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Informist, Thursday, Aug 29, 2024

By Rajesh Gajra

MUMBAI – Discussions have started among stock exchanges whether interoperability can be effected between trading venues, BSE's senior general manager Usha Sharma said today. Sharma was speaking at a session on clearing corporations interoperability at the Global Fintech Fest in Mumbai today.

Interoperability between trading venues will enable an investor to enter orders in a stock or security listed in the cash market and equity derivatives segment of one stock exchange on the trading platform of another stock exchange. For instance, an investor would theoretically be able to buy or sell Nifty 50 futures and options on BSE and another investor would buy or sell BSE Sensex futures and options on NSE’s platform.

In the same session at the event Securities and Exchange Board of India’s executive director Ruchi Chojer also said that such discussions had commenced. Later, on the sidelines, Chojer told Informist Media that these discussions are at a very nascent stage.

In November 2018, SEBI prescribed broad guidelines for the operationalising of the interoperable framework among clearing corporations, which are wholly owned subsidiaries of stock exchanges. The clearing corporations went live with interoperability soon thereafter.

According to National Stock Exchange's chief regulatory officer Piyush Chourasia, an indirect form of trading interoperability is already there in the Indian stock market. In cash market trading, many of the companies are listed on the cash market segments of both the stock exchanges, he said. Further, there was already cross-margining happening for clients having positions in index derivatives on NSE as well as BSE.

However, a direct trading interoperability would make it easier for investors. When the clearing corporation subsidiaries of BSE and NSE went live in 2019 it enabled brokers, who were also clearing members, to settle their NSE client trades with BSE’s clearing corporation Indian Clearing Corporation, and inversely a BSE broker could settle its client trades with NSE’s clearing corporation, National Securities Clearing Corporation.  End

Edited by Deepshikha Bhardwaj

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