The National Stock Exchange of India (NSE) is considering allowing its shares to trade on its own platform after a formal listing on the rival BSE Ltd. This potential move was discussed with global investors during roadshows for NSE's proposed initial public offering (IPO), which is targeted for September. Under this proposal, NSE shares would trade in the "permitted to trade" category on the NSE, even though they would be formally listed on the BSE. This arrangement could provide NSE shares with access to liquidity on both exchanges, while retaining BSE as the primary listing venue.
However, current regulations do not permit a stock exchange to self-list. As a market infrastructure institution, NSE would require approval from the Securities and Exchange Board of India (SEBI) for its shares to trade on its own platform. Discussions are ongoing, and the final decision hinges on regulatory approval. The "permitted to trade" framework allows securities to trade on the NSE without formal listing, and NSE revised its index eligibility rules in 2019 to allow such securities to qualify for inclusion in the Nifty indexes.
The news of this potential move led to a significant intraday drop in BSE's share price. BSE shares fell over 2.5% from their intraday high, trading down approximately 0.36% from the previous close. This reaction indicates market concern that BSE might lose out on trading volumes and revenue that an exclusive NSE listing on its platform would have brought. Investors and analysts noted that while listing fees and prestige would remain with BSE, the ongoing trading franchise for NSE's shares might shift to the NSE's own deeper order book, impacting investor access, index eligibility discussions, and broker economics.
