MCX nominees for MD post fail to get Sebi nod

Instead, the Securities and Exchange Board of India (Sebi) has directed Multi Commodity Exchange of India Ltd (MCX) to restart the selection process and make interim arrangements to run the bourse, after Padala Subbi Reddy steps down as managing director and chief executive officer next month. The reasons behind Sebi’s action are not known.

“Sebi has vide letter dated March 22, 2024 directed to redo the process of appointment of MD & CEO and to submit an action plan for interim arrangements, post completion of the term of incumbent MD & CEO of MCX,” the Kotak Mahindra Bank-backed exchange informed stock exchanges on 27 March. It had forwarded the names of three candidates on 10 February.

Queries sent to MCX and Sebi officials remained unanswered until press time. A person aware of the matter said the appointment process takes months, and that an interim CEO or an interim committee would have to be appointed, after Sebi approval, to run the exchange in the absence of a full-time MD & CEO.

“The board of MCX will meet on Tuesday to approve its March quarter results, where it could propose an internal candidate or an interim committee to run the bourse, subject to Sebi’s approval, until a candidate is chosen,” he said . “An emergency meeting can be convened even thereafter.”

Another person, requesting anonymity, said Sebi might have desired the prospective candidate to be “technologically proficient, in addition to having relevant domain expertise.” “Exchanges have become more like IT firms. So, we are looking for somebody who has significant IT knowledge, in addition to having knowledge of major commodities,” he said.

Reddy has had an eventful tenure as the head of MCX, seeing the exchange through the pandemic when oil prices tanked to negative values and the transition to new software vendor TCS from its former promoter 63 Moons in October last year.

MCX is the markets leader in commodity derivatives segment with a 97% share in February, according to Sebi data. It had a turnover of ₹25.56 trillion in February, followed by NSE’s ₹686 billion (2.62%) by NSE and the rest by NCDEX and BSE.

Its single largest shareholder is Kotak Mahindra Bank (15%). Mutual funds held 30.73% and FPIs 25.30% at the end of the December quarter.

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Published: 21 Apr 2024, 03:47 PM IST