Sebi allows ACE Derivatives and Commodity Exchange to shut operations

Markets regulator Sebi has allowed ACE Derivatives and Commodity Exchange to discontinue operations as a bourse and withdrew the recognition granted to it.

ACE Derivatives and Commodity Exchange Ltd, Ahmedabad or ACE (formerly known as The Ahmedabad Commodity Exchange), was granted recognition as a commodity derivatives bourse in August 2010.

However, trading operations in ACE, primarily organising futures trading in certain commodities, were suspended with effect from May 31, 2015. It has not been able to resume trading on its platform till date, the regulator said in an order dated December 31.

Further, more than two years have elapsed from the date of suspension of trading but the exchange has not formulated any credible revival plan for the purpose of revival of its trading operations, it added.

Under the rules, if there is no trading operation on the platform of any commodity derivatives exchange for more than 12 months then such bourse is liable to exit.

Following this, ACE decided to voluntarily surrender the recognition granted to it as a deemed recognised stock exchange.

After considering all the facts, relevant documents, valuation report and submissions by the exchange placed on record for the purpose of considering the grant of exit, the Securities and Exchange Board of India (Sebi) noted that it is a fit case to allow exit to ACE.

"I...permit the exit of the ACE Derivatives and Commodity Exchange Ltd as a stock exchange and thus the consequent withdrawal of recognition granted to ACE," Sebi's whole time member Santosh Kumar Mohanty said.

The regulator noted ACE has substantially complied with all the norms and has submitted a "written undertaking to state that it does not have any third party liabilities or undisclosed liabilities in respect of futures trading and that it undertakes to assume complete responsibility for financial implications of any such claims that may arise at any future date against ACE".