By Jayshree P Upadhyay
India's markets regulator should reconsider allowing exchanges to list on their own platforms, NSE BSE:NSE Chairman Srinivas Injeti said on Friday, a day after the bourse operator debuted on rival BSE at a valuation of about $47 billion.
India's markets regulator debated allowing self-listing in 2015 but rejected the idea over potential conflicts of interest, requiring their shares to trade on rival bourses.
However, self-listing is permitted in several major global markets. In the United States for example, the New York Stock Exchange's parent Intercontinental Exchange NYSE:ICE is listed and traded on the NYSE, which it operates.
NSE accounts for about 93% of India's cash-market trading and nearly 75% of options.
IMPACT ON OPTIONS VOLUME IS LARGELY OVER
The world's busiest derivatives exchange listed as investors grow wary of slowing volumes and its reliance on options for growth.
Options trading has declined after tighter regulation and rule changes aimed at aligning Indian markets with global standards.
"Whatever volumes had to go down due to regulatory changes to cool down derivatives trading and due to teething issues due to closing auction session have already gone down," Ashish Chauhan, chief executive, NSE said in an interview with Reuters on Friday.
"Volumes are still high and spread across many instruments including monthly options which are pretty large," Chauhan said.
NEW GROWTH AVENUES
The Securities and Exchange Board of India has sought to curb speculative options trading by raising costs while encouraging growth in the cash market.
Chauhan said NSE would help develop the cash market if the government set out that objective through regulation.
Allowing foreign portfolio investors to trade bullion contracts would also help NSE grow its commodities business, Chief Business Officer Sriram Krishnan said.
India on Thursday permitted FPIs to participate in physically settled non-agricultural commodity derivatives, a move expected to boost trading volumes in bullion contracts by broadening the investor base and bringing the market more in line with global peers.
FPIs will be able to use capital already allocated for equity investments to trade in commodity derivatives, Krishnan said.
He added that slowly both commodities and data monetisation will evolve from peripheral activities into standalone revenue generators.