India's oldest stock exchange Bombay Stock Exchange (BSE) is getting slicker. After the new MD & CEO - the 36-year old Madhu Kannan from New York Stock Exchange - came in, it seems a quiet revolution is underway in the exchange. In his most visible move after he took over as the CEO, Kannan has made three senior level appointments from the investment banking world including a foreigner. For the 133-year old exchange, that is going to be quite a change. 

BSE has hired former NYSE executive and investment banker James E. Shapiro as the head of Market Development of the exchange. The other senior executive to join is Dr. Sayee Srinivasan who comes from Chicago Mercantile Exchange. Srinivasan will be the Head of Product Strategy. Former Law & Compliance director of DSP Merrill Lynch, Nehal Vora, is another senior hand to join Kannan's team. He has been appointed as the Head of Planning and Policy. If the first two has joined from today (July 1), Vora is joining on July 23.

BSE would need some aggressive blood. Although the exchange is the oldest and its Sensitive Index (popularly known as Sensex) is the bellwether index, the trading volumes in the exchange has been declining (from 80% 15 years ago to 25% today, according to a WSJ report). The much younger National Stock Exchange (founded in 1992) has garnered most of the volumes and customers. 

Kannan told Wall Street Journal in an interview:"Old is great, but let's figure out a way to become more than that. We were effectively a monopoly and now it is hypercompetitive. That requires a cultural shift."

So Kannan's latest appointments seems to be a part of effecting this cultural shift.

Prior to joining BSE, Shapiro was senior managing director of Galileo Global Advisors, a boutique investment bank in New York focused on cross-border M&A advisory.  Before that, he worked at NYSE for 16 years in various senior management roles. Shapiro also opened the first NYSE offices in Asia (in Tokyo and Hong Kong) and has been involved in the Indian capital markets since 1997, according to a BSE release. He has a B.A. from Harvard University and an M.A in economics from Yale University.

Dr. Sayee Srinivasan was a Director, Asian Product and Market Development, with the Chicago Mercantile Exchange (CME) Group, based in Mumbai.  He has over a decade of experience in developing products across multiple asset classes including equities, interest rates, corporate bonds, and foreign Exchange. Srinivasan has also worked at the National Stock Exchange (NSE) of India, on derivatives market development.

What about Nehal Vora? He has covered equities and investment banking compliance at DSP Merrill Lynch Ltd before joining BSE. Prior to that for 10 years, he was with the Securities and Exchange Board of India (SEBI) in various functions including the Derivatives and New Products Department, covering policy, product  and process innovation  in areas of derivatives, implementation of T+2 rolling settlement, system of straight through processing for the institutional trades. 

Also reports suggest that BSE is planning to go public and is expected to soon file the IPO documents with SEBI (Securities Exchange Board of India). Investment bank Kotak Mahindra Capital is reportedly advising the exchange. BSE is also working closely with SEBI to frame self-listing norms as it also intends to get listed on itself. It also plans to list its shares on NSE.

BSE has strategic investors like Deutsche Börse and Singapore Exchange,while NYSE has backed National Stock Exchange. Kannan will have a challenging task to regain its lost market share, and glory.

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