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Bombay Stock Exchange (BSE) is the oldest stock exchange in the country and in Asia. It was established in the year 1875 and became the first stock exchange to be recognized by the Government of India in 1956 under the Securities Contracts (Regulation) Act, 1956. It plays an important role in the development of the country’s capital market. This is recognized worldwide and its SENSEX is also tracked worldwide. The vision of the Bombay Stock Exchange is to “emerge as the premier Indian stock exchange by establishing global benchmarks.” The day-to-day operation is managed by the Board of Director. The other members involved are the professionals, representatives of Trading Members and the Managing Director. The Board works to benefit from the market intermediaries participation. The Board has the full authority to control and formulates large trade policies. Its network reaches 417 cities and towns in the country. Its framework has been designed to safeguard market integrity and to operate with transparency. Its online trading system known as BOLT has been started functioning nationwide from 1997. The functions of the Exchange are ISO 9001:2000 certified. The Bombay Stock Exchange has an international conference hall which conducts meetings, conferences and other important events. It has many facilities in the hall like Projection Equipment, Web-cast facility, Internet, Photocopiers and telecom equipment’s
Background
Objectives
Organisational Structure
Governance of the BSE IndoNext Segment
Participating Exchanges
Road map for implementation of BSE IndoNext
Trading model
Groups in BSE IndoNext segment
Eligible securities
Eligibity Norms For Permitting Trading Under IndoNext
List of Companies under 'S' group
Information Memorandum of RSE listed BSE IndoNext Companies
Background
BSE IndoNext was formed to benefit small and medium size companies, the investors in these companies and the capital market as a whole.
Investors and the companies, which are listed only on Regional Stock Exchanges (RSEs) have been impacted severely, as the RSEs are recording either nil or negligible trading volumes. Investors in such small and medium companies are therefore unable to find an exit route and realize fair market value of their investments. The companies listed only at RSEs find it extremely difficult, if not impossible, to raise fresh resources from the capital markets in the absence of price discovery of their securities in the secondary market. New small and medium enterprises (SMEs) have also been unable to tap the markets to raise equity and debt, to fund their plans.
Bombay Stock Exchange Ltd. (BSE) and the Federation of Indian Stock Exchanges (FISE) believe in igniting growth by putting the smile back on the SMEs and also allow new SMEs to bloom. Small businesses could become the backbone of our economy, and an avenue for massive employment generation.
BSE and FISE (which represents 20 RSEs), have jointly created an alternate national platform named BSE IndoNext, to enable SMEs to raise equity and debt, and facilitate trading in such companies, both old and new.
The BSE IndoNext would help the investors to reach the BSE IndoNext traded scrips in addition to the network of BSE, also through the network of about 7,000 members of RSEs, who cater to the investors in the far - flung areas of the country and, thus, contribute to the development of the capital market. BSE IndoNext thus, envisages harnessing advantages of creating a single national trading platform, with a
large number of member participation, which would help achieve a fairly vibrant trading platform for SMEs.
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Objectives
The BSE IndoNext Segment has the following objectives:
To allow companies listed only with RSEs to raise fresh resources from the capital market, given higher liquidity in their shares.
To create liquidity in all the scrips listed on the Exchanges.
To provide an avenue for new SMEs from various regions of the country to raise fresh resources from the capital markets, which would help, achieve balanced regional growth.
To harness the infrastructure at RSEs
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Organizational Structure
BSE is the Central Participating Exchange and the RSEs, which are participating in BSE IndoNext are referred to as Participating RSEs.
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Governance of the BSE IndoNext Segment
BSE IndoNext is a joint initiative by BSE and Participating RSEs. In order to instill higher sense of involvement on the issues relating to management, business development, marketing and general operations of the BSE IndoNext platform, a "BSE IndoNext Council" has been constituted. This Council's duties have been defined in the Bye-laws of BSE and participating RSEs and operate under the overall supervision and control of the Governing Board of BSE.
The Council has 6 representatives from BSE and 5 representatives nominated from RSEs by FISE. BSE provides secretarial assistance and convene the meetings of this Council. The Governing Board of BSE appoints the representatives from BSE. Whereas for the initial six months the representatives from RSE were by FISE, thereafter they are selected for a year starting from every financial year, based on the highest volume generating RSEs during immediate preceding year. The meeting elects a Chairman in the beginning of the financial year, who continues chairing the meeting for the year.
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Participating Exchanges
The following RSEs have participated in the formation of BSE IndoNext ( referred to as the Participating RSEs).
Name of the participating RSEs
The Stock Exchange, Ahmedabad
Banglore Stock Exchange Ltd.
The Delhi Stock Exchange Association Ltd.
Madras Stock Exchange Ltd.
The Hyderabad Stock Exchange Ltd.
Inter - connected Stock Exchange of India Ltd.
Jaipur Stock Exchange Ltd.
The U.P. Stock Exchange Ltd.
The Ludhiania Stock Exchange Association Ltd.
Pune Stock Exchange Ltd.
Saurashtra Kutch Stock Exchange Ltd.
The Vadodara Stock Exchange Ltd.
Cochin Stock Exchange Ltd.
Magadh Stock Exchange Association.
Coimbatore Stock Exchange Ltd.
Guwahati Stock Exchange Ltd.
Bhubaneshwar Stock Exchange Association Ltd.
Madhya Pradesh Stock Exchange
In case, subsequently, any RSE other than the referred to above wishes to join, the same would be permitted as per the terms and conditions as laid down for other participating RSEs in formation of BSE- IndoNext.
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Road map for implementation of BSE IndoNext
To have a quick takeoff of the BSE IndoNext implementation, it was decided to do it in a phased manner. Phase - I of the BSE IndoNext was launched on 7th January 2005. The detailed road map of the phases are as follows:
To first establish the trading platform expeditiously, the BSE set up the BSE IndoNext market as separate trading market on its BOLT system as 'S' group. All the eligible securities in the B1 groups of the BSE were transferred to the 'S' group. Eligible scrips from the participating RSEs were also introduced in the 'S' group under the permitted category at BSE. The members of the BSE and the sub brokers of the subsidiaries which are members of the BSE are allowed to trade in this market. The clearing and settlement as well as the risk management is the sole responsibility of the BSE at this stage. Implementation may not require any change in the Bye - laws of the BSE. All members of the BSE, including the subsidiaries of the RSEs thus have an opportunity to trade on this market without any difficulty.
The participating RSEs whose listed securities are permitted to be traded on BSE IndoNext are required to ensure compliance of all listing requirements.
BSE and the participating RSEs have constituted a BSE IndoNext Council to monitor the implementation of the BSE IndoNext.
Further development would be done in subsequent phases for the optimum usage of the network of the RSEs.
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Trading Model
Trading in the securities of the companies included in BSE IndoNext is done on the BSE's On-Line Trading (BOLT) system as a separate Segment.Trading is also done through the BSE Webx. BSE would continue to be the sole owner of the BOLT in all respects, including the BSE IndoNext feature on the BOLT and this Segment would run under full ownership of BSE.
RSEs are required to discontinue trading in the shares of those companies which are included in the BSE IndoNext segment. Similarly, BSE is required to discontinue trading in B group' of the shares of those companies which are included in the BSE IndoNext segment.
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Groups in BSE IndoNext segment
There are two groups in this segment. The first segment is for the r regular scrips of BSE IndoNext called as 'S' group. The second segment is for the scrips which are transferred to Trade - to - Trade basis from this segment which would be called as ' TS ' group.
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Eligible Securities
Securities which satisfies the "Guidelines for listing in BSE IndoNext" as laid down by the BSE IndoNext Council are eligible to trade in the BSE IndoNext segment. Eligible securities from the following types of companies would be included for trading in BSE IndoNext segment:
Companies listed with RSEs but not with BSE:
Companies with a minimum paid up capital of Rs. 3 crore listed with RSEs but not with BSE, would be included in the BSE IndoNext Segment. Participating RSEs may, however, decide to include the securities of a company with paid up capital above Rs. 20 crore. Securities of those companies which have violated the provisions of the Listing Agreement and the same have still not been resolved or the companies that have not paid listing fees etc., would not be eligible for inclusion in the BSE IndoNext. Also, suitable
parameters would be applied to ensure that only those companies are included whose securities could otherwise be classified in "B1" and "B2" groups of BSE.
Companies exclusively listed with BSE:
Companies with a paid up capital of Rs. 3 crore listed and traded on BSE in B group on 31st March, 2004 or any subsequent date as may be decided by the BSE IndoNext Council would be eligible to be included in BSE IndoNext Segment. Since the "Z" group of BSE comprises of securities of non - complaint companies, the same would not be included in this Segment.
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ELIGIBITY NORMS FOR PERMITTING TRADING UNDER IndoNext
The entry norms for including a company under BSE IndoNext are as under:
Capital
The minimum issued and paid up equity capital shall be Rs. 3 crore.
Networth
The minimum net worth shall be Rs.5 crore. (Net worth includes equity capital and free reserves excluding revaluation reserves).
Non-promoter shareholding
A minimum 25% of company's issued capital shall be be with the non-promoter shareholders. Out of non-promoter holding, if any single shareholder individually or jointly holds with others, except for
banks/FIs /FIIs /OCBs /NRIs, more than 0.5% of the paid up capital of the company, the same shall not be considered as non-promoter holding.
Shareholders
The minimum number of shareholders shall be 500.
Asset Base
The company shall have net tangible assets of at least Rs. 3 crore in each of the preceding 3 full years (of 12 months each).
Turnover
The minimum turnover (excluding exceptional items and other income) shall be Rs. 5 crore in each of the preceding 3 financial years (of 12 months each).
Profitability
The company shall have a track record of distributable profits in terms of Section 205 of the Companies Act, 1956, for at least 3 out of immediately preceding 5. This should exclude non- recurring income.
Demat
The company shall have signed with both depositories and mandated for compulsory demat by SEBI.
. Market segmentation
BSE’s market structure consists of four sections where each section represents a separate market with different trading rules. The following types of financial instruments ara traded in different sections:
securities, which represent ownership right (cash market),
debt securities (cash market),
futures and options (derivatives market),
commodities (cash and derivatives market).
Trading rights are obtained by the brokerage firms separately in each section, therefore the llist of brokerage firms who are active in the different section may differ in each section.
Equities Section
Securities, which represent ownership right (equities, investment fund shares) are traded in the equities section. besides these instruments also the structured products (certificates, ETFs) and special securities (compensation notes) are represented in this section.
Debt Securities Section
Debt securities are represented in the Debt Securities Section, such as government debt securities (treasury bills and government bonds), corporate bonds and mortgage bonds.
Derivatives Section
Derivatives Section of BSE is consists of futures and options contracts based on single stocks, equity indices, FX and interest rate.
Commodities Section
As a result of the BSE and BCE merge dated November 2005, there is commodity trading also on BSE, principally with grain products. Contrary to other sections spot and derivative commodity instruments are traded in one single section.
Non regulated free market
For those securities that are not officially listed on BSE the stock exchange provides a non-regulated free market. The free market uses the stock exchange trading system MMTS and the trades are cleared and settled through KELER. As this market segment is not a regulated market, the trades concluded on it are considered as OTC trades.
Bombay stock market
The Bombay stock market is focused on the Bombay Stock Exchange Limited, popularly referred to as The Bombay Stock Exchange or BSE. The Bombay stock market is of international interest and the Bombay Stock Exchange index – the SENSEX – is today tracked worldwide. The Bombay Stock Exchange provides the Bombay stock market with a place for trading in equity, dept instruments and derivatives.
The Bombay Stock Exchange Sensitive Index – commonly known as the BSE Sensex – is a value-weighted index consisting of the 30 largest and most actively traded stock on the Bombay Stock Exchange. The companies are representative of various sectors and the base value of the index is 100 on April 1, 1979. The base year of BSE Sensex is 1978-1979. These 30 companies account for roughly 20 percent of the market capitalization of the BSE and is naturally an important indicator for the Bombay stock market.
The Bombay Stock Exchange was established in 1875 as "The Native Share & Stock Brokers Association" and is the oldest stock exchange in Asia. It was earlier also named The Stock Exchange, Mumbai. The Bombay stock exchange was the first stock exchange in the country that obtained permanent recognition from the Indian government and it has naturally played an extremely important role for the development of the Bombay stock market, as well as for the Indian stock market. The Bombay Stock Exchange received permanent recognition under the Securities Contracts (Regulation) Act, 1956, in the year of 1956.
You can find this stock exchange at Dalal Street in Mumbai (the city formerly known as Bombay). Roughly 4,800 Indian companies are listed with the Bombay Stock Exchange and in 2007, the equity market capitalization was US$ 999 billion (Rs. 40.7 trillion). The Bombay stock market is one of the five largest stock exchanges in the world when it comes to transaction volume and the Singapore Exchange (SGX) has made a strategic investment (5%) in the exchange for US$ 42.7 million.
The Bombay stock market is huge and the Bombay stock exchange is by no means limited to the Bombay region; it reaches all over the country and is present in over 400 Indian cities and towns. The systems and processes have been designed to ensure market integrity and promote transparency.
The Bombay Stock Exchange was once an Association of Persons (AOP), but it has now been changed into a demutualised and corporatised entity. This entity is incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE (Corporatisation and Demutualisation) Scheme, 2005 notified
by the SEBI (the Securities and Exchange Board of India). The Bombay Stock Exchange was granted with its Certificate of Incorporation in 2005, and received its Certificate of Commencement of Business almost exactly 12 months later.
The change from Association of Persons (AOP) to a demutualised and corporatised entity was naturally an important step in the history of the Bombay stock market. The demutualization caused a separation of ownership rights and trading rights, a way of handling previous concerns regarding both real and perceived conflicts of interest for the Bombay stock exchange.
When it comes to organisation structure, the Bombay Stock Exchange has a Board of Directors responsible for creating major policies and exercise over-all control. The Board consists of professionals, Trading Members representatives, and the Managing Director of the Exchange. The everyday operations are managed by a team of professionals and the Managing Director & CEO.
Bombay Stock Exchange is one of the oldest stock exchanges in Asia was established in the year 1875 in the name of "The Native Share & Stock Brokers Association".
Bombay Stock Exchange is located at Dalal Street, Mumbai, India. It got recognition in 1956 from the Government of India under Securities Contracts (Regulation) Act, 1956. Presently BSE SENSEX is recognized over the world. Trading volumes growth in the year 2004-05 have drawn the attention over the globe.
As to the statistics, the total turnover from BSE transcation as in June 2006 is calculated at 72013.36 crores.
BSE Indices:
The well-known BSE SENSEX is a value weighted of 30 scrips.
Other stock indices of BSE are BSE 500, BSEPSU, BSEMIDCAP, BSESMLCAP, and BSEBANKEX.
BSE 100 Index:
The equity share of 100 companies from the list of 5 major stock exchanges such as Mumbai, Calcutta, Delhi, Ahmedabad and Madras are selected for the purpose of compiling the BSE National Index. The year 1983-84 is taken as the base year for this index. The method of compilation here is same as that of the BSE SENSEX.
BSE 200 Index:
The BSE 200 Index was lunched on 27th May 1994. The companies under BSE 200 have been selected on the basis of their market capitalisation, volumes of turnover and other findamental factors. The financial year 1989-90 has been selected as the base year.
BSE 500 Index:
BSE 500 Index consisting of 500 scrips is functioning since 1999. Presently BSE 500 Index represents more than 90% of the total market capitalisation on Bombay Stock Exchange Limited.
BSE PSU Index:
BSE PSU Index has been working since 4th June 2001. This index includes major Public Sector Undertakings listed in the Exchange. The BSE PSU Index tracks the performance of listed PSU stocks in the exchange.
Companies In BSE:Companies listed on the Bombay Stock is rising very fast. As to statistics, companies listed to the end of March 1994 reached at 3,200 compared to 992 in 1980.
The Address and Contact Details of Bombay Stock Exchange India is as follows:
Can the capital market exist without stock exchanges? Of course not! The Indian capital market at present is steered by two key bourses, viz. Bombay Stock Exchange and National Stock Exchange. There are a number of other small bourses, but these are the two exchanges where major transactions take place. No wonder the share market of India is also termed as the NSE BSE market at the international context. The indices with live updates are displayed in all news channels not to mention news portals, financial portals, and brokerage sites. For the National Stock Exchange it is the nifty and BSE sensex for the Bombay Stock Exchange.
India Index Services & Products Limited (IISL) is the index service wing of National Stock Exchange. Several stock indices have been launched under this wing. These are as follows:
S&P CNX Nifty (Standard & Poor's CRISIL NSE Index)
CNX Nifty Junior
CNX 100 (CNX Nifty Junior plus S&P CNX Nifty)
S&P CNX 500 (CNX 100 + 400 major companies covering 72 industries)
CNX Midcap (formerly CNX Midcap 200).
Both the NSE and BSE have pioneered the concept of trading in the share market of India, opening the gateway for investors to make big money. It is the BSE that introduced securities trading in India, replacing its open outcry system with totally automated trading. BSE Online trading (BOLT) system network, since the time it was introduced in 1995, was expanded across the country in 1997 facilitating investors with easy trading options. Online trading was first launched in India by NSE.
The trading sessions are a bit different for both the bourses. In case of the National Stock Exchange normal trading sessions start from 9:15 am and ends at 3:30 pm on all days of the week excluding Saturdays and Sundays. Trading does not take place on all Official Holidays declared by the Government of India or the Exchange in advance. The time structure for BSE is 8 am to 5:30 pm and the non-working days besides holiday structures are similar to that of the NSE.
Many a business news portal and brokerage portal carries BSE live statistics displaying complete information related to the BSE market. Right from BSE sensex figures to recommended BSE stocks, top gainers, top losers, losses and gains in terms of percentage, sectors that are in the uptrend and those in the downtrend and more are exhibited in a BSE live platform. Those who are full time traders in the BSE
market, especially for short term, always need to stay updated with the BSE live statistics. Similar is the case with the NSE market.
The NSE BSE market in the current times is not performing up to the expectations of the investors. Volatility has been prevailing for the past several weeks at a stretch. Frequent ebb and flow with no consistency in the upward graph did dampen the spirits of many. But the situation will certainly improve after a few days.
The Bombay Stock Exchange (BSE), also known as the Stock Exchange Mumbai, is one of the oldest stock exchanges in all of Asia, dating back to 1875 when it was known as the Native Share and Stock Brokers Association. The exchange is home to about 5,000 listed companies, with a total market capitalization of around 71 trillion Rupees, or nearly $1.6 trillion as of November 2010.
The BSE is also one of the busiest stock exchanges in the world, currently ranking around number four in terms of annual transactions. The exchange has experienced explosive growth, with a four-fold increase in trading volume over the last 15 years.
Vision and Security of the BSE
Additional Resources
Stock Exchange
American Stock Exchange
Australian Stock Exchange
Bombay Stock Exchange
London Stock Exchange
Stock Market Holidays
The vision of the Bombay Stock Exchange is "Emerge as the premier Indian stock exchange by establishing global benchmarks." That means the exchange is thinking big in terms of customer service and trading activity. The market has not only experienced explosive growth in terms of trading volume, but also in terms of overall return to investors.
After compensating for inflation, the BSE has averaged a 15.8% annual return when measured by Sensex, the most popular stock index in India, over the last 20 years. Other important indices originating from the Bombay exchange include the BSE 100, BSE 500, BSEPSU, BSEMIDCAP, BSESMLCAP, and BSEBANKEX.
Protecting the interests of investors dealing in securities is one of the primary objectives of the exchange. The exchange provides this additional security by ensuring remedy of grievances, whether
this is against member companies or member/brokers. Overall guidelines for the marketplace are established by the Securities and Exchange Board of India (SEBI).
The Bombay Stock Exchange has a national reach in India, claiming a presence in 296 towns and cities throughout the country. The exchange is operated through a unique and proprietary computer system known as the "BSE On Line Trading System" or BOLT. The exchange has also received ISO 9001:2000 certification in the areas of surveillance and clearing / settlement functions.
BSE Facts and Figures
* The following are some of the facts and figures that can help you get a better feel for the volume of trading that occurs on the Bombay Stock Exchange:
In 2010, the average volume of business conducted on the BSE was approximately $23 billion each month.
The number of shares traded each month on the BSE is in the range of 40 to 50 million.
The total market capitalization for the companies traded on the BSE is in the area of $1.6 trillion. All of the above dollar values are stated in USD.
Bombay Stock Exchange Holidays
The BSE's list of holidays and trading holidays is a bit different than those found in U.S.-based stock exchanges such as the NYSE. The following table show the holidays that will be observed during the calendar year 2010 and 2011:
BSE Holiday Schedule 2011
Holiday Date
Republic Day January 26, 2011
Mahashivratri March 2, 2011
Ram Navmi April 12, 2011
Dr. Babasaheb Ambedkar Jayanti April 14, 2011
Good Friday April 22, 2011
Independence Day August 15, 2011
Ramzan Id August 31, 2011
Shri Ganesh Chaturthi September 1, 2011
DasseraOctober 6, 2011
Diwali Amavasya (Laxmi Pujan) October 26, 2011
Diwali Balipratipada October 27, 2011
Bakri-Id November 7, 2011
Gurunanak Jayanti November 10, 2011
Moharum December 6, 2011
BSE Holiday Schedule 2010
Holiday Date
New Year January 1, 2010
Republic Day January 26, 2010
Mahashivratri February 12, 2010
Holi March 1, 2010
Ram Navami March24, 2010
Good Friday April 2, 2010
Dr. Babasaheb Ambedkar Jayanti April 14, 2010
Ramzan Id September 10, 2010
Diwali (Laxmi Pujan) November 5, 2010
Bakri-Id November 17, 2010
Moharum December 17, 2010
BSE Trading Hours / Session Timing
The following is a table of the session timing / hours of operation for trading that occurs on the BSE. These times apply to both the equities and derivatives markets. They also indicate the schedule for the start and finish of electronic trading sessions on the BSE.
BSE Hours of Operation
Beginning of the Day Session 8:00 - 9:00
Login Session 9:00 - 9:15
Trading Session 9:15 - 15:30
Position Transfer Session 15:30 - 15:50
Closing Session 15:50 - 16:05
Option Exercise Session 16:05 - 16:35
Margin Session 16:35 - 16:50
Query Session 16:50 - 17:35
End of Day Session 17:35
The hours of operation for the BSE quoted above are stated in terms of the local time in Mumbai, India (also known as Bombay). This translates into a standard time zone UTC/GMT +5:30.
