Unhappy over technical glitches, SEBI may consider special audit of MCX’s technology

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New Delhi, Jul 17: Capital and commodities market regulator Securities and Exchange Board of India has conveyed its displeasure to the Multi Commodity Exchange over the recurring technical glitches on its trading platform, sources said. The regulator may consider a special audit of the exchange’s systems, assisted by the SEBI-appointed Technical Advisory Committee.
Over the last year, MCX has had six major technical glitches, five of them in less than two months. In comparison, BSE had experienced no glitches while NSE reported 8. The snags on the MCX led to trading being halted, inconveniencing investors and brokers.
“SEBI wants to understand the root cause of these frequent technical glitches,” a source told Moneycontrol.
MCX declined to comment on the report.
Another source on the Technical Advisory Committee said that it would recommend a special audit of MCX’s systems.
“If SEBI presents the case before us, we would recommend a special audit of the exchange’s systems,” the source said, adding “Frequent glitches need to be addressed and that is possible only by getting to the root of the issue.”
The Technical Advisory Committee will be meeting next month.
MCX has a technology agreement till October 2022 with 63Moons, formerly Financial Technologies. 63 Moons is promoted by Jignesh Shah, also the founder of the scam-tainted National Spot Exchange Limited. Following the Rs 5600 crore scam at NSEL, the Forward Markets Commission declared Financial Technologies as unfit to run any exchange. Financial Technologies was forced to sell its entire 26 percent stake in group company MCX in tranches.
A clause in the technology arrangement between 63 Moons and MCX states that deal can be revoked only if the regulator rules that MCX’s technology is not up to the mark.