BSE INTRODUCTION

The Stock Exchange, Mumbai which was established in 1875 as "The Native Share and Stockbrokers Association" (a voluntary non-profit making association), has evolved over the years into its present status as the premier Stock Exchange in the country. It may be noted that the Stock Exchange is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was founded in 1878.

The Stock Exchange, Mumbai (BSE) is generally referred to as the Gateway to the capital market in India. It is a lynch-pin of the Indian Capital market. Its governing board and administration are keenly aware of the future needs of the exchange to maintain its lead role. As Indian economy is opening up, the Exchange has brought its operations at par with international standards. It is poised to take advantage of changes in Indian economic deregulation to expand the market and make the security market, in India, more transparent and more liquid.

However, the objectives and the role of the Stock Exchange, Mumbai has remained the same as enunciated by our founding fathers and given to us as a mandate in 1887 through the charter. These objectives are:

1. To safeguard the interest of investing public having dealings on the Exchange and the members.
2. To establish and promote honourable and just practices in securities transactions.
3. To promote, develop and maintain a well regulated market for dealing in securities.
4. To promote industrial developments in the country through efficient resource mobilisation by way of investment in corporate securities.

The Exchange while providing an efficient market also upholds the interests of the investors and ensures redressal of their grievances, whether against the companies or its own member-brokers. It also strives to educate and enlighten the investors by making available necessary informative inputs.

A Governing Board comprising of 9 elected directors (one third of them retire every year by rotation), an Executive Director, three Government nominees, a Reserve Bank of India nominee and five public representatives, is the apex body which regulates the Exchange and decides its policies.

A President, Vice-President and an Honorary Treasurer are annually elected from among the elected directors by the Governing Board following the election of directors.

The Executive Director as the Chief Executive Officer is responsible for the day-to-day administration of the Exchange.

The Exchange has obtained permission from Securities and Exchange Board of India (SEBI) for expansion of its BSE-On-Line-Trading (BOLT) network to locations outside Mumbai. In terms of the permission granted by SEBI and certain modifications announced later, the members of the Exchange are free to install their trading terminals at any place in the country. However, the Exchange had earlier signed a Memorandum of Understanding (MOU) with eleven regional stock exchanges permitting it to install the BOLT terminals in their jurisdictional areas. The Exchange has accordingly decided, for the time being, to allow its members to install BOLT terminals in all metro cities and other areas having stock exchanges who have not signed a MOU with the Exchange.

The expansion of BOLT network was inaugurated by the then Finance Minister, Government of India, Shri P. Chidambaram on August 30, 1997. The BOLT network has been expanded to centres outside Mumbai and covers 291 centres having 1207 VSATs (Very Small Aperture Terminals) and 1795 TWSs (Trader Work Stations) as on August 31, 2000. Of these, 1134 VSATs and 1662 TWSs are installed outside Mumbai.

The average daily turnover at the Exchange has increased from Rs.851 crores in 1997-98 to Rs. 1284 crores in 1998-99 and further to Rs. 2729 crores in 1999-2000. The average daily trades which were about 80,000 in 1997-98 have increased to 2,95,000 in 1999-2000.

Some of the important aspects of the working of the Stock Exchange, Mumbai are discussed in other pages