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Time of India
26-05-2025
- Business
- Time of India
Sebi fines MCX Rs 25 lakh over lapses in disclosing payments
Sebi fines MCX NEW DELHI: The Securities and Exchange Board of India (SEBI) on Monday imposed a Rs 25 lakh penalty on the Multi Commodity Exchange of India (MCX) for failing to adequately disclose substantial payments made to 63 Moons Technologies (formerly known as Financial Technologies India Ltd). The penalty, which must be paid within 45 days, stems from insufficient transparency in MCX's disclosures related to payments for trading software services. The matter revolves around continued payments to 63 Moons after delays in implementing a new trading platform developed by Tata Consultancy Services (TCS). MCX had originally signed a software agreement with 63 Moons in 2003, when the latter was the sole owner of the exchange. Although MCX decided in 2020 to transition to a new platform- Commodity Derivatives Platform (CDP)- built by TCS, project delays led to extended reliance on 63 Moons' services at significantly higher costs. According to Sebi's findings, between October 2022 and June 2023, MCX paid Rs 222 crore to 63 Moons, including Rs 60 crore in the October–December 2022 quarter and Rs 81 crore in each of the next two quarters. These figures were not disclosed in real time, despite the fact that they far exceeded earlier payments and had a major bearing on the company's profitability. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch xu hướng AUD/USD? IC Markets Đăng ký Undo Sebi noted that the total amount paid during these three quarters was nearly double MCX's net profit of Rs 118 crore in FY 2021–22. However, the full extent of these payments was only publicly disclosed in January 2023, well after the fact. 'I note that the quarterly payments made by MCX to 63 Moons for three quarters between October 2022 and June 2023, which totalled Rs 222 crore, were much larger than the annual profit of MCX for the previous financial year,' said Sebi whole time member Ashwani Bhatia. 'This information was material... and warranted public disclosure under the LODR Regulations," he added. Sebi noted that the failure to disclose such significant financial outflows in a timely manner constituted a violation of the Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015, thereby justifying the monetary penalty. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
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Business Standard
26-05-2025
- Business
- Business Standard
Sebi imposes ₹25 lakh fine on MCX for disclosure lapses, misleading info
MCX fined ₹25 lakh by Sebi for failing to disclose timely payments to 63 Moons and delays in migrating to a TCS-developed trading platform On Monday, India's markets regulator, the Securities and Exchange Board of India (Sebi), imposed a fine of ₹2.5 million (approximately $29,383) on Multi Commodity Exchange of India Ltd (MCX) for lapses in disclosure and for providing inaccurate information regarding its trading software contract. The penalty stems from prolonged delays in MCX's migration to a new trading platform developed by Tata Consultancy Services (TCS), while continuing to rely on an older system provided by 63 Moons Technologies Ltd (formerly Financial Technologies India Ltd). Platform migration delay MCX, initially backed by 63 Moons, had used its trading software since inception in 2003. Over time, 63 Moons reduced its ownership in MCX from 100 per cent as of 30 March 2005 to zero by 30 September 2014. Under the original software licence, MCX was entitled to use the system for 99 years. However, to keep the platform operational, it entered into supplementary agreements with 63 Moons for support services—continuing to pay significant sums even after the original licence terms. In 2018, after Sebi brought commodity exchanges under its direct oversight, MCX was required to shift clearing and settlement operations to its subsidiary, MCX Clearing Corporation Ltd (MCXCCL). This led to the need for a new trading platform, and in 2021, TCS was contracted to develop the Commodity Derivatives Platform (CDP). However, the project encountered major delays, missing several go-live deadlines. In response, MCX extended its support contract with 63 Moons multiple times at steep costs—paying ₹60 crore for the quarter ending December 2022, ₹81 crore per quarter for the two quarters ending June 2023, and later ₹125 crore per quarter for the two quarters ending December 2023. Sebi said MCX failed to disclose these payments in a timely manner, only revealing them in January 2023. The regulator noted that while initial announcements mentioned the extension of 63 Moons' services, they did not include the financial details, which were substantial and exceeded MCX's annual profits. In its latest order, Sebi acknowledged the operational complexities faced by MCX, but criticised the exchange for not being transparent with stakeholders about the financial impact. Sebi stated: 'MCX was clearly caught in a Catch-22 situation where the timely operationalisation of the CDP project looked uncertain due to the complexity of the project and the prevailing Covid restrictions. At the same time, any coercive legal action by MCX against 63 Moons could have led to an abrupt cessation of services, jeopardising the continuity of operations.' 'It must be reckoned that MCX and MCXCCL were ultimately able to operationalise the CDP project without glitch and inconveniencing investors,' the order added.
