NSE proposes exploring share trading on BSE due to Sebi rules
GS3Economy · S&T · Environment · Security· Capital markets & SEBI· Prelims + Mains·
Regulatory framework and market integrity: a GS3 case study on capital market regulations.
Why in news
NSE proposed exploring the 'permitted to trade' route to trade its shares on the BSE because SEBI regulations prohibit a stock exchange from listing its own securities on its own platform.
Background
NSE's IPO price band is set at Rs 1,700-1,785 per share. Under Regulation 45(1) of the SEBI Stock Exchanges and Clearing Corporations Regulations, 2018, a recognized stock exchange can only list its securities on another recognized stock exchange.
Facts for Prelims
- FactNSE IPO price band: Rs 1,700 to Rs 1,785 per share
- Act / BillSEBI Stock Exchanges and Clearing Corporations Regulations, 2018: Regulation 45(1) mandates listing on a different exchange
- BodyNSE: National Stock Exchange of India
- BodyBSE: Bombay Stock Exchange
- FactNSE reduced its stake sale from 6.2% to 5.11% due to shareholder reluctance
Prelims practice question
Under which regulation does SEBI mandate that a recognized stock exchange can only list its securities on another recognized stock exchange?
- (a)Regulation 30(5)
- (b)Regulation 88(2)
- (c)Regulation 45(1)
- (d)Regulation 12(3)
Show answer
Answer: (c) Regulation 45(1) — Regulation 45(1) of the SEBI Stock Exchanges and Clearing Corporations Regulations, 2018, prohibits an exchange from listing its own securities on its own platform.
For Mains
Q. Discuss the regulatory rationale behind prohibiting stock exchanges from listing their own securities on their own platforms in India.
Dimensions to cover in your answer
- Regulatory integrity: Preventing self-regulation to ensure impartial oversight and market transparency
- Market liquidity: Balancing listing restrictions with the need for wider investor access via 'permitted to trade' routes
Keywords: Capital Markets · Regulatory Framework · Self-Regulation · Market Integrity · Listing Requirements
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