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Bombay Stock Exchange Overview

The Bombay Stock Exchange, also known as BSE is one of the main stock exchanges in the world. It is definitely the first stock exchange in Asia and the oldest in India. Its history dates back from 1855 when five stock traders gathered under a banyan tree nearby the City Hall of Mumbai. The number of traders increased over time and the exchange moved to Dalal Street in 1874.

Booms and bubbles in various stocks made the BSE interesting and attractive for investors, even from the early times. The BSE gained permanent recognition under Securities Contracts Act in 1957.

The BSE opened its derivatives market in 2000, by trading SENSEX futures contracts. SENSEX options followed over the next two years.

Bombay Stock Exchange includes two strategic partners, Singapore Exchange and Deutsche Bourse and it provides a transparent market for debt instruments, equity, mutual funds and derivatives. BSE is the biggest in the world in terms of listed members, with about 5000 companies listed. BSE is not only big but also very active. It’s the fifth most active exchange in the world in terms of number of transactions. It’s also the third largest in the world in terms of Index options trading.

BSE’s electronic trading system was implemented in 1995 and the transition took only 50 days, a remarkably short time, taking into consideration the huge amount of data that needed to be processed.

This online trading system, named BOLT, was the second in the world to obtain the BS 7799-2-2002, a very important security standard. It can take the impressive amount of 8 million orders per day. This is really amazing. Thanks to the centralized internet trading system, any investor in the world can trade on the BSE platform.

All systems and processes of the Bombay Stock Exchange are designed to stimulate innovation and competition, to safeguard market integrity and to accelerate the growth of the India’s capital market. The associated educational institute, BSE Institute ltd, is one of the most respected in India.

S&P BSE SENSEX, formerly known as SENSEX, is the popular equity index of BSE and the most traded benchmark index. SENSEX was launched on January 2nd 1986. This index was renamed from SENSEX to S&P BSE SENSEX after BSE entered a strategic partnership with S&P DOW JONES INDICES. It is traded internationally. Other indexes are: BSE Small Cap, BSE Mid-Cap and BSE 500.

The Bombay Stock Exchange is open and has normal trading sessions every day, except Saturdays, Sundays and legal holidays declared by the BSE itself in advance. Its index, SENSEX, is correlated with other stock indices of emerging markets. SENSEX, as well as the other BSE indexes are periodically reviewed by a committee of independent finance professionals, called the BSE Committee. This committee makes the broad policy guidelines for all BSE indexes, both for their development and their maintenance.

BSE is a reputable institution with great initiatives in Corporate Social Responsibility. Its CSR initiative brought it the Golden Peacock Global CSR Award. Reuters cited it as one of the world’s best performing stock markets.