MCX-SX gets 1yr conditional extension for forex trade

The Security and Exchange Board (SEBI) today gave a conditional extension to MCX Stock Exchange (effective tomorrow) to continue currency trading, but asked it to explain why the same should be given during the pendency of the case in Bombay High Court.

"We have received an extension of licence for currency futures trade for one year," MCX-SX spokesman told PTI. Sebi spokesperson could not be contacted.

According to sources, the regulator has given a "conditional extension in public interest". It will be subject to the outcome of show-cause notice or the decision of the Bombay High Court. Sebi also made it clear that the extension is applicable only to forex futures segment.

The extension will allow the privately-held exchange to continue to offer trading in currency futures segment.

In the show-cause notice sent to the Jignesh Shah-promoted MCX-SX, the markets watchdog has asked it to explain why its licence for currency futures trade should be extended as the matter is pending at the Bombay High Court.

When asked for comment on the show-cause, MCX spokesperson declined, as the issue formed part of the High Court proceedings between the exchange and the Sebi.

Currently, MCX-SX only offers trading in currency futures segment. This is the second licence extension for the exchange since last September.

The pending case before Bombay High Court pertains to MCX's application to Sebi for entering equity segment; the final hearing is expected to come up on Friday.

MCX-SX currently has more than 700 members and trading terminals in over 500 locations.