The much-awaited initial public offering (IPO) of the National Stock Exchange (NSE) could receive the final regulatory approval soon, Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey said on Thursday.
“Yes, we are close,” Pandey said when asked about Sebi’s approval for the NSE IPO on the sidelines of an event marking the 30th anniversary of NSE Clearing in Mumbai.
The exchange filed its draft red herring prospectus (DRHP) in June after receiving Sebi’s no-objection certificate (NOC) to proceed with the IPO.
Pandey also said the regulator has not yet taken a view on whether NSE shares could be traded on its own platform. “We have not thought about it yet (allowing NSE shares to trade under the permitted-to-trade category). We will have to think about it,” he said.
He also clarified that Sebi is not considering any changes to the recently introduced closing auction session (CAS), expressing confidence that participation will improve as brokers update their trading interfaces and investors become more familiar with the mechanism.
“We are not looking at any changes, and the system is running as it is. Participation will increase and brokers will enable it in their apps and people will learn and come to this market,” Pandey said.
CAS is a separate end-of-day auction used to determine the closing price of eligible stocks. Under the mechanism, buy and sell orders are collected during the auction and matched at an equilibrium price that maximises the number of shares traded. The mechanism has attracted criticism from brokers over low liquidity and price uncertainty.
Sebi introduced CAS for stocks in the equity cash segment that have derivative contracts, with the aim of improving price discovery and addressing shortcomings associated with the earlier volume-weighted average price (VWAP) method of determining closing prices.
Speaking at the event, Pandey also said the regulator plans to formulate a standard operating procedure (SOP) for settlement-related operational activities on unscheduled holidays. Sebi is also considering a proposal to rationalise margins on subsequent buy or sell transactions following the acceptance of early pay-in of securities in the cash segment.
Pandey said the growing use of artificial intelligence is also changing the nature of risks faced by financial markets.
“AI can improve surveillance, risk analytics, and decision-making. At the same time, it can introduce risks related to opaque models, data, governance, and operations. Risk management must evolve,” he said.
He emphasised that markets need to move beyond merely measuring risks to anticipating them as technology becomes more deeply embedded in the financial system.
“We must move from entity-level risk management to network-level and system-wide risk management. We must look at financial resilience together with operational resilience,” Pandey said.