Sebi allows Hapur Commodity Exchange to exit commodity business

Sebi has allowed Hapur Commodity Exchange to discontinue operations as a bourse, making it the seventh derivatives exchange to exit after the merger of Forward Markets Commission (FMC) with the capital markets regulator.

Hapur Commodity Exchange Ltd (HCEL) has been allowed to exit after it complied with the requirements of exit policy, the Securities and Exchange Board of India (Sebi) said in an order.

Moreover, there was no trading on the platform since January 2018.

The commodity exchange previously known as Chamber of Commerce was granted recognition for a period of five years from March 2013 to February 2018 for futures trading in mustard seeds.

As per Sebi, the exchange did not submit a plan duly approved by its shareholders to the regulator for achieving the net worth of Rs 100 crore even after repeated reminders. Further, the recognition expired on February 28, 2018.

Hence, HCEL in its annual general meeting held in January this year had proposed to voluntarily surrender its recognition and the same was communicated to the regulator too.

Besides, the Income Tax Authorities, finance ministry, corporate affairs ministry and Uttar Pradesh government are being intimated about the exit of HCEL, for appropriate action, at their end, Sebi said in a release.

As per Sebi, the bourse has complied with exit norms and submitted written undertakings that it does not have any third party or undisclosed liabilities in respect of futures trading.

Accordingly, Sebi has permitted "the exit of HCEL as a stock exchange and thus the consequent withdrawal of recognition granted to the exchange".

Besides, the regulator has directed the exchange to comply with certain regulations including not to use the expression 'exchange' in its name.