Commodity markets regulator FMC today said it has not approved a proposal by MCX to launch new contracts beyond August as part of a strategy to put pressure on the exchange to comply with its order on reduction of the stake held by the former promoter.
Business at the Multi Commodity Exchange of India (MCX) would be "seriously hurt" if no new contracts are launched beyond August, said Ramesh Abhishek, Chairman of the Forward Markets Commission.
In December, the FMC had declared MCX's erstwhile promoter Financial Technologies India Ltd (FTIL) as unfit to run any exchange after a Rs 5,600 crore payment crisis at group company National Spot Exchange Ltd (NSEL). The regulator asked FTIL to reduce its stake in MCX to 2 per cent from 26 per cent.
The FMC had directed MCX to take concrete steps to comply with this order.
"We have not given any deadline but we are putting all kind of pressure on MCX to comply with the order. We have not approved new contracts beyond August and not approved new contracts to be launched in the 2015 calendar year as well," Abhishek told PTI.
"MCX has to comply with the order by August. Otherwise, no new contracts will be approved. This will seriously hurt MCX's business," he said.
FTIL is in the process of selling a 24 per cent stake in MCX. It has received non-binding bids from nine companies, including Reliance Capital and Kotak Group.
Bidders have sought more time to submit final bids in view of "adverse findings" in a special audit report by PricewaterhouseCoopers on corporate governance issues at MCX.
MCX is the country's leading commodity exchange. Its trading volumes have fallen significantly since the NSEL payment crisis came to the fore in July.
Turnover on MCX declined 72 per cent to Rs 3,77,324 crore in April from Rs 13,26,155 crore a year earlier, according to FMC data. PTI LUX MJH JC 06041708