National Stock Exchange of India Ltd. will begin settling trades of its unlisted shares via a designated depository on Monday, shortening the process of buying or selling the stock.
Central Depository Services India Ltd. will be employed for that purpose, the NSE said in a statement on its website on Friday.
The move allows for trades to be settled within days, rather than months, by scrapping the need for buyers to get approvals from the bourse and the market regulator to carry out such transactions. That may bolster trading of the stock in the largely unregulated gray market ahead of its proposed initial public offering.
“Despite high demand for NSE's shares, it was taking up to four-to-five months for trades to be completed,” said Deven Choksey, managing director at wealth manager DRChoksey FinServ Pvt. “This anomaly will now get resolved.”
Demand for NSE's shares has surged in the gray market amid a rally in the shares of smaller rival BSE Ltd., which has soared about 5,000% in the past five years.
The Indian regulator instructed the exchange last year to make the change. As to the IPO, the bourse first filed its application for the offering in 2016, but its plans have been long-delayed.
The firm has yet to receive the go-ahead from the regulator to proceed. But last year, the Securities and Exchange Board of India cleared the NSE of any wrongdoing in a years-old case related to unfair market access, clearing a major hurdle to its listing plans.
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