Sebi grants conditional renewal to MCX-SX Clearing Corporation

Sebi today granted conditional one- year renewal of recognition to MCX-SX Clearing Corporation, which were among the entities where Jignesh Shah-led FTIL was asked by the regulator to divest stake.
The capital market watchdog's nod for MCX-SX CCL comes within weeks of renewing the approval for MCX-SX.
In the wake of the payment crisis at group firm National Spot Exchange Ltd (NSEL), Sebi in March had ruled that Jignesh Shah-led Financial Technologies (India) Ltd was not 'fit and proper' to own stakes in any stock exchange or clearing corporation.
Renewing the recognition of MCX-SX CCL, Sebi said it would be valid for one year starting from October 3.

The approval is subject to various conditions, including that the clearing house should "submit an action plan for achieving net worth requirements".
"The clearing corporation shall achieve a minimum net worth of Rs 100 crore within nine months from the date of grant of recognition. The clearing corporation shall also submit quarterly status update in this regard," Sebi said in a release today.

Further, MCX-SX CCL has been asked to take "immediate steps to rectify the deficiencies pointed out in the systems audit" apart from appointing Managing Director and Compliance Officer at the earliest.
According to Sebi, the clearing house should meet shareholding requirements and comply with its direction issued through the order in March this year.

Meanwhile, Sebi has renewed recognition of two other clearing houses -- National Securities Clearing Corporation Ltd (NSCCL) and Indian Clearing Corporation Ltd (ICCL) -- for a period of one year.
In its March 19 order, Sebi had ruled that FTIL was not 'fit and proper' to own stakes in any stock exchange and directed it to divest existing holdings in MCX-SX, MCX-SX CCL, Delhi Stock Exchange and Vadodara Stock Exchange.
As per Sebi's ruling, which had come against the backdrop of NSEL payment crisis, FTIL was not "a "fit and proper person to acquire or hold any equity share or any instrument that provides for entitlement for equity shares or rights over equity shares at any future date, in a recognised stock exchange or clearing corporation".

This would be applicable for both direct and indirect holdings of FTIL in stock exchanges and clearing corporations.
With regard to Indian Clearing Corporation and National Securities Clearing Corporation, Sebi today said their approvals is subject to conditions including that they take immediate steps to rectify the deficiencies pointed out in their respective systems audit.