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Self-listing not allowed under current norms: Watchdog Sebi to NSE

As it gears up to get listed, leading bourse NSE has been told by the markets regulator Sebi that the present regulations do not provide for ‘self-listing’ of a stock exchange. The National Stock Exchange (NSE) has been pitching hard for either self-listing or direct supervision by Sebi, and not by a rival exchange, in case of cross-listing.

In response to a letter from NSE, Securities and Exchange Board of India (Sebi) has now clarified that the “present regulatory framework does not provide for self-listing”. The matter is now likely to be discussed by the Listing Committee set up by NSE, as also by the exchange’s board to decide on the next course of action.

However, Sebi was silent on amending guidelines to allow self-listing in future, or on supervision by the regulator in case of NSE getting listed on its rival exchange BSE. Such models of exchange listings are present globally for avoiding any potential abuse of information by a competitor.

Sources said the NSE is also engaged with Sebi on the matter of its proposed restructuring and the dialogue is continuing between the two in this regard. Sebi had sought clarifications from NSE on rationale for segregating regulatory functions from other segments and the bourse replied to the regulator’s queries in this regard.

When contacted, NSE’s Managing Director and CEO Chitra Ramkrishna said, “We are in receipt of communications from time to time from Sebi on both self-listing and restructuring. Our listing committee and the NSE board will evaluate all such communications in ensuing meetings. All these are part of iterative processes.”  NSE’s rival BSE has also started its own process to get listed and it is open to the idea of cross-listing. BSE has already received in-principle approval from Sebi to launch its IPO and get listed. As per Sebi regulations, which were put in place after recommendations of an expert panel and a long-drawn consultation process involving all stakeholders and the general public, a stock exchange cannot list its shares on its own platform, but can get listed on another bourse.

After facing intense pressure from the shareholders, NSE in February had formed a committee to expedite the listing process and seek support for self-listing. The listing committee comprises NSE board members, shareholder representatives and the management. Recently, Sebi Chairman U K Sinha had also made it clear that the current norms do not permit self-listing but the regulator was open to look into issues faced by the exchanges. 
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