Inter-connected Stock Exchange of India

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Inter-connected Stock Exchange of India Ltd.
Type Stock Exchange
Location Mumbai, India
Founded 1998
Owner Inter-connected Stock Exchange of India Limited
Currency Indian rupee ()
Website Official Website
Branch Networks of Interconnected Stock Exchange of India

Inter-connected Stock Exchange Ltd. (ISE) started its operation in 1998[1] in Vashi, Mumbai.[2] It is a national-level stock exchange, providing trading, clearing, settlement, risk management and surveillance support to its trading members. It has 841 trading members, who are located in 18 cities. These intermediaries are administratively supported through the regional offices at Delhi, Kolkata, Patna, Ahmedabad, Coimbatore and Nagpur, besides Mumbai.[3]

The ISE is promoted by 12 [4] regional stock exchanges namely at Bangalore, Bhubaneshwar, Chennai, Cochin, Coimbatore, Guwahati, Indore, Jaipur, Kanpur, Mangalore, Magadh and Vadodara.[5] The participating exchanges of ISE have 4,500[6] members and listed securities. It is a stock exchange of stock exchanges,[7] members of the stock exchanges being traders on the ISE.


Establishment of National Stock Exchange of India Ltd., (NSE) in 1994 with an all-India spread and expansion of operations of Bombay Stock Exchange (BSE) throughout the country, both of which have their trader work stations at over 400 centres in the country today, have led to the virtual extinction of all the 19 Regional Stock Exchange (RSEs) spread across the length and breadth of the country. The share of 19 RSEs, which was as much as 45.6 per cent of the total all-India turnover of Rs. 2.39 lakh crore in 1995-96, declined progressively year after year and in 2001-02, it was just 8.4 per cent of the total volume of Rs. 8.96 lakh crore. At present, there is virtually no trading at any of the RSEs. Trading in the cash segment is thus confined to NSE and BSE only, with the share of the latter, which used to account for over 70 percent of the all-India volume of trading till 1995, is also progressively declining. Currently, BSE accounts for about 30 per cent of the aggregate volume of trading on NSE and BSE in the cash segment. In the derivatives segment, while NSE clocks in about Rs. 2000 crore daily, the turnover on BSE has been progressively declining virtually to the zero level. The RSEs of the country and their members had spent over Rs. 200 crore in automating their trading, clearing and settlement systems, largely driven by regulatory compulsions, sadly to witness them lying idle at present.

Causes of decline of the Regional Stock Exchanges[edit]

Abolition of Badla with effect from July 2, 2001, acted as the backbone of trading at the Calcutta, Delhi, Ahmedabad and Ludhiana Stock Exchange Association and also at a few other exchanges, which conducted Badla trading but in a clandestine manner, dealt a serious blow to trading at the RSEs. Introduction of uniform trading cycles at all the stock exchange, also effective from July 2, 2001, reduced further the volume of trading at the RSEs due to diminished opportunities for arbitrage transactions. Introduction of compulsory rolling settlements, initially in a few securities and subsequently in all securities effective from December 31, 2001 on a T+5 bases accelerated the reduction in turnover at the RSEs. The switch over of the rolling settlement to T+3 effective from April 1, 2002 and to T+2 with effect from April 1, 2003 sealed the fate of the RSEs. Yet another major reason for the absence of trading at the RSEs is that all the major operators are all these exchanges acquired memberships of either NSE or BSE or of both, while most others acquired the sub-brokerships of members of NSE/BSE and all of them switched over their operations completely to NSE and BSE. In spite of the fact that trading at the RSEs has ground to a halt, RSEs have managed to survive so far because of the annual listing fees that are being received from the listed companies. The circulars issued by the Ministry of Finance on April 23, 2003 withdrawing its earlier circulars which required all companies including existing listed companies, to be listed on the stock exchanges located in the State where the registered office or the main works/fixed assets of the company are situated, has led to the conclusion of RSEs as companies have started lining up one after the other to get themselves delisted from the RSEs.

Establishment of Inter-connected Stock Exchange[edit]

It was the dwindling fortunes of RSEs that brought them together to establish the Inter-connected Stock Exchange of India Ltd. (ISE). At a meeting of the Federation of Indian Stock Exchanges held in October 1996, a Steering Committee was formed to evolve an Inter-Connected Market System. As a result, ISE, which was promoted by 14 regional stock exchanges of the country (excluding Calcutta, Delhi, Ahmedabad, Ludhiana and Pune Stock Exchange, apart from NSE, BSE and OTCEI) was incorporated on ISE by SEBI under the Securities Contracts (Regulations) Act, 1956 on November 18, 1998, ISE commenced trading on February 26, 1999. ISE was launched with an objective of converting small, fragmented and illiquid markets into large, liquid national-level markets. This was a unique experiment, with a highly automated trading, clearing and settlement systems backed by state-of-the-art computers. ISE is also a professionally managed stock exchange with the Chairman of the Exchange being also a Public Representative Director from its inception. Unfortunately for the RSEs, particularly small brokers, the ISE experiment did not succeed. The daily turnover, which used to be Rs. 1 to 2 crore in the first six months, gradually declined to virtually zero level. Failure of ISE was, due to the bigger brokers of the participating RSEs failing to support any interest in trading on ISE due to commercial considerations. As a result, it becomes virtually impossible for ISE to create any worthwhile liquidity in its markets in competition with the breadth and depth of NSE and BSE. Markers continued to be fragmented as the participating RSEs did not close down their regional segments. All the while the small fragmented and illiquid market failed to emerge. ISE has also not succeeded in getting companies listed on it despite the stipulation by SEBI that the State of Maharashtra constituted the regional area for ISE due to lack of regulatory support for making it applicable to over 3,000 already listed companies in the State of Maharashtra.


ISE shall endeavor to provide flexible and cost-effective access to multiple markets to its intermediaries across the country using the latest technology.

Core team[edit]

Name Designation
Mr. K. Rajendran Nair Chairman, Public Interest Director
Mr. A. K. Mago Public Interest Director
Mr. H. C. Parekh Public Interest Director
Mr. K. V. Thomas Shareholder Director
Mr. Santosh Muchhal Shareholder Director
Mr. Bharat M. Meisheri Shareholder Director
Mr. Debaraj Biswal Shareholder Director
Mr. Dharmendra B. Mehta Shareholder Director
Mr. P. Sivakumar Shareholder Director
Mr. Surendra Holani Trading Member Director
Mr. Ranjan Kumar Trading Member Director
Shri P. J. Mathew Managing Director


July 6, 1996 A report on Inter-connected Market System (ICMS) submitted to the Federation of Indian Stock Exchange (FISE).

October 26, 1996 Steering Committee was constituted by FISE at Hyderabad.

January 4, 1997 Pricewater House Coopers,the management consultancy firm, submitted a feasibility report and recommended the establishment of ICMS.

January 22, 1998 ISE incorporated as a company limited by guarantee.

November 18, 1998 SEBI grants recognition to ISE.

February 26, 1999 Commencement of trading on ISE.

December 31, 1999 Induction of 450 Dealers commences.

January 18, 2000 Incorporation of ISS as a company limited by share capital.

February 24, 2000 SEBI registers ISS for the Capital Market segment of NSE.

May 3, 2000 Commencement of trading by ISS in the Capital Market segment of NSE.

January 10, 2001 Turnover in the Capital Market segment of NSE crosses Rs. 1000 million per day.

February 28, 2001 Turnover of Rs. 1508.80 million recorded by ISS in the Capital Market segment of NSE.

May 4, 2001 Internet trading for clients started by ISS for the NSE segment through DotEx Plaza.

May 19, 2001 ISE’s website,, launched.

February 13, 2002 SEBI registers ISS for the Futures & Options segment of NSE.

May 6, 2002 ISS commences trading in the Futures & Options segment of NSE.

March 12, 2003 ISS admitted as a member of the Equities segment of BSE.

April 1, 2003 DP services through CDSL launched by ISE.

June 21, 2003 First Investor Education Program under the Securities Market Awareness Campaign (SMAC) of SEBI conducted at Vashi.

January 9, 2004 Peak turnover of Rs. 3034.90 million recorded by ISS in the Capital Market segment of NSE.

May 17, 2004 First DP branch office opened at Coimbatore by ISE.

July 17, 2004 First Investor Point opened at the Vashi Railway Station Complex by ISE.

July 24, 2004 Second DP branch opened at New Delhi by ISE.

September 3, 2004 Third DP branch opened at Kolkata by ISE.

December 27, 2004 Trading in the BSE equities segment started by ISS.

September 15, 2005 Approval of ISE’s Corporatisation and Demutualisation Scheme by SEBI.

October 20, 2005 Switchover to Direct Client Dealing commences in ISS.

November 24, 2005 ISE re-registered as a “for profit” company, limited by shares.

November 24, 2005 Board of ISE reconstituted in tune with the Corporatisation and Demutualisation provisions.

July 28, 2007 ISE declared a dividend of 400% to its shareholders for the first time since its incorporation.

September 13, 2007 ISE was notified by SEBI as a “Demutualised Exchange”.

January 30, 2008 Restructuring of Board of ISE in accordance with the Corporatisation and Demutualisation Scheme, 2005.

March 4, 2010 ISE awarded the contract to TCS for reviving its Trading Platform.

September 25, 2011 ISE forwarded its application to SEBI for seeking trading platform approval.



A registered Member is entitled to execute trades and to clear and settle trades executed on his own account as well as on account of his clients in the Capital Markets Segment. Membership of the Exchange is open to corporate entities, individuals and partnership firms who fulfill the eligibility criteria laid down by SEBI and ISE

Depository services[8][edit]

Inter-connected Stock Exchange is a Depository Participant of Central Depository Service[9] (India) Limited (CDSL) and National Securities Depository Limited[10] (NSDL). ISE-DP has branches at Delhi, Kolkata, Patna, Guwahati, Ahmedabad, Hyderabad, Nagpur, Coimbatore, Tirunelveli and 155 Collection Centers across the country. Following depository services of CDSL are provided to the individual and corporate investors by ISE-DP.

  • Dematerialisation (Demat)
  • Rematerialisation (Remat)
  • Pledge of Demat securities
  • Electronic Access to Securities Information & Execution of Secured Transactions (easiest)
  • Settlement of securities in Demat Mode
  • Electronic Access to Securities Information (easi)

Research and Training[edit]

The ISE Training centre was established in November, 2000.[11] It is a classroom training program on subjects related to the capital market, such as equities trading and settlement procedure, derivatives trading, day trading, arbitrage operations, technical analysis, financial planning, and compliance requirement.[12] ISE also offers Joint Certification Training programmes in association with its partners.


The trading platform of ISE enables the 'Indian companies’ to access equity capital, by providing a liquid and well-regulated market.[13] Scrips which are already being traded on stock exchanges across India are traded on the Exchange. ISE’s trading members in India trade on the scrips and provide liquidity and visibility to such scrips.


  1. ^ "Inter-connected exchange to start operations in May". 1998-01-24. Retrieved 2012-06-07. 
  2. ^ Inter Connected Stock Exchange (1970-01-01). "interconnected stock exchange address - Google Maps". Retrieved 2012-06-07. 
  3. ^ "Interconnected stock exchange of india limited - Forum - Law, Lawyers, Advocates, Law Firms,Legal Help, Legal Experts,Judgements,Law Help, Indian Lawyers". Retrieved 2012-06-07. 
  4. ^ "Rediff On The NeT Business Interview/Joseph Massey". 1998-09-25. Retrieved 2012-06-07. 
  5. ^ [1][dead link]
  6. ^ V S Rama Rao. "Interconnected Stock Exchange of India and Regional Stock exchanges". Retrieved 2012-06-07. 
  7. ^ Pathak (1 September 2007). The Indian Financial System: Markets, Institutions And Services, 2/E. Pearson Education India. p. 201. ISBN 978-81-7758-562-9. Retrieved 7 June 2012. 
  8. ^ [2][dead link]
  9. ^ Sunday, May 26, 2002 at 0000 hrs IST (2002-05-26). "Depository Services: Basics to Benefits". Retrieved 2012-06-07. 
  10. ^ "NSDL". NSDL. Retrieved 2012-06-07. 
  11. ^ [3][dead link]
  12. ^
  13. ^ [4][dead link]

External links[edit]