SEBI rejects MCX-SX plea for equity trading

Market regulator Sebi on Thursday rejected MCX Stock Exchange's plea for starting trading in equities as also derivative trading in equity, interest rate and debt, saying giving the permission would not be in the interest of the market and public interest.

MCX Stock Exchange Limited (MCX-SX) had applied to deal in interest rate derivatives, equity, futures and options on equity and wholesale debt segments and all other segments permitted to BSE and NSE.

In an order issued on Thursday, the market regulator rejected the application dated 7th April, 2010, where MCX-SX had also sought permission for starting an SME Exchange for small and medium enterprises.

Sebi, after an enquiry into the application, said that it was "not satisfied that it would be in the interest of trade and also in public interest to allow the application."

MCX-SX is currently allowed to offer trade in currency futures only and recognition for the same was recently extended till 15th September, 2011.

While giving the extension, Sebi had asked the exchange to comply with regulations related to shareholding of promoters and other entities for other segments.

Meanwhile, MCX-SX said SEBI with the order rejecting permission for a full-fledged stock exchange has continued with its "bias and injustice" against the bourse.

The exchange said that it would take the necessary action after consulting the lawyers.

"We are sad to see the continuation of the same bias and injustice as we have seen hitherto in the order passed by SEBI today," MCX Stock Exchange said in a statement after the SEBI order.

It further said that it was "studying the lengthy order in all its aspects and will take appropriate measure in consultation with our legal counsels.