Regulator Not to Approve New Contracts for Trading on MCX

The Forward Markets Commission (FMC) has decided not to approve new contracts for futures trading at MCX till it ensures its promoter Financial Technologies India Ltd (FTIL) pares its stake to 2 per cent from the existing 26 per cent.

In a filing to the BSE, MCX said that the FMC has ordered the bourse that "till the order of the Commission is implemented, no new contract will be approved for trading in MCX".

Commodity markets regulator FMC has decided that the contract launch calendar for 2015 will be kept in abeyance.

"However, approved contracts where the contract launch calendar for 2014 has already been approved by the commission, the contracts shall be available for trading in the exchange," MCX said.

MCX was given April 30 deadline to implement the December 17, 2013 order that declared its promoter FTIL as unfit to run any exchanges and ordered it reduce the stake to 2 per cent from the current 26 per cent.

Financial Technologies (India) Ltd is in the process of divesting its stake in MCX and bidders have sought more time to submit their binding offers in view of the PwC audit report on related parties transaction between MCX and FTIL group.

The stake sale may further get delayed following the arrest of FTIL chief Jignesh Shah by the Mumbai police on May 7 for his alleged involvement in the NSEL scam.

FTIL ran into problems following the Rs 5,600 crore payment default at its subsidiary National Spot Exchange Ltd.

FTIL owns a 99.9 per cent stake in NSEL, which has suspended all trading operations since the payment shortages.