HC gives SEBI till Sept 30 to decide on MCX
Market regulator Securities and Exchange Board of India (SEBI) has been given time till September 30 to decide on the application of commodities exchange MCX-SX seeking to trade in equity and derivatives.india Updated: Aug 10, 2010 20:32 IST
Market regulator Securities and Exchange Board of India (SEBI) has been given time till September 30 to decide on the application of commodities exchange MCX-SX seeking to trade in equity and derivatives.
A division bench of Chief Justice Mohit Shah and Justice S.C. Dharmadhikari of Bombay High Court on Tuesday directed SEBI to finish correspondence with the banks and financial institutions who are share holders in MCX-SX within 10 days on whether they have any buy-back agreement with MCX-SX.
Then by September 30, SEBI has to decide on the various segments/products including equity and derivatives in which MCX-SX can trade.
Besides, the court has also directed SEBI to decide within three weeks on the renewal of the trading licence of MCX-SX, which is to expire in September.
Additional Solicitor General Darius Khambata, while arguing for SEBI, said it was not just the matter of licence renewal, they had to look into several aspects before even allowing MCX-SX to trade in equity and derivatives.
Khambata argued that they learnt from newspaper that while divesting their capital, MCX-SX had a buy-back agreement with several banks and financial institutions.
In April, MCX-SX divested capital to comply with the SEBI rule that no promoter or share holder must have more than 5 per cent of the equity.
Senior counsel Ravi Kadam and advocate Cherag Balsara argued for MCX-SX.
“We framed scheme for capital reduction and reduced the capital by R119 crore,” argued Kadam, adding that they did not have buy-back offer.
MCX-SX had moved the high court last week after SEBI did not grant it approval to set up equities trading platform.