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