Foreign bourses get BSE board seat

Ashish Rukhaiyar & Reena Zachariah
MUMBAI
Dec 30, 2008

ASIA’S oldest exchange, Bombay Stock Exchange (BSE), now has two foreign nominees on its board. According to people familiar with the development, BSE has inducted Singapore Exchange (SGX) chief financial officer Seck Wai Kwong and Eurex chief executive Andreas Preuss on its board. Eurex is jointly operated by Deutsche Borse AG and SIX Swiss Exchange.

SGX and Deutsche Borse AG hold 5% each in BSE. The development was confirmed to ET by one of the BSE board members. According to this member, “two new members have been inducted on the board of the exchange recently as shareholder directors from Singapore Stock Exchange and Deutsche Bvrse.”

However, a BSE spokesperson said only Mr Kwong of SGX has been inducted on the board. “Seck Wai Kwong has come on board on November 8, 2008, and the process of inducting a nominee of Deutsche Bvrse is on at present,” said an official in response to an email query. The BSE website, however, has no mention of the appointment of Mr Kwong. To this the spokesperson responded: “Our website is being updated.”

SGX and Deutsche Borse are the only two foreign exchanges to hold stakes of 5% each in BSE. The earlier demutualisation norms allowed foreign entities to hold a maximum of 5% in any Indian exchange. The latest amendments have hiked this limit to 15% although none of the foreign shareholders have, till date, increased their holdings beyond 5%.

While BSE has only recently inducted representatives of foreign shareholders on its board, the National Stock Exchange (NSE) did it in 2007 when NYSE Euronext got its nominee on the board of India’s largest stock exchange. NSE’s foreign shareholders include Goldman Sachs, General Atlantic and Softbank Asian Infrastructure Fund, among others.

On a different note, the BSE board is slated to meet on January 10, 2009, and there would be “at least some discussions related to the new chief executive,” of the exchange. It is more than four months since Rajnikant Patel resigned as managing director and CEO of the exchange.