The following is the list of some of the initial members of the exchange, and who are still running their respective
business:
1) D.S. Prabhudas & Company (now known as DSP, and a joint venture partner with Merrill Lynch)
2) Jamnadas Morarjee (now known as JM)
3) Champaklal Devidas (now called Cifco Finance)
4) Brijmohan Laxminarayan
In 1956, The Bombay Stock Exchange BSE was recognized as the first stock exchange in the country under the Securities Contracts (Regulation) Act by The Government of India.
In 1988, Government constituted Securities and Exchange Board of India (SEBI) in April 1988 for orderly development and regulation of securities industry and stock exchanges.
The Stock Exchanges are being administered by their governing boards and executive chiefs. Policies relating to their regulation and control are laid down by the Ministry of Finance.
In 1992 a major scandal with market manipulation involving Harshad Mehta, a BSE member who manipulated market took place. This scandal responded to call for reform with intransigence. The disappointment by the BSE helped radicalize the position of the government, which encouraged the creation of the National Stock Exchange (NSE), which created an electronic marketplace. The exchange was incorporated in 1992 as a tax-paying company and was recognized as a stock exchange in 1993 under the Securities Contracts (Regulation) Act, 1956, when P. V. Narasimha Rao was the Prime Minister of India and Manmohan Singh was the Finance Minister. NSE was set up by leading institutions to provide a modern, fully automated screen-based trading system with national reach. The Exchange has brought about unparalleled transparency, speed & efficiency, safety and market integrity.
In 1994, NSE started trading on 4 November. NSE was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system which offered easy trading facility to the investors spread across the length and breadth of the country. It took not more than a year to NSE to exceed turnover of BSE. BSE rapidly automated, but it never caught up with NSE spot market turnover.
In 1995, the second failure at BSE came in the following two years. NSE embarked on the launch of equity derivatives trading. It is also said that BSE responded by political effort, with a friendly Official aimed at blocking equity derivatives trading. IT is also said that BSE and the then Official succeeded in delaying the onset of equity derivatives trading by roughly five years.
But this trading, and the accompanying shift of the spot market to rolling settlement, did come along in 2000 and 2001 – helped by another major scandal at BSE involving the then highly decorated person. NSE scored nearly 100% market share in the runaway success of equity derivatives trading, thus consigning BSE into clearly second place. Today, NSE has more than 65% of equity spot turnover and almost 100% of equity derivatives turnover.
All Districts and Towns across the country are covered by the leading National Stock Exchange (NSE) in India. NSE has setup Systems, Procedures and Practices in terms of facilities that serve as a model of securities Industry. NSE in terms of microstructure, market practices and trading volume has almost changed the traditional practices and played an important role in reform.
NSE uses the state of art Information Technology to provide an efficient and transparent trading, settlement and clearing mechanism, and has witnessed several innovations in products and services related to demutualization of stock exchange governance, Computer based Trading, Settlement Cycles, Dematerialization of Shares and Electronic transfer of Securities DMAT, Borrowing and Lending of Securities, professionalization of Trading Member, Evolvement of Education, fine-tuned risk management systems, emergence of clearing corporations to assume counterparty risks, market of debt and derivative instruments and intensive use of information technology.