Decide on MCX full trading plea by 30 Sept, HC tells SEBI

The Bombay High Court on Tuesday directed the Securities and Exchange Board of India (SEBI) to decide on the application filed by MCX Stock Exchange (MCX-SX) seeking permission to start trading in equity and other segments on its platform by 30 September.

A division bench comprising Chief Justice Mohit Shah and Justice S C Dharmadhikari also said SEBI must pass an order within three weeks regarding the renewal of the recognition of the MCX-SX.

The court also asked Financial Technologies (FTIL) and MCX, the promoters of the exchange, to pass a suitable board resolution that they "at all times will not go beyond limits prescribed under MIMPS Regulations within 10 days from today".

The court said that the SEBI must get the required information from banks within ten days. It said SEBI must call upon MCX-SX in case they require any further clarification, and give hearing to MCX-SX within 10 days thereafter and dispose of application of MCX-SX for other segments by 30 September 2010.

In April, MCX-SX had sought the SEBI's permission to launch equity and other products. It moved the high court after the capital markets regulator allegedly kept sitting tight on its application, and failed to convey any decision.

In mid-July, the Jignesh Shah-led MCX-SX had publicly lashed out at SEBI through newspaper advertisements for not giving it clearance to become a full-fledged stock exchange, despite its meeting all the conditions. It also slammed its competitors like the National Stock Exchange (NSE). Soon after this, it took the unprecedented step of moving the court.