by Mayaram, the last couple of years saw Financial Technologies achieving a “dominant position in the exchange space” by promoting and running multi-asset class exchanges – Multi Commodity Exchange of India Ltd (MCX), MCX Stock Exchange (MCX-SX), Indian Energy Exchange (IEX).
Further, Financial Technologies also enjoys a dominant position in brokerage solutions segment with its product – ODIN - boasting of a market share of more than 70%.
Financial Technologies is also the promoter entity of other “ecosystem initiatives” such as National Bulk Handling Corporation (commodity collateral management) and ATOM (payments processing).
The panel is of the view that the issues related to Financial Technologies need to be addressed to “mitigate the potential systemic impact of the interconnectedness arising out of the dominant position of Financial Technologies in financial market infrastructure”. Experts, however, said the recommendation are tough to implement. Barring the Competition Commission of India (CCI), there is no other agency that can act against Financial Technologies with reference to its dominant role in the exchange and exchange infrastructure space.
“The panel has highlighted that Financial Technologies' dominance is dangerous and that one entity or person should not control such a large part of the market,” said a person familiar with the regulatory framework. “This is something similar to what the regulators in EU and US thought about Microsoft. In India, CCI can take suo moto action but one needs to tread cautiously so that any action taken in not ultra vires to the Companies Act,” he explained.