MCX may be restrained from launching fresh contracts: report

Multi Commodity Exchange (MCX), India's largest commodity bourse, may be barred from launching fresh contracts if it fails to bring down promoters' stake to 2 per cent, according to a Forward Markets Commission official.

"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," the official said.

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

In its order of December 17, 2013, FMC had declared FTIL and its chief Jignesh Shah unfit to run any exchange following a Rs 5,600-crore payment crisis 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 MCX. Financial Technologies India Ltd (FTIL) currently owns a 26 per cent stake in MCX.

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

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

Multiple investigative agencies like Enforcement Directorate and CBI are already probing the NSEL payment crisis, while the Revenue Department, the Reserve Bank of India (RBI), the Securities and Exchange Board of India (Sebi), FMC and the Corporate Affairs Ministry are also looking into it.