MCX Stock Exchange (MCX-SX) has received approval from Securities and Exchange Board of India (SEBI) for commencing operations in new asset classes. At present, MCX-SX offers trading in currency futures contract and this development will enable the exchange to offer additional asset classes.
SEBI has granted MCX-SX permission to deal in Equity and Equity Futures & Options, Interest Rate Futures and wholesale debt segments with the following main conditions:
In view of MCX-SX submissions and the undertakings of the promoters of MCX-SX, the shareholding of MCX and FTIL in the equity share capital of MCX-SX shall be brought within the 5% limit. The same shall be complied within 18 months from today.
MCX & FTIL shall reduce their entitlement to equity or rights over equity arising from such instruments (Warrants) in excess of the shareholding as specified in the revised SECC regulations within a period of 3 years from the date of notification of the SECC regulations.
The combined voting rights of FTIL and MCX in MCX-SX shall not exceed 5% of the paid up equity share capital of MCX-SX at any point of time.
Commenting on the latest development, Mr. Ashok Jha, Chairman, MCX-SX said, “This is indeed a huge development for the Indian Capital Market industry and will create a conducive environment for growth of all asset classes. We will continue with our efforts of systematic development of markets and the financial market ecosystem.”
Jignesh Shah, Vice-Chairman, MCX-SX, added, “We are thankful to the regulator and policymakers for effecting calibrated reforms that will foster a pro-competitive environment in India’s exchange industry. The new regulations have provided the much-needed level playing field. Allowing listing for stock exchanges will spur a transparent policy regime and encourage investments for market development and investor education.”
Joseph Massey, MD&CEO, MCX-SX, said, “We are truly grateful to SEBI for granting us approval to commence operations in other market segments. We remain committed to the development of Indian Capital Market, catering to the growing needs of investors for suitable investment avenues and to the corporate sector for raising risk & debt capital and for variety of instruments used by the industry for risk mitigation. We would soon be formally announcing our future plans for implementing these segments.”
This development will enable the much-needed broad-basing of Indian financial markets, promote inclusive growth and offer Indian investors a choice of products and services suited to their risk profile. It will also boost capital raising and facilitate risk management function for large corporates as well as small and medium enterprises (SMEs).
MCX-SX has been a market leader in the currency segment, witnessing a steady and significant growth in turnover and market share ever since its inception. The average daily turnover increased from Rs 355 crore during its first month of operations to Rs 12,927.83 crore in June 2012. MCX-SX currently witnesses a nationwide participation from across 707 towns and cities in India, which is supported by a strong membership base of 750 members.
MCX-SX has worked towards growth and development of the exchange-traded currency derivatives market in India. Several initiatives introduced by MCX-SX have been recognised as truly pioneering in the industry and contributed greatly in enabling this segment to gain a critical mass in just four years since its inception. Among most significant market development initiatives introduced by MCX-SX are reduction of the gap of collections of mark-to-market (MTM) margins, deployment of technology for continued operations during sun outage, launch of the Exchange website in 12 language, SMS and WAP service for currency futures price information and launch of India’s first handbook and CD on Currency Futures. Besides the above efforts, MCX-SX has forged several alliances, including with trade associations, media and top educational institutions, for financial literacy programmes and other market developmental initiatives.
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