MCX rallies 8% on merger talks with NSE

Shares of Multi Commodity Exchange of India (MCX) have rallied 8% to Rs 775 per share on the BSE in early morning trade after media reports suggested that the company has entered into merger talks with the National Stock Exchange (NSE) ahead of the implementation of the universal exchange framework in October.

The two entities are planning to approach market regulator Securities and Exchange Board of India (Sebi) as early as this month, according to an official. The merger will help NSE and MCX cement their leadership position both in the equities and commodity derivatives space, the Business Standard reported. CLICK HERE TO READ FULL REPORT

At 09:39 am; MCX was trading 6% higher at Rs 762 on the BSE, as compared to 0.43% rise in the S&P BSE Sensex. A combined 398,087 equity shares changed hands on the counter on the BSE and NSE so far.

Universal trading licences: Equity exchanges have advantage over commexes

STOCK MARKET - After allowing universal broking licences, the Securities and Exchange Board of India (Sebi) has now allowed setting up of universal exchanges – this means stock exchanges can now enter the commodity turf and commexes can also do stock exchange business like dealing in equity and forex. The market regulator has given exchanges three quarters to prepare for facing competition. However, there does not seem to be a level playing field – commodity exchanges are perhaps on a weaker wicket.

An industry official says: “MCX has better scope to first enter forex derivatives, as forex has a natural extension for commodities. NCDEX will now discuss the possibilities.” On the other hand, BSE and NSE are preparing to launch non-agri derivatives. NCDEX seems less worried as agri is its strong point where other exchanges will not rush to enter.

Several market intermediaries, industry officials and observers suggest that commodity exchanges appear weak, despite their dominance in their respective fields. The reason: Equity markets have evolved over time and have time-tested infrastructure, participants and products, so they have much more diversified revenue streams. But commodity exchanges, among many drawbacks, do not have enough products, they need to further develop market, and they do not have co-location or institutional investors.

The strength of commodity exchanges, especially MCX, is that they have vibrant energy and metals segments, where contracts are cash-settled and prices are derived from global exchanges like the London Metal Exchange for metals and the CME for energy contracts. Since these exchanges are leaders in their respective segments, equity exchanges will find it difficult to get global reference prices for settling their contracts. Sebi has, however, told exchanges to improve physical delivery and “only cash-settled contracts are less preferred by the regulator”, said a source. MCX will also work hard to retain this tie-up before any exchange takes it away.

NSEL scam: Jignesh Shah denies violation of Sebi rules; alleges conspiracy

STOCK MARKET - Embattled businessman Jignesh Shah on Friday denied any violation of insider trading norms following Sebi order against 13 entities, including his relatives, with regard to trading in shares of MCX and erstwhile FTIL even as he alleged "conspiracy" against him.

On Wednesday, Sebi ordered impounding of "averted losses" worth over Rs 125 crore through alleged insider trading in MCX and its erstwhile promoter FTIL by 13 persons, including relatives of Shah and former top executives, with 'prior information' about the NSEL case.


Shah had served as Chairman and Managing Director of FTIL at the time when the alleged insider trading happened. However, no order has been passed against him directly.

Addressing the media here, Shah said people bought the shares in the companies in compliance with regulations and claimed that information about NSEL "was not unpublished".

Shah is the chairman emeritus of 63 Moons Technologies, formerly known as FTIL -- which was promoted by him.

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Sebi asks MCX Biz to return investors' money, imposes 10-year market ban

STOCK MARKET regulator Sebi has asked MCX Biz Solutions and its proprietor Syed Sadaq to return the money collected from investors after finding them guilty of duping investors through false documents.

Besides, they have been barred from the securities markets for 10 years.


Sebi said the company allegedly solicited money from investors promising huge returns while using fake and forged broker registration documents and a name similar to that of an exchange group.

The entity has no relation to the Multi Commodity Exchange (MCX).

The entities had also made representations and statements on their website about their activities in securities market in an "entirely untruthful manner".

They have allegedly raised more than Rs 35 lakh from investors through various schemes.

"...Noticees (MCX Biz and Sadaq) by their the act and omissions including false statements and representations in deceitful manner, have fraudulently solicited, enticed and induced investors to deal in securities," Sebi Whole Time Member S Raman said in an order dated July 20.

By indulging in such activities, they have violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practice) Regulations, he added.

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MCX partners with Thomson Reuters to launch co-branded commodity indices

STOCK MARKET - Multi Commodity Exchange of India (MCX) on Tuesday announced that it has joined hands with Thomson Reuters to launch co-branded commodity indices in India. The move follows signals from the Securities and Exchange Board of India (Sebi) to open up commodity markets.

While Sebi has already allowed trading in commodity option, it had long been deliberating allowing allowing trading in indices. This is because unlike equity indices, commodity indices are not directly useful for hedging in general but are used more for assets allocation.

According to sources, once MCX is ready with the first set of new indices, prepared using more scientific methods, existing indices for metals, agri-products and other commodities are likely to be phased out.

Sources close to the development said, "In the first phase, MCX proposes to have around 5-6 Indices -- a few product-based Indices, a few single-commodity ones and a composite index. The exchange is trying to be ready for dissemination by September 2017."

Once index trading is permitted, Sebi is expected to look at allowing commodity-specific exchange traded funds (ETFs) similar to gold ETFs and portfolio management services (PMS). These were banned a few years ago when the Forward Markets Commission (FMC) was regulating commodity derivatives.

A commodity broking industry veteran said that they had recently met Sebi officials and proposed to allow PMS in commodities, as now the market is under a strong and powerful regulator.

Sebi has also allowed category-3 alternative investment funds or hedge funds in commodity derivatives, and has moved to integrate businesses of commodity broking and share broking, which means that all businesses can be transacted under single entity, allowing fungibility of capital and clients' margins.