Mumbai: The Securities Appellate Tribunal (SAT) has quashed an order passed by Securities and Exchange Board of India (Sebi) derecognising the Indian Commodity Exchange (ICEX). The tribunal, which hears appeals against Sebi, also pulled up the regulator for not giving an opportunity to the exchange to revive itself.
In May 2022, Sebi passed an order withdrawing the recognition given to ICEX as a stock exchange. Its order was based on the argument that the exchange fell short of the minimum net worth of ₹100 crore for exchanges. Sebi also pointed out that the exchange did not address various infrastructure issues pointed out by the regulator during inspections. ICEX argued that it was operating on thin budgets and did not have the financial power to address the issues pointed out by Sebi.
In a 14-page ruling, SAT said that the exchange was not accused of any illegal activity such as defrauding investors or misusing its status as a stock exchange for vested gains.
SAT has given ICEX one year to bring in the required funds and meet Sebi norms. However, until the net worth criteria are met, ICEX has been asked to keep its trading operations closed. ICEX had voluntarily closed its trading operations in March 2022 and currently is only offering mutual fund-related products.
SAT also added that if ICEX manages to find the capital before the deadline, it could make an application with Sebi for resuming trading operations. The tribunal has asked Sebi to consider the request and pass appropriate orders.
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