FEBRUARY 2014

operating in the country.
The BSE is planning to improve the
speed from current 200 microseconds to
25 microseconds within the next three
years. With the introduction of this system,
India has joined the ranks of the
leading exchanges in terms of latency and
throughput.
We expect this new system to be a key
element in attracting more foreign participants
to the BSE and Indian markets. Today,
over 90% of the volumes come from
algorithmic trading. The trading strategies
involve putting a large number of orders
and the exchange system needs to have the
capability to process. In near future, the
share of algorithmic trading is expected to
grow even more and the order handling capability
will become one of the differentiators
among exchanges. With the execution
of the NTA’s superior order handling capabilities
and throughput, BSE can handle
more than 100 times of its current orders,
with an option to add even more capacity
in a seamless manner.
The BSE will continue to remain the
market leader in terms of product development
and introduction. BSE is committed
to keep trading costs manageable by being
the lowest cost trading destination for investors
in the country.
The BSE plans to introduce cash settled
Interest Rate Futures on 10 Year G-Secs in
the last week of January. This product will
also be launched on the NTA, the fastest
trading platform in India. BSE has been
working on many innovative products in
the Equity as well as Derivatives Segment
and other products which are hugely popular
and highly traded in the developed
markets; for some of those products, the
BSE is in the process of soliciting feedback
from the international market participants.
BSE has more than 80% market share in
India in various products – including Offer
for Sale, Mutual Fund Distribution
through exchanges, SME platform, E-IPO,
and distribution of corporate debt through
exchanges among others. The BSE would
work towards market leadership in other
products as well.
The BSE remains committed to providing
the investors with the largest basket of
securities across segments to trade on – the
newly created Debt Segment by SEBI will
be one such initiative.
With the recent strategic tie-up with
S&P Dow Jones, BSE and its indices, led
by premier brands like SENSEX and BSE
100, will acquire the global footprint they
have been lacking until now. This venture
would mark the shift of SENSEX being
the benchmark India tracks, to the Indian
» Ashish Kumar Chauhan: A Visionary MD & CEO of Bombay Stock Exchange
benchmark that the world tracks. The JV is
going to launch new Government of India
Bond Index in 2014.
The BSE has recently also entered into
an arrangement with the Deutsche Boerse
for the marketing of BSE data products internationally.
The BSE has also entered into
an MoU with the Ministry of Corporate
Affairs and the Indian Institute of Corporate
Affairs for the development of India’s
first CSR (Corporate Social Responsibility)
Index. This CSR Index shall be viewed by
all market participants to track the leaders
in CSR activities in India. Top performers
of this CSR Index shall be drivers for
other corporates in India to perform and
meet the expectations of all stakeholders
in the society. As capital market gets more
aligned to the international norms, longterm
investors with very sizable amount
of investible money such as pension funds,
insurance companies and funds with mandate
of ‘Responsible Investment’, would
look at such index and its top performers
to decide their investments. Globally, it has
been observed that indices based on CSR
or ESG themes have outperformed the
benchmark indices.
The BSE had earlier provided free of
cost browser-based access to the Real Time
Risk Management System (RTRMS) for
member brokers to help them manage
their own risk; as also the browser-based
collateral management system.
The BSE has also released a state-ofthe-art
front-end order placing engine,
Bolt+, free of cost to its members. The
front-end software such as BOLT, FOW
and FasTrade were already available to
members for no cost and BSE was successful
in providing browser-based back office
solutions to members free of charge. With
all these online, browser-based systems,
the members no longer need to invest
heavily in technology and can still compete
with the big members with huge setups.
To facilitate effective surveillance
mechanisms at their end, the BSE has
launched the e-BOSS (Member Surveillance
System). The new e-Boss software
has a variety of alerts and reports (downloadable),
uploads, user management
and other such facilities for Equity Cash
segment as well as Equity Derivatives segment.
It is available to all BSE member brokers
for zero cost.
The BSE is in the process of bringing
several such innovations to reduce effective
cost for member brokers and at the
same time continues to provide the best in
class service in exchange eco system infrastructure.
Since its inception in 1875, the BSE
has promoted long term capital formation
vis-a-vis trading and speculation. The
BSE is the largest exchange in the world in
terms of number of companies listed. It is
the 8th largest in terms of trades per day,
16th largest in terms of market capitalisation
with more than 1.1 thousand billion
USD market cap listed on it, and 5th largest
exchange in the world in Index options
trading.
(The author is MD & CEO of the BSE
Ltd., Asia’s first stock exchange. He also
serves on the Board of ICCL, CDSL, BSE
Training Institute, BFSI Sector Skill Council
and Marketplace Technologies Limited.
He is also a member of the Board of Governors
of IIIT D&M)
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