Mumbai, Jan. 28: MCX-SX will begin trading of cash equities and equities derivatives on February 11, setting up what is expected to be an intense competition with the BSE and the NSE — the country’s two established bourses.
MCX-SX is likely to post muted volumes at first compared with the BSE and the NSE, but its entry could lead to lower trading costs as the exchanges vie for market share.
Trading volumes could grow substantially in coming years as the Centre pushes initiatives to bolster mutual fund and insurance investments to bring more retail investors into stock markets.
“I think there will be more competition between the exchanges and the kind of virtual monopolistic status of the NSE would get reduced,” said Paras Adenwala, chief investment officer of Capital Portfolio Advisors.
“Three exchanges would definitely increase the opportunities for traders multifold.”
MCX-SX vice-chairman Jignesh Shah said, “Inauguration of MCX-SX equity segment will be a significant milestone not only for MCX-SX but also for the entire nation. Our exchange adds a new dimension to the exchange evolution by embedding growth and inclusion that are so critical for a country like India.”
Equities and equity derivatives trading on MCX-SX will be officially inaugurated in a February 9 event to be attended by finance minister P. Chidambaram. Actual trading for investors will kick off two days later.
MCX-SX, controlled by commodity bourse Multi-Commodity Exchange of India Ltd and trading software provider Financial Technologies (India) Ltd, won approval last year from market regulators to start equity trading after a long regulatory process.
The new exchange has registered 270 trading members with the Securities and Exchange Board of India and will shortly cross the 350 target it had set for itself as a condition to officially start trading, it said in a statement.
MCX-SX did not say how many stocks would be available for trading from the first day.
Equity trading is dominated by the NSE, which has overtaken the older BSE in trading volumes.
The total value of share trading on the NSE reached $526.1 billion last year compared with $110.3 billion on the BSE, according to data from World Federation of Exchanges.