The Exchange operates the following sub-segments in the Equities segment:

• Rolling Settlement
• Limited Physical Market
• Institutional Segment
• Trade for Trade Segment

In a rolling settlement, each trading day is considered as a trading period and trades executed during the day are settled based on the net obligations for the day.

At NSE, trades in rolling settlement are settled on a T+2 basis i.e. on the 2nd working day. For arriving at the settlement day all intervening holidays, which include bank holidays, NSE holidays, Saturdays and Sundays are excluded. Typically trades taking place on Monday are settled on Wednesday, Tuesday's trades settled on Thursday and so on.

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Limited Physical Market

Pursuant to the directive of SEBI to provide an exit route for small investors holding physical shares in securities mandated for compulsory dematerialised settlement, the Exchange has provided a facility for such trading in physical shares not exceeding 500 shares. This market segment is referred to as 'Limited Physical Market' (small window). The Limited Physical Market was introduced on June 7, 1999.

Salient Features of the Limited Physical Market

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Institutional Segment

The Reserve Bank of India had vide a press release on October 21, 1999, clarified that inter-foreign-institutional-investor (inter-FII) transactions do not require prior approval or post-facto confirmation of the Reserve Bank of India, since such transactions do not affect the percentage of overall FII holdings in Indian companies. (Inter FII transactions are however not permitted in securities where the FII holdings have already crossed the overall limit due to any reason).

To facilitate execution of such Inter-Institutional deals in companies where the cut-off limit of FII investment has been reached, the Exchange introduced a new market segment on December 27, 1999.

The securities where FII investors and FII holding has reached the cut-off limit as specified by RBI (2% lower than the ceiling specified by RBI) from time to time would be available for trading in this market type for exclusive selling by FII clients. The cut off limits for companies with 24% ceiling is 22%, for companies with 30% ceiling, is 28% and for companies with 40% ceiling is 38%. Similarly, the cut off limit for public sector banks (including State Bank of India) is 18% whose ceiling is 20%. The list of securities eligible / become ineligible for trading in this market type would be notified to members from time to time.

Salient Features of the Institutional segment

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Trade for Trade Segment

The securities in Trade for Trade segment are made available for trading under BE or BT series. The settlement of securities available in this segment is done on a trade for trade basis and no netting off is allowed.

The surveillance action whereby securities are transferred for trading and settlement on a trade-to-trade basis under BE series is reviewed at periodic intervals viz fortnightly and quarterly. The criteria for shifting securities to/from Trade for Trade segment are decided jointly by the stock exchanges in consultation with SEBI and reviewed periodically. Securities on which derivatives products are available or securities included in indices on which derivatives products are available shall not be transferred to Trade for Trade segment.

Criteria for fortnightly review of securities:-

The detailed criteria for transfer of securities to Trade for Trade segment is as follows:

• Price Earnings Multiple (P/E) less than 0 or greater than or equal to upper limit # subject to a minimum of 25 as on the relevant date.
  (# If Nifty P/E on the relevant date is in the range of 15-20, then the upper limit will be 30. If Nifty P/E>20 or <15 then the difference rounded off to nearest number will be added to or subtracted from 30).
  
  AND
  
  

• Price variation greater than or equal to 20% plus Nifty variation for the fortnight; subject to a minimum of 10%.
  
  AND
  
  

• Market capitalization less than or equal to the threshold* as calculated in the last quarterly review subject to an upper limit of Rs. 500 crores as on the relevant date.
  
  *Market capitalization threshold shall be linked to the Nifty / Sensex movement between December 01, 2003 taking base as Rs. 200 crores and present quarterly relevant date (after rounding off to the nearest Rs. 50 crores of higher of Nifty / Sensex movement).

Dropping criteria:

• Newly listed scrips (IPO) and the securities which are made available for trading in Trade for Trade segment for the first 10 trading days with applicable price band, while keeping the price band open on the first day of trading as per SEBI circular no SEBI/Cir/ISD/1/2010 dated September 2, 2010 shall be dropped till the time they declare their first Quarterly results.
   

• Securities transferred out of Trade for Trade segment to Rolling settlement as per quarterly review will not be considered for transfer to Trade for Trade in the immediately following fortnightly review.
   

Criteria for quarterly review of securities:-

The detailed criteria for transfer of securities to/from Trade for Trade segment is as follows:

Criteria A

• Price Earnings Multiple (P/E) less than 0 or greater than or equal to upper limit # subject to a minimum of 25 as on the relevant date (#explained above in fortnightly criteria) AND
   

• Price variation greater than or equal to 20% plus Nifty variation for the month; subject to a minimum of 10%  AND
   

• Volatility greater than three times Nifty volatility over a period of three months. Volatility is computed as standard deviation of log normal close to close returns.
  
  

OR

Criteria B

• Price Earnings Multiple (P/E) greater than 0 but less than the upper limit # subject to a minimum of 25 as on the relevant date (#explained above in fortnightly criteria) AND
   

• Price variation greater than or equal to 40% plus Nifty variation for the month AND
   

• Volatility greater than three times Nifty volatility over a period of three months.
  
  

OR

Criteria C

Criteria C shall be applicable to securities with a market capitalization of less than 2 times of the market capitalization* arrived at for the review (*refer explanation in fortnightly criteria)

• Average daily volume variation month over month greater than 200% + Average volume variation of S&P CNX 500 constituents. (computed as average of average volume variation month over month across the constituents as on relevant date, rounded off to the nearest 5%), subject to minimum of 200% (average daily volume in the recent month being more than 1000 shares) AND
   

• Concentration (Gross Purchase plus Gross Sales) of top 10 Clients on the basis of PAN during the month more than 25% AND
   

• Price variation greater than or equal to 20% plus Nifty variation for the month; subject to a minimum of 10%.

OR

Criteria D

• Number of non promoter shareholders less than 500 as per the latest shareholding pattern available with the Exchange.

Dropping criteria:

Securities satisfying any of the above criteria A, B, C or D with market capitalization greater than the calculated threshold* (explained above) subject to the upper limit of Rs.500 crores , shall be excluded from transfer to Trade for Trade segment, if they satisfy any of the following conditions:

• The companies which have declared dividends or issued bonus shares in the last two years out of three years shall be excluded OR
   

• Securities having Institutional or government holding of more than 20% as per the latest available shareholding pattern. OR
   

• In case of IPO and the securities which are made available for trading in Trade for Trade segment for the first 10 trading days with applicable price band, while keeping the price band open on the first day of trading as per SEBI circular no SEBI/Cir/ISD/1/2010 dated September 2, 2010 shall be given the benefit of dividend paying record till they declare their first annual results.
   

Securities satisfying criteria for movement to trade for trade segment in the preceding fortnight will not be considered in the quarterly review for movement from trade for trade segment to rolling segment.

Additionally, SEBI has vide circular no SEBI/Cir/ISD/1/2010 dated September 02, 2010 laid down further guidelines for shifting of a security to trade for trade segment, which are as under:

a. The securities of all companies shall be traded in the normal segment of the exchange if and only if, the company has achieved at least 50% of non-promoters holding in dematerialized form by October 31, 2010 ( with the exception of the government holding in non promoter category)

b. In all cases, wherein based on the latest available quarterly shareholding pattern, the companies do not satisfy above criteria, the trading in such scrips shall take place in Trade for Trade segment (TFT segment) with effect from the time schedule specified above.

c. In addition to above measures, in the following cases (except for the original scrips, on which derivatives products are available or included in indices on which derivatives products are available) the trading shall take place in TFT segment for first 10 trading days with applicable price band while keeping the price band open on the first day of trading.

• Merger, demerger, amalgamation, capital reduction/consolidation, scheme of arrangement, in terms of the Companies Act and/or as sanctioned by the Courts, in cases of rehabilitation packages approved by the Board of Industrial and Financial Reconstruction under Sick Industrial Companies Act and in cases of Corporate Debt Restructuring (CDR) packages by the CDR Cell of the RBI.





• Securities that are being admitted to trading from another exchange by way of direct listing/MOU/securities admitted for trading under permitted category,





• Where suspension of trading is being revoked after more than one year.
  

Besides, securities which have not established connectivity with both the depositories as per SEBI directive are available for trading in Trade for Trade segment under series BT.