New Delhi: Multi Commodity Exchange (MCX) can launch new contracts for January, February and March of 2015 after if it signs a fresh technology deal with its erstwhile promoter Financial Technologies India Ltd (FTIL), the Forward Markets Commission (FMC) said on Wednesday.
Commodity markets regulator FMC, however, made it clear that the bourse will be allowed to roll out contracts for all 12 months of 2015 once the full divestment of Jignesh Shah-led Financial Technologies in MCX takes place as per the regulatory norms.
MCX has been seeking permission to launch fresh contracts for 2015 but FMC had warned that it would not allow new contracts unless FTIL brings down its 26 per cent stake to 2 per cent as per its order dated December 17, 2013.
Last year, FMC had declared FTIL unfit to run any exchange in the wake of a Rs 5,600-crore payment crisis at group company National Spot Exchange Ltd (NSEL). FTIL has exited from the bourse by selling its entire stake to various investors.
However, its deal with Kotak Mahindra Bank to sell a 15 per cent stake in MCX is yet to be completed.
In a letter to MCX, the regulator FMC said, "The MCX can launch contracts up to March 2015 as soon as a new technology agreement is signed between MCX and FTIL."
This is being done in view of the fact that signing of such an agreement is a pre-condition for the sale of shares from FTIL to Kotak Mahindra Bank. "It is expected that the divestment will be completed by FTIL soon after signing of the technology agreement," it said.
That apart, the commodity market watchdog said, "The MCX can launch all its contracts for the year 2015 once the full divestment by FTIL in MCX takes place in compliance of the Order of the Commission dated December 17, 2013."
FMC said it has received representations from market participants to permit launch of fresh contracts in MCX to ensure continuity of trading and hedging on the platform.
MCX is also directed to vigorously take all pending actions on findings of PwC Report and furnish an updated compliance report by October 15, it added.
Financial Tech has assured the regulator that it will sign the new technology deal by end of this month.