Solve row by Oct 18: HC to Sebi,MCX

The Bombay HC gave Sebi and MCX-SX a deadline to resolve the deadlock.

The Bombay High Court today asked market regulator Sebi and MCX Stock Exchange (MCX-SX) to amicably resolve the deadlock over the exchange’s bid to start trading in equities and other instruments by October 14 failing which the court would pass an order.

The Justice D Y Chandrachud heading the bench said it was pertinent for both the sides to sit down and thrash out the issues in the row amicably.

MCX-SX had last September moved the High Court challenging Sebi’s order which rejected its application to launch equity trading.

Justice D Y Chandrachud advised the warring parties to resolve the legal row and also advised Sebi to consider withdrawing the show-cause notice it had slapped on MCX-SX as most of the issues in the order have been resolved.

Sebi had denied permission to MCX-SX to begin equity trading as it was apprehensive of the shareholding pattern in the private exchange promoted by Jignesh Shah-led Financial Technologies.

Presently,MCX-SX conducts trading in currency derivatives and has been awaiting permission from Sebi to begin trading in stocks.

MCX-SX counsel today insisted before the court that Sebi should give it a fresh hearing on its application during the pendency of the petition filed by the bourse on the issue.

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“If they (Sebi) are ready to consider our application,we shall go to them for talks”,MCX-SX counsel told the bench.

However,Sebi Counsel Darius Khambata suggested that proper procedure should be followed. Firstly,the show cause notice issued to MCX-SC should be kept in abeyance and the order of Sebi refusing MCX-SX permission to start trading in stocks be set aside.

Thereafter,he said,Sebi would consider application of MCX-SX and if it allows that application,the matter would come to an end. But if Sebi is not satisfied,the same show-cause notice would come into force and the market regulator would give MCX-SX a fresh hearing besides passing a new order.

However,both the sides said they would have to seek instructions from the respective clients on the issue. The bench then asked to them to settle the issue amicably before October 14 or else it would pass an order.

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Sebi,however,said that it was not inclined to withdraw the impugned September 10 order of 2010 and added that it would abide by the orders of the Court. However,MCX-SX insisted that the impugned order may be withdrawn and it be given a fresh hearing.

“Lordships,we would like to know what their anxieties are and what they want us to do? We have waited for three years and it hurts us”,MCX-SX counsel submitted.