``We would like to remove the misconception that the president or other elected directors interfere in the day-to-day working of the exchange,'' was the reply sent to the standing committee's question on whether the president of the stock exchange should be a non-broker to remove potential conflict of interest at the board level.

Further, the answer to the various queries raised by the committee centres around the role of the executive director of the exchange, who is appointed with the approval of the Sebi.

It should, however, be recalled that the problems which engulfed the BSE's improving reputation and status, was sorted out by the governing board members, under the guidance of the executive director.

According to market sources, two leading BSE brokers who are also the governing board members shelled out hugeamounts of over Rs 3 crore each to bail out six brokers, who were trapped at the counters of Videocon International, BPL and Sterlite.

``The executive director of the exchange is responsible for day-to-day running of the exchange and he derives this authority under the rules and byelaws of the exchange,'' states the letter.

The reply also clarifies that, there has not been a single instance to suggest that the board has taken any decision which has been against the interest of the investors or the market as a whole.

``There are enough checks and balances in the present system to prevent any misuse. In fact, even the other elected directors can thwart any such attempt as they are not obliged to toe the line of the president unless it is in the the interest of the market as a whole,'' states the reply.

In order to further substantiate the role of brokers in the working of exchange's abroad, BSE has highlighted the US, New York Stock Exchange, Singapore, Hongkong and Tokyo Stock Exchange models where thegoverning board comprises of market practitioners and brokers.

BSE has further made a case on the basis that the inputs provided by elected directors who have hands on experience and knowledge about knity gritty and intricacies of the capital market have helped in evolving major reforms in the exchange.

``It will be worth putting on record that chairman or president of various stock exchanges world over are elected directors,'' stated the letter.