In order to retain its top talent amid increasing competition, the Bombay Stock Exchange

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(BSE) has doled out 24 per cent annual hike in salaries to its officer-grade employees with effect from April 1, 2008, people familiar with the matter told Financial Chronicle.

According to the sources, hikes have been given to more than 200 officers out of the total staff strength of about 540. “We would not like to offer any comment on this internal organisational matter,” BSE’s corporate affairs department replied to an e-mail query.

However, FC confirmed the development with BSE employees, who wished not to be quoted.

In the half year ended September 30, 2009, BSE’s total employee cost stood at Rs 18.75 crore, about 20 per cent of its total expenditure of Rs 95.04 crore.

The move from Asia’s oldest stock exchange is aimed at boosting employee morale and ward off any poaching attempts by other stock exchanges. BSE’s top management is trying hard to bring liquidity into its derivatives segment, where its bigger rival National Stock Exchange (NSE) has a monopoly.

In the cash segment, BSE has 25 per cent market share, while NSE commands the rest. The competition in the stock exchange space has intensified further with the entry a third national level player - MCX Stock Exchange (MCX SX), which is expected to start equities trading business later this year. The new stock exchange is likely to intensify hiring in the next few months and trained employees of BSE and NSE are the obvious poaching targets.

At present, MCX SX, jointly promoted by Financial Technologies and Multi Commodity Exchange (MCX), only offers trading in currency futures. It intends to start equity and derivatives trading on its platform after its promoters divest stake as per the regulatory requirements.

According to Indian rules, no single entity can hold over 5 per cent in an exchange, barring stock exchanges and banking organisations, which are allowed to own up to 15 per cent stake.