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.
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“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.