Meet all norms, but no SEBI nod for new products: MCX-SX
Anguished by the lack of clearance from market watchdog SEBI to become fully functional despite meeting the norms, Jignesh Shah-led group firm MCX Stock Exchange today went public with its grievance and hit out at competitors.delhi Updated: Jul 16, 2010 14:58 IST
Anguished by the lack of clearance from market watchdog SEBI to become fully functional despite meeting the norms, Jignesh Shah-led group firm MCX Stock Exchange on Friday went public with its grievance and hit out at competitors.
Without naming National Stock Exchange, MCX-SX also said that its rival was killing competition by offering free trading in currency derivatives, and thus making it difficult for it to get business and investors.
In a public notice, released on Friday in the form of advertisements in dailies, MCX-SX said "There have been attempts by some elements at spreading misinformation to create doubts among our shareholders and to undermine our reputation and business for their benefit."
A MCX-SX spokesperson did not respond to queries if the company was alluding to rival exchanges like BSE and NSE.
In an apparent attack at SEBI, it also said the go-ahead for doing full-fledged business was elusive despite MCX-SX having taken all the necessary steps to make it compliant to the relevant regulations about trading in equities, equity derivatives, interest rate derivatives, mutual fund and debt market among other instruments.
MCX-SX said that one of the key conditions put on it related to bringing down promoters' stake and it did so with a "capital reduction cum arrangement" scheme and SEBI was informed about the same, way back in December 2009.
While the scheme was already approved by the board and shareholders, it also got the nod of Bombay High Court in March 2010 and the same was also notified to the SEBI on April 7, 2010, MCX-SX said.
But, the exchange has got "no response from SEBI in this regard" as of July 2010, it noted.
MCX-SX said that it was operational since October 2008, but was offering only currency derivatives product, and it was first given recognition by SEBI for one year only with a condition that it would meet the shareholding-related regulations by September 15, 2009.
In another apparent allegation against SEBI, MCX-SX said in the same public notice that the regulator in August 2009 had approved trading in interest rate futures, to be traded on currency derivatives segment, but "it did so for exchanges other than MCX-SX."
"At the same time, SEBI renewed the recognition of the exchange for one year up to September 2010 on the condition that no new class of contracts in securities will be introduced without complying with the MIMPS (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges Regulation) regulations."
First Published: Jul 16, 2010 14:50 IST