MCX Stock Exchange

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MCX Stock Exchange Ltd (MCX-SX)
MCX-SX.gif
Founded October 2008
Headquarters Mumbai
Key People CEO and MD Joseph Massey
Products Currency derivative contracts
Website http://www.mcx-sx.com/index.htm

MCX-SX, which currently offers currency derivatives trading, is the most recent entrant to India's expanding landscape of public-trading exchanges as stocks and derivatives become increasingly popular and widespread there. MCX-SX began trading currency derivatives on October 7, 2008. Trading volume at MCX-SX grew rapidly and overtook those at a longer-established rival in the rapidly growing Indian currency futures market, which began trading only in August 2008.

In July of 2012, the Securities and Exchange Board of India permitted MCX-SX to offer trading in stocks and other asset classes. [1] The regulator had previously rejected MCX-SX's application to open stock and debt trading platforms on top of its currency platform, saying the application from MCX-SX had violated ownership limits restricting individual shareholders in a stock market to 5 per cent and that the exchange had been “dishonest” in its dealings with the regulator.[2]

MCX-SX launched a capital markets segment, futures and options segment and the flagship index ‘SX40’ on February 9, 2013 and commenced trading on February 11, 2013. ‘SX40’, is a free-float based index consisting of 40 large-cap, liquid stocks representing diverse sectors of the economy. Trading in derivatives on the ‘SX40’ index began May 15, 2013. [3]

In September 2014 the exchange received approval from the regulator SEBI to change its name and operate under the new name, ‘Metropolitan Stock Exchange of India Ltd’, abbreviated as ‘mSXI’. The exchange is in the process of registering for the new name. It also recently shifted its office to new premises in Bandra Kurla Complex and moved its data center to Tata Communications in BKC, Mumbai. [4]

Background

MCX Stock Exchange (MCX-SX) is a subsidiary of the Multi Commodity Exchange of India (MCX) and was inaugurated on October 6, 2008 to trade currency rate futures. Its primary investor was India-based exchange developer Financial Technologies (India) Ltd, but in March 2014 the Securities and Exchange Board of India (SEBI), India’s capital markets regulator, directed Financial Technologies India to sell its stake in MCX-SXX) and other exchanges within three months, because Financial Technologies failed to meet the 'fit and proper' criteria required for a shareholder of an exchange.

MCX-SX is regulated by SEBI and the Reserve Bank of India (RBI). MCX-SX has over 600 members using its electronic trading platform in several trading centers throughout India.[5]

Since its launch at the end of 2008, MCX-SX grew so quickly that less than a year later its currency-futures trading volumes overtook those of its more established rival, the National Stock Exchange of India (NSE), to give it a market share above 50% for the first time.[6] Meanwhile, total monthly volume for the contracts almost trebled for both exchanges in the period from April to September of 2009.[7] MCX-SX's plans to launch equities trading in 2010 led to a price war for transaction fees amongst established Indian exchanges like NSE and the Bombay Stock Exchange (BSE).[8]

Key people

Joseph Massey, the former chief executive officer and managing director of parent exchange MCX, was appointed to the same positions at MCX-SX in June 2009 but resigned in October of 2013 after the crisis arising from the 5,600-crore payment default at the National Spot Exchange Limited.[9] Massey was previously managing director at Interconnected Stock Exchange of India (ISEI), a network of 15 regional Indian trading exchanges. He has more than two decades of experience in India's financial marketplace with organizations such as the Reserve Bank of India (RBI), the Life Insurance Corporation of India (LIC) and the Stock Holding Corporation of India (SHCIL).[10]

Latest News

MCX-SX regulator the Securities and Exchange Board of India has given the exchange an additional year to reduce the stake of its promoters, Financial Technologies (India) Ltd and the MCX exchange from the current 70% down to the required stake of just 15%.[11] Several Indian banks that currently hold a combined 30% minority stake in the exchange have already increased their stakes as a result of the forced divestment, including Bank of India, Andhra Bank and IFCI.

References

  1. Sebi orders FTIL to sell shares in MCX-SX and other bourses. The Economic Times.
  2. Proposed Indian bourse ‘not fit and proper’. The Financial Times.
  3. About Us. MCX-SX.
  4. SEBI Approves New Name for MCX-SX. MondoVisione.
  5. Overview. MCX-SX.
  6. MCX-SX records highest turnover for currency derivatives. Economic Times (India).
  7. MCX-SX overtakes NSE in currency futures. LiveMint.com.
  8. David NSE now takes Goliath's place in turf war. Economic Times (India).
  9. MCX appoints Lamon Rutten as CEO. Reuters.
  10. Joseph Massey. Financial Technologies Group.
  11. Divestment of MCX-SX gets more time. ExpressIndia.com.