Sector: Exchanges

12 Annual Global Investor Conference

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NSE

Ms Chitra Ramakrishna

MD & CEO

NSE

Thematic

Presentation

C

hitra Ramkrishna is the first

woman MD and CEO of NSE.

Starting out as a chartered

accountant, her first brush with

finance came in 1985 when she

joined the project finance division

of IDBI. Ramkrishna then had a

stint at SEBI. The association of

Ms. Ramkrishna with the NSE

dates back to the formative years

when deliberations were on to

create a modern stock exchange

with a national presence.

Ms. Ramkrishna has undertaken

several key initiatives at the NSE

that has had far-reaching impact

and ensured the exchange

remained India's most premiere

bourse. She was instrumental in

setting up a pan-India VSAT

network and building the

infrastructure and legislative

framework for India's first

depositor.

She was selected as the woman of

the year in the Business

Leadership Awards by the Forbes

magazine recently, and was also

ranked 17th in the list of top

global women business leaders by

Fortune magazine, USA. She is the

second

most

powerful

businesswoman in India in this

list. She has been featured in the

list of top 30 women achievers by

the Business Today group for the

last four successive years.

Indian exchanges at inflection, led by forces of

regulation and technology

Takeaways from CEO Track

We hosted Ms Chitra Ramakrishna, MD and CEO of National Stock Exchange as part of CEO

Track at our conference. Here are the key takeaways from her presentation.

Exchanges an integral part of the global financial system:

The global financial

system is estimated at USD318t and moves USD74t around the world each day.

Within this, 63 regulated exchanges represent a total market capitalization of

USD64t and a total trading value of USD111t, which is >65% of the global GDP,

signifying the importance and criticality of exchanges in the system.

India an important contributing engine to global growth:

In multiple aspects,

the Asia-Pacific region has been the major global growth driver, and India is a major

contributor in this. As per IOMA’s derivatives survey, APAC was the top contributor

to global growth, and India was the top contributor to APAC. This also gets reflected

in the performance of NSE, which witnessed a growth of 61.2% to 3.03b contracts,

second only to CME Group.

Regulatory changes and technological advancements shaping global capital

markets:

Global capital markets are driven by two factors: [1] external aspects of

capital, clients and business diversification, and [2] internal push from the need to

optimize processes, systems and infrastructure. Regulations and technology both

play the role of critical pillars in capital markets. Regulations are being aimed at

risk

reduction

and improvement of

transparency

and

competitive forces.

Regulatory principles today presume that markets will talk to each other more and

that players will keep driving that infrastructure. The regulatory principles are

raising standards for players across the board. Players need to cope with global

benchmarks for capital requirement and risk management. Consequently, a

realignment of processes, systems and even business models is being necessitated.

Regulatory changes driving innovation as an outcome:

Regulatory changes

have been driving innovation, which is in fact a result of the core intent to reduce

risk, standardize, and increase transparency. Regulations are likely to drive

innovation in multiple areas including security (NFC, Biometric, Active Surveillance),

data privacy, cyber security, and means and measures to aid financial inclusion.

Ashish Chopra

(Ashish.Chopra@MotilalOswal.com); +91 22 3982 5424

/ Sagar Lele

(Sagar.Lele@MotilalOswal.com); +91 22 6129 1531

September 2016

Investors are advised to refer through important disclosures made at the last page of the Research Report.

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Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

HDFC Bank

12 Annual Global Investor Conference

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Role of technology in driving next leg of growth

Technology plays an important role in driving product and service innovation, and

can result in higher efficiency. While it has played a major role in increasing

transparency in the past, going forward, it has the potential to impact five key areas:



Post trade resilience

– Technology can transform the post trade process by

increasing integrity and reducing costs by altering collateral management and

optimizing minimum capital requirements.



AI and analytics

– The increasing output of data can be better monetized using

analytics, which can be used for client risk profiling, capital management,

devising products based on behavioral patterns, etc. A lot of these areas are yet

untapped by the financial industry.



Investment technology

– The use of technology can facilitate developments at

both ends of the spectrum: creating highly customized and sophisticated

products for the premium end, and creating basic products centered around

passive investments for the masses (thus, furthering financial inclusion).



Funding platforms

– Various alternate funding platforms can be created to

address the unmet needs of various pockets of investors and capital raisers.

Similarly, product offerings by FinTech companies can also be tested and scaled

up to benefit the ecosystem at large.



Core market infrastructure

– Technology can continue developing latency,

speed and efficiency of physical assets.

Advantage NSE:

NSE, which was put among the top 15 exchanges in the world by

WFE/IOMA acts as the barometer of India’s capital markets. It has been leading the

way in leveraging technological advancements in strengthening infrastructure,

augmenting a pan India presence, developing fault tolerant servers, ramping up

detection capabilities by integrating national and international surveillance feeds,

and predictive and active surveillance, initiating social media mining to catch scams,

phishing and social engineering. Using technology more suited to the ground level

requirements of India will be a big piece in financial inclusion. Digital ways of

onboarding customers could be a game changing driver for greater penetration in

the market. Leaders like NSE enjoy strengths today as a distribution platform,

moving on from offering only equities to offering a range of products including

mutual funds and sovereign gold bonds among others.

Multiple business verticals to remain globally competitive:

The advantage of

India’s late entry into the financial market has been that we can accommodate

multiple aspects of the market (cash, derivatives, clearing, settlements, etc) under

one roof, in a highly efficient manner. At the same time, underserved markets like

debt, currency and SMEs can be built on these strong foundation layers. With

technology at the center of new product and market opportunities, India can lead its

way to the top-3 markets globally. Opportunity size is huge – globally, debt markets

are significantly larger at at least 10-12x the size of the underlying cash markets.

Issuances in corporate bonds are still <1% of the total credit being issued.

September 2016

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HDFC Bank

12 Annual Global Investor Conference

Exhibit 1:

The role of technology in advancement of India’s exchanges

th

Source: Company, MOSL

Exhibit 2:

NSE’s position across major offerings

Source: Company, MOSL

Exhibit 3:

NSE’s global ranking across product categories

Source: Company, MOSL

September 2016

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