The first official milestone in the history of the newly created Budapest Stock
Exchange was the government’s decision to give green light for the preparation
of the Securities Act of 1989. The draft bill was submitted to Parliament in January
1990 and came into force on 1 March. At the same time that the bill came into
force on 21 June, 1990, the BSE held its statutory general meeting and the Exchange
re-opened its doors. With 41 founding members and one single equity, IBUSZ, the
Budapest Stock Exchange was set up as a sui generis organisation (an independent
legal entity). The re-establishment of the market economy during the same time
and the privatization of businesses played a decisive role in the exchange’s operations.
Even though the sale of the larger state-owned businesses often involved the assistance
of strategic investors, the BSE played a significant role in the privatisation
of many leading Hungarian companies (including IBUSZ, Skála-Coop, MOL, OTP. Matáv
(today Hungarian Telecom), Domus, Globus and Richter).
Over the years, there have been major changes in the operating conditions, organisation
and function of the BSE. The first trading floor was in the Trade Center on Váci
Street, followed by its move in 1992 to the atmospheric old building at 5 Deák
Ferenc Street in District V, where it continued its operations for 15 years. In
March, 2007 the BSE moved to its current headquarters to the former Herczog Palace
at 93 Andrássy Road.
The open-outcry system of the physical trading floor that characterized the spot
market functioned with partial electronic support until 1995. From 1995 until
November, 1998 securities trading took place concurrently on the trading floor
and in a remote trading system, when the new MultiMarket Trading System (MMTS),
based entirely on remote trading was launched. The traditional “battlefield rumble”
of the physical trading floor ceased within a year by September 1999, at which
time physical trading was entirely replaced by the electronic remote trading platform
of the derivatives market.
The derivatives market of the BSE in futures and options contracts has been available
to investors since 1995. BUX (the BSE’s main index) contracts have been available
for trading since the start of the futures market on 31 March 1995. In July, 1998
the BSE was among the first exchanges in the world to introduce contracts based
on individual equities. Another series of standardised derivatives in the options
market appeared in February, 2000 and on 6 September 2004 trading commenced in
the exchange’s second index, the BUMIX.
In April, 2000, after twelve years of operations as an independent legal person,
the new BSE Council decided to convert to a business association in order to maintain
and strengthen its competitive position. Effective 1 July 2002, the Budapest Stock
Exchange Company Ltd. was set up (and from April 2006, as a Private Limited Company)
and the BSE Council and BSE Secretariat were replaced by a Board of Directors
and an Executive Board.
In January, 2010, BSE becomes a member of the CEE Stock Exchange Group: BSE in
addition to the Vienna, Ljubljana and Prague Stock Exchanges becomes a member
of the CEE Stock Exchange Group. The Stock Exchange Group jointly offers easy
access to four attractive markets with long-term growth prospects. Simultaneous
to the establishment of the Group two joint indexes are also launched under the
names CEETX – CEESEG Traded Index and CEESEG Composite.
Source: Birth of an Exchange
Authors: Tamás G. Korányi - Nóra Szeles
Edited by Tamás G. Korányi
Budapest, 2007.
Brief history of the Exchange
1864-1914: An Exchange was born
1914-1948: From one world war to another
Present and previous managers of BSE
Event calendar from the beginning until today
