Currently, MCX enjoys market leadership with a share of over 75% in volumes traded on commodities exchanges in India
The country's top commodity bourse Multi Commodity Exchange has received the permission from commodity market regulator Forward Markets Commission (FMC) for launching the initial public offer (IPO), reports PTI.
"The Commission on 22 April 2010 has granted the permission/no objection certificate (NOC) to MCX for its proposed IPO subject to certain conditions," FMC said in a statement.
Two years back, MCX had got the NOC for launching the IPO from the regulator, after which the exchange sought the approval from the capital market regulator Securities and Exchange Board of India (SEBI). However, in August 2008, the exchange decided to scrap its IPO plan to sell six million shares as turbulent stock markets sapped investors' appetite for risk.
As the NOC expired recently, the exchange had applied for its renewal. Under FMC rule, it is mandatory for commodity exchanges to get NOC from the regulator for launching its IPO.
Asked if MCX would file fresh prospectus, the exchange's spokesperson told PTI, "We have not filed any draft red-herring prospectus (DRHP) and have not finalised any timeframe. So we cannot comment now."
Currently, MCX enjoys market leadership with a share of over 75% in volumes traded on commodities exchanges in India. The turnover of the exchange was Rs6,03,455 crore in April.
SEBI’s new rule asks mutual funds to disclose a summary of investor complaints, but investors almost never complain directly to AMCs. Most complaints are resolved by mutual fund agents
Market watchdog Securities and Exchange Board of India (SEBI) had yesterday asked all asset management companies (AMCs) to disclose investor complaints on their respective websites as well as in their annual reports in a bid to protect investor interest and bring in more transparency. Fund houses have been asked to disclose last year’s complaints by 30 June 2010. The disclosure includes the type of complaints and whether they are resolved or pending.
Although SEBI’s intentions are sound, it is unlikely that the move will do much good for investors. While some financial experts believe that this move will increase accountability on the part of fund houses, others say that it won’t have a major impact and will only increase compliance work.
Rajesh Jha, CEO, Jain Investment told Moneylife, “Six months back, there was some problem with CAMS back-up of one of the AMCs. In one month there were some 400 complaints against that AMC. It was a specific problem and we sorted it out with their operations head.” He added, “There are very few people who go on the AMC site and register complaints. Most of the complaints are resolved by our back-office team. We resolve it through the registrar or AMC. A majority of the complaints are resolved through us.”
Distributors say that complaints registered with them are mainly fundamental complaints related to dividend payments, delay in dispatching account statements, incorrect address, redemptions and problems with systematic investment plans (SIPs).
“The complaints are pertaining to service, but the larger issue is not about servicing; it’s about mis-selling. A fund house cannot be held responsible for mis-selling. They are the manufacturers. Generally all fund houses’ services are good. The main intention of SEBI is to curb mis-selling. AMCs have a limit to which they can handle investor complaints. Most top-rung investors are left high and dry when there is nobody to service them. So they approach us. Most investors don’t have time to complain to fund houses. We sort their complaints without charging anything so that we retain our clients,” said Vivek Rege, MD, VR Wealth Advisors Pvt Ltd.
Speaking about the directive, Harish Mohan, MD, Time Financials said, “It’s a good move but just registering a complaint doesn’t solve the problem. I have sent emails to each and every AMC for which I don’t have any reply from their end. I am not sure whether it will be registered on their website. Nobody is taking responsibility. I send complaints to the relationship manager (RM) of the fund house. If the RM does not escalate it to the next level it may not get registered.”
From what experts are saying about the move, it appears that SEBI is barking up the wrong tree instead of going into the root of the matter.
Both exchanges launched their much-hyped mutual fund trading platforms around the same time last year. Since then, volumes on the BSE have far outstripped those on the NSE
Bitter exchange rivals Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have been at each others’ throats for grabbing a larger share of the cash and derivatives segment in equity trading. It seems another battle is playing out on the newly-promoted mutual fund platforms of both exchanges.
However, the BSE appears to have hit the road running while its bigger rival is desperately trying to play catch-up. BSE has witnessed a sharp spike in trading volumes over the past few months. NSE, on the other hand, has remained mostly stagnant during this period. For the month of December 2009, when BSE StAR MF was launched, subscriptions touched Rs11.61 crore, with net inflows of around Rs4.43 crore. Comparatively, NSE’s MFSS platform registered a turnover of only Rs2.77 crore, with net inflows amounting to Rs1.85 crore.
Volumes on BSE StAR MF have surged by 82%, touching Rs21.19 crore by the end of April this year. On the other hand, volumes on NSE MFSS have witnessed a dip of 13%, touching Rs2.42 crore in April. While net inflows on BSE have jumped 268% to Rs16.30 crore during this period, NSE has barely managed an 18% rise amounting to Rs2.19 crore.
While the NSE was the first to jump into the fray when it launched its NEAT system based MF platform—Mutual Fund Service System (MFSS) on 30th November last year, the BSE followed closely on its heels by opening its Web-based trading platform—BSE StAR MF—on 4th December.
Why is it that NSE is so far behind its smaller competitor in this segment, when it enjoys an enviable market share in the equity derivatives segment?
Lack of adequate participation from brokers has probably hurt the NSE in its new venture. Some technical and operational issues have tipped the scales in favour of the BSE platform.
Chandrashekhar Layane, vice president, Fairwealth Financial Services, revealed that brokers prefer the BSE platform due to its comparative ease of use and flexibility. “Brokers favour the BSE platform because it is much more user friendly, not only in terms of technology but also in relation to operations.”
Deena Mehta, managing director, Asit C Mehta, believes that BSE enjoys a first-mover advantage in terms of providing a Web-based Internet platform. “When BSE launched its service, it started with a Web-based Internet platform straight away. Brokers could log in from anywhere and put in the trade. On the other hand, NSE started with its NEAT system. Hardly any broker now has NEAT terminals. We have shifted to Orion terminals. So having a direct connectivity with NSE was not workable.”
Ms Mehta also pointed out that BSE also offers a back-office solution, which facilitates billing and other tasks. “Otherwise, we would have to develop our own back-office software, which takes a lot of time and involves costs. Since BSE has already provided for technological compatibility, it is a lot more convenient for us,” added Ms Mehta.