INDIA: SEBI puts MCX-SX on watch list

Friday September 13 2013

The Securities and Exchange Board of India (SEBI) has issued directions to MCX-SX Exchange about its corporate governance structure, noting that the bourse’s recognition could be withdrawn if there are “adverse findings” by any other regulator about it. The exchange began operations in February 2013, after it was notified as a “recognised stock exchange” by the ministry of corporate affairs in December 2012. MCX-SX offers an electronic platform for trading in Capital Market, Futures & Options, Currency Derivatives and Debt Market segments.

MCX-SX Ltd is promoted by Financial Technologies Group which also runs spot commodity exchange NSEL, recently engulfed in a crisis when it stopped trading on all contracts on July 31 following government directives. To prevent a similar situation arising in respect of MCX-SX, SEBI has ordered that a governance committee be constituted to oversee the operations of the exchange.

Renewal of recognition has been granted by the Regulator to the exchange for a period of one year commencing on 16th September 2013, but non-compliance with SEBI’s directions could result in such renewal being withdrawn.

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