The Bombay Stock Exchange (BSE), a 133-year-old bourse, is all set to get foreign participation at the governing board level as the Securities and Exchange Board of India (Sebi) is understood to have approved BSE’s proposal to invite representatives of both its foreign partners on its board.
The Deutsche Bourse and the Singapore Exchange (SGX), the two foreign allies, have 5 per cent equity each in BSE. The two foreign bourses had picked up the stake last year as part of BSE’s 51 per cent equity divestment to non-broker investors in order to achieve demutualisation. BSE’s younger rival NSE already has NYSE-Euronext’s representative on its board.
Earlier, Sebi is understood to have raised objection to two board seats for foreign investor representatives, but the then BSE Chief Executive Officer Rajnikant Patel convinced the regulator that for the bourse both were strategic investors and that they should be permitted on the board. Both the foreign investors have expressed their willingness to participate in BSE at the board level.
When BSE decided to sell stake to them, it was expected that they will be able to share their rich experience in derivatives. Their board-level participation is expected to improve corporate governance and help derivatives segment also, said a BSE source.
Both these overseas exchanges were interested in seeing BSE’s presence in commodity futures business also. As the deal with NMCE, the Ahmadabad-based commodity futures exchange, is no longer there, it is now up to the board to decide in which way they can move into commodity futures business.