SEBI rejects MCX Stock Exchange's application
23 Sep 2010
Market regulator Securities and Exchange Board of India (SEBI) has rejected an application filed by MCX Stock Exchange Limited (Multi-Commodity Exchange-Stock Exchange) seeking permission to operate a stock exchange.
SEBI said it rejected the application as the promoters MCX and Financial Technologies failed to comply with the requirement of increasing and maintaining public shareholding.
According to SEBI regulation, the promoters of a stock exchange should limit their shareholding to 5 per cent in the exchange.
"The concentration of economic interest in a recognised stock exchange in the hands of two promoters is not in the interest of a well-regulated securities market," SEBI said in a release.
MCX SE had, on 7 April 2010, filed a letter with SEBI inter alia seeking permission to deal in interest rate derivatives, equity, futures and options on equity and wholesale debt segments and all other segments permitted to the Bombay Stock Exchange limited and the National Stock Exchange of India Limited. MCX-SX also requested SEBI to consider its application for SME Exchange as an additional segment within itself for operations.
Subsequently, MCX-SX filed a writ petition before the Bombay High Court, which disposed of the case and gave directions to SEBI to take a final decision in the matter latest by 30 September 2010.
SEBI has asked MCX to convey to SEBI the board resolution of the respective co-promoters indicating their resolve to comply with the requirement of statutory regulations regarding the shareholding not exceeding the prescribed percentage.
After receiving information from the promoters and other shareholders of the petitioner-company, if SEBI requires further information/clarification from petitioner or others, it would give an opportunity of hearing to the representatives of the petitioner-company within four weeks from today. SEBI said it would hold back a final decision till 30 September 2010.
.webp)
