Crisis-hit MCX has been given 10 days to submit a time-bound action plan to comply with regulator FMC’s order directing the bourse to ensure its promoter FTIL cuts stake to 2% or less from 26%.
On December 17, 2013, the FMC had issued an order declaring Financial Technologies India (FTIL) and its chief Jignesh Shah unfit to run any exchange, including the MCX, following a R5,600-crore payment crisis erupting at group company National Spot Exchange (NSEL).
In an 80-page order, FMC held that FTIL is not 'fit and proper' to hold anything more than 2% in MCX, the country's leading commodity bourse.
In a BSE filing, MCX informed that it has received a letter from the Forward Markets Commission (FMC) directing the bourse to "take immediate and effective steps to implement the Order of
the Commission dated December 17, 2013."
"The company has been asked to submit to FMC a time-bound programme for implementation of the aforesaid order within 10 days of receipt of FMC letter," the filing added.
On December 26, the MCX board had asked FTIL to reduce its stake to 2% in accordance with the FMC order.
Meanwhile, FTIL and Shah have already moved the Bombay High Court challenging the FMC order. The case is scheduled for hearing next week.
NSEL, which is promoted by FTIL, has been defaulting on payments to 13,000 investors. It plunged into the payment crisis after halting trading in commodities from late July last year on a government directive.