The Calcutta Stock Exchange, also known as CSE, is one of the oldest stock exchanges in India. It was established in 1830 and is located in Kolkata, West Bengal. CSE is recognized by the Securities Contracts Regulation Act, 1956.
The exchange provides a platform for trading in various financial instruments, including equities, futures, and options. It offers an integrated trading system that facilitates efficient and transparent trading activities. The exchange also provides opportunities for companies to raise capital through public offerings and listing of securities.
Calcutta Stock Exchange has a diverse range of listed companies from various sectors, including manufacturing, finance, information technology, and more. It plays a vital role in the economic growth and development of the region, providing investors with opportunities to participate in the growth of listed companies.
The Calcutta Stock Exchange promotes investor education and awareness through various programs and initiatives. It also adheres to strict regulations and guidelines to ensure investor protection and maintain market integrity.
Overall, the Calcutta Stock Exchange is an important financial institution in India, facilitating trading, investment, and capital raising activities while promoting transparency, fairness, and investor confidence.
History of the Calcutta Stock Exchange (CSE)
Though the buying and selling of stocks in Calcutta can be traced back to the early 1800s, there was not a code of conduct or permanent place to execute trades. It is said that stockbrokers convened by a neem tree on a location that now holds the offices of the Standard Chartered Bank in Calcutta.
The earliest record of dealings in securities in India is the British East India Company’s loan securities. The official exchange was incorporated in 1908, as the Calcutta Stock Exchange Association. At this time, it had 150 members. In 1923, the Association became a limited liability concern. In 1980, the exchange was permanently recognized by India’s government under the relevant provisions of the Securities Contracts Regulation Act of 1956. The CSE has since grown to more than 900 members and over 3,500 listed companies. The Exchange’s present building, at the Lyons Range in Kolkata, was constructed in 1928.
In 1997, the exchange replaced its manual trading system with a computerized trading system called C-STAR (CSE Screen-Based Trading And Reporting). C-STAR was subject to a major payment settlement system scam in 2001 that closed down the exchange and resulted in the suspension of 300 CSE members, many of whom were able to get their licenses back several years later. Many companies delisted from the CSE and joined the BSE or NSE instead. In 2007, the CSE entered a piggyback arrangement with the BSE. Most of the trading in the Indian stock market takes place on the BSE and the NSE.
The Calcutta Stock Exchange Limited. “Genesis and Growth of the Calcutta Stock Exchange.” Accessed Nov 25, 2020.
In 2012, the Securities and Exchange Board of India (SEBI) declared strict regulations for regional stock exchanges (RSEs), which triggered the voluntary exit of nearly 20 exchanges, including the Bangalore Stock Exchange, Hyderabad Stock Exchange, and Madras Stock Exchange. The CSE experienced a halt in trading on C-STAR in 2013. It has struggled to maintain its existence in the face of stringent regulations; however, it considers itself a demutualized and professionally-run stock exchange that enables members to trade on the BSE and NSE exchanges as well.
Products offered by the Calcutta Stock Exchange
The Calcutta Stock Exchange (CSE) offers a range of products to cater to the diverse investment needs of investors. Here are some of the key products offered by CSE:
1. Equity: Calcutta Stock Exchange provides a platform for trading in equity shares of listed companies. Investors can buy and sell shares of various companies listed on the exchange, enabling them to participate in the growth potential of these companies.
2. Indices: Calcutta Stock Exchange offers different indices that act as benchmarks for tracking the performance of specific sectors or the overall market. These indices include the C-50 Index, CSE 500 Index, CSE Tata Motors Index, among others. They provide investors with insights into the market movement and enable them to make informed investment decisions.
3. Derivatives: Calcutta Stock Exchange also offers derivative contracts, allowing investors to trade in futures and options. Derivatives provide opportunities for hedging risks, speculation, and portfolio diversification. The exchange offers equity index futures and options contracts, which derive their value from the underlying index.
4. SME Platform: Calcutta Stock Exchange has a dedicated platform called the SME Exchange, where small and medium-sized enterprises can list their shares and raise capital. The SME platform aims to facilitate the growth of these enterprises by providing them access to the capital market ecosystem.
5. Mutual Funds: Calcutta Stock Exchange provides a platform for trading in mutual fund units, enabling investors to invest in a diversified portfolio managed by professional fund managers. This allows investors to access a wide range of investment options and benefit from professional expertise.
6. Government Securities: Calcutta Stock Exchange facilitates trading in government securities, providing a platform for investors to buy and sell government bonds. These bonds offer a relatively safer investment option and are backed by the government’s creditworthiness.
7. Debt Instruments: CSE facilitates trading in various debt instruments, including corporate bonds, debentures, and government securities. These instruments offer fixed-income opportunities for investors seeking stable returns.
8. Exchange-Traded Funds (ETFs): CSE provides a platform for trading in ETFs, which are investment funds that trade on the stock exchange. ETFs provide investors with exposure to a diversified portfolio of assets, such as stocks, bonds, or commodities, and can be bought or sold like any other listed security.
9. Commodities: CSE allows trading in commodity futures contracts, enabling investors to participate in price movements of various commodities, such as gold, silver, crude oil, agricultural products, etc. Commodities trading provides a way to diversify investment portfolios and hedge against inflation or other economic risks.
10. Currency Derivatives: The exchange offers currency futures and options contracts, allowing investors to trade in currency pairs such as USD/INR, EUR/INR, GBP/INR, etc. Currency derivatives provide opportunities for speculation, hedging foreign exchange risks, or taking advantage of currency movements.
11. Depository Services: CSE provides depository services through its subsidiary, facilitating the holding, transfer, and settlement of securities in electronic form. Investors can conveniently manage their investments and enjoy faster and secure transactions through the depository system.
12. Bonds and Debentures: CSE offers a platform for trading in bonds and debentures issued by both corporate entities and government bodies. These fixed-income securities provide regular interest payments over a specified period.
13. Mutual Funds: CSE provides a platform for buying and selling units of various mutual funds. Mutual funds pool money from multiple investors to invest in a diversified portfolio of securities, such as stocks, bonds, or a combination of both. This allows investors to access professionally managed portfolios and benefit from economies of scale.
14. Initial Public Offerings (IPOs): CSE facilitates the primary market activity by offering IPOs to investors. An IPO is the process through which a company raises capital by offering its shares to the public for the first time. Investors can participate in IPOs and potentially profit from the price appreciation of the newly listed company’s shares.
15. Research and Analysis: CSE provides research reports, market analysis, and investment recommendations to help investors make informed decisions. These services provide valuable insights into market trends, company performance, and investment opportunities.
16. Investor Education: The Calcutta Stock Exchange offers investor education programs and workshops to improve financial literacy and promote responsible investing. These initiatives aim to empower investors with knowledge, skills, and awareness of market dynamics to make well-informed investment decisions.
17. Listing Services: CSE offers companies the opportunity to list their securities on the exchange. By listing their shares, companies gain access to a wider pool of investors and additional avenues for raising capital.
18. Corporate Governance: CSE promotes and enforces good corporate governance practices among listed companies. This ensures transparency, accountability, and fairness in corporate decision-making and operations, ultimately enhancing investor trust and confidence.
19. Online Trading: CSE provides online trading platforms and mobile applications, allowing investors to trade and monitor their investments conveniently and securely from anywhere at any time. These platforms offer real-time market data, order placement, and account management features.
20. Regulatory Compliance: As a stock exchange, CSE ensures compliance with the relevant securities laws, regulations, and guidelines. It monitors market activities, investigates potential violations, and takes necessary actions to maintain a fair and orderly market.
These are products offered by the Calcutta Stock Exchange. The exchange continuously strives to introduce new products and services to meet the evolving needs of investors and enhance the depth and breadth of the Indian capital markets.
Awards
The Calcutta Stock Exchange has been recognized and honored with several awards and achievements over the years. Some of the notable awards and accolades received by the exchange include:
1. Dun & Bradstreet Corporate Awards: The Calcutta Stock Exchange has been awarded the “Best Regional Stock Exchange” by Dun & Bradstreet multiple times. This award highlights the exchange’s contribution to regional economic growth and development.
2. ASSOCHAM National Excellence Awards: The exchange has been felicitated with the “Best Regional Stock Exchange” award by the Associated Chambers of Commerce and Industry of India (ASSOCHAM). This award recognizes CSE for its outstanding performance and achievements in the stock market.
3. BSE IPF Best Regional Stock Exchange Award: The Calcutta Stock Exchange has also received recognition from the Bombay Stock Exchange (BSE) Investor Protection Fund (IPF). It has been honored with the “Best Regional Stock Exchange” award for its commitment to investor protection and education.
These are just a few examples of the awards and recognition received by the Calcutta Stock Exchange. These accolades showcase the exchange’s dedication to excellence, transparency, and service to the investor community.
Milestones
The Calcutta Stock Exchange has achieved several significant milestones throughout its history. Here are some notable milestones:
1. Establishment: The Calcutta Stock Exchange (CSE) was established on 15th December 1908, making it the first stock exchange in India to be recognized by the government.
2. Recognition as a Regional Stock Exchange: CSE was granted recognition as a regional stock exchange in 1987 by the Government of India. This recognition allowed CSE to function as a full-fledged stock exchange and provide trading facilities to investors.
3. Automated Trading System: In 1997, CSE became one of the early Indian exchanges to adopt an automated trading system, replacing the traditional open outcry system. This modernization enhanced efficiency, transparency, and speed in trading operations.
4. Launch of C-Star Platform: The C-Star platform was launched by CSE in 2002, which enabled online trading for member brokers and investors. This initiative brought greater convenience and accessibility to market participants.
5. Merger with MCX-SX: In 2013, the CSE entered into a merger agreement with Metropolitan Stock Exchange of India Limited (formerly MCX Stock Exchange Limited or MCX-SX). This merger aimed to strengthen the market position and increase liquidity and participation.
6. Transformation into a De-Mutualized Exchange: In 2018, CSE completed its transformation into a de-mutualized exchange, converting from a mutual society to a company limited by guarantee. This move brought about enhanced governance standards and aligning with global best practices.
7. Introduction of New Products and Services: Over the years, CSE has introduced various new products and services to meet the evolving needs of investors. These include index-based products, derivative contracts, and initiatives to promote SME listings.
These milestones highlight the growth, progress, and adaptability of the Calcutta Stock Exchange in its journey to serve investors and contribute to the development of the Indian capital markets.
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