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RENEWAL
The
PROCESS
Global Custodian: You’ve turned around
what is a very old institution and, when
that happens, some people are very en-
thusiastic about change and some people
have to be encouraged to go along with it.
So if you look at the participants in the old
Bombay Stock Exchange did you have a lot
of hard work to get people on board?
Ashish Chauhan: Well it’s always hard
work to change an old system, particularly
one that was 135 years old when I joined.
Some people had given up on the BSE.
Since then, we have come back. First we
had to clean ourselves up, focusing on four
or five specific areas. One obvious one
was technology, not only for trading, but
collateral management, banking, broker
management, listings... the entire network.
We also had to acquire newer mem-
bers because ours was a physical loca-
tion-based membership, you had to be
in the building to be a member. We had
to attract people from outside and in the
state we were, that was tough. We had
to attract new talent, but nobody saw
a career here. Our only products were
stocks, and so we had to go into all other
products very, very quickly. We were also
in need of regulatory reform.
Now thinking back over the past eight
years, I think we have achieved reason-
62
Global Custodian
Spring 2018
Ashish Chauhan is the MD and
CEO of BSE, paradoxically both
the oldest exchange in Asia
and the fastest exchange in the
world with six micro seconds
response time. Global Custodian
asked him about his strategy.
able progress in all those areas. Today
technologically we are the fastest in the
world, our trading, clearing everything
has changed, network, hardware, soft-
ware, whatever you can think of we have
changed it.
GC: Did you do all that internally or did you
buy in?
AC: We’ve built most of it internally, but
not exclusively. For example, in the area
of security we have internal people and
external people. For trading, we bought
software and modified it to our require-
ments, using both our own in-house ex-
pertise as well as TCS people. We have a
very large technology team now which is
a separate company because the skill sets
required are different from the traditional
stock market norm.
GC: So does the fact that you are the
fastest in the world mean you’ve attracted
a different set of participants, such as high
frequency traders?
AC: Speed is one parameter which people
consider for trading, but there are prob-
ably eight to 10 others. Bragging rights
are very important, however. It also keeps
you on your toes because your entire team
knows that you are the fastest and you’ll
want to remain fastest. That keeps you on
a different technological curve.
GC: Do you offer co-location?
AC: We do have co-location, It is ex-
tremely fast, very, very sophisticated but
extremely low cost.
GC: In the face of competition, what would
you say is now your USP?
AC: Ten years back or even five years
back, if you had asked about BSE tech-
nology, people would have looked around
bewildered. Today everyone in the market
recognises the strength of BSE technology
either by reputation or through experi-
ence. We’ve also gained people’s trust by
refusing to cut corners. Although we have
lost some business as a result, we have
gained more.
In terms of getting business we have two
strategies; one is what you might call the