National Stock Exchange (NSE)

Why in news?

• Recently, Securities and Exchange Board of India (SEBI) noted that the National Stock Exchange (NSE) was a systemically important Market Infrastructure Institution (MII).

More about the news:

• The National Stock Exchange (NSE), the country's largest equities and derivatives exchange, was earlier this month fined for laxity in governance pertaining to actions taken during the tenure of its former MD and CEO Chitra Ramkrishna.

About National Stock Exchange (NSE):

• The National Stock Exchange was founded in 1992. It was recognized as a stock exchange by SEBI under the Securities Contracts (Regulation) Act, 1956 and the operation commenced in 1994.
• It is India's largest financial market. It ranked fourth in the world by equity trading volume.
• NSE was the first exchange in India to provide modern, fully automated electronic trading.
• The NIFTY 50 is the flagship index on the National Stock Exchange of India Ltd. (NSE). The Index tracks the behavior of a portfolio of blue chip companies, the largest and most liquid Indian securities. It includes 50 of the approximately 1600 companies listed on the NSE.

What are MIIs?

• Stock exchanges, depositories and clearing houses are all Market Infrastructure Institutions and constitute a key part of the nation's vital economic infrastructure.
• A panel set up under the chairmanship of former RBI Governor Bimal Jalan — to examine issues arising from the ownership and governance of MIIs — in its 2010 report said:
  • The term ‘infrastructure’ would mean the basic, underlying framework or features of a system
  • The term ‘market infrastructure’ denotes such fundamental facilities and systems serving this market.

PRACTICE QUESTION

Which of the following statements is/are correct regarding ‘National Stock Exchange’?

1. It is India's largest financial market

2. It was recognized as a stock exchange by SEBI under the Securities Contracts (Regulation) Act, 1956

Select the correct answer using the code given below:

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer