Ms. Chitra Ramkrishna, MD & CEO, NSE

“NSE’s commitment is to improve financial well-being of the people. With new initiatives such as entry of pension funds, we envisage more indirect participation of retail investors and growth in awareness.”

Jan 12, 2016 03:01 IST IIFL Anil Mascarenhas |

Ms. Chitra Ramkrishna, MD & CEO, NSE, B. Com, B.L., FCS serves as Managing Director and Chief Executive Officer of The National Stock Exchange. Ms. Ramkrishna serves as Promoter Director of Power Exchange India Limited and has been the Managing Director and Chief Executive Officer of National Stock Exchange of India Ltd. since April 1, 2013. Ms. Ramkrishna served as Joint Managing Director of National Stock Exchange of India Ltd. from September 1, 2009 to April 1, 2013. She serves as a Member of Derivatives Panel of Securities and Exchange Board of India.
 
The National Stock Exchange (NSE) is India's leading stock exchange covering various cities and towns across the country. NSE was set up by leading institutions to provide a modern, fully automated screen-based trading system with national reach. The Exchange has brought about unparalleled transparency, speed & efficiency, safety and market integrity. It has set up facilities that serve as a model for the securities industry in terms of systems, practices and procedures. NSE has played a catalytic role in reforming the Indian securities market in terms of microstructure, market practices and trading volumes. The market today uses state-of-art information technology to provide an efficient and transparent trading, clearing and settlement mechanism, and has witnessed several innovations in products & services viz. demutualisation of stock exchange governance, screen based trading, compression of settlement cycles, dematerialisation and electronic transfer of securities, securities lending and borrowing, professionalisation of trading members, fine-tuned risk management systems, emergence of clearing corporations to assume counterparty risks, market of debt and derivative instruments and intensive use of information technology.


Replying to Anil Mascarenhas of IIFL, Ms. Chitra Ramkrishna, says, “NSE’s commitment is to improve financial well-being of the people. With new initiatives such as entry of pension funds, we envisage 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 independent financial career. How has the journey been?
I think as one grows up, the person starts evaluating various options. During the formative years in school, be it today or my time, not all students are aware about the options available. In my case, after finishing CA, I entered the corporate world. Once I got the chance to get into a new capacity building project 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 income and commodities.
It’s indeed an achievement that NSE considered the ETF segment at a time when no one deemed it fit to talk about the segment. We have explored it as a product category about a decade ago. We believed that this product category can actually ensure wealth creation for the masses. We started educating a large population of small savers on how a simple passive investment vehicle, which is on a broad-based index such as NIFTY, is perhaps the simplest and the most protected way for market participation. For example, CPSE ETF based on Nifty CPSE index has helped the government execute a disinvestment of Rs.3000 cr; people got a long-term, low-cost, small ticket and a convenient investment product simultaneously. In recent times, Exchange-traded funds (ETFs) have garnered wider acceptance, as financial 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 risk-management?  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 so because the organisation has an impact on a large diaspora and can facilitate nation building through peoples’ participation. Stock is an enabling platform for many things. We are still a young market infrastructure institute that has so many things to do. India has developed a lot, but a lot can be done in regards to financial inclusion and deepening. Smart phones are ushering in more and more people to the market. The outreach of technology is expanding and trading through mobile phone is doubling yoy.
 
What is your assessment regarding technological changes that are taking place in the financial space? Are you comfortable with the developments on algo trading?
No business model can be static and there will be changes with time. Technology is ever-evolving, and the exchange platform is also constantly upgrading to match people’s expectations. In regards to algo platform, NSE follows guidelines and regulations that SEBI brings into the market from time to time. We also try to incorporate the best practices in our day-to-day operations. Since NSE has remained a trusted destination for all sorts of traders, including long-term investors, algo traders, strategy players, and first time investors, the journey in itself says it all.
 
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 segments such 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 some maturity. Lot of institutional corporate investors are participating in SME IPOs and many of them are coming back to invest in other SMEs. As an organization, we remain true to our commitment of improving 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 products encompassing various formations. While some focus on market cap and sectors, others could channelise their focus toward strategy-based indices or govt bonds. At a time when NIFTY has become synonymous with country’s economic and capital market performance, inclusion and prefixing the word NIFTY in the names of IISL’s indices will widen the acceptability of the products linked 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 guidelines and a more detailed one is expected. NSE board and management will take listing to its logical conclusion soon.
 
What steps are you taking to make NSE popular internationally?
NSE has collaborated with leading international exchanges. This has helped Nifty 50 to become global. NSE has cross listing agreement with some of the leading exchanges, including Chicago Mercantile Exchange and London Stock Exchange. NSE has signed a licensing pact with Singapore Exchange Ltd. Indian investors also get exposure to the US and Europe through derivatives on S&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 and advice to retail investors?
NSE has a diverse client base comprising domestic institutions, foreign investors, and sophisticated derivatives traders, and retail investors. The retail investors’ number is ever-growing, mostly due to awareness issues. At NSE, we emphasize on investor education. In 2015, we have done more than 1000 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, you will note that our single-minded purpose is to ensure the larger financial wellbeing of those who come to the market. The geographical outreach of NSE members is something unique. NSE members are present in 36 states, 600 districts, 3250 cities, with around 34000 branches in India.  More than 19 million retail investors (unique PAN accounts) are registered with the exchange. With new initiatives such as entry of pension funds, we envisage more indirect participation of retail investors and growth in awareness.

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