A day after market regulator SEBI told Financial Technologies to sell its stake in stock exchanges, the company said it will examine various legal options before abiding by the SEBI order.

“We wish to inform you that our legal team is examining the SEBI order and the company will take appropriate steps as suggested by the lawyers in due course of time. The order was received by the company only by way of e-mail,” said the company in a statement.

The SEBI order may now trigger action by other overseas financial market regulators. FTIL manages exchanges in Dubai, Mauritius, Bahrain and Botswana. Last September, Dubai Gold and Commodity Exchange issued a statement that FTIL is a minority shareholder in the exchange and holds two of five nominated board seats. It added that none of the directors of the exchange has any operational responsibility for the exchange.

Barring Botswana, the regulators of Singapore, Mauritius and Bahrain are members of International Organisation of Securities Commissions, just like the Indian market regulator SEBI.

FMC order in focus SEBI has relied entirely on the commodity market regulator Forward Markets Commission ruling FTIL as not ‘fit and proper’ to run a commodity exchange after its subsidiary National Spot Exchange failed to settle trades worth ₹5,600 crore entered on its trading platform.

FTIL has already challenged the FMC order in the High Court. However, the Court has rejected the plea for an interim stay on the FMC order. Acceptance of SEBI ruling will not only lead to huge revenue loss but also weaken the case for FTIL in the High Court, said legal sources.

In a matter of three months, FTIL has to offload its holding in NSEL, MCX Stock Exchange and MCX-SX Clearing Corporation, besides the now defunct Delhi and Vadodara stock exchanges.

FTIL’s holding in the four stock exchanges and one clearing corporation is valued at ₹2,500 to ₹3,000 crore. It will be a difficult task for the company to find a buyer except for its holding in the NSEL. This apart, finding the right valuation is going to be another challenge since none of the entities is listed on a trading platform, said an analyst.

Last month, the FTIL board constituted a committee to propose and oversee a restructuring plan, which included bringing down its stake in MCX to 2 per cent from 24 per cent. FTIL and MCX, which are listed on stock exchanges, command a market valuation of ₹1,740 crore and ₹2,580 crore, respectively.

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