SEBI Likely to Penalise MCX Over Four-Hour Trading Outage Caused by Capacity Breach
India’s market regulator, the Securities and Exchange Board of India (SEBI), is likely to penalise the Multi Commodity Exchange (MCX) for a four-hour trading outage on Tuesday, sources told Reuters. The disruption was reportedly triggered by a “capacity breach” when the exchange failed to handle a sudden spike in trading volumes. SEBI has expressed concern over the delay in identifying the root cause and may direct MCX to strengthen its system infrastructure to prevent future incidents.
MCX stated that the outage occurred due to predefined system parameters limiting the number of “unique client codes,” which led to trading constraints beyond the set threshold. Although trading was shifted to the disaster recovery site as required by SEBI, the problem persisted because the capacity breach extended to the backup system as well. The exchange said it has since taken preventive measures to enhance system stability and avoid similar disruptions.
The outage has sparked outrage among bullion traders, many of whom reported financial losses during the trading halt. Several traders have approached the India Bullion and Jewellers Association Ltd (IBJA) to raise the issue with SEBI, citing repeated delays and halts on MCX this year. A Mumbai-based bullion dealer said falling global gold and silver prices forced traders holding long positions to incur heavier losses due to the trading delay.
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