Can the National Stock Exchange (NSE) allow trading in its own shares on its platform?

The question has gained prominence after a report suggested that NSE is exploring the ‘Permitted to Trade’ (PTT) route to allow investors to trade its shares on NSE while keeping the exchange formally listed on the BSE.

NDTV Profit, citing sources, reported that the National Stock Exchange (NSE) is looking to trade its shares on its own platform while remaining formally listed only on the BSE.

The existing regulatory framework does not permit stock exchanges to list themselves, the report said.

Therefore, the exchange would need approval from the market regulator, the Securities and Exchange Board of India (SEBI), to admit its shares for trading on its own platform.

However, the PTT framework allows NSE to admit securities for trading without formally listing them on the exchange. Companies using this mechanism continue to remain listed on their primary stock exchange.

Earlier in May, NSE issued FAQs and clarified the framework for securities admitted under the PTT category on its mainboard segment. Under this framework, companies do not need to sign a separate listing agreement with NSE, while the exchange considers disclosures made to the primary exchange sufficient.

However, NSE continues to subject PTT securities to its surveillance and regulatory mechanisms.

Companies can subsequently seek full listing for securities admitted under PTT, provided they meet the applicable eligibility conditions. The exchange also retains the authority to suspend or prohibit trading in such securities.

If SEBI approves the arrangement for NSE, the exchange would remain formally listed on the BSE while allowing investors to trade its shares on NSE as well, giving them an additional trading venue.

The development comes ahead of NSE’s proposed initial public offering. The exchange filed its draft red herring prospectus with SEBI in June for an IPO comprising an offer for sale of 14.89 crore equity shares.

NSE first initiated its listing plans in 2016 but delayed them amid regulatory scrutiny related to the co-location controversy.

Separately, NSE reported an 8.2 per cent sequential decline in consolidated revenue from operations to Rs 4,560 crore for the quarter ended June 30. However, its net profit rose 8.7 per cent to Rs 3,120 crore.