SEBI demands specifics from MCX after 4-hour outage
The second disruption over the last few months raised questions over the exchange’s systems
The Securities and Exchange Board of India (SEBI) has sought details from the Multi-Commodity Exchange of India (MCX), which faced a four-hour trading disruption.
The country’s largest commodities bourse was hit by a technical glitch, raising concerns among market participants about its trading infrastructure.
In a statement, MCX said, “Due to a technical issue at the exchange, the commencement of trading on 28 October was delayed. Operations were shifted to the Disaster Recovery (DR) site, and trading resumed at 1:25 pm. All trading systems are now functioning normally.”
Even as the exchange launched an internal investigation into the cause and SEBI questioned senior officials from MCX about the glitch, several market participants complained that trading could not be carried out even through the DR site.
Rakesh Kumar Jain, president, Commodity Participants Association of India, stated, “Such technical issues deteriorate trust in the ecosystem. It is pertinent that confidence is restored among market participants. MCX must work on the infrastructure so that such an outage does not occur again.”
The association will meet the MCX chairperson on October 31 to discuss the recurring outages.
Meanwhile, it was reported that the issues were due to a database problem, and an investigative report will soon be submitted to SEBI by the exchange.
The market watchdog seeks a report from the exchange if the delay is above 45 minutes. SEBI may consider financial disincentives if the lapse is significant, particularly for interruptions lasting over 75 minutes.
However, MCX stated, “We are committed to identifying the cause and implementing corrective measures. Updates on our findings and subsequent actions will be shared in due course.”
It’s not the first time that MCX has faced such an incident. In July, it reported an hour-long delay in opening the trade, citing a repeated database issue that disrupted overnight clearing processes. In February 2024, a similar outage lasting over four hours occurred due to slow backend file processing for member systems.
Thus, repeated technical glitches have unsettled brokers and market participants, prompting calls for regulatory intervention. They urged the exchange to undertake structural technology upgrades to restore confidence and ensure uninterrupted market functioning.
Narinder Wadhwa, managing director at SKI Capital, noted, “MCX has seen multiple technical issues – three to four incidents in the past few months alone, raising serious concerns about the stability and reliability of its trading infrastructure.”
He added, “Given that TCS, MCX’s key technology vendor, has the expertise to deploy globally benchmarked exchange solutions, it is imperative that MCX adopt a more resilient architecture.”