NSE Is Now World’s Largest Derivatives Exchange - The Industry Spread

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NSE Is Now World’s Largest Derivatives Exchange

January 26, 2020

NSE - Derivatives ExchangeMumbai, January 21, 2020: National Stock Exchange of India Ltd (NSE) has emerged as the world’s largest derivatives exchange in 2019 by number of contracts traded surpassing the CME Group, based on the statistics published by Futures Industry Association (FIA), a derivatives trade body. NSE is also ranked 3rd in the world in the cash equities segment by number of trades as per the statistics published by the World Federation of Exchanges (WFE).

Commenting on the occasion, Mr. Vikram Limaye, MD & CEO, NSE said, “It is indeed a matter of great pride for all of us and for our country that NSE has emerged as a global leader and has achieved this unique distinction of being the largest derivatives exchange in the world and the 3rd largest exchange in cash equities. We are grateful to the government, regulators and all our stakeholders for the support extended to us over the years. Our achievements have been made possible by supportive government and regulatory policies, state of the art technology infrastructure, a robust risk management framework and broad based trust and participation by the entire spectrum of global and domestic investors.  Market development is critical for financing the growth of India and for achieving the aspiration of becoming

Vikram Limaye, Managing Director and Chief Executive Officer, NSE

a $5 trillion economy by 2024-25. Robust capital markets are not only critical for financing the country’s growth potential but also for creating employment opportunities for our youth.”

NSE has been focused on building robust markets for all asset classes. Over the last 5 years, the cash equities segment has grown by more than 90%, from a daily average turnover of about Rs.17,572 crores in CY 2015 to about Rs. 34,264 crores in CY 2019. During the same period, equity derivatives daily average turnover has increased by 70% from about Rs.52,371 crores in CY15 to Rs 88,772 crores in CY19. Derivatives to cash market turnover ratio consistently remained around 3x. Further, during this period, NSE witnessed about 60% delivery percentage of trades executed in the cash market. Empirical research globally and in India has established beneficial impact of the derivatives market on cash market turnover.

Growth in volumes of both cash equities and derivatives is on the back of deepening of equity markets in India. NSE witnessed more than 1.2 crore new investor registrations in the cash equities segment in the last 5 years out which close to 87 lakh registrations were in the last 3 years. It is also observed that a third of the new investors have come from tier 3 and tier 4 cities and towns. Another heartening feature is adoption of digital tools by investors with about 26% of total trading activity in the cash equities segment coming through mobile and internet trading.

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