
NSE shrinks monthslong share transfer process to days ahead of a likely IPO
Subscribe to enjoy similar stories. Mumbai: In a significant step towards the potential listing of India’s largest bourse, the National Stock Exchange of India Ltd will lift a key hurdle that stood in the way of faster transfers of its shares. The stock exchange has informed its shareholders that the existing process for transferring its shares will be lifted on Monday, implying that NSE shares can be credited to a buyer’s account more expeditiously than in the current 2-4 months.
NSE’s move is in line with a 14 October circular by the Securities and Exchange Board of India specifying shareholding rules for market infrastructure institutions, including on share transfers and designating depositories for transfer of shareholding. This was to be implemented in January but got delayed. Faster completion of NSE share transfers—in a few days after a trade is executed, rather than in a few months—could increase the demand and activity in the unlisted segment for NSE’s shares because of vastly reduced transaction costs.
The current monthslong process for transferring NSE shares renders the stock relatively illiquid as compared with other unlisted entities, which don’t have to adhere to such rules as they are not systemically important institutions. NSE in August submitted an application for a no-objection certificate from Sebi for filing its documents for an initial public offering of its shares. The regulator’s nod is awaited.
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