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Can your father be your father-in-law or your mother your mother-in-law? It may sound strange, anomalous and paradoxical; yet it is possible. A successful Tamil movie by veteran K. Balachander in the 1980s, Apoorva Ragangal, showed how relationships can mutate and make the unthinkable actually possible. A silent revolution in the form of social and economic liberalisation is turning relationships topsy-turvy.

The corporate world is no exception. Markets are integrating. Equity, forex, bond and commodity markets are becoming seamless and money flows from one to the other effortlessly. So, how does one define relationship between markets? Or should one define it at all?

These and other thoughts crossed one's mind when the story about Bombay Stock Exchange (BSE) proposing to divest 51 per cent of its equity came in last week. The BSE will divest 26 per cent in favour of one or more strategic partners and 25 per cent to public through an Initial Public Offer.

Imagine a situation: A bank becomes a strategic partner of the BSE; and the bank 's shares are traded on the bourse. Market participants can go to the same bank and borrow money either to buy BSE shares or the bank's shares or both.

Also, BSE shares themselves can be listed on the BSE and traded. Another possibility. Let's say (hypothetically) commodity exchange MCX becomes BSE's strategic partner with 26 per cent equity stake. When the MCX completes its IPO, its shares can be listed on the BSE too.

For the next step, stretch your imagination. Because the BSE is a demutualised corporate, a time may come when it will start trading commodities. Then, the BSE can trade commodities on the MCX whose stocks are traded on the BSE.

Thinking about these possibilities and emerging relationships, my head started to spin. What kind of regulatory system will such changing relationships need? All this looks nightmarish.

G. Chandrashekhar

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