Sebi asks MCX to keep implementation of new Commodity Derivatives Platform in abeyance, shares drop 8%

Markets regulator Securities and Exchange Board of India (Sebi) has asked Multi Commodity Exchange of India Ltd (MCX) to keep the proposed Go-Live of its new Commodity Derivatives Platform "in abeyance". In abeyance means a state of temporary disuse or suspension.

On Thursday, MCX had informed that its new commodity derivatives platform will go live on October 3. The commodity derivatives exchange, which was supposed to move to its new technology platform on October 3, will conduct the mock session on October 2, 2023.

In a letter to the Bombay Stock Exchange, the commodity exchange said it received a mail from the market regulator from the Chennai Financial Markets and Accountability (CFMA) regarding the new platform. MCX informed the BSE that writ petitions filed by the CFMA on the commodity derivatives platform is pending before the Madras high court for disposal.

Sebi has shared a letter from Chennai Financial Markets and Accountability (CFMA) dated September 27 with MCX, regarding CDP. It is important to know that CFMA had filed legal petitions related to CDP, which is awaiting a decision from the Madras High Court.

"Pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please be informed that SEBI has vide email dated September 28, 2023, forwarded a copy of the letter dated September 27, 2023 from Chennai Financial Markets and Accountability (CFMA) regarding CDP. It may be noted that writ petitions filed by CFMA on CDP is pending before the Hon’ble Madras High Court for disposal. 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. Meanwhile, SEBI has advised the Exchange to keep the proposed Go-Live of CDP in abeyance," the exchange said in a regulatory filing on September 29.

"As the Exchange is ready and keen to go-live as soon as permitted, the Exchange will continue to conduct CDP mock tests pending further directions in the matter from SEBI. This intimation will also be available on the website of the Company at https://www.mcxindia.com/," it added. 

Sebi also stated that since the matter involves technical issues, the same will be discussed in the Sebi technical advisory committee meeting, which will be held shortly. However, no dates have been specified for the same.

Shares of MCX were trading at Rs 1,928.80, down by 8.17 per cent, at 9.35 AM. The stock had gained over 16 per cent in the past five trading sessions ahead of the launch of the new platform.