The National Stock Exchange of India Ltd. tied up with the Nasdaq Stock Market to bring in the American exchange’s settlement and clearing technology.
The NSE will replace its wholly owned National Securities Clearing Corporation Ltd.’s indigenous technology with the post-trade technology of Nasdaq’s Financial Framework, the two exchanges said in a joint statement. This will allow the NSE to scale up, bring in blockchain technology and integrate settlement of multiple assets classes. It will have to be customised to meet Indian regulatory requirements and the rollout could take anywhere between 24 and 36 months, said Vikram Limaye, managing directors and chief executive officer of the NSE.
The deal also involves bringing the latest technology from Nasdaq and also collaborating with the NSE’s information technology arm to market Nasdaq products outside India, said Adena Friedman, president and CEO at Nasdaq. NSE IT Ltd. will coordinate with the Nasdaq’s team in Bengaluru to implement and development solutions for India and overseas, said Friedman. The U.S. bourse has a 300-people team in Bengaluru which it acquired from Thomson Reuters a couple of years ago.
Both the exchanges will also work with the regulator on dual listing. Indian markets are highly liquid and provide access to foreign investors, but a dual listing will give access to domestic U.S. funds, said Friedmen.
The Securities and Exchange Board of India set up a committee to look at the issue of dual listing couple of weeks ago, said Limaye. “We need to look at how we can expand the market with more products and foreign companies listing in India.”
The agreement between the two exchanges is not exclusive. Nasdaq provides technologies to over 100 exchanges, Friedman said. The NSE will customise the Nasdaq platform as per its requirements and these customisations will not be shared with other exchanges, including those in India, if Nasdaq enters into an agreement with them, said Limaye.