A PROJECT REPORT ON

A COMPARATIVE STUDY OF NSE &BSE

FOR THE PARTIAL FULFILLMENT OF DEGREE OF BECHELOR OF BUSINESS ADMINISTRATION

SUBMITTED TO:
MS. SAFIA KHAN LECTURER MGMT. DEPT

SUBMITTED BY:
SHELENDRA BHATT MBA 3RD

AMRAPALI INSTITUTE OF MANAGEMENT AND COMPUTER APPLICATION

Shiksha Nagar, Lamachaur, Haldwani (Affiliated to Uttarakhand Technical University) Dehradun

ACKNOWLEDGMENT

I would like to express my sincere gratitude and thanks to all whom in some way or the other helped and guided me in the due course of the completion of this project work. It was indeed impossible for me to accomplish to this task without the timely accelerating encouragement and exuberant support .it will be unfair to mention the name of those who directly or indirectly helped me to make it a success. It goes beyond words to express my special thanks to Ms. Safia Khan, who despite of her busy schedule for providing information which I required for my project.

SHELENDRA BHATT MBA 3rd

TABLE OF CONTENTS

NATIONAL STOCK EXCHANGE ABOUT NSE CORPORATE STRUCTURE EQUITIES LISTING LISTING PROCEDURE ON NSE ELIGIBILITY CRITERIA FOR LISTING ON NSE BOMBAY STOCK EXCHANGE ABOUT BSE LISTINGS OF SECURITIES ON BSE BIBLOGRAPHY

DECLARATION

I, Shelendra Bhatt, Student of MBA, Amrapali Institute declare that the project on A Comaparative Study Of NSE & BSE is the result of my own efforts and it is based on data collected and guidance given to me.

NATIONAL STOCK EXCHANGE

The National Stock Exchange (NSE) is India's leading stock exchange covering various cities and towns across the country. 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. It has set up facilities that serve as a model for the securities industry in terms of systems, practices and procedures. NSE has played a catalytic role in reforming the Indian securities market in terms of microstructure, market practices and trading volumes. The market today uses state-of-art information technology to provide an efficient and transparent trading, clearing and settlement mechanism, and has witnessed several innovations in products & services viz. demutualisation of stock exchange governance, screen based trading, compression of settlement cycles, dematerialisation and electronic transfer of securities, securities lending and borrowing, professionalisation of trading members, 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.

THE ORGANISATION
The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000.

Mission NSE's mission is setting the agenda for change in the securities markets in India. The NSE was set-up with the main objectives of:

establishing a nation-wide trading facility for equities, debt instruments and hybrids,

ensuring equal access to investors all over the country through an appropriate communication network, providing a fair, efficient and transparent securities market to investors using electronic trading systems, enabling shorter settlement cycles and book entry settlements systems, and meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology have become industry benchmarks and are being emulated by other market participants. NSE is more than a mere market facilitator. It's that force which is guiding the industry towards new horizons and greater opportunities.

Logo The logo of the NSE symbolises a single nationwide securities trading facility ensuring equal and fair access to investors, trading members and issuers all over the country. The initials of the Exchange viz., N, S and E have been etched on the logo and are distinctly visible. The logo symbolises use of state of the art information technology and satellite connectivity to bring about the change within the securities industry. The logo symbolises vibrancy and unleashing of creative energy to constantly bring about change through innovation

PROMOTERS

NSE has been promoted by leading financial institutions, banks, insurance companies and other financial intermediaries:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.

Industrial Development Bank of India Limited Industrial Finance Corporation of India Limited Life Insurance Corporation of India State Bank of India ICICI Bank Limited IL & FS Trust Company Limited Stock Holding Corporation of India Limited SBI Capital Markets Limited The Administrator of the Specified Undertaking of Unit Trust of India Bank of Baroda Canara Bank General Insurance Corporation of India National Insurance Company Limited The New India Assurance Company Limited The Oriental Insurance Company Limited United India Insurance Company Limited Punjab National Bank Oriental Bank of Commerce
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19. 20. 21.

Corporation Bank
Indian Bank Union Bank of India

CORPORATE STRUCTURE
NSE is one of the first de-mutualised stock exchanges in the country, where the ownership and management of the Exchange is completely divorced from the right to trade on it. Though the impetus for its establishment came from policy makers in the country, it has been set up as a public limited company, owned by the leading institutional investors in the country. From day one, NSE has adopted the form of a demutualised exchange - the ownership, management and trading is in the hands of three different sets of people. NSE is owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries and is managed by professionals, who do not directly or indirectly trade on the Exchange. This has completely eliminated any conflict of interest and helped NSE in aggressively pursuing policies and practices within a public interest framework. The NSE model however, does not preclude, but in fact accommodates involvement, support and contribution of trading members in a variety of ways. Its Board comprises of senior executives from promoter institutions, eminent professionals in the fields of law, economics, accountancy, finance, taxation, etc, public representatives, nominees of SEBI and one full time executive of the Exchange.While the Board deals with broad policy issues, decisions relating to market operations are delegated by the Board to various committees constituted by it. Such committees include representatives from
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trading members, professionals, the public and the management. The day-today management of the Exchange is delegated to the Managing Director who is supported by a team of professional staff.

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COMMITTEES The Exchange has constituted various committees to advise it on areas such as good market practices, settlement procedures, risk containment systems etc. These committees are manned by industry professionals, trading members, Exchange staff as also representatives from the market regulator.

Executive Committee Committee On Trade Related Issues (COTI) Advisory Committee - Listing of Securities

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EQUITIES
NSE started trading in the equities segment (Capital Market segment) on November 3, 1994 and within a short span of 1 year became the largest exchange in India in terms of volumes transacted. Trading volumes in the equity segment have grown rapidly with average daily turnover increasing from Rs.17 crores during 1994-95 to Rs.4,328 crores during 2003-04. During the year 2003-04, NSE reported a turnover of Rs.1,099,535 crores in the equities segment accounting for 68.60% of the total Indian securities market. The Equities section provides you with an insight into the equities segment of NSE and also provides real-time quotes and statistics of the equities market. In-depth information regarding listing of securities, trading systems & processes, clearing and settlement, risk management, trading statistics etc are available here.

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LISTING
Listing means admission of securities of an issuer to trading privileges on a stock exchange through a formal agreement. The prime objective of admission to dealings on the Exchange is to provide liquidity and marketability to securities, as also to provide a mechanism for effective management of trading. Listing on NSE provides qualifying companies with the broadest access to investors, the greatest market depth and liquidity, cost-effective access to capital, the highest visibility, the fairest pricing, and investor benefits. NSE trading terminals are now situated in various cities and towns across the length and breath of India.

Securities listed on the Exchange are required to fulfill the eligibility criteria for listing. Various types of securities of a company are traded under a unique symbol and different series. NSE plays an important role in helping an Indian companies access equity capital, by providing a liquid and well-regulated market. NSE has about 800 companies listed representing the length, breadth and diversity of the Indian economy which includes from hi-tech to heavy industry, software, refinery, public sector units, infrastructure, and financial services. Listing on NSE raises a companys profile among investors in India and abroad. Trade data is distributed worldwide through various news-vending agencies.

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More importantly, each and every NSE listed company is required to satisfy stringent financial, public distribution and management requirements. High listing standards foster investor confidence and also bring credibility into the markets.

NSE lists securities in its Capital Market (Equities) segment and its Wholesale Debt Market segment

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LISTING PROCEDURE
An Issuer has to take various steps prior to making an application for listing its securities on the NSE. These steps are essential to ensure the compliance of certain requirements by the Issuer before listing its securities on the NSE. The various steps to be taken include:

1. Initial Discussions 2. Approval of Memorandum and Articles of Association 3. Approval of draft prospectus 4. Submission of Application 5. Listing conditions and requirements

Initial Discussions Authorised persons of the concerned Issuer should hold discussions with NSE personnel regarding various requirements to be fulfilled by the Issuer for listing its securities. The discussions should particularly cover the qualifications of the Issuer which are required for an Issuer to be admitted for listing on the NSE and to understand all the conditions that are precedent to listing on the NSE. The proposed Memorandum & Articles of Association and the draft prospectus may be presented to the NSE for examination before finalizing.

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Approval of Memorandum and Articles of Association Rule 19(2) (a) of the Securities Contracts (Regulation) Rules, 1957 requires that the Articles of Association of the Issuer wanting to list its securities must contain provisions as given hereunder.

The Articles of Association of an Issuer shall contain the following provisions namely: a. that there shall be no forfeiture of unclaimed dividends before the claim becomes barred by law; b. that a common form of transfer shall be used; c. that fully paid shares shall be free from all lien and that in the case of partly paid shares the Issuer's lien shall be restricted to moneys called or payable at a fixed time in respect of such shares; d. that registration of transfer shall not be refused on the ground of the transferor being either alone or jointly with any other person or persons indebted to the Issuer on any account whatsoever; e. that any amount paid up in advance of calls on any share may carry interest but shall not in respect thereof confer a right to dividend or to participate in profits; f. that option or right to call of shares shall not be given to any person except with the sanction of the Issuer in general meetings. g. permission for Sub-Division/Consolidation of Share Certificate. Note: The Relevant Authority may take exception to any provision contained in the Articles of Association of an Issuer which may be deemed undesirable

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or unreasonable in the case of a public company and may require inclusion of specific provisions deemed to be desirable and necessary. If the Issuer's Articles of Association is not in conformity with the provisions as stated above, the Issuer has to make amendments to the Articles of Association. However, the securities of an Issuer may be admitted for listing on the NSE on an undertaking by the Issuer that the amendments necessary in the Articles of Association to bring Articles of Association in conformity with Rule 19(2)(a) of the Securities Contract (Regulation) Rules, 1957 shall be made in the next annual general meeting and in the meantime the Issuer shall act strictly in accordance with prevalent provisions of Securities Contract (Regulation) Act, 1957 and other statutes. It is to be noted that any provision in the Articles of Association, which is not in tune with sound corporate practice, has to be removed by amending the Articles of Association.

Approval of draft prospectus The Issuer shall file the draft prospectus and application forms with NSE. In case NSE is not the Regional Stock Exchange then the draft prospectus and application forms have to be filed simultaneously with the NSE when the same is filed with the Regional Stock Exchange pertaining to the issue, for the perusal of NSE. The draft prospectus should have been prepared in accordance with the statutes, notifications, circulars, guidelines, etc. governing preparation and issue of prospectus prevailing at the relevant time. The Issuers may particularly bear in mind the provisions of Companies Act,
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Securities Contracts (Regulation) Act, the SEBI Act and the relevant subordinate legislations thereto. NSE will peruse the draft prospectus only from the point of view of checking whether the draft prospectus is in accordance with the listing requirements, and therefore any approval given by NSE in respect of the draft prospectus should not be construed as approval under any laws, rules, notifications, circulars, guidelines etc. The Issuers shall file a copy of the draft prospectus given by the respective Regional Stock Exchange with NSE. The Issuer should also submit the SEBI acknowledgment card or letter indicating observations on draft prospectus or letter of offer by SEBI

Submission of Application

For Issuers listing on NSE for the first time Listing of further Issues by Issuers already listed on NSE Listing Fees Security deposit (for new & fresh issues and when NSE is the Regional Stock Exchange) Supporting documents

Submission of Application (For Issuers listing on NSE for the first time)

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Issuers desiring to list existing/new securities on the NSE shall make application for admission of their securities to dealings on the NSE in the forms prescribed in this regard as per details given hereunder or in such other form or forms as the Relevant Authority may from time to time prescribe in addition thereto or in modification or substitution thereof. Appendix 'A' - Clauses of Articles of Association. Appendix 'B'- Application Letter for Listing. Appendix 'C-1' - Listing Application providing pre-issue details of securities. Appendix 'C-2' - Listing Application providing post-issue details of securities. Appendix 'D'- Checklist for supporting documents ( as applicable to the issuer) Appendix 'E' - Schedule of Distribution Appendix 'F'- Listing Agreement

Submission of Application (Listing of further Issues by Issuers already listed on NSE)

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Listing Fees
The listing fees depend on the paid up share capital of your Company: Particulars Initial Listing Fees Annual Listing Fees Companies with paid up share and/or debenture capital: Of Rs.1 crore Above Rs.1 crore and up to Rs.5 crores Above Rs.5 crores and up to Rs.10 crores Above Rs.10 crores and up to Rs.20 crores Above Rs.20 crores and up to Rs.50 crores Above Rs.50 crores 4,200 8,400 14,000 28,000 42,000 70,000 Amount (Rs.) 7,500

Companies which have a paid up capital of more than Rs. 50 crores will pay additional listing fees of Rs. 1400 for every increase of Rs. 5 crores or part thereof in the paid up share/debenture capital. Kindly draw your Cheques/Demand Drafts favouring National Stock Exchange of India Limited, payable in Mumbai.

Submission of Application (Security Deposit)

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(Payable only for new and fresh issues and only when NSE is the Regional Stock Exchange)

The Relevant Authority shall not grant admission to dealings of securities of an Issuer which is not listed or of any new (original or further) issue of securities of an Issuer excepting Mutual Funds, which is listed on the NSE unless the Issuer deposits and keeps deposited with the NSE (in cases where the securities are offered for subscription, whether through the issue of a prospectus, letter of offer or otherwise, and NSE is the Regional Stock Exchange for the Issuer) an amount calculated at 1% of the amount of securities offered for subscription to the public and or to the holders of existing securities of the Issuer, as the case may be for ensuring compliance by the Issuer within the prescribed or stipulated period of all requirements and conditions hereinafter mentioned and shall be refundable or forfeitable in the manner hereinafter stated: 1. The Issuer shall comply with all prevailing requirements of law including all requirements of and under any notifications, directives and guidelines issued by the Central Government, SEBI or any statutory body or local authority or any body or authority acting under the authority or direction of the Central Government and all prevailing listing requirements and conditions of the NSE and of each recognized Stock Exchange where the Issuer has applied for permission for admission to dealings of the securities, within the prescribed or stipulated period; 2. If the Issuer has complied with all the aforesaid requirements and conditions including, wherever applicable, its obligation under Section 73 (or any statutory modification or re-enactment thereof) of the
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Companies Act, 1956 and obligations arising therefrom, within the prescribed or stipulated period, and on obtaining a No Objection Certificate from SEBI and submitting it to NSE , NSE shall refund to the Issuer the said deposit without interest within fifteen days from the expiry of the prescribed or stipulated period; 3. If on expiry of the prescribed or stipulated period or the extended period referred to hereafter, the Issuer has not complied with all the aforesaid requirements and conditions, the said deposit shall be forfeited by the NSE, at its discretion, and thereupon the same shall vest in the NSE. Provided the forfeiture shall not release the Issuer of its obligation to comply with the aforesaid requirements and conditions; 4. If the Issuer is unable to complete compliance of the aforesaid requirements and conditions within the prescribed or stipulated period, the NSE, at its discretion and if the Issuer has shown sufficient cause, but without prejudice to the obligations of the Issuer under the laws in force to comply with any such requirements and conditions within the prescribed or stipulated period, may not forfeit the said deposit but may allow such further time to the Issuer as the NSE may deem fit; provided that 1. the Issuer has at least ten days prior to expiry of the prescribed or stipulated period applied in writing for extension of time to the NSE stating the reasons for non-compliance, and 2. the Issuer, having been allowed further time by the NSE, has before expiry of the prescribed or stipulated period, published in a manner required by the NSE, the fact of such extension
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having been allowed; provided further that where the NSE has not allowed extension in writing before expiry of the prescribed or stipulated period, the request for extension shall be deemed to have been refused; provided also that any such extension shall not release the Issuer of its obligations to comply with the aforesaid requirements and conditions.
5. 50% of the above mentioned security deposit should be paid to the

NSE in cash. The balance amount can be provided by way of a bank guarantee, in the format prescribed by or acceptable to NSE.

Submission of Application (Supporting Documents) Issuers applying for admission of their securities to dealings on the NSE shall submit to the NSE the following:

Documents and Information

The documents and information prescribed in Appendix D or Appendix I (as the case may be) to this Regulation or such other documents and information as the Relevant Authority may from time to time prescribe, in addition thereto or in modification or substitution thereof together with any other documents and information which the Relevant Authority may require in any particular case;

Distribution Schedules

Distribution Schedules duly completed in respect of each class and kind of security in the form prescribed in Appendix E (Table I, II & III) to this
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Regulation or in such other form or forms as the Relevant Authority may from time to time prescribe in addition thereto or in modification or substitution thereof.

Listing conditions and requirements All Issuers whose securities are listed on the NSE shall comply with the listing conditions and requirements contained in the Listing Agreement Form appearing in Appendix F to this Regulation or such other conditions and requirements as the Relevant Authority may from time to time prescribe in addition thereto or in modification or substitution thereof. After fulfilling these criteria, a company has to send the following information for further processing: 1. A brief note on the promoters and management. 2. Company profile. 3. Copies of the Annual Report for last 3 years. 4. Copies of the Draft Offer Document. 5. Memorandum & Articles of Association.

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ELIGIBILITY CRITERIA FOR LISTING

An applicant who desires listing of its securities with NSE must fulfill the following pre-requisites:

A. For Initial Public Offerings (IPOs) B. For Securities of Existing Companies

NSE staff welcome the opportunity to discuss a companys eligibility to list before a formal application is made. On fulfillment of the eligibility criteria, the company is required to fill in the listing application form.

IPOs by Companies
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Qualifications for listing Initial Public Offerings (IPO) are as below: 1. Paid up Capital The paid up equity capital of the applicant shall not be less than Rs. 10 crores * and the capitalisation of the applicants equity shall not be less than Rs. 25 crores**

In respect of the requirement of paid-up capital and market capitalisation, the issuers shall be required to include, in the disclaimer clause forming a part of the offer document that in the event of the market capitalisation (Product of issue price and the post issue number of shares) requirement of the Exchange not being met, the securities of the issuer would not be listed on the Exchange. * For this purpose, the post issue paid up equity capital for which listing is sought shall be taken into account. **For this purpose, capitalisation will be the product of the issue price and the post issue number of equity shares.

2. Conditions Precedent to Listing:

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The Issuer shall have adhered to conditions precedent to listing as emerging from inter-alia from Securities Contracts (Regulations) Act 1956, Companies Act 1956, Securities and Exchange Board of India Act 1992, any rules and/or regulations framed under foregoing statutes, as also any circular, clarifications, guidelines issued by the appropriate authority under foregoing statutes.

3. At least three years track record of either:

a. The applicant seeking listing; or b. The promoters*/promoting company, incorporated in or outside India For this purpose, the applicant or the promoting company shall submit annual reports of three preceding financial years to NSE and also provide a certificate to the Exchange in respect of the following: The Company has not been referred to the Board for Industrial and Financial Reconstruction (BIFR). The networth of the company has not been wiped out by the accumulated losses resulting in a negative networth. The company has not received any winding up petition accepted by a court. * Promoters mean one or more persons with minimum 3 years of experience of each of them in the same line of business and shall be holding at least 20% of the post issue equity share capital individually or severally
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4. The Project/ Activity plan of the applicant must have been appraised by a financial institution u/s 4 A of the Companies Act, 1956 or a state finance corporation or a scheduled commercial bank with a paid up capital exceeding Rs.50 crores or a category I Merchant Banker with a net worth of atleast Rs.10 crores or a venture capital fund with a net worth of atleast Rs. 50 crores. or The applicant should have working capital arrangements with a bank having a Networth of not less than Rs.50 crores. Provided that this Clause 4 shall not be applicable for listing of: a) Equity shares and securities convertible into equity issued by 1. a banking company including a local area bank (i.e. Private Sector Banks) set up under sub-clause (c) of Section 5 of the Banking Regulation Act, 1949 and which has received license from the Reserve Bank of India or 2. a corresponding new bank set up under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, State Bank of India Act, 1955 and the State Bank of India (Subsidiary Banks) Act, 1959 (i.e. Public Sector Banks) or 3. an infrastructure company (a) whose project has been appraised by a Public Financial Institution or Infrastructure Development Finance Corporation (IDFC) or Infrastructure Leasing and Financial Services Limited (IL&FS) and (b) not
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less than 5% of the project cost is financed by any of the institutions referred to in clause (a) above, jointly or severally, irrespective of whether they appraise the project or not, by way of loan or subscription to equity or a combination of both. b) Securities other than equity shares or securities convertible into equity shares at a later date issued by Government Companies, Public Sector Undertakings, Financial Institutions, Nationalised Banks, Statutory Corporations, Banking Companies and subsidiaries of Scheduled Commercial Banks. 5) The applicant desirous of listing its securities should satisfy the exchange on the following:

No disciplinary action by other stock exchanges and

regulatory authorities in past three years The applicant, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) have not been in default in payment of listing fees to any stock exchange in the last three years or has not been delisted or suspended in the past, and has not been proceeded against by SEBI or other regulatory authorities in connection with investor related issues or otherwise.

Redressal mechanism of Investor grievance

The points of consideration are:

The applicant, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting
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11company(ies) track record in redressal of investor grievances

The applicants arrangements envisaged are in place for servicing its investor.

The applicant, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) general approach and philosophy to the issue of investor service and protection

defaults in respect of payment of interest and/or principal to the debenture/bond/fixed deposit holders by the applicant, promoters/promoting companies promoted company(ies), by the group companies, promoters/promoting

company(ies) shall also be considered while evaluating a companys application for listing. The auditors certificate shall also be obtained in this regard. In case of defaults in such payments the securities of the applicant company may not be listed till such time it has cleared all pending obligations relating to the payment of interest and/or principal.

Distribution of shareholding

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The applicants/promoting company(ies) shareholding pattern on March 31 of last three calendar years separately showing promoters and other groups shareholding pattern should be as per the regulatory requirements.

Details of Litigation

The applicant, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) litigation record, the nature of litigation, status of litigation during the preceding three years period need to be clarified to the exchange.

Track Record of Director(s) of the Company

In respect of the track record of the directors, relevant disclosures may be insisted upon in the offer document regarding the status of criminal cases filed or nature of the investigation being undertaken with regard to alleged commission of any offence by any of its directors and its effect on the business of the company, where all or any of the directors of issuer have or has been charge-sheeted with serious crimes. Note: In case a company approaches the Exchange for listing within six months of an IPO, the securities may be considered as eligible for listing if they were otherwise eligible for listing at the time of the IPO. If the company approaches the Exchange for listing after six months of an IPO, the norms for existing listed companies may be
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applied and market capitalisation be computed based on the period from the IPO to the time of listing.

BOMBAY STOCK EXCHANGE

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Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage. Popularly known as "BSE", it was established as "The Native Share & Stock Brokers Association" in 1875. It is the first stock exchange in the country to obtain permanent recognition in 1956 from the Government of India under the Securities Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role in the development of the Indian capital market is widely recognized and its index, SENSEX, is tracked worldwide. Earlier an Association of Persons (AOP), the Exchange is now a demutualised and corporatised entity incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE(Corporatisation and Demutualisation) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI). With demutualisation, the trading rights and ownership rights have been delinked effectively addressing concerns regarding perceived and real conflicts of interest. The Exchange is professionally managed under the overall direction of the Board of Directors.The Board comprises eminent professionals, representatives of Trading Members and the Managing Director of the Exchange. The Board is inclusive and is designed to benefit from theparticipation of market intermediaries. In terms of organisation structure, the Board formulates larger policy issues and exercises over-all control. The committees constituted by the Board are broad-based.The day-to-dayoperations of the Exchange are managed by the Managing Director and a management team of professionals. The Exchange has a nation-wide reach with a presence in 417 cities and towns of India. The systems and processes of the Exchange are designed to safeguard market integrity and enhance transparency in operations. During

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the year 2004-2005, the trading volumes on the Exchange showed robust growth. The Exchange provides an efficient and transparent market for trading in equity, debt instruments and derivatives. The BSE's On Line Trading System (BOLT) is a proprietory system of the Exchange and is BS 7799-2-2002 certified. The surveillance and clearing & settlement functions of the Exchange are ISO 9001:2000 certified.

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HERITAGE
The oldest exchange in Asia and the first exchange in the country to be granted permanent recognition under the Securities Contract Regulation Act, 1956, Bombay Stock Exchange Limited (BSE) has had an interesting rise to prominence over the past 130 years. While the BSE is now synonymous with Dalal Street, it wasnt always so. In fact the first venues of the earliest stock broker meetings in the 1850s were amidst rather natural environs - under banyan trees - in front of the Town Hall, where Horniman Circle is now situated. A decade later, the brokers moved their venue to another set of foliage, this time under banyan trees at the junction of Meadows Street and Mahatma Gandhi Road. As the number of brokers increased, they had to shift from place to place, and wherever they went, through sheer habit, they overflowed in to the streets. At last, in 1874, found a permanent place, and one that they could, quite literally, call their own. The new place was, aptly, called Dalal Street. The journey of BSE is as eventful and interesting as the history of Indias securitiesmarkets. Indias biggest bourse, in terms of listed companies and market capitalisation, BSE has played a pioneering role in the Indian Securities Market - one of the oldest in the world. Much before actual legislations were enacted, BSE had formulated comprehensive set of Rules and Regulations for the Indian Capital Markets. It also laid down best practices adopted by the Indian Capital Markets after India gained its Independence.

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Perhaps, there would not be any leading corporate in India, which has not sourced BSEs services in resource mobilization. BSE as a brand is synonymous with capital markets in India. The BSE SENSEX is the benchmark equity index that reflects the robustness of the economy and finance. At par with international standards, BSE has been a pioneer in several areas. It has several firsts to its credit even in an intensely competitive environment.

First in India to introduce Equity Derivatives First in India to launch a Free Float Index First in India to launch US$ version of BSE Sensex First in India to launch Exchange Enabled Internet Trading Platform First in India to obtain ISO certification for Surveillance, Clearing & Settlement 'BSE On-Line Trading System (BOLT) has been awarded the globally recognised the Information Security Management System standard BS7799-2: 2002. First to have an exclusive facility for financial training Moved from Open Outcry to Electronic Trading within just 50 days

An equally important accomplishment of BSE is the launch of a nationwide investor awareness campaign - Safe Investing in the Stock Market - under which nationwide awareness campaigns and dissemination of information
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through print and electronic medium was undertaken. BSE also actively promoted the securities market awareness campaign of the Securities and Exchange Board of India. In 2002, the name The Stock Exchange, Mumbai, was changed to BSE. BSE, which had introduced securities trading in India, replaced its open outcry system of trading in 1995, when the totally automated trading through the BSE Online trading (BOLT) system was put into practice. The BOLT network was expanded, nationwide, in 1997. It was at the BSE's International Convention Hall that Indias 1st Bell ringing ceremony in the history Capital Markets was held on February 18th, 2002. It was the listing ceremony of Bharti Tele ventures Ltd. BSE with its long history of capital market development is fully geared to continue its contributions to further the growth of the securities markets of the country, thus helping India increase its sphere of influence in international financial markets. For the premier Stock Exchange that pioneered the stock broking activity in India, 125 years of experience seem to be a proud milestone. A lot has changed since 1875 when 318 persons became members of what today is called "Bombay Stock Exchange Limited" by paying a princely amount of Re1. Since then, the stock market in the country has passed through both good and bad periods. The journey in the 20th century has not been an easy one. Till the decade of eighties, there was no measure or scale that could precisely measure the various ups and downs in the Indian stock market.

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Bombay Stock Exchange Limited (BSE) in 1986 came out with a Stock Index that subsequently became the barometer of the Indian Stock Market. BSE-SENSEX, first compiled in 1986 is a "Market Capitalization-Weighted" index of 30 component stocks representing a sample of large, wellestablished and financially sound companies. The base year of BSESENSEX is 1978-79. The index is widely reported in both domestic and international markets through print as well as electronic media. BSESENSEX is not only scientifically designed but also based on globally accepted construction and review methodology. The "Market CapitalizationWeighted" methodology is a widely followed index construction methodology on which majority of global equity benchmarks are based. The growth of equity markets in India has been phenomenal in the decade gone by. Right from early nineties the stock market witnessed heightened activity in terms of various bull and bear runs. More recently, the bourses in India witnessed a similar frenzy in the 'TMT' sectors. The BSE-SENSEX captured all these happenings in the most judicial manner. One can identify the booms and bust of the Indian equity market through BSE-SENSEX. The launch of BSE-SENSEX in 1986 was later followed up in January 1989 by introduction of BSE National Index (Base: 1983-84 = 100). It comprised of 100 stocks listed at five major stock exchanges in India at Mumbai, Calcutta, Delhi, Ahmedabad and Madras. The BSE National Index was renamed as BSE-100 Index from October 14, 1996 and since then it is calculated taking into consideration only the prices of stocks listed at BSE. With a view to provide a better representation of the increased number of companies listed, increased market capitalisation and the new industry
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groups, the Exchange constructed and launched on 27th May, 1994, two new index series viz., the 'BSE-200' and the 'DOLLEX-200' indices. Since then, BSE has come a long way in attuning itself to the varied needs of investors and market participants. In order to fulfill the need of the market participants for still broader, segment-specific and sector-specific indices, the Exchange has continuously been increasing the range of its indices. The launch of BSE-200 Index in 1994 was followed by the launch of BSE-500 Index and 5 sectoral indices in 1999. In 2001, BSE launched the BSE-PSU Index, DOLLEX-30 and the country's first free-float based index - the BSE TECk Index taking the family of BSE Indices to 13. The Exchange also disseminates the Price-Earnings Ratio, the Price to Book Value Ratio and the Dividend Yield Percentage on day-to-day basis of all its major indices. The values of all BSE indices (except the Dollar version of indices) are updated every 15 seconds during the market hours and displayed through the BOLT system, BSE website and news wire agencies. All BSE-Indices are reviewed periodically by the "Index Committee" of the Exchange. The committee frames the broad policy guidelines for the development and maintenance of all BSE indices. The Index Cell of the Exchange carries out the day to day maintenance of all indices and conducts research on development of new indices.

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LISTING OF SECURITIES
Listing means admission of the securities to dealings on a recognised stock exchange. The securities may be of any public limited company, Central or State Government, quasi-governmental and other financial institutions/corporations, municipalities, etc. The objectives of listing are mainly to :

provide liquidity to securities; mobilize savings for economic development; protect interest of investors by ensuring full disclosures.

The Exchange has a separate Listing Department to grant approval for listing of securities of companies in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956, Securities Contracts (Regulation) Rules, 1957, Companies Act, 1956, Guidelines issued by SEBI and Rules, Byelaws and Regulations of the Exchange.

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A company intending to have its securities listed on the Exchange has to comply with the listing requirements prescribed by the Exchange. Some of the requirements are as under: -

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1. Minimum Listing Requirements for new companies 2. Minimum Requirements for companies delisted by this Exchange seeking relisting of this Exchange 3. Minimum Requirements for companies delisted by this Exchange seeking relisting of this Exchange 4. Permission to use the name of the Exchange in an Issuer Company's prospectus 5. Submission of Letter of Application 6. Allotment of Securities 7. Trading Permission 8. Requirement of 1% Security 9. Payment of Listing Fees 10.Compliance with Listing Agreement 11."Z" Group
12. Cash Management Services (CMS) - Collection of Listing

Fees

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[I] MINIMUM LISTING REQUIREMENTS FOR NEW COMPANIES (A) Minimum Capital: 1. New companies can be listed on the Exchange, if their issued & subscribed equity capital after the public issue is Rs.10 crores. In addition to this the issuer company should have a post issue networth (equity capital + free reserves excluding revaluation reserve) of Rs.20 crores. 2. For new companies in high technology ( i.e. information technology, internet, e-commerce, telecommunication, media including advertisement, entertainment etc.) the following criteria will be applicable regarding threshold limit: i. The total income/sales from the main activity, which should be in the field of information technology, internet, e-commerce, telecommunication, media including advertisement, entertainment etc. should not be less than 75% of the total income during the two immediately preceding years as certified by the Auditors of the company. ii. The minimum post-issue paid-up equity capital should be Rs.5 Crores.

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iii.

The minimum market capitalisation should be Rs.50 Crores. (The capitalisation will be calculated by multiplying the post issue subscribed number of equity shares with the Issue price).

iv.

Post issue networth ( equity capital + free reserves excluding revaluation reserve) of Rs.20 Crores.

(B) MINIMUM PUBLIC OFFER:

As per Rule 19(2) (b) of the Securities Contracts (Regulation) Rules, 1957, securities of a company can be listed on a Stock Exchange only when at least 25% of each class or kind of securities is offered to the public for subscription. In case of IPOs by unlisted companies in the IT & entertainment sector, at least 10% of the securities issued by the company may be offered to the public subject to the following:

Minimum 20 lac securities are offered to the public (excluding reservation, firm allotment and promoters contribution) The size of the offer to the public is minimum 50 crores.

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For this purpose, the term "offered to the public" means only the portion offered to the public and does not include reservations of securities on firm or competitive basis. SEBI may, however, relax this condition on the basis of recommendations of stock exchange(s), only in respect of a Government company defined under Section 617 of the Companies Act, 1956.

[II] MINIMUM LISTING REQUIREMENTS FOR COMPANIES LISTED ON OTHER STOCK EXCHANGES The Governing Board of the Exchange at its meeting held on 6th August, 2002 amended the direct listing norms for companies listed on other Stock Exchange(s) and seeking listing at BSE. These norms are applicable with immediate effect. 1. The company should have minimum issued and paid up equity capital of Rs. 3 crores. 2. The Company should have profit making track record for last three years. The revenues/profits arising out of extra ordinary items or income from any source of non-recurring nature should be excluded while calculating distributable profits. 3. Minimum networth of Rs. 20 crores (networth includes Equity capital and free reserves excluding revaluation reserves). 4. Minimum market capitalisation of the listed capital should be at least two times of the paid up capital.
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5. The company should have a dividend paying track record for the last 3 consecutive years and the minimum dividend should be at least 10%. 6. Minimum 25% of the company's issued capital should be with NonPromoters shareholders as per Clause 35 of the Listing Agreement. Out of above Non Promoter holding no single shareholder should hold more than 0.5% of the paid-up capital of the company individually or jointly with others except in case of Banks/Financial Institutions/Foreign Institutional Investors/Overseas Corporate Bodies and Non-Resident Indians. 7. The company should have at least two years listing record with any of the Regional Stock Exchange.
8. The company should sign an agreement with CDSL & NSDL for

demat trading.

[III] Minimum Requirements for companies delisted by this Exchange seeking relisting of this Exchange The companies delisted by this Exchange and seeking relisting are required to make a fresh public offer and comply with the prevailing SEBI's and BSE's guidelines regarding initial public offerings.

[IV] Permission to use the name of the Exchange in an Issuer Company's prospectus

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The Exchange follows a procedure in terms of which companies desiring to list their securities offered through public issues are required to obtain its prior permission to use the name of the Exchange in their prospectus or offer for sale documents before filing the same with the concerned office of the Registrar of Companies. The Exchange has since last three years formed a "Listing Committee" to analyse draft prospectus/offer documents of the companies in respect of their forthcoming public issues of securities and decide upon the matter of granting them permission to use the name of "Bombay Stock Exchange Limited" in their prospectus/offer documents. The committee evaluates the promoters, company, project and several other factors before taking decision in this regard. [V] SUBMISSION OF LETTER OF APPLICATION
As per Section 73 of the Companies Act, 1956, a company seeking listing of its securities on the Exchange is required to submit a Letter of Application to all the Stock Exchanges where it proposes to have its securities listed before filing the prospectus with the Registrar of Companies.

[VI] ALLOTMENT OF SECURITIES As per Listing Agreement, a company is required to complete allotment of securities offered to the public within 30 days of the date of closure of the subscription list and approach the Regional Stock Exchange, i.e. Stock Exchange nearest to its Registered Office for approval of the basis of allotment.
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In case of Book Building issue, Allotment shall be made not later than 15 days from the closure of the issue failing which interest at the rate of 15% shall be paid to the investors.

[VII] TRADING PERMISSION As per Securities and Exchange Board of India Guidelines, the issuer company should complete the formalities for trading at all the Stock Exchanges where the securities are to be listed within 7 working days of finalisation of Basis of Allotment. A company should scrupulously adhere to the time limit for allotment of all securities and dispatch of Allotment Letters/Share Certificates and Refund Orders and for obtaining the listing permissions of all the Exchanges whose names are stated in its prospectus or offer documents. In the event of listing permission to a company being denied by any Stock Exchange where it had applied for listing of its securities, it cannot proceed with the allotment of shares. However, the company may file an appeal before the Securities and Exchange Board of India under Section 22 of the Securities Contracts (Regulation) Act, 1956.

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[VIII] REQUIREMENT OF 1% SECURITY The companies making public/rights issues are required to deposit 1% of issue amount with the Regional Stock Exchange before the issue opens. This amount is liable to be forfeited in the event of the company not resolving the complaints of investors regarding delay in sending refund orders/share certificates, non-payment of commission to underwriters, brokers, etc.

[IX] PAYMENT OF LISTING FEES All companies listed on the Exchange have to pay Annual Listing Fees by the 30th April of every financial year to the Exchange as per the Schedule of Listing Fees prescribed from time to time. The schedule of listing fees for the year 2004-2005, prescribed by the Governing Board of the Exchange and approved by the Securities and Exchange Board of India is given hereunder:

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SCHEDULE OF LISTING FEES FOR THE YEAR 2005-2006 Sr. No. 1 2 Annual Listing Fees (i) Companies with paid-up capital* upto Rs. 5 crores (ii) Above Rs. 5 crores and upto Rs. 10 crores (iii) Above Rs. 10 crores and upto Rs. 20 crores 3 Companies which have a paid-up capital* of more than Rs. 20 crores will pay additional fee of Rs. 750/- for every increase of Rs. 1 crores or part thereof. 4 In case of debenture capital (not convertible into equity shares) of companies, the fees will be charged @ 25% of the fees payable as per the above mentioned scales. *Includes equity shares, preference shares, fully convertible debentures, partly convertible
debenture capital and any other security which will be converted into equity shares.

Particulars Initial Listing Fees

Amount (Rs.) 20,000

10,000 15,000 30,000

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[X] COMPLIANCE WITH LISTING AGREEMENT The companies desirous of getting their securities listed are required to enter into an agreement with the Exchange called the Listing Agreement and they are required to make certain disclosures and perform certain acts. As such, the agreement is of great importance and is executed under the common seal of a company. Under the Listing Agreement, a company undertakes, amongst other things, to provide facilities for prompt transfer, registration, sub-division and consolidation of securities; to give proper notice of closure of transfer books and record dates, to forward copies of unabridged Annual Reports and Balance Sheets to the shareholders, to file Distribution Schedule with the Exchange annually; to furnish financial results on a quarterly basis; intimate promptly to the Exchange the happenings which are likely to materially affect the financial performance of the Company and its stock prices, to comply with the conditions of Corporate Governance, etc. The Listing Department of the Exchange monitors the compliance of the companies with the provisions of the Listing Agreement, especially with regard to timely payment of annual listing fees, submission of quarterly results, requirement of minimum number of shareholders, etc. and takes penal action against the defaulting companies.

[XI] "Z" Group The Exchange has introduced a new category called "Z Group" from July 1999 for companies who have not complied with and are in breach of
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provisions of the Listing Agreement. The number of companies placed under this group as at the end of May, 2001 was 1,475. The number of companies listed at the Exchange as at the end of May 2001 was 5,874. This is the highest number among the Stock Exchanges in the country and in the world.

New Direct Listing norms The Governing Board of the Exchange at its meeting held on 6th August, 2002 amended the direct listing norms for companies listed on other Stock Exchange(s) and seeking listing at BSE. These norms are applicable with immediate effect. 1. The company should have minimum issued and paid up equity capital of Rs. 3 crores. 2. The Company should have profit making track record for last three years. The revenues/profits arising out of extra ordinary items or income from any source of non-recurring nature should be excluded while calculating distributable profits. 3. Minimum networth of Rs. 20 crores (networth includes Equity capital and free reserves excluding revaluation reserves). 4. Minimum market capitalisation of the listed capital should be at least two times of the paid up capital. 5. The company should have a dividend paying track record for the last 3 consecutive years and the minimum dividend should be at least 10%. 6. Minimum 25% of the company's issued capital should be with NonPromoters shareholders as per Clause 35 of the Listing Agreement.
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Out of above Non Promoter holding no single shareholder should hold more than 0.5% of the paid-up capital of the company individually or jointly with others except in case of Banks/Financial Institutions/Foreign Institutional Investors/Overseas Corporate Bodies and Non-Resident Indians. 7. The company should have at least two years listing record with any of the Regional Stock Exchange. 8. The company should sign an agreement with CDSL & NSDL for demat trading.

[XII] CASH MANAGEMENT SERVICES (CMS) - COLLECTION OF LISTING FEES As a further step towards simplifying the system of payment of listing fees, the Exchange has entered into an arrangement with HDFC Bank for collection of listing fees, from 141 locations, situated all over India. Details of the HDFC Bank branches, are available on our website site www.bseindia.com Companies. Companies intending to utilise the above facility for payment of listing fee would be required to furnish the information, (mentioned below) in the Cash Management Cash Deposit Slip. These slips would be available at all the HDFC Bank centres. as well as on the HDFC Bank website www.hdfcbank.com The above facility is being provided free of cost to the

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COMPARISON OF LISTING FEES

BSE
Initial Listing Fees
Rs.20, 000

NSE

Rs.7, 500

Annual Listing Fees Companies with paid up share and/or debenture capital:
Of Rs.1 crore Up to Rs. 5 crores 10,000 Above Rs.1 crore and up to Rs.5 crores Above Rs. 5 crores and up to Rs. 10 crores Above Rs. 10 crores and up to Rs. 20 crores Additional fee of Rs. Above 20 crores 750/- for every increase of Rs. 1 crores or part thereof. Above Rs.50 crores 70,000 30,000 15,000 Above Rs.5 crores and up to Rs.10 crores Above Rs.10 crores and up to Rs.20 crores Above Rs.20 crores and up to Rs.50 crores 8,400 4,200

14,000

28,000

42,000

The comparison of INITIAL LISTING FEES is shown in the chart:-1 54

NSE

BSE

NSE

BSE

Initial Listing Fees (In Rs.)

NSE 7,500 BSE 20,000

With the help of these charts we can simplify the comparison of listing fees. These charts depict that listing fees on NSE is much lower than on BSE.

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BIBLIOGRAPHY

WEBSITES www.managementguru.com www.nseindia.com www.bse.com

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