Market regulator Securities and Exchange Boar of India (SEBI) has delayed a nod to the MCX Stock Exchange (MCX SX) to begin trade in interest rate futures as the promoters have yet to dilute their stake in the bourse to the limit stipulated by the market watchdog.
MCX, one of the chief promoters of the equity exchange, is optimistic of meeting the divestment deadline by September 15, 2009. Financial Technologies (India) is the other co-promoter of the bourse.
Currently, MCX SX is providing a platform for currency futures and in less than a year of the launch of the segment, it has managed to acquire nearly 50% market share.
Under SEBI guidelines, a specified set of domestic investors – including depositories, stock exchanges, banks and financial institutions – can hold up to 15% stake in a stock exchange.
While MCX is in talks with several players – domestic as well as international – to sell stake in MCX SX, valuation is seen as a hindrance in the stake sale.
We strongly Recommend that the Government should stop Private Exchanges and should only permit Professional Exchanges like the NSE with 100% Government control. MCX-SX is one of the main reasons for the Food Inflation which is rampant in country.