MCX-SX moves Bombay high court against SEBI order

The legal battle between MCX Stock Exchange and the Securities and Exchange Board of India (SEBI) has moved to the next level with MCX-SX filing a writ petition in the Bombay high court challenging the SEBI order rejecting its application for commencement of trading in new segments.

In its order dated 23 September 2010, SEBI had rejected MCX-SX's application seeking approval for commencement of trading in equity, futures and options, wholesale debt markets and other segments / products (See: SEBI rejects MCX Stock Exchange's application).

The high court is expected to take up the writ petition, filed on 29 October 2010, for admission after court vacation.

"The recent decision of SEBI not granting currency options to us along with other exchanges was vindictive, biased and discriminatory like its earlier decision of not granting IRF to us. Such a decision has already started impacting our business adversely," Joseph Massey, MD and CEO of MCX-SX said.

"Currency options and IRF are part of the currency derivatives segment and we have an approved currency derivatives segment. The earlier decision of not granting IRF had discouraged prospective investors and, therefore, the exchange had to adopt the scheme of capital reduction to comply with MIMPS regulation as suggested by SEBI officials.

This scheme was informed to the chairman, SEBI way back in December 2009, seeking guidance and SEBI never objected to the scheme, till the order dated 23 September 2010," he added.