National Stock Exchange of India (NSEI)

National Stock Exchange of India was recognised in 1992 and started working in 1994. Ringless trading takes place in NSEI i.e., the trading of securities takes place through network of computers. NSEI provide a nationwide transparent market for different types of securities.

Objective of NSEI

  1. To provide a nationwide transparent market for all types of securities.

  2. To ensure access to investors all over the country through an appropriate communication network.

  3. To provide an efficient securities market using electronic trading systems.

  4. To make available shorter settlement cycles and book entry settlement system.

  5. To meet international standards.

Trading Procedure on Stock Exchange

Now-a-days trading of securities has shifted from the floor of a stock exchange to the broker’s office. Securities are bought and sold with the help of brokers who are members of a stock exchange. They act as intermediaries between buyers and sellers of securities. Companies have to get their securities listed in the stock exchange for the purpose of trading through stock exchange. Trading procedure involves the following steps:

  1. Selection of Broker: Firstly, investor chooses the broker through whom he will buy or sell the securities.

  2. Placement of Order: After fixing the broker, the investor places the order stating the name of the company, number of shares to be bought or sold the price at which the transaction has to be made.

  3. Trade by the Broker: Broker makes the deal if the desired price is quoted by any buyer/seller in his computer. Transactions on a stock exchange can be on cash basis or carryover basis (badla).

  4. Information to Investor: The broker informs the investor about the deal. The buyer makes arrangement for payment.

  5. Settlement: All transactions are settled through the clearing house through electronic book entry.