FMC allows MCX to launch contracts subject to conditions
New technology agreement to be signed between MCX, FTIL
Mumbai: The Forward Markets Commission (FMC), in a letter issued on Wednesday, allowed Multi-Commodity Exchange of India Ltd (MCX) to launch contracts up to March 2015 after a new technology agreement is signed between the exchange and Financial Technologies India Ltd (FTIL).
The regulator has, however, reiterated that the commodity bourse can launch all its contracts for the year 2015 only after the divestment by FTIL is completed under the regulatory order dated 17 December 2013.
In December, FMC declared FTIL unfit to hold a stake in any commodity exchange and ordered the company to sell its stake in MCX. FTIL has sold its stake to various entities, including well-known investor Rakesh Jhunjhunwala and Kotak Mahindra Bank Ltd.
FMC has also directed MCX to take all pending actions based on the findings of a PricewaterhouseCoopers (PwC) report and furnish an updated compliance report by 15 October 2014.
The special audit conducted by PwC pointed out questionable transactions entered into between the exchange and various related and unrelated parties, including donations given to charitable trusts whose existence could not be established by the auditors.
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