Bombay Stock Exchange (BSE)

What is a Stock Exchange?

A stock exchange refers to the market wherein shares and securities are bought and sold. In the way we go to the shopping market to buy groceries, stock exchanges are mainly for trading in securities. All companies that are public for trading are listed on the stock market. Shares of these companies can be bought and sold in the stock market. It is operated by stockholders and stockbrokers and a wide array of individuals serving different purposes in the market. In India, the stock market is regulated and supervised by the Securities and Exchange Board of India, or SEBI for short. All companies in India must abide by the rules and regulations set by SEBI when stepping foot into public trading, meaning the stock market. 

What is the Bombay Stock Exchange (BSE)?

The Bombay Stock Exchange (BSE) is the oldest premier stock market in Asia, with roots connecting back to 1875. Upon its establishment, it was known as the Native Share & Stock Brokers’ Association. Most traders in India primarily use either the BSE or the National Stock Exchange (NSE). It functions as a company with a chairman and a board of directors.

As a company, BSE believes in transparency and efficiency above all else. In finance institutions, these are two of the most highly needed qualities. Its board and SEBI helps to maintain these qualities of the BSE, making it a very conducive market for growth. BSE has recently launched its India INX exchange in line with the vision of the union government. This is India’s first stock exchange market meant for international trading. Although India INX is located in Ahmedabad, Gujarat, it is run and managed by the Bombay Stock Exchange today. Additionally, this stock exchange is a parent company to various other subsidiaries dabbling in matters such as education and corporate social responsibility (CSR).

Bombay Stock Exchange Today and Before

One of the most impressive feats of the Bombay Stock Exchange is that after almost 150 years of existence, it is the fastest stock market in the world. Today, about 5000 companies have their shares listed on the BSE. Its reach is furthered wherein EUREX (European Stock Exchange) and BRCS (Brazil, Russia, China and South Africa) countries trade at the BSE. Additionally, StAR MF is BSE’s platform for managing the mutual funds of lakhs of people.

You may have heard the phrase “cost of downtime” if you are familiar with IT and related services in businesses. A company can lose crores if its servers are down, even just for a few minutes. In the same way, the faster the operations, the more money can be earned. The Bombay Stock Exchange functions at a speed of 6 microseconds. This means that crores of rupees are being traded, and shares worth that much is being handled by its stockbrokers at any given moment in this market. A decade ago, the BSE was aiming to bring down their speed to 15 microseconds. The reduction down to 6 microseconds shows us immense and steady progress from its conception.

When the Bombay Stock Exchange was called ‘The Native Share & Stock Brokers Associations’, it was in the mid-1850s. Trades were conducted by a group of men sitting under a large banyan tree at present-day Horniman Circle in South Bombay. In 1875, this group was formalised as the Bombay Stock Exchange. Until this time, these men sat at different banyan trees around the city.

In January 1899, the founders of BSE and their proteges inaugurated what was called the Brokers’ Hall, their first office. Post World War I, a building was constructed at Horniman Circle on what would later be called Dalal Street – this building houses the Bombay Stock Exchange address today. The name ‘Dalal Street’ comes from that ‘Dalal’ in Marathi refers to ‘broker’.

Conclusion

All in all, the Bombay Stock Exchange (BSE) is the seventh-largest stock exchange in the world, with a value of tens of lakhs of crores of rupees. Bombay is called the financial capital of India because critical financial institutions such as the BSE were formed here. It happens to be the fastest stock exchange globally and the oldest one in Asia. This is all the more impressive because these stats also consider India’s National Stock Exchange.