NSE shares to trade on its own bourse? Management weighs in

According to fresh market updates, National Stock Exchange of India began trading as a listed firm on the BSE on Wednesday, but a key question around its own platform stays unresolved: whether NSE could eventually seek regulatory approval to list or trade its shares on the exchange it operates.

At a post-stock-exchange debut interaction with the press, NSE's management stated the present regulatory framework does not permit the exchange to list or trade its own shares on its platform, but indicated that the offering could evolve as regulations change.

“Earlier, prior to 2012, even stock-exchange debut was not allowed. A stock exchange or an MII could not list. In 2012, it was allowed,” stated an official. He further noted that if the regulator finds merit in aligning Indian rules with global practices that allow an exchange to list on its own platform, NSE would provide its inputs.

“As the market develops, as things change, if the regulator feels that there is merit in aligning with the global practice of allowing an exchange to list on its own platform or to trade, we will certainly give our input,” he stated.

For now, that stated, NSE stated it would follow the existing framework. “The present framework doesn't allow trading or stock-exchange debut on your own platform,” they further noted.

NSE says derivatives expansion can continue despite regulatory scrutiny. The exchange additionally sought to propel back against concerns that increasing regulatory scrutiny of derivatives, particularly options, could weigh on its expansion.

NSE's management argued that the expansion of derivatives participation during the past decade has been accompanied by a broader gain in investor participation and trust in Indian markets. “10 years back, there was no derivative momentum. So, each time more market participants come, we find it more trustworthy, more safe, more people come,” he stated.

The comments come at a time when the Securities and Exchange Board of India (SEBI) has been tightening its focus on derivatives, particularly short-duration and expiry-day options trading.

CEO Ashish Chauhan stated the regulator's objective was not to eliminate derivatives but to ensure that the segment develops in a way that protects retail market participants. “There's no opposition to the derivative market. How can the derivative market develop like a healthy market?” the official stated, adding that products with very short tenures should not become “lottery ticket type trading”.

The exchange additionally stated its business was not dependent solely on derivatives and that it anticipated to balance its expansion across the broader capital market as India's financial markets expand.

The exchange made its public market debut earlier today, September 24th. On the BSE, shares of the NSE were listed at Rs 1,800 per share, a premium of 0.84 percent. The firm's market capitdalisation post-stock-exchange debut of its shares stood at Rs 4,45,500 crore.

The Rs 22,569-crore initial public offering (IPO) of the National Stock Exchange of India (NSE), the country's second-largest IPO, was subscribed 5.71 times on the final day of bidding on Monday, fuelled by firm demand from institutional market participants.