Capital market regulator SEBI has directed the country’s largest commodity exchange MCX not to go live with the new Tata Consultancy Services-developed trading platform.
SEBI said the Chennai Financial Markets and Accountability has filed a case in the Madras High Court seekingprobe into the process of new commodity derivatives trading platform being rolled out and the case is pending in the High Court.
The Regulator has informed that since the matter involves technical issues, the same would be discussed in the SEBI Technical Advisory Committee meeting, which would be held shortly, it said.
SEBI has advised the Exchange to keep the proposal to go live with CDP in abeyance.
However, MCX has decided to conduct the mock test as planned on October 2 as it would be going live as soon as SEBI gives the approval.
“As the exchange is ready and keen to go live as soon as permitted, it will continue to conduct CDP mock tests pending further directions in the matter from SEBI,” said MCX.
The exchange announced its decision to switch over to new trading platform on Thursday after a series of failed attempts.
The background
The software support and maintenance agreement between 63 Moons and MCX, which was last amended in September 2014, ended in September 2022 and ever since it was extended in a piecemeal fashion.
In June, MCX renewed its software services contract with 63 Moons till December for ₹250 crore.
Given the uncertainty, the investors group Chennai Financial Markets and Accountability filed a case in the Madras High Court seeking a detailed probe by SEBI into the exchange with regard to the “integrity and competence of the market software technology” to be adopted by MCX.
The technology support for MCX has always been provided by 63 Moons (earlier Financial Technologies) and was its erstwhile founder-promoter.
However, TCS was selected as the vendor for the development of the new commodity derivative platform in February 2021.
Although the new platform was to go live by July 2022, it got delayed and was first revised to go live after September 2022, though that deadline also could not be met.
MCX, in its annual report, said the complexity in platform development and integration as reason for the delay.