Marketing Research Process Procedure

 Q. Explain the procedure of conducting marketing research. 

Ans. Marketing research process consists a sequence of several steps, these steps are closely interlinked and interdependent. They are so logical that success of one depends on the prior step. Marketing research process is carried out with a series of steps which are required to be taken in a chronological order. Some commonly followed major steps involved in a marketing research project are as follows:

1. Formulation of Research Problem: The first step in any marketing research project is formulating a research problem. It is the most important stage in applied research because poorly defined problem will not give useful results. It is rightly said that, “a problem well defined is half-solved.” Poorly formulated problems create confusion and do not allow the researcher to develop a good research design. Therefore, the researcher should take into account the purpose of the study, the relevant background information, the information needed and how it will be used in decision making. 

Formulation of research problem involves discussion with the decision makers, interview with industry experts and analysis of secondary data. Formulation of research problem involves three sub-steps:

i) Discovering the managerial problem: Discovering the managerial problem is not a easy job, because these are covert (meaning hidden) and subtle (meaning complex, difficult). The dynamic and competitive world of business creates many problems for the firm. One should be alert in discovering the managerial problem well in advance of its occurrence.

ii) Defining the problem: It is really difficult to define managerial problem as it is more systematic than cause-oriented. The researcher is to go to the very roots of the problem to establish cause and effect relations. For example, the problem of falling sales may be because of wrong pricing, wrong packaging, wrong distribution system or cut throat competition. The researcher is to see the real cause of falling sales.

iii) Translating of managerial problem into a research problem: A research problem is one in respect of which the data is collected and analysed to find a solution. All management problems are not research problems. Therefore, to translate managerial problem into a research problem, the cause and effect relation must be established. Translation of managerial problem into a research problem involves the in-depth study of company’s strengths and weaknesses in respect of production, marketing, finance and study of marketing environment under which the company is working. 

Thus, it is clear that to investigate the reasons for falling sales researcher can investigate all aspects affecting sales or he may investigate the problem on the basis of product policies or pricing policies or distribution policies or other marketing policies of the company. But it is sure that before assigning research project to the researcher, the problem in hand must be well defined, because a well defined problem leads to a better solution.

2. Situation Analysis: Situation analysis is important to obtain background information on the problem. Situation analysis means the circumstances under which the research is being conducted. Situation analysis generally consists of following information:

(i) Products of the company

(ii) Company itself its competitors and the industry in general

(iii) Its markets

(iv) Its channels of distribution 

(v) Its sales organisation 

(vi) Its advertising and sales policies

This analysis enables the researcher to arrive at a hypothesis or a tentative presumption on the basis of which further investigation may be done. Hypothesis are tentative statements describing relationship between concepts or possible cause and effect relationships. 

Formulation of research problem helps to specify and precise the scope of marketing problem. It makes research both economical and meaningful.

3. Developing Research Design: Research design is the heart of marketing research. Once the research problem is defined, the next step is to determine research design. A research design specifies the methods and procedures for conducting a marketing research. A research design is the master plan for the conduct of marketing research. Research design keeps the study right on the track making it to keep pace with the problem requirements and makes possible best result with minimum resources and possible procedures. Research design specifies the methods for data collection and data analysis i.e, 

(i) How would tĥe data be collected?

(ii) Which instruments for data collection would be used?

(iii) What sampling method would be used?

The choice of research design will depend essentially on the nature of the problem on which the research is to be undertaken. Another factor is the scope of the research project. Research having wider scope has different research design from a research having limited scope. 

Research designs are classified by the purpose of research and data collection efforts. These are: 

(i) Exploratory Research Design: An exploratory research design focuses on the discovery of ideas and is generally based on secondary data. This design aims at defining the research problem and identifying the possible alternative solutions. Information for exploratory research are gathered from the internal sources, interviews with knowledgeable persons and from secondary sources. 

(ii) Descriptive Research Design: It is most commonly used research design. A descriptive study is undertaken when the researcher wants to know the characteristics of certain group on the basis of age, education, income, occupation, etc. The purpose of descriptive research design is:

1. to describe the phenomena,

2. to describe the consequences of possible alternative course of actions,

3. to describe the potential market in terms of present and future attitude of the customers and 

4. to describe the product image.

(iii) Causal Research Design: A causal research design is undertaken when the researcher wants to know the cause and effect relationship between two or more variables. 

Formulation of research design involves the following steps: 

1. Determining the objectives of the research project.

2. Determining the scope of the research project.

3. Determining the methods for collection of data.

4. Designing the questionnaire.

5. Deciding sampling process and sample size.

6. Decision regarding analysis and interpretation of data.

7. Determining the time required for research work.

8. Determining the budget of completion of research project.

9. Designing the personnel and administrative set-up.

10. Preparing the research proposal and getting it approved. 

4. Collection of Marketing Data: Once the research design is finalised, the next step before the researcher is to go for data collection. A comprehensive research study requires both primary and secondary data. 

(i) Primary Data: Primary data is one which is originally collected by the researcher specifically for the project in hand through questionnaire and interviews. Collection of primary data is time and money consuming affair. It is an unpublished but latest and relevant to the problem and most accurate. It may be collected by survey, observation or experimentation method. Primary data sources includes: Company’s salesman, consumers, middlemen, executives, suppliers, competitors and trade associations. 

(ii) Secondary Data: Data originally collected by someone else for other purpose but can be used for research project in hand is known as secondary data. Such data or information may not be latest but accurate and reliable. It costs less in terms of time and money. The sources of secondary data are: Internal company records, Government Publications, Government Reports, Publication of Research Organisations, Publications of Trade Associations and Chamber of Commerce, Reports and Journals etc. 

The researcher has to decide whether he has to collect primary data or depend on secondary data. Sometime the researcher study is based on both primary data as well as secondary data. When a study is based on secondary data, it is necessary to satisfy oneself that the available data are matched with the objectives of research project. One should be familiar with the authentic sources of such data, their periodicity, the concept used in compilation and their limitations, if any. The researcher should look to the secondary data first, if needed information are already available, the time and expense of gathering it from primary sources can be saved. 

If the decision in favour of primary data is taken, then one has to decide the method of data collection. Following three methods are available for collecting primary data. 

I. OBSERVATION METHOD: Suggests that data are collected through one’s observation. This method is non-reactive as data are collected without the direct participation of the respondent. In observation method, actions of the respondents are observed either directly mixing with them or indirectly without getting mixed up with them. 

II. EXPERIMENTATION METHOD: The experimentation method emphasis on the creation of controlled environment where some variables are allowed to vary and cause-and-effect relationship is studied. 

III. SURVEY METHOD: In marketing research, field surveys are commonly used to collect primary data. With the use of survey method, we are able to collect wide range of valuable information, which may not be possible in observation and experimentation methods. Surveys can be (i) personal, (ii) telephonic and (iii) by mail. Personal interviews are suitable when detailed information are to be collected. Telephonic survey is suitable when limited information is sought in a short period of time. Mail survey is used when respondents are scattered over a large geographical area and detailed information are required. Sometimes a combination of two or more methods could also be used. 

5. Determining Sampling Design and Sample Size: When the marketing researcher has decided to carry out a field survey, he has to decide whether it is to be census survey or sample survey. In census survey, all members of the relevant universe are contacted. In research surveys, it is not possible to contact the entire population because of cost, time and energy involved in it. Therefore, researcher has to establish a ‘sample’ or the representative group from whom the information may be collected. It is called as sample survey. 

In determining the sampling design, the researcher must specify:

(i) Sampling frame

(ii) Sample selection process 

(iii) Size of the sample

(i) Sampling frame: Sampling frame is the list of population elements from which sample will be drawn. 

(ii) Sample selection process: The sample selection process requires that the form of the sample must be specified. Will it be probability sample in which each population element has a known chance of being selected, or will it be a non-probability sample? The type of sample design chosen will depend on its suitability and the availability of the requisite sampling frame.

(iii) Sample size: Sample size means how many units to be surveyed? The researcher has to select a relevant fraction of the population which is the representative of the entire population or universe. In any case, the sample size must not be increased more than 10 per cent of the universe. 

6. Field Work and Data Collection: Field work is the most expensive of all the steps in a research project. Interviewing and supervision are two important aspects of field survey. The task of interviewing seems to be simple, but in reality, it is one of the most difficult task in marketing research. Because respondents are generally hesitant in giving information. If the researcher is carefully selected or trained, he may use his tactics and intelligence to persuade the respondents to answer the questions.

Supervision of field staff is equally important to ensure timely and proper completion of the field survey. Proper selection, training, supervision and evaluation of field force help to minimise data-collection errors. 

7. Analysis and Interpretation of Data: Once the field survey is over and filled questionnaires have been received, the next step is to aggregate the data in a meaningful manner. The data are first edited, coded and tabulated for the purpose of analysing them. 

Editing refers to the process by which collected data are reviewed to check that they are complete, consistent and that the instructions were followed. Editing facilitates tabulation.

Once the questionnaire forms have been edited they must be coded. Coding involves assigning numbers or letters codes to the observations, so that can be properly analysed.

Tabulation implies data arrangements as to classes and weightages. If the questionnaire has been well planned, tabulation work is very much facilitated. From the tabulated summaries, conclusions may be drawn. The editing, coding and tabulation functions are common to most research studies. The researcher should have a well thought out framework for processing and analysing the data and this should be done prior to the collection of data. The editing, coding and tabulation is must when the researcher has huge amount of data concerning the research project in hand.

It is necessary that the researcher gives as much importance to the analysis and interpretation if data as he has given to their collection. In the absence of proper analysis, data may be rendered useless resulting in a waste of time and money. The analysis of data can be conducted by using simple statistical tools like percentages, averages and measures of dispersion. The collected data may be analysed by using diagrams, graphs, charts, pictures, etc. Data may be cross-tabulated to produce useful relationships among the variables involved. 

Interpretation of data includes conclusion, summary and recommendations of research based on the statistical analysis. Thus, interpretation is a minute and meticulous work involving the use of mental facilities of sound judgement and clear vision to reach a cut-off point. 

8. Report Preparation and Presentation: Once the data have been tabulated, analysed and interpreted, the marketing researcher is to present his findings to the users in the form of research report. The report should be written in clear language, properly paragraphed and should be able not only to hold the interest of the reader but also convince him by presenting it with necessary evidences. 

While preparing a research report, the researcher should follow the principles of objectivity, coherence, clarity in the presentation of ideas and use of charts and diagrams. The essence of good research report is that it effectively communicates its research findings in simple and lucid manner. Latest visuals and colour combinations such as charts, graphs, diagrams, photographs are to be used. The findings and recommendations must be clear, precise and feasible. The report should be in written form and must be technically accurate as well as it should be understandable and useful. 

The research report must contain the following sequence:

1. Title page with name of organisation from whom it has been conducted

2. Table of contents, alongwith charts and diagrams used in the report

3. Preface

4. Statement of objectives and hypothesis with statement of marketing problem.

5. Research methodology containing (a) Research design, (b) Assumptions, (c) Data collection methods and instruments used, (d) Sampling plan, (e) Field survey, (f) Scheme of analysis and interpretation of data, (g) Scope and (h) Limitations 

6. Analysis of collected data

7. Interpretation of data 

8. Findings of the research study

9. Conclusions arrived at and recommendations suggested

10. Appendices: contain - (a) Copy of questionnaire used, (b) Glossary of terms, (c) Tables, (d) Maps, (e) Charts, (f) Photographs, (g) Bibliography 

9. Follow-up of Recommendations: .In the last, the researcher should follow up his study and see that his recommendations must be implemented. The researcher gets satisfaction and the user rich returns for his investments made in research only when the research findings are implemented in the form of objectives, policies, strategies, procedures and methods. 

Each step described above is more complex when actually performed. Because each involve number of issues to be decided. Marketing research attempt to achieve the scientific way in their research projects ɓy using a series of steps referred to collectively as the marketing research process.

Methods of International Payment.

 Q. Explain different methods of International Payment.

Ans. There are various methods of settling transactions in international marketing. These methods involve different degrees of risk for exporter and importer. These methods differ in degree of flexibility in terms of payment schedules. Main methods of payment in international marketing are:

1. Cash in Advance: In this method, exporter asks the importer to make payment in advance before the shipment of goods. The exporter is relieved of the task of collection of funds from importer. The exporter has no risk of bad-debts as he receives due amount in advance and can also use these funds in business. For importer, payment in advance involves cash flow problem and risk. It is possible that the exporter may not send the goods, may make excessive delay in delivery of goods or may supply low quality goods. So, this method of payment is beneficial for exporter and to the disadvantage of importer. If the exporter is in dominating position due to his unique innovative products or due to good demand of his products then he will insist on the importer for making payment in advance. Further, if credit-worthiness of importer is less or there is political or/and economic crisis in importer’s nation then exporter will ask the importer to make payment in advance.

2. Letter of Credit (L/C): Letter of credit is issued by the importer’s bank on the demand made by importer. When importer sends an order with the exporter, then exporter will ask importer to send letter of credit. It is a sort of guarantee give by importer’s bank to exporter or his bank to pay the specified amount. As L/C is issued and signed by the importer’s bank, it creates trust in the mind of exporter and he feels secure regarding his payment. Importer’s bank will issue letter of credit to importer only after getting itself satisfied about the credit-worthiness of importer. The issuing bank of L/C will ask the importer to make some cash deposit or to pledge something as security and/or also ask for collateral security. The issuing bank of L/C will also charge some commission depending upon the value of L/C from the importer. The letter of credit also facilitates the exporter in getting pre-export finance against it. L/C is an obligation of the issuing bank but it is also treated as financial responsibility of the importer. 

Importer will request his bank to issue letter to credit. In this letter, importer’s bank promises to make payment to exporter’s bank on behalf of importer, subject to fulfilment of certain terms and conditions. Letter of credit is valid up to the date of expiry. If importer’s bank is not well known in the exporter’s country or there is economic or political crisis in the importer’s nation then exporter may insist on confirmed letter of credit.

● Types of Letter of Credit 

1. Revocable Letter of Credit: This letter of credit can be revoked or terms of letter of credit can be changed without consulting the exporter. It provides no protection to exporter as terms of such letter can be changed to the disadvantage of exporter. It is not a popular form of letter of credit as it can be invalidated at any time.

2. Irrevocable Letter of Credit: In this type of letter of credit, the terms and conditions can not be changed unless both parties agree to such change. It cannot be revoked by importer nor can its terms be changed to the disadvantage of exporter without his consent. It provides sense of security to the exporter regarding recovery of payment. This type of L/C is widely used.

3. Transferable Letter of Credit: This type of letter can be transferred to third party by exporter or holder of such letter. It is a negotiable instrument.

4. Non-Transferable Letter of Credit: This type letter of credit cannot be transferred by exporter to third party. It is non-negotiable. If exporter transfers it to third party then issuing bank will not be responsible for its payment.

5. Confirmed Letter of Credit: In some cases, issuing bank of importer may not be well known or political/economic situation of importing country may not be stable then exporter may require that the letter of credit should be confirmed by the designated bank in the exporter’s country. The exporter’s bank will despatch this L/C to the designated bank for its confirmation. On receiving confirmation from designated bank, the exporter is relieved and gets assurance about credit-worthiness of importer’s bank. Confirmed and irrevocable letter provides maximum security to the exporter.

6. Unconfirmed Letter of Credit: If letter of credit is not confirmed by designated bank of exporter’s natuon or exporter/exporter’s bank do not send L/C for confirmation, it is called unconfirmed L/C. If exporter and importer have long business relations or importer’s issuing bank is well known, then letter of credit is not sent for confirmation.

7. Ancillary/Back to Back Letter of Credit: It is a type of assisting L/C based on original L/C. The exporter in whose favour L/C has been issued, may request his bank, to issue another L/C, (on the security of original L/C) in favour of his supplier of raw material/components, etc. This type of L/C helps the exporter to get pre-shipment finance against the L/C received from the importer. If exporter has to purchase raw material/components from any supplier on credit then exporter can request his bank to issue L/C against the security of original L/C. This newly L/C helps the exporter in procuring raw material/components on credit.

8. With Recourse Letter of Credit: This letter of credit is issued with a condition that if exporter’s bank is not able to recover the amount from importer’s bank, but has already made payment to exporter, then exporter’s bank can demand the refund of already paid amount alongwith interest from exporter. The exporter’s bank, instead of taking action against importer’s bank, claims refund from exporter. So exporter does not feel secured in such case. Due to this reason, such letter of credit is not much popular.

9. Without Recourse Letter of Credit: In this type of letter of credit, if the exporter’s bank is not able to recover the amount from importer’s bank, but has already paid to the exporter then exporter’s bank cannot claim refund of money from exporter. The exporter’s bank can take legal action against importer’s bank for the recovery of amount already paid to exporter. In this type of L/C, exporter feels safe. 

10. Revolving letter of Credit: This type of L/C is popular among such exporters and importers who indulge in regular and continuous foreign trade transactions. Instead of providing letter of credit for each business transaction separately, importer provides a single letter of credit of large amount and of long duration. This large amount is like ceiling limit. With each business transaction, a separate L/C is not sent. Exporter bank makes payment to exporter for every business transaction till the ceiling or time period of L/C is exhausted. It makes payment in foreign trade transactions very convenient. If the individual trade transactions are of small amount but are very frequent then revolving L/C is very suitable.

● Advantages of Letter of Credit

(i) The exporter is relieved of risk of bad-debts.

(ii) The exporter gets the payment immediately after handing over shipment documents to his bank.

(iii) The exporter can arrange pre-shipment funds against the security of letter of credit.

(iv) It is more beneficial to importer in comparison to the method of advance payment.

(v) All terms and conditions are written in letter of credit. Exporter’s bank and importer’s bank also become party to this letter. So this document becomes more authentic and clear. Hence, chances of dispute are minimized.

(vi) Importer feels assured about timely delivery of goods as exporter is under obligation to despatch the goods for shipment before the expiry of validity period of letter of credit, otherwise the exporter cannot get amount against L/C.

(vii) Importer can get better terms by sending letter of credit.

(viii) The clearance from exchange control authorities becomes easier due to involvement of exporter’s bank and importer’s bank. The authorities feel that provisions of foreign exchange regulations have been duly compiled.

● Limitations of Letter of Credit 

(i) Validity period of letter of credit is very short.

(ii) It is complicated method of payment as it involves excessive formalities. The terms and conditions of trade have to be written in L/C in the initial stage only, which may be difficult for exporter and importer.

(iii) If there is any discrepancy in documents presented by exporter, i.e., these documents are not in confirmity with terms and conditions then importer’s bank can withhold the payment although goods have already been shipped by exporter.

(iv) Revocable letter of credit offers little security to exporter as it can be revoked anytime.

(v) Importer’s bank, exporter’s bank and confirmating bank (Designated Bank) make huge charges which inflates the transaction cost of foreign trade.

3. Bill of Exchange (Draft): It is an important instrument used in international trade to make or receive payment. In export-import transactions, exporter writes the bill instructing the importer or his agent (importer’s bank) to make specified payment on specified date. The exporter is drawer of the bill and importer/importer’s bank is drawee of the bill. The importer/importer’s bank accepts this bill by signing it and returns the accepted bill to the drawer of the bill. This bill is treated as Bill Receivable (B/R) for the exporter and Bill Payable (B/P) for the importer. The bill of exchange can be of two types — sight bill and time bill. Sight bill is different from time bill.

Sight bill is payable by the drawee on its presentation, while the time bill is payable after a specified time period. In case of time bill, it is payable on due date. Due date/maturity date of bill is computed by adding the specified time period and 3 grace days to the date of issue of bill. The drawer of bill (in case it is a time bill) can get it discounted from his bank. In this case, after deducting discount charges, bank will make immediate payment to the holder of the bill. If the bill is discounted from the bank, then the bank (holder of the bill on due date) will receive the payment of the bill from the drawee on its due date.

In case of sight bill, documents of title are handed over to importer only after receiving the payment, so exporter is secure in case of sight bill. Here, no credit period is allowed to importer. In case of time bill, documents of title are handed over to importer before receiving the payment. So, time bill is risky for exporter, but it is to the advantage of importer. Here, credit period is allowed by exporter to importer. If the bill is accepted by the importer, then it is called trade acceptance, and if the bill is accepted by the importer’s bank, then it is called banker’s acceptance. In international trade, generally exporters insist the importers for bank’s acceptance to generate more trust and to get secure about its payment.

4. Open Account: In case of open account method, exporter makes the shipment of goods, sends all documents to importer and allows credit for a specified period to importer. In the method, letter of credit or banker’s acceptance are not required. Title of goods is transferred from exporter to importer without receiving any assurance from importer. This method is used when importer enjoys good credit-worthiness, there is long trade relationship between exporter and importer, exporter is financially sound, and there is no economic/political crisis in importer’s nation. But this method is very risky for exporter, as in the absence of banking channel (Lack of L/C, banker’s acceptance) and trade acceptance (Bill of exchange), it is very difficult for exporter to recover the amount in the situation of default in payment. Exporter has no other way to recover his amount except to take legal action, which is generally costly, lengthy and cumbersome. When there is excessive competition in foreign market, the exporter has to sell goods through open account due to risk of losing the client.

5. Consignment Method: In this method, exporter makes shipment of goods to foreign consignee. These goods are shipped at the cost of consignor. The exporter retains the title of goods until these are sold and bear the whole risk. The consignee acts as agent of exporter and sells goods on behalf of exporter. The foreign consignee will make payment only when he has sold the goods and has recovered the amount. The foreign consignee will make payment only when he has sold the goods and has recovered the amount. The foreign consignee will remit the amount after deducting his expenses and commission. If goods remain unsold then foreign consignee may send the goods back to exporter at the exporter’s expense. So the exporter has to wait for payment for long time and further he may not get any payment if goods remain unsold. So this method involves huge risk to the exporter. The exporter sends goods on consignment only when the foreign consignee is very trustworthy and there is good demand for exporter’s products in foreign market.

6. Counter-trade: Counter-trade is a trade agreement that has a requirement to import as a condition to export. Counter-trade is a bilateral trade agreement between two nations, under which a nation imports from another country on the condition that other country will also imports products of same value from the first country. This type of trade agreement does not require foreign exchange, hence it does not put any burden on balance of payments of a country. It is a type of barter trade. 

Counter trade is a trade practice which is based on barter trade and is used by trading partners who lack in foreign exchange. In counter trade, exporter accepts goods or services from the importer in partial or full payment of his products. If the exchanged goods are not of equivalent value then balance is carried forward in the books of both parties and will be settled in future counter trade transactions. The payment in future trade transactions may involve some conflict between exporter and importer due to various reasons viz. fluctuations in exchange rate, delay in delivery, defective packaging, discrepancy in documents, change in regulations of exchange control, economic or political crisis, etc. The legal remedy for settlement of disputes is very complicated, costly and time consuming as both parties belong to different nations and have different legal set-up. Counter-trade does not involve any such problem. 

● Types of Counter-trade

(1) Barter Trade: It is the simplest form of counter-trade. In barter trade, direct exchange of goods/services takes place between two nations without cash. It can be at the same point of time or the two transactions can be at different points of time but within a specified time period.

(2) Counter-purchase: In this agreement, a firm agrees to purchase specific goods from the country to which sales are made. Suppose a US firm sells goods to Indian company. Indian company has to make payment in US dollars, but US firm instead of receiving the export proceeds in cash, agrees to spend the export proceeds on import of some specific commodity from Indian company in a specified time period. Money exchange takes place in accounting books only. In reality, money does not change hands.

(3) Switch Trading: In this type of counter-purchase agreement, exporter is given counter-purchase credits in consideration of goods sold by him. These counter-purchase credits can be sold/transferred to any third party. Suppose, exporter does not want to import any product against these counter-purchase credits, then he can sell these counter-purchase credits to any trading house, that wants to import goods from that nation. 

General Agreement on Tarrifs and Trade (GATT) and later World Trade Organisation (WTO) has criticised counter-trade as it restricts the free flow of goods from one country to another country. Under counter-trade, benefits of competition do not reach the ultimate consumers. 

7. Gold: In the past, payments in international trade transactions were made mainly through gold. But now gold as a mode of payment has only theoretical importance.

What is Bombay Stock Exchange (BSE)? State listing procedure in BSE

 Q. What is Bombay Stock Exchange (BSE) ? State in detail the procedure of listing of securities in BSE.

Ans. MEANING OF BOMBAY STOCK EXCHANGE (BSE): The brand name of Bombay Stock Exchange is BSE. It was established in 1875. It is the Asia’s first and fastest stock exchange. It was established as “The Native Share and Stock Brokers’ Association”. Now BSE is a corporatised and demutualised entity. The Deutsche Brouse and Singapore Exchange are its strategic partners. It is also known as world’s no. 1 exchange in terms of listed members. More than 5500 companies are listed on BSE. BSE is the first exchange in India and second in the world who obtained as ISO 9001-2000 certification. It has also received Information Security Management System Standard BS 7799-2-2002 certification for its On-Line Trading System (BOLT) and thus become India’s first and world’s second exchange for obtaining such certificate.

What BSE is today, it was not from the beginning. The brokers started meeting in natural environment under banyan tree in front of town hall. A decade later they shift their venue to meadows Street. That too was also under banyan trees. The number of brokers goes on increasing and they had to shift from place to place. In 1874, the brokers found a place which is now known as Dalal street.

LISTING PROCEDURE AT BSE: The listing procedure at BSE is as follows: 

1. Permission to Use the Name of BSE in an Issuer Company’s Prospectus: The companies desiring to list their securities offered through a public issue have to obtain prior permission from BSE to use the name of BSE in their prospectus or offer for sale documents before filling the same with the Registrar of companies. BSE  has a listing company which decides upon the matter of granting permission to companies. This Committee evaluates the promoters, company, project, financials, risk factors and several other aspects before reaching to any decision.

2. Submission of Letter of Application: The company seeking listing of its securities as per section 40(1) of Companies Act, 2013 is required to submit an application to all stock exchanges where it proposes to have its securities listed.

3. Allotment of Securities: As per listing agreement, a company is required to complete the allotment of securities offered to the public within 30 days of the date of closure of the subscription list. The basis of allotment should be approved by designated stock exchange. In case of Book Building issues, allotment should be made within 15 days from the date of closure of issue. Otherwise interest at the rate of 15 per cent shall be paid to investors.

4. Trading Permission: As per SEBI guidelines, an issuer company has to complete the formalities for trading within 7 working days of finalisation of the basis of allotment. A company has to complete all the formalities related to allotment of securities, dispatch of allotment letters, credit in depository accounts and refund orders for obtaining listing permissions.

5. Requirement of 1% Security: Companies making public or right issues are required to deposit 1% of the issue amount with the designated stock exchange before the issue opens. This amount is liable to be forfeited in the event of the company not resolving the complaints of investors regarding delay in sending refund orders, credit in depository accounts, non-payment of commission to brokers or underwriters, etc.