MCX-SX plans 40-stock barometer index

Liquidity and non-promoter market value are the factors for making it into the index

MCX-SX, the latest entity to set up a full-fledged stock exchange, on Wednesday said its barometer index would comprise of 40 top stocks based on liquidity and non-promoter market value among other factors.

To be called 'SX-40', the new flagship index of MCX-SX (MCX Stock Exchange) would compete with other benchmark indices like BSE's 30-share Sensex and NSE's 50-stock Nifty.

MCX-SX also announced that it would work India's premier research organisation Indian Statistical Institute (ISI) for its indices, while it also has an international partnership with FTSE and its other Indian partner Financial Technologies Knowledge Management Company (FTKMC) for developing benchmark domestic and global indices.

MCX-SX, which is currently present in currency derivatives segment only, recently got the market regulator Sebi's approval to set up a full-fledged stock exchange and plans to begin operations around mid-November.

Making this announcement at a road-show organised here today for its membership drive, MCX-SX said 'SX-40' will be a free-float based index of large market-cap and liquid stocks representing most important sectors.

The exchange said that further details of the stocks forming part of the index and their weight, among others, would be announced by MCX-SX before the launch of its equity segment.

These indices may be used as performance benchmarks and also form the basis for many financial products such as institutional and retail funds, exchange traded funds and derivative contracts.

MCX-SX plans to appoint state-level advisory boards, comprising of members, investor associations, academic institutions, professional bodies and all other stakeholders of the capital market, in each state for financial literacy, financial inclusion and identifying and resolving capital market-related issues.

It will also have a national level advisory board comprising of members of members co-opted from state level board and including others operating at national level.

The bourse has also announced a competitive transaction fee and membership fee structure, in comparison to its rivals BSE and NSE.

MCX-SX is offering an entry-level membership fee and deposit at Rs 25 lakh to be valid till October 18 and afterwards it would be raised to Rs 50 lakh.