What is the future of stock brokerage technology? BSE Commercial Director Explains

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By Samir Patil

From its humble beginnings as an outcry trading exchange in the late 1800s to becoming the second country after China to begin the process of transitioning to a T+1 equity settlement mechanism in 2022, the market Indian stock market has come a long way to emerge as one of the largest market ecosystems in the world. Without a doubt, technology has been the main driver behind the dramatic transformation of the brokerage industry.

Thanks to advancements in technology, the stock market is no longer just for wealthy individuals. Anyone with a smartphone and internet access can buy and sell stocks online from the comfort of their home. This democratized the process of investing in stocks and helped the economy grow.

The introduction of e-commerce in the mid-1990s and SEBI’s decision to legalize Direct Market Access (DMA) in 2009 were the two most important milestones in the revolutionary journey of Indian stock markets. This had further opened the doors for technological innovation to allow brokers and clients to use electronic and automated trading and reduce manual errors.

Today, brokers use advanced technology to offer a suite of services that can save investors time and money. For example, they can provide real-time quotes, allow you to trade online without having to depend on your brokers to physically lock in your orders, and offer research and analysis tools. Automation of processes, improved market intelligence, better communication with clients, and enhanced security to protect client data have helped brokers meet today’s business challenges. Adhaar-based e-KYC facilitated a fast and paperless account opening process, and UPI made the process of transferring funds to brokerage accounts much faster.

During Covid-19, these systems have been put to the test, and exchanges and their trading systems have shown extraordinary robustness and reliability. BSE, for example, has provided several brokerage technology solutions to all of its members as order routing platforms. BOLTPlus On Web™️ (BOW) is one such powerful hosted real-time trading solution provided by BSE Tech Infra Services Pvt Ltd. Many business members, who worked from home, were fully functional due to its meticulous system design, scalability, user interface, ease of access with limited infrastructure, and support from BSE.

As part of its ecosystem, BSE enables over 1,300 brokers with over 100,000 branches to enable trading for over 11 million investors on its platform. The sheer volume of transactions requires transparent and error-free performance. The BOW platform allows the user to monitor real-time market prices and execute orders on multiple exchanges (BSE, NSE, MCX and NCDEX) instantly with real-time price streaming and price management. risks from a one-stop shop.

BOW services ensure that all members, especially small members, stay connected and trade seamlessly with the latest technologies at no cost. This allows members to continue to focus on their business expansion plans with the assurance of technical support from BOW. Going forward, BSE will continue to hold business members for business continuity through BOW.

The BOW platform will also allow BSE to offer Electronic Gold Receipt (EGR) trading, which Indian regulators have cleared for trading. EGRs were made “fungible” and “interoperability between vault managers” was allowed. The BOW platform will thus enable ordinary Indians to easily transact and invest in gold.

The path to follow

There is also continuous innovation in motion, as BSE understands that an important factor for a trading solution is to provide trading innovation combined with greater efficiency, speed of execution and lower costs. At BSE, we believe in setting an example of how a centuries-old organization can meet today’s business challenges with a focus on technological innovation. BSE plans to improve the BOW based on market needs and innovation around speed, capacity and flexibility – the ability to support increased volumes, speed to reduce latency and the flexibility to be able to integrate trading in all asset classes and on all markets.

(Sameer Patil is Commercial Director at BSE. Opinions expressed are those of the author.)

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