BSE Share Price Rises 4% As CEO Rules Out NSE Self-Trading After IPO; CAS Impact In Focus

BSE shares rose more than 3.5% on Thursday, September 3, after the exchange’s managing director and CEO said NSE would not be allowed to trade on its own platform following its much-awaited IPO.

Speaking to CNBC-TV18, Sundararaman Ramamurthy, BSE’s MD and CEO, said NSE has confirmed that no addendum will be issued to its offer document to allow self-trading. At the time of writing, BSE shares were trading at ₹3,285.40 apiece, up 3.7%.

Ramamurthy pointed to precedent while addressing the matter, noting that BSE itself was not allowed to trade on its own exchange despite attempting to secure permission in 2017. He added that self-listing is not permitted under the current regulatory framework.

Why Are BSE Shares Rising Today?

Reports had earlier suggested that NSE could look to trade on its own exchange through the “permitted to trade” category once it lists on BSE as part of its proposed NSE IPO, a workaround that had raised concerns among BSE investors.

Ramamurthy’s comments reduce the immediate concern around the possibility of NSE trading on its own platform, removing one of the overhangs that had been in focus for BSE.

BSE Closing Auction Session: What Did The CEO Say?

On the Closing Auction Session (CAS), introduced on August 3, Ramamurthy acknowledged that index option volumes have declined since the mechanism came into effect. He said liquidity is a critical requirement for a CAS system to function well, and the lack of it has weighed on participation and pulled index volumes lower.

He said BSE has been holding dealer meetings to gather feedback on the CAS framework. Among the suggestions received, dealers proposed delinking F&O expiry from CAS and implementing the system in a more gradual manner. Another piece of feedback was that order modification should not be permitted during the auction window.

Ramamurthy said the exchange is collating the dealer feedback before presenting it to regulators.

The CAS is a brief end-of-day auction mechanism in which buy and sell orders are matched to determine a stock’s official closing price. Similar systems are used in other Asian markets, including China, Taiwan, Hong Kong and South Korea.

It replaced the earlier methodology, under which closing prices were based on the average price of trades executed during the final 30 minutes of continuous trading. Regulators had said the shift was intended to bring Indian markets closer to global practices.

Since its introduction, however, the CAS has been associated with sharp swings and price divergences in benchmark indices. Liquidity during the roughly 20-minute auction window has remained thin and has been largely dominated by institutional participants.

Exchange data showed CAS trades accounted for less than 1% of daily cash-market turnover and less than a third of the volumes seen under the previous system. The lower participation means relatively small buy or sell orders can have a larger impact on key indices.

NSE, BSE Derivatives Turnover Under Pressure

As reported by The Economic Times on September 2, NSE’s total monthly equity derivatives turnover stood at ₹34.48 lakh crore in August, the lowest since November 2023. BSE’s August turnover came in at ₹32.2 lakh crore, its lowest since June 2025.

Market participants told the publication that brokers have started squaring off positions earlier, around 3:05 to 3:10 pm, while traders are also closing out positions ahead of time to avoid the heightened volatility seen in the final minutes of trade.

For BSE, the impact of the CAS on trading activity and the exchange’s ability to maintain liquidity will remain an important area to watch as the new mechanism evolves.

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