04 Dec 2017 12:32 IST

BSE, NSE want to venture into AI, data analytics biz

Stakeholders look to diversify, seek SEBI nod for new entity

The Bombay Stock Exchange and the National Stock Exchange are exploring the opportunity to venture beyond the current businesses and have, along with other market infrastructure companies, sought SEBI’s permission to form a separate entity to take on these businesses.

“Stock exchanges (SEs) are seeking a one-time regulatory approval to venture into business areas outside SEBI’s purview,” sources close to the development told BusinessLine. “They have sought SEBI’s permission to engage in activities or businesses that are unrelated to, or not identical to, those of an SE or of clearing corporations (CCs) or their core business, through a separate legal entity,” they added.

The proposal was made to the newly-formed SEBI committee headed by former Reserve Bank of India Deputy Governor R Gandhi, which has been mandated to review norms for stock exchanges, depositories and CCs. The BSE and the NSE did not respond to an e-mail from BusinessLine seeking their views.

Market experts say SEs and depositories are already charting out other businesses, which in the long run could pave the way for data repository services, AI or a big data analytics eco-system.

For instance, the NSE is the largest promoter of Computer Age Management Services (CAMS) and NSDL e-Governance, via an investment vehicle. CAMS is a virtual monopoly in transaction processing and customer care services to mutual funds and a service partner to insurance companies, banks, NBFCs and private equity funds. It also serves as PAN facilitation centre for new applicants and extends PAN-related services. CAMS is an approved GST Suvidha Provider that facilitates seamless GST services.

Similarly, NSDL e-Governance, which is co-promoted by a network of large private banks. It works with government agencies to design, manage and implement e-governance projects including GSTN. NSDL e-Governance is a sister concern of NSDL, the equity depository service provider. Additoonally, NSDL e-Governance is a registrar for the Unique Identification Authority of India, which issues Aadhaar number to residents. All these businesses are a gold mine of data and can propel these companies into the future of the AI ecosystem.

BSE has tied up with Switzerland’s algorithmic data analysis firm Sentifi to report social media updates related to 40,000 globally listed stocks. It is also betting big on selling insurance policies via a real time e-platform.

“Stakeholders in Indian SEs find their valuations are not growing because capital markets are heavily regulated, and are betting big on AI, the future of business,” said a top official at a bank that owns a large stake in one of the SEs.

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