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.
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