MCX board approves new pact with FTIL for tech support

Commodity exchange MCX today said its board has approved a new agreement with Jignesh Shah-led FTIL for availing technological support and services, paving the way for the bourse to launch new contracts for January-March period of 2015.
MCX, which is already using the technology provided by its erstwhile promoter Financial Technologies (FTIL), is likely to sign a new agreement in the next few days.
On September 17, the commodity markets regulator FMC had said the exchange can launch new contracts for three months January, February and March of 2015 after if it signs a fresh technology deal with FTIL.
In a filing to BSE, MCX today said the Board has approved "the master amendment to principal agreements to be entered into between MCX and FTIL for availing technology support and managed services on such terms & conditions as contained therein".

Pursuant to this agreement, MCX would continue to avail technology support and managed services from FTIL, it added.
In a separate filing, FTIL also informed that its board also approved the amendment to principal agreements to be entered into with MCX for continued provisions of software support and managed services.

"It is also to be noted that by entering into the above said agreement, the companies have completed all the condition precedents of share purchase agreement with Kotak Mahindra Bank Limited (KMBL) as disclosed on July 20, 2014," FTIL added in the filing.
Sources said MCX has renegotiated the agreement with FTIL as the earlier contract was proving to be expensive. In 2013-14 fiscal, MCX paid about Rs 60 crore to FTIL for giving technological support and services to the exchange.

Under the new agreement, MCX will pay lesser than this amount, sources added.
Meanwhile, the regulator, however, had made it clear that the exchange will be allowed to roll out contracts for all 12 months of 2015 once the full divestment of FTIL in MCX takes place as per the regulatory norms.
MCX has been seeking permission to launch fresh contracts for 2015 but the Forward Markets Commission (FMC) had warned that it would not allow new contracts unless FTIL brings down its 26 per cent stake to two per cent as per its order dated December 17, 2013.