Mumbai, Sept. 11 (PTI): Market regulator Sebi today asked NSEL group entity MCX Stock Exchange (MCX-SX) to strengthen its governance structure to continue remaining a recognised bourse.
While renewing MCX-SX’s recognition for a period of one year, starting September 16, Sebi asked the bourse to constitute a committee of two independent directors and three institutional investor nominees to oversee key business decisions, policy matters and appointments of top management. The committee needs to be set up within two days of the renewal of licence.
Similar directions were also issued to MCX-SX Clearing Corporation, a subsidiary of MCX-SX.
Sebi also warned that the licence can be withdrawn in case the bourse fails to comply with the market regulator’s directions.
MCX-SX is promoted by Financial Technologies Group, which also runs spot commodity exchange National Spot Exchange Limited (NSEL) that got engulfed in a crisis when it stopped trading on all contracts on July 31 following government directives. It raised concerns about the possible default of Rs 5,500 crore to investors.
MCX-SX had got a licence from Sebi to operate as a stock exchange last year and this permit was to expire on September 15.
The bourse began operations in February this year, after it was notified as a “recognised stock exchange” by the ministry of corporate affairs. However, trading volumes on the exchange have been quite low compared with rivals BSE and NSE.