MCX prepares ground for complete FTIL exit

Board to ask National Securities Depository to unfreeze 5% of FTIL's stake

Multi Commodity Exchange (MCX) has decided to ask National Securities Depository Ltd (NSDL) to unfreeze five per cent stake of its erstwhile promoter Financial Technologies. This has been done to make way for FTIL’s complete exit from MCX.

FTIL’s 20 per cent stake had a lock-in since March 2012 when MCX came out with an initial public offering . Because of the lock-in, the depository, which keeps shares in demat form, can not transfer shares till such lock-in is officially vacated.

Sebi recently conveyed to MCX that the lock-in had been removed on 18 per cent of the 20 per cent holding of FTIL, as the regulator had asked FTIL to exit the exchange.

The MCX board has now decided to ask NSDL, which is the depository for FTIL’s shares, to allow unfreezing of five per cent of the locked-in shares. As Sebi has removed the lock-in clause on 18 per cent stake, MCX is seeking unfreezing of 5 per cent of that. FTIL had 26 per cent stake in MCX, of which it sold 21 per cent. Six per cent shares were free of lock-in and were hence sold through open market deals. For the remaining 20 per cent, the company signed an agreement with Kotak Mahindra Bank for the sale of 15 per cent. Now, it has to sell the remaining five per cent stake. The actual share transfer to Kotak Mahindra Bank is yet to take place as some formalities are being processed.

For the five per cent stake still up for sale, the buzz is that the US-based CME Group is interested.  The exit of FTIL from MCX is crucial because the regulator, FMC, has not been approving any proposals or contracts from MCX lately as the exchange has not been able to comply with the regulatory order issued last December that the FTIL stake must be fully divested.