Six more Months given to NMCE by Commodity Exchange Regulator to Restructure Equity Capital

Commodity exchange regulator Forward Markets Commission (FMC) in March end 2011 finally agreed to give six more months to National Multi Commodity Exchange (NMCE) for restructuring its equity capital. The earlier deadline for meeting the norm was end March 2011 and after the grant of the extension the deadline was pushed to end September 2011.

The extension was granted at a time when NMCE is trying to scout for new investors in order to increase its net worth - equity plus reserves and increase operations.

Running bourses like MCX, NCDEX and NMCE were given adequate time to meet the norm which was introduced in July 2009. Both NCDEX and MCX complied with the guideline with their equity capital at a little over Rs 50 crore each and networth - equity plus reserves over the stipulated Rs 100 crore.

According to the FMC guideline, the three bourses have to have networth of Rs 100 crore of which equity capital has to be `50 crore. NMCE's networth stands at around Rs 70 crore, of which the paid-up capital is a little over Rs 19 crore only.

In October 2010 NMCE sold 12.8% stake to Bajaj Holdings for Rs 25 crore, valuing the bourse at Rs 195 crore. In terms of turnover NMCE ranks third after MCX, which has 80% market share, and NCDEX.