
requires a lot of patience.

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 BIBLIOGRAPHY

Websites:
 nseindia.com
 bseindia.com
 wikipedia.org

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