The Bombay High Court also asked SEBI to expedite process as MCX-SX is suffering losses and take a decision on licence renewal of the stock exchange in six weeks
The Bombay High Court (HC) has asked market regulator Securities and Exchange Board of India (SEBI) to take decision on equities trading on MCX Stock Exchange (MCX-SX) by 30th September. The HC also asked SEBI to expedite process as MCX-SX is suffering losses and take a decision on licence renewal of the stock exchange in six weeks.
At present, MCX-SX is allowed to trade only in currency derivatives. In April the Exchange had applied to SEBI seeking permission to expand its operations.
MCX-SX, promoted by Financial Technologies India Ltd and Multi Commodity Exchange (MCX), have filed a writ petition in the Bombay High Court seeking a response from SEBI for the delay in permission to launch trading in equities, equity derivatives and other instruments. The High Court told MCX-SX to issue a board resolution about the 5% cap on promoter's shareholding within ten days.
According to sources, during the hearing on Tuesday, the market regulator told the court that it needed some time to get necessary information from with regard to share buyback in MCX-SX. SEBI said it did not receive any information from some banks, which holds stake in the stock exchange, regarding their buy-back agreements with the MCX-SX promoters. The HC then asked the banks to file necessary information on share buyback within 10 days.
The stock exchange pleaded that although it had complied with all SEBI regulations and norms to commence operations, it has not yet been given permission to commence equity trading. MCX-SX also alleged that the SEBI was favouring a rival stock exchange.
In an advertisement put out in July, MCX-SX, without naming any entity, alleged 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.
"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," the advertisement said.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
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