Late on Wednesday, Sebi renewed the licence of MCX-SX for a period of one year while including certain conditions to strengthen the governance structure. This assumes significance when seen in the backdrop of events at the National Spot Exchange (NSEL), which is in the midst of a settlement crisis. Both NSEL and MCX-SX are promoted by Jignesh Shah-owned Financial Technologies (India) (FTIL)..
Sebi has directed MCX-SX to form a committee comprising two public interest directors and three nominees from institutional investors. This committee will advise the board on matters, including all financial transactions, lending/borrowing of funds, appointment of key management personnel and major capital expenditures.
“The board of directors of NSEL is already under the scanner of the commodities market regulator and since both the bourses belong to the same group, Sebi seems to have decided on taking some of the operational control away from the current board,” said a person privy to the developments. “This was partly necessitated due to the change in guidelines related to the manner in which stock exchanges are managed,” he said.
Interestingly, while there are three public interest directors — SU Kamdar, Ashima Goyal and DR Dogra — already on the board of MCX-SX, it is believed that the bourse could look at the option of appointing new public interest directors for the committee so as to give it a completely ‘neutral’ look. Also, the exchange could find it tricky to get three nominees from institutional investors at a time when the group is embroiled in probes from various agencies.