NSE Can’t Trade Its Own Shares, Avoiding Conflict-of-Interest Trap
GS3Economy · S&T · Environment · Security· Capital markets & SEBI· Prelims·
Regulatory compliance and market integrity: a key GS3 and Ethics case study on preventing market manipulation.
Why in news
NSE will not trade its own shares on its platform to comply with SEBI regulations and avoid conflict-of-interest traps.
Background
Under Regulation 45(1) of the SEBI Stock Exchanges and Clearing Corporations Regulations, 2018, a recognised stock exchange is prohibited from listing its securities on itself. NSE's IPO, an offer for sale by existing shareholders, is expected to be valued between Rs 22,500-23,500 crore.
Facts for Prelims
- BodySEBI: The regulatory body governing stock exchanges and clearing corporations in India
- FactNSE IPO: Expected to be an offer for sale by existing shareholders
- FactNSE IPO: Expected value of Rs 22,500-23,500 crore after reducing share size to 12.64 crore shares
- Act / BillSEBI Stock Exchanges and Clearing Corporations Regulations, 2018: Regulation 45(1) prohibits listing securities on the exchange's own platform
Prelims practice question
Which specific regulation prohibits a recognised stock exchange from listing its own securities on its own platform?
- (a)Regulation 50(1)
- (b)Regulation 33(5)
- (c)Regulation 10(2)
- (d)Regulation 45(1)
Show answer
Answer: (d) Regulation 45(1) — Regulation 45(1) of the SEBI Stock Exchanges and Clearing Corporations Regulations, 2018, prohibits listing securities on the exchange's own platform.
For Mains
Q. Discuss the importance of regulatory frameworks in preventing conflicts of interest and market manipulation within India's capital markets.
Dimensions to cover in your answer
- Market integrity: Preventing price manipulation and insider trading by exchange-listed entities
- Regulatory oversight: Ensuring independent governance structures for stock exchanges to maintain investor trust
Keywords: Conflict of Interest · Market Manipulation · Regulatory Compliance · Capital Markets · Governance
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This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.