Draft:Metropolitan Stock Exchange
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Last edited by Frietjes (talk | contribs) 2 days ago. (Update) |
| Type | Stock exchange |
|---|---|
| Founded | 2008 |
| Key people | Latika S. Kundu (MD & CEO) |
| Currency | Indian rupee |
Metropolitan Stock Exchange of India Limited (MSEI), formerly known as MCX Stock Exchange (MCX-SX), is a national stock exchange based in Mumbai, India. It is recognized by the Securities and Exchange Board of India (SEBI) under Section 4 of the Securities Contracts (Regulation) Act, 1956
msei.in , and was notified as a “recognized stock exchange” by the Indian government in December 2012 msei.in . MSEI operates electronic trading platforms for equity (cash market), equity derivatives (futures and options), currency derivatives, and debt securities msei.in ndtvprofit.com . The exchange began operations in October 2008 with currency futures trading (USD/INR) msei.in
and later expanded to a full capital market segment. In early 2013 it launched its equity cash and derivatives segments along with its flagship index SX40
msei.in . Despite this, MSEI’s market share has remained very small. Its equity platform covers around 1,443 stocks (roughly 90% of average market volume) msei.in , but the exchange “has so far been unable to make a mark in the stock exchange market, which is dominated by the National Stock Exchange” ndtvprofit.com . The exchange emphasizes high technology infrastructure and investor education as part of its mission msei.in msei.in . ==History== MSEI was originally incorporated as MCX Stock Exchange (MCX-SX), a subsidiary of the Multi Commodity Exchange (MCX) and Financial Technologies India Ltd (FTIL), to operate a stock trading platform. It launched India’s first currency futures contract on October 7, 2008 msei.in , under SEBI and RBI regulation. In February 2013, after regulatory approvals, the exchange introduced a Capital Market (cash) segment and a Futures & Options (F&O) segment, along with its flagship SX40 equity index msei.in
(SX40 is a free-float index of 40 large-cap stocks). Trading in SX40-based index derivatives began from May 15, 2013
msei.in . The Debt Market segment opened on June 7, 2013 (trading from June 10) msei.in , and the exchange added Government bond interest-rate futures (IRF) in January 2014 msei.in . In September 2014 SEBI approved renaming MCX-SX to Metropolitan Stock Exchange of India Limited, reflecting new management after FTIL exited the business business-standard.com . In subsequent years the exchange has undertaken various strategic moves. For example, in 2016 SEBI granted MSEI an annual renewal of its stock-exchange license (for Sept 2016–Sept 2017) business-standard.com . The exchange has also lobbied for reforms (such as longer trading hours) and attracted new product approvals. In 2024, MSEI announced a major capital raise of ₹238 crore (about USD 30 million) via issuance to broker-investors like Groww’s parent and Zerodha’s Rainmatter fund ndtvprofit.com . ==Ownership and governance== MSEI is a demutualised, publicly traded corporation in compliance with SEBI’s Stock Exchanges regulations msei.in . Its ownership is diversified among public and private institutions. Notable shareholders include the Multi Commodity Exchange of India Limited (MCX) with about a 6.9% stake, and NRI investor Siddharth Balachandran with about 4.9% ndtvprofit.com . (Early investors Rakesh Jhunjhunwala and Radhakishan Damani held stakes; Damani owns ~0.89% as of late 2023 ndtvprofit.com .) The exchange also counts many Indian banks among its owners. These include major public-sector banks (Union Bank of India, State Bank of India, Bank of Baroda, Punjab National Bank, Indian Bank, Bank of India, Indian Overseas Bank, Canara Bank, UCO Bank) and private banks such as Axis Bank and HDFC Bank ndtvprofit.com . The board of directors consists of independent (public interest) and non-independent members. As of 2025, key board members include Chairman Dinesh C. Patwari (a former tax official) and Managing Director & CEO Latika S. Kundu msei.in . Other directors include Ashok K. Dogra and Rakesh K. Srivastava (public-interest directors) and Manoj Kunkalienkar (non-independent director) msei.in msei.in . ==Products and services== MSEI offers a full range of trading segments: Equity Cash Market: A standard order-driven market for buying and selling shares. By 2017 the platform listed about 1,443 stocks covering roughly 90% of the total market’s equity volume msei.in . MSEI also provides trading in exchange-traded funds (ETFs) and other equity securities. Equity Derivatives (Futures & Options): Standard futures and option contracts on individual equities and indices. The MSEI F&O market trades derivatives on its SX40 index and on individual stocks (subject to eligibility criteria). Currency Derivatives: Futures and options contracts on currency pairs. The exchange’s currency segment launched with USD/INR futures on October 7, 2008 msei.in . It now offers futures on four currency pairs (USD–INR, EUR–INR, GBP–INR, JPY–INR) and USD–INR options msei.in . Each currency futures contract has a 12-month rolling cycle, and USD–INR options have serial monthly and quarterly expiries msei.in . Debt Market: Trading in government and corporate debt securities, including corporate bonds and government securities. MSEI’s debt segment opened on June 7, 2013 msei.in . It also supports Treasury bills and 7-year government bond interest-rate futures (launched January 2014) msei.in
to allow hedging of interest-rate risk.
Technology Services: MSEI emphasizes high-end trading technology. Its order-matching system is hosted on fault-tolerant servers with “lockstep” redundancy to ensure continuous uptime msei.in . The robust infrastructure enables extremely fast order processing, immediate trade execution, and rapid market data dissemination msei.in . MSEI provides co-location facilities to trading members and employs multiple high-speed connectivity options to minimize latency msei.in .
Regulation
[edit]MSEI is a SEBI-registered national stock exchange under the Securities Contracts (Regulation) Act. The exchange must renew its recognition periodically (the SECC 2012 regulations require compliance checks and annual renewals for category-II exchanges) business-standard.com . For example, SEBI granted a one-year renewal to MSEI for Sept 2016–Sept 2017 business-standard.com . Clearing and settlement of trades executed on MSEI is carried out by SEBI-approved clearing corporations. Historically MSEI’s trades were novated through its wholly owned clearing arm, Metropolitan Clearing Corporation of India Ltd. (MCCIL). MSEI also participates in the interoperability framework implemented by SEBI, whereby trades across different exchanges can be cleared by a common clearing house. In May 2019 SEBI issued guidelines for interoperability among the clearing corporations of NSE (NSE Clearing Ltd), BSE (ICCL), and MSEI (MCCIL) msei.in . Thus, MSEI trades can be cleared by institutions like National Clearing Ltd (formerly NSE Clearing) and ICCL (BSE’s clearing arm) under these interoperability arrangements. In July 2024 SEBI introduced a “True to Label” circular affecting stock exchanges and clearing corporations cdslindia.com . Under this rule, any charges or fees that an exchange (or clearing house) levies on a trading member must be transparently and exactly passed through to end clients. This was aimed at eliminating incentive “slab” charges where aggregated client fees exceed the official exchange charges cdslindia.com . MSEI, like other exchanges, is required to comply with the new “true to label” fee structure once it takes effect. ==Market share and volumes== MSEI’s market share remains small compared to India’s two dominant exchanges (NSE and BSE). Its equity and derivative trading volumes form only a tiny fraction of the overall market. Official materials note that MSEI’s equity platform covers 1,443 stocks (roughly 90% of market turnover) msei.in , but in practice its daily volumes are much lower. The exchange periodically highlights growth in its turnover. For example, its publications report rising average daily volume and contract turnover in recent years, although still far behind the largest bourses. In any case, industry observers note that MSEI has struggled to gain significant market traction, and “has so far been unable to make a mark” against the far larger NSE ndtvprofit.com . ==Investor education and CSR== MSEI places emphasis on investor education and financial literacy. Its stated mission is “Financial-literacy-for-Financial Inclusion” msei.in . In support of this, the exchange conducts large-scale investor awareness programs across India – on average at least one program per working day msei.in . These seminars and workshops target retail investors and aim to improve understanding of capital markets. The exchange also participates in industry-wide initiatives such as the World Investor Week, and has organized public events (such as an “investor expo”) to engage with the investment community (for example, hosting an organ-donation awareness drive alongside an investor seminar). Overall, MSEI’s corporate social responsibility (CSR) efforts focus largely on education, inclusion, and promoting ethical market practices. ==Challenges and developments== MSEI faces several ongoing challenges. As a newer exchange, it holds a limited-duration license and must seek SEBI renewal periodically, rather than having perpetual status. For instance, in 2016 MSEI obtained only a one-year extension of its recognition business-standard.com . The exchange has sought regulatory changes to aid its competitiveness: it requested longer trading hours for equity and currency sessions (applying to extend equity trading to 17:00 hours) business-standard.com , though SEBI has required justification for such changes. MSEI has also worked on product and listing initiatives to boost volumes. For example, it planned to introduce block-trading windows and exchange-traded funds in its equity segment business-standard.com . It has offered highly affordable listing fees (₹5 lakh) and successfully attracted over 130 companies that migrated from regional exchanges business-standard.com . Another area of industry debate involves clearinghouse structures. SEBI has contemplated consolidating multiple clearing corporations to improve efficiency. MSEI’s clearing arm (MCCIL) is a participant in this discussion. The exchange supports interoperability of clearing functions msei.in , and is subject to the new “True to Label” fee regime cdslindia.com
which may affect its revenue model. In general, MSEI continues to pursue incremental reforms and partnerships (such as tie-ups with brokers and overseas investors) in an effort to deepen liquidity and scale up operations. Despite its strong institutional backing, it remains a relatively minor exchange, and reforms (including possible consolidation of smaller bourses) are often discussed as ways to bolster its role in India’s capital markets. ==References==