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MCX-SX Clearing Corporation has transferred the entire 23 per cent stake held by Financial Technologies India and 21 per cent of Multi Commodity Exchange into an escrow account. Metropolitan Stock Exchange holds 51 per cent in the clearing corporation.
Regulatory needsMCX holds 26 per cent in the clearing corporation, but according to Stock Exchange and Clearing Corporation regulation only stock exchanges are allowed to own 100 per cent in the clearing corporation while the holding by other entities are limited to 5 per cent. This has resulted in the clearing corporation transferring the excess holding of MCX’s 21 per cent into an escrow account.
Shareholders of the clearing corporation also cleared the amendment to the Articles of Association to give effect to the change in shareholding pattern and cancel the voting rights of FTIL at the extraordinary general meeting held on Tuesday, said sources.
It is reliably learnt that MCX has written again to SEBI seeking deemed stock exchange status. The government has merged the Forward Contracts (Regulation) Act under which MCX was operating with the Securities Contracts (Regulation) Act, thus bringing all the commodity exchanges under the purview of SEBI and providing deemed stock exchange status to commodity exchanges.
If SEBI accedes to MCX demand, it will not only allow MCX to retain its stake in the clearing corporation but also raise its stake in Metropolitan Stock Exchange to 15 per cent from 4.14 per cent.
Holding warrants with hopeThe commodity exchange had recently started a bidding process to sell 40 crore warrants in Metropolitan SE, but retained 18 crore warrants which constitutes about 10 per cent holding in the stock exchange with a hope to get deemed stock exchange status.
FTIL was not able to sell its stake in the clearing corporation due to legal issues.
Last year, SEBI declared FTIL, its promoter and key directors as not ‘fit and proper’ to hold stake in any exchange after its group company National Spot Exchange failed to settle trades worth ₹5,600 crore. NSEL investors have filed a series of cases against FTIL and its promoter Jignesh Shah.
To protect themselves, FTIL and NSEL have filed cases against defaulters.
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