BSE Share Price: Shares of BSE Ltd came under pressure on Wednesday, September 2, falling more than 4 per cent from the day’s high as investors weighed concerns over lower participation following the introduction of the Closing Auction Session, competition from the upcoming NSE IPO and a broader sell-off in global markets.
The stock came under pressure after BSE management acknowledged that the newly introduced CAS has resulted in lower participation from high-frequency trading firms, proprietary traders and retail investors.
“CAS has led to lower participations from HFT, proprietary accounts, retail traders. CAS participation needs to pick up,” BSE management told Zee Business, in an interview.
The CAS is a call auction mechanism designed to determine the closing price of stocks in the cash segment that have active derivative contracts. Under the system, buy and sell orders are aggregated during the closing session to arrive at a single price, with the aim of improving transparency and fairness in closing-price discovery.
The mechanism came into effect on August 3 following the Securities and Exchange Board of India’s decision to introduce a closing auction session in Indian equity markets. The NSE has said the mechanism brings India’s market closer to global best practices in closing-price discovery.
BSE management also clarified that, under the current framework, an exchange cannot list its own shares on its platform. However, it indicated that NSE could first list its shares on BSE and subsequently seek to have the shares permitted for trading on NSE.
The distinction between listing and permitted-to-trade is significant. While listing makes an exchange the primary platform for a company’s securities and brings disclosure and compliance obligations, permitted-to-trade status allows shares listed on another recognised exchange to be bought and sold on the platform without the company being listed there.
Last month, reports suggested that NSE could allow its shares to trade on its own platform after listing them on another recognised exchange, potentially under the existing permitted-to-trade framework.
NSE already has more than 200 companies whose shares are permitted to trade on its platform despite not being listed there, highlighting the distinction between trading and listing.
Other exchanges also follow a similar arrangement. MSEI and NCDEX together have around 4,000 companies whose securities are permitted to trade on their platforms even though they are not listed on those exchanges.
The broader weakness in global equities and higher crude oil prices amid escalating tensions in West Asia have also added to the pressure on Indian stocks, contributing to the decline in BSE shares on Wednesday.
Namit Singh Sengar is a Chief Copy Editor with over seven years of experience in delivering content across diverse domains. Specialising in business news across personal finance, real estate, IPOs and markets, Namit brings an editorial eye and a deep understanding of complex subjects to his work. His educational foundation includes Post Graduate Diploma in Journalism from the Indian Institute of Mass Communication (IIMC), Delhi, which has equipped him with the skills to craft compelling and accurate narratives. His interest also keeps him follow topics such as economy, politics and stand-up comedy.
In his previous roles, Namit has covered brands, marketing and advertising as key writing beats. His expertise extends beyond the newsroom, as he has actively reported on and participated in numerous industry events, gaining insights into emerging trends and fostering connections within the field.
