Mumbai: Financial Technologies India (FTIL) and Multi-Commodities Exchange (MCX), the promoters of MCX Stock Exchange (MCX-SX), have passed board resolutions confirming that they will not hike their stakes in MCX-SX to beyond permissible limits, capped at 5% now. The two companies have also communicated the same to market regulator Sebi. This has been done as directed by the Bombay High Court.
Joseph Massey, MD, MCXSX, confirmed to TOI the latest development in the legal battle between the bourse and the regulator. On August 10, a division bench of the Bombay HC had ordered the promoters of MCX-SX to pass such a resolution within 10 days of the order. The order came in response to a writ petition filed by MCX-SX in which it had sought the court’s intervention in directing Sebi to decide on the bourse’s application to start trading platforms for shares, derivatives on shares, interest rate futures and some other products regulated by Sebi.
With these resolutions passed and communicated to Sebi, the regulator now has nearly one-and-a-half months to get the responses from the shareholders of MCX-SX, the 18 banks and financial institutions, and then decide on the bourse’s application for starting trading platforms for shares and other products that it regulates.
Chief Justice Mohit S Shah and Justice S C Dharmadhikari had asked Sebi to decide by September 30 whether it would allow MCXSX to start the new trading platforms. The court had also directed Sebi to pass an order within the next three weeks regarding renewal of MCX-SX’s recognition as a stock exchange. The bourse was given a conditional recognition to start its foreign exchange derivatives trading platform till September 15, 2010.
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