MCX may be restrained from launching fresh contracts

Tags: News
Country's largest commodity exchange MCX, part of crisis-hit Jignesh Shah-led FTIL group, may be barred from launching fresh contracts if it fails to bring down promoter's stake to two per cent.

Sectoral regulator Forward Markets Commission (FMC) might crack the whip on MCX in case the bourse fails to comply with its directive on reducing promoter shareholding which came in the wake of Rs 5,600 crore payment crisis at NSEL.

"FMC will take action against MCX if they do not comply with the shareholding order by April 30. FMC is likely to stop MCX from floating new contracts," an official said.

The commodity market regulator's order has been challenged by the group in Bombay High Court.

In its order of December 17, 2013, the FMC had declared FTIL and its chief Jignesh Shah unfit to run any exchange following the turmoil at group firm National Spot Exchange Ltd (NSEL).

The regulator said FTIL was not 'fit and proper' to hold more than 2 per cent stake in Multi Commodity Exchange (MCX). Financial Technologies India Ltd (FTIL) currently owns 26 per cent in MCX.

Following this the board of MCX also asked its promoter FTIL to divest shares in excess of 2 per cent.

The NSEL, which is promoted by FTIL, has been defaulting on payments to 13,000 investors. In July, FMC had halted trading at the exchange.

Multiple investigative agencies like Enforcement Directorate and the CBI are already probing the NSEL payment crisis, while Revenue department, Reserve Bank, Sebi, FMC and Corporate Affairs Ministry are also looking into it.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Banks must learn from past mistakes to promote financial inclusion

    Prime minister Narendra Modi launched a massive financial inclusion programme yesterday titled “pradhan mantri jan dhan yojana’ (PMJDY), that will

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Tushar Gandhi

Could prohibition mean profiteering?

In the mid 1930s, an American journalist asked Bapu if ...

Zehra Naqvi

The five universal languages of love

Love is a universal language. Don’t we all believe that? ...

Dharmendra Khandal

Time to protect our endangered wildlife species

After 65 million years of existence, the earth’s biodiversity is ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture