What Is the Calcutta Stock Exchange (CSE)?

The Calcutta Stock Exchange (CSE) is a stock exchange located in Kolkata, India. It is the second oldest stock exchange in South Asia. The CSE provides its members with opportunities to trade in capital markets and the futures and options markets of the Bombay Stock Exchange (BSE) and the National Stock Exchange of India Limited (NSE).

Key Takeaways

  • The Calcutta Stock Exchange (CSE) is a stock exchange located in Kolkata, India.
  • In 1980, the exchange was permanently recognized by India's government; the CSE has since grown to more than 900 members and over 3,500 listed companies.
  • The CSE provides its members with opportunities to trade in capital markets and the futures and options markets of the Bombay Stock Exchange (BSE) and the National Stock Exchange of India Limited (NSE).

History of the Calcutta Stock Exchange (CSE)

Though the buying and selling of stocks in Calcutta can be traced back to the early 1800s, there was not a code of conduct or permanent place to execute trades. It is said that stockbrokers convened by a neem tree on a location that now holds the offices of the Standard Chartered Bank in Calcutta.

The earliest record of dealings in securities in India is the British East India Company’s loan securities. The official exchange was incorporated in 1908, as the Calcutta Stock Exchange Association. At this time, it had 150 members. In 1923, the Association became a limited liability concern. In 1980, the exchange was permanently recognized by India's government under the relevant provisions of the Securities Contracts Regulation Act of 1956. The CSE has since grown to more than 900 members and over 3,500 listed companies. The Exchange's present building, at the Lyons Range in Kolkata, was constructed in 1928. 

In 1997, the exchange replaced its manual trading system with a computerized trading system called C-STAR (CSE Screen-Based Trading And Reporting). C-STAR was subject to a major payment settlement system scam in 2001 that closed down the exchange and resulted in the suspension of 300 CSE members, many of whom were able to get their licenses back several years later. Many companies delisted from the CSE and joined the BSE or NSE instead. In 2007, the CSE entered a piggyback arrangement with the BSE. Most of the trading in the Indian stock market takes place on the BSE and the NSE. 

In 2012, the Securities and Exchange Board of India (SEBI) declared strict regulations for regional stock exchanges (RSEs), which triggered the voluntary exit of nearly 20 exchanges, including the Bangalore Stock Exchange, Hyderabad Stock Exchange, and Madras Stock Exchange. The CSE experienced a halt in trading on C-STAR in 2013. It has struggled to maintain its existence in the face of stringent regulations; however, it considers itself a demutualized and professionally-run stock exchange that enables members to trade on the BSE and NSE exchanges as well.