SEBI directs MCX-SX to strengthen governance

Non-compliance with its directions and any adverse findings by any other regulator may result in de-recognition, SEBI said.

January 01, 1970 5:30 IST | India Infoline News Service
Market regulator SEBI (Securities and Exchange Board of India) on Wednesday has issued directions to MCX-SX Ltd and MCX-SX Clearing Corporation Ltd (MCX-SXCCL) to strengthen their governance structure while granting the renewal of recognition to MCX-SX for one year commencing from September 16, 2013.

A committee comprising of two public interest directors and three nominees from institutional investors in MCX-SX shall be constituted within two days of renewal of recognition to oversee the following functions of the exchange:

All financial transactions related to investment, lending, and borrowing of fun
ds and related party transactions as defined in AS 18, Appointment of Key management personnel, All facility / infrastructure sharing arrangements and all major capital expenditures and advise the board on all the major policy matters. The board will consider the advice and maintain a record of the proceedings.

A committee on the same lines may also be constituted by MCX-SXCCL which is a subsidiary of MCX-SX. The said committee shall oversee the clearing and settlement functions in addition to the functions listed above.

In-order to further secure the management of the exchange and clearing corporation, shareholders of MCX-SX and MCX-SX-CCL in AGM/EGM would examine conflict of interest and compliance with SECC Regulations 2012 by the directors and the key management personnel including managing director, and take appropriate action including reconstitution of board, reappointment of any key management personnel and will report to SEBI within 30 days from the date of renewal of recognition.

Any non-compliance with the directions of SEBI as given above or which may be given from time to time or any adverse findings by any other regulator may result in withdrawal of recognition of the exchange.

Necessary steps have been taken to notify the renewal of recognition of MCX-SX Limited in the Gazette of India.

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