MSE in equity deal with UK’s GMEX to ex­pand of­fer­ings

Financial Chronicle - - COMPANIES - FC BUREAU

LONDON-BASED GMEX Group will pick up a five per cent stake in the Metropoli­tan Stock Ex­change of In­dia (MSE) and will help the do­mes­tic bourse de­velop new prod­uct cat­e­gories and re­lated in­fra­struc­ture fa­cil­i­ties.

GMEX, which of­fers sus­tain­able and in­no­va­tive solutions for cap­i­tal mar­kets, would also ac­quire a five per cent stake in Metropoli­tan Clear­ing Cor­po­ra­tion of In­dia, an MSE arm.

This apart, MSE is also in the process of slap­ping a com­pen­sa­tion claim of over Rs 800 crore from ri­val ex­change NSE for losses it suf­fered from the dom­i­nant bourse’s al­leged un­fair trade prac­tices in the cur­rency de­riv­a­tives seg­ment.

A joint state­ment by MSE and the GMEX Group said the col­lab­o­ra­tion be­tween the two “will de­velop high im­pact ini­tia­tives in In­dian cap­i­tal mar­kets, in­clud­ing prod­uct de­vel­op­ment in ex­ist­ing seg­ments and launch­ing new prod­uct cat­e­gories, in­creased fo­cus on tech­no­log­i­cal in­no­va­tions and mar­ket in­fra­struc­ture de­vel­op­ment for new prod­ucts and project fi­nance.”

MSE now of­fers equity, equity de­riv­a­tives and cur­rency de­riv­a­tives trad­ing plat­forms but has plans to ramp up its op­er­a­tions with new prod­ucts in debt, in­ter­est rate fu­tures and gold to raise its mar­ket share, as these seg­ments are not well-cov­ered by NSE and BSE, the two dom­i­nant ex­changes in the equity and equity de­riv­a­tive seg­ment.

“MSE is devel­op­ing in­no­va­tive prod­ucts in ex­ist­ing mar­ket seg­ments as well as launch­ing new trad­ing seg­ments. It is also ex­pand­ing the eco-sys­tem and en­cour­ag­ing greater par­tic­i­pa­tion from mar­ket par­tic­i­pants. Tech­nol­ogy and prod­uct in­no­va­tion are cor­ner­stones of the fu­ture plans of MSE,” the ex­change said in a state­ment.

Udai Ku­mar, MD & CEO, MSE said, “This col­lab­o­ra­tion will sup­port the MSE strat­egy and vi­sion of de­liv­er­ing in­no­va­tion in prod­ucts and tech­nol­ogy.”

Hi­ran­der Misra, chair­man & CEO, GMEX, said, “the ad­vanced busi­ness and tech­nol­ogy en­able­ment that we bring to the MSE and MCCIL will fa­cil­i­tate new strate­gic op­por­tu­ni­ties not only within In­dia but also in­ter­na­tion­ally.”

GMEX uses its ex­ten­sive mar­ket in­fra­struc­ture ex­pe­ri­ence and ex­per­tise to cre­ate strate­gic mas­ter plans with ex­changes, clear­ing houses, de­pos­i­to­ries, reg­istries and ware­house re­ceipt plat­forms. GMEX also has unique global ex­pe­ri­ence in the in­tro­duc­tion of new ex­change traded prod­ucts.

On the dispute with NSE, Ku­mar said MSE could sub­mit by July a re­port, eval­u­ated by in­de­pen­dent ex­perts, with the Com­pe­ti­tion Ap­pel­late Tri­bunal (Com­pat) for over Rs 800-crore com­pen­sa­tion from the NSE.

"We had made the claim re­port but it was re­quired to be eval­u­ated by in­de­pen­dent ex­perts, in­clud­ing fi­nan­cial ex­pert and in­dus­try ex­pert, now we are in a po­si­tion to file it with Com­pat and will sub­mit it by July," Ku­mar said.

The case re­lates to MSE's com­plaint against the NSE, al­leg­ing abuse of its dom­i­nant po­si­tion and preda­tory pric­ing in the cur­rency de­riv­a­tives seg­ment.

MSE launched trad­ing in cur­rency de­riv­a­tives in 2008 and had filed a com­plaint with CCI that it was un­able to charge any trans­ac­tion charges on ac­count of free of­fer­ing by the NSE.

In 2011, the Com­pe­ti­tion Com­mis­sion of In­dia (CCI) had found the NSE guilty of abus­ing its dom­i­nant mar­ket po­si­tion and adopt­ing un­fair trade prac­tices in cur­rency de­riv­a­tives trad­ing by not charg­ing for such trades.

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