A major change of guard is underway at the country's oldest stock exchange as it pulls out all the stops to transform itself into a well-oiled trading platform

The Bombay Stock Exchange (BSE) is in the midst of a major overhaul of its management and personnel to bring the rest of the bourse in line with the systems and operating style of its internationally experienced top management team. Over the past couple of months the BSE has been getting rid of the "deadwood", says an old-time broker. Replacing them are highly qualified people who are all set to drag the 130-year-old exchange into an efficient and highly-competitive entity that can take on the National Stock Exchange (NSE), which dominates the cash market and has a near monopoly in the equity derivatives segment.

The key areas where the BSE is working on changes is-first, to establish a strong pan-Indian presence with offices that handle training, investor outreach and certification at all major cities. It is understood to have engaged a global realty consultant to do the job.

Second, the exchange is on a hiring spree. Some key departments such as administration, listing, security (both physical security and IT security), communication and training already have fresh faces or will soon see them. The changes are not merely about cleaning out the "deadwood" and getting new people-it is a paradigm change in the manner in which the BSE has been staffed for its entire existence.

For instance, consider this. The BSE's administration, IT security and investor issues will be handled by G Lakshman, who is on a sabbatical from the Kerala government. He has a highly impressive academic background-an engineer from IIT Kanpur, a management degree from IIM Bangalore and a 1997 batch IPS officer, who has been with the Kerala government as managing director of Matsyafed, the State fisheries undertaking, in his previous posting. We learn that Mr Lakshman has already started overhauling BSE's laidback administration and is
overhauling the IT security, under the watchful eye of the BSE's new chairman S Ramadorai.

There is another new face handling listing and compliance in Nehal Vora, a former SEBI hand, who has apparently been a colleague of the BSE CEO Madhu Kannan at the regulatory body. It is no secret that the BSE is stuck with the legacy of several thousand listed companies, with low floating stock and poor liquidity. This makes their stocks extremely easy to manipulate, when the listing compliance department is lethargic, disinterested or worse. Sources say that one will see a lot of action in cleaning up this section too. As things stand, however, Moneylife has been routinely reporting the most brazen manipulation which goes unchecked.

Two other departments where the BSE is expected to see fresh faces and major change is training and communication. However, not much is available on these fronts as yet. Meanwhile, several senior employees have either been asked to go or have put in their papers. Among these is Atul Tirodkar, once the executive director and former whistleblower, who has apparently been most irregular at work after his triumphant return to the bourse, following the Joint Parliamentary Committee report. BSE's corporate communications head, Kalyan Bose, has also moved on and the BSE Training Department is expected to see some big departures.

A senior-level employee confirmed that old faces were indeed making way for new ones. He said, "Exits are part and parcel of any corporate entity. The reasons for these sudden departures are best known to the company itself." He also made it clear that given a better opportunity, he too would head for the exit.

While the BSE is cleaning up its act in a big way, it has continued to lose turnover and market share. The bourse is now pinning its hopes on the Bimal Jalan Committee submitting its report quickly so that it is permitted to go public. The Jalan Committee, it may be recalled, was set up by SEBI, to take yet another look at the listing of stock exchanges, although SEBI's own primary and secondary market advisory committees had already examined the issue at length and their suggestions were further revised by a one-person committee headed by a former whole-time member, Mr Ananthraman. It is an open and widespread belief that the Jalan Committee was only constituted to help the NSE which is not keen on listing, but also wants to avoid pressure from its international investors to list itself.

Well, the BSE may work hard at becoming sharp, efficient and profitable, but ultimately, its fate rests in the hands of the regulator's willingness to level the playing field by clearing a fair system for algorithm trading and the listing of the bourse.

The BSE, in a response to Moneylife's query stated, "The BSE assesses its talent requirement on a continuous basis at all levels and recruits suitable resources based on these requirements."