MCX surges as SC urges SEBI to amend MIMPS’ rules

Multi Commodity Exchange of India (MCX) is currently trading at Rs 1,272.55, up by 4.15 points or 0.33% from its previous closing of Rs 1268.40 on the BSE.

The scrip opened at Rs 1276.00 and has touched a high and low of Rs 1288.00 and Rs 1272.20 respectively. So far 32000 shares were traded on the counter.

The BSE group 'B' stock of face value Rs 10 has touched a 52 week high of Rs 1426.00 on 09-Mar-2012 and a 52 week low of Rs 1214.00 on 12-Mar-2012.

Last one week high and low of the scrip stood at Rs 1,294.00 and Rs 1250.00 respectively. The current market cap of the company is Rs 6489 crore.

The promoters holding in the company stood at 26% while Institutions and Non-Institutions held 34.01% and 39.91% respectively.

Tossing the ball in SEBI’s Court, Supreme Court urged market regulator to amend provision relating to buy-back and commonality clauses in MIMPS Regulations, 2006, and re-consider Multi Commodity Exchange of India (MCX)-Supreme Court (SX’s) application to start an equity platform as fresh plea, within three months. The apex court disposed off SEBI's special leave petition (SLP) challenging the Bombay High Court order, which directed the regulator to reconsider MCX-SX's application afresh by April 14,2012.

The bench comprising justices Aftab Alam and C K Prasad passed the order on the basis of a consensus, reached between SEBI which was represented by Attorney General GE Vahanvati and MCX-SX represented by Harish Salve. However, the court ordered that SEBI shall amend its MIMPS Regulations without being influenced by the observations made by the Bombay High Court in the case. The HC had overturned SEBI's decision rejecting MCX-SX's plea to start a full-fledged stock exchange.

According to SEBI's decision earlier, the voting rights of the shareholders shall not exceed the maximum permissible limit of 5% at any point of time. The regulator, while earlier rejecting MCX-SX's application seeking its nod to offer a stock trading segment, had cited the buy-back arrangements to justify its stand. It stated that the promoters of the applicant were not 'fit and proper' persons since they failed to disclose that they had entered into buy-back agreements with the financial investors which were really a forward contract. Such contracts are not allowed under the prevailing law, SEBI contended. SEBI had also objected to the promoters diluting their combined stakes from 70% to 10% by getting warrants issued to themselves.

However, with the passing of this order, the regulator will have to take a relook at norms relating to the manner of increasing and maintaining Public Shareholding in Recognized Stock Exchanges (or MIMPS).