Arch rivals for over 15 years, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) are joining hands to make equity trading more convenient.
Sources close to the exchanges say stock feeds coming from both BSE and NSE will be made available on a single trading platform. Till now, stock brokers had to use two separate terminals to trade or view stock quotes coming from both the exchanges.
To begin with, BSE’s online trading platform (BOLT), or Fast Trade, will be made available on NSE’s in-house software Neat-on-Web (NOW). Traders using this platform will get access to more than 7,000 stocks listed on BSE.
INTEGRATED PLATFORM
Stock feeds coming from both BSE and NSE will be accessible on a single trading platform
BSE’s online trading platform will be made available on NSE’s in-house software Neat-on-Web (NOW)
BSE will get access to NSE’s over 200,000 trading terminals in 1,400 towns
BSE will offer NSE’s trading terminal NOW free of cost to its members
NSE has more than 1,300 major companies listed on its platform and a large number of BSE-listed stocks, lying outside this universe, are punters’ favourites. BSE will get access to NSE’s over 200,000 trading terminals in 1,400 towns across India. Effectively, the move means integration of trading terminals and widening of reach, experts say.
BSE will offer NSE’s trading terminal NOW (Net On Web) free of cost to its members.
Announcing their collaboration, BSE and NSE said in a late evening release that the technological differences between the two exchanges had been resolved.
“The move will provide a consolidated market view to traders and brokers, which is good. Although the move may help handle competition in the trading technology business, growth of volumes will depend on the efficiency of exchanges,” says US-based Tony Weerasinghe, founder of Millennium Information Technologies, which caters to leading exchanges in the US and Europe.
Market experts say the alliance between BSE and NSE will help them tackle the upcoming competition from MCX-SX. The court case between MCX-SX and the Securities and Exchange Board of India (Sebi), regarding an equity trading licence to the former, is in its final stages.
The Bombay High Court, in its last hearing, had asked both parties to return with a 'workable solution' by September 30.
NSE had earlier proposed such an alliance with BSE in March 2009, when M L Soneji was heading BSE. However, no agreement could be reached as Soneji left BSE.
There is a view that the move by BSE and NSE would not attract the attention of the Competition Commission of India. Volumes on BSE are not very high, and Financial Technologies, a promoter of MCX-SX, already provides brokers with a single terminal, enabling them to trade on both NSE and BSE. It is done through a computer to computer link (CTCL). In the domestic trading vendor business, Financial Technologies is a leader with over 70 per cent market share.
Should this not raise competition issues? After all , here are two competitors joining hands within the same market of equity segment and any such agreement is prima facie an anti-competitive agreement , which needs to be scrutinized by CCI whether or not it will have any appreciable adverse effect on competition in terms of Section 3 of the Competition act,2002.
MM Sharma
Head-Competition Law Practice,
Vaish Associates,Advocates
Content Guide
Sources close to the exchanges say stock feeds coming from both BSE and NSE will be made available on a single trading platform. Till now, stock brokers had to use two separate terminals to trade or view stock quotes coming from both the exchanges.
