Putting all speculations to rest, Securities and Exchange Board of India on Thursday rejected the application of MCX Stock Exchange (MCX-SX) for permission to deal in equity, futures and options on equity, interest rate derivatives and debt as permitted to Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) saying the exchange did not meet the desired regulations.
The regulator has found that two promoters (Financial Technologies India Ltd and MCX) are persons acting in concert and cannot hold more than 5 per cent in the equity shares of a recognised stock exchange. It also said that concentration of economic interest in a recognised stock exchange in the hands of two promoters is not in the interest of a well-regulated securities market.
“The applicant has been dishonest in withholding material information on arrangements regarding the ownership of shares of its shareholders and therefore has not adhered to fair and reasonable standards of honesty that should be expected of a recognised stock exchange,” Sebi Whole Time Director K.M. Abraham in his order.
“Based on all relevant material before me, I am not satisfied that it will be in the interest of trade and in public interest to allow the application.”
Reacting to the order, an MCX spokesperson said: “We are sad to see the continuation of the same bias and injustice as we have seen hitherto in the order passed by SEBI today.”
Sebi had recognised MCX-SX as a stock exchange on September 18, 2008 subject to the condition that it ensures full compliance with its provisions within one year.
That did not happen in the duration, following which Sebi extended its recognition by another year till September 15, 2010 to allow MCX-SX to comply with the requirements, the order stated.