SEBI likely to penalise MCX for four-hour trading halt: Report

SEBI likely to penalise MCX for four-hour trading halt: Report

Markets regulator SEBI is likely to penalise Multi Commodity Exchange for a four-hour outage on Tuesday that was caused by a trading spike, two sources with direct knowledge of the matter told Reuters on Friday.

The disruption was a result of a "capacity breach" across systems, with the exchange unable to handle the number of clients trading on that day, the sources said.

The sources did not want to be named as they are not authorised to speak to media.

MCX in a statement on Friday said its systems had predefined parameters that limit the number of so-called unique client codes, "which led to constraints beyond the threshold."

Its trading systems remain stable and equipped for future growth, the exchange said.

The Securities and Exchange Board of India is concerned about the delay in identifying the cause for the trading halt and could direct MCX to improve its system capacity, according to the sources.

"Had MCX early on Tuesday identified that it was facing a capacity breach, trading could have resumed much faster," the first source said.

SEBI regulations require shifting trading to a disaster recovery site when trading halts at the main exchange. However, this backup option did not help the exchange, the source said.

"Since the root cause was capacity breach, it continued to persist in disaster recovery site as well due to the volume spike," the source said.

MCX said it has taken steps to address the constraints to prevent similar issues in the future.