MCX-SX ties up with FTSE for domestic index series

Jignesh Shah-promoted MCX Stock Exchange (MCX-SX) on Wednesday announced a strategic tie-up with London-based index calculator FTSE to create new index opportunities for Indian financial markets.

FTSE is a joint venture between the London Stock Exchange (LSE) and the Financial Times, UK.

Announcing the tie-up, Shah said, “We are soon likely to get a nod from the Securities and Exchange Board of India to launch equity trading. The procedure is on but it will be difficult to give a definite time-line.”

The new domestic index series, to be created along with a range of international FTSE indices, are to be listed and traded on MCX-SX.

FTSE will also extend co-operation to the Financial Technologies Group’s exchange network in India, Singapore and Bahrain, and facilitate creation of international investment products to be listed on MCX-SX.

Currently, two of the most popular indices — the Bombay Stock Exchange (BSE) Sensex and the National Stock Exchange (NSE) Nifty — dominate the domestic equity space. NSE, which is the country’s largest stock exchange, has partnered with global indices major Standard and Poors.

MCX-SX is a year-old stock exchange presently active in the currency space. It is yet to get regulatory approval to commence equity trading.

The agreement was signed by MCX-SX Managing Director & CEO Joseph Massey and FTSE Group’s Asia-Pacific’s Managing Director Paul Hoff, in the presence of Shah and FTSE Group’s Chief Executive Donald Keith.

Replying to a query on why FTSE partnered with MCX-SX, which is still to get adequate approvals, Keith said, “MCX-SX is the right partner. The exchange has a long-term strategy, good technology and is poised for better growth.”

He, however, declined to divulge the financial details of the agreement. These indices can be used extensively by a range of financial professionals such as fund managers, investment banks, consultants, asset owners, private investors and brokers for the purpose of investment analysis, performance measurement, asset allocation, portfolio management, exchange-traded funds and the creation of index-tracking funds.