MCX-SX to challenge Sebi order

MCX Stock Exchange (MCX-SX) today said that it is seeking legal opinion on whether to approach the High Court or Securities Appellate Tribunal (SAT) to challenge Sebi's order that rejected its application to offer trading in segments like equities and equity derivatives.

"We will shortly take appropriate measures in consultation with our legal counsels to move the High Court or SAT," MCX-SX's MD & CEO Joseph Massey told reporters here.

Sebi, last week, rejected MCX-SX application to offer trading in segments like equities and equity derivatives, citing failure to comply with shareholding norms and illegal buyback agreements by promoters, among several other issues.

"The Sebi order goes on to reinforce our feeling that the regulator is biased. It is unfortunate that Sebi did not consider most of our submissions in its order. This leaves us with no other choice but to go to an appropriate forum for justice," Massey said.

The exchange has always maintained transparency in all its conduct and practices.

"We kept Sebi updated about every move of ours through letters and meetings, but Sebi never got back with any replies with any suggestions, solutions or deadlines," Massey said.

Massey also alleged that the scheme of reduction of capital was initially advised by Sebi and was informed to Sebi by a detailed letter in December 2009 immediately after filing the scheme.

"Sebi never questioned the scheme and our compliance with Manner of Increasing and Maintaining Public Shareholding (MIMPS) Regulations in all these eight months. Sebi raised these issues about the scheme only in its notice in August 2010, when we had already reached a point of 'irreversibility' on implementation of the scheme," he said.

Massey said that MIMPS policy was relaxed for NSE shareholders in December 2008 up to 15 per cent and the suggestions of MCX-SX was ignored by Sebi. NSE was also given 4-years for MIMPS compliance whereas MCX-SX was given only one year, Massey added.

Sebi also directed MCX-SX to approach CCI for predatory pricing in CD segment instead of resolving the same, Massey said.