Stock Exchanges Current Affairs - 2019
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BSE Ltd (earlier known as Bombay Stock Exchange) became first Indian exchange to be designated as Designated Offshore Securities Market (DOSM) by United States Securities and Exchange Commission (US-SEC).
DOSM status will allow sale of securities to US investors through trading venue of BSE without registration of such securities with US SEC. This will ease trades by US investors in India and also enhance attractiveness of Indian Depository Receipts (IDRs) amongst US investors.
The new status is also expected to primarily benefit securities issued in US private placements to institutional investors. Moreover, it will provide liquid resale market which will exempt offerings by BSE-listed companies, making them more attractive to US investors.
DOSM status will also provide additional benefits to companies whose securities are traded both in US and on BSE. It will allow certain directors and officers of dual-listed companies to resell their securities on BSE, regardless of any restrictions or holding periods that may apply under US securities laws.
Bombay Stock Exchange (BSE)
BSE is Indian stock exchange located at Dalal Street, Mumbai (Maharashtra). It was established in 1875 (founded by Premchand Roychand as Native Share & Stock Brokers’ Association), making it Asia’s first stock exchange. It was first Indian stock exchange to be recognized by Government under the Securities Contracts Regulation Act in 1957. It has established India’s first international exchange India INX in December 2016 in GIFT city, Gujarat.
BSE’s popular equity index -S&P BSE SENSEX is India’s most widely tracked stock market benchmark index. BSE also provides host of services to capital market participants including risk management, clearing, settlement, market data services and education.
BSE is the world’s 12th largest stock exchange with overall market capitalization of more than $ 2 trillion as of July, 2017. It also claims to be world’s fastest stock exchange, with median trade speed of 6 microseconds. It is also a Partner Exchange of United Nations Sustainable Stock Exchange initiative, joining in September 2012.
BSE is first exchange in India and second in world to obtain an ISO 9001:2000 certification. It is also first Exchange in India and second in world to receive Information Security Management System Standard BS 7799-2-2002 certification for its On-Line trading System (BOLT).
The Union Cabinet has given its approval for raising foreign shareholding limit from current 5% to 15% in Indian Stock Exchanges.
The decision brings the investment limit of foreign entities at par with that of domestic institutions.
This enhanced limit is for a stock exchange, depository, banking company, insurance company and commodity derivative exchange.
Additionally, the Union Cabinet also gave its approval for foreign portfolio investors to acquire shares through initial allotment, besides secondary market, in the stock exchanges.
- Enhance global competitiveness of Indian stock exchanges.
- Enable Indian stock exchanges to acquire and adopt latest technology and global best practices.
- Pave way for better overall growth and development of the Indian capital market
- The Union Cabinet approval is in pursuance of implementation of the 2016-17 Budget Announcement made by the Union Finance Minister Arun Jaitley.
- Finance Minister had made this announcement with regard to reforms in FDI Policy in order to enhance investment limit for foreign entities in Indian stock exchanges from 5% to 15%.