Nifty Stock Exchange

http://www.nse-india.com/
The Organization

The National Stock Exchange of India Limited has genesis in the report of the High Powered
Study Group on Establishment of New Stock Exchanges. It recommended promotion of a
National Stock Exchange by financial institutions (FIs) to provide access to investors from all
across the country on an equal footing. Based on the recommendations, NSE 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 unlike other stock exchanges in the country.

On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956
in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in
June 1994. The Capital Market (Equities) segment commenced operations in November 1994
and operations in Derivatives segment commenced in June 2000.

The following years witnessed rapid development of Indian capital market with introduction of
internet trading, Exchange traded funds (ETF), stock derivatives and the first volatility index -
IndiaVIX in April 2008, by NSE.

August 2008 saw introduction of Currency derivatives in India with the launch of Currency
Futures in USD INR by NSE. Interest Rate Futures was introduced for the first time in India by
NSE on 31st August 2009, exactly after one year of the launch of Currency Futures.

With this, now both the retail and institutional investors can participate in equities, equity
derivatives, currency and interest rate derivatives, giving them wide range of products to take
care of their evolving needs.

1
 Our Group Associate/Affiliate Companies

  

   

 
     

NSCCL         NCCL NSETECH

  

DotEx Intl. Ltd.

IISL NSE.IT

2
NSE Milestones

November 1992 Incorporation

April 1993 Recognition as a stock exchange

May 1993 Formulation of business plan

June 1994 Wholesale Debt Market segment goes live

November 1994 Capital Market (Equities) segment goes live

March 1995 Establishment of Investor Grievance Cell

April 1995 Establishment of NSCCL, the first Clearing Corporation

June 1995 Introduction of centralised insurance cover for all trading members

July 1995 Establishment of Investor Protection Fund

October 1995 Became largest stock exchange in the country

April 1996 Commencement of clearing and settlement by NSCCL

April 1996 Launch of S&P CNX Nifty

June 1996 Establishment of Settlement Guarantee Fund

Setting up of National Securities Depository Limited, first

November 1996
depository in India, co-promoted by NSE

November 1996 Best IT Usage award by Computer Society of India

December 1996 Commencement of trading/settlement in dematerialised securities

December 1996 Dataquest award for Top IT User

December 1996 Launch of CNX Nifty Junior

February 1997 Regional clearing facility goes live

November 1997 Best IT Usage award by Computer Society of India

Promotion of joint venture, India Index Services & Products

May 1998
Limited (IISL)

May 1998 Launch of NSE's Web-site: www.nse.co.in

July 1998 Launch of NSE's Certification Programme in Financial Market

August 1998 CYBER CORPORATE OF THE YEAR 1998 award

February 1999 Launch of Automated Lending and Borrowing Mechanism

April 1999 CHIP Web Award by CHIP magazine

October 1999 Setting up of NSE.IT

January 2000 Launch of NSE Research Initiative

February 2000 Commencement of Internet Trading

3
June 2000 Commencement of Derivatives Trading (Index Futures)

September 2000 Launch of 'Zero Coupon Yield Curve'

Launch of Broker Plaza by Dotex International, a joint venture

November 2000
between NSE.IT Ltd. and i-flex Solutions Ltd.

December 2000 Commencement of WAP trading

June 2001 Commencement of trading in Index Options

July 2001 Commencement of trading in Options on Individual Securities

November 2001 Commencement of trading in Futures on Individual Securities

December 2001 Launch of NSE VaR for Government Securities

January 2002 Launch of Exchange Traded Funds (ETFs)

NSE wins the Wharton-Infosys Business Transformation Award in

May 2002
the Organization-wide Transformation category

October 2002 Launch of NSE Government Securities Index

January 2003 Commencement of trading in Retail Debt Market

June 2003 Launch of Interest Rate Futures

August 2003 Launch of Futures & options in CNXIT Index

June 2004 Launch of  STP Interoperability

August 2004 Launch of  NSE’s electronic interface for listed companies

March 2005 ‘India Innovation Award’ by EMPI Business School, New Delhi

June 2005 Launch of Futures & options in BANK Nifty Index

December 2006 'Derivative Exchange of the Year', by Asia Risk magazine

January 2007 Launch of  NSE – CNBC TV 18 media centre

March 2007 NSE, CRISIL announce launch of IndiaBondWatch.com

June 2007 NSE launches derivatives on Nifty Junior & CNX 100

October 2007 NSE launches derivatives on Nifty Midcap 50

January 2008 Introduction of Mini Nifty derivative contracts on 1st January 2008

March 2008 Introduction of long term option contracts on S&P CNX Nifty Index

April 2008 Launch of India VIX

April 2008 Launch of Securities Lending & Borrowing Scheme

August 2008 Launch of Currency Derivatives

4
 CAPITAL MARKET (EQUITIES) SEGMENT

1 Settlement Guarantee Fund 31-MAR-2009 Rs.4,843.50 crores

2 Investor Protection Fund 31-DEC-2009 Rs.307.00 crores

3 Number of securities available for trading 31-JAN-2010 1,781

4 Record number of trades 19-MAY-2009 11260392

5 Record daily turnover (quantity) 19-MAY-2009 19225.95 lakhs

6 Record daily turnover (value) 19-MAY-2009 Rs.40151.91 crores

7 Record market capitalisation 07-JAN-2008 Rs.67,45,724 crores

8 Record value of S&P CNX Nifty Index 08-JAN-2008 6357.1

9 Record value of CNX Nifty Junior Index 04-JAN-2008 13209.35

CLEARING & SETTLEMENT

1 Record Pay-in/Pay-out (Rolling Settlement):

Funds Pay-in/Pay-out (N2007200) 23-OCT-2007* Rs.4,567.70 crores

Securities Pay-in/Pay-out (Value) (N2009088) 21-MAY-2009* Rs.9,523.33 crores

Securities Pay-in/Pay-out (Quantity) (N2009088) 21-MAY-2009* 4,385.75 lakhs

*Settlement Date

DERIVATIVES (F&O) SEGMENT

1 Settlement Guarantee Fund 31-MAR-2009 Rs.23,655.86 crores

2 Investor Protection Fund 31-DEC-2009 Rs.52.91 crores

3 Record daily turnover (value) 28-JAN-2010 Rs.166,193.03 crores

4 Record number of trades 07-JAN-2009 1874697

CURRENCY DERIVATIVES SEGMENT

1 Record daily turnover (value) 11-JAN-2010 Rs.19,600.72 crores

2 Record number of trades 11-JAN-2010 78935

3 Record number of contracts 11-JAN-2010 4314969

4 Investor Protection Fund 31-DEC-2009 Rs.0.01 crores

WHOLESALE DEBT SEGMENT

1 Number of securities available for trading 31-JAN-2010 4,109

5
 2 Record daily turnover (value) 25-AUG-2003 Rs. 13,911.57 crores

  Our Technology

Across the globe, developments in information, communication and network technologies

have created paradigm shifts in the securities market operations. Technology has enabled
organisations to build new sources of competitive advantage, bring about innovations in
products and services, and to provide for new business opportunities. Stock exchanges all
over the world have realised the potential of IT and have moved over to electronic trading
systems, which are cheaper, have wider reach and provide a better mechanism for trade
and post trade execution.

NSE believes that technology will continue to provide the necessary impetus for the
organisation to retain its competitive edge and ensure timeliness and satisfaction in
customer service. In recognition of the fact that technology will continue to redefine the
shape of the securities industry, NSE stresses on innovation and sustained investment in
technology to remain ahead of competition. NSE's IT set-up is the largest by any
company in India. It uses satellite communication technology to energise participation
from around 200 cities spread all over the country. In the recent past, capacity
enhancement measures were taken up in regard to the trading systems so as to
effectively meet the requirements of increased users and associated trading loads. With
upgradation of trading hardware, NSE today can handle up to 15 million trades per day in
Capital Market segment. In order to capitalise on in-house expertise in technology, NSE
set up a separate company, NSE Technology Services Ltd. which is expected to provide a
platform for taking up all IT related assignments of NSE.

NEAT is a state-of-the-art client server based application. At the server end, all trading
information is stored in an in-memory database to achieve minimum response time and
maximum system availability for users. The trading server software runs on a fault
tolerant STRATUS main frame computer while the client software runs under Windows on
PCs.

The telecommunications network which was using X.25 protocol and is the backbone of
the automated trading system is being upgraded to use the more popular and modern IP
Protocol. This is a major project involving use of X.25 and IP in parallel and ensuring
smooth transition to IP. Each trading member trades on the NSE with other members
through a PC located in the trading member's office, anywhere in India. The trading
members on the various market segments such as CM / F&O, WDM are linked to the
central computer at the NSE through dedicated leased lines and VSAT terminals. The
Exchange uses powerful RISC -based UNIX servers, procured from HP for the back office
processing. The latest software platforms like ORACLE 10g RDBMS, SQL/ORACLE FORMS
Front - Ends, etc. have been used for the Exchange applications. The Exchange currently
manages its data centre operations, system and database administration, design and
development of in-house systems and design and implementation of telecommunication
solutions.

NSE is one of the largest interactive VSAT based stock exchanges in the world. Today it
supports more than 2000 VSATs and 3000 leased lines across the country. The NSE-
network is the largest private wide area network in the country and the first extended C-
Band VSAT network in the world. Currently more than 9000 users are trading on the real
time-online NSE application. There are over 15 large computer systems which include
non-stop fault-tolerant computers and high end UNIX servers, operational under one roof
to support the NSE applications. This coupled with the nation wide VSAT network makes
NSE the country's largest Information Technology user.

6
 In an ongoing effort to improve NSE's infrastructure, a corporate network has been
implemented, connecting all the offices at Mumbai, Delhi, Calcutta and Chennai. This
corporate network enables speedy inter-office communications and data and voice
connectivity between offices.

In keeping with the current trend, NSE has gone online on the Internet. Apart from
having multiple internet links and our own domain for internal browsing and e-mail
purposes, we have also set up our own Web site. Currently, NSE is displaying its live
stock quotes on the web site (www.nseindia.com) which are updated online.

NSE today allows members to provide internet trading facility to their clients through the
use of NOW (NSE on web), a shared web infrastructure.

  Careers with Us

Since its inception in 1992, National Stock Exchange of India has been at the vanguard of
change in the Indian securities market. This period has seen remarkable changes in
markets, from how capital is raised and traded, to how transactions are cleared and
settled. The market has grown in scope and scale in a way that could not have been
imagined at the time. Average daily trading volumes have jumped from Rs. 17 crore in
1994-95 when NSE started its Cash Market segment to Rs.11,325 crore in 2008-09.
Similarly, market capitalization of listed Indian firms went up from Rs.363,350 crore at
the end of March 1995 to Rs.2,896,194 crore at end March 2009.

NSE has many firsts to its name such as creation of the first clearing corporation in the
country in the form of the National Securities Clearing Corporation Limited (NSCCL),
including the first systematic process of member inspections, building a sophisticated
market surveillance system, and a country wide high capacity data network supporting
close to 200,000 dealer.

NSE is the largest stock exchange of the country. It has a market share of nearly 70% in
equity trading and 98% in futures and options trading in India. Globally, NSE ranks
among the top three stock exchanges in terms of number of contracts traded in single
stock futures, index futures and stock options. We are among the top four of the stock
exchanges around the world in terms of number of transactions and are also ranked
among the top ten largest derivatives exchanges of the world. At NSE, we are constantly
working towards creating a more transparent, vibrant & innovative securities market.
This invariably implies that our need for competent people is continuous.

The NSE Group is comprised of National Securities Clearing Corporation Ltd (NSCCL), NSE
Infotech Services Ltd, NSE.IT Limited, India Index Services and Products Limited (IISL),
Dotex International Ltd., National Securities Depository Limited (NSDL), National
Commodity and Derivatives Exchange Limited (NCDEX), National Commodity Clearing
Limited (NCCL) and Power Exchange India Limited (PXI).

As the leading stock exchange and fiscal entity in the country, we believe in recruiting the
finest of talent in the industry. We are looking for talent to be developed into future

7
 leaders of our organisation by cross-departmental exposure, continuous self-development
opportunities and ongoing reinforcement to develop & enhance customer orientation &
leadership potential.

Awaiting you is an excellent compensation package including medical benefits, super-

annuation benefits and a reward system designed to promote merit and professionalism.

Equities

NSE started trading in the equities segment (Capital Market segment) on November 3,
1994 and within a short span of 1 year became the largest exchange in India in terms of
volumes transacted.
 
Trading volumes in the equity segment have grown rapidly with average daily turnover
increasing from Rs.17 crores during 1994-95 to Rs.14,148 crores during FY 2007-08.
During the year 2007-08, NSE reported a turnover of Rs.3,551,038 crores in the equities
segment.

The Equities section provides you with an insight into the equities segment of NSE and
also provides real-time quotes and statistics of the equities market. In-depth information
regarding listing of securities, trading systems & processes, clearing and settlement, risk
management, trading statistics etc are available here

Listing

Listing means admission of securities of an issuer to trading privileges on a stock

exchange through a formal agreement. The prime objective of admission to dealings on
the Exchange is to provide liquidity and marketability to securities, as also to provide a
mechanism for effective management of trading.

  Listing on NSE provides qualifying companies with the broadest access to investors, the
greatest market depth and liquidity, cost-effective access to capital, the highest visibility,
the fairest pricing, and investor benefits. NSE trading terminals are now situated in
various cities and towns across the length and breath of India.

Securities listed on the Exchange are required to fulfill the eligibility criteria for listing.
Various types of securities of a company are traded under a unique symbol and different
series.

  Trading

NSE introduced for the first time in India, fully automated screen based trading. It uses a
modern, fully computerised trading system designed to offer investors across the length
and breadth of the country a safe and easy way to invest.

8
 The NSE trading system called 'National Exchange for Automated Trading' (NEAT) is a
fully automated screen based trading system, which adopts the principle of an order
driven market.

Clearing & Settlement (Equities)

NSCCL carries out clearing and settlement functions as per the settlement cycles
provided in the settlement schedule.

The clearing function of the clearing corporation is designed to work out a) what
members are due to deliver and b) what members are due to receive on the settlement
date. Settlement is a two way process which involves transfer of funds and securities on
the settlement date.

NSCCL has also devised mechanism to handle various exceptional situations like security
shortages, bad delivery, company objections, auction settlement etc.

Risk Management (Capital Market)

Categorisation of stocks for imposition of margins

 
Margins

Margins collection from Client

Margin Shortfall

Liquid assets
 
Margins for institutional deals

Exemption upon early pay-in of securities

Exemption upon early pay-in of funds

Cross Margin

Formats for Collaterals

9
 Categorisation of stocks for imposition of margins

Stock are classifed into three categories on the basis of their liquidity and
impact cost.

 The Stocks which have traded at least 80% of the days for the previous six
months shall constitute the Group I and Group II.

 Out of the scrips identified above, the scrips having mean impact cost of less
than or equal to 1% are categorized under Group I and the scrips where the
impact cost is more than 1, are categorized under Group II.

 The remaining stocks are classified into Group III.

 The impact cost is calculated on the 15th of each month on a rolling basis
considering the order book snapshots of the previous six months. On the basis of
the impact cost so calculated, the scrips move from one group to another group
 
from the 1st of the next month.

 For securities that have been listed for less than six months, the trading
frequency and the impact cost are computed using the entire trading history of
the security.

Categorisation of newly listed securities

For the first month and till the time of monthly review a newly listed security is
categorised in that Group where the market capitalization of the newly listed security
exceeds or equals the market capitalization of 80% of the securities in that particular
group. Subsequently, after one month, whenever the next monthly review is carried out,
the actual trading frequency and impact cost of the security is computed, to determine
the liquidity categorization of the security.

In case any corporate action results in a change in ISIN, then the securities bearing the
new ISIN are treated as newly listed security for group categorization.

  Margins

Daily margins payable by members consists of the following:

1. Value at Risk Margin

2. Extreme Loss Margin
3. Mark to Market Margin

Daily margin, comprising of the sum of VaR margin, Extreme Loss Margin and mark to
market margin is payable.

Value at Risk Margin

All securities are classified into three groups for the purpose of VaR margin

10
  For the securities listed in Group I, scrip wise daily volatility calculated using the
exponentially weighted moving average methodology is applied to daily returns.
The scrip wise daily VaR is 3.5 times the volatility so calculated subject to a
minimum of 7.5%.

 For the securities listed in Group II, the VaR margin is higher of scrip VaR (3.5
sigma) or three times the index VaR, and it is scaled up by root 3.

 For the securities listed in Group III the VaR margin is equal to five times the
index VaR and scaled up by root 3.

The index VaR, for the purpose, is the higher of the daily Index VaR based on S&P CNX
NIFTY or BSE SENSEX, subject to a minimum of 5%.

NSCCL may stipulate security specific margins from time to time.

The VaR margin rate computed as mentioned above is charged on the net outstanding
position (buy value-sell value) of the respective clients on the respective securities across
all open settlements. There is no netting off of positions across different settlements. The
net position at a client level for a member is arrived at and thereafter, it is grossed
across all the clients including proprietary position to arrive at the gross open position.

For example, in case of a member, if client A has a buy position of 1000 in a security and
client B has a sell position of 1000 in the same security, the net position of the member
in the security is taken as 2000. The buy position of client A and sell position of client B
in the same security is not netted. It is summed up to arrive at the member’s open
position for the purpose of margin calculation.

The VaR margin is collected on an upfront basis by adjusting against the total liquid
assets of the member at the time of trade.

The VaR margin so collected is released on completion of pay-in of the settlement or on

individual completion of full obligations of funds and securities by the respective
member/custodians after crystallization of the final obligations on T+1 day.

Extreme Loss Margin

The Extreme Loss Margin for any security is higher of:

1. 5%, or

2. 1.5 times the standard deviation of daily logarithmic returns of the security price
in the last six months. This computation is done at the end of each month by
taking the price data on a rolling basis for the past six months and the resulting
value is applicable for the next month.

The Extreme Loss Margin is collected/ adjusted against the total liquid assets of the
member on a real time basis.

The Extreme Loss Margin is collected on the gross open position of the member. The
gross open position for this purpose means the gross of all net positions across all the

11
clients of a member including its proprietary position.

There is no netting off of positions across different settlements. The Extreme Loss Margin
collected is released on completion of pay-in of the settlement or on individual
completion of full obligations of funds and securities by the respective
member/custodians after crystallization of the final obligations on T+1 day.

Mark-to-Market Margin

Mark to market loss is calculated by marking each transaction in security to the closing
price of the security at the end of trading. In case the security has not been traded on a
particular day, the latest available closing price at NSE is considered as the closing price.
In case the net outstanding position in any security is nil, the difference between the buy
and sell values shall be is considered as notional loss for the purpose of calculating the
mark to market margin payable.

The mark to market margin (MTM) is collected from the member before the start of the
trading of the next day.

The MTM margin is collected/adjusted from/against the cash/cash equivalent component

of the liquid net worth deposited with the Exchange.

The MTM margin is collected on the gross open position of the member. The gross open
position for this purpose means the gross of all net positions across all the clients of a
member including its proprietary position. For this purpose, the position of a client is
netted across its various securities and the positions of all the clients of a member are
grossed.

There is no netting off of the positions and setoff against MTM profits across two rolling
settlements i.e. T day and T+1 day. However, for computation of MTM profits/losses for
the day, netting or setoff against MTM profits is permitted.

Trade for Trade segment –Surveillance segment

In case of securities in Trade for Trade –Surveillance segment (TFT-S segment) the
upfront margin rates (VaR Margin + Extreme Loss Margin) applicable is 100 % and each
trade is marked to market based on the closing price of that security.

Capping of margins

In case of a buy transaction, the VaR margins, Extreme loss margins and mark to market
losses together cannot exceed the purchase value of the transaction. In case of a sale
transaction, the VaR margins and Extreme loss margins together are capped to the
extent of the sale value of the transaction and mark to market losses are also levied.

The details of all margins VAR, extreme loss margin and mark to market as at end of
each day are downloaded to members in their respective Extranet directory.

Release of margins

12
 All margins collected for a settlement for a member/custodian are released on their
individual completion of full obligations of funds and securities by the respective
member/custodians after crystallization of the final obligations on T+1 day. Further,
members are provided a facility to provide confirmation from their clearing banks
towards their funds pay-in obligations on settlement day before prescribed pay-in time
through the prescribed procedure.

Margins collection from Client

Members should have a prudent system of risk management to protect themselves from
client default. Margins are likely to be an important element of such a system. The same
  should be well documented and be made accessible to the clients and the Stock
Exchanges. However, the quantum of these margins and the form and mode of collection
are left to the discretion of the members.

  Margin Shortfall

In case of any shortfall in margin:

 The members shall not be permitted to trade with immediate effect.

 There is a penalty for margin violation

Penalty applicable for margin violation is levied on a monthly basis based on slabs as
mentioned below:
 

Instances of Penalty to be levied

Disablement
1st instance 0.07% per day
2nd to 5th instance
0.07% per day +Rs.5000/- per instance from 2nd to 5th instance
of disablement
6th to 10th instance 0.07% per day+ Rs. 20000 ( for 2nd to 5th instance) +Rs.10000/-
of disablement per instance from 6th to 10th instance
0.07% per day +Rs. 70,000/- (for 2nd to 10th instance)
11th instance +Rs.10000/- per instance from 11th instance onwards.
onwards Additionally, the member will be referred to the Disciplinary Action
Committee for suitable action

Instances as mentioned above shall refer to all disablements during market hours in a
calendar month. The penal charge of 0.07% per day shall is applicable on all

13
 disablements due to margin violation anytime during the day.

Liquid assets

Members are required to provide liquid assets which adequately cover various margins and
Security Deposit requirements. A member may deposit liquid assets in the form of cash, bank
guarantees, fixed deposit receipts, approved securities and any other form of collateral as may
be prescribed from time to time. The total liquid assets comprise of the cash component and
the non cash component wherein the cash component shall be at least 50% of liquid assets.

1. Cash Component:

a. Cash
b. Bank fixed deposits (FDRs) issued by approved banks and deposited with approved
custodians or NSCCL.
c. Bank Guarantees (BGs) in favour of NSCCL from approved banks in the specified
format.
d. Units of money market mutual fund and Gilt funds where applicable haircut is 10%.

2. Non Cash Component:

a. Liquid (Group I) Equity Shares in demat form, as specified by NSCCL from time to
time deposited with approved custodians.
b. Mutual fund units other than those listed under cash component decided by NSCCL
from time to time deposited with approved custodians.

 Margins for institutional deals

Institutional businesses i.e., transactions done by all institutional investors are margined from T+1
day subsequent to confirmation of the transactions by the custodians. For this purpose, institutional
investors include

 Foreign Institutional Investors registered with SEBI. (FII)

 Mutual Funds registered with SEBI. (MF)

 Public Financial Institutions as defined under Section 4A of the Companies Act, 1956. (DFI)

 Banks, i.e., a banking company as defined under Section 5(1)(c) of the Banking Regulations
Act, 1949. (BNK)

 Insurance companies registered with IRDA. (INS)

 
 Pension Funds registered with PFRDA (PNF)

14
Levy of margins:

 Institutional transactions are identified by the use of the participant code at the time of order
entry.

 In respect of institutional transactions confirmed by the custodians the margins are levied on
the custodians.

 In respect of institutional transactions rejected/not accepted by the custodians the margins

are levied on the members who have executed the transactions.

 The margins are computed and levied at a client (Custodial Participant code) level in respect
of institutional transactions and collected from the custodians/members.

Retail Professional Clearing Member:

In case of transactions which are to be settled by Retail Professional Clearing Members (PCM), all the
trades with PCM code are included in the trading member’s positions till the same are confirmed by
the PCM. Margins are collected from respective trading members until confirmation of trades by PCM.

On confirmation of trades by PCM, such trades are reduced from the positions of trading member and
included in the positions of PCM. The PCMs are then liable to pay margins on the same.

Exemption upon early pay-in of securities

In cases where early pay-in of securities  is made prior to the securities pay-in, such positions for
which early pay-in (EPI) of securities is made are exempt from margins. Members are required to
 provide client level early pay-in file in a specified format. The EPI of securities is allocated to clients
having net deliverable position, on a random basis unless specific client details are provided by the
member/ custodian. However, member/ custodian shall ensure to pass on appropriate early pay-in
benefit of margin to the relevant clients. Additionally, member/custodian can specify the clients to
whom the early pay-in may be allocated

 Exemption upon early pay-in of funds

 In cases where early pay-in of funds is made prior to the funds pay-in, such positions for
which early pay-in (EPI) of funds is made shall be exempt from margins subject to bank
confirmation.

 Members/Custodians shall make early pay-in funds through a screen-based request in the
Collateral Interface for Members (CIM). The facility for making early pay-in of funds will be
separate from the facility of allocation of the early pay-in of funds which can be done either

15
 through Screen based request or file upload.

 Members/Custodians may provide early pay-in of funds from any of their settlement
accounts.

 Early pay in of funds may be allocated at client level or at client-security level. The allocation
can be revised through a screen based request or through the file upload facility in the
specified format.

 Members can make early pay-in of funds along with details of client-security allocation before
execution of a trade and shall be able to avail the benefit of early pay-in of funds on
execution of the trade.

 Where no allocation is made, Early pay in of funds would be allocated against the clients in
the descending order of their net buy value of outstanding positions.

 Cross Margin

Salient features of the cross margining available are as under:

1. Cross margining benefit is available across Cash and Derivatives segment

2. Cross margining benefit is available to all categories of market participants

3. For client/entities clearing through same clearing member in Cash and Derivatives segments,
the clearing member is required to intimate client details through a file upload through
Collateral Interface for Members (CIM) to avail the benefit of Cross margining

4. For client/entities clearing through different clearing member in Cash and Derivatives
segments they are required to enter into necessary agreements for availing cross margining
benefit.

5. For the client/entities who wish to avail cross margining benefit in respect of positions in
Index Futures and Constituent Stock Futures only, the entity’s clearing member in the
Derivatives segment has to provide the details of the clients and not the copies of the
agreements. The details to be provided by the clearing members in this regard are stipulated
in the Format.

1. Positions eligible for cross-margin benefit

2. Entities/clients eligible for cross margining
3. Facility of maintaining two client accounts
4. Computation of cross margining benefit
5. Provisions in respect of default
6. Additional Reports for Cross Margin

16
1. Positions eligible for cross-margin benefit:

Cross margining is available across Cash and F&O segment and to all categories of market
participants. The positions of clients in both the Cash and F&O segments to the extent they offset
each other are being considered for the purpose of cross margining as per the following priority

a. Index futures and constituent stock futures in F&O segment

b. Index futures and constituent stock positions in Cash segment
c. Stock futures in F&O segment and stock positions in Cash segment
i. In order to extend the cross margin benefit as per (a) and (b) above, the basket of
constituent stock futures/ stock positions should be a complete replica of the index
futures. NSCCL specifies the number of units of the constituent stocks/ stock futures
required in the basket to be considered as a complete replica of the index on the
website of the exchange (www.nseindia.com/NSCCL/Notification) from time to time.

ii. The number of units are changed only in case of change in share capital of the
constituent stock due to corporate action or issue of additional share capital or
change in the constituents of the index.

iii. The positions in F&O segment for the stock futures and index futures should be in the
same expiry month to be eligible for cross margining benefit.

iv. The position in a security is considered only once for providing cross margining
benefit. E.g. Positions in Stock Futures of security ‘A’ used to set-off against index
futures positions will not be considered again if there is an off-setting positions in the
security ‘A’ in Cash segment.

v. Positions in option contracts are not considered for cross margining benefit.

2. Entities/clients eligible for cross margining

The clearing member has to inform NSCCL the details of client to whom cross margining benefit is to
be provided. The cross margining benefit is available only if clearing members provide the details of
clients in such manner and within such time as specified by NSCCL from time to time.

1. Client/entity settling through same clearing member in both Cash and F&O
segment

i. The clearing member has to ensure that the code allotted (code used while executing
client trade) to client/entity in both Cash and F&O segment is same

ii. The clearing member must inform the details of clients to whom cross margining
benefit is to be provided through a file upload facility provided in Collateral Interface
for Members (CIM).

2. Client/entity settling through different clearing member in Cash and F&O segment

i. In case a client settles in the Cash segment through a trading member / custodian

17
 and clears and settles through a different clearing member in F&O segment, then
they are required to enter into necessary agreements.
ii. In case where the client/entity settles through Custodian in Cash segment, then the
client/entity, custodian and the clearing member in F&O segment are required to
enter into a tri-partite agreement as per the format
iii. In case where the client/entity clears and settles through a member in Cash
segment, and a different clearing member in F&O segment, then the member in Cash
segment and the clearing member in F&O segment have to enter into an agreement
as per the format. Further, the client/entity must enter into an agreement with the
member as per the format.
iv. The clearing member in the F&O segment must intimate to NSCCL the details of the
client/entity in F&O segment along-with letter from trading member/custodian giving
details of client/entity in Cash segment who wish to avail cross margining benefit.

3. Facility of maintaining two client accounts

As specified by SEBI, a client may maintain two accounts with their respective members to avail
cross margin benefit only. The two accounts namely arbitrage account and a non-arbitrage account
may be used for converting partially replicated portfolio into a fully replicated portfolio by taking
opposite positions in two accounts. However, for the purpose of compliance and reporting
requirements, the positions across both accounts shall be taken together and client shall continue to
have unique client code.

4. Computation of cross margining benefit

i. The computation of cross margining benefit is done at client level on an online real time basis
and provided to the trading member / clearing member / custodian, as the case may be,
who, in turn, shall pass on the benefit to the respective client.

ii. For institutional investors the positions in Cash segment are considered only after
confirmation by the custodian on T+1 basis and on confirmation by the clearing member in
F&O segment.

iii. The positions in the Cash and F&O segment are considered for cross margining only till time
the margins are levied on such positions.

iv. While reckoning the offsetting positions in the Cash segment, positions in respect of which
margin benefit has been given on account of early pay-in of securities or funds are not
considered.

v. The positions which are eligible for offset, are subject to spread margins. The spread margins
are 25% of the applicable upfront margins on the offsetting positions or such other amount
as specified by NSCCL from time to time.

vi. The difference in the margins on the total portfolio and on the portfolio excluding off-setting
positions considered for cross margining, less the spread margins is considered as cross

18
 margining benefit. Example

5. Provisions in respect of default

In the event of default by a trading member / clearing member / custodian, as the case may be,
whose clients have availed cross margining benefit, NSCCL may:

i. Hold the positions in the cross margin account till expiry in its own name.

ii. Liquidate the positions / collateral in either segment and use the proceeds to meet the
default obligation in the other segment.

iii. In addition to the foregoing provisions, take such other risk containment measures or
disciplinary action as it may deem fit and appropriate in this regard.

6. Additional reports

Additional reports providing details of cross margin benefit and off-setting positions at client level are
provided to members as per the format specified

Market Information

 Market Today
 
 Historical Data

Market Today
Get Quote
Bhavcopy (fo.zip) Trade Statistics for 11-Mar-2010
Bhavcopy Put
Download | No. of Turnover(Rs.
Product Call
contracts cr.) *
Archives Ratio
Market Activity Index Futures 461075 11527.33 -
Report | Archives Stock Futures 404476 14175.49 -
SPAN Risk
Index Options 1496559 38434.54 0.99
Parameter Files |
Archives Stock Options 56923 2085.75 0.31
Daily Settlement F&O Total 2419033 66223.11 0.96
Prices | Archives * Notional Turnover in case of options
Archives
Daily Volatility |
Archives
Client-wise

19
 Position Limits |
Archives
Base Prices for Illiquid Contracts | Help File    

Cumulative FII positions as percentage of total gross market

position in the derivative segment as on March 10, 2010 is
31.38%
FII derivatives statistics as on 10-Mar-2010

Historical Data

Archives

Contract-wise Price Volume Data

Charting with TAME-LITE

Facts & Figures

  Business Growth in Derivatives segment

Monthly Derivatives Update | Exercise File | Archives

Nifty close on expiry

Quantity Freeze

Average Quarter Sigma

  Wholesale Debt Market

The Wholesale Debt Market segment deals in fixed income securities and is fast
gaining ground in an environment that has largely focussed on equities.

The Wholesale Debt Market (WDM) segment of the Exchange commenced

operations on June 30, 1994. This provided the first formal screen-based
trading facility for the debt market in the country.

This segment provides trading facilities for a variety of debt instruments

including Government Securities, Treasury Bills and Bonds issued by Public
Sector Undertakings/ Corporates/ Banks like Floating Rate Bonds, Zero Coupon
Bonds, Commercial Papers, Certificate of Deposits, Corporate Debentures, State
Government loans, SLR and Non-SLR Bonds issued by Financial Institutions,

20
 Units of Mutual Funds and Securitized debt by banks, financial institutions,
corporate bodies, trusts and others.

Large investors and a high average trade value characterize this segment. Till
recently, the market was purely an informal market with most of the trades
directly negotiated and struck between various participants. The
commencement of this segment by NSE has brought about transparency and
efficiency to the debt market, along with effective monitoring and surveillance
to the market.

Corporate Bonds

Corporate bonds are debt securities issued by private and public corporations.
Companies issue corporate bonds to raise money for a variety of purposes, such as
building a new plant, purchasing equipment, or growing the business. When one buys a
corporate bond, one lends money to the "issuer," the company that issued the bond. In
 
exchange, the company promises to return the money, also known as "principal," on a
specified maturity date. Until that date, the company usually pays you a stated rate of
interest, generally semiannually. While a corporate bond gives an IOU from the
company, it does not have an ownership interest in the issuing company, unlike when
one purchases the company's equity stock.

  Retail Debt Market

With a view to encouraging wider participation of all classes of investors across the country
(including retail investors) in government securities, the Government, RBI and SEBI have
introduced trading in government securities for retail investors.

Trading in this retail debt market segment (RDM) on NSE has been introduced w.e.f. January 16,
2003. Trading shall take place in the existing Capital Market segment of the Exchange.

In the first phase, all outstanding and newly issued central government securities would be
traded in the retail segment. Other securities like state government securities, T-Bills etc. would
be added in subsequent phases.

Listing

All Government securities and Treasury bills are deemed to be listed automatically as and when
they are issued. Other securities, issued publicly or placed privately, could be listed or admitted
for trading, if eligible, as per rules of the Exchange by following prescribed procedure.

Certain securities like Treasury Bills and other securities issued by Government of India and
certain Corporate and PSU debt securities available in demat form are eligible for Repo. Every
security in the trading system is given a symbol representative of the security.

The market capitalisation of the securities on the WDM segment has been increasing steadily.

21
 The segment has also seen a marked increase in the number of securities available for trading
other than the traditional instruments like Govt. securities and T-bills

Market Timings

Trading in the WDM segment is open on all days except Saturdays, Sundays and other
holidays, as specified by the Exchange. The market timings are as given below:

Trading Days Same day Settlement Other day Settlement

Monday to Friday 10.00 a.m. to 3.00 p.m. 10.00 a.m. to 5.45 p.m.

Trading on WDM segment is divided into three phases as under:

1.  Pre-Open
2.  Market Open
3.  SURCON

Pre-Open Market Phase

The pre-open period commences from 9.00 a.m. This period allows the trading
member/Participant to:
§  set up counter party exposure limits
§  set up Market Watch (the security descriptor)
§  make inquiries

Market Open Phase

The system allows for inquiries of the following activities when the market is open for trading:
1.  Order Entry
2.  Order Modification
3.  Order Cancellation
4.  Negotiated Entry
5.  Trade Cancellation
6.  Setting up counter party exposure limits

Post Market Phase (also called SURCON)

During the period of SURCON (SURveillance and CONtrol) a trading member gets only inquiry
access with a facility to request for trade cancellation. On completion of SURCON the trading
system processes data and gets the system ready for the next day.

22
 Entities

Due to the high trade values and the market practice of settling deals bilaterally, participants
generally set a maximum risk exposure vis-a-vis all potential counter parties in the market to
ensure that they do not take any undue risk exposure against any particular counter party.
  Recognising this feature of the market, the WDM trading system provides for two kinds of
entities on the segment: Hence this market segment has a two-tier system that recognizes
Trading members and Participants and their roles have been clearly explained in Exchange
guidelines.

Trading System

The fully computerised, on-line trading system used in the WDM segment of the Exchange has
changed the very manner in which trading is perceived in the Indian securities market.
Besides the fact that the system helped increase in trading velocities and cut time frames, it
has also managed to incorporate the critical aspect of security in its functioning.

The Exchange provides a facility for screen based trading with order matching facility. The
members are connected from their respective offices at dispersed locations to the main system
at the NSE premises through a high-speed, efficient satellite tele-communication network. The
trading system is an order-driven, automated order matching system, which does not reveal
the identity of parties to an order or a trade. This helps orders whether large or small to be
placed without the members being disadvantaged by disclosure of their identity. The trading
system operates on a price time priority. Orders are matched automatically by the computer
keeping the system transparent, objective and fair. Where an order does not find a match it
remains in the system and is displayed to the whole market, till a fresh order which matches,
comes in or the earlier order is cancelled or modified.

The trading system provides tremendous flexibility to the users in terms of the type of orders
that can be placed on the system. Several time-related, price-related or volume-related
conditions can easily be placed on an order. The trading system also provides complete on-line
market information through various inquiry facilities. Detailed information on the total order
depth in a security, the best buys and sells available in the market, the quantity traded in that
security, the high, the low and last traded prices are available through the various market
screens at all points of time.

  Brokerage Rates

The Exchange has specified the maximum rates of brokerage chargeable by trading members
in relation to trades done in securities available on the WDM segment of the Exchange.

Govt. Of India Securities and T-Bills

Order Value upto Rs.10 million 25 ps. per Rs.100
More than 10 million upto 50 million 15 ps. per Rs.100
More than 50 million upto 100 million    10 ps per Rs.100
More than 100 million 5 ps per Rs.100

23
  
State Govt. Securities & Institutional Bonds
Order Value upto Rs.2.5 million 50 ps. per Rs.100
More than 2.5 million upto 5 million 30 ps. per Rs.100
More than 5 million upto 10 million 25 ps per Rs.100
More than 10 million upto 50 million 15 ps per Rs.100
More than 50 million upto 100 million 10 ps per Rs.100
More than 100 million 5 ps per Rs.100
 
PSU & Floating Rate Bonds
Order Value upto Rs.10 million 50 ps. per Rs.100
More than 10 million upto 50 million 25 ps. per Rs.100
More than 50 million upto 100 million 15 ps per Rs.100
More than 100 million 10 ps per Rs.100
 

Market Holidays
 1% of the order value
Commercial paper and Debentures
WHOLESALE DEBT MARKET
Circular No. 372
Sub: Trading holidays for the calendar year 2010.
Dear Trading Members and Participants,
In pursuance of the Trading Regulation No 2.3.1, it is hereby notified that
holidays enclosed as Annexure shall be observed as Trading Holidays by
the Wholesale Debt Market Segment of the Exchange for the calendar year
2010.
For and on behalf of
For National Stock Exchange of India Ltd
Sd/-
Suprabhat Lala
Asst. Vice President
Date: Dec 31, 2009
Download No: 13793
Heena Pendharkar
Shishir Shekhar
Anuya Bhave
022-26598285

24
022-26598287
022-26598290
wdm@nse.co.in
No of Pages:2
Annexure
Sr,No. Date Day Description
1. 26-Jan-10 Tuesday Republic Day
2. 12-Feb-10 Friday Mahashivratri
3. 01-Mar-10 Monday Holi ( 2nd day)
4. 16-Mar-10 Tuesday Gudi Padwa
5. 24-Mar-10 Wednesday Ram Navmi
6. 02-Apr-10 Friday Good Friday
7. 14-Apr-10 Wednesday Dr Babasaheb Ambedkar Jayanti
8. 27-May-10 Thursday Buddha Pournima
9. 19-Aug-10 Thursday Parsi New Year ( Shahenshahi)
10. 10-Sep-10 Friday Ramzan Id (Id-ul-Fitar) ( Shawal-1)
11. 05-Nov-10 Friday Diwali Amavasya ( Laxmi Pujan)
12. 17-Nov-10 Wednesday Bakri Id (Id-uz-Zua)
13. 17-Dec-10 Friday Moharum
The holidays falling on Saturday / Sunday are as follows:
Sr,No. Date Day Description
1. 27-Feb-10 Saturday Id-e-Milad
2. 28-Mar-10 Sunday Mahavir Jayanti
3. 01-May-10 Saturday Maharashtra Day
4. 15-Aug-10 Sunday Independence day
5. 11-Sep-10 Saturday Ganesh Chaturthi
6. 02-Oct-10 Saturday Mahatma Gandhi Jayanti
7. 17-Oct-10 Sunday Dasara
8. 07-Nov-10 Sunday Diwali ( Balipratipada)/ Bahubeej)
9. 21-Nov-10 Sunday Guru Nanak Jayanti
10. 25-Dec-10 Saturday Christmas

 SEBI Circular

SEBI/CFD/DIL/BOND/1/2006/12/12
December 12, 2006
The Managing Director / Executive Director / Administrator
Of All Stock Exchanges
Dear Sirs,
Sub: Corporate Bond Market – Launch of Reporting Platform
I. SEBI had issued circular No.SEBI/MRD/SE/AT/36/2003/30/09 dated September
30, 2003 stipulating the conditions to be complied in respect of private

25
placement of debt securities. These conditions governed three aspects, viz.,
issuance, listing and trading of privately placed debt securities. Subsequently,
circular No.SEBI/MRD/SE/AT/46/2003 dated December 22, 2003 was issued
which included clarifications on the circular issued earlier in the matter.
II. In order to implement the Union budget proposal on creation of a unified
platform for trading of Corporate Bonds, it has been decided to establish, in the
first phase, a system to capture all information related to trading in corporate
bonds as accurately and as close to execution as possible through an
authorized reporting platform. In the second phase of development, it is
proposed to permit recognized stock exchanges having nationwide access to
set up a corporate bond trading platform to enable efficient price discovery and
reliable clearing and settlement in a gradual manner.
III. It has been decided that Bombay Stock Exchange Limited would be setting up
and maintaining a corporate bond reporting platform as envisaged in the first
phase. For the purpose, the following shall be implemented with effect from
January 1, 2007:
1. The term ‘Corporate Bonds’ for this purpose shall include all listed debt
securities issued by institutions such as Banks, Public Sector Undertakings,
Municipal Corporations, bodies corporate and companies.
2. All issuers, intermediaries and contracting parties shall be granted access
to the corporate bond reporting platform for reporting of trades. Where
transactions are executed through the intermediary, reporting responsibility
shall lie with the intermediary. If executed otherwise, reporting will be made
either through an authorized intermediary or directly by the contracting
parties.
¹ãÀãØã ºããÔãì Parag Basu
„¹ã ½ãÖã¹ãƺãâ£ã‡ãŠ Deputy General Manager
ãä¶ãØã½ã ãäÌã§ã ãäÌã¼ããØã / Corporation Finance Department
ãä¶ãØãý㠆Ìãâ ÔãîÞããèºã®¦ãã ¹ãƼããØã / Division of Issues and Listing
Phone: +91 22 2644 9360 Email: paragb@sebi.gov.in

Page 2 of 3
3. All transactions in corporate bonds of the value of Rs.1,00,000 or above are
required to be reported to the corporate bond platform. The transactions
shall be reported within 30 minutes of closing the deal. The information on
settlement shall be reported by the parties involved in the transaction within
1 trading day from completion of the settlement.
4. The Bombay Stock Exchange Limited (BSE) shall ensure that the
Corporate Bond Reporting platform for the purpose shall be available from
10.00 am to 5.30 pm on all trading days.
5. The access to the platform for the purpose of reporting will be given to all
market intermediaries who approach BSE for the purpose. The connectivity
to the non-members of the Exchange would be enabled through Virtual
Private Network (VPN).
6. The BSE shall populate the data reported on their platform on their website
on a real time basis for information of investors/public.
7. Since the platform is purely for reporting purposes, the stock exchange
shall have no role or liability for settlement of these trades. The
intermediaries/ contracting parties shall settle the trades bilaterally.
8. Issuers are required to disclose/ update regularly all material information
such as rating obtained on the instruments and the rating migrations as and
when they take place, record date, reasons for record date, put/call option
dates, units exercised under put/call option etc, failing which action may be
initiated against the issuer and/or its directors/promoters.
IV. Applicability
1. The reporting shall be made for all trades in listed debt securities issued by

26
all institutions such as Banks, Public Sector Undertakings, Municipal
Corporations, bodies corporate and companies.
2. The reporting of trades in Corporate Bonds shall be made by all person(s)
dealing in such corporate bonds irrespective of whether they are SEBI
registered intermediaries or otherwise.
V. Direction to Stock Exchanges
All Stock Exchanges are directed to:
a. Make necessary amendments to the listing agreement, bye- laws, rules and
regulations for the implementation of the above decision immediately, as
may be applicable and necessary.
Page 3 of 3
b. Bring the provisions of this circular to the notice of the entities in both equity
and debt segments, member brokers, clearing members of the Exchange
and also to disseminate the same on the website for easy access to the
investors; and
c. Communicate to SEBI, the status of the implementation of the provisions of
this circular in Section II, item no. 13 of the Monthly Development Report
from the month of January, 2007.
VI. This circular is issued in exercise of powers conferred by sub-section (1) of
Section 11 of the Securities and Exchange Board of India Act, 1992, to protect
the interests of investors in securities and to promote the development of, and
to regulate the securities market. The provisions of the earlier circulars
No.SEBI/MRD/SE/AT/36/2003/30/09 dated September 30, 2003 and Circular
No.SEBI/MRD/SE/AT/46/2003 dated December 22, 2003 in so far as they are
inconsistent with the provisions of the instant circular shall stand superceded.
VII. This circular is available on SEBI website at www.sebi.gov.in.
Yours faithfully,
Parag Basu

  Settlement

Settlement is on a rolling basis, i.e. there is no account period settlement. Each order has a
unique settlement date specified upfront at the time of order entry and used as a matching
parameter. It is mandatory for trades to be settled on the predefined settlement date. The
Exchange currently allows settlement periods ranging from same day (T+0) settlement to a
maximum of (T+2) for non-government securities while settlement of all outright secondary
market transactions in government securities was standardized to T+1. In case of repo
transactions in government securities, first leg can be settled either on T+0 basis or T+1
basis. The above guidelines came into effect from May 24, 2005.(Refer Circular no:
NSE/WDM/6313)

In case of government securities, the actual settlement of funds and securities are effected
directly between participants or through Reserve Bank of India (RBI). All trades in
government securities are reported to RBI-SGL through the Negotiated Dealing System (NDS)
of RBI, and Clearing Corporation of India Limited (CCIL) provides settlement guarantee for
transactions in government securities including repos. The trades are settled on a net basis
through the DvP-III system. In the DvP-III, the settlement of Securities and Funds are
carried out on a net basis.

For securities other than government securities and T-bills, trades are settled on a gross basis

27
 directly between participants on delivery versus payment basis.

On the scheduled settlement date, the Exchange provides data/information to the respective
member/participant regarding trades to be settled on that day with details like security,
counter party and consideration.

The settlement details for non-government securities, i.e. certificate no., Cheque no.,
constituent etc. are reported by the member/participant to the Exchange.

The Exchange closely monitors the settlement of transactions through the reporting of
settlement details by members and participants. In case of deferment of settlement or
cancellation of trade, participants are required to seek prior approval from the Exchange. For
any dispute arising in respect of the trades or settlement, the exchange has established
arbitration mechanism for resolving the same.

Products & Services

 FIMMDA-NSE MIBID MIBOR

 
 NSE Zero Coupon Yield Curve (ZCYC)

 NSE VaR for Government Securities

 NSE Government Securities Index

  Reference Rates - FIMMDA-NSE MIBID MIBOR

A reference rate is an accurate measure of the market price. In the fixed income market, it is
an interest rate that the market respects and closely watches. It plays a useful role in a
variety of situations.

In particular, a call money reference rate can find the following applications:

 Traders can make many decisions as offsets compared with the prevailing reference
rate.
 Derivatives require a clearly defined reference rate as a foundation, off which the
pay-off from the derivative is defined.
 A variety of contracts can be structured as offsets from the future levels of a
reference rate. The simplest example may be a floating rate bond that uses an
interest rate which is a given 'n' offsets above a given reference rate.

Apart from its accuracy, such a reference rate needs to have other qualities. The methodology
of collation and computation should be scientific, should eliminate noise, and resist
manipulation. It should be from an unbiased source, be representative of the market,
transparent, reliable and continuously available. Moreover, it should find applicability across a

28
 wide range of products. A reference rate, which embodies all these qualities, would be widely
acceptable to the market as the benchmark rate.

NSE Zero Coupon Yield Curve (ZCYC)

With NSEIL's strong focus on debt market segment and the long felt need to create
standardized market practices, NSEIL has embarked upon developing products that will be
used by the market participants to address themselves to issues relating to this market
segment.

In its continuing effort to innovate, the Exchange has developed a 'Zero Coupon Yield Curve'
 
(ZCYC) that will help in valuation of sovereign securities across all maturities irrespective of
its liquidity. It aims to create uniform valuation standards in the market. The product has
been developed keeping in mind the requirements of the banking industry, financial
institutions, mutual funds, insurance companies, etc. that have substantial investment in
sovereign papers. NSE ZCYC aims to help in improving Asset Liability Management of
institutions with realistic valuations of portfolio of sovereign papers. It has been developed
keeping in mind the emergence of a scientific forward curve for the market that will be useful
in developing derivative products and STRIPS in the emerging scenario.

 NSE VaR for Government Securities

Value-at-Risk (VaR) has been widely promoted by regulatory authorities as a way of monitoring and
managing market risk and as a basis for setting regulatory minimum capital standards. The revised
Basle Accord, implemented in January 1998, makes it mandatory for banks to use VaR as a basis for
determining the amount of regulatory capital adequate for covering market risk beyond that required
for credit risk. Within the realm of the fixed income portfolios of financial sector players, market
related risk has become more relevant and important on account of their trading activities and market
positions. For players in the Indian financial sector, the need to develop risk measurement models
would prove critical as regulation progressively moves from uniform prudential standards to entity-
specific risk coverage requirements. Specifically, the guidelines call for linking of each entity’s market
risk capital charge to the riskiness of its assets as measured by the chosen VaR model. Accuracy of
measurement would prove critical as regulation would not specify ‘a’ single model for measurement of
risk; - the choice of model would be left to market participants who would also be required to furnish
details of back-testing for the chosen VaR model. While a conservative estimate of risk would lead to
very large capital holdings, a liberal estimate would result in inadequate coverage of loss and
excessive number of model failures historically, which would in turn attract penalties from the
regulator. It would therefore be in the interest of market participants to develop models that
accurately measure the riskiness of their portfolios and furnish estimates of capital charge that would
provide adequate cover. An important consideration in this context is that setting up of risk
measurement systems by each individual participant for estimating portfolio risk under alternative
models and scenarios would involve significant costs.

29
In line with its endeavour to develop market infrastructure, NSE has taken initiative in developing a
VaR system for measuring the market risk inherent in Government of India (GoI) securities. The NSE-
VaR system builds on the NSE database of daily yield curves - the NSE-ZCYC is now well accepted in
terms of its conceptual soundness and empirical performance, and is increasingly being used by
market participants as a basis for valuation of fixed income instruments. The NSE-VaR system
provides measures of VaR using 5 alternative methods - variance-covariance (normal) and historical
simulation methods, together with weighted normal, weighted historical simulation and the recently
developed extreme value method [a technical paper explaining these methods is available on the NSE
website]. While the first set of methods are easier to implement and therefore more popular, they
may not provide accurate assessment of risk in volatile market conditions. To this end, we provide
estimates based on the latter set of methods that are specifically suited for this purpose. Together,
the 5 methods would provide a range of options for market participants to choose from.

 NSE Government Securities Index

The increased activity in the government securities market in India and simultaneous emergence of
mutual (gilt) funds has given rise to the need for a well-defined Bond Index to measure returns in the
bond market. The NSE-Government Securities Index prices components off the NSE Benchmark
ZCYC, so that movements reflect returns to an investor on account of change in interest rates only,
and not those arising on account of the impact of idiosyncratic factors. The index is available from
January 1, 1997 to the present. The index would provide a benchmark for portfolio management by
various investment managers and gilt funds. It could also form the basis for designing index funds
and for derivative products such as options and futures.

Salient features of the Index:

 The base date for the index is 1st January 1997 and the base date index value is 100

 The index is calculated on a daily basis from 1st January 1997 onwards; weekends and
holidays are ignored.

 The index uses all Government of India bonds issued after April 1992. These were issued on
the basis of an auction mechanism that imparted some amount of market-relatedness to their
pricing. Bonds issued prior to 1992 were on the basis of administered interest rates.

 Each day, the prices for all these bonds are estimated off the NSE Benchmark-ZCYC for the
day.

 The constituents are weighted by their market capitalisation.

 Computations are based on arithmetic and not geometric calculations.

 The index uses a chain-link methodology i.e. today's values are based on the previous value
times the change since the previous calculations. This gives the index the ability to add new

30
 issues and also remove old issues when redeemed.

 Coupons and redemption payments are assumed to be re-invested back into the index in
proportion to the constituent weights.

 Both the Total Returns Index and the Principal Returns Index are computed.

 The indices provided are: Composite, 1-3, 3-8, 8+ years, TB index, GS index

More details available in the Technical Paper

NSE G-Sec Index for the day

As on 19-March-2010

Total Principal Avg. Portfolio

Avg. Portfolio Portfolio Portfolio
Index Returns Returns Residual Modified
Coupon YTM Duration Convexity
Index index Maturity Duration

ALL 295 122.46 7.935 9.594 8.210 5.772 5.544 60.947

1-3 248.88 89.98 8.953 1.841 7.392 1.697 1.637 3.214

3-8 289.17 108.22 7.791 5.533 8.025 4.459 4.287 23.845

8+ 355.58 136.69 7.692 15.539 8.315 8.550 8.209 108.458

TB 271.24 271.24 0.000 0.280 4.280 0.277 0.271 0.147

GS 298.11 111.54 7.935 10.224 8.222 6.136 5.894 64.945

Time Series:
 - Composite index
 - Sub maturity 1-3 years
 - Sub maturity 3-8 years
 - Sub maturity 8+ years
 - Dated Government securities index
 - Treasury Bill index

 Issuer's Offer Document

Recent Issues

Issuer's Offer Documents for instruments issued after Sep 30, 2003

31
Issuer's Offer Documents for instruments issued prior to Sep 30, 2003

Retail Debt Market

With a view to encouraging wider participation of all classes of investors across the country (including
retail investors) in government securities, the Government, RBI and SEBI have introduced trading in
government securities for retail investors.

Trading in this retail debt market segment (RDM) on NSE has been introduced w.e.f. January 16,
 2003. Trading shall take place in the existing Capital Market segment of the Exchange.
In the first phase, all outstanding and newly issued central government securities would be traded in
the retail segment. Other securities like state government securities, T-Bills etc. would be added in
subsequent phases.

SLBS

NSCCL as an Approved Intermediary has launched the Securities Lending & Borrowing Scheme from
April 21, 2008. Lending & Borrowing will be on an automated screen based platform where the order
matching will be on price time priority. The borrowing will be for a fixed tenure of thirty days with the
first leg settlement on T+1 day and reverse leg settlement on T+31 day. Securities traded in F&O
segment shall be eligible for lending & borrowing under the scheme.

Market Information

   Market Today

 Historical Data

32
 Order Matching

Order Matching System

NSE operates on the 'National Exchange for Automated Trading' (NEAT) system, a fully
automated screen based order matching system, which adopts the principle of an order
driven market.

Market Timings
The platform for borrowing and lending is available on all days of the week (except Saturdays
and Sundays and holidays declared by the Exchange in advance). The market timings of the
Securities Lending & Borrowing Market are:
Market Open: 09:00 hours
Market Close: 15:30 hours

Note: The NSCCL may however close the market on days other than the above schedule
holidays or may open the market on days originally declared as holidays. The NSCCL may
also extend, advance or reduce market hours when its deems fit and necessary.

Securities Available for Borrow / Lending

  Parameters
The parameters for SLBS are as follows:-

Series "FL"

Permitted Lot Size 1

Tick Size Rs. 0.01

Price Band No Band with operating range of 40%

Mkt. Type Indicator N (Normal Market)

Book Type RL (Regular Lot)

Trader Workstation
The trader workstation is the terminal from which the member accesses the borrow and
lending system. Each member has a unique identification by way of Participant ID and User
ID through which he is able to log on to the system for order entry purposes. A ‘participant’
can have multiple user IDs allotted to him by which he can have more than one employee

33
 using the system concurrently.
 

  Clearing & Settlement (SLBS)

Participant Eligibility
All Clearing members of NSCCL including Banks and Custodians referred to as ‘Participant’ are
eligible to participate in SLBS. In order to participate in SLBS, clearing members have to
register as Participants in SLBS.

For this purpose, the eligible persons are required to follow the registration procedure as
specified by NSCCL which includes entering into an agreement with NSCCL as per the format
specified.

Participants desirous of lending or borrowing securities can do so either on their own account
or on behalf of their clients. Prior to undertaking lending or borrowing of securities on account
of clients, the Participants are required to enter into an agreement with each client as per the
format specified by NSCCL.

The Participant need to apply to NSCCL for allotment of a “Unique client ID” for each client
with whom they have entered into the agreement for participating in SLBS.

The formats of Agreement between NSCCL & Participant and Participant & Client along with
the procedure of UCI allotment to clients is available in SLB Circular NSE/CMPT/10164 dated
January 30, 2008.

Eligible Securities

Securities Available for Borrow / Lending

Currently securities available for trading in F&O segment of National Stock Exchange of India
Ltd. (NSEIL) are permitted.

Securities lending and borrowing is permitted in dematerialized form only.

Securities in which there are corporate actions are subject to either foreclosure of
transactions or adjustment depending on the type of corporate action.

Period of lending
The tenure of lending / borrowing shall be thirty trading days. Accordingly the return of
securities by borrower shall be scheduled on the T+31 day (where T is the SLBS transaction
day). This is a fixed tenure lending / borrowing.

Clearing:
All obligations are on a gross basis i.e. there is no netting of transactions. Where the
participant have transacted for their client or on their own account the obligation arising out
of such transactions shall be on the Participant. However, where participants have transacted
for a Custodial Participant (CP) client the transaction shall be subject to confirmation of the

34
respective custodian and the obligation shall be the Custodians. However, non-confirmation of
such transactions by the Custodian would revert the transaction to the participants obligation.
Obligations for the first leg are downloaded to participants/Custodians on the T day and
obligations for the reverse leg are downloaded on T+1 day.

Transactions under SLBS segment are identified based on different settlement types as
intimated by NSCCL for the first leg and reverse leg settlements.

Lender’s Obligation : The lenders obligation is the securities lent on T day (Transaction
date). The lender is required to deliver the securities by the scheduled time on T+1 day.

Borrower’s Obligation : Borrower’s obligation is the lending fees in cash form and the
lending price ( T-1 day closing price in the underlying security) in cash collaterals payable on
T+1 day.

Settlement Procedure:
The pay-in and pay-out of funds and securities is through the designated bank accounts and
securities settlement account respectively.

Transactions are settled on a T+1 day basis for the First Leg
Transactions are settled on a T+31 day basis for the Reverse leg

Clearing & Settlement cycle for a lending and borrowing transaction

Designated Bank Account

The bank account currently used by Participant for settlement of funds in the Capital Market
segment is the designated bank account for giving effect to funds debits/credits under SLBS.

Securities Settlement Account

Participants are required to maintain accounts with both depositories i.e NSDL & CDSL. The
pool account currently used by Participants in NSDL for effecting securities pay-in and pay-out
in the Capital Market segment is used for settlement under SLBS.

In case of CDSL, Participants are required to open a separate settlement account for effecting
securities pay-in and pay-out under SLBS.

Client direct payout facility

Participants / Custodians have been provided the facility of crediting the payout of securities
directly to clients account. In order to avail of this facility, participant/custodian are required
to provide a file in the specified file format available in SLB Circular (NSE/CMPT/10134) dated
January 25, 2008 containing details of the beneficiary accounts to which direct credit is to be
given.

Process of return of securities

The borrowing Participants are required to return the securities borrowed on completion of
period of lending i.e on T+31 day. The securities are returned to the lender of the securities

35
by NSCCL on the T+31 day. In the case of borrower failing to return securities, NSCCL
conducts an auction for obtaining securities. In the event of failure to procure securities in
auction the transactions are financially closed-out on the basis of the close-out computation
formula.

Shortages and Close out

In the event of funds shortage by the borrower, the SLBS transactions are cancelled and the
securities returned to the lenders along with lending fees.

In the event the lender fails to deliver securities, the transaction is closed out as per the
below procedure.

Higher of:

 25% of closing price of the security on T+1 day (closing price for the security in the
capital market segment of NSEIL), or
 (Maximum trade price of the security in the capital market segment of NSEIL from T
to T+1 day) - (T+1 day closing price of the security in capital market segment of
NSEIL)

In the event the borrower fails to return the securities NSCCL conducts a buy-in auction in the
Capital Market segment of NSEIL.

If the security cannot be bought through the buy-in auction, the transaction is closed out as
per the below procedure.

Higher of:

 The maximum traded price in the Capital Market segment of NSEIL from T+1 day to
T+31 day, or
 25% above the closing price of the security in the capital market segment on the
T+31 day

In all cases of shortages, NSCCL may initiate various actions including withdrawal of access to
the order matching platform, withhold of the securities/funds pay-out due to the Participant
or any other action as may be intimated by NSCCL.

Adjustment for Corporate Actions

All transactions in case of corporate actions other than dividend and Stock spilt shall be
foreclosed 2 days prior to ex-date.

In case of dividend, the dividend amount shall be collected from the borrower on the reverse
leg settlement date and shall be paid to the lender on the reverse leg settlement date.

In case of stock split the position of the borrower would be proportionately adjusted and the
lender shall receive the revised quantity on the reverse leg settlement date.

Adjustment of lending fees in case of foreclosure

In case of foreclosure where the corporate action is announced by NSCCL after the
transaction has been executed, lending fees shall be adjusted on a pro-rata basis by NSCCL.
The lending fee shall be bought by the lender on the foreclosure settlement date and shall be

36
 passed on to the borrower.

However in case of foreclosure where the corporate action is announced upfront by NSCCL
before the transaction has been executed there shall be no adjustment of lending fee. Market
participants shall accordingly quote lending fee for the shorter transaction cycle.

Risk Management (SLBS)

Position Limits
The applicable position limits for SLBS are as under:

(a) the market–wide position limits for SLB transactions is 10% of the free-float capital of the
company in terms of number of shares
(b) No Participant should have open position of more than 10% of the market-wide position limits or
Rs. 50 crore (base value), whichever is lower
(c) For a FII/MF, the position limits are the same as of the Participant
(d) The client level position limits should not be not more than 1% of the market-wide position limits.
All the applicable position limits applicable are computed on the last trading day of every month which
will be applicable for the next month.

Collateral Deposits
Participants may deposit collaterals in the form of cash equivalents i.e. cash, fixed deposit receipts
and bank guarantee. The collateral deposited by the participant are utilized towards margin
requirement of the participant.

In case of failure of the participant to meet its obligation, the collaterals provided by the participants
may be liquidated by NSCCL to meet the obligation of the participant.

Minimum Collateral
Every participant is required to continuously maintain minimum collateral of Rs.10 lacs in the form of
cash as prescribed by NSCCL. This deposit should be provided by the participant at the time of
registration in Securities Lending and Borrowing Scheme (SLBS).

Margins
All transactions under SLBS are subject to margins. Following margins are applicable for transactions
under SLBS.

First Leg transactions

Both lender and borrower are levied margins in respect of first leg of transactions under SLBS.

Borrow transaction
The borrower is levied only the Lending fee on T day.

Lend transaction

The following margins are levied on the Participants for lend transactions:

1. Mark to Market Margins

2. 25% of the Lending price

Lenders may bring in early pay-in of securities on the day of the transaction execution itself. In such

37
cases no margins are levied on the lender.

Reverse Leg transactions

Borrow transaction- Reverse leg

The borrower is levied margins in respect of reverse leg of transactions under SLBS. The following
margins are levied on the Participants for a borrow transaction from T+1 to T+31 day.

1. Value at Risk Margins

2. Extreme Loss Margins
3. Mark to Market Margins
4. Lending price

Lending price is collected in the form of cash or cash equivalents as prescribed by NSCCL.

Borrower’s may bring in early pay-in of securities any time during the tenure of the borrowal period
for availing of margin benefits.

Lend transaction- Reverse leg

The Lender would not be charged any margins for the reverse leg.

Value at Risk Margin (VaR Margin)

 VaR  margin rate as applicable to the security in the capital market segment are applicable in
the SLBS.

 The VaR margin is collected on an upfront basis by adjusting against the collateral of the
Participant at the time of transaction.

 The VaR margin is collected on the gross open position of the Participant. The gross open
position for this purpose would mean the gross of all positions across all the clients of a
Participant including its proprietary position.

 VaR margin rate for each security is disseminated to the Participants through the Extranet
and on the website of the Exchange.

 The VaR margin so collected is released on completion of pay-in of the respective settlement.
 

Extreme Loss Margin

 Extreme Loss margin (ELM) rate as applicable to the security in the capital market segment is
applicable in the SLBS.

 The Extreme Loss margin is collected on an upfront basis by adjusting against the collateral of
the Participant at the time of transaction.

38
  The Extreme Loss margin is collected on the gross open position of the Participant. The gross
open position for this purpose would mean the gross of all positions across all the clients of a
Participant including its proprietary position.

 The Extreme Loss margin so collected is released on completion of pay-in of the respective
settlement.

Mark to Market Margin

 Mark to market loss is calculated by marking each transaction in security to the closing price
of the security at the end of day in the capital market segment. In case the security has not
been transacted on a particular day in the capital market segment, the latest available closing
price at the NSE is considered as the closing price.

 The mark to market margin (MTM) iscollected from the Participant before the start of the
SLBS session of the next day.

 The MTM margin is collected /adjusted from/against the collateral deposited by the
Participant.

 The MTM margin is collected on the gross open position of the Participant. The gross open
position for this purpose would mean the gross of all positions across all the clients of a
Participant including its proprietary position. For this purpose, the position of a client would be
netted across its various securities and the positions of all the clients of a Participant would be
grossed.

 There would be no netting off of the positions and setoff against MTM profits across two
settlements However, for computation of MTM profits/losses for the day, netting or setoff
against MTM profits would be permitted.

 The MTM margin so collected is released on completion of pay-in of the settlement.

Exemption from margins in case of Early Pay-in

In cases where early pay-in of securities is made prior to the securities pay-in, such positions for
which early pay-in (EPI) of securities is made are exempt from margins. The EPI would be allocated to
clients having net deliverable position, on a random basis.

Custodial transactions
In respect of transactions entered by a Participant which is to be settled by a custodian, the margins
from the time of transactions till confirmation by the custodian are levied on the Participant. On
confirmation of the said transactions by the custodian, the custodian is levied the margins applicable
on such transactions.

In case of rejection by the custodian, the margins on the transaction rejected continue to be levied on
the Participant.

39
Short fall of margins
In case of any shortfall in margin the Participant is not be permitted to transact in SLBS with
immediate effect. The same is considered as violation and would attract penal charges as may be
specified by NSCCL from time to time

Margins from the Client

Participants should have a prudent system of risk management to protect themselves from client
default. Margins are likely to be an important element of such a system. The same should be well
documented and be made accessible to the clients and NSCCL. However, the quantum of these
margins and the form and mode of collection are left to the discretion of the Participants.

Lending price

 Lending price refers to the previous day closing price of the security in the capital market
segment i.e. T-1 day closing price in the capital market segment.
 

 25% of the lending price is levied as margin on the Participants for lend transactions on T
day. This is released on completion of pay-in of T+1 settlement.
 

 100% of the Lending price is levied as margin on the Participants for borrow transactions
starting from T+1 day till the shares are returned by the borrower.
 

 This is collected on an upfront basis by adjusting against the collateral of the Participant at
the time of transaction.
 

 This is collected on the gross open position of the Participant. The gross open position for this
purpose would mean the gross of all positions across all the clients of a Participant including
its proprietary position.
 

 The margin so collected is released on completion of pay-in of the respective settlement.

Lending fee

 Lending fee refers to the actual price of the transaction at which the transaction is executed.
Lending fee per share is quoted by the participants while entering in to SLB Transactions.
Lending fee obligation is the lending fee per share*quantity of shares borrowed/lent.
For e.g. If a transaction is executed at Rs 5 per share for 100 shares of Security “X” then the
total lending fee obligation for the borrower for security “X” will be Rs. 500.
 

 Lending fee is levied as margin on the Participants for borrow transactions on T day on an
upfront basis.

40
  

 This is collected on an upfront basis by adjusting against the collateral of the borrower at the
time of transaction.
 

 The margin so collected is released on completion of pay-in on T+1 settlement date.

Initial Public Offerings (IPO)

A corporate may raise capital in the primary market by way of an initial public offer, rights
issue or private placement. An Initial Public Offer (IPO) is the selling of securities to the public
in the primary market. It is the largest source of funds with long or indefinite maturity for the
company.

What is Book Building?

SEBI guidelines defines Book Building as "a process undertaken by which a demand for the
securities proposed to be issued by a body corporate is elicited and built-up and the price for
such securities is assessed for the determination of the quantum of such securities to be
issued by means of a notice, circular, advertisement, document or information memoranda or
offer document".

Book Building is basically a process used in Initial Public Offer (IPO) for efficient price
discovery. It is a mechanism where, during the period for which the IPO is open, bids are
collected from investors at various prices, which are above or equal to the floor price. The
  offer price is determined after the bid closing date.

As per SEBI guidelines, an issuer company can issue securities to the public though
prospectus in the following manner:

1. 100% of the net offer to the public through book building process
2. 75% of the net offer to the public through book building process and 25% at the price
determined through book building. The Fixed Price portion is conducted like a normal
public issue after the Book Built portion, during which the issue price is determined.

The concept of Book Building is relatively new in India. However it is a common practice in
most developed countries.

Difference between Book Building Issue and Fixed Price Issue

In Book Building securities are offered at prices above or equal to the floor prices, whereas
securities are offered at a fixed price in case of a public issue. In case of Book Building, the
demand can be known everyday as the book is built. But in case of the public issue the
demand is known at the close of the issue.

41
 Issuers

An Issuer Company can issue capital through book building in following two ways:

 75% Book Building process

The option of 75% Book Building is available to all body corporates that are otherwise
eligible to make an issue of capital to the public. The securities issued through the
book building process are indicated as 'placement portion category' and securities
available to public are identified as 'net offer to public'. In this option, underwriting is
mandatory to the extent of the net offer to the public. The issue price for the
placement portion and offers to public are required to be same.

 100% of the net offer to the public through Book Building process
In the 100% of the net offer to the public, entire issue is made through Book Building
  process. However, there can be a reservation or firm allotment to a maximum of 5%
of the issue size for the permanent employees, shareholders of the company or group
companies, persons who, on the date of filing of the draft offer document with the
Board, have business association, as depositors, bondholders and subscribers to
services, with the issuer making an initial public offering.

The number of bidding centres, in case of 75% book building process should not be less than
the number of mandatory collection centres specified by SEBI. In case of 100% book building
process, the bidding centres should be at all the places where the recognised stock exchanges
are situated.

For additional details, issuers are requested to refer to SEBI guidelines.

Book Building at NSE

The NSE has set up nation-wide network for trading whereby members can trade remotely
from their offices located all over the country. The NSE trading network spans various cities
and towns across India.

NSE decided to offer this infrastructure for conducting online IPOs through the Book Building
  process. NSE operates a fully automated screen based bidding system called NEAT IPO that
enables trading members to enter bids directly from their offices through a sophisticated
telecommunication network.

Book Building through the NSE system offers several advantages:

 The NSE system offers a nation wide bidding facility in securities

 It provides a fair, efficient & transparent method for collecting bids using latest

42
 electronic trading systems

 Costs involved in the issue are far less than those in a normal IPO

The IPO market timings are from 10.00 a.m. to 5.00 p.m. On the last day of the IPO, the
session timings can be further extended on specific request by the Book Running Lead
Manager.

Reverse Book Building

Procedures

Issuers
Issuers desirous of using NSE's online IPO system are required to comply with the following
procedures:

1. Submit a written request as per prescribed format (Letter1, Letter2, BRLM) for usage
of electronic facilities and software of NSE

2. Give details regarding Book Running Lead Manager, Co Book Running Lead Managers
and Syndicate Members.

3. Pay the requisite charges to NSE.

 
Trading Members
The Book Running Lead Manager will give the list of trading members who are eligible to
participate in the Book Building process to the Exchange. Members have to submit a one time
undertaking to the Exchange. Eligible trading members have to give in the prescribed format
details of the user IDs that they would like to use.

Subscribers
Subscribers can approach any of the approved trading members for submitting bids in the
NEAT IPO system. On line transaction registration slip are generated automatically after
entering the bids in to the system which acts as proof of the registration of each Bid option.

User Hierarchy | Order Book | Bidding Workstation | Current Issue

Current Issues at NSE

 IL&FS Transportation Networks Limited

43
  PRADIP OVERSEAS LIMITED

 PERSISTENT SYSTEMS LIMITED

 SHREE GANESH JEWELLERY HOUSE LIMITED

IL&FS Transportation Networks Limited

Symbol - Series ITNL EQ

Issue Period March 11, 2010 to March 15, 2010

Public Issue of [?] Equity Shares of Rs. 10/- each for cash aggregating
Issue Size to Rs. 7,000 million (including Anchor investor portion upto 48,33,720
equity shares

Issue Type 100% Book Building

Face Value Rs. 10/-

Price Range Rs.242 to Rs.258

Tick Size Re. 1/-

Market Lot 25 Equity Shares

Minimum Order Quantity 25 Equity Shares

Maximum Subscription Amount for

Rs.100000
Retail Investor

IPO Market Timings 10.00 a.m. to 5.00 p.m.

IPO Grading CARE IPO Grade 4 and 4 (ind)

Rating Agency CARE and Fitch Ratings India Private Limited

Enam Securities Private Limited, Nomura Financial Advisory And

Book Running Lead Manager Securities (India) Private Limited And JM Financial Consultants Private
Limited

44
Co- Book Running Lead Manager Avendus Capital Private Limited, SBI Capital Markets Limited

SBICap Securities Limited,JM Financial Services Private Limited, Reliance

Syndicate Member
Securities Limited

FI, IC, VC, MF, FII, FVCI, SIDC, PF, PEF, MLA, BDFI,NIF, FIISA, CO,IND,
Categories
HUF, NRI and OTH

No. of Cities with Bidding Centers 47

Name of the registrar Link Intime India Private Limited

C-13, Pannalal Silk Mills Compound,L.B.S Marg,Bhandup (West),Mumbai

Address of the registrar
400 078, India.

Contact person name number and Email Mr. M. Sachin Achar, Tel: + 91 22 2596 0320 Fax: + 91 22 2596 0329
id E-mail: itnl.ipo@linkintime.co.in

Prospectus
Click Here

Application Forms
Click Here

Trading Member List

Click Here

IPO Grading
Click Here

IL&FS Transportation Networks Limited - Bid details

No. of
Sr. No.of shares No. of times of total
Category shares bid
No. offered/reserved meant for the category
for

1 Qualified Institutional Buyers (QIBs) 12148761 639117875 52.6077

1(a
Foreign Institutional Investors (FIIs) 385566675
)

1(b Domestic Financial Institutions(Banks/ Financial

118504775
) Institutions(FIs)/ Insurance Companies)

1(c
Mutual Funds 135046425
)

45
1(d
Others 0
)

2 Non Institutional Investors 2892562 113950575 39.3943

2(a
Corporates 68824125
)

2(b
Individuals (Other than RIIs) 32642800
)

2(c
Others 12483650
)

3 Retail Individual Investors (RIIs) 8677686 39601825 4.5636

3(a
Cut Off 35803425
)

3(b
Price Bids 3798400
)

Updated as on 15 Mar 2010 at 1915

Past Issues Through NSE

2010
Select the Year

No.
Introduc
S Book of Issue Issu Date
No. of ed in Grade
r. Name of the Running Date of Bidd Size Price e of
LTP mem F&O Rating agency assigne
N issue Lead Issue ing (lakh Range Price Listin
bers alongwit d
o. Manager cent shares) (Rs.) g
h IPO $
ers

SBI
Capital
Markets
Limited
Edelweis 23/02/
Rs. 60 18- IPO
UNITED BANK 69.0 s Capital 2010 to 66.0
1 116 73 500 to Rs. Mar- * CARE & ICRA Grade 3
OF INDIA 5 Limited 25/02/ 0
66 2010 &4
and 2010
Enam
Securitie
s Private
Limited

2 RURAL - Kotak 19/02/ 107 55 1717.3 For @ * * CARE NA

ELECTRIFICAT Mahindr 2010 to 2 Retail,
ION a Capital 23/02/ NIB &
CORPORATION Compan 2010 Reser
LIMITED y ve

46
 Limited
DSP
Merrill categ
Lynch ory
Limited Floor
ICICI price
Securitie 203/-
s Limited For
JM QIB
Financial categ
Consulta ory,
nts any
Private price
Limited above
and RBS floor
Equities price
(India)
Limited

IDFC-
SSKI
MAN 18/02/ Rs.24
Limited 11-
INFRACONSTR 367. 2010 to 3 to 252. IPO
3 and 94 63 56.25 Mar- * Crisil Limited
UCTION 95 22/02/ Rs.25 00 Grade 3
Edelweis 2010
LIMITED 2010 2
s Capital
Limited

Almondz 16/02/
TEXMO PIPES Rs.85
Global 2010 to IPO
4 & PRODUCTS - 96 48 50 to 90 * * CARE
Securitie 19/02/ Grade 2
LTD Rs.90
s Ltd 2010

Morgan
Stanley
India
Compan
y Private
Limited,
UBS
HATHWAY 09/02/ Rs.24
Securitie IPO
CABLE & 210. 2010 to 0 to
5 s India 112 58 277.5 240 * * CRISIL Grade
DATACOM 95 11/02/ Rs.26
Private 3/5
LIMITED 2010 5
Limiteda
nd kotak
Mahindr
a Capital
Compan
y
Limited

IDBI [.]
ARSS
Capital 08/02/ equity Rs.41
INFRASTRUCT 03-
919. Market 2010 to shares 0 to 450. IPO
6 URE 110 31 Mar- * CARE
00 Services 11/02/ aggreg Rs.45 00 Grade 2
PROJECTS 2010
Limited 2010 ating 0.
LIMITED
and SBI upto
Capital Rs.103

47
 Markets
00 lacs
Limited

ICICI
Securitie
For
s
Retail,
Limited,
NIB &
Citigroup
Reser
Global
ve
Markets
categ
India
ory,
Private
Floor
Limited, 03/02/
price
J.P. 2010 to 4122.7
7 NTPC Limited - 111 61 201/- @ * * NA NA
Morgan 05/02/ 322
.For
India 2010
QIB
Private
categ
Limited
ory,
and
any
Kotak
price
Mahindr
above
a Capital
floor
Compan
price.
y
Limited

Keynote
01/02/
EMMBI Corporat Rs.40 24-
23.1 2010 to 45.0 IPO
8 POLYARNS e 84 51 95.74 to Feb- * CARE
5 03/02/ 0 Grade 2
LIMITED Service Rs.45. 2010
2010
Limited

Enam
Securitie [.]
s Private Equity
Limited, 29/01/ Shares Rs.46
24-
D B REALTY 452. Kotak 2010 to aggreg 8 to 468. IPO
9 102 47 Feb- * CRISIL
LIMITED 00 Mahindr 02/02/ ating to Rs. 00 Grade 2
2010
a Capital 2010 Rs. 486
Compan 15,000
y Million
Limited

[?]
Saffron equity
Capital shares
Advisors for
25/01/ Rs.20
AQUA Pvt cash Brickwork
1 2010 to 0 to IPO
LOGISTICS - Ltd 91 57 aggreg 220 * * Ratings India
0 02/02/ Rs. Grade 3
LTD ,Centru ating Pvt Ltd
2010 225
m upto
Capital Rs.
Ltd 15,000
lacs

1 SYNCOM 110. Chartere 27/01/ 74 34 75 Rs. 65 75.0 15- * Credit IPO

1 HEALTHCARE d Capital 2010 to to Rs. Feb- Analysis and

48
 And
29/01/ Research Ltd
LIMITED 30 Investm 75 0 2010 Grade 2
2010 (CARE)
ent Ltd

Kotak
Mahindr
a Capital
Compan 27/01/ Rs.16
VASCON 15-
1 140. y 2010 to 5 to 165. IPO
ENGINEERS 119 54 108 Feb- * CRISIL
2 20 Limited, 29/01/ Rs. 00 Grade 3
LIMITED 2010
Enam 2010 185
Securitie
s Private
Limited

Keynote
27/01/ BWR
THANGAMAYIL Corporat Rs. 70 19- Brickwork
1 77.4 2010 to 75.0 IPO
JEWELLERY e 85 51 14.075 To Feb- * Ratings India
3 0 29/01/ 0 Grade
LIMITED Services Rs.75. 2010 Pvt. Ltd
2010 III
Limited

Kotak
Mahindr 18/01/ Rs.13
JUBILANT 08- IPO
1 345. a Capital 2010 to 226.70 5 to 145. Fitch Ratings
FOODWORKS 111 62 Feb- * Grade
4 05 Compan 20/01/ 447 Rs. 00 India Pvt Ltd
LIMITED 2010 3(ind)
y 2010 145
Limited

11/01/
BIRLA SHLOKA Ashika Rs. 45
1 2010 to
EDUTECH - Capital 47 43 59.55 To 50 * * NA NA
5 13/01/
LIMITED Limited Rs.50.
2010

India
Infoline
INFINITE Rs.
Limited 11/01/
COMPUTER 155 03- IPO
1 209. and Spa 2010 to
SOLUTIONS 121 45 115.03 To 165 FEB- - CRISIL GRADE
6 00 Merchan 13/01/
(INDIA) Rs.16 2010 2/5
t 2010
LIMITED 5.
Bankers
Limited

2010
Select the Year

@   Issue was under alternate book building mechanism thereby Issue price was on discriminatory basis.
#   No. of shares to be decided after book building process.
*   Equity shares of this company are not listed and traded on NSE.
** Considering lower price band.
$   Eligible securities can be introduced in F&O subject to SEBI permission.
     The above status is as at the time of listing of IPO; subsequently, a securities eligibility/ineligibility for
      F&O may change based on various criteria laid down by SEBI.

49
 Application Supported by Blocked Amount -  Procedure

Main Features of ASBA process

ASBA provides an alternative mode of payment in issues whereby the application money
remains in the investor’s account till finalization of basis of allotment in the issue.

ASBA process facilitates retail individual investors bidding at cut-off, with single option, to
  apply through Self Certified Syndicate Banks (SCSBs), in which the investors have bank
accounts. SCSBs are those banks which satisfy the conditions laid by SEBI. SCSBs would
accept the applications, verify the application, block the fund to the extent of bid payment
amount, upload the details in the web based bidding system of NSE, unblock once basis of
allotment is finalized and transfer the amount for allotted shares, to the issuer.

This would co-exist with the current procedure of investors applying through sub syndicate/
syndicate members, with cheque as a payment instrument.

Reverse Book Building at NSE

Delisting of shares under SEBI (delisting of Securities) guidelines 2003

Securities and Exchange Board of India has issued the SEBI (Delisting of Securities) Guidelines 2003’
for delisting of shares from stock exchanges. The guidelines inter alia provide the overall framework
for voluntary delisting by a promoter. In accordance with the guidelines for the first time in India by
any Exchange, National Stock Exchange now provides online reverse book building for
promoter/acquirer through its trading network which spans various cities and towns across India. NSE
operates a fully automated screen based bidding system that enables trading members to enter offers
directly from their offices through a sophisticated telecommunication network.

What is Reverse Book Building (Delisting of shares)?

The Reverse Book Building is a mechanism provided for capturing the sell orders on online basis from
the share holders through respective Book Running Lead Managers (BRLMs) which can be used by
companies intending to delist its shares through buy back process. In the Reverse Book Building
scenario, the Acquirer/Company offers to buy back shares from the share holders. The Reverse Book
Building is basically a process used for efficient price discovery. It is a mechanism where, during the
period for which the Reverse Book Building is open, offers are collected from the share holders at
various prices, which are above or equal to the floor price. The buy back price is determined after the
offer closing date

Business process for delisting through book building is as follows:

 The acquirer shall appoint designated Book Running Lead Manager (BRLM) for accepting offers
from the share holders.

 The company/acquirer intending to delist its shares through Book Building process is identified
by way of a symbol assigned to it by BRLM.

 Orders for the offer shall be placed by the share holders only through the designated trading
members, duly approved by the Exchange.

50
  The designated trading members shall ensure that the security / share holders deposit the
securities offered with the trading members prior to placement of an order.

 The offer shall be open for 'n' number of days.

 The BRLM shall intimate the final acceptance price and provide the valid accepted order file to
the National Securities Clearing Corporation Limited (A wholly owned subsidiary of NSE
carrying out clearing and responsible for settlement operations.)

SEBI guidelines shall be applicable to delisting of securities of companies and specifically apply to:

 Voluntary delisting being sought by the promoters of a company.

 Any acquisition of shares of the company (either by a promoter or by any other person) or
scheme or arrangement, by whatever name referred to, consequent to which the public
shareholding falls below the minimum limit specified in the listing conditions or listing
agreement that may result in delisting of securities.

 Promoters of the companies who voluntarily seek to delist their securities from all or some of
the stock exchanges.

 Cases where a person in control of the management is seeking to consolidate his holding in a
company, in a manner which would result in the public shareholding or in the listing
agreement that may have the effect of company being delisted.

 Companies which may be compulsorily delisted by the stock exchanges.

NSE Reverse Book Building System

NSE uses the reverse book building system; a fully automated screen based bidding system that
allows offers to run in several issues concurrently. The system has the facility of defining a hierarchy
amongst the users of the system. The Book Running Lead Manager can define who will be the
Syndicate member and who will be the other members participating in the issue. The Syndicate
Member and other Members also have a facility of defining a hierarchy among the users of the system
as Corporate Manager, Branch Manager and Dealer.

Trading Members

The Book Running Lead Manager will give the list of trading members who are eligible to participate in
the Book Building process to the Exchange. Members have to submit a one-time undertaking to the
Exchange. Eligible trading members have to give in the prescribed format details of the user IDs that
they would like to use.

List of Approved Trading Members:

 ICICI Brokerage Services Limited.

 Karvy Stock Broking Limited.

 Master Capital Services Limited.

Subscribers

51
Subscribers can approach any of the approved trading members for submitting offers in the NEAT IPO
system. On line transaction registration slip are generated automatically after entering the offers in to
the system, which acts as proof of the registration of each offer.

Reverse Book Building through the NSE system offers several advantages:

 The NSE system offers a nation wide bidding facility in securities.

 It provides a fair, efficient & transparent method for collecting offers using latest electronic
trading systems.

Reverse Book Building at NSE

Procedure

Acquirers/Companies desirous of using NSE's system for reverse book building &
settlement mechanism are required to comply with the following procedures: :
 
 Letter from Lead Manager providing details of the issue.

 Tri-partite Agreement between NSEIL, the Acquirer (including Issuer Company) and
the Lead Manager along with the requisite charges.

Past Issues Through NSE Reverse Book Building System

Sr. No. of No. of Bidding

Name of the issue Book Running Lead Manager Date of Issue
No. members centers

Religare Capital Markets Mar 23, 2009 to Mar

1 KAUSAR INDIA LIMITED 1
Limited 25, 2009

Jacqart Chemical Industries Jun 07, 2006 to Jun 12,

2 J M Morgan Stanley Pvt. Ltd. 1
Ltd. 2006

Beekay Engineering & Enam Financial Consultants May 17, 2006 to May
3 1
Castings Ltd. Pvt Ltd. 19, 2006

Enam Financial Consultants Nov 28, 2005 to Dec

4 Fortune Infotech Ltd. 1
Pvt. Ltd. 02, 2005

Nov 23, 2005 to Nov

5 Federal Technologies Ltd. Karvy Investor Services Ltd. 1
25, 2005

Ind global Corporate Finance Oct 17, 2005 to Oct 21,

6 Wimco Ltd. 1
Pvt. Ltd. 2005

52
 Aug 24, 2005 to Aug
7 Kadri Mills (Cbe) Ltd Karvy Investor Services Ltd. 1
26, 2005

Jul 04, 2005 to Jul 06,

8 Rockwool (India) Ltd. Karvy Investor Services Ltd. 1
2005

Madras Aluminium Company Mar. 14, 2005 to Mar.

9 ICICI Securities Ltd. 1
Ltd. 18, 2005

Dec 08, 2004 to Dec

10 Amalgamations Repco Ltd. SBI Capital Markets Ltd. 1
10, 2004

Nov 25, 2004 to Nov

11 SRP Tools Ltd Karvy Investor Services Ltd 1
30, 2004

Vickers System International Aug 30, 2004 to Sep

12 SBI Capital Markets Ltd. 1
Ltd 03, 2004

Aug 30, 2004 to Sep

13 India Gypsum Ltd. ICICI Securities Ltd. 2
03, 2004

Stratcap Securities (India) Aug 25, 2004 to Aug

14 Rochees Breweries Ltd. 1
Pvt. Ltd 27, 2004

Kotak Mahindra Capital Aug 13, 2004 to Aug

15 e-Serve International Ltd 2
Company Ltd. 19, 2004

Apr 28, 2004 to Apr 30,

16 Ideaspace Solutions Ltd Karvy Investor Services Ltd. 1
2004

Astra Zeneca Pharma India Jul 19, 2004 to Jul 23,

17 DSP Merrill Lynch Ltd. 1
Ltd. 2004

CTR Manufacturing Industries April 12, 2004 to April

18 Fedex Securities Ltd. 1
Ltd. 19, 2004

M/s. Karvy Investor Services Feb 09, 2004 to Feb

19 Spencer & Company Ltd. 2
Ltd. 11, 2004

Feb 09, 2004 to Feb

20 Sharadha Terry Products Ltd. Karvy Investor Services Ltd. 2
11, 2004

Jan 19, 2004 to Jan 23,

21 Digital Globalsoft Ltd. ICICI Securities Ltd. 3
2004

  Indices

An Index is
used to give
information
about the

53
 price
movements
of products
in the
financial,
commodities
or any other
markets.
Financial
indexes are
constructed
to measure
price
movements
of stocks,
bonds, T-
bills and
other forms
of
investments.
Stock
market
indexes are
meant to
capture the
overall
behaviour of
equity
markets. A
stock
market
index is
created by
selecting a
group of
stocks that
are
representati
ve of the
whole
market or a
specified
sector or
segment of
the market.
An Index is
calculated
with
reference to
a base
period and a
base index

54
 value.

Stock
market
indexes are
useful for a
variety of
reasons.
Some of
them are :

 They
provi
de a
histo
rical
com
paris
on of
retur
ns
on
mon
ey
inve
sted
in
the
stoc
k
mar
ket
agai
nst
othe
r
form
s of
inve
stme
nts
such
as
gold
or
debt
.
 They
can
be
used
as a

55
 stan
dard
agai
nst
whic
h to
com
pare
the
perf
orm
ance
of an
equit
y
fund
.
 It is
a
lead
indic
ator
of
the
perf
orm
ance
of
the
over
all
econ
omy
or a
sect
or of
the
econ
omy
 Stoc
k
inde
xes
refle
ct
highl
y up
to
date
infor
mati
on
 Mod
ern

56
 finan
cial
appli
catio
ns
such
as
Inde
x
Fund
s,
Inde
x
Futu
res,
Inde
x
Opti
ons
play
an
impo
rtant
role
in
finan
cial
inve
stme
nts
and
risk
man
age
men
t

  India Index Services & Products Ltd. (IISL)

India Index Services & Products Ltd. (IISL) is a joint venture between the National
Stock Exchange of India Ltd. (NSE) and CRISIL Ltd. (formerly the Credit Rating
Information Services of India Limited). IISL has been formed with the objective of
providing a variety of indices and index related services and products for the
capital markets.

IISL has a licensing and marketing agreement with Standard and Poor's (S&P), the
world's leading provider of investible equity indices, for co-branding IISL's equity

57
 indices.

  Products & Services

IISL offers a wide range of products and services which are key support tools for the
equity markets. We provide reliable, accurate and valuable data on indices and
index related services to cater to the needs of various segments of users. Our
speciality is indices based on Indian equity markets, which may be used for
benchmarking, trading or research. Use of IISL data or name or indices
requires a license or subscription.

Financial products on IISL Indices

IISL maintains, develops, compiles and disseminates entire gamut of equity indices.
Licensing is mandatory for tracking the performance of an IISL Index. Licensing is
also required for use of the name of IISL or S&P CNX or CNX or any IISL
Index. Fees for licensing would vary according to the type of the product and the
period.

CNX ensures common branding of indices, to reflect the identities of both the
promoters, i.e. NSE and CRISIL. Thus, 'C' stands for CRISIL, 'N' stands for NSE .
The S&P prefix belongs to the US-based Standard & Poor's Financial Information
Services.

CNX indices are useful for fund managers, corporates, brokers and all such
enterprises connected with investments in the equity markets. These indices can be
used for tracking the markets, understanding the performance of a company vis-a-
vis the market, determining how an investors portfolio is performing as compared to
the market, trading derivative products and most importantly for development of
index based funds by mutual funds.

Data subscription

IISL provides index data on a daily, weekly or ad-hoc basis through preferred
method. Data includes Index values, index constituents, historical growth trends
etc. This is a paid service and the subscription charges vary depending upon the
type of data sought and the period.

Customized Indices

IISL undertakes development & maintenance of customized indices for clients for
tracking the performance of the client portfolio of stocks vis-à-vis objectively defined
benchmarks, or for benchmarking NAV performance to customized indices. The
customized indices can be sub-sets of existing indices or a completely new index viz.
Sector Indices, Individual Business Group Indices, Industry Indices etc. Charges for
this service vary depending on the activity performed by IISL.

58
 Consulting

IISL provides consulting services in areas of Index Funds, Exchange-traded-fund,

derivatives, Index options, alerting for rebalancing for index funds etc. This is a paid
service.

Market Updates

IISL provides to specialized clients facts and figures, reports and equity market
updates on regular intervals. This is a paid service.

Research

IISL undertakes research activities for its clients on matters concerning equity and
derivative markets.

Please contact us for more information on any of the products and services listed
above.

  IISL Indices

Major Indices Other Indices

S&P CNX Nifty CNX IT Index

CNX Nifty Junior CNX Bank Index

CNX 100 CNX FMCG Index

S&P CNX 500 CNX PSE Index

CNX Midcap * CNX MNC Index

Nifty Midcap 50 CNX Service Sector Index

S&P CNX Defty S&P CNX Industry Indices

Customised Indices

    CNX Energy Index

    CNX Pharma Index

    CNX Infrastructure Index

59
     CNX PSU BANK Index

    CNX Realty Index

    S&P CNX Nifty Shariah / S&P CNX 500 Shariah

    S&P ESG India Index

*   CNX Midcap - Introduced from July 18, 2005

** CNX Midcap 200 - Discontinued from July 18, 2005

Index Concepts

Impact Cost

Beta

Total Returns Index

Impact Cost

Introduction

Liquidity in the context of stock markets means a market where large orders can be executed
without incurring a high transaction cost. The transaction cost referred here is not the fixed
costs typically incurred like brokerage, transaction charges, depository charges etc. but is the
cost attributable to lack of market liquidity as explained subsequently. Liquidity comes from
the buyers and sellers in the market, who are constantly on the look out for buying and
selling opportunities. Lack of liquidity translates into a high cost for buyers and sellers.

The electronic limit order book (ELOB) as available on NSE is an ideal provider of market
  liquidity. This style of market dispenses with market makers, and allows anyone in the market
to execute orders against the best available counter orders. The market may thus be thought
of as possessing liquidity in terms of outstanding orders lying on the buy and sell side of the
order book, which represent the intention to buy or sell.

When a buyer or seller approaches the market with an intention to buy a particular stock, he
can execute his buy order in the stock against such sell orders, which are already lying in the
order book, and vice versa.

An example of an order book for a stock at a point in time is detailed below:

Buy Sell

Sr.No. Quantity Price Quantity Price Sr. No.

60
 1 1000 3.50 2000 4.00 5

2 1000 3.40 1000 4.05 6

3 2000 3.40 500 4.20 7

4 1000 3.30 100 4.25 8

There are four buy and four sell orders lying in the order book. The difference between the
best buy and the best sell orders (in this case, Rs.0.50) is the bid-ask spread. If a person
places an order to buy 100 shares, it would be matched against the best available sell order
at Rs. 4 i.e. he would buy 100 shares for Rs. 4. If he places a sell order for 100 shares, it
would be matched against the best available buy order at Rs. 3.50 i.e. the shares would be
sold at Rs.3.5.

Hence if a person buys 100 shares and sells them immediately, he is poorer by the bid-ask
spread. This spread may be regarded as the transaction cost which the market charges for
the privilege of trading (for a transaction size of 100 shares).

Progressing further, it may be observed that the bid-ask spread as specified above is valid for
an order size of 100 shares upto 1000 shares. However for a larger order size the transaction
cost would be quite different from the bid-ask spread.

Suppose a person wants to buy and then sell 3000 shares. The sell order will hit the following
buy orders:

Sr. Quantity Price

1 1000 3.50

2 1000 3.40

3 1000 3.40

while the buy order will hit the following sell orders :

Quantity Price Sr.

2000 4.00 5

1000 4.05 6

This implies an increased transaction cost for an order size of 3000 shares in comparison to
the impact cost for order for 100 shares. The "bid-ask spread" therefore conveys transaction
cost for a small trade.

This brings us to the concept of impact cost. We start by defining the ideal price as the

61
average of the best bid and offer price, in the above example it is (3.5+4)/2, i.e. 3.75. In an
infinitely liquid market, it would be possible to execute large transactions on both buy and sell
at prices which are very close to the ideal price of Rs.3.75. In reality, more than Rs.3.75 per
share may be paid while buying and less than Rs.3.75 per share may be received while
selling. Such percentage degradation that is experienced vis-à-vis the ideal price, when
shares are bought or sold, is called impact cost. Impact cost varies with transaction size.

For example, in the above order book, a sell order for 4000 shares will be executed as
follows:

Sr. Quantity Price Value

1 1000 3.50 3500

2 1000 3.40 3400

3 2000 3.40 6800

Total value 13700

Wt. average price 3.43

The sale price for 4000 shares is Rs.3.43, which is 8.53% worse than the ideal price of
Rs.3.75. Hence we say "The impact cost faced in buying 4000 shares is 8.53%".

Definition

Impact cost represents the cost of executing a transaction in a given stock, for a specific
predefined order size, at any given point of time.

Impact cost is a practical and realistic measure of market liquidity; it is closer to the true cost
of execution faced by a trader in comparison to the bid-ask spread.

It should however be emphasised that :

(a) impact cost is separately computed for buy and sell

(b) impact cost may vary for different transaction sizes
(c) impact cost is dynamic and depends on the outstanding orders
(d) where a stock is not sufficiently liquid, a penal impact cost is applied

In mathematical terms it is the percentage mark up observed while buying / selling the
desired quantity of a stock with reference to its ideal price (best buy + best sell) / 2.

Example A :

ORDER BOOK SNAPSHOT

Buy Quantity Buy Price Sell Quantity Sell Price

1000 98 1000 99

62
 2000 97 1500 100

1000 96 1000 101

TO BUY 1500 SHARES

Nifty Securities - Impact Cost Archives

Beta

Risk is an important consideration in holding any portfolio. The risk in holding securities is
generally associated with the possibility that realised returns will be less than the returns
expected.

Risks can be classified as Systematic risks and Unsystematic risks.

 Unsystematic risks:
These are risks that are unique to a firm or industry. Factors such as management
capability, consumer preferences, labour, etc. contribute to unsystematic risks.
Unsystematic risks are controllable by nature and can be considerably reduced by
sufficiently diversifying one's portfolio.

 Systematic risks:
These are risks associated with the economic, political, sociological and other macro-
level changes. They affect the entire market as a whole and cannot be controlled or
eliminated merely by diversifying one's portfolio.

What is Beta?

The degree to which different portfolios are affected by these systematic risks as compared to
the effect on the market as a whole, is different and is measured by Beta. To put it differently,
the systematic risks of various securities differ due to their relationships with the market. The
Beta factor describes the movement in a stock's or a portfolio's returns in relation to that of
the market returns. For all practical purposes, the market returns are measured by the returns
on the index (Nifty, Mid-cap etc.), since the index is a good reflector of the market.

63
Methodology / Formula

Beta is calculated as :

where,
Y is the returns on your portfolio or stock - DEPENDENT VARIABLE
X is the market returns or index - INDEPENDENT VARIABLE
Variance is the square of standard deviation.
Covariance is a statistic that measures how two variables co-vary, and is given by:

Where, N denotes the total number of observations, and and respectively represent the
arithmetic averages of x and y.

In order to calculate the beta of a portfolio, multiply the weightage of each stock in the
portfolio with its beta value to arrive at the weighted average beta of the portfolio

Standard Deviation

Standard Deviation is a statistical tool, which measures the variability of returns from the
expected value, or volatility. It is denoted by sigma(s) . It is calculated using the formula
mentioned below:

Where, is the sample mean, xi’s are the observations (returns), and N is the total number of
observations or the sample size.

  Total Returns Index

Introduction

Nifty is a price index and hence reflects the returns one would earn if investment is made in
the index portfolio. However, a price index does not consider the returns arising from dividend
receipts. Only capital gains arising due to price movements of constituent stocks are indicated
in a price index. Therefore, to get a true picture of returns, the dividends received from the
constituent stocks also need to be factored in the index values. Such an index, which includes
the dividends received, is called the Total Returns Index.

64
 Total Returns Index reflects the returns on the index arising from (a) constituent stock price
movements and (b) dividend receipts from constituent index stocks.

Methodology for Total Returns Index (TR) is as follows:

The following information is a prerequisite for calculation of TR Index:

1. Price Index close

2. Price Index returns
3. Dividend payouts in Rupees
4. Index Base capitalisation on ex-dividend date

Dividend payouts as they occur are indexed on ex-date.

Indexed dividends are then reinvested in the index to give TR Index.

Total Return Index = [Prev. TR Index + (Prev. TR Index * Index returns)] +

                                 [Indexed dividends + (Indexed dividends * Index returns)]

Base for both the Price index close and TR index close will be the same.

An investor in index stocks should benchmark his investments against the Total Returns index
instead of the price index to determine the actual returns vis-à-vis the index.

  Statistics

 Daily
o Index Watch (Live)
o Comparison of Indices
o Online Indices Charts
o Daily Outstanding Shares and Weightages  | Archives

o Nifty - Top 10 Holdings

 Monthly
o IISL Monthly Update | Archives
o Industry-wise market capitalisation and weightage:
Bank Nifty | CNX IT | CNX 100 | Nifty Midcap 50
o Market Capitalisation, Weightage, Beta etc.: Nifty | Nifty Junior | Archives
o Monthly Index Returns

65
 o Nifty securities - impact cost | Archives

 Historical
o P/E, P/B & Div. Yield values
o S&P CNX NIFTY Total Returns Index
o Indices Data: Values | Charts
o Details of past changes to Constituents: Nifty | Nifty Junior

  Index Funds

Index Funds today are a source of investment for investors looking at a long term, less risky
form of investment. The success of index funds depend on their low volatility and therefore the
choice of the index.

S&P CNX Nifty is used by a number of well know mutual funds in India for promoting Index
Funds. These funds are:

A. Index Funds :

1. Principal Index Fund, an index fund scheme on S&P CNX Nifty launched by
Principal PNB AMC Pvt. Ltd in July 1999.

2. UTI Nifty Index Fund launched by UTI AMC Pvt. Ltd in March 2000.

3. Franklin India Index Fund launched by Franklin Templeton AMC (India) Pvt.Ltd.
in June 2000.

4. Franklin India Tax Fund launched by Franklin Templeton AMC (India) Pvt.Ltd. in
February 2001.

5. SBI Magnum Index Fund launched by SBI Funds Management Ltd in December
2001.

6. ICICI Prudential Index Fund launched ICICI Prudential AMC Ltd in February
2002.

7. HDFC Index Fund – Nifty Plan launched by HDFC AMC Ltd. in July 2002.

8. Birla Index Fund launched by Birla Sun Life AMC Ltd in September 2002.

9. LICMF Index Fund – Nifty Plan launched by LIC Mutual Fund AMC Ltd in
November 2002.

10. Tata Index Fund-Nifty Plan launched by Tata AMC Pvt. Ltd in February 2003.

66
 11. ING Vysya Nifty Plus Fund launched by ING Investment Management (I) Ltd in
January 2004.

12. Canara Robeco Nifty Index Fund launched by Canara Robeco AMC Ltd. in
September 2004.

13. Principal Junior Cap fund launched by Principal PNB AMC Pvt. Ltd in May 2005.

14. Reliance Equity Advantage Index Fund launched by Reliance Capital AMC Ltd.
in June 2007.

15. Religare Banking Fund launched by Religare AMC Pvt. Ltd. in May 2008.

16. Reliance Quant Plus Fund launched by Reliance Capital AMC Ltd in June 2008.

17. Taurus Ethical Fund launched by Taurus AMC Ltd in February 2009.

18. Edelweiss Nifty Enhancer Fund launched by Edelweiss AMC Ltd in May 2009.

19. JM Nifty Plus Fund launched by JM Financial AMC Pvt. Ltd. in June 2009.
B. Exchange Traded Fund :

1. NIFTY BeES an Exchange Traded Fund launched by Benchmark AMC Pvt. Ltd in
January 2002.

2. Junior BeES an Exchange Traded Fund on CNX Nifty Junior, launched by

Benchmark AMC Pvt. Ltd in February 2003.

3. SUNDER an Exchange Traded Fund launched by UTI in July 2003.

4. Bank BeES an Exchange Traded Fund (ETF) launched by Benchmark AMC Pvt.
Ltd. in May 2004.

5. Benchmark Split Capital launched by Benchmark AMC Pvt. Ltd. in August 2005.

6. Lyxor ETF India launched by Lyxor International Asset Management in

September 2007.

7. db X-trackers S&P CNX Nifty ETF launched by Deutsche Bank AG in July 2007.

8. PSU Bank Exchange Traded Scheme launched by Benchmark AMC Pvt. Ltd. in
October 2007.

9. KOTAK PSU BANK Exchange Traded Scheme launched by Kotak Mahindra AMC
Ltd in October 2007.

10. Reliance Banking ETF launched by Reliance Capital AMC Ltd in August 2008.

67
 11. Quantum Index Fund-Exchange Traded Fund launched by Quantum AMC Pvt
Ltd. in May 2008

12. Benchmark S&P CNX 500 Fund launched by Benchmark AMC Pvt. Ltd. in
November 2008

13. Shariah Benchmark Exchange Traded Scheme (Shariah BeES) launched by

Benchmark AMC Pvt. Ltd. in January 2009

C. Issue of Debentures by following clients:

1. Morgan Stanley India Capital Pvt. Ltd

2. JP Morgan Securities India Pvt Ltd
3. ABN AMRO Securities (India) Pvt Ltd
4. Deutsche Investment India Pvt Ltd
5. Citi Financial Consumer Finance India Ltd
6. Rank Investments & Credit (India) Ltd
7. Kotak Mahindra Investments Ltd
8. DSP Merrill Lynch Capital Ltd.
9. Citicorp Finance (I) Ltd.
10. Edelweiss Capital Ltd.

D. Issue of Insurance Products by following clients:

1. Bajaj Allianz Life Insurance Company Ltd.

2. Aviva Life Insurance Company India Ltd.
3. IDBI Fortis Life Insurance Company Ltd

IISL Press Releases

Mar - 2010 Archives

 Mar 10, 2010

 SGX to offer Nifty options, related products

 Mar 04, 2010

 Index Changes w.e.f March 09, 2010.

 Page 1 of 2
 JOINT NEWS RELEASE
 SGX to offer Nifty options, related products
 10 March 2010 – Singapore Exchange (SGX) today said it expects to offer
options on the
 S&P CNX Nifty Index (Nifty) and related products in the coming year.

68
 This follows SGX’s obtaining of licensing rights from India Index Services &
Products
 Limited (IISL) for the product range including derivative contracts on the CNX
Nifty
 Junior, CNX 100 and CNX Midcap indices. The addition of these products is
subject to
 relevant regulatory approvals. The development comes amid a sharp
increase in the
 trading of India-related products on SGX and elsewhere as the country’s
economy
 continues to be one of the fastest-growing in the world.
 Building on the success of SGX’s current offerings, these new India-based
products will
 provide market participants with increased trading opportunities and
enhanced means for
 risk management. Since its launch in 2000, the SGX S&P CNX Nifty Futures
has grown
 to be one of SGX’s key Asian equity derivatives products. Total trading
volume in 2009
 was 7.1 million contracts, representing a daily average of 29,524 contracts. A
new daily
 record of 297,280 contracts was achieved on 27 January 2010 on the back of
an active
 onshore market and rollover activity.
 SGX also lists four exchange-traded funds (ETFs) linked to Indian equity
indices on the
 securities market, namely the db x-trackers S&P CNX Nifty ETF, iShares
MSCI India
 ETF, Lyxor India S&P CNX Nifty ETF and Lyxor MSCI India ETF with
combined assets
 under management of US$782 million as at end-2009. In 2009, total trading
value of
 Indian-based ETFs on SGX surged 48% to S$2.6 billion, underscoring strong
investor
 appetite for Indian assets.
 Mr Magnus Bocker, CEO of SGX, said, “We would like to express our
appreciation to our
 customers for their support of our current suite of India-linked products. As we
continue to
 find ways to meet customers’ growing interest in the Indian market through
our different
 partnerships, we are very excited to deepen our relationship with IISL with
this planned
 expansion of our suite of Indian equity derivatives. This will complement our
current

69
 offerings and bolster SGX’s position as a one-stop gateway for international
market
 participants to manage their Indian investment, trading and hedging needs.”
 Mr Ravi Narain, Chairman of the Board of Directors of IISL and Managing
Director &
 CEO of the National Stock Exchange of India Limited, said, “SGX has
achieved a solid
 track record with Nifty futures contract. We are pleased to see SGX’s interest
in
 expanding the range of products based on the Nifty family of indices. This is
testament to
 the international brand recognition of the Nifty index. Today, the Nifty is used
extensively
 by investors in India and around the world to take exposure to the Indian
equities market.
 Page 2 of 2
 The total trading volume of Nifty-linked Futures on NSE in 2009 was 167
million contracts,
 representing a daily average of 687,000 contracts and the trading volume of
Nifty-linked
 Options on NSE in 2009 was 321 million contracts representing a daily
average of
 1,321,000 contracts Index derivatives based on Nifty have been very
successful both in
 India and in Singapore over the last few years. Further, ETFs and structured
products on
 Nifty have been successfully introduced in US, European and Asian markets
by leading
 ETF providers and investment banks. Nifty has become the true benchmark
of the Indian
 capital market.”
 - End -
 For further information, kindly contact:
 SGX
 Carolyn Lim
 Corporate Communications
 Tel : (65) 6236 8139
 Email : carolyn.lim@sgx.com
 NSE
 K. Hari
 Corporate Communications
 Tel (91) 22 2659 8148
 Email: cc_nse@nse.co.in

70
  IISL
 INDIA INDEX SERVICES & PRODUCTS LIMITED
 (A joint venture of NSE & CRISIL)

 PRESS RELEASE

 Securities of Kirloskar Brothers Limited will be suspended from trading on the
National Stock Exchange with effect from March 9, 2010 on account of a
“Scheme of Arrangement”.
 The Index Maintenance Sub-Committee has decided to make the following
changes in this regard which will become effective from March 9, 2010:

 1) S&P CNX 500 Index

 The following company is being excluded:

Sr. No. Company Name
1 Kirloskar Brothers Limited

 The following company is being included:

Sr. No. Company Name
1 Brigade Enterprises Ltd.


 2) CNX Midcap Index

 The following company is being excluded:

Sr. No. Company Name
1 Kirloskar Brothers Limited.

 The following company is being included:

Sr. No. Company Name
1 LIC Housing Finance Ltd.

 Place: Mumbai

 Date: March 4, 2010.




71
 FAQs

Basics

What should a stock market index be?

What do the ups and downs of an index mean?

What is the basic idea in an index?

What kind of averaging is done?

What is the portfolio interpretation of index movements?

Why are indices important?

What kinds of indices exist?

Index construction

Isn't averaging like diversification; cancelling out vulnerability to one stock?

Then a larger number of stocks in an index will give more diversification -- isn't that a
good thing? Why don't we put all the stocks of the country into the index?
 

Component illiquidity contaminates index

What is wrong with the price information for illiquid stocks?

A stock may be liquid on one exchange and illiquid on another -- what price do you take
when calculating the index?

What is `stale prices'?

What is `bid-ask bounce'?

What about market manipulation - how would manipulation of an index take place, and
how would an index be made less vulnerable to manipulation?

So diversification yields diminishing returns, and illiquid stocks are best kept out of an
index.... what is the ideal middle road?

The S&P CNX Nifty

How does the S&P CNX Nifty work?

72
 What is `impact cost'?

What do you mean by `an S&P CNX Nifty trade'?

What's the impact cost on Rs.5 million of the full S&P CNX Nifty?

Index revision

Why does the index keep changing from time to time?

When a stock goes out and a new stock comes in, doesn't that make index levels non-
comparable?

Index revision sounds dangerous in terms of political pressures. Won't speculators try to
push a stock they have purchased into the index? Or remove a stock from the index
when they are shorting it?

High quality information

How is the S&P CNX Nifty closing price calculated?

What is special about the NSE closing price?

What about dividends?

You say that buying a S&P CNX Nifty portfolio yields the same returns as percentage
changes on the S&P CNX Nifty index. But the weights will have to keep on changing from
day to day when market caps change?

So when do weights in an index change?

What historical data for the S&P CNX Nifty is available?

Where do I get data for the S&P CNX Nifty?

Index funds

What index should be used for index funds?

What index funds are available on the S&P CNX Nifty?

Index Futures

73
 What about index futures?

What is hedging effectiveness?

Why not form a small portfolio of the ten most liquid stocks, and work to ensure that the
small portfolio is maximally correlated with the S&P CNX Nifty?

Alternatives to the S&P CNX Nifty

How does the S&P CNX Nifty compare with other indices?

Parents

How did the S&P CNX Nifty come about?

Where does IISL come in?

Who is Standard & Poors, and why does their name appear with the S&P CNX Nifty's?

What does CNX in "S&P CNX Nifty" stand for?

We sometimes hear the term `nifty fifty' used in the US to denote a certain set of growth
stocks. Is there any connection?

Siblings

What's S&P CNX Defty?

What's S&P CNX 500?

What's CNX Nifty Junior?

What's CNX MidCap?

What's CNX Segment Indices?

What's CNX IT Index?

  IISL - Publications

IISL - Corporate Brochure

74
 Fact Sheets of Indices

 S&P CNX 500

 S&P CNX Nifty

 CNX Nifty Junior

 CNX Midcap

 CNX IT sector Index

 CNX 100 Index

 CNX Bank Index

The S&P CNX 500 is India’s fi rst broad-based

benchmark of the Indian capital market for comparing
portfolio returns vis-à-vis market returns.
• Market Representation
The S&P CNX 500 represents about 91.93% of total
market capitalization and about 79.48% of the total
turnover on the NSE.
• Criteria for Selection of Constituent Stocks
The constituents and the criteria for the selection judge
the effectiveness of the index. Selection of the index
set is based on the following criteria :
• Market Capitalisation
• Industry Representation
• Trading Interest
• Financial Performance
• Market Capitalisation
A company’s rank on market capitalisation is an
important consideration for its inclusion in the Index.
• Industry Representation:
S&P CNX 500 Equity Index refl ects the market as
closely as possible. In order to ensure that this is
accomplished, industry weightages in the index mirror
the industry weightages in the universe. Consequently,
companies to be included in the index are selected
from the industries which are under represented in the
index. S&P CNX 500 Equity Index currently contains
72 industries. The number of industries in the Index
and the number of companies with in each industry
have been kept fl exible, in order to ensure that the
Index retains its objective of being a dynamic market
indicator
• Trading Interest
S&P CNX 500 Equity Index includes those companies,
which have a minimum listing record of 6 months on

75
the Exchange. In addition these companies must have
demonstrated high turnover and trading frequency.
• Financial Performance
S&P CNX 500 Equity Index includes companies that
have minimum record of three years with a positive
net worth.
• Others
A company which comes out with an IPO will be eligible
for inclusion in the index, if it fulfi lls the normal eligibility
criteria for the index for a 3 month period instead of a
6 month period.
• Method of Computation
S&P CNX 500 is computed using market capitalisation
weighted method, wherein the level of the index refl ects
the total market value of all the stocks in the index
relative to a particular base period. The method also
takes into account constituent changes in the index
and importantly corporate actions such as stock splits,
rights, etc without affecting the index value.
• Base Date and Value
The calendar year 1994 has been selected as the base
year for S&PCNX 500. The base value of the index is
set at 1000.
• S&P CNX Industry Indices
S&P CNX 500 Equity Index is desegregated into 72
Industry sectors, which are separately maintained by
IISL. These industry indices are derived out of the S&P
CNX 500 and care is taken to see that the industry
representation in the entire universe of securities is
refl ected in the S&P CNX 500. e.g., if in the entire
universe of securities, Banking sector has a 5%
weightage then the Banking sector (as determined by
the Banking stocks in S&P CNX 500) would have a 5%
weightage in the S&P CNX 50(j. The Banking sector
index would be derived out of the Banking stocks in
the S&P CNX 500. The changes to the weightage of
various sectors in the S&P CNX 500 would dynamically
refl ect the changes in the entire universe of securities

Licensing

Index Licensing
 
Index Data Subscription

76
  Index Licensing

Index Licensing

IISL Indices are used as an underlying for a wide range of financial instruments offered by
financial institutions, asset management companies, etc., to their investors worldwide. These
include structured financial products as well as index funds and exchange traded funds. A
license from IISL is required for creating a product based on or linked to an IISL index. IISL
also offers annual global licenses covering all index-linked financial instruments by an
institution, as well as licenses for single transactions.

Benchmarking

Investors, asset managers and financial institutions may use IISL indices to track the
performance of funds, or as benchmarks for their actively managed portfolios, in particular. If
an institution is benchmarking the performance of its product to any of the IISL Indices, prior
approval is required from IISL along with payment of fees, where applicable. If the AMC or
the financial institution uses the IISL trademarks and the indices as an underlying for their
Products, then it is mandatory for these financial institutions to seek IISL’s prior approval and
executing a license agreement with IISL.

Licensed Uses and Applications

Structured Products & Derivatives

The market for structured products and derivatives ranges from un-leveraged indexed notes
to payouts for sophisticated, risk tolerant holders. IISL index-linked derivatives allow
investors to create, control or maximize market exposure. Options, warrants, notes, bonds
and trusts linked to IISL indices can be issued by prospective clients.

Index Funds

Indexing continues to gain popularity among individual and institutional investors. Most major
mutual fund families have responded to client demands and added funds indexed to the IISL
Indices. Index Funds today are a source of investment for investors looking at a long term,
less risky form of investment. The success of index funds depends on their low volatility and
therefore the choice of the index.

Exchange Traded Funds

The expansion of the exchange-traded funds market to the Indian exchange is a testament to
the growing popularity of this product. The ETFs offers the ability to establish long-term
investments based on the market performance of the top companies in India, with the ease of
a single transaction and will provide the tools needed to capture the investment opportunities
created by economic shift. For the mechanism to work, potential arbitragers need to have full,
timely knowledge of a fund's holdings. The success of ETFs on indices depends on their low
volatility and tracking error therefore the choice of the index.

Annuities and Other Insurance Products

Variable life, variable and fixed annuities and universal life products are structured to provide
a return based on an IISL index's growth. Like a traditional annuity, purchasers receive a
guaranteed return of principal along with a minimum interest rate. However, annuities linked

77
 to the IISL indices provide greater return potential by enabling purchasers to benefit from
growth in the Indian stock market.

Guaranteed Funds and Structured Products

While passive index investing continues to grow, guaranteed products have long been a
hallmark of these markets. In response to client demand, major asset management
companies and banks issue index products such as tracker funds, warrants and individual
certificates linked to IISL indices.

For information on licensing opportunities, contact

India Index Services & Products Ltd. (IISL)

Exchange Plaza
Plot no. C/1, G Block
Bandra-Kurla Complex
Bandra (E)
Mumbai - 400 051
Tel: (022) 26598385/86
Fax: (022) 26598120
Email: iisl@nse.co.in

Or, if you so wish, you can send us your queries / suggestions online

IISL HAS AND RETAINS ALL PROPRIETARY RIGHTS INCLUDING BUT NOT LIMITED TO THE
INDEX NAME, TRADEMARKS AND COPYRIGHTS OF ITS INDICES AND ITS COMPILATION,
COMPOSITION AND CHANGES THEREIN ARE AT THE COMPLETE DISCRETION AND CONTROL
OF IISL.

  Index Data Subscription

Index Data Subscription

IISL offers a range of Index products that provide ongoing and historical data and information
on individual securities in the India. These data products are designed for clients who require
consistent measures of capital market performances as well as the underlying data on
component securities.

Investors, asset managers and financial institutions use data related to IISL indices for their
benchmarking and indexing purposes. IISL Index Data Products are the original and official
source of data that formulates the proprietary calculation and maintenance of IISL indices.

IISL Index Data Products are tools to measure equity market movements at all levels of detail
and sophistication. Index constituent data includes company names, identifiers, market
capitalization, weights and prices.

Data Uses and Applications

Asset Allocation

78
 Index data are tools to determine which and how much of each market segment for each
investment strategy. Additionally, data could be used for research for allocation strategy
overtime.

Quantitative Research

Index back history allow investors to define and test investment strategies, stock selection
models, and fundamental ratio analysis such as price-to-earnings, yield, etc.

Portfolio Construction

Passive managers use index data for replication to create an exact index portfolio. Active
managers use index data to construct the list of equity securities for potential investment.
With the underlying data, they can overweight or underweight selected securities in their
efforts to outperform the index while managing tracking errors.

Risk Monitoring

Used as an analytics tool, index data measures aggregate statistics on portfolio positions.
Managers, in turn, monitor and control exposure to specific market and systemic risk factors
such as companies, credit quality, and sectors.

Performance Attribution Analysis

Looking at single exposure factors, managers can analyze the specific effects contributed or
detracted most from ex-post performance. With the underlying index data, they can compare
their portfolios against indices.

For information on licensing opportunities, contact

India Index Services & Products Ltd. (IISL)

Exchange Plaza
Plot no. C/1, G Block
Bandra-Kurla Complex
Bandra (E)
Mumbai - 400 051
Tel: (022) 26598385/86
Fax: (022) 26598120
Email: iisl@nse.co.in

Or, if you so wish, you can send us your queries / suggestions online

IISL HAS AND RETAINS ALL PROPRIETARY RIGHTS INCLUDING BUT NOT LIMITED TO THE
INDEX NAME, TRADEMARKS AND COPYRIGHTS OF ITS INDICES AND ITS COMPILATION,
COMPOSITION AND CHANGES THEREIN ARE AT THE COMPLETE DISCRETION AND CONTROL
OF IISL.

Exchange Traded Funds ETF Brochure

ETFs are just what their name implies: baskets of securities that are traded, like individual
stocks, on an exchange. Unlike regular open-end mutual funds, ETFs can be bought and sold

79
throughout the trading day like any stock.

Most ETFs charge lower annual expenses than index mutual funds. However, as with stocks,
one must pay a brokerage to buy and sell ETF units, which can be a significant drawback for
those who trade frequently or invest regular sums of money.

They first came into existence in the USA in 1993. It took several years for them to attract
public interest. But once they did, the volumes took off with a vengeance. Over the last few
years more than $120 billion (as on June 2002) is invested in about 230 ETFs. About 60% of
trading volumes on the American Stock Exchange are from ETFs. The most popular ETFs are
QQQs (Cubes) based on the Nasdaq-100 Index, SPDRs (Spiders) based on the S&P 500 Index,
iSHARES based on MSCI Indices and TRAHK (Tracks) based on the Hang Seng Index. The
average daily trading volume in QQQ is around 89 million shares.

Their passive nature is a necessity: the funds rely on an arbitrage mechanism to keep the
prices at which they trade roughly in line with the net asset values of their underlying
portfolios. For the mechanism to work, potential arbitragers need to have full, timely
knowledge of a fund's holdings.

Exchange Traded Funds ETF Brochure

ETFs are just what their name implies: baskets of securities that are traded, like individual
stocks, on an exchange. Unlike regular open-end mutual funds, ETFs can be bought and sold
throughout the trading day like any stock.

Most ETFs charge lower annual expenses than index mutual funds. However, as with stocks,
one must pay a brokerage to buy and sell ETF units, which can be a significant drawback for
those who trade frequently or invest regular sums of money.

They first came into existence in the USA in 1993. It took several years for them to attract
public interest. But once they did, the volumes took off with a vengeance. Over the last few
years more than $120 billion (as on June 2002) is invested in about 230 ETFs. About 60% of
trading volumes on the American Stock Exchange are from ETFs. The most popular ETFs are
QQQs (Cubes) based on the Nasdaq-100 Index, SPDRs (Spiders) based on the S&P 500 Index,
iSHARES based on MSCI Indices and TRAHK (Tracks) based on the Hang Seng Index. The
average daily trading volume in QQQ is around 89 million shares.

Their passive nature is a necessity: the funds rely on an arbitrage mechanism to keep the
prices at which they trade roughly in line with the net asset values of their underlying
portfolios. For the mechanism to work, potential arbitragers need to have full, timely
knowledge of a fund's holdings.

  Creations & Redemptions

ETFs are different from Mutual funds in the sense that ETF units are not sold to the public for
cash. Instead, the Asset Management Company that sponsors the ETF (Fund) takes the
shares of companies comprising the index from various categories of investors like authorized

80
 participants, large investors and institutions. In turn, it issues them a large block of ETF units.
Since dividend may have accumulated for the stocks at any point in time, a cash component
to that extent is also taken from such investors. In other words, a large block of ETF units
called a "Creation Unit" is exchanged for a "Portfolio Deposit" of stocks and "Cash
Component".

The number of outstanding ETF units is not limited, as with traditional mutual funds. It may
increase if investors deposit shares to create ETF units; or it may reduce on a day if some ETF
holders redeem their ETF units for the underlying shares. These transactions are conducted
by sending creation / redemption instructions to the Fund. The Portfolio Deposit closely
approximates the proportion of the stocks in the index together with a specified amount of
Cash Component. This “in-kind” creation / redemption facility ensures that ETFs trade close to
their fair value at any given time.

Some investors may prefer to hold the creation units in their portfolios. While others may
break-up the creation units and sell on the exchanges, where individual investors may
purchase them just like any other shares.

ETF units are continuously created and redeemed based on investor demand. Investors may
use ETFs for investment, trading or arbitrage. The price of the ETF tracks the value of the
underlying index. This provides an opportunity to investors to compare the value of
underlying index against the price of the ETF units prevailing on the Exchange. If the value of
the underlying index is higher than the price of the ETF, the investors may redeem the units
to the Sponsor in exchange for the higher priced securities. Conversely, if the price of the
underlying securities is lower than the ETF, the investors may create ETF units by depositing
the lower-priced securities. This arbitrage mechanism eliminates the problem associated with
closed-end mutual funds viz. the premium or discount to the NAV.

  Creations & Redemptions

ETFs are different from Mutual funds in the sense that ETF units are not sold to the public for
cash. Instead, the Asset Management Company that sponsors the ETF (Fund) takes the shares
of companies comprising the index from various categories of investors like authorized
participants, large investors and institutions. In turn, it issues them a large block of ETF units.
Since dividend may have accumulated for the stocks at any point in time, a cash component to
that extent is also taken from such investors. In other words, a large block of ETF units called a
"Creation Unit" is exchanged for a "Portfolio Deposit" of stocks and "Cash Component".

The number of outstanding ETF units is not limited, as with traditional mutual funds. It may
increase if investors deposit shares to create ETF units; or it may reduce on a day if some ETF
holders redeem their ETF units for the underlying shares. These transactions are conducted by
sending creation / redemption instructions to the Fund. The Portfolio Deposit closely
approximates the proportion of the stocks in the index together with a specified amount of
Cash Component. This “in-kind” creation / redemption facility ensures that ETFs trade close to
their fair value at any given time.

Some investors may prefer to hold the creation units in their portfolios. While others may
break-up the creation units and sell on the exchanges, where individual investors may purchase
them just like any other shares.

ETF units are continuously created and redeemed based on investor demand. Investors may
use ETFs for investment, trading or arbitrage. The price of the ETF tracks the value of the

81
 underlying index. This provides an opportunity to investors to compare the value of underlying
index against the price of the ETF units prevailing on the Exchange. If the value of the
underlying index is higher than the price of the ETF, the investors may redeem the units to the
Sponsor in exchange for the higher priced securities. Conversely, if the price of the underlying
securities is lower than the ETF, the investors may create ETF units by depositing the lower-
priced securities. This arbitrage mechanism eliminates the problem associated with closed-end
mutual funds viz. the premium or discount to the NAV.

Advantages of ETFs

While many investors have similar outlooks, no two are exactly alike. Due to the unique
structure of ETFs, all types of investors, whether retail or institutional, long-term or short-
term, can use it to their advantage without being at a disadvantage to others. They allow
long-term investors to diversify their portfolio at one shot at low cost and insulate them from
short-term trading activity due to the unique “in-kind” creation / redemption process. They
provide liquidity for investors with a shorter-term horizon as they can trade intra-day and can
have quotes near NAV during the course of trading day. As initial investment is low, retail
investors find it simple and convenient to buy / sell. They facilitate FIIs, Institutions and
Mutual Funds to have easy asset allocation, hedging, equitising cash at a low cost. They
enable arbitrageurs to carry out arbitrage between the Cash and the Futures markets at low
impact cost.

ETFs provide exposure to an index or a basket of securities that trade on the exchange like a
single stock. They offer a number of advantages over traditional open-ended index funds as
follows :

 While redemptions of Index fund units takes place at a fixed NAV price (usually end of
day), ETFs offer the convenience of intra-day purchase and sale on the Exchange, to
take advantage of the prevailing price, which is close to the actual NAV of the scheme
at any point in time.

 They provide investors a fund that closely tracks the performance of an index
throughout the day with the ability to buy/sell at any time, whereby trading
opportunities that arise during a day may be better utilized.

 They are low cost.

 Unlike listed closed-ended funds, which trade at substantial premia or more frequently
at discounts to NAV, ETFs are structured in a manner which allows Authorized
Participants and Large Institutions to create new units and redeem outstanding units
directly with the fund, thereby ensuring that ETFs trade close to their actual NAVs.

 ETFs are like any other index fund, wherein, subscription / redemption of units work
on the concept of exchange with underlying securities instead of cash (for large deals).

 Since an ETF is listed on an Exchange, costs of distribution are much lower and the
reach is wider. These savings in cost are passed on to the investors in the form of
lower costs. Further, the structure helps reduce collection, disbursement and other
processing charges.

82
  ETFs protect long-term investors from inflows and outflows of short-term investors.
This is because the fund does not incur extra transaction cost for buying/selling the
index shares due to frequent subscriptions and redemptions.

 Tracking error, which is divergence between the NAV of the ETF and the underlying
Index, is generally observed to be low as compared to a normal index fund due to
lower expenses and the unique in-kind creation / redemption process.

 ETFs are highly flexible and can be used as a tool for gaining instant exposure to the
equity markets, equitising cash or for arbitraging between the cash and futures
market.

The first ETF in India, “Nifty BeEs (Nifty Benchmark Exchange Traded Scheme) based on S&P
CNX Nifty, was launched in January 2002 by Benchmark Mutual Fund. It may be bought and
sold like any other stock on NSE. Its symbol on NSE is “NIFTYBEES”.

Top

ETFs Launched on NSE ETF and Indexing | Sparklines

 World Indices
o Hang Seng BeES™

 Equity
o Nifty BeES
o Junior Nifty BeES
o Bank BeES
o PSUBNKBEES
o SHARIABEES
o S&P CNX Nifty UTI Notional Depository Reciepts Scheme (SUNDER)
o KOTAKPSUBK
o RELBANK
o QNIFTY

 Liquid
o Liquid Benchmark Exchange Traded Scheme (Liquid BeES)

 Gold
o GOLDBEES
o GOLDSHARE
o KOTAKGOLD
o RELGOLD
o QUANTUMGOLD
o SBIGETS
o RELIGARE

83
Applications of ETFs

 Efficient Trading : ETFs provide investors a convenient way to gain market exposure
viz. an index that trades like a stock. In comparison to a stock, an investment in an
ETF index product provides a diversified exposure to the market. Depending on the
index, investors may obtain exposure to countries/ markets or sectors.

 Equitising Cash : Investors with idle cash in their portfolios may want to invest in a
product tied to a market benchmark like an index as a temporary investment before
deciding which stocks to buy or waiting for the right price.

 Managing Cash Flows : Investment managers who see regular inflows and outflows
may use ETFs because of their liquidity and their ability to represent the market.

 Diversifying Exposure : If an investor is not sure about which particular stock to buy
but likes the overall sector, investing in shares tied to an index or basket of stocks
provides diversified exposure and reduces stock specific risk.

 Filling Gaps : ETFs tied to a sector or industry may be used to gain exposure to new
and important sectors. Such strategies may also be used to reduce an overweight or
increase an underweight sector.

 Shorting or Hedging : Investors who have a negative view on a market segment or

specific sector may want to establish a short position to capitalize on that view. ETFs
may be sold short against long stock holdings as a hedge against a decline in the
market or specific sector.

  Comparison of ETFs with other mutual funds

In essence, ETFs trade like stocks and therefore offer a degree

of flexibility unavailable with traditional mutual funds.
Specifically, investors can trade ETFs throughout the trading
day as in stocks. In comparison, in a traditional mutual fund,
investors can purchase units only at the fund’s NAV, which is
published at the end of each trading day. In fact, investors
cannot purchase ETFs at the closing NAV. This difference gives
rise to an important advantage of ETFs over traditional funds:
ETFs are immediately tradable and consequently, the risk of
price differential between the time of investment and time of
trade is substantially less in the case of ETFs.

ETFs are cheaper than traditional mutual funds and index funds
in terms of fees. However, while investing in an ETF, an
investor pays a commission to the broker. The tracking error of
ETFs is generally lower than traditional index funds due to the
“in-kind” creation / redemption facility and the low expense
ratio. This “in-kind” creation / redemption facility ensures that
long-term investors do not suffer at the cost of short-term
investor activity.

84
 ETFs can be bought / sold through trading terminals anywhere
across the country. Table No. 1 presents a comparative view
ETFs vis-à-vis other funds.

ETFs Vs. Open Ended Funds Vs. Close Ended Funds

Open Ended
Parameter Closed Ended Fund Exchange Traded Fund
Fund
Fund Size Flexible Fixed Flexible
NAV Daily Daily Real Time
Liquidity Stock Market / Fund
Fund itself Stock Market
Provider itself
At NAV plus Significant Premium Very close to actual
Sale Price
load, if any / Discount to NAV NAV of Scheme
Through Exchange
Availabilit Through Exchange
Fund itself where listed / Fund
y where listed
itself.
Portfolio
Disclosur Monthly Monthly Daily/Real-time
e
Equitising Equitising Cash,
Uses -
cash Hedging, Arbitrage
Intra-Day
Not possible Expensive Possible at low cost
Trading

  Mutual Funds

Now the buying and selling of mutual fund have become easier
for investors.

An investor who wishes to subscribe or redeem units of a

mutual fund scheme can now use Mutual Fund Service
System (MFSS) provided by NSE.

This service has been launched on November 30, 2009 at the

hands of Mr C B Bhave, Chairman, Securities Exchange Board
of India (SEBI), on November 30, 2009.

Mutual Fund Service System

Mutual Fund Service System (MFSS) is an online order

collection system provided by NSE to its eligible members for
placing subscription or redemption orders on the MFSS based
on orders received from the investors.

Orders Placing

The MFSS will be available for Participants between 9 a.m. to 3

85
p.m.

The NSE MFSS shall facilitate entry of both buy and sell orders.
In order to subscribe units, member will be required to place
buy orders. A member who wishes to redeem units of mutual
fund scheme will be required to place sell orders in the system.
Participants can choose between Physical mode and depository
mode while putting their subscription / redemption requests on
the MFSS. All orders shall be settled on order to order basis, on
T+1 (working days).

Individuals, HUF and Body Corporate can participate in MFSS

subject to completing the KYC procedure. In case of a minor
the guardian would have to be KYC compliant.

Confirmation of order

The system will generate an order confirmation slip for each

order which includes time stamp of the order being put on the
system, on behalf of the investor. The order confirmation slip
which is generated by the system shall be given to the investor
by the member and is the conclusive evidence of the
transaction.

Eligibility criteria for Members

Trading Members of NSE who have obtained AMFI Registration

Number (ARN) from Association of Mutual Funds of India
(AMFI) are eligible to participate in MFSS. Further, eligible
members would have to register as distributor with the Mutual
Fund Company. Hence, eligible members would be able to
place orders only in respect of Mutual Fund Companies where
they have registered as distributor.

Daily Statistics

HIGHLIGHTS:19-03-2010

Subscription Redemption

No of orders Total subscription amount No of orders Total redemption amount

58 1960000 4

  AMC Schemes
Contact Details

86
   List of Eligible scheme for MFSS (Refer latest NSE Circular for updated lis

Franklin Templeton Asset Management India Pvt Ltd.

Benchmark Asset Management Company Pvt. Ltd.

Kotak Mahindra Asset Management Company Ltd.

UTI Asset Management Company Ltd.

Birla Sun Life Asset Management Company Ltd.

Reliance Capital Asset Management Ltd.

HDFC Asset Management Company Ltd.

ICICI Prudential Asset Management Company

SBI Funds Management Pvt. Ltd.

Tata Asset Management Ltd.

Religare Asset Management Company Ltd.

IDFC Asset Management Company Ltd.

Quantum Asset Management Company Pvt. Ltd.

FIL Fund Management Pvt. Ltd.

DSP Blackrock Investment Managers Pvt. Ltd.

NEAT-MFSS Features

The NEAT MFSS features and user navigation for MFSS are
described below. For further details Participants are requested
to refer to the on-line help facility.

Parameters for Mutual Fund Service System.

Market time 9.00 AM - 3.00 PM MFSS Segment

DP Dividend Payout option

Series DR Dividend reinvestment option

GR Growth option

87
Setting up schemes in market watch
The facility is available to the user to set up the schemes on
the market watch screen. The user can set up the scheme
individually by first pressing the [F4] key and then enters the
schemes details like category, symbol and series. Alternatively
the user can set up the schemes on the market watch screen
through ‘Security List’. The schemes set up on market watch
allow the user to:

1. View the indicative NAV (i.e. NAV of previous day) for

the scheme.
2. Default the scheme descriptor while entering
subscription/ redemption request thereby reducing
data entry.
3. View scheme details like ISIN, limits etc. by double
click on the scheme.

Security List
The facility is available to the user to list the schemes available
for trading on NEAT-MF The user can search for the schemes
by filtering on scheme category, symbol, series, ISIN code,
scheme name, AMC code.

Setting up of Client Registration:

The facility is available to the user to set the client details. The
user shall not be allowed to place an order for the client if
registration details of the client are not maintained.

The user can modify/ delete client registration already

maintained subject to certain restrictions. A bulk upload facility
is also available to set up client registration.

DP Master
A client is registered as an individual client in client registration
process described above. However, depository accounts can be
maintained in joint accounts.

Firstly the user is required to register all joint holders for the
depository account if subscription/ redemption request is to be
entered with depository settlement. Then the user is required
to maintain DP master for such clients.

The facility is available to the user to maintain DP Master of the

client. The user is required to provide depository ID and client
beneficiary ID along with client codes. The sequence in which
client codes are entered shall be the same as available for
depository ID and client beneficiary ID combination.

88
This one time set up of DP master is must if the user wishes to
enter subscription/ redemption request for the client with
depository settlement.

Order Entry
This facility is available to the user to enter the subscription
and redemption order by pressing the [F1] and [F2] key
respectively.

The user can request following types of subscription/

redemption requests:

o Physical Subscription – Fresh (first time)

o Physical Subscription – Additional
o Depository Subscription – Fresh (first time)
o Depository Subscription – Additional
o Physical Redemption
o Depository Redemption

DP Settlement
The user can declare upfront whether the subscription/
redemption request would be settled in physical mode (‘N’) or
depository mode (‘Y’).

Purchase Type
The user can request for fresh or additional subscription. For
additional subscription in physical mode folio number would be
mandatory.This field is not applicable for redemption requests.

Application Number
This is optional field.

DP ID – Beneficiary ID
If the DP Settlement is ‘Y’, it is mandatory for the user to enter
depository details. The user must enter depository ID and
client beneficiary ID available in DP master. The client codes
linked to the combination are picked up from DP master and
relevant details for such clients are picked up from the client
registration.

FOLIO Number
If the DP Settlement is ‘N’, it is mandatory to enter the folio
number for additional subscriptions and redemption requests.

89
Order Amount
The user is allowed to place order amount in multiples of
rupees. Minimum amounts are specified at the scheme level for
fresh and additional subscription. The subscription order would
be rejected if the order amount is not greater than or equal to
the amount specified.

Similarly, maximum amount is specified at the scheme level for

physical redemption. Physical redemption order would be
rejected if the order amount is equal to or greater than the
amount specified.

No subscription/ redemption order should be entered with

amount equal to or greater than Rs. 1 crore. For depository
redemption order amount is not applicable.

Order Quantity
The user is allowed place order quantity only for redemption
requests. Maximum quantity is specified at the scheme level
for physical redemption. Physical redemption order would be
rejected if the order quantity is equal to or greater than the
amount specified.

Client Code and mode of holding

For physical subscription and redemption orders the user would
enter the client code and mode of holding. The mode of holding
can be ‘Single’ (SI) / ‘Joint’ (JO) / ‘Anyone or Survivor’ (AS)
For depository subscription and redemption orders the client
codes would be defaulted from the depository master for the
given DP ID – Beneficiary ID combination. The user would not
be allowed to change the default client codes.

For the client code entered client name, PAN and KYC
information shall be displayed from Client Registration. The
user would not be allowed to change this information. For
subscription request above Rs. 50,000/- KYC must be
completed (‘Y’) for all the clients entered for the order.

Following additional facilities are provided along with order

entry:

1. The facility to submit the bulk orders using offline order

entry facility.
2. The facility to take online backups of orders entered by
the user for the day.
3. The facility to print the confirmation slips either online
or offline.

90
Outstanding Orders
This facility is available to the users to view the outstanding
orders in particular scheme. This information is available only
for the current day. Subscription and redemption orders would
be presented separately. A facility is available to modify or
cancel particular order displayed in the list.

Order Modification/ Cancellation

This facility is available for the user to modify or cancel specific
outstanding orders. This is available only during the market
hours. The user would not be allowed to modify symbol, series,
scheme name and depository settlement.

Activity log
This facility is available for the user to track order entry/
modification/ cancellation activities performed for specific
scheme.

Full Message Display

This facility is available to the user to view interactive
messages (i.e. sign on/ sign off, transaction messages like
order confirmation, order modifications etc.) and market
messages sent by the exchange.

Risk Management
Following trading member firm level risk management features
are provided along with order entry:

1. The facility is available to the corporate manager to set

the limit on the total value of orders that can be
entered by the specific branch within the trading
member’s firm by specifying the branch order value
limit.
2. The facility is available to the corporate manager or
branch manager to set the day limit on the total value
of the orders that can be entered by the specific user
within the trading member’s firm by specifying the user
order value limit.
3. The facility is available to the dealer to the set quantity
/ amount limits for individual orders entered by self by
specifying the order limit.

Operating Guidelines

Operating Guidelines for Mutual Fund Service System

91
Subscription of units

 Participants have to open a separate clearing bank

account for the purpose of settlement of funds for
subscription.

 Funds pay-in confirmation files are downloaded to

participants on the T day for units subscribed.

 Participants have to provide funds in their settlement

accounts by 8.30 a.m. on the T+1 day.

 Participants have to upload payment confirmation files

on the T+1 day by 9.30 a.m. identifying transactions
for which payments have been received and
transactions for which payments have not been
received. Wherever the funds collected from the bank
account fall short of the amount indicated in the details
provided by the participant, the details are considered
defective and are not further processed. In such cases,
the funds collected, if any, are returned to the
designated bank account of the participant.

 Daily funds report is downloaded to participants after

completion of funds settlement.

Redemption of units

 Investors are required to transfer units for their

transacted orders to the NSCCL pool account on the T
day by 4.30 p.m. for the purpose of redemption. The
details of such instructions are given in the circular
NSE/CMPT/13534 dated November 24, 2009.

 Demat Final Delivery Statement (DFDS) is downloaded

to participants after units are received by NSCCL.

Designated clearing banks

Clearing & settlement circular

92
Frequently Asked Question –
Mutual Fund Service System (MFSS) for Investors
1. What is MFSS?
Mutual Fund Service System (MFSS) is an online order collection system provided by
NSE
to its eligible members for placing subscription or redemption orders on the MFSS based
on orders received from the investors.
2. How is MFSS different from existing process for subscription to and redemption
of mutual funds?
Hitherto, an investor interested in subscribing to a mutual fund had to identify a
distributor
of the mutual fund and submit all documents along with payment instrument where
applicable to the distributor or directly to Mutual Fund/AMC/RTA. The
subscription/redemption request would thereafter get processed and investor would know
about status of the request only in the form of direct communication from Mutual
Fund/AMC/RTA.
In the MFSS, investor will have an opportunity to deal with SEBI registered NSE
member
who is eligible to participate in MFSS for subscription/redemption of units. Members
would enter the order into MFSS. Investor would be able to know the order details and
modify his order details till the order acceptance time ends i.e. up to 3.00 pm. By end of
the day investor would also get to know about the validity of his order and the value at
which the units would get credited/redeemed to his account.
3. What are the benefits of using MFSS for participation in mutual funds?
Investor would able to get a single view of his portfolio across multiple assets like
securities, mutual fund units etc.,
Investor would be able to get services from same intermediary for different asset class
Investor would be able to optimize his investment decisions due to reduced time lag in
movement of funds
Investor would have a voice in agreeing on charges to be paid for services rendered.
Reduction of paperwork
Transparency in knowing status of order till completion thereby reducing disputes
Recourse to grievance resolution in case of deficiency in service provided by member
4. Who all can are eligible to participate in MFSS?

93
Individuals, HUF and Body Corporate can participate in MFSS subject to completing the
KYC
procedure. In case of a minor the guardian would have to be KYC compliant.
5. Can Units of all Mutual Funds and all Schemes be subscribed or redeemed using
MFSS?
Asset Management Companies (AMC) desirous of offering MFSS to their existing and
prospective customers enter into an arrangement with Exchange and only schemes of
such
AMCs would be available on MFSS. All schemes which are available on MFSS would be
informed to the Participants and investors through issue of circulars from time to time.
The
currently available schemes on MFSS are available on NSE website
(http://www.nseindia.com/content/mfss/mf_schemes.htm)
6. Can I approach any member for placing order on MFSS?
Only Trading Members who have obtained AMFI Registration Number (ARN) from
Association of Mutual Funds of India (AMFI) are eligible to participate in MFSS.
Further,
eligible members also have to register as distributor with the Mutual Fund Company.
Hence,
eligible members would be able to place orders only in respect of Mutual Fund
Companies
where they have registered as distributor.
7. Are there specific timings when MFSS orders could be placed?
MFSS would be available for placing of orders between 9.00 am and 3.00 pm on all the
working days of the Exchange. Any order placed beyond these timings could be for
placing it
on the MFSS the next day.
8. If I already have an existing relationship with a MFSS eligible member, what is
the additional documentary requirement for MFSS?
If you are already using the services of NSE member for your other investment needs and
you
already hold units of one or more mutual fund, member would require you to sign up a
letter
consenting to participate on MFSS. Thereafter, you could place subscription/redemption
order
by meeting the requirements applicable for placing such order.
9. In Equity/F&O I have myself as client. However, I use the demat account in
which I
am the first holder and one of my family member is second holder. Is this sufficient
for
MFSS?
For dealing in MFSS, client details entered in MFSS should exactly match the account
holders
name in the demat account. In other words, if, A and B are joint account holders of a
demat

94
account, for placing orders on MFSS, client particulars to be given to member would be
that of
both A and B.
10. I have so far not invested in mutual funds. What are the KYC requirements for
a
Mutual Fund Investor?
Every investor investing more than Rs.50,000 in mutual fund has to necessarily complete
KYC
process.
The Association of Mutual Funds of India (AMFI) has facilitated a centralized platform
to
carry out one time KYC procedure on behalf of all Mutual Funds. Once the KYC is duly
completed in all regards, the investor needs to produce a copy of the acknowledgement
when
investing for the first time with Mutual Fund. There is no need to repeat the KYC process
individually for each mutual fund.
For more details on KYC visit AMFI site:
http://www.amfiindia.com/showhtml.aspx?page=kyc
11. Should mutual fund units be held in physical form or demat form?
Investors have a choice of holding units either in physical form or in demat. However, for
convenience of operations and ease of entry and exit it would be advisable to hold the
units in
demat form.
12. For the purpose of holding units in demat account, is there a requirement of
opening
a separate demat account?
If you already have an existing demat account say for holding of your securities, same
account
can be used for holding units in demat form also.
13. After I provide the member with all particulars along with required documents
for
registering me as a client would I get any ID or code allotted?
After receiving complete particulars from you, member would allot a Unique Client Code
(UCC) to you and report all the details to Exchange by way of UCC Upload. This UCC
would
form an important reference point for you. Member may allot same UCC as in
Equity/F&O or
allot a different UCC for MFSS.
14. When I wish to subscribe for a mutual fund through MFSS, what are the details
I
need to give to the Member for placing of order?
For placing a subscription order, you would need to give the name of the Mutual Fund,
Name
of the Scheme, the value (i.e. money) that you intend investing, whether you would like
units

95
in physical form or demat form, whether your subscription is fresh (first time investor for
a
Mutual Fund company) or additional. In case you choose physical option for an
additional
purchase you need to provide the existing folio number also.
15. At the time of placing order if I make a mistake in giving details would I be in a
position to correct or modify the order?
Orders can be placed between 9.00 am to 3.00 pm. Within this time period, you would
able to
request your member for correction of mistake if any including cancellation of order or
placing
a fresh order altogether.
16. What will be the number of units that I would get for the value that I decided to
invest?
For all orders received up to 3.00 p.m Net Asset Value (NAV) of the business day will be
the
rate at which units would be allotted to you. Illustratively if you invested Rs. 1 Lakh,
NAV of
the scheme is say Rs.10/- you would get 10000 units allotted to you.
17. For subscription, how should I make payment?
For subscribing to Mutual funds through MFSS, you need to make payment in favour of
the
Member necessarily through cheque/Demand Draft. Member is obliged to place order
only
when clear balance from your end is available in Member’s account.
18. When and how I would get credit of units to my demat account ?
After closure of order acceptance time, Exchange would provide details to Mutual
Fund/AMC/RTA and to Depository for validation. On receipt of valid order information
from
both of these entities, on T+1 day as per the settlement calendar(currently at around
10.00am),
Exchange would debit the Settlement account of the Member towards all valid orders and
then
transfer the money to the concerned AMC/Mutual Fund Company. Thereafter the
AMC/Mutual Fund/RTA would process the subscription request and credit units to your
demat
account by T+1 end of the day.
19. What would be the process if in case I have opted for subscription of units in
physical
form?
In case you have subscribed for units in physical form, the subscription form along with
documents like copy of PAN of all holders, KYC acknowledgement of all holders needs
to be
sent by member to RTA/Mutual Fund essentially before 4.00pm. Based on order data
sent by

96
Exchange RTA/Mutual Fund would validate the order information along with physical
papers
received and return the validated order information to Exchange. Exchange would debit
the
funds from settlement account of the member only in respect of valid orders. In case the
papers
have not reached RTA/Mutual Fund order would get invalidated. Information on invalid
orders
would be given to Trading members who would in turn inform the investor.
20. Once my subscription order is placed on the MFSS, what confirmation would I
get
from my Member?
Immediately on placing of order on MFSS, Member would be in a position to confirm the
details of order to the investor. By end of the day member would be able to issue
transaction
confirmation memo containing particulars like Mutual Fund, Scheme, value of
subscription,
Physical/demat mode, brokerage and service tax applicable. In cases of rejection of the
order,
reason for rejection would also be communicated by the member.
21. What are the particulars that I need to provide the member while placing
redemption
order?
At the time of placing order for redemption in respect of demat units, you need to
mention
name of the Mutual Fund, Scheme, and Number of Units to be redeemed.
22. Once my redemption order is placed on MFSS, what confirmation would I get
from
the member?
Immediately on placing of order on MFSS, Member would be in a position to confirm the
details of order to the investor. By end of the day member would be able to issue
transaction
confirmation memo containing particulars like Mutual Fund, Scheme, value of
subscription,
Physical/demat mode, brokerage and service tax applicable. In cases of rejection of the
order,
reason for rejection would also be communicated by the member.
23. In case of redemption of units in demat form, to whom and how should I
transfer
units?
In respect of redemption of units in demat form, you should transfer units to the pool
account
of “National Securities Clearing Corporation (NSCCL)”. You should ensure that you
have
given appropriate delivery instruction to your Depository participant and that you also
ensure

97
that units have been transferred to NSCCL account before 4.30 pm.
24. When and how would I get redemption proceeds after transferring the units to
NSCCL?
NSCCL on T+1 day at the specified time would transfer units in its pool account to the
concerned AMC/RTA’s pool account. Thereafter AMC/RTA would process the
redemption
request at Transaction day’s NAV and directly credit the proceeds to investors’ bank
account.
25. How would I deal with redemption of physical units?
In respect of redemption of physical units, order would be placed by member on receipt
of
necessary redemption request form along with documents including statement of account
issued by mutual fund reflecting your units. Member needs to send the papers to
RTA/Mutual
Fund. Thereafter, the RTA/MF would process redemption request and send the payment
directly to investor. If the physical papers do not reach the RTA/MF within the time
stipulated
for the purpose, orders may get invalidated.
26. What are the charges that I need to pay for utilizing the services of a Member
for
placing orders on MFSS?
There are no regulatory restrictions on the fees to be charged by the member for services
rendered on MFSS. However, investor and the member may mutually agree on the
commission/brokerage for services rendered on MFSS and it would be advisable to agree
to
terms of charges in writing. Service tax would be applicable on charges so levied by the
Member.
27. If I need to intimate changes to my personal information, should I intimate
through
my member?
Changes to personal information would have to be directly informed to the concerned
Mutual
Fund as well as to AMFI’s centralized KYC platform. MFSS as a system can be used
only for
subscription or redemption.
28.(a) If I have paid my money for subscription but not received units to my credit ,
or
(b) if there is significant delay in placing of my orders despite availability of clear
balance which has impact on units allotment price whom should I approach for
resolution of my grievance ?
Investor can approach investor services cell of the Exchange for resolution of dispute
relating
to service rendered by the broker.
29. Are there any restrictions on maximum value or quantity for a single order on
MFSS?

98
In case of demat transactions the maximum value of subscription or redemption for a
single
order is pegged at Rs. 1 Crore and there is no restriction on number of orders that can be
placed. However, with reference to redemption of physical units a maximum limit of
Rs.1,00,000/- per order has been kept.

Corporate
Announcements

Pfizer Ltd. - Outcome of Board Meeting (Mar 19, 20:11 hours)

State Bank of India - Updates (Mar 19, 20:06 hours)

Religare Enterprises Limited - Updates (Mar 19, 20:00 hours)

Amit Spinning Industries Limited - Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19,
19:52 hours)

Bharti Airtel Limited - Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 19:52 hours)

Dewan Housing Finance Corporation Ltd - Disc under Reg Subs Acq &Takeover & SEBI Insider Trading Reg
(Mar 19, 19:52 hours)

HCL Technologies Ltd - Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 19:52 hours)

Visesh Infotecnics Limited - Corrigendum (Mar 19, 19:44 hours)

Listing

NSE plays an important role in helping an Indian companies access equity capital, by providing
a liquid and well-regulated market. NSE has about 1319 companies listed representing the
length, breadth and diversity of the Indian economy which includes from hi-tech to heavy
industry, software, refinery, public sector units, infrastructure, and financial services. Listing
on NSE raises a company’s profile among investors in India and abroad. Trade data is
distributed worldwide through various news-vending agencies. More importantly, each and
every NSE listed company is required to satisfy stringent financial, public distribution and
management requirements. High listing standards foster investor confidence and also bring
credibility into the markets.

NSE lists securities in its Capital Market (Equities) segment and its Wholesale Debt Market
segment

  What's New

Securities listed and admitted to dealings

99
 Date of
Sr.No. Symbol Series Company Name ISIN Code
Listing

ICICI Prudential Mut Fund -ICICI Prudential 19-Mar-

1 IP511YAD MF INF109K01DC9
FMP-S51-1 Yr Pl A Divd. 2010

ICICI Prudential Mut Fund -ICICI Prudential 19-Mar-

2 IP511YAG MF INF109K01DD7
FMP-S51-1 Yr Pl A Cum. 2010

Benchmark Mutual Fund - Hang Seng 18-Mar-

3 HNGSNGBEES EQ INF732E01227
Benchmark Exchange Traded Scheme 2010

18-Mar-
4 UNITEDBNK EQ United Bank of India INE695A01019
2010

ICICI Prudential Mut Fund-ICICI Prudential 16-Mar-

5 IP5115MBG MF INF109K01DB1
FMP-S51-15 Month Pl E-Cum 2010

ICICI Prudential Mut Fund-ICICI Prudential 16-Mar-

6 IP5115MED MF INF109K01DA3
FMP-S51-15 Month Pl E-Div 2010

16-Mar-
7 L&TFINANCE N5 L&T Finance Limited INE523E07475
2010

16-Mar-
8 L&TFINANCE N6 L&T Finance Limited INE523E07483
2010

11-Mar-
9 MANINFRA EQ Man Infraconstruction Limited INE949H01015
2010

10-Mar-
10 TEXMOPIPES EQ Texmo Pipes and Products Limited INE141K01013
2010

Taurus Mutual Fund - TMF FMP - 15M -S1- 10-Mar-

11 TMF15MS1IG MF INF044D01104
Institutional- Growth Option 2010

Taurus Mutual Fund - TMF FMP - 15M -S1 - 10-Mar-

12 TMF15MS1RD MF INF044D01096
Retail- Dividend Option 2010

Taurus Mutual Fund - TMF FMP - 15M -S1 - 10-Mar-

13 TMF15MS1RG MF INF044D01088
Retail- Growth Option 2010

UTI Mutual Fund - UTIMF FTIFS - VII-I - 10-Mar-

14 UFTIFDVII1 MF INF789F01AX0
Dividend Payout Option 2010

UTI Mutual Fund - UTIMF FTIFS - VII-I - 10-Mar-

15 UFTIFGVII1 MF INF789F01AW2
Growth Option 2010

UTI Mutual Fund - UTIMF FTIFS - VII-I 10-Mar-

16 UFTIFRVII1 MF INF789F01AY8
-Dividend Reinvestment Option 2010

09-Mar-
17 DEEPIND EQ Deep Industries Limited INE677H01012
2010

09-Mar-
18 KECL EQ Kirloskar Electric Company Limited INE134B01017
2010

09-Mar-
19 SMPL EQ Sujana Metal Products Limited INE215G01021
2010

09-Mar-
20 SPECTACLE EQ Spectacle Industries Limited INE409H01028
2010

100
 Latest Corporate Announcements

Also see: Financial Results | Board Meetings| Daily NAV/Buy Back

Company Name Short Description Date

PFIZER LTD. Outcome of Board Meeting (Mar 19, 20:11)

STATE BANK OF INDIA Updates (Mar 19, 20:06)

RELIGARE
Updates (Mar 19, 20:00)
ENTERPRISES LIMITED

BHARTI AIRTEL
Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 19:52)
LIMITED

HCL TECHNOLOGIES
Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 19:52)
LTD

AMIT SPINNING
Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 19:52)
INDUSTRIES LIMITED

DEWAN HOUSING
FINANCE Disc under Reg Subs Acq &Takeover & SEBI Insider Trading Reg (Mar 19, 19:52)
CORPORATION LTD
 
VISESH INFOTECNICS
Corrigendum (Mar 19, 19:44)
LIMITED

SUZLON ENERGY
Appointment/Others (Mar 19, 19:33)
LIMITED

UTV SOFTWARE
COMMUNICATIONS Regulation 8A of SEBI (SAST) Regulations (Mar 19, 19:25)
LIMITED

HOUSING
DEVELOPMENT
Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 19:25)
FINANCE
CORPORATION LTD.

HCL TECHNOLOGIES
Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 19:25)
LTD

GREAVES COTTON
Reg 7 of SEBI (Susbs Acq of shares & Takeovers) (Mar 19, 19:25)
LIMITED

DIGJAM LIMITED Disc under Reg Subs Acq &Takeover & SEBI Insider Trading Reg (Mar 19, 19:25)

AMBUJA CEMENTS LTD Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 19:25)

ITC LTD. Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 19:25)

101
LUPIN LIMITED Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 19:25)

LARSEN & TOUBRO

Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 19:25)
LIMITED

SURANA
CORPORATION Disclosure of shareholding (Mar 19, 19:24)
LIMITED

AGEE GOLD REFINERS

Outcome of Court Convened Meeting (Mar 19, 19:18)
LTD.

PVR LIMITED Merger/Others (Mar 19, 19:18)

THE ANDHRA
PRADESH PAPER MILLS Closure of Rights Issue (Mar 19, 19:18)
LIMITED

AKSH OPTIFIBRE
Appointment of Company Secretary and Compliance Officer (Mar 19, 19:18)
LIMITED

PVP VENTURES
Results of Postal Ballot (Mar 19, 19:18)
LIMITED

HOUSING
DEVELOPMENT
Allotment of shares (Mar 19, 19:18)
FINANCE
CORPORATION LTD.

MUKAND LIMITED Reg.7(3) of SEBI (Substantial Acq of shares &Takeovers),1997 (Mar 19, 19:12)

JM FINANCIAL LIMITED Press Release/Others (Mar 19, 19:11)

LOKESH MACHINES
Regulation 8A of SEBI (SAST) Regulations (Mar 19, 19:09)
LIMITED

SUJANA METAL
Regulation 8A of SEBI (SAST) Regulations (Mar 19, 19:01)
PRODUCTS LIMITED

AEGIS LOGISTICS
Results of Postal Ballot (Mar 19, 18:50)
LIMITED

SHIPPING
CORPORATION OF Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 18:41)
INDIA LTD.

HOUSING
DEVELOPMENT Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 18:41)
FINANCE
CORPORATION LTD.

102
ZENITH INFOTECH
Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 18:41)
LTD.

HOUSING
DEVELOPMENT
Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 18:41)
FINANCE
CORPORATION LTD.

INDIA FOILS LIMITED Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 18:41)

MADHUCON PROJECTS
Reg.7(3) of SEBI (Substantial Acq of shares &Takeovers),1997 (Mar 19, 18:41)
LIMITED

MSK PROJECTS
Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 18:41)
(INDIA) LIMITED

ORACLE FINANCIAL
SERVICES SOFTWARE Reg.13-SEBI(Prohibition of Insider Trading Regulations)1992 (Mar 19, 18:41)
LIMITED

PROVOGUE (INDIA)
Resignation (Mar 19, 18:41)
LIMITED

BLUE BIRD (INDIA)

Outcome of Board Meeting (Mar 19, 18:35)
LIMITED

TEXMO PIPES AND

Reg7(3)&Reg13(6)of SEBI Subs. Acq &Takeovers&Insider Trading (Mar 19, 18:31)
PRODUCTS LIMITED

SASKEN
COMMUNICATION
Resolution passed by the shareholders (Mar 19, 18:31)
TECHNOLOGIES
LIMITED

CARBORUNDUM
Outcome of Board Meeting (Mar 19, 18:21)
UNIVERSAL LTD

ZENITH BIRLA (INDIA)

Updates on Scheme of Arrangement (Mar 19, 18:18)
LIMITED

STORE ONE RETAIL

Outcome of Postal Ballot (Mar 19, 18:14)
INDIA LIMITED

SUJANA TOWER
Regulation 8A of SEBI (SAST) Regulations (Mar 19, 17:24)
LIMITED

EDUCOMP SOLUTIONS
Allotment of Equity Shares (Mar 19, 17:23)
LIMITED

ZEE ENTERTAINMENT
Press Release/Others (Mar 19, 17:21)
ENTERPRISES LTD

103
 IL&FS INVESTMENT
Updates (Mar 19, 17:14)
MANAGERS LIMITED

ZEE NEWS LIMITED Updates on Scheme of Arrangement (Mar 19, 17:11)

Corporate Action Details

Ex-Date Record Date Bc Start Date

From Date (dd-mm-yyyy) To Date (dd-mm-yyyy)

Get Results Reset

     
0

Corporate Information

This section gives you detailed information for companies traded on the Exchange:

  (Enter whole or part of Company Name / NSE Symbol) 

Office Addresses, Transfer Agents & Company Website 

Corporate Actions | Corporate Action Search

Corporate Announcements  | Latest Announcements

Board Meeting Information  | Board Meetings

Financial Results

Shareholding Pattern

Get Quote

Result - Current v/s Previous

Search

Corporate Information - WDM  

104
 Announcement

Financial Results

Corporate Actions
 
18-FEB-
J.P. Morgan Securit
2010

18-FEB-
State Bank of Patia
2010

105
 16-FEB-
HCL Infosystems Li
2010

12-FEB-
National Capital Re
2010

10-FEB-
J.P. Morgan Securit
2010

09-FEB- Sundaram BNP Pari

2010 Limited

08-FEB- Sundaram BNP Pari

2010 Limited

04-FEB- Sundaram BNP Pari

2010 Limited

03-FEB-
NHPC Limited
2010

02-FEB-
HCL Technologies L
2010

28-JAN- CItiFinancial Consu

2010 Limited

28-JAN- CItiFinancial Consu

2010 Limited

27-JAN-
HCL Technologies L
2010

21-JAN-
State Bank of Patia
2010

08-JAN-
Tata Teleservices L
2010

08-JAN-
Escorts Limited
2010

04-JAN-
Konkan Railway Co
2010

04-JAN-
Konkan Railway Co
2010

01-JAN-
Deutsche Investme
2010

01-JAN- Barclays Investmen

106
 2010 Limited

01-JAN-
Reliance Industries
2010

01-JAN-
Citicorp Finance (In
2010

01-JAN-
Citifinancial Consum
2010

18-DEC- RBS Financial Servi

2009 Limited

18-DEC-
State Bank of Patia
2009

15-DEC- RBS Financial Servi

2009 Limited

14-DEC-
Citicorp Finance (In
2009

14-DEC- CitiFinancial Consum

2009 Limited

14-DEC-
Fullerton India Cred
2009

Results

Archives

   Date Compa

21-JAN-
State Bank of Patiala
2010

20-NOV-
ICICI Home Finance Co
2009

20-NOV-
ICICI Home Finance Co
2009

18-NOV-
Morgan Stanley India C
2009

13-NOV- Housing & Urban Devel

2009 Limited

107
 13-NOV-
DSP Merrill Lynch Capit
2009

11-NOV-
Citifinancial Consumer
2009

09-NOV-
Nuclear Power Corpora
2009

09-NOV-
Citicorp Maruti Finance
2009

04-NOV-
Konkan Railway Corpor
2009

03-NOV-
The Great Eastern Ship
2009

03-NOV- Indian Renewable Ener

2009 Limited

03-NOV-
Bharat Aluminium Com
2009

03-NOV-
Karnataka State Financ
2009

31-OCT-
Deutsche Investments
2009

31-OCT- RELIANCE GAS TRANSP

2009 INFRASTRUCTURE LIMI

31-OCT-
Indian Railway Finance
2009

30-OCT-
RBS Financial Services
2009

30-OCT-
Neyveli Lignite Corpora
2009

30-OCT-
The Catholic Syrian Ban
2009

30-OCT-
J. P. Morgan Securities
2009

30-OCT-
Global Trade Finance L
2009

30-OCT- Citicorp Finance (India)

108
 2009

30-OCT-
Pidilite Industries Limit
2009

28-OCT-
Tata Teleservices Limit
2009

28-OCT-
Neelachal Ispat Nigam
2009

27-OCT-
Morgan Stanley India C
2009

27-OCT-
Small Industries Develo
2009

26-OCT-
SREI Equipment Financ
2009

Corporate Action

Archives

     

   Sec
Company Name Sec
Type

TATA MOTORS
DB TM
LIMITED

TATA MOTORS
DB TM
LIMITED

TATA MOTORS
DB TM
LIMITED

TATA MOTORS
DB TM
LIMITED

ANDHRA PRADESH
POWER FINANCE
PT APP
CORPORATION
LIMITED

ORIENTAL BANK OF
BB OB
COMMERCE

109
 SARDAR SAROVAR
NARMADA NIGAM PT SS
LIMITED

SARDAR SAROVAR
NARMADA NIGAM PT SSN
LIMITED

SARDAR SAROVAR
NARMADA NIGAM PT SSN
LIMITED

TATA CHEMICALS
DB TCH
LIMITED

SUNDARAM HOME
DB SH
FINANCE LIMITED

ESSAR SHIPPING
PORTS & LOGISTICS DB ES
LIMITED

TATA CAPITAL
DB TAC
LIMITED

TATA CAPITAL
DB TAC
LIMITED

TATA CAPITAL
DB TAC
LIMITED

TATA CAPITAL
DB TAC
LIMITED

TATA CAPITAL
DB TAC
LIMITED

TATA CAPITAL
DB TAC
LIMITED

SREI EQUIPMENT
FINANCE PRIVATE DB SEQ
LIMITED

SREI EQUIPMENT
FINANCE PRIVATE DB SEQ
LIMITED

KRISHNA BHAGYA
PT KB
JALA NIGAM LIMITED

110
 Securities Information

Equity shares

Preference Shares

Debt Instruments

Warrants

Close Ended MF Schemes (Listed)

Securities available for trading in IL series

Securities available for trading in ETF

  Changes in Company Names

Changes in Symbols

Listed companies suspended from trading for non-compliance

List of companies delisted

Companies not submitted Corporate Governance Report

List of Companies - Clause 40A

List of top 100 common companies for Common Filing

Data on Shareholding Pattern

Legend for series of different securities

Public Issue Offer Document

IPO Final Prospectus

IPO Draft Offer Documents

Others

Public Issue of Debt Securities

111
 Past Public Issues

Name of the Company Issue Open Date Issue Close Date

Rural Electrification Corporation Limited 19-Feb-2010 23-Feb-2010

Man Infraconstruction Limited 18-Feb-2010 22-Feb-2010

Texmo Pipes and Products Limited 16-Feb-2010 19-Feb-2010

Hathway Cable & Datacom Limited 09-Feb-2010 11-Feb-2010

ARSS Infrastructure Projects Limited 08-Feb-2010 11-Feb-2010

  NTPC Limited 03-Feb-2010 05-Feb-2010

Emmbi Polyarns Limited 01-Feb-2010 03-Feb-2010

D B Realty Limited 29-Jan-2010 02-Feb-2010

Syncom Healthcare Limited 27-Jan-2010 29-Jan-2010

Vascon Engineers Limited 27-Jan-2010 29-Jan-2010

Aqua Logistics Limited 25-Jan-2010 02-Feb-2010

Jubilant Foodworks Limited 18-Jan-2010 20-Jan-2010

Infinite Computer Solutions (India) Limited 11-Jan-2010 13-Jan-201

  IPO Draft Offer Documents

Name of the Company

Ambience Limited

Aqua Logistics Limited

112
Ashoka Buildcon Limited

Asian Business Exhibition & Conferences Limited

Aster Silicates Limited

BPTP Limited

Bajaj Corp Limited

Cantabil Retail India Limited

Career Point Infosystems Limited

D B Realty Limited

DQ Entertainment (International) Limited

Emaar MGF Land Limited

Emmbi Polyarns Limited

Eros International Media Limited

Everest Infra Energy Limited

Fatpipe Networks India Limited

Gallantt Ispat Limited

Glenmark Generics Limited

Godrej Properties Limited

Goenka Diamond & Jewels Limited

Gravita India Limited

Gujarat Pipavav Port Limited

Gyscoal Alloys Limited

Hathway Cable & Datacom Limited

Hindustan Media Ventures Limited

IL&FS Transportation Networks Limited

113
 Indosolar Limited

Intrasoft Technologies Limited

Inventure Growth and securities Limited

Jaypee Infratech Limited

Jindal Power Limited

Jubilant Foodworks Limited

Kumar Urban Development Limited

Lodha Developers Limited

Man Infraconstruction Limited

Mandhana Industries Limited

Mittal Corp Limited

  Others

Name of the
Company

McDowell Holdings
Ltd.

Netflier Finco
Limited

Sun Pharma
Advanced Research
Company Limited

Sun Pharma
Advanced Research
Company Limited

D-Link (India) Ltd

114
 Nath Bio-Genes
(India) Ltd.

Agri-Tech (India)
Ltd.

Man Aluminium
Limited

ETC Networks
Limited

Indiabulls
Securities Limited

Bajaj Finserv
Limited

Bajaj Auto Limited

Public Issue of Debt Securities

Draft Prospectus
 

Name of the Company

L&T Finance Ltd.

   

   

   

   

  Final Prospectus

   

Name of the Company

L&T Finance Ltd.

 
Shriram Transport Finance Co. Ltd.

Tata Capital Ltd.

115
 QIP Offer Documents

Disclaimer of placement documents for QIP

The placement is meant only for QIBs on a private placement basis and
is not an offer to the public or to any other class of investors.

The public cannot subscribe to the issue since it is a private placement

document.

 
Type of Offer Documents:

Draft Placement Documents

Final Placement Documents

Recent Issues

Issues prior to Mar 2010

  Draft Placement Documents

Name of the Company Merchant Banker Name

3i INFOTECH LIMITED UBS Securities India Private Limited

Aban Offshore Ltd. Citigroup Global Markets India Private Limited

ANAND RATHI ADVISORS LIMITED, PIONEER

Ackruti City Limited
INVESTCORP LIMITED

IDFC-SSKI Limited, Edelweiss Capital Limited,

Adhunik Metaliks Limited
ICICI Securities Limited

AIA Engineering Ltd. Enam Financial Consultants Private Ltd.

Allied Digital Services Anand Rathi Advisors Limited and Edelweiss

Limited Capital Limited

Ansal Properties and DSP Merrill Lynch Ltd.

Infrastructure Ltd. Anand Rathi Securities Ltd.

Apollo Tyres Ltd. JM Morgan Stanley Pvt. Ltd.

Ashapura Minechem Ltd. SSKI Corporate Finance Private Ltd.

116
Home> Corporate > QIP Offer Documents > Final Placement Documents

Final Placement Documents

Shareholding
Offer
QIP Allottee
Name of the Company Merchant Banker Name Document
Pattern-Pre Details(>5%)
Date
and Post

IDFC Capital Limited and UBS Securities India 17-Mar-

Radico Khaitan Limited
Private Limited 2010

Deutsche Equities India Private Limited & RBS 11-Mar-

The India Cements Limited
Equities (India) Limited 2010

DSP Merrill Lynch Ltd., Enam Securities Pvt.

10-Mar-
Exide Industries Limited Ltd., Morgan Stanley India Company Pvt. Ltd.
2010
and UBS Securities India Private Limited

Final Placement Documents

Offer
Name of the Company Merchant Banker Name Document
Date

CLSA India Limited, Citigroup Global Markets India Private

United Spirits Limited Limited, UBS Securities India Private Limited & Morgan Stanley -
India Company Private Limited

17-Mar-
Radico Khaitan Limited IDFC Capital Limited and UBS Securities India Private Limited
2010

The India Cements Deutsche Equities India Private Limited & RBS Equities (India) 11-Mar-
Limited Limited 2010

Exide Industries DSP Merrill Lynch Ltd., Enam Securities Pvt. Ltd., Morgan Stanley 10-Mar-
Limited India Company Pvt. Ltd. and UBS Securities India Private Limited 2010

Mahindra Forgings Kotak Mahindra Capital Company Limited, Anand Rathi Advisors 24-Feb-
Limited Limited 2010

Electrosteel Castings 04-Feb-

EDELWEISS CAPITAL LIMITED
Ltd. 2010

Shriram Transport
Citigroup Global Markets India Private Limited, DSP Merrill Lynch 25-Jan-
Finance Company
Limited and IDFC-SSKI LIMITED 2010
Limited

The Karnataka Bank EDELWEISS CAPITAL LIMITED and ANTIQUE CAPITAL MARKETS 22-Jan-

117
Limited PRIVATE LIMITED 2010

Morgan Stanley India Company, CLSA India Limited and Goldman 22-Jan-
Yes Bank Limited
Sachs (India) Securities Private Limited 2010

18-Jan-
Usha Martin Limited Equirus Capital Private Limited
2010

Unity Infraprojects Collins Stewart Inga Private Limited and Antique Capital Markets 21-Dec-
Limited Private Limited 2009

J.Kumar Infraprojects 15-Dec-

ANAND RATHI ADVISORS LIMITED
Limited 2009

10-Dec-
Gammon India Ltd. IDFC-SSKI Limited, India Infoline Limited
2009

Bajaj Electricals 09-Dec-

Edelweiss Capital Limited
Limited 2009

Citigroup Global Markets India Private Limited, Deutsche Equities

India Private Limited, DSP Merrill Lynch Limited, HSBC Securities
Hindalco Industries 26-Nov-
and Capital Markets (India) Private Limited, RBS Equities (India)
Limited 2009
Limited, SBI Capital Markets Limited and UBS Securities India
Private Limited

Citigroup Global Markets India Private Limited, Kotak Mahindra 26-Nov-

Sunteck Realty Limited
Capital Company Limited and UBS Securities India Private Limited 2009

Welspun Gujarat Stahl 24-Nov-

J.P. Morgan India Private Limited
Rohren Limited 2009

Pantaloon Retail 23-Nov-

Enam Securities Private Limited and DSP Merrill Lynch Limited
(India) Limited 2009

Adhunik Metaliks IDFC-SSKI Limited, Edelweiss Capital Limited and ICICI Securities 20-Nov-
Limited Limited 2009

17-Nov-
Aban Offshore Ltd. Citigroup Global Markets India Private Limited
2009

Development Credit 13-Nov-

Edelweiss Capital Limited
Bank Limited 2009

KSK Energy Ventures 13-Nov-

India Infoline Limited and Axis Bank Limited
Limited 2009

JAI BALAJI MACQUARIE CAPITAL ADVISERS (INDIA) PRIVATE LIMITED, 26-Oct-

INDUSTRIES LIMITED MOTILAL OSWAL INVESTMENT ADVISORS (P) LIMITED & 2009

118
 CENTRUM CAPITAL LIMITED

Allied Digital Services ANAND RATHI ADVISORS LIMITED & EDELWEISS CAPITAL 21-Oct-
Limited LIMITED 2009

Daiwa Securities SMBC India Private Limited, Kotak Mahindra

Patel Engineering Capital Company Limited, Nomura Financial Advisory & Securities 21-Oct-
Limited (India) Private Limited, Antique Capital Markets Private Limited 2009
and Axis Bank Limited

16-Oct-
HCL Infosystems Ltd CLSA India Limited & JM Financial Consultants Private Limited
2009

Larsen & Toubro 09-Oct-

Citigroup Global Markets India Private Limited
Limited 2009

Parsvnath Developers Citigroup Global Markets India Private Limited, Edelweiss Capital 01-Oct-
Limited Limited, JM Financial Consultants Private Limited 2009

CLSA India Limietd, J.P.Morgan India Private Limited & Kotak 24-Sep-
CIPLA LIMITED
Mahindra Capital Company Limited 2009

22-Sep-
3i INFOTECH LIMITED UBS Securities India Private Limited
2009

J.P. Morgan India Private Limited, Deutsche Equities India Private 22-Sep-
Axis Bank Limited
Limited, Goldman Sachs (India) Securities Private Limited 2009

Citigroup Global Markets India Private Limited, ENAM Securities

LIC HOUSING 18-Sep-
Private Limited, Kotak Mahindra Capital Company Limited &
FINANCE LIMITED 2009
Nomura Financial Advisory and Securities (India) Private Limited

Glenmark
Enam Securities Private Limited and Citigroup Global Markets 14-Sep-
Pharmaceuticals
India Private Limited 2009
Limited

ANAND RATHI ADVISORS LIMITED, PIONEER INVESTCORP 10-Sep-

Ackruti City Limited
LIMITED 2009

OPTO CIRCUITS Antique Capital Markets Private Limited & HSBC Securities and 10-Sep-
(INDIA) LIMITED Capital Markets (India) Private Limited 2009

ING Vysya Bank 08-Sep-

Enam Securities Private Limited
Limited 2009

03-Sep-
Delta Corp Limited YES BANK LIMITED
2009

NAGARJUNA IDFC - SSKI Limited, Kotak Mahindra Capital Company Limited & 01-Sep-
CONSTRUCTION

119
COMPANY LIMITED RBS Equities (India) Limited 2009

24-Aug-
PSL Ltd. Edelweiss Capital Ltd
2009

Axis Bank Limited, Citigroup Global Markets India Private Limited,

Goldman Sachs (India) Securities Private Limited, The Hongkong
Housing Development
and Shanghai Banking Corporation Limited, JM Financial 21-Aug-
Finance Corporation
Consultants Private Limited, Kotak Mahindra Capital Company 2009
Limited
Limited and Nomura Financial Advisory and Securities (India)
Private Limited

Orbit Corporation Kotak Mahindra Capital Company Limited, Macquarie Capital 14-Aug-
Limited Advisers (India) Private Limited & Edelweiss Capital Limited 2009

Morgan Stanley India Company Private Limited & IDFC ? SSKI 13-Aug-
IndusInd Bank Limited
Limited 2009

Citigroup Global Markets India Private Limited and Kotak 05-Aug-

Punj Lloyd Limited
Mahindra Capital Company Limited 2009

Goldman Sachs (India) Securities Private Limited, Credit Suisse

Lanco Infratech Securities (India) Private Limited, ICICI Securities Limited, IDFC - 04-Aug-
Limited SSKI Limited, J.P. Morgan India Private Limited and UBS 2009
Securities India Private Limited

23-Jul-
Rei Agro Limited DSP Merrill Lynch Limited, RBS Equities (India) Limited
2009

Indiabulls Financial 21-Jul-

Morgan Stanley India Company Private Limited
Services Limited 2009

Educomp Solutions 09-Jul-

CLSA India Limited
Limited 2009

Dewan Housing
06-Jul-
Finance Corporation Motilal Oswal Investment Advisors Private Limited
2009
Ltd

Anand Rathi Financial Services Limited, India Infoline Limited & 06-Jul-
Emami Limited
Avendus Capital Private Limited 2009

Housing Development
Kotak Mahindra Capital Company Limited, J.P. Morgan India 02-Jul-
and Infrastructure
Private Limited, Macquarie Capital Advisers (India) Private Limited 2009
Limited

Bajaj Hindusthan 01-Jul-

CLSA India Limited, Deutsche Equities India Private Limited
Limited 2009

Hindustan Morgan Stanley India Company Private Limited 30-Jun-

Construction Co.

120
Limited 2009

Shree Renuka Sugars 30-Jun-

DSP Merrill Lynch Limited
Limited 2009

Sobha Developers Enam Securities Private Limited, Morgan Stanley India Company 30-Jun-
Limited Private Limited 2009

IDFC-SSKI Limited, UBS Securities India Private Limited, Morgan

30-Jun-
Unitech Limited Stanley India Company Private Limited, Credit Suisse Securities
2009
(India) Private Limited

Network 18 Fincap ICICI Securities Limited, Kotak Mahindra Capital Company 11-Jun-
Limited Limited, Antique Capital Markets Private Limited 2009

DSP Merrill Lynch Limited, Kotak Mahindra Capital Company 25-May-

PTC India Limited
Limited 2009

Indiabulls Real Estate 19-May-

Morgan Stanley India Company Private Limited
Limited 2009

IDFC-SSKI Limited, UBS Securities India Private Limited & 17-Apr-

Unitech Limited
Morgan Stanley India Company Private Limited 2009

JM Financial Consultants Private Limited, Antique Capital Markets

ibn18 Broadcast 24-Nov-
Private Limited, HSBC Securities and Capital Markets (India)
Limited 2008
Private Limited

Ashapura Minechem 28-Aug-

SSKI Corporate Finance Pvt. Ltd.
Ltd. 2008

Dynamatic 07-Aug-
Spark Capital Advisors (India) Private Limited
Technologies Limited 2008

SBI Capital Market Limited, A.K.Capital Services Limited,

Edelweiss Capital Limited, HSBC Securities and Capital Market
07-Feb-
Bank of India (India) Private Limited, JM Financial Consultants Private Limited,
2008
Kotak Mahindra Capital Company Limited & Motilal Oswal
Investment Advisors Private Limited

Simplex Infrastructure J M Financial Consultants Private Limited & SSKI Corporate 06-Feb-
Limited Finance Private Limited 2008

Sintex Industries CLSA India Limited, IDFC-SSKI Private Limited, J.P.Morgan India 06-Feb-
Limited Private Limited, Motilal Oswal Investment Advisors Private Limited 2008

Sunil Hitech Engineers 16-Jan-

Avendus Capital Private Limited
Limited 2008

Peninsula Land Limited UBS Securities India Private Limited & Enam Securities Private 20-Dec-

121
 Limited 2007

The India Cements ABN AMRO Securities (India) Limited & Deutsche Equities India 20-Dec-
Limited Private Limited 2007

Pratibha Industries 18-Dec-

Centrum Capital Limited
Limited 2007

Citigroup Global Markets India Private Limited, DSP Merrill Lynch

18-Dec-
Suzlon Energy Limited Limited, JM Financial Consultants Private Limited & Yes Bank
2007
Limited

Citigroup Global Markets India Private Limited, JM Financial

Consultants Private Limited, J.P.Morgan India Private Limited,
GMR Infrastructure 10-Dec-
Kotak Mahindra Capital Company Limited, Lehman Brothers
Limited 2007
Securities Private Limited and UBS Securities India Private
Limited

Parekh Aluminex Saffron Capital Advisors Private Limited & PL Capital Markets 03-Dec-
Limited Private Limited 2007

The West Coast Paper 30-Nov-

Axis Bank Limited
Mills Limited 2007

Avendus Advisors Private Limited & Motilal Oswal Investment 21-Nov-

Nitco Tiles Limited
Advisors Private Limited 2007

Godrej Industries 15-Nov-

Kotak Mahindra Capital Company Limited
Limited 2007

ING Vysya Bank ENAM SECURITIES PRIVATE LIMITED & EDELWEISS CAPITAL 08-Nov-
Limited LIMITED 2007

Shree Renuka Sugars 31-Oct-

Motilal Oswal Investment Advisors Private Limited
Limited 2007

United Phosphorus SSKI Corporate Finance Private Limited, Deutsche Equities India 16-Oct-
Limited Private Limited and UBS Securities India Private Limited 2007

Kotak Mahindra Bank Citigroup Global Markets India Private Limited and Kotak 10-Oct-
Limited Mahindra Capital Company Limited 2007

Logix Microsystems 28-Sep-

Prime Securities Limited
Limited 2007

The South Indian Bank 27-Sep-

Edelweiss Capital Limited
Limited 2007

122
Centurion Bank of Kotak Mahindra Capital Company Limited, Deutsche Equities India 24-Sep-
Punjab Limited Pvt. Limited and SSKI Corporate Finance Private Limited 2007

Citigroup Global Markets India Private Limited & IDFC SSKI 17-Aug-
Punj Lloyd Limited
Limited 2007

JM Financial Consultants Private Limited, IL & FS Investsmart

The Phoenix Mills 31-Jul-
Securities Limited, Collins Stewart Inga Private Limited and
Limited 2007
Edelweiss Capital Limited

Citigroup Global Markets India Private Limited, Goldman Sachs 26-Jul-

UTI Bank Limited
(India) Securities Private Limited 2007

Sadbhav Engineering Collins Stewart Inga Private Limited and IL&FS Investsmart 06-Jul-
Limited Limited 2007

Infrastructure Kotak Mahindra Capital Co. Ltd.,Citigroup Global Markets I. Pvt.

05-Jul-
Development Finance Ltd, JM Financial Consultants Private Limited and UBS Securities
2007
Company Limited India Private Limited

29-Jun-
Escorts Ltd. Centrum Capital Limited
2007

11-Jun-
Max India Limited CLSA India Limited
2007

GVK Power & SSKI Corporate Finance Private Ltd, CITI Group Global Markets 09-May-
Infrastructure Ltd. India Private Limited, Kotak Mahindra Capital Company Limited. 2007

Pritish Nandy 23-Mar-

Prime Securities Ltd.
Communications Ltd. 2007

09-Mar-
PSL LIMITED Edelweiss Capital Limited
2007

02-Mar-
Bartronics India Ltd. Karvy Investor Services Ltd.
2007

Television Eighteen HSBC Securities and Capital Markets (India) Private Ltd. , Ambit 07-Feb-
India Ltd. Corporate Finance Private Limited 2007

29-Jan-
Visaka Industries Ltd. Systematix Corporate Services Ltd.
2007

Bombay Rayon 19-Jan-

ICICI Securities Ltd.
Fashions Ltd. 2007

19-Dec-
Peninsula Land Ltd. Citigroup and A.K.Capital Services Ltd.
2006

123
IVRCL Infrastructures ABN Amro Securities (India) Pvt. Ltd., Citigroup Global Markets 18-Dec-
& Projects Ltd. India Pvt. Ltd. 2006

Pantaloon Retails 15-Dec-

Enam Financial Consultants Private Ltd.
(India) Ltd. 2006

14-Dec-
AIA Engineering Ltd. Enam Financial Consultants Ltd.
2006

Ansal Properties & 06-Dec-

DSP Merrill Lynch Ltd.
Infrastructure Ltd. 2006

Kotak Mahindra Capital Co. Ltd., Citigroup Global Markets I Pvt. 02-Dec-
Marico Ltd.
Ltd. 2006

S. Kumars Nationwide 29-Nov-

Prime Securities Ltd.
Ltd. 2006

Deccan Chronicle 20-Nov-

CLSA India Ltd.
Holdings Ltd. 2006

Mcleod Russel India 08-Nov-

ICICI Securities Ltd.
Ltd. 2006

23-Oct-
EMCO Ltd. SSKI Corporate Finance Priavte Ltd.
2006

20-Oct-
Apollo Tyres Ltd. JM Morgan Stanley Private Ltd.
2006

Asian Electronic 17-Oct-

Prime Securities Limited
Limited 2006

Mahindra Gesco 05-Oct-

Kotak Mahindra Capital Company Ltd.
Developers Ltd. 2006

Kalpataru Power 01-Sep-

Kotak Mahindra Capital Co. Ltd.
Transmission Ltd. 2006

Draft Placement Documents

Top

124
 Members
We appreciate your interest in membership of National Stock Exchange. This
section of our website provides you with all information required to obtain
membership of our Exchange as well as other information required by members
on a continuous basis.

In case of any queries or clarifications, please feel free to contact Ms. Ketki
Khedkar / Ms. Jinal Shal / Ms. Kalyani PLS on 022-26598249.

Currency Derivatives

Segment                                                    

SEBI has issued a circular on August 6 2008 on Exchange Traded Currency

Derivatives.

NSE invites applications for membership to the Currency Derivatives Segment.

 If you are already a member of NSE

 If you are a member of NCDEX
 If you are a Bank
 Others

  The deposit requirements for currency derivatives segment is given below -

( Rs. In lakhs)

  NSE Members NCDEX Members New Applicants

Trading Trading Trading

Professional
Trading cum Trading cum Trading cum
Deposits
Membership Clearing Membership Clearing Membership Clearing
Membership
Membership Membership Membership

Networth 100 1000 100 1000 100 1000

Security Deposit - NSEIL

Cash 2 2 2 2 2 2

Non-
8 8 10.5 13 13 18
Cash

Security Deposit - NSCCL

125
Cash - 25 - 25 - 25

Non-
- 25 - 25 - 25
Cash

 Processing fee for NCDEX members & new applicants  - Rs. 10,000.

Interest Rate Futures Segment

NSE is the first stock Exchange in India to launch Interest Rate Futures (IRF) on the Currency
Derivative Segment of the Exchange.

Applications are invited from the members for enablement.

Eligibility Criteria:

 Who are eligible to trade in IRF :

1. Existing members who are registered either in Currency Derivatives Segment

or Futures & Options (F&O) Segment shall be eligible to trade in IRF, subject
to meeting the Balance Sheet net worth requirement of Rs. 100 lakhs for
Trading Membership and Rs. 1000 lakhs in Trading cum Clearing Membership.

2. New members interested in participating in IRF would be required to get

registered in Currency Derivatives Segment of the Exchange in order to trade
in IRF.

Documents required for enablement in IRF:

 Existing CDS enabled members: No additional documents are required for

enablement in IRF.

 Existing F&O members :

a. If enabled as TM in F&O: Such members will have to identify a CDS registered

Clearing Member for clearing their trades for IRF and submit the documents
for the enablement as per the Annexure I.
b. If enabled as TMCM in F&O:
 

o For enablement as TM in IRF: Such members will have to identify a

CDS registered Clearing Member for clearing their trades for IRF and
submit the documents for the enablement as per the Annexure I.

126
 o For enablement as TMCM in IRF: Such members will have to submit
the documents for the enablement as per the Annexure II.

Incase of any query or clarification, kindly get in touch with membership department on
022-26598249 or write to us on minward@nse.co.in
New Membership

NSE offers multi-asset class products and services and operates trading platforms and the
Clearing and Settlement platform is operated by NSCCL, a wholly owned subsidiary of NSE.
Participation on the Exchange in each of the products is through the Member of the Exchange
who is registered for the product.

Membership of the Exchange/NSCCL is open to corporate entities, individuals and partnership

firms who fulfill the eligibility criteria laid down by SEBI and NSE.
 

o Categories of membership
o Eligibility Criteria
o Fees, Deposits & Networth Requirements
o Admission Process
o Set of documents

  Categories of Membership

Members are admitted in the following categories:

 Only Capital Market – This category of membership entitles a member to execute

trades and to clear and settle the trades executed on his own account as well as on
account of his clients in the Capital Market Segment.

 Capital Market and Futures & Options Trading – A membership in this category
entitles a member to

o execute trades and to clear and settle the trades executed on his own account
as well as on account of his clients in the Capital Market Segment and

o Execute trades on his own account as well as on account of his clients in the
Futures & Options segment, but, clearing and settlement of trades executed
through the Trading Member would have to be done through a Trading-cum
Clearing Member or Professional Clearing Member of the Exchange.

1. Capital Market and Futures & Options Trading & Self Clearing – A membership
in this category entitles a member to

o execute trades and to clear and settle the trades executed on his own account
as well as on account of his clients in the Capital Market Segment and

127
 o execute trades on his own account as well as on account of his clients and to
clear and settle trades executed only on his own account as well as on
account of his clients in Futures & Options segment.

o Capital Market and Futures & Options Trading and Clearing – A

membership in this category entitles a member to
o execute trades and to clear and settle the trades executed on his own account
as well as on account of his clients in the Capital Market Segment and
o execute trades on his own account as well as on account of his clients and to
clear and settle trades executed by themselves as well as by other trading
members who choose to use clearing services of the member in Futures &
Options segment.

o Only WDM – A membership in this category acquires a right to execute

trades and to clear and settle the trades executed by the members in the
WDM Segment. This membership can be also taken in combination with any
of the 4 categories as stated above.

o Professional Clearing Members – A membership in this category entitles a

member to clear and settle trades of such members of the Exchange who
choose to clear and settle their trades through this member.

Further to Circular No: 648 with Download No: NSE/MEMB/11148 dated

August 19, 2008, the different categories of membership in the Currency
Derivatives segment is as follows:

o Only trading membership in Currency Derivatives – A membership in

this category entitles a member to execute trades on his own account as well
as on account of his clients in the Currency Derivatives segment, but, clearing
and settlement of trades executed through the Trading Member would have to
be done through a Trading-cum Clearing Member or Professional Clearing
Member of the Exchange.

o Trading and Clearing membership in Currency Derivatives - A

membership in this category entitles a member to execute trades on his own
account as well as on account of his clients and to clear and settle trades
executed by themselves as well as by other trading members who choose to
use clearing services of the member in Currency Derivatives Segment.

o Professional Clearing Members – A membership in this category entitles a

member to clear and settle trades of such members of the Exchange who
choose to clear and settle their trades through this member.

Eligibility Criteria

128
The following are eligible to apply for membership subject to the regulatory norms and
provisions of SEBI and as provided in the Rules, Regulations, Byelaws and Circulars of the
Exchange -

1. Individuals;
 
2. Partnership Firms registered under the Indian Partnership Act, 1932;
 
3. Corporations, Companies or Institutions or subsidiaries of such Corporations,
Companies or Institutions set up for providing financial services;
 
4. Banks for Currency Derivative Segments
 
5. Such other person as may be permitted under the Securities Contracts (Regulation)
Rules 1957.

 Other Eligibility Criteria

 
 Who cannot become a member
 

1. Individuals (Sole Proprietor)

CRITERIA

Age 21 Years

Status Indian Citizen

Education At least a graduate or equivalent qualification

Should have a minimum of 2 years experience in an activity related to dealing in

securities or as portfolio manager or as investment consultant or as a merchant banker
Experience or in financial services or treasury, broker, sub broker, authorised agent or authorised
clerk or authorised representative or remisier or apprentice to a member of a
recognised stock exchange, dealer, jobber, market maker, or in any other manner in
dealing in securities or clearing and settlement thereof.

2.

Top

129
3. Partnership Firms

Where the applicant is a partnership firm, the applicant shall identify a Dominant
Promoter Group as per the norms of the Exchange at the time of making the
application. Any change in the shareholding of the partnership firm including that of
the said Dominant Promoter Group or their sharing interest shall be effected only with
the prior permission of NSEIL/SEBI.
 

CRITERIA

Age Minimum age of partner(s) : 21 years

Status Registered Partnership firm under Indian Partnership Act, 1932

Education Partners should be at least a graduate or equivalent qualification

Designated Identify at least two partners as designated partners who would be taking care of the
Partners day to day management of the partnership firm

Designated Should have a minimum of 2 years experience in an activity related to dealing in

Partners securities or as portfolio manager or as investment consultant or as a merchant banker
Experience or in financial services or treasury, broker, sub broker, authorised agent or authorised
clerk or authorised representative or remisier or apprentice to a member of a
recognised stock exchange, dealer, jobber, market maker, or in any other manner in
dealing in securities or clearing and settlement thereof.

Dominant  Identify partner’s sharing interest as per Exchange Dominant Promoter Group norms.
Promoter Norms

Top

4. Corporations, Companies or Institutions

A Company as defined in the Companies Act, 1956 (1 of 1956), shall be eligible to be

admitted as a member of a Stock Exchange provided:

i. such company is formed in compliance with the provisions of Section 12 of the

said Act;

ii. it undertakes to comply with such other financial requirements and norms as
may be specified by the Securities and Exchange Board of India for the

130
 registration of such company under sub-section (1) of section 12 of the
Securities and Exchange Board of India Act, 1992 (15 of 1992);

iii. the directors of such company are not disqualified for being members of a
stock exchange under clause (1) of rule 8 [except sub-clauses (b) and (f)
thereof] or clause (3) of rule 8 [except sub-clauses (a) and (f) thereof] of the
Securities Contracts (Regulation) Rules, 1957 and the directors of the
company had not held the offices of the directors in any company which had
been a member of the stock exchange and had been declared defaulter or
expelled by the stock exchange

CRITERIA

Age Minimum age of director(s) : 21 years

Status Corporate registered under The Companies Act, 1956 (Indian)

Minimum Paid up Rs.30 lakhs

Equity Capital

Education Each of the Designated Directors should be at least graduate or equivalent qualification

Designated Identification of at least two directors as designated directors who would be managing
Directors the day to day trading operations

Designated Should have a minimum of 2 years experience in an activity related to dealing in

Directors securities or as portfolio manager or as investment consultant or as a merchant banker
Experience or in financial services or treasury, broker, sub broker, authorised agent or authorised
clerk or authorised representative or remisier or apprentice to a member of a
recognised stock exchange, dealer, jobber, market maker, or in any other manner in
dealing in securities or clearing and settlement thereof.

Dominant  Identify dominant group as per Exchange Dominant Promoter Group norms.
Promoter Norms

5. Professional Clearing Member (PCM)

The following persons are eligible to become PCMs of NSCCL for Futures & Options
and/or Capital Market Segment provided they fulfill the prescribed criteria:

1. SEBI Registered Custodians; or

2. Banks recognised by NSEIL/NSCCL for issuance of bank guarantees

Top

131
6. Banks

Further to Circular No: 648 with Download No: NSE/MEMB/11148 dated August 19,
2008, the eligibility membership criteria for banks in the Currency Derivatives
segment is as follows:

Banks authorized by the Reserve Bank of India under section 10 of the Foreign
Exchange Management Act, 1999 as ‘AD Category - I bank’ are permitted to become
trading and clearing members of the currency futures market of the recognized stock
exchanges, on their own account and on behalf of their clients, subject to fulfilling the
following minimum prudential requirements:

Minimum net worth of Rs. 500 crores.

Minimum CRAR of 10 per cent.

Net NPA should not exceed 3 per cent.

Made net profit for last 3 years.

The AD Category - I banks which fulfill the prudential requirements are required to lay
down detailed guidelines with the approval of their Boards for trading and clearing of
currency futures contracts and management of risks.

AD Category - I banks which do not meet the above minimum prudential requirements
and AD Category - I banks which are Urban Co-operative banks or State Co-operative
banks can participate in the currency futures market only as clients, subject to
approval therefore from the respective regulatory Departments of the Reserve Bank.

The requirement of approved users of being certified as per the certification as

applicable in the F&O segment is waived off for banks for a period of one year from
the date of the issuance of SEBI circular SEBI/DNPD/Cir- 38 /2008 dated August 06,
2008.
 

Top

7. Other applicable eligibility criteria

i. At any point of time the applicant has to ensure that at least the sole
proprietor/one of the designated partner/one of the designated
director/compliance officer would have a valid certificate for at least one of the
following NCFM Modules :

 Securities Market (Basic) Module

 Compliance Officer (Broker) Module
 Capital Market (Dealers) Module
 Derivatives Market (Dealers) Module

132
 The above norm would be a continued admittance norm for membership of the
Exchange.

ii. An applicant must be in a position to pay the membership and other fees,
deposits etc, as applicable at the time of admission within three months of
intimation to him of admission as a Trading Member or as per the time
schedule specified by the Exchange.

iii. The Exchange may specify such standards for investor service and
infrastructure with regard to any category of applicants as it may deem
necessary, from time to time.

2. Who cannot become a member ?

Further to the capital and network requirements, No entity shall be admitted as a

member/partner or director of the member if

i. It has been adjudged bankrupt or a receiver order in bankruptcy has been

made against him or he has been proved to be insolvent even though he has
obtained his final discharge;

ii. it has compounded with his creditors for less than full discharge of debts;

iii. it has been convicted of an offence involving a fraud or dishonesty;

iv. it is engaged as a principal or employee in any business other than that of

Securities, except as a broker or agent not involving any personal financial
liability or for providing merchant banking, underwriting or corporate or
investment advisory services, unless he undertakes to severe its connections
with such business on admission, if admitted;

v. it has been at any time expelled or declared a defaulter by any other Stock
Exchange or he has been debarred from trading in securities by an Regulatory
Authorities like SEBI, RBI etc;

vi. it incurs such disqualification under the provisions of the Securities Contract
(Regulations) Act, 1956 or Rules made there-under so as to disentitle such
persons from seeking membership of a stock exchange;

vii. it incurs such disqualification consequent to which NSE determines it to be not

in public interest to admit him as a member on the Exchange, provided that in
case of registered firms, body corporates and companies, the condition from
(will apply to, all partners in case of partnership firms, all directors in case of
companies; NSE may from time to time modify / expand the scope of activities
that could be considered as relevant experience for the abo

 New Membership

133
Deposit & Networth Requirements (Corporates)
DEPOSIT STRUCTURE (Rs. IN LAKHS)

Cash- Non-Cash Cash Non-Cash Net

Segment Type of Membership Total
NSEIL NSEIL NSCCL NSCCL Worth

Capital Market TM & SCM 85 - 15 25 125 100

Wholesale Debt
TM & SCM 150 - - - 150 200
Market

               

TM 25 - - - 25 100

TM & SCM 25 - 25 25 75 100

Futures & Options
TM & CM 25 - 25 25 75 300

PCM - - 25 25 50 300

               

Existing TM 2 8 - - 10 100
Members TM & CM 2 8 25 25 60 1000

NCDEX TM 2 10.5 - - 12.5 100

Currency
Derivatives Members TM & CM 2 13 25 25 65 1000
Segment
Other TM 2 13 - - 15 100
Members TM & CM 2 18 25 25 70 1000

PCM - - 25 25 50 1000
* TM = Trading Membership.
* TM & SCM = Trading and Self Clearing Membership.
* TM & CM = Trading and Clearing Membership.
* PCM = Professional Clearing Membership.

  Deposit & Networth Requirements(Individual / Partnership Firms)

DEPOSIT STRUCTURE (Rs. IN LAKHS)

Cash- Non-Cash Cash Non-Cash Net

Segment Type of Membership Total
NSEIL NSEIL NSCCL NSCCL Worth

Capital Market TM & SCM 26.5 - 6 17.5 50 75

Wholesale Debt
TM & SCM 150 - - - 150 200
Market

TM 25 - - - 25 75

Futures & Options TM & SCM 25 - 25 25 75 100

TM & CM 25 - 25 25 75 300

               

Currency TM 2 8 - - 10 100
Existing
Derivatives
Members
Segment TM & CM 2 8 25 25 60 1000

NCDEX TM 2 10.5 - - 12.5 100

134
 Members TM & CM 2 13 25 25 65 1000

TM 2 13 - - 15 100
Other
Members TM & CM 2 18 25 25 70 1000
* TM = Trading Membership.
* TM & SCM = Trading and Self Clearing Membership.
* TM & CM = Trading and Clearing Membership.
* PCM = Professional Clearing Membership.

Fees and Charges :

 Application Processing Fees : Rs. 10,000/- Plus applicable Service Tax.

 Admission Fees : Rs. 5,00,000/- Plus applicable Service Tax

 Annual subscription charges (Captial Market Segment):

o For Corporates - Rs. 1,00,000 P.A.
o For Individuals/Partnership Firms - Rs. 50,000 P.A.

 Annual subscription charges (Wholesale Debt Market): Rs. 1,00,000 P.A.

 Advance minimum transaction charges (Futures & Options segment): Rs. 1,00,000 P.A.

135
Set of Documents

For Corporate

For Partnership Firms

For Individuals

For Banks (only for Currency Derivatives Segment )

ENABLEMENT FOR NEW MEMBERSHIP

Deposit Structure.

Set of documents required for Enablement.

New Membership

Deposit & Networth Requirements (Corporates)

DEPOSIT STRUCTURE (Rs. IN LAKHS)

Cash- Non-Cash Cash Non-Cash Net

Segment Type of Membership Total
NSEIL NSEIL NSCCL NSCCL Worth

Capital Market TM & SCM 85 - 15 25 125 100

Wholesale Debt
TM & SCM 150 - - - 150 200
Market

               

TM 25 - - - 25 100

TM & SCM 25 - 25 25 75 100

Futures & Options
TM & CM 25 - 25 25 75 300

PCM - - 25 25 50 300

               

Existing TM 2 8 - - 10 100
Members TM & CM 2 8 25 25 60 1000

NCDEX TM 2 10.5 - - 12.5 100

Currency
Derivatives Members TM & CM 2 13 25 25 65 1000
Segment
Other TM 2 13 - - 15 100
Members TM & CM 2 18 25 25 70 1000

PCM - - 25 25 50 1000

136
* TM = Trading Membership.
* TM & SCM = Trading and Self Clearing Membership.
* TM & CM = Trading and Clearing Membership.
* PCM = Professional Clearing Membership.

  Deposit & Networth Requirements(Individual / Partnership Firms)

DEPOSIT STRUCTURE (Rs. IN LAKHS)

Cash- Non-Cash Cash Non-Cash Net

Segment Type of Membership Total
NSEIL NSEIL NSCCL NSCCL Worth

Capital Market TM & SCM 26.5 - 6 17.5 50 75

Wholesale Debt
TM & SCM 150 - - - 150 200
Market

TM 25 - - - 25 75

Futures & Options TM & SCM 25 - 25 25 75 100

TM & CM 25 - 25 25 75 300

               

TM 2 8 - - 10 100
Existing
Members
TM & CM 2 8 25 25 60 1000
Currency
NCDEX TM 2 10.5 - - 12.5 100
Derivatives
Segment Members TM & CM 2 13 25 25 65 1000

TM 2 13 - - 15 100
Other
Members TM & CM 2 18 25 25 70 1000
* TM = Trading Membership.
* TM & SCM = Trading and Self Clearing Membership.
* TM & CM = Trading and Clearing Membership.
* PCM = Professional Clearing Membership.

Fees and Charges :

 Application Processing Fees : Rs. 10,000/- Plus applicable Service Tax.

 Admission Fees : Rs. 5,00,000/- Plus applicable Service Tax

 Annual subscription charges (Captial Market Segment):

o For Corporates - Rs. 1,00,000 P.A.
o For Individuals/Partnership Firms - Rs. 50,000 P.A.

 Annual subscription charges (Wholesale Debt Market): Rs. 1,00,000 P.A.

 Advance minimum transaction charges (Futures & Options segment): Rs. 1,00,000
P.A.

137
Set of documents required for Enablement

I. Enablement on Capital Market

Members are requested to furnish the documents for enablement:-

1. Board Resolution/Letter of authorisation - mentioning the authorised signatories, along

with the specimen signature of the signatories.

2. Audited Net worth certificate in format. If CA certification is more than six month old.

3. Annexure C-3, C-6 and C-7 only if there are any changes.

4. Latest Audited Annual accounts. If any changes.

5. VSAT connectivity has to be established before the enablement can be done.

6. Confirmation / Proof of taking up an insurance with either Oriental Insurance Company

Ltd. (OICL) or New India Assurance Company Ltd. (NIACL) under the Broker Indemnity
Policy.

7. Submit a proof of application for registration with Central Excise. (Submit an

acknowledgement copy from the Central Excise to us.)

8. Open Settlement account and Exchange Dues account (Mumbai Branch) with the
designated Bank and submit the account number and a documentary reference thereof.
Open two more bank accounts for (a) Client Money and (b) other business purposes and
submit the account numbers and documentary reference thereof.
The trading member has to give the proof of opening of accounts on the letterhead of
the bank specifically stating the date of the opening of the account with the bank.

9. Further a five point confirmation letter as per the format enclosed as below is required.
Please note that the letter should be on the letter head of the trading member duly
acknowledged by the Bank. Format enclosed.

138
10. Copy of the Memorandum of Association.

11. Open Depository accounts (Pool and beneficiary accounts) with any of the Depository
Participants of NSDL and CDSL and submit the account number and documentary there
of.

12. Copy of the CDSL letter duly acknowledged by the CDSL Authority. Format as enclosed.

13. Letter availing the facility of Automatic Delivery Out in NSDL. Please note that member
has to exercise the option of the settlement type for which it needs the
dematerialization facility. Format as enclosed.

14. Letter requesting activation of account in Collateral Interface for Member (CIM). Format
as enclosed.

15. Letter requesting activation of account in NSCCLs Clearing Interface System (NCIS).
Format as enclosed.

16. Trading member has to give undertaking on their letterhead that they do/do not want to
be enabled on the Mutual Funds. (Strike off which is not required). The undertaking
should be signed & duly stamped.

17. Trading Member needs to submit collateral deposits in the form of a Bank Guarantee /
FDR/ Deposit (cheque/DD) of Rs.25/17.50 lakhs as pe the demand advice. Proof of the
same is required.

18. Member should ensure that payment as per demand advice has been made to
NSEIL/NSCCL. Proof of the same is required

19. Undertaking that member/director(s) does not appear in the list of companies/directors
debarred by SEBI and if any disciplinary action such as suspension or cancellation taken
by the Board.

II. Enablement on F & O segment

139
1. Board Resolution/ Letter of authorization mentioning the authorised signatories, along
with the specimen signature of the signatories.

2. Trading member is required to make the payment as per the demand advice and submit
a proof of the same

3. Audited Net worth certificate in format C-1.

4. In case the trading member wants to be enabled as clearing/ self clearing member they
need to open the settlement account, and proof of the same on the letterhead of the
banker with the date of opening of the accounts needs to be submitted.

5. Further a five point confirmation letter as per the format enclosed is required. Please
note that the said letter should be on the letter head of the clearing/self clearing
member duly acknowledged by the Bank. As per the format enclosed (Kindly note that
the above document is required only in case where trading member wants to be
enabled as Clearing Member or Self Clearing member)

III. Enablement on WDM

Members are requested to furnish the documents for enablement:-

1. Board Resolution/ Letter of authorization mentioning the authorised signatories,

along with the specimen signature of the signatories

2. Trading member is required to make the payment as per the demand advice and
submit a proof of the same

3. Audited Net worth certificate in format C-1.

IV. Enablement on Currency segment

140
Members are requested to furnish the documents for enablement:-

1. Board Resolution/Letter of authorisation - mentioning the authorised signatories,

along with the specimen signature of the signatories.

2. Audited Net worth certificate in format. If CA certification is more than six month
old. As per LC Gupta Method

3. VSAT connectivity has to be established before the enablement can be done.

4. Confirmation / Proof of taking up an insurance with either Oriental Insurance

Company Ltd. (OICL) or New India Assurance Company Ltd. (NIACL) under the
Broker Indemnity Policy. (If taken membership only in Currency Derivatives)

5. Submit a proof of application for registration with Central Excise. (Submit an

acknowledgement copy from the Central Excise to us.) (If taken membership only in
Currency Derivatives)

6. Open Settlement account and Exchange Dues account with the designated Bank and
submit the account number and a documentary reference thereof. Open two more
bank accounts for (a) Client Money and (b) other business purposes and submit the
account numbers and documentary reference thereof. Needs to open the
settlement account separately for Currency derivatives if getting enabled as a
clearing member. The trading member has to give the proof of opening of accounts
on the letterhead of the bank specifically stating the date of the opening of the
account with the bank.

7. Further a five point confirmation letter as per the format enclosed as below is
required. Please note that the letter should be on the letter head of the trading
member duly acknowledged by the Bank. Format enclosed.

8. Copy of the Memorandum of Association.

9. Trading Member needs to submit collateral deposits as per the demand advice.
Proof of the same is required.

10. Member should ensure that payment as per demand advice has been made to
NSEIL/NSCCL. Proof of the same is required

141
142
Format of Five Point Confirmation Letter for Settlement account in Capital Market (F&O/CDS if
member has applied for Clearing /Self Clearing Membership)

Date:
From

(Clearing Member name and address)

To:

(Clearing Bank name and address)

Dear Sirs,

Sub: Operation of Clearing Bank for National Securities Corporation Limited (NSCCL)

Ref: Our Clearing Bank Account No: ____________________ with (Clearing Bank
name and address)
With reference to the above, we note that:

1 National Stock Exchange of India Ltd. has formed National Securities Clearing
Corporation Limited. (NSCCL), as a wholly owned subsidiary to undertake clearing and
settlement activity for its Members. NSCCL has established a clearing and settlement
system, whereby its members will be able to undertake the clearing and settlement of
deals admitted.

2 The bank has been nominated/ appointed as a Clearing Bank for the purpose of Clearing
and Settlement by NSCCL.

3 As per the Byelaws, Rules and Regulations of NSCCL, the member shall authorise the
Clearing Bank to access their clearing account for debiting & crediting their accounts as
per the instructions received from NSCCL from time to time.

143
4 Having due regard to the above, we hereby irrevocably authorise the Clearing bank to
debit and credit our above mentioned account number from time to time. Further, we
authorise the Clearing Bank to report balances and other information relating to this
account to NSCCL as may be required by NSCCL from time to time. This irrevocable
undertaking will be effective from the date of commencement of operation by NSCCL.

5 We further hereby undertake to abide by such other or further guidelines/ instructions

as may be communicated / decided by NSCCL.

Yours Faithfully,

Format for CDSL Letter to acknowledged by CDSL

(On Company Letterhead):

To:

Central Depository Services Ltd (CDSL)

P.J. Towers, Dalal Street,

Fort, Mumbai – 400023

Dear Sir,

Sub: Operation Of Depository for National securities Clearing Corporation Limited

Ref: Our Depository account No: …………………& Client ID: …………. With CDSL address…………….,
address …………………….

144
With reference to the above, we note that:

1. NSCCL has established a clearing and settlement system, whereby its members will be
able to undertake the clearing and settlement of deals admitted.

2. Central Depository Services (I) Ltd (CDSL) has been appointed by NSCCL as a settling
Depository for the purpose of settlement of securities in dematerialized form.

3. Now I/We do hereby irrevocably authorize CDSL to block/earmark the balances in my

/our Depository account and to debit/credit my/our above account as the case may be
as per the instructions received from NSCCL. Additionally I/We authorize CDSL to report
balances and give any other information as and when required to NSCCL relating to
my/our above mentioned account. This irrevocable undertaking will be effective from
the date of commencement of operation by NSCCL.

4. I/We further hereby undertake to abide by such other or further guidelines/instructions

as may be communicated /devised by the NSCCL.

Yours Faithfully,

For…………………Ltd.

(Director)

CC to NSCCL

Cc to DP

145
 Annexure – B

Account Opening Confirmation

T. M. code:

T.M. Name:

Account No.:

(By CDSL)

DP ID:

Signature:

Stamp:

Date:

146
Format for facility of Automatic Delivery out in NSDL.

147
To be given in the members letterhead / signed by the Member/any one Partner of Partnership firm or
Director of a Corporate Member and stamped)

Date:

From: [Clearing Member Name and address]

To: [NSCCL Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai – 400 051]

Dear Sirs,

Sub: Availing the facility of Automatic Delivery Out in NSDL

With reference to the above, we note that:

1. NSCCL is commencing a new facility for automating the delivery out instructions.

2. We wish to avail of this facility for the following settlement types. (Please mark 'Y' against the
settlement type for which this facility is desired and 'N' against the settlement for which this facility is
not required)

Settlement Type 'N', Market Type 13 Y/N

Settlement Type 'A', Market Type 14 Y/N

Settlement Type ‘W’, Market Type 22 Y/N

148
3. We do hereby irrevocably authorize NSCCL to provide NSDL with the details of the delivery
obligations, including the security details and the quantities to deliver for all the above settlement types
and any other details which may have to be given to NSDL with respect to the above subject. This
irrevocable undertaking will be effective from the date of this letter.

4. We understand that in the case of pari-passu shares and multiple ISINs, Auto DO instructions will be
generated for only the primary ISIN. We also understand that in case an IDO is given, the Auto DO
instructions for the same will be monitored by us and any changes desired to be made in the Auto DO
instructions will be done by us accordingly.

5. In case of shifting of our CM pool account in NSDL, we undertake to monitor the delivery instructions
including the Auto DO instructions generated by NSCCL. We understand that NSCCL will be generating
Auto DO instructions for a single depository account only, even if two CM pool accounts are operating at
the same time.

6. NSCCL will not be responsible for any short or excess shares being transferred from our depository
account with NSDL on account of Auto DO.

7. In case we fail to comply with the specified requirements of NSDL, resulting into short deliveries and
consequential close out, NSCCL will in no way be responsible.

8. We further hereby undertake to abide by such other or further guidelines / instructions as may be
communicated / devised by NSCCL from time to time.

Yours faithfully

Signature of

(Member/Partner of Partnership firm/Director of a Corporate Member)

149
150
Format of Letter requesting activation of account in Collateral Interface for Member (CIM) Application

Date:

The Manager

NSCCL - Collaterals Department

NSE Exchange Plaza

Mumbai - 400051

Dear Sir/ Madam,

Sub: Activation of account in Collateral Interface for Member (CIM) Application

We are interested in availing the facilities provided through the Collateral Interface for Member (CIM)
Application. We therefore request you to activate our account and provide us necessary access in the
said interface.

Please find below the necessary details as required:

S Particulars To be filled by the Member

No

151
1. Trading Member Code

2. Member Name

3. Segment for which application is being made

(Cash/F&O/CDS/All segments)

4. Contact Person (The account details will be

sent to this person)

5. Address for Communication with Pin Code

6. Phone Number with STD Code

7. Mobile number of contact person

8. Fax Number with STD Code

9. No of User Ids required

We hereby authorize NSCCL to act upon the instructions sent through the interface and we shall be
solely responsible for any errors pertaining to data entry from our end.

We would request you to advise us the account details allotted to us for this purpose at the above
mentioned address.

Yours sincerely,

Authorized Signatory

Name:

Designation

152
 Format of Letter requesting activation of administrator user in NSCCLs Clearing Interface System
(NCIS)

Date:

The Manager

NSCCL - Securities Department

NSE Exchange Plaza

Mumbai - 400051

Dear Sir/ Madam,

Sub: Activation of account in NSCCLs Clearing Interface System (NCIS)

We are interested in availing the facilities provided through the NSCCL’s Clearing Interface System
(NCIS). We therefore request you to activate our account and provide us necessary access in the said
interface.

Please find below the necessary details as required:

S Particulars To be filled by the Member

No

1. Trading Member Code

2. Member Name

3. Contact Person (The account details will be

sent to this person)

4. Address for Communication with Pin Code

5. Phone Number with STD Code

153
6. Mobile number of contact person

7. Fax Number with STD Code

We hereby authorize NSCCL to act upon the instructions sent through the interface and we shall be
solely responsible for any errors pertaining to data entry from our end.

We would request you to advise us the account details allotted to us for this purpose at the above
mentioned address.

Yours sincerely,

Authorized Signatory

Name:

Designation:

154
 Additional Segment

For existing trading members in Capital Market segment who are desirous of seeking
registration in F & O segment of the Exchange needs to follow the requirements as in Circular
No:NSE/MEM/2001/234, download reference no. NSE/MEMB/3090 dated December 31, 2001

o Existing member seeking additional WDM membership – formats

o Existing member seeking additional F&O trading membership – formats
o Existing member seeking additional F&O self clearing membership – formats
o Existing member seeking additional F&O clearing membership – formats

Further to Circular No: 648 with Download No: NSE/MEMB/11148 dated August 19, 2008, the
existing members can apply for additional membership in any of the categories of the
Currency Derivatives segment as follows:
 
o Existing member seeking additional trading membership in Currency Derivatives –
formats
o Existing member seeking additional trading and clearing membership in Currency
Derivatives – formats

  Change in Clearing Member affiliation

F&O Segment.

(Circular No. 297, download reference no. NSE/MEMB/3661 dated October 07, 2002)

Trading Members on the F&O segment intending to change their association/affiliation from
one Clearing Member to another in the F&O segment are required to submit the following
documents:

1. Letter from the Trading Member, requesting the change in affiliation as per Annexure
I
2. Letter from the disaffiliating / outgoing Clearing Member as per Annexure II
3. Letter from the affiliating / incoming Clearing Member as per Annexure III
4. Draft Clearing Member – Trading Member Agreement as per Annexure VIII A

Clearing Members undertaking such functions for every trading member are required to remit

155
 Interest Free Cash Security Deposit of Rs.2 lakhs and Collateral Security Deposit of Rs.8 lakhs
to NSCCL on behalf of each such trading member.

CDS Segment.

(Circular No. NSE/MEM/2008/653, download reference no. NSE/MEMB/11534 dated October

23, 2008)

Trading Members on the Currency Derivatives segment intending to change their

association/affiliation from one Clearing Member to another in the Currency Derivatives
segment are required to submit the following documents:

1. Letter from the Trading Member, requesting the change in affiliation as per Annexure
I
2. Letter from the disaffiliating / outgoing Clearing Member as per Annexure II
3. Letter from the affiliating / incoming Clearing Member as per Annexure III
4. Draft Clearing Member – Trading Member Agreement, Annexure VIII B

IRF on CDS Segment

Trading Members on the Interest Rate Futures on Currency Derivatives segment intending to
change their association/affiliation from one Clearing Member to another in the Currency
Derivatives segment are required to submit the following documents:

1. Letter from the Trading Member, requesting the change in affiliation as per Annexure
I
2. Letter from the disaffiliating / outgoing Clearing Member as per Annexure II
3. Letter from the affiliating / incoming Clearing Member as per Annexure III
4. Draft Clearing Member – Trading Member Agreement, Annexure VIII C
 

Trading Members / Clearing Members are requested to take note of the above and ensure its
due compliance accordingly.

  Telecom Connectivity

NSE uses TCP/IP protocol based Wide Area Network facilitating higher bandwidth of 2Mbps,
expansion and scalability.

In order to provide equal access to all the Trading Members spread over a wide geographical
area, the Exchange offers two forms of telecommunication connectivity viz

 VSAT (Very Small Aperture Terminal) –satellite based connectivity

 Leased Line-Terrestrial based connectivity

Trading Members are required to choose a scenario from the categories mentioned below in
order to apply for connectivity.

156
Key features of Category A, B, C and Category T type of connectivity

Particulars Category A Category B Category C Category T

Bandwidth 2 Mbps 2 Mbps 2 Mbps 2 Mbps

Interactive
messages per 40 messages 100 messages 200 messages Nil
second

Market Data
Yes No No Yes
Broadcast

20 user id's can be in any 50 user id's can be in any

combination for CM and
No of user
F&O segment and additional
id's
10 user id's can be availed
only for the CD segment.
combination for CM and 100 user id’s
F&O segment and additional including all Nil
10 user id's can be availed the segments.
only for the CD segment.

No of
5 2 2 2
scenario's

A1- Single VSAT.

A2-Single Leased Line.

C1-Single
T1- Single
Leased Line.
A3-Single Leased Line with B1-Single Leased Line. Leased Line.
VSAT as a Back-up.
Types of
T2-Dual
Scenario's C2-Dual
A4- Dual Leased Lines to B2-Dual Leased Lines to Leased Lines
Leased Lines
One or two POP's . One or two POP’s. to one or two
to One or two
POP’s.
POP’s.
A5- Dual Leased Lines and
VSAT as a back-up.
 

Formats

 Application for new scenario

 Application for shifting of scenario
 Application for cancellation of non-commissioned scenario
 Application for surrender of scenario
 Format of VSAT Undertaking
 Format of NOC from the owner of premises for VSAT
 Application for Change in Scenario
 Application for shifting of IDU of VSAT
 Application for shifting of ODU of VSAT
 Port II Activation of VSAT

157
  Undertaking for Activation of Port II of VSAT

Deposits & Costing 

Co-location

RELEVANT CIRCULARS

Download Reference
Date Subject
Number

NSE/MEMB/14222 04-Mar-2010 Co-location services at NSEIL premises

NSE/MEMB/14134 18-Feb-2010 POP at Cochin & Jaipur

NSE/MEMB/13599 3-Dec-2009 IP Connectivity for Category T (Tick by Tick)

NSE/MEMB/13539 25-Nov-2009 IP Connectivity for Category C (200 Messages/per second)

NSE/MEMB/13025 7-Sep-2009 POP at Rajkot

NSE/MEMB/12985 31-Aug-2009 Co location services at NSEIL premises

NSE/MEMB/11832 31-Dec-2008 Business Continuity Planning(BCP)/Disaster Recovery (DR)

NSE/MEMB/11821 30-Dec-2008 Sun Outage - Continuation of Trading

NSE/MEMB/11052 29-Jul-2008 Increase in number of User Ids in TCP/IP

NSE/MEMB/11042 25-Jul-2008 Application forms for connectivity on TCP/IP Technology

Application form for VSAT migration from X.25 protocol to TCP/IP

NSE/MEMB/10884 25-Jun-2008
protocol

NSE/MEMB/10833 13-Jun-2008 Migration from X.25 protocol to TCP/IP - Including costing

NSE/MEMB/10365 28-Feb-2008 Connectivity at Third Party Data Centre/Service Provider Location

In case of any query or clarification on connectivity, please contact us on

+91 22 26598249 or write to us on minward@nse.co.in 

Top

User ID / CTCL ID :

User ID

CTCL ID

158
User ID

(Circular No. 640, download reference no. NSE/MEMB/11052 dated July 29, 2008)

In view of the migration from X.25 protocol to TCP/IP based trading network. Members are requested
to note that the Exchange has reviewed the allotment of user ids per TAP as follows:

1. the maximum number of NEAT user ids that would be enabled per TAP for both the segments
of Capital Market and F&O is 20 user ids for 40 messages/per second line and 50 user ids for
100 messages/per second line. The member can specify the distribution of these user ids in
each of the segments (Capital Market and F&O) but should not exceed the maximum number
of 20 user ids for 40 messages/per second line and 50 user ids for 100 messages/per second
line per TAP id.

2. the maximum number of CTCL ids that would be enabled per TAP id is 2 ids per segment and
4 ids across the two segments of Capital Market and F&O.

Further the Exchange requirement of NCFM certification in Capital Market Segment would be
maintained as under:-

o In case of NEAT Terminal: - Every Approved User is linked to a branch manager and under
each branch for every five NEAT user there is a requirement of one valid NCFM certification.
The requirement of valid NCFM certification shall continue to be applicable for Corporate
Manager ID.

o In case of CTCL Terminal: - In case of CTCL Users, each CTCL location is identified as a branch
(refers to the Branch ID in the 12 digit CTCL ID) and for every 5 CTCL Users or part thereof
(in that branch), 1 User should be NCFM certified and shall continue to have valid certification.

The existing norm on NCFM for F&O would continue that is for every approved user there is a
requirement of one valid NCFM certification.

Further Circular No. 651 download Reference No. NSE/MEMB/11421 dated October 3, 2008 in regard
to the number of user ids in Currency Derivatives Segment is as follows:

 All trading members are informed that in view of launch of trading in Currency Derivatives,
Exchange would enable 10 additional user ids per TAP IP and three additional user-ids on X.25
protocol.

 The maximum number of CTCL ids that would be enabled per TAP IP is 2 ids for Currency
Derivatives Segment.

Members may please note that for allotment of user IDs in the Currency Derivative Segment, NISM
(National Institute of Securities Market) certification of NSE, BSE or MCX-SX would be applicable as
per circular no. NSE/MEMB/12421 dated May 20, 2009.

Members can apply for new/additional user ids, shifting, dual locking and disablement on IP based
technology through ENIT. (Path for User ID Application – Login > Exchange > User Requests)

CTCL ID

159
a. Upload of CTCL data

(Circular No. NSE/MEM/2006/547, download reference no. NSE/MEMB/7913 dated September 25,
2006)

In order to enhance the operational effectiveness in uploading the CTCL data, the Exchange had
introduced an ‘Integrated CTCL Database’. This database uses ENIT (available at
https://www.enit.co.in), an internet enabled interface, for uploading of the CTCL data by the
members. This has eliminated the need for uploading the details of CTCL terminals in two different
databases namely ‘TERM CTCL’ and ‘MEM CTCL’.

In this regard, the procedure for uploading fresh CTCL data to the Exchange is as follows. Procedure.

It may be noted that with effect from October 9, 2006, only the Integrated CTCL Database has been
operational. Accordingly, the details of all the activations and deactivations are being uploaded
through this database only with effect from October 9, 2006.

It is reiterated that the trading terminals of the member shall be located only at its registered office /
main office / branch office or at the office of its registered sub-broker (only in Capital Market
segment) or at the office of its approved Authorised Person (only in Futures and Options Segment). In
order to capture the location of the CTCL terminal, a new field has been added to the database
wherein the member is required to mandatorily update the status of the office where the terminal is
located.

Failure to upload the details, by a member, if observed shall render such terminals unauthorized and
shall consequently attract disciplinary action as prescribed by the Exchange from time to time.

b. Levy of non uploading charges of CTCL details in ENIT

(Circular No. 587, download reference no NSE/MEMB/8754 dated April 2, 2007). It has been observed
that some members do not upload the complete details of CTCL IDs in integrated CTCL database
through ENIT, which results to mismatches between CTCL IDs uploaded in ENIT & trade order logs.

Trading members are requested to ensure upload of complete CTCL details in ENIT at their end.
Failure to do so will attract non uploading charges @ Rs.100/- per day per CTCL ID mismatch. Here it
is clarified that every CTCL ID should be reported in ENIT whether they are used for admin, trading,
testing or view purpose.

In this regard, please note that in case any CTCL ID is charged continuously for two months or any
members is charged continuously for three months, such members would be referred to Disciplinary
Action Committee for appropriate action, if necessary. Further, please note that non reporting of CTCL
IDs which are used for admin, testing or view purpose will be considered as violation during
inspection.

For further information kindly contact Ms. Amla Kamat Ghanekar & Mr. Yogesh Deshmukh on 022-
26598249.

Continuing Membership

Compliance with respect to Trading Members

160
 Code of Advertisement

Upgradation of Membership

Merger / Amalgamation of Membership

Transfer of Membership

Change in Name

Multiple Memberships

Suspension of Membership & Expulsion

Declaration of Default

SEBI Turnover Fees

Stamp Duty

SUB BROKER

a. Registration of Sub Broker

(Circular No. 637 download Ref. No. NSE/MEMB/10917dated June 30, 2008)

Trading Members are requested to note the new procedure applicable for sub broker registration
applications from July 1, 2008 and this circular is in replacement to the Exchange Circular reference
number: NSE/MEMB/9421 dated August 31, 2007.

1. Members would continue to submit the sub broker registration applications electronically
through ENIT (go to sub broker master and click on ‘Fresh’) and ensure that the physical
documents are received by the Exchange within 7 days from submission of application in ENIT.

2. In case of non receipt of physical documents by the Exchange within 7 days from submission
of application in ENIT, the Reference request number would be rejected in ENIT.

3. Members would be informed through letter and Bill vide FTP to make available in its Exchange
Dues Account the processing fee amounting to Rs. 2,000/- plus the applicable service tax for
every sub broker registration application. Alternatively, the status of the sub broker
registration application would be ‘Documents Received’ in ENIT.

4. In case of any deficiency in the application, the application form would be returned to the
member.

5. In case the member desires to resubmit the same application vide ENIT after rectifying the
deficiencies then the member needs to go to the sub broker master and click on the ‘Resubmit’
button. The member then needs to enter the ‘ENIT reference request number’ and the details
of that sub broker registration application would be displayed. The member needs to check

161
 and update the details as required and then submit the same to the Exchange. In such cases
of resubmission, the Exchange would not charge the sub broker registration processing fee.

6. In case of complete applications, members would be informed through letter in FTP regarding
the applications complete in all respect and for which the requisite SEBI registration fees
should be made available in their Exchange dues account.

7. The Exchange would start collecting the SEBI registration fees through debiting the Exchange
dues account of the members for sub broker applications which are processed and complete in
all respect from the very next day of intimation to the member.

8. In case the amount of SEBI registration fees is not debited from the member’s Exchange Dues
Account within 10 days from the date of intimation to the member, then the respective sub
broker applications would be returned to the member. In case of resubmission of such
applications, the Exchange would process the applications from point 1 considering the
application as a fresh application.

9. Status of applicants for which the applicable SEBI registration fees has been collected and
recognized by the SRC, would be informed to the members by way of display of ‘Date of
recognition’ through ENIT.

10. For cases where applicants is not recognized by SRC or the sub broker registration application
has been withdrawn by the member, then the Exchange would not refund the SEBI
registration fee collected but such fees would be adjusted towards subsequent sub broker
registration application by the same member.

11. After recognition granted by SRC, status of sub broker applications uploaded by Exchange to
SEBI would be informed to members by way of display of ‘Upload reference number’ and
‘Upload date’ through ENIT within 3 days of upload by Exchange to SEBI.

12. In case the member applies for withdrawal of the sub broker registration application after its
recognition by SRC or for cancellation of the application after it is registered with SEBI, then
the member would need to procure the refund of the SEBI registration fees directly from SEBI.

13. On receipt of the sub broker registration certificate from SEBI, the details of registration
number and registration date would be made available to the member through ENIT. The
physical sub broker registration certificate would be forwarded to the member for onward
dispatch to sub broker.

14. Partial or the total amount collected towards SEBI sub broker registration fees would not be
adjusted towards any other dues payable to the Exchange.

15. In case the member applies afresh for SEBI registration for sub brokers applications returned
to the member who have been derecognized since they were unable to provide necessary
clarification as sought by SEBI within the time stipulated by SEBI, then the Exchange would
process such applications from point 1 as given in this circular.

Further, the members need to attach the scanned copies and send the physical copies of the following
documents as of the latest date along with the sub broker registration application form:

a. Proof of address of the applicant entity (trade name) – This is a mandatory field and the
address on the proof needs to match with that of the application. Only the latest Telephone

162
 Bill, Electricity bill, valid ration card, valid Passport, valid Driving License and bank statement
of the last one month from a Nationalised Bank is acceptable.

b. Proof of experience certificate – This is a mandatory field only in cases where qualification of
Individual/Partner/Director is less than HSC. Experience of atleast two years in the capacity of
employee/dealer in capital market in the name of Individual/Partner/Director is only
acceptable.

c. Documents to be submitted along with print of ENIT application - Formats

d. Model agreement between stock broker and sub broker - Format

b. Change in affiliation

(Circular No. 625 with download ref . NSE/MEMB/10577 dated April 10, 2008)

SEBI vide its circular dated December 20, 2007 (ref no.MIRSD/DR1/MK/CIR-15/111600/07) has
intimated to the Exchange the procedure to be followed for change in affiliation of Sub-brokers from
one member to another member of the Exchange. The procedure to be followed is attached in
Annexure 1.

The set of documents required to be submitted to the Exchange is attached in Annexure 2

c. Sub Broker Annual Fees

(Circular No. 606 download Ref. No. NSE/MEMB/9437 dated September 4, 2007)

Members are kindly requested to take note and accordingly forward sub broker annual fees, as per
Schedule III of the SEBI (Brokers and Sub-Brokers) Regulations, 1992.

d. Cancellation of Sub Broker

(Circular No. 428 download ref. No. NSE/MEMB/5548 dated October 26, 2004)

The documentary requirements relating to surrender of SEBI registration of sub-brokers are given
below:

1. Request from Trading Member for surrender of registration of sub-broker.

2. Application from Sub-broker for surrender of registration, in the format given as Annexure.
Please note that the said format includes a clause requesting to dispense with the procedure
laid down in the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty)
Regulations, 2002 as amended vide SEBI (Procedure for Holding Enquiry by Enquiry Officer
and Imposing Penalty) (Second Amendment) Regulations 2004 notified on September 2,
2004. The said clause may be retained while making the application at the option of the
applicant sub-broker.

163
 3. Copy of public notification intimating the investors/general public of the surrender, issued in
the local newspaper where the sub broker’s registered office, Head Office/Corporate office is
situated and another in English daily news paper with wide circulation.

4. SEBI registration certificate of the sub-broker in original. In case the original certificate is lost,
an affidavit to SEBI in this regard by the concerned trading member and the sub-broker
separately on stamp paper of appropriate value, duly notarised.

Trading members are advised to take note of the above and ensure that the aforesaid documents are
enclosed while forwarding the surrender requests in respect of the sub-brokers affiliated to them.

e. Withdrawal of sub-broker application

Trading Members wanting to withdraw the sub-broker application already submitted to the Exchange
are requested to submit the withdrawal application in the format attached.

f. Procedure for Change in Constitution /Status of registered Sub-Broker

As per SEBI Circular no. 439 (download ref no. NSE/MEM/5677) dated December 21, 2004 in case of
change in status and constitution of Sub-brokers the Members are required to apply to the Exchange
for prior approval of SEBI. Upon receipt of prior approval of SEBI, Trading Members have to apply for
cancellation of registration of the Sub-broker who is undergoing change in status and/or constitution
and simultaneously for fresh registration of the Sub-broker.

Documents to be submitted seeking prior approval:

1) Covering letter from the Trading Member on its letterhead (duly stamped and signed by the
authorised signatory) seeking prior approval of the Exchange for the change in status and/or
constitution of its Sub-broker providing the following details:
i) Confirmation that there are no any complaints /arbitration /disciplinary proceeding /investigation
/inquiry pending against the Sub-broker with the Exchange,
ii) Confirmation that there in no outstanding fees payable to SEBI for any of their sub-brokers on any
Stock Exchange,
iii) Granting of approval by the trading member for the change in status /constitution of the specified
registered sub-broker from one form to another (Proprietorship, Partnership Corporate and
Reconstitution of Partnership.)

2) Letter from Sub-broker (duly signed and stamped) applying to the Trading Member for the change
in status and/or constitution as the case may be providing the following details:
i) Reason for change in status/constitution,
ii) Confirmation that they have no pending dues payable to the Exchange and SEBI,
iii) Confirmation that there are no any complaints /arbitration /disciplinary proceeding /investigation
/inquiry are pending against the sub-broker with the Exchange, pending against them,
iv) Undertaking that they would be jointly / severally liable for all liabilities / obligations (including
monetary penalties) for violations, if any, of the provisions of the SEBI Act, 1992 and the SEBI (Stock
Brokers and Sub-brokers) Rules and Regulations, 1992 that have taken place before the change in
status and constitution.
v) Details of current and proposed list of directors/partners and shareholding pattern/sharing ratio of
the Sub-broker.

164
Documents to be submitted upon receipt of prior approval:

1) Covering letter from the Trading Member on its letterhead (duly stamped and signed by the
authorised signatory) has to be submitted with subject line ‘Change in Status and/or Constitution of
Sub-broker, ___________(name of the sub-broker) while applying for cancellation and fresh
registration of sub-broker upon receipt of prior approval of SEBI.

2) Application for cancellation of sub-broker registration as per Exchange Circular No. 428 (download
ref. no. NSE/MEMB/5548) dated October 26, 2004.

3) Application for fresh registration of sub-broker registration as per Exchange Circular No. 637
(download ref. no. NSE/MEMB/10917) dated June 30, 2008.

  Authorised Person

Definition of Authorised Person

As per Circular No. 702, download Ref no. NSE/MEMB/13429 dated Nov 9, 2009 an
Authorised Person is
"Any person-individual, partnership firm, LLP or body corporate-who is appointed as such by a
stock broker (including trading member) and who provides access to trading platform of a
stock Exchange as an agent of the stock broker."

Eligibility Criteria

1. An individual is eligible to be appointed as an authorised person if he:

o is a citizen of India;

o is not less than 18 years of age;

o Has not been convicted of any offence involving fraud and dishonesty;

o Has good reputation and character;

o Has passed at least 10th standard or equivalent examination from an institution

recognized by the government; and

o Has the certification, as applicable to approved user/sales personnel of the respective

segment and undertakes to continue to have valid certification thereafter.

2. A partnership firm, LLP or a body corporate is eligible to be appointed as authorised person

o If all the partners and directors, as the case may be, comply with the requirement

165
 contained in clause no.1 above.

o The object clause of the partnership deed and the Memorandum of Association
contains a clause permitting the person to deal in securities business.

3. The person shall have necessary infrastructure like adequate office space, equipment and
manpower to effectively discharge the activities on behalf of the Trading Member.

Conditions of Appointment

The following are the conditions of appointment of an authorised person:

1. The Trading Member shall be responsible for all acts of omission and commission of
the authorised person.

2. All acts of omissions and commission of the authorised person shall be deemed to be
that of the Trading Member.

3. The authorised person shall not receive or pay any money or securities in its own
name or account. All receipts and payments of securities and funds shall be made in
the name or account of a Trading Member.

4. The authorised person shall receive his remuneration-fees, charges, commission,

salary etc for his services only from the Trading Member and he shall not charge any
amount from the clients.

5. A person shall not be appointed as a authorised person by more than one Trading
Member.

6. A partner or director of an authorised person shall not be appointed as an authorised

person with the Exchange.

7. The Trading member and authorised person shall enter in to written agreement(s) in
the form(s) prescribed by the Exchange. The agreement shall inter-alia cover scope of
the activities, responsibilities, confidentiality of information, commission sharing,
termination clause, etc.

Procedure for Appointment

Trading members desirous of appointing Authorised Persons are advised to note that approval
of the Exchange is required for appointment of an Authorised Person.

An applicant has to apply through ENIT via link https//:.enit.co.in.> Exchange > Authorised
Person, for each segment i.e Capital Market, Futures & Options and Currency Segment along
with the following documents:-

1. Physical copy of request submitted through ENIT along with the prescribed formats

166
 for appointment.

2. Copy of the agreement between the Trading Member and the Authorised Person.

3. Copy of NCFM/BCDE or NISM certificate as applicable.

It may be noted that approval for appointment of Authorised Person is subject to receipt of
complete set of documents by the Exchange. Trading members are required to ensure that
the Authorised Person appointed by them comply with the requirement relating to their
appointment on an ongoing basis.

Change in Constitution/Status

Trading members who want to change the constitution/Status of any of their Authorised
Persons from Individual to Partnership Firm/LLP/Corporate or from Partnership Firm/LLP to
Partnership Firm/LLP/Corporate needs to submit an application in the prescribed format.

Withdrawal/Cancellation of Appointment

Withdrawal given to an authorised person may be withdrawn by the Exchange if:

1. On receipt of a request to that effect from the stock broker concerned or the
authorised person, subject to compliance with the requirements prescribed by the
Exchange, or
2. On being satisfied that the continuation of authorised person is detrimental to the
interest of investors or securities market or the authorised person at a subsequent
date becomes ineligible under any of the clauses under the eligibility criteria
mentioned above.

Trading Members, who want to withdraw/cancel the appointment of any of their Authorised
Persons, needs to give an application for the same in the prescribed format.

Formats

 Checklist for Appointment of Authorised Person Application

 Checklist for Cancellation of Authorised Person Application
 Application for Appointment of Authorised Person
 Application for cancellation of Authorised Person
 Change in Status and constitution of Authorised Person
 Agreement format between the Trading Member and Authorised Person

RELEVANT CIRCULARS

167
 Download Reference
Date Subject
Number

3-Dec- Procedure to be followed for appointment and cancellation of

NSE/MEMB/13601
2009 Authorised Persons

9-Nov-
NSE/MEMB/13429 Market Access through Authorised Persons
2009

In case of any query or clarification on Authorised Person, please contact us on +91 22

26598249 or write to us on minward@nse.co.in.

Home > Members > ENIT

  ENIT

a. User Management

Circular No. 568 with download reference no. NSE/MEMB/8364 dated January 12, 2007)

As you may be aware, the Exchange has introduced a new facility called ‘ENIT’ – Electronic
NSE Interface for Trading Members, which is fully electronic, internet enabled application.
This interface is expected to provide a two way mechanism for exchange of information for
various processes between the trading members and the Exchange. Currently there is one
login id which is given to the User (which is Corporate manager id for Trading and clearing
members in Capital Market and F&O, Corporate manager id + Code for Professional Clearing
member and Privelege id + Code for Wholesale Debt Market segment)

With the invention of various utilities through ENIT, we have been receiving various
representations from members to provide different login ids for different utilities since the
information cannot to be shared between different users using different utilities.

Taking into view the same, to facilitate the members, we intend introducing a User
Management tool in ENIT wherein the Current user (to be termed as the Admin User of the
members) would be allowed to create and manage 10 Users under it. These Users can be
created by the Admin User, the password can be reset by the Admin Users of the members
and also the Users can be deleted by the Admin Users.

The path for the same would be ENIT>Members Login>Users. The User name created will by
default be prefixed with the 5 digit trading member SEBI code. Members can input 7
characters after the 5 digit code as their User Id.

Eg:- SEBI Code 12345, 7 character User name desired – 1234567

In this case the user name would be “123451234567”.

Please note that the User name should be more than 1 digit (Alphanumeric) and can be upto
7 digits.

The management (creation, password reset and deletion) of the User ids created will be done

168
by the Admin User of the Trading member who is currently using the ENIT login id.

b. Grants of rights and privileges to users in ENIT

(Circular no. 639 with download reference no. NSE/MEMB/10977 dated July 11, 2008)

In regard to creation of ten sub-users in ENIT for different utilities, members have been
representing to the Exchange that due to the various enhancements in ENIT, they would
prefer to provide limited rights and privileges to their sub-users accessing ENIT.

The Exchange after taking into consideration the member’s representation has now provided
a utility in ENIT that would enable the main user of the member to provide limited rights and
privileges to their sub-users accessing ENIT.

The path for the same is ENIT>Members Login>Users. Against each sub-user a link called
permissions would be displayed. On clicking permissions, a screen “Assign Menu Permissions”
wherein all the existing modules in ENIT would be displayed. The main user would have an
option to grant access to specific or all modules by ticking on the modules. The screens are
attached in Annexure I for your reference.

c. Updation of member contact details

Vide circular no. 618 with Ref. No. NSE/MEMB/10257 dated February 13, 2008 the Exchange
informed that the Exchange displays certain details relating to Members on its website
www.nseindia.com under the Icon “Members” in the “Member Directory” folder. It is noticed
that the members are not informing changes to corporate information which results in display
of incorrect information to general investors at large.

Further, Exchange is also proposing to enhance the contents of the Directory to include all
locations of members where the trading terminals of the member is located along with the
details of the person in charge at these locations and contact numbers. It would be very
important to disseminate the correct information to investors. In view of this, members are
requested to report on an ongoing basis, the changes in key information to Exchange
immediately so that the particulars could also be updated by the Exchange on a continuous
basis.

In order to ensure accuracy of the information, Exchange would be downloading various

existing information which is proposed to be put up on the website for review by Members. In
case any discrepancy is noticed, members may please provide the correct information so that
the database could be updated with the correct information.

The format in which particulars would be displayed on website is attached herewith for
immediate reference of the Members in Annexure 1.

d. Digital Signature Certificate for Members

(Circular No. NSE/MEM/2006/556, download reference no. NSE/MEMB/8109 dated November

15, 2006)

The Exchange is also in process of servicing the requests of trading members like Application
for VSATs / Leased Lines, Application for Sub-brokers and Change in Shareholding / Directors,
etc through ENIT. This would make interaction and tracking of the status more transparent

169
and reliable. It is proposed to accept all aforesaid requests only through ENIT after successful
implementation of the digital signature and to avoid receipt of applications in hard form.

In our continuous endeavor to ensure smooth flow of communication with our members and
make your effort hassle free, the Exchange has decided that it would provide every member
with Class 2 digital signature certificate, legally valid under the Indian IT Act 2000.

In this regard, the members are requested to note the following:-

1. The member would be required to send a request for digital signature to be allotted to
one designated Director (already approved by the Exchange/SEBI) involved in the day
to day activities. Kindly note that signature once obtained for a specified designated
director cannot be transferred in favor of any other person. In the event of
resignation / cessation of service of such a designated director on whose behalf digital
signature is obtained by the member through the Exchange, the member would have
to apply for cancellation / revocation of the digital signature and apply afresh for
another digital signature in the name of another designated director, in which case,
the cost would be borne by the member.
 

2. The Exchange would bear the cost of providing one digital signature per member with
a validity period of two years.
 

3. All the members are requested to go through Process guide as provided in Annexure
1 and submit the application form as per Annexure 2 on or before December 10,
2006.
 

4. After submission of application form in hard copy along with the relevant documents,
NSE.IT would issue Token Redemption Number and a CD Serial Key which will be
forwarded to the email address mentioned in the application form of the member.
Subsequently, the member has to send a request through online enrolment. In this
regard, please refer to Annexure 3.
 

5. The digital certificate issued will have a validity period of two years from the date of
issuance and needs to be renewed by the member before the expiry of the term.
 

6. The cost of renewing the digital certificate (obtained through the said scheme) will be
Rs.1000/- + taxes as applicable, which shall be required to be borne by the member.
 

7. Members are advised to directly communicate with NSE.IT for cancellation /

revocation / renewal of the digital certificate. Members need to take utmost care and
caution to ensure that the digital signature obtained by them on behalf of their
designated director are not misused, stolen etc since the liability and responsibility for
the usage shall solely vest with the member entity.

For any query related to submission of documents by a member, processing of

170
 application, downloading certificate etc. members may contact Ms. Sneha Mody on
022-28277741.

Further vide circular no. 628 with download ref no. NSE/MEM/10693 dated May 13,
2008 Members are intimated to have atleast one digital signature to sign the
application through ENIT digitally for various processes/functions.

e. Upload of Direct Market Access (DMA) User Ids data to the Exchange

(Circular No. NSE/MEM/2008/640, download ref no. NSE/MEMB/11019 dated July 21, 2008)

As per the Circular ref no. NSE/CMTR/10679 dated May 09, 2008 and NSE/FAOP/10680 dated
May 09, 2008, members are required to provide details of all user-ids activated / deactivated
by the member for DMA facility to the Exchange.

Trading Members are requested to report the details of DMA IDs to the Exchange through
ENIT (available at https://www.enit.co.in) in the following manner:

1. Upload the details of NEAT Id when the same is enabled for DMA facility. Instructions
given in Annexure – 1.

2. Upload the DMA User Id with complete details of client, when DMA User Id is
activated / deactivated. Instructions given in Annexure–2.

For queries, if any, you may contact Ms. Amla Kamat Ghanekar & Mr. Yogesh Deshmukh  at
022 – 26598249.

f. Status Report

Vide circular no. 636 with download Reference No. NSE/MEMB/10910 dated June 30, 2008
trading members were informed that to facilitate the members for submitting online requests
for Status Report, the Exchange has provided a facility to accept these requests through ENIT
(Electronic NSE Interface for Trading Members) w.e.f. July 01, 2008. Please note that no
physical request for Status Report shall be accepted after June 30, 2008.

In this regard, members are requested to note the following procedure:

 The member needs to login through https://www.enit.co.in with his corporate

manager user id of the Capital Market segment, The detailed manual for submitting
the request has been enumerated in Annexure 1.

 On submission of the request through ENIT, a unique request reference no. will be
generated which has to be used for future correspondence (will also be displayed in
Login>Exchange>Status Report>Status Report Details).

 The member would have to make available in its Exchange Dues account an amount
of Rs 1000 /- for every Status report request. The member would be intimated about
the same vide letter sent through File Transfer Protocol (FTP). (As per Circular no. ref.
no. 634 download ref. no.10846 dated June 17, 2008).

171
  The member’s Exchange Dues Account would be debited on the day the unique
request reference no. is generated in ENIT.

 Members will not be able to submit multiple requests on the same day in ENIT for the
same “Purpose” and same “As on Date”. Further, members will not be able to submit
requests in ENIT for a future date.

For any further queries, you may contact Ms. Molly D’Mello on 26598130 (direct) or through
Board line 022-26598100-14 (Extn. 3006).

Top

Surrender of Membership

Circular no. 658 with downlof reference no. NSE/MEMB/11755 dated December 11, 2008)

Trading members are hereby informed that the norms for surrender of membership have been
revised.

1. A Trading Member desirous of surrendering its membership of the Exchange shall send its
request in writing in the prescribed format as per Annexure III (A).

2. Trading Members shall, before submission of an application for surrender of membership, be

required to comply with all the Pre-requisites for application of surrender as per Annexure II.

3. In respect of an application for surrender from a Trading Member,

o who has been suspended/ disciplinary action taken by the Exchange /SEBI,

o in respect of whom any investigation/ action consequent to a default has been initiated
by the Exchange /SEBI,

o who is falling within the category of “associates” as defined by SEBI,

o who owes dues to the Exchange/ NSCCL,

o against whom claims by investors of value of Rs.10 lakhs or more are pending or any
claim for any amount is pending for a period more than 6 months,

o against whom any other claim /complaint is pending which, in the opinion of the
Exchange/ NSCCL, needs to be resolved by the concerned trading member,

o whose turnover fees liability to SEBI is still outstanding,

The Exchange shall have absolute discretion in dealing with such applications and if it decides
to process/ accept the surrender application of such trading member, it may impose additional
terms and conditions as it may deem fit.

172
4. An application for surrender shall not be allowed to be withdrawn unless permitted by the
Exchange at its discretion. However, once the request for surrender of trading membership is
approved, whether communicated to the trading member or not, no withdrawal of surrender
application will be permitted.
 

5. No trading member, who has surrendered its trading membership, their partners (in case of
partnership firm) and/ or dominant shareholders (in case of corporates) shall be eligible to be
readmitted to the Trading Membership of the Exchange in any form for a period of one year
from the date of cessation of trading membership (i.e. from the date of cancellation of
registration from SEBI).

6. The application of surrender of trading membership is subject to fulfillment of the following

conditions :

o Submission of original SEBI registration certificate(s) on all segments on which the

trading member is registered.

o Submission of proof of payment of SEBI turnover fees.

o Submission of an undertaking/ declaration that no investigation/Enquiry/Disciplinary

action pending against the trading member or any of its shareholders/ directors as per
Annexure III (B).

o Submission of details of Directors and shareholders (as per Annexure III (D) and
Annexure III (E)) as on date of surrender application.

7. Penal charges, the interest on dues and late submission charges to the Exchange and/ or
NSCCL in respect of such trading member shall be levied up to and including the date on
which such dues/ interest/ charges are paid remitted to or appropriated /adjusted by the
Exchange / NSCCL.

8. In case, a Trading Member desires to withdraw the application for surrender and the Exchange
in its discretion approves the same in writing, the application and levy of annual subscription,
interest and penal charges shall be as if the Trading Member had not applied for the surrender
of trading membership. All the costs related to the installation of new VSAT(s) will also be
borne by the concerned Trading Member.

9. A notice to public by way of a public notification in newspapers shall be made by the

Exchange. The time period (from the date of public notification) given to investors, public, etc.
to lodge claims against the surrendering trading member will be as follows:

o Trading Member Category Duration of Public Notification

o Trading members whose applications are with SEBI for registration, are SEBI
registered but not enabled, enabled but have not traded at all No public notification

o Trading members who have traded during last 12 months preceding the date of receipt
of surrender application 2 months

173
o Trading members who have not traded during last 12 months preceding the date of
receipt of surrender application 1 month

o Trading members who have not traded during last 24 months preceding the date of
receipt of surrender application 15 days

 A letter shall be sent to SEBI seeking pending dues, if any, from member.

 On the expiry of period for receipt of investor claims and on receipt of intimation of
dues amount, if any, from SEBI, the total amount payable by the member shall be
appropriated against Trading Member’s deposits available with the Exchange / NSCCL
and the Trading member will be intimated accordingly. Incase the amount payable
exceeds the deposits, the trading Member would be intimated to bring in the requisite
amount within 21 days of intimation. Upon the failure of the member to do so within
21 days of intimation, the case shall be referred to the relevant authority for further
action.

 Upon the application for surrender being approved, the Exchange shall notify to all the
Trading Members the fact of such approval. The concerned Trading Member, whose
application has been approved, shall also be accordingly informed and also intimated
of the terms and conditions subject to which their surrender has been approved.

 On receipt of confirmation of cancellation of registration from SEBI, the deposits shall

be refunded to the member after adjustments of dues, if any.

 Upon acceptance/ approval of surrender of trading membership as aforesaid, the

concerned Trading Members shall not be entitled to any rights or privileges accorded
under the Bye-Laws, Rules and Regulations of the Exchange/ NSCCL, but shall
continue to be liable to meet their liabilities/obligations under the Bye-Laws, Rules and
Regulations of the Exchange/NSCCL.

 A Trading Member, whose public notification has been issued, has an option to seek
substitution of the interest-free security deposits, details of which are as follows :

 Cash component of IFSD may be substituted with the FDRs.

o Under this scheme, their IFSD would be converted to FDRs with the Clearing Bank of
the surrendering trading member in multiples of 5 FDRs of Rs 1 lakh, one FDR of Rs. 5
lakhs and one FDR for the remaining amount of deposits with the minimum retention
of at least Rs.5 lakhs in cash with the Exchange/ NSCCL. The duration of the FDRs
would be six months.

o Trading members desirous of availing the said facility are required to submit their
request as per Annexure III (C) which shall be submitted along with their application
for surrender.
 

o A facility to substitute the IFSD with Bank Guarantees issued by one of the bankers
approved by the Exchange/NSCCL is also available to the trading members.

In either case, (i.e. substitution of cash component of the IFSD with FD/BG), a

174
 minimum deposit component of Rs.5 Lakhs in cash form will be retained by the
Exchange/ NSCCL in order to meet any dues / obligations falling due immediately.

o Refund of any part component of the deposits is subject to the Trading Member :

o Making payment to SEBI of all the turnover fees, interest payable thereon etc. as may
be applicable to such trading members in respect of all the segments they have been
admitted to.

o Obtaining No Dues Certificate from SEBI.

o Redressing, to the satisfaction of the Exchange, all investors’ complaints and other
grievances pending against the trading member.

o Making, in respect of arbitration proceedings, suitable arrangements to the satisfaction

of the Exchange so as to meet any obligation that may arise out of awards that may
be made against them.

The release/ refund of any component/ portion of a trading member’s IFSD or any other
monies owing to a surrendering trading member shall be made through the Trading Member's
account with their Clearing Bank. As an alternative, refund may be made to any another bank
account of the trading member provided they furnish a No Objection Certificate from their
Clearing Bank.

o FDRs/ Bank Guarantees furnished by the Trading Member in connection with surrender
of trading membership shall be returned to the Trading Member on the receipt of
confirmation of cancellation of registration from SEBI provided there are no un-
discharged obligations on account of the trading member or after adjusting such
liability from the proceeds of the FDR or through invocation of Bank Guarantee unless
adequate money is deposited against such outstanding liability.

o Upon a Trading Member, whose surrender application has been received / approved by
the Exchange, being subsequently declared a defaulter/ expelled by the Exchange, all
the process applicable to that of a surrendered trading member shall cease ipso facto
and the relevant process pertaining to a defaulter/ expelled trading member shall
forthwith commence/ apply.

o Cessation of membership consequent upon surrender will become final and effective
after refund of deposits provided all the terms and conditions stipulated by the
Exchange/NSCCL are complied with in its entirety. Till cessation, a Trading Member
whose application for surrender has been approved shall be subject to all the terms
and conditions set forth herein or as may be stipulated/ decided in future from time to
time. Approval of surrender of trading membership shall remain conditional upon due
compliance by the concerned Trading Member with all their obligations under the
Rules/Regulations/Bye-laws of the Exchange/NSCCL, and circulars issued there under,
including arbitration awards and valid investors/ other grievances/claims against them.

o The Exchange, at its sole discretion, may waive, add, modify or relax one or more of
the above requirements wherever it feels appropriate.

175
 NSCCL

The National Securities Clearing Corporation Ltd. (NSCCL), a wholly owned subsidiary of NSE,
was incorporated in August 1995. It was set up to bring and sustain confidence in clearing
and settlement of securities; to promote and maintain, short and consistent settlement
cycles; to provide counter-party risk guarantee, and to operate a tight risk containment
system. NSCCL commenced clearing operations in April 1996.
 
NSCCL carries out the clearing and settlement of the trades executed in the Equities and
Derivatives segments and operates Subsidiary General Ledger (SGL) for settlement of trades
in government securities. It assumes the counter-party risk of each member and guarantees
financial settlement. It also undertakes settlement of transactions on other stock exchanges
like, the Over the Counter Exchange of India.

NSCCL has successfully brought about an up-gradation of the clearing and settlement
procedures and has brought Indian financial markets in line with international markets.

NSCCL, The Organisation

The National Securities Clearing Corporation Ltd. (NSCCL), a wholly owned subsidiary of NSE,
was incorporated in August 1995. It was the first clearing corporation to be established in the
country and also the first clearing corporation in the country to introduce settlement
guarantee.

It was set up with the following objectives:

 to bring and sustain confidence in clearing and settlement of securities;

 to promote and maintain, short and consistent settlement cycles;
 to provide counter-party risk guarantee, and
 to operate a tight risk containment system.

  NSCCL commenced clearing operations in April 1996. It has since completed more than 2400
settlements (equities segment) without delays or disruptions.

National Securities Clearing Corporation Limited First Indian Clearing Corporation to

get rated

CRISIL has assigned its highest corporate credit rating of ‘AAA’ to the National Securities
Clearing Corporation Ltd (NSCCL). 'AAA' rating indicates highest degree of strength with
regard to honouring debt obligations. NSCCL is the first Indian Clearing Corporation to get
this rating. The rating reflects NSCCL’s status as Clearing Corporation for NSE, India’s largest
stock exchange. The rating also factors in NSCCL’s rigorous risk management controls and
adequate settlement guarantee cover.
 

176
 Products & Services

Clearing & Settlement

Guarantee
 
Risk Management

Corporate Bonds

Clearing & Settlement

NSCCL carries out the clearing and settlement of the trades executed in the equities and
derivatives segments of the NSE. It operates a well-defined settlement cycle and there are no
deviations or deferments from this cycle. It aggregates trades over a trading period, nets the
positions to determine the liabilities of members and ensures movement of funds and
securities to meet respective liabilities.
 
NSCCL has empanelled 13 clearing banks to provide banking services to trading members and
has established connectivity with both the depositories for electronic settlement of securities.

It also undertakes settlement of transactions on other stock exchanges like, the Over the
Counter Exchange of India.

Guarantee

NSCCL assumes the counter-party risk of each member and guarantees settlement through a fine-
tuned risk management system and an innovative method of on-line position monitoring.

A large Settlement Guarantee Fund provides the cushion for any residual risk. It operates like a self-
insurance mechanism where members contribute to the Fund. In the event of failure of a trading
member to meet settlement obligations or committing default, the Fund is utilised to the extent
required for successful completion of the settlement. This has eliminated counter-party risk of trading
on the Exchange. As a consequence, credit risk no longer poses any threat in the market place. The
market has full confidence that settlement shall take place in time and shall be completed irrespective
of default by isolated trading members.

A separate Settlement Guarantee Fund is maintained for the Futures & Options segment.

Risk Management

A sound risk management system is integral to an efficient clearing and settlement system. NSE
introduced for the first time in India, risk containment measures that were common internationally but
were absent from the Indian securities markets.

177
NSCCL has put in place a comprehensive risk management system, which is constantly upgraded to
pre-empt market failures. The Clearing Corporation ensures that trading member obligations are
commensurate with their networth.

Risk containment measures include capital adequacy requirements of members, monitoring of

member performance and track record, stringent margin requirements, position limits based on
capital, online monitoring of member positions and automatic disablement from trading when limits
are breached, etc.

Clearing & Settlement (Corporate Bonds)

NSCCL provides a facility for settlement of deals in corporate bonds.

Settlement of Corporate Bond Transactions

 All trades in corporate bonds available in demat form which are reported on any of the
following platforms provided viz., FIMMDA, NSE-WDM and NSE web site shall be eligible for
settlement through NSCCL.

 In order to facilitate settlement of corporate bond trades through NSCCL, both buy and sell
participants shall be required to explicitly express their intention to settle the corporate bond
trades through NSCCL.

 The trades will be settled at participant level on DVP I basis i.e., on gross basis for securities
and funds. The settlements shall be carried out through the bank and DP accounts specified by
the participants.

 On the settlement date, during the pay-in, participants shall be required to transfer the
securities to the Depository account specified by NSCCL and transfer the funds to the bank
account specified by NSCCL within the stipulated cut-off time.

 On successful completion of pay-in of both securities and funds, the securities / funds shall be
transferred by NSCCL to the depository / bank account of the counter-party.

Custodian Trades

 The participants desirous of clearing and settling the trade through a custodian may do so by
specifying the custodian details.

 Custodian may be specified either for a participant wherein all the trades for such participant
shall be eligible for settlement by custodian or for a trade wherein only that trade shall be
eligible for settlement by custodian.

 In order to facilitate settlement of trades identified for settlement by custodian, through

NSCCL, the custodian shall be required to explicitly express its intention to settle such trades
through NSCCL. The settlement of trade in such case shall take place through the custodian’s
bank and DP account as specified by the custodian.

178
Failure of Settlement Obligation of Corporate Bond Transactions

If either of the participants / custodians fails to honor their pay-in obligation, either fully or partially,
by stipulated time then the transaction shall be cancelled and shall not be considered for settlement.
Further the securities / funds received towards the pay-in obligation shall be returned back to the
respective participants / custodians.

Partners

CLEARING
   
MEMBERS

CLEARING BANKS DEPOSITORIES

PROFESSIONAL
CLEARING   CUSTODIANS
MEMBERS

Clearing & Settlement

NSCCL carries out the clearing and settlement of the trades executed in the equities and derivatives
segments of the NSE. It operates a well-defined settlement cycle and there are no deviations or
deferments from this cycle. It aggregates trades over a trading period, nets the positions to determine
the liabilities of members and ensures movement of funds and securities to meet respective liabilities.

NSCCL has empanelled 13 clearing banks to provide banking services to trading members and has
established connectivity with both the depositories for electronic settlement of securities.

It also undertakes settlement of transactions on other stock exchanges like, the Over the Counter
Exchange of India.

Clearing & Settlement (Equities)

NSCCL carries out clearing and settlement functions as per the settlement cycles provided in the
settlement schedule.

The clearing function of the clearing corporation is designed to work out a) what members are due to
deliver and b) what members are due to receive on the settlement date. Settlement is a two way
process which involves transfer of funds and securities on the settlement date.

NSCCL has also devised mechanism to handle various exceptional situations like security shortages,
bad delivery, company objections, auction settlement etc.

179
 Clearing & Settlement (Derivatives)

National Securities Clearing Corporation Limited (NSCCL) is the clearing and settlement
agency for all deals executed on the Derivatives (Futures & Options) segment. NSCCL acts as
  legal counter-party to all deals on NSE's F&O segment and guarantees settlement.

A Clearing Member (CM) of NSCCL has the responsibility of clearing and settlement of all
deals executed by Trading Members (TM) on NSE, who clear and settle such deals through
them.

Clearing & Settlement (Currency Derivatives)

National Securities Clearing Corporation Limited (NSCCL) is the clearing and settlement
agency for all deals executed on the Currency Derivatives segment. NSCCL acts as legal
counter-party to all deals on NSE's Currency Derivatives segment and guarantees settlement.
 
A Clearing Member (CM) of NSCCL has the responsibility of clearing and settlement of all
deals executed by Trading Members (TM) on NSE, who clear and settle such deals through
them.

Home > NSCCL > Clearing & Settlement > Interest Rate Futures

Clearing & Settlement (Interest Rate Futures)

National Securities Clearing Corporation Limited (NSCCL) is the clearing and settlement
agency for all deals executed in Interest Rate Futures. NSCCL acts as legal counter-party to
  all deals on Interest Rate Futures contract and guarantees settlement.

A Clearing Member (CM) of NSCCL has the responsibility of clearing and settlement of all
deals executed by Trading Members (TM) on NSE, who clear and settle such deals through
them.

  Clearing & Settlement (Retail Debt Market)

National Securities Clearing Corporation Limited (NSCCL) is the clearing and settlement
agency for all deals executed in Retail Debt Market.

Salient features of Clearing and Settlement in Retail Debt Market segment

 Clearing and settlement of all trades in the Retail Debt Market shall be subject to the
Bye Laws, Rules and Regulations of the Capital Market Segment and such regulations,
circulars and requirements etc. as may be brought into force from time to time in

180
 respect of clearing and settlement of trading in Retail Debt Market (Government
securities).

 Settlement in Retail Debt Market is on T + 2 Rolling basis viz. on the 2nd working
day. For arriving at the settlement day all intervening holidays, which include bank
holidays, NSE holidays, Saturdays and Sundays are excluded. Typically trades taking
place on Monday are settled on Wednesday, Tuesday's trades settled on Thursday
and so on.

 Clearing and settlement would be based on netting of the trades in a day.

 NSCCL shall compute member obligations and make available reports/data by T+1.
The obligations shall be computed separately for this market from the obligations of
the equity market.

 The settlement schedule for the Retail Debt Market (Government Securities)

Sr.No. Day Description

1 T Trade Date

2 T + 1   (11:00 a.m.) Custodial Confirmation

3 T + 2  (10.30 a.m.) Securities & Funds pay-in

4 T+2 Securities & Funds pay-out

 Funds settlementand securities settlement shall be through the existing clearing

banks and depositories of NSCCL, in a manner similar to the Capital Market segment.
The existing clearing bank accounts shall be used for funds settlement.

 The existing CM pool account with the depositories that is currently operated for the
CM segment, will be utilized for the purpose of settlements of securities.

 In case of short deliveries, unsettled positions shall be closed out. The close out would
be done at Zero Coupon Yield Curve (ZCYC) valuation for prices plus a 5% penalty
factor. The buyer shall be eligible for the highest traded price from the trade date to
the date of close out or closing price of the security on the close out date plus interest
calculated at the rate of overnight FIMMDA-NSE MIBOR for the close out date
whichever is higher and the balance shall be credited to the Investor Protection Fund.

 Members may please note that the penal actions and penalty points shall be similar to
as in Capital Markets.

Top

Clearing & Settlement (Corporate Bonds)

NSCCL provides a facility for settlement of deals in corporate bonds.

181
Settlement of Corporate Bond Transactions

 All trades in corporate bonds available in demat form which are reported on any of the
following platforms provided viz., FIMMDA, NSE-WDM and NSE web site shall be eligible for
settlement through NSCCL.

 In order to facilitate settlement of corporate bond trades through NSCCL, both buy and sell
participants shall be required to explicitly express their intention to settle the corporate bond
trades through NSCCL.

 The trades will be settled at participant level on DVP I basis i.e., on gross basis for securities
and funds. The settlements shall be carried out through the bank and DP accounts specified by
the participants.

 On the settlement date, during the pay-in, participants shall be required to transfer the
securities to the Depository account specified by NSCCL and transfer the funds to the bank
account specified by NSCCL within the stipulated cut-off time.

 On successful completion of pay-in of both securities and funds, the securities / funds shall be
transferred by NSCCL to the depository / bank account of the counter-party.

Custodian Trades

 The participants desirous of clearing and settling the trade through a custodian may do so by
specifying the custodian details.

 Custodian may be specified either for a participant wherein all the trades for such participant
shall be eligible for settlement by custodian or for a trade wherein only that trade shall be
eligible for settlement by custodian.

 In order to facilitate settlement of trades identified for settlement by custodian, through

NSCCL, the custodian shall be required to explicitly express its intention to settle such trades
through NSCCL. The settlement of trade in such case shall take place through the custodian’s
bank and DP account as specified by the custodian.

Failure of Settlement Obligation of Corporate Bond Transactions

If either of the participants / custodians fails to honor their pay-in obligation, either fully or partially,
by stipulated time then the transaction shall be cancelled and shall not be considered for settlement.
Further the securities / funds received towards the pay-in obligation shall be returned back to the
respective participants / custodians.

Clearing & Settlement (SLBS)

Participant Eligibility
All Clearing members of NSCCL including Banks and Custodians referred to as ‘Participant’ are eligible
to participate in SLBS. In order to participate in SLBS, clearing members have to register as
Participants in SLBS.

For this purpose, the eligible persons are required to follow the registration procedure as specified by

182
NSCCL which includes entering into an agreement with NSCCL as per the format specified.

Participants desirous of lending or borrowing securities can do so either on their own account or on
behalf of their clients. Prior to undertaking lending or borrowing of securities on account of clients, the
Participants are required to enter into an agreement with each client as per the format specified by
NSCCL.

The Participant need to apply to NSCCL for allotment of a “Unique client ID” for each client with whom
they have entered into the agreement for participating in SLBS.

The formats of Agreement between NSCCL & Participant and Participant & Client along with the
procedure of UCI allotment to clients is available in SLB Circular NSE/CMPT/10164 dated January 30,
2008.

Eligible Securities

Securities Available for Borrow / Lending

Currently securities available for trading in F&O segment of National Stock Exchange of India Ltd.
(NSEIL) are permitted.

Securities lending and borrowing is permitted in dematerialized form only.

Securities in which there are corporate actions are subject to either foreclosure of transactions or
adjustment depending on the type of corporate action.

Period of lending
The tenure of lending / borrowing shall be thirty trading days. Accordingly the return of securities by
borrower shall be scheduled on the T+31 day (where T is the SLBS transaction day). This is a fixed
tenure lending / borrowing.

Clearing:
All obligations are on a gross basis i.e. there is no netting of transactions. Where the participant have
transacted for their client or on their own account the obligation arising out of such transactions shall
be on the Participant. However, where participants have transacted for a Custodial Participant (CP)
client the transaction shall be subject to confirmation of the respective custodian and the obligation
shall be the Custodians. However, non-confirmation of such transactions by the Custodian would
revert the transaction to the participants obligation. Obligations for the first leg are downloaded to
participants/Custodians on the T day and obligations for the reverse leg are downloaded on T+1 day.

Transactions under SLBS segment are identified based on different settlement types as intimated by
NSCCL for the first leg and reverse leg settlements.

Lender’s Obligation : The lenders obligation is the securities lent on T day (Transaction date). The
lender is required to deliver the securities by the scheduled time on T+1 day.

Borrower’s Obligation : Borrower’s obligation is the lending fees in cash form and the lending price (
T-1 day closing price in the underlying security) in cash collaterals payable on T+1 day.

183
Settlement Procedure:
The pay-in and pay-out of funds and securities is through the designated bank accounts and securities
settlement account respectively.

Transactions are settled on a T+1 day basis for the First Leg
Transactions are settled on a T+31 day basis for the Reverse leg

Clearing & Settlement cycle for a lending and borrowing transaction

Designated Bank Account

The bank account currently used by Participant for settlement of funds in the Capital Market segment
is the designated bank account for giving effect to funds debits/credits under SLBS.

Securities Settlement Account

Participants are required to maintain accounts with both depositories i.e NSDL & CDSL. The pool
account currently used by Participants in NSDL for effecting securities pay-in and pay-out in the
Capital Market segment is used for settlement under SLBS.

In case of CDSL, Participants are required to open a separate settlement account for effecting
securities pay-in and pay-out under SLBS.

Client direct payout facility

Participants / Custodians have been provided the facility of crediting the payout of securities directly
to clients account. In order to avail of this facility, participant/custodian are required to provide a file
in the specified file format available in SLB Circular (NSE/CMPT/10134) dated January 25, 2008
containing details of the beneficiary accounts to which direct credit is to be given.

Process of return of securities

The borrowing Participants are required to return the securities borrowed on completion of period of
lending i.e on T+31 day. The securities are returned to the lender of the securities by NSCCL on the
T+31 day. In the case of borrower failing to return securities, NSCCL conducts an auction for obtaining
securities. In the event of failure to procure securities in auction the transactions are financially
closed-out on the basis of the close-out computation formula.

Shortages and Close out

In the event of funds shortage by the borrower, the SLBS transactions are cancelled and the securities
returned to the lenders along with lending fees.

In the event the lender fails to deliver securities, the transaction is closed out as per the below
procedure.

Higher of:

 25% of closing price of the security on T+1 day (closing price for the security in the capital
market segment of NSEIL), or
 (Maximum trade price of the security in the capital market segment of NSEIL from T to T+1
day) - (T+1 day closing price of the security in capital market segment of NSEIL)

184
In the event the borrower fails to return the securities NSCCL conducts a buy-in auction in the Capital
Market segment of NSEIL.

If the security cannot be bought through the buy-in auction, the transaction is closed out as per the
below procedure.

Higher of:

 The maximum traded price in the Capital Market segment of NSEIL from T+1 day to T+31
day, or
 25% above the closing price of the security in the capital market segment on the T+31 day

In all cases of shortages, NSCCL may initiate various actions including withdrawal of access to the
order matching platform, withhold of the securities/funds pay-out due to the Participant or any other
action as may be intimated by NSCCL.

Adjustment for Corporate Actions

All transactions in case of corporate actions other than dividend and Stock spilt shall be foreclosed 2
days prior to ex-date.

In case of dividend, the dividend amount shall be collected from the borrower on the reverse leg
settlement date and shall be paid to the lender on the reverse leg settlement date.

In case of stock split the position of the borrower would be proportionately adjusted and the lender
shall receive the revised quantity on the reverse leg settlement date.

Adjustment of lending fees in case of foreclosure

In case of foreclosure where the corporate action is announced by NSCCL after the transaction has
been executed, lending fees shall be adjusted on a pro-rata basis by NSCCL. The lending fee shall be
bought by the lender on the foreclosure settlement date and shall be passed on to the borrower.

However in case of foreclosure where the corporate action is announced upfront by NSCCL before the
transaction has been executed there shall be no adjustment of lending fee. Market participants shall
accordingly quote lending fee for the shorter transaction cycle.

Top Clearing & Settlement (MFSS Clearing and Settlement)

The settlement for Mutual Funds Service System is carried out by NSCCL through the depository and
bank interface. The clearing and settlement mechanism provides for funds settlement for subscription
of units and transfer of mutual funds units to AMCs for the purpose of redemption. All requests for
subscription and redemption are settled on individual basis and only to the extent of the funds/units
paid in by participants/clients on the settlement day. Receipt and transfer of funds for subscription of
mutual fund units are done on a T+1 day basis. The allotment of units under subscription is carried
out directly by the RTA. Receipt and transfer of mutual fund units for redemption is done on T day and
is conducted for units in dematerialised form only. The transfer of funds for redemption is carried out
directly by the RTA.

The settlement cycles are in accordance with the settlement schedules issued by NSCCL from time to
time.

NSCCL is only a facilitator and not a counter party for the subscription and redemption of units.

185
Subscription of units

 Participants have to open a separate clearing bank account for the purpose of settlement of
funds for subscription.

 Funds pay-in confirmation files are downloaded to participants on the T day for units
subscribed.

 Participants have to provide funds in their settlement accounts by 8.30 a.m. on the T+1 day.

 Participants have to upload payment confirmation files on the T+1 day by 9.30 a.m.
identifying transactions for which payments have been received and transactions for which
payments have not been received. Wherever the funds collected from the bank account fall
short of the amount indicated in the details provided by the participant, the details are
considered defective and are not further processed. In such cases, the funds collected, if any,
are returned to the designated bank account of the participant.

 Daily funds report  is downloaded to participants after completion of funds settlement.

Redemption of units

 Investors are required to transfer units for their transacted orders to the NSCCL pool account
on the T day by 4.30 p.m. for the purpose of redemption. The details of such instructions are
given in the circular NSE/CMPT/13534 dated November 24, 2009.

 Demat Final Delivery Statement (DFDS)  is downloaded to participants after units are received
by NSCCL.

Participants can refer to the circular mentioned above for detailed clarifications in relation to clearing
and settlement procedures of mutual funds units.
 

http://www.nse-india.c

  Risk Management

A sound risk management system is integral to an efficient clearing and settlement system.
NSE introduced for the first time in India, risk containment measures that were common
internationally but were absent from the Indian securities markets.

NSCCL has put in place a comprehensive risk management system, which is constantly
upgraded to pre-empt market failures. The Clearing Corporation ensures that trading member
obligations are commensurate with their networth.

186
Risk containment measures include capital adequacy requirements of members, monitoring of
member performance and track record, stringent margin requirements, position limits based
on capital, online monitoring of member positions and automatic disablement from trading
when limits are breached, etc.
om/content/nsccl/nsccl_introduction.htm

187