When in a recent media blitzkrieg the Bombay Stock Exchange (BSE) announced a drop of a whopping 90% in its
membership fee for new applicants, the pressure (of growing competition) was
palpable. For, Asia's oldest stock exchange, which has consistently been losing
market share ever since the technology-savvy National Stock Exchange or
NSE arrived on the scene some 16 years ago, as it faces a ferocious rival in the
Multi-Commodity Exchange-Stock Exchange (MCX-SX), which is awaiting
regulatory approvals to start operations in stock trading segment soon. The MCX-SX
is owned by Jignesh Shah's Financial Technologies group, which is known
for its technological prowess; its software powers 8 out of 10 trading desks
of member brokers of NSE, which is going to be the main rival of MCX-SX.
However, it would be the BSE which lacks a pro-tech image that would be
facing maximum heat as the two technologically-advanced rivals slog it out in
the country's galloping equity trading. According to estimates, the trading
volumes on the bourses in the equity segment has gone up sharply during
the last few years.
In what could easily be termed as the mother of all discounts, the BSE,
Asia's oldest stock exchange, in a rare display of audacity, announced to slash
its membership fee by a whopping 90%. The announcement took the broking
fraternity as well as rivals by surprise as the grand old stock exchange has
never been an aggressive player despite losing market share consistently
ever since rival NSE descended on the scene nearly one-and-a-half decade ago.
This is a far cry from those days of the 1990s when it would cost nothing less than
a few crores to be a member on the country's premier bourse.
"Fourteen years on, the entry barrier to being
a stock broker on Asia's oldest bourse has all but vanished," commented The Economic Times. |
