MCX SX to trade equities from Monday

To trade 1,116 equity stocks on its platform under the permitted category rules

Country's third national level stock exchange the MCX SX will go live with equity cash and derivative trading from Monday. Financial Technologies promoted bourse was inaugurated by finance minister P Chidambaram today. MCX SX will trade 1,116 equity stocks on its platform under the permitted category rules.

"You (MCX SX) have competition from two guys (BSE, NSE) waiting at the arena. And the two guys in the arena will have competition from you. Good luck to all three of you. Competition that all three of you provide will make the stock market a vibrant place for more and more people to invest their savings.,"  Chidambaram said after punching the first trade order at MCX SX.

U K Sinha, the Securities and Exchange Board of India (Sebi) chairman, who was also present at the event advised all the stock exchanges to focus on risk mitigation. "We will ensure that regulations are followed with fairness and uniformity."

Like BSE's Sensex and S&P CNX Nifty of the National Stock Exchange (NSE), SX-40 will be the flagship index of MCX SX. SX 40 will be a free-float based index of 40 large-cap stocks, representing diverse sectors of the economy. The base value of SX-40 will be 10,000 and its base date will be March 31, 2010, the exchange said. Out of the 700 members signed-up by MCX SX, registration of 405 were cleared by the regulator and more will be cleared in the coming days. Both BSE and NSE have 1,400-1,500 registered members each.

Adi Godrej, President of Confederation of Indian Industry said MCX group has run their commodities business very effciently and they are expected to do the same with stock exchange business too.

When asked about a market share target that they had in mind, Jignesh Shah, vice chairman of MCX SX said they were not sprinting for a 100 meter race. "We will run a marathon. MCX SX is a solid institutional set-up with strong foundation. Market share will come gradually and focus would be on widening the markets."

Joseph Massey, managing director and chief executive officer of MCX-SX said they would also launch other sectoral indices and focus would be on broad-basing financial markets. "We will start approaching corporate houses to get companies listed on our platform. Focus will be to develop bonds, SME segment and interest rate derivatives too," Massey said.

Trade timings of MCX SX will be the same as BSE and NSE  i.e. 9 am to 3:30 pm, wherein first 15 minutes will be for pre-open session and then the normal market session will start till 3:30 pm. Exchanges can have trading up to 5 p.m. in the evening. Post close session will be for 20 minutes from 3:40 pm to 4:00 pm and then the client code modification time will be upto 4:15 pm. Special pre-open session is only for IPO/re-listed securities that will be for duration of 60 minutes from 9:00 am to 10:00 am for securities participating in that session and will be followed by the continuous trading session.

"The call auction trading mechanism will be applicable to the special pre-open session to determine the opening price of the stocks that are eligible to participate in that session," MCX SX said.