SEBI rejects MCX-SX proposal

Shares of Financial Technologies India tumbled after the Securities and Exchange Board of India (SEBI) rejected the application of Multi-Commodity Exchange-Stock Exchange (MCX-SX) to operate an equity trading exchange. SEBI rejected a proposal by MCX-SX for stock and debt trading platforms, citing non-compliance with shareholding rules, witholding of material information, concentration of 'economic interest', and 'illegal' buyback transactions with investors.



The regulator pointed out that for all practical purposes the management and control of MCX-SX was with two promoters, MCX and Financial Technologies, and that their holdings were beyond the permissible limit of 5% allowed to any entity in any stock exchange in India.

MCX-SX commenced operations in currency derivatives in September 2008, but its application to start other segments like equity, interest-rate derivatives and bonds, have been pending with SEBI since long. MCX-SX had moved the Bombay High Court in July, alleging delay in getting SEBI clearance despite having complied with all regulatory requirements. The High Court had given SEBI time till September 30 to decide on MCX-SX's application.