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Answer. I met Mr. Amarjeet of Soin Investments and he provided me the following details about NSE/BSE trading system. The BSE has fully automated computerized mode of trading known as BOLT (BSE on Line Trading) System w.e.f. March 14, 1995. Through the BOLT system, the member-brokers now enter orders for purchase or sell of securities from Trader Work Stations (TWSs) installed in their offices instead of assembling in the trading ring. This system, which was initially both order and quote driven, is currently only order driven. The facility of placing of quotes has been discontinued w.e.f., August 13, 2001 in view of lack of market interest and to improve system-matching efficiency. The system, which is now only order driven, facilitates more efficient in-putting, processing, automatic matching and faster execution of orders in a transparent manner.

The trading in securities at the Exchange is conducted in an anonymous environment and the counterparty identity is not revealed. The buyers and sellers of securities do not know the names of each other.

In order to expand the reach of BOLT network to centers outside Mumbai, to reach out to investors in these centers and provide them access to the trading facilities in all scrips listed and permitted to be traded on the Exchange and to support the smaller Regional Stock Exchanges, the Exchange has admitted subsidiary companies formed by 15 Regional Stock Exchanges as its member-brokers as on June 30, 2003. The member-brokers of these Regional Stock Exchanges work as sub-brokers of the member-brokers of the Exchange.

Trading on the BOLT System is conducted from Monday to Friday between 9:55 a.m. and 3:30 p.m. The scrips traded on the Exchange have been classified into 'A', 'B1', 'B2', 'F' ,'G' and 'Z' groups. The number of scrips listed on the Exchange under 'A', 'B1 ', 'B2' and 'Z' groups, which represent the Equity Segment, as on June 30, 2003 was 198, 790, 1830 and 2776 respectively.

The Exchange has for the guidance and benefit of investors classified the scrips in the Equity Segment in A', 'B1', & 'B2' based on certain qualitative and quantitative parameters which include number of trades, value traded, etc. for the guidance and benefit of investors.

The 'F' group represents the fixed income securities wherein 730 securities were listed as on June 30, 2003.

The Exchange has commenced trading in Govt. Securities for retail investors under "G" group w.e.f. January 16, 2003 and 85 Govt. Securities are traded on the Exchange under this group as on June 30, 2003.

The 'Z' group was introduced by the Exchange in July 1999 and includes the companies which have failed to comply with the listing requirements of the Exchange and/or have failed to resolve investor complaints or have not made the required arrangements with both the Depositories, viz., Central Depository Services (I) Ltd. (CDSL) and National Securities Depository Ltd. (NSDL) for dematerialization of their securities. The Exchange also provides a facility to the market participants for on-line trading in "C" group which covers the odd lot securities in physical form in 'A', 'B1', 'B2' and 'Z' groups and Rights renunciations in all the groups of scrips in the Equity Segment.

The scrips of the companies which are in demat can be traded in market lot of one but the securities of companies which are still in the physical form are traded on the Exchange in the market lot of generally either 50 or 100. However, the investors having quantities of securities less than the market lot are required to sell them as "Odd Lots". The facility of trading in odd lots of securities not only offers an exit route to investors to dispose of their odd lots of securities but also provides them an opportunity to consolidate their securities into market lots.

The 'C' group facility can also be used by small investors for selling upto 500 shares in physical form in respect of scrips of companies where trades are required to be compulsorily settled by all investors in demat mode. This facility of selling physical shares in compulsory demat scrips is called an Exit Route Scheme.

With effect from December 31, 2001, trading in all securities listed in equity segment of the Exchange takes place in one market segment, viz., Compulsory Rolling Settlement Segment.

Across the globe, developments in information, communication and network technologies have created paradigm shifts in the securities market operations. Technology has enabled organizations 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 realized 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 400 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 can handle up to 1 million trades per day. NSE has also put in place NIBIS (NSE's Internet Based Information System) for on-line real-time dissemination of trading information over the Internet. In order to capitalize on in-house expertise in technology, NSE set up a separate company, NSE.IT, in October 1999. This is expected to provide a platform for taking up new IT assignments both within and outside India and attaining global exposure.

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 uses X.25 protocol and is the backbone of the automated trading system. 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 Wholesale Debt Market segment are linked to the central computer at the NSE through dedicated 64Kbps leased lines and VSAT terminals. These leased lines are multiplexed using dedicated 2 Mbps, optical-fibre links. The WDM participants connect to the trading system through dial-up links.

The Exchange uses powerful RISC -based UNIX servers, procured from Digital and HP for the back office processing. The latest software platforms like ORACLE 7 RDBMS, GUPTA - SQL/ORACLE FORMS 4.5 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 3000 VSATs and is expected to grow to more than 4000 VSATs in the next year. 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.

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 a 2mbps link to VSNL 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.

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