Financial Technologies India (FTIL), the promoter of crisis-hit National Spot Exchange (NSEL), on Monday said it has received a showcause notice on October 5 from commodity market regulator FMC regarding its 'fit and proper' status as a shareholder in Multi Commodity Exchange (MCX).
In a filing to the Bombay Stock Exchange, FTIL said "the company has received a show cause notice on October 05, 2013, from Forward Markets Commission (FMC) on the status of the company as 'Fit and Proper Person' as a shareholder in MCX."
The company would reply to the showcause notice suitably in due course of time, it added.
FMC guidelines require exchange board directors to satisfy fit and proper criteria such as a general reputation and record of fairness and financial integrity.
The regulator has seven conditions for disqualification, including involvement in
acts of fraud or dishonesty and conviction by a court for moral turpitude or economic offences.
A person who is financially unsound and has been declared insolvent or barred from dealing in commodities or from accessing the market by any regulatory authority would be considered for disqualification.
Sources had earlier said FMC issued showcause
notices to Jignesh Shah, founder of FTIL, and three other officials following the NSEL payment crisis, asking why they should be considered 'fit and proper' to operate group company MCX.
FMC issued the
notices to four officials, including Shah, Shreekant Javalgekar, MCX Managing Director and CEO, and Joseph Massey, MCX Stock Exchange Managing Director and CEO.
The officials have been asked to reply within two weeks, the sources had said.
The notices were issued following the Rs 5,600 crore payment crisis at the NSEL after the exchange halted trading in commodities from July 31 on a government directive.
Last week, the Mumbai police had registered an FIR against Shah and others in connection with the NSEL payment crisis and raided their offices, residences and warehouses across the country.
PHOTO: Associated Press 
Special 
