STOCK EXCHANGE IN INDIA

Origin

The Bombay Stock Exchange (BSE) is the oldest stock exchange in India. It is more than 100 years old. It was first organised as an informal association of brokers in 1875 and later in 1887 it was formally established in Bombay as a society known as Native Share and Stock Broker’s Association. The Ahmedabad Stock Exchange (ASE) was set up in 1894. These were organised as voluntary non-profits-making associations of brokers with Trust Deed. Before 1950, the control of stock exchange was a state subject and they used to be regulated by the Bombay Securities Contracts (Control) Act of 1925. Under this Act, BSE and ASE were recognized in 1927 and 1937, respectively. During the period between the two world wars, there was a great boom in the share market, and a number of stock exchanges were established. But they could not survive long as they were not recognized under the Bombay Securities Contracts (Control) Act. By 1950, the control on securities trading became a central subject under the Indian Constitution.
A committee headed by A.D. Gorwala was appointed to study the problem of central registration for control of security trading in India. The Securities Contracts (Regulation) at was passed in 1956 according to the committee’s recommendations and public discussions. There are at present 23 recognised stock exchanges in India including the Over –the-Counter Exchange of India (OTCEI) and the National Stock Exchange (NSE). Some of them are voluntary non-profit-marking organizations while others are companies limited by guarantee. Among the recognised stock exchanges in India, Bombay, Calcutta, Madras, Delhi and Ahmedabad are the prominent ones. Table 10.1 presents a list of stock exchanges in India with some details.