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MCX SX to usher in battle of the exchanges


MCX SX to usher in battle of the exchanges
With the MCX Stock Exchange (MCX SX) planning to start trading in equities and debt segment by Diwali, the battle of the exchanges is all set to begin. MCX would be the 3rd equity and derivative exchange in India, after the National Stock Exchange and the Bombay Stock exchange.

The exchange is promoted by FT and Commodity Exchange MCX, which is the only commodities exchange in India.


The Securities and Exchange Board of India (Sebi) had granted MCX-SX permission to deal in equity and equity futures & options, interest rate futures and wholesale debt segments subject to a few conditions in the month of July.
MCX-SX, if reports are to be believed will go live with equity and debt market trading from Diwali. It has already started a membership drive, which is way below that of the NSE and which will now spark a fierce membership price war.
According to a Business Standard report a broker will have to shell out nearly 80 per cent less, Rs 25 lakh for membership of MCS-SX compared to National Stock Exchange's (NSE) Rs 1.5 crore, during the offer period to become a trading member.

The NSE membership is high, as it is a premium exchange and is a leader in the equity cash and derivative segment, followed by the Bombay Stock Exchange. Over the years, the NSE has dominated the capital market segments, over the Bombay Stock Exchange, despite the latter having the largest largest number of listed companies in the world.
The MCX-SX in order to compete will have to break the dominance of the BSE and NSE, especially when volumes are dismal and market conditions are pathetic. Brokerage rates have already fallen to absymally low levels and the business prospects are pretty tough.


How successful it is in its membership drive would also remain important, since this would help it develop a network.
It's sure going to be a long way to go for the MCX-SX and the journey is unlikely to be that simple.

Read more about: mcx sx
Story first published: Friday, September 7, 2012, 8:37 [IST]
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