Ms. Chitra Ramkrishna, MD & CEO, NSE, B. Com, B.L., FCSserves as Managing Director and Chief Executive Officer of NationalSecurities Clearing Corporation Limited. Ms. Ramkrishna serves asPromoter Director of Power Exchange India Limited and has been theManaging Director and Chief Executive Officer of National StockExchange of India Ltd. since April 1, 2013. Ms. Ramkrishna served asJoint Managing Director of National Stock Exchange of India Ltd.from September 1, 2009 to April 1, 2013. She serves as a Member ofDerivatives Panel of Securities and Exchange Board of India.
The National Stock Exchange (NSE) isIndia's leading stock exchange coveringvarious cities and towns across the country.NSE was set up by leading institutions to provide a modern, fully automatedscreenbasedtrading system with national reach. The Exchange has brought about unparalleledtransparency, speed & efficiency, safety and market integrity. It has set up facilities that serve as amodel for the securities industry in terms of systems, practices and procedures. NSE has played acatalytic role in reforming the Indian securities market in terms of microstructure, market practices andtrading volumes. The market today uses stateofartinformation technology to provide an efficient andtransparent trading, clearing and settlement mechanism, and has witnessed several innovations inproducts & services viz. demutualisation of stock exchange governance, screen based trading,compression of settlement cycles, dematerialisation and electronic transfer of securities, securitieslending and borrowing, professionalisation of trading members, finetunedrisk management systems,emergence of clearing corporations to assume counterparty risks, market of debt and derivativeinstruments and intensive use of information technology.
Replying to Anil Mascarenhas of IIFL, Ms. Chitra Ramkrishna, says, “NSE’s commitment is toimprove financial wellbeingof the people. With new initiatives such as entry of pension funds, weenvisage more indirect participation of retail investors and growth in awareness.”
You said you knew little commerce in school and that you wanted to build an independentfinancial career. How has the journey been?
I think as one grows up, the person starts evaluating various options. During the formative years inschool, be it today or my time, not all students are aware about the options available. In my case, afterfinishing CA, I entered the corporate world. Once I got the chance to get into a new capacity buildingproject in the capital market, I joined NSE, the country’s most trusted stock exchange.
Tell us about your plans to launch new ETFs based on various asset classes such as fixed incomeand commodities.
It’s indeed an achievement that NSE considered the ETF segment at a time when no one deemed it fit totalk about the segment. We have explored it as a product category about a decade ago. We believed thatthis product category can actually ensure wealth creation for the masses. We started educating a largepopulation of small savers on how a simple passive investment vehicle, which is on a broadbasedindexsuch as NIFTY, is perhaps the simplest and the most protected way for market participation. Forexample, CPSE ETF based on Nifty CPSE index has helped the government execute a disinvestment ofRs.3000 cr? people got a longterm,lowcost,small ticket and a convenient investment productsimultaneously. In recent times, Exchangetradedfunds (ETFs) have garnered wider acceptance, asfinancial instruments’ unique advantages over mutual funds have caught the eye of many investors.
How have you kept yourself abreast with the nitty gritties of operations, technology, and riskmanagement?Do you perceive digital push and mobile trading as the game changer?
Since I began my journey, I never needed an excuse to come to office. It’s a lovely place and more sobecause the organisation has an impact on a large diaspora and can facilitate nation building throughpeoples’ participation. Stock is an enabling platform for many things. We are still a young marketinfrastructure institute that has so many things to do. India has developed a lot, but a lot can be donein regards to financial inclusion and deepening. Smart phones are ushering in more and more peopleto the market. The outreach of technology is expanding and trading through mobile phone is doubling
What is your assessment regarding technologicalchanges that are taking place in the financialspace? Are you comfortable with thedevelopments on algo trading?
No business model can be static and there will bechanges with time. Technology is everevolving,andthe exchange platform is also constantly upgrading tomatch people’s expectations. In regards to algoplatform, NSE follows guidelines and regulationsthat SEBI brings into the market from time to time.We also try to incorporate the best practices in ourdaytodayoperations. Since NSE has remained atrusted destination for all sorts of traders, includinglongterminvestors, algo traders, strategy players,and first time investors, the journey in itself says itall.
What are the opportunities and challenges for NSE at present?
We are a regulated platform and will stick to SEBI’s directions. At present, some of the new segmentssuch as ETF, currency, interest rate, and SME platform are doing well at NSE. In the SME platform,for example, after two years of engagements with stakeholders, we are now seeing signs of somematurity. Lot of institutional corporate investors are participating in SME IPOs and many of them arecoming back to invest in other SMEs. As an organization, we remain true to our commitment ofimproving financial wellbeing of people.
You recently rebranded the NSE indices. What benefits do you hope to derive?
NSE’s subsidiary, IISL, which creates most of the indices has now more than 50 productsencompassing various formations. While some focus on market cap and sectors, others couldchannelise their focus toward strategybasedindices or govt bonds. At a time when NIFTY hasbecome synonymous with country’s economic and capital market performance, inclusion andprefixing the word NIFTY in the names of IISL’s indices will widen the acceptability of the productslinked to the Nifty family worldwide.
Your comments on listing?
As we have already made it clear, NSE will list. SEBI has recently come out with broad guidelinesand a more detailed one is expected. NSE board and management will take listing to its logicalconclusion soon.
What steps are you taking to make NSE popular internationally?
NSE has collaborated with leading international exchanges. This has helped Nifty 50 to becomeglobal. NSE has cross listing agreement with some of the leading exchanges, including ChicagoMercantile Exchange and London Stock Exchange. NSE has signed a licensing pact with SingaporeExchange Ltd. Indian investors also get exposure to the US and Europe through derivatives onS&P500, DJIA, and FTSE 100. These contracts are traded in Indian hours and settled in Rupee,ensuring minimal currency risks.
Tell us about the steps being taken to improve retail participation? What is your message andadvice to retail investors?
NSE has a diverse client base comprising domestic institutions, foreign investors, and sophisticatedderivatives traders, and retail investors. The retail investors’ number is evergrowing,mostly due toawareness issues. At NSE, we emphasize on investor education. In 2015, we have done more than1000 programs across the country. NSE has marked its forays into formal education in financial literacy and investor protection. We define the kind of appropriate products for the market. Thus, youwill note that our singlemindedpurpose is to ensure the larger financial wellbeing of those who cometo the market. The geographical outreach of NSE members is something unique. NSE members arepresent in 36 states, 600 districts, 3250 cities, with around 34000 branches in India. More than 19million retail investors (unique PAN accounts) are registered with the exchange. With new initiativessuch as entry of pension funds, we envisage more indirect participation of retail investors and growthin awareness.