The following was not the objective of setting up the Bombay Stock Ex…

The following was not the objective of setting up the Bombay Stock Exchange:

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → Enabling shorter settlement cycles and book entry settlements

Option (1) Enabling shorter settlement cycles and book entry settlements — Not an objective of BSE (Correct). This is one of the objectives of the National Stock Exchange (NSE), set up in 1992 to bring a modern electronic system into Indian trading.
Option (2) To conform to international standards — An objective of BSE (Incorrect). BSE aims to work to the standards of the leading exchanges of the world.
Option (3) To provide an efficient and transparent market for trading in equity, debt instruments, derivatives and mutual funds — An objective of BSE (Incorrect). It is the basic job of the exchange: an open, efficient market for many kinds of securities.
Option (4) To ensure active trading and safeguard market integrity through an electronically driven exchange — An objective of BSE (Incorrect). Trading on an electronic system keeps the market busy and honest.

Note: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below.

NCERT (Pre-rationalised Edition): “BSE (BOMBAY STOCK EXCHANGE LTD.) … It has the following objectives:
(a) To provide an efficient and transparent market for trading in equity, debt instruments, derivatives, and mutual funds.
(b) To provide a trading platform for equities of small and medium enterprises.
(c) To ensure active trading and safeguard market integrity through an electronically-driven exchange.
(d) To provide other services to capital market participants, like risk management, clearing, settlement, market data, and education.
(e) To conform to international standards.”

“OBJECTIVES OF NSE NSE was set up with the following objectives: a. Establishing a nationwide trading facility for all types of securities.”

“d. Enabling shorter settlement cycles and book entry settlements.”