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The Multi Commodity Exchange (MCX) board is set to meet on Friday to decide on a PricewaterhouseCoopers (PwC) report on the exchange, as well as the resignation of its managing director, Manoj Vaish.
The Forward Markets Commission (FMC) has scheduled a meeting on Tuesday to consider action on the PwC report and discuss action against MCX for failing to ensure the exit of its anchor investor.
For months, MCX hasn’t been able to focus on its core operations. And, it seems challenges for the exchange are increasing. However, if the anchor investor completes the stake sale without further delay, things could improve.
Recently, PwC has submitted a special audit report on MCX’s functioning and its agreements with anchor investor Financial Technologies India Ltd (FTIL).
In December 2013, FMC had issued an order declaring FTIL wasn’t ‘fit and proper’ to run an exchange; it had asked MCX to ensure FTIL reduced its stake in the bourse from 26 per cent to two per cent. Subsequently, it had asked the exchange to have a special audit of its functioning carried done by PwC.
MCX planned to emerge from its woes after a new board took charge, with Satyendra Mishra as chairman. Earlier, the exchange had seen volumes fall, due to the imposition of commodity transaction tax from July and the payment crisis at FTIL’s National Spot Exchange Ltd. Following a rise in volumes, the last few months have again seen average daily volumes drop.
On the bidders for stake in the exchange demanding the PwC report, Mishra said, “We need the consent of the audit firm to release the full report in public domain. I think this will be procedural issue, and can be done.” On action on the report, he said the exchange had convened a board meeting on May 9 to take a decision on the matter.
Meanwhile, the finance ministry is set to announce new norms for ownership of commodity exchanges in a week. What excites the MCX brass is public institutions such as banks will be allowed to hold up to 15 per cent stake in exchanges. Mishra said, “New norms will bring institutional investors to steer the exchange; this is always better, whoever it may be.”
Body corporates will be allowed to hold up to five per cent.
