MCX-SX asked to improve governance structure

MUMBAI Thu Sep 12, 2013 1:11am IST

A staff member walks past the MCX-SX logo at their Exchange Square building in Mumbai February 11, 2013. REUTERS/Vivek Prakash/Files

A staff member walks past the MCX-SX logo at their Exchange Square building in Mumbai February 11, 2013.

Credit: Reuters/Vivek Prakash/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - The Securities and Board Exchange of India (SEBI) has directed shareholders of the country's new MCX-SX stock exchange to resolve any conflicts of interest within its board and management team as a precondition for renewing the bourse's license.

In an order issued late on Wednesday, the regulator asked the MCX-SX shareholders to reconstitute its board and rejig its top management if necessary to improve governance standards within the stock exchange.

The order from SEBI comes after MCX-SX's affiliated commodity exchange, the National Stock Exchange of India Ltd (NSEL), abruptly suspended trading. NSEL has since struggled to square off outstanding contracts worth over 55 billion rupees.

SEBI did not elaborate on why it had issued the conditional approval. However a source at the regulator said the move was a direct consequence of the NSEL development and was aimed at preventing a similar situation on the stock exchange platform.

The regulator extended the exchange's licence for a period of one year beginning September 16 subject to its conditions being met. (For the SEBI order, see link.reuters.com/fyp92v)

SEBI also directed the exchange to form a committee of independent directors that will be responsible for overseeing financial transactions and management appointment at the bourse.

Financial Technologies (India) Ltd(FITE.NS), which ran NSEL, holds a 26 percent stake in Multi Commodity Exchange of India Ltd(MCEI.BO). Financial Technologies and Multi Commodity Exchange are the promoters, or founders, of the MCX-SX stock exchange.

MCX-SX, which goes by the tagline "India's new stock exchange," commenced equity trading only earlier this year and sold itself as an alternative to the National Stock Exchange and the Bombay Stock Exchange.

The regulator has asked MCX-SX's shareholders to report to SEBI its findings as well as remedial actions within 30 days from the approval.

(Reporting by Himank Sharma; Editing by Sonya Hepinstall)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

India-China Ties

REUTERS SHOWCASE

India-US Diplomacy

India-US Diplomacy

Obama to nominate Indian-American Richard Verma as India ambassador - congressional source.  Full Article 

GMR in Nepal

GMR in Nepal

Nepal clears India’s GMR plan for $1.4 bln hydroelectric plant.  Full Article 

LIC on Markets

LIC on Markets

LIC chairman bullish on Indian markets  Full Article 

India Rains

India Rains

Monsoon rains weaken as late retreat looms.  Full Article 

Infosys-Huawei

Infosys-Huawei

Infosys partners with China's Huawei for cloud-based services  Full Article 

Gold Outlook

Gold Outlook

Gold imports seen up, premiums likely to double on festive buying  Full Article 

Trade Dispute

Trade Dispute

U.S. to press India on trade row during Modi's Washington visit  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage