BSE expects 30-40% of its members to join its international bourse

The Bombay Stock Exchange (BSE) expects around 40 per cent of its existing member base of 1,400 to set up offices at the Gujarat International Finance Tec-city (Gift City) in Gandhinagar.

The exchange has already started marketing the concept to its members and the first road show in India was organised in Ahmedabad.

"During interaction with the members, many of them have shown interest to be a part of international exchange. We are expecting that about 30-40 per cent of our existing members will move to GIFT," said Ashish Chauhan, managing director and chief executive officer of BSE.

BSE had organised first road show at Ahmedabad to market the international exchange at the Gift City and talked with the brokers of Gujarat about the facilities, operations, benefits and rules for the new exchange.

Chauhan said, "It was our first marketing meeting with the brokers and members. Similar things will be done in other places in India."

According to Chauhan, the operational cost at international exchange will almost 70-75 per cent lower than other international exchanges like Singapore, Hong Kong and Dubai which may attract foreign players.

BSE intends to commence the exchange in first quarter of calendar year 2017 and plans to invest about Rs 400 crore on exchange and clearing.

"We expect that the exchange will be operational in first quarter of next calendar year, most probably in January. We have planned to invest Rs 100 crore on the exchange and Rs 300 crore on clearing activities in initial stage," said Chauhan.

In the framework set for 2016 -17 the Minimum Alternate Tax (MAT) for entities established in GIFT IFSC was reduced from 18.5 per cent to 9 per cent. The Security Transaction Tax (STT), Commodity Transaction Tax (CTT) and Long Term Capital Gain (LTCG) was completely waived off while the Dividend Distribution Tax (DDT) is also abolished. The Government of Gujarat has also exempted stamp duty for entities having registered office in GIFT for capital market activities.

BSE has got approval from the Corporate Affairs Ministry to establish BSE International Exchange and BSE International Clearing Corporation. The exchange had signed memorandum of understanding (MoU) with GIFT SEZ Ltd in January 2015 to set up the two entities at the GIFT City -- India's first International Financial Services Centre (IFSC).