The National Stock Exchange (NSE) has finalised an agreement with the Jaipur Stock Exchange (JSE) under which the shares of companies listed on the latter will be available for trading on the country's largest stock exchange, according to officials familiar with the matter.
According to the agreement, JSE members will also be able to trade in shares of companies listed on NSE and issue their own contract notes.
The terms of the memorandum of understanding (MoU) between the two had been finalised and were awaiting approval from the Securities and Exchange Board of India (Sebi), said officials, on condition of anonymity.
According to information on its website, JSE has 740 listed companies with total paid-up capital of Rs 5,688.50 crore (Rs 56.88 billion). It has 468 trading members.
An e-mail to NSE remained unanswered.
To expand its footprint, NSE has been actively looking to tie up with regional stock exchanges. The latest agreement with JSE is similar to the arrangement it entered into with the Madras Stock Exchange (MSE) in November last year.
"The thinking is that there are a lot of wonderful regional companies that have been languishing on those (regional) exchanges, primarily because their customer base, historically, has been local," NSE Managing Director and CEO Ravi Narain told Business Standard in a recent interview.
At present, more than 20 MSE-listed companies are available on NSE's platform. According to MSE officials, liquidity in these counters has improved due to NSE's vast network. MSE has received more than 100 applications for new membership and has added 25 members after partnership with NSE.
There are 18 Sebi-recognised regional stock exchanges. However, hardly any trading happens on these. A partnership with a national stock exchange can improve liquidity in stocks listed on their platforms.
"The association with NSE is helping in real price discovery of MSE-listed small- and medium-enterprise stocks," said V Nagappan, director, MSE.
Ahead of an imminent entry of the MCX Stock Exchange (MCX-SX) into equity and equity derivatives trading business, India's two premier stock exchanges - NSE and the Bombay Stock Exchange - are wooing brokers by reducing charges and launching new products.
