SEBI Likely To Form Panel On Stock Exchange Self-Listing Rules After NSE Listing Debate

Market regulator Securities and Exchange Board of India (SEBI) is likely to set up a committee to examine the possibility of allowing stock exchanges to list and trade their own shares on their platforms, according to a CNBC-TV18 report citing sources.

If introduced, the proposed self-listing framework would also apply to exchanges that are already publicly listed. However, SEBI is expected to first address concerns related to conflict of interest, governance standards and regulatory oversight before moving ahead.

Self-listing debate gains momentum after NSE IPO

The issue has gained attention following the listing of National Stock Exchange (NSE) shares on the Bombay Stock Exchange (BSE). NSE Chairman Srinivas Injeti had earlier said regulators should reconsider allowing exchanges to list on their own platforms.

“Earlier, prior to 2012, even listing was not allowed. A stock exchange or an MII could not list. In 2012, it was allowed,” an NSE official had said, adding that global practices could be considered if regulators find merit in allowing self-listing.

SEBI had examined the possibility of self-listing in 2015 but rejected the proposal due to concerns over potential conflicts of interest. Under the existing framework, stock exchange shares are required to trade on rival exchanges.

Global practices and regulatory concerns

Self-listing is permitted in several international markets. In the US, Intercontinental Exchange, the parent company of the New York Stock Exchange, is listed and traded on the NYSE.

NSE currently dominates India’s capital markets, accounting for around 93% of cash-market trading and nearly 75% of options trading.

Reports have suggested that NSE could eventually seek permission to trade its shares on its own platform through the “permitted to trade” category after its BSE listing.

Under current regulations, a stock exchange classified as a market infrastructure institution requires SEBI approval before its shares can be traded on its own platform.

Meanwhile, NSE shares fell below their IPO price on Monday amid selling pressure after their market debut.