Newly-formed national level stock exchange, the MCX Stock Exchange (MCX-SX), is expected to complete its stake divestment in the next two months, thus enabling it to start equity trading.
Promoted by Financial Technologies (India), MCX-SX has already divested about 25 per cent stake to banks, apart from giving about five per cent to IFCI.
Banks picking up stake in the exchange included Union Bank of India, Bank of India and Andhra Bank, said Joesph Massey, managing director and CEO, MCX-SX, on the sidelines of a the Confederation of Indian Industry (CII) seminar here today.
The exchange currently trades in currency derivatives only, while it is awaiting regulatory approval to begin equity trading.
“Equity trading will coincide with the completion of stake divestment. It should start in a couple of months,” said Massey.
Under the Securities and Exchange Board of India (Sebi) regulations, no single shareholder can hold more than five per cent stake in a stock exchange, while for some categories of financial institutions (domestic banks, depositories, insurance companies and clearing corporations), the limit has been fixed at 15 per cent.
As part of the divestment process, the existing shareholding institutions are likely to hold a total of 20 per cent stake in MCX-SX, 30 per cent has already been divested and another 50 per cent has to be divested.
Financial Technologies currently holds 49 per cent stake in the exchange and MCX another 51 per cent.
Interest rate futures by August
Trading in interest rate futures will kickstart in August, according to M S Sahoo, wholetime Sebi member.
“We are working on interest rate futures and it should begin by August,” said Sahoo.
According to data released by the Bank of International Settlement (June 2009), the notional principal amount outstanding in organised exchanges across all futures instruments amount to $18.5 trillion in March 2009 globally, of which, $17.8 trillion pertains to interest rate futures. In Asia, the notional amount outstanding in exchange-traded interest rate futures is estimated at $1.9 trillion.
