Indian Commodity Exchange Limited (ICEX) will shut down its commodity operations, sources told BusinessLine. ICEX has applied to market regulator SEBI for it as it does not have the requisite funds to meet the regulatory criteria. SEBI is likely to keep ICEX plea in abeyance for a year as per the rules. but the regulator has also issued a show-cause notice to the exchange asking it why it should not be shut down, the sources said.

When contacted, the company spokesperson declined to comment.


ICEX was promoted by Anil Dhirubhai Ambani Group and traded in steel, rubber and diamond futures contracts. BusinessLine had reported in November 2020 that a forensic audit of ICEX found irregularities in the liquidity enhancement scheme (LES) launched by the bourse for diamond, steel and rubber contracts, among others. The LES involves paying money to certain brokers for providing two-way quotes on any trading contract to generate market interest. Regulations require exchanges to have ₹100 crore net worth all the time. But the market making scheme may have sucked out cash liquidity from ICEX and SEBI should investigate this, legal experts said. The forensic auditor, Choksey and Choksey LLP, has said in its report that the “process raises suspicion around questionable practices in selecting market-makers (brokers).” SEBI had ordered a forensic audit of ICEX based on a complaint of alleged misuse of the LES by the exchange’s officials. The auditor pointed out that “certain important criteria for a member (broker) becoming a market-maker like a networth certificate from a CA and assurance of no disciplinary action against members were not incorporated in the final scheme. As per the email trail, the criteria were indicated to be relaxed for becoming a market-maker. These changes indicate that the CEO aimed at the entry of certain low profile/inexperienced members to become market-makers.” The auditor also said that there was a pricing difference of more than 50 per cent between selected and rejected market-makers.