Without naming National Stock Exchange, MCX-SX also said that its rival was killing competition by offering free trading in currency derivatives, and thus making it difficult for it to get business and investors.
In a public notice, released today in the form of advertisements in dailies, MCX-SX said, "There have been attempts by some elements at spreading misinformation to create doubts among our shareholders and to undermine our reputation and business for their benefit."
A MCX-SX spokesperson did not respond to queries if the company was alluding to rival exchanges like Bombay Stock Exchange and National Stock Exchange.
In an apparent attack at Securities and Exchange Board of India, it also said the go-ahead for doing full-fledged business was elusive despite MCX-SX having taken all the necessary steps to make it compliant to the relevant regulations about trading in equities, equity derivatives, interest rate derivatives, mutual fund and debt market among other instruments.
MCX-SX said one of the key conditions put on it related to bringing down promoters' stake and it did so with a 'capital reduction cum arrangement' scheme and Sebi was informed about the same, way back in December 2009.
While the scheme was already approved by the board and shareholders, it also got the nod of Bombay high court in March 2010 and the same was also notified to the Sebi on April 7, 2010, MCX-SX said.
But, the exchange has got 'no response from Sebi in this regard' as of July 2010, it noted. MCX-SX said it was operational since October 2008, but was offering only currency derivatives product, and it was first given recognition by Sebi for one year only with a condition that it would meet the shareholding-related regulations by September 15, 2009.
In another apparent allegation against Sebi, MCX-SX said in the same public notice that the regulator in August 2009 had approved trading in interest rate futures, to be traded on currency derivatives segment, but 'it did so for exchanges other than MCX-SX.'
"At the same time, Sebi renewed the recognition of the exchange for one year up to September 2010 on the condition that no new class of contracts in securities will be introduced without complying with the Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges Regulation regulations."
"Thereafter, it became impossible to get any new investors in the exchange with no revenues due to no fees or charges being levied by the competing exchange in the currency segment and more so because of no possibility of any new product without complying with MIMPS regulations," the public notice said.
"New Investors wanted MCX-SX to have regulatory permission for all segments, before investing, whereas Sebi wanted divestment before giving approval for other segments," it added.
MCX-SX said that this 'log-jam' forced it to go for a scheme that required reduction in its share capital to bring down the stake of some entities, including promoter group firms FTIL and MCX, to five per cent each. Under the scheme, warrants were issued to the shareholders whose equity capital was cancelled by way of reduction.
MCX-SX said that its shareholders currently comprise of banks and public financial institutions with nearly 89 per cent stake collectively and the 'conditions stipulated by Sebi while granting renewal to the exchange up to September 2010 stands complied" after the high court approval in March 2010.
"Since then, MCX-SX is awaiting necessary Sebi approval for providing trading facilities in equities, futures and options on equities, interest rate derivatives, mutual fund trading platform, debt market etc."
The company also listed out the members of its board of directors and the advisory board, which includes many former top bureaucrats and regulators.
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