BSE to finalise IT co buy to get a tech edge in trading

http://economictimes.indiatimes.com/Markets/Stocks/Market-News/BSE-to-finalise-IT-co-buy-to-get-a-tech-edge-in-trading/articleshow/5001176.cms

MUMBAI: The Bombay Stock Exchange (BSE) board will meet on Saturday to finalise the acquisition of Marketplace Technologies, a Mumbai-based IT
solutions firm focused on exchange-traded shares, derivatives and commodities markets in India. The objective of the bourse is to develop proprietary technology to enhance BSE’s trading and clearing facilities, and thus, help faster execution of trades and introduction of new products.

According to people familiar with the deal, BSE will pay around Rs 40 crore for buying out the Navi Mumbai-based firm. The board has already given an in-principal approval for the proposed transaction, according to the people.
“No comment,” said a BSE official in response to the detailed questionnaire by ET.

In January last year, the bourse had signed a deal with the Nasdaq OMX group for a new trading and clearing platform in an attempt to overhaul its IT infrastructure. However, the deal was subsequently scrapped in October after differences between the two parties on some technical specifications as well as the timeline for delivery.

Traded turnover in the cash segment of BSE is around one-fourths that on rival National Stock Exchange. In the derivatives segment, NSE clocks around Rs 70,000 crore of turnover daily, while BSE’s derivative segment hardly sees any trades. The BSE top brass feels that overhauling its trading technology will be the first step towards narrowing the market share gap with its arch rival.

It is also learnt that the board will consider appointment of Ashish Kumar Chauhan as the deputy chief executive of the bourse. According to market sources, Mr Chauhan is the brain behind Marketplace Technologies. When contacted by ET, Mr Chauhan, who is currently CIO at Reliance Industries and also the CEO of Mumbai Indians, RIL promoter Mukesh Ambani’s cricket team which plays in the Indian Premier League, refused to comment.

A top BSE source told ET that Marketplace Technologies is owned by a relative of Mr Chauhan. The company’s website does not provide any information about the promoters. The website, however, says the company is run by a team of professionals instrumental in setting up and operating India’s largest stock exchange. Mr Chauhan was indeed part of the core team at the NSE when that bourse was set up in 1994. Others in that team included RH Patil, former NSE chairman, and now chairman of the Clearing Corporation of India, Ravi Narain, the current MD of NSE, and Chitra Ramkrishna, currently deputy MD of NSE.

An official at Marketplace Technologies said the firm is among the leading providers of back-office support solutions and has started providing software for front-end functions just a year ago. It claims to have offered back-office solution to JM Financial, Motilal Oswal and Anand Rathi among others apart from providing front-end trading solutions to brokerages like Networth Stock Broking, Joindre, Systematix Stock Broking, among others.