National Stock Exchange (NSE)

What is NSE? 

The National Stock Exchange (NSE) is one of India’s largest financial market exchanges, operating from Mumbai (Maharashtra). It offers investors a platform for trading, settlement and clearing services. It is also India’s first stock exchange to offer electronic trading facilities.

Points to Remember

• The index measuring the performance of stocks traded on the NSE is called the Nifty
• NSE is the largest exchange in India in terms of volume traded

How does the National Stock Exchange work?

The stock exchange at NSE takes place through an ‘electronic limit order book’ method. As such, when an investor places a buy and sell order, order matching occurs through a trading computer. 

This process allows the order to get automatically matched with the limit order, as the buyer and seller remain anonymous in this market. Since the system displays every buy and sell order placed, it offers more transparency to the investors. Stockbrokers offering the online trading facility place the order.

What are the Functions of NSE?

Here are the key functions you should know: 

• Provide nationwide trading facility for debt, equity and other asset classes
• Act as a communication network for investors for equal participation in the trading system
• Ensure fair, efficient and transparent securities market
• Meet the contemporary international standards established for the financial securities markets
• Foster quick trade and book-entry settlement systems

What are the Top Indices on NSE?

Here are some broad-market indices on the NSE

• Nifty 50 Index
• Nifty 100 Index
• Nifty Smallcap 50 Index
• Nifty Next 50 Index
• Nifty Midcap 50 Index
• Nifty 500 Index
• Nifty 200 Index
• Nifty Midcap150 Index
• Nifty 500 Multicap 50:25:25 Index etc.

Why do Companies List on the NSE?

Following are the benefits that companies listed on the NSE enjoy: 

• It has a fully integrated business model that allows coverage across all asset classes
• It has better risk management and framework for rapid and automated order execution
• It allows investors to have better reach and visibility for the securities 
• It is the largest stock exchange in India and the fourth largest in the world by equity trading volume, as per WFE 2015 data

FAQs on the National Stock Exchange (NSE)

Is NSE a government company?

No. It is governed by the Securities and Exchange Board of India, which is under the authority of the government.

Who is the owner of NSE?

Currently, Ashishkumar Chauhan acts as the NSE’s Managing Director and Chief Executive Officer.

How many indices are there in NSE?

National Stock Exchange of India Limited has 350 indices under the Nifty brand.

What is the main index of the NSE? 

The Nifty Total Market Index tracks the performance of 750 stocks across different market segments.