63 Moons to challenge Sebi order in STP services case

The markets regulator Sebi on 3 December 2020 issued an order prohibiting 63 Moons from providing 'straight through processing' (STP) software on the ground that the company is not fit and proper.

The Securities and Exchange Board of India (Sebi) said that 63 Moons has been offering STP (Straight Through Processing) services without its approval. The regulator has, however, allowed 63 Moons to provide necessary services for a period not exceeding three months from the date of its order to avoid any possible disruptions for securities market participants.

Expressing "disbelief" at the Sebi order, 63 Moons technologies (formerly Financial Technologies) in a statement said it would challenge the Sebi ruling. The 'fit and proper' order passed against the company in 2014 specifically deals with barring persons or entities from holding equity stake in any exchange platform and has no bearing on providing technology services. The order has been challenged in the court of law and the matter is sub-judice, it added.

The latest order of Sebi is with regards to STP gate service only and it has nothing to do with any other technology services by the group, the company said in a filing. An STP software is used for putting through trades without any human intervention.

Since 2003 till date, 63 Moons technology holds over 75% market share in all segments including its service offerings to MCX and MSEI, it has the distinction of having 97% market share in STP gate.

Revenue from STP gate service is approximately Rs 4 crore, which is 1.56% of total revenue of 63 Moons.

"Odin and Exchange Technology are not affected by the SEBI order at all," said Keshav Samant, President & CEO - Brokerage Technology Solutions, and Mehmood Vaid, Head-Exchange Technology, 63 Moons technologies.

On a consolidated basis, 63 Moons Technologies reported a net loss of Rs 0.77 crore in Q2 September 2020 as compared to a net loss of Rs 3.98 crore in Q1 June 2020. Net sales jumped 16.33% to Rs 41.73 crore in Q2 September 2020 over Q1 June 2020.

Shares of 63 Moons Technologies fell 1.70% to Rs 83.90 on BSE. 63 moons Technologies (formerly FTIL) is in the business of developing and selling technology products for facilitating trading on exchanges such as stock and commodity exchanges.

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