BSE Shares Fall Over 2% as Reports Point to Possible Review of Self-Listing Rules

Shares of BSE Limited fell more than 2% on Monday, September 28, following reports that the Securities and Exchange Board of India (SEBI) could review the rules governing self-listing of stock exchanges. 

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At 2:26 pm, BSE shares were trading 2.18% lower at ₹3,121.20 apiece on the NSE. The stock had moved between an intraday high of ₹3,180 and a low of ₹3,104. At that price, the company’s market capitalisation stood at ₹1,27,357.72 crore. 

The movement in the stock came as reports indicated that SEBI may consider forming a high-level panel to examine whether stock exchanges should be allowed to list their shares on their own platforms. 

The development has not been independently verified by Mint. 

Self-listing framework may come under review 

The proposed panel is expected to examine issues surrounding self-listing, particularly possible conflicts of interest and the governance structure of exchanges. 

Under the framework being considered, responsibility for supervising an exchange is expected to remain with its existing regulator. 

The panel could include market experts and senior SEBI officials. According to media reports cited by Mint, recommendations could be submitted within one to one-and-a-half months. SEBI may subsequently issue a consultation paper dealing with the framework for self-listing. 

If the rules are eventually changed, they could also cover exchanges that are already listed. This could potentially allow both BSE and the National Stock Exchange to have their shares traded on their respective exchanges. 

Development follows NSE’s market debut 

The discussion around self-listing comes shortly after the National Stock Exchange entered the listed market. 

NSE was listed on BSE on September 24 at ₹1,800 per share. The listing price represented a gain of 0.84% over the final issue price of ₹1,785 per share. 

Before the listing, there had been speculation that NSE could list on its own platform through the permitted-to-trade category. 

NSE Chairman Srinivas Injeti had indicated on September 25 that such a route was feasible and that the exchange intended to discuss the matter with the regulator. No timeline was provided. 

Self-listing is not without precedent globally. Nasdaq Inc trades on Nasdaq, while Intercontinental Exchange, the parent company of the New York Stock Exchange, is listed on the NYSE. In India, however, any move towards such a framework remains subject to the market regulator’s decision. 

For now, the reported regulatory review remains at a preliminary stage, with the possible formation of a panel and any subsequent consultation process yet to translate into a final framework.