The Securities and Exchange Board of India (Sebi) late on Wednesday approved the application for renewal of registration for currency futures trading of MCX Stock Exchange (MCX-SX). The approval comes a day after Sebi issued a showcause notice to the exchange asking the bourse to explain why its application for renewal of registration for currency futures trading should not be rejected.
The regulator said that the renewal was subject to the outcome of litigation in the Bombay High Court between Sebi and MCX-SX relating to compliance with share holding norms of a stock exchange and a decision to be taken on the show cause notice issued on Tuesday.
The exchange cannot launch new products till the issue is settled. Sebi’s conditional approval for the currency segment is valid till Sept 15, 2012. A Sebi notification issued late on Wednesday said that the extension was “in the interest of trade.”
MCX exchange has come under much scrutiny, SEBI had rejected its offering to become an approved stock exchange in 2010 offering equities and debt instruments. SEBI had rejected the license as MCX is privately owned by Indian billionaire Jignesh Shah and does not comply with the MIMPS whee key stake holder cannot hold more then 5%.
MCX is renowned for tis massive growth in commdities triadng and INR currency futures. MCX is the sixth largest commodity exchange in the world with No 1 in silver and No 2 ranking in gold.