The Bombay Stock Exchange is set to see a reshuffle in its board of directors, the first since the country's oldest bourse was demutualised and became a limited company last year.

The reshuffle, details of which are yet to be discussed, is widely believed to be at the behest of market regulator Securities and Exchange Board of India.

Sebi Chairman C B Bhave declined to comment, but sources said the regulator was keen to strengthen the BSE, India's second largest exchange by turnover, so that it emerged as a strong competitor to the National Stock Exchange.

The BSE's 12-member board consists of three stockbrokers, eight directors, seven of whom are industry captains, and a government nominee. The brokers include Prakash R Kacholia, designated director of Emkay Share; and stock brokers Balkishan Mohta and Siddharth J Shah, designated directors of J G A Shah Share Brokers.

The move to reshuffle follows resignations yesterday by Shekhar Dutta, non-executive chairman, and Shareholder-Director Jamshyd Godrej [Get Quote], within nine months of joining the board.

Sources said the industry veterans and BSE's Chief Operating Officer Ashok Kumar Rout quit because they did not agree with the way the exchange was being managed.

Rout, who resigned last month, could not be contacted, but a BSE spokesperson said the reasons for the COO's exit differed from those of Dutta and Godrej, but declined to elaborate.

Godrej, also chairman & managing director of Godrej & Boyce, cited personal reasons for leaving, saying he was too busy running his company.

Several questions, however, have been raised over Dutta's sudden resignation. He is said to have left in protest against what was perceived as the board's micro-management. Sources said Dutta was keen that the BSE board should act as a guiding force and not get into the day-to-day management.

Sebi is keen that BSE should gain strength after having lost out to NSE, its younger rival, in areas like derivatives trading. Last week, Bhave had addressed the BSE board and asked it to settle its disputes internally.

The last time the BSE board was revamped was in 2001 following a scam by stock broker Ketan Parekh.

BSE now has 19 domestic and overseas shareholders. These include Life Insurance Corporation, State Bank of India [Get Quote] and the AV Birla group, among domestic players and Deutsche Borse Group and Singapore Stock Exchange, which hold 5 per cent each.

The exchange recently faced several controversies ranging from a technical snag that suspended trading to a steep rise in penny stocks when they were relisted.

The exchange is amongst the largest in the world in terms of the number of listed companies, but trading in at least 1,500 scrips has been suspended due to non-compliance with exchange rules.