Now Reading: SEBI may examine liquidity before allowing NSE to trade own shares
-
01
SEBI may examine liquidity before allowing NSE to trade own shares
The Securities and Exchange Board of India (SEBI) is likely to assess liquidity and other issues before granting 'Permitted to Trade' (PTT) status to the National Stock Exchange (NSE), according to a…
The Securities and Exchange Board of India (SEBI) is likely to assess liquidity and other issues before granting 'Permitted to Trade' (PTT) status to the National Stock Exchange (NSE), according to a source. The PTT status would allow NSE shares to be traded on its own platform without being formally listed there, while formal listing would still need to be done on another exchange like BSE. Market analysts say this could concentrate more transactions on NSE, reducing liquidity on the rival exchange where it is formally listed.
A circular dated May 7, 2026, from NSE states that PTT admission is permitted under current regulations, but the Securities Contracts (Stock Exchanges and Clearing Corporations) Regulations, 2018 prohibit self-listing. Critics argue that trading NSE shares on its own platform raises concerns about conflicts of interest, market surveillance and price discovery. Separately, SEBI's observation on NSE's draft red herring prospectus (DRHP) for its IPO is pending, with a source citing expected changes by an existing shareholder.
NSE filed its DRHP in June for an offer-for-sale of up to 148.9 million equity shares, or nearly 6 per cent stake, by existing institutional shareholders, with no fresh issue. Based on an unlisted valuation of about Rs 5 lakh crore, the issue size is estimated at up to Rs 30,000 crore. NSE will not receive any proceeds from the offer.
Indian Opinion Analysis
NSE's attempt to trade its own shares on its platform challenges the core principle that exchanges must not be issuers on their own market to avoid inherent conflict of interest. The closest precedent is BSE, which listed on its own platform in 2017 only after a regulatory exemption, but NSE's size and market dominance make the stakes far higher. For NSE, which holds roughly 70 per cent of equity derivatives turnover, even a small shift in liquidity to its platform could distort price discovery and reduce volumes on BSE. SEBI's real calculus will be whether allowing PTT creates a regulatory loophole that other exchanges could exploit, or whether strict surveillance can mitigate risks. The next signal to watch is SEBI's observation on the DRHP, which may clarify its stance on the PTT proposal.
Source: thehindubusinessline.com
This story was synthesised by AI from the source linked above.
