FMC to issue showcause notice to FT, 3 MCX directors

As the National Stock Exchange Limited (NSEL) is all set to default for the sixth consecutive time, the focus is also on the MCX (Multi Commodity Exchange). The government has empowered the Forward Markets Commission (FMC) to take a call on the ‘fit and proper’ status of the NSEL, reports CNBC-TV18’s Varinder Bansal.

Also read: Multiple agencies to start proceedings against NSEL The FMC is likely to issue showcause notice to Financial Technologies, three directors of MCX- Jignesh Shah, Joseph Massey and Shreekant Javalgekar this week. The showcause notice will seek an explanation as to why the "fit & proper" status of promoters shouldn't be revoked. They are likely to be given 1-2 weeks to respond to the notice and justify any linkages between Indian Bullion Market Association (IBMA), NSEL and MCX. FMC is likely to firm up its decision on the ‘fit and proper’ by the end of October. If the FMC decided to revoke their status, it may result in FT Group divesting its stake in MCX. Meanwhile, FT Group said that it neither had they met any organisation nor have any plans of selling stake in any of its companies.