After a wait of more than 2 years, MCX-SX (MCX Stock Exchange) on recently received nod from the SEBI (Securities and Exchange Board of India) to introduce new asset classes on its platform viz.
equity, equity derivatives, interest rate futures and wholesale debt segments.
MCX-SX, which becomes the 3rd national stock exchange after the BSE (Bombay Stock Exchange) and the NSE (National Stock Exchange), will have to bring down the shareholdings of its group companies — MCX (Multi-Commodity Exchange of India) and FTIL (Financial Technologies) — to 5% within 18 months,
SEBI said.MCX and FTIL have to reduce their entitlement to equity or rights over equity arising from warrants in excess of the shareholding within 3 years.
At any point of time, the combined voting rights of FTIL & MCX in MCXSX shall not exceed 5% of the paid-up equity share capital of MCX-SX, the market regulator SEBI said.
Now, MCX-SX offers trading only in the currency futures segment, where it tops rival NSE in terms of market share. BSE backed USE is a distant third in the currency futures segment.
MCX-SX statement said, “SEBI has granted MCX-SX permission to deal in equity and equity futures & options, interest rate futures and wholesale debt segments with certain conditions, The grant of licence ends a prolonged battle with SEBI (especially under its former chairman Mr. C.B. Bhave) and legal tussles over the reduction of shareholding by key shareholders.
Reacting to the SEBI green signal, Ashok Jha, Chairman,MCX-SX said: “This is indeed a huge development for the Indian capital market and it will create a conducive environment for growth of all asset classes.We will continue with our efforts of systematic development of markets and the financial market ecosystem.”
level playing field..!
Mr. Jignesh Shah, Founder and Vice-chairman, said: “We are thankful to the regulator SEBI and policy
makers for effecting calibrated reforms that will foster a pro-competitive environment in India's exchange industry. The new regulations have provided the much needed level playing field. Allowing listing for stock exchanges will spur a transparent policy regime and encourage investments for market development and investor education”.
The entry of MCX-SX is likely to create ripples in the exchange space, especially in the equity derivatives space, where NSE dominates with daily volumes of nearly Rs 1,00,000 crore.
MCX-SX is expected to deepen the equity market culture in India, where less than 2% of the population is participating in exchange trading activities at present.
Mr. Joseph Massey, MD & CEO, MCX-SX. Said, “We are truly grateful to SEBI for granting us approval to commence operations in other market segments. We remain committed to the development of the Indian capital market, catering to the growing needs of investors for suitable investment avenues and to the corporate sector for raising risk and debt capital and for a variety of instruments used by the industry for risk mitigation. We would soon be formally announcing our future plans for implementing these segments”
MCX-SX has been the market leader in the currency segment, witnessing a steady & significant growth in turnover and market share ever since its inception. Its average daily turnover increased from Rs. 355 crore during its first month of operation to Rs. 12,928 crore this June, 2012.
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