The exchange had assigned ORG Marg the task of carrying out an extensive research on BSE indices and its popularity. The findings of the research had clearly highlighted the popularity of the 30-share sensitive index which has carried with it a history of over 17 years. "The market is conditioned to thinking in terms of ups and downs in the Sensex rather than any other index. The Sensex provides an adequate benchmark for gauging the fundamental mood of the market as well asfor technical analysis," explained a veteran broker in the light of the interesting findings of the ORG Marg study.

Besides cashing in on the index factor, the exchange has also decided to reduce the annual subscription fee paid by the clearing and the trading member to attract to more participation. On NSE, a clearing member with a trading right is expected to pay an annual subscription charge of Rs 1 lakh over and above the various deposits maintained with the exchange. BSE has proposed an annual subscription cost of Rs 50,000. The clearing member who does not have trading rights is required to maintain a networth of Rs 3 crore coupled with a deposit of Rs 50 lakh, which is supposed to be maintained with the clearing house (common at both exchanges). Clearing members with trading rights are also expected to also maintain a deposit of Rs 8 lacs with the exchange.

For trading members, NSE has fixed a networth of Rs 1 crore, while BSE has reduced it to Rs 50 lakh. The same is the case for annualsubscription to be paid by the trading member. On BSE, the annual subscription is Rs 50,000, while on NSE the charges are pegged at Rs 1 lakh. A clearing member is responsible of settlement of trades and, hence, is required to maintain a higher deposit with the exchange.

"Derivative trading in Sensex is bound to become popular because the index is not only the most popular index, but also has a market cap of over 37 per cent which also gives a proper representation of the popular stocks," said BSE president J C Parekh. Nifty represents a market cap of 41 per cent. "The importance given to industry representation in the Sensex provides a better tool for hedging," added Parekh.