Mumbai: A third national-level equity exchange is set to go live in the next few weeks, with the Multi Commodity Stock Exchange (MCX-SX) securing regulatory permission to operate as a full-fledged stock exchange. This comes after a four-year wait and an intense legal battle between the stock exchange aspirant and the Securities and Exchange Board of India (Sebi).
MCX-SX will be the first national-level equity exchange to be launched since 1998. While the BSE is 150 years old, the NSE had gained recognition in April 1993. The government had allowed the Inter-connected Stock Exchange to launch operations in 1997, but the bourse was a failure.
The Sebi on Tuesday allowed MCX-SX to offer trading in equity, interest-rate and wholesale debt segments. Currently, the exchange hosts only currency derivative trading on its platform. The regulator, however, has set a condition that the promoters of MCX-SX would have to reduce stake to five per cent in 18 months.
“Both promoters will reduce their entitlement to equity or rights over equity in excess of the shareholding as specified in the revised SECC (Stock Exchanges and Clearing Corporation) regulations within a period of three years from the date of notification of the SECC regulations,” said a late evening release from MCX-SX.
Financial Technologies and MCX together hold nearly 70 per cent stake in MCX-SX, including warrants. Both promoters would have to cut their combined stake to five per cent. Jignesh Shah, vice-chairman, MCX-SX, said the new regulations provided a level playing field. Joseph Massey, MD & CEO, MCX-SX, said the exchange would cater to the growing needs of investors for suitable investment avenues, to the corporate sector for raising risk and debt capital, and for a variety of instruments used by the industry for risk mitigation.
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