BOMBAY STOCK EXCHANGE
Bombay stock exchange was established as the “Native share and stock broker’s Association” through the presidency of Bombay with the approval of the central government. The management of BSE is vested on a Governing Board comprising of Nine elected directors, an executive, three government nominees, one RBI nomine and five public nominees. Bombay stock Exchange in the oldest stock exchange in India. It started trading in shares in the year 1875 and since then it has been the forerunner of the secondary market in India.
BSE limited has two segments.
1. Capital market segment.
2. Derivative market segment.
OBJECTIVES OF BSE
The major objectives of BSE are the following.
1. To safeguard the interest of the investing public.
2. To establish and promote honest and just practices in security transactions.
3. To promote, develop and maintain a well regulated market for dealing in securities.
4. To promote industrial development in the country through efficient resource mobilization by way of investment in corporate securities .
CAPITAL REQUIREMENTS
The capital requirement of BSE are
1. The minimum issued equity capital of Rs.3 crores.
2. Profitability record of at least THREE years.
3. The minimum market capitalization of Rs. 20 crose (based pm Average size) for the last six months.
4. Trading for a minimum of 50% of the total trading days during the same six months on any exchange.
5. The minimum average volume traded per day during the last three completed months should be 500 shares and at least five trades per day.
TRADING SYSTEM
The Bombay stock Exchange computerized its trading system by introducing Bombay On line Trading (BOLT) on 14th March,1995.
It serves Two purposes
1. It allows retention and matching of orders against one another where no quotes exist in the system for particular scrip and
2. It improves the price competitive character of the market, in case investors are willing to deal at prices better than the current best quotes.
At the Bombay stock Exchange, trading takes place in groups. The scrip traded on the exchange have been classified into A,B,B1,B2,C,F,G,T & Z groups.
The categories of securities traded under the group are
1. Group A – Specified shares.
2. Group B – Non specified shares
3. Group C – odd lots and permitted shares
4. Group F – Debit market.
5. Group G – Government securities
6. Group Z – List of companies which have failed to comply with listing requirement and /or failed to resolve investor complaints.
Besides the exchange also has another segment called the “Trade to Trade” category that has been shifted to “T” group. It was created as a preventive surveillance measure to ensure market safety and integrity.
BSE is a witness to continuous rise and fall in share prices over all these years. It has taken number of steps to develop and strengthen the secondary capital market. The trading system has gradually shifted from traditional system to computerized on-line system.