Here's why BSE share price dropped 5% on Nov 26; check details here

The drop in BSE shares followed a Bloomberg report suggesting that India's leading stock exchanges might face profit pressures due to proposed regulatory changes to the ownership structure of CCs

BSE Share Price: Shares of BSE were seen languishing in the negative zone on Tuesday, November 26, 2024, as the scrip dropped up to 5 per cent to hit an intraday low of Rs 4,452 per share. A total of 19.18 lakh shares of BSE worth Rs 872.98 crore have exchanged hands on NSE until 11:10 AM.

 

The drop in BSE shares followed a Bloomberg report suggesting that India’s leading stock exchanges might face profit pressures due to proposed regulatory changes to the ownership structure of clearing corporations (CCs).

 

What changes did SEBI propose?

 

The Securities and Exchange Board of India (SEBI), in a consultation paper released last Friday, proposed reforms aimed at ensuring the independence of CCs from their parent exchanges.

 

Currently, CCs—key institutions responsible for trade confirmation, settlement, and delivery—are wholly-owned by stock exchanges. 

 

SEBI's recommendations seek to diversify this ownership to boost the financial and operational autonomy of these entities, which play a critical role in India's market infrastructure.

 

Under the proposed framework, exchanges would be required to reduce their stake in CCs from 51 per cent to 15 per cent over a five-year period, or alternatively, distribute CC shares among existing exchange shareholders to create a clean separation. 

 

Sebi believes such measures would strengthen public interest, reduce reliance on individual large entities, and ensure a level playing field across market infrastructure institutions.

 

The regulator also suggested adjustments to the profit and dividend distribution policies of CCs while maintaining the current restriction on their public listing. 

 

It further advocated for the consolidation of CCs operating in interoperable segments to streamline operations.

 

Currently, BSE and the National Stock Exchange (NSE) own the only two clearing corporations serving the equity markets, with others focused on commodities and debt. 

 

The total market capitalisation of BSE is 60,944 crore, according to National Stock Exchange (NSE).

 

At 11:15 AM, BSE shares were trading 3.95 per cent lower at Rs 4,501.90 per share. In comparison, Nifty50 was trading 0.06 per cent lower at 24,206.35. levels.