Multi Commodity Exchange (MCX) is seeking to take support from the National Stock Exchange (NSE) to run its trading technology and clearing and settlement in case of any emergency, sources told businessline.
The nearly two-decade technology contract between MCX and 63Moons (erstwhile Financial Technologies) ends on September 30, after which the exchange will not receive any vendor support for its existing platform. In a letter in August, market regulator SEBI had asked MCX to look for other options since the trading platform that TCS was supposed to provide was not yet ready. SEBI told MCX to rely on software as a service from other exchanges.
MCX did not show much interest in renewing its contract with 63Moons. Insead, it issued a contract to TCS nearly two years ago.
Concessions to MCX
Real time risk management is one of the key aspects of any trading softwares and SEBI has so far ensured that exchanges do not run their trading systems without vendor support. Both NSE and BSE had availed the services of their then vendors for several years when they too were making changes to existing platforms or migrating to a new platform.
However, sources say, the regulator is likely to make some concessions to MCX in terms that the exchange can take support of technology of other exchanges, if its existing platform develops a snag. MCX has informed SEBI that it may be able to run the existing platform without new changes or introduction of new products without support from 63Moons.
Ensure adequate infra
“It is necessary that MCX and MCX CCL (clearing corporation) ensure, on a continuous basis, that it has adequate infrastructure and systems put in place to ensure the orderly execution of trades and timely clearing and settlement of trades as well as having online surveillance capability,” SEBI had told MCX.
There is also a concern among regulatory officials that MCX and NSE are competitors and that the exchange ensures data protection when it actually has to take support from NSE or migrate trades.
MCX, NSE and SEBI did not respond to an email query.