While the question of why Indian companies are still shying away from tapping the American capital market remains unanswered, the NSE firmly believes that more collaboration with international bourses is a must in the current milieu of integrated globalised markets.
“Indian capital market has to look at international systems as we integrate more with the global marketplace,” Vikram Limaye, Managing Director & Chief Executive Officer, NSE, said.
Limaye, along with Adena Friedman, President & CEO, Nasdaq, met a small group of journalists here on Tuesday, a day after inking an agreement with Nasdaq for the latter to deliver a customised real-time clearing, risk management and settlement technology to the NSE.
Asked what the NSE gets from this deal, Limaye said, while Indian capital market gets a global solution, and therefore, those who are used to using the Nasdaq system can tap this market, it also gives stimulus to companies to look at different markets. “FPI interest in India is very large. Indian capital market has to look at international systems as we integrate more with the global market place,” he said.
“Till now all our systems have been developed in-house and we are continuously investing in technology upgradation. We have been looking at the clearing and settlement part of our system. We could have done it ourselves, but what I believe is that there is room for collaboration among the exchanges generally and can learn from each other,” Limaye said.
Besides, the technology will be customised for the NSE platform depending on Indian requirements and it also gives the Indian bourse the ability to upgrade easily, he said, adding that “Our own team will also be involved. Ultimately, we have to run it on our own.”
Adding to what Limaye said, Friedman stated the agreement was consistent to what Nasdaq has with exchanges. “We worked with the NSE for a year, studying their requirements and which members of their team will be involved in it. It is a collaborative effort. Over time, you will see the Indian market having more global participation.”
Indian companies have not tapped the US market for a while for various reasons, according to Friedman. But, some significant ones could be that the Indian firms have been private for far too long or being bought, and second could be they choose to tap some other market before coming to the US. The companies have to be pretty large and a global brand that is well understood by global players.
Cyber security initiative
As regards American companies coming into India – “they don’t have any opportunities today, so I can’t say there is a demand as such. I know SEBI is considering…,” she said. Asked how the technology would work for data protection, given that the exchange is a data mine, he said, “We have a robust cyber security initiative that is completely separate and cuts across all systems.”
When asked about cloning of technology, both Limaye and Friedman maintained that enough protections are in place. The NSE is in dispute with the Singapore bourse over the latter launching Nifty-based derivative products.
On the future of crypto-currencies, which still remain a grey area in India, Friedman said, “I don’t know the future. We believe as a concept it is pretty interesting. It ia s new technology and is going through its own life cycle… Though it has generated enthusiasm, still a lot of things have to be worked out.”