India's third national-level stock exchange, the MCX-SX, will go live with equity cash and derivatives trading from Monday. The Financial Technologies-promoted bourse was inaugurated by Finance Minister P Chidambaram on Saturday. MCX-SX will trade 1,116 equity stocks on its platform under the permitted category rules.
"You (MCX-SX) have competition from two guys (BSE, NSE) waiting in the arena, and they will have competition from you. Good luck to all three of you. The competition that all three of you provide will make the stock market a vibrant place for more people to invest their savings," Chidambaram said after punching the first trade order at MCX-SX.
Securities and Exchange Board of India (Sebi) Chairman U K Sinha, also present at the event, advised all the stock exchanges to focus on risk mitigation. "We will ensure regulations are followed with fairness and uniformity."
Like BSE's Sensex and the National Stock Exchange's (NSE's) S&P CNX Nifty, SX-40 will be MCX-SX's flagship index. It will be a free-float-based index of 40 large-cap stocks, representing the economy's diverse sectors. The base value of SX-40 would be 10,000 and its base date would be March 31, 2010, the exchange said. Of the 700 members the bourse has signed up, registration of 405 have already been cleared by the regulator, while more clearances will take place in the coming days. Both BSE and NSE have 1,400-1,500 registered members each.
Asked if the bourse had a market share target in place, Vice-Chairman Jignesh Shah said it was not sprinting for a 100-metre race. "We will run a marathon. MCX-SX is a solid institutional set-up with a strong foundation. Market share will come gradually and focus would be on widening the markets."
MCX-SX Managing Director & Chief Executive Officer Joseph Massey said other sectoral indices would also be launched and focus would be on broad-basing financial markets.
"We will start approaching corporate houses to get companies listed on our platform. Focus will be to develop bonds, the SME segment and interest-rate derivatives, too," Massey said.
Trade timings of the bourse would be the same as BSE and NSE, that is 9 am to 3:30 pm - the first 15 minutes for pre-open session and the normal market session till 3:30 pm. Exchanges can have trading up to 5 pm. The post-close session would be of 20 minutes, from 3:40 pm to 4:00 pm. The client code modification time would be up to 4:15 pm.
The special pre-open session would be only for IPO/re-listed securities, for 60 minutes, from 9:00 am to 10:00 am, for securities participating in that session. This would be followed by a continuous trading session.
"The call-auction trading mechanism will be applicable to the special pre-open session, to determine the opening price of the stocks eligible to participate in that session," MCX-SX said.