SEBI Asks MCX to Put Launch of New Commodity Derivatives Platform on Hold

Markets regulator the Securities and Exchange Board of India (SEBI) has asked the Multi-Commodity Exchange of India (MCX) to put on hold the proposed go-live of its new commodity derivatives platform, which was planned for October 3, 2023.

SEBI will discuss the commodity platform in its technical advisory committee meeting to be held in a short time, as per MCX. Meanwhile, the exchange will go ahead with conducting mock tests on the platform till it gets further green signal from the market regulator.

Previously, MCX had informed that its new commodity derivatives platform would go live on October 3. 2023, which was after many delays. About three months ahead of the December deadline, the new platform was all set to go live. In June 2023, MCX extended a support services contract with 63 Moons for six months more at Rs 125 crore per quarter.

The intervention of the market regulator comes as an investor group named Chennai Financial Markets and Accountability (CFMA) had asked it to ensure that MCX required technical support.

The SEBI had informed MCX that CFMA has forwarded a letter dated September 27, 2023, about the new platform, and considering that it involves ‘technical issues’, it will discuss these issues in its forthcoming meeting.

Typically, MCX is a commodity derivatives exchange for online trading of commodity derivatives transactions, which provides a platform for price discovery and risk management. This particular exchange started operations in November 2003 and operates under the regulatory guidelines set up by SEBI.

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