MCX tech glitch: Trading commences on MCX at 1 pm after 4-hour delay

In 2021, the market regulator had introduced financial disincentives for exchanges in case of delays in recovery or failure of disclosures

MCX

The Securities and Exchange Board of India (Sebi) mandates that a preliminary report on such instances should be filed within 24 hours and a comprehensive root cause analysis report within 21 days

Khushboo Tiwari Mumbai

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Multi Commodity Exchange of India (MCX), the largest commodity derivative exchange in the country, on Tuesday suffered a technical glitch, which delayed its opening by nearly four hours.

The exchange, instead of opening at 9 am, commenced trading after 1 pm.

“The exchange commenced its trading activity in the commodity derivatives segment from 1 pm. The delayed start was attributed to the slow processing and generation of backend files for the members,” said a spokesperson of the exchange.

“The matter is being examined for identifying the root cause which led to the issue,” they added.

The Securities and Exchange Board of India (Sebi) mandates that a preliminary report on such instances should be filed within 24 hours and a comprehensive root cause analysis report within 21 days.

In 2021, the market regulator had introduced financial disincentives for exchanges in case of delays in recovery or failure of disclosures.

Failure to restore operations within 45 minutes may result in a penalty of 10 per cent of average standalone net profit of two financial years or Rs 2 crore—whichever is higher.

Additionally, the managing director and chief technology officer (CTO) may face a penalty of 10 per cent each of their annual pay for such an incident.

It remains to be seen how the newly-introduced rules will impact MCX on account of Tuesday’s glitch.

Shares of MCX closed at Rs 3,416.6, down 2 per cent over its previous close. In October 2023, the commodity bourse shifted to a new commodity derivative platform (CDP) developed and serviced by Tata Consultancy Services (TCS).

The exchange migrated from its previous vendor 63 Moons. Volumes on MCX have surged by over 20 per cent after migration to the new platform. Before the transition, the daily average value of trades stood at Rs 98,371 crore, which has surged to over Rs 1.18 trillion. 

MCX’s stock has risen 65 per cent since October 16, 2023 —when it transitioned to the new platform.

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First Published: Feb 13 2024 | 5:31 PM IST

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