MCX-SX to file appeal on Sebi rejection


Mumbai: MCX Stock Exchange (MCX-SX) and the Securities and Exchange Board of India (Sebi) are all set to take their legal battle to the next level. Challenging the Sebi order of September 23 which rejected its request to be allowed to offer various new products, the exchange would file an appeal in the Securities Appellate Tribunal (SAT), reports Ashish Rukhaiyar of Business Standard. The 68-page Sebi order had barred MCX-SX from offering equity and equity derivatives, interest rate futures and separate futures and a separate platform for small and medium enterprises. Sebi had cited that the MCX-Sx did not adhere to the shareholding norms and illegal buyback agreements by promoters. "Till last week, the lawyers were divided on the appropriate forum for appeal against the Sebi order and meetings were held over the weekend. It, however, appears the exchange will move SAT, that is well equipped to go into the merits of the case," said a person familiar with the development. In July, MCX-SX had petitioned at the High Court, where it had asked for a direction to Sebi on why it has not yet granted permission to the application asking to operate itself as a full fledged stock exchange. The petition said that, even after MCX-Sx had fulfilled the key condition of bringing down the promoters' stake, the regulator did not respond to the application. Finally, Sebi rejected the application saying that the exchange was not fully in compliance with "Manner of Increasing & Maintaining Public Shareholding" norms for recognised stock exchanges. Sebi says that MCX-SX had been 'dishonest' by withholding material information on the buyback arrangements of its promoters with other shareholders. MCX-SX expressed its discomfort towards such a statement and said this was 'character assassination'.