Financial Tech Signs New Technology Contract With MCX

New Delhi: Financial Technologies India Ltd (FTIL) on Saturday said it has signed a 10-year long-term technology contract with commodity exchange MCX, resulting in a negative impact of nearly Rs 9 crore on its total income for this fiscal year. Earlier this week, the board of directors of both FTIL and MCX had approved the new agreement to be signed between them. Financial Tech in a filing to the BSE said," FTIL and MCX have executed a master amendment to principal agreements (supplementary agreement) for providing software support and managed services on mutually agreed terms and conditions until the year 2022." "Due to this supplementary agreement and based on the current volume of MCX and assuming MCX daily volume remain same, the negative impact on the total income of the company would be around Rs 8.82 crore for the period of 2014-15," the Jignesh Shah-led company further said. As per the new agreement, MCX will pay FTIL a fixed charge of Rs 1.5 crore per month including managed services payable in advance on semiannual basis. FTIL will also get a variable charge of 10.3 per cent of gross transaction fees. Sources had said that MCX has renegotiated the agreement with FTIL as the earlier contract was proving to be expensive. In 2013-14 fiscal, MCX paid about Rs 60 crore to FTIL for giving technological support and services to the exchange. The signing of the new agreement will pave the way for MCX to launch new contracts for January to March period of 2015. On September 17, the Forward Markets Commision (FMC) had said the exchange can launch new contracts for three months January, February and March of 2015 after if it signs a fresh technology deal with FTIL. FTIL had said that by entering into the new agreement with MCX, it has completed all the formalities to complete its sale of 15 per cent stake in MCX to Kotak Mahindra Bank Ltd.. Commodity market regulator FMC had said that MCX will be allowed to roll out contracts for all 12 months of 2015 once the full divestment of FTIL in MCX takes place as per the regulatory norms.

Financial Tech Signs New Technology Contract With MCX

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