MCX receives Sebi nod to start equity trading

MCX-Stock Exchange has been approved by Indian regulators to kickstart stock products trading, as the bourse operator looked to challenge more established rivals the Bombay Stock Exchange and the National Stock Exchange.

MCX-SX, which had focused solely on currency futures till date would now be allowed to trade equity, equity futures, interest rate futures and wholesale debt products, according to a company statement issued late yesterday said.

The Securities and Exchange Board of India approved the entry of the bourse operator into stock trading provided MCX, along with its founder Financial Technologies (India) Ltd, cut their combined stakes to 5 per cent within 18 months, the statement said.

Moreover, the promoters would further need have to reduce their entitlement to equity or rights over equity from instruments like warrants within the 5 per cent shareholding limit within 3 years, and the combined voting rights of the two promoters shall never exceed 5 per cent of MCX-SX's equity capital.

According to the company web site, MCX and Financial Technologies had a combined 10-per cent stake in MCX-SX.

Analysts say MCX was expanding its offerings even as Sebi was looking  to allow bourse operators to list in India. The stock exchange regulator issued guidelines in April that would govern how bourse operators could pursue initial public offerings.