Multi Commodity Exchange of India (MCX) on Friday said the country’s markets regulator has asked the company to put on hold the proposed go-live of its new commodity derivatives platform planned for next week, sending shares crashing.
Shares of MCX fell 8.7% in early trade, their biggest intraday percentage drop since June 30, and were last down 6% at 1,927 rupees per share.
MCX had said earlier this week that its commodity derivatives platform would go live on Oct. 3 after several delays.
The Securities and Exchange Board of India (SEBI) will discuss the platform in its technical advisory committee meeting to be held shortly, MCX said in a statement.
SEBI’s intervention comes after investor group Chennai Financial Markets and Accountability (CFMA) asked it to ensure that MCX had required technical support and a public interest litigation was filed in the Madras High Court in December 2022.
The regulator had informed MCX that CFMA has forwarded a letter dated Sept. 27 about the new platform and since it involves “technical issues,” it will discuss them in its meeting, the exchange filing from MCX said.
“So far MCX has conducted only mock testing of the new platform and not parallel testing as required by law, which is why we have informed the regulator of the pendency of writ petition in Madras high court,” CFMA President Manoj Sheth told Reuters.
The exchange will continue to conduct mock tests on the platform till it gets further directions from SEBI, it added.
Shares of MCX are still up about 27% so far this year, despite Friday’s slump.