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‘The ‘Native Share and Stock Brokers Association’, a precursor to today’s Bombay Stock Exchange (BSE), was born in 1875 and formally constituted in 1887. The oldest exchange in Asia and the first exchange in the country to be granted permanent recognition under the Securities Contract Regulation Act, 1956, BSE has had an interesting rise to prominence over the past 130 years. BSE, established as a voluntary not for profit, association of persons, jointly owned by the members of the Exchange, is now a de-mutualised and corporatised entity, and a proposed public company limited by shares.

India’s biggest bourse, in terms of listed companies and market capitalisation, BSE has played pioneering role in the Indian Securities Market - one of the oldest in the world. Much before actual legislations were enacted, BSE had formulated comprehensive set of Rules and Regulations for the Indian Capital Markets. It also laid down best practices adopted by the Indian Capital Markets after India gained its Independence.

With over 800 members and 14,426 trading terminals, BSE network stretches across 417 cities in India. Today, the BSE trading platform offers liquidity to the securities of 4,687 companies - the largest number of companies listed.

Registering almost 1.4 million transactions per day, the average daily turnover of BSE is about Rs.25 billion. While thousands of investors seek BSE for a wide range of investment opportunities in equity, derivatives and debt, over 500 foreign institutions also invest funds through it. Responding to the growing demand, BSE offers easy access to the securities market through its Internet trading facility WEBx.

BSE as a brand is synonymous with capital markets in India. The BSE SENSEX is the benchmark equity index that reflects the robustness of the economy and finance. At par with international standards, BSE has been a pioneer in several areas and is the first stock exchange in Asia and second stock exchange in the world to get ISO 9001:2000 certification for the entire surveillance function.

‘BSE On-Line Trading System’ (BOLT) has been awarded the globally recognised the Information Security Management System standard BS7799-2:2002. BSE is the only exchange in India and second in the world to achieve this for its On-line Securities Trading System.

It is also the first in India to introduce Equity Derivatives, the first in India to launch a Free Float Index, the first in India to launch US$ version of BSE SENSEX, the first in India to launch an Exchange Enabled Internet Trading Platform WEBx 2001, and the first to have an exclusive facility for financial training. It is also the only Exchange to offer Weekly Options in Derivatives.

The real time surveillance system of BSE monitors the market online and throws alerts on slightest indications of market irregularities. These alerts are then examined by way of strict procedures, after which necessary action is initiated. In fact, there was no default reported on 17th of May 2004, the day the market crashed to a record low, with no member being declared a defaulter.

The Clearing and Settlement department is also ISO 9001:2000 certified. This reflects the robust and efficient ‘risk management’ system at BSE.

Products

BSE offers a wide range of products for trading in the securities market. An investor can choose from 4,687 listed companies. For the easy reference of investor, companies are classified into A, B1, B2, and Z groups. These denote the levels of compliance by companies of the regulations of SEBI and the Exchange. The companies in ‘A’ group denote the highest level of companies, while those in the ‘Z’ group have the lowest compliance level.

Another feature of equity trading at BSE is the ‘Basket Trading’ facility wherein all scrips forming part of the BSE SENSEX can be dealt in as a ‘basket’ in the same ratio as the weightage given to them in the SENSEX.

BSE also offers trading in SENSEX futures and options; as well as Futures and Options in individual stocks. BSE also introduced trading in the Debt segment in 2001.

A full-fledged Investor Services Cell (ISC) redresses grievances of investors. Since its establishment in 1986, the cell has played a pivotal role in enhancing and maintaining the faith and confidence of investors by resolving issues against listed companies or against members of the Exchange. BSE was the first Exchange in the country to provide an amount of Rs.1 million towards the investor protection fund; it’s an amount higher than that of any Exchange in the country.

BSE also has an effective three-level arbitration mechanism that redresses grievances between members, investors against members, and investors against companies. With more and more foreign investment flowing into the country’s financial markets, particularly from the Non-Resident Indian (NRI) community, BSE has also charted out plans to conduct seminars abroad, covering various aspects of Indian’s capital markets.

The BSE Training Institute (BTI), which imparts capital market training and certification, organized 150 programmers in 2003-04. At present, BTI, in collaboration with reputed management institutes and universities, offers 40 courses on various aspects of the capital market and financial sector. More than 20,000 people have so far benefited from them.

In order to enable Small and Medium Enterprises (SME) to raise equity and debt, and facilitate trading in such companies, BSE has launched a single order book national trading platform called BSE IndoNext. It envisages to harness the advantages of creating a single national trading platform, with a large number of member participation, which would help achieve a fairly vibrant trading volumes for small and medium enterprises.

BSE launched a nationwide investor awareness programme, ‘Safe Investing in the Stock Market’ under which 264 programmes were held in more than 200 cities. Furthermore, dissemination of information through print and electronic medium was undertaken on safeguards by retail and small investors.

Through its strict listing norms and other compliance requirements BSE promotes good corporate governance, transparency in operations through print and electronic media and road-shows. BSE also promotes investor education by sponsoring programmes.

Over the past 130 years, BSE has also facilitated the growth of corporates by providing them with an efficient access to resource mobilization. There is, perhaps no leading corporate in India, which had not sourced BSE’s services in raising resources from the capital market. Today, BSE stands tall - an image of the iconic stature of the Exchange in the Indian Capital Markets.