Bombay Stock Exchange

The history of the Bombay Stock Exchange (BSE) can be traced back to the 1850s, when a group of five stock brokers would hold and conduct meetings beneath the banyan tree in front of the Mumbai Town Hall. Gradually, numbers of brokers in the area increased and, consequently, so did the size of the meetings.

The location of these meetings changed regularly over time to accommodate increasing numbers of brokers until the group moved to Dalal Street in 1874. In the same year, the group became officially recognised as “The Native Share and Stock Brokers Association”.

In following the Securities Contracts Regulation Act, the Native Share and Stock Brokers Association became the first stock exchange to be officially recognised by the government of India in 1956. In 1986, the BSE Sensex was developed as a means of measuring the overall performance of the Bombay Stock Exchange. The BSE used this index to open a number of equity derivative markets.

In 1995, the BSE switched to an electronic trading system, taking just fifty days to transition all information and data. This system is still used and is referred to as BOLT (BSE Online Trading), and is an automated trading platform with capacity for 8 million orders to be placed each day. The BSE is also the first stock exchange in the world to implement a centralised internet trading system, which allows investors from all over the world to trade on the BSE platform.

Nowadays, the BSE has 417 cities and several towns lying within its fold. It is managed by a panel of directors and the board members include various representatives of trading organisations. This committee takes care of the formation and implementation of policies, guidelines and programmes that manage the whole exchange.

There are a number of indices that track the BSE. However, the main index used is: The BSE SENSEX

The BSE SENSEX is a free-float, market-weighted stock market index of 30 well-established and financially sound companies within the Bombay Stock Exchange.

Other indices that track the BSE include the S&P BSE SmallCap, S&P BSE MidCap, S&P BSE LargeCap, and BSE 500 – however, the BSE SENSEX is the most widely used index and the best place to go to see the performance of the BSE.