SEBI Fines MCX Rs 25 Lakh For Disclosure Lapses On Trading Platform

The Securities and Exchange Board of India has imposed a monetary penalty of Rs 25 lakh on the Multi Commodity Exchange of India for failing to properly disclose information related to its software contract with 63 Moons Technologies Ltd., formerly known as Financial Technologies India.

According to the SEBI order, MCX did not disclose certain material information to the public and admitted this lapse as an inadvertent mistake. SEBI noted that since the exchange had accepted the lapse, the violations stood established under the relevant regulatory provisions.

In an order given by Whole-Time Member Ashwani Bhatia, SEBI concluded that a penalty under the disclosure lapse norms was appropriate.

The order also mentioned an allegation regarding a misleading disclosure made in press release issued by MCX on Sept 30, 2022, concerning its managed services agreement with 63 Moons. However, after reviewing MCX's explanation that the release was about the extension of the existing agreement and that no services had changed, SEBI decided to drop this particular allegation.

Another charge in the show-cause notice was related to incorrect disclosures made by one of the noticees about the timeline for the shift to the new trading platform developed by Tata Consultancy Services.

SEBI found that since TCS was the vendor, the timeline shared by the noticee based on TCS’s inputs did not amount to a regulatory lapse.