India’s market regulator, the Securities and Exchange Board of India (SEBI), is expected to impose a penalty on the Multi Commodity Exchange (MCX) following a four-hour trading outage on Tuesday that was triggered by a surge in trading activity, according to sources familiar with the matter.
The disruption occurred due to a “capacity breach,” as the exchange’s systems were unable to handle the high number of clients trading that day. SEBI has not issued an official comment on the matter.
MCX cites system limits for outage
MCX stated on Friday that its systems had predefined parameters restricting the number of “unique client codes,” which led to constraints beyond the allowed threshold. The exchange said its systems have since stabilised.
According to sources, SEBI is examining the delay in identifying the root cause of the trading halt and may instruct MCX to enhance its system capacity. The outage persisted even after shifting trading to a disaster recovery site, as the underlying capacity issue remained unresolved due to the volume spike.
MCX said it has taken corrective steps to strengthen its infrastructure and prevent similar incidents in the future.
Bullion traders report losses
The outage impacted bullion traders, many of whom faced losses and approached the India Bullion and Jewellers Association Ltd (IBJA) to raise the issue with the regulator. Frequent trading delays and halts on MCX this year have raised concerns among market participants.
One Mumbai-based bullion dealer said that price corrections in the global gold and silver markets coincided with the outage, making it difficult for traders holding long positions to exit their trades in time.
MCX has assured that it is implementing additional safeguards to ensure trading continuity and system resilience.
Disclaimer: This article is based on publicly available information and reports. Investors should verify details independently before making financial decisions.
