MCX moves Sebi to skip SX stake sale

Says no more acting in concert with Financial Technologies

Multi Commodity Exchange of India (MCX) has approached the Securities and Exchange Board of India (Sebi), urging it be allowed not to reduce stake in MCX Stock Exchange (MCX-SX), an MCX arm. It added it could no longer be seen to be acting in concert with Financial Technologies India Ltd (FTIL), following a regulatory ruling asking FTIL to reduce stake in MCX.

The Forwards Markets Commission had ruled FTIL wasn’t a ‘fit-and-proper’ entity to hold more than two per cent stake in MCX. On January 31, the commission asked MCX to submit a plan to reduce FTIL stake.

The decision of the commodities regulator follows a Rs 5,600-crore payment scam in National Spot Exchange Ltd, in which FTIL had 99.99 per cent stake.

DIALLING SEBI

• 4.99%
  MCX’s stake in MCX-SX. MCX has sought Sebi’s approval to continue holding the stake
• 5%
  The highest stake an entity and a PAC can hold in an exchange, according to Sebi norms
• 4.99%
  Stakes MCX and FTIL own each in MCX-SX
• Jan 18
  Cut-off date for MCX, FTIL to pare stake to 5%
• MCX believes it no longer PAC with FTIL

Meanwhile, FTIL has moved the high court here against the ruling. The next hearing on the case is scheduled for Friday.

Earlier, Sebi had asked MCX and FTIL to reduce their stakes in MCX-SX to five per cent within January 18. It had also asked the two to reduce their stakes, held in the form of warrants, to meet the regulations on shareholding in stock exchanges.

The Stock Exchanges and Clearing Corporations Regulations, 2012, require the MCX and FTIL to reduce their stakes to five per cent from the current 10 per cent. If their warrants are taken into account, their combined stake stands at 71.84 per cent.

Spokespersons for MCX-SX and Financial Technologies did not immediately respond to an email seeking comment. An email sent to Sebi did not elicit a response, too.

A spokesperson for MCX declined to comment.