You are here: Home » Markets » News
Business Standard

Fit & Proper Case: Sebi wants FTIL to reply in 10 days

Sebi issued the notice in December, questioning its 'fit and proper' status to own and operate MCX-SX.

BS Reporter  |  Mumbai 

Financial Technology

The Securities and Exchange Board of India (Sebi) asked Financial Technologies (India) Ltd (FTIL), founder of the MCX Stock Exchange, to give a written reply before March 16 on the showcause notice issued to it, sources said.

Sebi issued the notice in December, questioning its ‘fit and proper’ status to own and operate MCX-SX.

Sources said the capital regulator has asked the Jignesh Shah-promoted company to explain why it shouldn’t be asked to pare its holding in MCX-SX. And, to state the impact of a ‘restructuring plan’ to be undertaken by the company on MCX-SX.

Last week, FTIL set up a committee to propose a restructuring plan for itself. The aim is to divest its holdings in exchanges, including a 24 per cent stake in the Multi Commodity Exchange of India (MCX). It comprises two non-executive independent directors, Venkat Chary and S Rajendran, along with legal advisor Berjis Desai and FTIL’s wholetime director, Dewang Neralla.

The Sebi showcause followed FTIL’s involvement in the National Spot Exchange payment crisis. After which, the Forward Commission, the commodity regulator, declared FTIL not ‘fit and proper’ to own a substantial stake in MCX. FTIL has appealed against this to the high court here. The matter is pending but the HC has declined to stay the FMC order.

FTIL and MCX own 4.99 per cent stake each and also warrants, amounting to nearly 69 per cent after conversion, in MCX-SX.

The FMC matter is likely to come for a hearing on Wednesday. Meanwhile, FTIL's next hearing before Sebi is scheduled for March 17, a day after the deadline for giving a written reply.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, March 06 2014. 22:47 IST