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November 2, 2012 2:16 pm
Ashishkumar Chauhan has been appointed managing director and chief executive of the Bombay Stock Exchange, Asia’s oldest bourse, according to a statement released on Friday.
Mr Chauhan has been acting as interim CEO since his predecessor, Madhu Kannan, left the exchange to take a position with the Tata group in May. He takes over as the exchange plans a long-considered initial public offering and struggles against the rival National Stock Exchange, which Mr Chauhan helped launch in 1993.
Vinay Agrawal, executive director of equities at Angel Broking, said Mr Chauhan must focus on building up derivatives volumes, which have helped the NSE dominate the market with upwards of 70 per cent of all volumes.
“The biggest challenge is to sustain their volumes and to ensure that they remain one of the key exchanges in India – to overcome this, Ashish has been doing a lot of market making to help derivatives volumes pick up,” Mr Agarwal said. “We have to wait and see if that becomes successful and it comes up as good competition to NSE.”
Competition will also come from the Multi Commodity Exchange, whose IPO earlier this year was 53-times oversubscribed, and which received a stock exchange licence in July, and is set to launch services later this month.
In August, Mr Chauhan said the BSE would look to list in the first half of 2013. The listing will be the first since the Securities and Exchanges Board of India passed a rule in April allowing the practice, subject to certain constraints, including that 51 per cent of the company be publicly held and that they list on a different exchange.
Singapore Exchange and Deutsche Bourse are both strategic investors in the exchange, though they will continue to be restricted to a 5 per cent stake, something the BSE has long lobbied to increase.
According to the statement announcing his appointment, Mr Chauhan has played a key role in upgrading technology at the exchange. His expertise will be increasingly important amid regulators’ growing scrutiny of technology in trading after last month’s $60bn “flash crash” of the NSE, which it blamed on human error.
Mr Chauhan joined the BSE in 2009 as deputy CEO. He was previously group chief information officer at Reliance Industries, India’s biggest company by market capitalisation. From 1993 to 2000, Mr Chauhan worked at the NSE, which he set up and operated as part of a five-person team, setting up and operating the bourse’s equities and derivatives markets.
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