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Mumbai: MCX-SX Clearing Corporation Ltd (MCX-SX CCL) plans to transfer the 23% stake held by Financial Technologies India Ltd (FTIL) in the clearing entity to an escrow account since the latter has been found unfit by the capital markets regulator to hold a stake in any exchange or a clearing corporation.

The board of directors of MCX-SX CCL will hold an extraordinary general meeting on Tuesday to approve the transfer and also amend the Articles of Association of the company to include the provisions related to restrictions on shareholding as per the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012.

According to the extraordinary general meeting notice, FTIL holds 5.75 million equity shares of MCX-SX CCL, representing 23% of its paid-up equity share capital.

“In the event the said shareholder fails or neglects to divest the shares within such time as prescribed in the communication from the company… the board of directors shall cause to transfer such shares immediately to an escrow account which would be opened and operated by the board of directors of the company," said the notice.

After the 5,574.34 crore settlement crisis at the National Spot Exchange Ltd (NSEL) was reported in July 2013, the Securities and Exchange Board of India (Sebi), in an order passed on 19 March 2014, declared FTIL unfit to hold a stake in any exchange or clearing corporation.

NSEL, in which FTIL owns 99.99% stake, suspended operations in August 2013.

While FTIL has challenged Sebi’s orders, it was forced to sell its stake in the Multi Commodity Exchange of India Ltd (MCX) and Metropolitan Stock Exchange of India Ltd (MSXI), formerly known as MCX Stock Exchange Ltd (MCX-SX) due to the regulatory orders.

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