MCX contract launch calendar for 2015 kept in abeyance: FMC

Says new contracts will not be approved till it meets certain conditions

Forward Markets Commission (FMC) today said it will not approve new contracts for trading on Multi-Commodity Exchange (MCX) and the contract launch calendar for 2015 will be kept in abeyance.

The commodity market regulator also sought more clarity from MCX on the stake sale deal between Financial Technologies, its promoter, and Kotak Bank.

FMC, in a circular to the exchange, said new contracts will not be approved till it meets certain conditions and the contract launch calendar for 2015 will be kept in abeyance.

The watchdog had previously directed the bourse to implement the findings of a report by professional services firm PwC and the closure report of Oversight Committee in a time-bound manner.

In a response to MCX letter seeking permission to launch new contracts, the FMC had said the share purchase agreement (SPA) signed between Financial Technologies and Kotak Mahindra Bank appears to be conditional pact, the execution of which depends upon revision of the technology agreement between the two entities.

The SPA lacks in clarity with regard to the exact date of its execution and consequently does not inspire adequate confidence and assurance with regard to the proposed acquisition of 15 per stake in MCX by the bank, FMC said.

The regulator asked the exchange to clarify as to exactly by what date the divestment shall be completed.

Meanwhile, MCX today clarified that it is hopeful of receiving approval for launch of calendar contracts shortly and addressing the issues raised by FMC by September 30.

"We are hopeful that the issues raised by FMC will be addressed by September 30 and the FMC approval (for contracts) will be received shortly," MCX said in a statement here.

MCX said it had requested FTIL on September 5 to indicate the exact date by which they will be divesting 15 per cent stake in the exchange. They are yet to give a firm date.

MCX also said the findings of earlier Oversight Committee have been already addressed and informed to FMC. As desired by them, the same will be reviewed by the company's Audit Committee this week.

Commenting on PwC report, MCX said most of its observations have already been addressed and informed to FMC from time to time.

The commodity futures trading on MCX has been hit severely due to the Rs 5,600 payment crisis in the Group firm National Spot Exchange Ltd (NSEL) last year.