Market regulator SEBI has started adjudication proceedings and also issued a show cause notice to the Multi Commodity Exchange (MCX) with regard to its payments to London-based PESB for developing software for the spot trading platform.

SEBI official Asha Shetty was appointed to adjudicate the matter on October6 and MCX is now planning to file a settlement application with SEBI, which allows it to just pay a fine without acceptance or denial of guilt, sources told businessline.

The violation

SEBI has launched proceedings against MCX for violating norms that require an exchange to seek permission from the regulator for indulging in payments or activities that are not related to its core business. MCX had awarded the contract to PESB in 2017 and made bulk of the payments in advance. But the software was not deliveredfor nearly three years and even the one that was received was not much useful.

This year, a forensic audit report of ABN Systems alleged a conflict of interest and slew of discrepancies in the agreement with PESB.

MCX did not reply to an e-mail query.