Financial Technologies and MCX today said they will dilute their stakes in MCX Stock Exchange (MCX-SX) within the Sebi-stipulated 5% in the next 18 months.
The promoters at present hold 10% stake in MCX-SX after converting their 70% holding into warrants last year following a Sebi directive.
"In view of MCX-SX submissions and the undertakings of the promoters of MCX-SX, the shareholding of MCX and Financial Technologies in the equity share capital of MCX-SX will be brought within the 5% limit within 18 months," MCX-SX Vice-Chairman Jignesh Shah told reporters.
Market regulator Securities and Exchange Board of India (Sebi) had granted MCX-SX permission to deal in equity and equity futures & options, interest rate futures and wholesale debt segments with the conditions that the promotes bring down the equity stake to 5%.
MCX-SX now offers trading in currency futures contract and Sebi permission will enable the exchange to offer additional asset classes.
MCX-SX has a networth of Rs 250 crore at present which has to go up to Rs 300 crore over the next three years once it launches commercial operations.
On the timing of launch of trading in stocks, MCX-SX Managing Director & Chief Executive Joseph Massey, without offering a clear timeframe said, "The commencement of MCX Stock Exchange may take a few months. We have the required technology and infrastructure in place, but not the members."
"We will now start the process of membership enrolment and registration, which may take a couple of months," he added.
The board will meet shortly to chalk out the future course of action, Massey further said.
"The promoters will also have to reduce their entitlement to equity or rights over equity arising from warrants issue within three years as per the revised SECC regulations," Shah said, adding promoters cannot exercise this non-convertible warrants.
Sebi had earlier told Sebi that the combined voting rights of FTIL and MCX in the stock exchange would not exceed five% at any point of time.
Replying to a query on which products will be launched first, Massey said, "We remain committed to the development of the domestic capital market, catering to the growing needs of investors for suitable investment avenues and to the corporate sector for raising risk and debt capital and for variety of instruments used by the industry for risk mitigation. We would soon be formally announcing our future plans for implementing these segments."
There is a huge need for bond market. The regulator has given framework for SME exchanges and bond market. The exchanges can do specialisation and launch innovative products, Shah said.
MCX-SX is a leading player in the currency segment. The average daily turnover rose from Rs 355 crore in its first month of operations to Rs 12,927.83 crore in June. MCX-SX has participation from 750 brokers in 707 towns.
