HC urges MCX, SEBI to settle issues by 30 September

The Bombay high court today asked market regulator SEBI and MCX Stock Exchange (MCX-SX) to sort out the legal logjam over the bourse's bid to start trading in stocks and other instruments. MCX-SX's operations are currently limited to only a currency derivatives platform. The court urged SEBI to give MCX-SX another chance with an open mind as the idea was to encourage business.

SEBI's counsel said the market regulator would consider the court's suggestions in two weeks. The next hearing in the matter has been posted for 30 September.

A bench of justices D Y Chandrachud and Anoop Mohta tried to persuade the two parties to resolve the vexed issue of "persons acting in concert", which stopped SEBI from allowing MCX-SX to start trading platforms in stocks and other instruments under SEBI's regulatory ambit. The market watchdog had last September rejected MCX-SX's application for starting other trading platforms citing the bourse's non-compliance with the guidelines for shareholding structure of stock exchanges. The bourse then approached the court against SEBI.

During the course of today's arguments by counsel Virendra Tulzapurkar and Ameet Naik for Financial Technologies India, Justice Chandrachud asked the additional solicitor general Darius Khambatta, representing Sebi to reconsider the matter and discuss with MCX-SX to sort out the issues "in the interest of justice". According to the judge, prima facie the main issue concerned "person acting in concert" that needed to be resolved in a businesslike manner and, if required, SEBI could take necessary undertaking and assurances from MCX-SX.

The HC bench, however, said it had no intention to curb the market regulator's powers.

While SEBI could consider to resolve the issues in a business like manner, Khambatta asked for two weeks' time for SEBI to decide whether it could work on the court's suggestion.