The Bombay Stock Exchange (BSE) is Asia's oldest stock exchange. Based in Mumbai, India, BSE was established in 1875 as the Native Share & Stock Brokers' Association. Prior to that brokers and traders would gather under banyan trees to conduct transactions.
BSE functions as the first-level regulator in the securities market, providing monitoring and surveillance mechanisms that are able to detect irregularities and manipulations in stock prices. The Exchange also provides counter-party risk management in all transactions that take place on its trading platform through its clearing and settlement services. Shares of more than 5,000 companies are traded on BSE. In addition to equity and debt, the Exchange allows for trading of mutual fund units and derivatives.
Bombay Stock Exchange was recognized as an exchange under the Securities Contracts (Regulation) Act in 1957. Its benchmark index, the Sensitive Index (Sensex) was launched in 1986. In 1995, the BSE launched its fully automated trading platform called BSE On-Line Trading system (BOLT) which fully replaced the open outcry system.
In 2005, the Exchange changed from being simply an association of brokers to became a corporate entity. The administrative structure of the Exchange is headed by a board of directors, below which is a governing council and management that presides over its day-to-day functioning.