An executive from BSE Ltd revealed on Wednesday that the exchange is in discussions with high-frequency trading firms and other market participants who have yet to engage with India's recently introduced closing call auction mechanism. BSE Chief Executive Sundararaman Ramamurthy stated in an interview with Zee Business that liquidity is the key to the success of the closing auction mechanism, adding that its current performance has fallen short of expectations, with neither retail investors nor high-frequency traders participating.

Ramamurthy said that if the two exchanges could share a single order book, it would likely increase participation and liquidity in the closing auction, while also improving price discovery. On the regulatory rule that prohibits exchanges from listing on their own platforms, Ramamurthy noted that stakeholders are exploring whether this restriction could be lifted under the "permitted trading" framework. He explained that BSE is currently listed on its larger rival, the National Stock Exchange of India (NSE), and had previously sought regulatory approval to trade its own shares on its platform through the "permitted trading" channel, but the application was not approved.

During Mumbai trading, BSE shares fell as much as 3.4% intraday, potentially closing at their lowest level since April 7. The stock has declined approximately 14% over the past month.