SEBI has time till June 11 to reply to MCX-SX charges

The Securities and Exchange Board of India has time till June 11 to reply to charges that it did not follow the principle of natural justice when rejecting MCX-SX’s proposal to function as a stock exchange. The Bombay High Court said it will hear the case between the regulator and the exchange on June 27. “The capital market regulator did not follow the principal of natural justice while rejecting the exchange’s application,” C Aryama Sundaram, senior advocate, argued with the division bench comprising Justice Ranjana Desai and Rajesh Ketkar. He said the findings on the basis of which the regulator rejected the MCX-SX application were related to its promoter entities, Multi Commodity Exchange and Financial Technologies SEBI said the exchange had suppressed information while seeking approval. “SEBI will hear the applicants, not all the shareholders of the applicants,” said SEBI counsel and additional solicitor general Darius Khambatta. He said the exchange had suppressed material information on the buyback arrangement it had entered into with three financial institutions. SEBI had turned down MCX-SX’s proposal to function as stock exchange since its buyback arrangement with financial institutions was in violation of the holding norms for exchanges.