Sebi gives MCX-SX conditional renewal, seeks business plan
As crisis at its erstwhile promoter group continues to cast a shadow, MCX Stock Exchange on Monday got a one-year conditional renewal to function as a bourse and regulator Sebi asked it to submit a long-term sustainable business plan and take other remedial actions.
Besides, the exchange would not be allowed to introduce any new contract till it meets minimum networth requirement of Rs 100 crore, for which it has been given three-months time.
The current recognition of MCX-SX, which was set up by Jignesh Shah-led Financial Technologies group, expired on Monday, but Sebi has now decided to extend it for a period of one year, commencing tomorrow and ending on 15 September, 2015. The renewal is subject to five specific conditions and compliance to other conditions specified by Sebi from time to time, the Securities and Exchange Board of India (Sebi) said in a statement.
'The exchange shall build its networth (undisputed) to the level as prescribed in Sebi (SECC) Regulations 2012 within a period of three months from the date of renewal of recognition. Further, the e
xchange shall also submit a business plan to satisfy the regulator about the long term sustainability of the exchange,' the regulator said.
While the exchange has been claiming to have a networth of Rs 100 crore, the regulator does not share the same view and pegs the figure at about Rs 56 crore, sources said.
Sebi further said that MCX-SX 'shall not introduce any new contracts till fulfilment of networth requirement' and it would have to comply with Sebi's directions with regard to entities which have been declared not 'fit and proper' person.