In a bid to clear the cloud of uncertainty, the country’s largest commodity exchange, MCX, has initiated talks with 63 Moons to extend the technical support contract for clearing and settlement software by six months from October, as the present contract ends by this month.
The exchange has sought a proposal from Jignesh Shah-founded 63 Moons for an extension of the existing support service and is waiting for a response from the company. The sources said that after the negotiation with the company, the proposal will be submitted to the board for final approval.
While the exchange can manage day-to-day affairs with the internal team, the role of a services provider comes only if market regulator SEBI makes any regulatory changes and any new features are to be introduced, he added.
In the absence of continuity of services by 63 moons, the existing system will be operated by an in-house IT team and, if necessary, the team will be augmented by such expertise as may be required, said MCX in its annual report released on Saturday.
MCX has the licence to use the software beyond the expiry of the Support and Managed Services Agreement, and there are no code changes and enhancements are envisaged under this option, it added.
On the other hand, if the extension proposal is found to be commercially viable, the service contract with 63 Moons will be extended by and another six months, said the exchange.
The existing trading, clearing, and Settlement platform was developed and supported by 63 Moons. Since the software licence with 63 Moons was expiring on September 30, MCX floated an RFP (request for proposal) for October, 2020 for developing the Exchange’s Commodity Derivatives Platform (CDP).
It may be noted that as per extant agreements executed between MCX and 63 Moons, a vendor for the development of CDP could not be engaged before two years of the expiry of the contract.
In response to the RFP, 63 Moons chose not to submit any bids and MCX selected Tata Consultancy Services as the vendor for development of the CDP and issued a letter of intent in February 2021. Although the CDP was to go-live by July 2022, the project timelines have since been revised to go-live after September due to complexity in platform development and integration, said the exchange.
“We are working towards managing the situation and have also kept Sebi informed of the developments related to the migration to the new technology platform,” it said.
However, in the event that none of the options are found viable, the risk quotient of the exchange’s operations may go up till the new platform is fully implemented, it added.
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